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New Haven Register
December 4, 2001
by Dr. Steven Wolfson

“Nearly three months after the start of our national trauma, it is clear that we did not generate a rapid response to an attack that used a microorganism rather than a plane.”

“On a national or regional basis, essential clinical information that should be distributed quickly finds no avenue to reach doctors, hospitals, pharmacies, or clinical laboratories. Our health care system has no infrastructure! Less than half of the doctors in our country have computer skills. Fewer use this source of information on a regular basis. Fewer still are connected in any organized fashion with their local hospitals.”

“There are many reasons for this. One is that information systems able to incorporate the mass of data generated by modern medicine have developed late, are still being “debugged,” and are very expensive. Another is that the funding for their deployment cannot be found in the health care industry. It has been removed by a more than decade-long national effort to systematically downsize health care delivery so as to reduce cost. This effort has been led by managed care organizations who have, in the process, developed large bureaucracies, sizable administrative budgets, and shareholders who demand profits.”

“The private sector, represented by managed care organizations, has failed to deliver on its promise to reform the health care system, and has retreated from those programs and those localities whose health care has not generated profit.”

“There is an essential role for our government here. It alone has the resources and the authority to develop uniform standards for computer technology. It alone has the resources and authority to fund deployment of medical information systems and training of medical personnel nationwide. This funding could be in the form of direct grants, or tax incentives. Whatever the path taken to this end, construction of an infrastructure would permit the health care system to respond to the needs of traditional care as well as to the new threats to our health.”

http://www.zwire.com/site/news.cfm?newsid=2726917&BRD=1281&PAG=461&dept_id=7581&rfi=6

American Medical News
December 10, 2001
by Markian Hawryluk

“… a new type of Medicare+Choice option that more closely resembles traditional fee for service is winning converts.”

“The product differs little from the traditional Medicare fee-for-service program but offers greater administrative simplicity for physicians. Doctors need only collect the co-payment for the beneficiary and bill the Medicare allowable rate to the plan. There’s no primary and secondary payer to worry about as there often is with traditional Medicare.”

“Beneficiaries are free to choose from any Medicare-eligible physician, allowing patients who sign up for the private fee-for-service option to continue seeing their doctors.”

“So how can Sterling and Humana make money paying full Medicare rates while HMOs are unable to cover their costs? For one, they don’t offer additional benefits such as prescription drugs or eyeglasses, or a zero premium. Premiums for both plans are somewhat higher than the Medicare Part B premium but offer medigap-type coverage at a lower price”

“The plans also are taking advantage of idiosyncrasies in payment policies for Medicare+Choice. Prior to 1997, plans were paid 95% of the average cost of treating a beneficiary in the fee-for-service program in the same county. But plans flocked to urban areas where the rates were higher than the national average, leaving rural beneficiaries with little choice in Medicare coverage.”

“In an effort to attract plans to underserved areas, Congress in 1997 set a floor for payment to plans and limited the increase in high-payment counties. Lawmakers again raised the floor in 2000.”

“As a result, in some counties, payments to Medicare+Choice plans now exceed the average fee-for-service payment. The private fee-for-service option was a prime candidate to serve these mainly rural, floor-payment counties.”

“Three-quarters of the counties in which Sterling operates are floor-payment counties, and it is withdrawing from areas that accounted for 20% of its enrollment in non-floor counties in 2001.”

Murray Ross, PhD, executive director of the Medicare Payment Advisory Commission:

“On the one hand, such plans represent an alternative to traditional Medicare that the Medicare+Choice program was intended to provide. On the other hand, the lack of care management means that additional benefits provided by such plans come not from efficiency in the provision of medical care, but from higher-than-needed payments.”

http://www.ama-assn.org/sci-pubs/amnews/pick_01/gvsb1210.htm

Comment: It is astounding to observe the extent to which Congress is attempting to resuscitate the Medicare + Choice program. This particular option is simply the traditional fee-for-service Medicare program turned over to private health plans to administer. This is probably the ultimate demonstration of the relative effectiveness of private versus public administrative bureaucracies.

There are two primary differences between the public and private fee-for-service models. The private sector charges the Medicare beneficiary higher premiums. And the private plans direct their marketing to counties with a “floor payment” rate that exceeds that of the traditional fee-for-service program. The “success” of the private models is based on the fact that Medicare beneficiary pays a higher premium, and the taxpayer pays a higher rate. Since the Medigap-type benefits of these programs are negligible and subject to change, both the Medicare beneficiary and the taxpayer are not receiving value for their additional investment.

Traditional Medicare, as a publicly administered program of social insurance, has served us well. Instead of misguided efforts to privatize Medicare, wouldn’t it be better to direct our efforts to providing publicly administered social insurance for everyone? The need lies with patients, not health plans.

