PNHP

First Single-Payer System Advances in Vermont Legislature

First Single-Payer System Advances in Vermont Legislature

By Robert Lowes
Medscape, April 26, 2011

Vermont is closer to becoming the first state in the country with something akin to a single-payer healthcare system after today’s 21 to 9 vote by the state Senate to approve the plan.

The measure, which preserves a role for private insurers alongside a single giant public plan, passed easily last month in the state House. However, because the state Senate amended what it received from the state House, the bill will likely go to a legislative conference committee for a final rewording, and then back to each chamber for one more vote, which could happen next week. Vermont Governor Peter Shumlin is expected to sign the measure into law at that time.

The concept of a single-payer system — in which all citizens are insured by a single payer — seems to have won over a majority of Vermont lawmakers, but not a majority of Vermont physicians. Of roughly 600 physicians who completed a recent online survey conducted by Democratic state Rep. George Till, MD, 44.2% support the single-payer concept, and 45.6% oppose it. In addition, 28.4% say they would likely stop practicing medicine in Vermont if such a plan gets off the ground.

The survey, criticized by some as unreliable because nonphysicians were able to participate covertly, also revealed a division between primary care physicians and their specialist peers with regard to Vermont-style healthcare reform. According to the survey, almost 62% of primary care physicians back the single-payer concept, whereas 56.5% of specialists oppose it. Nationally, organized medicine split along similar lines when it came to passage of federal healthcare reform in 2010. Both in Vermont and across the country, primary care physicians generally view their financial prospects as improving under healthcare reform, whereas specialists fear the opposite.

Vermont will not be the first state where lawmakers have enacted a single-payer system — that distinction belongs to California. However, Gov. Arnold Schwarzenegger vetoed such legislation twice, so the system was never implemented in that state.

Vermont Plan Hinges on Affordable Care Act Opt-Out

Even though a single-payer system — or, rather, a hybrid version of such a system — is on the verge of becoming Vermont law, it will not become a reality for a number of years, and state officials and lawmakers must take intermediary steps to make it happen.

As a prelude to a single-payer system, the legislation gets Vermont in sync with the new federal healthcare reform law known as the Affordable Care Act (ACA). The ACA requires states to set up so-called health insurance exchanges by 2014, through which individuals and small businesses can purchase coverage, with federal subsidies for those in need. The Vermont bill establishes such a state exchange for insurance shoppers.

Under the bill, the exchange created for the ACA could turn into a single-payer plan called Green Mountain Care, which would offer coverage to all Vermont residents. As the ACA reads now, states wishing to implement their own version of healthcare reform can begin to do so in 2017, provided they obtained a federal waiver. Such states must demonstrate that their plan would extend comprehensive and affordable health coverage to just as many people as the ACA, and not increase the federal deficit. They would then receive all the federal funds they would have been otherwise entitled to under the ACA.

Vermont may not need to wait until 2017 to opt out of ACA requirements and offer Green Mountain Care to its citizens, however. A bill sponsored by Sen. Ron Wyden (D-OR) and awaiting Senate consideration would move the opt-out year up to 2014.

Vermont also will need permission from the Centers for Medicare and Medicaid Services to include Medicaid and Children’s Health Insurance Program patients in Green Mountain Care, and to administer the Medicare program for Vermont seniors, who also would be covered.

In addition to receiving these federal approvals, Vermont will need to develop a benefit package for Green Mountain Care and come up with the necessary funding. The job of designing the benefit package falls to a new entity called the Green Mountain Care Board, which is also tasked with figuring out new ways to cut healthcare costs, pay providers, and strengthen the healthcare workforce.

Physician Group Says Vermont Plan Falls Short

Vermont is on the road to creating universal coverage, but it would be home to more than just a single payer; that is, Green Mountain Care. Residents would be allowed to maintain coverage they already have, and if they switch to Green Mountain Care, they could purchase supplemental “wrap-around” plans from private insurers. In addition, Vermont would contract with a private insurer to administer Green Mountain Care.

This mix of payers is one reason why the Physicians for a National Health Plan (PNHP) says the Vermont legislation falls short of the single-payer reform it advocates. Multiple payers multiply administrative costs that are eliminated by a true single-payer plan, according to the PNHP. The organization notes that in the amendment process, Vermont lawmakers expunged the phrase “single payer” from the bill, which now refers to a “universal and unified health system.” The PNHP also faults the Vermont plan for subjecting many patients to copayments that would obstruct access to care.

The Harvard University economist whom Vermont hired to design its hybrid single-payer plan — William Hsiao, PhD — countered in a Boston Globe interview that Vermont employers and employees alike would pay less for healthcare in his system than they do now, and would enjoy improved healthcare in the process.

Dr. Hsiao brought considerable experience to his assignment in Vermont — he helped design the single-payer healthcare system in Taiwan. In this country, and particularly in its medical circles, he is best known for developing the Resource-Based Relative Value Scale that Medicare uses to put a dollar value on physician services.

http://www.medscape.com/viewarticle/741447

Republican and Democratic Plans for Medicare and Medicaid Misguided: Push for Privatization will Accelerate Costs and Deaths

By Margaret Flowers, M.D.
FireDogLake, April 27, 2011

Leadership in Washington recognizes the damage our soaring health care spending is doing to our entire economy. Although their rhetoric differs, recent budget proposals from both Republicans and Democrats mistakenly place the blame on Medicare and Medicaid. Cuts to and privatization of these important public insurances will place us on a dangerous path that will leave health care costs soaring and more patients unable to afford necessary care.

Medicare and Medicaid must be left out of the discussion entirely until leadership has the courage to address the real reasons why our health care costs are rising, the toxic environment created by investor owned insurances and the profit-driven health care industry.

Health care spending in the United States is the highest in the world and in some cases is two times higher than spending in other industrialized nations, which achieve nearly universal coverage with better health outcomes than the U.S. Our soaring health care costs outpace our growth in GDP, inflation and wages. By any measure it is an unsustainable situation.

If we look at the various health care models in the United States, we find that the rise in spending is lower for traditional (non-privatized) Medicare and Medicaid than it is for the private sector. Our public insurances are our most efficient insurances with administrative costs of around 3%, despite the fact that they cover our most vulnerable and least healthy populations. Administrative and marketing costs for private plans are 15% or more, and the plethora of private plans further increase cost and complexity as patients and health professionals try to navigate their arbitrary and ever-changing rules.

Medicare and Medicaid are the victims of our current fragmented and profit-driven model of paying for health care which has resulted in high prices for health services and medications.

Private health insurers are financial institutions designed to create profit by obstructing, denying and restricting access to health care. They add no value to our health and in fact their business practices have polluted health care financing causing all insurances to adopt their practices in order to ‘compete’.  They have also fragmented the health care market and thus the ability to negotiate for fair prices for goods and services leading to the highest prices for pharmaceuticals and procedures.

