PNHP

Vermont health law spurs fresh interest in single-payer reform: doctors group

Vermont health law spurs fresh interest in single-payer reform: doctors group

As governor signs a 'universal health care' bill, a national physicians group says the Vermont developments show that many Americans want to go beyond the new federal health law to more fundamental reform

FOR IMMEDIATE RELEASE
May 25, 2011

Contact:
Garrett Adams, M.D.
David Himmelstein, M.D.
Ida Hellander, M.D., or Ali Thebert, (312) 782-6006, info@pnhp.org

Gov. Peter Shumlin’s signing of Vermont’s health reform bill this Thursday is spurring renewed interest in single-payer health reform across the United States, even though the Vermont legislation is much more modest in its actual reach than a single-payer plan would be, a spokesperson for a national doctors group said today.

“The people of Vermont, including the state’s doctors, nurses and other health professionals, have inspired the entire nation by their unflagging dedication to winning a publicly financed, comprehensive and equitable health care system based on the principle that health care is a human right,” said Dr. Garrett Adams, president of the 18,000-member Physicians for a National Health Program. “We salute their efforts and the efforts of their many organizations, even as we share their conviction that their work has just begun.”

“This praise also extends to Gov. Peter Shumlin, who was elected to office on a single-payer platform and who has made many speeches in support of publicly financed care,” Adams said. “The governor has argued, for example, that single payer is the best way for Vermont to get its economy back on track and to create jobs.”

“Credit is also due to Sen. Bernie Sanders and other members of the state’s congressional delegation who are seeking waivers from the federal government so Vermont can innovate with its own model of reform,” he said. As of now, the federal Affordable Care Act prohibits states like Vermont from adopting their own models of reform until 2017. Shumlin, Sanders and others are trying to move that date up to 2014.

Adams continued: “Vermonters, like their counterparts across the United States, recognize that our current way of financing care – using wasteful, inefficient middlemen known as private health insurance companies – is broken and economically unsustainable. Many also understand that the new federal health law, while containing modest benefits, is an insufficient remedy, among other reasons because it retains a central role for these same greedy insurers.”

He noted that several other states, including California, are looking at variations of a single-payer model for reform.

Adams said while the Vermont law declares health care to be a “public good” and says the state has a responsibility to “ensure universal access to and coverage for high-quality, medically necessary health services for all Vermonters,” a praiseworthy objective, the actual provisions of the law fall considerably short of the single-payer reform needed to realize those goals.

A major problem, he said, is that the Vermont law will permit multiple private insurers to operate in the state indefinitely, setting the stage for multi-tiered care, rising costs and needless waste.

“Allowing multiple insurers in the system will deny Vermonters the enormous administrative savings they would otherwise get under a true single-payer plan,” Adams said. “Having multiple insurers also nullifies the potential bargaining power of a ‘single payer’ to negotiate reduced prices for pharmaceutical drugs and other goods and services.”

Dr. David Himmelstein, co-founder of Physicians for a National Health Program, said that the law’s emphasis on complying with the Affordable Care Act means that it will leave the door open for burdensome co-pays, deductibles and other out-of-pocket expenses that deter people from seeking timely care. Finally, to the extent the law permits large, for-profit institutional providers to allocate their profits as they see fit, it will deny the system the ability to do effective health planning.

“In this context, the continuing mobilization of Vermont’s broad-based movement for true single-payer reform will be essential,” Himmelstein said. “Such a mobilization can bolster the governor’s clear enthusiasm for the single-payer project and the courage of the Legislature as they face the inevitable onslaught of corporate opposition to deep-going health reform.”

“We remain hopeful that the rhetorical commitment to further reform will become a reality,” Himmelstein said. “Much more work, including continuing advocacy for a national solution – a single-payer system as embodied in legislation such as H.R. 676, the Expanded and Improved Medicare for All Act – will be needed in the years ahead to achieve Vermonters’ goal of universal access to high-quality, affordable care.”

******

Physicians for a National Health Program (www.pnhp.org) is an organization of 18,000 doctors who support single-payer national health insurance, an improved Medicare for all. To speak with a physician/spokesperson in your area, visit www.pnhp.org/stateactions or call (312) 782-6006.

Insurers are expensive middlemen

By Robert N. Shorin, A.C.S.W., B.C.D.
Newsday, Letters, May 24, 2011

Regarding “Insurer puts undue pressure on doctors” [Letters, May 19]: I am a clinical social worker, and I can tell you from hard experience that many private insurance companies are only out to make a profit, often at the direct expense of their own customers, and at the indirect expense of the government.

For example, private insurance companies often deny payment for medical treatment without justification to the agency providing service, making it time-consuming and burdensome for the understaffed and underfunded agency to protest. Since the agency cannot abandon its responsibility to provide service to a suicidal patient, for example, service is continued at the expense of the agency, with the financial support of the limited government funding we are granted. In effect, the private insurance company’s clients are paid for by the agency and the government, without costing the insurance company an extra penny.

