PNHP

U.S. should have Medicare for all ages

pnhpf3a

U.S. should have Medicare for all ages

By Robert Gumbiner
Press-Telegram, 1/27/08
Long Beach, CA

There is a somewhat illogical argument being made against expanding Medicare to include all citizens and taxpayers in the U.S., which is that Social Security and Medicare are going to go broke. This argument makes no sense. For one thing, if this were true, how could the federal government keep borrowing from Social Security and Medicare? The fact is, Medicare has the money and the federal government doesn’t.

Another argument used to muddy the waters is that health care costs more than Medicare can afford to pay. The answer to this problem is simple: collect more money. When the cost of living goes up, we expect to pay more for goods and services. Twenty years ago, a house might cost $50,000 or $150,000; that same property now costs $800,000. So why should we expect to pay the same amount of money for Medicare health care that we were paying 20 years ago?

In addition, let’s pay more attention to controlling the costs and better education of the providers in the cost of their procedures. Give the providers, i.e. doctors and hospitals, some responsibilities for cost control.

True, when 80 million baby boomers join the 40 million people currently covered by Medicare, the budget may be stretched thin. But since Medicare will be spreading the risk over 120 million people, in the future it will work. Remember, a lot of those new people are accessing Medicare at 66 years of age and those are winners for the Medicare program because they are healthier than the average. These younger people will be feeding in over the next 20 to 30 years, and using less care initially. Actually, Medicare may work better; it’s the increasing number of people in their late 80s and 90s that we have to worry about.

By the same token, we could expand Medicare to provide health care to everyone, using a simple payroll deduction (from employees) and contribution (from employers). We know that people will agree to pay more if they get more. In the Scandinavian countries people are willing to pay more because they get more social services, including health care coverage. People in this country can understand this simple equation. They would be agreeable to pay another 4 percent payroll deduction if it meant 100 percent coverage and no financials worries.

This is a simple plan that can work, but the public is being led down the garden path by a bunch of unknown, talking heads. The propaganda machines for the insurance and pharmaceutical companies are trying their old-fashioned scare techniques on the American public, claiming that Medicare is going broke, so forget about using it to establish national universal health care.

Garbage!

It will just take another three or four percentage points – whatever it costs – out of payroll. People will be delighted to pay it in order to get full coverage.

The biggest opponents to expanding Medicare are the insurance and pharmaceutical companies. Insurance companies are parasitical. They get paid for doing nothing. In fact, they create their work. Having managed two insurance companies in addition to a large HMO, I can tell you that it costs at least 15 percent or more to market your product and another 10 percent to run the company, even if you are fully funded and spreading the risk. This means 25 percent to 30 percent of “health care cost” is going directly to the insurance companies and is not contributing anything to health care. Right now, Medicare avoids this added 25 to 30 percent, paying something like 4 to 6 percent, all in, for claims adjustments outsourced to companies like Blue Cross. It is time for insurance companies to get out of the health care business.

We brought the tobacco companies under control for the greater good of the American public; we can do the same with the insurance and pharmaceutical companies that shamelessly exploit the American public.

How is it that American pharmaceutical companies can sell their same product for 30 percent, 40 percent or 50 percent less in Canada and Mexico and make money? Doesn’t that mean they are making 30 percent, 40 percent or 50 percent more than they need to make off the American public? It is a crime. It’s ridiculous. Why doesn’t Congress do anything about it?

Robert Gumbiner, M.D., is founder and former CEO of FHP International.

IOM report: Knowing What Works

Knowing What Works in Health Care: A Roadmap for the Nation

The National Academies
Institute of Medicine
January 24, 2008

Where is the wisdom we have lost in knowledge?
Where is the knowledge we have lost in information?
T. S. Eliot, The Rock (1934)

Recommendations

Building a Foundation for Knowing What Works in Health Care

Congress should direct the secretary of the U.S. Department of Health and Human Services to designate a single entity (the Program) with authority, overarching responsibility, sustained resources, and adequate capacity to ensure production of credible, unbiased information about what is known and not known about clinical effectiveness. The Program should:

* Set priorities for, fund, and manage systematic reviews of clinical effectiveness and related topics.

* Develop a common language and standards for conducting systematic reviews of the evidence and for generating clinical guidelines and recommendations.

* Prepare an annual report to Congress.

The secretary of Health and Human Services should appoint a Clinical Effectiveness Advisory Board to oversee the Program. Its membership should be constituted to minimize bias due to conflict of interest and should include representation of diverse public and private sector expertise and interests.

The Program should develop standards to minimize bias due to conflicts of interest for priority setting, evidence assessment, and recommendations development.

Setting Priorities

The Program should appoint a standing Priority Setting Advisory Committee (PSAC) to identify high priority topics for systematic reviews of clinical effectiveness.

* The priority setting process should be open, transparent, efficient, and timely.

* Priorities should reflect the potential for evidence-based practice to improve health outcomes across the life span, reduce the burden of disease and health disparities, and eliminate undesirable variation.

