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Single-payer health plan outlined

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Single-payer health plan outlined

Vermont News – WCAX.com
August 30, 2006

MONTPELIER, Vt. — Vermont could offer health coverage to all its residents and spend $51 million less a year on health care under a single-payer system, according to a legislative consultant’s report released Tuesday.

But while businesses that currently offer health insurance to their employees would save money, those that don’t _ and their workers _ would see a combined new 13.4 percent payroll tax that even some single-payer advocates see as fatal to the plan.

Sen. James Leddy, D-Chittenden, and Rep. John Tracy, D-Burlington, co-chairs of the Legislature’s Vermont Commission on Health Care Reform, joined the consultant, Dr. Kenneth Thorpe of Atlanta’s Emory University, in describing the report’s findings at a news conference.

“I assume employers would pay about 75 percent of the total (10.1 percent payroll tax) and workers the remaining 3.4 percent,” Thorpe said. Those taxes would be a new expense for businesses and their workers that don’t have health coverage now, he said.

“On the other hand, some employers and families currently pay more than 10.1 percent and 3.4 percent of payroll respectively for insurance and would pay less,” he wrote.

For their money, they would get a “a benefit package modeled after the typical plan in the state,” he added, saying that half of those who currently have insurance have more generous coverage.

Thorpe said copays and deductibles would be set very low under his plan. “These low cost sharing obligations will result in substantial reductions in consumer out-of-pocket spending.”

The lawmakers said Thorpe’s report was not a formal proposal, but was merely informational and one option as they pursue the key goal of health care reform legislation passed in each of the last two years: moving Vermont from a state that has an estimated 61,000 uninsured and 180,000 underinsured to one that offers universal coverage.

Leddy called the report “one more step in our ongoing process that will continue.”

Thorpe, Leddy and Tracy acknowledged that the coverage would not be truly universal. It would exclude Medicare beneficiaries, who already get comprehensive health coverage for seniors from the federal government.

Also excluded would be Vermonters who work for out-of-state employers, whether private companies, national nonprofits or the federal government.

Jason Gibbs, a spokesman for Gov. James Douglas, said the single-payer plan envisioned in the Thorpe report would result in less comprehensive health coverage for many teachers, state employees and others whose employers currently offer more generous plans.

Gibbs said the state should concentrate on implementing health care reform already passed, including the Catamount Health plan designed to get coverage to the uninsured. He noted the legislation’s emphasis on managing chronic diseases, which he said account for 80 percent of health care costs.

“From the governor’s point of view our focus should be laserlike as we implement Catamount Health and these new reforms and our focus should not be on ways to increase taxes,” Gibbs said.

Dr. Deborah Richter, a Cambridge-based family physician and president of the single-payer advocacy group Vermont Health Care for All, called the payroll tax a “nonstarter” because of the opposition it would generate among Vermont’s small business owners.

But she called the report “a great way to open the discussion” about moving the state toward a single-payer system.

Medical miasma

By George H. Lesser
The Washington Times
Published August 16, 2006

I have problems with our health insurance “provider,” as I suppose some of you reading this do as well.

I had a minor test done in my doctor’s office. He injected a little pain killer, did the test, and I was gone in about half an hour. The insurance company refuses to pay half the costs, because the doctor anesthetized me, rather than having an anesthesiologist come. Of course, that would have dramatically increased the cost, but that’s what the insurance company demands.

Not too long ago, another doctor sent me to a hospital to have two routine tests performed, which required a general anesthetic in an operating room. My wife went through the same thing a few months before, and the insurance company paid only half because the two tests were performed simultaneously. So I scheduled two visits, on separate days, in the full operating room with the doctor, anesthesiologists, nurses, and who knows what else. I missed two days of work. The insurance company paid twice as much, plus twice the administrative costs for processing two claims. And, of course, I had to run twice the risks of two procedures under general anesthetic. The insurance tail wags the medical dog.

The last time I sought medical help in Italy, I suffered from gastrointestinal distress to such an extent I wasn’t eating. If I can’t eat in Italy, that is serious. The night before I was due to fly to Washington, I was in a hotel near the Milan airport. I wanted to see my doctor in Washington as soon as possible, so I telephoned him to make an appointment. He questioned me about my symptoms and told me I was too sick to fly. We argued, and then he said I could fly, but only if I got a doctor to prescribe ciprofloxacin (“Cipro”) and metronidazole (“Flagyl”) for me to start taking that evening.

I asked the hotel for a doctor. They said it would be faster to go to the clinic at the airport. I followed their advice and found a doctor. He wrote out two prescriptions for me, but said the airport pharmacy had just closed. He directed me to the nearest town with an open pharmacy.

I couldn’t find the drug store. I did find a hospital. I parked in the parking lot, walked in, and asked if I could get the prescriptions filled. The lady got testy and informed me this was a hospital not a pharmacy. I asked for her advice. She told me: “This is a hospital. We practice medicine. If you would like us to treat you, take a seat in the waiting room.” Unable to think of a better course, I went out to my car, grabbed my book, went back into the hospital and settled in for a nice, long read.

