PNHP

Can Health Insurers Be Cost-Cutters?

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Can Health Insurers Be Cost-Cutters?

Laura S. Boylan
Letter to the Editor
New York Times
May 11, 2009

To the Editor:

Paul Krugman outlines proposed cost-cutting by the “medical-industrial complex.” Why, thank you, medical- industrial complex! How nice to suggest lowering costs.

At the risk of seeming ungrateful, I wish to point out that the problem with voluntary cost reduction is that it’s voluntary. As long as the logic of our system is set by a huge for-profit multipayer bureaucracy, we will continue to get low value on the health care dollar.

Our nation’s ability to afford decent health care for all our citizens must not depend on voluntary self-regulation of for-profit entities. We need single-payer national health insurance. Let’s circle the wagons around health care, not around private insurance companies and Big Pharma.

The writer, a clinical associate professor of neurology at New York University School of Medicine, is on the board of directors of Physicians for a National Health Program, Metro New York.

Not Change We Can Believe In

By Claudia Chaufan, MD, PhD
KQED
May 12, 2009

In this second posting, I wish to elaborate on the question: “Is the public option model change we can believe in?”

I wish I could, but sadly I see no reason or evidence to do so. But before readers who may be excited about this approach conclude that I am a “spoiler,” let me lay out my case, making educated guesses about what assumptions underlie the “public option theory.”

During his election campaign, President Obama said he believed that health care is a right, so I assume that whatever he does, granting this universal right must be a high priority. So to secure this right he has promised to “overhaul” health care.

Very well. What may he and his supporters (like Kennedy, Baucus, etc.) have in mind? They have called their approach “uniquely American,” and modeled it after Berkeley professor Jacob Hacker’s proposal of a “public option” competing with private plans within a “highly regulated health care market.”

I call them all “hope it works” health care policy.

The fundamental problem is that, because supporters of this policy hold false assumptions about health insurance — that it is something you can comparative shop for with the same ease you comparative shop for designer shoes — they send you comparative shopping for it. But you do not comparative shop for rights; you are entitled to them.

“But,” says the public option crowd, “we have to send you comparative shopping because this will control costs and make health care affordable to everybody!” But what if I still cannot afford meaningful coverage that will protect me financially if I get sick? They might answer, “don’t worry; the health care marketplace will be highly regulated.”

What would they mean by that? Let me lay it out schematically:

First, they mean that private insurers will be legally bound to sell policies to everybody, regardless of past or present health status, and at prices people can afford. (Note: we are not told how this regulatory machinery will be enforced, or who will pay for it, but we can infer that taxpayers will foot the bill and, given the history of private insurance business practices, it won’t be cheap).

Second, employers will either provide insurance or contribute to a public fund. Discussions are also now moving from Obama’s initial demand for a mandate for children to a “universal individual mandate” that will legally compel all Americans to buy insurance.

Third, public programs for “vulnerable (i.e. expensive or poor) populations” will be expanded (Note: again, we are not told who will foot the bill of the machinery to divide people up according to “vulnerable” or not, or who will pay for the public programs, but we can safely infer it will be all taxpayers).

Fourth, there will be subsidies for those who cannot afford market prices, yet who are not “poor enough” to qualify for public programs (Note: again, criteria for “poor enough” remain a mystery, and once more we can infer that taxpayers will pay for subsidies, whether or not they qualify for them themselves).

Fifth, and here is where the theme of this second posting comes into play, there will be a “public option” good enough to set high standards — assuming, that is, that private insurers do not kill this option or water it down enough to make it worthless. The high standards of the public option — presumed by Hacker, based on Medicare’s indicators of performance, to provide excellent services and fair prices — will force insurers to compete or drop out of the market.

Finally, the plan will encourage providers to use electronic medical records, emphasize preventive medicine and fund research on comparative efficacy of treatment options.

Then we will all hold our breath, and hope that all this works, somehow.

Don’t get me wrong. I am not against electronic medical records, preventive medicine, eating your broccoli and not smoking, or researching what really works in medicine. All else equal, they are wonderful things. But is there any reason to believe that all or any of these things will, for instance, increase our purchasing power so that health care becomes affordable and can be universally guaranteed, as it is everywhere else in the industrialized world?

