pnhpf3a

Specialty hospitals reveal the perversities of pseudo-markets

Do Specialty Hospitals Promote Price Competition?
By Robert A. Berenson, Gloria J. Bazzoli, Melanie Au
Center for Studying Health System Change
January 2006

In three Center for Studying Health System Change (HSC) sites with significant specialty hospital development-Indianapolis, Little Rock and Phoenix-recent site visits found that purchasers generally believe specialty hospitals are contributing to a medical arms race that is driving up costs without demonstrating clear quality advantages.

Price Competition

Although previous research indicates that purchasers believe specialty hospitals have lower unit costs, some believe that referring physicians, especially those with a financial interest in the specialty hospital, increase volume by inducing patient demand for elective procedures. The higher volume more than offsets the savings achieved from lower prices from competition, leading to increased aggregate costs. Health plans indicated they had few tools to restrain the induced utilization that physician ownership of specialty hospitals can engender.

Focused Factories or Risk Skimmers?

Some health plans and employers believe that physicians referred relatively easy cases to specialty hospitals and more complex patients to general hospitals, whether out of quality concerns or financial considerations.

Competitive Juices Flow

Although there was some evidence of increased price competition, respondents observed that the more important outcome was the perceived need for general hospitals to compete aggressively with the new physician-owned specialty hospitals by developing similar dedicated centers, as distinct hospitals-within-hospitals or freestanding facilities.

Thus, in the views of purchasers and other market observers, physician-owned specialty hospitals caused general hospital competitive juices to flow, but most of those juices flowed toward capacity expansion for lucrative services and enhanced specialty service branding and not necessarily toward improved quality and efficiency.

Policy Implications

Some assert that specialty hospitals represent desirable competition for general hospitals and, therefore, public policy should consistently foster competition provided by new market entrants, including specialty hospitals.

These commentators call for reliance on antitrust enforcement, resist expansion of CON (Certificate of Need) laws that would limit specialty hospitals and oppose general hospital efforts to restrict the hospital privileges of physicians with ownership interests in competing specialty hospitals.

Others believe that specialty hospitals add unneeded, expensive capacity to the health care system, make it more difficult for general community hospitals to cross subsidize the care provided to the uninsured and underinsured, and intensify the problems associated with physician self-referral for economic gain. These advocates would design public policy to discourage the development of new specialty hospitals.

It is striking that purchasers and their health plan agents, some of which themselves are for-profit, entrepreneurial ventures, who might be expected to favor increased hospital competition, generally do not view the development of specialty hospitals positively. They believe that specialty hospitals add to health care costs and have not demonstrated clear quality advantages. Further, purchasers are concerned about the opportunity for physician owners to induce demand through self-referral, to cherry pick among the patient population and to threaten community hospitals’ reliance on profitable services to make up for shortfalls in other areas. To some extent, purchasers seemed implicitly to accept general hospitals’ need for insured patients to subsidize care for the uninsured and underinsured, and profits from well-compensated services to support unprofitable services.

In most sectors of the economy, specialized producers foster market competition. In the airlines industry, for example, leaner point-to-point air carriers have forced aggressive price competition and dramatic changes in the traditional cost structure of the major airlines, for better or worse. In contrast, in the case of specialty hospitals, the ability of providers with market power to tie particular specialty service prices to other contracted services; the seeming acceptance by at least some purchasers that general hospitals have a legitimate need to cross subsidize services because of uncompensated care burdens; and the lack of useful measures by which purchasers can differentiate the quality and efficiency of cardiac, orthopedic and other specialty hospital services contribute to a very different result. The findings again confirm that even a competitive health care system does not function like most other sectors of the economy.

It is important to note that purchasers also have described a medical arms race focused on the promotion and marketing of specialty services involving general hospitals in areas where there is no specialty hospital competition.

Indeed, increased competition among local hospitals and between hospitals and physicians for profitable services, including cardiac, orthopedic and cancer care, has been observed across the 12 HSC sites. This service-line competition has involved new facilities and dedication of existing hospital space to profitable specialty services and is taking place whether or not there are specialty hospitals, suggesting that the policy focus on specialty hospitals per se might be somewhat misplaced.

Marked disparities in the relative profitability of certain services under both Medicare and private plan payment policies appear to be a major force driving competition for these profitable services. These pricing distortions are contributing to the current emphasis on specialty service differentiation and to escalating health care costs generally, with specialty hospitals being one prominent manifestation of such distortions.

Indeed, proponents of greater provider competition and proponents of greater regulation to restrict new specialty facilities agree that distorted pricing policies create an unlevel playing field and influence providers’ resource-allocation decisions for the worse. CMS has indicated that it will revise its payment systems for both inpatient and ambulatory services to reduce the artificial financial advantage that specialty hospitals currently enjoy because of the limited range of services they provide.

http://www.hschange.org/CONTENT/816/

Comment: By Don McCanne, M.D.

