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HEALTH AFFAIRS
Web Exclusive
November 13, 2001
by Robert J. Blendon, et al

“In contrast to health problems, health care issues have become less salient to the public. This is likely to lead to decreased support for government action on health care issues that were being debated by the Congress before September 11. These include Medicare reform, a Medicare prescription drug benefit, patients’ rights legislation, and coverage for the uninsured.

“How long these opinion changes last and what direction they take in the future depend upon three critical yet unknown factors: the occurrence and severity of new domestic terrorist attacks; the duration and success of the war in Afghanistan; and the duration and depth of the economic recession.”

http://www.healthaffairs.org/

Dear Health Care Activists,

Most Members of Congress do not have a clear picture of how being uninsured and underinsured impacts the family or individual. This is a major problem. They think that an uninsured individual can receive their health care in an emergency room or a community clinic. Until members of Congress start receiving phone calls and letters from constituents who are angry and sick and tired of the American health care system, this is going to be a long and protracted struggle. We have to bring the pain and misery of this health care system into the Congress now! We need more stories like the one from Carol Gross; Cong. Conyers will put them on his web-site.

I know what it is like to be uninsured—- I used to raise money from friends, relatives, co-workers,and strangers whenever my medical equipment for sleep apnea broke down during the night. Blue Cross Blue Shield would not cover my equipment costs and various medical procedures for sleep apnea because it was a pre-existing condition, or it was experimental surgery. I have been kicked out of hospitals, once one day after major knee surgery because I did not have health insurance. I was often denied treatment for sleep apnea and prostate problems because I had unpaid medical bills. I owe over $80,000 in medical bills. My credit is shot–I cannot buy a car, a cell phone, or an apartment without somebody giving me a loan. My mother who is 72, has no money, because it went to all of my medical bills since I was 18 years old. She is totally stressed out because of her financial situation. This is the reality of our health care system!!

There are millions of Americans, especially senior citizens, who have chronic illnesses or are handicapped, and cannot afford quality treatment. There are millions that cannot afford private health insurance, and want decent coverage. We must organize these individuals and families. This can be done only if there is a grassroots organization with affiliates across the country, who can organize these folks into a strong and vocal movement for universal health care.

Sincerely,

Joel Segal Legislative Assistant Rep. John Conyers, Chair, Congressional Universal Health Care Task Force

“Please keep on advocating for a national health plan. My husband and I both worked and paid for health insurance for many years and never really accessed those benefits until he became very ill with early-onset Parkinson’s disease. Now, in order for him to be able to move, eat and speak, it takes up to $1500 a month in medications. We now live on one instead of two paychecks. It has become increasingly difficult for us to cover his medical costs even with having two private policies and Medicare. We are far more fortunate than some because I also am a working professional. Our out-of-pocket costs for medical services take nearly one-half of our annual income. If things keep on getting worse we will have to just become poor enough that we quit even trying to pay our own way. It seems that only the poor and the rich have any secure health benefits, and almost everyone can be touched by a health care crisis without out any real safety net of protection, no matter how long they’ve contributed. When they actually need the services they may no longer be available to them. The truth about health care is shocking.”

Comment: Medicare and two private policies. And yet out-of-pocket medical expenses are nearly half of Mr. & Mrs. Gross’ annual income. What has happened to the security of health care coverage?

The fact that we are tolerating the exclusion of 40 million from health care coverage is a national disgrace. But the explosion in under-insurance now threatens access to care for most of the rest of us. Private health plans are rapidly shifting more and more of the burden to the beneficiaries. The deficiencies in coverage under Medicare have long been recognized, creating a market for private Medigap and Medicare + Choice options. But these too are becoming less effective in covering out-of-pocket expenses.

The effort to gain coverage for the uninsured is only part of the battle. There is urgency in reversing the trend to “empower” patients by making care unaffordable, a market “solution” that can negatively impact all of us. Mrs. Gross is right. Only the wealthy, who are able to fund all of their needs, and the poor, who have access to under-funded public programs, can be assured that there will be no financial barriers to care. Those of the rest of us that are healthy may be complacent, but, in spite of our coverage, we may be one major illness or injury away from a serious financial hardship

For a nation that prides itself on its ingenuity, it is astounding that we accept this shameful state of our health care system that is deteriorating further before us. It does not require a genius economist to recognize that the $1.4 trillion we spend on health care is enough to provide comprehensive care for everyone. Why do we stubbornly continue to support our ineffective, wasteful, fragmented system of private health plans when a public program of universal health insurance would solve our problems? Mr. & Mrs. Gross and all of the rest of us deserve much more value for our health care investment than we currently are receiving.