* Priorities should also consider economic factors, such as the costs of treatment and the economic burden of disease.

* The membership of the PSAC should include a broad mix of expertise and interests and be chosen to minimize committee bias due to conflicts of interest.

Assessing Evidence

The Program should develop evidence-based methodologic standards for systematic reviews, including a common language for characterizing the strength of evidence. The Program should fund reviewers only if they commit to and consistently meet these standards.

* The Program should invest in advancing the scientific methods underlying the conduct of systematic reviews and, when appropriate, update the standards for the reviews it funds.

The Program should assess the capacity of the research workforce to meet the Program’s needs, and, if deemed appropriate, it should expand training opportunities in systematic review and comparative effectiveness research methods.

Developing Clinical Practice Guidelines

Groups developing clinical guidelines or recommendations should use the Program’s standards, document their adherence to the standards, and make this documentation publicly available.

To minimize bias due to conflicts of interest, panels should include a balance of competing interests and diverse stakeholders, publish conflict of interest disclosures, and prohibit voting by members with material conflicts.

Providers, public and private payers, purchasers, accrediting organizations, performance measurement groups, patients, consumers, and others should preferentially use clinical recommendations developed according to the Program standards.

http://www.iom.edu/CMS/3809/34261/50718.aspx

Comment:

By Don McCanne, MD

Our mishmash that we call a health care system has two general characteristics that must be rectified. First, we provide both insufficient and excessive health care services that fall far short of the goals of high quality health care and optimal health care outcomes. Second, we waste an enormous amount of funds on poor quality, ineffective care while failing to spend enough on efficient, high quality services.

John Wennberg, Elliott Fisher and their colleagues have demonstrated the high prevalence of expensive, high-tech excesses that provide no net health care benefit. Barbara Starfield and colleagues have demonstrated that higher quality and less expensive health care is delivered by systems that reinforce their primary care infrastructures. Studies by RAND have demonstrated that those receiving the best care we have to offer are being deprived of important services that they would be receiving in a high performance system. The sad status of our health care system is exemplified by the recent report demonstrating that the United States, of nineteen OECD nations, has the worst rate of amenable mortality.

The Institute of Medicine has produced several reports that should provoke action on our part. One famous report demonstrated that 18,000 U.S. residents die each year merely because they lack health insurance. We dutifully read the report and filed it in the health policy section of our libraries. That number is now 22,000 and growing.

Let’s not do that with this report. It has long been recognized that we need to know what works in health care so that we can establish guidelines for better use of our resources. It is inconceivable that a system operating under the rules of market justice could ever erect the guideposts for such reform. For this to work for all of us, we need to shift toward using the rules of social justice.

Dispensing with the superfluous rhetoric, that simply means that we need our government to use the resources of the Department of Health and Human Services to move forward with the crucial goals described in this Institute of Medicine report.

While we’re at it, let’s provide our administrators with a modern, efficient, integrated method of financing health care that would ease the task of achieving the goals in the report. Let’s enact a single payer national health program.

Report cards won't improve health care

Proposals would apply some of the mistakes made under No Child Left Behind to hospitals and doctors.

By KIP SULLlIVAN
Minneapolis StarTribune
January 7, 2008 – 6:03 PM

If you liked the school report cards required by President Bush’s No Child Left Behind law, you’re just going to love the doctor and hospital report cards that will almost certainly be recommended by the two state health care commissions — the Health Care Access Commission and the grandly named Minnesota Health Care Transformation Task Force — due to report in the next few weeks.

The supreme irony is that these calls for medical report cards will come in the midst of a tremendous backlash against the school report cards required by the 2001 No Child Left Behind (NCLB) Act. Teachers, parents and leaders of both political parties are fed up with NCLB school report cards. Those report cards have not been shown to improve the quality of education for all children, but they have driven up education costs, induced teachers to “teach to the tests,” punished schools that serve an above-average number of disadvantaged children, induced some schools to get rid of troubled kids and triggered lawsuits by states and school districts against the federal government.

We can expect similar mayhem from widespread implementation of No Patient Left Behind report cards.

The best-documented example of a medical report card harming patients is the New York state report card on heart surgeons. A 2003 study said the report card led to “major adverse health consequences for sicker patients.” At least three other studies reached similar conclusions about New York’s heart surgery report card.

This illustrates a serious problem with most of the studies on medical and school report cards: They tell you only about what the report cards measure; they tell you nothing about the unintended consequences, including the decline in quality of services rendered to patients and students whose care or education was unmeasured.

The most serious indictment of medical report cards is identical to the most serious indictment of school report cards: Even though they fail to take into account factors outside of the doctor’s or teacher’s control, the report cards are nevertheless used to punish and reward doctors and teachers. To put this another way, even though we don’t know why School A or Clinic A scored poorly on a report card, we’re going to pretend the low grades were the teacher’s or doctor’s fault and punish them financially and with embarrassing publicity. Report cards used in this fashion are a prescription for disaster — for inducing good doctors and teachers to leave their profession, for punishing disadvantaged patients and students, and for wasting precious resources on “solutions” that may even make the problem worse.