After at most five minutes, a male nurse interrupted me. I assumed it was to wrestle with insurance forms in Italian. Instead, the fellow escorted me into a hospital room, where we were joined immediately by a doctor. He spoke English about as well as I speak Italian, so we spoke my language until he ran into problems, then switched to his language until I couldn’t find a word. He questioned me closely about my symptoms. He had me lie down on the bed and started poking and asking me how it felt. He had the male nurse draw some blood, and he ran some other tests. He took a medical history and inspected parts of my anatomy that seemed to have nothing to do with the problem.

I was there six hours. The nurse was in the room with me for all but a few minutes. The doctor was there almost all the time. After a while, he got the test results, which showed I did not have food poisoning, but he wanted to observe me a while longer. Eventually, he concluded I had contracted some kind of intestinal bug, and he gave me a couple of days supply of Cipro and Flagyl.

I checked in with the waspish lady at the front desk to ask how much I owed. She asked me if I had parked in the hospital parking lot. I said yes. She said I owed one euro and 50 pence ($2). I asked how much for the medical care and the medicine. She said that was free. When I got back to Washington, I saw my doctor. He had a few tests run in the office, gave me full prescriptions for Cipro and Flagyl, and billed me $1,000.

Most Americans I talk to have a lot of screwy ideas about medical care. They think Americans have “The Best Health-Care System in the World.” They think “socialized medicine” doesn’t work, because people have to wait too long to get care, and the care isn’t very good and they don’t have any choices.

We have many wonderful doctors, hospitals and pieces of equipment in the U.S. However, statistically, we don’t do so well. Life expectancy, infant mortality, how long people live with a disease after it is diagnosed: You name the criterion, and we don’t compare well with any of the countries that have national health care. And we spend a whole lot more for a lot less health care.

Here are a few comparisons between the U.S. and France. According to the Organization for Economic Cooperation and Development: French women live 3-1/2 years longer than American women; French men live just over three years longer than American men. Our infant mortality rate is 72-1/2 percent higher than theirs. And 30 percent more Frenchmen smoke than we do, and they consume almost twice as much alcohol. Who knows how much more butter, cheese and fois gras?

Worried about waiting for a doctor? Or a hospital bed? The French have 37-1/2 percent more doctors than we, and way over twice as many hospital beds, per capita. Worried about choice? French hospitals are 65 percent government run and 35 percent privately run. Take your pick. The health-care system pays. You also get to choose your doctor.

The difference in the quality of service is difficult for Americans to comprehend. In France, doctors routinely make house-calls. Patients aren’t thrown out of hospitals because the insurance companies decide when it is time to go. They stay until doctors decide it is time to go. The French government pays 75 percent of all health care costs. Most of the rest is paid by private insurance. If somebody can’t afford private insurance, the government makes up the difference.

The bottom line: We pay 43 percent more for health care than the French do, and we get a whole lot less for our money.

George H. Lesser has reported for more than 30 years on international political and economic developments for both U.S. and European publications. He has been based in Washington, New York, London and Brussels, and lives in Washington D.C. and Florence, Italy.

Study: Single-payer health care would save state money

By Louis Porter
Vermont Press Bureau
August 30, 2006

MONTPELIER — A Legislative study released Tuesday concludes that Vermont could save money by adopting a single-payer health care system.

But key lawmakers who authorized the study said they want more information before endorsing or rejecting such a system.

Implementing single-payer health care would pose political and financial challenges by forcing a “substantial redistribution of who pays for health care,” said Kenneth Thorpe, a national consultant hired by lawmakers to conduct the study.

Vermonters who lack insurance now and companies that do not offer coverage to their employees would pay more under a single-payer system, the study found. People who already have health insurance, and employers that offer it to their workers, would pay less.

When state lawmakers passed a reform bill last year to change the way health care is delivered and financed in Vermont, they promised to continue examining one alternative — a single-payer system, run by the state, that would pay hospital and doctor bills for all Vermonters.

Such a system would be more complex than it might seem, lawmakers and experts said.

For example, even the single-payer system studied by Thorpe would be funded by at least three sources. In addition to money provided by the state, the federal Medicare program would continue to cover eligible Vermonters. And private insurance companies would keep paying bills on behalf of out-of-staters who receive medical care while visiting the state.

Even with multiple funding sources, such a system could save $51 million in administrative costs, Thorpe said.

A single-payer system in Vermont would be financed by a payroll tax on companies and workers of about 13.5 percent, Thorpe said. Companies would pay about 75 percent of those costs, while employees would pick up the rest.

Companies that offer their employees health insurance, and workers who have coverage, would see a net savings under that system. But the roughly 40 percent of companies that offer no coverage to their workers would pay more, Thorpe said.

Rep. John Tracy, D-Burlington and Sen. James Leddy, D-Chittenden, who run the Legislature’s Health Care Commission, said they aren’t prepared to endorse the single-payer system outlined in Thorpe’s report. They said they need to see additional studies, including an analysis of all the economic effects such a system would have on the state.

Tracy and Leddy said a single-payer system could be a complement, rather than an alternative, to the “Catamount Health” measure lawmakers passed last year to increase the number of Vermonters covered by health insurance and improve care of chronic illnesses.

“We are not at the end of the road,” said Tracy, who is a Democratic candidate for lieutenant governor. His primary opponent is state Sen. Matthew Dunne. “As we continue to go forward we need to look at all the options to finance it.”

The report quickly drew fire from two sides: from those who don’t believe last year’s measure went far enough, and from those who believe it went too far.

