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Survey Report: Time May Be Right for a Single-Payer Health Care System

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Survey Report: Time May Be Right for a Single-Payer Health Care System

By Marianne Mattera
Managing Editor
MedPage Today
Reviewed by Zalman S. Agus, MD; Emeritus Professor at the University of Pennsylvania School of Medicine.
September 28, 2007

Presidential candidates might consider proposing a health care reform package that relies on a single-payer system, if results of a MedPage Today poll reflect the country’s mood.

When we asked visitors if it is time for the U.S. to adopt a single-payer health care system, 56% said, Yes, the current system cannot be fixed by half-way measures.

The 696 respondents represented most of the key segments of the health care equation — including physicians, nurses, nurse practitioners and physician assistants, pharmacists, health care administrators, and patients.

Economics was a big factor in the decision of many who voted for one source of financing. One respondent summed up the rationale: “The system is broken. A single payer system would save taxpayers millions of dollars when the middle men [in the insurance system] are cut out. There are too many rules, too many deductibles, too many games doctors have to play. The paperwork is a nightmare for doctors and patients alike.”

Another agreed, noting that the excess between cost of care and insurance profit would pay for all the uninsured.

Even physicians, who have traditionally opposed anything that smacks of national health insurance — as a single-payer plan would imply — came down heavily in the Yes column. They chose that option two-to-one over an answer that recognized that a single-payer system could mean “the end of whatever physician autonomy and patient choice still remains in this country.”

One doctor spelled out why he and his colleagues feel that way: “The only way to fix the system is single payer. Under the current system, choice of provider is limited by which provider is covered by [the patient’s] insurance. This combined with [insurers’] drug formularies already limits choices in care.”

Overall, only 20% of respondents were worried about maintaining choice and autonomy. Another 24% said there should be more players involved in the financing mechanism, but there should be a plan to cover the uninsured.

Those who voted No had strong opinions, though. Said a nurse practitioner with 30 years in health care, “I’ve seen the failures in multiple government-run programs and talked to doctors who fled the Canadian system because their patients were being denied care. There is no way government should run health care.”

One physician noted that the United States is a capitalist society and the only role of government is to maintain a level playing field. “It is the right of individuals and groups of individuals acting as ‘legal persons’ or corporations to trade capital goods, labor, land and money,” he said.

A colleague who supports a single-payer system, however, looks at competition from another angle. “The current health care environment takes away the competitiveness of our industries in the global arena. We need a basic universal health care system for all.”

Although universal coverage doesn’t necessarily translate into a single-payer system, that doctor is right about the timing of this debate, he said, “I am glad that this question on health care reform comes up now, before a new president is elected.”

Single-payer health plan best for taxpayers

By Kathy Waller
The Coloradoan
October 1, 2007

The numbers are in, and every citizen needs to pay attention.

The U.S. Census Bureau recently released data on health insurance coverage in the United States. For 2006, 47 million Americans were uninsured, an increase of 2.18 million from the previous year. In other words, one in 6 Americans does not have any health insurance. In every other industrialized country in the world, the number of uninsured is zero.

The increase in the number of uninsured Americans from 2005 to 2006 is the biggest jump reported by the Census Bureau since 1992. There are now more uninsured people in the United States than at any time since the passage of Medicare & Medicaid in the mid-1960s.

Strikingly, nearly all of the increase in uninsured over the past year (2.02 million of the 2.18 million) was concentrated among middle-class Americans making over $50,000 per year.

More than half of the newly uninsured (56.4 percent) are full-time workers. Maybe this is because the average health-insurance premium for a family of four is just over $12,000 per year (not including deductibles and co-pays). Hardworking, middle-class Americans are now feeling the distress of being uninsured. Many of us are only one illness or accident away from financial ruin.

More numbers: Private health insurance companies made $40 billion in profit last year, while it would cost $54 billion to cover all of the uninsured.

In Colorado, there are 792,000 uninsured, including 180,000 children.

Now for some good news. Here in Colorado, the 208 Commission (a bipartisan group created by the state Legislature) solicited input and requested health-care reform proposals from the people of the state. Of 31 proposals submitted, they narrowed the choices to four and sent them to an independent health-care analysis group to determine the potential impacts on health spending and coverage in Colorado.

Three of the proposals are based upon combinations of public and private health insurance, some with mandates requiring individuals and/or employers to purchase health insurance. The fourth proposal is a single-payer plan, pooling the risk of all residents into a single fund, minimizing the administrative costs and eliminating the profit motive from health insurance (a fifth proposal, also a combination of public and private insurance, was created by the commission; it was sent for analysis later and the results are still pending).

The results were released last month, and the numbers are astounding. The three plans that give private insurance a continued role are estimated to cost the state between $595 million and $1.3 billion, and still leave between 109,000 and 467,000 people without adequate health insurance. The single-payer plan will save the state $1.4 billion and everyone will be covered.