Or, the private insurance company will raise its co-pay requirements, knowing full well that its customers cannot afford the increase. As a result, the agency again spends its own limited funds, or worse, the client prematurely drops out of treatment.

Expanding Medicare is the only fair way to go. It would cost less, without the need to make a profit and pay the private executive salaries. Nor would we need the insurance company itself to act as an unessential and parasitic middleman.

Robert N. Shorin, ACSW, BCD, resides in Syosset, N.Y.

Medicaid maintenance-of-effort

GOP Pushes To Let States Reduce Medicaid Rolls

By Mary Agnes Carey and Phil Galewitz
Kaiser Health News, May 23, 2011

Medicaid covers about 56 million Americans, with states sharing the costs with the federal government. States have been barred from cutting eligibility for the program since 2009 when economic stimulus legislation gave states billions to prop up their Medicaid program on the condition they didn’t tighten eligibility standards. The 2010 health law extended this requirement until 2014.

President Obama and congressional Democrats say eliminating the “maintenance-of-effort” provision would increase the challenge of expanding Medicaid in 2014; an additional 16 million people will qualify, with the federal government picking up most of the cost.

The House Energy and Commerce Health Subcommittee voted along party lines earlier this month to repeal the Medicaid “maintenance of effort” requirement. The legislation is expected to pass both the full Energy and Commerce panel and the GOP-controlled House. A vote on similar standalone legislation in the Democratic-controlled Senate is unlikely but the measure could end up in a debt-limit package.

But liberals have at times been disappointed by Obama’s concessions, including last year’s deal to extend the Bush-era tax cuts. They worry that the president will ultimately feel compelled to trade away the “maintenance-of-effort” requirements. The White House declined to comment.

http://www.kaiserhealthnews.org/Stories/2011/May/24/medicaid-maintenance-of-effort-republicans.aspx

Comment: 

By Don McCanne, MD

As has been said many times in these messages, Medicaid is a welfare program, and our politicians will continue to approach it as such. It will remain underfunded and will always be vulnerable to budgetary decisions. Not only did the Affordable Care Act greatly expand coverage with the highly flawed private insurance plans, it also greatly expanded the highly flawed Medicaid program. It’s still not too late to eliminate these unsatisfactory programs and replace them with an improved Medicare that covers everyone.

Calif. health plan revived: Democrats re-introduce single payer

By Jim Steinberg and Mediha Fejzagic DiMartino, Staff Writers
Contra Costa Times, May 22, 2011

State Democrats have revived a bill that would create a single-payer health care system and provide access to doctors for everyone in the state, including illegal residents.

Senate Bill 810, the California Universal Health Care Act introduced earlier this month by Sen. Mark Leno, D-San Francisco, would replace President Barack Obama’s health care reform legislation with a more comprehensive system — one its advocates say would cost everyone no more than what they already pay.

But local Republican legislators emphatically deny that assertion.

“S.B. 810 is a job-killing measure that will end many insurance plans, lead to huge tax increases and health care rationing,” said Assemblyman Curt Hagman, R-Chino Hills. “S.B. 810’s socialized medicine makes the ruinous Obamacare look like small government.”

Supporters of the measure say it would create a public-private partnership to provide every state resident with medical, dental, vision, hospitalization and prescription drug benefits, while still allowing patients to choose their own doctors and hospitals.

This plan would set up a single-payer “Medicare for All” type of program by pooling the money that government, employers and individuals already pay and using that money more efficiently by cutting out the middle man — insurance companies.

State Sen. Bob Dutton said he understands that there needs to be some fixes within the health-care delivery system, but making it government-run is not the answer, said Larry Venus, Dutton’s spokesman.

“Sen. Dutton wants to make sure the cost is accounted for,” Venus said. “That you would be able to cover every single person without increasing cost, it’s not a reality. That cost has to be borne by somebody, generally the taxpayer.”

Assemblyman Tim Donnelly, R-Hesperia, said creating a single-payer health care system in California would impose a massive overgrowth of government that will be costly to both the state and the people at a time when the state is working to close a huge budget gap.

“It is unrealistic and disingenuous to promise what the author has promised in this bill,” Donnelly said. “It is impossible to offer coverage to every resident at a reasonable cost without engaging in rationing. S.B. 810 promises to destroy any semblance of consumer choice in health care left.

“Furthermore, the bill does nothing to address shortages in doctors and nurses and will only exacerbate the problem. Promises to provide greater access to health care are void without ensuring there is someone to provide that care.”

So how will the health care solution created by S.B. 810 not cost more than we are paying now?

Advocates say a big reason will be in the reduction of administrative expenses of health care by reducing the involvement of insurance companies — and trimming administrative expenses of doctors’ offices — and other medical providers — as they seek payment from insurers.

“There are some 6,000 health plans in California, and health care providers spend about one-third of their resources just getting paid,” Leno said.

And there will be other saving opportunities as well — in unprecedented bulk purchasing power for everything from pharmaceuticals to hearing aids, eyeglasses and the investment in primary and preventive care, Leno said.

