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Senate advances plot to privatize Medicare

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Senate advances plot to privatize Medicare

Medicare Advantage Organizations: Actual Expenses and Profits Compared to Projections for 2005

GAO
June 24, 2008

On average, MA organizations’ self-reported actual medical expenditures as a percentage of revenue were lower in 2005 than they had projected. MA organizations, on average, reported spending 85.7 percent of total revenue on medical expenses in 2005, but had projected medical expenditures of 90.2 percent of total revenue. Because organizations spent less revenue on medical expenses than projected, they earned higher average profits than projected. On average, MA organizations’ self-reported actual profit margin was 5.1 percent of total revenue, which is approximately $1.14 billion more in profits in 2005 than MA organizations projected.

http://www.gao.gov/new.items/d08827r.pdf

And…

Medicare Cloture Narrowly Fails

By Drew Armstrong
CQ Politics
June 26, 2008

It now looks certain that doctors will take a deep cut to their Medicare payment rates next week, after the Senate failed to move forward on a take-it-or-leave-it Medicare bill offered up by Democrats.

The White House reiterated its veto threat against the bill on Thursday, likely making moot the narrow victory that seemed possible for Democrats. The administration opposes a provision that would partially offset the cost of the bill by cutting some bonus payments to private Medicare Advantage plans in areas with teaching hospitals. It also disagreed with a provision to limit a subset of the plans known as “private fee for service,” saying the bill would “reduce access, benefits, and choices for many of the approximately 2.25 million beneficiaries who have chosen to enroll in” those plans.

The Medicare Advantage plans are paid at a higher rate than traditional Medicare, and Democrats have long argued that the private plans’ rates should be cut.

The Bush administration and many Republicans argue that the plans inject private competition into the market and will eventually lower costs.

The House passed the measure two days ago, 355-59, in a vote comfortably more than the two-thirds majority that would be needed to override a presidential veto.

http://www.cqpolitics.com/wmspage.cfm?docID=news-000002907388&parm1=1&cpage=1

Comment:

By Don McCanne, MD

The political defeat of the measure to prevent Medicare pay cuts for physicians was not partisan. Enough Republicans joined Democrats in the House to form a veto-proof majority in support of the legislation. Though many Republicans also joined the Democrats in the Senate, they came up one vote short on cloture. Sens. Obama and Clinton interrupted campaign activities to vote, but Sen. McCain was a no-show.

This was a victory for conservative/libertarian ideologues who wish to destroy the traditional Medicare program and replace it with private health plans. Their first step was to use taxpayer funds to overpay private Medicare Advantage plans so that patients would be attracted by the greater benefits that could be offered (benefits that in all fairness should be offered as well to those remaining in the traditional program). The next step is to reduce compensation in the traditional Medicare program so that physicians will bail out. Fee reductions of about 40 percent are scheduled over the next couple of years, which should accelerate the physician exodus. That would convert Medicare into an underfunded Medicaid-type welfare program, with patients fleeing to the private options.

The eventual surprise that Medicare Advantage beneficiaries are not anticipating is that it will be converted into a defined contribution program with the costs of health care inflation being shifted to the patients’ portion of the Medicare Advantage premium and to other out-of-pocket cost sharing.

Fortunately, many Republicans do support the social solidarity represented by Medicare. They are offended by the efforts to waste taxpayer funds on the excesses of private insurers in a nefarious plot to destroy the best health care financing program we have (though it needs further improvement). Joining with the Democrats, these Republicans will surely do the right thing when they return from their recess. Sen. McCain will also have another opportunity to dispel the claim that he offers us only four more years of Bush policies.

The battle to save Medicare

Saul Friedman
Gray Matters
Newsday
June 26, 2008

Reader Jack Wajda, 69, of Orlando, a retired AT&T executive and financial planner, identifies the single greatest problem with the American health-care system as well as anyone. He writes: “To allow private for-profit insurance companies to decide whether and what type of care we receive is incomprehensible to me.”

If you’ve been reading my columns and mail in reaction to what I’ve written, that private insurers have the power to virtually run American health care is also incomprehensible to most doctors, nurses, technicians, as well as patients.

Don’t get me wrong. I have auto, homeowners and life insurance. The risk pools for these coverages are fairly predictable and we can largely depend on the insurance protection. But consider what happened on the Gulf coasts and even in parts of Long Island after recent hurricanes. Insurance was canceled or premiums raised sky high because of the slim possibility of another storm.

But one’s health should not be held hostage to the profit motive. Health is too important to be left to the insurance business. It is not like a car or a roof that can be replaced.

Yet that is how for-profit health insurance works. As long as you’re young and reasonably healthy, insurance companies are glad to take your money and cover your bumps, bruises and routine doctor visits. But if you’re really ill and your costs run into the thousands, your insurer will have second thoughts about your coverage. And if you’re elderly and more likely to suffer costly health problems, the risk pool suddenly becomes too risky for the profit-seeking health insurers.

Those costs are why the Republicans, who seek to replace Medicare with private insurance companies, took the first step toward that in 1995, with the assent of the Clinton administration, when Newt Gingrich’s Congress required Medicare to bring in private so-called Medicare HMOs. Gingrich, you recall, promised insurers that Medicare would “wither on the vine.” The HMOs bugged out on Medicare because they weren’t making sufficient profits. But they were replaced by “Medicare Plus Choice.”

Now, as Wajda correctly writes, taxpayers pay the private Medicare Advantage plans at least $9,000 a year more per patient than for traditional Medicare, with salespeople getting commissions. On top of that, the prescription benefit, Part D, has also been given to the insurance companies, which are earning high profits.

Medicare Advantage and Part D have been so confusing and corrupted by greedy sales practices and deception that even this administration has taken measures to crack down. But more important, the privatization of Medicare has come at great cost to the principles and the budget of our most popular public health-insurance program. As Judith Stein, of the Center for Medicare Advocacy, writes, private insurance is in danger of killing Medicare.

