PNHP

Public and private spending in Canada and the United States

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Public and private spending in Canada and the United States

Health care spending to reach $148 billion this year

Canadian Institute for Health Information
December 5, 2006

The public and private shares of total health care spending have remained fairly steady over the past decade. This year, the public share is expected to account for 70.3% of total health care spending, in line with the 70/30 ratio of public/private spending seen over the last ten years.

http://secure.cihi.ca/cihiweb/dispPage.jsp?cw_page=media_05dec2006_e#2

Full report: National Health Expenditure Trends, 1975-2006
http://secure.cihi.ca/cihiweb/dispPage.jsp?cw_page=PG_592_E&cw_topic=592&cw_rel=AR_31_E

From a “Quote of the Day” earlier this week:

Mining data from the National Health Expenditures Accounts, Mr. (Thomas) Selden found that public expenditures on health care — Medicare, Medicaid, military health care and federal employee benefits — accounted for $888 billion of the $1.96 trillion spent on health care in 2004. Adding in the aforementioned subsidies (tax exemptions for employer-sponsored plans), and premiums paid for public-sector employees, the total comes to $1.2 trillion, or 61 percent.

Uwe E. Reinhardt, the James Madison professor of political economy at Princeton, suggests adding 5 percent for the federal mandate that hospitals provide free health care to the uninsured. “So government accounts for about two-thirds of health care spending,” Mr. Reinhardt said.

https://pnhp.org/news/2006/december/private_plans_pay_so.php

Comment:

By Don McCanne, MD

The policy lesson? Do not let anyone ever again claim that the new taxes required to fund a single payer system would require an intolerable drain on the economy. We are already paying those taxes, and the economy has not suffered as a result.

This does not mean that we don’t need new tax policies. Changes should be made to improve equity and increase transparency in our public financing of health care. The fairness and efficiency that a single payer system would bring us have been goals that have been elusive under our current fragmented system of funding health care.

Transparency in Health Care Insurance

By Kip Sullivan
Z Magazine

Comedian Jon Lovitz used to do a skit for “Saturday Night Live” in which he played Tommy Flanagan, the pathological liar. Lovitz’s character was always telling tall tales that made him look good. When a tale would become so outrageous even he suspected he was about to be exposed, Flanagan would stop for a moment, then, with a huge grin, he would blurt out a new fib and proclaim, “Yeah, that’s the ticket.”

The health insurance industry is proving to be a master at the Jon Lovitz routine. For a quarter-century the industry and its apologists in business, politics, and academia told the public managed care would solve the health care crisis. When even diehard defenders of the industry realized in the late 1990s that managed care had flopped, the industry came up with a new excuse to justify its existence and to distract public attention from real health care reform. Of the several names bestowed on the new excuse, the most faddish is transparency in health care. “Yeah, transparency, that’s the ticket.”

Like “health maintenance organization” and “consumer-driven health plan” (to name two other misnomers coined by the insurance industry and their hangers-on), “transparency in health care” is terribly misleading. The phrase evokes glorious visions of a world in which:

  • Data on the quality of doctors and hospitals and other health care providers are published in great quantities (by whom is unclear)
  • This cornucopia of data forces providers to improve quality
  • The improved quality leads to lower costs

The odds against any of these steps occurring are great. The likelihood that all three will occur is zero. But the promoters of transparency dogma are powerful. Transparency evangelists come from the insurance and computer industries, big business, the Republican and Democratic parties, academia, and the world of corporate-funded think tanks. CEOs John Chambers (Cisco Systems), Steven S. Reinemund (PepsiCo), Frederick W. Smith (FedEx), and Ivan G. Seidenberg (Verizon) are just a few of the business executives who tout transparency. Senator Hillary Rodham Clinton (D-NY) is the most prominent Democrat in the movement. In 2005 she sponsored legislation promoting the computerization of all medical records (an essential component of the transparency fantasy) and held press conferences celebrating the magic of quality measurement with Senator Bill Frist (R-TN) and former Speaker Newt Gingrich.

Like managed care theology before it, transparency theology draws support from the elite because it is consistent with conservative fantasies about making “the health care market” work. The insurance industry and its conservative allies understand that if “market reform” fails to solve the health care crisis, greater regulation, possibly in the form of a single-payer (or Medicare-for-all) system, will come sooner rather than later.

George W. Bush is one of many conservatives who misrepresent what regulation or a single-payer system would mean (government will “tell your doctor how to practice medicine” is the usual misrepresentation) and then brandish that caricature as justification for their support. Bush’s opening remarks at a press conference in Minnesota last August, at which he endorsed “transparency in health care,” illustrate this tactic. “We’ve got an interesting debate in health care in America,” Bush intoned in front of an invited audience in a fancy hotel in a wealthy suburb of Minneapolis. “And I guess if I had to summarize how I view it, I would say there’s a choice between having the government make decisions or consumers make decisions. I stand on the side of encouraging consumers. I think the most important relationship in health care is between…the patient and the doc…. And health care policy ought to be aimed at bolstering the consumer, empowering individuals to be responsible for health care decisions–is kind of the crux about what we’re talking about.”

In Bush’s world transparency is the great weapon against further government involvement in the U.S. health care system, and transparency will be achieved by the publication of report cards on clinics and hospitals. The grades on these report cards will render doctors and hospitals transparent. Once transparency is achieved, a series of other events will occur, to wit: patients will “shop” for the best providers, quality will rise, costs will come down, and everybody but the crummy clinics and hospitals, which scored poorly on report cards, will be better off.

Bush announced he had selected Minnesota to endorse transparency in health care because it is the home of Community Measurement Project (CMP), a coalition of Minnesota’s largest health insurance companies that produces a report card on Minnesota providers. Bush told the executive director of the CMP, who was present at the event, that the CMP is a “leading edge” report card that will make providers transparent. The CMP report card (www.mnhealth.org) suffers from four defects:

  • It has very limited scope (it covers only a portion of Minnesota’s clinics and hospitals and attempts to measure only a tiny fraction of medical services offered by those providers)
  • It measures services at the “provider” level, not the individual doctor level
  • Grades tend to bunch up so that distinguishing one “provider” from another is impossible
  • The grades are inaccurate

A brief discussion of each of these defects shows how expensive it will be to fix them. First, the CMP report card is quite limited in the number of providers and services it purports to grade. It covers fewer than half of all clinics in the state and covers only child vaccination rates, well-baby visits to doctors, and treatments for six diseases (asthma, depression, diabetes, high blood pressure, cancer, and chlamydia) out of thousands of diseases and conditions for which people are treated these days. Obviously, collecting data on thousands of other medical services on all providers in the state will make this report card much more expensive.

Second, despite Bush’s talk about “you and your doctor,” there is no information about individual doctors on the CMP report card. Grades are available only for entire “provider networks”–groups of clinics and hospitals, some with dozens of clinics and hospitals in them. Common sense and research indicate that to the extent patients want information on medical quality, they want it for particular health care professionals, not for entire clinic-hospital chains. The reason data on individual doctors is not offered is that the CMP is not collecting data on enough patients to make a statistical analysis of individual doctors possible. In other words, if the total number of patients in CMP’s current database were broken down by doctor instead of by provider network, the sample sizes for the vast majority of doctors would be too small to permit rigorous analysis. Collecting data on many more patients means, obviously, greater expense.

