PNHP

Connecticut's study of three models of reform

Connecticut's study of three models of reform

Health Care in Connecticut:
Sounding the Alarm
(A Policy Brief released June 22, 2006)

Economic and Social Research Institute (ERSI) (Jonathan Gruber, a health economist at the Massachusetts Institute of Technology developed the cost and coverage estimates used in the full report and this brief. The Urban Institute contributed to macroeconomic analysis to the report.)

This brief outlines three health care policies for Connecticut to consider as alternatives over its current helter-skelter system of health care and coverage. The implementation of each strategy would result in a range of benefits over the existing system. However, only one of the three strategies fully meets the criteria of universal health care established by the Institute of Medicine (IOM).

Policy I

One Health Plan Serving All State Residents

With all state residents under 65 in a single health plan sponsored by the state government, Connecticut would achieve 100 percent coverage while reducing total health care costs. By directly purchasing services from health care providers, the plan would provide benefits like those offered by typical private employers today. A standard benefits package would be available to all and would include the services covered by a typical benefits plan offered by the Connecticut employer now.

A new state commission would administer the plan either directly or through a private insurer. The commission would control costs by defining covered benefits and out-of-pocket sharing rules, setting a statewide budget for health spending, negotiating reimbursement levels with providers and setting standards for quality of care. Individuals and employers could purchase additional health care services or coverage.

…while all residents would be insured, total health care spending on the nonelderly would fall by 5 percent. Average health costs per insured would decline by 16 percent, from $4,121 to $3,447, in part because of reduced administrative costs incurred by insurers, health care providers and employers.

Total employer payments for health insurance would fall by $590 million or
11 percent.

Because of lower health insurance and health care costs, this approach would give Connecticut households $1 billion in new, net annual income available for purposes other than health care and health insurance.

This policy alternative could fully meet the criteria articulated by the Institute of Medicine:

  • Universal coverage can be achieved – 100 percent of residents would be covered.
  • Health care coverage would be more continuous, with all nonelderly residents enrolled in the state plan.
  • Coverage would be affordable to state residents.
  • The health insurance strategy would be affordable and sustainable for society, although some firms not offering coverage today would experience new costs.
  • The one state plan would have the capacity to implement measures that dramatically improve quality and efficiency, and eliminate disparities in access to and the quality of care among ethnic and racial minorities.

(Endnote 6: Estimates are limited to the nonelderly. However, the reduction in health care prices… would probably affect costs for the elderly as well. If either such “ripple effects” or a federal waiver allowed Medicare beneficiaries to benefit fully from the cost savings achieved by the one state plan alternative, the average Medicare beneficiary could realize annual savings of up to $410 in out-of- pocket costs.)

Policy II

A State Pool with Competing Private Plans for Residents Lacking Employer-Sponsored Coverage

This second policy alternative would satisfy some, but not all, of the Institute of Medicine’s principles.

Policy III

Expanding the Health Coverage Safety Net for Low- and Moderate- Income Adults and Insuring All Children

While this approach would cover a significant number of the uninsured at modest cost, it would not satisfy the criteria of the Institute of Medicine.

http://www.universalhealthct.org/pdf/policybrief_web.pdf

Comment:

By Don McCanne, M.D.

Who’s surprised? We now have yet one more highly credible study from other independent sources demonstrating that single payer is the only model of the three which meets the reform criteria of the Institute of Medicine, while also being the most effective in reducing health care spending. An FEHBP-type program for the uninsured, or expanding the safety net for lower-income individuals and all children, both are more expensive and fall short of reform goals.

Although PNHP would tweak the single payer model studied, our changes would not alter the fundamental findings of this report. Single payer would provide continuous, comprehensive, high quality care for everyone, reduce disparities in access and quality, while being the most effective model in finally making health care affordable.

We really don’t need more studies. The policy science could not be more solid. What we need now is politics.

Bring on National Health Insurance

By Vincent P. Maconi
Delaware On-line, The News Journal, 6/25/06

Editorial for Single-Payer

When Gov. Minner nominated me to be Delaware’s secretary of Health and Social Services in January 2001, a few eyebrows were raised. I’m not a physician, nor had I spent any of my government career in health care. But if coming into the job without a lifetime of experience required me to climb a steep learning curve, it also allowed me to enter the field without preconceived notions.

It quickly became clear to me that this nation needs universal health care. America’s health care system, despite the efforts of millions of dedicated health care professionals, is broken. Frankly, nothing but national health insurance makes sense.

I might seem an odd official to be championing national health insurance, given that many of the times my name has appeared in this newspaper over the past few years, it has been to defend efforts to control costs of the state’s largest health care program, Medicaid. In fact, attempting to get my arms around state spending has given me an excellent vantage point from which to see the system’s problems — and the only logical solution.

