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The reinvention of failure

Existing health services are being deliberately destabilised to pave the way for an ideologically driven privatisation programme
By John Lister
Wednesday July 20 2005
The Guardian

How is it that with spending on the NHS now running at double the level of 1997, the service is running into an autumn crisis, with debts totalling at least 750m pounds, bed closures, theatres closed, services cut and estimates of 8,000 or more redundancies?

The answer lies in the breakneck process of “modernisation”, under which existing services are being deliberately destabilised to establish a competitive market system incorporating for-profit private providers, in place of a planned system of public healthcare.

Under John Major the NHS was buying less than 200m pounds worth of treatment from private hospitals a year. This will have increased 10-fold by 2007. Up to 15% of elective surgery will be hived off to private hospitals, leaving NHS trusts to cover the remainder.

Hospital buildings have also been privatised: private finance initiative schemes worth more than 5bn pounds have been completed since 1997 or are being built, and another 12bn pounds of projects are under negotiation – all of them locking trusts into costly, long-term leasehold deals.

But while New Labour ministers press relentlessly on, opposition is starting to coalesce. Last week in London a group of consultants, academics, MPs and trade-union officials met to plan a “save our NHS” coalition against these “stealth reforms”, which have little public support – a recent poll showed 89% against private provision of NHS care – and are little reported or discussed.

That is likely to change in the autumn as huge, unprecedented budget deficits – and cuts in services – begin to take shape alongside the new competitive health market.

Soon all patients must be allowed to “choose and book” elective treatment from a list including both NHS and private providers. Millions will be siphoned out of trust budgets into private-sector treatment centres: Brighton and Sussex University Hospitals NHS Trust stands to lose 85% of its elective orthopaedic work, worth 15m pounds.

The attempt by the health secretary, Patricia Hewitt, to claim the mantle of Nye Bevan in her defence of New Labour’s NHS reforms earlier this month – arguing that even Bevan “saw a role for the private sector” – should have drawn a gasp.

When Bevan nationalised the flagging network of voluntary and municipal hospitals in 1948 he made compromises that left some relics of the pre-NHS private sector intact – pay beds and private practice for consultants, and allowing GPs to remain as “independent contractors”.

But what for Bevan were concessions, to ensure the passage of ground-breaking changes, have for Hewitt become a point of principle. Billions are now diverted from NHS budgets to create a new, expanding private sector, which will now be free to poach staff from NHS hospitals. Hewitt’s first announcement in her new job was that another 3bn pounds was to be spent on services exclusively from private providers – with NHS hospitals forbidden to bid. Two modern NHS treatment centres are to be privatised, reversing Bevan’s modernisation. This is neither expanding capacity nor supporting patient choice, since existing high-quality NHS services will no longer be available in these areas.

Hewitt is also creating a new private sector in primary-care services, while GPs are encouraged to act more like businesses, and allowed to retain unspent surpluses from “practice-based commissioning”.

A survey of more than 40 countries shows that for 15 years England has gone furthest and fastest down the road of market-style reforms; but there is no evidence that these reforms improve efficiency or cut costs.

Thatcher’s 1990s marketising reforms, by fragmenting the NHS into purchasers (health authorities and GP fundholders) and providers (trusts), massively increased administrative costs and boosted the number of senior managers.

Throughout Europe and around the world, insurance-based systems with separate purchasers and providers cost more to administer than the NHS: admin costs in France and Germany are over 20% of health spending, while in the US almost a third of the $1.4 trillion spent on health goes on administration.

New Labour came to office pledging to scrap the costly internal-market system, and began to do so – only to turn rapidly back towards the current policy, creating a market in which the NHS competes on unequal terms with a private sector free to cherry-pick the most profitable specialities and treatments.

NHS productivity has been hampered by soaring costs of goods and services from the private sector. For every £1 spent on NHS staff in 1995, according to the Office for National Statistics, 71p was spent on procurement of goods and services from the private sector; by 2003 the figure was 1.15 pounds for every 1 pound on staff.

Hewitt’s plans to spend billions on buying in treatment from private hospitals and treatment centres will therefore increase costs – just as private-sector care, especially for-profit care, costs more in almost every country where it is purchased alongside public provision.

New Labour’s ideologically driven modernisation reinvents failed policies and ignores the evidence. Competition, which brought fragmentation, dislocation and widened inequalities under the Tories, is coming back as “payment by results” from next April; it is already destabilising local NHS hospitals, and will bring more closures. Foundation Trusts ape failed experiments that were dropped in Spain, brought soaring debts in New Zealand, and led to outright privatisation in Stockholm.