So will someone tell me why even Medicare’s well-wishers, including Sens. Barack Obama and Hillary Clinton, continue to look to the private insurers to strengthen the nation’s health-care system and cover the 47 million uninsured Americans? Both would subsidize the coverage for millions of Americans, but most of the insurance would be private. And many would not be covered. Sen. John McCain, who would slash spending for public health insurance, except for federal employees such as himself, would provide tax credits to purchase private insurance.

As columnist (and my former Newsday colleague) Marie Cocco writes, these proposals would not bring everyone into the system, and without universal coverage, the risk pool is bound to fail. Besides, patients and physicians would still be at the mercy of a profit-seeking business, with large administrative costs, bureaucrats checking and second-guessing your coverage, executive salaries, salespeople’s commissions and stockholders to satisfy.

Stein and other Medicare advocates have been lobbying to strengthen the program by canceling a potentially devastating 10 percent slash in physicians’ fee and easing the assets test to permit more of the near poor to take advantage of low-income programs. And Democratic lawmakers would pay for these changes by cutting the excessive payments to private Medicare Advantage plans.

But Mike Leavitt, the Secretary of Health and Human Services, who has been on the road telling audiences and reporters that Medicare is in financial trouble, has told Democrats that President George W. Bush will veto any bill that touches the fund for the private insurers.

As Democrats seek a Medicare bill that will pass, AARP has launched a nationwide advertising campaign to “Keep Medicare Fair.” AARP’s Andrew Nannis told me the organization favors the bill’s proposals to loosen the assets tests and cancel the physician cuts, without raising Medicare premiums. He added that AARP favors cutting the subsidies to private plans, but it’s not clear how hard their lobbyists are pushing for it. AARP’s insurer, UnitedHealthcare, is lobbying hard to retain the subsidies, which earns AARP $700 million a year in royalties.

Traditional Medicare is still the nation’s most popular health insurance, even among the young. Why not save the system with Medicare for all? Rep. John Conyers’ bill, HR 676, would cover every person for all health-care issues, and eliminate the expense of dozens of other programs, such as Medicaid, and the high overhead and profits of the private-insurance industry. The bill has 90 co-sponsors, and the support of organized labor, nurses and thousands of doctors. Take a look at the bill at thomas.loc.gov.

http://www.newsday.com/news/columnists/ny-bzsaul0627,0,4451877.column

Insured experience a larger relative increase in access problems

Falling Behind: Americans' Access to Medical Care Deteriorates, 2003-2007

By Peter J. Cunningham and Laurie E. Felland
Center for Studying Health System Change (HSC)
June 2008

The number and proportion of Americans reporting going without or delaying needed medical care increased sharply between 2003 and 2007, according to findings from the Center for Studying Health System Change’s (HSC) nationally representative 2007 Health Tracking Household Survey. One in five Americans — 59 million people — reported not getting or delaying needed medical care in 2007, up from one in seven — 36 million people — in 2003.

While access deteriorated for both insured and uninsured people, insured people experienced a larger relative increase in access problems compared with uninsured people. Moreover, access declined more for people in fair or poor health than for healthier people. In addition, unmet medical needs increased for low-income children, reversing earlier trends and widening the access gap with higher-income children. People reporting access problems increasingly cited cost as an obstacle to needed care, along with rising rates of health plan and health system barriers.

While cost continued to be the overwhelming concern among uninsured people (more than 90% of uninsured people reported cost as a barrier across all three surveys), the increase in cost barriers occurred mostly among insured people. Higher patient cost sharing — people facing higher deductibles and other increased out-of-pocket expenses for medical services — likely is driving growing cost concerns among insured people.

The health plan-related barriers that people increasingly cited were that their health plan would not pay for treatment (9.2 percentage point increase), followed by the doctor or hospital would not accept their insurance (4.5 percentage point increase). The return of health plan prior-authorization requirements for certain services may be a contributing factor. Also, rising insurance deductibles or coinsurance that cause people to be responsible for much or all of a medical bill may contribute to some people reporting that their health plan would not pay for the treatment. The increase in people reporting that their doctor would not accept their insurance may mean more doctors are opting out of private insurance networks or not accepting new Medicare or Medicaid patients.

http://www.hschange.org/CONTENT/993/

And…

Increasing Number of U.S. Residents Delay, Forgo Needed Health Care Because of Cost Concerns, According to (HSC) Report

Kaiser Daily Health Policy Report
June 26, 2008

Karen Ignagni, CEO of America’s Health Insurance Plans, said that lawmakers must address a number of issues — such as differences in quality of care across the nation and the high costs of surgeries, medical imaging services and specialty medications — to make medical care more affordable (Rubenstein, Wall Street Journal, 6/26).

http://www.kaisernetwork.org/Daily_reports/rep_hpolicy.cfm#52980

Comment:

By Don McCanne, MD

Access to health care in the United States is bad and getting worse. Particularly shocking are some of the factors that are associated with impaired access: increasing rates of uninsurance, deterioration in the financial protection afforded those who are insured, rising rates of health plan barriers, children being in families with low incomes (reversing prior gains), excessive increases in health care costs, and, most shocking of all, actually having a need for health care, insured or not.

Other contributors to impaired access include the growing shortage of primary care professionals, evolving entrepreneurial trends with a decline in the provision of charity services, and the increasing constraints in the capacities of community health centers and other safety-net institutions.

The fastest growing cause of impaired access is the increase in health plan-related barriers. So what is the response of the insurance industry? “Lawmakers must address” the issues. If the insurance industry is making things worse, and they want to turn the problems over to lawmakers, then we should accept their suggestion. Why continue to pay them hundreds of billions of dollars when their insurance product innovations are no longer ensuring affordable access for those of us with significant health care needs?