Most policy analysts concede that free, unfettered markets do not exist in health care, and, consequently, market competition cannot be relied on to bring us higher quality care at a lower cost. Specialty hospitals are an exception, the physician-investors would have us believe. By developing technologically-advanced, streamlined hospitals, these investors contend that they force the general hospitals in the community to compete by both improving the quality of the specialized services and by providing greater value through lower prices.

The proponents do have a reach to try to convince us. Duplicating services that already exist in the community is very expensive. We are not talking about the marginal costs of improving existing services, with a full support structure already in place. We are talking about beginning anew with incorporation costs, venture capitalist costs, architect and building contractor costs, the costs of construction, the costs of the most advanced and most expensive high-tech equipment, the costs of support services required, the costs of a new set of operating expenses, and, not the least, the costs of the return on investment.

The magic of the marketplace is supposed to reduce costs, but it is inconceivable that the investors could ever conjure up enough magic to meet these expenses while providing a nifty profit. While competitively-contracted prices may provide the appearance of lower costs, this report confirms that there is no magic. The per-unit cost might be slightly lower, but John Wennberg and his colleagues have demonstrated repeatedly that increased capacity for high-tech services drives up untilization and total costs, without a commensurate return in quality or outcomes. Specialty hospitals increase total health care costs and do so while placing a greater economic burden on our community hospitals.

If our teenage driver is in a major collision, we want a trauma center to be there, backed up by a full service hospital. If our granddaughter develops meningitis, we want facilities available with a pediatric intensivist and appropriate infectious disease support. If a respected and endeared community activist blows a berry aneurysm, we want the neurosurgical team available and accessible to save her brain and her life. We will always want a fully equipped and well staffed general hospital to be there for us whenever we need it.

A boutique specialty hospital surely would provide us with elegant surroundings, gourmet meals, high-tech equipment in the latest designer styles, and all of the other amenities that we should expect from an organization dedicated to Profits through Patient-Pleasing.

Is that really worth the trade-off? Do we want to cater to the wealthy who value such niceties for their elective surgeries? Or do we want to use those funds to support a strong health care infrastructure that would be there for all of us whenever we need it?

Private solutions inject into the process the type of thinking that brings us boutique hospitals. This is a public problem, and it requires a public solution. Single-payer national health insurance would provide a public funding structure that would ensure that our health care funds are spent on our health care.

Pull health care out of crisis mode

Letters

Outside America, most health care systems provide medications from one comprehensive formulary to all citizens. There are no restrictions or economic credentialing, and all citizens are included.

In addition, the rest of the world’s health care systems negotiate the prices of their drugs.

We seem to relish going from crisis to crisis. Many now face the economic decision of purchasing food or medications. There is, however, a solution.

The next time you hear the words “national health insurance” or “single-payer health care,” take note that this kind of system will cost less than our current system and cover all Americans with much less red tape.

Speaking of red, we are not talking about socialized medicine. It is American medicine for all Americans, by all Americans. For more information, visit www.pnhp.org/

Charles Katzenberg, M.D.
Physicians for a National Health Program, Tucson

http://www.azstarnet.com/allheadlines/112633

$22 billion taxpayer gift to private Medicare Advantage plans

Closed-Door Deal Makes $22 Billion Difference
By Jonathan Weisman
The Washington Post
January 24, 2006

House and Senate GOP negotiators, meeting behind closed doors last month to complete a major budget-cutting bill, agreed on a change to Senate-passed Medicare legislation that would save the health insurance industry $22 billion over the next decade, according to the nonpartisan Congressional Budget Office.

Since managed-care companies first began working through Medicare in the 1990s, the government has recognized an issue in the way the companies are paid for their participation. Private insurers attract healthier seniors than the traditional government-run Medicare system, so their payment rates — based on the elderly population as a whole — exceed the actual cost of treatment.

In 2003, the government began lowering payments to Medicare HMOs to account for their healthier population of beneficiaries. But to keep those HMOs from fleeing the system, the Bush administration added a “hold harmless” payment that negated that cut.

http://www.washingtonpost.com/wp-dyn/content/article/2006/01/23/AR2006012301700_2.html

Comment: By Don McCanne, M.D.

Although the details of the CBO analysis are somewhat technical, the fundamental perversity is not. The Medicare Advantage private insurance programs are paid at a rate which assumes that patients enrolled in their programs have the same health care needs as the average patient remaining in the traditional Medicare program. That is not the case. The Medicare Advantage programs are successful in selectively marketing to a healthy subset of Medicare patients. Thus the private plans are overpaid when compared to payments for comparable patients within the traditional program.