Phil Soule, Delaware’s long-serving Medicaid director who recently retired, once told me that in years past, Medicaid was all about making people healthier. Now it’s all about who is paying the bills. He’s absolutely right, and sadly that focus extends to just about everyone else in the health care arena.

Everybody — doctors, hospitals, insurance companies, government officials, and patients themselves — spends too much time administering or coping with the system and figuring out who will pay for a service — and not enough time figuring how to deliver service better or to more people. No one spends enough time figuring out how to make people healthier.

Having spent my life in politics and government, I’m a realist. I know that the current president and leadership in Congress have no interest in a universal health care system. Those who don’t oppose it on philosophical grounds would likely argue that the country can’t afford it.

I could make the argument that the world’s wealthiest country should guarantee health care to all of its citizens. That’s the kind of society that I want to live in. But for those who aren’t moved by that aspiration, there’s every likelihood that a national health care system would not only pay for itself through a healthier populace, it would also cost less in dollars than what the nation pays for health care now.

Our money’s worth

The literature of health care is replete with studies comparing this country’s health care with other developed nations, all of which have national health care systems. Virtually every one shows the same thing: The United States spends more money per capita than any other country, yet is less healthy.

We’re paying the highest prices, but getting the lowest quality.

Look at a health spending analysis by the Organization for Economic Cooperation and Development, comprised of 30 of the world’s leading industrialized nations. Examining the 2002 data, the OECD reported that the United States per capita health care spending of $5,267 was not only 53 percent higher than that of the second-highest country, Switzerland, it was almost two and a half times the average per capita health care expenditure of all the other developed nations.

To put it another way, the United States is spending nearly 15 percent of its gross domestic product (the combined value of all goods and services produced by a nation) on health care. Only Switzerland and Germany also spend as much as 10 percent.

The United States pays much higher prices than other countries for hospital stays, drugs and physician services.

Administratively, we’re awash in red tape. Health administrative costs in America are triple what they are in Canada, which has universal health care.

What results are we getting for paying that huge bill? The system hasn’t produced health coverage for all. Even in Delaware, which has one of the lowest rates of people without health insurance in the country — thanks largely to the huge investments Gov. Minner and the General Assembly have made in the state’s major health care programs, Medicaid and the Children’s Health Insurance Program — 10 percent of our residents lack any form of coverage.

Nationwide, that figure is more than 15 percent. Many of the uninsured are the working poor, who earn too much to receive government aid, but not enough to afford insurance.

Let’s also examine two universally recognized measures of national health: life expectancy and infant mortality. A quick surf on the Internet reveals that, among those 30 OECD countries, the U.S. life expectancy of 76 years exceeds that of only seven: Mexico, South Korea, Turkey, and the former communist nations of Slovakia, Poland, Hungary and the Czech Republic.

People everywhere from Iceland to Australia live longer than we do in America.

Last November, ABC News reported that the United States ranks 28th in the world in infant mortality — not just far behind Sweden, France, Japan and Germany but behind Cuba too. The United States is on a par with Croatia and Lithuania.

If the lack of support for health care reform by the president and Congress isn’t puzzling, the lack of business support is. You can’t pick up a newspaper without reading about another company cutting back on health coverage for employees or pensioners.

Certainly, the business community has historically preferred less government. But given that private businesses are having the same difficulties paying for health care as the public sector, I predict that over time, more business executives will come to see that health care is better left to government.

In today’s global economy, American companies are at a competitive disadvantage when up against businesses in other nations whose out-of-pocket health costs are zero. It’s a mystery why General Motors and other automobile companies, with their well-publicized dilemmas regarding health care overhead, are not leading the call for national health care. Small businesses too are experiencing increased difficulty in locating affordable health insurance.

With all due respect to those passionate advocates for a single-payer system in Delaware, I doubt this state could do it alone. Were Delaware the only state to adopt universal health care, individuals from surrounding states (if not the entire country) would flock here, especially the sick and uninsured. Delaware would go broke quickly.

Universal health care likely wouldn’t work in Delaware alone unless it figures out a way to prevent individuals from moving to this state to take advantage of the health care system — something I’m sure the Supreme Court of the United States would find problematic.

Whether the president, Congress and business are uninterested or opposed to a nationwide health care system, the country nevertheless is going to get there sooner or later. The only question is whether it gets there accidentally or on purpose.

Right now it’s getting there accidentally. As fewer private businesses offer health insurance to employees, the percentage of the population that receives health care from government programs continues to rise. The New York Times recently projected that by 2014, more than half of Americans will receive their health care from the government. So let’s get there on purpose.

Taiwan did exactly that 11 years ago, switching from a system similar to that of the United States to universal health care. Within six years, its uninsured population declined from over 40 percent to less than 3 percent, without an increase in costs.