In an HSC press release, Gail Shearer, director of health policy analysis at Consumers Union, stated, “This study is yet another wake-up call to policymakers that our health care system is failing to meet the needs of even insured consumers in America. Health care reform is not just about decreasing the numbers of uninsured people. It is about transforming the system into one that consistently provides appropriate quality care without unfair financial burdens.”

Single payer, anyone?

International Health Systems for Single Payer Advocates

By Dr. Ida Hellander
PNHP Executive Director

Health care systems in the Organization for Economic Cooperation and Development (OECD) countries primarily reflect three types of programs:

1. In a single-payer national health insurance system, as demonstrated by Canada, Denmark, Norway, Australia, Taiwan and Sweden, health insurance is publicly administered and most physicians are in private practice. U.S. Medicare would be a single payer insurance system if it applied to everyone in the U.S.

2. Great Britain and Spain are among the OECD countries with national health services, in which salaried physicians predominate and hospitals are publicly owned and operated. The Department of Veteran’s Affairs would be a U.S. single payer national health service system if it applied to everyone in the U.S.

3. Highly regulated, universal, multi-payer health insurance systems are illustrated by countries like Germany and France, which have universal health insurance via non-profit “sickness funds” or “social insurance funds”. They also have a market for supplementary private insurance, or “gap” coverage, but this accounts for less than 5 percent of health expenditures in most nations.

Sickness or social insurance funds do not operate like insurance companies in the U.S.; they don’t market, cherry pick, set premiums or rates paid to providers, determine benefits, earn profits or have investors, etc. In most countries, sickness funds pay physicians and hospitals uniform rates that are negotiated annually (also known as an “all-payer” system). Princeton economist Uwe Reinhardt calls Switzerland’s “sickness funds” quasi-governmental agencies**

There is no model similar to sickness funds *** operating in the U.S., although they are often confused with the Federal Employee Health Benefit Program (FEHBP), which is simply a group of for-profit private insurance plans with varying benefits, rules, regulations, providers, etc. The 1993 Clinton health plan was an attempt to regulate private insurance companies in the U.S. to behave more like sickness funds, but the insurance industry defeated it.

Bottom line: The most important point for single payer advocates is that every country with universal coverage has a non-profit insurance system. No country uses for-profit, investor-owned insurance companies such as we have in the U.S. (although they do have a small role in selling “gap” coverage).

Notes:

* The three basic models are general outlines, and there are many examples of “mixed models” (e.g. although Sweden has national health insurance, the hospitals are owned by county government, a feature more common to countries with a national health service).

** Many countries are tinkering with how sickness funds operate (e.g. Germany). The most extreme change is in the Netherlands, which since 2006 has allowed the non-profit regional sickness funds to become for-profit insurance companies, and new insurance companies to form, in the hope that “competition” would control costs. After just one year of experience, the country has experienced 1) a wave of anti-competitive mergers of the insurers 2) emergence of health plans that “cherry pick” the young and healthy and 3) loss of universal coverage and the emergence of 250,000 residents who are uninsured and 4) another 250,000 residents who are behind on their insurance payments. All of the positive data from the Netherlands (on costs, infant mortality, quality, etc) is based on the system pre-2006 (personal communication, Hans Maarse).

*** In the film “Sick around the World” five nation’s health systems are shown. The U.K. is an example of a single payer national health service. Taiwan is an example of a single payer national health insurance. Germany, Japan, and Switzerland use multiple “sickness funds” that are non-profit and pay uniform rates to providers (“all-payer”)

The OECD regularly publishes a CD-ROM with 10+ years of comparative data for those interested in pursuing further research. It is available on the OECD website at www.oecd.org

Comparative studies of several nations’ systems by Gerard Anderson at John Hopkins are on the Commonwealth Fund web site, www.commonwealthfund.org

Strong support for universal risk pool

Kaiser Health Tracking Poll: Election 2008

Kaiser Family Foundation
June 2008

As a result of recent changes in the economy, have you and your family experienced any of the following problems, or not? Was this a serious problem, or not?

Percent of the public saying each was a “serious problem:”
43% – Problems paying for gas
27% – Problems getting a good-paying job or raise in pay
25% – Problems paying for health care and health insurance
19% – Problems paying for food
16% – Problems with credit card debt or other personal debt
15% – Losing money in the stock market
14% – Problems paying your rent or mortgage

Which ONE of the following health care issues would you most like to hear the presidential candidates talk about?

51% – Making health care and health insurance more affordable
22% – Expanding health insurance coverage for the uninsured
10% – Improving the quality of care and reducing medical errors
7% – Reducing the total amount the country spends on health care
4% – Reducing spending on government programs like Medicare/Medicaid

Do you think that the cost of health care is something the president and Congress can do a lot about, do a little about, or is that mostly beyond their control?

62% – A lot
21% – A little
13% – Beyond their control
3% – Don’t know

The presidential candidates have proposed different approaches to improving the health care system in the U.S. Which of the following comes closest to your view?

56% – The main goal of these efforts should be to make sure that EVERYONE is covered by health insurance
41% – The main goal of these efforts should be to make health insurance more available and affordable in the private marketplace, even if everyone doesn’t get covered

When thinking about health insurance coverage in this country, which of the following comes closer to your view?

59% – We need to get everyone into the same insurance pool so we can spread the costs of sick and healthy people over the whole population
32% – Healthier people should not be asked to pay more to subsidize sicker people by being in the same insurance pool with them
10% – Don’t know/Refused

http://www.kff.org/kaiserpolls/h08_posr062508pkg.cfm

Comment:

By Don McCanne, MD

Paying for health care and health insurance is already a serious problem for one-fourth of us. That is greater than the percent of individuals having serious problems paying for food and housing and paying off credit cards and other personal debt.