Let’s repeat that for emphasis. The single-payer plan will provide coverage for everyone and save more than a billion dollars for Colorado taxpayers. The other plans cost millions of dollars and still leave hundreds of thousands of people uninsured.

We have a unique opportunity in Colorado to show the rest of the country how to achieve efficient, affordable, universal health coverage. Single-payer is the only plan that makes sense. To learn more and get involved, visit www.healthcareforallcolorado.org and www.pnhp.org. From medical, moral and economic perspectives, we just can’t afford to sit around and wait for the numbers to get even worse.

Kathy Waller, MD, MPH, lives in Fort Collins.

Oprah Winfrey Talks To Michael Moore About Sicko And Health Care Insurance Industry

Submitted by Dan Wilson
Best Syndication
September 27, 2007

Michael Moore visited Oprah Winfrey on Thursday to talk about the health insurance industry. His movie Sicko has stirred a debate, and even Oprah admitted that it opened her eyes to the issue. The movie is a warning to the vast majority of Americans who believe they are protected because they have health insurance. The movie does not concern the 50 million without coverage.

Oprah asked a question that she wanted everyone to answer. She asked “Should the son of a gas station attendant have the same health coverage as the son of a CEO?” She told her audience “You need to see this movie”! When she saw the film, it completely changed the way she looked at health care.

Following Michael Moore’s last appearance, the Oprah show was inundated with thousands of emails. One caller said “while I am searching for affordable health care, my daughter may die.”

A pivotal moment in the health care debate came a few weeks ago during the Democratic Presidential debate in Chicago. Retired steel worker, Steve Skvara, asked “After 34 years with LTV steel I was forced to retire because of a disability. Two years later LTV filed bankruptcy. I lost a third of my pension and my family lost their healthcare… what is wrong with America and what will you do to change it.” Oprah had Scuvara on the set Thursday.

One of the problems Oprah brought up involved a bone marrow transplant. Stewart Eastham, a 25 year old worker in the oil and gas industry, was told by the hospital that he must bring $250,000 cash for a life saving treatment. Stewart’s insurance would only cover $150,000 of the procedure, and he needed to pay the additional $250,000.

The delay in his treatment caused Stewart to go blind in one eye. Lisa Ling decided to call his insurance company to find out what had happened with Stewarts case. She wanted to talk to the CEO of Blue Cross / Blue Shield about his case.

Civia Katz is a working mother of three. She needed a special surgery, and later her insurance company refused to pay for anything. Lisa also decided to call Civia’s insurance company.

Michele Marron was attacked by an auto immune disorder. She lost weight and needed to use on oxygen 24 hours a day because the disease had attacked her lungs. Her doctor says a stem cell transplant is the only chance for her to breath on her own. This was deemed an experimental surgery and would not be paid for by insurance. Lisa decided to call her insurance as well.

Out of all three cases, none of the insurance company’s CEOs would speak to Lisa Ling. The media representatives gave her various explanations. Only Civia received any help from her insurance company, Aetna, who said they made a mistake.

A comment came from a former hospital CEO, William Blaine of Minnesota, who said “I retired early because I had Multiple Sclerosis (MS) and could no longer work. Since retiring, my health insurance denied me critical medication and my disability insurance told me that I am no longer disabled…. I face a daily battle with my insurance companies.

“Most people can’t afford to fight these companies. I think we can’t afford not to. If this can happen to me, it can happen to anyone.”

On average, having a brain tumor will cost about $200,000 more in treatment. A stroke will cost $140,000. Leukemia can cost up to $600,000. Oprah asks “would you be covered?”

Michael Moore said that medical obligations are the number one cause of both bankruptcy and homelessness. “It is an absolute outrage,” Moore said. He said people who are sick are sometimes unable to fight the insurance companies.

Karen Ignagni, president of America’s Health Insurance Plans, made an attempt to defend the insurance companies and said that Michael Moore is right, and American needs health insurance for everyone. She represents a health insurance lobbying group.

Michael Moore doesn’t agree with that. Moore says the insurance companies are the problem. Insurance companies deny claims, cancel policies and eliminate people with pre-existing conditions. Both Hillary Clinton and John Edwards are calling for “Universal Coverage” which would force people to buy health insurance. This could actually exacerbate the problem.

But what about experimental procedures? “The National Institute of Health (NIH) should cover that as part of their research, said Professor Uwe Reinhardt of Princeton.

Reinhardt came up with the fundamental question for Oprah’s show, “Sick in America”. He asked “Should health care be more like elementary and secondary education, where every American simply has a right to it. Or do you want to treat it like a luxury like fine dining, where if you have the money you get it but if you don’t you won’t.”

