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Medicare PPOs' gain is taxpayers' loss

Defective Design: Regional Competition In Medicare An inconsistent approach to regional competition in the Medicare Modernization Act will be very costly for taxpayers.
by Steven D. Pizer, Roger Feldman, and Austin B. Frakt
Health Affairs
August 23, 2005

Abstract:

The Medicare Prescription Drug, Improvement, and Modernization Act (MMA) of 2003 creates several new types of private insurance plans in Medicare. The most familiar of these is the preferred provider organization (PPO). Uneven application of regional bidding requirements will place new PPOs at a competitive disadvantage relative to established health maintenance organizations (HMOs). A little-noticed section of the regulations implementing MMA offsets this disadvantage and gives PPOs a strong incentive to bid in some regions, but costs to the taxpayer will be high: up to $60 billion over ten years.

http://content.healthaffairs.org/cgi/content/abstract/hlthaff.w5.399

Comment: We have been sold the concept that Medicare can improve quality and reduce costs only by introducing private plans that compete in the marketplace, competing with each other and with the traditional Medicare program. Is that really true?

Competing health plans under the Medicare + Choice program were not able to reduce costs. In fact, when it was recognized that costs were actually higher, rate increases were reduced and many plans fled the market, even though they were still receiving more funds than were paid for comparable services under the traditional program.

You would think that this failed experiment would have been enough. But no. Congress then established the Medicare Advantage program, specifically designed to be certain that PPOs would enter the private Medicare market. To ensure that private plans would be successful, Congress provided extra funds for the plans, estimated by some to be as much as 119% of the amount paid for comparable services in the traditional Medicare program.

Now we see that this was still not enough. Since it was clear that PPOs would not be able to compete with HMOs in some regions, rules were established that could result in giving PPOs an additional $60 billion in incentives to cover regions not served by HMOs.

Wouldn’t it be appropriate to ask how paying more money reduces costs? Shouldn’t we ask for an explanation of how providing extra funds to private plans creates a level playing field for competition with the traditional Medicare program?

Maybe Congress had something else in mind. Maybe they wanted to see private plans thrive, and they knew that they could not without trumping marketplace dynamics by artificially infusing extra funds into the private element of the competing programs.

Why would Congress and the administration go to such an effort and expense to support private plans? We think we know. Once such plans are commonplace, then Congress can begin a process of neglect by design, transforming the traditional Medicare program into a severely underfunded program that will satisfy no one, patients and providers alike. Once private plans predominate, the process of shifting costs to the Medicare beneficiaries through innovative product design can be accelerated. The ultimate goal is to shift the responsibility for funding health care away from the tax system and back to the individual.

Once again we’ve fallen into the trap of letting the opponents of government frame the debate. They would have us believe that only marketplace competition can improve quality and reduce costs, but by their own deliberate interference in the marketplace, they have shown us that they know that the market didn’t work.

Advocates of market competition will tell us that monopolies (single sellers) and monopsonies (single buyers) can destroy market competition by gaining exclusive control of the market. That is true, but does that mean that we would automatically receive lower quality health care at a higher cost?

Suppose that the monopsony were our own public, single payer insurance system. Wouldn’t we be in a position to demand higher quality health care than we are currently receiving? And wouldn’t we be in a position to demand fair pricing of services so that we would receive appropriate value for our health care investment?

Let’s no longer participate in the debate on health care reform as they have framed it: the failed model of market competition between health plans. Let’s move on to our framing of the debate: a single payer monopsony that provides higher quality at fair prices.

Medicare Law Prompts a Rush for Lobbyists

By Robert Pear
New York Times
August 23, 2005

WASHINGTON, Aug. 19 – The new Medicare law has touched off explosive growth in lobbying by the health care industry, whose spending on advocacy here far exceeds that of consumer groups and other industries like defense and banking.

Almost every week the federal government issues new rules or guidelines to carry out the 2003 law, which provides a drug benefit starting in January. To keep track of the new rules and to decipher their meaning is a full-time job for hundreds of lawyers and lobbyists, who regularly seek changes advantageous to their clients.

With hundreds of billions of dollars at stake, health care providers, insurers, drug makers and pharmacies are continually trying to influence rules for the drug benefit and other initiatives authorized by the law.

“You see a real surge in health care lobbying because that’s where the money is,” said Frederick H. Graefe, a lobbyist for hospitals and makers of medical equipment. “Twenty years ago the defense industry was dominant and had the most lobbyists, the big players. Now it’s health care.”

Last year alone, the health care industry spent $325 million – more than any other sector – in its efforts to influence Congress and federal agencies, according to Political Money Line, a nonpartisan group that studies reports filed with Congress by lobbyists and their clients.

Drug companies led the way. They reported spending $86.9 million on lobbying last year, followed by hospitals with $55 million and doctors with $35.4 million.

Lobbying Congress nowadays often means persuading lawmakers to make telephone calls to Bush administration officials on behalf of clients concerned about specific issues, like the Medicare payment for a drug or a medical device.

The pinpoint focus of much lobbying is illustrated by the case of Lexapro, an antidepressant made by Forest Laboratories. The Bush administration has said that Medicare drug plans must cover “substantially all” antidepressants, but not necessarily Lexapro, a drug widely prescribed for depression and anxiety among older adults. Claudia Schlosberg, a lawyer with Blank Rome who represents Forest Laboratories, has been pressing Medicare officials to reverse that decision and has obtained letters from several members of Congress supporting the company’s position in favor of covering Lexapro.

“Every health care interest has a voice on Capitol Hill,” said Elizabeth J. Fowler, a lawyer who recently left the Democratic staff of the Senate Finance Committee to join a consulting firm. “What you lose in the process is consumer and beneficiary voices. We heard a lot more from industry interests than from beneficiaries.”

Chris Jennings, who became a lobbyist after serving as health policy coordinator for President Bill Clinton, said: “The proliferation of health care lobbyists produces specialization. The broader good is often lost as people focus on next year’s Medicare reimbursement rate for a specific group of health care providers, or a regulation to be issued next month.”

