PNHP

Insurers promoting phony "self-insured" plans for small employers

Insurers promoting phony "self-insured" plans for small employers

California seeks limits on small-business self-insurance trend

By Chad Terhune
Los Angeles Times, March 23, 2012
Self-insurance, in which employers pay medical providers for their workers’ care, has traditionally been used only by large employers that have the financial resources to pay for expensive medical claims.
Now some insurers are chasing after much smaller customers with new plans designed to limit employer payouts for big claims using what’s called stop-loss policies. This guarantees that businesses won’t be responsible for anything over a certain amount per employee, perhaps as low as $10,000 or $20,000, with the rest paid by an insurer. Regulators and health-policy experts say this arrangement undercuts the notion of self-insurance since employers aren’t bearing much of the risk, and it allows companies to circumvent some state insurance rules.
“This is not real self-insurance. This is clearly a sham,” said Mark Hall, a professor of law and public health at Wake Forest University who has studied the small-business insurance market.
Critics said insurers such as Cigna Corp. are using these new plans to game the system and cherry-pick companies with healthier workers. They said this could undermine a key goal of the federal Affordable Care Act to lower premiums by pooling together more healthy and sick Americans into insurance exchanges. Premiums could continue to escalate without a diverse pool of consumers.
Insurance officials say that they are responding to employer demands for more affordable coverage and that regulators shouldn’t interfere in the market.
Self-insurance is attractive for many reasons, particularly the prospect of lower costs. It’s exempt from state insurance regulations such as mandated benefits, granting employers the flexibility to design their own benefit package and the opportunity to reap some of the savings from employee wellness programs. A federal law, the Employee Retirement Income Security Act, or ERISA, governs self-funded plans. Some aspects of the Affordable Care Act do apply to self-insurance, such as the elimination of caps on lifetime benefits and some preventive care at no cost.
Anthem Blue Cross, California’s largest for-profit insurer and a unit of WellPoint Inc., began selling these self-insured plans to employers with as few as 35 workers March 1, down from its previous minimum of 250 employees. Assurant Inc., a New York-based insurer, is selling plans to companies in California and other states with as few as 10 workers.
Marc Neely, vice president for Cigna’s self-insured business in 14 Western states, said his sales to small businesses with as few as 25 people are growing at a double-digit rate because employers are fed up with annual rate hikes of 10% to 15% on their traditional plans. Neely said Cigna offers stop-loss coverage as low as $20,000 per employee. “We’re excited about California as a growth market for us,” Neely said.
http://www.latimes.com/business/la-fi-small-business-insure-20120323,0,4…

Now that the Affordable Care Act (ACA) is law, we can be assured the the private insurers will be team players in helping to craft regulated insurance markets that will serve the interests of patients first. Right? Wrong! Just read this article about how they are dumping much of the risk onto employers through these phony “self-insured” plans, while using ERISA to escape some of the regulatory provisions of ACA.
These crooks will never change. It is in their corporate DNA. No matter how much they are regulated, they will always find a way around to cheat the payers and avoid paying for the sick. This is what insurance market innovation is all about – screw the patients and take the money and run.
(For more, this topic was covered in a previous message: https://pnhp.org/news/2011/november/exemptions-for-self-insured-plans…)

Controlling costs through HHS rate reviews

2012 Progress Report: Health Reform is Opening the Insurance Market and Protecting Consumers

HealthCare.gov, March 22, 2012

The Affordable Care Act’s Rate Review policies bring an unprecedented level of scrutiny and transparency to health insurance rate increases.  They ensure that, in every state, every proposed increase of 10% or more is evaluated by independent experts to assess whether they are based on reasonable assumptions and sound data.

Rate review is expected to help moderate premium increases and provide consumers with greater value for their premium dollar. Additionally, health insurance companies must provide easy to understand information to their customers about their reasons for significant rate increases, as well as publicly justify and post on their website any unreasonable rate increases.

The Affordable Care Act’s Rate Review program started for most individual and small group plans on September 1, 2011.

Through March 10, 2012, 186 increases affecting more than 1.3 million people have been posted on companyprofiles.healthcare.gov.  Each provides an explanation from the insurer, including the rate increases determined to be unreasonable rate increases.

States are taking a strong lead in reviewing proposed rate increases.  Of the 186 requested increases posted on HealthCare.gov as of March 10, 2012, two-thirds (125 filings) of these are being reviewed by rate review programs in the states. Only one-third (61 filings) is under review by HHS.

In the 61 instances to date where HHS is charged with conducting reviews, the Department has completed 28 determinations.  HHS has determined that 20 of the 28 proposed rate increases are unreasonable.  The most common reason for this determination is that the proposal would result in projected medical loss ratios (MLRs) below the 80% applicable threshold.

http://www.healthcare.gov/law/resources/reports/rate-review03222012a.html

Comment: 

By Don McCanne, MD

The title of today’s message, “Controlling costs through HHS rate reviews,” is deliberately deceptive to make a point. Supposedly, the Affordable Care Act (ACA) was designed to help control spending in health care, and the insurance premium Rate Review process was a component of cost containment. In fact, not only does the process have no impact on health care spending, it doesn’t even have any federal control over increases in health insurance premiums.

ACA regulations require that any plan with premium increases of 10 percent or more be reviewed. Although states may have some influence over rate increases, the federal government has no authority to do anything about the increases other than expose the insurers to public ridicule.

In the last six months, 20 rate increases reviewed by the federal government have been found to be unreasonable, primarily because they exceeded the 20 percent of the premium that they could use for administrative services and profits. Many of these insurers in the individual market will find that their inefficiencies are so great that they will be unable to comply with this requirement, so they really don’t need ridicule to drive home this point.

In the meantime, insurers will be able to increase their premiums 9.9 percent each year with no questions asked, at least not by the federal government. Compound that rate over several years, and then where will we be?

Obviously this ACA measure to “control costs” will have very little impact, if any, on insurance premiums and absolutely no impact on total health care spending.

