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Medicare for All seems to be embraced by all

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Medicare for All seems to be embraced by all

Saul Friedman
Gray Matters
Newsday
October 6, 2007

There is something in the air besides autumn. I’ve been waiting for readers to take me to task for the Gray Matters of Aug. 4, in which I suggested that all of us – young and old – needed a single-payer universal health plan, Medicare for All, even if it meant raising some taxes.

But if you go to Newsday online and read the comments, several of which I list below, you’ll see that no one dissented. And while the e-mail and regular mail voiced skepticism that our politicians would overcome the conservative opposition and the lobbies of the medical-industrial complex, virtually everyone welcomed the possibility of universal Medicare for every American, as if to say with a deep sigh, “It’s about time.”

Alas, the presidential candidates, especially most of the Democrats, have not caught up with the voters. They still are trying to avoid a single-payer plan to pacify the insurance industry and minimize their opposition

Yet, the messages of the past couple of years have sunk in with readers, if not the pols. Just last month the National Center for Health Statistics reported that while life expectancy has risen among white American males to 77.9 years, the United States has dropped from 11th to 42nd place in 20 years. But we’re first in the problem of obesity and the number of people (47 million) without health coverage. Wednesday, President George W. Bush vetoed a bill that would have expanded government health insurance for children.

And every day there’s another horror story about someone whose insurance failed them and left them broke as well as sick. Consumer Reports last month said that 29 percent of insured persons who were surveyed said their coverage was so meager that they often postponed medical care. And 43 percent with insurance said they were financially unprepared to cope with serious illness.

One writer from Brooklyn made a point by attaching a Newsday story about the naval ship Comfort, which had just completed a mission to provide free medical care for 25,000 patients in Belize and Guatemala. “It appears that the U.S. provides free medical care to everyone but U.S. citizens,” said the writer.

From Johannes in Gallatin, Tenn.: “Several hundred billions for a war that was supposedly meant to protect Americans, but billions for universal health care could protect Americans. I’ve heard people say health care is a privilege and not a right.”

But Mag, from Katy, Texas, replied, “When the uninsured quit buying cell phones and cable TV and eating out at every fast-food place … I might care about their plight.”

To which Johannes replied, “How do you know that people buying fast-food, cell phones and cable TV are all uninsured? … A great many uninsured people have jobs and would love to pay for insurance but insurance companies don’t like to cover everyone.”

And Judy K, from New York, wrote, “I watched ‘Sicko’ yesterday and I cried for the people in the film and for all other Americans in similar positions. I am so angry. Our government has let us down on every level.”

The e-mail from Daryl Altman, 52, of Lynbrook, was clinical, reflecting his profession. He’s a pediatrician and an allergist for the school health program of New York City’s Health Department. And he supplements his income treating poor patients at a community health center. But, as he writes, “I’m also a patient like everyone else.” And in the summer, when there is no school, he’s furloughed and loses his health insurance. “So right now, my family and I are among the millions of uninsured Americans.” He added, “But I’m lucky. I’m a doctor and I earn a decent living. I see patients every day, mostly American citizens, working poor who can afford my care because of my clinic’s sliding scale. But they won’t get better because they can’t afford their asthma medication. It’s obvious to me that the only answer is Medicare for all. Medicare works for senior citizens. Why are the rest of Americans denied this plan?” Altman digressed to analyze most Republican plans, like one offered by former Mayor Rudy Giuliani, which depends on giving tax credits of up to $15,000 to workers to buy insurance. Good insurance for a family of four might cost near that much.

But citing the IRS tax tables, Altman pointed out that a person qualifying for $15,000 in credits is earning $80,000. But the median family income in the U.S. is $46,000, with taxes amounting to $6,860. Even if the worker got every penny back in credit, it wouldn’t buy much health insurance. “The larger issue,” Altman said, “is why should insurance companies exist at all? Why should non-medical people at remote locations be making medical decisions for my patients? Why should shareholders speculate with our health care money? The money wasted by insurance companies could easy fund Medicare for all.”

Coincidentally, the aforementioned Consumer Reports analysis found that the median income of families without health insurance was $58,950 a year. But between 2001 and 2005, employer-based health coverage for middle-income households – a family of four earning between $40,000 and $80,000 – declined by 4 percent.

“An explanation isn’t difficult to find,” said Consumer Reports. “Health plans are offloading more and more expenses onto consumers. Co-pays and deductibles have risen steadily.”

Dr. Don McCanne, of Physicians for a National Health Program, says, “Private insurers have had their day. They have been ineffective in expanding coverage and affordability, while being the greatest cause of the expanding inefficiency of our system.”

Tell that to the presidential candidates.

WRITE TO Saul Friedman, Newsday, 235 Pinelawn Rd., Melville, NY, 11747-4250, or by e-mail at saulfriedman@comcast.net.

Medicare Audits Show Problems in Private Plans

By ROBERT PEAR
The New York Times
Published: October 7, 2007

WASHINGTON, Oct. 6 — Tens of thousands of Medicare recipients have been victims of deceptive sales tactics and had claims improperly denied by private insurers that run the system’s huge new drug benefit program and offer other private insurance options encouraged by the Bush administration, a review of scores of federal audits has found.

The problems, described in 91 audit reports reviewed by The New York Times, include the improper termination of coverage for people with H.I.V. and AIDS, huge backlogs of claims and complaints, and a failure to answer telephone calls from consumers, doctors and drugstores.

Medicare officials have required insurance companies of all sizes to fix the violations by adopting “corrective action plans.” Since March, Medicare has imposed fines of more than $770,000 on 11 companies for marketing violations and failure to provide timely notice to beneficiaries about changes in costs and benefits.

The companies include three of the largest participants in the Medicare market, UnitedHealth, Humana and WellPoint.

The audits document widespread violations of patients’ rights and consumer protection standards. Some violations could directly affect the health of patients — for example, by delaying access to urgently needed medications.

In July, Medicare terminated its contract with a private plan in Florida after finding that it posed an “imminent and serious threat” to its 11,000 members.

In other cases, where auditors criticized a company’s “policies and procedures,” the effects on patients were not clear.

The audits show the growing pains that Medicare has experienced as it introduced the popular new drug benefit and shifted more responsibility to private health plans.

For years, Democrats have complained about efforts to “privatize Medicare,” and they are likely to cite the findings as evidence that private insurers cannot be trusted to care for the sickest, most vulnerable Medicare recipients.

But federal officials point with pride to their efforts to police the Medicare market, and they say that competition among private plans has been a boon to beneficiaries, offering more choices at lower cost than anyone expected.

“The Medicare drug benefit is saving seniors an average of $1,200 a year,” said Michael O. Leavitt, the secretary of health and human services.

Medicare officials said the audits also showed that insurers would be held accountable.

