The New York Times
June 5, 2001
by Robert Pear

“A top federal official said today that the Bush administration would try to double the enrollment of Medicare beneficiaries in health maintenance organizations within four years.”

Thomas A. Scully, newly appointed administrator of the Health Care Financing Administration:

“The government is better in the long run when it’s a buyer of insurance, rather than an insurer.”

Comment: Unfortunately, this is not a mere rhetorical statement. It is a blatant lie, and Mr. Scully knows that. Although not without its problems, the HCFA has been much more efficient than the HMOs in the administration of health care coverage. GAO studies have confirmed this. What the HCFA needs now is leadership that will work with Congress to obtain legislative relief and adequate funding to further improve the efficiencies of the HCFA. The task of making the HCFA more user friendly for patients and health care providers alike would not be that great under a dedicated administrative-legislative partnership. Instead, Mr. Scully is intending to use our Medicare dollars to support his friends in the managed care industry, patients and providers be damned.

The New York Times
June 5, 2001
by Robert Pear

“A top federal official said today that the Bush administration would try to double the enrollment of Medicare beneficiaries in health maintenance organizations within four years.”

Thomas A. Scully, newly appointed administrator of the Health Care Financing Administration:

“The government is better in the long run when it’s a buyer of insurance, rather than an insurer.”

Comment: Unfortunately, this is not a mere rhetorical statement. It is a blatant lie, and Mr. Scully knows that. Although not without its problems, the HCFA has been much more efficient than the HMOs in the administration of health care coverage. GAO studies have confirmed this. What the HCFA needs now is leadership that will work with Congress to obtain legislative relief and adequate funding to further improve the efficiencies of the HCFA. The task of making the HCFA more user friendly for patients and health care providers alike would not be that great under a dedicated administrative-legislative partnership. Instead, Mr. Scully is intending to use our Medicare dollars to support his friends in the managed care industry, patients and providers be damned.

amednews.com
(A publication of the American Medical Association)
June 11, 2001
Opinion

By Eric Anderson, M.D., AMNews contributor

Eric Anderson, M.D.:

“Originally a British-trained physician bitterly opposed to socialized medicine, I have actually come to the opinion that America now needs a single-payer system for health care.”

http://www.ama-assn.org/sci-pubs/amnews/amn_01/edca0611.htm

The Washington Post
June 1, 2001

By Ceci Connolly

Steven A. Schroeder, M.D., President and CEO of The Robert Wood Johnson Foundation:

“What we discovered was that six out of ten parents whose children qualified for CHIP or Medicaid didn’t think they were eligible.”

“He then hired ad makers at GMMB for a $48 million promotional campaign that used the power of television and the creativity of grass-roots groups to reel in new participants.”

Comment: It is ironic that a large advertising budget is deemed to be required to sell a program of public insurance. Yet, it will be impossible to enroll every eligible child because of other obstacles, including access to the enrollment process for the eligible, the stigma of a program that smacks of welfare (income eligibility standards), difficulties in re-accessing the process for continued enrollment, premiums that are perceived to be unaffordable for those with no disposable income, changing eligibility because of changing family income levels, and isolated incidences of bureaucratic sloth, amongst other problems. At best, all efforts to increase enrollment can only raise the threshold of the steady state of enrollment, that is, raising the level at which those exiting the program equate to new enrollees. The only way to be sure that all children are enrolled, not to mention their parents, is to make insurance truly universal and truly permanent for life. We lack only the political will to adopt the moral imperative: publicly-administered, universal health insurance with everybody in, nobody out. Let’s work on creating that will.

The New York Times
May 25, 2001

By Milt Freudenheim

“As costs rise, some economists said, the growing unhappiness could stoke popular demand for political solutions, and even revive interest in a national single-payer health system like Canada’s.

“‘In 1991 and 1992, the last time a business slowdown coincided with double-digit inflation in health costs, people started to talk about universal health coverage,’ recalled Uwe Reinhardt, a Princeton university economist. Instead, employers placed their faith in managed care.”

http://www.nytimes.com/2001/05/25/business/25COST.html

Comment: Managed care is losing its clout, and the plans are resembling the indemnity coverage of years past. This quasi-indemnity model is returning us to double digit inflation in health care. The current movement toward “enabling empowered consumers” will compound the problems of of impaired access due to the inevitability of inadequate, flawed coverage. All other paths create so many problems that we are left solely with the logic of a universal health program to solve our problems in health care. We’ve been in denial long enough. Let’s now move forward with rational reform.