My criticism of report cards should not be construed to mean I think our education and health care systems are problem-free. To the contrary, I believe both systems suffer serious problems. But what is the cause of these problems?

Report-card buffs assume defects in doctors and teachers, or clinics and schools, are the main problem. But they have no evidence for this claim. Advocates of medical report cards often state that doctors follow guidelines only half the time, but that claim is simply not supported by scientific evidence. It’s true the research indicates patients do not get the care they need half the time. But the research does not tell us why. The causes of that problem are more likely to be high rates of uninsured people, a serious nurse shortage, crowded emergency rooms, sky-high drug prices, managed care and other factors far beyond the control of clinics and hospitals.

Let’s study the reasons American patients get half the care they need, and let’s continue to do research on report cards. If by some chance it turns out report cards do more good than harm, and if it turns out spending money on them will accomplish more than spending money on other quality-improvement projects, then let’s proceed with widespread implementation of medical report cards. But until then, let’s ignore calls to endorse No Patient Left Behind.

Kip Sullivan is the health systems analyst of the Greater Minnesota Health Care Coalition and the author of “The Health Care Mess: How We Got Into It and How We’ll Get Out of It.”

Report cards won’t improve health care

Proposals would apply some of the mistakes made under No Child Left Behind to hospitals and doctors.

By KIP SULLlIVAN
Minneapolis StarTribune
January 7, 2008 – 6:03 PM

If you liked the school report cards required by President Bush’s No Child Left Behind law, you’re just going to love the doctor and hospital report cards that will almost certainly be recommended by the two state health care commissions — the Health Care Access Commission and the grandly named Minnesota Health Care Transformation Task Force — due to report in the next few weeks.

The supreme irony is that these calls for medical report cards will come in the midst of a tremendous backlash against the school report cards required by the 2001 No Child Left Behind (NCLB) Act. Teachers, parents and leaders of both political parties are fed up with NCLB school report cards. Those report cards have not been shown to improve the quality of education for all children, but they have driven up education costs, induced teachers to “teach to the tests,” punished schools that serve an above-average number of disadvantaged children, induced some schools to get rid of troubled kids and triggered lawsuits by states and school districts against the federal government.

We can expect similar mayhem from widespread implementation of No Patient Left Behind report cards.

The best-documented example of a medical report card harming patients is the New York state report card on heart surgeons. A 2003 study said the report card led to “major adverse health consequences for sicker patients.” At least three other studies reached similar conclusions about New York’s heart surgery report card.

This illustrates a serious problem with most of the studies on medical and school report cards: They tell you only about what the report cards measure; they tell you nothing about the unintended consequences, including the decline in quality of services rendered to patients and students whose care or education was unmeasured.

The most serious indictment of medical report cards is identical to the most serious indictment of school report cards: Even though they fail to take into account factors outside of the doctor’s or teacher’s control, the report cards are nevertheless used to punish and reward doctors and teachers. To put this another way, even though we don’t know why School A or Clinic A scored poorly on a report card, we’re going to pretend the low grades were the teacher’s or doctor’s fault and punish them financially and with embarrassing publicity. Report cards used in this fashion are a prescription for disaster — for inducing good doctors and teachers to leave their profession, for punishing disadvantaged patients and students, and for wasting precious resources on “solutions” that may even make the problem worse.

My criticism of report cards should not be construed to mean I think our education and health care systems are problem-free. To the contrary, I believe both systems suffer serious problems. But what is the cause of these problems?

Report-card buffs assume defects in doctors and teachers, or clinics and schools, are the main problem. But they have no evidence for this claim. Advocates of medical report cards often state that doctors follow guidelines only half the time, but that claim is simply not supported by scientific evidence. It’s true the research indicates patients do not get the care they need half the time. But the research does not tell us why. The causes of that problem are more likely to be high rates of uninsured people, a serious nurse shortage, crowded emergency rooms, sky-high drug prices, managed care and other factors far beyond the control of clinics and hospitals.

Let’s study the reasons American patients get half the care they need, and let’s continue to do research on report cards. If by some chance it turns out report cards do more good than harm, and if it turns out spending money on them will accomplish more than spending money on other quality-improvement projects, then let’s proceed with widespread implementation of medical report cards. But until then, let’s ignore calls to endorse No Patient Left Behind.

Kip Sullivan is the health systems analyst of the Greater Minnesota Health Care Coalition and the author of “The Health Care Mess: How We Got Into It and How We’ll Get Out of It.”

