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National health-care anarchy isn't serving Americans well

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National health-care anarchy isn't serving Americans well

Sunday, December 14, 2003
National health-care anarchy isn’t serving Americans well
By Froma Harrop
Providence Journal columnist

The next person to call me liberal for advocating a national health plan is in for a tongue-lashing – or I’ll just hand him a copy of this column. What we have now is anarchy. We have government plans, private coverage, no coverage, not enough coverage. There are untreated illnesses, overtreatment, too many pills, pills that cost too much, federal regulators and state regulators.

It happens that the best arguments for universal coverage with a strong federal hand are conservative ones. But conservatives are the last ones to make them. Or, to be more accurate, Richard Nixon was the last conservative to make the case, and that was a long time ago.

Why should conservatives support making health insurance primarily a federal responsibility?

For starters, it would help American business. Asking America’s employers to pay for their workers’ health care makes no sense. Why not ask them to pick up their employees’ supermarket tabs or dry cleaning bills, as well?

The practice started during World War II, when the government froze wages. Factories desperate for workers offered health benefits instead of pay raises. The idea grew, and that’s why today’s employers are funding our allergy shots and heart bypasses.

Many also cover lots of hangers-on – workers’ spouses, children and domestic partners. About two-thirds of Americans younger than 65 now obtain coverage through someone’s employer. And some generous companies cover their retirees, also. General Motors, for example, now pays the medical bills of one-half of 1 percent of all Americans.

Businesses also end up paying for the uninsured. Because law requires hospitals to treat every comer, people without coverage go to hospitals for their medical needs, major and minor. Many don’t pay their hospital bills. Hospitals offset these losses by raising fees for paying customers – that is, the insured. The upshot is higher premiums for employers.

The system burdens America’s businesses in other ways. Companies must hire people just to administer their workers’ medical benefits. And the employer that spends money on good benefits is put at a competitive disadvantage to companies that do not. Health care raises its labor costs.

Our employment-based health-care system costs jobs: Health costs have spurred U.S. companies to move their operations elsewhere. For example, American automakers like making cars in Canada, because the Canadian government pays for medical care.

The cost of insuring workers makes companies wary of hiring more people. When business heats up, they prefer asking current workers to put in more hours. That’s because paying time-and-a-half wages is often cheaper than providing an expensive health-care package to a new worker.

There are strong “family values” arguments for universal coverage. Social conservatives want mothers to stay home with their young children. I know several young mothers who would do so, were it not for the health-insurance problem. They have husbands who work – but in jobs lacking family coverage. These families can plan for a year or two of a parent’s lost wages. But they won’t risk having a family member come down with a serious illness requiring $100,000 worth of medical care and no coverage.

It’s time to shatter several myths about a national health plan. One is that it must be a restrictive single-payer program, like Canada’s. The systems in France and Germany combine a basic government guarantee of coverage with the option of buying fancier care through private insurance.

Another myth is that a national health plan would be expensive. Actually, it would save the U.S. economy money. Our muddled system sends administrative costs skyrocketing and wastes medical resources. As a result, the United States now spends 14 percent of its gross domestic product on health care, versus the 11 percent spent in Germany and 10 percent in France.

A third myth is that workers don’t pay for company health benefits. They do. Money that their employer spends on their health coverage comes out of their paychecks. Without that expense, employers could raise salaries.

So let’s free the American corporation! Let Acme Widgets make widgets and not worry about its foreman’s asthma condition. Let’s free the American mother (or father) to stay at home with the kids and not have to work just for health coverage.

Today’s health-care system offers neither a liberal nor a conservative vision. It’s anarchy, pure and simple.

Froma Harrop is a Providence Journal columnist. Contact her by writing to
fharrop@projo.com.

Cost sharing is bad for your health

Center for Studying Health System Change (HSC)
News Release
Dec. 12, 2003
Health Care Spending Growth Slows Sharply in First Half of 2003

Health care spending growth per privately insured American slowed in the first half of 2003, increasing 8.5 percent, a sharp drop from the 10 Percent increase in the second half of 2002, according to a Center for Studying Health System Change (HSC) study released today.

“Increased patient cost sharing is probably an important factor in the slowing of cost trends, but few experts expect this tool to substantially lower cost trends over the long term,” said Paul B. Ginsburg, Ph.D., coauthor of the study and president of HSC, a nonpartisan policy research organization funded exclusively by The Robert Wood Johnson Foundation.

“Without more effective cost-control measures, the rising cost of health insurance will make coverage unaffordable to more and more Americans,” Ginsburg said.

“As patients are having to share more of the costs, the fact is that more and more patients go without care,” said Paul Ginsburg, president of the Washington, D.C.-based center (Agovino, Associated Press).
HSC release
http://www.hschange.com/CONTENT/634/

Associated Press article by Teresa Agovino:
http://www.chron.com/cs/CDA/ssistory.mpl/health/2289043

And…

The New England Journal of Medicine
December 4, 2003
The Effect of Incentive-Based Formularies on Prescription-Drug
Utilization
and Spending
By Haiden A. Huskamp, et al

In conclusion, we found large effects on the continuation of the use of medications and out-of-pocket expenditures for enrollees associated with the switch by one employer from a one-tier to a three-tier formulary involving across-the-board increases in cost sharing… The discontinuation of the use of medications such as statins and ACE inhibitors that are needed for the treatment of chronic illnesses raises important questions about potentially harmful effects of formulary changes and the associated changes in copayments.

http://content.nejm.org/cgi/content/abstract/349/23/2224

Comment: In order to control the premium increases in private health plans, insurers are reducing benefits and increasing cost sharing.