Like the first two defects, the third defect–bunched up grades–is due to CMP’s effort to make report cards on the cheap. CMP issues only three grades (one, two, or three stars; which look like the glittery little plastic stars elementary school teachers use) and the vast majority of networks get two stars. Even if you wanted to know the grade of entire provider fiefdoms rather than of individual doctors, CMP grades rarely distinguish one fiefdom from the other .

The fourth and most important defect in the CMP report card is that it is grossly inaccurate, and–to make this defect more insidious–the inaccuracy is not mentioned or even hinted at in the CMP website. On the contrary, the first page of the website assures readers that the report card contains “accurate, comparative details on the quality of care at Minnesota’s provider groups.” The grades are inaccurate for several reasons. The two most important of which are failure to adjust the grades to reflect differences in patients that doctors have no control over and failure to ensure that patients the CMP says are patients of Network X really are patients of Network X.

The grades are not adjusted for differences in the patients seen by each network, notably, differences in their health, quality of insurance, and income. It is much easier for doctors who see primarily healthy, well-insured, and/or upper-income patients to score well on CMP’s report card than it is for doctors who see primarily sicker-than-average, poorly insured, and/or low-income patients. “Some communities… have more resources to influence outcomes than others,” said Dr. Randall Maxey, an Inglewood, California nephrologist, in a recent interview with American Medical News about report cards the Bush administration is preparing for physicians who treat Medicare beneficiaries. “I may treat you exactly correctly and give you the right pills, but if you have to choose between buying pills and giving your baby milk, that drug may lose out and my performance may be judged as poor because of it.”

Consider two of the CMP “quality measures” for diabetes: percent of diabetic patients who have their HbA1c count (a measure of blood sugar) under 8 percent and percent who have their cholesterol under 130. The Neighborhood Health Care Network (NHCN), a coalition of six clinics which serves primarily poor, uninsured people in the Twin Cities, ranked very low on this “quality” measure. Only 46 percent of the diabetics who visited NHCN doctors in 2004 had their blood sugar under the target level and (apparently coincidentally) only 46 percent had their cholesterol under 130. By comparison, the average for all provider groups for both measures was 65 percent. The 46 percent score was so low compared to the other provider groups that CMP gave MHCN one star.

What should readers make of this bad grade? By assuring readers that the report card is “accurate,” the insurance companies behind the CMP project lead readers to think NHCN is doing an inferior job of getting the sugar and cholesterol levels of its diabetics down. But because the CMP did not adjust NHCN’s grades to reflect the fact that NHCN doctors treat a sicker, less well-insured, and poorer population, we cannot conclude that NHCN’s doctors are inferior. Given the circumstances NHCN’s doctors are up against, it’s possible they are superior doctors and their low grades reflect forces they cannot overcome. NHCN doctors may have prescribed appropriate cholesterol-lowering medications (such as Lipitor or Zocor) to all their diabetics, for example, but because many of those patients had insurance with no drug coverage, or drug coverage that required co-payments they couldn’t afford, they failed to fill their prescriptions.

The inaccuracy of the CMP grades is aggravated by the sloppy methodology used to “assign” patients to networks. The CMP simply assigns patients according to which network patients used the most in the course of a year. So, for example, if you were a diabetic who made seven visits to doctors in one year, and four of those visits were to doctors in Network A and three were to doctors in Network B, Network A will take all the blame or all the credit for your cholesterol level.

Like the other three defects, this fourth defect is fixable, but only at great cost. The CMP could, in theory, decide to adjust grades on diabetes care, for example, to correct for differences in factors outside doctors’ control–patient age, sex, cholesterol, and blood pressure levels when the patient first visited the clinic, number of years diagnosed with diabetes, history of other diseases such as coronary artery disease, education level, income level, and presence of co-payments for prescription drugs, to name a few. But the cost of collecting all that data will be immense. And that’s just for the diabetes scores.

When he endorsed transparency and the Community Measurement Project last August, Bush claimed the CMP-like report cards would lead to a cut in total health care spending of 25 to 30 percent. That will never happen.

The insurance industry, cheered on by the transparency crowd, may crank out lots of cheap report cards suffering from the four defects of the CMP card. Or it may spend enormous sums of money to produce report cards that don’t have those defects. Whichever route they choose, costs are more likely to go up than down. The transparency hype will, however, have distracted attention from the only solution to the health care crisis–single-payer or Medicare for all.

Kip Sullivan is author of The Health Care Mess: How We Got Into It and How We’ll Get Out of It (AuthorHouse). He is on the steering committee of the Minnesota Universal Health Care Coalition.

Physicians, hospitals and quality

Hospital-Physician Relations: Cooperation, Competition, Or Separation?

Economic pressures are creating an adversarial climate in some areas and pushing physicians and hospitals together in others.

By Robert A. Berenson, Paul B. Ginsburg, Jessica H. May
Hospital-Physician Relations
Health Affairs
December 5, 2006

Because many services performed in hospitals can safely and conveniently be performed in ambulatory settings, physicians have become owners of entities directly competing with hospitals for patients in a new medical arms race. Hospitals and medical staff physicians face growing tensions as a result of physicians’ growing reluctance to take emergency department call and the consequences of hospitalists replacing physicians in the care of inpatients. Although there are increasing expectations that health system challenges will lead hospitals and physicians to collaborate, in many markets the willingness and ability for hospitals and physicians to work together is actually eroding.

http://content.healthaffairs.org/cgi/content/full/hlthaff.26.1.w31/DC1

Creating Accountable Care Organizations: The Extended Hospital Medical Staff

By Elliott S. Fisher, Douglas O. Staiger, Julie P.W. Bynum, Daniel J. Gottlieb

Many current policies and approaches to performance measurement and payment reform focus on individual providers; they risk reinforcing the fragmented care and lack of coordination experienced by patients with serious illness. In this paper we show that Medicare beneficiaries receive most of their care from relatively coherent local delivery systems comprising physicians and the hospitals where they work or admit their patients. Efforts to create accountable care organizations at this level–the extended hospital medical staff– deserve consideration as a potential means of improving the quality and lowering the cost of care.

Fostering local organizational accountability for capacity.

The most important reason, however, to focus on hospitals and their affiliated medical staffs is to establish accountability for local decisions about capacity. Higher spending across U.S. health systems is largely attributable to greater use of discretionary “supply- sensitive” services: visits, specialist consultations, tests, imaging services, and the use of institutional settings (rather than outpatient settings) for care. Patients’ preferences do not explain these differences in care, and responses to survey-based clinical vignettes reveal that physicians in higher-spending systems have developed a more intensive practice pattern in exactly these discretionary clinical settings.

These findings are most consistent with an underlying causal model that highlights our current lack of accountability for capacity. Because such a high proportion of decisions are in the “gray areas” of medicine, physicians adapt their practices to work with whatever resources are locally available (such as making more frequent referrals in systems with more specialists). And–in the current payment environment–they are always able to stay busy themselves by seeing their own patients more often. Local decisions that influence capacity (capital investments, recruitment, and physicians’ choices about practice location), therefore, are likely to be the first step in the causal chain leading physicians to adopt more-intensive practice patterns–and leading to the overuse of supply-sensitive services.