And I especially want to thank Carol Gross for agreeing to share their story with us. I pray that she will inspire us to act.

Don

American Medical News
November 12, 2001
by Cheryl Jackson, AMNews staff

Would you like to know, right when they walk in the door, if patients can pay you?

TransUnion LLC, a consumer credit information service headquartered in Chicago, and Englewood, Colo.-based Quovadx Inc., a software company, last month began offering ExpressCheck.

The system provides credit scores, which hospitals and doctors can use to determine payment arrangements. It follows the lead of Atlanta-based Equifax Inc., which last year began offering a similar product.

TransUnion’s pitch: Hospitals and physicians will need to use such systems more often as patients become responsible for bigger shares of their medical bills.

Physicians and hospitals feeling the pressure from lower reimbursement rates have started honing in on billing inefficiencies. Managed care has reduced revenues, and in response to rising premiums, employers have pushed more of the costs on to workers, who are facing bigger deductibles and co-payments.

Having the credit history upfront can help a physician practice or a hospital in developing adequate payment plans, Smith said (Neal Smith, national sales manager for TransUnion). If a patient’s credit history is poor, for example, the facility might insist on payment upfront for an elective procedure.

Brenda St. Pe-Bruno, vice president of sales for Equifax:

“Physicians every day are starting to come to us for access. The large physician groups are very interested. Even your onesies and twosies doctors’ offices are interested in using it.”

http://www.ama-assn.org/sci-pubs/amnews/pick_01/bisc1112.htm

Comment: As the numbers of uninsured continue to increase, the leadership of the American Medical Association is supporting defined contribution approaches that include medical savings accounts, tax credits, and greater cost sharing to empower the patient as a health care shopper. These policies are impairing access for the insured by making out-of-pocket expenses unaffordable. Underinsurance is growing at an even greater rate than the growth of the uninsured. It is heartbreaking for physicians with traditional values to see the profession responding today by adopting rapid credit checks that will protect the physician from the uninsured and underinsured. Isn’t it time for the AMA leadership to begin supporting policies that will protect patients from health care debts that impair access to care? A comprehensive program of universal health insurance would serve us all just fine, physicians and patients alike.

Amicore Press Release
October 10, 2001

“New York, October 10, 2001 – Pfizer, IBM and Microsoft today announced the launch of Amicore, a newly formed independent software and services company providing workflow and connectivity solutions to office-based physicians. Amicore’s focus will be to reduce the administrative workload and paperwork for physicians, allowing them to dedicate more time toward their mission of providing quality patient care.”

David Lubinski, Public Sector and Healthcare general manager, Enterprise Sales and Industry Group at Microsoft:

“Microsoft is committed to helping the healthcare industry and its providers reduce paperwork and streamline the practice of medicine. The Microsoft® .Net technology platform will enable physicians to practice medicine any time, any place, on any device.”

http://www.amicore.com/press.html

Comment: Heads up! This may be the most important development in health care of this decade. But there has been virtual silence from the health policy community since this press release of a month ago. Why should we be concerned?

The current model of using private health plans to allocate our abundant health care resources has been a miserable failure. The health plans have been riddled with administrative waste, have failed to assure equitable access to care, and have failed to contain runaway health care costs. Because they have created instability in the health care delivery system, major changes are absolutely inevitable. Health plans as we know them are history.

Current functions of health plans include risk pooling, administration and management (managed care), and information management. What will happen to these roles?

Health plans already are abandoning risk pooling as they pass risk on to their beneficiaries, thereby compounding issues of access due to lack of affordability. Risk pooling works well in the public sector, as has been proven by the Medicare program, and it is inevitable that most, if not all, risk pooling will end up in the public sector. Health plans will be relieved of their risk pooling function.

The private health plans have been egregiously wasteful in the administration of their programs, diverting tremendous resources away from patient care and into their own industry. Managed care’s greatest success has been in controlling fees through contracting. But that is a function that has been very effectively applied by the public sector, as witness the Medicare program. Other effective managed care tools also can be utilized by public programs with appropriate enabling legislation. In the future, health plans will be relieved of their role in managing care.