Check Back Next Week For Part 2 of this Story See what others are saying and join the discussion at our Forum

Privatized "Big Brother"

Employers, Health Insurers Increasingly Use Care Managers To Review Physicians' Treatment Plans, Ensure They Conform to Evidence-Based Practices

Kaiser Daily Health Policy Report
September 25, 2007

A growing number of employers and health insurers are using care managers, or integrated health managers, who “essentially audit an employee’s health care and look for ways to both improve outcomes and save money,” the Wall Street Journal reports. According to the consulting firm Deloitte & Touche, there are more than 200 care managers in the U.S. who provide “programs designed to save employers and health plans money by reviewing employees’ health care claims and targeting high-cost cases for special management,” the Journal reports.

Care managers often review physicians’ treatment plans to ensure they are following established evidence-based practices and help coordinate care for people with serious illnesses. Based on the reviews, “the companies then may nix certain drugs or procedures,” the Journal reports.

Critics say that some of the programs “intrude into the private relationship between patients and their doctors and that they add yet another layer of bureaucracy, while saving money mostly by denying or switching specific drugs and procedures,” according to the Journal. Other critics say that care managers can be inflexible and ignore differences between individual patients and the judgment of physicians and nurses.

Cecil Wilson, immediate past chair of the American Medical Association, said, “The patient’s physician should ultimately be the one in charge,” adding that cost-saving should not be the main goal of care managers (McQueen, Wall Street Journal, 9/25).

http://www.kaisernetwork.org/Daily_reports/print_report.cfm?DR_ID=47740&dr_cat=3

Comment:

By Don McCanne, MD

Big Brother is watching you. Only he is not from the government. He is an agent of the Invisible Hand.

Intrusive micromanagement of health care today is not coming from an oppressive government, but rather it is an innovation of the free marketplace.

Rather than micromanaging health care, the stewards of a government-administered single payer system would macromanage the funds to pay for health care. Health care micromanagement decisions would be left to patients in consultation with their health care practitioners.

Of course, oversight of the spending of public funds would be essential to be certain that they are not inappropriately diverted through fraud and abuse. But that would be at arms length and not through disruptive intrusions.

Again, the private industry is foisting off on us yet more of its primary product: wasteful administrative excesses.

The Socialists Are Coming! The Socialists Are Coming!

By PHILIP M. BOFFEY
The New York Times
Published: September 28, 2007

The epithet of choice these days for Republicans who oppose any expansion of government’s role in health care programs is “socialized” medicine.

Rudy Giuliani has used the “s-word” to denounce legislation that would enlarge a children’s health insurance program and to besmirch Hillary Clinton’s health plan. Mitt Romney has added a xenophobic twist, calling the Clinton plan “European-style socialized medicine,” while ignoring its similarities to a much-touted health care reform he championed as governor of Massachusetts. Other conservative critics have wielded the “s-word” to deplore efforts to expand government health care programs or regulation over the private health care markets.

Our political discourse is so debased that the term is typically applied where it is least appropriate and never applied where it most fits the case.

No one has the nerve to brand this country’s purest systems of “socialized medicine” — the military and veterans hospitals — for what they are. In both systems, care is not only paid for by the government but delivered in government facilities by doctors who are government employees. Even so, a parade of Washington’s political dignitaries, including President Bush, has turned to the National Naval Medical Center in Bethesda, Md., for checkups and treatment, without ideological complaint. Politicians who deplore government-run health care for average Americans are only too happy to use it themselves.

Nor are they eager to tar the vast array of government hospitals and clinics that serve our nation’s veterans. For one thing, the veterans’ hospitals, once considered a second-rate backwater, now lead their private sector competitors in adopting electronic medical records and score well for delivering high quality care at relatively low cost. Even when the veterans’ hospitals were rightly criticized this year for their part in the disgraceful failure to care adequately for soldiers injured in Iraq and Afghanistan, there was no clamor to junk or privatize the system, only demands to make it better.

Mayor Michael Bloomberg startled most New Yorkers two years ago when he asserted that the city’s public hospitals are “better than the great teaching hospitals” all around them. Although some deemed his praise hyperbolic, the city’s billionaire, entrepreneurial, free-market-enriched mayor thought he knew quality when he saw it, even if it was socialist at its core.

The country’s vast Medicare program is one step less socialized — a “single-payer” program in which the government pays for the care and sets reimbursement rates, but the actual care is delivered by private doctors and hospitals. When Medicare was launched in 1965 it was routinely denounced as socialized medicine, but it has become so popular that politicians deem it the third rail of American politics, sure to electrocute anyone who tries to cut it or privatize it. No politician is eager to brand 43 million beneficiaries as socialists at heart.

Meanwhile, the two current butts of the “s-word” are such hybrids of public and private elements that it is hard to know how to characterize them. The State Children’s Health Insurance Program, or S-chip, was denigrated by one Republican congressman this week as “a government-run socialized wolf masquerading in the sheep skin of children’s health.” It might better be thought of as a “double-payer system” in which the states and the federal government put up the money, the states take the lead in defining the program and the actual care is typically delivered through private health plans by private doctors and hospitals.