Comprehensive measures of longitudinal quality and costs at the hospital staff level would bring the impact of such decisions to light. Hospitals that recruited additional specialists or expanded their acute care facilities could expect to see those decisions reflected in their longitudinal performance measures. Similarly, decisions to invest in care management, reduce acute care capacity, forgo unnecessary specialist recruitments, or more effectively manage postacute care resources could result in improved quality and lower costs.

http://content.healthaffairs.org/cgi/content/full/hlthaff.26.1.w44/DC1

Gain Sharing: A Good Concept Getting A Bad Name?

Allowing physicians to share in the savings they help produce could lead to greater accountability in health care.

By Gail R. Wilensky, Nicholas Wolter, and Michelle M. Fischer

Gain sharing, of the type we have described, is envisioned as an important transitional strategy, leading U.S. health care to higher levels of accountability and improved performance. It would allow the physicians that produce the savings and that can do so in ways that maintain or improve quality of care to share in the results of their efforts, even when not formally aligned in IDSs (integrated delivery systems). Although safeguards need to be put in place to protect against abuses, the results of the current system are abundantly clear: continued unsustainable increases in spending and unacceptable levels of quality.

http://content.healthaffairs.org/cgi/content/full/hlthaff.26.1.w58/DC1

Hospitals And Physicians: Not A Pretty Picture

By Jeff Goldsmith

Hospital-physician relationships in the United States have deteriorated markedly in the past few years. An asymmetry of obligations to caring for the uninsured and inappropriate financial incentives have worsened the conflict between hospitals and physicians in many markets. Sadly, the resources and political bandwidth consumed by managing this conflict have been diverted from the fundamental challenge of providing universal health coverage–the root cause of much of this conflict.

http://content.healthaffairs.org/cgi/content/full/hlthaff.26.1.w72/DC1

Comment:

By Don McCanne, MD

A well functioning health care system continues to strive for optimal value. That requires balancing efforts to maximize quality while controlling spending. (Some suggest that access is a third variable, but access to appropriate services and facilities should be a given.)

What role should money play in achieving this balance? Should providers receive explicit financial rewards for meeting quality goals that should be expected as part of the individual’s professional duties? Should providers (physicians) receive explicit financial rewards merely for reducing another provider’s costs (hospitals)?

Terms such as fee-splitting and kickbacks are now out of vogue, but have the concepts left us? Is “gain sharing” merely a euphemism for kickbacks?

Gail Wilensky, in her drive to reduce health care spending in this nation, has been an advocate of erecting financial barriers to care, even though health outcomes may be impaired. Her insensitivity to the needs of patients seems to be consistent with her advocacy of kickbacks. Is greed really an acceptable driving force, as long as it achieves the goal of reducing health care spending?

Money should play a role in improving quality, but the way to do that is to allocate what funds are available to a health care system designed to achieve the highest quality that can be expected. Elliott Fisher and his colleagues describe a process that is based on system design to benefit patients rather than system design that acquiesces to greed.

What is sad is that, as Jeff Goldsmith has stated, we continue to accept the asymmetry of obligations to caring for the uninsured and inappropriate financial incentives, largely because we have failed to meet our fundamental challenge of providing universal health coverage — the root cause of much of this conflict.

National Health Care? We're Halfway There

By DANIEL GROSS
The New York Times, Economic View, December 3, 2006

WHEN Democrats assume control of Congress next month, they may be dusting off some long-dormant proposals on how to deal with the growing disconnect between health insurance and employment. From 2000 to 2005, the proportion of workers aged 18 to 64 with employment-based health benefits fell to 70.6 percent from 74.5 percent, according to the Employee Benefits Research Institute. A record 46.6 million Americans lacked health insurance last year; of them, more than 82 percent lived in households headed by someone holding a job.

Any efforts to expand government’s role in providing insurance will likely be opposed by the Bush administration, which says it opposes excessive direct government involvement in an industry that constitutes about 14 percent of the gross domestic product. Michael O. Leavitt , the secretary of health and human services, recently dismissed a proposal to have the government negotiate drug prices for the Medicare benefit, arguing that “it’s a surrogate for a much larger issue, which is really government-run health care.”

While the administration may oppose government-run health care in principle, the government’s role in the vast health industry has been expanding. By various measures, the United States is about halfway toward a system in which the government and taxpayers fully fund health care. And trends are pushing the government to become more involved each year.

Out of a total population of about 300 million, 35.6 million elderly Americans were on Medicare in 2005. Of the working-age population, which reached 257.8 million in 2005, some 45.5 million were covered by Medicare, Medicaid or military health programs, according to the benefits institute. An additional 18.2 million workers had health insurance through jobs in the public sector, which includes state, federal and local governments, public schools and state universities, according to Paul Fronstin, director of the institute’s health research and education program. Millions of those workers’ dependents are covered as well. Even if those dependents are not included in the tally, taxpayers paid the bill for almost two-fifths of all Americans with insurance in 2005.

But that’s not the full extent of government and taxpayer involvement. Employer-provided health insurance premiums are a form of compensation, yet are not subject to federal payroll or income taxes and are exempt from many state and local taxes. Economists consider these exemptions a form of subsidy. Thomas M. Selden, economist at the federal Agency for Healthcare Research and Quality, estimates that the tax subsidy for employment-related coverage at $208.6 billion in 2006, or 35.4 percent of the amount spent on premiums.

“The tax subsidy is one of the largest public expenditures on health care,” Mr. Selden said. In fiscal 2006, by comparison, spending on Medicare was $378.7 billion and federal spending on Medicaid was $180.6 billion.

Viewed strictly in terms of dollars and cents, the government already accounts for more than half of the nation’s health care spending. Mining data from the National Health Expenditures Accounts, Mr. Selden found that public expenditures on health care — Medicare, Medicaid, military health care and federal employee benefits — accounted for $888 billion of the $1.96 trillion spent on health care in 2004. Adding in the aforementioned subsidies, and premiums paid for public-sector employees, the total comes to $1.2 trillion, or 61 percent.

Uwe E. Reinhardt, the James Madison professor of political economy at Princeton, suggests adding 5 percent for the federal mandate that hospitals provide free health care to the uninsured. “So government accounts for about two-thirds of health care spending,” Mr. Reinhardt said.

The government spends money as if there were a national health insurance program. In 2004, government spending on health care equaled 9.6 percent of the gross domestic product, compared with 6.9 percent in Canada, which has a single-payer universal health care program, said David Himmelstein, associate professor of medicine at Harvard Medical School. And yet some significant components of federal support are not efficient methods of providing health insurance to the people who most need it. Higher-income workers are likely to have higher rates of coverage, higher premiums and higher taxes, all of which means that the tax break for compensation disproportionately helps the well-off.

“We’re paying for national health insurance, but we’re not getting it,” Dr. Himmelstein added.

Taxpayers also don’t get as much bang for their bucks because the government guarantees coverage for the elderly and the poor, groups that account for a disproportionately large amount of expenditures.

“A rough rule holds that private insurance covers two-thirds of the population and pays for only one-third of all health care,” Mr. Reinhardt said.

