PNHP

Mad as Hell Doctors March in Santa Barbara

Mad as Hell Doctors March in Santa Barbara

Universal Health Care Forum Draws Crowd

By Carla Amurao
Santa Barbara Independent, Oct. 1, 2010

Last night, the Mad as Hell Doctors, a group of activist physicians and health care providers, marched across town in an effort to raise awareness about universal health care and calling “Obamacare” a bare-minimum reform. From Anapamu Street to Canon Perdido, the sound of drums and cheers filled the air while passersby honked their horns and offered high fives and other plaudits.

The group of 50 marchers consisted of members of Physicians for a National Health Program, the Progressive Democrats, and the Santa Barbara and Santa Maria branches of Health Care for All (California). The march led into to a public forum at the Santa Barbara Central Public Library’s Faulkner Gallery hosted by Mike Huntington, a retired oncologist from Corvallis, Oregon. Organized with the help of Santa Barbara healthcare activists Peter and Paulina Conn, the forum drew a crowd of over 100.

Mad as Hell Doctors (MAHD) will head to Sacramento on October 12. They argue that the Patient Protection and Affordable Care Act of March 2010 just doesn’t cut it. They hope their tour will strengthen efforts to pass, in this state, Senate Bill 810, the California Universal Healthcare Act. MAHD also wants to pass House Resolution 676, also known as the United States National Health Care Act or the Expanded and Improved Medicare for All Act, which would reduce up to 75 percent of out-of-pocket costs.

Single-payer health care calls for a pool of funds, contributed by taxpayers, to pay for healthcare, cutting out middle-man: health insurance companies. According to members of this movement, insurance companies primarily create hassles, and take up to 30 percent of funds to pay for administration, political campaigns, and profits for investors. An increase of profit is achieved by denying coverage—a tactic implemented by insurance companies far too often.

If SB 810 and HR 676 pass, there would be no more need for private health insurance companies—out-of-work employees would be eligible for training and first preference for jobs under the new health care system, and would be provided up to two years of unemployment under HR 676.

In the event SB 810 passes, the ideal of “Everybody in, nobody out” would be implemented and overall health care would not see an increase in spending, according to Bill Smiley, a local activist. The reason why single-payer health care has not yet been approved is that insurance companies are constantly seeking a profit, he said.

“If California adopts [SB 810], it would sweep through the U.S. like wildfire,” said Smiley, in reference to this being California’s fourth attempt to establish a more beneficial health care system.

Local physicians Dr. Van Hamilton from Sansum and Dr. William Mellers from Med Center were present at the forum and spoke about the inefficiency of the United States current health care system, which they called one of the weakest in the world. Also present were physicians Norman Castillo, Marc Sapir, and Margaret Flowers. The latter has been arrested on three separate occasions during demonstrations for universal health care. A Congressional Fellow for Physicians for a National Health Program, Flowers took the campaign to Congress in 2009, claiming perks include saving and improving lives, saving money, and increasing life expectancy.

“Single-payer health reform is the approach approved by the majority of Americans,” said Flowers, during the demonstration in Santa Barbara. “Health insurance companies don’t care about your health,” she added. “Congress needs to listen to people, not health insurance companies. Health care is a human right.”

The Mad as Hell Doctors are also mad because, frankly, not enough people, especially young people, are mad. MAHD encourages people to build a broad social movement, to speak out, spread the word, join organizations, and rally for the cause.

MAHD accepts tax-deductible donations and shares them with local organizations that help them assemble public forums.

http://www.independent.com/news/2010/oct/01/mad-hell-doctors-march-santa-barbara/

‘Single payer is sound medicine’: doctors on Calif. tour

The following interviews with three members of the Mad as Hell Doctors who are presently on a 24-city tour of California appeared in the Visalia (Calif.) Times-Delta, Oct. 2, 2010.
 
Radiation oncologist: ‘Single payer is sound medicine’
 
By Mike Huntington, M.D.
 
I’m Mad As Hell because Americans aren’t getting the information they need to make an educated decision about health care. The fact is that a single-payer health care system has been working in other countries for decades and it can work here. But there is so much misinformation, so much undue corporate influence, that the truth doesn’t penetrate. People need to know that single-payer is not socialism, it’s not communism, it’s sound medicine for a sick system. Plain and simple.
 
I have enjoyed my 36-year career as a radiation oncologist. But I have become concerned about the geometric progression of costs in my specialty and other medical specialties over the years and the effects of those costs on affordability of health insurance and accessibility of health care.
 
Between 1996 and 2006, new tests and treatment techniques doubled and tripled the costs of certain radiation treatment courses, often without proof of commensurate improvements in outcomes.
 
I knew that insurance premiums rose proportionately to the cost of such expensive technology, driving many people off the bottom rungs of affordable insurance.
 
Some of these uninsured or under-insured individuals would later become my patients after their early cancers progressed to untreatable cancers because of these individuals’ inability to access medical care and an early diagnosis.
 
We must design a system that prioritizes services to make the best use of existing resources and keeps costs low so that all citizens gain access to good essential care.
 
We need to de-emphasize the high-tech non-essential care that currently brings in revenue to finance our health institutions but is breaking the societal bank.
 
Good sustainable health care systems based on the single-payer model have been achieved in most of the industrialized world. These systems work well and they belie the wealth-care propaganda that trumpets the relatively few shortcomings of these systems.
 