The “s-word” seems even less appropriate for Senator Clinton’s proposed universal health care plan, which seeks to bolster employer-provided health benefits and create new purchasing pools to help individuals buy private policies at low group rates.

True, her plan would expand government regulation, and she wants to make a Medicare-like option available to compete with private policies. But that would only lead to a socialized, single-payer system if everybody were to choose the Medicare-like option.

There is no special magic in government-run or government-financed health care. Medicare has serious cost-control and financing problems, and the veterans’ hospitals could take a turn for the worse, as they have in the past, should federal funding shrivel. Private health care systems have strengths of their own, are favored by many patients and often provide care as good as any.

The take-home message for voters is this: Look behind the labels to judge health care proposals on their merits. Whenever you hear a candidate denounce something as a step toward socialized medicine, it probably isn’t. More likely the politician is demagoguing the issue or is abysmally ignorant of the inner workings — and real, not ideological, failings — of the country’s multifaceted health care system.

Time for universal care

The Kansas City Star ran a series of articles, editorials, and op-eds on single payer and other health care reform proposals this summer — here are two pro-single payer letters from their readership.

http://blogs.kansascity.com/unfettered_letters/2007/09/time-for-univer.html

We all agree that health care in the U.S. is in need of improvement. Some would advocate a major reworking, and some would say we need to just let the free market work its magic.

E. Thomas McClanahan stated in his op-ed piece last Sunday (9/23) that “the root problem with Hillary’s plan is that it doesn’t do enough to create a real market in health care.” I would submit that the free market has had its chance. Now it’s time for government intervention.

I’m not endorsing Sen. Clinton’s plan. What I am saying is that we need to take the cue from other Western nations and establish universal health care, whether it be “socialized medicine” or a single-payer system.

The common mantra should be: “You think health care is expensive now! Just wait till tomorrow — it will be even higher!”

We pay much more for health care than other industrialized nations, and still we have nearly 50 million without insurance and many with poor coverage.

Let’s look at the universal health care plans already out there and take the best of each. We can make ours the best of the bunch and still spend less than we do now.

Frank T. Strada
Overland Park

E. Thomas McClanahan’s opinion of Sept. 23 suggests that competition among health-care providers will resolve the cost issue in health care.

Though physicians may charge different amounts for the same service, the insurance companies reimburse to providers as per their contract, which can be quite different to each provider.

Recently I found out that an EKG done at the out-patient department of a local hospital (non-emergency) was charged by the hospital at $414. This did not include interpretation charges.

The insurance company asked the patient to pay $166, as it was applied to the deductible.

Similar service at doctor’s office with interpretation is charged at $66, and the physician is paid $31 by the same insurer.

Why should a hospital be paid more than five times what the doctor’s office is paid? Is it fair to blame physicians for rising health-care costs while hospitals and insurance companies are real reason?

The only way to resolve rising health-care costs is single-payer,
universal health care financed by tax dollars.

Laxmidas A. Sawkar, MD
Overland Park

Privatized “Big Brother”

Employers, Health Insurers Increasingly Use Care Managers To Review Physicians’ Treatment Plans, Ensure They Conform to Evidence-Based Practices

Kaiser Daily Health Policy Report
September 25, 2007

A growing number of employers and health insurers are using care managers, or integrated health managers, who “essentially audit an employee’s health care and look for ways to both improve outcomes and save money,” the Wall Street Journal reports. According to the consulting firm Deloitte & Touche, there are more than 200 care managers in the U.S. who provide “programs designed to save employers and health plans money by reviewing employees’ health care claims and targeting high-cost cases for special management,” the Journal reports.

Care managers often review physicians’ treatment plans to ensure they are following established evidence-based practices and help coordinate care for people with serious illnesses. Based on the reviews, “the companies then may nix certain drugs or procedures,” the Journal reports.

Critics say that some of the programs “intrude into the private relationship between patients and their doctors and that they add yet another layer of bureaucracy, while saving money mostly by denying or switching specific drugs and procedures,” according to the Journal. Other critics say that care managers can be inflexible and ignore differences between individual patients and the judgment of physicians and nurses.

Cecil Wilson, immediate past chair of the American Medical Association, said, “The patient’s physician should ultimately be the one in charge,” adding that cost-saving should not be the main goal of care managers (McQueen, Wall Street Journal, 9/25).

http://www.kaisernetwork.org/Daily_reports/print_report.cfm?DR_ID=47740&dr_cat=3

Comment:

By Don McCanne, MD

Big Brother is watching you. Only he is not from the government. He is an agent of the Invisible Hand.

Intrusive micromanagement of health care today is not coming from an oppressive government, but rather it is an innovation of the free marketplace.