This overpayment is vital to the Medicare Advantage plans. Without it, they could not meet their higher administrative costs. New private plans would not enter the market, and once rates are adjusted to match risk, existing plans would exit the market.

Even though Democrats were excluded from the behind-closed-doors sessions, the intent of these overpayments is no secret. In 2010, a process will begin which is designed to reduce payments in the traditional Medicare program. It will be important to have in place a market of private Medicare Advantage plans as patients begin to flee from an underfunded public program. That market of private plans cannot develop unless Congress and the administration pays this $22 billion bribe of taxpayer funds.

The Washington Post article also states, “Republican aides involved in the change dismiss its significance, saying the CBO is reading too much into it.” A $22 billion bribe may be insignificant to Republican aides, but the rest of us certainly should be concerned. That’s our tax money and our Medicare program that they’re messing with!

Health Care Is Broke, How Do We Fix It?

FOR IMMEDIATE RELASE:

Contact:
John Wasik at 847-223-9814, johnwasik@ameritech.net.
Stan Rosenberg at 847-543-1202, bcbarn@prairiecrossing.com.

A Prairie Crossing Public Forum

Saturday, February 4, 2006, 1:00 p.m.
Byron Colby Barn, Route 45 and Jones Point Road, Grayslake, IL

Affordable and accessible health care is a serious national problem that impacts everyone, yet it rarely tops the agenda for most politicians (Note: President Bush will mention health care in his upcoming State of the Union speech). Nevertheless, the topic needs to be aired, focusing on the following questions:

* Why is the U.S. losing the economic battle (jobs, factories) to compete worldwide because of its crippled health care system?

* Why is the single-payer Canadian health-care system being attacked so vigorously by American special-interest groups? What makes the Canadian system work?

* Why does the U.S. provide some of the most extensive healthcare and still lag behind industrialized countries despite having the highest gross domestic product on earth?

* Why are 45 million Americans without health insurance and 20 million underinsured?

* Why is it extremely difficult to find affordable coverage if you’re a part-timer, contract worker, small business employee or have serious pre-existing health conditions or are between jobs?

* Why are most employers cutting back on healthcare benefits, forcing you to pay more out of pocket?

At the Byron Colby Barn, we will have a number of expert speakers who will examine the current situation and propose solutions. There will be a question-and-answer session in which you can ask questions and enter into intelligent discussions concerning the alternatives to our present system. Here are some of the exciting and informed speakers you can expect to hear:

– One of our lead speakers will be Dr. Quentin Young with Physicians for a National Health Care Program. Dr. Young is the former chairman of Medicine at Cook County Hospital and a well-known authority on health care. He is a regular commentator on WBEZ-FM.

– Joining us from Canada will be Dr. Robert McMurtry, an expert on the Canadian health program and orthopedic surgeon (see bio below). Dr. McMurtry is a leader in efforts to reduce waiting times in the Canadian system. This is a great opportunity to learn the facts about health care in Canada, get your questions answered, and discuss evidence-based health care reform with a brilliant, committed, practicing physician from north of the border.

– We’ll also feature a speaker from the Illinois Health Care Referendum 2006, a statewide effort to ask the voters if they want lawmakers to improve our health care system. Citizen Action Illinois will also be presenting the “Healthy Illinois” proposal, a plan to provide health care to everyone in the state through partnerships with private insurers. As President Bush and other leaders embark upon a national dialogue to discuss health care, be a part of the discussion and debate.

Bio of Dr. Robert McMurtry

Dr. Robert McMurtry is a graduate of the University of Toronto in Medicine in 1965 and a Fellow of the Royal College of Physicians and Surgeons of Canada.

During his residency in Orthopedic Surgery, he spent 2 years in Africa, first in a mission hospital in Sekhukhuniland (South Africa) and then with the Canadian International Development Agency in Uganda. Following his residency, Dr. McMurtry did a fellowship in Hand Surgery at the University of Iowa. He started his practice at the former Sunnybrook Hospital (now Sunnybrook and Womens Health Centre) in 1975. It was there that Dr. McMurtry founded and directed Canada’s First Trauma Unit and the multi-disciplinary Hand Unit.

In 1987, he was appointed Professor and Chair of Surgery at the University of Calgary and Chief of Surgery at Foothills Hospital. In 1992, he became Dean of Medicine at the University of Western Ontario and subsequently Dean of Medicine and Dentistry, a post he held until 1999. In 1999, he became the first Cameron Visiting Chair at Health Canada – a post carrying the responsibility for providing policy advice to the Deputy Minister and Minister of Health for Canada.