The Washington Post
November 30, 2001
by Rebecca Cook, Associated Press Writer

“In a groundbreaking proposal that could set a national precedent, Washington state has asked the federal government’s permission to make some Medicaid recipients pay for services and cap enrollment for some programs.”

“If the Bush administration approves Washington’s request for a waiver of the normal Medicaid rules, it would give states new cost-cutting powers.”

“Details would be subject to legislative approval, but state officials say no Medicaid family would pay more than about 5 percent of their yearly income.”

Dennis Braddock, the head of Washington’s Department of Social and Health Services:

“We have a lot of programs more important than health insurance. There are greater costs to society than someone not getting their physical.”

http://www.washingtonpost.com/wp-dyn/articles/A41468-2001Nov30.html

Comment: Now that we are exiting the age of managed care and are entering the age of the “empowered consumer,” more and more of the costs of health care are being shifted to the individual patient. Current trends suggest that the affordability of health care for average income individuals will soon be threatened. While our nation’s policy makers are ignoring that threat, they contend that, as least for low income individuals, protection from cost sharing is afforded by the Medicaid program. The proposed solution for Washington state would eliminate that protection.

Cost sharing by low income individuals will erect an insurmountable financial barrier to care. Medicaid’s primary deficiency is under-funding. States are being challenged by budget deficits. But states cannot address their fiscal problems by policies that prevent access to medical care for their most vulnerable populations.

Because of chronic under-funding, Medicaid has been shifting costs to other sectors. But these sources have been squeezed dry. The only realistic option for ending under-funding and cost shifting is to establish a universal risk pool and boost funding by eliminating the waste of the fragmented system of private health plan bureaucracies. With our great wealth, we could provide high quality, comprehensive health care for everyone merely by establishing equity in the funding and in the allocation of our health care resources. A publicly administered program of universal health insurance would do just that.

(A technical note: These “Quote of the Day” email messages are distributed through Cox Communications and ExciteAtHome. A bankruptcy court order issued yesterday authorized the option of an abrupt discontinuation of the ExciteAtHome services. If that were to occur, there would be an interruption of the distribution of the “Quote of the Day” messages for an as yet undetermined duration.)

JAMA Vol. 286 No. 20, November 28, 2001
by Robert L. Ferrer, MD, MPH

“My waiting room is bigger than yours. It seats 228 and by mid-afternoon it is usually packed. On a good day patients will wait two to three hours to see me or one of the other clinicians who work here. On a bad day the wait can reach five or six hours. Not as many patients complain as you might think. Almost all are uninsured, and they have nowhere else to go. Our ‘acute care’ clinic is a large county-hospital walk-in clinic — portal of entry to the public health care system in a county in which 360,000 of the 1.3 million inhabitants are uninsured. The numbers are alarming, but the stories underlying them are even worse.”

(Dr. Ferrer then describes the shocking realities of ten patients seen at the clinic. A description of one follows in the next paragraph.)

“A man in his early 20s with a worsening dental infection who was unable to afford a dentist. He finally saw a physician who prescribed an antibiotic, but the patient was unable to pay for the prescription. He presented to our clinic with sepsis and spread of the infection to his mediastinum. He died soon after admission.”

“I wish this was a top-ten list of lamentable stories, but it is not. The egregious is commonplace in our setting. My colleagues and I are part of what is widely known as the health care ‘safety net’ for the uninsured, but to work here is to realize that, for many, the safety net does not provide a soft landing, nor are its failures the random ‘accidents’ implied by the image of missing a net.

“In actuality, events such as these are the product of a system, an increasingly coherent system of exclusion that denies care to the uninsured: the system of no-system. The system of no-system’s components are the fragmented resources locally available to the uninsured, embedded within the national nonsystem of health care. It is a netherworld of closed doors and shrinking services. The paradox of the system of no-system is that it is becoming increasingly systematized. Unintended consequences of changes in health care organization and financing, positive feedback loops enabled by the nonsystem, and maladaptations to the health care market are solidifying the barriers to care for the uninsured.”

(Dr. Ferrer then explains the features of the system of no-system: inversion, concentration, fragmentation, evasion, degradation, resignation, amplification, and maladaptation. The descriptions of these features will alarm you. As one example, the process of evasion is described in the next paragraph.)

“Despite legislation to prohibit patient ‘dumping,’ it still occurs. To survive, it has mutated into a less visible form. Private hospitals are no longer shipping indigent patients off to public EDs in a taxicab. Instead, they now offer perfunctory treatment, forego any diagnostic procedures, and discharge patients with instructions to ‘follow up tomorrow with your primary care physician.’ They might as well be advised to see their personal banker.”