As Winston Churchill once said, “Count on Americans to do the right thing, after they’ve tried everything else.” It’s time to end the irrationality of this health care system and move to national health insurance.

Vincent P. Meconi is secretary of the Delaware Department of Health and Social Services.

Smooth Sailing in Medicare Drug Benefit May Not Last, Wall Street Seers Say

Commonwealth Health Policy Report

June 22, 2006 — An annual event that typically gives Washingtonians blinkered by spin and ideology a bracing dose of business perspective on health care lived up to its reputation Wednesday.

Among the blunt assessments offered by Wall Street analysts at the event: the commercial insurance industry has given up trying to control health costs; much of the enrollment growth in the private plan side of Medicare is in plans that do little if anything to actually try to manage care; Medicare drug plans are going to set premiums for 2007 with basically no clue about whether they are running profits or losses in 2006; and starting in 2008, those plans are likely to cover a much more limited range of drugs.

Much of the focus of this year’s “Wall Street Comes to Washington Conference” was on the first year of the Medicare drug benefit, a reflection perhaps of the much greater impact that private sector behavior has on Medicare since the passage of the Medicare overhaul law (PL 108-173) in 2003.

Wall Street types noted the drug benefit has commanded center stage in the health care investment community, even though it has about as much impact on the overall earnings of the companies that offer those benefits as the price of paper clips, said Douglas Simpson, an analyst at Merrill Lynch.

But Wall Street’s growing focus on Washington seems less surprising due to the larger trend suggested by the Medicare drug benefit—the growing use by Republicans of private or public–private approaches to health care ills that policy makers more traditionally have targeted with government solutions.

Insurance industry analyst Robert Laszewski noted there are now three “important experiments” testing those approaches—the Medicare drug benefit, health savings accounts, and the new Massachusetts law requiring individuals without insurance to buy private coverage, in some cases with the help of government subsidies.

The result of those experiments tilting toward the private sector may be known within a few years, when the health care cost crisis may be reaching the boiling point nationally, Laszewski suggested, hinting at the possibility of dramatic government intervention in health care if those experiments don’t work out well.

‘Training Wheels’ on Rx Benefit

Laszewski said Medicare drug plans won’t have enough data on claims this year to make their premium bids for next year anything other than guesswork. He said one plan told him that premium bids for 2007 would be nothing more than “a crapshoot.”

But Christine Arnold, a managed care analyst with Morgan Stanley, noted that the drug benefit comes with “training wheels” for drug plans. She was referring to reinsurance provisions and “risk corridors” that cushion plans against losses, particularly in 2007.

But those wheels start to come off in 2008, with plans absorbing a larger share of any losses they occur that year, Arnold said. The result is that plans will have more restrictive formularies that year to rein in costs, she predicted. Plans also may be in a much tighter cost control mode because they tried to get a larger market share at the start of the benefit by charging low premiums, analysts suggested.

Because enrollment surpassed their projections, the analysts suggested that “adverse selection” would not be a big problem in the first year of the benefit. Adverse selection is when so many people with high health costs sign up for coverage that it forces the plan to charge sharply higher premiums the following year. This causes enrollees with relatively low costs to seek a better deal and creates a continuing spiral of rising premiums that makes the plan unaffordable.

Analysts suggested that enough healthy people are enrolling to keep that from happening, but they expressed some caution. “I think it’s way too early to know anything,” said Laszewski, referring to a lack of data on claim costs.

“It doesn’t look like adverse selection was an issue per se,” said Matthew Borsch, an insurance analyst with Goldman Sachs. But Borsch said he’ll be interested to see how high premiums are next year in drug plans with more comprehensive coverage that are more attractive to seniors who expect to fully utilize the drug benefit as compared with low premium plans offered by Humana that were expected to attract relatively healthy seniors.

‘Policy Mess’ in ’08?

Laszewski suggested that the drug benefit’s future may not be serene. “What happens when the federal government makes up for all the underpricing” by drug plans in early premium-setting? he asked.

If risk corridors entail much added federal spending to bail out plans with losses, and if plans also have to boost premiums 25 to 30 percent [in 2008] “to make up for all of this, you’ve got a policy mess on your hands,” he said. “I think there’s a real issue in terms of long-term policy sustainability of the program.”

Arnold agreed with Laszewski that managed care plans in Medicare, called Medicare Advantage plans, will have to trim benefits because strong reimbursement by the federal government since passage of the Medicare overhaul law won’t continue.

Medicare Advantage enrollment is up by about a million since then, but Laszewski expressed surprise that growth hasn’t been greater because of the extra benefits and lower-cost sharing offered by those plans. The plans are a “fantastic deal” for seniors but “the leap was just too much” out of traditional Medicare for many seniors, he said.