The commonsense solution is to eliminate wasteful and costly private health insurance and adopt a universal health care system modeled on the strengths of Medicare and given the power to negotiate for reasonable prices.

It is counterproductive to even discuss cuts to Medicare and Medicaid before addressing the fundamental reasons for rising costs. Yet, both Democrats and Republicans have focused on cuts to Medicare and Medicaid in their budget proposals.

The Ryan budget proposal, the Path to Prosperity, would fully privatize Medicare by moving to a voucher system in 2022 forcing all seniors to purchase private insurance. The vouchers are not designed to keep up with the rate at which health care costs are increasing so that over time seniors will either have to pay more out of pocket for health insurance premiums or will choose skimpier insurance plans that leave them unprotected should they have a serious illness or accident. Nearly half of Medicare enrollees have an income that is less than twice the federal poverty leveland so have little room to absorb an increased share of health care costs.

Medicaid is significantly limited under the Ryan budget proposal which plans to cut overall Medicaid spending by $800 billion over ten years and change to block grants for each state. Block grants will mean that individual states will continue to be under economic pressure to limit who and what services are covered. As fewer are covered by Medicaid, they will have to either purchase private insurance through the exchanges or either seek a waiver from or be penalized for not purchasing insurance.

The Obama administration supports cuts to Medicare through the Independent Payment Advisory Board (IPAB) which is tasked with keeping per capita Medicare spending below a target level which is set to be lower than the current rate of health care cost inflation. Rather than blatantly privatizing Medicare as called for in the Ryan proposal, the President’s plan will slowly strangle Medicare leaving seniors struggling to find physicians able to care for them.

The IPAB was actually created in the Affordable Care Act (ACA). The President’s budget proposal would increase the power of the IPAB to cut Medicare costs. Medicaid spending is also capped under the President’s budget.

Sadly, the Peoples Budget put forth by the Congressional Progressive Caucus rubberstamps the President’s approach to cutting Medicare and Medicaid spending.

Underneath cuts to Medicare and Medicaid is a dangerous trend of increasing privatization of health care in the U.S.

There is a growing trend to put more of our population into private insurances and a growing privatization of our public health insurances. Over the past few years as the number of people able to afford employer sponsored health insurance has fallen, private health insurance profits have continued to grow as they move into providing insurance to or administering plans for the Medicare and Medicaid populations.

The ACA puts more people into the private insurance market by mandating that all uninsured who do not qualify for public health insurance purchase private insurance through the exchanges starting in 2014 and subsidizes the purchase of private insurance using public dollars.

Half of the newly insured under the ACA are eventually supposed to come from an expansion of Medicaid eligibility. However, the Department of Health and Human Services has already allowed state expansions in Medicaid coverage to lapse. A recent White House Fact Sheet also supported allowing states to place their Medicaid population into priva
te insurance through the health insurance exchanges.

Privatization of health care is a failed experiment in the United States.

The United States differs from other nations in allowing investor-owned corporations to profit at the expense of human suffering and lives. After decades of experience with this unique privatized model of financing health care, the results are clear and startling.

The United States has the highest per capita health care costs, the highest prices for medical goods and services (and lower overall usage rates) and no control over health care spending. Despite attempts to patch the current health care situation, the number of uninsured and those with skimpy health insurance that leaves them unable to afford health care or at risk of medical bankruptcy continues to grow. Suffering and preventable deaths are higher in the U.S. than in other industrialized nations.

In addition, there have been no significant gains in important measures of health such as life expectancy and infant and maternal mortality rates. Our health disparities continue to grow, especially for those who have chronic conditions. And our health care workforce continues to be inadequate as health professionals quickly burn out from trying to practice in our complex and irrational health care environment.

It is time to recognize the failure of the market model of paying for health care and embrace comprehensive and effective health reform. The model for our ‘uniquely American’ solution lies in traditional Medicare, a single payer health system for those who are 65 years of age and over.  Since its inception 45 years ago, Medicare has lifted seniors out of poverty and improved their health status.

Physicians for a National Health Program advocates for an improved Medicare for all health system, one that builds on the strengths of Medicare such as its universality, administrative efficiency and the patient’s freedom to choose a health provider, and also corrects the weaknesses of Medicare such as the lack of comprehensive benefits, out of pocket costs and low reimbursement rates.

Both Democrats and Republicans are missing the point by putting the emphasis on controlling Medicare and Medicaid costs without effectively addressing the reasons for our rising health care costs. Rather than embracing the Republican rhetoric which blames our public insurances, Democrats would do well to call out the real reason for our health care spending crisis, our current fragmented and profit-driven model, and advocate for a national improved Medicare for all.

Dr. Margaret Flowers is a pediatrician who serves as Congressional Fellow for Physicians for a National Health Program (www.pnhp.org).

http://my.firedoglake.com/mflowersmd/2011/04/27/republican-and-democratic-plans-for-medicare-and-medicaid-misguided-push-for-privatization-will-accelerate-costs-and-deaths/

Commonwealth Fund report on affordability is no cause for celebration

Realizing Health Reform’s Potential: Will the Affordable Care Act Make Health Insurance Affordable?

By Jonathan Gruber and Ian Perry
The Commonwealth Fund
April 2011

Abstract:

Using a budget-based approach to measuring affordability, this issue brief explores whether the subsidies available through the Affordable Care Act are enough to make health insurance affordable for low-income families. Drawing from the Consumer Expenditure Survey, the authors assess how much “room” people have in their budget, after paying for other necessities, to pay for health care needs. The results show that an overwhelming majority of households have room in their budgets for the necessities, health insurance premiums, and moderate levels of out-of-pocket costs established by the Affordable Care Act. Fewer than 10 percent of families above the federal poverty level do not have the resources to pay for premiums and typical out-of-pocket costs, even with the subsidies provided by the health reform law. Affordability remains a concern for some families with high out-of-pocket spending, suggesting that this is the major risk to insurance affordability.

What are necessities?

The Family Economic Self-Sufficiency Standard (FESS) considers necessary expenditures as:
• child care
• food
• housing
• taxes
• transportation
• miscellaneous (calculated as 10% of other costs).

Exhibit 3. Percent of Households That Do Not Have Room in Budget for Health Care (after paying for necessities + subsidized premium + subsidized out-of-pocket costs at the 90th percentile)

At each reported income as a percent of poverty level:
<Poverty – 17.3%
101-150 – 10.8%
151-200 – 17.5%
201-250 – 26.2%
251-300 – 24.2%
301-350 – 17.5%
351-400 – 12.5%
401-450 – 15.3%
451-500 – 12.0%
>500 – 2.5%

Affordability generally increases as incomes increase, although affordability is particularly challenging for families at 201 percent to 300 percent of poverty with high out-of-pocket expenses (90th percentile). Because the actuarial value of available plans falls from 100 percent for those below the poverty level to between 70 percent and 73 percent for those in this bracket, about one-quarter of families in this income range with very high out-of-pocket costs cannot afford health care–related costs.

http://www.commonwealthfund.org/~/media/Files/Publications/Issue%20Brief/2011/Apr/1493_Gruber_will_affordable_care_act_make_hlt_ins_affordable_reform_brief_v2.pdf

News reports on this new Commonwealth Fund study have cheery titles such as, “Health Reform Will Make Insurance Affordable for Nearly All Families.” These titles should be extended to include, “… But Not Health Care.”