But information management holds the promise of improving efficiency, improving quality, reducing error, identifying and improving best practices resulting in better outcomes, improving both controlled access and confidentiality of patient information, and endless other applications that will make our great health care delivery system even better and more efficient. This was the new promise of health plans. But when they were flush with funds, they failed to deliver on this promise, preferring instead to concentrate on a simpler business model of improving profits. They now have one option left. They can metamorphose into information management vendors, or they can step aside while others fulfill this role.

That leads us to today’s quote. Microsoft, IBM and Pfizer did not become the companies they are by simply concentrating on the bottom line. They have been astute at recognizing products and services that not only have broad appeal, their products and services have become essential in today’s world. Just imagine the role of health care information technology once it has matured. To say that it will be essential to our health care delivery system is a world class understatement! If you think Bill Gates is wealthy now….

Why hasn’t the health care system moved into the IT (information technology) age? There are plenty of application service providers with their networks of providers and vendors. But their IT packages have been too expensive. There has been a reluctance to move beyond simple business office management and claims management, partly because of the high cost, and partly because of the fear of rapid obsolescence and concern about the failure to adequately integrate with other IT applications that will be necessary to realize the full potential of IT in health care.

Does IT in health care have to be expensive? When you look at the low cost of today’s very powerful home computers, and the low cost of the software and the negligible costs of accessing the Internet, you realize that much can be done at very little expense. The market should be able to provide the computer power needed for an integrated technology system with only a negligible drain on our health care resources. The anticipated value should be much greater than the costs.

The actual costs of developing software than can process medical records is very low. The high charges result from the proprietary interests that continue to profit from ownership and licensing of the software. The public sector could contract for development of the required software, not only for medical records but for all health care IT applications, and then move that software into the public domain. The costs would be a minute fraction of what the industry has in mind. And the public would be receiving great value for its extremely modest investment.

Information management services probably should be provided by vendors in the private sector at contracted rates that provide value for the public dollar. This would be analogous to the entities that currently provide claims processing for the Medicare program. There is plenty of opportunity for the IT industry to establish successful business models that also will create value for all of us, but without repeating the model of the health plans that were designed to suck the resources out of the health care system.

In the future we will most likely continue with our existing private and public health care delivery system, but we will move our risk pools into the public sector, and we will serve the system with a modern, integrated, information technology system.

The policy issue? The health care information technology system probably should be developed and serviced by the private sector, but the funding and policies should be established by the public sector, assuring value for our public dollars, and assuring that the information technology resources will have a mission of improving health care for everyone, instead of a mission of enhancing personal megawealth.

From “Networking Health,” by the Committee on Enhancing the Internet for Health Applications: Technical Requirements and Implementation Strategies, National Research Council (National Academy Press):

“A Final Word”

“The recommendations offered above are intended to set the nation on a course that will ensure that technology, organizational practices, and public policies converge in ways that will lead to broader deployment of Internet-based systems in health applications.”

Final comment: There is extreme urgency in establishing the public policies that need to be in place as the technology and health care organizational practices converge.

For those that are asleep, THERE IS EXTREME URGENCY IN ESTABLISHING THE PUBLIC POLICIES THAT NEED TO BE IN PLACE AS THE TECHNOLOGY AND HEALTH CARE ORGANIZATIONAL PRACTICES CONVERGE.

Modern Healthcare
November 5, 2001
Washington Report
by Jonathan Gardner

“To help lure investors to healthcare, the Bush administration wants to make providing Medicare services a stable and moderately profitable business. The trouble is, it’s Congress, not the administration, that turns Medicare’s financial spigot on and off.

“Thomas Scully, administrator of the Centers for Medicare and Medicaid Services, says the boom-bust cycle in Medicare payments scares Wall Street away from the healthcare sector.

“So now he’s proposing a different approach to give investors in the stock and bond markets more confidence in investing in healthcare providers and companies.”

Bill Reiland, a principal with Morgan Stanley Dean Witter who runs high-yield healthcare research:

“`He (Scully) probably has a good intention and has a good objective, and I’m sure healthcare providers around the country rise up and cheer when he says that. The important question is, in five years will the administration have the same objectives? You don’t know. You might not have the same administration.”

http://www.modernhealthcare.com/currentissue/topten.php3?refid=7998&db=mh99up&published=20011105

Comment: Let us pray.