Conservatives contend that it is essential to make patients sensitive to cost so that they will make wise financial decisions on the care that they really need. Unfortunately, since most patients with significant health care needs have little disposable income, the only real choice that they will have is to do without. Innumerable studies have now confirmed that increased cost sharing
significantly reduces the utilization of beneficial health care services.

The health savings accounts (HSAs) which will go into effect next month will help neither those who deplete their accounts because of chronic disorders
nor those who are unable to fund their accounts. Insurance premiums for these less fortunate individuals will be made affordable only by reducing benefits and increasing cost sharing.

Ironically, those who are able to build large HSAs are precisely those who have the least health care needs. Neglecting the ill to benefit the healthy is not rational health policy.

No matter what we do, under the present fragmented system of funding care the increased trends in cost sharing will make health care unaffordable for moderate and low income individuals with significant health care needs.

The experiment with cost containment through greater cost sharing has already failed miserably when measured by its impact on those with greater needs.

Let’s abandon these perverse efforts and move forward by adopting an equitable, comprehensive, universal system of social insurance. That Will work.

Wal-Mart calls for a national solution

The New York Times
December 12, 2003
Letters

Health Plan at Wal-Mart

To the Editor:

Re “Wal-Mart’s Health Plan” (letter, Dec. 4):

More than 90 percent of our associates have health insurance, about Half through Wal-Mart and half through other sources like spouses or parents.

We strive to make our health plan affordable and not a burden to taxpayers. That’s why we pay approximately two-thirds of the cost.

Like other employers, we face escalating health care costs, leading to adjustments in premiums…

This crisis needs a national solution.

SUSAN CHAMBERS
Senior V.P., Benefits and Insurance Administration
Wal-Mart Stores
Bentonville, Ark.

Comment: And what national solution would that be? Perhaps a single, equitable, affordable, comprehensive program of national health insurance for everyone? Why not? It would work for Wal-Mart, and it would certainly work for all of the rest of us.

Message 2:

Date: Fri, 12 Dec 2003 10:02:08 -0800
Subject:: Additional comment about Wal-Mart

We shouldn’t gloss over the statement by Susan Chambers, Wal-Mart Senior V.P. for Benefits and Insurance Administration, that “This crisis needs a national solution.”

The call for a national solution is a clear call for leveling the Playing field. Establishing equity in health care is a compelling goal. Wal-Mart has made its initial move. We should grab it and run with it.

Don

Orange County Area seniors denounce Medicare drug law

Area seniors denounce Medicare drug law. People at meeting say they’re feeling more betrayed and angrier as details come to light about complex measure.

MAKING A POINT: Dr. Brenda Ross, mayor pro tem of Laguna Woods and member of People for a National Health Program, addresses Thursday’s meeting of the Health Care Council of Orange County in Santa Ana, where the changes in Medicare were discussed.

MINDY SCHAUER, THE ORANGE COUNTY REGISTER
• Answering some Medicare questions
By MAYRAV SAAR and DENA BUNIS

The new Medicare prescription-drug bill has given Lenore Rufrano some sleepless nights.

The 76-year-old retired nurse from Mission Viejo has read every word she could get her hands on about the landmark legislation. And it looked like she was going to have to give up the medigap policy that she counts on to fill the gaps in Medicare’s coverage and help her pay for her seven prescriptions.

“For the first time in my life, I started to think about what is more important,” Rufrano said. Could she continue to give her three children and grandchildren the Christmas gifts that she always has? Would going out to lunch once a week become a luxury she couldn’t afford?

As more details about the complicated law come to light, Rufrano has learned that the private medigap policy, which costs her almost $7,000 a year, won’t be taken away from her.

Beginning in 2006 when the prescription-drug plan kicks in, new medigap policies won’t be able to contain drug coverage. But anyone who currently has a medigap policy that includes drugs and wants to keep it will be able to.

“I’m so relieved,” Rufrano said. But she is still miffed at AARP, formerly known as the American Association of Retired Persons, for promoting a bill that she believes will force too many seniors into the managed-care plans that she wants no part of.

“They didn’t ask me. They didn’t ask anyone I know,” Rufrano said of AARP’s decision to support the plan.

EXTRA COVERAGE ALSO AFFECTED
Nine out of 10 people on Medicare have some type of supplemental insurance to help pay what Medicare doesn’t cover. Some have retiree health plans. Some who have low incomes are eligible for Medicaid – Medi-Cal in California – and others buy medigap policies from private insurance companies.

These policies generally pick up costs like the hospital deductible, the deductible and some co-payments for office visits and some home-care expenses. And three of the 10 federally standardized medigap policies offer some prescription drug coverage.

