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Rationing health care in Texas

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Rationing health care in Texas

INDEPTH: HEALTH CARE IN GALVESTON
Galveston, oh Galveston
Rationing health care in Texas
Reporter: Frank Koller, CBC Radio | December 8, 2003

On December 8, 2003, U.S. President George W. Bush signed a $400-billion overhaul of Medicare, the American government-run system to help the elderly with medical care. The new provisions are designed to offer some relief from the soaring costs of prescription drugs in the U.S.

Galveston As the U.S. presidential election campaign heats up, health care is emerging as perhaps the major domestic issue. The already-high costs of private health insurance are rising monthly. But 44 million people – 15 per cent of the American population – have no health insurance coverage at all.
Texas – Bush’s home state – has the highest proportion of uninsured citizens. In Galveston, the situation is so severe the local hospital has been forced to deliver medical care based on patients’ ability to pay.

Income screening

Rosalyn McCray In the financial screening centre of the University of Texas Medical Branch hospital in Galveston, Rosalyn McCray examines the bank statements of a woman desperate to see a doctor. Irene Perez has also brought a notarized letter stating she and her disabled husband earn less than $8,000 a year.

They’ve never had health insurance. Perez hopes to prove she’s so poor the hospital will declare her “medically indigent.” And let her see a doctor.
“It’s very embarrassing because we’ve never in our 20 years of marriage asked for any help,” Perez says. “We own two shrimp boats and worked for ourselves until he lost both of his kidneys. We finally lost everything because I became incapacitated also.”

The University of Texas Medical Branch is the only state-owned hospital left in Texas. For a century, people who couldn’t pay for medical care have come here for help. Some drove a thousand kilometres to sleep in their cars while waiting to see a doctor.

But the public hospital was trapped by a shrinking state budget, soaring costs for prescription drugs – and a flood of uninsured people seeking help. So it undertook what it calls “rationing of medical care.” If potential patients don’t have insurance or a fat wallet, screening officer Rosalyn McCray must decide whether or not they’re admitted. Not everyone gets in.

Heartbreaking stories

“And it can be heartbreaking when you listen to people’s stories – it’s not that we don’t have compassion but you have to do what you have to do to keep the reimbursement going,” McCray says. The hospital saw trouble ahead in the late 1990s as the number of people without health insurance in Galveston began to soar. The new CEO, Dr. John Stobo, tried traditional cost-cutting methods. They weren’t enough. “And so we had to ration health care. That’s not something I came here to do,” Stobo says. “It’s not something I like doing. People initially asked, ‘why are you doing this?’ and my response was we’re not going to be able to deliver any health care if we become indigent as an institution.”

Galveston The new system took several forms. First, the hospital cut in half the number of people it admitted without insurance. Second, they started rigorous financial screening of potential patients – some say the toughest in the U.S.

Dr. Ben Raimer, head of community medicine, designed the original system. “We often liken it to flying on an airplane,” Raimer says. “You have a guaranteed opportunity to travel safely but you have a choice between first class and coach. There may be certain amenities that people choose to have in addition.”

But even when so-called indigent patients are admitted, the scrutiny continues. Almost daily, Dr. Karen Richardson, the hospital’s medical director, makes tough decisions based on a patient’s ability to pay. Today, she approved anti-cancer drugs for a patient on financial assistance – but only prescribed half as many pills as for a patient with insurance. The indigent patient’s case will be reviewed before more treatment is approved. Richardson says a paying patient has an easier time.

“No, that wouldn’t be a question [for a paying patient] that would have been taken care of,” Richardson says. “The medications would have been taken care of and the patient would have been on their way.”

Medically Indigent

In the screening centre, Irene Perez has proven she’s “medically indigent.” Even though she makes only $650 a month, Perez will still have to pay $40 to see a doctor, probably once a week. Rosalyn McCray, the screener, doesn’t think a $40 fee is too much.

“My gut tells me they’re not going to wait. She looks like she’s in quite a bit of pain,” McCray says. “And I don’t think the $40 will be too much of an issue. I think they’re willing to make that sacrifice because she looks like she’s in quite a bit of pain. Quite a bit of pain.”

In theory, this hospital’s not the last resort for the poor in Galveston. In theory, people turned away can get help at free street clinics and the county medical centre. Chief executive officer Dr. John Stobo admits he doesn’t know how theory plays out in the real world.

“Unfortunately, we don’t know that they’re getting the health care in the communities in which they live,” Stobo says. “We try to connect them to the appropriate care-givers but whether or not they get the care they need, I’m not sure … we just don’t have a good way to track it and, in some cases, I suspect they’re not getting the health care they need.”

Street clinic

The Jesse Tree is Galveston’s biggest free street clinic, helping hundreds of people in one of Texas’s poorest cities. Ted Hanley, the clinic’s founder, says $40 is an impossible cost for too many people. It’s creating a sense of helplessness among those who need help the most.

“My deep concern is for the quiet people out there dying because they have chronic illnesses,” Hanley says. “They’re not good self-advocates. They do get the medical care by the time their conditions are already so advanced there’s no coming back.”