Sorry. I had intended to avoid political comments, believing that we all need to work together. But when Thomas Scully is more worried about the health of the health plans than he is about the health of the people of this nation, it is political.

Modern Healthcare
November 5, 2001
Washington Report
by Jonathan Gardner

“To help lure investors to healthcare, the Bush administration wants to make providing Medicare services a stable and moderately profitable business. The trouble is, it’s Congress, not the administration, that turns Medicare’s financial spigot on and off.

“Thomas Scully, administrator of the Centers for Medicare and Medicaid Services, says the boom-bust cycle in Medicare payments scares Wall Street away from the healthcare sector.

“So now he’s proposing a different approach to give investors in the stock and bond markets more confidence in investing in healthcare providers and companies.”

Bill Reiland, a principal with Morgan Stanley Dean Witter who runs high-yield healthcare research:

“`He (Scully) probably has a good intention and has a good objective, and I’m sure healthcare providers around the country rise up and cheer when he says that. The important question is, in five years will the administration have the same objectives? You don’t know. You might not have the same administration.”

http://www.modernhealthcare.com/currentissue/topten.php3?refid=7998&db=mh99up&published=20011105

Comment: Let us pray.

Sorry. I had intended to avoid political comments, believing that we all need to work together. But when Thomas Scully is more worried about the health of the health plans than he is about the health of the people of this nation, it is political.

The Washington Post
November 6, 2001
by Melody Simmons

“Get ready. Those large packets beetling with details about health insurance re-enrollment will arrive soon, if they are not already on your nightstand nagging you for attention. And the bad news is, experts say that this year you really need to read them. Costs are going up and benefits are going down in nearly every plan, making this a lousy year to (go ahead, admit it) just put a check mark next to your current insurance plan and be done with it.”

http://www.washingtonpost.com/wp-dyn/articles/A32938-2001Nov2.html

Comment: The remainder of the article discusses innumerable permutations and combinations of choices that must be made during the “open season” of the health plans. The “empowered consumer” is clearly the prey during this open season since the options available are specifically designed to shift more costs to the beneficiary. Increased cost shifting reduces affordability and consequently reduces access to care, the exact opposite of what our health policy should be.

Our current national health policies are specifically designed to perpetuate and enhance the health of health plans while neglecting the health of the patients. Let’s place patients first by establishing one universal health plan that is specifically designed to assure access and affordability for everyone. The only loser would be the parasitic private health plans.

The Washington Post
November 6, 2001
by Melody Simmons

“Get ready. Those large packets beetling with details about health insurance re-enrollment will arrive soon, if they are not already on your nightstand nagging you for attention. And the bad news is, experts say that this year you really need to read them. Costs are going up and benefits are going down in nearly every plan, making this a lousy year to (go ahead, admit it) just put a check mark next to your current insurance plan and be done with it.”

http://www.washingtonpost.com/wp-dyn/articles/A32938-2001Nov2.html

Comment: The remainder of the article discusses innumerable permutations and combinations of choices that must be made during the “open season” of the health plans. The “empowered consumer” is clearly the prey during this open season since the options available are specifically designed to shift more costs to the beneficiary. Increased cost shifting reduces affordability and consequently reduces access to care, the exact opposite of what our health policy should be.

Our current national health policies are specifically designed to perpetuate and enhance the health of health plans while neglecting the health of the patients. Let’s place patients first by establishing one universal health plan that is specifically designed to assure access and affordability for everyone. The only loser would be the parasitic private health plans.

Few would disagree that equity, or fairness, should be a goal of our health care system. Most of us want to see fairness in the way that we allocate our health care resources and fairness in the way that we fund our system.

For the uninsured and underinsured, the benefits of an equitable system of universal health insurance are obvious. Access to affordable health care would be assured. For the purchasers of health care, including employers, the government, and more affluent individuals, the adoption of publicly administered, universal insurance would provide mechanisms for containing health care costs, a goal that has been elusive for market based health plans. And, very importantly, it would assure the return of free choice of providers of health care. But, because of our progressive tax system, those taxpayers that fund a larger portion of our national budget understandably are concerned about the impact on their contribution to an equitable system that shifts more costs to higher income individuals. So is equity in health care good or bad for the affluent, especially business owners?

Equity is to be clearly distinguished from the unrealistic and inequitable goal of equality in health care. Equal access to cosmetic surgery, to penthouse suites in ivory tower medical centers, or to detrimental high technology interventions would waste resources and introduce inequity by forcing some to pay for such excessive services that are utilized by others. That would be unfair.