Well, there is not, because as I discussed in my previous posting, purchasing power comes from bulk purchasing, and all of the above are irrelevant to it.

Nor do electronic medical records or healthy lifestyles have any connection whatsoever with the other big “cancer” of our system: the administrative overhead that comes from dividing people up according to a mind boggling number of policies or eligibility criteria. (Britons spend half of what we do, while providing comprehensive and universal coverage, since they created the National Health Services. And there is no evidence whatsoever that their costs are lower because they eat more broccoli or use computerized records).

“But,” you might still insist, “what about the public option?” Well, in the absolutely best case scenario, it will end up with all the “bad customers” (i.e. the sicker, the poorer and the “not so poor for public programs yet not poor enough to qualify for a subsidy”, etc.).

And of course the public option, by being just an option, will be deprived of the greatest strengths of social insurance: 1. risk pooling, which assures sustainability and lowest costs, and 2) cooperative compulsory contributions, which secures an economically and politically sustainable source of money to pay for health care for all.

“But”, you may still argue, “can we not hope that this time a hybrid “private-public” insurance model will work?” You can, but you can’t rely on any past evidence of success — quite the contrary. Similar “hybrids” giving a central role to private insurance have been tried, touted repeatedly as “ground-braking” by a complacent, misinforming mainstream media, and have failed, repeatedly. There were tried in Massachusetts in 1988; Oregon in 1989; Minnesota, Tennessee and Vermont in 1992; Washington State in 1993; Maine in 2003; and again in Massachusetts in 2006. (For excellent analysis of these attempts, see “State Health Reform Flatlines” [PDF].)

Now, I recognize that the picture I have given you is grim. But let me tell you about the change I, at least, can believe in. It is the change that grassroots, truly popular social movements are able to bring about. One such movement is the single-payer movement.

If all those who believe that health care is a right — and evidence indicates that it is the majority of the population — drop the self-defeating belief that a true right to health care is not “politically feasible” and join in this movement, its collective strength will move mountains. After all, during the civil rights movements, Americans did not say, “let us just negotiate that black people be able to sit in the rear half of buses and hope this will lead to a universal right to sit in the whole bus.” They settled for no less than full equal rights.

Single payer legislation has already passed twice in our state, and was vetoed, twice, by Governor Schwarzenegger and his fellow Republicans. It has recently been reintroduced by Senator Mark Leno. At the federal level, many brave Americans are being dragged out of Washington-sponsored meetings and thrown in jail for demanding single payer (see video clips in my reply to a reader’s comment on my previous post). And as more people continue falling into debt or suffering unnecessarily, many more will join the ranks of these brave Americans. There are only so many jails to throw the increasing number who fight for health care equity. And they — we – cannot be silenced forever.

This growing grassroots movement gives me real hope that meaningful change is on the horizon and that politicians will eventually have to listen.

Because it is ordinary people who hold the vote.

More Tools for Single Payer Advocates

Action Alert from Health-Justice.Org

New Tools and Continuing Campaigns

Stuff You Can Do. Free. Easy. Free and Easy. NOW

New Tool for Phone Calling Campaign.

Until this morning, we had to transcribe the 200-300 voicemails we get each day from callers to our 800-578-4171 number. After transcription, we faxed the messages to the White House and each member of the Senate Finance Committee. Today, for instance, I sent a 36 page fax of closely printed voicemails from May 6.

But starting at 0900 EST today, we went live with a system that converts each overnight voice message to a phone call, dialing the White House and Sen. Baucus automatically, waiting for a human to answer, then playing the message and hanging up. And then dialing again to deliver the next message in the queue. And the next. And so on. So this morning we delivered 500 phone messages to the White House and Sen. Baucus at the rate of one or two a minute.

You can join the fun. Call 1-800-578-4171 and press 0 for the White House or 1 for Sen. Baucus. Or call during the day and be transferred directly to the live White House operator. Or call tonite and tomorrow and tomorrow nite and . . .