The health care industry is subject to pervasive federal regulation, and the government sets prices for many goods and services provided to the elderly under Medicare. But the Bush administration and the Republican majority in Congress are receptive to advice from the industry, including private insurers who will deliver the drug benefit.

“The success of the new Medicare law depends on a robust partnership between government and the private sector,” said Stacey Hughes, a partner in the lobbying firm established by former Senator Don Nickles, Republican of Oklahoma.

Health policy experts and officials said the growth of health care lobbying reflected several trends:

* Congress earmarks more and more money each year for specific hospitals, medical schools and health care projects. Health care providers and local officials have a better chance to obtain such largess if they retain lobbyists to plump for their projects on Capitol Hill.

* Lobbying has become more substantive. To buttress their arguments, lobbyists need data, cost estimates and economic analyses of health policy proposals. They retain expert consultants to prepare such reports.

* Lobbyists have adopted many techniques of political campaigns. They hire pollsters and buy advertising to sway public opinion and pressure Congress.

* Many lobbyists have carved a niche for themselves by focusing on one party, one house of Congress, one Congressional committee or a handful of influential lawmakers.

Carol A. McDaid, a health care lobbyist at Capitol Decisions, a subsidiary of the Van Scoyoc Companies, said, “It’s become so sophisticated that, in preparation for a critical vote, a big health care or pharmaceutical company will hire a different firm to lobby each key member of an important committee, like the Ways and Means Committee.”

The Pharmaceutical Research and Manufacturers of America reported spending $15.5 million on lobbying last year, while two of its members, Pfizer and Bristol-Myers Squibb, spent $5.6 million apiece and Johnson & Johnson spent $4.5 million.

Other heavyweight lobbies included the American Medical Association, which spent $18.5 million last year, and America’s Health Insurance Plans, which spent $5.6 million, about the same amount as the Blue Cross and Blue Shield Association.

By contrast, AARP, the lobby for older Americans, spent $8 million. The American Cancer Society spent $2.6 million, the American Heart Association spent $1 million and Families USA, the liberal group that calls itself a voice for health care consumers, reported spending $40,000.

Alan B. Mertz, president of the American Clinical Laboratory Association, said the advocacy budget for his group had more than tripled, to $2.5 million this year from $750,000 in 2002. “We had to beef up our advocacy to deal with threats to our Medicare reimbursement,” Mr. Mertz said, noting that Medicare payments for laboratory tests had been frozen through 2008.

Lobbyists said it made sense for their clients to pour money into lobbying because so much money was at stake. Health care accounts for more than 15 percent of the nation’s economy, and private insurers often look to Medicare as a guide in deciding what services to cover and how much to pay.

Moreover, the federal role is growing. Medicare and Medicaid will account for 37 percent of all spending on prescription drugs next year, up from 20 percent this year, said Stephen Heffler, an economist at the federal Centers for Medicare and Medicaid Services.

The Bush administration and the Congressional Budget Office say Medicare will spend more than $1 trillion on prescription drugs in the next 10 years, with outlays topping $100 billion a year after 2009.

Two linguistic changes show how health care lobbyists have emerged as a potent force. Lobbyists and trade associations, once seen as special interests, are now called “stakeholders,” with a legitimate claim to be heard in the policy-making process.

“Expanding coverage” used to mean providing health insurance to people who had none. But lobbyists now use the term in a different sense. When they speak of “coverage expansions,” they mean that Medicare should cover, or pay for, new technology like PET scans, implantable defibrillators and drug-coated stents to treat clogged arteries.

Political campaign contributions are frequently coordinated with lobbying campaigns. Lobbyists often hold fund-raisers at the request of members of Congress, as allowed by campaign finance laws. They are expected to contribute money from their own pockets and to raise money from clients.

“You increase your influence and access by doing fund-raisers,” said James C. Pyles, a lawyer and lobbyist for psychoanalysts and home care agencies. “If you’re not on the donor list, you don’t have much access.”

Ms. McDaid, who lobbies for hospitals and ambulance companies, said: “In the old days, the requests for political giving went mainly to your clients’ political action committees. Now health care lobbyists have to tithe personally. The bigger your client base, the more pressure there is to give. It’s not unusual for a lobbyist at a big firm to give $25,000 to $50,000 in personal contributions to Congressional candidates in a two-year election cycle.”

The growing prominence of health care issues on the national agenda has created an unquenchable demand for lobbyists. New issues include bioterrorism, stem cells, health information technology, the privacy of medical records, television advertising of prescription drugs and the importing of drugs from Canada.

Republicans are in demand at lobbying firms and trade associations, but so are knowledgeable Democrats.

John E. McManus, who formed his own lobbying firm after working for Republican members of the House Ways and Means Committee, received a total of $620,000 last year from the American Medical Association, the Advanced Medical Technology Association, the Pharmaceutical Research and Manufacturers of America and several drug companies, including Merck and Genentech. Mr. McManus can help them navigate the new Medicare law because, as a Congressional aide, he helped write it.

On the other side of the political spectrum, David H. Nexon, a health policy adviser to Senator Edward M. Kennedy for more than two decades, stepped down in February to become senior executive vice president of the Advanced Medical Technology Association, the lobby for makers of medical devices like Medtronic and Guidant.

Charles M. Brain, director of legislative affairs for President Clinton, reported that he got $240,000 last year for representing the Pharmaceutical Research and Manufacturers of America. Stephen J. Ricchetti, deputy chief of staff in the Clinton White House, lobbies for Eli Lilly & Company, Novartis and Pfizer.

Richard J. Pollack, executive vice president of the American Hospital Association, said health lobbying had become more partisan.

“We hire Republicans to lobby Republican members of Congress and Democrats to work Democratic offices,” Mr. Pollack said.