Mike Huntington, M.D. is a radiation oncologist with a practice in Corvallis, Ore.
 
http://www.visaliatimesdelta.com/article/20101002/OPINION09/10020321/1014/OPINION/Radiation+oncologist

Family practice doctor: Save lives, money by removing insurers from health system
 
By Marc Sapir, M.D.
 
I’m Mad As Hell because rather than deal with the root causes of illness, many doctors are only able to perform tests and pass out pills. I’m really mad as hell because our politicians ignore the 70 percent of Americans and 55 percent of their doctors calling for a single-payer national health care plan! The time is now!
 
I’ve provided health/medical care to patients in nonprofit and public clinics in California for more than 38 years. The most disturbing thing about health care in the U.S. is that we actually deny or limit access to so many people. I have many patients right now who have lost insurance because they lost their jobs or their employer stopped covering the workers as the cost of insurance skyrockets. Our public clinics can’t serve all of these patients.
 
We have allowed the medical-industrial complex to inflate health costs at 15 percent to 20 percent a year. As a result, waiting time for care with us in Alameda County is up to 6 months. Almost 2 million people go bankrupt each year in the U.S. because of health care debt. The new federal reform won’t change that, because even with subsidies, people will not be able to afford the private insurance they are required to buy. Costs for everyone will rise and benefits will shrink as before.
 
No one goes broke due to health debt in other countries. Other countries treat health care as a human right. Our system leads to discontinuous, spotty health care, bad health outcomes and needless suffering. Many of us find our insurance companies trying to dump us when we get very sick. With Medicare, patients can go to any willing doctor, hospital or service provider, without any red tape, period. We could save a ton of money and improve our care as doctors by getting the insurance companies out of our care system and out of our offices and clinics.
 
We can and should fortify and improve Medicare, and at the same time make it available to all, as a single payer, national health insurance program with everybody in, and nobody out except for the insurance companies.
 
Marc Sapir M.D., M.P.H., is a primary care physician who practices in Alameda County, Calif.
 
http://www.visaliatimesdelta.com/article/20101002/OPINION09/10020323/1014/OPINION

Emergency room physician: ‘We have a broken, non-system of care’
 
By Paul Hochfeld, M.D.
 
I’m Mad As Hell because we have a broken, non-system of health care in this country designed and implemented around profit, not people. It not only represents a health crisis, it is also a fiscal disaster that threatens the solvency of our government. Some form of single payer is the only solution.
 
As an emergency physician, I regularly observe people suffer from financial barriers to timely care while others suffer from overtreatment.
 
In 2006, I channeled my frustration into an exploration with the goal of producing a video.
 
What I discovered is we have a sick care “non-system” that’s more about fear and money than health. It’s beyond ailing or broken. It’s dumb.
 
Subsequently, I created a film, “Health, Money and Fear,” which addresses three questions about our health care “system.”
 
* Why does it cost so much? Advances in technology, fear of liability, abuses of pharmaceutical companies, unrealistic expectations (especially toward the end of life), chaos in medical records, a scarcity of primary care providers, and an abundance of perverse incentives that motivate physicians to do more and more, without regard for actually doing better. Furthermore, insurance companies use tax payer subsidies to creatively avoid having to cover those at greatest risk, whose care gets paid for by, of course, the taxpayer. Servicing the insurance industry adds 25 percent to 30 percent to the total cost of health care.
 
* What does it say about us? We fear death more than we fear suffering, even in futility. We fear the U.S. government more than we fear United Healthcare (who only cares about the bottom line).
 
Our political system, manipulated by corporate interests, generates public policy that is more about sustaining corporate profits than making sure the taxpayer is receiving value for the money “we” are spending on health care.
 
* What can we do about it? Put everybody in the same risk pool. Get the most health and the least suffering we can get for the precious money we are spending.
 
We cannot afford to continue servicing the health insurance industry, which adds substantially to cost without adding anything to health.
 
Paul Hochfeld, M.D., is an emergency room doctor who practices in Good Samaritan Regional Medical Center, Corvallis, Ore.
 
http://www.visaliatimesdelta.com/article/20101002/OPINION09/10020322/Emergency-room-physician

Model exists to provide health insurance for all – it's called Medicare

By Dr. James C. Mitchiner
Ann Arbor News, Oct. 3, 2010

The announcement last month by the Census Bureau that the number of uninsured increased last year to a record 50.7 million individuals should come as no surprise to those who understand the uniquely American tradition of linking health insurance to employment.

Combined with the corresponding finding that the rate of employer-based insurance has decreased, the conclusion is obvious: in a declining economy, as unemployment rates increase and employer payrolls tighten, the number of people lacking health insurance goes up.

Why is this? I have never understood why health insurance must be associated with employment. Historically, I recognize how businesses’ response to FDR’s wartime wage and price controls lead to the situation we have now. But I fail to see how a model first applied in the 1940s should continue to operate in the 21st century. Other forms of insurance – car, home, boat, flood, and universal life insurance – are not linked to a job, so why should health insurance have this unique relationship?

Imagine a world where your health care coverage would not be predicated on what you did or where you worked, where you lived under a system that provided continual access to care as you moved from job to job or state to state, and guaranteed your health security even if you were laid off or terminated. Picture yourself in such a world where “choice” refers not to your choice of health insurer, but instead to the freedom to choose your own doctor and hospital, based on whatever criteria you and you alone deem to be personally relevant. And imagine a world where more than 95 percent of your contribution to health insurance was actually spent on health care, with no substantial contributions to a bloated and mindless bureaucracy.