Continuing Campaign Update

You are still sending faxes and lots of them. This morning we had sent about 22 thousand faxes to the White House and members of Congress. You can take your pick of faxes, from chastising Republicans for intransigent obstructionism to asking Obama to do the right thing. Each one allows you to add your comments. Each one is sent immediately. Each one is free to you.

Click here and pick a fax to send. Or pick several. Or pick all. And remember, when we work together, we can overwhelm the fax machines in Washington. We did it before. We can do it again.

Yes, Some Things in Life Are Free — And Some Are Not

Much as I enjoy providing a way for you to send faxes and make phone calls, it’s kind of like Free Beer Tomorrow. Today I have to pay. So please donate to help keep the faxes free for those who can’t afford to donate, to keep the phone lines open for those who despaired of ever being heard, and to keep the videos on TV inspiring others to join us. Your donation is appreciated and the money will be carefully spent on this cause and this cause only. Not a penny is wasted because we can’t afford to let the rich guys beat us just because they are rich. We may not be wealthy, but we are smart and we are dedicated and we are many. Donate today to keep these campaigns alive.

Marcia Angell’s testimony before Senate Finance

“Financing Comprehensive Health Care Reform”

Committee on Finance
United States Senate
May 12, 2009

Testimony of Marcia Angell, M.D.

(file does not exist)

http://finance.senate.gov/sitepages/hearing051209.html

Comment:

By Don McCanne, MD

It didn’t happen.

After nurses and physicians supporting single payer were removed from the audience, single payer was mentioned once only parenthetically.

During a discussion on the tax deductibility of employer-sponsored health plans, Sen. Max Baucus indicated that we should retain the tax preference, perhaps with modifications, since we should work with what we have and not make a radical change.

In response, considering that eliminating the tax preference would be a radical change especially impacting workers, Gerald Shea of AFL-CIO stated, “If we’re going to do a radical change, I think that single payer is really the way to go.”

A Doctor’s Letter to Senator Baucus

Why We Need a Single-Payer Health Care System

By ANA M. MALINOW, MD
Counterpunch
May 7, 2009

Honorable Senator Baucus:

Last week, in the public clinic where I work, I treated a 6-year-old girl who had visited the emergency room for cellulitis, an infection of the skin, over her hand. Usually a relatively minor condition that is easily treated with a 10-day course of antibiotics, cellulitis can sometimes cause severe consequences, including life-threatening sepsis, if not treated promptly.

The reason this patient was notable was because she was uninsured and had been sent home with a prescription that her mother tried to fill but was unable to afford. How much did the antibiotic suspension cost? $500.

When I saw her three days after her ER visit, her hand was swollen twice the normal size, purple, tender and warm to the touch, with a red streak (signifying an extension of the infection from the skin to the bloodstream) up to her elbow. I took one look at her and quickly made the decision to admit her for IV antibiotics, including a consultation with pediatric surgery to ensure that the infection had not spread between the deep layers of her skin.

What struck me most about this visit, other than the child’s deformed hand, was the mother’s shame at not being able to afford her child’s medication. I assured her that I did not blame her, that our health care system was unconscionable, and that we needed a health care system where everyone was included and everyone paid according to his or her ability to pay. She agreed.

I’m not surprised she agreed. From 1943 to today, opinion polls consistently show that a stable majority of Americans favor a government role in the financing of health care. In the lead-up to President Truman’s national health care proposal, 82 percent of Americans agreed that something needed to be done to make health bills easier to afford.

Today, 65 percent of Americans, including 59 percent of U.S. physicians, support a tax-financed national health insurance plan. Why wouldn’t my patient’s mother support national health care?

What she probably doesn’t know is how much she already pays for the health care her child does not get, or gets late. Her uninsured family pays an extra 10 percent out of its paycheck in taxes to pay for our health care system. Her daughter’s hospitalization will be covered by emergency Medicaid, for which she pays through her sales taxes, income taxes, property taxes and other hidden taxes. She will still have many out-of-pocket costs, of course.

I was struck by your remarks this week during the Senate Finance Committee hearings as physicians were carted away. “We need more police.” No, Mr. Senator, we need true health care reform.