There is a much more efficient model of health care financing that actually would slow the increase in health care spending while ensuring health care for everyone. Instead of playing ACA games, we should move forward with an improved Medicare for everyone.

Spin Doctors in Vermont

An industry defector warns of outside influence in the single-payer debate

By Kathryn Flagg
Seven Days (Burlington, Vt.), March 21, 2012

Maybe you’ve seen the commercial. It debuted on Vermont airwaves last month, and the message goes something like this:

“Governor Peter Shumlin and the Democratic majorities in Montpelier want to completely uproot our health care system and spend more than $5 billion on a single-payer health care scheme,” says a middle-aged woman sitting down to tea in her kitchen. She looks exasperated and extremely skeptical. She tells viewers that no one knows where the money will come from or what the benefits will look like, and that elected officials won’t have any answers until after the next election.

“It’s not fair and it’s not right,” she says, then adds, “They’re hiding something. They’re not giving us any reason to trust them.”

The ad was paid for by a group called Vermonters for Health Care Freedom — and Wendell Potter predicted exactly this kind of publicity. It’s indicative, he says, of the kind of tactics the insurance industry will roll out in the coming months and years to counteract the forward march of single-payer health care in Vermont.

Potter knows those tactics well: He’s a longtime insider who defected from a high-ranking, high-paying public relations job to draw back the curtain on the health insurance industry. Based in Philadelphia, he is closely watching Vermont and testified last year before its legislators. Now Potter warns that the state will be a frontline battleground for single-payer health care in the U.S., and that the insurance industry — with its profits at stake — is sure to have a hand in the debate.

“The insurance industry is very afraid that [if Vermont succeeds] … other states will pay attention,” Potter says. That includes much larger states, such as California, where a single-payer bill stalled out in the state senate last month.

Vermont led the nation last year when it passed legislation to establish the country’s first single-payer health care plan. Proponents say it will cut care costs while providing universal insurance, but opponents such as Vermonters for Health Care Freedom say the system could raise taxes, chase off employers and limit health care choices.

Under current federal rules, the state can’t enact that plan until 2017. Potter and local single-payer advocates say the delay gives opponents time to mobilize.

“What I’m seeing right now is that they’re having their shills, the people they’re influencing, try to raise doubts about how the state will pay for universal coverage and what will happen to taxes,” Potter says. “They’ll try to … get Vermonters to second-guess themselves.”

Potter would know: Not long ago, he was on the inside. He began his career as a newspaper reporter, then, like many journalists, made the switch to public-relations work. He spent the bulk of his PR days at Cigna, where he climbed the corporate ladder and eventually ended up about as close to the top as a public-relations executive can be, he says.

“I spent a lot of time trying to mislead people,” says Potter, though in the early days, he notes, he himself was a believer. He joined Cigna in the early 1990s at the advent of “managed care,” an approach the industry hoped would bring down costs while providing coverage to more people. During the heyday of managed-care plans, Potter says, that worked relatively well.

But slowly the industry changed. Companies began focusing on what they called “consumer-driven care” and shifting more and more customers to high-deductible plans. Potter calls these customers the “underinsured”: They’re technically covered, but their deductibles are so high — often thousands of dollars each year — that they can’t afford much care, or must go into debt to obtain it. Part of Potter’s job was making people think these plans were a good solution to the problems of providing health care in America, yet he grew increasingly doubtful.

“I was trying to sell people snake oil, to tell you the truth,” he says.

Potter is soft spoken, and the twang in his voice reflects his Southern upbringing. It was during a trip back to the South, in 2007, that he had what he now calls his “epiphany.” Potter tagged along to watch a Knoxville, Tenn.-based nonprofit dole out medical care at county fairgrounds in Virginia. That nonprofit, Remote Area Medical, has tended to patients in developing countries, but its leaders found that people closer to home desperately needed attention, too.

With RAM, Potter drove the 50-odd miles from Tennessee to the Wise County, Va., fairgrounds, where he watched thousands of patients queue up to see doctors and nurses ensconced in animal stalls-turned-makeshift clinics. Though he’d been having doubts about his career for some time, he says that experience opened his eyes.

“What I was doing for a living was in some way making it necessary for people to get care that way, in an undignified, dehumanizing way,” Potter says.

Potter quit his job in 2008, a few months after he worked on a white paper to persuade legislators that the problem of uninsured citizens in the United States wasn’t a problem at all. By the time he left Cigna, he was convinced of exactly the opposite. These days, Potter supports single-payer health care as a way to provide quality care while cutting costs.

Surprisingly, Potter hasn’t experienced any backlash from the insurance industry, which he says he’s seen effectively silence or discredit critics in the past. What he has experienced, though, is a flood of emails from former coworkers and others still in the insurance world — often writing from private accounts — thanking him for the work he does. Potter has returned to his roots as a reporter and now writes news-analysis columns for the Center for Public Integrity. He’s also published a book, “Deadly Spin: An Insurance Company Insider Speaks Out on How Corporate PR is Killing Health Care and Deceiving Americans.”

While Potter says the insurance industry itself may never be especially visible in Vermont, he predicts it will funnel in money through groups such as the National Federation of Independent Business and the U.S. Chamber of Commerce. He expects a “fear-mongering” campaign to unfold over time.

“It will be the attempt to kill [single payer] by a thousand cuts over the months to come,” Potter says.

He warns Vermont residents to be skeptical of the talking points they’ll hear on the topic of single-payer health care, to question motives and to look at the sources of the information provided.

“I encourage Vermonters to seek out the truth and keep their eyes on really transforming the health care system here,” Potter says. “Vermont can lead the country toward a more rational and equitable health care system.”

Local proponents of a single-payer system are well aware that the fight isn’t over. Ellen Oxfeld is a longtime advocate, one of the leaders of Vermont Health Care for All. She says she’s particularly concerned about the influence of outside money on the health care debate in the state. She points out that Vermont is a small market where ad time isn’t that expensive.

“They have more money, and they have time,” Oxfeld says of her opponents. “But I think what’s on our side is that the present system is unsustainable, and people’s own experiences are showing them that.”