Much of the enrollment growth in Medicare Advantage has been in “private fee-for-service” plans, which allow enrollees to see the providers of their choice without financial penalty while also getting good coverage of costs not covered by traditional Medicare, analysts said. But there is little management of care in the plans. It’s unclear how sustainable the plans will be, said Borsch, apparently referring to their cost to taxpayers.

‘Boring’ Consolidation

Simpson said consolidation in the insurance industry has been “huge” and will continue over the next several years. Other analysts agreed, saying the trend is troubling. “I don’t like it—I just get bored,” Arnold said, complaining that she has just five big companies to follow and they have stopped innovating.

“When has anything interesting ever come out of a huge company trying to integrate 30 others,” she said.

Insurers are so big that they cope with Wall Street pressure for near-term earnings growth not through innovations in cost control but by acquiring other companies, Laszewski said. “It’s never been so boring—or profitable. The industry has given up on managing care and controlling costs,” he said. “We have a lot of people making themselves really rich and selling their industry down the river,” he said of insurance company executives. “I think my industry is on a long walk off a short pier.”

Private innovation using credit cards

This may pinch a bit – Credit cards for health care can cost big bucks
By Jennifer Heldt Powell
BostonHerald.com
June 19, 2006

The cards and credit programs have been around for many years but they’re becoming more prevalent as credit card companies look to create new products. New consumer-driven health plans could also drive up demand. Under those plans, patients face higher co-pays and deductibles. They may look to put those payments on credit cards.

Overall, consumer advocates say they’re concerned about the use of credit cards to pay for health care costs, especially among those with lower incomes.

But those who offer the cards say they allow consumers to get treatments they might otherwise have to delay.

Some plans, like Capital One’s, work like a car loan with a fixed interest rate and a fixed monthly payment for a certain amount of time.

Others are credit cards with no interest for a number of months. If the card is not paid off by the end of the promotional period, interest rates of 22 percent or more will be charged retroactively to the beginning of the loan.

http://business.bostonherald.com/businessNews/view.bg?articleid=144360

Comment:

By Don McCanne, M.D.

How often have we heard that national health insurance should be rejected because it would suppress innovations that could only take place in the private sector? Well, they’re right.

Only in the private sector would insurers offer innovative products that are designed to shift risk from the insurer to the individual insured (by reducing benefits and increasing cost sharing). Only in the private sector would insurers establish health savings accounts and high-deductible health plans (with their lucrative fees and decreased risk for insurers). Only in the private sector would insurers expand their market to include credit cards and debit cards (with an additional twenty-two percent added to the patients’ out-of-pocket costs). Only in the private sector would insurers push for a mandate to require individuals to purchase their own affordable plans (affordable only because they shift unaffordable costs from the insurers to the patients). Only in the private sector would insurers push for regulatory relief allowing them to offer more profitable, lower-premium plans (threatening to eliminate financial security for patients). Only in the private sector would insurers support policies allowing them to cherry-pick the healthy (while shifting high-cost patients to public programs, proposed government reinsurance schemes, and to involuntary private charity when all else fails).

Wouldn’t it be terrible if we had to give up all of this innovation merely because we decided to establish a national health insurance program?

Twenty-two percent is hard to beat. Why look for health care value when private innovation can generate profits like that?

Pact signed to develop health insurance program for British Virgin Islands

By ANGELA BURNS-PIPER
Virgin Islands Daily News
June 9, 2006

Tortola – Within one year, the government of the British Virgin Islands should receive a design for a national health insurance program to provide adequate health-care coverage for every man, woman and child in the territory.

Chief Minister Orlando Smith signed a contract Thursday with the University of the West Indies’ Health Economics Unit for the design and implementation of a national health insurance program for the BVI.

“While there are many intricate details to be worked out, the fundamental vision behind national health insurance is simple: We want a system of health-care coverage that will enable every man, woman and child of the BVI to get the health care that they need,” Smith said.

As in many other countries, the government of the BVI provides health care for certain categories of people, such as children younger than 15 years old and the elderly. Everyone else usually has to pay for their health care, although it is heavily subsidized.

“Though some people have health insurance, too many people do not and therefore cannot get access to the health care that they need, especially when they have to travel overseas to be referred,” Smith said. “So these are some of the things that had to be taken into consideration.”

Smith said that for the program to succeed, it will take the input and participation of the entire community, and he challenged every citizen and resident of the BVI to get involved.

“Over the coming year, there will be many opportunities for you to make your voices heard and to contribute to the formulations of a health-care system that works best for you,” he said. “Take up this challenge, speak your mind, ask hard questions, seek out information.”

The Social Security Board will be working closely with the UWI team during the coming months and will be responsible for administering this program after it is implemented.

Director Antoinette Skelton, who chaired Thursday’s signing ceremony, said the board is committed to making the program a success. “The Social Security Board is committed to this project because we see the access to adequate health care as the extension of the social protection presently offered by our organization,” she said.