The strongest support is for making health care and health insurance affordable. The public also supports covering everyone with insurance, although that support is much weaker amongst Republicans (11%).

A strong majority believes that the president and Congress can do a lot about the cost of health care, suggesting that there is strong support for a major government role in health care reform.

The most reassuring finding in this poll is that almost twice as many people believe that “we need to get everyone into the same insurance pool so we can spread the costs of sick and healthy people over the whole population” as do those who believe that the healthy “should not be asked to pay more to subsidize sicker people by being in the same insurance pool with them.”

And look at the breakdown of the support for a single risk pool covering everyone: 74% of Democrats, 57% of Independents, and 39% of Republicans. Imagine a coalition of the Democrats, a strong majority of Independents, and two-fifths of the Republicans. That should be more than enough to refute the notion that a single payer national health program is not politically feasible. The public already supports the policy; we just need to get them to understand the “single payer” label, or come up with a new one.

Fein Calls For Taking Profit Out Of Health

by Melinda Tuhus
New Haven Independent
June 24, 2008 1:35 PM

This man wants to get rid of co-pays and deductibles for health insurance, which he calls “remarkably crude ways of controlling demand.” He has a better idea — health insurance for all in a system that allows private coverage with public funding.

Dr. Oliver Fein is taking the reins at Physicians for a National Health Program, a 20-year-old organization of more than 15,000 doctors who support a single-payer plan for all, similar to Medicare for those over 65.


Melinda Tuhus Photo
PNHP President-Elect Dr. Oliver Fein

He told about 30 doctors and medical students over dinner Monday night at Mory’s (that “fabled Yale drinking club,” as one diner described it) that under the current system, the U.S. ranks highest in the number of preventable deaths among 19 developed nations. That’s because 45 million Americans are uninsured, and more than 50 million are underinsured.

One of those attending was Yale historian Jennifer Klein, who wrote a book about what she called “our screwed-up health care system.” She said that back in the 1930s people were organizing health care as a community benefit; it wasn’t a profit-based system. “It had nothing to do with insurance companies, and it had very little to do with employers,” she said. Click here to hear a two-minute lesson in how the system evolved to its current state.

Responding to those flaws, Fein, a practicing physician and professor of public health at Weill Cornell Medical College in New York, said health coverage must be universal, covering everyone. As for undocumented immigrants, he proposed the wording of any new health insurance law should stipulate that “residents” are covered, but then lawmakers should decide what length of residency is required to be eligible for coverage.

Fein enumerated other requirements of a new paradigm of health insurance. “It must be comprehensive. Would there be any exclusions? Yeah, probably, you know, tummy tucks, botox for wrinkles. I might even exclude a private room in the hospital unless medically indicated,” such as if a patient has a roommate with tuberculosis.

“It must be tier-free. Now we have one tier for the elderly, another tier for the poor, another tier for those who are employed, another for those who are uninsured. We really need to think of a single tier of care.”

That’s when he proposed eliminating co-pays and deductibles, “because what they do is cut demand for needed services equal to the amount they cut for unneeded services.” Another tenet of a tier-free system, he said, is that private insurance can supplement, but not duplicate, public coverage.

He said public funding should replace the “regressive” funding of premium-based financing for health insurance. “Right now, the president of a company usually pays the same premium as the secretary in the company. Are their incomes equal? Absolutely not.”

And finally, the new system must have low administrative costs, for which the U.S. has to look no further than its own health care program for elders. “Medicare has an administrative cost of three percent,” he pointed out, “whereas the average commercial insurance in this country has an overhead and profit of roughly 19 to 20 percent.” For some insurers, that number goes up to 30 percent of medical costs.

This reporter was seated next to Veronica Marer, a Canadian-born solo private practitioner in Connecticut. She said with her roots in Canada (and relatives also in France), she’s learned a lot about the single payer health systems in those countries, which she believes are better for more people than the U.S. system. But, she added, “Of course it’s not perfect; there’s rationing of care and waiting for non-emergency procedures.” But she supports single payer not only because it covers more people, but because it’s much more cost-effective. She said with such a system in place, she could do with one fewer of her 2.5 employees. “Not that I want to get rid of anyone,” she hastened to add. “I love my employees.”

One goal of the gathering was to resuscitate the dormant state chapter of PNHP that had existed in the 1990s. John Battista, a psychiatrist and one of the leaders of that chapter, recounted a brief history of their efforts, from “giving talks at churches and all that,” to drafting a single payer bill in 1999; to do that PNHP spun off the Connecticut Coalition for Universal Health Care. The bill failed to pass in the General Assembly, for which Battista blamed the influence of the insurance industry on key lawmakers.

When those present introduced themselves, Michael Connair, an orthopedic surgeon in private practice and an associate clinical professor at the Yale School of Medicine, said he hoped the organization would “modify its spiel slightly to have more appeal.”

Asked to elaborate after the event, Connair replied, “I think there is a knee-jerk prejudice against a single payer system — rightly so, looking at Medicaid or the Canadian system or the deteriorating aspects of the Medicare system. So to use that phrase unnecessarily alienates people. I think the message this organization is trying to get across is that we should have universal health care sponsored by the government, controlled by the government, with the elimination of skimming by the insurance companies and the unnecessary administrative barriers that make life difficult for doctors and patients. I think this organization wants an enlightened European system.

“The Universal Health Care Foundation of Connecticut has a similar message,” Connair continued, “but it seems to be a little more readily accepted — universal health care for all. I think they should unite with the foundation which has the support of providers, consumers and businesses. It would be a shame to duplicate efforts — I think a common presentation of ideas would benefit both. PR [public relations] is important here. You’ve gotta get your foot in the door before people will listen, and you don’t want to turn them off before they’ve heard your message. Americans probably wouldn’t tolerate the Canadian or British systems, but would probably accept some of the European models.” (Disclosure: The Universal Health Care Foundation of Connecticut grants money to the Online Journalism Project, which publishes this website.)