The Generic Pharmaceutical Association has retained Mr. Jennings and Mark W. Isakowitz to lobby for legislation to increase the use of generic drugs. As a White House aide, Mr. Jennings helped devise the Clinton plan for universal health insurance. As a lobbyist at the National Federation of Independent Business, Mr. Isakowitz, a Republican, helped defeat the Clinton plan.

As the costs of Medicare and Medicaid soar, federal prosecutors and members of Congress are investigating fraud and abuse with new zeal. Many health care companies find they need more lawyers and lobbyists to cope.

In a recent advertisement recruiting lawyers for its Washington office, Sidley Austin Brown & Wood, one of the nation’s largest law firms, said its health care practice had “experienced tremendous growth.”

Pharmaceutical Industry Spent $800 million on Lobbying over 7 years, Report States

Kaiser Daily Health Policy Report
08 Jul 2005

The pharmaceutical industry spent $800 million on federal lobbying and campaign contributions over the last seven years, according to a report released Wednesday by the… Center for Public Integrity, Bloomberg/Philadelphia Inquirer reports. CPI reviewed more than 5,500 lobbying disclosure reports filed with the Senate Office of Public Records (Hallam, Bloomberg/Philadelphia Inquirer, 7/7). CPI found that the industry spent $116 million on lobbying and political campaigns in 2003, when Congress approved the prescription drug benefit under Medicare that bars HHS from negotiating drug prices with the industry. The industry spent $128 million in 2004 to lobby for such measures as tax breaks as part of a corporate tax relief bill (Freking, AP/Long Island Newsday, 7/7). CPI said the industry also has lobbied to weaken FDA enforcement, strengthen patent protections and extensions and receive tax credits (CQ HealthBeat, 7/6). In addition, the report stated that the pharmaceutical industry employs 1,291 registered lobbyists — more lobbyists in Washington, D.C., than any other industry — more than half of whom were former U.S. officials (Bloomberg/Philadelphia Inquirer, 7/7). CPI found that more than 3,000 people over the past seven years have lobbied for the industry, including 75 former lawmakers. Those lawmakers include former Sens. Bob Dole (R-Kan.) and Lloyd Bentsen (D-Texas), former Reps. Bob Livingston (R-La.) and Tom Foley (D-Wash.) and current Pharmaceutical Research and Manufacturers of America President Billy Tauzin (R-La.) (AP/Long Island Newsday, 7/7). According to Bloomberg/Inquirer, Tauzin was a “key architect” of the 2003 Medicare law. The report is part of CPI’s yearlong investigation of pharmaceutical industry lobbying and campaign financing. CPI last week published a report that found drug makers have spent more time attempting to influence the U.S. Trade Representative’s Office than FDA. CPI also examined the number of warning letters FDA sent to drugmakers from 1997 to 2004 and found that the number decreased by 84% from 140 to 23 (Bloomberg/Philadelphia Inquirer, 7/7).

Reaction
Roberta Baskin, executive director for CPI, said, “It is astonishing to learn that no other interest has spent more money to sway public opinion in this time period.” Baskin added, “We are not accusing drug companies of wrongdoing; however, we do believe that such financial success deserves close scrutiny” (CQ HealthBeat, 7/6). Ken Johnson, senior vice president for PhRMA, said the report was “clearly biased and one-sided” and did not recognize that “medicines researched and developed by America’s biopharmaceutical research companies save lives and improve the quality of life for tens of millions of patients from around the world” (AP/Long Island Newsday, 7/7). Johnson added that the tax credits the industry receives do not constitute a major subsidy. Johnson said, “Today’s regulations and laws encourage companies to take risks as they pursue cutting-edge research and spend nearly $50 billion a year to develop new and better medications.” Dan Eramian — vice president for communications for the Biotechnology Industry Organization, which is headed by former Rep. Jim Greenwood (R-Pa.) — said that “having a staff with legislative experience to understand the black box of D.C. is a good thing” (CQ HealthBeat, 7/6). The report is available online.

Drug Lobby Second to None

How the pharmaceutical industry gets its way in Washington
Special Report

By M. Asif Ismail

WASHINGTON, July 7, 2005 — The pharmaceutical and health products industry has spent more than $800 million in federal lobbying and campaign donations at the federal and state levels in the past seven years, a Center for Public Integrity investigation has found. Its lobbying operation, on which it reports spending more than $675 million, is the biggest in the nation. No other industry has spent more money to sway public policy in that period. Its combined political outlays on lobbying and campaign contributions is topped only by the insurance industry.

The drug industry’s huge investments in Washington—though meager compared to the profits they make—have paid off handsomely, resulting in a series of favorable laws on Capitol Hill and tens of billions of dollars in additional profits. [See What the Industry Got.] They have also fended off measures aimed at containing prices, like allowing importation of medicines from countries that cap prescription drug prices, which would have dented their profit margins. Pfizer, the world’s largest drug company, made a profit of $11.3 billion last year, out of sales of $51 billion.

The industry’s multi-faceted influence campaign has also led to a more industry-friendly regulatory policy at the Food and Drug Administration, the agency that approves its products for sale and most directly oversees drug makers. [See FDA: A Shell of its Former Self]

Most of the industry’s political spending paid for federal lobbying. Medicine makers hired about 3,000 lobbyists, more than a third of them former federal officials, to advance their interests before the House, the Senate, the FDA, the Department of Health and Human Services, and other executive branch offices.

In 2003 alone, the industry spent nearly $116 million lobbying the government. That was the year that Congress passed, and President George W. Bush signed, the Medicare Modernization Act of 2003, which created a taxpayer-funded prescription drug benefit for senior citizens.

That figure was not anomalous. In 2004, drug makers upped their reported expenditures on lobbyists to $123 million, a record amount for the industry. Of the 1,291 lobbyists who were listed that year as prepresenting pharmaceutical corporations and their trade groups, some 52 percent were former federal officials.

By adding the benefit to Medicare, the government program that provides health insurance to some 41 million people, the industry found a reliable purchaser for its products. Thanks to a provision in the law for which the industry lobbied, government programs like Medicare are barred from negotiating with companies for lower prices.