“The failure to provide adequate social health protection leads to great inequality and poverty, since health expenditure puts pressure on family income and has an enormous effect on the most vulnerable,” she said.

She said it is a well-known fact that the high cost of treatment of illnesses such as HIV-AIDS, cancer, and heart disease is one of the main factors in generating poverty because it forces families who are not protected by health insurance to go to extreme lengths – sacrificing their savings or avoiding spending on basic necessities – to meet the high cost.

Professor Karl Theodore of UWI, who signed the contract with the chief minister, said it is important for the BVI and the university. “For in coming here to cooperate with the establishment of the national health insurance program, UWI is demonstrating its commitment to improving the quality of life of the people of the region,” he said.

Theodore said the program basically is about social insurance, in which there is prepayment and when an event occurs, contributors can access health services without having to put money in. He said it is different from private insurance, in which there is a pooling of risk and payment is based on individual risk.

“With social insurance, payment is based on risk assigned to the community as a whole,” Theodore said said. “The objective is to really maximize the access to health care of all the citizens and residents of the country.”

He said that when the system becomes functional, each person will be issued a card, which will be a guarantee to good service and an instrument to keep track of what is happening with the system in terms of quality and cost of service.

The professor said the program will take about three years to put in place.

The contract, worth $585,100, calls for UWI to perform a number of tasks, including developing the legislative framework, registering the population, developing information systems and generating actuarial projects.

– Contact Angela Burns-Piper at 284-494-1291 or send e-mail to angelaburnspiper@yahoo.com.

APA President Urges Support For Single-Payer Insurance System

Steven Sharfstein, M.D., ends his year as president of APA in the same way that he began it: by urging APA members to become or stay involved in advocating for psychiatric patients.

By Catherine F. Brown

Psychiatrists need to “tirelessly advocate” for a single-payer, universal health care system so every American has access to care as a right, not a privilege.

That was the message that outgoing APA President Steven Sharfstein, M.D., delivered to those attending the Opening Session of APA’s 2006 annual meeting last month in Toronto.

“To advocate and to lead, we must say five simple words about the state of our health care system in the U.S. today: the emperor has no clothes,” said Sharfstein, president and CEO of the Sheppard Pratt Health System in Maryland.

Sharfstein reminded his audience that in the speech he had delivered at last year’s Opening Session, he challenged fellow APA members to become involved in advocating for patients and the profession of psychiatry at the local, state, and national levels.

His challenge did not end with his presidency, however. “We cannot slow down,” he said. “Advocacy is not just calling on others to do what we want; it is a shining light for others to follow.”

Sharfstein’s year as president was punctuated by more crises and high-profile news events than usual. His term got off to a running start when he found himself being interviewed by Katie Couric on the “Today” show in response to antipsychiatry remarks that Tom Cruise had made to Matt Lauer a few days earlier. The incident had a silver lining: “At the end of it all, I can only thank Mr. Cruise for giving psychiatrists across North America the opportunity to get our message out—that we are physicians who prescribe treatments that work.”

But the incident also raised an issue that Sharfstein had addressed in his speech last year as well. He noted that one weapon the antipsychiatry movement uses against American psychiatry is its relationship with the pharmaceutical industry. While the industry has developed drugs that have transformed the lives of countless psychiatric patients, he said, it abides by ethics and values that are different from psychiatry’s, and psychiatrists need to be mindful of that difference.

“Our advocacy in favor of access to effective pharmacopeia should never have been seen as mere marketing on behalf of industry; it must come from a dispassionate reading of the science, access to all clinical trial data, and our clinical experience,” he said.

To ensure the credibility of continuing medical education (CME), Sharfstein called for independent review of CME programs and the phase-out of educational events sponsored by a single drug company. Also, he reminded his audience that accepting gifts from drug company reps generates distrust in patients.

Psychiatrists must be vigilant over other core values of the profession as well, he said. After reading in the New England Journal of Medicine that psychiatrists were participating in the interrogation of detainees at the U.S. Naval Station at Guantanamo Bay, Sharfstein expressed his concern in a letter to the assistant secretary for health in the Department of Defense. That letter led to an invitation to tour Guantanamo with the top health leaders in the military and other leaders of medical and psychological organizations. They were briefed on the involvement of “behavioral science consultation teams” and were told that while stress techniques had been used in the past, current techniques focused on building rapport with detainees because the development of positive relationships was found to be more effective. That wasn’t an acceptable alternative for Sharfstein, however.

“It is the thinnest of thin lines that separate such consultation from involvement in facilitating deception and cruel and degrading treatment,” he said. The detainees, being held as enemy combatants with no legal rights, live in despair, and multiple suicide attempts and hunger strikes are common. “Our profession is lost if we play any role in inflicting these wounds.”