“Imposing a payroll tax will drown Vermont’s job providers, who are a backbone of Vermont’s economy,” Vermont Chamber of Commerce President Duane Marsh said in a prepared statement.

Jason Gibbs, a spokesman for Gov. James Douglas, said the governor “negotiated and signed the most comprehensive health care legislation in the country.”

“The governor’s focus is on implementing those reforms, assuring universal access to affordable health insurance and lowering the cost of care for those who currently have health insurance,” Gibbs said. “We find it very troubling that, just a few months after landmark legislation has been passed, the Legislature is contemplating how to raise the payroll tax.”

But Marvin Malek, a Progressive Party candidate running for lieutenant governor, said Vermont’s new law does little to address the problems of information management and administrative waste. Lt. Gov. Brian Dubie, a Republican, also is running for lieutenant governor.

“That bill is hardly the answer,” Malek said. “I don’t even think it is funded.”

Taxpayers fund the health insurance plans provided to federal, state and local government workers, Malek said. “We are already paying so much for these government plans, why not just say all right, everybody is in,” Malek said.

Increasing the number of Vermonters eligible for government-subsidized health insurance fails to go far enough, he said.

Contact Louis Porter at louis.porter@timesargus.com

Sample Specialty Society Resolution

INTRODUCED BY: List Sponsors (The more, the better!)

TITLE: National Health Insurance- Improved Medicare for All

WHEREAS, the number of Americans uninsured is in excess of 46.6 million and tens of millions more Americans are underinsured and growing1;

WHEREAS, physicians have a moral imperative to advocate for a healthcare system in which all Americans have guaranteed access to high quality and affordable healthcare;

WHEREAS, business is increasingly withdrawing coverage from employees1;

Whereas, the quality of practice for physicians is declining and the lack of control over the practice of medicine (e.g. reimbursements, procedures and formularies) is growing;

WHEREAS, the healthcare infrastructure is inadequate and deteriorating (e.g. reduction in number of emergency rooms2, decrease in hospital beds3 and a decline in the ability to fulfill projected physician workforce requirements4);

WHEREAS, in the new global economy, American companies are at a competitive disadvantage, in part due to health care costs;

WHEREAS, our hodgepodge healthcare system is inadequate to meet homeland security threats (e.g. natural disasters, possible flu epidemics5 and terrorist attacks);

WHEREAS, universal health insurance would guarantee payment for all patients treated;

WHEREAS, the U.S. spends twice as much per capita in healthcare costs compared to other western democracies, yet fails to include all its citizens and fails to achieve equivalent healthcare statistics (e.g. life expectancy, infant mortality and vaccination rate)3;

WHEREAS, a single source government health insurance, i.e. Medicare, would reduce the vast sums of money spent on administrative costs that could more appropriately go to direct patient care6;

WHEREAS, medical malpractice premiums would decrease because settlements would not have to cover future medical expenses of the plaintiff;

WHEREAS, universal Medicare would increase choice of doctors and portability and eliminate job lock;

NOW, THEREFORE BE IT Resolved: that the (Name of Organization) does hereby endorse and will support HR 676, United States National Health Insurance Act (or the Expanded and Improved Medicare for All Act), which covers all medically necessary care for every American and guarantees meaningful physician input and/or negotiating power over all aspects of medical practice and the healthcare system;

and be it further Resolved: that the (Name of Organization) does hereby commit to encourage other medical groups to adopt the same policy and work together with other medical organizations work towards bringing this to reality.

Thanks to Harvey Fernbach for introducing a similar version of this resolution to the Maryland Medical Society.


1. Income, Poverty, and Health Insurance Coverage in the United States; 2005, August 2006. Current Population Reports U.S. Census Bureau
2.”Hospital-Based Emergency Care: At the Breaking Point,” Institute of Medicine, June 14, 2006
3. Health at a Glance- OECD Indicators 2005
4. “Physician Workforce Policy Guidelines for the U.S. 2000-2020,” Council on Graduate Medical Education, July 2004
5. National Strategy for Pandemic Influenza: Implementation Plan, Homeland Security Council, May 2006
6. Woolhandler, S., Campbell, T., and Himmelstein, D. “Costs of Health Care Administration in the United States and Canada.Ć¢ā‚¬Ā New England Journal of Medicine 349:768-775, 2003

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Will primary care survive?

Primary Care – Will It Survive?

By Thomas Bodenheimer, M.D.
The New England Journal of Medicine
August 31, 2006

The American College of Physicians recently warned that “primary care, the backbone of the nation’s health care system, is at grave risk of collapse.”

And indeed, primary care is facing a confluence of factors that could spell disaster. Patients are increasingly dissatisfied with their care and with the difficulty of gaining timely access to a primary care physician; many primary care physicians, in turn, are unhappy with their jobs, as they face a seemingly insurmountable task; the quality of care is uneven; reimbursement is inadequate; and fewer and fewer U.S. medical students are choosing to enter the field.

Even as primary care spirals further into crisis, studies have demonstrated that a primary care-based health care system has the potential to reduce costs while maintaining quality. The hospitalization rates for diagnoses that could be addressed in ambulatory care settings are higher in geographic areas where access to primary care physicians is more limited. States with a higher ratio of generalist to population have lower per-beneficiary Medicare expenditures and higher scores on 24 common performance measures than states with fewer generalist physicians and more specialists per capita.