THE raw figures may be worrisome, but the trends behind the data are clearly troubling. Despite five consecutive years of economic growth, the private sector has continued to reduce its role in providing insurance. As the population ages, the ranks of Medicare recipients grow. And if the price of health insurance keeps rising at a much faster rate than the average earnings of lower-income people, more and more of the working poor will be priced out of the market.

So even as politicians rail against the pernicious effects of government-run health care, taxpayers, one way or another, are likely to be footing more of the nation’s huge and mounting medical bills.

Daniel Gross writes the “Moneybox” column for Slate.com.

Public Citizen’s Response to CHCWG Interim Recommendations

Here is Public Citizen‘s Response to the Citizens’ Health Care Working Group Interim Recommendations.

For the original version from Public Citizen, please click here. (pdf)

Health Care Reform in the United States: Arguments for a Single Payer System

Health services in the United States aren’t good enough, cost too much, and leave too many people out: those are the conclusions voiced by participants in a two-year federally mandated and funded process that produced The Health Report to the American People.i Public Citizen is pleased to submit its comments to the Citizen’s Health Care Working Group, and looks forward to continuing to participate in the discussion aimed at providing better quality, more affordable care for the country as a whole.

We are gratified that the recent efforts at tapping into public opinion reveal significant agreement on key issues in health care:

  • An overwhelming majority (96.8%) of the persons attending the community meetings felt that the health care system is in crisis or constitutes a major problem;
  • Over 94% thought that affordable health care should be part of national public policy; and
  • When faced with different priorities competing for public spending, respondents ranked “Guaranteeing that all Americans have health coverage/insurance” as the highest. Similarly, when asked to evaluate different proposals for expanding access to care, respondents ranked “Create a national health insurance program, financed by taxpayers, in which all Americans would get their insurance” as the highest.

Given the emerging consensus on health care reform, we are surprised and extremely disappointed that the Interim Recommendations of the Citizens’ Health Care Working Group did not address the issue of payment under a national health program. Yet many of those who took part in the town meetings or submitted comments to the Working Group advocated for a single payer, and, among the 1,814 respondents who expressed a desire for a “single health care system,” fully 46 % recommended a single-payer system.

Public Citizen supports single payer, universal health care. The rationale for single-payer has become increasingly compelling right now, when US businesses are increasingly feeling the pinch of rising health care costs, the number of uninsured continues to rise, the nation is losing its comparative advantage in world markets, hospitals are eager to shed the burden of their “bad debt and charity” pool, and consumers are increasingly baffled by an array of insurers who offer confusion in the guise of ‘choice.’

The arguments in favor of having a single payer are summarized below. These reasons are in addition to the most overwhelming reason, namely that such a system is the only way we can realistically afford to end the dangerous, 2 embarrassing, and worsening situation wherein about 45 million people in this country lack health insurance and tens of millions more are seriously uninsured.

Single Payer is good for business. Publicly financed but privately run health care for all would cost employers far less in taxes than their costs for insurance.ii With universal coverage, employers would no longer have to pay for medical care as part of the compensation package offered to workers. And with health care outlays expected to increase between 14% and 18% between now and 2010, employers can expect no relief from the already unsustainable situation they are facing at present. A survey of senior-level executive in Detroit found that 75% consider employee health insurance “unaffordable,” while the remaining 25% consider it “very unaffordable.”

If the situation is untenable for individual employers, it is even worse for the economy as a whole. Increases in health care costs are a drag on economic growth: they thwart job growth, suppress increases for current workers, weaken the viability of pension funds, and depress the quality of jobs. Rising health care costs are also causing budgetary problems for federal and state governments, who are currently paying over 50% of the US health care bill.

Universal health coverage would also have a salutary effect on labor-management relations. Many if not most strikes in the past five years have involved conflicts over health benefits. Universal coverage would defuse this contentious issue, provide benefits independent of employment status, and allow business greater flexibility in whom to hire.

Single Payer will enhance the comparative position of the US in the global market. President Bush has repeatedly said that the United States is not reluctant to compete on the international market as long as there is an even playing field. At present, the lack of universal health insurance places the US at a disadvantage vis-à-vis other countries. Companies such as General Motors that have factories in both the US and other countries have learned this lesson well; for example, in 2003 the costs of manufacturing a midsize care in Canada were $1,400 less than that of manufacturing the identical car in the US, primarily because of much higher health costs in this country.iii

Single Payer builds on the existing experience. Those who fear that single payer is new and foreign, and therefore untested, need to be reminded that Medicare is, in essence, a single-payer system. For those who are eligible, Medicare is universal and identical, not means-tested, and administered by the government, which acts as a single-payer for hospital and outpatient physician services. Because it did not have to sift and sort the population or cope with a layer of insurers, the rollout of Medicare in 1966 was amazingly smooth.iv Practically overnight–and without computers–the program covered services 3 provided by 6,600 hospitals, 250,000 physicians, 1,300 home health agencies, and hundred of nursing homes. By the end of its first year, Medicare had enrolled more than 90% of eligible Americans, a feat that cemented its popularity and redeemed President Johnson’s faith in the efficacy of government.

In contrast, Part D of Medicare, which departed from the single-payer model and introduced private insurers, encountered the wrath of consumers who were unable to maneuver the complicated choices required to obtain prescription drug benefits.

Single Payer has significantly lower administrative costs. Studies by both the Congressional Budget Office and the General Accounting Office have repeatedly shown that single-payer universal health care would save significant dollars in administrative costs. As early as 1991, the GAO concluded that if the universal coverage and single-payer features of the Canadian system had been applied in the United States that year, the total savings (then estimated at $66.9 billion) “would have been more than enough to finance insurance coverage for the millions of American who are currently uninsured.”v More recently, estimates published in the International Journal of Health Services conclude that “streamlining administrative overhead to Canadian levels would save approximately $286 billion in 2002, $6,940 for each of the 41.2 million Americans who were insured as of 2001. This is substantially more than would be needed to provide full insurance coverage.” vi At present, the US spends 50% to 100% more on administration than countries with single-payer systems.

Single Payer facilitates quality control. Having a single-payer system would create for the United States a comprehensive, accurate, and timely national data base on health service utilization and health outcomes. This would provide information on gaps and disparities or duplication of care, thereby serving as valuable intelligence for decision-making and resource allocation. At present, the closest analogy to this is the Veterans Health Administration (VHA), which has been highly successful in containing costs while providing excellent care. The key to its success is that it is a universal, integrated system: “Because it covers all veterans, the system doesn’t need to employ legions of administrative staff to check patients’ coverage and demand payment from their insurance companies. Because it’s integrated, providing all forms of medical care, it has been able to take the lead in electronic record-keeping and other innovations that reduce costs, ensure effective treatment and help prevent medical errors.”vii

Single Payer gives the government greater leverage to control costs. A single payer would be able to take advantage of economies of scale and exert greater leverage in bargaining with providers, thereby controlling costs. Recent experiences with both the VHA system and that of Medicare Part D indicate the difference exerting such leverage can make. The Department of Veterans Affairs 4 uses its power as a major purchaser to negotiate prices with pharmaceutical makers. But when the legislation leading to the drug prescription plan (better known as Medicare Part D) was passed, Congress explicitly barred negotiating prices with drug makers. The results of this are now becoming evident: at present, the VA is paying 46% less for the most popular brand-name drugs than the average prices posted by the Medicare plans for the same drugs.viii Because Part D increased the effective demand for drugs without controlling costs, prescription drug prices have risen sharply: during the first quarter of 2006, prices for brand-name pharmaceuticals “jumped 3.9%, four times the general inflation rate …and the largest quarterly price increase in six years.”ix