The good news is that such a model exists. It is called a single-payer, Medicare-for-All program. It is a plan modeled on Medicare, a popular program that is universal, portable, affordable, non-profit, non-discriminatory, and administratively efficient. An expanded Medicare program would sever the link between employment and health insurance for all Americans, and use as its sole entry criteria nothing more than U.S. citizenship. Such a program would drastically reduce the number of uninsured, at a total cost much less than what we are paying now. And, under a single-payer system, private insurance firms would be used for simple administrative functions only, and not for decisions that place greedy corporate profits over an individual’s right to medical care.

And the bad news? The United States remains the only western democracy that does not have universal single-payer health insurance. For illogical reasons, we as a country continue to have blind faith in the ability of the private insurance industry to solve the dual problems of access to care and cost containment. If for-profit insurance has not fixed the problems with health care after over 60 years of existence, why would anyone believe it would happen now under the recently passed health care reform act, where private insurance continues to play a dominant role? Clearly, the only logical solution is to insure everyone, and the most efficient way to do that is through single-payer national health insurance.

Dr. James Mitchiner, an Ann Arbor physician, is the former president of the Washtenaw County Medical Society and a member of Physicians for a National Health Program.

http://www.annarbor.com/news/opinion/model-exists-to-provide-health-insurance-for-all—its-called-medicare/

Model exists to provide health insurance for all – it’s called Medicare

By Dr. James C. Mitchiner
Ann Arbor News, Oct. 3, 2010

The announcement last month by the Census Bureau that the number of uninsured increased last year to a record 50.7 million individuals should come as no surprise to those who understand the uniquely American tradition of linking health insurance to employment.

Combined with the corresponding finding that the rate of employer-based insurance has decreased, the conclusion is obvious: in a declining economy, as unemployment rates increase and employer payrolls tighten, the number of people lacking health insurance goes up.

Why is this? I have never understood why health insurance must be associated with employment. Historically, I recognize how businesses’ response to FDR’s wartime wage and price controls lead to the situation we have now. But I fail to see how a model first applied in the 1940s should continue to operate in the 21st century. Other forms of insurance – car, home, boat, flood, and universal life insurance – are not linked to a job, so why should health insurance have this unique relationship?

Imagine a world where your health care coverage would not be predicated on what you did or where you worked, where you lived under a system that provided continual access to care as you moved from job to job or state to state, and guaranteed your health security even if you were laid off or terminated. Picture yourself in such a world where “choice” refers not to your choice of health insurer, but instead to the freedom to choose your own doctor and hospital, based on whatever criteria you and you alone deem to be personally relevant. And imagine a world where more than 95 percent of your contribution to health insurance was actually spent on health care, with no substantial contributions to a bloated and mindless bureaucracy.

The good news is that such a model exists. It is called a single-payer, Medicare-for-All program. It is a plan modeled on Medicare, a popular program that is universal, portable, affordable, non-profit, non-discriminatory, and administratively efficient. An expanded Medicare program would sever the link between employment and health insurance for all Americans, and use as its sole entry criteria nothing more than U.S. citizenship. Such a program would drastically reduce the number of uninsured, at a total cost much less than what we are paying now. And, under a single-payer system, private insurance firms would be used for simple administrative functions only, and not for decisions that place greedy corporate profits over an individual’s right to medical care.

And the bad news? The United States remains the only western democracy that does not have universal single-payer health insurance. For illogical reasons, we as a country continue to have blind faith in the ability of the private insurance industry to solve the dual problems of access to care and cost containment. If for-profit insurance has not fixed the problems with health care after over 60 years of existence, why would anyone believe it would happen now under the recently passed health care reform act, where private insurance continues to play a dominant role? Clearly, the only logical solution is to insure everyone, and the most efficient way to do that is through single-payer national health insurance.

Dr. James Mitchiner, an Ann Arbor physician, is the former president of the Washtenaw County Medical Society and a member of Physicians for a National Health Program.

http://www.annarbor.com/news/opinion/model-exists-to-provide-health-insurance-for-all—its-called-medicare/

Why are the insurers supporting the Republicans?

Insurance firms infuse GOP with big doses of cash

By Noam N. Levey
Chicago Tribune
October 4, 2010

Faced with wide-ranging new requirements in the health care law, the insurance industry is pouring money into Republican campaign coffers in hopes of scaling back regulations while preserving the mandate that Americans buy coverage.

Since January, the nation’s five largest insurers and the industry’s Washington-based lobbying arm have given three times more money to Republican lawmakers and political action committees than to Democrats.

That is a marked change from 2009, when the industry largely split its political donations between the two parties, according to federal election filings.

The largest insurers also are paying hundreds of thousands of dollars to lobbyists with close ties to key Republican lawmakers who could be shaping health policy in January, records show.

Cigna’s head lobbyist, G. William Hoagland, a former senior Republican Senate aide, said the company hopes to get a more receptive hearing next year. “This is all political now,” he said.

“We generally support candidates whose views align with our business and health care interests,” said Aetna spokeswoman Anjie Coplin.

And Indianapolis-based WellPoint Inc., which was vilified by Democrats this year for proposing huge rate hikes in California, has given nearly nine times as much to Republicans this year.

Karen Ignagni, America’s Health Insurance Plans president, said she wouldn’t speculate about what Republicans would do if they retake the House and Senate in November.

But she acknowledged the industry’s interest in the GOP. America’s Health Insurance Plans has given the party twice as much as it has given Democrats this year.