Rather than micromanaging health care, the stewards of a government-administered single payer system would macromanage the funds to pay for health care. Health care micromanagement decisions would be left to patients in consultation with their health care practitioners.

Of course, oversight of the spending of public funds would be essential to be certain that they are not inappropriately diverted through fraud and abuse. But that would be at arms length and not through disruptive intrusions.

Again, the private industry is foisting off on us yet more of its primary product: wasteful administrative excesses.

Mandatory insurance isn’t reform

Forcing consumers to buy policies without regulating the market won’t solve the healthcare crisis.

By Jamie Court
The Los Angeles Times
September 25, 2007

Is it the right of the government to impose an obligation to buy a private product that costs $12,000 a year for a family of four?

Gov. Arnold Schwarzenegger and Assembly Speaker Fabian NuƱez claim they are close to a deal on healthcare reform that will require every Californian to prove they have a private health insurance policy — but does not cap how much insurers can charge for it. Hillary Clinton’s health plan, released last week, would require all Americans to have health insurance, also with no cap on premiums.

The goal of universal healthcare plans, including the one Clinton designed while first lady, has been to rein in waste and profiteering, then redistribute the savings to the public in the form of guaranteed healthcare. But these new “post-partisan” plans have been stripped of all effective cost containment. They simply force businesses, individuals and taxpayers to pick up the tab. Apparently, if you can’t beat the medical-insurance complex, join it. If it passes, the new system could be in place next year.

Under the proposed California compromise, employers will have to pay a share, but the ultimate responsibility lies with the individual. Policies for the poor would be subsidized, but taxpayers surely would be overcharged to boost corporate profits: Insurance premiums have increased 78% since 2001, compared with a 17% increase in inflation.

Health insurance is so unaffordable today precisely because no one is watching costs. With regulation of all medical charges, insurance would be cheaper and people might want to buy it. But Sacramento politicians already refused to standardize what doctors, hospitals, drug companies and insurers charge.

Californians are ready for market reforms to make health insurance more available and affordable, including forcing insurers to price policies fairly and preventing them from denying coverage to less healthy patients. Sacramento legislators should make the system fairer, regulate healthcare costs, then expand subsidies for low-income families. They should fix the broken market, not foist it on the public.

Mandatory purchase is nothing but a sop to top health insurers, which have given more than $4 million in campaign contributions to Sacramento politicians since 2001. Health insurers have had a hard time selling their increasingly expensive and less generous policies. So their plan is to make the government the big stick to force more customers into this market.

There is a big difference between mandatory participation in a cost-effective government program that protects us all (like Medicare) and being forced to buy an unregulated private product. This proposed mandate may get us closer to universal insurance coverage, but we’ll still be far from achieving universal healthcare. Why? Because the requirement will likely be for “affordable,” bare-bones policies — the kind that come with $5,000 deductibles, big co-pays and holes in coverage and benefits.

Research shows that high-deductible policies discourage patients of moderate incomes from seeking preventive treatment. So low- and middle-income patients likely will wind up with coverage they won’t or cannot use until they are very sick, the point at which their illnesses are the most expensive to treat.

Forcing citizens to buy an expensive, unregulated private product is nothing less than taxation without representation. If California were to follow the Massachusetts model for mandatory private insurance purchase (the only one in the United States), Californians would have to prove on their tax returns that they were insured or face tax penalties.

Insurance companies, meanwhile, remain beholden only to profit-driven shareholders, not taxpayers or their elected representatives. That will mean either bigger premiums or fewer benefits. In Greenfield, Mass., for instance, a couple in their 50s with one child pays $767 a month for the cheapest mandatory health plan, one without prescription drug coverage. If legislators want to enact their universal private insurance program, they should do it honestly through an across-the-board tax — not a backdoor tax like this.

Most important, mandatory private insurance on this scale will not work. Mandatory auto insurance, which has been in force in California for more than two decades, has failed miserably. That’s why a portion of our auto insurance premiums today go to pay for “uninsured motorist” coverage.

One in seven drivers has no auto insurance, compared to one in five without health insurance under a nonmandatory system. California’s auto insurance is the most tightly regulated in the nation, and because of that, premiums have declined since Proposition 103 was passed in 1988. When car insurance was required, but before the industry was regulated, the uninsured motorist rate was double what it is today.

We can choose not to own a car and not to be subject to mandatory insurance, as inconvenient as that might be. Californians’ only choice to avoid mandatory health insurance would be to flee the state.

Jamie Court is president of the Santa Monica-based Foundation for Taxpayer and Consumer Rights.

Employers offer private underinsurance

To Keep Health Plans, Many Firms Shift Costs

By Fran Hawthorne
The New York Times
September 26, 2007

Health insurance premiums have been rising faster than the rate of inflation for years. Lack of health coverage has become a major issue in the presidential race. Yet somehow, 59 percent of small businesses provide some kind of insurance, according to a recent survey by the Kaiser Family Foundation.