“The start-up period is over,” said Kerry N. Weems, the new acting administrator of the Centers for Medicare and Medicaid Services. “I am simply not going to tolerate marketing abuses.”

The same insurance companies that offer stand-alone drug plans also sell Medicare Advantage plans, which provide a full range of benefits including coverage of doctor’s visits and hospital care. Enrollment in Medicare Advantage plans has grown rapidly, to more than 8 million, from 4.7 million in 2003. Federal auditors found the same types of violations in both parts of the program.

Of the audits conducted by the Department of Health and Human Services, 39 focused on drug benefits, 44 focused on managed care plans and 8 examined other types of private plans.

Medicare officials said that compliance problems occurred most often in two areas: marketing, and the handling of appeals and grievances related to the quality of care.

Many of the marketing abuses occurred in sales of the fastest-growing type of Medicare Advantage product, known as private fee-for-service plans. In June, the government announced that seven of the leading companies in this market, including UnitedHealth, Humana and Coventry, had agreed to suspend marketing of these plans. Medicare recently allowed them to resume marketing after they took steps to monitor their sales agents more closely.

Each Medicare plan has a list of preferred drugs, known as a formulary. Under federal law, patients can request coverage of other drugs that may be medically necessary. But many insurers do not have procedures to handle such requests, auditors said.

John H. Wells, the compliance officer at Bravo Health, defended the company’s record, but he said: “The appeals and grievance process is very complex. It is very difficult for any plan to be fully compliant. In many cases, the government’s guidance is unclear, so it’simpossible for a business to know what to do.”

These findings were typical of the deficiencies described in Medicare audit reports:

UnitedHealth, which serves more than six million Medicare beneficiaries, did not have an “effective program” to supervise its marketing representatives, agents and brokers. In some cases, United improperly denied claims without giving any explanation to beneficiaries. Peter L. Ashkenaz, a company spokesman, said, “We terminated a few agents and brokers for misrepresenting our products.”

WellPoint, one of the nation’s largest insurers, had “a backlog of approximately 354,000 claims” at certain Medicare plans offered through its UniCare subsidiary. The company’s call center took an average of 27 minutes to answer phone calls from its members and 16 minutes to answer calls from health care providers. More than half the callers hung up before speaking to a company representative. Karen Brown, a spokeswoman for WellPoint, had no immediate comment.

In March, Sierra Health Services ended drug coverage for more than 2,300 Medicare beneficiaries with H.I.V./AIDS, saying they had not paid their premiums. In many cases, the premiums had been paid, and beneficiaries had canceled checks to prove it. Sierra initially refused to reinstate them, but eventually agreed to do so after repeated requests from federal officials. Peter O’Neill, a vice president of Sierra, said this particular drug plan, which attracted people with very high drug costs, would not be offered in 2008.

Humana, which covers more than 4.5 million people on Medicare, promised to investigate every complaint about its marketing practices, but it received so many complaints that it could not keep up. Many beneficiaries said they had received incorrect information from Humana agents. Medicare officials said some agents had not been adequately trained or supervised. Thomas T. Noland Jr., a senior vice president of Humana, said the company had taken “corrective action to improve the situation.”

Humana did not always tell beneficiaries about changes in its list of covered drugs. In some cases, Humana did not explain its reasons for denying claims and did not inform beneficiaries of their appeal rights.

The Sterling Life Insurance Company, a subsidiary of the Aon Corporation, did not pay claims correctly or handle appeals in a timely way. The company has “a demonstrated pattern of failure” to meet Medicare performance standards. Problems were compounded by a rapid growth in enrollment. Sterling said it had taken steps to improve compliance.

Two sponsors of popular Medicare drug plans, MemberHealth and Bravo Health, did not act on requests for coverage of specific drugs within 72 hours, as required by the government. Bravo did not comply with federal rules requiring doctors to review all claims denied for a “lack of medical necessity.”

D. Alan Scantland, senior vice president of MemberHealth, a subsidiary of the Universal American Financial Corporation, said, “We don’t believe that we were compromising any beneficiaries’ health because of what we were doing or not doing.”

Representative Bart Stupak, a Michigan Democrat who is chairman of the investigations subcommittee of the House Energy and Commerce Committee, said he had “verified countless stories of deceptive sales practicesby insurance agents who prey upon the elderly and disabled to sell them expensive and inappropriate private Medicare plans.”

Kathleen Healey, a lawyer at the Alabama Department of Senior Services, said: “Despite the prohibition of door-to-door marketing, agents arrive on residents’ doorsteps stating that the president sent them, or that they represent Medicare. Some telemarketers insist they are calling from Medicare, and they tell beneficiaries that they will lose their Medicare if they do not sign up for the telemarketer’s plan.”

Medicare has taken “vigorous action” to halt marketing violations, said Abby L. Block, a Medicare official.

But David A. Lipschutz, a lawyer at California Health Advocates, a nonprofit group, said that Medicare’s generous payments to private plans still encouraged predatory sales practices.

“Every enrollee in a private Medicare plan is a potential source of substantial profits,” Mr. Lipschutz said.

“No Worry” health plan

Health insurers introduce plans with “predictable premiums.”

American Medical Association
Morning Rounds
October 9, 2007

The Wall Street Journal (10/9, D3, McQueen) reports, “Guardian Life and Humana Inc. are introducing multiyear plans designed to make health-insurance premiums more predictable from year to year for smaller employers.” However, “workers could face sharply higher deductibles and co-payments for prescriptions and office visits if medical costs rise more than expected.” Guardian Life will make available its “Premium Protect” plan “in the next week or two in five states and the District of Columbia for employers with 51 to 150 employees.” Meanwhile, Humana already introduced its plan, called “No Worry,” in February. “The Humana plans require employers [of 51 to 99 staff] to hand over a large percentage of workers’ phone and email contact information to get annual premium rises of no more than 6%.” The Journal notes, “Guardian achieves its rate-increase lock-in by charging employers an upfront fee of 3% to 4% in return for a guaranteed increase of 0%, 6% or 9% in the second year of a two-year plan.” In contrast, Humana “guarantees annual rate increases won’t exceed 6%.” However, “employers who terminate the contract before the end of the three-year period face a $25,000 penalty.”

http://www.ama-assn.org/

Comment:

By Don McCanne, MD

No worry. Employers can now lock in their premium rates by merely agreeing in advance to pass on health care cost increases to their employees through yet higher deductibles and co-payments.

And you were beginning to think that the private insurance industry was incapable of adressing the problem of escalating health costs.

There is a problem though. If employers really do care about the welfare of their employees, they will need to provide bankruptcy counselors for those whose families actually need medical care.

Nation’s healthcare crisis gets personal

By David Lazarus
Los Angeles Times
October 7, 2007

I write a lot about healthcare reform. Now it’s personal.