The fantasy numbers of the Schwarzenegger/Nunez proposal

California Legislative Analyst's report on the Health Care Security and Cost Reduction Act, ABX1 1 (Nunez/Schwarzenegger compromise) and the proposed funding initiative

By Elizabeth G. Hill
Legislative Analyst

We then estimated the fiscal impact of HCR (health care reform) using two different assumptions of premiums: $250 per month per person (which is what the proponents have assumed for their estimates) and $300 per month per person because, as we explain later, there are reasons to believe that a $250 premium level may be difficult to achieve. Based on our estimates, we conclude that under the $250 premium scenario, there are sufficient revenues to support the program in the first year of operation (2010-11). However, by the fifth year of the program (2014-15), annual costs exceed revenues by $300 million.

Under the $300 premium assumption, costs exceed revenues by $122 million in the first year of operation and this shortfall increases to $1.5 billion by the fifth year of the program.

… according to the 2007 California Employer Health Benefits Survey, the average monthly premium for individuals with employer coverage was $374. In order to provide premium levels of $250 pmpm, the state will need to either negotiate a much lower rate than the average employer, or set the minimum benefit level substantially below the average employer-provided benefit level.

http://www.lao.ca.gov/2008/hlth/health_reform/health_reform_012208.pdf

Comment:

By Don McCanne, MD

Although this analysis was done for the compromise reform legislation currently under consideration in California (ABX1 1), the general principles apply to all comprehensive proposals that would mandate individuals to purchase private insurance plans.

Let’s look at the real numbers first. The average premium paid in California in 2007 for individuals with employer coverage was about $4500 ($374/month). Keep in mind that this is an average, so premiums were higher for roughly half of the individuals (not adjusted for skew). Those with higher premiums were likely receiving benefits that were more generous, yet still below the level expected for a single payer program. More importantly, also keep in mind that these are premiums for the comparatively healthy workforce without including higher risk individuals. So even $4500 would be a conservative estimate for the level of premiums required for universal coverage.

Those negotiating the policies behind ABX1 1 recognized the difficulty of financing private plans at premiums in that range. So they accepted the fantasy concept that the private insurers could provide us with reasonably comprehensive products at affordable premiums. They selected a premium of $3000 ($250/month), and decided that they would figure out later what they could buy with that once the program is enacted. It appears that they would have to give up one-third of the health care benefits which today’s insured workers are receiving. That’s not acceptable. We’ll use the $4500 estimate, which is still conservative.

Most reform proposals would provide either public programs (Medicaid, SCHIP) or insurance subsidies for individuals with incomes up to 250% of the federal poverty level (FPL), and sometimes 300% for families. No proposal suggests subsidies for those over 400% FPL. Let’s use 400% as the level at which a person would be expected to fund his/her own coverage under an individual mandate to purchase coverage. Using the 2008 federal poverty guidelines, 400% FPL for an individual is an income of $41,600. A premium of $4500 is 10.8% of income, considered by health policy analysts to be a “high burden” health expense. Add to this out-of-pocket expenses including deductibles, coinsurance, and services and products not covered by the plan, then you have worse-than-high-burden expenses.

And for families? The average employer-sponsored family coverage is now over $12,000, and 400% FPL for a family of four is $84,000. Thus the premium alone, without out-of-pocket costs, is 14.1% of income. And don’t even think about anyone in the family suffering serious illness or injury.

Why do these fools keep insisting that private health plans must be the foundation of any comprehensive reform proposal? They don’t work! Get over it!

Miracle Worker?

By Peter Freyne
7 Days – Vermont’s Independent Voice
Inside Track
1/23/08

Surprise, surprise! Rep. Topper McFaun’s health-care-reform bill — the one the powers-that-be said was absolutely, positively not coming off the committee-room wall — is going to get two days in the spotlight next week, after all!

H.304, the Vermont Hospital Security Plan, would guarantee hospital coverage for all Vermonters while cutting $60 million in annual spending. Pretty radical stuff, eh?

In what some would call a miraculous reversal of political fortune, H.304 will be on the table before the Senate Committee on Health and Welfare and the House Committee on Health Care on the afternoons of January 29 and January 30. “Expert” witnesses are being scheduled, mostly critics with six-figure salaries, we’re told, but supporters of the bill, too.


Dr. Deb Richter | Photo by Peter Freyne

Cool.

Support for the reform legislation has been building outside the Statehouse at public meetings held in small towns around the state in recent months. They’ve been hosted by Barre Republican McFaun and the “Joan of Arc” pushing health-care reform in the Green Mountains, Dr. Deb Richter.

Richter is admired even by those who don’t sing from the same health-care hymnal she does. One is Peter Sterling, executive director of the Vermont Campaign for Health Care Security Education Fund. That’s the outfit selling the new stopgap Catamount Health Plan to the state’s working uninsured — http://www.catamounthealth.org.

Catamount is the compromise, Jim Douglas-supported plan that offers to sell health insurance to working Vermonters who lack it. Admittedly, Dr. Richter is not a big fan of Catamount; she predicts it will experience a financial collapse within a couple years. But even Sterling concedes, “Beyond a doubt, Deb Richter has done the most in this state to make health-care reform happen. No one can question her credentials and dedication.” Dr. Deb, he said, “is so steadfast in her resolve that people feed off that energy.”