Referring to the difference between Washington insiders and most polls over the stimulus package, President Obama’s advisor, David Axelrod said, “This town talks to itself and whips itself into a frenzy with its own theories that are completely at odds with what the rest of America is thinking.” The moral, he said, is “not just that Washington is too insular but that the American people are a lot smarter than people in Washington think.”

I agree. As I talk about a single-payer national health program across Texas (yes, Texas!) and other states, I am repeatedly amazed by the ability of Americans to understand the complex issues of health reform if it is adequately explained to them. People quickly understand that a sustainable solution will come only when we contain costs and eliminate fragmentation.

The more I listen, the more I hear that all Americans want a health care system that is affordable, accountable, accessible, comprehensive, universal and just – not another Band-Aid that will condemn thousands of us to unnecessary pain, suffering, bankruptcy and death. Listen for yourself, and you will hear Americans clamoring for true health care reform.

By Washington standards, single payer is politically unfeasible. But step outside the beltway and you will be surprised by the genuine support that exists for a publicly funded, privately delivered, expanded and improved Medicare for all.

This mother should not be made to feel ashamed. Nor should her child be relegated to suffer like a Third World beggar. Your compromise plan that keeps the private, for-profit insurance industry in the game will perpetuate the shame and the begging. Already, there is a grassroots movement building against private health insurance and for single payer. It will reach Washington, whether Washington is ready or not.

Sincerely yours,

Ana M. Malinow, MD

Pediatrician in Houston, Texas
Past president, Physicians for a National Health Program
Co-founder, Health Care for All Texas

Marcia Angell's testimony before Senate Finance

"Financing Comprehensive Health Care Reform"

Committee on Finance
United States Senate
May 12, 2009

Testimony of Marcia Angell, M.D.

(file does not exist)

http://finance.senate.gov/sitepages/hearing051209.html

Comment:

By Don McCanne, MD

It didn’t happen.

After nurses and physicians supporting single payer were removed from the audience, single payer was mentioned once only parenthetically.

During a discussion on the tax deductibility of employer-sponsored health plans, Sen. Max Baucus indicated that we should retain the tax preference, perhaps with modifications, since we should work with what we have and not make a radical change.

In response, considering that eliminating the tax preference would be a radical change especially impacting workers, Gerald Shea of AFL-CIO stated, “If we’re going to do a radical change, I think that single payer is really the way to go.”

A Doctor's Letter to Senator Baucus

Why We Need a Single-Payer Health Care System

By ANA M. MALINOW, MD
Counterpunch
May 7, 2009

Honorable Senator Baucus:

Last week, in the public clinic where I work, I treated a 6-year-old girl who had visited the emergency room for cellulitis, an infection of the skin, over her hand. Usually a relatively minor condition that is easily treated with a 10-day course of antibiotics, cellulitis can sometimes cause severe consequences, including life-threatening sepsis, if not treated promptly.

The reason this patient was notable was because she was uninsured and had been sent home with a prescription that her mother tried to fill but was unable to afford. How much did the antibiotic suspension cost? $500.

When I saw her three days after her ER visit, her hand was swollen twice the normal size, purple, tender and warm to the touch, with a red streak (signifying an extension of the infection from the skin to the bloodstream) up to her elbow. I took one look at her and quickly made the decision to admit her for IV antibiotics, including a consultation with pediatric surgery to ensure that the infection had not spread between the deep layers of her skin.

What struck me most about this visit, other than the child’s deformed hand, was the mother’s shame at not being able to afford her child’s medication. I assured her that I did not blame her, that our health care system was unconscionable, and that we needed a health care system where everyone was included and everyone paid according to his or her ability to pay. She agreed.

I’m not surprised she agreed. From 1943 to today, opinion polls consistently show that a stable majority of Americans favor a government role in the financing of health care. In the lead-up to President Truman’s national health care proposal, 82 percent of Americans agreed that something needed to be done to make health bills easier to afford.

Today, 65 percent of Americans, including 59 percent of U.S. physicians, support a tax-financed national health insurance plan. Why wouldn’t my patient’s mother support national health care?