I was diagnosed this past week with diabetes. As of Friday, I was injecting myself with insulin, something I’ll be doing four or five times a day, every day, for the rest of my life. Without the injections, I’ll likely die.

Scared? You’re damn right I’m scared. What’s going to happen to me? What’s going to happen to my family?

I got past the shock pretty quickly and am now stuck somewhere between denial and anger. Depression will soon arrive, followed eventually by acceptance. Something to look forward to.

This is an uncertain time for me, but I know this much: I’m more convinced than ever that our medical system is a mess and that a single-payer insurance program is the only realistic way we can achieve universal coverage, promote preventive treatment and make healthcare affordable to all.

And if contracting diabetes is frightening for a relatively well-insured person like myself, what must it be like for any of the 47 million Americans who lack health insurance?

According to the American Diabetes Assn., nearly 21 million U.S. adults and kids have the disease — 7% of the population. About 15 million of this number have been diagnosed. The rest have no idea that they’re afflicted.

With obesity rates soaring, as many as 54 million others are strongly at risk of contracting diabetes in the future.

In my case, diabetes struck not because I stuff my face with Big Macs and fried chicken, which I don’t. I take good care of myself and am not overweight — considerably less so since unexpectedly dropping about 15 pounds over the past couple of months.

No, it’s almost certain I got nailed because a genetic time bomb finally exploded.

My father, Paul N. Lazarus III, who produced the movies “Westworld” and “Capricorn One,” has Type 1 diabetes and is now nearly blind. My younger brother has Type 1 and is doing well enough. My aunt had Type 1 before it blinded and then killed her.

The doctors say diabetes — almost certainly Type 1 — has been lurking in my DNA since I was a child, waiting for its time to strike.

But why now? I’ve lived 46 fairly healthy years, except for certain pharmaceutical pursuits during college. I don’t drink. I don’t smoke. I exercise as regularly as I can. What did I do wrong?

Probably nothing. The stress of my recent move to L.A. and starting a new job didn’t help, but it’s not to blame. This was going to happen no matter what.

I had a good idea something was wrong when I noticed that my weight kept going down no matter what I ate, and that I was consumed with a thirst of biblical proportions (accompanied by a commensurate increase in bathroom breaks).

I visited my doctor and had a blood test. The bad news came just days later. I was immediately referred to a specialist, whom I’ll call Dr. B.

Dr. B was great — knowledgeable, sensitive, empathetic. Problem was, Dr. B didn’t take insurance.

Excuse me? I said.

Dr. B explained that it just wasn’t cost-effective for him to seek reimbursement from insurance companies. It was too much hassle, he said, and he didn’t get paid enough for his efforts. Dr. B said an increasing number of doctors were cutting ties with insurers for the same reasons.

If I wanted to see him at his private practice, which was most convenient to my home, each visit could cost me hundreds of dollars — not the most appealing prospect when one’s facing a chronic disease.

Dr. B said I could try to deal with insurance reimbursements on my own, but that’s the last headache I wanted to inflict on myself at this point.

So I had to quickly find a doctor who would take insurance. My insurer’s website had a directory of possible choices, but you’re essentially pulling a name out of a hat — not the best way to make decisions when your blood-sugar level is three or four times normal.

This led me to Dr. W, who was equally knowledgeable if perhaps a bit lacking in the empathy department. He also had what seemed to me unconventional ideas about how diabetes can be treated with certain drugs and a rigidly monastic diet of his own devising.

This ultimately led me to Dr. D at UCLA’s Gonda (Goldschmied) Diabetes Center, whom I’m very fortunate to have found. Not only does he know what he’s doing, but he also has the resources of a world-class medical facility that focuses exclusively on what’s trying to put me under dirt.

It was Dr. D who finally made the call that I needed to start insulin injections, and it was he who made sure I knew how to handle that first, life-changing moment when needle touched skin.

Clearly I’m receiving the best available treatment, and I’d rather be here than anywhere in the world.

But the quirks and complexities of the insurance system border on madness. Through my employer, I have about as much insurance coverage as anyone. Yet that wasn’t good enough for Dr. B.

I have to wonder where else my private-sector insurance will fail me in years ahead.

And what happens if I get fired tomorrow? With a preexisting condition, I’m virtually uninsurable in the individual insurance market. Will diabetes leave my family destitute?

In the past, I always wrote about the uninsured in a largely abstract way — a faceless mass of millions of people confronted with a broadly defined medical challenge. I know better now.

The terrifying possibility of my own loss of coverage gives me an acute sense of what the uninsured must deal with, the dreadful awareness that you and your loved ones are only one medical misstep from catastrophe.

That’s unacceptable for any person who lives in the wealthiest, most advanced nation in the history of the world.

I’ll have a lot more to say about this in the future, especially as my own situation takes shape. But this much at least is evident:

* Universal coverage must be our goal, and it must allow ready access to all aspects of the medical system at affordable prices.

* The emphasis must be on treatment, not bureaucracy. As it stands, researchers at Harvard University estimate that about a third of the $2 trillion in annual healthcare spending is squandered on bureaucratic overhead.

* Employer-based healthcare is obsolete. As costs continue climbing, businesses can no longer meet their historical obligation of being the primary provider of coverage to American families.

* Quality medical treatment is a right, not a benefit.

Unfortunately, nearly all healthcare-reform proposals on the table center on expanding the existing system and pushing the uninsured into high-cost individual policies that will make private insurers even more profitable.

That can’t be the answer.

Single-payer isn’t perfect. Critics say it can involve long waits for treatment and can stifle innovation.

My belief is that Americans can get it right. We can learn from the examples of other nations and refine things so that our healthcare is second to none. It won’t be easy. Then again, how much worse could it be than the way things are now?

As of this moment, I’m completely dependent on the U.S. healthcare system to keep me alive. I, and you, shouldn’t have to settle for anything but the best.

Audience at health care forum backs single-payer proposal

By David Montero
Rocky Mountain News
October 5, 2007

BOULDER – There may be five proposals being considered to reform health care in Colorado, but only one seemed to satisfy most of the 150 gathered at the Millennium Hotel on Thursday night.

That proposal was the so- called single-payer system.

One after another, they strode to the microphone – breast cancer survivors, parents of children with autism and even a few people with no illnesses – all asking members of the Blue Ribbon Commission for Health Care Reform to radically restructure the current system.

People like William Starr, a healthy 84-year-old Boulder resident.

“I have the feeling that this is all a put-on if you’re making a fifth proposal that is backing the insurance companies when there is only one proposal that fits what your guiding principles were,” Starr said, advocating the single-payer system.

The public comment sessions were set up by the commission to gather public input on how to change the way health care is delivered for state residents.