Dr. McMurtry is the founding Assistant Deputy Minister of the Population and Public Health Branch of Health Canada. He was appointed to the Romanow Commission in 2002 as a Special Advisor to Commissioner Romanow.

Presently, Dr. McMurtry is Professor of Surgery at the University of Western Ontario and Orthopedic Consultant at St. Josephs Health Care in London, Ontario. His work involves an active clinical practice as well as teaching and research In December 2003, he was appointed to the Health Council of Canada and is Chair of the Wait Times and Accessibility Work Group. In June of 2003, he received the Presidential Award of Excellence from the Canadian Orthopedic Association.

Tami understands

An email that I received this morning from my daughter-in-law, Tami, who lives in Berkeley:

i thought of you this weekend as i was taking a training workshop for a clinic i will be volunteering at. the clinic serves low income women with cancer. it was extremely heart wrenching to see and hear their stories.

women who had to take public transportation to their chemo appts, living in cars while going through cancer and treatments, etc. and the #1 reason for the current poverty situation was lack of health care or not enough of it.

many or most had good or decent jobs prior to their diagnoses but because of deteriorating health they lost their jobs and then lost their insurance, or some just didn’t have it before and the diagnosis and bills, etc. put them into utter poverty. your mission for the need for universal health care slapped me in the face!

Comment: Tami understands.

'Wal-Mart law' the wrong approach on health care

Don’t mandate coverage by only large companies.
By Register Editorial Board
Des Moines Register
January 17, 2006

While millions of people flock to shop at Wal-Mart every day, the company has also gained a flock of critics for running small stores out of business, paying low wages and forcing many of its employees to turn to taxpayer-financed programs like Medicaid for health care.

It’s easy to throw stones at such a big target. But the Maryland General Assembly went too far last week when it overrode the governor’s veto and required employers with more than 10,000 workers ? i.e., Wal-Mart ? to spend at least 8 percent of their payroll on employee health care or pay into a fund for the uninsured.

Maryland is the first state in the country to pass a “Wal-Mart bill,” but labor unions are pushing legislatures in at least 30 other states – including Iowa – to enact similar requirements. It should end there: The law is unfair because it targets only companies of a certain size. Of the state’s large employers, only Wal-Mart spends less than 8 percent on health care. Other government mandates, such as those requiring companies to pay minimum wage or honor medical leave, apply to all companies.

So why did Maryland do it?

“The taxpayers are giving a health-care subsidy to the largest retailer on Earth,” said Maryland lawmaker Kumar Barve.

But that rationale is misguided because it assumes providing health care is the responsibility of employers. It shouldn’t be. Employers don’t pay workers’ car insurance, homeowners’ insurance or grocery bills. They shouldn’t be responsible for picking up their health care tab, either.

Unfortunately, the twists and turns of this country’s history have led to employer-based health insurance. Following World War II, a labor shortage and wage-freeze led to some companies offering insurance as a “perk.” Now it’s become an expectation that burdens companies financially. Worse, it keeps workers in dead-end jobs they hate. It thwarts entrepreneurial spirit when people are forced to stay with a company solely because it provides health insurance.

The United States is alone in the world in tying jobs to health care.

The country should be moving away from employer-based health care and toward a tax-financed system that provides health care to all Americans, regardless of where or if they’re employed.

What has happened in Maryland should be a wake-up call to businesses all over America to get on board with reforming health care. The best action for employers to take: support the expansion of the existing, tax-financed Medicare program for seniors to cover all Americans.

Companies and workers could contribute to the Medicare fund through payroll taxes the same way they pay into Social Security. Because Medicare has lower administrative costs and covers a larger pool of people, that may be cheaper for companies than the premiums they’re currently paying to private insurance companies to cover workers.

Maryland lawmakers had good intentions. They want more residents to have access to health care. They’re tired of Wal-Mart employees ending up on the public dime. But the move is unfair to large business and, in the long run, detrimental to moving this country toward a single system of health care that covers all Americans.

VA care is rated superior

VA Care Is Rated Superior to That in Private Hospitals
By Rob Stein
The Washington Post
January 20, 2006

The Department of Veterans Affairs medical system once epitomized poor-quality care. But after a series of changes, the system has been hailed in recent years as a model for health care reform.

Now, survey results released this week indicate that those improvements have translated into a high level of satisfaction among veterans getting treated by the rehabilitated VA.

The telephone survey, conducted in October, found inpatient care received a rating of 83 on a 100-point scale; outpatient care got a rating of 80. In comparison, a similar survey of patients receiving private care found they rated their satisfaction at 73 for inpatient care and 75 for outpatient care.