“The numbers speak for themselves,” Ignagni said.

http://www.chicagotribune.com/business/ct-biz-1004-health-insurance-politics20101004,0,6116765,full.story

Comment: 

By Don McCanne, MD

Well, that didn’t last long. The insurance industry supported the Democrats just long enough to get passed into law their one policy proposal made in insurance heaven: a mandate for everyone to purchase their private insurance products. Now that we have to buy their plans, they want Republican-style market reforms to make sure that their insurance products are not priced totally out of the market, even if that leaves health care itself unaffordable.

What are these measures that Republicans support and that Democrats don’t?

* Insurers want to be able to sell their plans across state lines. By opening up markets in the less regulated states, insurers can sell more competitively priced products, even if they provide patients less protection against loss.

* They want to sell less expensive, high-deductible plans linked to health savings accounts that attract their favored healthier and wealthier clientele, even if it harms the sick by pushing them into more expensive, higher-risk insurance pools.

* They want to increase wasteful taxpayer subsidies of their private Medicare Advantage plans in order to create incentives to shift more patients from our government Medicare program into their own industry plans.

* They want relief from having to insure high-needs, high-cost patients. They would do this by shifting the burden to taxpayer-financed high-risk insurance pools or reinsurance programs.

* They don’t want to be exposed to some of the transitional programs such as requiring coverage of children with preexisting disorders.

* They want to be sure that required “standard benefits” are defined as loosely as possible to protect their market of low cost products, even if those products fail to provide adequate protection.

* They want to be sure that rules for waivers will be applied liberally so that they can continue to offer innovative products such as the mini-med plans for McDonald’s employees that have basic benefits paying a maximum of $2,000 per year, or up to $10,000 maximum per year for the deluxe plan. (These plans are a cruel hoax.)

* They want to be sure that overall regulatory oversight will be relaxed as much as possible so that the free market can offer the highest quality insurance products at the very best prices (sic).

Right now Sandy and I have the pleasure and honor of hosting some of the Mad as Hell Doctors at our home during their current California tour in support of single payer. At dinner last night, one of them asked me if, when I’m writing the Quote of the Day, aren’t there times that I want to say… like… Bullshit!!… or something like that.

Yes! Right now. Bullshit!! Today I’m also a Mad as Hell Doctor!

We have to get this uncaring, thieving industry out of our health care and out of our lives. The Republicans won’t do that, but don’t ever forget that it was the Democrats who set up the framework that will keep them there forever – unless we start exercising more effectively our responsibilities to participate in a citizen-run democracy.

Why are the insurers supporting the Republicans?

Insurance firms infuse GOP with big doses of cash

By Noam N. Levey
Chicago Tribune
October 4, 2010

Faced with wide-ranging new requirements in the health care law, the insurance industry is pouring money into Republican campaign coffers in hopes of scaling back regulations while preserving the mandate that Americans buy coverage.

Since January, the nation’s five largest insurers and the industry’s Washington-based lobbying arm have given three times more money to Republican lawmakers and political action committees than to Democrats.

That is a marked change from 2009, when the industry largely split its political donations between the two parties, according to federal election filings.

The largest insurers also are paying hundreds of thousands of dollars to lobbyists with close ties to key Republican lawmakers who could be shaping health policy in January, records show.

Cigna’s head lobbyist, G. William Hoagland, a former senior Republican Senate aide, said the company hopes to get a more receptive hearing next year. “This is all political now,” he said.

“We generally support candidates whose views align with our business and health care interests,” said Aetna spokeswoman Anjie Coplin.

And Indianapolis-based WellPoint Inc., which was vilified by Democrats this year for proposing huge rate hikes in California, has given nearly nine times as much to Republicans this year.

Karen Ignagni, America’s Health Insurance Plans president, said she wouldn’t speculate about what Republicans would do if they retake the House and Senate in November.

But she acknowledged the industry’s interest in the GOP. America’s Health Insurance Plans has given the party twice as much as it has given Democrats this year.

“The numbers speak for themselves,” Ignagni said.

http://www.chicagotribune.com/business/ct-biz-1004-health-insurance-politics20101004,0,6116765,full.story

Well, that didn’t last long. The insurance industry supported the Democrats just long enough to get passed into law their one policy proposal made in insurance heaven: a mandate for everyone to purchase their private insurance products. Now that we have to buy their plans, they want Republican-style market reforms to make sure that their insurance products are not priced totally out of the market, even if that leaves health care itself unaffordable.

What are these measures that Republicans support and that Democrats don’t?

* Insurers want to be able to sell their plans across state lines. By opening up markets in the less regulated states, insurers can sell more competitively priced products, even if they provide patients less protection against loss.

* They want to sell less expensive, high-deductible plans linked to health savings accounts that attract their favored healthier and wealthier clientele, even if it harms the sick by pushing them into more expensive, higher-risk insurance pools.

* They want to increase wasteful taxpayer subsidies of their private Medicare Advantage plans in order to create incentives to shift more patients from our government Medicare program into their own industry plans.

* They want relief from having to insure high-needs, high-cost patients. They would do this by shifting the burden to taxpayer-financed high-risk insurance pools or reinsurance programs.

* They don’t want to be exposed to some of the transitional programs such as requiring coverage of children with preexisting disorders.

* They want to be sure that required “standard benefits” are defined as loosely as possible to protect their market of low cost products, even if those products fail to provide adequate protection.

