Health Affairs
Web Exclusive
April 3, 2002
By John Holahan and Mary Beth Pohl

Abstract:

The number of uninsured Americans fell in 2000 for the second consecutive year. The reduction has been attributed to the continued expansion of employer-sponsored insurance. However, the increase in employer coverage among adults was offset by declines of other types of coverage. For children, increases in public coverage plus the growth in employer-sponsored insurance led to the reduction in the number of uninsured children. Over the longer period (1994-2000), one of great economic growth, the uninsurance rate was essentially the same at the end as at the beginning. The rate of employer-sponsored insurance increased sharply, so that more people had employer coverage. However, these increases were offset by reductions in other forms of coverage, particularly Medicaid and state-sponsored insurance and private nongroup coverage, so the overall rate of uninsurance did not change.

And from the article:

This analysis examines a period of great prosperity. As of this writing, the nation was in a recession, and there is concern that the number of uninsured persons will rise sharply.

http://www.healthaffairs.org/WebExclusives/Holahan_Web_Excl_040302.htm

San Francisco Chronicle
April 2, 2002

By Oliver Fein, Joanne Landy

This country’s employer-based health-care system is broken. It depends on private insurance companies to manage our health care needs, with disastrous results: Some 15 percent of Americans don’t have health insurance at all.

And those who do have health insurance face spiraling premium costs and shrinking benefits.

Despite its limitations, our publicly funded (“single payer”) Medicare system points the way to a workable alternative.

Under traditional Medicare, patients have their choice of physicians and hospitals, while administrative costs are 2.1 percent — compared to private health plan administrative costs of 13 to 33 percent.

Medicare saves money because it places everyone under a single, universal insurance pool. It doesn’t waste resources on marketing, on profits or on the sky-high administrative costs built in to a system that forces providers to comply with hundreds of different insurance plans.

We could have an improved Medicare-like program covering everybody without paying any more than we do now, but only if we have the political courage to do it.

(Oliver Fein and Joanne Landy are, respectively, chair and executive director of the New York chapter of Physicians for a National Health Program.)

http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2002/04/02 /ED91665.DTL

Steven A. Schroeder, M.D., President and CEO, The Robert Wood Johnson Foundation, responds to comments by Sumner Rosen, Ph.D. and Donald Light, Ph.D. on the role of foundations, especially RWJ, in health care reform:

Thank you for inviting me to reply to the PNHP listserv discussion about the role Foundations are playing in current efforts to expand health coverage. We are supporting several strategies to expand health insurance coverage.

The first strategy is to take advantage of existing opportunities such as SCHIP and Medicaid expansion programs. These programs provide health coverage for millions of children and working adults who would have been uninsured just a few years ago. That should be celebrated, even as we regret that more has not been done. These programs don’t solve the entire problem, but we think they play a crucial role, and we want to enroll every eligible person we can reach. Moreover, we believe the fledgling SCHIP and Medicaid expansion programs represent an historical advance which we cannot ignore. The success or failure of SCHIP and Medicaid expansion programs will in part inform the next phase of public sector coverage expansion.

The second strategy is to look for new coverage expansion opportunities. We work with state governments to mount coverage expansion demonstration programs. We also work with private sector partners in efforts to make private insurance more accessible.

Third, we are mounting a paid ad campaign “Covering The Uninsured” to make plain the health and financial consequences of being uninsured. Our aim is to make certain that multiple proposals ranging from tax credits to single payer options are debated in an environment in which the consequences of the status quo are clear to all.

Last but not least, we support significant research into the consequences of being uninsured as well as policy development by a range of experts, including some of your members. As always, we would welcome suggestions from Dr. Rosen and his colleagues about new endeavors to expand coverage.

SAS

Comment: Dr. Schroeder has clearly stated that single payer reform should be an option included in the debate, and that we should be included as participants in the process of policy development. It will be our responsibility to make every effort to be certain that we are represented. Some of those attempting to control the process doubtlessly will need our reminder that all options need to be discussed. We need to be there, whether it’s on the dais, or through our conspicuous placards and brochures at the entrance. Our voice must be heard.

Don McCanne

Joanne Landy responds to Steven Schroeder and to Don McCanne’s comment:

Good for you, Don, for your persistence in insisting that the single payer view be part of the discussion of the health care crisis in this country.

I would go one step further: the single payer point of view should always be represented on the dais of any discussion that purports to be representative; we shouldn’t ever be limited to flyers, signs and brochures–important as those are. The results of the California State Health Care Options Project have shown the single payer options to be far superior in terms of expense and in actually covering everyone. The ongoing debate, if it is to be credible, requires that single-payer voices be heard and that people hear how advocates of other proposals reply to our ideas and critiques.