The bill will not conflict with the federal health care reform legislation — it allows states to set up their own health care systems if their program does not obligate Uncle Sam to shell out more money.

“We applaud the president’s affordable-care program, but we know it leaves 3 million Californians without insurance,” Leno said.

In some areas the state version of health care reform seems more comprehensive.

S.B. 810 would provide dental care – something largely not addressed in the federal program.

The California proposal would also cover both legal and illegal residents.

“Infection and disease does not recognize immigration status,” Leno said.

S.B. 810 is estimated to save California about $20 billion its first year through reduced administrative costs, based on a study conducted in 2006, for an earlier go-around with this proposal.

The bill has passed through Senate Health Committee and is now in the Rules Committee.

Leno said the bill will not advance this year and that the 2006 study will be redone to bring up-to-date figures to a campaign for its approval next year.

Single-payer systems were passed twice by the Legislature in recent years, only to be vetoed each time by then-Gov. Arnold Schwarzenegger.

The proposal was tabled in 2009.

Leno reintroduced it in January, making this the fourth effort.

“We (were not) surprised,” Venus said. “There is never new bill ideas, just different people introducing it. Now they have a Democratic governor.”

Leno said he has not discussed the plan in detail with Gov. Jerry Brown, but noted that when Brown ran against former President Bill Clinton in the 1992 presidential primary, he said he favored a nationwide universal health care plan.

Leno said he hopes to have that in-depth conversation with Brown soon.

Patrick Johnston, the president and CEO of the California Association of Health Plans, said S.B. 810 “has no chance of becoming a law.”

The association represents 39 public and private organizations that provide health care coverage to more than 21 million Californians.

He said an analysis of the bill in a previous form determined there would be a shortfall of $45 billion three years after its implementation.

“There is not enough money in the system to provide services to everyone who shows up,” Johnston said, adding that private money to purchase new medical technology would dry up. “The president and Congress reviewed all the options and decided on the course of the affordable health care plan.

“Implementing that federal law is a huge task that state and federal health care officials are working on. The debate over this law is a diversion” from the work that needs to be done, he said.

One academic observer of health care policy said, “If you think the fight over affordable care was nasty, you haven’t seen anything yet.”

“This plan is going to gore a lot of oxen,” said Gerald F. Kominski, associate director for UCLA Center Health Policy Research. “No. 1 is the insurance industry. They are not about to see their business go up in smoke.”

Kominski said that the federal Patient Protection and Affordable Care Act “is a very moderate, middle-of-the-road approach to health care reform. It fills the gaps in the current system.”

On the other hand, he said the state proposal “is a fundamental reform.”

Asked if he thought S.B. 810 has a chance to become reality, Kominski said, “I’ve seen enough things happen to never say `never.’ I don’t know how the ongoing financial crises might change public opinion on health care to vote for a more fundamental change of health care delivery.”

http://www.contracostatimes.com/california/ci_18118630?nclick_check=1

Medicaid maintenance-of-effort

GOP Pushes To Let States Reduce Medicaid Rolls

By Mary Agnes Carey and Phil Galewitz
Kaiser Health News, May 23, 2011

Medicaid covers about 56 million Americans, with states sharing the costs with the federal government. States have been barred from cutting eligibility for the program since 2009 when economic stimulus legislation gave states billions to prop up their Medicaid program on the condition they didn’t tighten eligibility standards. The 2010 health law extended this requirement until 2014.

President Obama and congressional Democrats say eliminating the “maintenance-of-effort” provision would increase the challenge of expanding Medicaid in 2014; an additional 16 million people will qualify, with the federal government picking up most of the cost.

The House Energy and Commerce Health Subcommittee voted along party lines earlier this month to repeal the Medicaid “maintenance of effort” requirement. The legislation is expected to pass both the full Energy and Commerce panel and the GOP-controlled House. A vote on similar standalone legislation in the Democratic-controlled Senate is unlikely but the measure could end up in a debt-limit package.

But liberals have at times been disappointed by Obama’s concessions, including last year’s deal to extend the Bush-era tax cuts. They worry that the president will ultimately feel compelled to trade away the “maintenance-of-effort” requirements. The White House declined to comment.

http://www.kaiserhealthnews.org/Stories/2011/May/24/medicaid-maintenance-of-effort-republicans.aspx

As has been said many times in these messages, Medicaid is a welfare program, and our politicians will continue to approach it as such. It will remain underfunded and will always be vulnerable to budgetary decisions. Not only did the Affordable Care Act greatly expand coverage with the highly flawed private insurance plans, it also greatly expanded the highly flawed Medicaid program. It’s still not too late to eliminate these unsatisfactory programs and replace them with an improved Medicare that covers everyone.

Vermont Steps Closer To Single-Payer Health Care

By NPR Staff, All Things Considered
NPR, May 22, 2011

Vermont is about to accomplish something the federal government couldn’t.

Once Gov. Peter Shumlin signs a bill on May 26, the state will be on track to having a single-payer health care system.