(Veterans Affairs Secretary Jim) Nicholson acknowledged that some veterans do have to wait for care, but he said the waiting time has been improving and continues to improve.

http://www.washingtonpost.com/wp-dyn/content/article/2006/01/19/AR2006011902936.html

Comment: During discussions of national health insurance, how many times have you heard someone say that we don’t want government health care because then we would all have health care like they have at the VA?

Previous studies have shown that the quality of care in the VA system is actually higher than in the private sector, and now this study shows that patient satisfaction is also greater. It is ironic that the VA can still be used as an argument against national health insurance, but in an entirely different way. Imagine this comment: “We don’t want national health insurance that covers lower quality care in the private sector when we can have higher quality and greater patient satisfaction through a government-owned socialized medicine system as exemplified by the VA.”

Of course, you won’t hear such comments because the nation is not supportive of a public buy-out of our entire health care delivery system. They are having enough trouble accepting the concept of public insurance, as persuasive as are the arguments for a social insurance system.

One reason for the VA’s effectiveness is that it is an integrated health care delivery system, but many would prefer care in the private sector rather than in what they perceive to be a less personal, clinic-type environment. However, Kaiser Permanente, as an integrated health delivery system, has many features in common with the VA system, and yet many patients select Kaiser as their provider of choice.

If we had a national health insurance program, individuals would have the freedom to choose integrated health systems. For veterans, that should certainly include the VA. They should not be deprived of the option of higher quality and greater satisfaction with their care.

The VA does have a unique problem. Wars abruptly create new veterans, and a fixed system has limited flexible surge capacity to meet the increased demand. Queues for elective services can be a problem, though they can be moderated through modest capacity adjustments and queue management. Regardless, for those veterans who cannot afford care in the private sector, and who are stuck in a queue, a universal national health insurance program could provide them the option of obtaining their care in the private sector.

The least we could do for our veterans is to give them the additional choice of accessing the poorer quality and less satisfying care that the rest of us have.

Doctor is in — for a price

By David Lazarus
San Francisco Chronicle
Sunday, January 8, 2006

David Ogden, a doctor in Marin County’s affluent Greenbrae, says he wants more time to spend with his nearly 3,000 patients, and he knows his patients want more face time with him.

Ogden’s solution: a $2,400 annual retainer to be paid by “several hundred” patients who want round-the-clock access to his expertise, no waiting for appointments, plus more leisurely visits with him in the examining room.

Everyone else — in other words, at least 2,000 current patients — will no longer see Ogden during routine checkups or for most ailments. Instead, they’ll have to make do with a nurse practitioner.

This is the latest trend in health care — variously called “concierge medicine” or “boutique medicine.” For an additional fee, patients receive more access to, and attention from, their physician, on top of the normal cost of treatment.

For those who can’t (or won’t) pay the extra charge, health care can be less convenient, less comprehensive and possibly less skillful. And that’s if the concierge doctor will still accommodate patients who aren’t paying retainers.

Most of the estimated 200 concierge doctors nationwide are making such people look elsewhere for primary care. Ogden is one of a relative few attempting to maintain a full practice through expanded use of nurse practitioners.

“This is about spending more time with patients,” he told me. “It’s what I want, and it’s what my patients want.”

Perhaps, but most apparently don’t want to pay thousands more each year for the privilege.

Ogden said he notified most of his patients shortly after Thanksgiving about the switch to what he prefers to call a “retainer practice.” As of last week, only about 1 percent had signed up for the new service.

“I’m very encouraged by the response so far,” Ogden said.

Gordon Schiff, a founder of Physicians for a National Health Program and a doctor at Chicago’s Cook County Hospital, responded that there’s little encouraging about concierge medicine. At least from a patient’s point of view.

“They should resent this,” he said. “Many of the things that doctors are saying they’ll do under concierge medicine should already be expected by patients. It shouldn’t be a privilege that you have to pay extra for.”

In-depth meetings with physicians, personal calls with test results, ready access to treatment — these should be staples of all medical practices, Schiff said.

“Concierge medicine is inherently discriminatory,” he observed. “Poor people will be treated differently from rich people, probably worse.”

But Schiff acknowledged that the U.S. health care system is so dysfunctional that most doctors are prevented from providing concierge-level service to all patients. It’s impossible when a physician is churning through 20 patients a day so he or she can reap sufficient returns from insurers.

This was Ogden’s situation. He said most visits with patients had to be limited to just 15 minutes so he could squeeze in as many as possible during an eight-hour shift.

“It’s not how I want to practice medicine,” Ogden said.

On the other hand, being restricted for the most part to seeing a nurse practitioner, and not their primary-care physician, is probably not what most of his non-retainer patients want either.

