The White House
August 4, 2001

President George W. Bush:

“Medicaid is designed to provide low-income Americans with medical insurance. It has a noble purpose and some serious challenges.”

“Clearly, this important program needs reform.”

“My administration will adopt new rules that empower states to propose reforms tailored to the needs of their citizens.”

“In our new system, we will inform states in advance of the criteria for responsible Medicaid reform. If they meet those conditions, the federal government stands ready to help expand health insurance coverage to those who need it the most — no uncertainty, and no run-around.”

http://www.whitehouse.gov/news/releases/2001/08/20010804.html

Comment: The formula is simple: (no change in Medicaid contribution to funding) plus (increased numbers of low-income individuals covered) equals (reduced benefits for those currently covered).

President Bush has just announced that Medicaid is being converted from a defined benefit program to a defined contribution program — no uncertainty, and no run-around! This shift in policy controls the government’s costs while placing a greater burden on the Medicaid beneficiary by removing essential benefits from the program which now will either have to be paid for out-of-pocket, or, more likely, will be no longer be accessible simply because of lack of affordability. We have the resources to provide comprehensive care for everyone. It is inexcusable that the President of the United States is deliberately decreasing access to essential medical care for the most vulnerable members of our society merely so that he can assure that his tax cuts for the wealthy will be protected. For shame, Mr. President, for shame!

kaisernetwork.org
August 3, 2001
by Samuel Goldreich, CQ Daily Monitor

“The House also adopted, 236-194, an amendment (to HR 2563, the patients’ rights bill) by Ways and Means Chairman Bill Thomas, R-Calif., that would remove limits on the number of people who could set up tax-sheltered medical saving accounts (MSAs) and allow small businesses to join “association health plans” (AHPs) that could purchase insurance under federal, not state regulation.”

http://www.kaisernetwork.org/health_cast/uploaded_files/ACFBBA.pdf

Health Affairs Volume 20, Number 1 “HealthMarts, HIPCs, MEWAs, and AHPs: A Guide for the Perplexed” By Mark A. Hall, Elliot K. Wicks, and Janice S. Lawlor

“… these proposals could erode previous market reforms whose goal is increased risk pooling.”

“A case can be made that HealthMarts and AHPs violate the principle ‘first, do no harm.’ They are unlikely to generate true efficiencies, and they partially undermine existing regulatory and market structures.”

Comment: The debate over the patients’ bill of rights has been widely attacked for merely attempting to tweak managed care, when our legislators should be addressing the real problems with our health care system. We need comprehensive reform, which should include elimination of the egregiously wasteful managed care middlemen. But until we can create the political will needed for reform, we do need to establish accountability for this industry through an effective patients’ bill of rights. The Norwood amendment significantly weakened the provisions of this legislation and will need to be reversed in the joint conference committee.

Those of us that have attacked this process as grossly deficient, considering the great needs for comprehensive reform, are particularly concerned not so much about the Norwood amendment, but rather the Thomas MSA-AHP amendment. Congress needs to act to provide comprehensive coverage for everyone. The Thomas amendment proceeds in the opposite direction! MSAs allow the healthy and wealthy to opt out of existing programs. This removes from the risk pool necessary funds to meet the medical needs of the sick, but, more importantly, it removes from the risk pool the political drive to assure that it will always be adequately funded. The poor do not have the same intense political influence of the affluent. Thus the under-funded care available to not only low-income but also average-income individuals will culminate in mediocrity. AHPs also risk removing healthy individuals with established incomes from the risk pool. Further, AHPs are intended to relax state control over insurance coverage, allowing abusive practices of insurers and association managers to proliferate, which would impair coverage for and remove choice of the intended beneficiaries. It is absolutely imperative that the Thomas amendment be amputated in the joint conference committee. And then let’s get on with the task of establishing a program of publicly administered, universal health insurance.

The Oregonian
August 1, 2001
by Don Colburn

“Forty-three percent of the people covered by the Oregon Health Plan, the state’s medical safety net, leave the plan within a year. Most do so because rising income from a new job or raise makes them ineligible under the plan’s income limits. Trouble is, the added income that disqualifies them from coverage under the Health Plan usually is not enough to buy private insurance or pay for their health care out of pocket. Of those who leave the plan within a year of joining it… 71 percent stay uninsured.”

Joan Kapowich, program and policy manager of the Oregon Office of Medical Assistance Programs:

“This is the problem with poverty. You get a better income, but you lose your health benefits.”

Comment: Is it really necessary to say, once again, that we desperately need a universal, publicly administered, health insurance program?

http://www.oregonlive.com/morenews/oregonian/index.ssf?/xml/story.ssf/html_standard.xsl?/base/news/9966690231042288.xml

The Oregonian
August 1, 2001
by Don Colburn

“Forty-three percent of the people covered by the Oregon Health Plan, the state’s medical safety net, leave the plan within a year. Most do so because rising income from a new job or raise makes them ineligible under the plan’s income limits. Trouble is, the added income that disqualifies them from coverage under the Health Plan usually is not enough to buy private insurance or pay for their health care out of pocket. Of those who leave the plan within a year of joining it… 71 percent stay uninsured.”