“We’re actually trying to design the first single-payer health care system for America,” Shumlin told Guy Raz, host of weekends on All Things Considered.

“Basically what our system will do is treat health care as a right and not a privilege,” he says. “We want to design a system where health care will follow the individual, and not be a requirement of the employer, which we think will be a huge jobs creator.”

Most importantly, Shumlin says, it’ll be a publicly financed system. Everyone pays, and the state uses those “health care dollars to make us healthier, not to enrich insurance companies, inefficiency, waste, and the current fee-for-service system, which bills providers based on how much service they do.”

But don’t break out the Canada comparisons just yet.

Vermonters aren’t going to wake up to a single-payer system overnight. What’s being passed is more of a framework. They are using the Affordable Care Act, the hotly contested bill passed last year by Congress, as a bridge for the state to get there. When that bill becomes law in 2014, so will Vermont’s plan.

The basic outline looks like this: The federal government, Vermont’s state government and employers will all still pay in for health insurance. That money will then all flow through Green Mountain Care, Vermont’s official health insurance. To equalize the rates consumers pay, the state will ask the federal government for Medicaid waivers. The state government must also court national employers that do business in Vermont to put their employees on Green Mountain Care.

The bill doesn’t lay out hard specifics on how to pay for it all, which has critics nervous. A financial exploratory committee has the task of putting together a proposal due January 2013, but for now Shumlin isn’t worried. He says there are only a few different options to choose from in order to pay for a publicly financed system, like using Medicaid vouchers.

The logistics will come in time, he says. Right now, the cost of health care is swelling and Shumlin believes setting Vermont up on a single-payer system will create a more sustainable way to take care of everybody.

“We have a crisis,” he says. “What I find alarming is that so many of us are willing to pretend that everything is going to be OK if we stick with the current system. So we’re taking the bull by the horns up here in Vermont.”

If Vermont does get it right, it could see more businesses and jobs coming in. Shumlin sees this type of health insurance as a big financial ease for employers, especially small-business owners.

That’s a big economic incentive, but it wasn’t enough to save the single-payer provision of the Affordable Care Act from being axed by Congress last year. [PNHP note: the writer is almost certainly referring to the “public option,” since there was no “single-payer provision” in the draft federal legislation.] Yet Vermont might be the right size and the right political environment to be a sandbox for a single-payer system in America, and Shumlin believes it could serve as a model for other states.

“We want to figure this one out and get it right,” Shumlin says, “Then we hope that perhaps others might follow.”

http://www.npr.org/2011/05/22/136502764/vermont-steps-closer-to-single-payer-health-care

Vermont closing in on single payer

By Ezra Klein
The Washington Post, 05/09/2011

Kevin Outterson is an associate professor of health law, bioethics and human rights at Boston University, as well as a blogger at the Incidental Economist. He’s also been following the Vermont health-care reform process in some detail, and is one of fairly few people who has actually read the 141-page single-payer bill that the governor is poised to sign. Earlier this afternoon, he walked me through what he’s learned.

Ezra Klein: What is Vermont passing, exactly? My understanding is that they’re not going to sign this legislation and wake up with single-payer health care the next day. So what’s in this bill, and what does it do?

Kevin Outterson: This bill is more of a framework. For example, they left out all the financing. But it sets a planning process for a single-payer — or what they’re calling a “single-payment” — system. If you read the various reports and presentations they’ve released so far, you can get a sense of where that’s going. Their plan is to roll every payer they can into one system. It’s easy to do with state and municipal employees. They might be able to do it with the individual and small-group markets that they regulate under the terms of the Affordable Care Act. They are going to ask the Obama administration for waivers for Medicaid, so they’d get the Medicaid money and use it in this system, and they also want a waiver for Medicare, which I’m not sure anyone has ever done before. And the last group they’re trying to woo in are the large, national employers who are regulated by ERISA. Their plan is to tax these employers whether they pay in or not, and then these employers have to ask themselves, “We’re already paying this tax, why wouldn’t we just put our employees into Green Mountain Care?”

EK: So all these different players remain part of the health-care system. But now their payments run through the Vermont state government.

KO: Right. So employers would still be paying in, the Vermont state government would still pay in, the federal government would still be paying in, but all the money would then flow through Green Mountain Care, the single-payment system. And for all providers, there’d just be one contract. It’d equalize payment rates between private insurance and Medicare and Medicaid. It’ll dramatically reduce their paperwork. That’s why they’re supporting it. And Blue Cross/Blue Shield of Vermont, which is the biggest insurer in the state, supports it.

EK: Wait, Blue Cross/Blue Shield supports it? Why? Won’t this put them out of business?

KO: You would think. But this is one of those Blue Cross plans that never sold out to Anthem. They’re still nonprofit. And they’ve got 70 percent of the market in Vermont. So the theory is they would administer the payment system. But they’re not alone. The Vermont Medical Association and the Vermont hospitals are supporting this legislation. [PNHP correction: the Vermont Medical Society has taken a neutral stance on the bill.] The most vocal opponents are the state association of insurance agents, and the drug companies are about to descend in force, because there’s a lot in there the drug industry won’t like.