In Britain, what is called modernisation has already increased costs and overheads, demoralised and alienated staff, undermined planning – and done nothing to ensure equal access to local care. It cannot continue to go unchallenged.

John Lister is the information director of London Health Emergency, and lectures in health policy and journalism at Coventry University; his book Health Policy Reform – Driving the Wrong Way? is published this month.

Immigrants do not overwhelm healthcare – study

Mon Jul 25, 2005 5:16 PM ET

WASHINGTON (Reuters) – Immigrants are not swamping the U.S. health care system and use it far less than native-born Americans, according to a study released on Monday.

The study, published in the American Journal of Public Health, found that immigrants accounted for 10.4 percent of the U.S. population but only 7.9 percent of total health spending and 8 percent of government health spending.

Health spending by the government, insurers and patients themselves averaged $1,139 per immigrant compared to $2,564 for non-immigrants. Thirty percent of immigrants used no health care at all in the course of the year.

Immigrant children spent or cost $270 that year, compared to $1,059 for native-born children.

“Our study lays to rest the myth that expensive care for immigrants is responsible for our nation’s high health costs. The truth is, immigrants get far less care than other Americans,” Dr. Sarita Mohanty, who led the study while she was at Harvard University and who is now at the University of Southern California, said in a statement.

“Further restricting their eligibility for care would save little money and place many immigrants — particularly children — at grave risk. Already, many immigrant children fail to get regular checkups and as a result more end up needing emergency care, or get no care at all.”

The researchers used U.S. government data taken in a 1998 survey from U.S. residents, including natural-born citizens, immigrants who had become citizens, temporary residents and illegal aliens.

“The only case in which immigrants’ costs for health care were higher than U.S.-born children was in emergency department visits ($45 vs. $18 per capita),” the researchers said in a statement.

Most immigrants had health insurance, the survey found. It said 58 percent of immigrants had private insurance, compared to 74.9 percent of native-born U.S. citizens, and 17.3 percent of immigrants had some sort of public insurance such as Medicare or Medicaid, compared to 15 percent of natives.

“Our data indicates that many immigrants are actually helping to subsidize care for the rest of us,” Dr. Steffie Woolhandler, a founder of Physicians for a National Health Program and one of the authors of the study, said in a statement.

“Immigrant families are paying taxes — including Medicare payroll taxes — and most pay health insurance premiums, but they’re getting only half as much care as other families.”

“We constantly hear anti-immigrant extremists, elected officials and media commentators making baseless claims about how immigrants are contributing to our nation’s high health care costs,” Rep. Luis Gutierrez, an Illinois Democrat and chair of the Congressional Hispanic Caucus Immigration Task Force, said in a statement.

“This comprehensive new study shows just how unfounded these allegations are and I hope it will permanently put to rest these misinformed and misguided myths.”

In 2000, there were 28.4 million immigrants in the United States, including legal and non-legal residents.

Gap in health care noted

Spending 55% less for immigrants than U.S.-born residents
08:57 PM CDT on Monday, July 25, 2005
By Sherry Jacobson
The Dallas Morning News

A new national study suggests that immigrants in the United States receive about half as much medical care as their American counterparts.

U.S.-born residents averaged $2,564 in annual health care costs compared with per capita immigrant care that averaged $1,139, about 55 percent less, according to the study published Monday in the American Journal of Public Health.

The study concluded that the spending disparity refuted the notion that immigrants were “a substantial burden” on the U.S. health-care system.

It estimated that immigrant care accounted for $39.5 billion, or almost 8 percent of U.S. health-care spending in 1998, the year that was analyzed. Immigrants made up 10 percent of the U.S. population in 2000.

“These are the most recent numbers we had to work with,” said Dr. Olveen Carrasquillo of Columbia University and one of the study’s authors. “We have no reason to think that the expenditure for immigrant care has gone up in recent years as a percentage of the entire cost.”

However, Dallas health officials said Monday that there was another way to look at the numbers. The officials wondered whether the lower cost of health care for immigrants signaled that they were having trouble accessing medical services.

“You can explain this disparity as a lack of access due to language, financial and insurance barriers,” said Dr. Ron Anderson, president and chief executive officer of Parkland Memorial Hospital, which services a large immigrant population.

“There’s nothing to celebrate in this study,” he said.

Dr. Michele Smith, who treats immigrants at the Community Health Clinic in East Dallas, said it was not uncommon to diagnose more advanced diseases in immigrants, who waited too long to see a doctor.

“We see women with cervical and breast cancer who haven’t had Pap smears and mammograms” that could have caught the disease earlier, she said. “Our patients are from Mexico, Africa and the various Asian countries. Many of the women in their 60s have never had these basic tests.”