–Joanne Landy, Executive Director, Physicians for a National Health Program, New York Chapter

San Francisco Chronicle
April 2, 2002

By Oliver Fein, Joanne Landy

This country’s employer-based health-care system is broken. It depends on private insurance companies to manage our health care needs, with disastrous results: Some 15 percent of Americans don’t have health insurance at all.

And those who do have health insurance face spiraling premium costs and shrinking benefits.

Despite its limitations, our publicly funded (“single payer”) Medicare system points the way to a workable alternative.

Under traditional Medicare, patients have their choice of physicians and hospitals, while administrative costs are 2.1 percent — compared to private health plan administrative costs of 13 to 33 percent.

Medicare saves money because it places everyone under a single, universal insurance pool. It doesn’t waste resources on marketing, on profits or on the sky-high administrative costs built in to a system that forces providers to comply with hundreds of different insurance plans.

We could have an improved Medicare-like program covering everybody without paying any more than we do now, but only if we have the political courage to do it.

(Oliver Fein and Joanne Landy are, respectively, chair and executive director of the New York chapter of Physicians for a National Health Program.)

http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2002/04/02 /ED91665.DTL

Steven A. Schroeder, M.D., President and CEO, The Robert Wood Johnson Foundation, responds to comments by Sumner Rosen, Ph.D. and Donald Light, Ph.D. on the role of foundations, especially RWJ, in health care reform:

Thank you for inviting me to reply to the PNHP listserv discussion about the role Foundations are playing in current efforts to expand health coverage. We are supporting several strategies to expand health insurance coverage.

The first strategy is to take advantage of existing opportunities such as SCHIP and Medicaid expansion programs. These programs provide health coverage for millions of children and working adults who would have been uninsured just a few years ago. That should be celebrated, even as we regret that more has not been done. These programs don’t solve the entire problem, but we think they play a crucial role, and we want to enroll every eligible person we can reach. Moreover, we believe the fledgling SCHIP and Medicaid expansion programs represent an historical advance which we cannot ignore. The success or failure of SCHIP and Medicaid expansion programs will in part inform the next phase of public sector coverage expansion.

The second strategy is to look for new coverage expansion opportunities. We work with state governments to mount coverage expansion demonstration programs. We also work with private sector partners in efforts to make private insurance more accessible.

Third, we are mounting a paid ad campaign “Covering The Uninsured” to make plain the health and financial consequences of being uninsured. Our aim is to make certain that multiple proposals ranging from tax credits to single payer options are debated in an environment in which the consequences of the status quo are clear to all.

Last but not least, we support significant research into the consequences of being uninsured as well as policy development by a range of experts, including some of your members. As always, we would welcome suggestions from Dr. Rosen and his colleagues about new endeavors to expand coverage.

SAS

Comment: Dr. Schroeder has clearly stated that single payer reform should be an option included in the debate, and that we should be included as participants in the process of policy development. It will be our responsibility to make every effort to be certain that we are represented. Some of those attempting to control the process doubtlessly will need our reminder that all options need to be discussed. We need to be there, whether it’s on the dais, or through our conspicuous placards and brochures at the entrance. Our voice must be heard.

Don McCanne

Joanne Landy responds to Steven Schroeder and to Don McCanne’s comment:

Good for you, Don, for your persistence in insisting that the single payer view be part of the discussion of the health care crisis in this country.

I would go one step further: the single payer point of view should always be represented on the dais of any discussion that purports to be representative; we shouldn’t ever be limited to flyers, signs and brochures–important as those are. The results of the California State Health Care Options Project have shown the single payer options to be far superior in terms of expense and in actually covering everyone. The ongoing debate, if it is to be credible, requires that single-payer voices be heard and that people hear how advocates of other proposals reply to our ideas and critiques.

–Joanne Landy, Executive Director, Physicians for a National Health Program, New York Chapter

The Sacramento Bee
March 24, 2002
By Keith Richman

It is time to address the fundamental health care financing problems causing our access and affordability symptoms. The Band-Aid approach can no longer cover the deep wound. California needs a master plan for health care — a practical, cost-effective blueprint for the facilities, human resources and financing needed to provide quality health care to the estimated 45 million people who will call California home in 2020.

It will take strong leadership to develop the consensus needed to make significant changes. A system that spends more than $100 billion a year on vital tasks such as improving and saving lives will not easily change. The vested interests will be strong and the emotions will be high.

Yet if we want to forestall the impending collapse of California’s health care system, we must look at the big picture and make some difficult decisions about our future.