Worse, it might violate guidelines laid out by the American Medical Association, which determined in 2003 that concierge medicine raises “ethical concerns that warrant careful attention, particularly if retainer practices become so widespread as to threaten access to care.

“Physicians who engage in mixed practices, in which some patients have contracted for special services and amenities and others have not, must be particularly diligent to offer the same standard of diagnostic and therapeutic services to both categories of patients,” the association concluded.

“All patients are entitled to courtesy, respect, dignity, responsiveness and timely attention to their needs.”

This is why a Florida company called MDVIP, the leading force in concierge medicine, requires participating doctors to shift all non-retainer patients to other physicians.

“The hybrid approach with nurse practitioners is questionable,” said Darin Engelhardt, MDVIP’s chief financial officer. “If you’re providing priority to some patients, that could be detrimental to others.”

MDVIP accounts for about half of all doctors now practicing concierge medicine nationwide. The company essentially helps a physician get a concierge practice up and running. In return, it gets $500 of the doctor’s annual retainer, which typically runs $1,500.

Tommy Thompson, who until January 2005 served as President Bush’s secretary of health and human services, is on MDVIP’s payroll. He’s chairing a committee on preventive medicine.

Engelhardt confirmed that Thompson is being compensated for his role with MDVIP but declined to specify how much he’s being paid.

In 2002, Thompson was asked by members of Congress to clarify the government’s position on concierge medicine in general, especially as it relates to Medicare patients, and on MDVIP’s operations in particular.

Thompson responded that “it is not clear that such annual retainer agreements necessarily violate the law” and that “physicians may proceed with agreements of this type,” thus providing concierge doctors with the administration’s legal blessing.

Thompson didn’t address the lawmakers’ specific questions about MDVIP.

Engelhardt disputed critics’ charges that concierge medicine is responsible for a tiered health care system. He said managed care has already created different levels of service for patients.

“In a perfect world, the services provided by MDVIP physicians would be available to everyone,” he said. “The market reality precludes that.”

At Chicago’s Cook County Hospital, Schiff said, he can sympathize with doctors wanting to spend more time with patients. But he questions the ethics of any physician who demands more money for preferential treatment.

“If medicine is a public service and we’re here to take care of everyone, you don’t limit yourself to people who have money,” Schiff said. “Most people expect to be treated based on need, not on how much money they have.”

In Greenbrae, Ogden said, he feels comfortable that all his patients — retainer-paying and otherwise — will receive appropriate care.

“If someone needs me, I’m here,” he said. “I’m still a doctor.”

And, increasingly, a businessman.

David Lazarus’ column appears Wednesdays, Fridays and Sundays. Send tips or feedback to dlazarus@sfchronicle.com.

John Sweeney on covering everybody

John J. Sweeney, President of the AFL-CIO
National Press Club
January 18, 2006

… if I were President of the United States, I’d use this State of the Union speech to… challenge Congress to quit stalling and pass universal health coverage this year …

(Later in the speech…)

We need a simple national health care plan that covers everybody…

http://www.aflcio.org/mediacenter/prsptm/sp01182006.cfm

Comment: Everyone across the political spectrum supports “universal health coverage,” even though for some that means only providing everyone with the option of being able to purchase a low-cost, stripped-down plan of “basic” benefits, while excluding those who fail underwriting requirements. Individuals claiming to support universal coverage can be ignored unless they present specifics on a plan for comprehensive coverage that would automatically include absolutely everyone. The problem is that most people who speak about universal coverage really mean covering the most people we can with our fragmented system of public and private programs, recognizing that “we’ll never be able cover absolutely everyone,” often said with a wink and a nod.

What about “a simple national health care plan that covers everybody”? If this is a truly sincere statement, it says much more.

“Everybody” is much more specific than that abused term: “universal.” Presumably “everybody” really does mean everybody.

“National” means federal, as opposed to state and local programs that tend to be patchwork attempts to cover more (or sometimes less) under a shredded system. A national program presumably would be a standardized, equitable program that would cover everyone in the nation.

“Simple” is a term that you don’t hear from most individuals speaking about universal coverage. That is likely because their proposals are complex modifications of our fragmented system, such as the touted consumer-directed health plans that actually reduce coverage. On the other hand, “simple” is a term used by advocates of reform who would replace our complex, highly inefficient and wasteful system of administering health care funds with a simple, publicly-administered single payer system. Could that be what John Sweeney meant?

There is no doubt that John Sweeney’s words were chosen very carefully for this important speech before the National Press Club. As to the meaning behind his words, we anxiously await signals to see if AFL-CIO’s actions will quickly evolve beyond their current efforts to merely target a few large employers.

PNHP Board Member on How to Fix the Medicare Drug Benefit

New York Times of Sunday, January 15.