Dr. Deb “does say Catamount is good for some people,” said Sterling, but he admitted, “It just doesn’t solve the big problem, and we know that.”

Richter, who’s been promoting showings of Michael Moore’s illuminating health-care flick Sicko around the state, says that a single-payer health-care system like the rest of the civilized modern world is where we will end up . . . eventually. It’s just a matter of when, eh? And of how long we can prop up the for-profit health-insurance market and hospital CEOs making $750,000?

The big problem, of course, is that health care in our country costs twice as much as in the rest of the civilized world and isn’t as good. Also, people have to shell out $5000 to $10,000 deductibles as well as co-pays. Working people often go without. One can be “covered” by insurance and still be broke.

But, surprise, surprise. H.304 is coming off the committee room wall.

Why is this happening?

“This is happening this week,” Dr. Deb told yours truly, “because of public pressure. People realize this is actually a very decent idea and a pretty good deal for the people of Vermont.”

Richter, a Montpeculiar resident and Cambridge family practioner, calls it a bill “that would do something for everybody and give them peace of mind while actually costing less.”

The Legislative Joint Fiscal Office, she said, ran some numbers and found that, with all of us in the pool together, Vermonters would have to fork out $60 million a year less than what we’re currently spending on hospital bills. H.304 also drew more than 150 regular folks to rally at the Statehouse and lobby lawmakers. They plan to return on February 7.

Richter told “Inside Track” she is “pleasantly surprised,” but “not shocked” that the legislative health-care committees have reversed course and decided to shine some light on H.304 after all.

“The pent-up desire for something like this is overwhelming,” said Richter. “You can feel it everywhere.”

Even “behind the scenes” said the Cambridge physician, “if you talk to hospital executives who aren’t allowed to be in favor of it, you find out they really are, especially at the smaller hospitals.”

This legislation would provide a global budget for the state’s hospitals while guaranteeing every Vermonter’s hospitalization would be covered, said Dr. Richter.

“This would guarantee the hospital CEOs,” she said, that they could pay for the cost of doing business, could pay their staff. “They would not have to worry about chasing the money,” said Dr. Deb.

Interesting.

Topper’s bill, said Richter, would provide “emergency surgery” to a broken health-care system “and help everybody in the bargain.”

But in order to pay for it, “You’ve got to raise a tax,” said Richter, “and that is politically why it’s a challenge, and why they’ve been trying to avoid it like the plague.”

Four or five taxes have been suggested, she said, including a 5.5 percent payroll tax and a $220 annual fee on working folks.

But look at the upside, noted Dr. Richter. “It’s not an increase in spending [it would be a decrease in hospital spending], and everybody gets the security of hospital coverage. So why wouldn’t we do that?” she asked rhetorically.

You know why.

“People advocating for this are not politicians,” said Dr. Deb. “They’re ordinary Vermonters who are hurting and in need of help, and they need help now. They can’t wait until it’s the right time in the political world. They just can’t.”

At the moment, H.304 is not drawing rave reviews from the hospital and insurance execs with the six-figure salaries. Several will testify against the legislation at the hearings next week.

“It’s going to take a while for them to warm up to it,” Dr. Deb said, but, she predicted, “They’ll be begging for it in a few more years. They will!”

But can Vermont really lead the whole nation on health-care reform? Doesn’t it have to be a national program?

“We’ve done it in other areas,” said Dr. Deb, citing the abolition of slavery and welfare reform as two examples.

“New ideas are done at the state level all the time. This isn’t even a new idea. This is how Medicare started,” Richter noted. “They gave everyone over 65 hospital coverage and, ironically enough, they did it because hospitals were having a hard time paying their bills.”

Interesting.

Medical Research Increased Throughout Decade of PharmaCare Reference Pricing

Media Release
The University of British Columbia
Jan. 23, 2008

Ten years after BC PharmaCare implemented spending limits for equivalent prescription drugs — a policy known as reference pricing — investments in British Columbia medical research are as strong as ever and continue to increase, according to a UBC study.

The findings from the UBC Centre for Health Services and Policy Research (CHSPR) demonstrate B.C.-based pharmaceutical R&D grew from $16 million in 1994, the year before B.C. changed its policy on drug coverage, to $50 million in 2005. This news comes one week before a special task force is to report on drug coverage policy in B.C.

“The research disproves claims that pharmaceutical cost-controls impact investment in local research and development initiatives,” says CHSPR’s Steve Morgan, lead author on the study published today in Healthcare Policy. “These potentially surprising results are actually consistent with business fundamentals: firms locate R&D based on the cost and productivity of scientific activity in a given area.”

Beginning in the 1990s, BC PharmaCare — the provincial government drug plan in B.C — refused to pay more for newer brand-name drugs unless manufacturers could prove that such products produced better results than older generic ones.