The 10 medigap policies are designated by letters A through J. The A policies cost the least and offer the least coverage. J policies cost the most and have the highest level of benefits.

Here’s what will happen to medigap policies under the new law.
• Policies A through G, which don’t offer drug coverage, will remain the same.
• As of 2006, all new H, I and J policies will not include prescription drug coverage. Anyone who has one of those policies, however, will be able to keep it and the prescription drug coverage as long as they do not enroll in the new Medicare Part D prescription drug plan. Lawmakers wanted to avoid anyone having duplicate coverage.
• As of 2006, two new medigap policies will be added. Policies K and L will have high deductibles and will not cover the deductibles for doctor visits. They will be designed to cover catastrophic costs.

FOR MORE INFORMATION
www.kff.org – This Kaiser Family Foundation site includes a Medicare calculator. Beneficiaries can insert income, drug costs and other information and the computer will calculate the amount of the benefit under the plan.
www.aarp.org – This Web site of the giant seniors organization has information about the Medicare law and the organization’s reasons for its support of the changes.

www.medicare.gov – This is the official U.S. government’s site for Medicare. More information can also be obtained calling (800) 633-4227.

Rufrano has company. A roomful of angry seniors and health-care advocates gathered at a town-hall meeting in Santa Ana on Thursday to rail against the bill and pledge support for the lawmakers who opposed it.

They wereangry at AARP. Angry at the legislators who passed it. Seniors have started sifting through the 7-lb. Medicare bill, and they are growing angrier with each page they read.

“It’s such a travesty, and people won’t know that until they need health care,” said Sandra Hester, a member of the Health Care Council of Orange County, which sponsored the event.

The town-hall meeting drew more than 40 people, including representatives from the office of Rep. Loretta Sanchez, D-Santa Ana.

Sanchez is the only one of the six House members representing Orange County who voted against the Medicare bill. None of those members or their staffs showed up at the forum.

Lawmakers are on recess until late January, and several members are out of the country. Sanchez was in Israel. Staff members of other House members said either they never received the invitation or their schedules were full.

Also absent were representatives from AARP, which lost 15,000 members after it supported the bill. Ernie Powell, advocacy representative for the organization, said AARP recognizes flaws in the bill but supported it as a “first step” toward providing prescription drug entitlements.

“From 1965 until a week and a half ago, there was no prescription drug benefit. There is now a benefit that can be worked on to be made stronger and to be made more beneficial,” Powell said.

Powell said AARP plans to work with Congress to repeal certain aspects of the bill, such as the provision that seniors can no longer buy cheaper drugs from Canada and Mexico.

But many people at the forum said they still felt betrayed. Reading a full-page newspaper ad that AARP took out in support of the bill, Ted Rosenbaum said AARP’s contention that the bill protects traditional Medicare was “an outright lie.”

Rosenbaum drew applause when he urged other seniors in the audience to send complaint letters to the politicians and organizations who supported the bill and ended with a rallying cry indicative of how grave the group considered the new law:

“We shall overcome!” he said.

click to view photo
————————————————————————
CONTACT US: (714) 796-6880 or msaar@ocregister.com

S. 1992 – Defense of Medicare and Real Medicare Prescription Drug Benefit Act

United States Senate
December 9, 2003
Statements on Introduced Bills and Joint Resolutions
(Page: S16127)

Mr. KENNEDY. Mr. President, today, along with Senator Bob Graham, I am introducing the “Defense of Medicare and Real Prescription Drug Benefit Act.” Congressman John Dingell is introducing companion legislation in the House of Representatives.

S. 1992. A bill to amend the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 to eliminate privatization of the medicare program, to improve the medicare prescription drug benefit, to repeal health savings accounts, and for other purposes; to the Committee on Finance.

Summary: Provisions of the Defense of Medicare and Real Medicare Prescription Drug Benefit Act

Title 1: Defense of Medicare

Repeals the premium support demonstration. Requires risk adjustment between private sector plans and Medicare. Medicare will pay private sector plans an amount reflecting Medicare’s cost for covering an individual, rather than paying HMOs a large markup as a result of failing to adjust for the better health of senior citizens who join HMOs.

Repeals PPO slush fund. Pays all private sector plans an amount equivalent to average Medicare costs, rather than paying an average of 109 percent of Medicare costs, as provided under the current legislation. Phased in over 5 years. Repeals Medicare spending cap.

Title II: Establishment of Real Medicare Prescription Drug benefit Eliminates coverage gap in 2006-2008, beneficiaries will pay 75 percent coinsurance in the coverage gap. In 2009-2011, they will pay 50 percent. In 2012 and subsequent years, they will pay the same 25 percent copayment as
under the initial coverage limit.

Eliminates discriminatory treatment of employer plans. Allows Medicaid wrap-around for dual eligibles. Eliminates assets test. Requires two stand-alone prescription drug plans to avoid federal fallback. Secretary defines classes and categories under any formula.

Repeals prohibition on Medigap coverage of prescription drugs. Modifies current Medigap policies covering drugs to wrap-around new benefit.

Phases out elimination of state “clawback.”