* They want to be sure that rules for waivers will be applied liberally so that they can continue to offer innovative products such as the mini-med plans for McDonald’s employees that have basic benefits paying a maximum of $2,000 per year, or up to $10,000 maximum per year for the deluxe plan. (These plans are a cruel hoax.)

* They want to be sure that overall regulatory oversight will be relaxed as much as possible so that the free market can offer the highest quality insurance products at the very best prices (sic).

Right now Sandy and I have the pleasure and honor of hosting some of the Mad as Hell Doctors at our home during their current California tour in support of single payer. At dinner last night, one of them asked me if, when I’m writing the Quote of the Day, aren’t there times that I want to say… like… Bullshit!!… or something like that.

Yes! Right now. Bullshit!! Today I’m also a Mad as Hell Doctor!

We have to get this uncaring, thieving industry out of our health care and out of our lives. The Republicans won’t do that, but don’t ever forget that it was the Democrats who set up the framework that will keep them there forever – unless we start exercising more effectively our responsibilities to participate in a citizen-run democracy.

How can a family with $50,000 in income pay $18,000 in medical expenses?

By Don McCanne
October 1, 2010

In the Quote of the Day for September 28, 2010, I wrote, “The $18,000 in average health care costs for a family of four is already over one-third of the median household income of $50,000.” Understandably, some readers perceived that I was implying that the average family with an income of $50,000 was paying an average of $18,000 out of that income for health care. That wasn’t my intent. I was trying to make the point that our current level of spending on health care is already far beyond the capability of the members of a typical household to pay their equally allocated share.

Also I should have refined the numbers a little bit more. The median household income is now $50,221, but the Census Bureau does not include the value of the employer contribution to the insurance premium in that number. According to the Hewitt report in my September 28 message, employers contribute $7612 per employee (including dependents if covered). So the median income with the employer insurance contribution added would be $57,833. The population with a median household income is not identical to the family of four described by the Milliman Medical Index (the average amount spent on actual health care for a family of four covered by an employer-sponsored PPO), but there is considerable overlap.

For purposes of describing how high health care spending is in relation to income, dividing the the Milliman Index of $18,074 by the adjusted median household income of $57,833 does provide a rough approximation of how much that is. It is still over 31 percent, though short of the “over one-third” I reported previously. Again, I can’t overemphasize that $18,074 is not the average amount that each family of four is paying directly out of its income, but it is the average amount that is being spent on health care on its behalf.

Even these numbers seem unbelievable. How could we possibly be spending that much when incomes are so low comparatively?

A very good friend of mine responded in appropriate disbelief. He wrote, “The information on the average health care costs that a family pays is difficult to determine, but the link here shows an average about $6,000 which is about 14% of the median household income.”

The link to an article on the cost of heath insurance:
http://healthinsurance.about.com/od/healthinsurancebasics/a/cost_of_health_insurance.htm

Because it has been so difficult for many of us (including me) to grasp just how much we are spending on health care, I decided to provide a more detailed response. Since this reality check is so important, I decided to share my comments with others by making this the Quote of the Day for today (and you may wish to share it with others):

Response to a Dear Friend:

I knew that you would have a problem with these numbers. It doesn’t seem reasonable that the average health care costs for a family of four with employer-sponsored insurance is $18,000 when the median household income is $50,000. These numbers don’t seem to compute, but they are very real.

Let me start with the $6,000 (actually $6,328) for family insurance as cited in the article you sent. That number came from a report by AHIP (America’s Health Insurance Plans – the lobby organization that helped to orchestrate the reform bill).

AHIP – Individual Health Insurance 2009:
http://www.ahipresearch.org/pdfs/2009IndividualMarketSurveyFinalReport.pdf

From page 4 of the report: “Nationwide, annual premiums averaged $2,985 for single coverage and $6,328 for family plans in mid-2009.”

That $6,328 is not health care costs, but rather it is the premium paid for family coverage in the individual insurance market. It is not the premium paid for an employer-sponsored family plan. That’s a very important distinction and here’s why.

The individual insurance market is highly dysfunctional, and was one of the primary motivators for the regulatory changes in the Patient Protection and Affordable Care Act (ACA). About 30 percent of individuals who apply for individual plans are denied coverage. The private insurers will cover only individuals with an unblemished health record. Most health care costs for those individuals are very low and often below the deductible. This is why the insurers can sell an individual family policy for only $6,328 – these are healthy people who rarely file significant claims. In fact, when they do file larger claims, the private insurers routinely look to see if they could find an omission in the application such as a prior yeast infection not reported, and then they would reject all claims and rescind the coverage.  Both of these practices are illegal for employer-sponsored group coverage, which is partly why group coverage is more expensive, but they were very effective in limiting claims losses in the individual market. The new law requires guaranteed issue (all applicants accepted) and prohibits rescission (retroactive revocation of insurance). These two changes will wipe out the individual insurance market as we know it, and will result in skyrocketing insurance premiums.

Another reason that individual plans are so cheap (if you call $6,328 cheap) is that they do not provide nearly as good coverage – both in benefits and cost sharing. Individual plans frequently omit pharmaceuticals, mental health services, maternity benefits, etc. Also they tend to have larger deductibles ($1,000 to $25,000) and high coinsurance (a percentage of fees which is usually much higher than co-pays would be). The bankruptcy studies have shown that medical debt contributes to about 60 percent of personal bankruptcies, and three-fourths of those with medical debt had health insurance. Individual plans have deteriorated to a degree that they don’t keep people out of bankruptcy when they develop significant medical problems. The new law will establish a standard benefit package which will also drive premiums up, though it will still permit excessive cost sharing (at an actuarial value of 60 to 70 percent).