Critics charge that the prescription drug benefit will transfer wealth from taxpayers, who provide the funding for Medicare, to pharmaceutical firms. According to a study done in October 2003 by Boston University professors Alan Sager and Deborah Socolar, 61 percent of Medicare money spent on prescription drugs will become profit for drug companies. Drug-makers will receive $139 billion in increased profits over eight years, the study predicts. The Medicare prescription drug benefit starts in 2006.

America the lucrative
The U.S. government contributes more money to the development of new drugs—in the form of tax breaks and subsidies—than any other government. Of the 20 largest pharmaceutical corporations, nine are based in the United States. Yet drugs are more expensive in the United States than in any other part of the world, and global drug companies make the bulk of their profits in the United States.

Many blame the industry’s clout in Congress and with the executive branch for the high price of drugs. While many governments worldwide have regulated drug prices, the industry has been able to block a host of measures aimed at controlling prices in the United States. In the past few years, the industry has mounted an effective, organized campaign against legalizing importation of drugs from Canada.

As the Center reported in January, the industry trade group, Pharmaceutical Research and Manufacturers of America, hired a former U.S. ambassador to Canada, Gordon Giffin, and his top aide to lobby the Canadian government on the issue. The industry’s pressure may be paying off. Last week, Canadian Health Minister Ujjal Dosanjh announced that his government would ban the bulk export of prescription drugs and crack down on Internet pharmacies that sell drugs to Americans.

A spokesman for PhRMA, Jeff Trewitt, told the Center in January that price controls thwart innovation and importation of drugs pose serious health risks.

The top 20 drug corporations and the industry’s two trade groups, PhRMA and the Biotechnology Industry Organization, which represents biomedicine companies, disclosed lobbying on more than 1,600 bills between 1998 and 2004. They may have lobbied on far more bills; the Center could only count bills specifically mentioned by the companies and trade groups in their filings. In many cases, lobbyists list issues, like “animal health issues,” rather than specific bills. In counting the number of bills, the Center excluded those lobbied on by BIO that relate solely to biotechnology issues, such as genetically engineered foods.

Apart from Congress, the industry lobbied an array of agencies including the Department of Health and Human Services, the Food and Drug Administration and the State Department on dozens of issues. For instance, PhRMA lobbied 33 federal agencies on 39 issues separately identified under the Lobbying Disclosure Act of 1995.

As the Center reported last week, the agencies include the Office of the U.S. Trade Representative, which shapes the country’s trade agreements with other nations. Since 1998, it has filed 59 lobbying reports concerning the USTR, more than any other lobby or interest.

In recent years, the industry has shown significant power in influencing U.S. trade policy. For example, current drafts of the Dominican Republic-Central American Free Trade Agreement reflect PhRMA’s desire to remove price controls on drugs and provide intellectual property protection in proposed member countries. Recently, the USTR, at the behest of the pharmaceutical industry, pressured Guatemala into repealing a recently passed law permitting wider marketing of generic drugs.

The top 20 corporations and the trade groups reported spending nearly $478 million on lobbying, or nearly 70 percent of all the money the industry reported. These corporations had roughly 64 percent of the global market share, according to IMS Health, a private consulting company that studies the industry.

Congress is most frequently listed as a target of the industry’s lobbying attentions; contacts with the House or Senate are listed on about 5,500 lobby disclosure reports. The Department of Health and Human Services, the Centers for Medicare and Medicaid Services, the Food and Drug Administration and the Executive Office of the President are other agencies heavily lobbied by the industry.

Like other well connected interests in Washington, pharmaceutical firms look to former insiders to carry their message to Congress and executive branch officials. In May 2003, as the battle over the Medicare legislation was climaxing, the Pharmaceutical Research and Manufactures of America, the industry trade group, hired the newly formed lobby shop of Larson Dodd, LLC to join its already formidable army of representatives swarming the hallways of Congress. The hiring of Dave Larson and Quin Dodd by PhRMA—and later by Wyeth and other drug manufactures—was in keeping with the industry’s standard operating procedure: employing former officials to lobby on bills sponsored by their ex-bosses.

Larson was a health policy advisor to Senate Majority Leader Bill Frist, the chief sponsor of a Medicare bill that, six months later, would become law, with potentially tens of billions of dollars of windfall for the drug companies. Dodd is a former legislative director to Sen. Kay Bailey Hutchison, the fourth ranking Republican in the upper chamber.

A third of all lobbyists employed by the industry are former federal government employees, including more than 15 former Senators and more than 60 former members of the U.S. House of Representatives. The two trade groups, PhRMA and BIO, are headed by two influential former members of Congress. PhRMA chief Billy Tauzin and BIO president Jim Greenwood were on committees that regulated drug companies and they each sponsored several bills related to the industry.

The Center reviewed the 1,600 plus bills the top 20 drug corporations and PhRMA and BIO lobbied. Sponsors of more than 50 percent of those bills had one or more former staff members representing the industry. A few of the sponsors have gone on to become lobbyists themselves.

Political giving
In addition to hiring former members and their staffs, the industry has also helped keep lawmakers in office by making political contributions. Since the 1998 election cycle, employees of the pharmaceutical and health product industry, their family members and industry political action committees have given $133 million in campaign contributions to candidates running for federal and state offices, according to the Center for Responsive Politics. Since 2000, the top drug corporations and their employees and PhRMA gave more than $10 million to 527 organizations, tax-exempt political committees which operate in the grey area between federal and state campaign finance laws.

Nearly $87 million of the contributions went to federal politicians in campaign donations, with almost 69 percent going to Republican candidates. Top recipients of the industry’s campaign money include President George W. Bush (upwards of $1.5 million) and members who sit on committees that have jurisdiction over pharmaceutical issues.

In the states, the industry gave more than $46 million to candidates since ’98, according to the Institute on Money in State Politics, which tracks campaign finance at the state level.