Keith Richman, M.D. is a Republican member of the California Assembly.

http://www.sacbee.com/content/opinion/story/1936339p-2080975c.html

Comment: The California Health Care Options Project is a study of various models of health care reform that was requested by the state legislature. The study has now been completed and will soon be available for the members of the legislature. Dr. Richman will find the ideal master plan in this report when he reviews it.

One of the models studied, “Cal-Health,” is based on Dr. Richman’s own legislative proposal, Assembly Bill 32. The Lewin Group analysis of his proposal demonstrates that it would still leave five million California residents without insurance coverage, but would increase costs by about $1 billion. On the other hand, three of the proposals would provide comprehensive benefits for everyone while decreasing costs by billions of dollars.

When Dr. Richman reviews his copy of the report, we hope that he will heed his own advice and demonstrate strong leadership. We hope that he will not be deterred by strong vested interests and high emotions from doing the right thing. We hope that he will recognize the deficiencies of his own proposal and join with those that support the single payer approach. Comprehensive care for everyone at a lower cost is clearly the moral imperative.

Sumner Rosen, Professor Emeritus of Social Welfare Policy at Columbia University, responds on the problems of linking insurance to employment and the misplaced efforts of foundations. Donald Light expands on the issue and then comments on the Bush administration’s unusual approach to health policy. And Beth Capell comments on factors other than price that influence employers.

Sumner M. Rosen, Ph.D.:

It’s been clear for a long time that the employer base for health coverage will shrink irreversibly. Cost data like this tell part of the story; the more important part is the erosion of the employer-employee linkage as job tenure shortens and multiple jobs over one’s working life become the dominant pattern. Employers will continue to shrink the core and expand the periphery of the work force through downsizing, contracting out and a host of other moves amply documented in the business press. That RWJ persists in this futile effort is discouraging evidence of failure to learn from substantial and growing evidence that new initiatives are needed. The right wing virus of ideological resistance to a federal program appears to have infected people and institutions that should know better.

Donald Light, Ph.D.:

Besides trying to get free-riding employers to offer affordable health insurance, the other great white hope of foundation board members is CHIP and its extensions. They have poured tens of millions of private money into trying to make this new public patch, in the patchwork quilt of public health insurance programs, work. It would be instructive to hear from Ted Marmor and others why they think CHIP and other patches have low uptake and costly problems, while Medicare did not and does not.

Closely related to this question is another approach: just do it. Today’s NYTimes article announces that President Bush simply decided that Medicare would cover the wide-ranging, messy and costly care that patients with Alzheimer’s disease need. It’s a rather major advance for a tragic group that are an insurer’s nightmare. It’s “incremental reform” but without even the trappings of “reform.” No debate. No bill. He just did it. What are the implications of this for participants and readers of this listserve?

Beth Capell, Ph.D.:

It would be terrific if one of our academic colleagues did a state-by-state comparison on this topic.

Such a comparison would show that in California, where premiums are lower than almost anywhere else in the country, employers are substantially less likely to offer coverage, particularly to low-income workers, than elsewhere in the country where premiums are higher. This is also true within California: Bay Area employers facing higher premiums are more likely to offer coverage than Los Angeles employers whose relatively low premiums reflect a ferociously competitive market for both plans and providers.

Similarly, in California, in the early-mid 1990s when premiums were level or declining, employers shifted cost to workers and the number of uninsured remained stubbornly the same or increased–while in the late 90’s as premiums in California increased, the number of uninsured declined and employers ceased shifting costs to workers—because of the tight labor market. Again, price of premiums was not directly and simply related to levels of uninsurance or worker share of premium.

While employers may claim that price is a major factor, experience suggests otherwise. Other factors, such as the nature of the labor market and the rate of unionization, are better explanatory factors for underlying trends.

Price is merely the polite term for employer freedom to ignore the need of working people for affordable health care.

Health Services Research

Authors: M. Susan Marquis and Stephen H. Long

Principal Findings:

Changes in price affect decisions to offer insurance: however, even a 40 percent reduction in premiums would lead only to a 2 to 3 percentage point increase in the share of employers offering insurance. Employers of low-wage workers are substantially less likely to offer health insurance than other employers.

Conclusions:

Policies to reduce the number of uninsured that focus on increasing the supply of employment-based insurance are unlikely to have the intended effect unless coupled with policies to help low-wage workers afford insurance.

http://www.hsr.org/ArticleAbstracts/Marquis365.cfm

Comment provided by Prof. Donald W. Light:

In a detailed study of private employers, Marquis and Long found that 51.5% of small employers offer health insurance (many with high co-premiums that workers feel they cannot afford), but they also found that only 58.1% of all other employers offered health insurance. This is a strikingly low number for a system based on employers in a large, affluent nation.