Another study done for AHIP by PriceWaterhouseCoopers:
http://www.ahip.org/content/default.aspx?bc=174|28536

From page 5: “This analysis shows that the cost of the average family coverage is approximately $12,300 today.”

Once again, this is not the costs of health care, but it is the average of family premiums paid by those in both the individual and employer-sponsored group market. Already you can see that group coverage is going to be higher when you remove the individual plans from the calculations.

Okay, now the Milliman Medical Index does not represent premiums paid, but rather it represents the average amount paid for health care for a family of four with an employer-sponsored PPO plan (Blue Cross, Blue Shield, etc.). It does not include the administrative costs and profits for the insurer; it includes only the average amount that was paid for actual health care for the family. It is an important number for business entities because it shows what health care actually costs. You should read the first couple of pages of their report since it really brings home what we are paying in health care. (Note that Milliman is an actuarial consulting firm for industry – so these are not numbers that we concocted.)

Milliman Medical Index:
http://publications.milliman.com/periodicals/mmi/pdfs/milliman-medical-index-2010.pdf

From page 1 (3rd page of document): “The total 2010 medical cost for a typical American family of four is $18,074.”

But it’s even worse. This is what busines
ses and their employees are paying for health care. Keep in mind that this sector is the relatively healthy workforce and their young healthy families.

When you think about it, the private insurance industry has skimmed off the largest and healthiest sector of our society and is selling insurance to them – America’s workforce. The private insurers are having great difficulties selling affordable plans to employers because these costs even for the healthy are so high. They have been shifting more costs to patients through higher deductibles and other cost sharing, but they still can’t keep their premiums affordable. This is why Karen Ignagni of AHIP said over and over again during the debate on reform that this is not going to work unless the GOVERNMENT does something to control costs – a tacit admission that the insurers are incapable of controlling costs.

But think about this. If $18,074 is the average amount that health care costs for a relatively healthy family of four, then what is average cost if you include everyone in the calculation? That is, what is the cost per capita if you add up all health care spending in the nation and divide that by our population of 310,000,000? That number is available from the Office of the Actuary, Centers for Medicare and Medicaid Services (CMS).

Health Spending Projections:
http://content.healthaffairs.org/cgi/reprint/29/3/522

From the table on page 523:
Projected National Health Expenditures (NHE) for 2010: $2,589.6 billion
NHE as percent of GDP: 17.3%
NHE per capita: $8,289.9

So if we put all of our health spending dollars into one giant insurance fund, we would be paying out an average of $8,290 for each man, woman and child in this nation. For that family of four, their share is $33,160. Think about what that means when the median household income is $50,000.

These numbers are very accurate, yet how could that be? How could we be spending so much per capita and yet the average family does not see health bills of that magnitude?

First of all, we fragment our insurance risks into multiple pools. The less healthy 20 percent of people consume 80 percent of our health care. Workers fall into the 80 percent of people who use only 20 percent of the care. Thus isolating the healthy workers and their families into employer-sponsored pools dramatically reduces the per person insurance premiums because of the much lower per person costs of these healthy individuals.

Let’s see what that would be for this healthy family of four. Milliman shows that their average health care costs are about $18,000. The new health care bill says that the plans should have an actuarial value of 60 or 70 percent, but let’s use 70 percent (the insurance pays an average of 70 percent of health care costs and the family pays an average of 30 percent out of pocket). Thus the insurer pays an average of $12,600, and the family pays an average of $5,400. The law also allows the insurer to keep 15 percent of the premium to pay the bills and the administrative costs, so the premium for the family would be $14,824 ($12,600 divided by .85). Thus the family pays, under the new law, an average of $20,223 (the premium plus the out-of-pocket expenses). Again, with a median household income of $50,000 no middle income family could afford that. That is why the law provides subsidies for both the premiums and for the out of pocket expenses. However these subsidies will not be adequate for most, so, under the new law, financial hardship is an almost inevitable consequence for those who face significant medical problems.

There is a much more important reason why families are not paying an average of $33,000. Although they receive their health care financing through risk pools for the healthy, most higher cost patients have their care financed through expensive risk pools for the sick. Some examples include Medicare, Medicaid, the VA system, state high risk health pools, safety-net institutions for the uninsured, and so forth. What do these have in common? They are financed by us – the taxpayers! In fact, if you add those together, and include the tax subsidies we are providing for employer-sponsored coverage, and include the private health insurance that tax payers purchase for federal, state and local government employees, we are already paying 60 percent of our entire national health expenditures through the tax system. That is largely invisible to most of us. Also, it shows that our health care financing is much more progressive than most realize. The wealthy are paying much more than average-income families.

If that’s already true, then why don’t we leave it like it is? The reason is that this fragmented system of financing health care wastes hundreds of billions of dollars each year – money that could be going to pay for health care. Perhaps worst of all, from our perspective, is that the current law will leave tens of millions uninsured; it will establish underinsurance as the norm (60 to 70 percent actuarial value); and it will do very little to slow the outrageous escalation in health care costs. A single payer national health program – an improved Medicare that covers everyone – would control costs and cover everyone. How that works is another story.