Psychologists have taken a position allowing them to provide consultations in interrogations, Sharfstein noted, “and if you ever wondered what makes us different from psychologists, here it is.” Earlier that day, he announced, the Assembly, and then the Board of Trustees, voted in favor of a position statement reconfirming that psychiatrists should not participate in prisoner interrogations (see page 1).

Two other major events during Sharfstein’s presidential year demonstrated the Bush administration’s failure to take care of the poor and disadvantaged in this country, he said. The first was Hurricane Katrina late last summer, and the second was the launching of the Medicare Part D prescription drug benefit on January 1.

“To advocate and to lead, we must say five simple words about the state of our health care system in the U.S. today: the emperor has no clothes.”

Regarding Katrina, he praised the many APA members who helped traumatized survivors—some of whom were survivors themselves—but expressed outrage over the government’s failure to follow through on promises to provide health care and other assistance to them. Many survivors were poor and had lost everything to the violence of the storm and flooding.

Four months later, APA had a front-row seat for the train wreck that occurred when Medicare Part D went into effect. APA and other advocacy groups had warned the government about the serious flaws and limitations of Part D, Sharfstein said, but these warnings went largely unheeded. In particular, APA and its partners were concerned about the 6.5 million patients dually eligible for both Medicaid and Medicare; beginning January 1, their drug coverage was moved from Medicaid to Medicare. Within days of the new year, reports proliferated about patients who could not get the medications they needed for a variety of reasons, from confusion over which plan they had been enrolled in to high copays they could not afford, he noted.

The program’s unreasonably complex design and rocky start, said Sharfstein, represented “another abandonment of the most poor and vulnerable of our patients, another shocking insight into the failure to care for the less fortunate.”

The federal government needs to address Part D’s many inadequacies, but more than modest tinkering is required, said Sharfstein. “The solution is for the federal government to establish a basic drug plan that works for those who fail in the private Part D plans,” he advised. “This is a concept so obvious that it is easy to be pessimistic that it will ever be adopted.”

The events that Sharfstein weathered this past year underscored the importance of the advocacy mission in which he had challenged his fellow APA members to join him. He left them with this simple but weighty message:

“We must tirelessly advocate for [single-payer universal health reform]. As the health care crisis extends and mushrooms, with more and more Americans without adequate coverage, the opportunity for such change will come at national, state, and local levels. And we must be there as advocates for our patients.”

You Don't Want to Get Sick if You're American

by Silver Donald Cameron
The Chronicle Herald, Halifax, Nova Scotia
June 23, 2006

I CAN’T AFFORD to Get Sick! cried the cover of Reader’s Digest. And below that line was the somber title, Fixing Our Health Crisis.

Right, I thought. Here we go again. Economists viewing medicare with alarm. Politicians defending it by dismantling it. Soaring costs, a quicksand of bureaucracy, physicians departing for the States.

But no. This article was about the States. This was not the Canadian edition of Reader’s Digest, it was the U.S. version. And the Americans were evidently having a health crisis of their very own.

Like most discussions of medicine, the article was mostly about money. Americans who have medical insurance get it from private companies, often as a benefit of employment. The poor and the elderly are sometimes covered by government plans. About 15 per cent of the population — 45.8 million Americans — don’t have any coverage at all.

As in Canada, medical costs have been rising, driving insurance premiums up by 73 per cent since 2000. But employers resist, demanding that employees “co-pay” a larger share of the cost of treatment or accept a lower level of coverage. Many employees can’t afford the co-pay, especially if there’s serious illness in the family. They postpone treatment.

When they can’t postpone it any more, they go ahead with treatments they can’t pay for. They scramble desperately to cover the costs, spending their savings, borrowing heavily, running up their credit cards. Eventually they topple into bankruptcy. Health costs are by far the leading cause of personal bankruptcy in the U.S.

But if the patient doesn’t pay, the doctors and hospitals are stuck with the costs. They recover their losses by raising their prices, and the cycle begins again.

All of which led the Reader’s Digest to ask how costs could be better controlled in the first place. Malpractice suits are common and expensive, and the average jury award is now $600,000. Doctors may pay $200,000 a year just for malpractice insurance. And the wide array of insurance companies means that the system is choking on paper and stifled by bureaucracy. A doctor needs a whole staff just to process patients’ insurance claims.

The Digest dutifully surveyed the opportunities for reducing costs, including caps on malpractice awards, tax incentives for citizens, reform of the insurance regulations, the use of generic drugs, and digitization of records and prescriptions. Good, boring stuff, and some of it would be useful in Canada, too — like digital record-keeping.

But the issues the Digest did not consider provide a textbook lesson in the way the media can shape debate. The Digest notes, but doesn’t discuss, the cost of white collar crime in the form of health insurance fraud, which drains off $100 billion a year. And it doesn’t even mention the most obvious and effective way to get better coverage at a lower cost, which is to bring in national health insurance, like every other OECD nation except Mexico.