Of the two aspects of equity in health care, funding of care and allocation of resources, let’s first look at equity in allocation. With our abundant health care resources, and with the excess capacity in our system, access to care should be available to everyone. But what care? Acute appendicitis, meningitis, a fractured hip, a heart attack, all require and would receive appropriate emergency services, regardless of how it is funded. Some preventive services, especially those with public health implications such as immunization programs, are, in general, readily accessible. On the other hand, management of chronic medical conditions, periodic screening for disorders with effective interventions, pharmaceuticals, and other beneficial services frequently are not accessible to those with limited funds or inadequate health care coverage, simply because of lack of affordability. In fact, this deficiency in our system is so great that, in spite of excess resources, of all industrialized nations we have the most inequitable mechanisms of allocating these resources.

What should be the basis of our decisions on allocation of our health care resources? Quite simply, services that prevent premature death and services that maintain or improve quality of life should be accessible to everyone in an equitable system. We currently have enough funds allocated to health care to assure equitable access to virtually all beneficial services for everyone. The inequities in allocation arise primarily from the financial barriers characteristic of our system, and usually not from barriers due to limited capacity.

The other issue of equity, funding of health care, is more complex than is commonly realized. What would be an equitable method of funding care? Fairness would dictate that each individual contributes his or her fair share, but that no person should suffer a financial hardship as a result of accessing the health care system. Since an equitable system would assure that the contribution of low-income individuals would be below the threshold of financial hardship, they would not be able to afford to contribute an equal amount as would higher income individuals. The result is that higher income individuals would be absorbing more costs than their sector would generate.

This concept of inequality in contributions to an equitable system has been a major stumbling block to enactment of health care reform. Inevitably, there is fear that a public funding system, whether through a tax or a premium, would “unfairly” burden higher income individuals, an irony since, in this instance, equity is falsely perceived as being unfair. The affluent sector has been successful in assuring that equitable systems are not adopted because of the distributive tax policies involved.

We currently have enough funds dedicated to our health care system, but is that funding equitable? Half of health care dollars already pass through the hands of the federal government, primarily collected as payroll taxes and general tax revenues. Payroll taxes are at a fixed percentage, creating a greater tax burden for low-income individuals who have little, if any, disposable income, and often do not have enough income to meet their most basic needs. Thus payroll taxes can be inequitable. Although general tax rates theoretically are set at levels that establish equity through their progressive bracketing, the perception of equity varies with the prevailing political element in control.

Health plan premiums tend to be inequitable. Those paying the premiums are paying costs that have been shifted to them from those that are not paying the full costs of the services they have received, even though they may be capable of doing so. Those paying premiums also are paying for expensive health plan bureaucracies that are not providing value for the health care dollars they consume. In addition, premiums “assigned” to lower income employees, whether nominally paid by the employer or the employee, constitute a significantly larger percentage of their net income than do the premiums paid on behalf of higher income employees, a gross inequity. Further, for employment-linked insurance plans, the tax system provides greater implicit discounts for higher income individuals than for those with lower incomes. This regressive tax policy is highly inequitable.

And then there is the hidden burden of funding health care through mechanisms that are often not considered when calculating the nation’s health care costs. As examples, we should consider the added costs of the medical component of homeowners’ policies, auto insurance, workers’ compensation insurance, and malpractice and other liability coverage. Contributions to medical charities are part of the funding, but the deductibility also shifts the tax burden to others. A much greater shift of the tax burden occurs with established tax policies such as the tax deductibility of employer provided insurance. Funding of community clinics also may increase local taxes. The products that we purchase include added health care related costs of the businesses involved. Several of these more obscure funding sources overlap, shifting costs to a degree that it is sometimes difficult to know who is paying what in health care. But they all perpetuate significant inequities in the overall funding of our health care system.

Thus, besides the inequity of our allocation of resources, the funding of health care in the United States is the least equitable of all other industrialized nations. Those relatively affluent individuals that are concerned about the inequality of an equitable system of funding care should look more closely at the much greater inequalities of the inequitable system that we now have. Unequal equity certainly is better than unequal inequity.

Without changing our health care delivery system, and without increasing the financial resources dedicated to health care, we can bring equity to the funding of health care, and we can bring equity to the allocation of those health care resources that provide value. Equity would be realized by the simple measure of adopting a publicly administered program of universal health insurance.