The Center could not determine the amount drug interests spent on lobbying in states because of the lack of comparable state disclosure requirements for expenditures. But their lobbying, campaign donations and grassroots efforts have taken on an added dimension because many states are threatening the industry’s high profit margins in a way the federal government and Congress have been unwilling to do.

With states running into fiscal crises, several governors and legislatures have been exploring ways to contain drug prices. Among the several options that have been considered around the country include allowing seniors and others to legally buy drugs from Canada and other countries.

Though some states have been less amenable to drug industry pressure, the drug industry hasn’t given up the fight. For Washington’s biggest spending lobby, it’s a small investment to make for its continuing prosperity.

Victoria Kreha, Alexander Cohen, Kevin Boettcher and Emily McNeill contributed to this report.

Medicare PPOs’ gain is taxpayers’ loss

Abstract:

http://content.healthaffairs.org/cgi/content/abstract/hlthaff.w5.399

President Bush on 9/11

The White House
September 10, 2005
President’s Radio Address

On Sunday, our nation will observe the fourth anniversary of the September the 11th terrorist attacks. Every American has memories of that day that will never leave them. We remember the images of fire and terror at the Pentagon, in Pennsylvania, and in the heart of New York City.

We remember the ruthlessness of those who murdered the innocent and took joy in their suffering. We remember the courage of the police and firefighters and rescue personnel who rushed into burning buildings to save lives, knowing they might never emerge. And we remember the victims — moms and dads, sons and daughters, brothers and sisters, husbands and wives — and the loved ones they left behind.

As night fell on America on September the 11th, 2001, we felt grief and great sorrow. Yet we also saw that, while the terrorists could kill the innocent, they could not defeat the spirit of our nation. The despair and tragedy of that day were overcome by displays of selflessness, courage and compassion.

Today, America is confronting another disaster that has caused destruction and loss of life. This time the devastation resulted not from the malice of evil men, but from the fury of water and wind.

Our greatest resource in such times is the compassionate character of the American people, because even the most destructive storm cannot weaken the heart and soul of our nation.

http://www.whitehouse.gov/news/releases/2005/09/20050910.html

Comment: Today we all mourn the terrible tragic loss of 3000 lives on 9/11/01. Mere words cannot express our thoughts…

In the two months following 9/11/01, another 3000 American lives were lost… merely due to the delay in access to health care because of lack of health insurance. A few of us also mourn that tragic loss… and the loss of another 3000 lives the following two months… and another 3000 the two months after that… and… and…

Since 9/11/01, twenty-four times we have duplicated the tragic loss of 3000 lives.

Is the “compassionate character of the American people” solely dependent on television images from CNN or Fox News? Does “the heart and soul of our nation” really require electronic cable feed for sustenance?

Should a city council set health policy?

Hospitals defeated in bid to block rival
By Darrell R. Santschi
The Press-Enterprise
September 7, 2005

More than a month into one of the most bitterly divisive public debates in Loma Linda’s 35-year history, three City Council members voted Tuesday night to issue a permit to build a specialty hospital here.

In so doing, Mayor Floyd Petersen and Councilmen Charles Umeda and Robert Christman rejected a consortium of area community hospitals’ argument that it was up to the city to prevent the specialty hospital from “cherry picking” patients for lucrative surgical procedures, which the hospitals say will jeopardize their emergency and indigent care.

The 28-bed California Heart and Surgical Hospital is to be built at the northeast corner of Barton Road and New Jersey Street, not far from two of the proposal’s biggest detractors: Redlands Community Hospital and Loma Linda University Medical Center.

In the end, the three council members said they didn’t see it as their responsibility to settle issues that they say the state and federal governments should be addressing.

At the Aug. 23 hearing, Dr. William Plested, president-elect of the American Medical Association, contended that specialty hospitals force nonprofit general hospitals to innovate.

http://www.pe.com/localnews/inland/stories/
PE_News_Local_C_hospital07.13717ca7.html

Comment: Just imagine that the $1.9 trillion that we are already spending on health care was in a single, taxpayer-funded pool. That’s not a far reach of imagination since 60% of that spending is already through the tax system.
As taxpayers, what would we want the stewards of our health care system to do in this situation?

Would we want our cardiac surgery services for our community to be delivered in a full-service, tertiary-level, not-for-profit Center of Excellence, or would we want to have our cardiac surgery done in a limited facility, devoid of other hospital support services, and managed with the primary intent of maximizing profit for passive investors?

What about joint replacement? If something went wrong, perhaps resulting in renal shutdown, does it seem reasonable that you would have to be transferred, while critically ill, to a real, full-service hospital, one with a renal team that could better manage your complication?

We would never allow our public funds to be placed in the hands of special interests more concerned about profit than the public good. We would demand regional planning to enable optimal use of our finite resources. What is ironic is that we are not already making this demand, but that has more to do with our current, inefficient, fragmented system of funding care. There are far better systems that would greatly improve our resource allocation; single payer certainly comes to mind.

AMA president-elect William Plested, himself a cardiovascular surgeon, seems to suggest that the technological innovations developed in our academic medical centers could continue to take place only if dollars are drained from our system to support highly profitable, private, special interests, competing in the marketplace, entities that are relieved of any obligation to provide emergency, indigent or other money-losing services. What nonsense.

Once again, the AMA demonstrates that we should not look to it for leadership in solving the problems of our health care crisis. The PNHP voice is needed now, more than ever.

Garamendi's "Priced Out"

Priced Out
Health Care in California
2005
John Garamendi, Insurance Commissioner

Table of Contents

Chapter 1
The State of California Health Care:

* The National Context
* Crisis in Health Insurance: Skyrocketing Health Insurance Premiums
* Crisis in Health Insurance: Paying More for Reduced Coverage
* Health Costs and the Economy
* Crisis in Health Insurance: Growing Uninsured Overall, Greater Reliance on Public Safety Net
* What Happens to the Uninsured?
* Health Status is Declining in California
* California Faces Unique Challenges in Public Health Care Funding Including Lack of Federal Support
* Health Care Quality and Cost Containment

http://www.insurance.ca.gov/PRS/PRS2005/priced-out-health-care-in-california.pdf

Comment: This certainly is not an exciting or provocative quote. So why was it selected?