One in seven without insurance

One in seven Americans don’t have health insurance and the proportion is increasing. Premiums for private insurance are going up more than 10 per cent a year. Dr. Ana Malinow, a pediatrician in nearby Houston, knows all too well the financial pressure that forced the Galveston hospital to ration care. Malinow says it’s unlikely to change soon.

“In a for-profit [system] there is no incentive to keep costs down, is there?” Malinow says. “So when people say ..oh … in the government we need to be fiscally conservative … blah blah blah … it’s all crap, because they know that what they want is to increase their profits and the only way to be increasing profits is for there to be more money in the system.”

No one at Galveston’s hospital boasts about the health care restrictions. No one waxes poetic about so-called “financial efficiencies.” Many are prophetic, however, that what they’ve had to do represents the cruel logic of a broken national medical care system.

“I can’t imagine there’s a hospital in the United States that isn’t facing this problem,” says Dr. Karen Richardson. “We also feel like we have an advocacy responsibility to shine some light on this issue and talk about what everybody else will soon have to do.”

Poison pill

Boston Globe

Poison pill

Why the new reform bill will make Medicare’s problems bigger — and even harder to fix

By Jacob S. Hacker and Theodore R. Marmor, 12/7/2003

TOMORROW, PRESIDENT BUSH is set to sign Medicare’s biggest overhaul in 38 years into law. But after watching the shrill yet perfunctory debate that culminated last week in the passage of the bill, even close observers of Washington politics can be forgiven for wondering just what exactly it was all about. On one side, congressional Republicans and President Bush described the $400-billion legislation as a moderate, sensible means of providing long-overdue drug coverage to seniors.

On the other, Democratic opponents — including most House Democrats, Senate minority leader Tom Daschle, and Senator Ted Kennedy, who led an unsuccessful filibuster — decried it as a monstrous giveaway to insurers and drug companies. They also charged that it was a “Trojan horse” aimed at crippling Medicare’s universal benefits in order to foster go-it-alone competition.

All this becomes more understandable when one recognizes that the bill is really two bills. The first provides a much-needed, if modest and excessively complex, drug benefit. But while this new benefit is generous for some low-income seniors, it will end up raising out-of-pocket drug costs for other poor beneficiaries. And because it is poorly designed and does not include effective ways of controlling drug costs, the plan will ultimatelyleave most seniors little better off than they are today, and some worse off.

The second, darker side of the new Medicare bill is a slew of changes that have little or nothing to do with drug coverage and everything to do with special-interest demands and ideological animus toward Medicare. These include huge new subsidies for private insurers, and provisions that ensure that drug companies will be spared from their greatest fear: that Medicare will use its massive buying power to demand reductions in drug prices. Perhaps most ominous, the bill also contains elements that favor private plans and risk further degeneration of Medicare’s all-in-the-same-boat structure.

Six sizable”demonstration projects” are intended to introduce greater competition into Medicare; they will also likely raise costs for seniors who remain in the traditional program.

What is most striking about the bill is not the consistency of its vision, but its deep incoherence. In the name of greater free-market competition, the legislation offers massive new subsidies to the pharmaceutical and insurance industries. In the name of providing greater protection, it threatens Medicare’s guarantee of universal benefits. (Indeed, it even provides more than $6 billion to support Health Savings Accounts outside of Medicare, risking the fragmentation of the broader insurance risk pool.) And in the name of greater cost containment, it encourages the expansion of private plans that have, to date, not saved medicare money, while creating new budgetary rules that could very well make Medicare less equitable and affordable down the road.

Behind these glaring inconsistencies lies the one great fact of contemporary American politics: partisan and ideological polarization. But if the bill were the product of political conflict alone, we would expect not a massive new entitlement with so many contradictions and problems but a more modest, lowest-common-denominator agreement — for example, a bill covering catastrophic drugs costs only. Instead, what we have is a bill driven principally by a mix of high Republican ideals and low political calculations that was crafted almost entirely in isolation from Democratic input and then tweaked just enough to win moderate votes and sidestep potentially hostile public opinion.

This brings us to the most overlooked reason for the unnecessary and self-defeating complexity: the conservative reform agenda itself, which is simultaneously driven by ideological principles that celebrate free competition and the interests of powerful industries that hope to avoid it at all costs. Private insurers and drug companies don’t want true competition: They want a playing field tilted in their favor. And they’re willing to do whatever it takes to seize the advantage, including, according to recent news reports, bidding exorbitant sums for the future lobbying services of the current Medicare administrator, Thomas Scully. Republicans, eager to win campaign funds and hostile to the very idea of Medicare, essentially gave the medical industry what it wanted. But what they produced has about the same intellectual purity as an ad jingle.