Don McCanne

November 2, 2001
By Robert F. Smith, Herald Correspondent

BELLOWS FALLS — Single-payer universal health coverage could save Vermonters more than $118 million a year over current medical insurance costs and cover every Vermonter in the process, according to a new report.

The study, paid for by a federal grant and prepared for the Office of Vermont Health Access by John Sheils and Randall Haught of the Lewin Group, was the center of discussion Thursday night during a Health Care for All forum. The forum was organized by Windham County Democratic Reps. Michael Obuchowski and Carolyn Partridge, and was held at the New Falls Cinema in Bellows Falls.

About 75 people attended, many of them local doctors, health-care practitioners, mental health counselors and politicians. Several spoke out in favor of the single-payer universal health coverage concept, and no one disputed its value.

The guest speaker was Dr. Deborah Richter, a family physician with the Cambridge, Vt., health center, who said the main problem with the U.S. health system is not that millions of citizens are uninsured or that it costs too much. The problem with the country’s health system is that it doesn’t really have a system, she said.

The U.S. has what she termed a “loose arrangement” that wastes billions of dollars in administrative costs created by the vast number of different health insurance companies offering various health plans and all requiring different types and amounts of paperwork.

“It’s cheaper to pay directly for the medical costs than to pay insurance premiums,” said Richter, who is a member of Physicians for a National Health Program. “Every other industrialized country realized this long ago.”

Several health professionals agreed that administrative costs had gotten out of hand. A woman who manages a clinic said that nearly every patient the clinic serves has a different kind of insurance coverage requiring its own special paperwork, and one mental health professional said she spends half of her working time filling out forms instead of treating patients.

Richter explained that 70 percent of health care costs are spent on just 10 percent of the population, while the majority of people, 80 percent, account for only 15 percent of health care costs. Healthcare administration, which involves mainly paperwork, overhead and bureaucracy expenses, is responsible for 24 percent of all healthcare costs she said. In the past 30 years there has been a 2500 percent increase in the number of healthcare administrators, while the number of healthcare practitioners – doctors and nurses – only increased by 159 percent during the same period.

The Lewin Report showed that under the current system, Vermont residents will spend $2.2 billion on health care in 2001. The report estimated that a single-payer program would provide coverage for everyone in the state — including the 51,000 estimated to be presently uninsured — and still save $118 million, mostly by reducing the administrative costs of health insurance programs.

Under a single-payer program health coverage would be paid for by a payroll or income tax. This arrangement would mean that taxpayers making less than $75,000 a year would see an average yearly decrease of more than $1,000 per family over current health insurance costs, while those earning $75,000 to $100,000 a year would see a nominal increase of about $58 over what they currently spend for insurance. Hardest hit would be families earning over $150,000 a year. Universal health coverage could cost them as much as $4,500 more per year.

Rockingham physician Dr. Matthew Peake asked Richter who in Vermont would oppose universal health care and such dramatic cuts in healthcare costs.

“Did you miss the parts about getting rid of insurance companies?” Richter replied. She said that universal health care administered by the state would eliminate the need for insurance companies, and these companies are very wealthy and influential.

“Every poll taken shows that two-thirds of the American people are in favor of this,” Richter said. “The problem is that insurance and pharmaceutical companies have more money than we do.” But Richter said that it is inevitable that universal insurance coverage will be adopted, and she said that she is confident Vermont will lead the way within the next five years.

And while there have been problems with the program in some countries, she said that Vermont and the nation could examine all the universal coverage programs now in use around the world and find out what has worked and what hasn’t.

The bottom line for Richter was that she felt single-payer universal coverage would allow her to concentrate on medicine and not on paperwork. “The good side of this is that I’d be able to focus on practicing medicine without having to worry if my patient could afford it,” she said.

Richter and several others at the forum agreed that the key to creating a national universal health care system was to educate the public on its benefits. “In general, this is a better deal for businesses,” she said, “and they know it. It’s common sense, and it makes business sense.”

For more information about universal healthcare, and especially how it affects Vermont, go to http://www.vthca.org.

Comment: Dr. Richter, a former president of Physicians for a National Health Program, is right on target when she is delivering her message to the business community. As with yesterday’s Quote of the Day message, if business owners recognized the significant benefits of universal health insurance for both them and for their employees, then we would have a crucial ally in our efforts to bring equity to health care in America.