Peace,

Don

Improved Medicare for all: the cure we need

The following text contains the remarks of Dr. Quentin Young, national coordinator of Physicians for a National Health Program, at a session of the 40th legislative conference of the Congressional Black Caucus Foundation in held in Washington, D.C., on Sept. 16.

Mr. Chairman, Sen. Sanders, Rep. Conyers, fellow panelists and friends,

First, a brief correction to the chairman’s very kind introduction. I used to be a doctor. Two years ago I retired after 62 years of practicing medicine. I enjoyed every minute of it. I didn’t retire out of lack of enthusiasm for medical practice, but out of a desire to see the world we live in change.

I retired and became a full-time volunteer for Physicians for a National Health Program, which is dedicated to achieving single-payer national health insurance.

Our 17,000 doctors in PNHP are the tip of the iceberg. Research conducted at Indiana University shows that today 59 percent of doctors support the idea of government-sponsored national health insurance, and among the general public an even larger percentage – around two-thirds – supports this kind of approach.

So we don’t have an unpopular cause that we have to fight to get to the forefront. We have a popular cause that the private health industry and drug companies have spent hundreds of millions of dollars trying to suppress, as we saw so vividly in the latest round of health care reform.

I want to bring you some information, some of it very fresh. This morning the Census Bureau reported the number of uninsured, and it turns out that last year the number of uninsured increased by over 4 million people, so that the total number of uninsured is now 50.7 million. That’s nearly 51 million people without health insurance.

I don’t think I need to spend a lot of time explaining what that means – the huge, crushing blow that can be inflicted on someone with an illness who doesn’t have health insurance. A common outcome in this picture: personal bankruptcy.

I hope none of you has had the experience of filing for bankruptcy, but if you have, you know that bankruptcy can end your ability to get credit, buy a home, send your kids to college and more.

Well, personal bankruptcy hit 1.4 million Americans last year, and about 62 percent of those bankruptcies can be linked to medical bills. That’s right: nearly two-thirds of personal bankruptcies in our country are associated with medical debt, according to a Harvard study published in the American Journal of Medicine last year.

Our health system has thus become a monster in the life of ordinary folks. You don’t want to get sick and, broadly speaking, you can’t avoid it. But if serious illness strikes, even if you have health insurance, you’re at risk of bankruptcy. Note that the same study found that three-fourths of those who go bankrupt with large medical debt had health insurance when they got sick.

Now take that home and think about it. Our health system, we want to believe, will help people. It will cure your illness, save you from pain and suffering, extend your life. And yet instead we learn that the present system is a major cause of bankruptcy.

Not having health insurance can also be lethal. About 45,000 excess deaths annually can be linked to lack of health insurance, according to research published last year in the American Journal of Public Health. After today’s Census report, that figure is probably closer to 50,000 unnecessary deaths annually.

Here’s another extremely important issue: we have an acute shortage of primary care doctors in the United States. What does that mean?

The ratio of primary care doctors to specialists should be about 70 percent to 30 percent. That was the case for many years. But more recently, due to the corporate domination of our system, we have many more specialists and fewer generalists. Today, only about 30 percent of our physicians are in primary care, and their number is going down.

Well, when you put that to work, you’ll learn that no system – even if PNHP’s proposal, single-payer health insurance, were adopted – will be able to provide our population with the care they need if we lack sufficient numbers of primary care doctors, nurses and other health professionals.

Another point: We spent twice as much on a per capita basis as other industrialized countries on health care costs and yet we have over 50 million uninsured and at least that many people with what we call underinsurance. Underinsurance is where you have a $50,000 hospital bill, and your insurance only pays $25,000. That’s not very good when you’re trying to survive in today’s economy.

I want to emphasize that Physicians for a National Health Program has been for single payer since were founded in 1986. We didn’t take this position out of any ideological considerations or because of some personal preference, but because we’ve learned in the course of our medical practice that only single payer works for everyone.

We have vast national experience with a public, single-payer-like system; it’s called Medicare. Now Medicare was hobbled in 1965 when its opponents could no longer prevent it from being enacted into law. And I assure you that until 1965, nothing substantive in health reform got passed simply because the American Medical Association, a powerful organization of doctors, opposed it.

Well, we won Medicare and Medicaid, but not without some damage on the way to passage. For example, there is no serious pharmaceutical protection under the program. Medicare Part D, which was passed under Bush administration, is an abomination. People can still go broke just from the cost of their medicine in Part D.

So why don’t we have medications in a system that’s supposed to take care of you? The answer again is corporate intervention, corporate intervention that made us go from a potentially cost- and hassle-free system to one that requires substantial cost-sharing and a degree of bureaucratic rigmarole that can drive you nuts. Older people who use Part D will know what I’m talking about.

There are other shortcomings in the Medicare program, like co-pays and deductibles. We all know about these, and some people say, “Well, that’s the American way” or “That’s natural.” We say no, it doesn’t have to be that way. There shouldn’t be any economic barriers to getting health care. To the extent that there are, we have a bad result from the resulting delay in care, especially for the poor.

So even under Medicare we have financial barriers to care, and thus people go from having a treatable cancer to a fatal cancer. Conditions that are treatable don’t get treated and they get worse. That’s the reality under the present Medicare program, as good as it is. I’m not trashing the program. These things are fixable. Congress can fix these problems in one vote.

The larger question is whether we can bring an improved version of Medicare to the rest of the American people, to the entire population. Can extend this kind of system to the tens of millions who are presently outside any system of getting care? We at PNHP believe that is the way to go. We need an improved Medicare for all.