** PLEASE READ THIS ONE ** This is an important quote about the direction in which our health care system is headed.

JAMA May 23/30, 2001

By James C. Robinson, Ph.D., Associate Professor of Health Care Economics, University of California, Berkeley

“The consumer era in health care is emerging due to the rejection of governmental, corporate, and professional dominance rather than due to a judicious evaluation of the alternative.”

“Four problems will plague a consumer-driven health care system. First, despite the widespread dissemination of information, consumers will face significant obstacles in understanding the quality and even the true price of health insurance and health care services. Variations in utilization, cost, and outcomes challenge the analytical capabilities of governmental, corporate, insurer, and physician organizations and are daunting even for the most sophisticated and Internet-enabled consumer. Second, consumers vary enormously in their financial, cognitive, and cultural preparedness to navigate the complex health care system. The new paradigm fits most comfortably the educated, assertive and prosperous and least comfortably the impoverished, meek, and poorly educated. Third, the consumer era will complicate the pooling of insurance risk between consistently healthy citizens and those who are chronically ill. Risk-adjusted subsidies by government and employers can foster risk-spreading, but the requisite actuarial methods are only embryonic. Finally, the emerging era will make transparent and render difficult the redistribution of income from rich to poor that otherwise results from the collective purchasing and administration of health insurance. The proliferation of insurance products and physician networks likely will accentuate the contemporary allocation of care based on ability to pay, partially mitigated through tax exemptions and refundable tax credits.”

Comment: Perhaps the most appropriate comment is that of the author, James Robinson, in a May 23 Reuters release, “If all the good people got together and designed a health care system, they wouldn’t design the health care system that we’re heading towards.”

April 19, 2001
Keynote Address by Professor Regina Herzlinger, Harvard Business School
“A Force for Innovation, Consumers Taking Charge of Their Health Care”

“Harvard University Professor Regina Herzlinger, the author of ‘Consumer-Driven Health Care’ and other books on America’s health care marketplace, predicts consumers exercising personal choice – not employers or managed care companies – will create dramatic change in the health care marketplace of the future.”

Audience Question:

“With a consumer driven model, a lot of people are concerned that folks who are healthy will elect into the lower cost options leaving the cost of care to the folks with the most chronic conditions and sometimes to the people who can afford it the least.”

Professor Regina Herzlinger:

“…. What happens in the individual market in a risk adjusted… the community rating systems end up in a death spiral. It there’s a community rated system there’s a great incentive for anybody whose costs are lower than the community average to get the hell out of that system. So ultimately it becomes a very expensive system because the people who are left in it are only the very sick. Doesn’t it make more sense to price the sick accurately and to price the well accurately right from the start and to provide more subsidies for the sick and fewer subsidies for the well and to get the incentives lined up the right way?”

http://www.bhcag.com/herzlinger_speech.pdf

Comment: The Buyers Health Care Action Group (BHCAG) has become the glamour boy of advocates that support utilizing “empowered consumers” in the marketplace to control costs and improve quality in health care. Although we share their goals of cost containment and quality improvement, their methods can only be disastrous for those with the greatest health care needs. Individuals active in the health care reform movement should be aware of this organization, and be prepared to respond to their defective proposals (www.bhcag.com). (Also, some of their concepts on quality improvement and improving efficiency may have some merit, although they are flawed in assuming that solutions should be limited to control by market forces.)

The extent to which marketplace advocates manipulate policy theory for the purpose of preserving our very sick system of pseudo-free market medicine is astonishing, considering that we could solve most of the problems of access, coverage, quality, and cost containment, by adopting the moral imperative, a publicly-administered risk pool with everybody in and nobody out.

amednews.com
May 28, 2001

Richard Corlin, M.D., President-elect of the American Medical Association:

“First, last and always is dealing with the 43 million uninsured. That is simply a stain on our national fabric, if you will, that we have got to erase.”

http://www.ama-assn.org/sci-pubs/amnews/pick_01/prsa0528.htm

Comment: Now if the AMA can only get the policy right.