The UBC researchers studied whether pharmaceutical R&D in B.C. had fallen behind other Canadian provinces as a result of the policy change. On a per capita basis, pharmaceutical R&D grew more rapidly in B.C. than in the rest of Canada, suggesting that reference pricing did not affect R&D investments.

The UBC researchers also reviewed international economic literature and compared both pharmaceutical and non-pharmaceutical R&D data from other provinces. The economic literature showed that the location of R&D is driven by the availability and cost of scientific infrastructure and skilled workforces, and the proximity to pharmaceutical headquarters. The data also demonstrated that B.C.-based biotechnology investment far surpassed most other provinces, putting B.C. among the top centers for biotech research worldwide.

Spending on prescription drugs in Canada topped $21 billion in 2006, or nearly $650 per capita. Prescription drug costs in B.C. are just under $570 per capita, or 12 per cent below the national average. “Reference pricing and other government policies are among the reasons for relatively low spending in B.C.,” added Morgan. “Government estimates suggest that reference pricing has saved approximately $10-million per year since its introduction in the mid 1990s.”

A 2002 study by Canada’s Patented Medicine Prices Review Board had shown that global pharmaceutical R&D is highly concentrated in specific countries. In 2000, pharmaceutical companies invested the equivalent of $30 per capita on R&D conducted in Canada, compared to $52 per capita in Germany, $75 per capita in France, $108 per capita in the UK, $118 per capita in the US, $164 per capita in Sweden and $386 per capita in Switzerland.

According to Morgan, “While B.C. can’t change its geographic location relative to dominant pharmaceutical industry centres, it has been wise to control drug spending while simultaneously investing public funds into the scientific infrastructure and personnel necessary to attract world-calibre investment into strategically focussed areas like biotechnology.”

The article is available for free at the journal’s website:
Healthcare Policy / Politiques de Santé: Longwoods Publishing
www.longwoods.com/pages.php?pageid=108&cat=247.

Cost of health initiative up $400m

Number expected to seek coverage exceeds earlier estimate

By Alice Dembner
The Boston Globe
January 24, 2008

Spending on the state’s landmark health insurance initiative would rise by more than $400 million next year, representing one of the largest increases in the $28.2 billion state budget the governor proposed yesterday.

The biggest driver of the cost increase is projected growth in the number of people signing up for state-subsidized insurance, which now far exceeds earlier estimates.

State and federal taxpayers are expected to bear nearly all of the additional cost.

Although the price tag for the initiative is ballooning, the governor yesterday reaffirmed the state’s commitment to ensuring that nearly every resident is covered.

“We have fully-funded healthcare reform,” Governor Deval Patrick said at a news conference. Patrick listed the initiative among several programs started by previous administrations that he supports.

But the long-term cost of the insurance initiative continues to concern pol icy makers and analysts, who are worried that it may become unaffordable.

“These increases are more than anticipated, so we absolutely have to find ways to hold down the rate of growth in future years,” said Michael Widmer, president of the Massachusetts Taxpayers Foundation, a business-funded budget watchdog that has supported the initiative.

This year the state is expected to exceed the initial budget for the health insurance initiative by about $245 million, and next year’s budget would boost spending by another $400 million.

The budget now goes to the Legislature, which last year accepted the governor’s recommendations on funding the health insurance initiative. A final budget is expected to be approved by the end of June.

The state’s top budget official, Leslie Kirwan, said yesterday that projecting costs for the health insurance initiative is difficult because the state is in “uncharted territory.”

“We’re ultimately working with a lot of uncertainty about the number of uninsured that remain out there in the population,” said Kirwan, secretary of administration and finance and chairwoman of the state panel overseeing the health insurance initiative. “Every significant decision we’ve made in healthcare reform” that draws on enrollment projections is based on “our best educated guess.”

The administration is currently working to develop a better way to count the uninsured.

When the law mandating that nearly all Massachusetts residents have health insurance was signed into law by then-governor Mitt Romney in April 2006, the state estimated that about 400,000 residents were uninsured.

Census estimates of the uninsured were far higher – about 650,000 – and many independent observers suggest that the truth lies somewhere in between.

Officials had projected that about 140,000 would enroll in the new state-financed insurance plan, called Commonwealth Care, which provides full or partial subsidies.

But by the end of last month, 169,000 people had signed up for Commonwealth Care, and the state is now estimating enrollment will reach 225,000 by June 2009, the close of the next fiscal year.

More than 70,000 have obtained Medicaid coverage since the law passed expanding eligibility, and the cost for covering those additional people, plus rate increases for hospitals, doctors, and others, is projected to grow significantly above this year’s spending.

Those who don’t qualify for subsidies or Medicaid are expected to buy private insurance or remain uninsured. Illegal immigrants are not subject to the insurance mandate or eligible for state insurance, but they can qualify for free care.

When the initiative was approved, the state expected that over time there would be a significant drop in spending on healthcare for the uninsured. The initial funding plan counted on shifting a significant portion of those “free-care” costs to pay for insurance subsidies.