Exhibit 3 noted above reveals that up to one-fourth of those with out-of-pocket costs at the 90th percentile level will not have enough money to pay for their necessities plus subsidized premiums plus subsidized out-of-pocket costs for their care. Even 2.5 percent of individuals with high incomes (over 500 percent of the poverty level – $111,750 for a family of four) will face financial hardship should they have greater health care needs.

Also of concern is that the assumption is made that all income beyond the necessities listed would be used for health care if financial hardship were to be avoided. Presumably that would mean no money for savings, for retirement, for higher education expenses, for vacations, for entertainment, nor for thousands of other preferences you might have for your spending. Is that the standard that we want to set? That we pay out what we need merely to exist and then almost everything else goes to pay for health health care if we need it?

Other exhibits in this report show that the outlook is worse for single individuals, for those living in states with a higher cost of living, and in the future it will be worse for everyone since affordability erodes further with the passage of time.

So what accounts for the cheery headlines? It is only subsidized health insurance that is affordable for most, but even there not all. Left out of the headlines is the fact that out-of-pocket expenses are not affordable for far too many.

Because the majority of people are healthy, the report concludes, “Fewer than 10 percent of families above the federal poverty level do not have the resources to pay for premiums and typical out-of-pocket costs, even with the subsidies provided by the health reform law.” The celebration is for the 90 percent who may have some funds left after paying for necessities plus health care. But isn’t the purpose of health insurance to take care of that 10 percent who face financial hardship in the face of health care needs? Or even the 2.5 percent who are wealthy and need health care but can’t afford it?

A properly designed single payer system eliminates for everyone financial hardship due to health care costs. Premiums are not a problem because the entire health care system is funded through equitable tax policies. Out-of-pocket spending is not a problem because first dollar coverage applies to all essential health care services and products.

Let’s all work to expose the deceptive rhetoric that the Patient Protection and Affordable Health Care Act has made health care affordable for almost everyone, when in fact, when you need health care, every last dime is squeezed out of you and that still isn’t enough for up to one-fourth of us with significant health care needs. In the same breath, let’s let the public know that there is a way we can do it – a single payer national health program.

How would Marcus Welby, M.D. fare in an ACO?

Family Physician Can’t Give Away Solo Practice

By Gardiner Harris
The New York Times
April 22, 2011

Handsome, silver-haired and likable, Dr. (Ronald) Sroka is indeed a modern-day Marcus Welby, his idol. He holds ailing patients’ hands, pats their thickening bellies, and has a talent for diagnosing and explaining complex health problems.

A former president of the Maryland State Medical Society, Dr. Sroka has practiced family medicine for 32 years in a small, red-brick building just six miles from his childhood home, treating fishing buddies, neighbors and even his elementary school principal much the way doctors have practiced medicine for centuries. He likes to chat, but with costs going up and reimbursements down, that extra time has hurt his income. So Dr. Sroka, 62, thought about retiring.

He tried to sell his once highly profitable practice. No luck. He tried giving it away. No luck.

Dr. Sroka’s fate is emblematic of a transformation in American medicine. He once provided for nearly all of his patients’ medical needs — stitching up the injured, directing care for the hospitalized and keeping vigil for the dying. But doctors like him are increasingly being replaced by teams of rotating doctors and nurses who do not know their patients nearly as well. A centuries-old intimacy between doctor and patient is being lost, and patients who visit the doctor are often kept guessing about who will appear in the white coat.

The share of solo practices among members of the American Academy of Family Physicians fell to 18 percent by 2008 from 44 percent in 1986. And census figures show that in 2007, just 28 percent of doctors described themselves as self-employed, compared with 58 percent in 1970. Many of the provisions of the new health care law are likely to accelerate these trends.

“There’s not going to be any of us left,” Dr. Sroka said.

Indeed, younger doctors — half of whom are now women — are refusing to take over these small practices. They want better lifestyles, shorter work days, and weekends free of the beepers, cellphones and patient emergencies that have long defined doctors’ lives. Weighed down with debt, they want regular paychecks instead of shopkeeper risks.

http://www.nytimes.com/2011/04/23/health/23doctor.html

Comment: 

By Don McCanne, MD

Having been a general practitioner (as family physicians were called in those days) even before Marcus Welby ventured onto our television screens, I identify closely with the model of the traditional, altruistic physician as exemplified by the fictional Marcus Welby and the real-life Ronald Sroka. In this day of a push toward integrated health care systems, as exemplified by accountable care organizations (ACOs), what role would us relics of Hippocratic medicine rightfully assume?

We don’t have to speculate on this since that question is already being answered. Although we are in a transitional phase, there is widespread recognition that we need to reinforce our primary care infrastructure. Patient-centered medical homes, community health centers, primary care divisions of multi-specialty centers, and non-profit health maintenance organizations organized as fully integrated health systems are some of the models that have established primary care as a central coordinating element in health care delivery.

Even Medicare has recognized this need and has moved funds from over-priced technology to under-priced primary care. We are beginning to see additional funds being directed to pay for care coordination under primary care.

But it isn’t just about money. When I was in practice, I simply accepted the fact that we were so busy that we had to extend office hours into evenings and weekends, and we had to renounce the luxury of sleep because of delivering babies in the middle of the night and assisting in emergency surgeries at all hours of the day and night. My sanity was preserved by rotating call with my brother, so that I had every other night and every other Sunday off call.

More than money, younger physicians are especially concerned about life-style issues. They don’t accept the grindstone that we were on, and I don’t blame them. But they don’t have to. The integrated delivery systems of today and the future offer not only much more freedom for lifestyle choices, they also offer practice environments that allow greater access to specialized and supportive services that improve both the quality of the practice experience and the quality of the care that patients receive.

So where do ACOs fit into all of this? Likely time will show that this was a fairly nebulous concept – a wish that by working together physicians and hospitals could reduce spending while improving quality – but the concept lacks a defining structure. But isn’t that what these integrated systems are already doing, and were doing before the term “accountable care organization” was even coined? So we already have the promise of ACOs without the bureaucratic boondoggle required in the Patient Protection and Affordable Care Act. We should expand these systems whether or not we label them ACOs.

So what would Dr. Welby do today? We can answer that because Dr. Welby is alive and well and replicated throughout today’s medical school graduates, and those graduates are turning once again to primary care. The future of health care is in the good hands of these dedicated women and men who still cherish our Hippocratic values.