To be sure, politics usually requires compromises. But what’s shameful about the present bill is just how deeply the compromises — or, more accurately, the concessions to knee-jerk beliefs and private interests — undercut the stated goal of the bill: drug coverage for seniors. By our back-of-the envelope calculations, the roughly $400 billion in new spending over the next 10 years (not to mention the $140 billion in new premiums paid by Medicare beneficiaries themselves) will buy only about half as much coverage as a sensibly designed bill could. This is not only because of the subsidies for private health plans and for Health Savings Accounts, but also because of the higher overhead costs of private plans (about five to six times higher than for traditional Medicare) and the 20-to-30-percent higher prices for drugs that seniors will have to pay because Medicare is forbidden from using its bargaining power to negotiate better deals.

All this helps explain why the drug benefit itself is so convoluted and ultimately so meager — covering, for example, only a small share of seniors’ expected drug expenses overall, and reimbursing the 300th dollar of drug spending but not the 3,000th. It also helps explain why, according to polls, seniors already don’t like the benefit very much. A recent University of Pennsylvania survey, for example, shows opposition to the bill outweighing support by two percentage points among the general public, but by some 16 points among Americans over 65.

Indeed, a significant proportion of Medicare beneficiaries will almost certainly be worse, not better, off under the bill. This includes several million low-income seniors who will lose the generous coverage they now enjoy under state Medicaid programs. It also includes millions who already have pretty good drug coverage through their former employers — coverage which will likely be dropped, despite the bill’s subsidies for employers that retain coverage.

Even if these clear losses are ignored, all credible estimates suggests that, except for the very poor and very sick, drug spending will consume a larger share of seniors’ incomes in the coming years than it does now, despite the new legislation. This is not just because the benefit is so meager, but also because the bill fails to authorize the negotiation strategies that large corporations and public programs like the veterans’ health plan use to rein in skyrocketing drug prices. Fortunately for Republicans, none of this will become crystal clear until after the 2004 election, because — not coincidentally — the new drug benefit does not kick in until 2006.

onetheless, some hopeful Democrats argue the bill is worth supporting bcause it will, in the long term, be a stepping stone to a good drug benefit and sensible Medicare reforms. Might they have a point? Making the benefit more rational and generous, especially for low-income seniors and those with high but not catastrophic drug costs, is essential. But for three important reasons, the new bill is unlikely to be refined and improved down the line.

The first is the dismal historical record of Medicare’s attempts to encourage private plans within the program. If the past is any guide, the next debate will not concern the expansion of benefits but figuring out how to make the amazingly complex legislation actually work. And there will be considerable pressure from conservatives to delay any major changes until after the demonstration projects designed to showcase the alleged benefits of market competition occur — in 2010.

Furthermore, efforts to upgrade the benefit will run headlong into the massive budget deficit, and into the fact that the profligate legislation has no effective cost-control mechanisms.

Finally, the legislation’s one bow to cost control is guaranteed to create conflict on terrain highly unfavorable to those seeking to expand and rationalize benefits. In a relatively unnoticed provision that wasn’t in either the original House or Senate legislation, the bill creates a new standard for Medicare “insolvency.” It would define the program as insolvent whenever, in two consecutive years, more than 45 percent of its spending comes from general income tax revenues (not incidentally, the most progressive source of Medicare financing) rather than payroll taxes and premiums. When this ceiling is hit, which is likely to happen sometime in the next decade, the law will require the president to propose spending cuts and tax increases within the program. That’s likely to cause benefit cuts and premium hikes, not benefit expansions.

It’s also certain to cause political conflict — which may be the bill’s ultimate contradiction. Republicans hope to take off the table an issue with which they have been battered for years, and they may well do so through 2006. But by pushing through such an unwieldy bill, they are virtually ensuring that Medicare will be the biggest issue in American politics in the coming decades. Sadly, at the present juncture, that seems to promise more acrimony, confusion, and disappointment, rather than the constructive steps forward that Medicare so desperately needs.

Jacob S. Hacker, assistant professor of political science at Yale and a fellow at the New America Foundation, is author most recently of “The Divided Welfare State.” Theodore R. Marmor, professor at Yale School of Management, is author most recently of “The Politics of Medicare” (2d edition).

An Impending Catastrophe

Quentin Young, M.D., makes his diagnosis clear—America’s health care system is failing. With more than 44 million Americans lacking health insurance, the argument for universal coverage has never been more relevant, he says. Dr. Young has been fighting to abolish profit-driven managed care for most of his medical career, which has spanned more than 50 years. After graduating from Northwestern Medical School, he completed his residency at Cook County Hospital, where he served as chairman of the Department of Internal Medicine through the early 1980s.

The 80-year-old doctor still practices three days a week in Hyde Park and can often be heard as an expert guest on WBEZ, Chicago public radio. He’s a clinical professor of preventive medicine and community health at the University of Illinois Medical Center and senior attending physician at Michael Reese Hospital. Despite remaining active in the medical community, Dr. Young devotes most of his time to combatting the corporate takeover of medicine in America. In 1980, he founded the Health & Medicine Policy Research Group, of which he is currently chairman. Additionally, Dr. Young has mobilized the Chicago-based Physicians for a National Health Program, acting as the organization’s national coordinator. Currently, PNHP consists of more than 10,000 physicians who support a single payer national health insurance. Dr. Young discusses his health care plan, its goals, obstacles and what America has in its favor.

click here to read the interview in Chicago Life

Single payer study for Missouri: Same compelling result

Missouri Foundation for Health
Press Release
November 25, 2003
New Report Details Universal Care for Missouri

The study “A Universal Health Care Plan for Missouri” highlights a coverage plan that could be delivered in the state for less than the nearly $30 billion currently spent on health care this year.