But that shift is not going to happen to any large extent in 2009, according to the proposed budget.

To fund the overall increases, the state is counting on getting about half from the federal government. But officials have just begun negotiations on how much Massachusetts will actually receive.

Patrick said he is optimistic about federal support, but acknowledged that “nothing is certain.”

Separately, the state is counting on $5 million in revenue from businesses that don’t provide insurance for their employees, down from the $24 million included in this year’s budget that has not materialized.

Alice Dembner can be reached at Dembner@globe.com.

Initiating a market for organs

Economists' study says paying for organs would cut wait lists

Kidney and liver sales would add 10% to 15% to the cost of transplants, a study says. Others say organ markets would exploit poor donors.

By Kevin B. O’Reilly
American Medical News
January 28, 2008

Nearly 100,000 Americans are waiting for an organ transplant. Every day, the wait for 17 of those people ends in death.

It is a wait that could be drastically shortened or even eliminated if a market for live and cadaveric organs were allowed to operate, according to a paper co-authored by Nobel Prize-winning economist Gary S. Becker, PhD, and published last year in the Journal of Economic Perspectives.

Dr. Becker and co-author Julio Jorge Elias, PhD, estimate that a $15,000 payment for kidneys would increase the number of transplants by 44%, to about 20,000 a year. It would take nearly $40,000 in cash to donors to net a two-thirds jump in the number of liver transplants, to more than 8,600 a year.

In the case of kidney transplants, the donor payment would add just 9.5% to the cost of a transplant, while liver transplants would cost 11.2% more.

The authors based their estimates on how much it would take to convince a person earning the median American salary of $35,000 to become a donor, considering the actuarial value of a statistical life, the small risk of death in surgery, the quality-of-life impact and the value of the time spent in recovery.

Benjamin Hippen, MD, is a nephrologist specializing in renal transplantation at the Carolinas Medical Center in Charlotte, N.C. He supports paying organ donors — or “vendors,” as he calls them.

http://www.ama-assn.org/amednews/2008/01/28/prsb0128.htm

Comment:

By Don McCanne, MD

Vendors? Of their own organs?

Those who support treating health care as a commodity surely didn’t imply that we should go to this extreme. Or did they?

Emergency Room Delays

Note: The following New York Times editorial on emergency room delays (January 19, 2008) is based on research by PNHP member Dr. Andy Wilper, PNHP co-founders Drs. Steffie Woolhandler and David Himmelstein, and other Harvard researchers.

Editorial
New York Times
January 19, 2008

The nation’s failure to provide health insurance for all Americans seems to be harming even many of those who do have good health coverage. That is one very plausible interpretation of a disturbing increase in waiting times at emergency rooms that are often clogged with uninsured patients seeking routine charity care.

An analysis by researchers at the Cambridge Health Alliance and Harvard Medical School, found that the median waiting time to see a physician in hospital emergency departments jumped from 22 minutes in 1997 to 30 minutes in 2004.

For the sickest heart attack patients, according to results published in the journal Health Affairs, wait times more than doubled. In 1997, half of them got to see a doctor within eight minutes; in 2004 it took 20 minutes. For a quarter of the heart attack patients, the wait reached 50 minutes or more — a particularly disturbing lag when every minute of delay increases the likelihood of death.

The researchers attribute the longer waits primarily to an increase in the number of emergency room visits coupled with the closure of many emergency rooms. Both factors are driven by the lack of universal health coverage. Uninsured patients — and those who have no primary care doctor — flock to emergency rooms for routine coverage, clogging the system. Meanwhile, hospitals lose so much money dispensing charity care through emergency rooms that many collapse into bankruptcy or give up emergency care.

Emergency rooms are further overburdened, caring for seriously ill patients who can spend hours or even days there waiting to be admitted to inpatient or intensive care units. That is because many hospitals are either short on beds or have decided to allocate many beds to patients who pay top dollar for elective care.

The Institute of Medicine, a unit of the National Academy of Sciences, warned two years ago that the nation’s emergency rooms were at a breaking point. It called for better systems to route patients to the least crowded emergency rooms and an infusion of money to bolster emergency care. The Cambridge Health Alliance doctors call for expanding insurance coverage and primary care for the poor to provide alternatives to overcrowded emergency rooms for those seeking routine care. That is the best way to ensure that all the people who truly need emergency care get it when they need it.

National Medicare is the answer, not the bogeyman

Letter to the Editor
Palm Beach Post
Wednesday, January 23, 2008

The writer of “Candidates give too few details on universal care” (Dec. 19 letter) marshals forceful arguments based on false assumptions.

1) “A national plan would undoubtedly require restrictions on doctors’ incomes … ” The universal health-care plan drawn up in HR 676 would have the contrary effect. The U.S. National Health Insurance Act, if enacted, would eliminate the excessive drainage of money that has nothing to do with providing care. The huge sums now going to the sales forces, advertising budgets, lobbying campaigns, shareholder dividends, and huge executive salaries and bonuses would be saved. These expenditures are the root cause of the present attempt to reduce the fees Medicare pays doctors. Their elimination would halt the process. The writer’s use of the word undoubtedly magnifies the assumption’s baselessness.