Peggy Carey agrees. Carey is a doctor and chair of the Vermont chapter of Physicians for a National Health Program. She says the tactics of which Potter warns are already in play in the state, and it’s going to take a continuous response from activists to counter those attacks. But she also thinks Vermont is fortunate enough to
have residents who want to hear both sides of the argument and make informed decisions.

“I think they’re pretty good about overlooking special-interest folks and the spin-meisters that are out there,” Carey says.

But who is doing the spinning? Potter says it’s likely organizations funded or in some other way backed by for-profit insurers, though tracking the funding behind voices in the unfolding health care debate may be impossible.

Vermonters for Health Care Freedom, for example, is a 501(c)(4) — in other words, a nonprofit devoted primarily to social welfare. That means the group doesn’t have to disclose its donors or sources of funding. Groups with that tax designation include major nonprofits, such as the National Rifle Association and AARP, some of which are also major political spenders. Tax law says these groups can’t promote individual candidates but can promote causes, and they may do unlimited lobbying on issues related to a cause.

Darcie Johnston, a Burlington consultant, founded VHCF, which aired some radio ads last year before unveiling its first television spot last month. Johnston headed the group until VHCF hired its executive director, Jeffery Wennberg. Johnston says her motivation is to educate Vermonters about the possible economic and health care impacts of Green Mountain Care, the state’s proposed single-payer system.

Though she’s squarely at odds with activists Oxfeld, Carey and Potter, Johnston does agree with them on one count: She predicts Vermont will soon be the focus of attention from individuals, companies and interest groups around the country.

“We’re lab rats,” she says.

http://www.7dvt.com/2012spin-doctors

Controlling costs through HHS rate reviews

2012 Progress Report: Health Reform is Opening the Insurance Market and Protecting Consumers

HealthCare.gov, March 22, 2012
The Affordable Care Act’s Rate Review policies bring an unprecedented level of scrutiny and transparency to health insurance rate increases.  They ensure that, in every state, every proposed increase of 10% or more is evaluated by independent experts to assess whether they are based on reasonable assumptions and sound data.
Rate review is expected to help moderate premium increases and provide consumers with greater value for their premium dollar. Additionally, health insurance companies must provide easy to understand information to their customers about their reasons for significant rate increases, as well as publicly justify and post on their website any unreasonable rate increases.
The Affordable Care Act’s Rate Review program started for most individual and small group plans on September 1, 2011.
Through March 10, 2012, 186 increases affecting more than 1.3 million people have been posted on companyprofiles.healthcare.gov.  Each provides an explanation from the insurer, including the rate increases determined to be unreasonable rate increases.
States are taking a strong lead in reviewing proposed rate increases.  Of the 186 requested increases posted on HealthCare.gov as of March 10, 2012, two-thirds (125 filings) of these are being reviewed by rate review programs in the states. Only one-third (61 filings) is under review by HHS.
In the 61 instances to date where HHS is charged with conducting reviews, the Department has completed 28 determinations.  HHS has determined that 20 of the 28 proposed rate increases are unreasonable.  The most common reason for this determination is that the proposal would result in projected medical loss ratios (MLRs) below the 80% applicable threshold.
http://www.healthcare.gov/law/resources/reports/rate-review03222012a.html

The title of today’s message, “Controlling costs through HHS rate reviews,” is deliberately deceptive to make a point. Supposedly, the Affordable Care Act (ACA) was designed to help control spending in health care, and the insurance premium Rate Review process was a component of cost containment. In fact, not only does the process have no impact on health care spending, it doesn’t even have any federal control over increases in health insurance premiums.
ACA regulations require that any plan with premium increases of 10 percent or more be reviewed. Although states may have some influence over rate increases, the federal government has no authority to do anything about the increases other than expose the insurers to public ridicule.
In the last six months, 20 rate increases reviewed by the federal government have been found to be unreasonable, primarily because they exceeded the 20 percent of the premium that they could use for administrative services and profits. Many of these insurers in the individual market will find that their inefficiencies are so great that they will be unable to comply with this requirement, so they really don’t need ridicule to drive home this point.
In the meantime, insurers will be able to increase their premiums 9.9 percent each year with no questions asked, at least not by the federal government. Compound that rate over several years, and then where will we be?
Obviously this ACA measure to “control costs” will have very little impact, if any, on insurance premiums and absolutely no impact on total health care spending.
There is a much more efficient model of health care financing that actually would slow the increase in health care spending while ensuring health care for everyone. Instead of playing ACA games, we should move forward with an improved Medicare for everyone.

Health Care Compact lessons for state single payer efforts

Utah fifth state to join Health Care Compact

By Kirsten Stewart
The Salt Lake Tribune, March 20, 2012

Utah Gov. Gary Herbert on Tuesday signed a controversial measure to replace Medicare and Medicaid with a block grant to the states.

SB208 would have Utah join an interstate “Health Care Compact” designed to allow states to opt out of federal health reform without forgoing billions in federal funding.

But hospitals and consumer advocates warned the bill risks tying Utah’s fate to states with poorer health and higher health costs.

It also would also mean sacrificing $132 million in federal funding by 2014 because the block grants are not designed to keep pace with medical inflation, they said.

To date, four states have pledged to join the compact: Texas, Missouri, Oklahoma and Georgia. Two governors have vetoed the idea, including Arizona Gov. Jan Brewer.

http://www.sltrib.com/sltrib/news/53757475-78/health-compact-states-bill.html.csp

And…

Indiana Gov. Mitch Daniels Signs Health Care Compact Into Law

By Shonda Werry
Health Care Compact Blog, March 21, 2012

Gov. Mitch Daniels Monday signed the Health Care Compact into law, paving the way for restoring state control over health care policy and providing Hoosiers an alternative to the federally-run system.

The Health Care Compact is an initiative of the Health Care Compact Alliance, a nonpartisan organization dedicated to providing Americans more authority over decisions that govern their health care. It does not make suggestions on what policies individual states should pursue but advocates that health care policy decisions be made at the state level.