True, that percentage was down from 68 percent just six years ago, says the foundation, a health policy research group that conducted the study of more than 3,100 employers.

How do they afford it? By cutting benefits and shifting more costs onto their workers. There are also newer insurance products geared to this market:

HIGH-DEDUCTIBLE PLANS These are sometimes called “consumer-driven plans,” not because consumers are driving the demand, but because they must pay such a high share of the cost that, managers hope, they will use fewer services.

Because they favor healthier employees, all these high-deductible plans are controversial.

BARE-BONES COVERAGE One way to pay less is to cover less. Group Health Inc. of New York has a “catastrophic care” option that covers hospitalization only and no routine care, cutting premiums by about two-thirds. Or a company might pay for a limited number of routine checkups but not hospitalization. Other variations impose tight caps, perhaps paying a maximum of $50,000 a year.

VIRTUAL INSURANCE Even more minimalist is companies’ paying nothing, leaving employees with the whole premium. Mr. Finnegan (of Mercer Human Resources Consulting) says companies can offer coverage through a payroll deduction and might be able to arrange group rates.

PREVENTIVE-CARE PLANS Principal Financial has started pitching to this market with a plan that gives each employee 30 minutes of face-to-face counseling a year, for about $100 a person.

GOVERNMENT HELP Tennessee has started a bare-bones plan called CoverTN, with a coverage cap of just $25,000 and the state paying one-third of the premium.

http://www.nytimes.com/2007/09/26/business/smallbusiness/26HEALTH.html

Comment:

By Don McCanne, MD

Although the numbers of uninsured continue to increase, the fastest growing problem in health care financing today is the transformation from insurance to underinsurance.

Private insurers have shifted much of the individual market into various innovative underinsurance products. Until recently, employers have attempted to maintain more comprehensive coverage. That has changed.

As this article indicates, underinsurance has now permeated the small employer market, and it is rapidly creeping into the large employer sector as well.

The leading proposals for reform call for an expansion of private insurance. The great deception in these proposals is that they really are calling for universal underinsurance, since insurance that is effective in preventing financial hardship for those individuals who actually need health care is no longer affordable.

In our national dialogue on health care reform, we should discard the term “private insurance,” and call it what it really is: “private underinsurance.”

Mandatory insurance isn't reform

Forcing consumers to buy policies without regulating the market won’t solve the healthcare crisis.

By Jamie Court
The Los Angeles Times
September 25, 2007

Is it the right of the government to impose an obligation to buy a private product that costs $12,000 a year for a family of four?

Gov. Arnold Schwarzenegger and Assembly Speaker Fabian NuƱez claim they are close to a deal on healthcare reform that will require every Californian to prove they have a private health insurance policy — but does not cap how much insurers can charge for it. Hillary Clinton’s health plan, released last week, would require all Americans to have health insurance, also with no cap on premiums.

The goal of universal healthcare plans, including the one Clinton designed while first lady, has been to rein in waste and profiteering, then redistribute the savings to the public in the form of guaranteed healthcare. But these new “post-partisan” plans have been stripped of all effective cost containment. They simply force businesses, individuals and taxpayers to pick up the tab. Apparently, if you can’t beat the medical-insurance complex, join it. If it passes, the new system could be in place next year.

Under the proposed California compromise, employers will have to pay a share, but the ultimate responsibility lies with the individual. Policies for the poor would be subsidized, but taxpayers surely would be overcharged to boost corporate profits: Insurance premiums have increased 78% since 2001, compared with a 17% increase in inflation.

Health insurance is so unaffordable today precisely because no one is watching costs. With regulation of all medical charges, insurance would be cheaper and people might want to buy it. But Sacramento politicians already refused to standardize what doctors, hospitals, drug companies and insurers charge.

Californians are ready for market reforms to make health insurance more available and affordable, including forcing insurers to price policies fairly and preventing them from denying coverage to less healthy patients. Sacramento legislators should make the system fairer, regulate healthcare costs, then expand subsidies for low-income families. They should fix the broken market, not foist it on the public.

Mandatory purchase is nothing but a sop to top health insurers, which have given more than $4 million in campaign contributions to Sacramento politicians since 2001. Health insurers have had a hard time selling their increasingly expensive and less generous policies. So their plan is to make the government the big stick to force more customers into this market.

There is a big difference between mandatory participation in a cost-effective government program that protects us all (like Medicare) and being forced to buy an unregulated private product. This proposed mandate may get us closer to universal insurance coverage, but we’ll still be far from achieving universal healthcare. Why? Because the requirement will likely be for “affordable,” bare-bones policies — the kind that come with $5,000 deductibles, big co-pays and holes in coverage and benefits.

Research shows that high-deductible policies discourage patients of moderate incomes from seeking preventive treatment. So low- and middle-income patients likely will wind up with coverage they won’t or cannot use until they are very sick, the point at which their illnesses are the most expensive to treat.