Joan Kapowich, program and policy manager of the Oregon Office of Medical Assistance Programs:

“This is the problem with poverty. You get a better income, but you lose your health benefits.”

Comment: Is it really necessary to say, once again, that we desperately need a universal, publicly administered, health insurance program?

http://www.oregonlive.com/morenews/oregonian/index.ssf?/xml/story.ssf/html_standard.xsl?/base/news/9966690231042288.xml

Economic Policy Institute
by Heather Boushey, Chauna Brocht, Bethney Gundersen and Jared Bernstein

“Policy makers in the United States have adopted the view that work is the solution to poverty, and the government’s role is to promote employment rather than provide income support for poor families. For many families, however, work may not be enough to assure a decent standard of living.”

“Using twice the national poverty line as a national proxy for the basic family budget, we found that… families with incomes below the basic family budget level faced nearly the same incidence of critical and serious hardships as those with incomes below the poverty line.”

“… the market has priced basic items such as health care, child care, and housing above what many families can afford.”

“Helping working families meet their basic needs requires a two-pronged approach. First, raising the minimum wage, expanding the Earned Income Tax Credit, adopting pay equity policies, and increasing workforce development will increase family incomes. Second, investing in a social safety net of universal programs will help families meet basic needs.”

Barbara Ehrenreich, author of “Nickel and Dimed: On (Not) Getting By in America,” a book on her personal experiences on becoming a low-wage worker:

“It is common, among the nonpoor, to think of poverty as a sustainable condition – austere, perhaps, but they get by somehow, don’t they? They are ‘always with us.’ What is harder for the nonpoor to see is poverty as acute distress: The lunch that consists of Doritos or hot dog rolls, leading to faintness before the end of the shift. The ‘home’ that is also a car or a van. The illness or injury that must be ‘worked through,’ with gritted teeth, because there’s no sick pay or health insurance and the loss of one day’s pay will mean no groceries for the next. These experiences are not part of a sustainable lifestyle, even a lifestyle of chronic deprivation and relentless low-level punishment. They are, by almost any standard of subsistence, emergency situations. And that is how we should see the poverty of so many millions of low-wage Americans – as a state of emergency.”

The entire 119 page report is available at: http://www.epinet.org/ and under “Hardships faced by working families” click on “Hardships in America: The Real Story of Working Families”

Barbara Ehrenreich’s book, “Nickel and Dimed: On (Not) Getting By in America,” is published by Metropolitan Books, New York, N.Y.

YAHOO! FINANCE
Business Wire
July 25, 2001

“Employers faced with rising health care costs and increased employee contributions to pay for those health benefits are finding a win-win solution in supplemental insurance.”

Cherie Tibbetts, vice president for products and marketing at Colonial Life and Accident Insurance Company:

“Employees may be forced to select lower levels of coverage or plans with higher deductibles in order to afford their major medical insurance. That can leave them with coverage gaps or increased financial exposure in the event of an accident or serious illness.”

http://biz.yahoo.com/bw/010725/2418.html

Comment: Although this press release from Colonial is obviously for marketing purposes, its implications are far more ominous. The current move to “empower” patients in the health care marketplace by making them more sensitive to health care costs through increased cost sharing has created coverage gaps large enough to warrant the opening of the market to supplemental insurance.

We already have extensive experience with supplemental insurance in the form of Medigap coverage for the Medicare program. Medigap has proven to be one of the worst insurance values based on the very high administrative costs compared to the relative paucity of benefits. Also, it is not affordable to those who need it the most, the Medicare beneficiaries who cannot afford the out-of-pocket expenses of the current program, yet do not qualify for Medicaid coverage.

To expand this concept to employment-linked coverage portends disaster. Diverting more health care dollars to this egregiously inefficient, middleman industry removes even more dollars that should be destined for patient care. This deficit will have to be taken up by the patients themselves. The deficits will be large enough to affect the affordability of health care for average-income wage earners. Thus the problems of the uninsured and underinsured will no longer be the exclusive domain of lower income individuals; it will be the problem of Mr. and Mrs. Average America and their children. The only good news about this is that finally the majority of voters will recognize the need to replace our sick system with publicly administered, universal health insurance. Then we’ll have decent health care for everyone.

Los Angeles Times
July 25, 2001
Commentary
by William W. Thomas, Chairman of the House Ways and Means Committee

“Let’s pause for a moment in the debate over a patients’ bill of rights and go back to the basic premise of health care. It’s about helping people. It’s about getting the best medical treatment. It’s about you and your doctor making decisions that affect your health, your family and your life. It’s not about a lawyer making those decisions.”