Four separate proposals sponsored, respectively, by a powerful union, a consortium of underwriters, health care industry officials and the single-payer plan went through several drafts and changes this year and could be forwarded to state lawmakers this winter for consideration. A fifth proposal is currently in its first draft and won’t be reviewed by the commission until the middle of the month.

Regina Hathorne, a 55-year- old Boulder resident, said the proposed cap of $50,000 for catastrophic care was “laughable” when put into context of what is considered catastrophic.

“This country is currently experiencing economic racism when it comes to health insurance,” she said. “The question is do we all deserve the same health insurance? It’s a huge change in society’s values.”

The five proposals appear to be a stab at that, with Gov. Bill Ritter urging the state to find a way to cover the more than 780,000 Coloradans currently without health insurance.

Though the tide at the Boulder meeting was decidedly toward single-payer, commissioners were quick to point out that the sentiment might be different as they solicit public comments throughout the state.

And at least one speaker, Brian Schwartz, proposed getting government out of health care entirely – calling Medicaid a “failure” and an example of why single-payer won’t work. Instead, he advocated the free-market system.

“Should we have single-payer food and housing?” he asked. “Didn’t we settle that with Soviet Russia and North Korea? Why is health care different?”

The Garden Hose Health Care Brigade

Matthew Holt
San Francisco
Oct. 4, 2007

It’s been a strange old week for me in healthcare. Half was spent working with new Health 2.0 technology companies who are trying change every conceivable aspect of the patient and physician relationship. The rest was spent hanging out with a bunch of right wing lunatics. In the background the major healthcare policy stories of the last few weeks have been Sen. Hillary Clinton’s announcement – at last! – of her plan for universal coverage, and President George Bush’s vetoing of the children’s health insurance program.

So, I guess it’s my job to try to make sense of all of this. And, well, I can. But not in ways you may like.

The politics of the moment is very strange indeed.

On the one hand, a deeply unpopular president has gone against moderate members of his own party by vetoing a bill to help “the children” by expanding government-backed health care for young Americans. If there is a more powerful sound bite for Democratic candidates during the next year, I haven’t seen it. Nor have you.

On the other hand, the Democrat presidential candidates have come up with a series of proposals that the Republicans have already dismissed as socialized or, worse, French. This despite the fact that the French health care system is commonly known as one of the best in the world and is actually one that Americans would rather like.

Meanwhile, inside the beltway and on WMUR, the only TV station that matters in Manchester, N.H., a myriad of interest groups are now focusing on the uninsured. The American Cancer Society is spending all of its publicity budget for the next year on the uninsured, while Physicians for a National Health Program (an advocate of the single-payer system) is attacking Democratic candidates because they all leave a role for private insurance companies in their policy proposals. The American Medical Association (AMA) is plastering the Washington DC Metro subway with exhortations to listen to the voice for the uninsured, hoping, I guess, that you’ll conveniently forget the AMA’s role in stopping any sort of national universal insurance program for the past century or so.

What this all comes down to is an open, raging and actually somewhat interesting philosophical battle about how best to provide insurance coverage. Which is how I found myself on a stage – with someone calling himself an “Objectivist” in that fine Ayn Rand tradition – speaking to an audience of knee-jerk libertarians. The Objectivist wasn’t very objective, but boy did he object to virtually everything done on behalf of the community. Why? In his philosophy anything done on behalf the community is, by definition, something done to somebody against their will. I have met plenty of people who want to abolish Medicare and Medicaid, without providing any substitute (and they are mostly young and rich). But this is the first time I’ve met someone wanting to abolish the publicly-funded fire department in favor of a garden hose brigade. My pleas that he support his contention that the private sector works better in healthcare than the public sector with actual data were roundly ignored so, faced with this sort of audience, I couldn’t help but feel some sympathy for the struggle any politician will have to get some level of common understanding of the real health care problems confronting America.

It’s quite possible to have a rational conversation with a libertarian and eventually convince them that a free market in health insurance is not the same as a free market in home insurance. After all, the health insurance seller is – through medical records and queries about your health, habits and well-being – able to see which house is already a simmering fire before they write an insurance contract. Yes – that’s what health insurance underwriting actually does–what do you think those “family history” questions are all about?. But if that objectivist doesn’t care that the sick person with the (figurative) house on fire is going to suffer, or agree that that somehow society should help them out, it’s pretty hard to understand how you come up with a solution that will keep them happy.

Which gives Democrats a two-faced dilemma if they really want to change the current system. First, can they get enough Americans with a shared general understanding of the problems facing the entire healthcare system so they can actually win an election on the issue? Democrats main chance of taking back the White House and keeping the Congress rests on people’s belief that they are better for domestic policy, particularly healthcare. Which is why the Republicans are playing to the gallery and decrying all things French (except wine, cheese, and in the case of Mrs. Rudolph Giuliani, handbags).

Assuming the Democrats get over that hurdle, then they actually have to try to get something passed. Now it gets really tricky.

I’ve said repeatedly on this site that I think things aren’t bad enough yet for enough Americans to clamor for a change in the health care system. Although most American have horrible health insurance, the majority of them don’t know it. And they have no idea that the medical care they are receiving is massively suboptimal. Getting that particular message across is very difficult. Who wants to hear that their doctor is a dope? Or that, by extension, they’re dope for having a bad doctor? No one. So Hillary Clinton, Sen. Barack Obama’s and to a lesser extent former Sen. John Edwards’ proposals all stress that they’re not trying to change employer-based health insurance, which most Americans have and, it seems, tolerate. Instead, the politicians say they are merely trying to add a little wraparound for those people for whom employer-based health insurance is not available.

When you burrow into the details of the proposals – and you can be assured that the lobbyists for the healthcare industry will – it becomes clear that at some stage employers and insurance companies, not to mention the Medicare program, will have to start acting very differently. No rational end payer – put in the situation of not be able to easily get out of covering people who are sick and therefore expensive – is going to just let the healthcare system continue on in cruise control as it is done for the past 50 years or so. The folks who pay the bills are going to demand changes. And changes aren’t going to be much loved by the folks who have been running health care for the past half-century. That means that despite their high-fallootin’ rhetoric about the uninsured, the AMA (not to mention the drug companies, hospitals and everyone else with a nose in the trough) is going to find itself in stark opposition to much of what health care reform will mean.

The question then is pretty basic: Is the disgust of the American public with the healthcare system enough to overcome the healthcare industry’s inertia? My guess is that much more pain and education is required. The group that I spoke with last week had no comprehension of the concept of spreading risk and cost for health care across the community or society. Worse, the discussion was also hijacked by several outright loonies who thought that all problems in American health care were due to illegal immigrants – as if there’s a rash of elderly cancer patients swimming across the Rio Grande. There’s lots of fear-mongering – on the left and the right – and gets in the way of genuine efforts for change.