The first chapter of “Priced Out” describes the health care problems in California, but in a national context. With over 12% of the nation’s population, California exemplifies the national problems and our failures to address them.

This first chapter serves as an excellent, stand-alone report of the some of the more important deficiencies of our entire health care system. We cannot hope for reasonable solutions unless we understand the problems. This report provides a foundation for that understanding. You should consider downloading the first chapter (if not the entire report) for use in your activism for reform.

The report is peppered with specific recommendations that some might describe as incremental tweaking of the system. They should not be lightly dismissed since many of the recommendations would be of value in a universal system of funding health care.

Although some might be distracted by these specifics, Garamendi does list his overriding health care principles. His first principle: “Universal health care coverage is the only real answer.”

The first chapter makes it very clear that the complexities of our dysfunctional system cannot be adequately addressed by simple measures that merely tweak the system, as important as they are. Thorough restructuring of the way that we fund health care will be required to achieve equitable, affordable, comprehensive health care for everyone.

The Lagging Poor

Washington Post
Editorial Page
Tuesday, September 6, 2005

THe poverty level edged up last year, to 12.7 percent — the fourth straight annual increase. Overall median income remained flat at $44,389, down 3.8 percent from its peak in 1999. This is a robust economic recovery?

The Census Bureau’s annual report on income, poverty and health insurance in the United States is not alarming — but neither is it cheering, or even reassuring. Rather, the numbers underscore the lagging and uneven nature of the economic recovery since the 2001 recession. According to the new data, 4 million more people were living in poverty in 2004 than in 2001, and 4.6 million more people lacked health insurance.

Administration officials counsel patience, pointing to the downturn of the 1990s, when it took several years for the poverty rate to start to fall. “The last, lonely trailing indicator of the business cycle,” Commerce Department official Elizabeth Anderson said of the poverty rate.

This has about it more than a whiff of wishful thinking. For one thing, the increase in poverty between 2003 and 2004 is in fact out of the ordinary; such a rise hasn’t happened between the second and third years of an economic recovery since the federal government began collecting poverty data in 1960. For another, the poverty rate may be a lagging indicator, but in this case it’s not lonely: See, for example, the median income of working-age households, which declined 1.2 percent.

Another ominous signal involves health insurance coverage. Although the percentage of people with coverage remained unchanged from 2003 to 2004, that masked a shift from employer-provided insurance to government coverage. The percentage of people with employer-based health insurance fell for the fourth year in a row. Most of this slack has been taken up by Medicaid, the shared federal-state health program for the poor and disabled. But with state budgets under increasing strain from Medicaid costs and with Congress poised to make cuts in the program, it’s not at all certain that states will be willing or able to maintain coverage for working Americans hovering at the edge of poverty.

In the wake of this data and the devastation caused by Hurricane Katrina, Senate Majority Leader Bill Frist (R-Tenn.) was wise to postpone this week’s planned vote to repeal the estate tax. Lawmakers need to remember in the weeks to come that this is an economic recovery that continues to leave too many Americans behind.

Free corporations from health expenses

OPINION
The Business Journal (Milwaukee)
From the September 2, 2005 print edition
Guest Comment
By Jack Lohman and Dr. Eugene Farley

It is by historical accident that U.S. businesses provide health care to their employees, and it has now placed them at a serious disadvantage when competing globally or against imports whose manufacturers do not have to add this extra 8 percent to 15 percent to the price of their products.

In other countries, health care is a taxpayer burden. It is here too, but we pay through many circuitous routes that have caused jobs to leave the country. We add these costs to our product prices, and it makes us uncompetitive with products that come from countries that already have taxpayer-paid medical systems. Corporations in Canada pay only an $800 annual per-employee tax. The result, as just one example: The Big Three auto companies now make more cars in Ontario than in Detroit, and Toyota just selected Canada over the United States for its new Rav4 manufacturing plant. Jobs are leaving our country because they are doing it right and we are doing it wrong!

The United States must adopt a universal health care system like Canada’s, but long wait times do not have to be a part of our system. We can do better and we will do better. With universal coverage, Canadians have longer life expectancy (by two years), 35 percent lower infant mortality, and 100 percent of the citizens are covered with 40 percent less in total costs. They’ve paid for it with a system that has 8 percent rather than 30 percent administrative costs. More than 90 percent of the patients love it, as do most of the physicians.

But who would pay for our system? The same people who are paying for it today: the taxpayers. We all pay for our health care system, which costs $1.6 trillion each year nationally, and 100 percent of this money comes from we the people, through taxes, premiums, co-pays, deductibles, purchases, employer tax breaks and the other methods we use for collecting money. When we buy product, that company adds its health care costs to the price and we pay at the cash register.

Jobs at stake

But that added price is killing American jobs, and if the feds aren’t willing to fix it the state must. We are only talking about changing how we collect and use the same health care money. Such a system would also replace our Medicaid and BadgerCare costs, assume 40 percent of worker compensation costs, and even replace Medicare if the feds were willing to buy in.

Even if it were zero savings we’d be market winners. And we’d have more than adequate coverage, though it would not cover non-essential lifestyle enhancement surgeries or drugs. Gap insurance would be an option for employers and those wanting to pay for those procedures themselves. That leaves a job for the 400 insurance companies.

Once we eliminate employer-paid medical coverage, which now represents from 8 percent to 15 percent of U.S. employee costs, companies and jobs will stop leaving the state and new companies and jobs (and the tax revenues that result) will start flowing into the state. A properly run universal health care system is the most business-friendly and public-friendly system available.

If our state is the first to do this we will gain jobs from other states. If we are last, they will get our jobs. We must be the leaders, and business leaders must sideline the health care interests to make it happen here.

Jack Lohman of Colgate is the retired CEO of an independent diagnostic lab. Dr. Eugene Farley is a retired physician in Madison.