Dr. David Buhner, medical director of the Dallas County health department, noted that the lack of insurance probably was the main reason immigrants had such trouble getting into the U.S. system.

“The ticket to access is health insurance, and if you don’t have it, you can’t get in,” he said.

Higher ER costs

In fact, the study found that immigrants were more likely to use the emergency room for basic treatment than to go to the doctor’s office. Although immigrant children had a lower rate of ER visits than American-born children, their average ER costs were three times higher because immigrant children tended to be sicker when they arrived.

The study estimated that 25 percent of U.S. immigrants lack public or private health insurance. However, immigrants were broadly defined as anyone born outside the U.S., including people who had moved to this country decades ago.

“It included people from Scandinavia who’ve been here 20 years and are citizens now,” Dr. Buhner said. “There would probably be even a greater disparity in health-care spending if it had looked at just undocumented workers. Their barriers to care are associated with being poor and uninsured.”

The study found that Asian immigrants had health-care expenses similar to U.S.-born residents, while Hispanics and blacks suffered the largest disparities in such spending.

Dr. Anderson noted that the longer immigrants resided in the United States, the more likely they were to become insured. About 25 percent of Texans are uninsured, one of the highest rates in the nation.

“Thirty-eight percent of our patients are uninsured because of our mission to serve the indigent,” he said. “We’re going to get a higher burden of uninsured patients.”

The authors of the study also theorized that immigrants receive a smaller proportion of health care than they pay for.

The study also challenged the belief that immigrants are to blame for the rising cost of U.S. health care, said Dr. Sarita A. Mohanty of the University of Southern California and the lead author of the report.

Myth debunked

“Our study lays to rest the myth that expensive care for immigrants is responsible for our nation’s high health costs,” she said. “The truth is, immigrants get far less care than other Americans. Our data indicates that many immigrants are actually helping to subsidize care for the rest of us.”

The study’s authors presented it as the first nationwide analysis of immigrant health-care expenditures, basing it on data from the Agency for Healthcare Research and Quality. It considered data collected from 21,241 people who took part in the 1998 Medical Expenditure Panel Survey.

E-mail sjacobson@dallasnews.com

Study Paints Bleak Picture of Immigrant Health Care

By Ceci Connolly
Washington Post Staff Writer
Tuesday, July 26, 2005; Page A11

Regardless of age, legal status or insurance coverage, immigrants, on average, receive about half the health care services provided to native-born Americans, according to findings released yesterday that immediately fueled the debate over tightening immigration policies.

Immigrants received an average of $1,139 worth of care, compared with $2,564 for non-immigrants, according to the analysis, published in the August issue of the American Journal of Public Health. The gap was especially pronounced among immigrant children, who received one-quarter the care given to U.S.-born youngsters.

“Our study lays to rest the myth that expensive care for immigrants is responsible for our nation’s high health costs,” said co-author Sarita Mohanty, an assistant professor of medicine at the University of Southern California. “The truth is, immigrants get far less care than other Americans.”

The report is based on government data that tabulated health spending for 21,000 people in 1998, the most recent year for which figures were available. The analysis includes legal and illegal immigrants.

“If we think our high health care costs are due to immigrants flocking to our shores, we’re wrong,” said co-author David Himmelstein of Harvard Medical School. Although immigrants accounted for 10 percent of the population, they consumed 8 percent of total health services, the study found.

Some immigration experts, however, said that tracking per capita spending ignores the larger societal costs of a growing immigrant population that is far less likely to have health insurance.

“The fact that immigrants, when uninsured, might use 27 percent less medical care doesn’t change the fact that they’re 200 percent more likely to be uninsured in the first place,” said Steven Camarota, research director at the Center for Immigration Studies, a Washington think tank that favors strict controls on immigration. “Why have a system that allows in so many people who aren’t self-sufficient?”

Immigrants account for 18 percent of the costs associated with the uninsured — expenses likely to be borne by taxpayers and charities, Camarota said.

Both sides said financial, cultural and language differences all make it hard for immigrants to afford care, understand medical advice or embrace recommendations from American doctors and nurses.

A much higher percentage of adult immigrants lack a high school education, which makes it difficult for them to navigate the health care system, said Elena Rios, president of the National Hispanic Medical Association.

“They don’t understand the lingo,” such as what a cholesterol reading signifies, she said. “Because of limited education levels, you can’t connect the dots and think about what prevention like physical exercise means in terms of the future and things like heart disease and cancer.”

Immigrants often live in low-income neighborhoods with fewer hospitals, clinics, physicians and pharmacies, she said. And many Latin Americans, coming from countries with government-run health systems, are unfamiliar with the concept of buying insurance.