Comment: It is rare for me to agree with the man that would privatize Medicare, and to disagree with our great allies in the cause for health care justice for all. But we should pause and reflect on Rep. Thomas’ words.

Most patients that suffer medical injury do not sue and are not compensated for their losses. Most patients that do sue are not victims of malpractice but have suffered a medical maloccurance that is not the result of error in judgment but is merely an unfortunate, fortuitous outcome. The medical tort system is an extremely ineffective system, yet about 10 billion dollars per year are diverted from patient care into this system. Much of this is consumed by the plaintiff’s attorneys, defense attorneys, malpractice insurance companies, investigators, and court costs, not to mention the additional waste of unnecessary “defensive medicine.” Of the remaining portion that reaches the plaintiffs, a relatively insignificant amount is used to obtain medical care. That 10 billion dollars would be better spent on beneficent programs such as meeting the needs of the uninsured or providing prescription drug coverage for Medicare beneficiaries. Instead, under the cloak of a “patients’ bill of rights,” Congress continues to debate the expansion of a tort system designed to divert even more funds to this wasteful legal industry. These comments will be challenged by our friends and colleagues on the basis that we need “accountability,” but what we really need is an expedited appeals process to gain access to needed care.

Tragically, this ridiculous debate has diverted our national leaders away from the real problems in health care. We desperately need to provide coverage for everyone, and we need to assure that our resources are provided exclusively for the benefit of patients. We can do this best through a publicly administered, universal health insurance program. Let’s start the real debate – now!

http://www.latimes.com/news/opinion/commentary/la-000060494jul25.story?coll=la%2Dnews%2Dcomment

Kip Sullivan responds to the quote of Rep. William Thomas and to my comment:

Don,

I agree with portions of your commentary, but I disagree with your characterization of the malpractice that occurs in this country as “a medical maloccurrence that is not the result of error in judgment but is merely an unfortunate, fortuitous outcome.”

You are usually a very crisp and precise writer, but the quoted phrase is mushy and, to the extent that I can understand it, wrong. Your phrasing suggests that malpractice is nonexistent (your invented word “maloccurrence” strikes me as almost Orwellian), or, if malpractice is real, it’s like gravity — there’s nothing we can do about it and, therefore, there’s no point in debating why it happens.

I offer a different point of view. Malpractice is real, some of it is due to system failure, some of it is due to the failings of individuals, and both types of failings are less likely to happen if individuals and systems know they could lose money and reputations in a law suit.

I agree completely with you that the existing malpractice system is highly imperfect. Too many people who shouldn’t sue do, too many who should sue do not, and the overhead costs of the system are very high. But we currently have no other system that can deter malpractice, whether by individuals, hospitals, HMOs or any other system.

Overwhelming evidence exists indicating that a substantial portion of adverse outcomes in medicine are the result of malpractice, which the law defines to be the provision of services, or the failure to provide services, that violates a widely recognized standard of care due to negligence of the doc or other provider. (For the sake of simplicity, I’m leaving out a few other elements of the definition of malpractice.) It’s true that a substantial body of evidence indicates that many (but not all) of the acts of malpractice should be blamed on the systems in which health care professionals work. I include managed care insurers in my definitions of “systems,” something the Institute of Medicine seems incapable of recognizing. According to the IOH, “quality is the problem, not managed care.”

But not all plane crashes are due to system failures –some are caused by errors of judgment by individual pilots — and, similarly, not all medical malpractice can be blamed on the system.

Regardless of where blame should ultimately lie for a given adverse outcome — on the individual, several individuals, or a system –the threat of a lawsuit will have a deterrent effect on at least some types of negligence. We’re already seeing proof of this axiom in the announcements by several HMOs that they are going to back away from utilization review. The plans doing this are claiming they are dropping UR because it wasn’t cost effective, but the timing of these announcements robs them of their credibility. UR has been around for three decades. That’s plenty of time for the plans to figure out that UR wasn’t cost effective. It is the threat of class action suits filed in recent years, and the possibility of many more if the right to sue HMOs is established by Congress, that has caused some HMOs to back off of UR.

Even after we get a universal health insurance system, malpractice will remain a problem. The public needs to discuss both issues –malpractice and universal coverage. They are separate problems.

I just wrote a piece for In These Times asking the question, Is the patient protection debate a waste of time? I don’t think it is. I’ll email it to you if you’d like to see it.

Keep up your great work.

Kip

Kip’s excellent article, “Patients Losing Patience,” from In These Times, August 20, 2001, is available at: http://www.inthesetimes.com/web2519/sullivan2519.html

Victor Sidel, M.D., Distinguished University Professor of Social Medicine at Albert Einstein College of Medicine of Yeshiva University, responds to the quote of Rep. William Thomas and to my comment:

Dear Don:

I not only “rarely disagree” with you, but I believe this is the first time I have ever disagreed with you.