Serious effort is required to develop a national primary care payment policy. Public policy on primary care does not exist; the fortunes of primary care are dictated not by the health care needs of the country but by a specialty-rich, quantity-based reimbursement system. Few legislators, particularly among those responsible for the trend-setting Medicare program, are aware that primary care is struggling. An educational campaign is needed – to explain the nature and causes of the threats to primary care’s survival; to provide well-documented information on the benefits of primary care, focusing on the potential for a strong primary care-based system to control health expenditures; and to offer concrete proposals for reforming both primary care at the microsystem level and the payment scheme at the macrosystem level.

Whoever takes up the cause of primary care, one thing is clear: action is needed to calm the brewing storm before the levees break.

Primary Care – Will It Survive? By Thomas Bodenheimer, M.D.
http://content.nejm.org/cgi/content/full/355/9/861

Also, Primary Care – The Best Job in Medicine? By Beverly Woo, M.D.
http://content.nejm.org/cgi/content/full/355/9/864

Comment:

Don McCanne, MD

“Crisis” is a word that has been thrown around lately to describe many of the trends that are resulting in higher health care costs, but without an improvement in coverage and access. When it comes to the deterioration that is taking place within our primary care infrastructure, “crisis” is not an adequate term. It’s much worse.

Both of the articles above provide an excellent, brief description of the status of primary care. The issue is of such great importance that the editors of the NEJM have provided free access to both of these articles.
They should be downloaded to be used in your health reform advocacy activities. Particularly valuable are the four graphs (two in each article) that can be downloaded as PowerPoint slides.

We need immediate macrosystem reform. We need single payer now!

How VA Hospitals Became The Best

No longer a nation’s shame, veteran care is acing competitors

By DOUGLAS WALLER
Time Magazine
Sunday, Aug. 27, 2006

Most private hospitals can only dream of the futuristic medicine Dr. Divya Shroff practices today. Outside an elderly patient’s room, the attending physician gathers her residents around a wireless laptop propped on a mobile cart. Shroff accesses the patient’s entire medical history–a stack of paper in most private hospitals. And instead of trekking to the radiology lab to view the latest X-ray, she brings it up on her computer screen. While Shroff is visiting the patient, a resident types in a request for pain medication, then punches the SEND button. Seconds later, the printer in the hospital pharmacy spits out the order. The druggist stuffs a plastic bag of pills into what looks like a tiny space capsule, then shoots it up to the ward in a vacuum tube. By the time Shroff wheels away her computer, a nurse walks up with the drugs.

Life in a big-name institution like the Mayo Clinic? Not hardly. Shroff, 31, a specialist in internal medicine, works at the Veterans Affairs hospital in Washington, where the vets who come for the cutting-edge treatment are mostly poor.

If you’re surprised, that’s understandable. Until the early 1990s, care at VA hospitals was so substandard that Congress considered shutting down the entire system and giving ex-G.I.s vouchers for treatment at private facilities. Today it’s a very different story. The VA runs the largest integrated health-care system in the country, with more than 1,400 hospitals, clinics and nursing homes employing 14,800 doctors and 61,000 nurses. And by a number of measures, this government-managed health-care program–socialized medicine on a small scale–is beating the marketplace. For the sixth year in a row, VA hospitals last year scored higher than private facilities on the University of Michigan’s American Customer Satisfaction Index, based on patient surveys on the quality of care received. The VA scored 83 out of 100; private institutions, 71. Males 65 years and older receiving VA care had about a 40% lower risk of death than those enrolled in Medicare Advantage, whose care is provided through private health plans or HMOs, according to a study published in the April edition of Medical Care. Harvard University just gave the VA its Innovations in American Government Award for the agency’s work in computerizing patient records.

And all that was achieved at a relatively low cost. In the past 10 years, the number of veterans receiving treatment from the VA has more than doubled, from 2.5 million to 5.3 million, but the agency has cared for them with 10,000 fewer employees. The VA’s cost per patient has remained steady during the past 10 years. The cost of private care has jumped about 40% in that same period.

Vets still gripe about wading through red tape for treatment. Some 11,000 have been waiting 30 days or more for their first appointment. The Iraq and Afghanistan wars could stress the system, although for the moment VA officials say the agency can accommodate the new patients. That’s because older vets, especially those from the World War II and Korean War eras, are dying of natural causes at the rate of about 600,000 a year, whereas the Iraq and Afghanistan wars have so far created a little more than 550,000 new vets.

On the other hand, because advances in body armor and field medicine have enabled soldiers to survive battlefield injuries that in earlier conflicts meant death, many of the new patients are arriving at VA hospitals with severe wounds. In response, the VA has set up four polytrauma centers around the country. Dawn Halfaker, a former Army captain who lost her right arm in Iraq, says negotiating the bureaucracy to get treatment for all her medical needs has been frustrating at times. She had to wait eight months for an appointment at the Washington hospital to get her teeth cleaned. Even so, she says, the care “is not as bad as I thought it would be.”
PAGEBREAK
The roots of the VA’s reformation go back to 1994, when Bill Clinton appointed Kenneth Kizer, a hard-charging doctor and former Navy diver, as the VA’s under secretary for health. Kizer decentralized the VA’s cumbersome health bureaucracy and held regional managers more accountable. Patient records were transferred to a system-wide computer network, which has made its way into only 3% of private hospitals. When a veteran is treated, the doctor has the vet’s complete medical history on a laptop. In the private sector, 20% of all lab tests are needlessly repeated because the doctor doesn’t have handy the results of the same test performed earlier, according to a 2004 report by the President’s information technology advisory committee.