United States House of Representatives Committee on Ways and Means Subcommittee on Health April 4, 2001
Testimony of Sara J. Singer, Executive Director, Center for Health Policy, Stanford University:

“Our plan would provide near-universal coverage among the non-Medicare population by making private plans more affordable. It would do so by using insurance exchanges to promote competition among plans.”

http://waysandmeans.house.gov/health/107cong/4-4-01/4-4sing.htm

Comment: The proposal of Sara Singer and her colleagues, Alain Enthoven and Alan Garber, includes the following:

* Insurance exchanges (private or public) – would offer individuals a choice of at least two plans, one that “provides some coverage for treatment by most providers,” and one that is a “low-priced alternative”

* U.S. Insurance Exchange (USIX) – like Federal Employees Health Benefits Program, for small employers in “areas in which private exchanges do not emerge”

* Refundable tax credits – for families who purchase insurance through an exchange, phased out with increasing income

* Default plan – automatic for lower income individuals who do not enroll in a health plan – federal funding at 50% of the tax credit – for financing of public hospitals and clinics and “open access” providers

* Phased in cap – limit amount of exclusion of premiums from taxable income to “encourage value-based purchasing”

* Independent Exchange Commission (IEC) – similar to the SEC, to “encourage smooth information flow and functioning of insurance exchange markets”

It is amazing how tenaciously Singer, Enthoven and Garber adhere to the doctrine that the solution to our health care problems is to promote competition between health plans, in spite of the overwhelming evidence that the private bureaucracies of health plans continue to waste a tremendous amount of valuable resources, while failing to provide for the unmet needs of the uninsured and underinsured. It is also ironic that, in recognizing that this model has not worked, they now are proposing government bureaucracies, including the USIX and IEC, along with tax subsidization. Yet this very expensive program will enable only “some coverage,” or a “low-priced alternative,” or additional funding of public facilities as a default (doctrinaire multi-tiered health care). To allow the “market” to function, they are recommending more government involvement and more taxpayer funds, while doing virtually nothing to correct the excesses of the industry, and failing to propose a satisfactory level of assured coverage.

What is even more amazing to me is that Sara Singer continues to reject the brilliant proposal strongly supported by her cousin and our friend, Quentin Young. It is a proposal that would meet their goal of controlling health care costs, but on the supply side by utilizing health planning and global budgeting, a much more humane approach than making health care unaffordable for low and moderate income individuals by providing only inadequate, Spartan coverage. That proposal, of course, is universal, comprehensive, publicly-administered insurance, with everybody in and nobody out!

Don McCanne

United States House of Representatives Committee on Ways and Means Subcommittee on Health April 4, 2001
Testimony of Sara J. Singer, Executive Director, Center for Health Policy, Stanford University:

“Our plan would provide near-universal coverage among the non-Medicare population by making private plans more affordable. It would do so by using insurance exchanges to promote competition among plans.”

http://waysandmeans.house.gov/health/107cong/4-4-01/4-4sing.htm

Comment: The proposal of Sara Singer and her colleagues, Alain Enthoven and Alan Garber, includes the following:

* Insurance exchanges (private or public) – would offer individuals a choice of at least two plans, one that “provides some coverage for treatment by most providers,” and one that is a “low-priced alternative”

* U.S. Insurance Exchange (USIX) – like Federal Employees Health Benefits Program, for small employers in “areas in which private exchanges do not emerge”

* Refundable tax credits – for families who purchase insurance through an exchange, phased out with increasing income

* Default plan – automatic for lower income individuals who do not enroll in a health plan – federal funding at 50% of the tax credit – for financing of public hospitals and clinics and “open access” providers

* Phased in cap – limit amount of exclusion of premiums from taxable income to “encourage value-based purchasing”

* Independent Exchange Commission (IEC) – similar to the SEC, to “encourage smooth information flow and functioning of insurance exchange markets”

It is amazing how tenaciously Singer, Enthoven and Garber adhere to the doctrine that the solution to our health care problems is to promote competition between health plans, in spite of the overwhelming evidence that the private bureaucracies of health plans continue to waste a tremendous amount of valuable resources, while failing to provide for the unmet needs of the uninsured and underinsured. It is also ironic that, in recognizing that this model has not worked, they now are proposing government bureaucracies, including the USIX and IEC, along with tax subsidization. Yet this very expensive program will enable only “some coverage,” or a “low-priced alternative,” or additional funding of public facilities as a default (doctrinaire multi-tiered health care). To allow the “market” to function, they are recommending more government involvement and more taxpayer funds, while doing virtually nothing to correct the excesses of the industry, and failing to propose a satisfactory level of assured coverage.

What is even more amazing to me is that Sara Singer continues to reject the brilliant proposal strongly supported by her cousin and our friend, Quentin Young. It is a proposal that would meet their goal of controlling health care costs, but on the supply side by utilizing health planning and global budgeting, a much more humane approach than making health care unaffordable for low and moderate income individuals by providing only inadequate, Spartan coverage. That proposal, of course, is universal, comprehensive, publicly-administered insurance, with everybody in and nobody out!

Don McCanne