To the Editor:

“States Intervene After Drug Plan Hits Early Snags” (front page, Jan. 8) reports that Medicare recipients are being denied promised prescription help. I would add that this has already increased hospitalizations.

I was outraged last week when one of my patients required hospital admission after stopping her medications because she couldn’t afford the new $45.57 co-payment demanded by her assigned private pharmaceutical benefit management company. Medicaid had previously covered her prescriptions.

The administration has designed a drug benefit to protect the pharmaceutical industry and discredit Medicare, our one single-payer health insurance program. Today’s mess could have been avoided if Congress had included the pharmacy benefit in Medicare and allowed Medicare to negotiate prices.

Congress should make changes in the drug benefit, instead of letting it serve as an opening wedge to privatizing and thus undermining original Medicare. Then it should extend Medicare coverage to everyone.

Oliver Fein, M.D.
New York, Jan. 9, 2006

The writer is chairman of the Metro New York chapter of Physicians for a National Health Program.

Citizens' Health Care Working Group

Citizens’ Health Care Working Group
“Health Care that Works for All Americans”

Note: This message is a call for action on your part. If you are already well informed on the Citizens’ Health Care Working Group, then skip to the three asterisks in the latter half of this message to take action. It is important that as many citizen voices as possible be heard during this process.

Background:

Senators Ron Wyden (D-Ore.) and Orrin Hatch (R-Utah) authored the “Health Care that Works for All Americans Act,” legislation designed to launch a national dialogue on health policy and bring quality care within the reach of every American. “Through open, public community meetings, the bill seeks to make citizen input the cornerstone of the reform process, giving citizens an opportunity to make hard decisions and voice their priorities for how to reshape the health care system. It would also guarantee a vote by Congress on the recommendations that result from the discussions.”

The bill was enacted as an amendment to the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA). Sec. 1014 of the MMA describes “Health Care that Works for All Americans: Citizens’ Health Care Working Group,” and is available at the following link:
http://www.citizenshealthcare.gov/about/law.php

The process described in Sec. 1014 has begun. The Citizens’ Health Care Working Group has been established, and the initial steps have been completed. An informative website is accessible online:
http://www.citizenshealthcare.gov/

Hearings have been held to gather information to prepare “The Health Report to the American People.” That report has been completed (though subject to
revision) and can be downloaded at the following link:
http://www.citizenshealthcare.gov/healthreport/hrtap_full.php

Beginning in mid-January, “community meetings” will be held throughout the nation to receive citizen input on reforming our health care system. The Working Group is also accepting other input, including public responses to a web-based questionnaire. Further information on what you can do to participate follows the three asterisks below.

After the community meetings are completed, the Working Group shall prepare and make available to the public through the Internet and other appropriate public channels, an interim set of recommendations on health care coverage and ways to improve and strengthen the health care system based on the information and preferences expressed at the community meetings. There shall be a 90-day public comment period on such recommendations.

After the expiration of the public comment period, the Working Group shall submit to Congress and the President a final set of recommendations.

Not later than 45 days after receiving the final recommendations of the Working Group, the President shall submit a report to Congress which shall contain– (1) additional views and comments on such recommendations; and (2) recommendations for such legislation and administrative actions as the President considers appropriate.

Not later than 45 days after receiving the report submitted by the President, each committee of jurisdiction of Congress, the Committee on Finance of the Senate, the Committee on Health, Education, Labor, and Pensions of the Senate, the Committee on Ways and Means of the House of Representatives, the Committee on Energy and Commerce of the House of Representatives, Committee on Education and the Workforce of the House of Representatives, shall hold at least one hearing on such report and on the final recommendations of the Working Group.

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What you can do to contribute to the national dialogue on reform:

(1) Provide your answer to each of the following four questions (framed by the Working Group):

What concerns you most about health care in America today?

Our current way of paying for health care includes payments by individuals, employers, and government. Are there any changes you think should be made to this system?

What trade-offs do you think the American public is willing to make in either benefits or financing to ensure access to affordable, high quality health care?

What is your single most important recommendation to make to improve health care for all Americans?

Submit your answers online at the following link:
http://www.citizenshealthcare.gov/speak_out/public_comment.php?pguid=e73766d8-f911-4ad1-af6c-45b2b461cf8f

(2) Attend a community meeting. For an overview, with links to meeting dates and locations, registration materials, etc.:
http://www.citizenshealthcare.gov/community/overview.php

(3) Tell your friends and members of organizations to which you belong to add their input to this process. For those without computers, please assist them in this process. Public libraries can provide computer access.