****

In the article, David J. Rothman, president of the Institute on Medicine as a Profession at Columbia College of Physicians and Surgeons, was quoted as follows: “Those of us who think about medical errors and cost have no nostalgia — in fact, we have outright disdain — for the single practitioner like Marcus Welby.” His followup statement released in response to the article is reassuring, defusing somewhat his unfortunate rhetoric:

“The quotation attributed to me in the April 24th New York Times story on primary care does not reflect the opinion, views or policy of the Institute on Medicine as a Profession. Nor does it accurately reflect my views. I have far too much respect for the medical profession, including solo practitioners, to make such offensive and derogatory statements. Rather, what I was trying to convey in a lengthy interview with the reporter (Gardner Harris) was my observations on what was being said and thought among a subset of health policy experts. However controversial or even misguided these views may be, they are seen as an aspect of the movement away from solo practitioners. It was not my intention to support or endorse this position but to call attention to it.

“To understand the principles that IMAP stands for, please read our agenda and mission. They contain descriptions of our programs promoting professionalism, including physician education and advocacy well as managing conflict of interest and strengthening evidence based medical practice.

“All of us concerned with medicine as a profession recognize that the decline of solo practice and the rise of group practice represent a crucial development that must be closely analyzed. We must consider how professionalism can best be maintained and strengthened under new types of delivery systems. Disparaging comments, whether wrongly attributed to me or to others, only serve to undercut constructive thinking and innovative policies.”

http://www.imapny.org/about_imap/news__announcements/4-25-11

The Special Doctor-Patient Relationship

Letters
The New York Times, April 25, 2011

Re “Patients Are Not Consumers” (column, April 22): Bravo to Paul Krugman. As a physician for 44 years, I have seen the sick person seeking medical care transformed from a patient to a consumer and, like Mr. Krugman, I have been sickened by this.

Raised in a family of doctors, I was fed on medical ethics. Vulnerable patients rely on the ethical principles of their physicians. They should never have to fear that their physician will look at them only as consumers of the commodity called health care: fair game from whom the largest possible payment should be extracted.

Most physicians are motivated first by the desire to do good, to help their patients, not by greed. We will do more to help the situation by appealing to their ethical principles rather than to their business prowess.

It is time for us to join the rest of the industrialized world and treat health care as a social need instead of as a commodity. A Medicare-for-all national health plan would transform the patient back to what he is: a person in need of care, not a “consumer.” The Independent Payment Advisory Board created under the new health care law would fit such a plan.

ELIZABETH R. ROSENTHAL
Larchmont, N.Y., April 22, 2011

How would Marcus Welby, M.D. fare in an ACO?

Family Physician Can’t Give Away Solo Practice

By Gardiner Harris
The New York Times
April 22, 2011

Handsome, silver-haired and likable, Dr. (Ronald) Sroka is indeed a modern-day Marcus Welby, his idol. He holds ailing patients’ hands, pats their thickening bellies, and has a talent for diagnosing and explaining complex health problems.

A former president of the Maryland State Medical Society, Dr. Sroka has practiced family medicine for 32 years in a small, red-brick building just six miles from his childhood home, treating fishing buddies, neighbors and even his elementary school principal much the way doctors have practiced medicine for centuries. He likes to chat, but with costs going up and reimbursements down, that extra time has hurt his income. So Dr. Sroka, 62, thought about retiring.

He tried to sell his once highly profitable practice. No luck. He tried giving it away. No luck.

Dr. Sroka’s fate is emblematic of a transformation in American medicine. He once provided for nearly all of his patients’ medical needs — stitching up the injured, directing care for the hospitalized and keeping vigil for the dying. But doctors like him are increasingly being replaced by teams of rotating doctors and nurses who do not know their patients nearly as well. A centuries-old intimacy between doctor and patient is being lost, and patients who visit the doctor are often kept guessing about who will appear in the white coat.

The share of solo practices among members of the American Academy of Family Physicians fell to 18 percent by 2008 from 44 percent in 1986. And census figures show that in 2007, just 28 percent of doctors described themselves as self-employed, compared with 58 percent in 1970. Many of the provisions of the new health care law are likely to accelerate these trends.

“There’s not going to be any of us left,” Dr. Sroka said.

Indeed, younger doctors — half of whom are now women — are refusing to take over these small practices. They want better lifestyles, shorter work days, and weekends free of the beepers, cellphones and patient emergencies that have long defined doctors’ lives. Weighed down with debt, they want regular paychecks instead of shopkeeper risks.

http://www.nytimes.com/2011/04/23/health/23doctor.html

Having been a general practitioner (as family physicians were called in those days) even before Marcus Welby ventured onto our television screens, I identify closely with the model of the traditional, altruistic physician as exemplified by the fictional Marcus Welby and the real-life Ronald Sroka. In this day of a push toward integrated health care systems, as exemplified by accountable care organizations (ACOs), what role would us relics of Hippocratic medicine rightfully assume?

We don’t have to speculate on this since that question is already being answered. Although we are in a transitional phase, there is widespread recognition that we need to reinforce our primary care infrastructure. Patient-centered medical homes, community health centers, primary care divisions of multi-specialty centers, and non-profit health maintenance organizations organized as fully integrated health systems are some of the models that have established primary care as a central coordinating element in health care delivery.

Even Medicare has recognized this need and has moved funds from over-priced technology to under-priced primary care. We are beginning to see additional funds being directed to pay for care coordination under primary care.

But it isn’t just about money. When I was in practice, I simply accepted the fact that we were so busy that we had to extend office hours into evenings and weekends, and we had to renounce the luxury of sleep because of delivering babies in the middle of the night and assisting in emergency surgeries at all hours of the day and night. My sanity was preserved by rotating call with my brother, so that I had every other night and every other Sunday off call.

More than money, younger physicians are especially concerned about life-style issues. They don’t accept the grindstone that we were on, and I don’t blame them. But they don’t have to. The integrated delivery systems of today and the future offer not only much more freedom for lifestyle choices, they also offer practice environments that allow greater access to specialized and supportive services that improve both the quality of the practice experience and the quality of the care that patients receive.

So where do ACOs fit into all of this? Likely time will show that this was a fairly nebulous concept – a wish that by working together physicians and hospitals could reduce spending while improving quality – but the concept lacks a defining structure. But isn’t that what these integrated systems are already doing, and were doing before the term “accountable care organization” was even coined? So we already have the promise of ACOs without the bureaucratic boondoggle required in the Patient Protection and Affordable Care Act. We should expand these systems whether or not we label them ACOs.

So what would Dr. Welby do today? We can answer that because Dr. Welby is alive and well and replicated throughout today’s medical school graduates, and those graduates are turning once again to primary care. The future of health care is in the good hands of these dedicated women and men who still cherish our Hippocratic values.