Title III: Reduction in Prescription Drug Prices

Allows reimportation from Canada with certification and inspection of Canadian exporters to assure safety of drugs. Repeals prohibition on government negotiating directly with drug companies for best prices and gives authority for such negotiations.

Title VI: Repeals Health Savings Accounts

http://thomas.loc.gov/cgi-bin/query/F?r108:1:./temp/~r108HTt6fm:e46026:

Sen. Kennedy’s press release:
http://www.senate.gov/~kennedy/statements/03/11/2003C10519.html

Comment: S.1992, the “Defense of Medicare and Real Medicare Prescription Drug Benefit Act,” would provide a bona fide prescription benefit for Medicare, and would protect Medicare as a program of social insurance. It would also repeal the health savings accounts (HSAs) which threaten all of us by reducing the affordability of care for those with the greatest health care needs.

This bill must be passed and signed. If the current Congress and President won’t do it, then we need to replace them with individuals who will.

Insurance CEO:We'll have national health insurance

Pittsburgh Post-Gazette
December 11, 2003
National health insurance inevitable?
Highmark CEO makes the case, says it may be solution to spiraling costs
By Pamela Gaynor

In spite of the wider role Congress created for private insurers in the recently enacted Medicare reform bill, the chief executive officer of the region’s largest health insurer yesterday said he believes the country will inevitably move toward a national health insurance plan for all age groups.

(Dr. Kenneth Melani, CEO of Highmark, Inc., when giving a speech at the University of Pittsburgh’s Graduate School of Public Health)… said a host of factors have driven double-digit increases in health care costs across the country the past four years, including technology, greater consumer demand from an aging population, litigation and labor costs. The increases, he said, had come without corresponding gains in life expectancy, earning much of the technology has proven to have dubious value.

With health care costs now accounting for roughly 15 cents of every dollar of the nation’s economic activity, he predicted a backlash among voters.

At some point, “Democrats will get into office and say the Republicans have made a big mistake. There will be sweeping reform and then we’ll have national health insurance,” Melani said. “That’s where I think we’ll end up.
I can’t say when.”

http://www.post-gazette.com/pg/03345/249907.stm

Comment: Highmark, Inc., a non-profit, Blue Cross Blue Shield affiliate, is the nation’s 11th-largest health insurer. As Highmark’s CEO, Dr. Melani has diligently followed the trends and shifting opinions in health care. As a noted insurance industry leader, his opinions certainly have credibility.

National health insurance is absolutely inevitable. It remains to be seen whether the politicians will have the courage to enact a program that ensures equity, comprehensiveness, affordability, and administrative efficiency through a publicly-administered and publicly-funded model.

It’s our task to be certain that everyone does understand the superiority of the public model.

Medicare Bill passed under cover of darkness

CONGRESS Democracy crumbles under cover of darkness
By SHERROD BROWN
Published: Thursday, Dec. 11 2003
(This Op-Ed ran in newspapers across the nation.)

House Republicans bend rules, press for votes during wee hours to escape
the light of accountability.

Never before has the House of Representatives operated in such secrecy:

At 2:54 a.m. on a Friday in March, the House cut veterans benefits by three votes.

At 2:39 a.m. on a Friday in April, the House slashed education and health care by five votes.

At 1:56 a.m. on a Friday in May, the House passed the Leave No Millionaire Behind tax-cut bill by a handful of votes.

At 2:33 a.m. on a Friday in June, the House passed the Medicare privatization and prescription drug bill by one vote.

At 12:57 a.m. on a Friday in July, the House eviscerated Head Start by one vote.

And then, after returning from summer recess, at 12:12 a.m. on a Friday in October, the House voted $87 billion for Iraq.

Always in the middle of the night. Always after the press had passed their deadlines. Always after the American people had turned off the news and gone to bed.

What did the public see? At best, Americans read a small story with a brief explanation of the bill and the vote count in Saturday’s papers.

But what did the public miss? They didn’t see the House votes, which normally take no more than 20 minutes, dragging on for as long as an hour as members of the Republican leadership trolled for enough votes to cobble together a majority.

They didn’t see GOP leaders stalking the floor for whoever was not in line.

They didn’t see Speaker Dennis Hastert and Majority Leader Tom DeLay coerce enough Republican members into switching their votes to produce the desired result.

In other words, they didn’t see the subversion of democracy.

And late last month, they did it again. The most sweeping changes to Medicare in its 38-year history were forced through the House at 5:55 on a Saturday morning.

The debate started at midnight. The roll call began at 3:00 a.m. Most of us voted within the typical 20 minutes. Normally, the speaker would have gaveled the vote closed. But not this time; the Republican-driven bill was losing.

By 4 a.m., the bill had been defeated 216-218, with only one member, Democrat David Wu, not voting. Still, the speaker refused to gavel the vote closed.

Then the assault began.

Hastert, DeLay, Republican Whip Roy Blount, Ways and Means Chairman Bill Thomas, Energy and Commerce Chairman Billy Tauzin – all searched the floor for stray Republicans to bully.

I watched them surround Cincinnati’s Steve Chabot, trying first a carrot, then a stick; but he remained defiant. Next, they aimed at retiring Michigan congressman Nick Smith, whose son is running to succeed him. They promised
support if he changed his vote to yes and threatened his son’s future if he refused. He stood his ground.