The study, commissioned by the Foundation and carried out by Kenneth.Thorpe, Robert W. Woodruff Professor and Chair of the Department of Health Policy and Management at Emory University in Atlanta, examined the impact of a single payer tax-based system on current health expenditures in Missouri.

The study reviewed three possible benefit levels- similar, better and worse than the current average private health insurance policy in the state. Even the more generous plan under the system proposed by Thorpe would save more than a billion dollars from the current Missouri health expenditures.

The proposed plan would be funded by a payroll tax similar to the way the
Federal Medicare program is funded. Businesses that currently provide health
insurance, and their employees, would pay less in taxes than they do now in
premiums. Employers who do not provide health insurance now would pay more
as would the uninsured who would obtain coverage under the plan.

The savings that would allow expansion to cover all residents of the state would be largely derived from lower administrative costs associated with a single payer.

http://www.mffh.org/press_releases/pr-11-25-03.pdf

The report, “A Universal Health Care Plan for Missouri”:
http://www.mffh.org/ShowMe3.pdf

Comment: You would think that our national policymakers would begin to recognize a pattern here. The single payer model has become the golden standard against which all other models of reform should be compared.

Do we really need another study? Or shall we just finally do it!?

Looting the Future

Looting the Future
By PAUL KRUGMAN, NY Times
Published: December 5, 2003

Bush, George W
Republican Party
United States Politics and Government
Budgets and Budgeting

One thing you have to say about George W. Bush: he’s got a great sense of humor. At a recent fund-raiser, according to The Associated Press, he described eliminating weapons of mass destruction from Iraq and ensuring the solvency of Medicare as some of his administration’s accomplishments.

Then came the punch line: “I came to this office to solve problems and not pass them on to future presidents and future generations.” He must have had them rolling in the aisles.

In the early months of the Bush administration, one often heard that “the grown-ups are back in charge.” But if being a grown-up means planning for the future — in fact, if it means anything beyond marital fidelity — then this is the least grown-up administration in American history. It governs like there’s no tomorrow.

Nothing in our national experience prepared us for the spectacle of a government launching a war, increasing farm subsidies and establishing an expensive new Medicare entitlement — and not only failing to come up with a plan to pay for all this spending in the face of budget deficits, but cutting taxes at the same time.

Recent good economic news doesn’t change the verdict. These aren’t temporary measures aimed at getting the economy back on its feet; they’re permanent drains on the budget. Serious estimates show a long-term budget gap, even with a recovery, of at least 25 percent of federal spending. That is, the federal government — including Medicare, which Mr. Bush has given new responsibilities without new resources — is nowhere near solvent.

Then there’s international trade policy. Here’s how the steel story looks from Europe: the administration imposed an illegal tariff for domestic political reasons, then changed its mind when threatened with retaliatory tariffs focused on likely swing states. So the U.S. has squandered its credibility: it is now seen as a nation that honors promises only when it’s politically convenient.

What really makes me wonder whether this republic can be saved, however, is the downward spiral in governance, the hijacking of public policy by private interests.

The new Medicare bill is a huge subsidy for drug and insurance companies, coupled with a small benefit for retirees. In comparison, the energy bill — which stalled last month, but will come back — has a sort of purity: it barely even pretends to be anything other than corporate welfare. Did you hear about the subsidy that will help Shreveport get its first Hooters restaurant?

And it’s not just legislation: hardly a day goes by without an administrative decision that just happens to confer huge benefits on favored corporations, at the public’s expense. For example, last month the Internal Revenue Service dropped its efforts to crack down on the synfuel tax break — a famously abused measure that was supposed to encourage the production of alternative fuels, but has ended up giving companies billions in tax credits for spraying coal with a bit of diesel oil. The I.R.S. denies charges by Bill Henck, one of its own lawyers, that it buckled under political pressure. Coincidentally, according to The Wall Street Journal, Mr. Henck has suddenly found himself among the tiny minority of taxpayers facing an I.R.S. audit.

Awhile back, George Akerlof, the Nobel laureate in economics, described what’s happening to public policy as “a form of looting.” Some scoffed at the time, but now even publications like The Economist, which has consistently made excuses for the administration, are sounding the alarm.

To be fair, the looting is a partly bipartisan affair. More than a few Democrats threw their support behind the Medicare bill, the energy bill or both. But the Bush administration and the Republican leadership in Congress are leading the looting party. What are they thinking?

The prevailing theory among grown-up Republicans — yes, they still exist — seems to be that Mr. Bush is simply doing whatever it takes to win the next election. After that, he’ll put the political operatives in their place, bring in the policy experts and finally get down to the business of running the country.