Forcing citizens to buy an expensive, unregulated private product is nothing less than taxation without representation. If California were to follow the Massachusetts model for mandatory private insurance purchase (the only one in the United States), Californians would have to prove on their tax returns that they were insured or face tax penalties.

Insurance companies, meanwhile, remain beholden only to profit-driven shareholders, not taxpayers or their elected representatives. That will mean either bigger premiums or fewer benefits. In Greenfield, Mass., for instance, a couple in their 50s with one child pays $767 a month for the cheapest mandatory health plan, one without prescription drug coverage. If legislators want to enact their universal private insurance program, they should do it honestly through an across-the-board tax — not a backdoor tax like this.

Most important, mandatory private insurance on this scale will not work. Mandatory auto insurance, which has been in force in California for more than two decades, has failed miserably. That’s why a portion of our auto insurance premiums today go to pay for “uninsured motorist” coverage.

One in seven drivers has no auto insurance, compared to one in five without health insurance under a nonmandatory system. California’s auto insurance is the most tightly regulated in the nation, and because of that, premiums have declined since Proposition 103 was passed in 1988. When car insurance was required, but before the industry was regulated, the uninsured motorist rate was double what it is today.

We can choose not to own a car and not to be subject to mandatory insurance, as inconvenient as that might be. Californians’ only choice to avoid mandatory health insurance would be to flee the state.

Jamie Court is president of the Santa Monica-based Foundation for Taxpayer and Consumer Rights.

About single-payer insurance

by Michele Swenson
Colorado Springs Independent – Colorado Springs,CO,USA
September 27, 2007

Perhaps the greatest conceit of health-care reform debates is the notion that free-market competition among private insurance companies will lower costs.

Instead of a free market, the insurance industry is increasingly a monopoly market, now dominated by three national firms: UnitedHealth, WellPoint and Aetna.

Inflationary premium rates have increased more than 70 percent in just the past six years. Even as we pay more for coverage, we experience less access and denial of free choice of providers and hospitals.

Abandoning the principle of shared risk, private insurers maximize profits by insuring the healthy and excluding everyone else with pre-existing conditions, denying or delaying provider reimbursements and peddling high-deductible policies with Health Savings Accounts that shift greater out-of-pocket expenses to individuals.

Such catastrophic insurance often lacks primary preventive health care such as mammograms, prostate screenings and mental health care. Higher deductibles and co-pays tend to discourage early treatment, resulting in higher future costs for chronic or emergency crisis care.

Due in part to increased marketing of catastrophic insurances, individual out-of-pocket health costs soared 59 percent over the decade preceding 2005, reports the American Hospital Association. During the same period, unpaid medical bills rose 60 percent. Medical bills account for an estimated 50 percent of all U.S. personal bankruptcies. Of the 50 percent increase in bankruptcy filings from 2006 to 2007, fully 99 percent were personal bankruptcies.

Commercial insurances carry high overhead costs — 20 percent of health care dollars go to administration, marketing and profits — compared to 1.8 percent overhead cost for Medicare. Another 12 percent administrative cost is imposed on providers and hospitals, due to different paperwork, medication formularies and requirements of multiple insurers. Add to that the cost of resubmitting denied claims, and the annual ritual of provider re-credentialing by each insurer.

The Colorado Health Services single-payer proposal is the only one of four recently evaluated by the Lewin Group (asked by the state to develop and analyze health-care expansion proposals) projected to save substantial money and insure everyone. Single-payer saves money by eliminating wasteful administrative costs of multiple insurers, and permitting negotiation of bulk rates for pharmaceutical and durable medical goods. Estimated overall net savings is $1.4 billion.

Indeed, single-payer insurance is an antidote to the wasteful corporate bureaucracy of 1,200-plus private health insurers. More than 20 studies since the 1990s, by the Congressional Budget Office, General Accounting Office and others, have demonstrated substantial savings with single-payer insurance — enough to insure the uninsured and upgrade coverage for the underinsured.

The single-payer reform proposal is a public-payer, private-provider system permitting free choice of providers and hospitals. Its benefits encompass a broader range than currently available through any single private insurance plan.

CHS would operate as a publicly owned, nonprofit insurance company. Savings would also be achieved by transferring federal (Medicare, Medicaid, etc.), state and local health care monies to a CHS trust, insulated from the general state budget.

The medical-expense portions of liability, workers’ compensation and automobile insurance would also be rolled into the program, eliminating related medical administrative and adjudication costs. Universal access to continuous health care would permit cutting costs of malpractice premiums and eliminating awards for future medical expenses.

Employers and employees would pay a progressive tax, at a substantially reduced cost for the vast majority, compared to current out-of-pocket and premium health expenditures (averaging $11,000 per family). Freed from administering health plans, businesses may compete more equally in the global marketplace. All institutions currently providing employee health plans (e.g., public education, state employment) would realize savings when relieved of responsibility for current inflationary health coverage costs.