EK: How quickly could something like this be up and running in Vermont?

KO: They can do a single-payment system fairly quickly for the state and municipal employees and the individual and small-group exchange markets that they regulate under the ACA. So that’s the core. And it’s pretty substantial. And if they get Blue Cross in, then they get Blue Cross’s customers. Then there’s Medicaid and Medicare, which will be a long process going back-and-forth with the Center on Medicaid and Medicare Services. And then the discussion with the big employers is happening now, as Vermont can toss this tax into place pretty quickly, which will force those guys in.

EK: But there’s no financing mechanisms in the bill yet, right? That seems like a pretty big omission.

KO: Vermont has a study group that’s been working on financing for a while and that’s been negotiating with these big employers to join the party. And they need them there: If they don’t tax the big guys, they don’t have the money, and if they don’t get buy-in from the big guys and they move their offices to New Hampshire, Vermont has a problem. But let’s say you’re Wal-Mart. You might be willing to take a risk on paying a bit more in Vermont because if it works and spreads, this might fix your long-term problems nationally. If I was a national employer with 3 or 4 million lives in my care, I might be willing to invest a little money to see if Vermont can do this.

EK: That national question seems like the interesting one. In Canada, single payer began in a single province and then spread across the whole country. If Vermont pulls this off successfully, it seems like the sort of thing that, in 10 or 20 years, could lead to very large changes in America’s health-care system.

KO: The first thing I posted on was the incredible power of Vermont’s version of the Independent Payment Advisory Board to control costs. If they do this and they’re successful, there are a number of other states that will want to try it. It’s a 20-year time horizon, but if you think national single-payer is a political nonstarter, this is where the action is. But that’s the question: whether they can control costs. That’ll be everything.

http://www.washingtonpost.com/blogs/ezra-klein/post/vermont-closing-in-on-single-payer/2011/05/09/AFvtBmZG_blog.html

Single-payer system provides security

By Thomas P Clairmont, W. Jost Michelsen and Patricia A Locuratolo
Letters, Portsmouth (N.H.) Herald, May 22, 2011

We read with interest the article on the Leadership Seacoast event on health care costs (Herald, May 5, 2011).

Identifying smoking, drinking and inactivity as contributing factors to these costs is exactly right. Unfortunately, the state has diverted every penny of the tobacco settlement money to be used for education of children about the dangers of smoking. Now they want to reduce the price of cigarettes to encourage even more of this disease-causing habit. Closing public pools and gyms are on their list, too. And they wonder why costs are rising.

Then there was a discussion about seniors, a group which has 10,000 members turning 65 every day for the next 20 years. At the end there will be 76 million of us. Are we really going to cut Medicare benefits for those who served/saved our country in World War II? That is just not right.

Finally, there was a discussion about Accountable Care Organizations of which the Mayo Clinic said “they would not participate, because the rules as written are so onerous it would be nearly impossible for them to succeed.”

There was absolutely no mention, as usual, of a publicly financed but privately delivered approach — also called single-payer or Medicare for All. Dr. David Himmelstein of Physicians for a National Health Program said reducing administrative overhead to Canadian levels would save $400 billion annually, “more than enough to cover our uninsured.” This is what most other countries do and they cover all of their citizens at a cost of less than half of the United States.

No one mentioned our neighboring state of Vermont, where Harvard Professor William Hsiao said “our research and analysis shows a single-payer system can immediately reduce health care costs in Vermont by 8 to 12 percent and reduce health care costs by an additional 12 to 14 percent over time.” His plan would cover every Vermont citizen.

No one mentioned the work of Dr. Jack Wennberg of Dartmouth, who said “bringing health care costs down to the level of Minneapolis or Seattle would save up to 40 percent, more than enough to offset any increase in public spending that might result from extending insurance coverage to the uninsured.” It is unbelievable that cost-saving research like this goes nowhere and gets no press at all. In testimony to the Portsmouth City Council in February, we said that extrapolating the Vermont data to Portsmouth would result in savings to local taxpayers of more than $1.5 million every year.

Those of you who “don’t want the government involved in my health care” must prefer the only alternative, Wall Street Medicine. You must be especially pleased with the current results. The CEO of United Health Care made $101.96 million last year and has a net worth approaching $1 billion. All seven of the leading insurance companies had huge profits and shareholder earnings in the first three months of this year. Of course, this wasn’t enough.

The New York Times, in a feature article on New Hampshire, demonstrated increases in health care premiums for various businesses of 20 percent to 43 percent for this year. Keep in mind that inflation in 2010 was 1.6 percent.

More than 130,000 of our fellow New Hampshire citizens have no insurance.