But I think they’re in denial. Everything we know suggests that Mr. Bush’s people have given as little thought to running America after the election as they gave to running Iraq after the fall of Baghdad. And they will have no idea what to do when things fall apart.  

Employers' response to health care costs

Hewitt Associates
Press Release
December 2, 2003
Hewitt Study Shows Employers Critically Concerned with Health Care
Costs and Looking for Creative Solutions

Employers are struggling to cope with continuing double digit health care
cost increases, more interested than ever in consumer-driven plans and actively developing strategies and economic incentives to drive and enable better employee health care decisions, according to a new survey by global human resources outsourcing and consulting firm Hewitt Associates.

Hewitt’s survey of nearly 650 major U.S. companies revealed that companies
anticipate an average health care cost increase of 14 percent for 2004, but can only afford to absorb an increase of 9 percent.

Companies’ interest in implementing consumer-driven health plans as a means to control costs continues to grow, according to Hewitt’s survey. The most common consumer-driven models currently in use or planned for 2004 are customized design plan, which allows employees to customize their benefit options, levels and contributions for physician, hospital and pharmacy benefits (13 percent of companies surveyed) and health accounts plus high deductibles (12 percent).

Consumer-driven health plans that combine a health reimbursement account
with PPO coverage after a bridged deductible are also growing in popularity…
… the number of employees and participants in consumer plans will grow
exponentially over the next five years…

Employer confidence in employees’ taking greater responsibility for making
health care choices is growing…

Employers Look to the Government for Help

While the overwhelming majority of employers do not support national health
care, an increasing number feel that the government should play a limited
role in helping control skyrocketing costs and in making legislative changes to help drive consumerism, such as mandating quality reporting by hospitals and physicians (85 percent), requiring providers to disclose prices publicly (70 percent), mandating uniform provider data and payment reporting if long-term savings outweigh costs (64 percent) and allowing U.S.consumers to purchase prescription drugs from foreign countries (47 percent). More than half of all respondents (58 percent) indicated that they feel the federal government should make Medicare available to retirees ages 55-64 at their own cost.

http://was4.hewitt.com/hewitt/resource/newsroom/pressrel/2003/12-02-03.htm

The Hartford Courant
December 3, 2003
Employers Shift Health Care Costs In New Ways
By Diane Levick

… Hewitt survey …

Though still in the minority, 21 percent of large employers think the government should develop a universal health care system, compared with 17 percent in last year’s survey, according to Hewitt. Half the employers this year oppose a universal system, and the rest weren’t sure.

http://www.ctnow.com/business/hc-healthsurvey1203.artdec03,1,5493792.story?coll=hc-headlines-business

Comment: Pro-market, MBA-type responses would be expected from this survey
of health program managers of large, mostly self-insured employers. So it is
no surprise that support for a universal health care system remains quite
modest, though growing. It is also no surprise that marketplace advocates are willing to compromise their purity by advocating for government solutions that distort or even nullify markets when it is to their benefit.

This pro-market, anti-government bias leaves the thinking of the MBA health
managers confined within their traditional boxes. Their rigid thinking is
leading to conclusions that costs need to be shifted from employers to employees through consumer-driven strategies. But by accepting the market as
being less fallible than the government, it leaves in place market mechanisms that are continuing to drive costs up well in excess of inflation, and that are shifting more costs to the payers as a result of the highly inequitable method that the marketplace uses to fund health care. The MBA health managers need to move their thinking out of the marketplace box, and look also at other solutions that would control costs and ensure equitable funding.

A government-run, taxpayer-financed program of national health insurance
would contain costs and would establish an equitable method of funding
care. And it would do so without the necessity of establishing consumer-driven
financial barriers to beneficial care. And who more than MBAs would understand the benefits of the well-documented administrative efficiency of public insurance when contrasted to private plans?

MBAs instinctively should support a system that would finally contain health
care costs and would do so equitably. The business community would greatly
benefit from a universal program of social insurance. Business leaders
and their MBA advisors need to expand their list of reform options under
consideration. It is our task to be certain that they are more thoroughly
informed on the universal, publicly-funded and publicly-administered
model.

When ideology is set aside, and all options are assessed objectively, employer support of a government insurance system should be an inevitability. In fact, a majority already support expansion of eligibility for Medicare, a government insurance system. We’re part way there.

Employers’ response to health care costs

Hewitt Associates
Press Release
December 2, 2003
Hewitt Study Shows Employers Critically Concerned with Health Care
Costs and Looking for Creative Solutions

Employers are struggling to cope with continuing double digit health care
cost increases, more interested than ever in consumer-driven plans and actively developing strategies and economic incentives to drive and enable better employee health care decisions, according to a new survey by global human resources outsourcing and consulting firm Hewitt Associates.

Hewitt’s survey of nearly 650 major U.S. companies revealed that companies
anticipate an average health care cost increase of 14 percent for 2004, but can only afford to absorb an increase of 9 percent.