Canada’s health-care system is demonstrably more efficient (and infinitely more democratic) than the awful Rube Goldberg contraption which is failing the U.S. so badly. In 2001, for instance, health care cost Canadians $2,163 per capita — $1,533 through medicare, $630 out of pocket. The U.S. system cost more than twice as much — $2,168 from the government and $2,719 from the individual, for a total of $4,887.

Or, to put it another way, the U.S. spent 13.6 per cent of GDP on health care — and didn’t cover 15 per cent of its people at all. Canada covered everyone at 9.5 per cent of GDP. If we’re after effectiveness and efficiency, those numbers are pretty conclusive.

But Canada’s system, of course, is “socialized medicine,” a phrase too scary for the Reader’s Digest even to mention, a concept so terrifying that it freezes thought (and even arithmetic) in its tracks. What Americans mean by this phrase is “socialist medicine,” or “government-controlled medicine,” which is ideological poison. Of course that’s not what Canada has; we simply have a publicly-operated health insurance program which covers everyone. Doctors here are as free and independent as they are anywhere else — and in Canada they always get paid, no matter how poor their patients may be.

But in a different sense, this is certainly “socialized medicine.” The word “socialize” also means “to make fit for companionship with others; make sociable,” and “to convert or adapt to the needs of society.” That’s exactly the way that medical services should be oriented. They should be integrated with the social order, and have social well-being as their objective.

The U.S. system could justly be called “unsocialized medicine,” and you would think that a major piece by a major magazine would at least have to consider the idea that the U.S. system may be fundamentally flawed. But no. And Americans will be stuck with it at least until publications like the Reader’s Digest can describe their dysfunctional medical industry as the disgrace it truly is.

Silver Donald Cameron lives in D’Escousse.

If you need insurance, you can't afford it

It’s absurd how much we all pay for so little

By WILLIAM MARVEL
Concord Monitor (NH)
June 11, 2006

I lacked health insurance until my 40th year. Until then I had declined workplace packages because of relentlessly good health and because chronically low local wages left me unable to afford my share of the premiums.

It was understood among veterans that the Veterans Administration would take care of catastrophic ailments, and all male Marvels were veterans, so I paid the small bills for my own routine care and counted on a grateful nation to stand by me in the event of a major illness.

National gratitude usually lasts only about as long as the echoes of big-mouth patriotism, though, and so renowned a patriot as Ronald Reagan eviscerated VA services in the 1980s. Even my father, with his quarter-century of naval service, suddenly found himself ineligible for most VA care, and he shifted to Medicare. I could be treated for only a couple of service-connected disabilities if they ever troubled me, but I still felt too young to worry.

At last I fell in with a company big enough for a group rate. I had begun to find my contemporaries featured in obituaries, and some of them had led lives even healthier than mine, so the group rate seemed more attractive than it might have before.

I participated for a time, but reverting to self-employment disqualified me. I had to resort to a Cobra plan, and the premium proved so expensive that I considered dropping it altogether. A friend discouraged me from that by enumerating the devious restrictions insurance companies impose on any lapse in coverage. While I pondered her advice, my gall bladder disintegrated.

I fear debt worse than death, and that close call with hospital-induced bankruptcy demonstrated that entropy had turned the odds against me. The Cobra plan expired, and I arranged for an individual plan with an inattentive agent who allowed my coverage to lapse. As I was dialing the state insurance commission, he repaired that blunder, finally restoring my continuous coverage at a price equal to one quarter of my income.
The new carrier played the common game of threatening massive premium increases for the same policy, or promising smaller increases if I agreed to significant reductions in coverage. Either way, the price always went up, and over the years my premiums more than made up for the cost of that gall bladder operation.

Eventually I married someone young enough to warrant a relatively reasonable family rate, but once that policy was in place, the scam of higher premiums for less coverage resumed almost immediately.

The latest increase has sent us looking for another carrier, and we found a company called something like Chincoteague Marine, Mollusk, and Tidewater Trust. As I understand it, its introductory premium covers us fully for any illness or injury, but with one minor proviso: Our policy will be immediately discontinued if it can be demonstrated that any family member has approached within 75 feet of a hospital, health clinic or medical office building – voluntarily or otherwise – or if a family member can be proven to have made eye contact with a surgeon, physician, physician’s assistant, nurse or emergency medical technician, or otherwise indicated a desire or need for medical treatment.

The policy is also void if any family member makes a phone call to an establishment offering medical services or advice. To ensure compliance, the insured must agree to the monitoring of all land-line and cell phones. The phone prohibition covers wrong numbers, too, on the rationale that someone worried about a potential medical problem might dial the family doctor through stress-related subconscious error.