I believe you give Thomas too much credit. Of course, lawyers should not be making medical decisions. (Doctors shouldn’t be making most medical decisions either, except in rare circumstances, but that’s a different topic.) But when managed care or other forms of medical care organization deny needed care to patients, under current conditions in the United States lawsuits are often the only channel for redress. Is that an effective, just, or equitable method for oversight of the U.S.medical care system? Of course not. Does it lead to “defensive medicine”? Of course it does. But until the United States arrives at what we both view as the needed high quality, publicly administered, universal health care system with an expedited appeals process, the tort system may be the only way to force the industry to provide needed care. Is it a diversion? Of course it is. But is it a necessary stopgap while the needed system change is attained? It may be. Tort law has certainly been misused in many instances, but defenders of the environment and of civil rights would be weaker without it.

Thomas opposes the patients’ rights bill that includes strengthening tort law methods as one of its provisions because he seeks to prevent needed system change and he views opposition to that bill as a tactic for his purpose. The remainder of his opinion piece makes his tactic clear. He should not be praised for that tactic.

Warmly, Vic

The Henry J. Kaiser Family Foundation

Report prepared by Public Opinion Strategies and Peter D. Hart Research Associates
July 2001

“1. Overall, seniors are VERY satisfied with the Medicare system.” “They do not want structural reform that they perceive might jeopardize what they are already getting.”

“2. The generally high levels of satisfaction have a significant impact on the way in which respondents react to words used to describe proposed ‘changes’ to the Medicare system.” “Words like ‘strengthened and improved’ elicit overwhelming favorable reactions, while words that suggest a more significant departure from the current Medicare structure, such as ‘changed’ or ‘privatized’ are very negatively perceived.”

“3. Participants suffer a severe case of sticker shock when they consider the price tag of a drug benefit program for seniors.” “Overall, participants were much more concerned with the costs to seniors than they were with the cost to the government in providing the benefit.”

“4. The budget surplus and the recent tax cut strongly influence perceptions about the affordability of a generous drug benefit.” “Given the current environment, participants do not blink at the idea of allocating significant government resources to pay for a new benefit.”

“7. Given their quite favorable views of Medicare, participants both presume and prefer that a new drug benefit would be administered within the framework of the current program.”

http://www.kff.org/content/2001/6002/Medicare%20Focus%20Group%20Report.pdf

Comment: Americans do want a prescription benefit for Medicare. They believe that the government can afford to pay for it. But they do not believe that drug benefits should be linked to privatization schemes. The message is clear: reject the Breaux-Frist premium support proposal, and enact a bona fide, comprehensive prescription benefit. (Then we can do focus groups on providing public insurance for all of us.)

The Orange County Register
July 22, 2001
by Margie Mason, The Associated Press

“About 250 students with dependents received letters earlier this month informing them a new health-care plan would be offered, but a premium increase of as much as 60% was expected. Many students said they can’t afford those rates and were embarrassed by an accompanying flyer detailing public-assistance plans available for low- or middle-income families in Santa Clara County.”

Jeffrey Martin, an engineering doctoral student with a wife and five children:

“I feel appalled that a world-class university like Stanford would let a situation come about whereby implying students should get public assistance for their dependents.”

Comment: Really? The university of such notables as Alain Enthoven and Milton Friedman is endorsing public-assistance health plans for family members of their own students? Surely it must be a practicum in applied economics. They wouldn’t really…. Naw, it must be a joke. Some sense of humor!

Medical Economics
July 9, 2001

A roundtable discussion

Moderator: “What about the proposal that Medicare be used as a model for a new American system?”

George D. Lundberg, M.D., Editor-in-chief of Medscape and former editor of JAMA:

“Medicare could certainly serve as part of our model. It’s not a new idea. Some people have said that it should be extended to cover the whole population. Then they made the terrible mistake of calling that a ‘single-payer system.’ There will never be a single-payer system in this country, because that presupposes people can’t or won’t use their own money to buy whatever they want outside the system.”

http://me.pdr.net/me/public.htm?path=content/journals/m/data/2001/0709/round2.html

Comment: All health care systems, including single payer, allow people to use their own money to buy whatever they want outside of the system. It is long past time to end fighting against reform based on semantic or rhetorical issues, and to begin supporting reform based on sound policy. The words, “single payer,” are not the enemy, but reflexive, stilted thinking is. The issues are straight forward. We all agree on the goals of universal access and coverage, free choice, quality, and value in health care. The structural changes required to achieve those goals are simple. Even Dr. Lundberg recognizes that publicly administered insurance, such as Medicare, will provide the reform we need. Call reform single payer or don’t call it single payer, just do it!