In addition, many immigrants do not qualify for government health programs that are targeted at specific groups such as retirees, American Indians and veterans, Camarota said.

Over the long term, Himmelstein said, the potential ramifications for children are most alarming. The data showed immigrant children had fewer doctor visits, took less medication and made fewer trips to the emergency room. But their emergency room costs were nearly triple those for non-immigrant children, suggesting that immigrant families missed routine checkups and waited until a condition was more serious before seeking treatment, Himmelstein said.

It is far more likely, he said, that immigrant children do not receive standard vaccinations and let chronic problems such as asthma go untreated.

Even better-educated, insured immigrants — and U.S.-born minorities — received less care, probably because of racism and cultural differences, Mohanty said.

The paper’s authors, who are active in the liberal Physicians for a National Health Program, said one solution would be to provide everyone with basic health coverage. Short of that, they advocated lifting restrictions on government health programs and easing entry into employer-provided health plans.

Camarota, who agreed that legal immigrants should have greater access to care, said lawmakers need to take a more critical look at who is allowed into the United States. He said, “The solution to the problem is make them go home or not let them in in the first place.”

U.S. Immigrants Have Lower Health-Care Costs, Study Finds

July 25 (Bloomberg) — Health-care costs for U.S. immigrants were an average of $1,139 a year each, half as much as medical expenses for citizens born in the U.S., according to an analysis by Harvard and Columbia universities.

U.S.-born citizens had an average of $2,565 a year in health costs in 1998, the latest year for which data were available for analysis, according to the study in the tomorrow’s issue of the American Journal of Public Health.

Legal and illegal immigrants, and their children, may skip preventive care, according to the researchers. This may mean that immigration isn’t a factor in rising U.S. health-care costs, the researchers said. U.S. medical expenses rose an estimated 7.5 percent last year, to $1.8 trillion, according to the U.S. government.

“We constantly hear anti-immigrant extremists, elected officials and media commentators making baseless claims about how immigrants are contributing to our nation’s high health-care costs,” U.S. Representative Luis Gutierrez, chairman of the Congressional Hispanic Caucus Task Force said in an e-mailed statement. “This comprehensive new study shows just how unfounded these allegations are.”

The researchers spent three years analyzing data from a 1998 survey of 21,241 people in the Agency for Healthcare Research and Quality’s Medical Expenditure Panel Survey. The panel collects health-spending information on the U.S.

The data is usually released three years after it is collected, Sarita Mohanty of the University of Southern California, a study co-author, said.

“We had seen in the press and media that there were concerns that immigrants were burdening the health-care system,” she said.

‘Grave’ Disparity

Most of the results weren’t very surprising, though the disparity in the amount of health-care immigrant children received compared with children of U.S. descent was, according to the doctors. Total spending for immigrant children’s care was $270 a year compared with $1,059 for U.S.-born children, the study found.

“We were surprised by the grave disparity in health-care that immigrant children received,” Mohanty said. “The difference was remarkable.”

When the lower cost of health-care is combined with the average paid in taxes by legal and illegal immigrants, in effect they may help subsidize medical costs for U.S.-born citizens, the review showed.

The study cited a report from the National Research Council that concluded that immigrants add as much as $10 billion to the economy each year and that they will pay about $80,000 per capita more in taxes than they use in government services over their lifetimes.

Policy Makers

Mohanty said she would like to see more discussion among communities and policy makers as a result of the study. She said her hope is that the facts of the study will dispel the notions that immigrants burden the system.

“When you separate fact from fiction, as this study does, you see the real picture of our immigrant community,” Gutierrez said.

Calls seeking comment from Republican Senators Jon Kyl of Arizona, and John Cornyn of Texas weren’t immediately returned.

Feeling Unwelcome

Olveen Carrasquillo, of Columbia University in New York, that cultural barriers, account for some of the reasons that immigrants use the health-care system less. Carrasquillo, a co- author, practices medicine on the city’s West Side, which has a large immigrant and Hispanic population.

“A lot of places aren’t friendly to immigrants,” he said. “They have a lack of interpreters, and many times they feel unwelcome and intimidated by the system.”

These barriers can lead to immigrants seeking health-care only until illness has significantly advanced, the authors all agreed. Steffie Woolhandler, a study co-author and co-founder of Physicians for a National Health Program, said that she has seen cases where immigrants have delayed medical attention.

“They’re waiting until they’re desperately ill to go to the hospital,” she said.