What she probably doesn’t know is how much she already pays for the health care her child does not get, or gets late. Her uninsured family pays an extra 10 percent out of its paycheck in taxes to pay for our health care system. Her daughter’s hospitalization will be covered by emergency Medicaid, for which she pays through her sales taxes, income taxes, property taxes and other hidden taxes. She will still have many out-of-pocket costs, of course.

I was struck by your remarks this week during the Senate Finance Committee hearings as physicians were carted away. “We need more police.” No, Mr. Senator, we need true health care reform.

Referring to the difference between Washington insiders and most polls over the stimulus package, President Obama’s advisor, David Axelrod said, “This town talks to itself and whips itself into a frenzy with its own theories that are completely at odds with what the rest of America is thinking.” The moral, he said, is “not just that Washington is too insular but that the American people are a lot smarter than people in Washington think.”

I agree. As I talk about a single-payer national health program across Texas (yes, Texas!) and other states, I am repeatedly amazed by the ability of Americans to understand the complex issues of health reform if it is adequately explained to them. People quickly understand that a sustainable solution will come only when we contain costs and eliminate fragmentation.

The more I listen, the more I hear that all Americans want a health care system that is affordable, accountable, accessible, comprehensive, universal and just – not another Band-Aid that will condemn thousands of us to unnecessary pain, suffering, bankruptcy and death. Listen for yourself, and you will hear Americans clamoring for true health care reform.

By Washington standards, single payer is politically unfeasible. But step outside the beltway and you will be surprised by the genuine support that exists for a publicly funded, privately delivered, expanded and improved Medicare for all.

This mother should not be made to feel ashamed. Nor should her child be relegated to suffer like a Third World beggar. Your compromise plan that keeps the private, for-profit insurance industry in the game will perpetuate the shame and the begging. Already, there is a grassroots movement building against private health insurance and for single payer. It will reach Washington, whether Washington is ready or not.

Sincerely yours,

Ana M. Malinow, MD

Pediatrician in Houston, Texas
Past president, Physicians for a National Health Program
Co-founder, Health Care for All Texas

Health Coalition attacks American TV ad in open letter to Barack Obama:

"Listen to Canadians, not Brian Day and his for-profit friends"

MEDIA RELEASE

FOR IMMEDIATE RELEASE
May 8, 2009

(Ottawa, ON) In a tough open letter to President Barack Obama, the Canadian Health Coalition (CHC) is taking on Dr. Brian Day, current past president of the Canadian Medical Association (CMA), and an American conservative group running TV ads against health care reform.

“We are urging President Obama to listen to the overwhelming number of Canadians who value and depend on our public health care, not to Brian Day and his for-profit friends,” said Michael McBane, national coordinator of the Canadian Health Coalition. “Medicare has been good to Canadians since the 1960s when we parted from the American model.”

Dr. Day, whose private surgical clinic in British Columbia is currently under investigation by the B.C. government for illegal billing practices, appears in an ad running on American TV for Conservatives for Patient’s Rights (CPR). (http://www.cpractionfund.org/) The ad is part of a million dollar campaign attacking President Obama’s plan to overhaul the nation’s health care system. In the ad, Dr. Day — a strong proponent of privatizing Canada’s public health system — sides with those who would privatize the system, sharing horror stories of government-run health care programs.

The campaign sponsor, CPR, is a conservative organization founded by Rick Scott, the discredited former owner of Columbia/HCA, one of the largest private health care companies in the world. In 1997, his board of directors removed him from office during the largest health care fraud scandal in the United States. The company was forced to pay $1.7 billion in fines for overbilling state and federal government health plans.

This campaign slogan- ‘Putting Patients First’ – is borrowed from the drug industry and really means ‘Putting Profits First’.

“Dr. Day and Rick Scott should not be allowed to speak for people who need and deserve quality health care,” said Mr. McBane. “We want President Obama to understand the benefits of Canada’s public health system.”

In the open letter, Mr. McBane points out several critical differences between Canadian and American health care.