Another innovation at the VA was a bar-code system, as in the supermarket, for prescriptions–a system used in fewer than 5% of private hospitals. With a hand-held laser reader, a nurse scans the bar code on a patient’s wristband, then the one on the bottle of pills. If the pills don’t match the prescription the doctor typed into the computer, the laptop alerts the nurse. The Institute of Medicine estimates that 1.5 million patients are harmed each year by medication errors, but computer records and bar-code scanners have virtually eliminated those problems in VA hospitals.

Private hospitals, which make their money treating people who come to them sick, don’t profit from heavy investments in preventive care, which keeps patients healthy. But the VA, which is funded by tax dollars, “has its patients for life,” notes Kizer, who served in his post until 1999. So to keep government spending down, “it makes economic sense to keep them healthy and out of the hospital.” Kizer eliminated more than half the system’s 52,000 hospital beds and plowed the money saved into opening 300 new community clinics so vets could have easier access to family-practice-style doctors. He set strict performance standards that graded physicians on health promotion.

As the reforms produced results, veterans began “voting with their feet,” says Dr. Jonathan Perlin, who just resigned as the VA’s health under secretary. Hundreds of thousands abandoned private physicians and enrolled in the lower-cost and higher-quality VA care. But that created a new problem. The VA’s budget from Congress (currently about $30 billion annually) couldn’t cover the influx. By January 2003, with hundreds of thousands waiting six months or more for their first appointment, the VA began limiting access to only vets with service-related injuries or illness or those with low income.

Veterans’ groups understandably want the health-care system expanded to accommodate vets with higher incomes and no service-related ailments. Tom Bock, commander of the American Legion, has another idea: allow elderly vets not in the system who are drawing Medicare payments to spend those benefits at a VA facility instead of going to a private doctor, as is now required by Medicare. “It’s a win-win-win situation,” he argues. Medicare, which pays more than $6,500 per patient annually for care by private doctors, could save with the VA’s less expensive care, which costs about $5,000 per patient. The vets would receive better service at the VA’s facilities, which could treat millions more patients with Medicare’s cash infusion.

But conservatives fear such an arrangement would be a Trojan horse, setting up an even larger national health-care program and taking more business from the private sector. Congress has no plans to enlarge the scope of veterans’ health care–much less consider it a model for, say, a government-run system serving nonvets. But it’s becoming more and more “ideologically inconvenient for some to have such a stellar health-delivery system being run by the government,” says Margaret O’Kane, president of the National Committee for Quality Assurance, which rates health plans for businesses and individuals. If VA health care continues to be the industry leader, it may become more difficult to argue that the market can do better.

$145,000 for an additional year of life

The Value of Medical Spending in the United States, 1960 -2000
By David M. Cutler, Ph.D., Allison B. Rosen, M.D., M.P.H., Sc.D., and Sandeep Vijan, M.D.
The New England Journal of Medicine
August 31, 2006

According to virtually any commonly cited value of a year of life, we found that if medical care accounts for about half the gains in life expectancy, then the increased spending has, on average, been worth it. However, the current trends are a cause for concern. There has been a sharp increase in the cost per additional year of life gained during the past two decades, primarily among the elderly. Analyses focused on spending and on the increase in life expectancy beginning at 65 years of age showed that the incremental cost of an additional year of life rose from $46,800 in the 1970s to $145,000 in the 1990s. The former amount certainly reflects a good value, but the latter fails to meet many cost-benefit criteria. Furthermore, it appears that although the rate of increase in spending had stabilized, if not declined, by 2000 for the newborn and 15-year-old groups, this rate is substantially outpacing the rate of increase in life expectancy in older age groups. If this trend continues in the elderly, the cost effectiveness of medical care will continue to decrease at older ages.

In conclusion, although medical spending has increased substantially during the past 40 years, the money spent has provided good value. However, temporal trends suggest that the value of health care spending is decreasing over time, particularly for older age groups. We need to continue tracking trends in health care spending and its benefits to ensure that resources are allocated wisely. Such efforts should focus on specific diseases in order to provide a more detailed picture of the value of health care both within disease categories and across a spectrum of common diseases over time. Also, the United States should modify its system of tracking the health sector to include a measure of population health in addition to spending, so that policymakers and the public have an informed picture of the benefits obtained for the money spent.

http://content.nejm.org/cgi/reprint/355/9/920.pdf

Comment:

Don McCanne, MD

Identifying the acceleration in cost trends is the first step. The second is to identify which spending is providing value. The final step is to direct spending away from expensive services with no benefit and toward health care services that do provide value. This process would be much simpler under a single payer health insurance system, whereas it is almost impossible with our current fragmented method of funding care.

Price transparency solves what problem?

Reveal health care costs
USA TODAY
Editorial
August 30, 2006

Traditional insurance, whether government- or employer-based, shields patients from the true costs of care. If someone else is paying most of the bill, patients have little incentive or ability to demand lower prices. Hospitals and doctors face little pressure to publicize their fees or to lower them.