Fein said he hoped one positive outcome of the nation’s economic downturn would be that more people would start thinking about taking the profit out of health care. He also said PNHP is supporting House bill 676 in Congress that would create a single payer system.

A contingent of Connecticut Green Party members was in attendance, including Battista and his wife, psychologist Justine McCabe from New Milford. After Fein’s talk, she pointed out that the Green Party has been a consistent and staunch supporter of single payer health insurance, moreso than almost all the Democrats in Congress (and none of the Republicans).

Single Payer "American Style"

By Robert Zarr MD, MPH, FAAP
American Academy of Pediatrics
Section of Young Physicians
Letters
Newsletter, Spring, 2008

I think the most important part of Hirotaka Yamashiro’s “Children and Single Payer Health Care: Pros and Cons,” was the comment about equity of care. Although it is important to discuss pediatrician’s relatively low reimbursement rates, more important is that America’s children receive quality care without bankrupting their families. Let’s not forget that we still have 9 million children without health insurance. These 9 million children forego necessary care, and suffer unnecessarily because of it. There is no doubt that the average Canadian child has better access to primary care than his/her American counterpart. The Canadian pediatrician, with lower office overhead, either specialist or primary care, is reimbursed with fewer hassles and more timely than his/her American counterpart. I would posit that what Canada has IS a good system that is under-funded. Canada’s neighbor to the South, in contrast, has a terribly wasteful and dysfunctional system with the largest private health insurance bureaucracy in the world. Our problem is not that we spend too little, but that we have no system. America spends twice as much per capita on health care as Canada, yet we have generally worse health outcomes. Currently more than 60% of US total health expenditures is publicly financed, and this amount is more than most developed countries spend total. Americans already pay for health care, but just don’t get it. Every developed country in the world, except the US, has government assured health insurance. Most spend half of what we do. Falling at number 37 in health outcomes, according to the World Health Organization, seems to suggest that the US has much to learn from other countries, and not vice versa. While every other developed country’s health care system most certainly has areas for improvement, none is in such a crisis as ours. We need a publicly financed but privately delivered health care system, which would be more equitable to all American children and their pediatricians. What we need in the US is single payer “American style.”

Single Payer “American Style”

By Robert Zarr MD, MPH, FAAP
American Academy of Pediatrics
Section of Young Physicians
Letters
Newsletter, Spring, 2008

I think the most important part of Hirotaka Yamashiro’s “Children and Single Payer Health Care: Pros and Cons,” was the comment about equity of care. Although it is important to discuss pediatrician’s relatively low reimbursement rates, more important is that America’s children receive quality care without bankrupting their families. Let’s not forget that we still have 9 million children without health insurance. These 9 million children forego necessary care, and suffer unnecessarily because of it. There is no doubt that the average Canadian child has better access to primary care than his/her American counterpart. The Canadian pediatrician, with lower office overhead, either specialist or primary care, is reimbursed with fewer hassles and more timely than his/her American counterpart. I would posit that what Canada has IS a good system that is under-funded. Canada’s neighbor to the South, in contrast, has a terribly wasteful and dysfunctional system with the largest private health insurance bureaucracy in the world. Our problem is not that we spend too little, but that we have no system. America spends twice as much per capita on health care as Canada, yet we have generally worse health outcomes. Currently more than 60% of US total health expenditures is publicly financed, and this amount is more than most developed countries spend total. Americans already pay for health care, but just don’t get it. Every developed country in the world, except the US, has government assured health insurance. Most spend half of what we do. Falling at number 37 in health outcomes, according to the World Health Organization, seems to suggest that the US has much to learn from other countries, and not vice versa. While every other developed country’s health care system most certainly has areas for improvement, none is in such a crisis as ours. We need a publicly financed but privately delivered health care system, which would be more equitable to all American children and their pediatricians. What we need in the US is single payer “American style.”

United States Conference of Mayors endorses HR 676

The United States Conference of Mayors

76th Annual Meeting
Resolutions Adopted
June 20-24, 2008

RESOLUTION IN SUPPORT OF THE UNITED STATES NATIONAL HEALTH INSURANCE ACT (H.R. 676)

WHEREAS, every person deserves access to affordable quality health care; and

WHEREAS, the number of Americans without health insurance now exceeds 47 million; and

WHEREAS, millions with insurance have coverage so inadequate that a major illness would lead to financial ruin, and medical illness and bills contribute to one-half of all bankruptcies; and

WHEREAS, proposals for “consumer directed health care” would worsen this situation by penalizing the sick, discouraging prevention and saddling many working families with huge medical bills; and

WHEREAS, managed care and other market-based reforms have failed to contain health care costs, which now threaten the international competitiveness of U.S. manufacturers; and

WHEREAS, administrative waste stemming from our reliance on private insurers consumes one-third of private health spending while the single payer Medicare system has administrative costs of less than 5%; and

WHEREAS, U.S. hospitals spend 24.3% of their budgets on billing and administration while hospitals under Canada’s single payer system spend only 12.9%; and

WHEREAS, Harvard researchers estimate that more than $300 billion could be recovered by replacing private insurance companies with a single public payer, enough to cover the uninsured and to improve coverage for all those who now have only partial coverage; and

WHEREAS, entrusting care to profit-oriented firms diverts billions of dollars to outrageous incomes for CEOs and threatens the quality of care; and

WHEREAS, The United States National Health Insurance Act (H.R. 676) would assure universal coverage of all medically necessary services, contain costs by slashing bureaucracy, protect the doctor patient relationship, assure patients a completely free choice of doctors, and allow physicians a free choice of practice settings; and