If this trend is allowed to continue unchecked, it could jeopardize the fiscal viability of the Medicare drug program and seriously undermine whatever political and public support it now has. In addition, this could have significant repercussions on the program as a whole. In the words of economist Stephen W. Schondelmeyer, who specializes in drug industry issues, “Higher drug prices may lead to higher premiums next year, which may discourage enrollees from joining or staying in the program, and fewer enrollees could drive premiums even higher.”x

Single Payer promotes greater accountability to the public. One of the key features of the US health care system is its fragmentation. When every player is responsible for only part of the care of part of the population part of the time, there is no overall accountability for how the system functions as whole. Consumers are therefore left wondering who is in charge, and whom they can appeal to when their knowledge is incomplete or their care is inadequate. The most recent report to Congress of the Medicare Advisory Commission recognizes this: “…perverse payment system incentives, lack of information, and fragmented delivery systems are barriers for full accountability.” Xi

The creation of a single payer would provide an opportunity for creating a system run by a public trust. Benefits and payments would be decided by the insurer which would be under the control of a diverse board representing consumers, providers, business and government.

Single Payer fosters transparency in coverage decisions. Single-payer plans have been criticized for “making all sorts of unbearable trade-offs explicit government policy, rather than obscuring them in complexities.” Given finite resources, it may not be possible to cover every single treatment, device or pharmaceutical a patient may require or desire. Priorities must be set, and the criteria for these should be transparent and consistently applied.

The practice of “obscuring trade-offs” is irresponsible and demeaning to the American public. Medical care decisions are too important and affect everyone 5 too directly to be made surreptitiously. Moreover, forcing policy-makers to make decisions concerning what to cover will ensure their confronting issues of safety, efficacy, and value-for-money that are often circumvented or overlooked. Tradeoffs that are transparent to health care consumers will therefore be in the public’s interest.

In sum, the reasons for supporting single payer are practical as well as principled, based on values of openness, equity, and social responsibility. We therefore urge the Citizens Health Care Working Group to adopt the creation of a single payer as an essential pillar without which the guiding values underpinning the Interim Recommendations will not be fulfilled.

NOTES
i Citizens’ Health Care Working Group. Health Care That Works for All Americans. October 2005.
ii Mintz, Morton. Single Payer: Good for Business. The Nation. November 15, 2004.
iii Ibid.
iv Friedman, Saul. A tale of two Medicare plan rollouts. Newsday, May 27, 2006.
v Quoted in Mintz, Op cit.
vi Himmelstein DU, Woolhander S, and Wolfe SM. “Administrative Waste in the US Health Care System in 2003: The Cost to the Nation, The States, and the District of Columbia, with State-Specific Estimates of Potential Savings. International Journal of Health Services. Vol. 34, No. 1, 2004: 79-86.
vii Krugman Paul. “Health Care Confidential.” The New York Times, January 27, 2006.
viii Freudenheim M. “Drug Prices Up Sharply This Year.” The New York Times, June 21, 2006.
ix Ibid.
x Quoted in Ibid.
xi Report to the Congress: Increasing the Value of Medicare. Washington, DC: Medicare Payment Advisory Commission. June 2006: xv.

Reforma de los Servicios de Salud en los Estados Unidos: El Argumento a Favor de un Pagador Único

En agosto de 2006, la organización sin fines de lucro Public Citizen sometió la siguiente ponencia al Group de Trabajo creado por el gobierno para auscultar las opiniones sobre los servicios de salud en los Estados Unidos. A continuación presentamos una traducción de un resumen de la ponencia.

La creación de un seguro universal de salud ha sido tema de debate en los Estados Unidos desde 1912, cuando un grupo laboral estableció un comité sobre seguridad social. Aunque el concepto de servicios de salud para todos fue discutido, la idea no prosperó. Pero el tema ha suscitado interés esporádicamente desde entonces, y actualmente ha vuelto a surgir como tema de interés social y politico.

El caso a favor de un pagador único ha cobrado vigencia en días recientes, cuando las empresas están sintiendo las presiones de un alza en el costo de los seguros de salud, el país está perdiendo su ventaja comparada en los mercados globales, los hospitales están buscando alivio contra la atención no remunerada, y los consumidores están confusos debido a la variedad de aseguradores que ofrecen confusión disfrazada como selección.

Actualmente la razón principal a favor de un reforma al sistema es el creciente número de personas — unos 47 millones — que no tienen seguro médico y los millones adicionales que tienen una cubierta tan escasa que no pueden contar con su seguro para protegerlos contra el riesgo de una condición grave. Pero también hay muchas razones prácticas a favor de un seguro universal con un pagador único. A continuación las resumimos.

El pagador único es conveniente para las empresas. Un seguro financiado por el sector público pero operado por el sector privado le costaría menos a los patronos en impuestos de lo que pagan actualmente para cubrir el seguro de salud. Con un seguro universal, los patronos no tendrían que ofrecer seguros médicos como parte de la compensación a sus empleados. Y, con el costo de servicios estimado a aumentar entre 14 a 18 por ciento entre ahora y el 2010, en ausencia de un seguro, los empleados no tendrían ningún alivio contra la situación intolerable en que se encuentran al presente. Una encuesta de ejecutivos llevada a cabo en Detroit reveló que un 75 por ciento considera que los costos de los seguros de salud que ofrecen los patronos son “no sufragables” y el 25 por ciento restante los considera “altamente intolerables.”

Si ésta es la situación para los patronos individuales, el cuadro es aún peor para la economía en general. Los aumentos en los costos de los servicios de salud tienden a rezagar el crecimiento económico: obstaculizan la creación de nuevos empleos, impiden los aumentos salariales, debilitan la viabilidad de los fondos de pensiones, y deprimen la calidad de los empleos. Los aumentos en los servicios de salud también tienen un impacto nocivo sobre los gobiernos federales y estatales, los cuales cubren la mitad del gasto nacional por concepto de servicios de salud.

Un seguro universal de salud también beneficiaría las relaciones obrero-patronales. Una gran parte de las huelgas que se han llevado a cabo en los últimos 5 años han concernido disputas sobre los beneficios de salud. La cobertura de toda la población eliminaría estas disputas, proveería beneficios independientemente del estado laboral del individuo, y el darían al patrono mayor flexibilidad en cuanto a quién emplear.

El pagador único fortacelería las ventajas comparadas de los Estados Unidos en el mercado mundial. El Presidente Bush ha indicado en repetidas ocasiones que los Estados Unidos no está renuente a competir en el mercado internacional siempre que sea en igualdad de condiciones. Al presente, la carencia de un seguro nacional pone al país en desventaja en comparación con otros países desarrollados. Compañías tales como General Motors que tienen fábricas tanto en los Estados Unidos como en otros países han aprendido bien esta lección. Por ejemplo, en 2003 el costo de manufacturar un carro mediano en Canadá era $1400 menor que el costo de fabricar el mismo carro en los Estados Unidos; la diferencia se debía principalmente a lo que gasta la compañía por concepto de servicios de salud.