So here is our plan for you and your children. Note that health care will not be free. For about 5 percent of your income, taken out of your paycheck or paid from your other income sources, you will get comprehensive coverage with choice of doctor and hospital, and no additional out-of-pocket costs. There will be no manuals to read, and you will never have to raise funds to cover your health care. No one will make those obscene amounts of money ever again. And you will sleep well, knowing you and your family are fully covered for life.

If this health security appeals to you and your family, then question the candidates about what they are going to do, and push them, like in every other country, toward a universal system that makes sense and will improve the health of all Americans.

Thomas P Clairmont, MD, W. Jost Michelsen, MD, and Patricia A Locuratolo, MD, are members of the Physicians for a National Health Program and practice in Portsmouth, N.H..

http://www.seacoastonline.com/articles/20110522-OPINION-105220317

The Self-Rationing of Medical Care

Letters, The New York Times, May 22, 2011

Re “Health Insurers Profit as Many Postpone Care” (front page, May 14): How more scathing an indictment could there be of the insurance industry’s commodification of the nation’s health? In a faltering economy, the health insurers have rung up record profits, rewarded shareholders with new dividends and are demanding double-digit premium increases for fear of possible higher costs.

Is health a commodity to be sold for profit, for bonuses and dividends, or is our nation’s health a responsibility of our government? Can we not now, or ever, see the need to replace this needless, costly, money-sucking, claim-denying middleman, this so-called health insurance industry, with a single-payer government-administered system?

HERBERT BENGELSDORF
Hastings-on-Hudson, N.Y., May 14, 2011

The writer is a retired psychiatrist.

S&P Medicare and Commercial Indices

US Healthcare Costs Continue to Rise, But At Declining Rates According to the S&P Healthcare Economic Indices

S&P Indices
May 19, 2011

David M. Blitzer, Chairman of the Index Committee at Standard & Poor’s:

“If you look over the last year or so of data, it is apparent that the rates of increase in health care costs continue to slow down. While there was some volatility within months, the general trend has been a slowdown across all nine of the indices we publish. Most of the annual growth rates peaked in the late winter/early spring of 2010. Since then, most of these rates have fallen by 2 percentage points or more. The biggest slowdown has come from the Hospital Medicare Index, where the annual growth rate fell from +8.30% in August 2009 to +1.18% in March 2011. On the other hand, we have not seen an equal trend for the Hospital Commercial Index, where the annual growth rate peaked at +9.36% in May 2010, and is still reporting a healthy +8.36% as of March 2011. This phenomenon could be the possible result of two things: (1) costs for Medicare patients are being better contained than those covered under commercial insurance plans and (2) hospitals are using more procedures and services covered under commercial plans, contributing to the increase in total costs. We see a similar differential across the Professional Services Indices, but not as severe.”

For the past several years, the trend of medical costs funded by commercial insurance plans is significantly greater than those funded by Medicare.

Click on this link for two graphs dramatically demonstrating these differences:
http://www.standardandpoors.com/servlet/BlobServer?blobheadername3=MDT-Type&blobcol=urldocumentfile&blobtable=SPComSecureDocument&blobheadervalue2=inline%3B+filename%3Ddownload.pdf&blobheadername2=Content-Disposition&blobheadervalue1=application%2Fpdf&blobkey=id&blobheadername1=content-type&blobwhere=1245305077461&blobheadervalue3=abinary%3B+charset%3DUTF-8&blobnocache=true

Comment: 

By Don McCanne, MD

We frequently see reports that attempt to explain away the findings that medical costs funded by private commercial insurance plans are significantly greater than those funded by Medicare. This report from Standard and Poor’s leaves absolutely no doubt that the difference is not only real, but it is very significant.

Just to show how different the people on Wall Street think, the Hospital Commercial Index is reported as “a healthy +8.36% as of March 2011.” Leave it to Wall Street gurus to declare that extremely high private sector (commercially insured) health care cost increases are “healthy.” You would think that businesses paying commercial rates rather than Medicare rates would take notice.

A Doctor's Push for Single-Payer Health Care for All Finds Traction in Vermont

By ABBY GOODNOUGH
The New York Times, May 21, 2011

MONTPELIER, Vt. — Many people move to Vermont in search of a slower pace; Dr. Deb Richter came in 1999 to work obsessively toward a far-fetched goal.

She wanted Vermont to become the first state to adopt a single-payer health care system, run and paid for by the government, with every resident eligible for a uniform benefit package. So Dr. Richter, a buoyant primary care doctor from Buffalo who had given up on New York’s embracing such a system, started lining up speaking engagements and meeting with lawmakers, whom she found more accessible than their New York counterparts.

“I wrote a letter to the editor, and the speaker of the House called me up to talk about it,” Dr. Richter, 56, recalled recently. “It was astounding. In New York, I couldn’t even get an appointment with my legislator.”

Twelve years later, Dr. Richter will watch Gov. Peter Shumlin, a Democrat, sign a bill on Thursday that sets Vermont on a path toward a single-payer system — the nation’s first such experiment — thanks in no small part to her persistence. Though scores of people pushed for the bill, she was the most actively involved doctor — “the backbone,” Mr. Shumlin has said, of a grass-roots effort that helped sway the Democratic Legislature to pass it this spring even as other states were suing to block the less ambitious federal health care law.