Perhaps what’s needed is a real down-and-dirty political operative like Otto von Bismarck, President Lyndon Johnson or even – God help us – Dick Cheney who knows how to focus attention on selling healthcare reform the way they sold the idea of invading other countries: As some kind of patriotic duty. If you question that you’re some kind of traitor.

Failing that, I can see Sen. Hillary Rodham Clinton spending two presidential terms trying – really trying – to have a sensible conversation about healthcare reform with an objectivist who wants to abolish the fire department so we can all put out mountain fires with our garden hoses.

What Sicko doesn't tell you…

Michael Moore's film hails the NHS and condemns US healthcare. But behind the scenes the UK government has already started adopting the American model of health provision.

Allyson Pollock
Monday September 24, 2007
The Guardian

Viewers of Michael Moore’s new film will come away convinced that the public healthcare system in this country is superior to its privatised American counterpart, where more than 50 million people are without any kind of care at all. But does the government agree? Or has it instead been taking ideas from the very system revealed in Sicko to be so iniquitous?

The film is very much made for a US audience. Moore does not go into the huge changes that are taking place in European healthcare – and the new, privatising project going on here. It might surprise many British people who see the film to know that, for example, the British government has for years been in contact with Kaiser Permanente, one of the big US healthcare corporations, and is actively trying to remodel the NHS along American lines. All the reforms carried out by the government over the past few years have been aimed at that.

In 1995, civil servants from the Department of Health, fresh from visits to the US, thought they had found the future of the NHS. They invited Kaiser Permanente to look at whether it could deliver health services as part of the new Private Finance Initiative in the NHS. The PFI is a building programme of public infrastructure that brings with it a long-term debt that the government takes out from a private company. But as the medical director of Kaiser Permanente, which is both an insurer and healthcare provider, told me at the time in her marbled headquarters in California, the NHS was not yet ready for Kaiser. Such a system, built on public ownership, control and accountability, was closed to commercial companies. And it was the same story for the whole of Europe. But Kaiser Permanente, which, along with the rest of the US healthcare industry, was known as one of the “darlings of Wall Street” because it made so much money, was restless. It wanted to make more, and had its eye on the rich pickings of European tax funds. And where better to begin than by conquering the UK’s “socialised” NHS, so long the model for much of the world?

Kaiser Permanente didn’t have long to wait. In 1997, the Labour administration swept away the last remaining obstacles to PFI and, in so doing, established the laboratory for the great market experiment in public services.

The accumulated neglect and backlog in maintenance and repair became an excuse to sell off NHS land and assets at knockdown prices. The NHS is now a tenant in hospitals it once owned, leasing back buildings and services from private sector landlords at astronomical rents that are currently consuming £500m a year and will increase exponentially. The diversion of scarce funds from hospital revenues to bankers and shareholders has starved the NHS of cash, and the result has been a major downsizing. For almost every PFI hospital built, three hospitals close. Bed closures and staff reductions occur on an unprecedented scale.

Back in 1997, the NHS had major capacity problems. Waiting lists kept rising, accident and emergency wards were overflowing, public discontent was growing and staff morale plummeting. Tony Blair found a solution one night in 2000 as he was leaving the smart River Cafe. He was introduced to Tim Evans, external affairs director of the Independent Health Care Association, the body that represented the private healthcare industry, who convinced him that the private sector had all the answers.

But the Labour government knew that a public sector NHS was close to the heart of most Britons, and a spin operation was required. So, from the start of the Labour government, ministers dismissed the NHS as Stalinist, a 1940s relic of socialism, bureaucratic and rigid. Then, in 2002, the highly respected British Medical Journal published a paper purporting to show that Kaiser Permanente (them again) was more efficient than the NHS. Within hours, hundreds of emails had poured into the BMJ exposing the flaws in the paper, from the misleading nature of the claims to the authors’ links to the company. But the BMJ’s editor, Richard Smith, declined to retract the paper, correct it or publish a proper scientific rebuttal.

The paper had done its work. Its propaganda was cited and repeated everywhere by academics and policy-makers and, most crucially, by the government in its white papers and documents, including the Wanless Report. The much-despised US healthcare industry, of which Kaiser Permanente is a part, was to be the new model for Britain.

Not long after publishing the article, Smith left the BMJ for a lucrative post as chief executive of the UK subsidiary of the US health corporation UnitedHealth. There he joined its new European president, Simon Stevens, formerly adviser to every Labour health secretary, and Tony Blair, since 1997. The flow of ideas, from him and many others like him, was all one-way: from the US to the UK.

As adviser to Alan Milburn, health secretary from 1999 to 2003, Stevens and his American colleagues helped to shape the NHS Plan 2000. It promised to provide more money, doctors, nurses, beds and capacity. But in the event the funds were directed at building a new parallel system that would be owned and operated not by the people but by the private sector on behalf of shareholders.

Using the mantra of choice, the market was thus disguised. In primary care the government negotiated a new GP contract that would allow commercial companies to run GP services. There are now more than 30 corporations running GP services in England.

It was choice that was used to bring in the highly controversial ISTC (independent sector treatment centre) programme, spearheaded by Texan Ken Anderson, which provides mini- factories for elective surgery. Anderson headed the new commercial directorate of the Department of Health and quickly set about awarding £6bn worth of contracts to healthcare corporations, thereby undermining elective surgery, diagnostics, radiology and pathology provision in the NHS.

Local people from Portsmouth to Scarborough have been protesting against ISTCs draining scarce NHS funds, which has led to service closures and staff redundancies to balance the books. There is not an area of the country where services are not being cut and closed. Protests against the closures of accident and emergency departments and hospital services are happening in Surrey, East and West Sussex, Kent, Worcester, Manchester, Leeds, Durham and Huddersfield; and against the 150 community hospitals in places such as Norfolk, Cambridge, Leicester, Devon, Marlborough and Bromley. The NHS, the government says, has had unprecedented levels of funding – so where has all the money gone if it isn’t into services? Is it really all down to bad managers and greedy doctors and nurses?

All markets need systems for pricing, billing and invoicing. Labour has introduced those: the electronic patient record, part of the £1bn IT disaster. The NHS too is being transformed from within. Foundation trusts such as University College London Hospitals Trust have been given new powers to enter joint ventures with commercial companies such as the Hospital Corporation of America and to spend millions of pounds on advertising campaigns, PR agents, mega-departments of finance and accounting, press officers, management consultants and profits. As in the US, billions of pounds, probably approaching 20% of annual NHS funds – estimated to be £20bn in England in a year – are being squandered on what are called the transaction costs of the market.

Earlier this year the US chief executive officer of UnitedHealth, Bill McGuire, was sacked along with other board members for repricing share options. His annual $126m package was not enough for him. Meanwhile more than 50 million Americans, including 10 million children, go without care – in the richest country in the world. Is this what we want?