El pagador único se basa en la experiencia ya vivida. Hay quienes alegan que el pagador único es algo nuevo y foráneo, y por lo tanto representa un concepto experimental. A éstos, hay que recordarles que el programa Medicare funciona como pagador único. Para las personas cubiertas por este programa en su forma original, Medicare es universal y uniforme, y no depende de la capacidad de pago de cada cual. El programa es administrado por el gobierno, y éste funciona como pagador único para los servicios médicos y de hospital. Debido a que el gobierno cubrió a toda la población mayor de 65 y no tuvo que clasificar a la población por nivel de riesgos ni lidiar con una multiplicidad de aseguradores, la inauguración del programa fue increíblemente sencilla y libre de escollos. Prácticamente de la noche a la mañana — y sin el uso de computadoras — el programa cubrió los servicios provistos por 6,600 hospitales, 250,000 médicos, 1,300 agencias de salud en el hogar, y cientos de casas de salud. Para fines del primer año de operaciones, Medicare había inscrito a un 90 por ciento de la población elegible, un logro que afianzó la popularidad del programa y vindicó la confianza del Presidente Johnson en el gobierno.

En contraste, la parte D de Medicare, que adoptó un modelo diferente e introdujo a las compañías aseguradoras en la administración del programa, tuvo un despegue difícil, incurriendo así la ira de muchos consumidores que tuvieron dificultad en descifrar los beneficios de los productos farmaceúticos a los cuales tendrían derecho.

El pagador único acarrea gastos administrativos mucho menores. Los estudios llevados a cabo tanto por la Oficina de Presupuesto del Congreso como por la Oficina de Contabilidad Gubernamental (GAO, por sus siglas en inglés) concluyen que la utilización de un pagador único bajo un seguro universal ahoraría mucho dinero en gastos administrativos. En 1991, el GAO calculó que, si Estados Unidos hubiese adoptado la cubierta ofrecida por el sistema de salud de Canadá junto con un pagador único ese año, el ahorro total (estimado en ese momento en $66.9 billones) “hubiese sido más que suficiente para financiar la cobertura de los millones de americanos que no tenían seguro de salud” en ese momento. Más recientemente, estimados publicados en el International Journal of Health Services demuestran que, extrapolando los gastos administrativos de Canadá a los Estados Unidos hubiese ahorrado unos $286 billones en 2002, suma que alcanzaría a $6,940 por cada uno de los 41.2 millones de personas que no tenían seguro médico para esa fecha. Al presente, los gastos administrativos de los Estados Unidos son entre 50 y 100 porciento más altos de lo que son en los países que usan un pagador único.

El pagador único facilita el control de calidad. Teniendo un pagador único, los Estados Unidos tendría un banco de datos abarcador, confiable y al día sobre la utilización de los servicios de salud y la eficacia de los mismos. Esto proveería datos sobre lagunas o duplicación en los servicios y disparidades en el acceso, suminstrando así información útil en la toma de decisiones y en la asignación de recursos.

El pagador único le da al gobierno mayor poder de regateo en el control de costos. Un pagador único podría beneficiarse de las economías de escala que conlleva un mayor volumen de servicios. Además, aumentaría el poder de regateo que tendría el gobierno al negociar con proveedores, abaratando así los costos. Experiencias recientes con el Departamento de Veteranos y la Parte D de Medicare indican la diferencia que puede hacer el poder de regateo. El Departamento de Veteranos utiliza su poder adquisitivo como comprador para negociar mejores precios cuando compra drogas y medicamentos. Pero cuando el Congreso pasó la ley que autorizó el Plan de Drogas (mejor conocido como Medicare, Parte D), el Congreso explícitamente prohibió la negociación de precios con los manufactureros de productos farmaceúticos. Los resultados de esto son obvios: al presente, el Depto. de Veteranos paga un 46 por ciento menos por las marcas más populares de medicinas de lo que paga Medicare por las mismas drogas.

El pagador único promueve una mayor responsabilidad de los servicios hacia el público. Una de las características claves del sistema de salud estadounidense es su fragmentación. Cuando cada parte es responsable de sólo parte del problema de parte de la población parte del tiempo, no hay nadie responsable por el funcionamiento del sistema en su totalidad. Los consumidores terminan confusos, y no saben a quién apelar cuando carecen de información o los servicios son deficientes.

La creación de un pagador único proveería una oportunidad para crear un sistema operado por un fideicomiso público. Los beneficios y los pagos los decidiría una entidad que operaría bajo el liderato de una junta diversa con representación de consumidores, proveedores, empresarios, y el gobierno.

El pagador único promueve la transparencia en las decisiones de qué cubrir. Dado que los recursos no son infinitos, puede que no sea posible cubrir todo la gama de servicios y tratamientos que un paciente requiera o desee. Habrá que establecer prioridades, y los criterios para éstas deben de ser explícitos y consistentemente aplicados. Las decisiones sobre qué servicios o terapias cubrir deberán basarse en criterios de seguridad, eficacia, y economía. Los consumidores necesitan saber qué juicios imperaron en el momento de seleccionar entre distintas terapias o servicios.

Resumiendo, las razones para seleccionar un pagador único se basan en consideraciones prácticas así como morales y éticas, basadas en valores de información compartida y responsabilidad social.

City Resolution (Ithaca)

The following Resolution was passed by the City of Ithaca, NY 6/7/06:

Resolution In Support Of a Comprehensive, Single-Payer National
Health Care System

Resolution

Whereas, the impact of the cost of healthcare on the City of Ithaca’s taxpayers has been considerable and has continued to increase exponentially as is shown by the fact that in the year 2001 the city’s cost of healthcare was $3,681,304 and $5,844,000 in the year 2005, and

Whereas, the percentages of the healthcare costs in relationship to the entire city of Ithaca budget for the last five years have been the following:

2001 9.19%
2002 10.82%
2003 12.48%
2004 11.65%
2005 12.01%

Whereas, enormous and rising profits of insurance companies, HMOs and pharmaceutical companies have resulted in limiting and virtually denying healthcare to as many as 100 million people in the United States; and

Whereas, the existence of thousands of public and private insurance payers has resulted in an unruly bureaucratic system and in confusion throughout every aspect of insurance coverage from patients to practitioners; and

Whereas, healthcare for all is a basic right under the UN Declaration of Human Rights and is a mandate under the U.S. Constitutional call to provide for life, liberty and the pursuit of happiness; and

Whereas, solutions that are often discussed other than a single payer solution imply limitations, high deductibles and the reduction of health services especially for the poor, the sick and elderly; and

Whereas, statistics show that the greatest barrier to health is poverty and that inequalities in healthcare diminish not only well-being but also everyone’s ability to work and prosper; and

Whereas, Congressman John Conyers has introduced H.R. 676, the United States Nation Health Insurance Act, also known as the Expanded and Improved Medicare For All Act; and

Whereas, H.R. 676 would cover every person in the U.S. for all necessary medical care including prescription drugs; hospital, surgical, outpatient services; primary and preventive care; emergency services; dental and mental health; physical therapy; vision care and long term care among others, without deductibles; and

Whereas, a national movement is growing in support of a national single payer system, and, as a result, the number of members of Congress endorsing this bill has tripled in the past year; now, therefore, be it:

Resolved, that the Mayor and Common Council of the City of Ithaca endorse H.R. 676, The United States National Health Insurance Act, and call on the Congress of the United States to pass this bill and begin its implementation swiftly in order to reduce the suffering and dying in our city, our state and our nation.