“We wouldn’t be where we are without Deb,” Mr. Shumlin said in an interview. “She’s made this her passion. And like anyone that’s making significant social change, she has qualities of persuasiveness and leadership and good judgment that are hard to find.”

As in all states, the cost of health care has increased sharply in Vermont in recent years. It has doubled here over the last decade to roughly $5 billion a year, taking a particular toll on small businesses and the middle class. All 620,000 of the state’s residents would be eligible for coverage under the new system, which proponents say would be cheaper over all than the current patchwork of insurers. A five-member board appointed by the governor is to determine payment rates for doctors, what benefits to cover and other details.

But much remains to be worked out — so much that even under the most optimistic projections the plan might not take effect until 2017. Most significantly, Mr. Shumlin still has to figure out how much it will cost and how to pay for it, possibly through a new payroll tax. Whether he will still be in charge by 2017 is among the complicating factors.

“If we had the exact same Legislature and the same governor we could get it done,” Dr. Richter said. “It’s a big if, because the opposition has a ton more money to convince people that the governor is evil and this is socialized medicine and all kinds of other scary stuff.”

The opposition will probably include insurance companies, drug makers and some employers who say there are too many unknowns. Many doctors, too, are wary of the change and what it might mean for their income. Dr. Richter said she believed a “slim majority” of the state’s 1,700 licensed physicians were supportive.

“One of the bigger worries I have is we’ve had all this hoopla and nothing’s going to happen,” she said at a coffee shop here recently on a rare quiet afternoon. “But it might also be helpful to us, because it’s going to be hard for any opposition to be steadily pushing for seven years.”

The federal health care law has complicated Vermont’s plans, requiring the state to first create a health insurance exchange to help residents shop for coverage by 2014. The state would then need a federal waiver to trade its exchange for a government-run system.

Dr. Richter said she embraced the idea of a single-payer system as a young doctor in Buffalo, where many of her patients put off crucial treatments because they were uninsured. As a medical student, she saw a patient with a life-threatening heart infection caused by an infected tooth that had gone untreated because he lacked dental insurance.

“He was in the hospital for six weeks, and I was like, ‘This makes no sense,’ ” she said.

She went to a meeting of Physicians for a National Health Program, a group that advocates for a national single-payer system, and started researching the concept. Before long she became a vocal advocate, even becoming president of the physicians’ group, and moved to Vermont.

John McClaughry, a former Republican state senator who is against the new law, said Dr. Richter meant well but did not understand the “long-term damage” it would wreak. In particular, he said the law would drive away businesses that did not want to help pay for it.

“She’ll tell you that putting in single-payer will attract businesses from all over the place,” said Mr. McClaughry, vice president of the Ethan Allen Institute, a conservative research group. “I don’t think she has any appreciation of business decisions at all.”

Since moving with her husband and two sons to a rambling old house within view of the State House, Dr. Richter has given about 400 talks on the single-payer concept, tutored lawmakers in the State House cafeteria and testified before the Legislature more times than she can remember. Once, she presented a printout of all the insurance companies her small practice in Cambridge had billed over five years.

“It was like 190 pages long,” she said. “Here we were, this tiny rural clinic having to bill all these different addresses. And all of them have different rules and reimbursements; I mean, it’s ridiculous.”

Some supporters of single-payer health care say Vermont’s law does not go far enough, mostly because it would allow at least a handful of private insurers to stay in the market indefinitely. Self-insured businesses like IBM, the state’s largest employer, could continue providing health coverage to workers under the law, though they would have to help finance the new system, possibly through a payroll tax.

Physicians for a National Health Program is among the critics, saying the law “falls well short of the single-payer reform needed.” Allowing private insurers to remain in the state will prevent meaningful savings, the group says.

Dr. Richter acknowledges that the law will not allow for “strict single-payer,” but said it still promised “health care for everybody, for less cost.”

“This is not the top of the mountain, but it’s the first time anyone has headed up the mountain,” she said. “No other place in the country has gotten this far.”

http://www.nytimes.com/2011/05/22/us/22vermont.html?_r=1&hp=&pagewanted=all

The Big (and Profitable) Business of Dying

By Marlys Harris
CBS Moneywatch: The Consumer Reporter, May 21, 2011

Taking leave of life is never good. But when the time comes, most people would like to think that they could come to an end free of pain, without needles stuck in their veins or tubes up their noses, surrounded by their families, preferably at home or in a home-like setting.

Achieving that dignified death has been the purpose of the hospice movement which got its start with Dame Cicely Saunders, a physician who founded St. Christopher’s Hospice in 1967 in a London suburb. She eventually exported the hospice concept to America via the Yale School of Nursing where she taught the holistic treatment — spiritual, medical, psychological — of dying patients. Rather than being subjected to so-called heroic measures that were often inhumane and of little benefit, terminal patients in hospice would be able to choose the end-of-life care they would receive.