Allyson Pollock is author of NHS plc: The Privatisation of Our Healthcare and professor and head of the centre for international public health policy at the University of Edinburgh.

What Sicko doesn’t tell you…

Michael Moore’s film hails the NHS and condemns US healthcare. But behind the scenes the UK government has already started adopting the American model of health provision.

Allyson Pollock
Monday September 24, 2007
The Guardian

Viewers of Michael Moore’s new film will come away convinced that the public healthcare system in this country is superior to its privatised American counterpart, where more than 50 million people are without any kind of care at all. But does the government agree? Or has it instead been taking ideas from the very system revealed in Sicko to be so iniquitous?

The film is very much made for a US audience. Moore does not go into the huge changes that are taking place in European healthcare – and the new, privatising project going on here. It might surprise many British people who see the film to know that, for example, the British government has for years been in contact with Kaiser Permanente, one of the big US healthcare corporations, and is actively trying to remodel the NHS along American lines. All the reforms carried out by the government over the past few years have been aimed at that.

In 1995, civil servants from the Department of Health, fresh from visits to the US, thought they had found the future of the NHS. They invited Kaiser Permanente to look at whether it could deliver health services as part of the new Private Finance Initiative in the NHS. The PFI is a building programme of public infrastructure that brings with it a long-term debt that the government takes out from a private company. But as the medical director of Kaiser Permanente, which is both an insurer and healthcare provider, told me at the time in her marbled headquarters in California, the NHS was not yet ready for Kaiser. Such a system, built on public ownership, control and accountability, was closed to commercial companies. And it was the same story for the whole of Europe. But Kaiser Permanente, which, along with the rest of the US healthcare industry, was known as one of the “darlings of Wall Street” because it made so much money, was restless. It wanted to make more, and had its eye on the rich pickings of European tax funds. And where better to begin than by conquering the UK’s “socialised” NHS, so long the model for much of the world?

Kaiser Permanente didn’t have long to wait. In 1997, the Labour administration swept away the last remaining obstacles to PFI and, in so doing, established the laboratory for the great market experiment in public services.

The accumulated neglect and backlog in maintenance and repair became an excuse to sell off NHS land and assets at knockdown prices. The NHS is now a tenant in hospitals it once owned, leasing back buildings and services from private sector landlords at astronomical rents that are currently consuming £500m a year and will increase exponentially. The diversion of scarce funds from hospital revenues to bankers and shareholders has starved the NHS of cash, and the result has been a major downsizing. For almost every PFI hospital built, three hospitals close. Bed closures and staff reductions occur on an unprecedented scale.

Back in 1997, the NHS had major capacity problems. Waiting lists kept rising, accident and emergency wards were overflowing, public discontent was growing and staff morale plummeting. Tony Blair found a solution one night in 2000 as he was leaving the smart River Cafe. He was introduced to Tim Evans, external affairs director of the Independent Health Care Association, the body that represented the private healthcare industry, who convinced him that the private sector had all the answers.

But the Labour government knew that a public sector NHS was close to the heart of most Britons, and a spin operation was required. So, from the start of the Labour government, ministers dismissed the NHS as Stalinist, a 1940s relic of socialism, bureaucratic and rigid. Then, in 2002, the highly respected British Medical Journal published a paper purporting to show that Kaiser Permanente (them again) was more efficient than the NHS. Within hours, hundreds of emails had poured into the BMJ exposing the flaws in the paper, from the misleading nature of the claims to the authors’ links to the company. But the BMJ’s editor, Richard Smith, declined to retract the paper, correct it or publish a proper scientific rebuttal.

The paper had done its work. Its propaganda was cited and repeated everywhere by academics and policy-makers and, most crucially, by the government in its white papers and documents, including the Wanless Report. The much-despised US healthcare industry, of which Kaiser Permanente is a part, was to be the new model for Britain.

Not long after publishing the article, Smith left the BMJ for a lucrative post as chief executive of the UK subsidiary of the US health corporation UnitedHealth. There he joined its new European president, Simon Stevens, formerly adviser to every Labour health secretary, and Tony Blair, since 1997. The flow of ideas, from him and many others like him, was all one-way: from the US to the UK.

As adviser to Alan Milburn, health secretary from 1999 to 2003, Stevens and his American colleagues helped to shape the NHS Plan 2000. It promised to provide more money, doctors, nurses, beds and capacity. But in the event the funds were directed at building a new parallel system that would be owned and operated not by the people but by the private sector on behalf of shareholders.

Using the mantra of choice, the market was thus disguised. In primary care the government negotiated a new GP contract that would allow commercial companies to run GP services. There are now more than 30 corporations running GP services in England.

It was choice that was used to bring in the highly controversial ISTC (independent sector treatment centre) programme, spearheaded by Texan Ken Anderson, which provides mini- factories for elective surgery. Anderson headed the new commercial directorate of the Department of Health and quickly set about awarding £6bn worth of contracts to healthcare corporations, thereby undermining elective surgery, diagnostics, radiology and pathology provision in the NHS.

Local people from Portsmouth to Scarborough have been protesting against ISTCs draining scarce NHS funds, which has led to service closures and staff redundancies to balance the books. There is not an area of the country where services are not being cut and closed. Protests against the closures of accident and emergency departments and hospital services are happening in Surrey, East and West Sussex, Kent, Worcester, Manchester, Leeds, Durham and Huddersfield; and against the 150 community hospitals in places such as Norfolk, Cambridge, Leicester, Devon, Marlborough and Bromley. The NHS, the government says, has had unprecedented levels of funding – so where has all the money gone if it isn’t into services? Is it really all down to bad managers and greedy doctors and nurses?

All markets need systems for pricing, billing and invoicing. Labour has introduced those: the electronic patient record, part of the £1bn IT disaster. The NHS too is being transformed from within. Foundation trusts such as University College London Hospitals Trust have been given new powers to enter joint ventures with commercial companies such as the Hospital Corporation of America and to spend millions of pounds on advertising campaigns, PR agents, mega-departments of finance and accounting, press officers, management consultants and profits. As in the US, billions of pounds, probably approaching 20% of annual NHS funds – estimated to be £20bn in England in a year – are being squandered on what are called the transaction costs of the market.

Earlier this year the US chief executive officer of UnitedHealth, Bill McGuire, was sacked along with other board members for repricing share options. His annual $126m package was not enough for him. Meanwhile more than 50 million Americans, including 10 million children, go without care – in the richest country in the world. Is this what we want?

Allyson Pollock is author of NHS plc: The Privatisation of Our Healthcare and professor and head of the centre for international public health policy at the University of Edinburgh.