WHEREAS, most polls show that the majority of Americans support universal healthcare; and

WHEREAS, as of the date of this resolution, the majority of American physicians (59%) believe that Single Payer is the best method of securing universal healthcare; and

WHEREAS, The United States National Health Insurance Act (H.R. 676) will guarantee every mayor that all residents and employees of his/her city will be fully covered for healthcare and save millions of taxpayer dollars now spent on premiums to provide less than full health insurance coverage for government employees; and

NOW, THEREFORE, BE IT RESOLVED, that the United States Conference of Mayors expresses its support for The United States National Health Insurance Act (H.R. 676), and calls upon federal legislators to work towards its immediate enactment, and further urges the adoption of a process by which healthcare will be required to justify any increases to healthcare costs.

http://usmayors.org/76thAnnualMeeting/AdoptedResolutions.pdf

PNHP press release on Mayors’ resolution:
https://pnhp.org/news/2008/june/us_conference_of_m.php

About The United States Conference of Mayors:

The U.S. Conference of Mayors (USCM) is the official nonpartisan organization of cities with populations of 30,000 or more. There are 1,139 such cities in the country today. Each city is represented in the Conference by its chief elected official, the mayor.

During the Conference’s Annual Meeting in June, standing committees recommend policy positions they believe should be adopted by the organization. At this time, every member attending the annual meeting is given the opportunity to discuss and then vote on each policy resolution. Each city, represented by its mayor, casts one vote.

The policy positions adopted at the annual meeting collectively represent the views of the nation’s mayors and are distributed to the President of the United States and Congress.

http://www.usmayors.org/about/overview.asp

Comment:

By Don McCanne, MD

The next politician who tells you that national health insurance is not politically feasible, tell him or her to discuss that opinion with the nation’s mayors. For those who say that all politics is local, national health insurance is the only reform that is politically feasible.

Dixon, U.S. Conference of Mayors push single-payer health coverage

by Sue Schultz
Baltimore Business Journal Staff
June 24, 2008

Baltimore Mayor Sheila Dixon is one of seven U.S. mayors to craft a bill supporting single-payer national health insurance, a proposal being pushed by the U.S. Conference of Mayors.

The resolution has been formally adopted by the U.S. Conference of Mayors, a national organization representing cities of more than 30,000, and is making its way through the U.S. Congress.

U.S. Rep. John Conyers, a Democrat representing Michigan, is the primary sponsor of the bill, which is backed by 90 other legislators. The universal health care approach would require all residents to have health insurance. Under the single-payer system, the program would be funded by one source such as the federal government. Canada’s health care system is a single-payer program.

“By taking this action, the mayors have put, in the boldest way, single-payer national health insurance on top of the domestic agenda, squarely in the middle of the legislative and presidential election,” said Dr. Quentin Young, national coordinator of Physicians for a National Health Program.

The Physicians for a National Health Program, a Chicago-based nonprofit representing about 15,000 physicians, helped the U.S. Conference of Mayors craft the resolution.

Media Miss Bigger Picture in Healthcare Debate

Ignoring 'mandate' plans' record of failure

By Roger Bybee
Fair & Accuracy in Reporting
Extra!
May/June 2008

In the 2008 Democratic primary campaign between Barack Obama and Hillary Clinton, each is offering a slightly different variant of individual mandate-based healthcare plans relying on the private insurance industry. Media coverage has magnified the slight variations while almost entirely ignoring the big picture: Both health plans are based on a model that has consistently failed to get off the ground in numerous states.

Most media analysis has focused on the political advantage provided by each proposal, rather than on the evidence that either plan would actually deliver quality, affordable care to all Americans.

Obama proposes that parents be mandated to buy private insurance for their children, with an individual mandate for adults to be imposed once “cost controls” drive down the cost of insurance–a highly optimistic scenario, given that he is not addressing insurers’ extremely high administrative costs. For her part, Clinton insists on an immediate and universal mandate for all to purchase private insurance. “As a practical matter, the difference between Senator Clinton’s and Senator Obama’s approaches comes down to timing and sequencing,” stated former Clinton Labor Secretary Robert Reich (American Prospect, 1/10/08).

Some health policy experts trace the roots of the Democratic candidates’ insurance-centered, mandate-based healthcare plans to Republican President Richard Nixon, who recognized the need for health reform but sought to protect private insurers and other powerful interests. In 1971, Nixon proposed mandating employers to cover their employees and requiring poorer Americans to pay reduced insurance premiums in an expanded Medicaid program. Over time, Nixon’s concept has devolved into an approach with less stress on employer payments and more emphasis on individual mandates to purchase private insurance.

The individual mandate essentially requires citizens to buy private insurance that is unaffordable for tens of millions. Consequently, it has been the rock upon which one “universal” state plan after another has crashed and splintered, as noted in a New York Times op-ed (12/15/07) by Harvard Medical School doctors Steffie Woolhandler and David Himmelstein.

Much-heralded plans passed in the late 1980s and early 1990s in Massachusetts, Oregon, Minnesota, Tennessee, Vermont and Washington all promised to provide universal coverage, most often based on a combination of employer and individual mandates. In each case, the mandate-based approach has failed to deliver any decreases in the number of uninsured; in several states there were substantial increases, as Himmelstein and Woolhandler detail.

The most recent experiment with mandates in Massachusetts appears to be sinking fast. The plan, signed into law in 2006 by Republican Gov. Mitt Romney, charges employers just $295 per year while forcing families earning as little as $29,400 a year to buy insurance without any subsidy, backed up with penalties as high as $4,000. While state officials claim progress, “according to the Census Bureau, the new sign-ups amount to less than one-quarter of the uninsured,” noted Himmelstein and Woolhandler (Boston Globe op-ed, 9/17/07). They pointed out that “244,000 of the Massachusetts uninsured get zero assistance–just a stiff fine if they don’t buy coverage.”