To contact the reporter on this story:
Mario Parker in Washington at Mparker16@bloomberg.net

Medicare's 40th Anniversary & Resources from Kaiser

Dear Colleague:

This summer marks the 40th year since the enactment of Medicare, the landmark health care program for the nation’s most vulnerable—the elderly, frail, and disabled. For the past decade, the Fund’s Program on Medicare’s Future has focused on the experience of beneficiaries, evaluating how new policies or emerging trends affect their coverage and access to care. In conjunction with the program’s anniversary, we are pleased to offer a new Medicare Resources page, a collection of selected Fund research on some of the program’s current challenges, including implementation of the new drug benefit, a restructured managed care program, and growing pressure to improve the quality of care while controlling costs.

Check this page again next week for a link to a webcast of a July 26th event at the Henry J. Kaiser Family Foundation conference center in Washington, D.C., noting the 40th anniversary of enactment of the laws establishing both Medicare and Medicaid, the jointly funded federal-state program that helps states provide medical assistance to low-income individuals and families. This historic event will include remarks from a half-dozen former Health Care Financing Administration (HCFA)/Centers for Medicare and Medicaid Services (CMS) administrators, former Health, Education, and Welfare Secretary Joseph A. Califano, Jr., and other health policy experts, including Kaiser President Drew Altman and Fund President Karen Davis. Also on the 26th, Health Affairs, in collaboration with the event’s co-sponsors, will publish several perspective articles by former HCFA/CMS administrators.

Toyota, Moving Northward

By Paul Krugman
The New York Times
July 25, 2005

Modern American politics is dominated by the doctrine that government is the problem, not the solution. In practice, this doctrine translates into policies that make low taxes on the rich the highest priority, even if lack of revenue undermines basic public services. You don’t have to be a liberal to realize that this is wrong-headed. Corporate leaders understand quite well that good public services are also good for business. But the political environment is so polarized these days that top executives are often afraid to speak up against conservative dogma.

Instead, they vote with their feet. Which brings us to the story of Toyota’s choice.

There has been fierce competition among states hoping to attract a new Toyota assembly plant. Several Southern states reportedly offered financial incentives worth hundreds of millions of dollars.

But last month Toyota decided to put the new plant, which will produce RAV4 mini-S.U.V.’s, in Ontario. Explaining why it passed up financial incentives to choose a U.S. location, the company cited the quality of Ontario’s work force.

What made Toyota so sensitive to labor quality issues? Maybe we should discount remarks from the president of the Toronto-based Automotive Parts Manufacturers’ Association, who claimed that the educational level in the Southern United States was so low that trainers for Japanese plants in Alabama had to use “pictorials” to teach some illiterate workers how to use high-tech equipment.

But there are other reports, some coming from state officials, that confirm his basic point: Japanese auto companies opening plants in the Southern U.S. have been unfavorably surprised by the work force’s poor level of training.

There’s some bitter irony here for Alabama’s governor. Just two years ago voters overwhelmingly rejected his plea for an increase in the state’s rock-bottom taxes on the affluent, so that he could afford to improve the state’s low-quality education system. Opponents of the tax hike convinced voters that it would cost the state jobs.

But education is only one reason Toyota chose Ontario. Canada’s other big selling point is its national health insurance system, which saves auto manufacturers large sums in benefit payments compared with their costs in the United States.

You might be tempted to say that Canadian taxpayers are, in effect, subsidizing Toyota’s move by paying for health coverage. But that’s not right, even aside from the fact that Canada’s health care system has far lower costs per person than the American system, with its huge administrative expenses. In fact, U.S. taxpayers, not Canadians, will be hurt by the northward movement of auto jobs.

To see why, bear in mind that in the long run decisions like Toyota’s probably won’t affect the overall number of jobs in either the United States or Canada. But the result of international competition will be to give Canada more jobs in industries like autos, which pay health benefits to their U.S. workers, and fewer jobs in industries that don’t provide those benefits. In the U.S. the effect will be just the reverse: fewer jobs with benefits, more jobs without.

So what’s the impact on taxpayers? In Canada, there’s no impact at all: since all Canadians get government-provided health insurance in any case, the additional auto jobs won’t increase government spending.

But U.S. taxpayers will suffer, because the general public ends up picking up much of the cost of health care for workers who don’t get insurance through their jobs. Some uninsured workers and their families end up on Medicaid. Others end up depending on emergency rooms, which are heavily subsidized by taxpayers.

Funny, isn’t it? Pundits tell us that the welfare state is doomed by globalization, that programs like national health insurance have become unsustainable. But Canada’s universal health insurance system is handling international competition just fine. It’s our own system, which penalizes companies that treat their workers well, that’s in trouble.

I’m sure that some readers will respond to everything I’ve just said by asking why, if the Canadians are so smart, they aren’t richer. But I’ll have to leave the issue of America’s comparative economic performance for another day.