Companies’ interest in implementing consumer-driven health plans as a means to control costs continues to grow, according to Hewitt’s survey. The most common consumer-driven models currently in use or planned for 2004 are customized design plan, which allows employees to customize their benefit options, levels and contributions for physician, hospital and pharmacy benefits (13 percent of companies surveyed) and health accounts plus high deductibles (12 percent).

Consumer-driven health plans that combine a health reimbursement account
with PPO coverage after a bridged deductible are also growing in popularity…
… the number of employees and participants in consumer plans will grow
exponentially over the next five years…

Employer confidence in employees’ taking greater responsibility for making
health care choices is growing…

Employers Look to the Government for Help

While the overwhelming majority of employers do not support national health
care, an increasing number feel that the government should play a limited
role in helping control skyrocketing costs and in making legislative changes to help drive consumerism, such as mandating quality reporting by hospitals and physicians (85 percent), requiring providers to disclose prices publicly (70 percent), mandating uniform provider data and payment reporting if long-term savings outweigh costs (64 percent) and allowing U.S.consumers to purchase prescription drugs from foreign countries (47 percent). More than half of all respondents (58 percent) indicated that they feel the federal government should make Medicare available to retirees ages 55-64 at their own cost.

http://was4.hewitt.com/hewitt/resource/newsroom/pressrel/2003/12-02-03.htm

The Hartford Courant
December 3, 2003
Employers Shift Health Care Costs In New Ways
By Diane Levick

… Hewitt survey …

Though still in the minority, 21 percent of large employers think the government should develop a universal health care system, compared with 17 percent in last year’s survey, according to Hewitt. Half the employers this year oppose a universal system, and the rest weren’t sure.

http://www.ctnow.com/business/hc-healthsurvey1203.artdec03,1,5493792.story?coll=hc-headlines-business

Comment: Pro-market, MBA-type responses would be expected from this survey
of health program managers of large, mostly self-insured employers. So it is
no surprise that support for a universal health care system remains quite
modest, though growing. It is also no surprise that marketplace advocates are willing to compromise their purity by advocating for government solutions that distort or even nullify markets when it is to their benefit.

This pro-market, anti-government bias leaves the thinking of the MBA health
managers confined within their traditional boxes. Their rigid thinking is
leading to conclusions that costs need to be shifted from employers to employees through consumer-driven strategies. But by accepting the market as
being less fallible than the government, it leaves in place market mechanisms that are continuing to drive costs up well in excess of inflation, and that are shifting more costs to the payers as a result of the highly inequitable method that the marketplace uses to fund health care. The MBA health managers need to move their thinking out of the marketplace box, and look also at other solutions that would control costs and ensure equitable funding.

A government-run, taxpayer-financed program of national health insurance
would contain costs and would establish an equitable method of funding
care. And it would do so without the necessity of establishing consumer-driven
financial barriers to beneficial care. And who more than MBAs would understand the benefits of the well-documented administrative efficiency of public insurance when contrasted to private plans?

MBAs instinctively should support a system that would finally contain health
care costs and would do so equitably. The business community would greatly
benefit from a universal program of social insurance. Business leaders
and their MBA advisors need to expand their list of reform options under
consideration. It is our task to be certain that they are more thoroughly
informed on the universal, publicly-funded and publicly-administered
model.

When ideology is set aside, and all options are assessed objectively, employer support of a government insurance system should be an inevitability. In fact, a majority already support expansion of eligibility for Medicare, a government insurance system. We’re part way there.

New York Times interview of Steffie Woolhandler

The New York Times
December 2, 2003
A Conversation with Steffie Woolhandler
Heal Health Care System? Start Anew
By Judy Foreman

Dr. Steffie Woolhandler… an associate professor at Harvard Medical School and an internist at Cambridge Hospital, wants to change the health care system. Soon, and not in the way Congress just did.

Her plan is simple. Get rid of the private health insurance industry and abolish Medicaid, the government’s health insurance program for the poor. In their stead, set up a national health insurance system that would cover all Americans by expanding Medicare, the old-style Medicare, to include everyone from birth to death.

Dr. Woolhandler’s plan would add prescription drug benefits to Medicare, as the newly passed bill does. But in her plan, drugs would be paid 100 percent by the government, not administered through private insurance plans. She would also abolish co-pays and deductibles for both drugs and medical visits.

Patients would still choose their doctors, who would be paid on a fee-for-service basis. Hospitals would be privately run and would be paid a fixed monthly budget. By getting rid of the high administrative costs of private insurance, the money that people now pay out in premiums would be collected as a new tax.

Q. Is it too late to move ahead on your plan for national health insurance now that Congress has passed the new Medicare bill?

A. Actually, no. The reasons for moving ahead are even larger. We are going
to see more money spent on administrative costs than before. The bill doesn’t even benefit seniors, much less extend benefits to everyone else.

Q. … What, if anything, is going to get a vast majority of doctors on your side?

A. We want to get a real debate going, so the American people can choose. If
no one discusses it, we have deprived the American people of their right to
choose.

Comment: Steffie’s message to us is that our colleagues and the public must understand our model of social insurance and how that contrasts with the current system and with the other options for reform.