Resolved, that copies of this resolution be sent to Senators Hillary Clinton and Charles Schumer, to Legislators Barbara Lifton and George Winner and to Congressman Maurice Hinchey.

“Of all the forms of inequality, injustice in health care is the most shocking and inhumane.” -Martin Luther King Jr.

Lorain County Board Resolution

Resolution of the Lorain County Board

RESOLUTION NO. 05-189
March 16, 2006

In the matter of supporting the United States National Insurance Act — HB676 — “Expanded and Improved Medicare for All”

WHEREAS, the United States National Health Insurance Act (or the Expanded and Improved Medicare for All Act) establishes the United States National Health Insurance Program to provide all individuals residing in the United States and in U S. Territories with free health care that includes all medically necessary care, such as a primary care and prevention, prescription drugs, emergency care and mental health services; and

WHEREAS, this bill will prohibit an institution from participating in the Program unless it is public or nonprofit institution; and

WHEREAS, this bill allows nonprofit health maintenance organizations that actually deliver care in their own facilities to participate in the program; and

WHEREAS, this bill gives patients the freedom to choose from participating physicians and institutions; and

WHEREAS, this bill (prevents) a private health insurer from selling health insurance coverage that duplicates the benefits provided under this act. Allows such insurers to sell benefits that are not medically necessary, such as a cosmetic surgery benefits; and

WHEREAS, this bill sets forth methods to pay hospitals and health professional for services. Prohibits financial incentives between HMOs and physicians based on utilization; and

WHEREAS, this bill authorizes appropriations and provides for appropriated sums to be paid for:
1) by reducing costly paperwork
2) by requiring a rational bulk procurement of medication
3) from existing source of government revenues for health care
4) increasing personal income taxes on the top five percent income earners
5) instituting a modest payroll tax
6) instituting a small tax on stock and bond transactions and;

WHEREAS, this bill requires the program to give first priority in retaining and job placement to individuals whose jobs are eliminated due to reduced administration; and

WHEREAS, this bill establishes a National Board of Universal Quality and Access to access to advise the Secretary and the Director to insure quality, access and affordability; and

WHEREAS, provides for the eventual integration of the health programs of the Department of Veterans’ Affairs and the Indian health Service into the Program.

NOW, THEREFORE BE IT RESOLVED, by the Lorain County Board of Commissioners that we hereby support the United States National Insurance Act — HB 676 — “Expanded and Improved Medicare for All”, to ensure that all Americans, guaranteed by law, will have access to the highest quality, cost effective, health care regardless of an individuals’ employment, income, or health care status.

BE IT FURTHER RESOLVED, we hereby Instruct the Clerk to send this resolution to the United States Senators and Representatives representing Lorain County and the Coalition to Project Healthcare

Warren County Board Resolution

Warren County Commission
McMinnville, Tennessee

Regular Session
October 17, 2005

RESOLUTION ___

A RESOLUTION urging Warren County’s representatives
in the Congress of the United States to endorse, support and
work for the passage of HR 676, known as the United States
National Health Insurance Act.

WHEREAS Warren County taxpayers contribute to the financial support of the health insurance system for its public-school teachers and ancillary personnel; and

WHEREAS the local tax subsidy is a minor factor in the school employees’ health insurance outlays but nevertheless represents, in the aggregate, a substantial cost to local taxpayers; and

WHEREAS present economic realities militate against significant increases in local government contributions to school employees’ health insurance premiums; and

WHEREAS the Tennessee Education Association calculates that the net “take-home” pay for Warren County teaches ranks next to last among Tennessee’s 136 local school districts, a disparity in which the high cost of health insurance and the relatively low local subsidy are dominant factors; and

WHEREAS this commission’s Education Committee found in a hearing October 10, 2005, that the higher subsidies offered by competing school systems have figured in the decision by some experienced Warren County teachers to leave the local system and this community for employment situations in other systems; and

WHEREAS pending legislation in the Congress of the United States (HR 676, The United States National Health Insurance Act) would make quality health care available to all American citizens; and

WHEREAS we recognize among the civil rights of all American citizens reasonable access to competent, effective and timely medical, surgical and rehabilitative care appropriate to each person’s need;

NOW THEREFORE, BE IT RESOLVED by the Warren County Commission that this statement be forwarded to US Senators Bill Frist and Lamar Alexander, and to US Representative Lincoln Davis, as an expression of support for the legislative objectives of HR 676.

BE IT FURTHER RESOLVED that this local legislative body call upon the said United States Senators and Representative to support passage of HR 676, and that each be asked by this commission’s chair to reply within 45 days from adoption of this resolution to advise this body of his position with respect to that proposed legislation.

Steelworkers' Resolution #1

The resolution below was passed by USWA (Steelworkers) Local 6787

RESOLUTION ENDORSING HR 676 — Single Payer Universal Health Care

Workers, their families and their unions are waging an increasingly difficult struggle to win or to keep good health care coverage. Almost every union at every contract deadline must battle and sacrifice merely to sustain health care benefits. The rising costs of health insurance are blocking workers’ progress in wages and other areas. All of our unions face a healthcare crisis.

But the crisis extends far beyond union members. More than 45 million people in the U. S. are currently without health insurance, more than 75 million went without for some length of time within the last two years, and millions more have inadequate coverage or are at risk of losing coverage. People of color, immigrants and women are denied care at disproportionate rates, while the elderly and many others must choose between necessities and life sustaining drugs and care. Unorganized workers have either no or inadequate coverage. The Institute of Medicine has found that each year more than 18,000 in the U. S. die because they had no health insurance.

While we in the United States spend approximately twice as much of our gross domestic product as other developed nations on health care, we remain the only industrialized country without universal coverage. Our problem worsens each year as insurance costs increase and as gradual solutions have failed to make a dent in the problem.

The U. S. health system continues to treat health care as a commodity distributed according to the ability to pay, rather than as a social service to be distributed according to human need. Insurance companies and HMOs compete not by increasing quality or lowering costs, but by avoiding covering those whose needs are greatest.
Economic necessity and moral conscience compel us to seek a better way. Congressman John Conyers, Jr. (D-MI) (joined by 77 co-signers) has introduced HR 676, the United States National Health Insurance Act, also called Expanded and Improved Medicare for All. This single-payer health care program proposes an effective mechanism for controlling skyrocketing health costs while covering all 43 million uninsured Americans. The bill also restores free choice of physicians to patients and provides comprehensive prescription drug coverage to seniors, as well as to younger people.

HR 676 would cover every person in the U. S. for all necessary medical care including prescription drugs, hospital, surgical, outpatient services, primary and preventive care, emergency services, dental, mental health, home health, physical therapy, rehabilitation (including for substance abuse), vision care, chiropractic and long term care. HR 676 ends deductibles and co-payments. HR 676 would save billions annually by eliminating high overhead and profits of the private health insurance industry and HMOs. The transition to national health insurance would apply the savings from administration and profits to expanded and improved coverage for all.