NMA Aids Hurricane Katrina Victims

September 7, 2005

Dear Colleague:

As African American physicians who live and work in the affected communities hit hardest by Hurricane Katrina, the nation is turning to us for guidance and support as the recovery continues. We are actively involved in the evolving participation of the NMA in this ongoing relief effort. By extension, this is an American crisis, and the NMA is addressing it as such.

To date, the NMA has several physicians: Drs. Rahn Bailey of Houston; Leonard Weather of New Orleans currently residing in Shreveport, LA; Roosevelt McCorvey of Montgomery, Alabama; Reginald Rigsby of Madison, Mississippi; Claudette Shepard of Memphis, Tennessee; Niva Lubin Johnson of Chicago, Illinois; Walter Faggett, D.C. Department of Health, Washington, DC; Ingrid Taylor of St. Louis, Missouri; Christopher Ervin of Atlanta, Georgia; and Wilma Wooten of San Diego, California among others who are serving as points of contact in these affected areas.

We are in the process of updating the NMA’s website www.nmanet.org with the latest information regarding our efforts. This portal, we hope, will become your destination of choice in the coming weeks. We will include relevant contact and resource information, as well as opportunities for volunteering and collaboration. Inquiries about NMA members’ involvement in this effort should be directed to our Membership department at (202) 347-1895 ext. 220 or to jwilson@nmanet.org. Media-related inquiries and suggestions should be directed to External Affairs, at (202) 347-1895, ext. 262 or to rstone@nmanet.org.

Finally, we are anxious to receive your feedback about how well the process is working and how we can improve. Please let us hear from you. We can be reached at 800-662-0554 and/or visit www.nmanet.org for regular updates of the hurricane relief efforts.

Below are updates from Dr. Bailey regarding his recent findings, experiences and needs in caring for the evacuees in Houston, TX. We appreciate his efforts and we will keep you apprised of the latest developments.

Sincerely,
Sandra L. Gadson, M.D.
President

September 2, 2005

Dear Fellow NMA members,

Many thanks for your phone calls and emails. I am honored to take lead role on coordinating efforts by way of a medical team of physicians to provide assistance to the victims of Hurricane Katrina not only in the Houston, Texas area but all across the United States. We are very concerned with the growing and compounding health issues not only in New Orleans and surrounding areas and states but for those victims transported to the Houston Area. The NMA is encouraging all members to please volunteer your time and give to the charities to help aid this national disaster. Taking lead role in combining our efforts to assist, I’m asking each of you to give of your time (1-2 weeks) working onsite at the Astrodome and shelters throughout the city. We are asking for all types of physicians. If you are not licensed in the State of Texas, you can contact the Harris County Medical Society at (713) 524-4267 or website www.hcms.org. The website gives information on how to obtain a provisional license as well as list information on insurance coverage for those with concerns on protection of malpractice lawsuits. The reason for the 45 day temporary license was intended for Louisiana (or Mississippi) physicians) to come over and care for their own patients. Other uses of that provision are being discouraged unfortunately. For MDs inside of Texas though, they can contact the TMA at 800-880-1300 and speak with Gayle Love.

For more information on insurance needs, you can call Texas Department of Insurance at (800) 252-3439 or visit their website at www.tdi.state.tx.us. Please assist by way of contacting any physicians you may know to help us in our joint efforts to better serve the Hurricane Katrina victims. They may contact me, my coordinator or any of the agencies that will be listed at the end of this letter. Your assistance doesn’t stop with aid by way of food, shelter, clothing, etc. We encourage each of you to speak with your pharmaceutical contacts regarding donating medical supplies and medicines. In your efforts to ask for donations by colleagues and pharmaceutical contacts, we must get a political response via our most powerful tool, which is our voice. We need all the states across the US to be challenged to adopt families. The City of Detroit adopted 500 families for which they are providing total support. All states must ban together and assist the multitude of displaced families. Also, we need to get our voice out to all African American radio and television stations and newspapers both local and national to become our media vehicle and aid our efforts to magnify the overall adversities and needs of African American victims.

It is my goal to send updated emails periodically of the NMA efforts to aid the victims of Hurricane Katrina who are being housed in the Astrodome, Reliant Arena, and soon at the George R. Brown Convention Center as well as surrounding Red Cross agencies and shelters in Fort Bend, Baytown, and throughout the Houston area.

Our strong commitment to assist African American patients and support of our medical students exemplify the integrity for which the NMA was founded. The National Medical Association (NMA) was established in 1895 to address the specific needs of a culturally diverse population. We represent over 25,000 minority physicians in 24 specialty medical disciplines. The National Medical Association’s Scientific Assembly is acclaimed as the nation’s foremost forum on medical science and African American health.

Given all the devastation, we cannot forget our future medical students who were displaced from all the schools in New Orleans and surrounding areas with regards to books, tuition, and other college expenses that was once covered by scholarships that are now questionable. As Section Chair of Psychiatry, I have proposed that our physicians adopt a medical student. We must not let our future medical students have interrupted education or financial difficulties. Some of the students displaced from Xavier, Tulane, Loyola and other area medical schools within the New Orleans area have lost everything. Some students are not from Louisiana and were recruited and supported by school scholarships and mentor programs. Their backgrounds are diverse and families are poor and/or unable to help them with their medical education and needs.

I’m sure many of you have watched the news channels and are inundated with information of donations, relief efforts, horrific and touching rescue scenes and much more. My NMA Psychiatry Coordinator and Executive Assistant noted that her company and many other companies within the Houston area have donated amounts of $2 million and more to the Red Cross and other charities. Many Houstonians are opening their homes to assist. The last news broadcast mentioned that over 100,000 people from New Orleans have come to the Houston area. The City of Houston and other local area towns have tried their best to accommodate and are doing an outstanding job but we are not equipped to handle this multitude of victims for an extended period of time. As members of the NMA, we must meet our responsibilities as a medical organization in a medical crisis.