The Compact has been introduced in 13 states since February of 2011 and has been adopted in Texas, Georgia, Oklahoma, Missouri, and now Indiana.

For the Health Care Compact to become law, it must be approved by Congress. Once it is ratified, states will then be responsible for crafting their own policies.

http://healthcarecompact.org/blog

Comment:

By Don McCanne, MD

Since the political barriers to enacting a national single payer program seem to be insurmountable, at least for the near future, many single payer activists are pursuing state level single payer models of reform. To be truly single payer, federal legislation would be required to free up funds from federal programs. The Health Care Compact should give us pause as to whether or not we want to give states that much control over our federal tax funds.

Under the Health Care Compact, Medicare and Medicaid funds would be transferred to the states under a block grant. To understand the significance of block grants for programs such as these, one need look no further than the House Budget proposal introduced yesterday by Congressman Paul Ryan. His proposal for block grants for Medicaid would eventually cut the federal contribution in half, leaving the states to fill in the gap.

With the budget problems that states already face, what would happen to coverage for Medicaid-eligible beneficiaries under a block grant? Even if all funds were combined into a single risk pool, these Medicaid cuts would result in either benefit reductions or in the need for higher state-based revenues, whether as taxes or premiums.

Six states – Texas, Georgia, Oklahoma, Missouri, Indiana, and Utah – have now passed the Health Care Compact. They are asking to use funds from existing federal programs to establish their own state health care programs. With their tight budgets and a further decrease in federal funding, would any of these states pass a single payer program that provided all necessary health care services for everyone? Of course not. Instead they seek to establish insurance markets that cross state lines, promoting the sale of low-premium, lowest-common-denominator plans that would destroy the financial security that health plans should be offering.

Keep this in mind as you work on state single payer solutions. When we ask for waivers (federal legislation) to allow states to use existing federal funds for state single payer programs, that process would also allow other states that are in the process of crushing unions, destroying retirement security, wiping out public primary and secondary education, driving up state college tuition to unaffordable levels, and so forth, to use their freedom to wipe out health security for their own people.

That seems like too dear of a price for our fellow Americans to pay. We can avoid that simply by enacting a national single payer program – an improved Medicare for everyone.

Pointing the way forward for primary care

By A.R. Strobeck Jr.
March 21, 2012

“Breaking Point: How the primary care crisis endangers the lives of Americans”
By John Geyman, M.D.
Copernicus Healthcare, 2011
Softcover, 231 pp., $18.95

Dr. John Geyman has written another tour de force on a health care topic. This time he examines the “silent crisis” which is rapidly unfolding in health care delivery: the unraveling and decline of the primary care structure.

Recognizing the flaws and limitations of the Affordable Care Act, and noting the decades-long decline in the number of primary care providers, Geyman asks: Going forward, how will patients and their families obtain medical care that is “affordable, readily accessible, continuity-based, and comprehensive”?

Assuming the ACA passes constitutional muster, millions of additional Americans will have new, limited coverage from either subsidized private insurers or Medicaid, but “Insurance without a physician — how much of a gain is that?”

Geyman divides his analysis into two parts. In Part I, he looks at the many dimensions of the crisis and its impacts on the system, particularly on patients and their families. In Part 2, he examines various policy alternatives, including lessons from other countries, and finally proposes “a comprehensive agenda for rebuilding primary care.”

Geyman believes the problem is such a challenge that its solution requires a long view, possibly over one or two generations. Successfully dealing with this problem would involve “a complete reorientation of the goals of health care, the roles of physicians and other health professionals” as well as fundamental changes in the way health care is financed. He warns that failure to do so will hasten an implosion “for much of our population, and potentially become a growing force that could bankrupt the nation.”

Geyman notes that less than one-third of U.S. physicians are practicing primary care, and “their numbers are falling fast.” Less than 20 percent of graduating U.S. medical students are selecting fields in primary care and only 7 percent are choosing family medicine. Largely because of the financial pressures associated with going to medical school, notably the heavy burden of student debt, many students are turning to specialties that they believe will be more lucrative.

At the same time, many primary care doctors have stopped seeing patients in the hospital and now confine their practice to their offices, where they are poorly reimbursed by third-party insurers. They are also experiencing higher levels of dissatisfaction with their work. Meanwhile, government policy appears to be out of touch with the magnitude of the crisis.

Yet studies show “consistent cost savings across the board in regions with most primary care physicians,” including fewer emergency room visits and hospitalizations, and a consistent increase in the quality of care in areas with a larger density of primary care doctors.

Patients are confronting greater financial barriers in accessing health care, including rising premiums and higher co-payments, deductibles and co-insurance. As for the uninsured, they are lucky to find any physician who will see them.

Patients are victimized in other ways, too. In their quest for ever greater profit, financing companies have even discovered “a highly profitable business in medical credit cards.” Interest rates can rise to 26.99 percent for G.E.’s Care Credit, and most people who obtain these cards have limited resources to begin with. They “are vulnerable to various abuses by hospitals and other providers who push these cards without transparent disclosure of their risks.”

In Part 2 of his work, Geyman looks at various policy alternatives, using key yardsticks such as accessibility, continuity of primary care, prevention, and financial neutrality in medical decision-making.

The author cites three basic policy alternatives: (1) Cede primary care to non-physicians such as nurse practitioners and physician assistants, (2) Continue our specialist dominated physician workforce; (3) Build a generalist physician workforce with primary care teams and a generalist-specialist mix of 50-50.

Geyman believes that the third choice is the obviously best course and he focuses on this solution. He views the building of a strong generalist base as the only way out of our national health care crisis.

He explains that this approach has worked well in the few areas where it has been tried, including at The Group Health Cooperative of Puget Sound, Rocky Mountain Health Plans, and the Mesa County Physicians Independent Practice Association.

At the same time, he remarks: “We cannot get to real health care reform without rebuilding our primary care infrastructure, and we can’t get that done without other fundamental system reforms — they are completely interdependent.”

Geyman takes a look at what other countries have done and how some of their experiences might be applied in the United States. He finds that we are clearly at a disadvantage: “All other countries around the world meet the challenges of access, quality, and fairness for comprehensive health care at costs that are affordable and sustainable.”