****

In the article, David J. Rothman, president of the Institute on Medicine as a Profession at Columbia College of Physicians and Surgeons, was quoted as follows: “Those of us who think about medical errors and cost have no nostalgia — in fact, we have outright disdain — for the single practitioner like Marcus Welby.” His followup statement released in response to the article is reassuring, defusing somewhat his unfortunate rhetoric:

“The quotation attributed to me in the April 24th New York Times story on primary care does not reflect the opinion, views or policy of the Institute on Medicine as a Profession. Nor does it accurately reflect my views. I have far too much respect for the medical profession, including solo practitioners, to make such offensive and derogatory statements. Rather, what I was trying to convey in a lengthy interview with the reporter (Gardner Harris) was my observations on what was being said and thought among a subset of health policy experts. However controversial or even misguided these views may be, they are seen as an aspect of the movement away from solo practitioners. It was not my intention to support or endorse this position but to call attention to it.

“To understand the principles that IMAP stands for, please read our agenda and mission. They contain descriptions of our programs promoting professionalism, including physician education and advocacy well as managing conflict of interest and strengthening evidence based medical practice.

“All of us concerned with medicine as a profession recognize that the decline of solo practice and the rise of group practice represent a crucial development that must be closely analyzed. We must consider how professionalism can best be maintained and strengthened under new types of delivery systems. Disparaging comments, whether wrongly attributed to me or to others, only serve to undercut constructive thinking and innovative policies.”

http://www.imapny.org/about_imap/news__announcements/4-25-11

America Needs a Single Payer Health Care System

Even if Obama's overhaul works as planned, there will still be 23 million Americans lacking health insurance in 2019

By Kay Tillow
Other Words, April 25, 2011

More than a year after President Barack Obama signed the Patient Protection and Affordable Care Act into law, our nation’s health care delivery and coverage remain the disgrace of the industrialized world. There are more than 50 million uninsured Americans. Even if the health care overhaul works as planned, 23 million Americans will still lack health insurance in 2019.

The new norm is underinsurance. About 40 percent of us go without needed care because we can’t afford it. The health care law won’t change that, even once it’s completely phased in. Our plague of medical bankruptcies will continue too.

For unions, bargaining for health care is getting tougher as employers demand cuts and shift more costs to workers. Negotiations over better health coverage will become almost impossible when the excise tax on health benefits begins in 2018.

Many who saw the reform bill as “the best we could get” are disappointed that support for it hasn’t grown. The truth is that most people agree on the reform law. They love the parts that block insurance companies from denying coverage and care. They hate the parts that give away our tax dollars to insurance companies. They hate the mandate that will force everyone to buy insurance from the very companies whose profit motive is the source of most of our health care system’s problems. They hate the escalating costs of insurance and care.

Only a single payer system can bring us the parts we love and do away with the parts we hate. It would essentially expand Medicare coverage to all Americans, providing 100 percent guaranteed coverage regardless of employment status or pre-existing conditions. That may sound expensive, but it’s not. The “potential savings on paperwork, more than $400 billion per year, are enough to provide comprehensive coverage to everyone without paying any more than we already do,” according to Physicians for a National Health Program.

Every pro-patient measure in the law brings an ugly backlash from insurance companies, because they want to remain in the driver’s seat. For example, the act says children who have been sick can’t be denied coverage. Insurers have responded by refusing to sell child-only policies. The act says there must be minimal standards of coverage. Yet hundreds of companies have obtained waivers after threatening to drop coverage altogether.

The legislation is designed to expand Medicaid as the main way for states to cover more people. It prohibits states from dumping people currently covered. Yet with state budgets in crisis, Medicaid is under the knife. Arizona plans on dumping 250,000. Many states propose increasing patient co-pays, thus damaging the ability of patients to find doctors and fatally undermining rural hospitals.

Some assert that healthcare reform just isn’t working. Yet. Give it 10 years, and all will be fixed.

But our new health law is anchored on the private insurance industry–and that’s its fatal flaw. The insurers inflict enormous and unnecessary administrative costs on our system. This amounts to hundreds of billions of dollars every year and condemns us to spend about double, per capita, what other nations spend on health care.

Health care advocates must move beyond the health care reform law. Rep. John Conyers (D-MI) has reintroduced H.R. 676, the Expanded and Improved Medicare for All Act, which would bring all medically necessary care to everyone while assuring choice of physician. The bill is based on sound single-payer policy and progressive public funding.

If every other industrialized nation can make health care a human right, we can do it too. Our challenge is to pass effective legislation despite the powerful private health insurance companies and other corporations whose influence often trumps democracy.

First, we must have a powerful movement. We can’t build it around a shriveled dream. Only single payer, with its bolder promise of social justice, can inspire that movement.

http://www.otherwords.org/articles/america_needs_a_single_payer_health_care_system

GOP's Medicare Plan Would Be a Windfall for Insurers

By Wendell Potter
Published on Friday, April 22, 2011 by PR Watch

Rep. Paul Ryan’s plan to privatize Medicare would accelerate a trend started several years ago by corporate CEOs and their political allies to shift ever-increasing amounts of risk from Big Business and the government to workers and retirees.

If enacted, the Ryan plan would represent a windfall of unprecedented proportions for insurance corporations and other businesses.

For millions of average Americans, many of whom already are finding it impossible to save for retirement, it would represent financial calamity. The nation’s middle class would pay dearly for Ryan’s proposed shredding of the social safety net that Medicare currently provides.

Ryan, chairman of the House Budget Committee, wants to dismantle the Medicare program and replace it with a system of vouchers. Starting in 2022, the government would give the average 65-year-old Medicare beneficiary $8,000 a year to buy coverage from a private insurer. That’s the amount health care analysts estimate will be what Medicare will spend on every 65-year-old in 2022 if the government doesn’t turn it over to private insurance companies.

While that might sound fair on the surface, it would actually be a very bad deal for people who turn 65 that year, compared to those who turn 65 in 2021. That’s because commercial insurance plans are much more expensive, and operate far less efficiently, than the current Medicare program.
Insurers Spend Less on Medical Care, More on Executive Pay, Marketing

The amount of money commercial plans actually spend to pay medical claims has been declining rapidly over the past several years, while the amount they spend on administrative activities such as marketing and underwriting — and to pay executives and reward shareholders — has been increasing. That’s why Congress included a provision in last year’s health care reform law to require insurance firms to spend no more than 20 percent of their policyholders’ premiums on overhead. By contrast, the current Medicare program spends just 3 percent of its budget on administration.

The nonpartisan Congressional Budget Office (CBO) says the $8,000 voucher won’t be nearly enough for seniors to buy comparable coverage from private insurers and pay the additional out-of-pocket costs that those insurers would require them to pay. The amount the average 65-year-old would have to shell out to buy private insurance in 2022, according to the CBO, will actually be $20,510. Seniors would have to pay the difference — $12,510. If Medicare is not privatized, the difference would be $6,150.
Ryan Plan: Insurers’ Dream Come True

Here’s why this would be a dream-come-true for the insurance industry: The more health plan enrollees have to pay out of their own pockets, the less insurers have to pay for medical care. The money that insurers avoid paying out in claims goes straight to their bottom line — and into shareholders’ pockets.