Many contribution websites are listed on the NMA website www.nmanet.org. I’ve listed more local websites below:

American Red Cross: www.redcross.org.
Houston Local Number: 713-313-5480

Salvation Army: www.salvationarmyusa.org
800-435-7669 (800 HELP NOW)

Texas Southern University (Admitting displaced students)
713-313-1059/713-313-7071

Houston Independent School District (For evacuee students)
713-892-6699

Texas A&M Galveston: 409-740-4448 or 877-322-4443

Harris County Housing Resource: 713-578-2055

FEMA: www.fema.gov
800-621-FEMA
Volunteer Houston: 713-965-0031

Employment for Evacuees: 1-888-469-5627

Food Stamps: 800-500-4266
(Displaced Families can get assistance in Houston area)

WIC: 800-942-3678

Sources for homes that are available: www.nola.com

To open your home to evacuees: www.openyourhome.com

Local news: www.abc13.com and www.click2Houston.com, www.KHOU.com and many more give more information.

Kindly forward this information to all your colleagues and other physicians in all specialty areas. When contacting us via phone or email, be sure to include email addresses, phone numbers, physical addresses and any other contact information so we can update our database and add more physicians to our communication updates. Please be in prayer for everyone. Thank you for your continued support and assistance in getting the word out and for your many donations and ongoing contributions.

Sunday September 4, 2005

I want to let all of my NMA colleagues know what is truly going on here regarding health care for the Hurricane Katrina victims from New Orleans currently housed in the Astrodome and Reliant Arena.

The stories I’m going to share are indicative to the many stories that was heard over and over again given by victims in dire need of medical treatment and comfort.

My first patient was an African American woman who cried uncontrollably the whole night. I did my best to sedate her but within an hour she was back up crying. Her story was about her lost 13-year-old daughter. She said that as the water kept rising in their home, her daughter was with her. However, when they got out of the house, her daughter along with others floated away in the raging waters and lost in the night. She doesn’t know if her daughter is alive or dead. Another African American woman lost both her daughter’s ages 6 and 16 the same way. She literally screamed to the top of her lungs much of the night in grief.

A 50-year-old African American man, Vietnam Veteran, had virtually the same story. Water was rising in the house so Monday night they slept in the attic. The next day with the water continuing to rise, they were told to evacuate to the Superdome. They did. They stayed from Tuesday to Thursday in the most deplorable conditions. At the Superdome, he reported three (3) girls were raped, men getting physically assaulted, and people walking through human waste down the hallway that leads onto the floor of the Superdome. People were sleeping in this same waste filled hallway because they had nowhere else to go and nowhere to sleep. His 22-year-old son lived through the flood but was shot at the Superdome. He said it was total ciaos everywhere you turned. No running water, no air, too many people, no security, no food, and nothing to drink. He told me the police in New Orleans were taking food and water from nearby stores and selling it to them. After the officers left the stores, other people went in to find food and water and were thought to be looters. How could this be? Where was the city government? Where is the law enforcement? Where was the local disaster relief groups located in the city? One would think if you were t! old to evacuate to a specific location, that the location would be prepared to accommodate as many as the location could hold and at the very least have bare necessities of water, food, place to use the restroom and somewhere to sleep. The Superdome had 40,000-50,000 people that couldn’t get out and had no means of transportation to evacuate the city. Most are poor African Americans. As I looked into our infamous Astrodome, I saw rows and rows of cots for people to rest, portable restrooms, food and water, clothing areas, designated shower areas for men and women, and medical areas to receive treatments.

I treated many opiate dependent patients. They had chills, cramps, sweating, diarrhea, and other symptoms associated with withdrawals. Many of these patients were on methadone and had been on it for years. By now they are four to five days without medications and are in withdrawals. Something that made me frown was to hear that it was good for these patients to go through these symptoms. How inconsiderate! It is bad medicine to ignore any healthcare conditions with real symptoms if they were caused from dependent medicines or not. We as physicians took an oath to help everyone from all walks of life in need of medical treatment regardless of ethnicity, background, religion, etc.

One dependent male told me his heartfelt story. Again, same beginning of rising water in their home. The water was 3-4 ft. on the first floor and rising by the minute. He grabbed his elderly grandmother and put her on his back then left the house wading in deep water and swam down to the St. Bernard Parish High School. They got up on the second floor where it was safe. He continued going back for others that were located on his street using a raft to help move them and their belongings safely to the school.

Three small boys came to me with Attention Deficit Hyperactivity Disorder (ADHD). One of the boys was shivering like a leaf. His mother told me that he had seen a man get shot in the Superdome. The mother went on to tell of all the children crying with no milk, formula and diapers. Some women had children that didn’t belong to them as they were displaced from their families.

These heartfelt stories go on and on. The loud screams and crying were so mentally exhausting as we tried our best to comfort the patients.

Something positive did come out of the evening. I must report that the medical services team of physicians was very organized in helping to treat the victims. I applaud the massive response from the pharmaceutical companies for supplying such neuroscience medications like Strattera, Concerta, Cymbalta, Prozac and many more. These were actual medicines and not samples. The kind humanitarian effort of the pharmaceutical companies is greatly appreciated by the medical staff in efforts to administer appropriate medical care to these victims.

In conclusion, I cannot accept nor understand our inability to respond to rudimentary and basic necessities like transportation, food and clothing, law enforcement, etc. This is totally pathetic, ridiculous, intolerable, and unacceptable coming from people in positions that should be prepared for these kinds of crisis and were caught off guard. How can FEMA, a national government agency to aid in such disasters, allow these victims to go over three (3) or more days without the basic human necessities?

We cannot sit idle by and see this happen again. We must be prepared at all times to take care of our own.

Rahn K. Bailey, M.D., F.A.P.A.
Board Certified, General and Forensic Psychiatry
Chairman, NMA Psychiatry Section

And

Holly L. Blackmon
NMA Psychiatry Section Coordinator

NMA is the National Medical Association, and they endorse single payer. We encourage people who wish to volunteer to work with NMA.

Garamendi’s “Priced Out”