The author observes that while there is no such thing as a perfect health care system, we have much to learn from other advanced countries if we remove our ideological blinders and “give up our unfounded attitude of American exceptionalism.” We also have to give up the myths that we have the best health care and our health problems are unique to us.

Geyman looks to Ontario, Canada’s, system for an example of organized health care as “a model worth organizing and fighting for.” The Family Health Team model there has expanded the capacity of primary care through interdisciplinary teams and resolved many hitherto nettlesome problems.

The teams include family physicians, nurse practitioners, pharmacists, social workers and health educators. They provide 24/7 care, handle most of the care themselves, and are coordinators of care provided by specialists as well as from other community resources. The teams now serve 2 million people and show every sign of success.

Geyman outlines 10 “primary building blocks for rebuilding primary care in the U.S.,” including evidence-based coverage, revised physician payment, new goals and paradigm, re-design of primary care, general medical education, emphasis on ethics, expanded research, increased regulation, and malpractice liability reform. But at the foundation of the entire structure is universal coverage through a single-payer national health insurance plan, a sine qua non for the overhaul’s success.

The author views American society as divided into two Americas: “a buoyant, bailed-out Wall Street and a depressed Main Street.” i.e. it’s the 1 percent vs. the 99 percent. He discusses how corporate America has profited at the expense of sick and vulnerable Americans, and notes that even with the ACA, there is a “continuing emphasis of our market-based culture and medical-industrial complex” to turn “quick profits with little regard for the public interest.”

But Dr. Geyman has pointed a way forward.

A.R. Strobeck Jr. holds a masters in health planning and policy from the University of Illinois at Chicago as well as a masters in history from Northern Illinois University. He worked as a research associate for over 10 years for an association of health care executives.

PNHP note: “Breaking Point” by Dr. John Geyman, past president of Physicians for a National Health Program, is available at PNHP’s store at the special price of $10 with free shipping. You can purchase the book here and you can review other books by Dr. Geyman and other authors at the PNHP store site.

Health Care Compact lessons for state single payer efforts

Utah fifth state to join Health Care Compact

By Kirsten Stewart
The Salt Lake Tribune, March 20, 2012

Utah Gov. Gary Herbert on Tuesday signed a controversial measure to replace Medicare and Medicaid with a block grant to the states.
SB208 would have Utah join an interstate “Health Care Compact” designed to allow states to opt out of federal health reform without forgoing billions in federal funding.
But hospitals and consumer advocates warned the bill risks tying Utah’s fate to states with poorer health and higher health costs.
It also would also mean sacrificing $132 million in federal funding by 2014 because the block grants are not designed to keep pace with medical inflation, they said.
To date, four states have pledged to join the compact: Texas, Missouri, Oklahoma and Georgia. Two governors have vetoed the idea, including Arizona Gov. Jan Brewer.
http://www.sltrib.com/sltrib/news/53757475-78/health-compact-states-bill…
And…

Indiana Gov. Mitch Daniels Signs Health Care Compact Into Law

By Shonda Werry
Health Care Compact Blog, March 21, 2012
Gov. Mitch Daniels Monday signed the Health Care Compact into law, paving the way for restoring state control over health care policy and providing Hoosiers an alternative to the federally-run system.
The Health Care Compact is an initiative of the Health Care Compact Alliance, a nonpartisan organization dedicated to providing Americans more authority over decisions that govern their health care. It does not make suggestions on what policies individual states should pursue but advocates that health care policy decisions be made at the state level.
The Compact has been introduced in 13 states since February of 2011 and has been adopted in Texas, Georgia, Oklahoma, Missouri, and now Indiana.
For the Health Care Compact to become law, it must be approved by Congress. Once it is ratified, states will then be responsible for crafting their own policies.
http://healthcarecompact.org/blog

Since the political barriers to enacting a national single payer program seem to be insurmountable, at least for the near future, many single payer activists are pursuing state level single payer models of reform. To be truly single payer, federal legislation would be required to free up funds from federal programs. The Health Care Compact should give us pause as to whether or not we want to give states that much control over our federal tax funds.
Under the Health Care Compact, Medicare and Medicaid funds would be transferred to the states under a block grant. To understand the significance of block grants for programs such as these, one need look no further than the House Budget proposal introduced yesterday by Congressman Paul Ryan. His proposal for block grants for Medicaid would eventually cut the federal contribution in half, leaving the states to fill in the gap.
With the budget problems that states already face, what would happen to coverage for Medicaid-eligible beneficiaries under a block grant? Even if all funds were combined into a single risk pool, these Medicaid cuts would result in either benefit reductions or in the need for higher state-based revenues, whether as taxes or premiums.
Six states – Texas, Georgia, Oklahoma, Missouri, Indiana, and Utah – have now passed the Health Care Compact. They are asking to use funds from existing federal programs to establish their own state health care programs. With their tight budgets and a further decrease in federal funding, would any of these states pass a single payer program that provided all necessary health care services for everyone? Of course not. Instead they seek to establish insurance markets that cross state lines, promoting the sale of low-premium, lowest-common-denominator plans that would destroy the financial security that health plans should be offering.
Keep this in mind as you work on state single payer solutions. When we ask for waivers (federal legislation) to allow states to use existing federal funds for state single payer programs, that process would also allow other states that are in the process of crushing unions, destroying retirement security, wiping out public primary and secondary education, driving up state college tuition to unaffordable levels, and so forth, to use their freedom to wipe out health security for their own people.
That seems like too dear of a price for our fellow Americans to pay. We can avoid that simply by enacting a national single payer program – an improved Medicare for everyone.

The Health Law Mandate

By Arnold S. Relman, M.D.
Letters, The New York Times, March 19, 2012

“White House Set to Shape Debate Over Health Law” (front page, March 9), about the Supreme Court’s hearings on the health law, doesn’t mention an important new argument against the Affordable Care Act’s mandated purchase of private insurance, the key issue before the Supreme Court.