Being drugged into prevention

Chronic illness costs the economy more than $1 trillion a year

By Victoria Colliver
San Francisco Chronicle
October 3, 2007

Americans who have common chronic health conditions cost the U.S. economy more than $1 trillion a year, a figure that could jump to nearly $6 trillion by 2050 unless people take steps to improve their health, a study released Tuesday found.

According to the report by the Milken Institute, a Santa Monica think tank, the economic impact of chronic illness goes far beyond the expense of treating disease. It takes an even greater toll on economic productivity in the form of extra sick days, reduced performance by ill workers and other losses not directly related to medical care.

But veering onto a path that emphasizes changing lifestyles along with prevention and early detection of disease could reduce the number of illnesses by 40 million cases and save $1.6 trillion by 2023, the report said.

“The public is telling us the No. 1 domestic issue is health,” said Dr. Richard Carmona, former U.S. surgeon general and now chairman of the Partnership to Fight Chronic Disease, in a news conference in Washington on Tuesday releasing the report.

“The data to stay the course is not a particularly attractive option,” said Ken Thorpe, executive director of the Partnership to Fight Chronic Disease and a professor at Emory University.

The study was funded in part by a grant from the Pharmaceutical Research and Manufacturers Association of America, the drug industry’s trade group. The Milken Institute declined to reveal the amount of the grant.

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/10/03/BUDKSGJLP.DTL

Milken Institute: “An Unhealthy America: The Economic Impact of Chronic Disease:”
http://www.chronicdiseaseimpact.com/

Comment:

By Don McCanne, MD

Uh-oh. Are we being dragged (drugged) into a process that places our health care system in the hands of the pharmaceutical industry?

PNHP continues its campaign to reform health care financing in America so that everyone will have affordable access to comprehensive, high quality health care services. Implicit in that is improving the health care delivery system through improved allocation of our health care dollars.

But there is a debate within the policy community as to the best approach for containing costs.

Following is a quote from a message received from Professor Kenneth Thorpe:

“The former (health reform) is true reform, and is focused on generating better value in the health care system – better outcomes at the same or lower spending. The second issue (health care financing reform) is a political one, focused largely on moving money around the health care system. Absent a clear bold focus on the first issue, moving on the health care financing reforms has historically proven problematic.”

Yesterday’s Quote of the Day from Kenneth Thorpe and his colleagues advocated, quite appropriately, for efforts to reduce the prevalence of chronic disease. But then the focus of the article was on “treated prevalence” based on medication use.

Here is another excerpt from the Thorpe, et al Health Affairs article used as the source for yesterday’s message:

“The impact of more aggressive treatment on patient outcomes is important to consider as well. The use of cholesterol and blood pressure medications has increased sharply in the United States over the past twenty years, while hypertension and hyperlipidemia prevalence has declined. Other recent estimates indicate that the additional spending associated with higher rates of medication treatment for hypertension yield overall net reductions in health care spending. Whether more intensive use of medication treatment for other conditions, such as the metabolic syndrome, yields overall reductions in spending remains unknown.”

Dr. Thorpe continues to strongly advocate for disease management as a key to reducing health care spending. His report released yesterday seems to imply that medications are one of the most important parts the solution for reducing the prevalence of chronic disease.

The very same day, the Milken Institute released a report sponsored, at least in part, by PhRMA (Pharmaceutical Research and Manufacturers of America, an advocacy organization). An excerpt from this report:

“The rapid growth of chronic disease is costing us lives, quality of life, and prosperity. The current health-care debate rightly focuses on the extension of coverage to the uninsured and the design of a financing mechanism that is both fair and efficient. We suggest that the nature of services provided — the failure to invest in prevention and early intervention — deserves equal place in the debate.”

Investing in early intervention in chronic disease equates with selling more drugs for hypertension, hypercholesterolemia, early diabetes, appetite suppression in obesity, slowing the progression of arthritis, etc., etc. Just imagine the potential market for the pharmaceutical firms.

A serious concern is that disease management seems to have come to mean pharmaceutical intervention. If we were really concerned about health care spending and about improved population health, we would back up from an emphasis on pharmaceutical intervention to an emphasis on prevention, especially good nutrition and exercise.

I have great respect for Dr. Thorpe, and I approve of his message on the importance of making efforts to reduce the prevalence of chronic disease (though I emphatically disagree with his apparent dismissal of the importance of health care financing reform). It is unfortunate that the Partnership to Fight Chronic Disease, of which Kenneth Thorpe is Executive Director, has included PhRMA as a partner organization. This does not serve to empower his message.

Two letters on single payer in Newsday

Newsday
Letters to the Editor
September 30, 2007

“A healthy debate” [Editorial, Sept. 23] dismisses single-payer systems because “they would give consumers very little choice.” That is dead wrong. The same choice seniors now enjoy under Medicare – free choice of doctor and hospital – would continue under a single-payer system, or Medicare for all. Most private insurance companies confine choice to their own list of participating doctors and hospitals.

We now spend on health care twice as much per capita as any other country, enough to cover everyone and preserve the choice that counts.

Dr. James S. Bernstein
Rockville Centre

Regarding your editorial, you are absolutely correct that none of the health care proposals so far offered by the leading presidential candidates really address the serious problems of cost and access.

On one crucial point you err: These plans offer consumers only a “choice” of health plan, something that few if any consumers care about. What they don’t offer is the choice consumers want: the ability to choose their doctors and their hospitals. Instead, the private insurers on whom these plans depend increasingly limit just such choices. A single-payer plan such as that offered by Rep. Dennis Kucinich (D-Ohio) is, contrary to your assertion, the only plan that would offer consumers the real choice they want.

Leonard Rodberg

Editor’s note: The writer is professor and chairman of the Urban Studies Department at Queens College and co-director of Community Studies of New York Inc.

High chronic disease prevalence and high spending

Differences In Disease Prevalence As A Source Of The U.S.-European Health Care Spending Gap

By Kenneth E. Thorpe, David H. Howard, Katya Galactionova
Health Affairs
October 2, 2007

Abstract:

The United States spends more on health care than any European country. Previous studies have sought to explain these differences in terms of system capacity, access to technologies, gross domestic product, and prices. We examine differences in disease prevalence and treatment rates for ten of the most costly conditions between the United States and ten European countries using surveys of the noninstitutionalized population age fifty and older. Disease prevalence and rates of medication treatment are much higher in the United States than in these European countries. Efforts to reduce the U.S. prevalence of chronic illness should remain a key policy goal.

http://content.healthaffairs.org/cgi/content/abstract/hlthaff.26.6.w678

And…

Health Spending In OECD Countries In 2004: An Update

By Gerard F. Anderson, Bianca K. Frogner and Uwe E. Reinhardt
Health Affairs
September/October 2007

To summarize, the United States continued to have much higher real health care spending per capita and as a percentage of GDP in 2004 than all other OECD countries. However, the availability of health care resources and the actual use of services in the United States were below those of most industrialized countries. The average annual growth rate in real health care spending per capita in the United States was actually similar to the OECD median growth rate between 1994 and 2004. Chronic disease prevalence and mortality were high in the United States compared to other OECD countries, which may be associated with the fact that a large proportion of the U.S. population was overweight or obese.

http://content.healthaffairs.org/cgi/content/abstract/26/5/1481?ck=nck

Comment:

By Don McCanne, MD

Are we spending so much more on health care than the other OECD nations because we have a much higher prevalence of chronic disease in older individuals, or are we spending much more merely because our prices are higher?