Insurers have been shifting more and more of the cost of care to their policyholders over the past several years by enticing — or pushing — them into plans with ever increasing deductibles. This trend is part of what Yale professor Jacob S. Hacker called “the personal responsibility crusade” — making people more responsible for the management and financing of the major economic risks they face — in his 2006 book, “The Great Risk Shift.”

This crusade has been led by Republicans and insurance company executives who have been saying for years that the best way to control medical costs is for Americans to have more “skin in the game.” That’s an expression that former Aetna CEO Jack Rowe used often before he retired in 2005, the year he made $22.2 million. It was also a sound bite favored by the CEO I used to work for, CIGNA’s Ed Hanway, before he retired in 2009. Hanway’s total compensation that year was almost $111 million.

The problem is, most Americans have far less skin to put in the game than CEOs like Rowe and Hanway or even Rep. Ryan, who makes $174,000 as a member of Congress. The median household income in the United States was just $49,777 in 2009, which was down $335 from 2008.

That decline, by the way, was the continuation of another trend that began as the Clinton era was ending and the George W. Bush era was beginning. Median household income in the United States peaked in 1999 at $52,388 (adjusted for inflation). It fell more than $2,000 during the eight years of the Bush administration.

During that time, health costs rose dramatically. According to the Kaiser Family Foundation, the average annual health insurance premium for family coverage increased from $5,791 in 1999 to $13,770 in 2010. The average amount that workers contributed out of their own pockets for family coverage increased from $1,543 to $3,997.
Ryan’s Plan Will Throw the Elderly Back into Destitution

With household incomes declining, Americans have had far less money to put into retirement. According to a recent survey conducted by Opinion Research Corp. for America Saves and the American Savings Education Council, less than half of current workers are saving enough to have a “desirable standard of living in retirement.”

If workers are having this much difficulty saving for retirement, where in the world will they find the money to pay what Rep. Ryan would make them pay for Medicare coverage when they turn 65?

Ryan’s “blueprint” is one that will take America back to the pre-1965 days when senior citizens were losing their homes and their farms to pay for medical care. They were becoming destitute — and dying much earlier than they are today — because insurers would not sell them coverage because they were too much of a risk to insure, and there was no safety net for them.

That’s exactly the same place future senior citizens would find themselves if Ryan’s plan to privative Medicare ever becomes public policy.
© 2011 Center for Media & Democracy

Wendell Potter is the Senior Fellow on Health Care for the Center for Media and Democracy in Madison, Wisconsin.

Obama, Berwick, Krugman and others on IPAB

The Independent Payment Advisory Board: A New Approach to Controlling Medicare Spending

By Jack Ebeler, Tricia Neuman and Juliette Cubanski
Kaiser Family Foundation
April 2011

Targets on Medicare Spending Growth Rate

The statute sets target growth rates for Medicare spending. The target is not a “hard cap” on Medicare spending growth, but if spending exceeds these targets, IPAB is required to submit recommendations to reduce Medicare spending by a specified percentage. For 2015 through 2019, the target for Medicare spending per capita is the average of general and medical inflation: specifically, the average of the projected percentage increase in the consumer price index for all Urban Consumers (CPI-U) and the medical care expenditure category of the CPI-U. For 2020 and later years, the target for Medicare spending per capita is the increase in the gross domestic product (GDP) plus one percentage point, which historically has increased at a higher rate than the CPI-based measures.

If projected growth for the implementation year exceeds the target, and the medical care component of the CPI-U exceeds the CPI-U, then IPAB is required to develop and submit a proposal to bring Medicare per capita growth within the target in the implementation year, subject to the applicable limits (maximum savings).

Provisions Affecting Beneficiaries

More broadly, to the extent changes in payments to providers affect beneficiaries’ access to care, such policies have an impact on beneficiaries. This issue is raised by the current physician payment limits and in evidence in Medicaid, where the state provider payment constraints are often severe, and is a potential consequence of any enforced target for Medicare growth, whether through IPAB or other means. If IPAB recommends policies that squeeze Medicare payment rates without equal pressure being placed on private payment rates, there is some concern that Medicare beneficiaries would be at greater risk of having access problems, as providers become more inclined to serve other patients.

http://www.kff.org/medicare/upload/8150.pdf

And…

Fact Sheet: The President’s Framework for Shared Prosperity and Shared Fiscal Responsibility

The White House
April 13, 2011

The President’s framework will strengthen IPAB to act as a backstop to the other Medicare reforms by ensuring that Medicare spending growth does not outpace our ability to pay for it over the long run, while improving the program and keeping Medicare beneficiaries’ premium growth under control. Specifically, it would:

Set a new target of Medicare growth per beneficiary growing with GDP per capita plus 0.5 percent. This is consistent both with the reductions in projected Medicare spending since the Affordable Care Act was passed and the additional reforms the President is proposing.

http://www.whitehouse.gov/the-press-office/2011/04/13/fact-sheet-presidents-framework-shared-prosperity-and-shared-fiscal-resp

And…

Berwick Says Obama’s Plan To Trigger Medicare Cuts Won’t Be Necessary

By Susan Jaffe
Kaiser Health News
April 15, 2011

A day after President Barack Obama proposed strengthening an independent commission to control Medicare’s costs, the program’s administrator said such oversight won’t be necessary because new efforts to reduce waste should slow down spending and even improve the quality of care.

“We don’t have to get to that point,” Medicare chief Donald Berwick told Kaiser Health News Thursday.

http://www.kaiserhealthnews.org/Stories/2011/April/15/Berwick-on-IPAB.aspx

And…

Patients Are Not Consumers

By Paul Krugman
The New York Times
April 21, 2011

About that advisory board (IPAB): We have to do something about health care costs, which means that we have to find a way to start saying no. In particular, given continuing medical innovation, we can’t maintain a system in which Medicare essentially pays for anything a doctor recommends. And that’s especially true when that blank-check approach is combined with a system that gives doctors and hospitals — who aren’t saints — a strong financial incentive to engage in excessive care.

And the point is that choices must be made; one way or another, government spending on health care must be limited.

http://www.nytimes.com/2011/04/22/opinion/22krugman.html

And…

The Other Medicare Cutters

The Wall Street Journal
April 20, 2011

Starting in 2014, the board (IPAB) is charged with holding Medicare spending to certain limits, which at first is a measure of inflation. After 2018, the threshold is the nominal per capita growth of the economy plus one percentage point. Last week Mr. Obama said he wants to lower that to GDP plus half a percentage point.

Post-ObamaCare, Medicare’s administered fee schedule is set eventually to dip below Medicaid payments in many states, which are themselves already far lower than the rates of private insurers that reflect the true costs of health care.