The authors also found once again that the continued efforts by the Robert Wood Johnson Foundation and others to increase the number of employers offering coverage by supporting lower premiums does not work. Even if offered a 40 percent reduction in premiums, only a few percent more employers said they would offer health insurance. These efforts to shore up an inherently partial system, which provides limited and variable coverage at very high prices to employers as well as to employees, have been tried for over 15 years. It seems time for the boards of Kaiser Family Foundation, RWJF, and others to face the data and turn to more equitable and efficient approaches.

Source: “To offer or not to offer.” Health Services Research 2001;36:937-958.

Health Services Research

Authors: M. Susan Marquis and Stephen H. Long

Principal Findings:

Changes in price affect decisions to offer insurance: however, even a 40 percent reduction in premiums would lead only to a 2 to 3 percentage point increase in the share of employers offering insurance. Employers of low-wage workers are substantially less likely to offer health insurance than other employers.

Conclusions:

Policies to reduce the number of uninsured that focus on increasing the supply of employment-based insurance are unlikely to have the intended effect unless coupled with policies to help low-wage workers afford insurance.

http://www.hsr.org/ArticleAbstracts/Marquis365.cfm

Comment provided by Prof. Donald W. Light:

In a detailed study of private employers, Marquis and Long found that 51.5% of small employers offer health insurance (many with high co-premiums that workers feel they cannot afford), but they also found that only 58.1% of all other employers offered health insurance. This is a strikingly low number for a system based on employers in a large, affluent nation.

The authors also found once again that the continued efforts by the Robert Wood Johnson Foundation and others to increase the number of employers offering coverage by supporting lower premiums does not work. Even if offered a 40 percent reduction in premiums, only a few percent more employers said they would offer health insurance. These efforts to shore up an inherently partial system, which provides limited and variable coverage at very high prices to employers as well as to employees, have been tried for over 15 years. It seems time for the boards of Kaiser Family Foundation, RWJF, and others to face the data and turn to more equitable and efficient approaches.

Source: “To offer or not to offer.” Health Services Research 2001;36:937-958.

Kaiser Daily Health Policy Report
March 28, 2002

The United States should replace the nation’s “broken” health care system with a single-payer system that would provide universal health coverage, syndicated columnist Molly Ivins writes in… (a syndicated) opinion piece. Ivins writes that although the U.S. health care system “works” for individuals with health insurance, for the uninsured, the “system is an insane nightmare.” Since the failure of former President Clinton’s national health care plan in 1994, lawmakers “have been trying to move the ball incrementally” on legislation to help the uninsured, Ivins writes. However, she says that the U.S. health care “system is moving faster than they can move to fix it. A patients’ bill of rights is not the answer. It won’t provide health insurance for a single additional individual.” Ivins recommends that the United States should move to a not-for-profit health care system. She backs a plan proposed by Dr. Rudolph Mueller in his new book, “As Sick As It Gets: The Shocking Reality of America’s HealthCare,” which would allow the federal government to conduct a “one-time fair buyout” of “all for-profit or investor-owned provider and insurance organizations.” Ivins concludes, “Every time we start to get serious about reform, the right wing starts screaming, ‘Socialized medicine, socialized medicine.’ And then we’re all supposed to run, screaming with horror. But if you want to see horror in action, try the emergency room of any large public hospital in this country” (Ivins, Tallahassee Democrat, 3/27).

http://www.kaisernetwork.org/daily_reports/rep_index.cfm?DR_ID=10318

The full article, released on March 26, is available at the Creators Syndicate: http://www.creators.com/opinion_show.cfm?columnsName=miv

St. Petersburg Times
March 20, 2002
By Anita Kumar

Rep. Frank Farkas scored a victory Tuesday when the House passed his controversial health insurance bill.

Farkas agreed to… increase coverage to $25,000 annually…

Farkas… said other aspects of the insurance plan would lower the cost, such as flexible deductibles, co-pays and other treatments and procedures not mandated by law but often covered by insurance companies.

The amended bill passed 113-2.

Rep. Eleanor Sobel, D-Hollywood:

“A bare-bones policy has been given meat. It is a great step forward.”

http://www.sptimes.com/2002/03/20/State/Health_insurance_bill.shtml

Comment: One technical criticism of the movie, “John Q,” was that a $20,000 cap on John Q’s coverage was almost non-existent; virtually all policies have much higher levels of coverage. Now we have a bipartisan, 113 to 2 vote that says that John Q’s fictional bare-bones policy is “a great step forward.”

What has happened to the soul of America?