Faced with rising costs, however, employers are pushing workers to shoulder a larger share with higher premiums, deductibles and co-pays. Plans combining low premiums, high deductibles and employee-funded health savings accounts are gaining popularity. Because those plans force people to spend more of their own money, they have more incentive to shop around. But they can’t do that without better data.

The medical industry has paid lip service to transparency but has been slow to act. Allen Hubbard, director of President Bush’s National Economic Council, warned hospital executives in March that the administration would urge Congress to require better disclosure unless voluntary efforts start soon.

Opposing view

Transparency or fig leaf?
By Steffie Woolhandler and David Himmelstein

Nearly 47 million Americans are uninsured, and millions more have coverage so skimpy that a major illness would bankrupt them. Yet President Bush apparently thinks Americans are too well-insured.

He’s pushing health savings accounts – a plan to make the sick pay thousands from their own pockets before insurance kicks in. And the fig leaf for his soak-the-sick scheme is “transparency.” Just make hospitals and doctors post their prices, he says, and the market will magically cut health costs.

The president’s scheme will drive millions more into medical poverty, but it won’t hold down costs.

Insured Americans already pay bigger co-payments and deductibles than do people in any other nation. Yet our health costs are far higher than anywhere else.

Steep out-of-pocket costs have little impact on overall spending. They discourage preventive care such as immunizations but don’t affect the real cost driver – expensive illnesses that afflict only 20% of Americans each year but account for 80% of spending.

Huge corporations like General Motors have tried for years to hold down health benefit costs by using their market muscle (and the kind of price and quality information Bush touts). They’ve failed. If GM can’t bargain down costs, will Mrs. Smith succeed?

Transparency won’t cut costs, but national health insurance would. A single-payer system could save $300 billion annually on health bureaucracy…

USA TODAY view:
http://www.usatoday.com/news/opinion/2006-08-29-medical-costs_x.htm

Opposing view:
http://www.usatoday.com/news/opinion/2006-08-29-medical-costs-oppose_x.htm

Comment:

By Don McCanne, MD

All too often in the debate on reform we see advocates lead with policy solutions and extrapolate backwards to the problem that is being addressed. The debate over price transparency certainly exemplifies this.

The solution is to have patients bear more of the costs of health care. The obvious problem solved is that we can reduce health care spending by making access to care truly unaffordable. But no, the backward argument is that we can make patients more thrifty shoppers by making them reach into their own pockets.

Insurance innovations have already evolved to the point that patients are exposed to costs, yet spending remains out of control. That leads to the next backwards extrapolation: patients who are responsible for most of the spending are accepting too much care because they are not presented in advance with a full itemization of the prices and fees that they will face in the care of their complex acute and chronic medical problems. The problem is so straightforward that Allen Hubbard is going to sic Congress on the providers if they don’t start to provide in advance the reams of itemized charges that the patient will face. It doesn’t matter that such lists are impossible to provide since health care is a dynamic process, and it is impossible to know which diagnostic and treatment decisions will be made along the way.

The problem is not the lack of price transparency. Americans are already very concerned about the affordability of health care. Patients are not jockeying for the right to be the price negotiator for their own care; they understand that they are impotent purchasers in the health care marketplace.

They want something done about the true drivers of health care costs. What they still don’t realize is that they want to be part of a public monopsony that can negotiate health care value for them: a single payer program of national health insurance.

Physician Group Decries 1.3 Million Rise in Uninsured

FOR IMMEDIATE RELEASE
August 29, 2006

Contacts:
Steffie Woolhandler, M.D. (617) 497-1268
Nicholas Skala (312) 782-6006
Olveen Carrasquillo, M.D. (917) 882-7997 cell
Don McCanne, M.D. (949) 493-3714

Uninsured Ranks Swell as Private Coverage Deteriorates

Middle-Class Losing Coverage at Fastest Rate

14,000 Doctors: “National Health Insurance is the Only Solution”

CHICAGO — Responding to newly-released data from the U.S. Census Bureau showing that the number of uninsured Americans increased by 1.3 million in 2005, members of Physicians for a National Health Program (PNHP) condemned the sharp increase in the number of uninsured and called for a national health insurance program to provide comprehensive coverage to all Americans.

The number of uninsured rose from 45.3 million in 2004 to 46.6 million in 2005 (15.9 percent of the population), the fifth straight year of increases. The number of uninsured has increased by 6.8 million since 2000. The number of uninsured children rose from 7.9 million in 2004 to 8.3 million (11.2 percent of all kids) in 2005, despite continued expansions of the Medicaid and SCHIP programs.

“Virtually all of the people who lost their coverage were solidly middle-class, full-time working American citizens,” said PNHP co-founder Dr. Steffie Woolhandler, Associate Professor of Medicine at Harvard Medical School. “Additionally, there are the tens of millions more whose insurance is so skimpy they’d be bankrupted if they got sick. The mainstream of America is suffering.”

The Physicians’ group noted that the large increase in the number of uninsured Americans was a result of the continued erosion of employer-based coverage. A million full time workers lost their coverage between 2004 and 2005 (in 2005, 21.5 million of the uninsured worked full-time). The proportion of Americans covered by employer-based coverage continues to plummet, from 63.6 percent in 2000, to 59.8 percent in 2004, and 59.5 percent in 2005.