A single payer program as provided by HR 676 is the only affordable option for universal, comprehensive coverage.

Resolved:

That __________________________________ wholeheartedly endorses Congressman Conyers’ bill HR 676, “Expanded and Improved Medicare for All,” a single payer health care program.

That _____________________ will work with other unions and community groups to build a groundswell of popular support and action for single payer universal health care and HR 676 until we make what is morally right for our nation into what is also politically possible.

That _____________________ will send a copy of this resolution to Congressman Conyers, to all members of the U.S. House and Senate, to the AFL-CIO Executive Council, and to the news media.

That ______________________ will take other actions to mobilize our members and our community at the grassroots to encourage other members of the House to sign on as co-sponsors of HR 676 and to encourage Senators to introduce a companion bill in the Senate.

HR 676 General Resolution

RESOLUTION IN SUPPORT OF THE US NATIONAL HEALTH INSURANCE ACT
(HR 676)

WHEREAS everyone deserves access to affordable quality health care; and

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

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

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

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

WHEREAS administrative waste stemming from our reliance on private insurers consumes one-third of health spending; and

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

WHEREAS American physicians are inundated with bureaucratic tasks and costs that Canadian physicians avoid; and

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

WHEREAS “consumer directed health care” adds yet another expensive layer of bureaucrats — the financial firms that manage health savings accounts; and

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

WHEREAS The US National Health Insurance Act which would assure universal coverage of all medically necessary services, contain costs by slashing bureaucracy, protect the doctor patient relationship, assure patients a completely free choice of doctors, and allow physicians a free choice of practice settings; NOW THEREFORE

BE IT RESOLVED that____________________________________ expresses its support for The US National Health Insurance Act (HR 676), and calls upon federal legislators to work towards its enactment within the current Congress.

Medical Group Resolution

A Resolution in Support of the United States National Health Insurance Act

Whereas everyone deserves access to affordable, quality health care.

Whereas the number of Americans without health insurance continues to rise and now exceeds 46 million.

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

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

Whereas managed care and other market-based reforms have failed to contain health care costs.

Whereas HMO and insurance company overhead consumes over $100 billion annually.

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

Whereas American physicians are inundated with bureaucratic tasks and costs that physicians in Canada and other nations with national health insurance avoid.

Whereas the U.S. Government Accountability Office has estimated the bureaucratic savings from converting to a single payer system at 10% of health spending, $200 billion in 2006, which is enough to cover the uninsured and to improve coverage for all of those who now have only partial coverage

Whereas “consumer directed health care” adds yet another expensive layer of bureaucrats – the financial firms that manage health savings accounts.

Whereas entrusting care to profit-oriented firms diverts billions of dollars to excessive incomes for CEOs and threatens the quality of care.

Whereas United States Representatives John Conyers and Dennis Kucinich have introduced H.R. 676, The United States National Health Insurance Act.

Whereas H.R. 676 would assure universal coverage of all medically necessary services under a non-profit single payer program, while containing costs by slashing bureaucracy.

Whereas H.R. 676 would protect the doctor patient relationship, assure patients a free choice of doctors, and allow physicians a free choice of practice settings.

Therefore ________________________________ expresses its support for H.R. 676, The United States National Health Insurance Act (HR 676).

Private plans pay so little for so many

National Health Care? We're Halfway There

By Daniel Gross
The New York Times
December 3, 2006

Out of a total population of about 300 million, 35.6 million elderly Americans were on Medicare in 2005. Of the working-age population, which reached 257.8 million in 2005, some 45.5 million were covered by Medicare, Medicaid or military health programs, according to (Employee Benefits Research Institute). An additional 18.2 million workers had health insurance through jobs in the public sector, which includes state, federal and local governments, public schools and state universities, according to Paul Fronstin, director of the institutes’s health research and education program. Millions of those workers’ dependents are covered as well. Even if those dependents are not included in the tally, taxpayers paid the bill for almost two-fifths of all Americans with insurance in 2005.

But that’s not the full extent of government and taxpayer involvement. Employer-provided health insurance premiums are a form of compensation, yet are not subject to federal payroll or income taxes and are exempt from many state and local taxes. Economists consider these exemptions a form of subsidy. Thomas M. Selden, economist at the federal Agency for Healthcare Research and Quality, estimates that the tax subsidy for employment-related coverage at $208.6 billion in 2006, or 35.4 percent of the amount spent on premiums.

Mining data from the National Health Expenditures Accounts, Mr. Selden found that public expenditures on health care — Medicare, Medicaid, military health care and federal employee benefits — accounted for $888 billion of the $1.96 trillion spent on health care in 2004. Adding in the aforementioned subsidies, and premiums paid for public-sector employees, the total comes to $1.2 trillion, or 61 percent.

Uwe E. Reinhardt, the James Madison professor of political economy at Princeton, suggests adding 5 percent for the federal mandate that hospitals provide free health care to the uninsured. “So government accounts for about two-thirds of health care spending,” Mr. Reinhardt said.

“A rough rule holds that private insurance covers two-thirds of the population and pays for only one-third of all health care,” Mr. Reinhardt said.

The government spends money as if there were a national health insurance program. In 2004, government spending on health care equaled 9.6 percent of the gross domestic product, compared with 6.9 percent in Canada, which has a single-payer universal health care program, said David Himmelstein, associate professor of medicine at Harvard Medical School.

“We’re paying for national health insurance, but we’re not getting it,” Dr. Himmelstein added.

http://www.nytimes.com/2006/12/03/business/yourmoney/03view.html

For the landmark Health Affairs article by Steffie Woolhandler and David Himmelstein, “Paying for national health insurance–and not getting it”: http://content.healthaffairs.org/cgi/content/abstract/21/4/88

Comment:

By Don McCanne, MD

So two-thirds of health care spending already is through our tax system. Percentage-wise that is close to what most other nations with universal systems pay in public funds. Thus the contention that we cannot afford the taxes to pay for a universal system is untrue; we are already paying them. We merely need to establish a financing system that would spend these same funds much more efficiently so that we can include everyone.

What role should private insurers have in an efficient system of health care financing? The inefficiencies of our fragmented system are due in a large part to the participation of the multitude of private insurers, but we should look carefully at the service they do provide us under our current system before we decide that they should be dismissed.

Uwe Reinhardt offers the rough rule that “private insurance covers two-thirds of the population and pays for only one-third of all health care.” Simply stated, the private insurance industry has avoided its purpose of pooling risk by skimming off the healthy sector of our population while leaving the risk of the high-cost individuals with us – the taxpayers. Paying the high costs is the purpose of insurance, yet the insurers have evaded their fiduciary responsibility.

The private insurers’ primary product is not insurance; it is administrative services, and more and more of them, which have contributed significantly to the waste in health care spending.

Just imagine the prospect of the private insurers covering two-thirds of our population and fulfilling their risk pooling responsibilities by paying for two-thirds (instead of one-third) of our health care costs. If you think that private insurance premiums are unaffordable now, just wait until they double!

The 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.

Since the taxpayers are already paying enough for an efficient and effective program of national health insurance, it’s time to demand that our public stewards produce the program we need, or we should replace them with leaders who would.