Essentially, healthcare plans have been configured to prevent a showdown with private health insurers over their unaffordable premiums, driven by astronomical U.S. administrative costs. As Woolhandler and Himmelstein observed in their New York Times op-ed (12/15/07):

The “mandate model” for healthcare rests on impeccable political logic: avoiding challenging insurance firms’ stranglehold on healthcare. But it is economic nonsense. The reliance on private insurers makes universal coverage unaffordable.

With an estimated excess administrative burden of $350 billion to $400 billion annually, it is impossible to envision effective cost controls under a system dominated by private insurance, at a time when per-person healthcare costs have reached $7,400 in the U.S. (New York Times, 3/3/08), virtually twice the cost of any other advanced nation.

Even when the individual mandate/private insurance approach is coupled with an option to choose a public insurance plan, as both Obama and Clinton have proposed, only a small portion of the excess insurance overhead can be eliminated, because providers and patients must contend with multiple insurers seeking to maximize profit. While some Democrats, like former candidate John Edwards, envisioned the public plan as the incubator for an evolving single-payer system (New York Times, 1/25/08), such an alternative system might also be transformed into the insurers’ dumping ground for patients who would likely diminish their profits by requiring more care.

The individual mandate approach is also weighed down by an unappealing political message, a point rarely mentioned in mainstream media. Rather than focusing on the benefits a new government program would confer on all Americans, the individual mandate puts the spotlight on the immediate burden of buying often-unaffordable insurance. As economist Robert Kuttner put it (American Prospect online, 1/30/08): “Universal social insurance signals government help. A mandate signals government coercion.”

Typifying the media analysis were New York Times reporter Kevin Sack’s pieces on the healthcare policy debate (12/25/07, 2/23/08). Sack pointed out (12/25/07) that the number of uninsured grew to 47 million in 2006, over 2 million more than the year before, and that employer-provided coverage now reaches only 60 percent of Americans, compared with 64 percent in 2000. Despite these mounting indicators of an increasingly crisis-wracked healthcare system, none of the “sweeping plans to restructure healthcare” in California, Illinois or Pennsylvania “will finish 2007 with a bill passed and signed.”

By way of explanation, Sack wrote, “In each state, the initiatives confronted entrenched opposition from insurance and other business lobbies that made it far more difficult to build a consensus than in the small New England states that acted in recent years.”

Such a statement is most notable for what it fails to illuminate. For one thing, the failures of the various New England mandate plans went unmentioned.

The candidates’ promised means of lowering insurance premiums also escaped any serious examination. “The difference is that Obama insists he will be able to lure all of the uninsured simply by dangling the carrot of low premiums; Mrs. Clinton believes there will always be some free riders who respond only to a government stick,” Sack wrote (New York Times, 2/23/08). While Sack cited cost-cutting proposals by Obama and Clinton for electronic record-keeping, preventive care and chronic disease management, he ignored the elephant in the room: the huge excess administrative costs in the U.S. imposed by private insurers. Overall, such costs account for 31 cents out of every U.S. dollar spent on healthcare (New England Journal of Medicine, 8/21/03; Health Affairs, 11-12/05).

Like much of the major media, Sack’s articles spotlighted relatively trivial procedural differences between Obama and Clinton while overlooking proven models of healthcare financing that deliver both universal coverage and effective cost controls through negotiations between provincial governments and providers. For example, neighboring Canada provides healthcare to every citizen for 52 percent of U.S. per-person costs, allows free choice of doctors, and produces far better health outcomes in terms of infant mortality, life expectancy and many other key indicators (Health Affairs, 1-2/08).

Yet many key policymakers and media commentators have utterly disqualified the single-payer plan from serious consideration. “If you want to get to universal coverage, then you have to do the individual mandate,” Urban Institute economist Joe Holahan told the Washington Post (2/24/08). “You can do it with a single-payer system, under which one entity, the government, would finance all healthcare,” he said. “But assuming that’s [politically] off the charts, then I think it [the individual mandate] is the only way to go.”

In the same vein, leading pundits like Ron Brownstein have pronounced (L.A. Times, 7/1/07):

For all the passion it evokes, the single-payer idea remains at the fringe of political viability. Though the cause energizes the left, the idea of the federal government completely replacing the private health insurance industry is so far outside the American experience that even the vast majority of health reform advocates consider it politically dead on arrival for the foreseeable future.

This viewpoint, while widely held among Washington, D.C. political and media insiders, overlooks the largely positive experience of over 40 million Americans with the Medicare and Veterans Administration systems that operate on a single-payer model.

Moreover, this exclusion reflects a vast gulf between Democratic leaders and the party’s constituency, as 70 percent of Democratic primary voters support a single-payer model of reform (Greenberg Quinlan Rosner Research, 5/4/07). This level of sentiment among Democratic voters was only slightly higher than that found among samples of all American citizens, as when CBS (9/14-16/07) found that 55 percent preferred “having one health insurance program covering all Americans that would be administered by the government and paid for by taxpayers,” vs. 29 percent who chose “keeping the current system where many people get their insurance from private employers and some have no insurance.”

But this overwhelming popular support for a single-payer system (both among the general public and increasingly doctors as well–Annals of Internal Medicine, 4/1/08) has rarely been found worthy of mention in influential media like the New York Times or Washington Post, where a search showed no record of articles on such polling over the last three years.

Meanwhile, a widely quoted New York Times poll (3/2/07) failed to even raise the single-payer issue, instead asking a much less revealing question about support for universal healthcare, a general goal supported by “nearly 8 in 10.” However, the ambiguous phrasing of possible alternatives–a list from which single-payer was omitted–produced predictably ambiguous responses from the public. Consequently, the accompanying story concluded by citing a Harvard expert predicting that public divisions would probably generate a “train wreck,” once more blocking reform. Such coverage reinforces the dubious notions that Americans resist large-scale healthcare reform and have no preferences on specific alternatives to the status quo.