Almost all the rise in the uninsured was in families with incomes over $50,000 per year; there was a modest decline in the number of uninsured poor, those families with incomes under $25,000 per year (partly due to the expansion of public coverage to another 857,000 people). The number of uninsured people making between $50,000 and $75,000 per year rose the fastest, by 600,000 people, to 8.3 million (14.1 percent of this income group). Additionally, the number of uninsured making over $75,000 rose by 800,000, to 8.7 million.

“The number of uninsured is going to continue to climb as long as health care costs continue to rise unchecked,” said Dr. Don McCanne, senior health policy fellow for PNHP. “We can no longer afford the waste and inefficiency, the high overhead and outrageous executive salaries of the private insurance industry.”

Hispanics continue to be hardest hit among minorities. The number of uninsured Hispanics increased from 13.5 million in 2004 to 14.1 million in 2005. 32.7 percent of all Hispanics are uninsured, compared with 19.6 percent of Blacks (7.2 million people), 17.9 percent of Asians (2.3 million people), and 11.3 percent of non-Hispanic whites.

“Lack of coverage among Hispanics is the greatest health disparity issues for the Latino population” said Dr. Olveen Carrasquillo, Director of the Center for Health of Urban Minorities at Columbia University. “Band-aid solutions are clearly failing the Latino community and are no longer tolerable. Already, eleven Latino Congressmen have signed on to The National Health Insurance Act (HR 676) and a growing list of Latino organizations and groups are calling for such reforms. Most recently, the National Hispanic Medical Organization, representing 36,000 licensed Hispanic physicians in the U.S., expressed their support for National Health Insurance.”

The doctors’ group said that the only solution to the rising number of uninsured and underinsured is a single-payer national health insurance program, publicly financed but delivered by private doctors and hospitals. Such a program could save more than $400 billion annually in administrative waste, enough to provide high-quality coverage to all and halt the erosion of the current private system. On Monday, the California Assembly voted 43-30 in favor of a statewide single-payer program.

“The mainstream of American is now experiencing the human suffering that results from being uninsured. It makes any illness a potential economic and social catastrophe,” said Dr. Woolhandler. “The Administration’s proposed reforms fail to address the systemic problems of the health system. Health savings accounts and schemes like the Massachusetts plan will only intensify the failure. By contrast, the experience of other industrialized nations teaches us that high-quality, comprehensive care can be provided to all our citizens without increasing health spending. A single-payer national health insurance system has emerged as only solution to the nation’s health system debacle.”

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Physicians for a National Health Program is an organization of 14,000 American physicians advocating for non-profit national health insurance. PNHP has chapters and spokespersons across the country. For contacts, call (312) 782-6006

Pros and cons of single-payer health care

By Nancy Remsen
Burlington Free Press
August 30, 2006

MONTPELIER — Vermont’s total health care bill would decrease by about $51 million if all residents except those on Medicare were covered under one state-financed health care plan, an Emory University researcher reported Tuesday to the Vermont Commission on Health Care Reform.

Supporters of a single-payer plan for all Vermonters have long argued it would produce significant administrative savings. This new analysis suggested reduced paperwork and processing at hospitals might shrink administrative expenses from 23.5 percent to 17 percent of total spending. Administrative expenses for doctors could drop from 27 percent of gross spending to 20 percent.

If such a statewide health plan were financed using a payroll tax, the rate would have to be 13.5 percent. That would raise $1.6 billion, the portion of the $2.7 billion total cost of a state health care plan that wouldn’t be covered by the state’s government-funded Medicaid program, said Kenneth Thorpe, researcher and consultant hired by the Legislature a year ago to assist with the analysis of health care options.

“The change in who pays for health care would be substantial,” Thorpe said Tuesday during a briefing on his research.

Employers who provide health insurance could pay less under a payroll-tax plan, especially if workers paid a share of the payroll tax, he said. Employers who don’t offer insurance — 9,282 mostly small businesses — would be hit with a new tax that would collectively cost them $388 million or more, depending on how the cost was split with workers.

John Tracy, co-chairman of the Legislature’s health reform commission, said Thorpe had provided analysis of just one option for organizing and financing health care. “There will be more,” Tracy said. “When you make a business decision, you have to look at all the options.”

Thorpe said he would look at other ways to pay for a statewide health insurance program and analyze their economic impacts. His next report is due in December.

Duane Marsh, president of the Vermont Chamber of Commerce, said he didn’t think the commission was considering all the options. He rejected the suggestion that a government-run and financed health care program would cost less in the long term. He said he believes high-deductible health insurance plans would encourage individuals to make better health care choices. Fewer mandates for coverage would make private insurance less expensive, too, he said.

“I would like Dr. Thorpe to see how that kind of system would work,” Marsh said.

Dr. Deborah Richter, longtime advocate for a single state-financed health insurance program, cheered Thorpe’s report as the start of an important conversation.

“This model would be a whole lot easier to practice under,” said Richter, a primary care physician with a practice in Cambridge. Vermont doesn’t have as many health insurance companies as other states, but those in business here offer dozens of plans. Richter said, “There is a huge amount of administrative complexity to what we do.”