Initially, small nonprofit groups, many of them composed of dedicated volunteers, provided care. Now, however, according to a study published in the summer issue of the Journal of Law, Medicine and Ethics, hospice care has evolved into “a multimillion dollar industry where the surviving nonprofits compete with for-profit providers, often publicly traded, managed by M.B.A.-trained executives, and governed by corporate boards.” Right now approximately 52 percent of hospices are for-profit, 35 percent are non-profit, and 13 percent are owned by the government.

Can this possibly be a good development? I guess I would put it on a par with for-profit prisons, which haven’t worked out so well (what with owners scrimping on medical care, food and rehabilitation), for-profit orphanages, which, thank heavens, haven’t been around since Oliver Twist, or for-profit organ sales and child adoptions, which are both outlawed. The incentives for profit, say the study’s authors, Joshua E. Perry, assistant professor in the Department of Business Law and Ethics at Indiana University’s Kelley School of Business and Robert C. Stone, an emergency medicine physician and assistant medical director at Indiana University Health Bloomington Hospital Hospice, are not necessarily on the side of the patient.

Fueling the money-making is Medicare which since 1982 has provided a hospice benefit for terminally ill patients — those whom physicians certify to have a life expectancy of 6 months or less. The government pays a set daily rate, currently about $143, regardless of the services actually provided on any given day. By 2008, according to study authors, hospice expenditures exceeded $11 billion, Medicare beneficiaries receiving hospice services (for increasingly longer periods of time) topped one million. (The National Hospice and Palliative Care Organization reports that in 2009, hospices served a total of 1.56 milion patients.) The number of hospice locations has risen to about 3,300, most of the increase coming from for-profit providers.

And, the for-profit business has been, well, amnazingly profitable. A 2005 study in the Journal of Palliative Medicine found that large hospices owned by publicly traded companies generate margins nine times higher than those of large nonprofits. “These cost savings and profit margins appear to flow primarily from business decisions relating to selective recruitment of a longer-term, increasingly non-cancerous, population of Medicare patients and the payment of lower salaries and benefits to less-skilled staff,” say study authors.

And what about quality? While Perry and Stone are cautious about drawing conclusions, others have. For example, a 2004 Medical Care study of 2,080 patients enrolled in 422 hospices across the country found that “terminally ill patients who receive end-of-life care from for-profit hospice providers receive a full range of services only half the time compared with patients treated by nonprofit hospice organizations.” Families of patients receiving care from a for-profit hospice received counseling services only [45% as often] as those in a nonprofit hospice. What’s more, for-profit hospices are only half as likely as nonprofits to provide palliative radiotherapy, which reduces pain for patients with tumors. Research from the University of California, Irvine, found that patients who stay longer at for-profit hospices receive less high-skilled nursing care-such as tracheotomy care, wound care, and suctioning or feeding tubes-because skimping on these services keeps costs down.

In fact, tumor care happens less in for-profit hospices because they take on a smaller share of cancer patients, partly because their care costs more than that of patients with other diseases. “For-profits are targeting long-term dementia patients,” says Joshua Perry. Their demise could be years in the future, but, he adds, “as long as the hospice medical director declares them terminal every 60 days, Medicare will pay.” Gaming the system boosts profits but also perhaps unfairly burdens taxpayers, adds Perry.

When you (or someone you love) is in extremis, you don’t exactly go shopping for a hospice program. “Consumers can’t evaluate a hospice like they would a cell phone or a car,” says Perry. “They are compromised, overwhelmed, in a different state of mind.” Usually, the hospital or nursing home sends in – or recommends — the hospice team. It’s unlikely that you’d know whether they are non- or for-profit. And the study authors point out that hospice providers don’t always get business on the merits. For example, VITAS Hospice Services, LLC, the largest provider of hospice services in the United States reportedly sends its patient recruiters into nursing homes equipped with pens and coffee cups for staff and then pays a commission to those recruiters who successfully sign-up patients. A rival hospice provider was indicted for allegedly paying nursing home operators $10 per day to assist in patient recruitment efforts and paying physicians $89 a month to certify patients as hospice eligible without examining the patient or reviewing medical records.

MedPAC, which advises Congress on Medicare, has recommended a change in reimbursement — though not until 2013 — that would pay more per day in the earliest and last days of a patient’s hospice care, when service needs are most intense, and less for days in-between. But that will probably do little to discourage the for-profits’ cherry-picking of patients who are likely to last the longest — leaving the non-profits to deal with the sickest patients and giving them fewer resources to do so.

I am sure that there are some for-profit hospices that do a good job with their patients. But in general, you can’t say that the interests of for-profits and their patients are aligned. “Things get very messy when profit enters the picture,” says Perry. Until new regulations or payment structures come into place to remedy that, consumers had better be asking: who owns the hospice that’s providing care for me or my family?

http://moneywatch.bnet.com/spending/blog/consumer-reporter/the-big-and-profitable-business-of-dying/1107/