Many of the two dozen Republicans who voted against the bill had fled the floor. One Republican hid in the Democratic cloakroom.

By 4:30, the browbeating had moved into the Republican cloakroom, out of sight of C-SPAN cameras and the insomniac public. Republican leaders woke President
George W. Bush, and a White House aide passed a cell phone from one recalcitrant member to another in the cloakroom.

At 5:55, two hours and 55 minutes after the roll call had begun – twice as long as any previous vote in the history of the U.S. House of Representatives – two obscure western Republicans emerged from the cloakroom. They walked, ashen and cowed, down the aisle to the front of the chamber, scrawled their names and district numbers on green cards to change their votes and surrendered the cards
to the clerk.

The speaker gaveled the vote closed; Medicare privatization had passed.

You can do a lot in the middle of the night, under the cover of darkness.

U.S. Congressman Sherrod Brown, a Democrat from Ohio, is the ranking member on the Committee on Energy and the Commerce Subcommittee on Health.

Dr. Quentin Young on the Medicare Prescription Drug Bill

For Immediate Release
Contacts: Quentin Young MD (312) 782-6006
December 11, 2003

Statement of Dr. Quentin Young on the Medicare Prescription Drug Bill
National Coordinator, Physicians for a National Health Program

The “Medicare reform” legislation signed into law by President Bush on December 8 is a sham and must be repealed at once. Medicare needs a straightforward full drug benefit, based on hard negotiations for the best prices from the drug companies. The current bill not only provides scrooge-like benefits; it also prohibits Medicare from adopting effective measures to contain escalating drug costs (rising 17% a year), assuring that seniors will soon be worse off under the bill than they are today.

The bill’s benefits are ephemeral. It actually worsens the position of millions of seniors and permanently disabled Medicare beneficiaries (such as persons with end-stage renal disease and HIV), and at best offers extremely limited assistance with drug costs. Of the current 6 million Medicare beneficiaries also eligible for Medicaid – the very poorest seniors and disabled persons – about half, 3 million, will lose their current excellent drug coverage through means testing. Millions more seniors who currently have near-full coverage through a former employer or Medigap plan also face higher costs for lower benefits.

The prime beneficiaries of the current legislation are not the aged and infirmed; it is the pharmaceutical industry, which is rewarded for decades of price-gouging and fraud with an additional $137 billion in profits. Wall Street immediately reacted to Congress’ largesse. Drug stock prices soared and the Bill’s Congressional supporters can expect a boost in contributions to their 2004 campaigns.

The bill prohibits the Secretary of HHS from negotiating the best price with manufacturers, despite the fact that other governmental agencies, the Veterans Administration and the Department of Defense, negotiate 40-60% discounts as major purchasers right now. Also, the bill effectively outlaws Canadian imports (with their sharply reduced prices) unless the FDA “certifies” the drugs safety; FDA commissioner McClellan had already declared he would not do this.

But most destructive is the provision of billions of dollars to private Medicare HMO’s to give them the advantage in competition with traditional Medicare. This strategy achieves Newt Gingrich’s malign vision of forcing Medicare to “wither away.”

Medicare HMOs raise Medicare’s costs by “cherry picking,” enrolling the healthy and excluding the sick. Over the last decade they have ratcheted down their benefits while dumping millions of seniors deemed unprofitable.

Add to this the “Health Savings Account” provision which will attract the wealthy and healthy into tax-free schemes. HSA’s will seriously undermine the insurance risk pool for all of us. Risk-pooling is the source of strength, prudence, and effectiveness of national health insurance. The enemies of universal coverage understand this and thus have inserted this poison pill into Medicare “reform.”

There is hope. A recent poll by ABC News/Washington Post found that the more seniors and the public learn about Bush’s Medicare bill, the less they like it. A real drug benefit is needed now more than ever, and is easy to devise. It should be administered by Medicare, with that program’s low (3%) overhead, and take advantage of Medicare’s bargaining power to reverse the skyrocketing costs of medications. It should provide a comprehensive, first-dollar benefit. Seniors in England, Canada, Australia and other industrialized countries already enjoy such benefits. American seniors deserve no less.

######

Physicians for a National Health Program is a 12,000 member organization that makes its headquarters in Chicago. PNHP has spokespeople across the country. For a contact in your area, please call (312) 782-6006. Media are also invited to receive our press releases via e-mail by enrolling at www.pnhp.org.

Dr. Quentin Young is an internist in private practice in Chicago. He is a co-founder and volunteer national coordinator of PNHP for the past decade.

Insurance CEO:We’ll have national health insurance

Pittsburgh Post-Gazette
December 11, 2003
National health insurance inevitable?
Highmark CEO makes the case, says it may be solution to spiraling costs
By Pamela Gaynor

In spite of the wider role Congress created for private insurers in the recently enacted Medicare reform bill, the chief executive officer of the region’s largest health insurer yesterday said he believes the country will inevitably move toward a national health insurance plan for all age groups.