“Mr. President, we know that you are deeply concerned about the 46 million Americans who have no medical coverage. We’re proud to say that Canada covers every Canadian citizen. Canadians live three years longer than Americans, and our infant mortality rate is 20% lower. Canada spends 10% of its GDP on health care, compared to 15.3% in the United States, yet we generally get more services. Economically, Canada’s public health system dramatically reduces costs for business, particularly the hard-hit manufacturing sectors, because of higher prices and administrative costs in the primarily private U.S. system.”

Mr. McBane urged the President to look at the consistent level of support among Canadians for the public health care system. “Canadians recognize our system can always be improved, but they overwhelmingly want public sector improvements, not for-profit private companies taking our scarce health care dollars. Our two countries need to stand together to strengthen public health care across the border and to protect the right to public health care from financially motivated doctors and insurance companies.”

“It remains shocking to us that Dr. Day, a past president of the CMA, is participating in a campaign to de-rail the efforts of the American people to secure their right to health care by misrepresenting the facts about Canada. This is a breach of fundamental ethical obligations of the medical profession, namely, a commitment to best evidence and avoidance of conflict of interest.

“Canadians and Americans both need more public health care not less. Private markets and commercial competition will make things worse, not better.”

The Canadian Health Coalition is a not-for-profit, non-partisan organization dedicated to protecting and expanding Canada’s public health system for the benefit of all Canadians. It includes organizations representing seniors, women, churches, nurses, health care workers and anti-poverty activists from across Canada.

-30-

Michael McBane
National Coordinator
Canadian Health Coalition
Ottawa, Canada
(613) 277-6295
www.medicare.ca

Single payer system subject of debate at health care roundtable

By RTT Staff Writer
RTTNews
May 12, 2009

The Senate Finance Committee held its third and final Health Care Roundtable Discussion Tuesday, focusing on how to finance comprehensive health care reform. The roundtable concluded the series aimed at helping the committee offer health care reform legislation by June.

Experts and lawmakers discussed the cost of the proposals that they have considered in recent weeks, with committee chairman Max Baucus, D-Mont noting that they “are not cheap.”

However, the cost of inaction is also high, he added, noting that Americans spend $4.5 million on health care every minute of every day, leading to $2.5 trillion a year – or $33 trillion over the next 10 years.

Monday, President Barack Obama announced that he had reached an agreement with various organizations to cut health care spending by 1.5 percent each year for the next 10 years, saving over $2 trillion.

Baucus noted that, along the lines of the reform promoted by President Obama, the first place to cut spending is within the health care industry itself.

In addition, experts discussed the tax treatment of health care.

“We should look at ways to modify the current tax exclusion so that it provides the right incentives,” Baucus said. “And we should look at ways to make it fairer and more equitable for everyone.”

Protestors once again marked the opening of the hearing, with many in favor of a single-payer system.

“This is a sham – all of you are special interest groups up there?” one yelled before police escorted them from the meeting room.

“Why aren’t single payer activists at the table?” another asked, before being similarly removed from the room.

The single-payer system provides only one source of money for paying health care providers, and can be on a national scope, like Canada, or smaller like statewide or community-based.

The payer may be a governmental unit or other entity such as an insurance company. Advocates say that single payer supports the patient by reducing costs and simplifying administrative work.

Gerald Shea, Assistant to the President for Governmental affairs of the AFL-CIO, added his support for the single-payer system.

“If you’re going to do it the right way, I think that single-payer is the way to go,” Shea said.

However, Baucus called the proposal unrealistic.

“Some want to go to single payer,” Baucus said. “I don’t think that’s going to work in this country.”

Rather, he supported other tax benefits for health care.

“Among these are tax-preferred health accounts and the itemized deduction for health expenses,” Baucus said. “We should try to make sure that those benefits are structured fairly and efficiently.”

Ranking member, Chuck Grassley, R-Iowa, noted that the hardest part of health care reform is figuring out how to pay for it. However, he noted that no matter what the reform, President Obama will be a “key player” in crafting the new health care system.

Last week, lawmakers heard from a panel of experts on the best ways to overhaul the individual health care system. Financing was not discussed, although all participants agreed that an increase in cost would be needed.

Approximately 87 million people — one in three Americans — went without health insurance for some period during 2007 and 2008.