For now, let me just point out that treating people decently is sometimes a competitive advantage. In America, basic health insurance is a privilege; in Canada, it’s a right. And in the auto industry, at least, the good jobs are heading north.

E-mail: krugman@nytimes.com

Study: AHP Legislation "A License to Steal"

JULY 21, 2005 — Legislation that would make it easier for small businesses to band together to purchase insurance and bypass state mandates is “a license to steal,” says a study released Thursday.

“The consequences are predictable: bankruptcy, delayed or forgone medical care, and loss of coverage for America’s businesses and workers,” said report author Mila Kofman, an assistant research professor at Georgetown University’s Health Policy Institute.

The report is referring to a bill (HR 525)—expected to pass the House next week—that would allow association health plans (AHPs) to bypass state regulation in areas such as mandating insurance coverage for specific treatments and procedures. Exempting AHPs from state laws, advocates say, would make it easier for small businesses to join forces and cut better deals with insurers when purchasing health care coverage for employees.

But Kofman said that the lack of state regulation of AHPs creates an easy opportunity for scam artists to come in, get their money and go out of business. “In law enforcement circles, these are called ‘cash cows,'” she said at a press conference.

The legislation would prohibit state regulators from shutting down fraudulent AHPs and would stop states from making it illegal to sell phony insurance to federal AHPs, Kofman said.

The bill would require the Department of Labor to monitor AHPs, a responsibility the agency cannot handle, Kofman said. And the bill would rely too heavily on self-reporting and self-regulation by the plans. “Crooks won’t be notifying the feds of lying, cheating, and stealing,” she said.

Between 2000 and 2002, fraudulent AHP-like plans affected more than 200,000 policyholders and left businesses and workers responsible for $252 million in medical bills, Kofman said. While the states shut down 41 illegal operations selling coverage through phony and real associations, the U.S. Labor Department shut down just three, Kofman found.

Rep. Sam Johnson, R-Texas, the leading sponsor of the House AHP bill, said such plans “protect people and increase the insured. The last time I checked, the Department of Labor has done a tremendous job monitoring the health plans of big business. I’d like to see small business have that same advantage—and their employees insured,” he said in a statement.

Groups such as the U.S. Chamber of Commerce, the National Federation of Independent Business, and the National Association of Manufacturers are pressuring Congress to pass the AHP legislation. They say such plans would help reduce the number of uninsured Americans by giving smaller employers the same market clout that larger businesses now enjoy when they purchase health coverage for their workers.

While the legislation has passed the House several times and is expected to do so again, it faces more opposition in the Senate, where Sen. Olympia J. Snowe, R-Maine, has introduced a similar bill (S 406).

Kate Sullivan Hare, executive director of health care policy for the U.S. Chamber of Commerce, said the AHP measure includes a number of licensing and solvency requirements to help prevent fraudulent companies from offering coverage. Hare also said the Department of Labor would add staff to help monitor the AHPs if the legislation became law.

“There’s nothing any of us can do about the scam operators—it’s buyer beware,” Hare said. “They’re out there now.”

Jill and Brent Burgess, who attended the press conference with Kofman, were the victims of one of those fraudulent operators. The couple, which operated their own business, lost their health care coverage for themselves and their three children when the company they bought insurance from was shut down for operating illegally, Jill Burgess said. Saddled with $30,000 in unpaid medical bills, her family had to file bankruptcy. “There was no other way out of this nightmare,” she said.

Kansas Commissioner of Insurance Sandy Praeger said there will be more victims like the Burgess family if Congress approves the AHP bill. “Simply put, allowing federal AHPs to operate outside the authority of state regulators will expose consumers to more fraud and insurance scams,” she said.

CQ HealthBeat is a daily e-mail newsletter distributed by Congressional Quarterly, Inc.

Medicare’s 40th Anniversary & Resources from Kaiser

Dear Colleague:

Study: AHP Legislation “A License to Steal”

The legislation would prohibit state regulators from shutting down fraudulent AHPs and would stop states from making it illegal to sell phony insurance to federal AHPs, Kofman said.

“There’s nothing any of us can do about the scam operators—it’s buyer beware,” Hare said. “They’re out there now.”

CQ HealthBeat is a daily e-mail newsletter distributed by Congressional Quarterly, Inc.

U.S. Will Offer Doctors Free Electronic Records System

By Gina Kolata
July 21, 2005

There is no one in medicine who does not consider it both crucial and long overdue to have electronic records in doctor’s offices and hospitals.

With electronic files, patient records are not stuck on pieces of paper in endless files, but are on a screen at the touch of a key. The computers alert doctors to do medical tests and avert errors by warning when they write a prescription for the wrong drug or the wrong dose. Patients can often see their own files and even make their own appointments, online, from their homes.