The restrictions of the company’s continuous-risk-assessment program may give pause to the nitpicker, but the low monthly rate of $557.63 is hard to beat, and the telephone monitoring devices are all included in the premium.

Like everyone, I’ve wondered why American medicine and medical insurance have become so abominably expensive. Castigate if you will the poor suburban doctor who makes a measly five or 10 times as much as the average American, or begrudge the overworked insurance executive his few million a year, but those people are innocent.

The real culprits are our neighbors to the north: If only those stubborn Canadians would abandon their nationalized health system and migrate to the United States, the size and better health of their population could reduce our group rates for months or years to come.

More to the point, dismantling their system of health care and coverage would eliminate the embarrassing comparison that makes ours look so damn bad.

(William Marvel is an author and historian who lives in South Conway.)

Myths as Barriers

Dr. John P. Geyman, Professor Emeritus of Family Medicine at the University of Washington, served as PNHP’s President in 2005 and 2006. Dr. Geyman has written three books and contributed numerous academic papers on the failures of the U.S. health system and the need for single-payer national health insurance. In this article from the International Journal of Health Services, Dr. Geyman identifies and refutes six myths employed by the opponents of single-payer:

  1. The uninsured and underinsured get the care they need.
  2. The U.S. does not ration health care.
  3. The free market is the best way to resolve our health system problems.
  4. Incremental changes can solve our health system problems.
  5. The U.S. has the best health system in the world.
  6. National health insurance should not be given attention because it is politically unfeasible.

The references are also useful as a bibliography for those seeking evidence refuting these myths.

“Myths as Barriers to Health Care Reform in the United States” (pdf)

“Mythbusters” by the Canadian Foundation for Healthcare Improvement

The Canadian Foundation for Healthcare Improvement is dedicated to accelerating healthcare improvement and transformation for Canadians. We collaborate with governments, policy-makers, and health system leaders to convert evidence and innovative practices into actionable policies, programs, tools and leadership development. In this series of briefs, CFHI researchers refute many of the myths about the Canadian health system and publicly-financed health care in general. Especially recommended are:

To read more of CFHI’s Mythbusters, visit their website.

“Moral Hazard:” The Myth of the Need for Rationing

One of the most pervasive myths in debates over health care reform is that of “moral hazard”: the idea that when access to health care is unrestricted, patients “overutilize” health services in wasteful and inefficient ways. Opponents of single-payer say this overuse contributes to long wait times for care*. The moral hazard idea also underpins the arguments of supporters of consumer-directed health care and health savings accounts.

As these authors point out, this dogma has no clothes. Beyond the common sense argument that going to the doctor is not a leisure activity for most people, there is compelling evidence both that moral hazard is both vastly overblown and a poor basis on which to formulate health policy. Empirical research shows that erecting financial barriers to care reduces as much necessary as unnecessary care, and the expectation that patients (especially the sickest 20 percent of the population that account for 80 percent of health spending) should be able to distinguish between what care is “necessary” and what is not is fantastical.

Cost Sharing in Health Insurance — A Reexamination (pdf)
Physician and health economist Edith Rasell reviews the literature on cost sharing in a 1995 New England Journal of Medicine article and reports that increased cost sharing reduces necessary care, discourages use of preventative services and has a negative effect on health outcomes, especially among the sick and poor. She concludes that overutilization is insignificant as a cost driver: far more important are huge levels of administrative waste, inefficient delivery of services and the United States’ comparatively high level of costly, high tech procedures.

Does Comprehensive Insurance Encourage Unnecessary Use? (pdf)
Across the border, Noralou P. Roos and her colleagues from the University of Manitoba studied health spending levels by health and socioeconomic status to determine whether the province’s universal comprehensive insurance resulted in resources being inefficiently allocated to the healthy. The answer was a resounding “no.” They found that, despite being provided universal access, most people still used little health care (low-income people use fewer than might be needed / expected), and the care that was used was allocated efficiently: the healthiest 70 percent of the population used 10 percent of the care, while the sickest 10 percent received 74 percent.

The Moral Hazard Myth
Finally, in an article for the New Yorker, journalist Malcolm Gladwell provides a concise review of the case against moral hazard, an idea some of its old adherents have since abandoned.

Related information is available at the PNHP webpage on health savings accounts.

*The existence of long wait times is itself an almost entirely false assertion. Canadians have no waits for emergency care, and queues for elective tests and procedures (contrary to spurious figures reported by ideologically-oriented institutions) are quite short when measured scientifically.

Introduction: How Much Would a Single-Payer System Cost?

How Much Would a Single-Payer System Cost?
The financial viability of a single-payer system has been analyzed time and again by researchers both from the U.S. government and independent consulting firms. Each time the conclusion is the same: single-payer saves enough on wasteful paperwork to provide high quality health coverage to all and contain future health spending. This paper catalogs the analyses of proposed single-payer systems at both the federal and state levels.