Roger Bybee, a frequent contributor to Extra!, is a Milwaukee-based freelance writer and consultant who often writes about healthcare policy and corporate globalization.

U.S. Conference of Mayors Backs Single-Payer National Health Insurance

For immediate release
June 23, 2008

Contacts:
David Prensky, D.D.S., (561) 242-3424
Quentin Young, M.D., (312) 782-6006, info@pnhp.org
Alison Landes, (561) 488-0095, aslandes@aol.com

The U.S. Conference of Mayors, meeting in Miami, adopted a resolution this morning in support of single-payer national health insurance.

The assembly, in unanimous vote, backed a resolution calling for the enactment of the “United States National Health Insurance Act,” H.R. 676. The bill, which is also known as the “Improved and Expanded Medicare for All Act,” is sponsored by Rep. John Conyers of Michigan and 90 other members of Congress.

“This is a major achievement, a qualitative change in the movement for genuine health care reform,” said Dr. David Prensky, a retired dentist from Palm Beach, Fla., who helped promote the resolution. Prensky is a member of the Chicago-based Physicians for a National Health Program (PNHP).

“It shows that our country’s mayors now support the kind of approach that every other industrialized country has – an approach that guarantees health care for everyone at an affordable cost,” he said.

“Mayors, in a very real sense, are closer to the people than most elected officials,” Prensky continued. “They are closer to the grassroots, where their communities and constituents are suffering. Meanwhile their city budgets are being shattered by health costs for their own employees.”

Conyers’ bill would guarantee everyone care for all medically necessary services, contain costs by slashing the administrative waste and bureaucracy associated with the private insurance industry and assure patients their choice of doctor and hospital.

The resolution was introduced by Mayor Lois Frankel of West Palm Beach, Fla., and six other mayors from Baltimore to Santa Cruz, Calif. Frankel worked in cooperation with the statewide advocacy group Floridians for Health Care and the national group Healthcare-Now.

“By taking this action,” said Dr. Quentin Young, national coordinator of PNHP, “the mayors have put, in the boldest way, single-payer national health insurance on top of the domestic agenda, squarely in the middle of the legislative and presidential elections.”

The U.S. Conference of Mayors is a nonpartisan organization of mayors representing cities with a population of 30,000 or more. It currently has about 1,100 members.

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Physicians for a National Health Program (www.pnhp.org) is an organization of over 15,000 physicians advocating for non-profit national health insurance. PNHP has chapters and spokepersons across the country. For contacts, call 312-782-6006 or info@pnhp.org.

Text of Resolution adopted by the U.S. Conference of Mayors, June 23

Resolution in support of the United States National Health Insurance Act, H.R. 676

Submitted By:
The Honorable Lois J. Frankel, Mayor of West Palm Beach, Fla.
The Honorable Wayne J. Hall Sr., Mayor of Mayor of Hempstead, N.Y.
The Honorable Carolyn K. Peterson, Mayor of Ithaca, N.Y.
The Honorable John E. Marks, III, Mayor of Tallahassee, Fla.
The Honorable Sheila Dixon, Mayor of Baltimore, Md.
The Honorable Becky Tooley, Mayor of Coconut Creek, Fla.
The Honorable Ryan Coonerty, Mayor of Santa Cruz, Calif.

WHEREAS, every person deserves access to affordable quality health care; and

WHEREAS, the number of Americans without health insurance now exceeds 47 million; and

WHEREAS, millions with insurance have coverage so inadequate that a major illness would lead to financial ruin, and medical illness and bills contribute to one-half of all bankruptcies; and

WHEREAS, proposals for “consumer directed health care” such as Health Savings Accounts or Health Reimbursement Accounts (HRAs) would only worsen this situation by penalizing the sick, discouraging prevention and saddling many working families with huge medical bills; and

WHEREAS, managed care and other market-based reforms have failed to contain health care costs, which now threaten the international competitiveness of U.S. manufacturers; and

WHEREAS, administrative waste stemming from our reliance on private insurers consumes one-third of private health spending while the single payer Medicare system has administrative costs of less than 5 percent; and

WHEREAS, U.S. hospitals spend 24.3 percent of their budgets on billing and administration while hospitals under Canada’s single payer system spend only 12.9 percent; and

WHEREAS, Harvard researchers estimate that more than $300 billion could be recovered by replacing private insurance companies with a single public payer, enough to cover the uninsured and to improve coverage for all those who now have only partial coverage; and

WHEREAS, entrusting care to profit-oriented firms diverts billions of dollars to outrageous incomes for CEOs and threatens the quality of care; and

WHEREAS, The United States National Health Insurance Act (H.R. 676) would assure universal coverage of all medically necessary services, contain costs by slashing bureaucracy, protect the doctor patient relationship, assure patients a completely free choice of doctors, and allow physicians a free choice of practice settings; and

WHEREAS, most polls show that the majority of Americans support universal health care; and

WHEREAS, as of the date of this resolution, the majority of American physicians (59 percent) believe that Single Payer is the best method of securing universal health care; and

WHEREAS, The United States National Health Insurance Act (H.R. 676) will guarantee every mayor that all residents and employees of his/her city will be fully covered for health care and save millions of taxpayer dollars now spent on premiums to provide less than full health insurance coverage for government employees; and

NOW, THEREFORE,

BE IT RESOLVED, that the United States Conference of Mayors expresses its support for The United States National Health Insurance Act (H.R. 676), and calls upon federal legislators to work towards its immediate enactment and further urges the adoption of a process to insure that health care providers justify any increase in health care costs.