But most doctors have balked. The systems cost tens of thousands of dollars, and doctors worry that the companies selling them and providing support will go out of business. Many use computers to file health insurance claims, but only 20 percent to 25 percent of the nation’s 650,000 licensed doctors outside the military and the Department of Veterans Affairs are using electronic patient records.

Now, however, Medicare, which says the lack of electronic records is one of the biggest impediments to improving health care, has decided to step in. In an unprecedented move, it said it planned to announce that it would give doctors – free of charge – software to computerize their medical practices. An office with five doctors could save more than $100,000 by choosing the Medicare software rather than buying software from a private company, officials say.

The program begins next month, and the software is a version of a well-proven electronic health record system, called Vista, that has been used for two decades by hospitals, doctors and clinics with the Department of Veterans Affairs. Medicare will also provide a list of companies that have been trained to install and maintain the system.

Given Medicare’s heft, the software giveaway could transform American medicine, said Dr. John Wasson, a Dartmouth Medical School health care researcher.

But, Dr. Wasson added, it may take a while. “If you look at it from a five-year point of view, it will make a huge difference,” he said.

At first, he predicted, many doctors will bide their time, to see just how good Vista is.

Dr. Alan Garber, a Stanford University economist and internist, said of the Medicare plan: “It’s a good idea. It’s not foolproof.”

But, Dr. Garber added, Medicare’s investment and the program’s many appealing features “are all signals that it might be around for a long time and a doctor in a small office would not be taking an enormous risk.”

Medicare has not estimated what its software giveaway is worth. But Duncan Pringle, chief Vista technologist at Perot Systems, said that each doctor in a practice paid about $20,000 to $25,000 to get started with a commercial system, including costs of software, a license fee charged to each doctor, installation and servicing.

Installing Vista would cost $10,000 to $12,000 for an entire medical practice. That means that a practice of five doctors might pay $100,000 to computerize, but if the doctors used the Medicare system they might pay only $10,000 for the whole office.

The problem is that Vista has a reputation for being extremely difficult to install. Medicare says it modified and simplified it for doctors’ offices, but it remains to be seen whether doctors will want it.

Doctors are well aware that even with free software, no system is really free.

“Vista is a good system and it all sounds great,” said Dr. Thomas Jevon, a family physician in Wakefield, Mass. But, he added, “anyone who uses a computer can get frustrated and waste time trying to make it work.”

And for doctors, whose time is typically valued at $250 an hour, that time adds up.

“If a program takes 10 minutes away from your hour each day, that is costing you tens of thousands of dollars a year,” Dr. Jevon said. “That’s what’s bugging doctors.”

There is little doubt that computerized offices can help. For instance, Dr. Kevin Toppenberg recently saw an emergency patient who had injured his leg at the beach and arrived at his office wincing in pain. The patient’s regular doctor, one of Dr. Toppenberg’s 14 colleagues, practiced in another of the group’s three offices in Greeneville, Tenn., and was taking the day off.

In a typical medical practice, the man’s records would ordinarily be in a paper file in his own doctor’s office and a colleague in another office would have no way of getting them. Dr. Toppenberg, like many other doctors, would rather send such a patient to an emergency room than see him without a medical record.

“To just be working blind is scary for doctors,” Dr. Toppenberg said.

But Dr. Toppenberg’s newly installed computer program let him see the man’s record immediately, on a computer screen. After examining the man and diagnosing a probable torn muscle, Dr. Toppenberg sent him to an orthopedist. Then Dr. Toppenberg added his findings to the man’s record so his colleague would have them instantly when he needed to consult them.

The Vista project began a few years ago when Medicare officials realized that help for small medical practices was in its own backyard. The federal government had already paid hundreds of millions of dollars to develop Vista, and now uses it in the Veterans Administration’s 1,300 inpatient and outpatient facilities, which maintain more than 10 million records and treat more than five million veterans a year. Why not give Vista to doctors?

In fact, though few knew, Vista had been available all along to anyone who submitted a Freedom of Information Act request.

Over the years, the program had accrued a passionate following and even an organization, World Vista, founded in 2002 mostly by V.A. employees to help spread it throughout the world. One reason for their enthusiasm was that no company owns Vista so anyone can modify and enhance it.

It is, said Joseph Dal Molin, director of World Vista, a survival of the fittest. “What’s good survives,” he said.

One feature, for example, was suggested by a V.A. nurse. Why not put a bar code on a prescription bottle to identify the drug and its dose, put a bar code on the patient’s wristband to identify the patient’s prescription, and then scan the drug label and the patient’s wristband before administering a drug? If there was a discrepancy, Vista could catch it before an error was made. Programmers added that feature, and V.A. drug errors plummeted by 80 percent overnight.