As a practical matter, the more likely outcome is the political rationing of care for the elderly, as now occurs in Britain, or else the board will drive prices so low that many doctors and hospitals drop out of Medicare. Either alternative would create the kind of two-tier system dividing the poor and affluent that Democrats claim is Mr. Ryan’s mortal sin.

http://online.wsj.com/article/SB10001424052748704613504576269582048771132.html

And…

Obama Panel to Curb Medicare Finds Foes in Both Parties

By Robert Pear
The New York Times
April 19, 2011

“But, in its effort to limit the growth of Medicare spending, the board is likely to set inadequate payment rates for health care providers, which could endanger patient care,” (said Representative Pete Stark of California, the senior Democrat on the Ways and Means Subcommittee on Health.)

http://www.nytimes.com/2011/04/20/us/politics/20health.html

And…

Health Reform Assumes its Role as a Punching Bag

By Merrill Goozner
The Fiscal Times
April 20, 2011

The IPAB “can’t order the system transformations that we need like care coordination and a focus on chronic conditions,” said Kenneth Thorpe, a professor of public health at Emory University. “So the only thing they can really do is cut payment rates.”

In other words, the problem isn’t that IPAB has too much power. It’s that it doesn’t have enough.

http://www.thefiscaltimes.com/Blogs/Gooz-News/2011/04/20/Gooz-News-Health-Reform-Assumes-Its-Role-as-a-Punching-Bag.aspx

Comment:

By Don McCanne, MD

Today’s quotes provide tastes of the broad spectrum of political flavors inspired by the establishment of the Independent Payment Advisory Board (IPAB). The fervor of the debate risks obscuring an important point that we have made before and must make ag
ain: Applying a cap on Medicare payments alone at GDP plus one-half or one percent, without placing the same caps on the rest of health care spending, risks devolving Medicare into an underfunded, lower tier welfare program, with impaired access for Medicare beneficiaries because of a lack of willing providers.

As other nations have demonstrated, global budgeting works as long as it is applied to the entire health care delivery system. Instead of merely taking a cleaver to payment rates, as IPAB would, attention in a single payer system is directed to improving productivity, expanding efficiencies, and reducing administrative and clinical waste, all within the constraints of a universal global budget. For those who would dismiss this because it is rationing, keep in mind that this form of rationing actually improves value in our health care purchasing. Maybe “beneficial rationing” should become a byword for reform.

If you wish to learn more about IPAB, the 24 page Kaiser Family Foundation report (first link above) is an excellent resource. The following quote from this report reemphasizes the primary lesson of today’s message: “If IPAB recommends policies that squeeze Medicare payment rates without equal pressure being placed on private payment rates, there is some concern that Medicare beneficiaries would be at greater risk of having access problems, as providers become more inclined to serve other patients.”

Obama, Berwick, Krugman and others on IPAB

The Independent Payment Advisory Board: A New Approach to Controlling Medicare Spending

By Jack Ebeler, Tricia Neuman and Juliette Cubanski
Kaiser Family Foundation
April 2011

Targets on Medicare Spending Growth Rate

The statute sets target growth rates for Medicare spending. The target is not a “hard cap” on Medicare spending growth, but if spending exceeds these targets, IPAB is required to submit recommendations to reduce Medicare spending by a specified percentage. For 2015 through 2019, the target for Medicare spending per capita is the average of general and medical inflation: specifically, the average of the projected percentage increase in the consumer price index for all Urban Consumers (CPI-U) and the medical care expenditure category of the CPI-U. For 2020 and later years, the target for Medicare spending per capita is the increase in the gross domestic product (GDP) plus one percentage point, which historically has increased at a higher rate than the CPI-based measures.

If projected growth for the implementation year exceeds the target, and the medical care component of the CPI-U exceeds the CPI-U, then IPAB is required to develop and submit a proposal to bring Medicare per capita growth within the target in the implementation year, subject to the applicable limits (maximum savings).

Provisions Affecting Beneficiaries

More broadly, to the extent changes in payments to providers affect beneficiaries’ access to care, such policies have an impact on beneficiaries. This issue is raised by the current physician payment limits and in evidence in Medicaid, where the state provider payment constraints are often severe, and is a potential consequence of any enforced target for Medicare growth, whether through IPAB or other means. If IPAB recommends policies that squeeze Medicare payment rates without equal pressure being placed on private payment rates, there is some concern that Medicare beneficiaries would be at greater risk of having access problems, as providers become more inclined to serve other patients.

http://www.kff.org/medicare/upload/8150.pdf

And…

Fact Sheet: The President’s Framework for Shared Prosperity and Shared Fiscal Responsibility

The White House
April 13, 2011

The President’s framework will strengthen IPAB to act as a backstop to the other Medicare reforms by ensuring that Medicare spending growth does not outpace our ability to pay for it over the long run, while improving the program and keeping Medicare beneficiaries’ premium growth under control. Specifically, it would:

Set a new target of Medicare growth per beneficiary growing with GDP per capita plus 0.5 percent. This is consistent both with the reductions in projected Medicare spending since the Affordable Care Act was passed and the additional reforms the President is proposing.

http://www.whitehouse.gov/the-press-office/2011/04/13/fact-sheet-presidents-framework-shared-prosperity-and-shared-fiscal-resp

And…

Berwick Says Obama’s Plan To Trigger Medicare Cuts Won’t Be Necessary

By Susan Jaffe
Kaiser Health News
April 15, 2011

A day after President Barack Obama proposed strengthening an independent commission to control Medicare’s costs, the program’s administrator said such oversight won’t be necessary because new efforts to reduce waste should slow down spending and even improve the quality of care.

“We don’t have to get to that point,” Medicare chief Donald Berwick told Kaiser Health News Thursday.

http://www.kaiserhealthnews.org/Stories/2011/April/15/Berwick-on-IPAB.aspx

And…

Patients Are Not Consumers

By Paul Krugman
The New York Times
April 21, 2011

About that advisory board (IPAB): We have to do something about health care costs, which means that we have to find a way to start saying no. In particular, given continuing medical innovation, we can’t maintain a system in which Medicare essentially pays for anything a doctor recommends. And that’s especially true when that blank-check approach is combined with a system that gives doctors and hospitals — who aren’t saints — a strong financial incentive to engage in excessive care.

And the point is that choices must be made; one way or another, government spending on health care must be limited.

http://www.nytimes.com/2011/04/22/opinion/22krugman.html

And…

The Other Medicare Cutters

The Wall Street Journal
April 20, 2011

Starting in 2014, the board (IPAB) is charged with holding Medicare spending to certain limits, which at first is a measure of inflation. After 2018, the threshold is the nominal per capita growth of the economy plus one percentage point. Last week Mr. Obama said he wants to lower that to GDP plus half a percentage point.

Post-ObamaCare, Medicare’s administered fee schedule is set eventually to dip below Medicaid payments in many states, which are themselves already far lower than the rates of private insurers that reflect the true costs of health care.