(4) For those willing to expand their efforts to advance this important national dialogue, further suggestions are listed at this link:
http://www.citizenshealthcare.gov/community/invitation.pdf

N.B.: The President, in his report to Congress, will make the final recommendations for any legislation and administrative actions. If we disagree with his recommendations, we will have no right to complain unless we have provided our input. If we do participate, then we have the right to expect from the President recommendations for “Health Care that Works for All Americans.”

No kidding – wealth improves access to specialized services

Inequalities in access to medical care by income in developed countries
By Eddy van Doorslaer, Cristina Masseria, Xander Koolman for the OECD Health Equity Research Group
CMAJ
January 17, 2006

The member states of the Organization for Economic Cooperation and Development (OECD) represent the wealthiest and healthiest countries in the world. Most of them achieved nearly universal coverage of their populations for a fairly comprehensive package of medical services decades ago. Their governments are committed not only to pursuing the efficient delivery of high-quality medical care but also to ensuring equitable access to that care. In most OECD countries, access to good-quality physician services is ensured at relatively low and sometimes zero financial cost at the point of delivery. This is mainly the result of a variety of public insurance arrangements aimed at ensuring equitable access. The increasing tension between affordability and equity has spurred a number of countries to reconsider their public-private mix and to study reforms that may enhance efficiency while maintaining equity.

Like the World Health Organization, the OECD is committed to a watchful monitoring and comparison of the performance of its members’ health care systems, and equity in access is regarded as a key objective. In 2002, the OECD Health Project commissioned a cross-country comparative study to assess how the very diverse health care delivery systems of its members fare in terms of equitable access. This article summarizes some of the main results of this study.

Results: We found inequity in physician utilization favouring patients who are better off in about half of the OECD countries studied. The degree of pro-rich inequity in doctor use is highest in the United States and Mexico, followed by Finland, Portugal and Sweden. In most countries, we found no evidence of inequity in the distribution of general practitioner visits across income groups, and where it does occur, it often indicates a pro-poor distribution. However, in all countries for which data are available, after controlling for need differences, people with higher incomes are significantly more likely to see a specialist than people with lower incomes and, in most countries, also more frequently. Pro-rich inequity is especially large in Portugal, Finland and Ireland.

Interpretation: Although in most OECD countries general practitioner care is distributed fairly equally and is often even pro-poor, the very pro-rich distribution of specialist care tends to make total doctor utilization somewhat pro-rich. This phenomenon appears to be universal, but it is reinforced when private insurance or private care options are offered.

http://www.cmaj.ca/cgi/content/full/174/2/177

And…

Commentary (on the article above)
By Jeremiah Hurley and Michel Grignon

The international comparison carries some potentially important lessons for health care policy debates in Canada. The most important is perhaps the link between equity of utilization and a country’s system of financing. It should not be surprising that the 2 countries in the study that lack universal health care insurance coverage (Mexico and the United States) have both some of the lowest overall visit rates and the greatest income-related inequity of utilization. More subtle appears to be the effect of parallel private insurance (private insurance that covers publicly insured services) among those countries with universal public insurance coverage. Such private insurance is disproportionately purchased by the wealthy and is particularly targeted at specialist services. Countries in which parallel insurance plays an important role in financing (e.g., Ireland, Spain and Portugal) achieve equitable utilization of general practitioner services across income groups – indeed, there is a tendency toward a pro-poor bias – but utilization for specialist services displays some of the highest degrees of inequity. The results of this study do not allow any definitive conclusions in this regard, but they caution against any illusion that parallel private insurance will increase access for anyone except the higher-income people who purchase it.

http://www.cmaj.ca/cgi/content/full/174/2/187

Comment: This OECD study has some very good news, some bad news, and some terrible news.

The very good news is that nations with universal systems (all industrialized nations except the United States) have relatively equitable access to primary care services – the foundation of a well-functioning health care system.

The bad news is that access to specialized services is not equitable in most countries, but it is certainly no surprise that wealth opens doors to specialized services. This differential is exaggerated in nations with parallel private insurance systems. This is not to begrudge the wealthy their improved access to specialized services (which are not always beneficial), but rather it is to express alarm over the fact that the remaining population has even greater impairment in access to specialized services merely because of stratification of the masses into the universal public insurance program, while granting the wealthy the option of using the red-velvet-roped First Class entrance to health care.

The terrible news is that the United States, lacking universal health insurance, has amongst the lowest overall visit rates and the greatest income-related inequity of utilization. There is not much consolation in the fact that Mexico shares that honor. Mexico, a relatively poor country, spends 6 percent of its GDP on health care whereas the United States, a very wealthy nation, spends 16 percent. Where is that greater quality at lower cost that the market enthusiasts keep talking about?

A brief OECD statement on the health system of Mexico:
http://www.oecd.org/dataoecd/35/19/34685343.doc

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