The study by Thorpe, et al looked at the treated prevalence of disease (as a product of disease prevalence and medication use) and concluded that “we cannot directly calculate the link between higher treatment rates and spending, but we show that U.S. health care spending would be lower if treatment rates were reduced to European levels.”

The study by Anderson, et al looked at physician visits per capita, acute care bed days, and average length of inpatient stay and concluded that “the United States had 30 percent fewer inpatient hospital days and 36 percent fewer physician visits per capita than the OECD median in 2004.”

So is our higher health care spending due to higher prices or higher treatment rates? Or does it really matter?

What matters more is that we do have a very high prevalence of chronic disease, and we have a very high level of health care spending that has failed to provide better health outcomes than in other OECD nations. So what can we do about it?

The most important measure is prevention. The two most important modalities, good nutrition and exercise, are not really much in the purview of the health care delivery system, but are more complex societal issues. Public and private resources must be directed to improving diet and exercise and other preventive measures, but that topic will not be addressed here.

Given that we do have high spending and a high prevalence of chronic disease, what is the best approach to managing these problems? Some would suggest that we need to reform the health care delivery system to improve chronic disease management. Others suggest that we need to reform health care financing so that our resources are more appropriately directed.

Well, we need to do both. If we can get a handle on the financing, then we can rebuild our primary care infrastructure that would provide the appropriate environment for clinical disease management, whether acute or chronic.

Just don’t wait around for the private insurance industry to do that for us.

Stories from the marketplace

Bristol-Myers Will Settle U.S. Government Drug Probe

By Lisa Rapaport and Beth Jinks
Bloomberg.com
September 28, 2007

Bristol-Myers Squibb Co. completed an agreement to pay $515 million to settle U.S. allegations it overcharged the government for drugs and promoted medicines for unapproved uses.

The settlement resolves federal charges the company inflated the average wholesale price of some drugs, and investigations into allegations Bristol-Myers promoted medicines for non-approved uses. The U.S. government uses average wholesale prices, as reported by drugmakers, to set reimbursement rates for medicines used by federal health programs, including Medicare and Medicaid.

Bristol-Myers in 2005 settled a previous probe involving allegations it boosted sales by encouraging distributors to buy more medicine than they could sell.

http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aGFYdv1vtWnU

And…

Court rules Medicare plans can be sued for nonpayment

By Amy Lynn Sorrel
American Medical News
October 8, 2007

The Texas Supreme Court… on Aug. 31 ruled that a group of Texas hospitals can sue Aetna in state court for allegedly failing to reimburse them.

In Christus Health Gulf Coast v. Aetna, five hospital groups had contracted with North American Medical Management of Texas to provide Medicare services to members of an Aetna subsidiary that participated in the Medicare Advantage program. NAMM went bankrupt in 2000 and stopped paying the hospitals, so the facilities turned to Aetna for reimbursement, court records show. Aetna said it already had paid NAMM for the services, and the health plan declined the hospitals’ claims.

The TMA’s Wilcox said the high court decision strengthens an Aug. 27 state trial court ruling holding PacifiCare liable for payment problems.

PacifiCare in the late 1990s contracted with a group of IPAs that eventually went bankrupt and failed to pay thousands of claims owed to doctors under its Medicare Advantage plan, Wilcox said. The insurer argued that it was not responsible for the unpaid claims, so the TMA and several physician groups sued in 2003.

http://www.ama-assn.org/amednews/2007/10/08/gvsd1008.htm

And…

New retail health clinic model puts doctors out front

By Pamela Lewis Dolan
American Medical News
October 8, 2007

While retail-based health clinics generally rely on nurse practitioners and physician assistants to see patients, another model is emerging that staffs entirely with physicians.

Despite the increase in overhead, that new model works, say clinic operators, because of its expanded scope and greater marketing potential. And some big names and deep pockets are jumping behind the concept.

One of the model’s early adopters is Jacksonville, Fla.-based Solantic, which recently expanded its stand-alone clinic chain to include clinics located inside Wal-Mart stores.

Solantic is also gaining attention because of one of the names behind it. Richard Scott, who founded Solantic in 2002, gained notoriety for taking two struggling Texas hospitals and creating, through mergers and acquisitions, the Columbia/HCA Healthcare Corp., which became the largest for-profit hospital chain in the world.

However, a massive Medicare fraud investigation cost Scott his job as Columbia/HCA’s CEO and president. Scott was never charged with wrongdoing, though other executives were, and HCA — which dropped the Columbia name — agreed to pay $1.7 billion in civil penalties and damages to settle the case.

http://www.ama-assn.org/amednews/2007/10/08/bisb1008.htm

And…

Medtronic, Again Questioned Over Payments to Doctors, Is Subject of Senator’s Inquiry

By Reed Abelson
The New York Times
September 27, 2007

Medtronic, which reached a $40 million settlement last year with the federal government over accusations that the company had paid illegal kickbacks to doctors for using its spinal devices, has continued to pay doctors millions of dollars in consulting fees, according to a lawyer representing a whistle-blower involved in the case.

In the case that led to last year’s settlement, the Justice Department accused Medtronic of paying kickbacks through what government officials described as “sham consulting agreements, sham royalty agreements and lavish trips to desirable locations” offered to doctors from 1998 to 2003.

http://www.nytimes.com/2007/09/27/business/27letter.html?ref=health

Comment:

By Don McCanne, MD

What do these stories have in common? They are examples of the marketplace at work, and it is our health care system and those it serves that are the victims.

Much of the current debate on reform centers around the issue of whether the free market or the government would provide the more efficient approach to financing health care.

These stories demonstrate that good business practices, designed to improve profits, are amoral or sometimes even immoral methods of allocating our health care dollars. The health care system is manipulated by businesses to achieve maximal return on investment. The for-profit private insurance industry adheres to these principles.

In contrast, government has the sole responsibility to use its public resources to promote the public good. Taxpayer-funded health insurance programs use their purchasing power to achieve maximal health care value for the beneficiaries of the public program.

If we were to establish our own national health insurance program we would be in a much better position to demand that the health care industry be injected with a heavy dose of business ethics.