Cornelius Hogan, who co-wrote a book with Richter about the state’s health care choices, also applauded the analysis of administrative savings, but criticized the selection of a payroll tax as an option to pay for a state-financed plan.

A payroll tax of 10 percent or more is a “non-starter,” Hogan said. “They ought to be looking at scenarios that take the burden off businesses.”

Craig Fuller, consultant for Business Resource Services, noted the impact of the payroll tax on workers. “The winner is the highly paid employee,” Fuller said, noting these people likely work for employers already providing insurance. They could pay less under the plan.

“The losers are the low-paid workers,” who would now pay a portion of their salary for health insurance, Fuller said. That wouldn’t be an easy sell in the Legislature.

“We waste an inordinate amount of time talking about this,” Fuller said of a single-payer health care system. The remedy for the problem of rising health care costs, he said, is to deal with obesity, chronic diseases and inappropriate utilization of expensive treatment.

Contact Nancy Remsen at 651-4888 or nremsen@bfp.burlingtonfreepress.com

Transparency or fig leaf?

By Steffie Woolhandler and David Himmelstein
Posted 8/29/2006 8:45 PM ET

Nearly 47 million Americans are uninsured, and millions more have coverage so skimpy that a major illness would bankrupt them. Yet President Bush apparently thinks Americans are too well-insured.

He’s pushing health savings accounts — a plan to make the sick pay thousands from their own pockets before insurance kicks in. And the fig leaf for his soak-the-sick scheme is “transparency.” Just make hospitals and doctors post their prices, he says, and the market will magically cut health costs.

The president’s scheme will drive millions more into medical poverty, but it won’t hold down costs.

Insured Americans already pay bigger co-payments and deductibles than do people in any other nation. Yet our health costs are far higher than anywhere else.

Steep out-of-pocket costs have little impact on overall spending. They discourage preventive care such as immunizations but don’t affect the real cost driver Ć¢ā‚¬ā€ expensive illnesses that afflict only 20% of Americans each year but account for 80% of spending.

A patient having a heart attack can’t comparison shop among hospitals, bargain for discount clot-buster drugs, or second-guess the doctor’s advice. And when steep deductibles make people delay care, the heart damage gets worse and the bill goes up.

Huge corporations like General Motors have tried for years to hold down health benefit costs by using their market muscle (and the kind of price and quality information Bush touts). They’ve failed. If GM can’t bargain down costs, will Mrs. Smith succeed?

Transparency won’t cut costs, but national health insurance would. A single-payer system could save $300 billion annually on health bureaucracy by eliminating paperwork and exorbitant CEO incomes. It could avoid the duplication of transplant facilities that raises costs and worsens quality. It would also reduce unnecessary surgery and other harmful procedures.

Most important, national health insurance would guarantee comprehensive coverage and close the health gap with Canada and other nations where people live longer than we do.

Drs. Steffie Woolhandler and David Himmelstein teach at Harvard Medical School and co-founded Physicians for a National Health Program.

Reveal health care costs

USA Today Editorial
Posted 8/29/2006 8:42 PM ET

No sensible consumers would purchase a new car or refrigerator without knowing the price, or without asking a few questions about reliability.

Yet they’ll undergo cardiac surgery or a hip replacement with little thought of the actual cost of treatment, and with virtually no information about their hospital’s track record with that procedure.

Patients who try to ask about price are unlikely to get a straight answer. “It depends” is how most hospitals will reply because they have sliding scales of fees based on a patient’s insurance, discounts negotiated by health plans, and potential complications in treatment. Bills are incomprehensible.

Unlike restaurants, hospitals don’t list prices on a menu. Perhaps it’s time they did.

Traditional insurance, whether government- or employer-based, shields patients from the true costs of care. If someone else is paying most of the bill, patients have little incentive or ability to demand lower prices. Hospitals and doctors face little pressure to publicize their fees or to lower them.

Faced with rising costs, however, employers are pushing workers to shoulder a larger share with higher premiums, deductibles and co-pays. Plans combining low premiums, high deductibles and employee-funded health savings accounts are gaining popularity. Because those plans force people to spend more of their own money, they have more incentive to shop around. But they can’t do that without better data.

The medical industry has paid lip service to transparency but has been slow to act. Allen Hubbard, director of President Bush’s National Economic Council, warned hospital executives in March that the administration would urge Congress to require better disclosure unless voluntary efforts start soon.

While hospitals and doctors are dragging their feet, the government and insurers are taking steps to make health care costs more transparent:

* Last week, Bush signed an executive order requiring four federal agencies to compile and release information about the quality and price of health care provided to people they cover.

* In June, Medicare started posting on its website how much it pays for 30 medical procedures in each of the nation’s counties, along with data on how many of the treatments each hospital performed last year. In general, the more experience a facility has with a procedure, the better the outcome for the patient, studies show.

* Aetna, which covers 30 million beneficiaries, will make physician-specific information on fees, clinical quality and efficiency available to its members in seven states.

Critics of transparency say patients can’t shop for bargains when they’re ill, it’s difficult to determine what constitutes high quality care, and it’s a diversion from doing something to help the uninsured.

True, patients on their way to the hospital in an ambulance are in no position to haggle, but most medical services aren’t emergencies. With the right tools, patients can find better values. More honesty about price and quality can lower costs and achieve better outcomes.