(Dr. Kenneth Melani, CEO of Highmark, Inc., when giving a speech at the University of Pittsburgh’s Graduate School of Public Health)… said a host of factors have driven double-digit increases in health care costs across the country the past four years, including technology, greater consumer demand from an aging population, litigation and labor costs. The increases, he said, had come without corresponding gains in life expectancy, earning much of the technology has proven to have dubious value.

With health care costs now accounting for roughly 15 cents of every dollar of the nation’s economic activity, he predicted a backlash among voters.

At some point, “Democrats will get into office and say the Republicans have made a big mistake. There will be sweeping reform and then we’ll have national health insurance,” Melani said. “That’s where I think we’ll end up.
I can’t say when.”

http://www.post-gazette.com/pg/03345/249907.stm

Comment: Highmark, Inc., a non-profit, Blue Cross Blue Shield affiliate, is the nation’s 11th-largest health insurer. As Highmark’s CEO, Dr. Melani has diligently followed the trends and shifting opinions in health care. As a noted insurance industry leader, his opinions certainly have credibility.

National health insurance is absolutely inevitable. It remains to be seen whether the politicians will have the courage to enact a program that ensures equity, comprehensiveness, affordability, and administrative efficiency through a publicly-administered and publicly-funded model.

It’s our task to be certain that everyone does understand the superiority of the public model.

Impact of the recent medicare legislation- New Mexico Analysis

This alert is from Health Action NM.

THE TRUTH ABOUT THE RECENTLY ENACTED MEDICARE LEGISLATION

The Senior Citizen’s Law office, Inc. and Health Action New Mexico are very concerned about provisions of the recently enacted Medicare Prescription drug bill, which was signed into law by President Bush on December 8, 2003.

The bill is more about destroying the Medicare program than delivering a comprehensive drug benefit to senior and disabled Americans. The legislation was mostly drafted in secret by Rep. Bill Thomas who excluded most Democratic conferees; the bill contains the position of house Republicans on most major issues rather than provisions of the bi-partisan Senate bill.

Everyone agrees that the bill passed because of AARP’s support, despite the opposition of an overwhelming majority of its members. Senator Domenici, Rep. Pearce, and Rep. Heather Wilson voted in favor of the legislation.

Senator Bingaman and Rep. Udall opposed the legislation. Seniors around the country are denouncing AARP and revoking their membership. You can reach AARP at the following e-mail addresses:

wdnovelli@aarp.org, member@aarp.org . You may also want to call your legislators and chastise them or thank them for their votes. Itemized below are the concerns of SCLO and HANM regarding the legislation.

* Basic Prescription Drug Coverage: Beginning 2006, a complicated prescription drug benefit will be available though with substantial out-of-pocket costs. Coverage will be available only through insurance companies and HMOs. Though enrollment will be “voluntary,” there will be considerable financial pressure to enroll at once. (It will be costly to enroll at a later time.)

* Benefit: Enrollees will pay the following initial costs for the initial benefits described herein. A minimum monthly premium of $35 (premiums may vary), a $250 annual deductible, 25% of costs up to $2,250, 100% of costs up to $5,100 (a gap of $2,850), and 5% of costs above $5,100. (or total out-of-pocket costs of $3,600).

Remember these are the anticipated initial costs and benefits. “Initial’ refers to the fact that these figures will increase each year by at least 10%”. Insurance premiums, which are not set in the bill even for 2006, are projected to rise 65% to $58 a month in 2013.

Enrollees will be required to pay monthly premiums during the period of time that they receive no benefits (the “donut hole”) and must pay the full cost of their medications.

* Low-Income Benefit: Imposes an assets test for the low-income benefit and denies low-income dual eligibles (those who receive both Medicare and Medicaid) the ability to continue to get wrap-around assistance through Medicaid (e.g. if a drug is not on the Medicare formulary but is on the state’s Medicaid formulary, a dually eligible enrollee will not be able to access the Medicaid drug). Also, low-ncome beneficiaries will be required to pay a modest co-payment for medications; under Medicaid there is currently no co-payment. In New Mexico, an estimated 33,000 low-income Medicare beneficiaries will be negatively impacted by the legislation.

* Income-Relating to the Part B Premium: Eliminates the universal guarantee of Medicare and imposes new bureaucracy and an assets test to qualify for the low-income benefit. The assets test raises privacy concerns for millions of Medicare beneficiaries.

* Inflating the Part B Deductible: Allows the Part B deductible to increase at a dramatic rate, at the same time many other added costs are being imposed on Medicare beneficiaries.

* Premium Support: Imposes competitive bidding beginning in 2010 in certain areas of the country, including Albuquerque. Not only are there ongoing problems with respect to plans being in and out of the medicare managed care market, benefit changes, and provider changes on an annual and even a semi-annual basis, but it is anticipated that out-of-pocket costs for seniors in pilot programs will be higher than for seniors in non-pilot locations. The irony is that New Mexico is the poorest state in the country and seniors in Albuquerque will be paying higher Medicare costs than elsewhere.