2) “In a national plan, millions of Americans would not be able to obtain the same level of medical care they now enjoy … ” I can’t calibrate the level of care the 47 million uninsured Americans now enjoy. I do know, from my experiences on the lecture platform, that the over-65 generation feels blessed with the level it enjoys. When the question is put, the response is a practically unanimous, enthusiastic “God bless Medicare!” The goal of the plan is to make everyone lucky enough to be included in that same plan.

3) “It is bad enough that Congress refuses to deal with the Medicare … crisis, but to ask them to legislate a national health insurance plan as a replacement … is hard to imagine … ” I agree. It is hard to imagine, since the proposal isn’t to replace it but to make it Medicare for everyone. He is wrong about the “huge tax increase that would be required.” According to the Congressional Budget Office, eliminating all of the excessive administrative spending in our current system would save up to $400 billion. The prospect of a huge tax increase scares people, but the reality is that there is no need for it.

Let’s stop muddying the waters and trying to scare people with nonexistent goblins. The urgent need is the adoption of the same type of responsible program the rest of the developed nations have. We can’t afford to allow our elected officials to propose feeble patchwork instead of the expansion of Medicare. Let’s demand a show of leadership that will get us a system already in operation that we know works well and that can easily become the entire, one-tier national system.

H. DAVID PRENSKY
Palm Beach

Prior authorization without payment authorization

CMA Asks DOI to Pull the Plug on United Healthcare's New Notification Protocol

California Medical Association
January 18, 2008

CMA has asked the Department of Insurance to require that United Healthcare rescind its new Advance Notification Protocol. This onerous protocol requires physicians to notify United before admitting patients to the hospital and mandates that if physicians don’t comply, they won’t be paid.

United is calling this “notification” rather than “preauthorization,” but is requiring physicians to provide the exact same information that other insurers require for preauthorization, without a guarantee of payment. In our request to the DOI, CMA set forth several problems with the protocol, including United’s failure to notify physicians in a timely manner of a material change to their contracts, as required by law. CMA believes the protocol is an attempt by the insurer to improperly insert itself into decisions regarding patient treatment.

CMA also believes that it unreasonable to expect a busy physician practice to allocate the time and resources necessary to comply with United’s protocol without a guarantee of payment. In order to be compliant with the protocol and to be eligible for payment, physicians may be forced to divert resources from patient care to administrative tasks.

This protocol is one of a series of policies recently announced by United that CMA believes are unfairly onerous, punitive to physicians, and detrimental to patient care, and that we are seeking to have overturned.

http://www.calphys.org/html/cc597.asp

Supporting documents:
http://www.calphys.org/assets/applets/poizner_letter_012108.pdf

Comment:

By Don McCanne, MD

UnitedHealthcare’s “Advance Notification” protocol is very similar to established preauthorization protocols in that the insurer can deny payment if the process is not followed prior to the provision of health care services. The physician must submit the same information, in advance, that is required for preauthorization. The important difference is that fulfilling this identical notification requirement no longer ensures that the physician will be paid.

This appears to be yet another wasteful administrative burden placed on the physician that serves no purpose other than using a technicality to relieve UnitedHealthcare from the responsibility of paying for legitimate services.

Actually, it is much more than that. It is a return to the intrusive managed care policies of the 1990s that were so offensive to patients and physicians alike. Following is an excerpt from a document from UnitedHealthcare on “Advance Notification” (accessible at the “Supporting documents” link, above):

12. Why does UnitedHealthcare require notification for certain services and inpatient admissions?

Notification facilitates the ability for UnitedHealthcare to provide supportive clinical support and education, such as:

* Perform pre-op education for the patient and ensure adherence to nationally recognized guidelines in order to maximize quality and cost-efficiency

* Facilitate post-op discharge planning to optimize clinical outcomes, e.g. facilitated treatment plans post-hip and knee replacement surgery or spine surgery in order to reduce unnecessary variation in health care delivery

* Refer patients to Centers of Excellence (e.g., congenital heart disease)

* Refer patients to appropriate in-network physicians, other health care professionals or facilities

* Refer patients to our case management and disease management programs

Notification also enables UnitedHealthcare to assist with non-clinical support and education, such as:

* Educate network physicians, other health care professionals or facilities regarding enrollee benefits (e.g., some services are not covered under certain benefit plans)

* Educate network physicians, other health care professionals or facilities regarding the impact of directing enrollees to out-of-network providers (including explanation of increased patient out of pocket costs for out-of-network services) and assisting with identification of available alternative network physician, other healthcare professional or facilities

* Maximize enrollee benefits (out-of-network services may be paid at in-network benefit levels under certain special circumstances)