Last month, an amicus brief was filed by 50 doctors and two nonprofit organizations arguing that Congress could avoid a mandate by legislating a national single-payer system that provides nearly universal insurance coverage.

Congress has already created two limited single-payer systems — Medicare and the veterans’ health system — and no legal barriers prevent doing more. Since a mandate isn’t necessary for Congress to exercise its legitimate role in regulating health insurance, there is no justification under the Constitution’s “necessary and proper” clause for such a legislative requirement.

How this argument will influence the court remains to be seen. But the brief is another reminder that the single-payer idea, although currently off the table in Washington, should not be counted out.

The writer, professor emeritus of medicine and social medicine at Harvard Medical School, is a former editor in chief of The New England Journal of Medicine. He resides in Cambridge, Mass.

http://www.nytimes.com/2012/03/20/opinion/the-health-law-mandate.html

Also in The New York Times of March 20, a profile of Dr. Relman and Dr. Marcia Angell titled “A Drumbeat on Profit Takers,” and a 6-minute video interview with these two past editors of The New England Journal of Medicine:

http://video.nytimes.com/video/playlist/science/1194811622277/index.html

Marmor and Oberlander – Controlling costs through emulation, not innovation

From HMOs to ACOs: The Quest for the Holy Grail in U.S. Health Policy

By Theodore Marmor, PhD and Jonathan Oberlander, PhD
Journal of General Internal Medicine, March 13, 2012 (Online)

The United States has been singularly unsuccessful at controlling health care spending. During the past four decades, American policymakers and analysts have embraced an ever changing array of panaceas to control costs, including managed care, consumer-directed health care, and most recently, delivery system reform and value-based purchasing. Past panaceas have gone through a cycle of excessive hope followed by disappointment at their failure to rein in medical care spending. We argue that accountable care organizations, medical homes, and similar ideas in vogue today could repeat this pattern. We explain why the United States persistently pursues health policy fads — despite their poor record — and how the promotion of panaceas obscures critical debate about controlling health care costs. Americans spend too much time on the quest for the “holy grail” — a reform that will decisively curtail spending while simultaneously improving quality of care — and too little time learning from the experiences of others. Reliable cost control does not, contrary to conventional wisdom, require fundamental delivery system reform or an end to fee-for-service payment. It does require the U.S. to emulate the lessons of other nations that have been more successful at limiting spending through budgeting, systemwide fee schedules, and concentrated purchasing.
 
Emulation, Not Innovation
 
We do not know how far ACOs will spread or what impact they, medical homes or other delivery system reforms will have on health care spending. But our history of failed cost control offers sobering lessons about exaggerated expectations, the limits of organizational reforms, and the recurring temptation to oversell reform ideas like ACOs as panaceas and the harbingers of a new, radically transformed, and vastly improved health care system. Such ideas should be seen as supplements, rather than the basis for a national strategy of health care cost control.

We believe that the U.S. needs less innovation and more emulation. That is, in order to control costs effectively Americans should focus less on (re)inventing the latest delivery system or payment method, and instead pay more attention to what other countries do to slow health care spending. Global budgets, fee schedules, systemwide payment rules, and concentrated purchasing power may not be modern, exciting or “transformational”. But they have the advantage of working.

http://www.springerlink.com/content/m86245k22018507n/

Comment:

By Don McCanne, MD

Why have we spent decades trying to circumvent the obvious? We need to emulate the health care policies that do work in other nations, and give up on pursuing our many innovations that haven’t worked. Haven’t we had enough of modern, exciting and transformational failures?

Marmor and Oberlander – Controlling costs through emulation, not innovation

From HMOs to ACOs: The Quest for the Holy Grail in U.S. Health Policy

By Theodore Marmor, PhD and Jonathan Oberlander, PhD
Journal of General Internal Medicine, March 13, 2012 (Online)
The United States has been singularly unsuccessful at controlling health care spending. During the past four decades, American policymakers and analysts have embraced an ever changing array of panaceas to control costs, including managed care, consumer-directed health care, and most recently, delivery system reform and value-based purchasing. Past panaceas have gone through a cycle of excessive hope followed by disappointment at their failure to rein in medical care spending. We argue that accountable care organizations, medical homes, and similar ideas in vogue today could repeat this pattern. We explain why the United States persistently pursues health policy fads — despite their poor record — and how the promotion of panaceas obscures critical debate about controlling health care costs. Americans spend too much time on the quest for the “holy grail” — a reform that will decisively curtail spending while simultaneously improving quality of care — and too little time learning from the experiences of others. Reliable cost control does not, contrary to conventional wisdom, require fundamental delivery system reform or an end to fee-for-service payment. It does require the U.S. to emulate the lessons of other nations that have been more successful at limiting spending through budgeting, systemwide fee schedules, and concentrated purchasing.
Emulation, Not Innovation
We do not know how far ACOs will spread or what impact they, medical homes or other delivery system reforms will have on health care spending. But our history of failed cost control offers sobering lessons about exaggerated expectations, the limits of organizational reforms, and the recurring temptation to oversell reform ideas like ACOs as panaceas and the harbingers of a new, radically transformed, and vastly improved health care system. Such ideas should be seen as supplements, rather than the basis for a national strategy of health care cost control.
We believe that the U.S. needs less innovation and more emulation. That is, in order to control costs effectively Americans should focus less on (re)inventing the latest delivery system or payment method, and instead pay more attention to what other countries do to slow health care spending. Global budgets, fee schedules, systemwide payment rules, and concentrated purchasing power may not be modern, exciting or “transformational”. But they have the advantage of working.
http://www.springerlink.com/content/m86245k22018507n/

Why have we spent decades trying to circumvent the obvious? We need to emulate the health care policies that do work in other nations, and give up on pursuing our many innovations that haven’t worked. Haven’t we had enough of modern, exciting and transformational failures?