There is no question that the vast majority of Americans would choose the single-payer social insurance model if only they really understood it. It’s our job to make sure that they do.

The Real Drug War

December 3, 2003 The Real Drug War: Against the Sick Profit Margins and Mortality Rates

By JOANNE MARINER

Here are some numbers to consider: 14 million, 35.9 billion, and one. The first is an estimate of the number of people who will die of AIDS and other treatable diseases over the course of the coming year, most of them in the poor countries of the developing world.

The second figure represents the combined 2002 profits, in dollars, of the ten biggest pharmaceutical companies listed in Fortune magazine’s annual review of America’s largest businesses. The third figure corresponds to the number of countries that, last week, voted against a U.N. resolution on access to drugs in global epidemics such as HIV/AIDS, tuberculosis and malaria. The resolution emphasized that the failure to deliver life-saving drugs to millions of people who are living with HIV/AIDS constitutes a global health emergency. 167 countries voted in favor of the resolution. The single vote against it was cast by the United States.

Sadly, these numbers are closely related. To protect their exorbitant profits, drug companies are fighting the production and distribution of cheap generic versions of patented drugs. Unable to afford the medicines that could save their lives, millions of poor people around the world die of treatable illnesses every year.
And, as the recent U.N. vote exemplifies, the drug companies have a reliable ally. Not only does the U.S. government use its considerable economic power to bully developing countries into restricting access to low-cost generics, it continues to try to change the international rules that allow such generics to be made in the first place.

Unnecessary Deaths,.
In their vulnerability to treatable diseases, the rich and the poor live in different worlds. Every year, millions of people in developing countries die of illnesses that they would likely have survived had they lived in Europe or the United States. A key factor in the enormous global disparities in death rates is poor people’s lack of access to needed drugs.

Consider the case of HIV/AIDS. An estimated 42 million people are living with HIV/AIDS worldwide, 39 million of them in the developing world. India alone has at least 4.5 million people who are HIV-positive, and possibly many more.
In the United States and other rich countries, since the advent of anti-retroviral drug treatment, AIDS has become a manageable disease, not a death sentence. But for the millions living with HIV in the developing world, prospects for effective treatment remain dim.

At present, only a tiny minority of HIV-positive people in poor countries have access to anti-retroviral drugs. For the others, as well as some marginalized populations in rich countries, the cost of treatment remains prohibitively high.
Patent Protections and Profits Nothing in the ingredients of anti-retroviral drug treatment makes it inherently expensive. Indeed, when a combination of generic drugs is used, treatment costs are about $600 per patient per year. But companies that profit from drug sales have an interest in keeping drug costs artificially high. In the United States, the cost of anti-retroviral drugs is generally in the range of $10,000 to $15,000 per patient annually, and people with advanced cases of AIDS may pay far more. Relying on international patent protections, drug companies have been trying to maintain drug prices high globally by restricting the production and distribution of low-cost generic substitutes.

Global patent protections are tied to global rules on trade, specifically, the rules of the World Trade Organization. Although the WTO’s strict intellectual property rules carve out exceptions for national health emergencies, they still go a long way toward limiting poor people’s access to life-saving medicines. And as Oxfam has shown in a paper titled “Patent Injustice,” the problem extends beyond HIV/AIDS. Brand name drugs for a number of major diseases cost several times more than their generic equivalents. The increasing drug resistance of endemic diseases such as tuberculosis and malaria — and the resulting need for access to new drugs — mean that the WTO’s monopolistic pricing rules threaten many millions of the world’s poor.

The Brazil Model
Despite the WTO’s restrictions, some developing countries have made important steps in meeting their peoples’ drug treatment needs. In Brazil, notably, extensive prevention efforts combined with state-funded anti-retroviral treatment have reduced AIDS-related deaths by more than half since 1996. The cornerstone of Brazil’s treatment program has been the local production of generic equivalents of brand name anti-retroviral drugs, which has driven down the cost of treatment enormously.

But Brazil’s successes, and those of countries like it, have been hard fought. TheWTO rules have been a battleground on which Brazil and others have fought a series of high-stakes skirmishes with drug companies. Backed by one of the world’s richest and most politically influential industrial lobbies, the drug companies have enlisted the U.S. government as a loyal ally in the campaign against generics. Through the office of the U.S. Trade Representative, the United States has fought to advance the interests of the pharmaceutical industry, pressuring other governments on a bilateral basis and threatening to seek trade sanctions via the WTO.

The U.S. vote last Wednesday in the Third Committee of the U.N. General Assembly was not too surprising, given this record. Still, it was dismaying to find the United States willing to stand alone against 167 other countries — as if it were a matter of principle to vote against a resolution calling for widespread public access to the drugs necessary to combat global epidemics such as HIV/AIDS, tuberculosis and malaria.