View results of the current Colorado proposal report and 19 previous federal and state studies of single-payer health insurance at healthcareforallcolorado.org.

Michele Swenson is a board member of Health Care for All Colorado, which co-authored the Colorado Health Services single-payer insurance proposal.

Fiscal Study of Four Health Options for Colorado – Lewin Group, September, 2007

The Colorado Health Services (CHS) single-payer proposal is the only one of the four reform options evaluated by the Lewin Group projected to save substantial money and insure everyone. Estimated overall net savings is $1.4 billion.

CHS would operate as a publicly owned, nonprofit insurance company. Single-payer saves money by eliminating wasteful administrative costs of multiple insurers, and permitting negotiation of bulk rates for pharmaceutical and durable medical goods. The medical-expense portions of liability, workers’ compensation and automobile insurance would also be rolled into the program, eliminating related medical administrative and adjudication costs. Universal access to continuous health care would permit cutting costs of malpractice premiums and eliminating awards for future medical expenses.

The single-payer reform proposal is a public-payer, private-provider system permitting free choice of providers and hospitals. Its benefits encompass a broader range than currently available through any single private insurance plans.

Democratic Hopefuls Urged to Scrap Private Insurers

By Avram Goldstein
Bloomberg News

Sept. 27 (Bloomberg) — Democratic presidential candidates, already criticized by Republicans for moving too far toward a government-run health system, are being urged by advocacy groups and lawmakers to go the rest of the way.

With backing from labor unions, 83 Democrats in the U.S. House are sponsoring a measure to create a national health plan, abolish the role of private insurers such as market leader United HealthGroup Inc. and second-place rival WellPoint Inc. and make all hospitals nonprofit, supporters said today.

The three leading Democratic presidential candidates largely agree on plans to preserve private insurance, provide tax incentives to make insurance more affordable and offer the uninsured a government option like the Medicare program for the elderly. Advocates of a “single-payer” system fully run by the government say they are gaining public support.

“When you build up a head of steam on an issue, people will do what they need to do to get re-elected or to get that campaign cash in the coffers,” said Representative John Conyers Jr., a Democrat from Detroit, at a press briefing today. “All we have to do is build up support for it, and they’ll come around. Many are secretly for it.”

Conyers and allies, led by the 80,000-member California Nurses Association of Oakland, California, and the 14,000 members of Chicago-based Physicians for a National Health Plan, say insurers take 31 percent of revenue for administration and profit. That compares with 3 percent for Medicare, they say.

Medicare, with a budget of $440 billion this year, provides benefits to 43 million elderly and disabled people.

TV Commercials

The doctor and nurse groups aired TV commercials yesterday challenging the health plans of the Democratic frontrunners, Senator Hillary Clinton of New York, former Senator John Edwards of North Carolina and Senator Barack Obama of Illinois. The ads ran only in New England and the Washington area during MSNBC’s broadcast of a Democratic candidates’ debate at Dartmouth College in New Hampshire.

In one of the commercials, a woman laments that she may go into bankruptcy because of insurance company penny-pinching over her benefits.

“It’s not good enough just to be better than the Republicans on this,” she tells a life-size cardboard photo of Obama. “We know Medicare works for seniors. So why can’t we have single-payer, guaranteed health care for every American, Senator Obama?”

Two other 30-second spots showed citizens addressing photos of Clinton and Edwards. Spokesmen for each of the campaigns declined to comment on the commercials.

Polls Cited

The group cited polling data it said showed most Americans are dissatisfied with rising health insurance costs and want “major” and “fundamental” changes. Supporters say insurance companies have a goal of not covering the sick.

Employers, companies and individuals will spend about $776 billion on health insurance in 2007, up 56 percent since 2001, according to the U.S. Centers for Medicare and Medicaid Services. That will reach $1.4 trillion in 2016, the agency says.

America’s Health Insurance Plans, a Washington trade group representing 1,300 insurance companies, is pushing for what it calls a “public-private partnership” to provide coverage for everyone while preserving its members’ role.

“The Medicare system faces tremendous burdens and it is not providing the benefits that the over-65 population needs and deserves,” said Mohit Ghose, the group’s spokesman. “Some candidates want to discuss building on what works. Our proposal not only will improve access but has a huge component on quality improvement.”

$10.6 Billion

In 2006, the five biggest U.S. health insurers reported combined net income of $10.6 billion on revenue of $188.4 billion as the number of uninsured reached a record.

“The insurance industry’s culpability in the health-care crisis is irrefutable,” said Todd Main, campaign director of the Physicians for a National Health Plan. “We pay the most and have lower outcomes. As a business model, it’s failing consumers, and as a result it’s hurting businesses across the country.”

To contact the reporter on this story: Avram Goldstein in Washington at agoldstein1@bloomberg.net .