Jonathan Haidt's "The Righteous Mind" – good people divided by politics

The Righteous Mind: Why Good People Are Divided by Politics and Religion

By Jonathan Haidt
Pantheon Books

We can define moral capital as the resources that sustain a moral community. More specifically, moral capital refers to “the degree to which a community possesses interlocking sets of values, virtues, norms, practices, identities, institutions, and technologies that mesh well with evolved psychological mechanisms and thereby enable the community to suppress or regulate selfishness and make cooperation possible.”

The Moral Matrix

Care/harm
Liberty/oppression
Fairness/cheating
Loyalty/betrayal
Authority/subversion
Sanctity/degradation

Liberal Wisdom

The left builds its moral matrix an three of the six foundations, but it rests most firmly and consistently on the Care foundation.

Liberals are often suspicious of appeals to loyalty, authority,and sanctity, although they don’t reject these intuitions in all cases (think of the sanctification of nature). For American liberals since the 1960s, I believe that the most sacred value is caring for victims of oppression. Anyone who blames such victims for their own problems or who displays or merely excuses prejudice against sacralized victim groups can expect a vehement tribal response.

Libertarian Wisdom

Some liberals began to see powerful corporations and wealthy industrialists as the chief threats to liberty. These “new liberals” (also known as “left liberals” or “progressives”) looked to government as the only force capable of protecting the public and rescuing the many victims of the brutal practices of early industrial capitalism. Liberals who continued to fear government as the chief threat to liberty became known as “classical liberals,” “right liberals” (in some countries), or libertarians (in the United States).

You can see the fork in the road by looking at the liberal moral matrix. It rests on two foundations primarily: Care and Liberty (plus some Fairness, because everybody values proportionality to some extent). Liberals in 1900 who relied most heavily on the Care foundation – those who felt the pain of others most keenly – were predisposed to take the left-hand (progressive) fork. But liberals in 1900 who relied more heavily on the Liberty foundation – those who felt the bite of restrictions on their liberty most keenly – refused to follow. In fact, libertarian writer Will Wlkinson has recently suggested that libertarians are basically liberals who love markets and lack bleeding hearts.

Social Conservative Wisdom

We have found that social conservatives have the broadest set of moral concerns, valuing all six foundations relatively equally. Their breadth – and particularly their relatively high settings on the Loyalty, Authority, and Sanctity foundations – give them insights I think are valuable, from a Durkheimian utilitarian perspective (i.e., recognizing that human flourishing requires social order and embeddedness).

A more positive way to describe conservatives is to say that their broader moral matrix allows them to detect threats to moral capital that liberals cannot perceive. They do not oppose change of all kinds (such as the Internet), but they fight back ferociously when they believe that change will damage the institutions and traditions that provide our moral exoskeletons (such as the family). Preserving those institutions and traditions is their most sacred value.

In sum

Morality binds and blinds. It binds us into ideological teams that fight each other as though the fate of the world depended on our side winning each battle. It blinds us to the fact that each team is composed of good people who have something important to say.

This book explained why people are divided by politics and religion. The answer is not, as Manichaeans would have it (i.e., battleground of forces of light and of darkness), because some people are good and others are evil. Instead, the explanation is that our minds were designed for groupish righteousness. We are deeply intuitive creatures whose gut feelings drive our strategic reasoning. This makes it difficult – but not impossible – to connect with those who live in other matrices, which are often built on different configurations of the available moral foundations.

http://righteousmind.com/

Comment: 

By Don McCanne, MD

Social psychologist Jonathan Haidt, in “The Righteous Mind,” provides us with a background on the evolution and development of the moral matrices that have contributed to our political divide. Although some might want to challenge details of his Moral Foundations Theory, there is absolutely no doubt that moral differences do exist, and he has provided plenty of experimental data to show that political views do correlate with the six moral foundations described.

Single payer supporters certainly identify with the Care foundation. That’s what single payer is all about – making sure that absolutely everyone is able to receive needed health care. Care is the most defining moral foundation of liberals. In contrast, Loyalty, Authority, and Sanctity are barely on the radar screen of many liberals.

Social conservatives are driven by all six foundations of the moral matrix, especially Loyalty, Authority, and Sanctity. Although they are also driven by Care, Care can be suppressed to some extent by by the “groupish righteousness” of Loyalty, Authority, and Sanctity. Although libertarians are often included on the right with conservatives, libertarians are unique in that they are influenced very little by the moral foundation of Care. Unabashed libertarians likely would never be single payer supporters.

So if social conservatives are partly driven by the moral foundation of Care, would they ever support single payer reform? In fact, many of them do. Most believe that everyone should have health care, and many recognize the efficiency of the single payer model. However, the groupish righteousness of Loyalty, Authority, and Sanctity often keeps them from breaking ranks with their conservative peer groups. Nevertheless, there does seem to be an opening for conservatives to join forces with liberals in advancing the concepts of single payer.

What about the liberals? They would certainly welcome the opportunity to work with conservatives on single payer. But if we listen to Jonathan Haidt, the liberals have been making a mistake by remaining oblivious to the conservatives’ moral values of Loyalty, Authority, and Sanctity – fundamentals of moral capital.

He writes, “If you are trying to change an organization or a society and you do not consider the effects of your changes on moral capital, you’re asking for trouble. This, I believe, is the fundamental blind spot of the left. It explains why liberal reforms so often backfire, and why communist revolutions usually end up in despotism. It is the reason I believe that liberalism – which has done so much to bring about freedom and equal opportunity – is not sufficient as a governing philosophy. It tends to overreach, change too many things too quickly, and reduce the stock of moral capital inadvertently. Conversely, while conservatives do a better job of preserving moral capital, they often fail to notice certain classes of victims, fail to limit the predations of certain powerful interests, and fail to see the need to change or update institutions as times change.”

As a liberal, I confess that I am fixated on the moral foundation of Care. I also confess that I have a blind spot on the full range of moral capital. However, the conservatives do not have a blind spot on Care, even
if they seem to have other priorities. Do you suppose that the conservatives would be willing to help us liberals understand the moral capital hidden in that blind spot, in exchange for liberals helping the conservatives understand better what it means to Care?