Still, it is one thing to use a system that someone else installed and someone else maintains. It is another to get a set of disks in the mail and do it yourself.

Giving out a version of Vista is “a great idea,” said Dr. David Kibbe, director of the center for health information technology at the American Academy of Family Physicians, a group that has been working on the project. “But at the beginning, there was a lot of wishful thinking. They said, ‘We’ll just release it.’ I said, ‘Where’s the fairy dust?’ ”

Those who tried to install Vista on their own would agree.

Dr. Nancy Anthracite, a family physician in Washington, needed endless hours of help from a group of Vista enthusiasts who call themselves the Hardhats and volunteer their time. Getting started with Vista was so daunting, Dr. Anthracite said, that even when the V.A. demonstrated its program at medical meetings, almost no none of those in attendance wanted to use it on their own.

“You go to meetings and they show you things doctors can do with Vista and everyone’s going , ‘Wow, wow, wow,’ ” Dr. Anthracite said. “But no one installs it.”

So for three years, Medicare and its contractors worked to make the program easier to use.

They even gave it a new name, VistaOffice, to signify that was intended for small-office practices, not the huge V.A. system.

Some, including Dr. Toppenberg, decided not to wait for the August release of the new program. Last year, he learned that he could get the unmodified V.A. version of Vista and decided to try it.

“I started looking around,” Dr. Toppenberg said. “The newer systems tended to be about $15,000 per doctor, not counting the ongoing support fees. Then I found out that the Vista system was available. You just have to figure out how to get it to work.”

He did – but it took him six months.

Anyone who wants the new Vista, which is expected to require far fewer steps to install than the V.A.’s version, must wait until August. Some, like Dr. Meyer Cohen, an internist in Boca Raton, Fla., want to see how it works before committing time and money to it.

But a few, like Dr. Ismet B. Kursunoglu, director of the Alaska Clinic in Wasilla, Alaska, cannot wait.

“There are a lot of fantastic vendors,” Dr. Kursunoglu said, “but, realistically, we’re in a time period where reimbursement is going down and costs are rising. This is free.”

“This,” he said, “is a fantastic opportunity.”

Two BU scholars to criticize Romney health plan

By Liz Kowalczyk
Boston Globe
July 20, 2005

Two Boston University professors plan today to release a report critical of Governor Mitt Romney’s health-care plan, arguing that it does not address the state’s soaring medical costs and that it does not provide full insurance coverage to everyone.

Professors Alan Sager and Deborah Socolar, directors of the university’s Health Reform Program, will testify at a legislative hearing focused on alternatives to the governor’s plan, which would require most uninsured Massachusetts residents to buy health insurance.

The hearing is scheduled for 10 a.m., and will be chaired by Representative Patricia Walrath, cochairwoman of the Joint Committee on Health Care Financing and Democrat from Stow. Discussions will focus on two bills that propose a single-payer health care system, also called universal health care, and a third that would redirect money from the cigarette excise tax and the national settlement with tobacco companies into health education and cancer prevention programs.

In a single-payer system, all residents would be covered under one umbrella, run by the government or some other entity. Essentially, Romney wants instead to expand the system of public and private coverage to provide insurance to about 500,000 Massachusetts residents who do not have it.

Romney has said he wants to make coverage less expensive by permitting insurers to offer low-cost policies with scaled-back benefits. People making too little to afford those plans and making too much to qualify for Medicaid would be eligible for state subsidies to help them buy insurance. Medicaid would remain in place for the poorest state residents unable to afford private insurance.

Residents who do not get health insurance would face tax penalties, and the garnishing of their wages, to cover care.

Today, Romney plans to announce more details of another component of his plan, called Safety Net Care, and to file legislation. The proposal would take the more than $1 billion a year that the state, health plans, and hospitals contribute to the so-called ”free care pool,” which pays for medical care for some uninsured residents, and to use it to help buy insurance for the residents.

Another approach being pushed by a coalition, including the nonprofit organization Health Care for All, would force most employers to cover workers.

Sager said that Massachusetts residents and insurers spent $2,176 per person in 2003 on hospital care alone, 41 percent higher than the national average.

”We don’t think [Romney’s] plan seriously attacks any of the causes of high health costs,” Sager said in an interview. ”We don’t think a single-payer is a cure-all. But it cuts a lot of administrative waste quickly by reducing complexity and provides the right foundation for squeezing out clinical waste.”

http://www.boston.com/news/local/articles/2005/07/20/
two_bu_scholars_to_criticize_romney_health_plan/

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