November 2, 2001
By Robert F. Smith, Herald Correspondent

BELLOWS FALLS — Single-payer universal health coverage could save Vermonters more than $118 million a year over current medical insurance costs and cover every Vermonter in the process, according to a new report.

The study, paid for by a federal grant and prepared for the Office of Vermont Health Access by John Sheils and Randall Haught of the Lewin Group, was the center of discussion Thursday night during a Health Care for All forum. The forum was organized by Windham County Democratic Reps. Michael Obuchowski and Carolyn Partridge, and was held at the New Falls Cinema in Bellows Falls.

About 75 people attended, many of them local doctors, health-care practitioners, mental health counselors and politicians. Several spoke out in favor of the single-payer universal health coverage concept, and no one disputed its value.

The guest speaker was Dr. Deborah Richter, a family physician with the Cambridge, Vt., health center, who said the main problem with the U.S. health system is not that millions of citizens are uninsured or that it costs too much. The problem with the country’s health system is that it doesn’t really have a system, she said.

The U.S. has what she termed a “loose arrangement” that wastes billions of dollars in administrative costs created by the vast number of different health insurance companies offering various health plans and all requiring different types and amounts of paperwork.

“It’s cheaper to pay directly for the medical costs than to pay insurance premiums,” said Richter, who is a member of Physicians for a National Health Program. “Every other industrialized country realized this long ago.”

Several health professionals agreed that administrative costs had gotten out of hand. A woman who manages a clinic said that nearly every patient the clinic serves has a different kind of insurance coverage requiring its own special paperwork, and one mental health professional said she spends half of her working time filling out forms instead of treating patients.

Richter explained that 70 percent of health care costs are spent on just 10 percent of the population, while the majority of people, 80 percent, account for only 15 percent of health care costs. Healthcare administration, which involves mainly paperwork, overhead and bureaucracy expenses, is responsible for 24 percent of all healthcare costs she said. In the past 30 years there has been a 2500 percent increase in the number of healthcare administrators, while the number of healthcare practitioners – doctors and nurses – only increased by 159 percent during the same period.

The Lewin Report showed that under the current system, Vermont residents will spend $2.2 billion on health care in 2001. The report estimated that a single-payer program would provide coverage for everyone in the state — including the 51,000 estimated to be presently uninsured — and still save $118 million, mostly by reducing the administrative costs of health insurance programs.

Under a single-payer program health coverage would be paid for by a payroll or income tax. This arrangement would mean that taxpayers making less than $75,000 a year would see an average yearly decrease of more than $1,000 per family over current health insurance costs, while those earning $75,000 to $100,000 a year would see a nominal increase of about $58 over what they currently spend for insurance. Hardest hit would be families earning over $150,000 a year. Universal health coverage could cost them as much as $4,500 more per year.

Rockingham physician Dr. Matthew Peake asked Richter who in Vermont would oppose universal health care and such dramatic cuts in healthcare costs.

“Did you miss the parts about getting rid of insurance companies?” Richter replied. She said that universal health care administered by the state would eliminate the need for insurance companies, and these companies are very wealthy and influential.

“Every poll taken shows that two-thirds of the American people are in favor of this,” Richter said. “The problem is that insurance and pharmaceutical companies have more money than we do.” But Richter said that it is inevitable that universal insurance coverage will be adopted, and she said that she is confident Vermont will lead the way within the next five years.

And while there have been problems with the program in some countries, she said that Vermont and the nation could examine all the universal coverage programs now in use around the world and find out what has worked and what hasn’t.

The bottom line for Richter was that she felt single-payer universal coverage would allow her to concentrate on medicine and not on paperwork. “The good side of this is that I’d be able to focus on practicing medicine without having to worry if my patient could afford it,” she said.

Richter and several others at the forum agreed that the key to creating a national universal health care system was to educate the public on its benefits. “In general, this is a better deal for businesses,” she said, “and they know it. It’s common sense, and it makes business sense.”

For more information about universal healthcare, and especially how it affects Vermont, go to http://www.vthca.org.

Comment: Dr. Richter, a former president of Physicians for a National Health Program, is right on target when she is delivering her message to the business community. As with yesterday’s Quote of the Day message, if business owners recognized the significant benefits of universal health insurance for both them and for their employees, then we would have a crucial ally in our efforts to bring equity to health care in America.