(And, concluding… )

“It is time to rescue the 39 million Americans who are forced to seek care within the system of no-system. If there is to be universal health care, we cannot keep having the same dialogues about the government vs. the market, equality vs. liberty, efficiency vs. bureaucracy. Stripped of all the ideology, the need and the suffering are there, now, plain for all to see. Stop by my waiting room sometime and I’ll show you.”

Robert L. Ferrer, MD, MPH San Antonio, Tex

http://jama.ama-assn.org/issues/current/ffull/jpo10168-1.html#aainfo

Comment: Download and save this one. The next person that tells you that the uninsured still receive care, hand them a copy of this and insist that they read it.

Health Affairs

Medicare+Choice: Doubling Or Disappearing? by Robert A. Berenson

Robert A. Berenson, senior advisor at the Academy for Health Services Research and Health Policy:

Abstract:

Although the changes in the program created by the Balanced Budget Act are often viewed as the reason for the current instability in the Medicare+Choice (M+C) program, in fact, health plans are having difficulties in all of their markets, not just in Medicare. It may be time to reconsider the purpose of the program and to fundamentally redesign how payments are made to managed care organizations contracting with Medicare. Two alternative approaches are suggested: treating M+C like another provider type by severing the payment linkage to spending under traditional Medicare, and overhauling the program by creating a value-based purchasing orientation rewarding plans that provide higher-quality care to beneficiaries with chronic diseases.

http://www.healthaffairs.org/

Comment: Although all objective evaluations to date have revealed that the Medicare + Choice program has failed miserably in its goal to reduce costs and improve quality, our policy leaders continue to flog this dead horse. Costs have been higher for comparable patients in the Medicare + Choice (M+C) plans than they have been in the traditional fee-for-service (FFS) Medicare program. The quest for quality has eluded the M+C plans with several studies suggesting that the level of quality may actually be lower.

Ignoring the rigor mortis of this horse, Robert Berenson has proposed two life saving measures. Suggesting that the plans be rewarded for advancing quality is an admirable recommendation. But rewarding quality should not be the exclusive domain of the M+C plans. Once we have adequate methods of evaluating quality, a reward system can and should be applied to all patient care, certainly including that in the FFS program. Thus quality rewards should not be considered to be a specific reason to extend the M+C options.

His other recommendation is much more problematic. It is clear that it is impossible to show that M+C will ever be able to save the taxpayers money as long as the fiscal mechanisms are linked to the traditional FFS program. By their very design, costs of administering private plans (e.g., M+C) will always be higher than publicly administered programs (e.g., FFS Medicare). Also, they have now proven that aggressive managing of care is not capable of achieving savings that will offset the higher administrative costs.

Yet, Berenson recommends that the link of M+C options to the FFS program be eliminated so that M+C options can be evaluated on a stand-alone basis. This might hide the inefficiencies of the M+C plans, but it will never create a new model which would, in fact, reduce costs below the FFS model. Hiding inefficiencies through creative accounting is hardly a solution to the fatal flaws in the M+C program.

This report, appearing in the web version of Health Affairs, brings up another painful issue. Health Affairs is considered by many to be the leading journal of health policy. As such, it has a responsibility to cover the spectrum of ideas in traditional and innovative health policy. In this instance, the editor invited five different responses to Berenson’s proposals. This should fulfill the editor’s responsibilities in providing a spectrum of opinions. But what happened here?

The five responses all, to some degree, discuss mechanisms for salvaging the M+C program. There was not even a hint that the program should be terminated based on its now-proven failure (though one suggested utilizing a “payment to organizations” authority, allowing private plans to survive in a FFS model). The decision of the editor to continue to publish articles heavily biased toward market solutions should be challenged. To assemble five pro-market solutions, while excluding consideration of the option of terminating the M+C program (while repairing the publicly administered FFS program), in my opinion constitutes editorial malpractice. To maintain its academic integrity, Health Affairs needs to open its coverage to all reasonable health care policy options. Managing editorial policy based on sightings on the political radar screen is not acceptable.

Don McCanne

by Rudolph Mueller, M.D.
Olin Frederick, Inc., 2001

Rudolph Mueller, M.D., from the Introduction:

“This is the story of the American healthcare system at the turn of the millennium from my perspective as a primary care and geriatric physician.”

“The premise of this book is that the American healthcare system is sick, As Sick As It Gets. It is a system with a confused purpose and mission, contaminated by its focus on money and its exploitation of the massive cash flow that modern medical technology has created. Its mission should be to maximize the well-being and health of every individual and our society as a whole, as well as to prevent illness and relieve pain.”