Jonathan Haidt’s “The Righteous Mind” – good people divided by politics

The Righteous Mind: Why Good People Are Divided by Politics and Religion

By Jonathan Haidt
Pantheon Books

We can define moral capital as the resources that sustain a moral community. More specifically, moral capital refers to “the degree to which a community possesses interlocking sets of values, virtues, norms, practices, identities, institutions, and technologies that mesh well with evolved psychological mechanisms and thereby enable the community to suppress or regulate selfishness and make cooperation possible.”

The Moral Matrix

Care/harm
Liberty/oppression
Fairness/cheating
Loyalty/betrayal
Authority/subversion
Sanctity/degradation

Liberal Wisdom

The left builds its moral matrix an three of the six foundations, but it rests most firmly and consistently on the Care foundation.

Liberals are often suspicious of appeals to loyalty, authority,and sanctity, although they don’t reject these intuitions in all cases (think of the sanctification of nature). For American liberals since the 1960s, I believe that the most sacred value is caring for victims of oppression. Anyone who blames such victims for their own problems or who displays or merely excuses prejudice against sacralized victim groups can expect a vehement tribal response.

Libertarian Wisdom

Some liberals began to see powerful corporations and wealthy industrialists as the chief threats to liberty. These “new liberals” (also known as “left liberals” or “progressives”) looked to government as the only force capable of protecting the public and rescuing the many victims of the brutal practices of early industrial capitalism. Liberals who continued to fear government as the chief threat to liberty became known as “classical liberals,” “right liberals” (in some countries), or libertarians (in the United States).

You can see the fork in the road by looking at the liberal moral matrix. It rests on two foundations primarily: Care and Liberty (plus some Fairness, because everybody values proportionality to some extent). Liberals in 1900 who relied most heavily on the Care foundation – those who felt the pain of others most keenly – were predisposed to take the left-hand (progressive) fork. But liberals in 1900 who relied more heavily on the Liberty foundation – those who felt the bite of restrictions on their liberty most keenly – refused to follow. In fact, libertarian writer Will Wlkinson has recently suggested that libertarians are basically liberals who love markets and lack bleeding hearts.

Social Conservative Wisdom

We have found that social conservatives have the broadest set of moral concerns, valuing all six foundations relatively equally. Their breadth – and particularly their relatively high settings on the Loyalty, Authority, and Sanctity foundations – give them insights I think are valuable, from a Durkheimian utilitarian perspective (i.e., recognizing that human flourishing requires social order and embeddedness).

A more positive way to describe conservatives is to say that their broader moral matrix allows them to detect threats to moral capital that liberals cannot perceive. They do not oppose change of all kinds (such as the Internet), but they fight back ferociously when they believe that change will damage the institutions and traditions that provide our moral exoskeletons (such as the family). Preserving those institutions and traditions is their most sacred value.

In sum

Morality binds and blinds. It binds us into ideological teams that fight each other as though the fate of the world depended on our side winning each battle. It blinds us to the fact that each team is composed of good people who have something important to say.

This book explained why people are divided by politics and religion. The answer is not, as Manichaeans would have it (i.e., battleground of forces of light and of darkness), because some people are good and others are evil. Instead, the explanation is that our minds were designed for groupish righteousness. We are deeply intuitive creatures whose gut feelings drive our strategic reasoning. This makes it difficult – but not impossible – to connect with those who live in other matrices, which are often built on different configurations of the available moral foundations.

http://righteousmind.com/

Comment: 

By Don McCanne, MD

Social psychologist Jonathan Haidt, in “The Righteous Mind,” provides us with a background on the evolution and development of the moral matrices that have contributed to our political divide. Although some might want to challenge details of his Moral Foundations Theory, there is absolutely no doubt that moral differences do exist, and he has provided plenty of experimental data to show that political views do correlate with the six moral foundations described.

Single payer supporters certainly identify with the Care foundation. That’s what single payer is all about – making sure that absolutely everyone is able to receive needed health care. Care is the most defining moral foundation of liberals. In contrast, Loyalty, Authority, and Sanctity are barely on the radar screen of many liberals.

Social conservatives are driven by all six foundations of the moral matrix, especially Loyalty, Authority, and Sanctity. Although they are also driven by Care, Care can be suppressed to some extent by by the “groupish righteousness” of Loyalty, Authority, and Sanctity. Although libertarians are often included on the right with conservatives, libertarians are unique in that they are influenced very little by the moral foundation of Care. Unabashed libertarians likely would never be single payer supporters.

So if social conservatives are partly driven by the moral foundation of Care, would they ever support single payer reform? In fact, many of them do. Most believe that everyone should have health care, and many recognize the efficiency of the single payer model. However, the groupish righteousness of Loyalty, Authority, and Sanctity often keeps them from breaking ranks with their conservative peer groups. Nevertheless, there does seem to be an opening for conservatives to join forces with liberals in advancing the concepts of single payer.

What about the liberals? They would certainly welcome the opportunity to work with conservatives on single payer. But if we listen to Jonathan Haidt, the liberals have been making a mistake by remaining oblivious to the conservatives’ moral values of Loyalty, Authority, and Sanctity – fundamentals of moral capital.

He writes, “If you are trying to change an organization or a society and you do not consider the effects of your changes on moral capital, you’re asking for trouble. This, I believe, is the fundamental blind spot of the left. It explains why liberal reforms so often backfire, and why communist revolutions usually end up in despotism. It is the reason I believe that liberalism – which has done so much to bring about freedom and equal opportunity – is not sufficient as a governing philosophy. It tends to overreach, change too many things too quickly, and reduce the stock of moral capital inadvertently. Conversely, while conservatives do a better job of preserving moral capital, they often fail to notice certain classes of victims, fail to limit the predations of certain powerful interests, and fail to see the need to change or update institutions as times change.”

As a liberal, I confess that I am fixated on the moral foundation of Care. I also confess that I have a blind spot on the full range of moral capital. However, the conservatives do not have a blind spot on Care, even if they seem to have other priorities. Do you suppose that the conservatives would be willing to help us liberals understand the moral capital hidden in that blind spot, in exchange for liberals helping the conservatives understand better what it means to Care?