* Retiree Coverage: There will still be major drop in retiree coverage, which leads to retirees losing a much stronger benefit for a very pathetic benefit. The Congressional Budget Office estimates that 3.8 million retirees, about one-third of all non-federal retirees who have health insurance provided by their former employers, will have their more generous private coverage reduced or terminated. It is anticipated that 2.7 million retirees will lose their benefits after 2006.

* Health Savings Accounts: Gives conservatives one of the main items they want in health care and guarantees there is no further action for years on the uninsured. These tax-sheltered accounts are usable by wealthier and healthier beneficiaries. The HSAs are very problematic from a health policy perspective; their popularity may result in the destruction of the Medicare program.

* State Clawback: Imposes an effective “reverse block grant” on states in their Medicaid programs by requiring states to pay the federal government an amount each year based on some determination of their drug costs in a base year. (If the state spends more than the projected amount, then the state must reimburse the federal government the excess amount.) This provision creates major problems for the Medicaid program (e.g., nursing home care) for years to come.

* Cost Containment: Creates a budget process beginning in 2010 whereby there is a self-proclaimed “budgetary crisis” in Medicare every single year, thereby threatening Medicare from that date forward.

* Fallback: If there is not a private drug plan (PDP) in a region, the fallback is for the federal government to contract with one or more private companies to deliver the drug benefit, rather than the government providing the benefit as originally proposed. The volatility of private companies delivering “benefits” is traditionally a problem.

* Private Plan Slush Fund: The bill provides $12 billion to the Secretary in the form of a slush fund to hand out to managed care providers to try to move people out of traditional Medicare. Consequently, private companies will have an unfair advantage over the vastly more popular original Medicare program.

* Cost Containment: There is none. The bill specifically precludes the government from negotiating lower prices or discounts with drug manufacturers.

* Drug Re-importation: The law restricts the importing of less expensive drugs from Canada, Mexico and other countries.

______________________________________

Health Action New Mexico
P.O. Box 40119
Albuquerque, NM 87196
(505) 342-8081
info@healthactionnm.org

Ford exec gets new task: Solve health care crisis

Ford exec gets new task: Solve health care crisis

BY TOM WALSH
DETROIT FREE PRESS COLUMNIST

Ford Motor Co. Chief Executive Officer Bill Ford is so alarmed soaring hospital and doctor bills are destroying U.S. jobs that he has assigned one of his top executives, Vice Chairman Allan Gilmour, to craft a proposal for fixing the nation’s health care system. Ford and Gilmour would then take the idea to other companies, unions and ultimately, to public officials in Washington, D.C.

The automaker spends about $1,200 on employee and retiree health care for every vehicle it builds, a huge cost that private employers don’t bear in countries with government-funded medical care.

The health care issue “is driving investment decisions away from the U.S., and that’s wrong,” Ford told reporters Tuesday. Ford Motor, General Motors Corp. and other major U.S. industrial firms have provided generous health care benefits to hourly and salaried workers for decades. But the skyrocketing cost of those benefits — which has increased more than 10 percent annually in recent years — has saddled these firms with a competitive gap that Ford said is “so compelling that it’s very tough to offset when you want to make an investment decision” about where to build a plant and create jobs.

“I just think that as a country, if we have a model that isn’t working and a model that’s driving jobs overseas, then we’d better take another look at it,” Ford said.
Ford has spoken out before about the dangers of surging health care costs; he called the problem “intractable” in a May 30 speech at the Detroit Regional Chamber’s leadership conference on Mackinac Island. But he’s upping the ante by putting Gilmour on the case and planning to enlist other allies.

Gilmour, 69, was a highly respected longtime Ford Motor executive whom Bill Ford plucked out of retirement in May 2002 to repair the company’s financial house. During his retirement, Gilmour was chairman of the Henry Ford Health System’s board of directors in Detroit from 1996 to 2002.

Nancy Schlichting, CEO of Henry Ford Health, said Gilmour’s steady hand and sense of humor helped the hospital system navigate through a period of severe cost-cutting in which about 2,000 jobs were eliminated.

“I’ve asked Allan to head up a major health care initiative for us and involve, when the time is right, others in the industry,” Ford said. “He’s uniquely positioned to do that because he knows the issue very well. . . . He’s seen it from both sides. Plus, he’s got great external credibility, so when it’s time for him to interact in Washington, Allan will do so with authority.”

Rick Wagoner, GM’s chairman and CEO, has also decried the corrosive effect of health care costs for U.S. companies, and a GM spokesman said the company would probably be willing to discuss ideas that Ford and Gilmour might advance.

In a recent interview with Fortune magazine, Wagoner said, “We are trying to make a point in Washington that if we’re concerned about job growth in a competitive economy, it’s important to understand that health care costs are a significant competitive disadvantage” for the United States.

Ford said he has no preconceived notion of how to solve the health care crisis.
“I don’t want anyone to say Bill Ford’s out raising the banner for national health care,” he said. “But I do think we need a new model, because if the employers are getting choked with health care, and the hospitals are all losing money and the HMOs claim they’re not making any money, then the system does not seem to be working very well.

“I just think we need a dialogue on it in a national forum that we haven’t had yet. That’s why I hope Allan will be able to help us craft a position.” He said he hasn’t given Gilmour a deadline or timetable.