Future Trade Agreements

The U.N. vote is, moreover, a worrisome portent for the future. At present, the U.S. Trade Representative is negotiating a number of bilateral and multilateral trade agreements, including the proposed Free Trade Area of the Americas. Given U.S. advocacy on behalf of pharmaceutical companies’ interests, these agreements are likely to go beyond the WTO’s rules in protecting drug patents.
President George Bush, in a number of his most high-profile speeches, has expressed a rhetorical determination to assist in the global fight against HIV/AIDS. By allowing U.S. officials to lead the world in protecting the commercial interests of drug companies, he betrays his public commitment to this cause.
Joanne Mariner is a New York-based human rights lawyer. She can be reached at: mariner@counterpunch.org

Gingrich praises HSAs. Watch out!

The Atlanta Journal-Constitution
11/30/03
Condition of health care system has been upgraded
By Newt Gingrich

The historic Medicare and health savings account legislation that the House and Senate have passed, and which President Bush has promised to sign, is an extraordinarily important first step in the transformation of the American health and health care system that will save lives and money.

… the impact of this legislation extends far beyond the drug benefit. Through its creation of health savings accounts, the measure will begin to address the crisis in health care that affects all Americans.

If you are a fiscal conservative who cares about balancing the federal budget, the new legislation may have no more important feature than the health savings accounts. The new account will begin to move us away from the current model in which insurance companies dominate the health care transaction. Instead, the HSA will enable transactions between doctor and patient in which the patient controls how dollars are spent.

… the HSA represents the single most significant transformation that can be made in saving the country from skyrocketing health costs and steadily increasing calls for taxpayers to finance more and more of the health care system through higher taxes.

The next balanced budgets will only be possible once there is a transformation of the health system, and part of the key to this transformation will be the existence of health savings accounts. Without the first dollar interest in the payment of health expenses, there is little incentive on the part of the patient/consumer to scrutinize a doctor’s bill.

Health savings accounts will encourage individuals to shop for health plans that best fit their needs and to make cost-conscious decisions about how they spend their own health dollars as opposed to a third party’s money. Individuals who control their own health dollars will be wise purchasers of health services.

… all Americans will receive the opportunity to take control of their own health care spending so that they can provide better health for themselves and contribute to the better health of the economy.

http://www.ajc.com/opinion/content/opinion/1103/30newt.html

Comment: Laudatory comments about HSAs coming from Newt Gingrich should
alert us all to the intent of this isolated provision that was tacked onto the Medicare drug and “modernization” bill. HSAs are not about Medicare. Instead, they lay the foundation for a fundamental revision of the way we fund health care for all of us.

The individual accounts provide a tax “subsidy” for health care at the marginal tax rate which results in health care funding that is inversely proportional to income, the poor paying more for health care than the rich.

That alone should cause us to reject this model of health care “reform.” The
health policy literature is replete with other examples of the fundamental
flaws of these medical savings accounts.

Of perhaps greater concern is the flexibility that will be allowed in the design of the high-deductible plans. Although the plans would limit out-of-pocket expenses for families at $10,000, this does not include payments made for outside-of-network services. To keep premiums affordable, insurers will fail to provide adequate reimbursement increases for providers, limiting the numbers of providers who are willing to sign the contracts. Also, to provide options with lower premiums, insurers are deliberately diminishing the number of providers available thus saving costs by limiting access. Those families that purchase plans with affordable premiums will find that they do not have the protection of the $10,000 stop-loss limit when they are forced in urgent circumstances to accept available but non-contracted providers. A person with major trauma or an acute myocardial infarction cannot ever be an informed shopper of health care services. Those with high-cost, chronic problems may also find that restricted provider lists could significantly impair accessibility.

The claim that the catastrophic plans will take care of all costs after the HSAs are depleted is a fraud. The managed care PPO products will prove to be severely deficient for those with significant health care needs, but with modest or meager resources. Traditional indemnity catastrophic plans have almost disappeared already and, in the future, will surely not be an affordable option for the average-income individual.

Splitting the health insurance pool into millions of segregated accounts will adversely impact only those who have significant needs by depleting their accounts: the very individuals for whom insurance was designed. Providing catastrophic coverage by marketplace plans that compete on premium pricing (by reducing benefits and increasing cost-sharing) can only result in financial disaster and impaired health care access for the average individual with significant needs.

Title XII, authorizing HSAs, goes into affect one month from today. If it is
not repealed immediately, many of us will be left with the option of shopping for bankruptcy attorneys who will best meet our need to be relieved of a morass of medical bills. But after all, isn’t consumer-directed, personal bankruptcy the American way? Gingrich and friends apparently believe so.

The AARP Ads and the new medicare prescription drug law

On December 2, 2003, the AARP began running advertisements in national newspapers citing eight benefits of the final Medicare legislation that the President signed into law on December 8. The ad’s headline states that the ad contains “no sound bites… no spin…. no politics… just the facts.”

The following is an analysis of the ad’s claims.1 It should be noted that some of the problematic aspects of the legislation that relate to low-income Medicare beneficiaries and the premium support demonstration, which are described below, would have been more problematic without AARP’s use of its influence to soften the adverse effects of those provisions.

please click here to read the analysis of the ad’s claim