As a practical matter, the more likely outcome is the political rationing of care for the elderly, as now occurs in Britain, or else the board will drive prices so low that many doctors and hospitals drop out of Medicare. Either alternative would create the kind of two-tier system dividing the poor and affluent that Democrats claim is Mr. Ryan’s mortal sin.

http://online.wsj.com/article/SB10001424052748704613504576269582048771132.html

And…

Obama Panel to Curb Medicare Finds Foes in Both Parties

By Robert Pear
The New York Times
April 19, 2011

“But, in its effort to limit the growth of Medicare spending, the board is likely to set inadequate payment rates for health care providers, which could endanger patient care,” (said Representative Pete Stark of California, the senior Democrat on the Ways and Means Subcommittee on Health.)

http://www.nytimes.com/2011/04/20/us/politics/20health.html

And…

Health Reform Assumes its Role as a Punching Bag

By Merrill Goozner
The Fiscal Times
April 20, 2011

The IPAB “can’t order the system transformations that we need like care coordination and a focus on chronic conditions,” said Kenneth Thorpe, a professor of public health at Emory University. “So the only thing they can really do is cut payment rates.”

In other words, the problem isn’t that IPAB has too much power. It’s that it doesn’t have enough.

http://www.thefiscaltimes.com/Blogs/Gooz-News/2011/04/20/Gooz-News-Health-Reform-Assumes-Its-Role-as-a-Punching-Bag.aspx

Today’s quotes provide tastes of the broad spectrum of political flavors inspired by the establishment of the Independent Payment Advisory Board (IPAB). The fervor of the debate risks obscuring an important point that we have made before and must make again: Applying a cap on Medicare payments alone at GDP plus one-half or one percent, without placing the same caps on the rest of health care spending, risks devolving Medicare into an underfunded, lower tier welfare program, with impaired access for Medicare beneficiaries because of a lack of willing providers.

As other nations have demonstrated, global budgeting works as long as it is applied to the entire health care delivery system. Instead of merely taking a cleaver to payment rates, as IPAB would, attention in a single payer system is directed to improving productivity, expanding efficiencies, and reducing administrative and clinical waste, all within the constraints of a universal global budget. For those who would dismiss this because it is rationing, keep in mind that this form of rationing actually improves value in our health care purchasing. Maybe “beneficial rationing” should become a byword for reform.

If you wish to learn more about IPAB, the 24 page Kaiser Family Foundation report (first link above) is an excellent resource. The following quote from this report reemphasizes the primary lesson of today’s message: “If IPAB recommends policies that squeeze Medicare payment rates without equal pressure being placed on private payment rates, there is some concern that Medicare beneficiaries would be at greater risk of having access problems, as providers become more inclined to serve other patients.”

S&P's David Blitzer on single payer

Check-Up on U.S. Healthcare

Squawk on the Street, CNBC
April 21, 2011

Mark Haines: S&P’s latest health care costs report from February 2010 through February of this year shows health care costs rose 6.2%. That’s good in a sense that it’s down slightly from 6.3% in the previous 12-month period, but obviously way above the rate of inflation for everything else. Here first on CNBC, David Blitzer, chairman of the S&P 500 index committee. David, good morning. Thanks for being with us.

David Blitzer: Good morning, Mark. How are you?

Haines: Pretty good. What do you have for us?

Blitzer: Health care costs continue to rise, however the rate of increase continues to creep down a little bit. So the news isn’t good, but it’s not getting worse. It’s getting maybe a touch better.

Haines: Why are these costs escalating at – I don’t know – three or four times the rate of overall inflation? What’s going on here?

Blitzer: Health care – despite all the excitement about technology and drugs – health care is a very labor intensive activity, and people – labor – costs a lot of money, which seems to be the key factor driving it up.

Haines: So, if I may, logically then you would find the worst or the most inflation occurring in hospitals.

Blitzer: You would, and, indeed, on the commercial side you do. On the Medicare side, you don’t, and I think that brings up a different aspect. Over the last few years we have heard a lot of arguments about single payer plans versus other kinds of plans. Single payer means Uncle Sam pays for all the health care. We pay him.

Haines: Right.

Blitzer: Medicare for people over 65 is a single payer plan, and, indeed, we consistently see smaller rates of increase in Medicare items than we do in commercial insurance, the kind of insurance that employers provide for their employees.

Haines: Okay. I’m going to leave that lying there because some of our viewers right now are going apoplectic thinking you have just endorsed single payer health care.

Blitzer: I haven’t. I’ve only reported the numbers. I’m not endorsing anything.

Haines: Believe me, I understand. You’re quoting the facts. Some people think facts are partisan. I don’t know how they get there, but they do. David, thank you very much. Appreciate your input.

Blitzer: Thank you. Have a good day.

Video:
http://video.cnbc.com/gallery/?video=3000017902

Comment: 

By Don McCanne, MD

Facts are not partisan. Standard and Poor’s David Blitzer reports only the facts on single payer – and Wall Street needs to hear them.

S&P’s David Blitzer on single payer

Check-Up on U.S. Healthcare

Squawk on the Street, CNBC
April 21, 2011

Mark Haines: S&P’s latest health care costs report from February 2010 through February of this year shows health care costs rose 6.2%. That’s good in a sense that it’s down slightly from 6.3% in the previous 12-month period, but obviously way above the rate of inflation for everything else. Here first on CNBC, David Blitzer, chairman of the S&P 500 index committee. David, good morning. Thanks for being with us.

David Blitzer: Good morning, Mark. How are you?

Haines: Pretty good. What do you have for us?

Blitzer: Health care costs continue to rise, however the rate of increase continues to creep down a little bit. So the news isn’t good, but it’s not getting worse. It’s getting maybe a touch better.

Haines: Why are these costs escalating at – I don’t know – three or four times the rate of overall inflation? What’s going on here?

Blitzer: Health care – despite all the excitement about technology and drugs – health care is a very labor intensive activity, and people – labor – costs a lot of money, which seems to be the key factor driving it up.

Haines: So, if I may, logically then you would find the worst or the most inflation occurring in hospitals.

Blitzer: You would, and, indeed, on the commercial side you do. On the Medicare side, you don’t, and I think that brings up a different aspect. Over the last few years we have heard a lot of arguments about single payer plans versus other kinds of plans. Single payer means Uncle Sam pays for all the health care. We pay him.

Haines: Right.

Blitzer: Medicare for people over 65 is a single payer plan, and, indeed, we consistently see smaller rates of increase in Medicare items than we do in commercial insurance, the kind of insurance that employers provide for their employees.

Haines: Okay. I’m going to leave that lying there because some of our viewers right now are going apoplectic thinking you have just endorsed single payer health care.

Blitzer: I haven’t. I’ve only reported the numbers. I’m not endorsing anything.

Haines: Believe me, I understand. You’re quoting the facts. Some people think facts are partisan. I don’t know how they get there, but they do. David, thank you very much. Appreciate your input.

Blitzer: Thank you. Have a good day.

Video:
http://video.cnbc.com/gallery/?video=3000017902

Facts are not partisan. Standard and Poor’s David Blitzer reports only the facts on single payer – and Wall Street needs to hear them.