Despite the rising health care costs, Ford said his troops have done some herculean cost-cutting this year — about $3 billion in all areas of the company. As a result, Ford said the automaker will post a profit of about $1.8 billion this year, despite flat sales. He also said he expects 2004 “to be a better year than we had in ’03.” He said Ford Motor has beaten Wall Street profit estimates for seven straight quarters, and with cash reserves in excess of $27 billion, “We have the financial flexibility to do whatever we choose.”

Ford said he is “comfortable” with current employment levels. “I don’t anticipate anything new” in terms of head count next year, he said. Ford Motor has cut about 10,000 hourly jobs since 1996 and reduced salaried head count by a similar number during the past three years.

Cost-cutting will continue, however, and include the sourcing of more parts from China. Ford said the company will buy about $1 billion in parts from China next year. The U.S. economy, he said, is “clearly getting stronger. One of the fears I have, though, is whether it will be a full-employment recovery. We do have a lot of manufacturing jobs that are going overseas.”

Ford Motor has been billing 2004 as the “year of the car,” signaling a new emphasis on passenger cars after years of expanding its truck offerings. Most of its near-term new-car designs will be midsize and larger, but Ford said Tuesday that the firm is also exploring a minicar for the U.S. market.

The “Focus has been a very good entry-level vehicle for us, but there is a question, ‘Do we need to do something below Focus?’ ” he said. “And we’re taking a look at that. “We’re fairly far along,” he said. “But we would only do it if we could do it profitably.”

Copyright © 2003 Detroit Free Press Inc.

Claim vs. Fact: Medicare Bill Signing

Center for American Progress

Claim vs. Fact: Medicare Bill Signing 12/8/03

Claim: “A lot of this happened — this bill happened because of grassroots work. A lot of our fellow citizens took it upon themselves to agitate for change, to lobby on behalf of what’s right” [George W. Bush 12/08/03]

Fact: “Drug companies and their trade associations deployed nearly 700 lobbyists to stamp out any proposals that would result in the federal government negotiating the cost of drugs or otherwise limiting the industry’s astronomical profits.” [Public Citizen Report, 06/03]

Claim: “Some older Americans spend much of their Social Security checks just on their medications. Some cut down on the dosage to make a bottle of pills last longer. Elderly Americans should not have to live with those kinds of fears and hard choices. This new law will ease the burden on seniors and will give them the extra help they need.” [George W. Bush 12/08/03]

Facts: “[U]nder the new plan, seniors in the middle income quintile will pay an average of $1,650 a year in out-of-pocket expenses for prescription drugs in 2006. This figure is nearly 60 percent more than they paid in 2000, even after adjusting for inflation. Expenses are projected to continue to rise so that by 2013 middle-income seniors will be paying more than two and a half times as much for prescription drugs (adjusting for inflation) as they did in 2000.” [CEPR Report, 12/04/03]

“[T]he insurance plan would provide little relief for about 3 million people with moderate assets and incomes near the poverty level and would cost seniors with drug expenses under $835 a year more than they currently spend.” [Boston Globe, 11/18/03]

Claim: “For the first time we are giving seniors peace of mind that they will not have to face unlimited expenses for their medicine.” [George W. Bush 12/08/03]

Fact: “[The] Medicare drug plan could further limit coverage by establishing a list of preferred medicines known as a formulary… Medicare would not have to pay anything for drugs left off the list…if a beneficiary bought drugs not listed on the formulary, the bill says, those costs would not be counted toward the $3,600 limit.” [New York Times, 12/07/03]

Claim: “Bill Novelli, the CEO of AARP, stood strong in representing the people he was supposed to represent.” [George W. Bush 12/08/03]

Fact: “A poll last week by Hart Research showed that 65 percent of AARP members want Congress to go back to the drawing board.” [Alameda Times Star, 12/06/03]

Continued

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Claim: “[T]his legislation is a victory for all of America’s seniors.” [George W. Bush 12/08/03]

Facts: “Corporate lobbying groups are emerging as winners, having pushed hard for a bill in order to shift some of their costs to the government…companies can opt in, taking the proposed tax-free federal subsidy and shifting some costs to the government, or opt out and possibly cut or eliminate their own coverage altogether, a trend that is already under way.” [Wall Street Journal, 11/18/03]

“For the drug industry, the legislation is good news…Drug makers believe individual private buyers are less able to push down prices than a centralized government purchaser with a pool of 40 million patients.” [Wall Street Journal, 11/18/03]

“A substantial number of the 6.4 million low-income Medicare beneficiaries who also are eligible for Medicaid and currently receive prescription drug coverage through Medicaid would be made worse off under the Medicare conference agreement.” [Center of Budget and Policy Priorities Report, 11/21/03]

“Millions of Medicare beneficiaries have bought private insurance to fill gaps in Medicare. But a little-noticed provision of the legislation prohibits the sale of any Medigap policy that would help pay drug costs after Jan. 1, 2006, when the new Medicare drug benefit becomes available.” [New York Times, 12/07/03]

“The Congressional Budget Office estimates about 2.7 million seniors could lose benefits that may be more generous than those that will be offered under Medicare.” [USA Today, 11/25/03]