“This book includes the true stories of real-life illnesses of people who cannot afford adequate healthcare or who are denied it and my everyday experiences with them. It also includes stories about the system, the pharmaceutical industry, the insurance industry and HMOs, and the providers. These accounts are from one practice of one primary care physician… ”

http://www.olinfrederick.com/Our_Bookshelf/our_bookshelf.html

Comment: Dr. Mueller defines the problems of our sick health care system in terms of his real life patients and our current flawed policies that impair their care. He provides an economic picture of the great wealth in our system which has been distributed with a misdirected mission of enhancing the personal wealth of the few, rather than improving the health of the many. He then explains why a single payer, national health care program is the imperative solution.

The link above will provide the publisher’s information about this very readable and informative account. It should provide lay audiences and advocates with an excellent understanding of what really has gone wrong with our health care system and what we can do about it.

The Detroit News
November 27, 2001
by Sarah A. Webster

“DaimlerChrysler AG’s Chrysler Group has invited about 4,000 of its direct suppliers into a new program aimed at helping them reduce prescription drug costs. The new initiative may help the suppliers realize annual cost savings up to 10 percent through group purchasing.”

“Chrysler will get an undisclosed brokerage fee for referring business to Merck-Medco, the pharmacy benefit manager that will administer the program.”

http://detnews.com/2001/autos/0111/27/c01-352809.htm

Comment: In health care, discounts for favored groups result in increased costs for vulnerable groups. In this instance, DaimlerChrysler is shifting its pharmaceutical costs to the cash-paying senior subsisting on a modest retirement income. Even worse, DaimlerChrysler is becoming yet another middleman in the health care system by taking a cut of the action as it includes its suppliers in on the deal.

To prove that they have not entirely abandoned ethical principles, I’m sure that they will pass the financial benefit on as lower prices for their Mercedes line of automobiles. Or maybe not. They have a new ethical dilemma. Does this cost shift funded by pensioners accrue to the wealthy Mercedes purchasers, or to the wealthy shareholders?

Los Angeles Times
November 26, 2001

The cuts in funding to California’s “safety net” hospitals will certainly affect the poor (Nov. 21). But even if one is cynical enough to ignore the plight of the uninsured and underinsured, the impact upon services that we all take for granted will be devastating. If well-insured individuals are involved in an automobile crash and there is no trauma center, where will they go? If a wealthy couple’s newborn needs emergency surgery and there is no children’s hospital, what will they do? We can no longer deny the crisis situation in our health care infrastructure. Support of the “safety net” is not in the business interests of the insurance industry. Until a publicly administered system of universal coverage is enacted we will continue to drift closer to a health care meltdown.

Gerald Gollin MD Asst. Prof. of Pediatric Surgery Loma Linda University

by John P. Geyman, M.D. Butterworth-Heinemann, 2002

John P. Geyman, M.D., Professor Emeritus of Family Medicine, University of Washington School of Medicine, Seattle:

“It is easy to become discouraged by the lack of real progress toward structural reform in our ailing health care system after at least 20 years’ failure of the competitive marketplace approach. How much more time should be given to the experiment, and what real signs are there that it could yet work? The answers, in my view, are none and none. The stakeholders in the present system persist in their optimistic claims that the private sector marketplace will sort out the system’s problems, but all the evidence is to the contrary. We have a multitiered health care system that is not sustainable. It is filled with inequities and waste and falls far short of what is possible and needed for the nation. Corporatization of health care now dominates the health care landscape and has become the problem rather than a solution.”

Comment: In “Health Care in America,” Dr. Geyman has masterfully assembled the current literature on the status of our health care system, especially its failures in access, quality, and cost containment. It is a sad story.

But then he discusses the options available. Quoting Dr. Geyman, “Both near-term and long-term scenarios are unhealthy unless incrementalism is abandoned as ineffective and a national effort launched toward systemic reform. Some oxen in the commons oppose that level of reform and need to be gored (even if a sacred cow) if they stand in the way of the reform required to assure universal access to cost-effective care of the best quality achievable within available resources.”

“Health Care in America” is an excellent resource for organizing thoughts and updating our perceptions of the health care system in the United States. It is also an invaluable academic reference for facts about our ailing system. Information on this text is available at the website of the publisher, Butterworth-Heinemann:

http://www.bhusa.com and under “Medical and Health Professions” click “Primary Care,” and then click on the title, “Health Care in America – Can Our Ailing System Be Healed?”

This requires a political strategy. The insurance industry will fight it every step of the way. So many reputable organizations like League of Women Voters, AAUW, AARP, Neighbor to Neighbor, and organized Labor would be willing to work on reaching a consensus on a national health plan. You have your 10 million right there. Once consensus is reached you storm the doors of Congress and the White House. It took the League 2 years to reach consensus on universal health care which states:

(Please go to this link for the position of the League of Women Voters: http://www.lwv.org/where/creating/healthcare_read.html)