Other industrialized countries, from Taiwan to France, have taken this kind of approach, where health care is regarded as a human right and government acts to safeguard that right. They spend about half of what we do and all, overall, have better medical outcomes that we do.

We aren’t as optimistic about the recently passed health care legislation as some others are. We wish it weren’t so, but we’re very pessimistic about the ability of the new health law to fundamentally resolve our acute health care crisis. Today’s Census Bureau report only underscores this.

One of the major reasons for our pessimism is the continued and actually str
engthened role of the private health insurance industry in our health system. The private insurers are the cause of enormous bureaucratic waste in our system. This problem is not fixed by the new legislation.

It’s true that our national economy is threatened by the rising costs of health care, which go up in double-digits every year, and unfortunately these costs are likely to increase sharply under the new law.

In a shameless way, the insurance companies just recently gave the American people a “gift” of double-digit premium increases, following the passage of this bill. That’s painful, particularly in hard economic times such as these.

That’s why our message is that single payer is not just the best way to remedy our health care mess, it’s the only way. We have to make people understand that by replacing the private insurers with a streamlined, publicly financed system, we’d save about $400 billion annually, enough to provide everyone in the country with comprehensive, quality coverage without spending any more money than our nation does now.

Incidentally, under a single-payer program we would no longer have to witness spectacles where insurance company executives get paid as much as $100 million a year in compensation and where the main goal is to provide handsome return for private investors, or where care is denied so as to maximize an insurance company’s profits. That’s not the way to run a health system.

I agree with a previous speaker that we need to work, and we need to work hard, in this next period. We have to bring single payer back to the table. In some ways it’s already there: in a number of election districts around the country there are incumbents and challengers who support single payer. At the same time there are a number of right-wing fringe politicians who are running for office, including some Tea Party candidates, who if elected would pose a grave peril to any public health programs or any efforts to ameliorate the tragic state of health care in our country today.

We need to get organized. We have a tough fight. We need to build our alliances with organizations of labor, women and peoples of color, victims of racial disparities and inequities in health care. These kinds of alliances have proven to be the key to success in other historic struggles.

There is no guarantee of victory. But we have no choice but to push ahead for the only effective remedy to our health crisis, single-payer Medicare for all.

Thank you.

GOP clueless about plight of the uninsured

Letter to the Editor
Indianapolis Star, Sept. 30, 2010

Thank you for the review of the Republican Party’s thinking on health-care reform (The Star, Sept. 20). That the party is clueless about the severity of the problem could not be more obvious. While it proposes repeal or non-funding of the health-care reform act, tinkering with the tax system and creating a voucher system to replace Medicare, the facts on the ground are rapidly deteriorating.

According to the Census Bureau, the number of uninsured rose by more than 4 million in 2009 to greater than 50 million nationwide. In Indiana, there are currently more than 900,000 uninsured, 14.2 percent of the population, including from 30 to 40 percent of those ages 21 to 26. A failing employer-based system now covers only 55.8 percent of the population, down from 64.2 percent in 2000.

Although far from perfect, the health-care reform act has implemented immediate steps to help alleviate the problem of the uninsured and its resulting excess morbidity and mortality. Now, those younger than 26 may stay on their parents’ insurance, children may not be excluded from family policies for pre-existing conditions, and tax credits to offset premium expenses will begin for small business.

These measures and those to be implemented later will not solve the country’s health-care problem. That must come eventually in the form of a tax-funded, federally guaranteed, privately delivered program, an expanded, improved, cost-effective Medicare for all.

Christopher Stack, M.D.
Indianapolis

http://www.indystar.com/article/20101001/OPINION01/10010327/GOP-clueless-about-plight-of-the-uninsured

Prop. 106 raises blood pressure on both sides

By Stephanie Innes
Arizona Daily Star
Sunday, September 26, 2010

Arizona voters in November could create their own law to keep the national health-care overhaul at bay when they vote on Proposition 106.

Bitterly contested, the new health-care law triggered angry, sometimes violent demonstrations in the weeks and months leading up to its March approval, and became a rallying point that helped catapult the tea party movement to greater prominence.

And an Arizona doctor who is leading a campaign to pass Arizona Proposition 106, dubbed the Arizona Health Care Freedom Act, has been at the forefront of the national movement to challenge a key provision of the national law: mandated insurance.

Prop. 106 on the Nov. 2 general election ballot would amend the state constitution, barring any law that forces people to participate in a specific health-care program, including insurance.

Arizona is the second state to give voters a say on the matter. In August, 71 percent of Missouri voters approved a similar measure.

Supporters say the amendment, if passed, would allow Arizonans to opt out of mandated health insurance under the new national health-overhaul law and avoid paying fines.

Opposing the national law has been a big selling point, too. At a Prop. 106 town hall in Green Valley Thursday, a woman holding a “Stop Obama” sign drew enthusiastic applause.

The second key point of Prop. 106 says people can use their own money to buy any health service that’s legal and that no government entity can stop them from doing so. That would mean, for example, that a woman who wanted a mammogram every six months instead of yearly could pay for the extra screening her insurance wouldn’t cover, said Dr. Eric Novack, the Glendale orthopedic surgeon leading the Yes on 106 campaign. Novack says such choices are threatened under the new federal law.

Arizona Rep. Phil Lopes, D-Tucson, says that claim is “ridiculous.” He says he continues to study the new law closely and has seen nothing that would prevent people from spending their own money on health-care services they want.

Critics say the language of Prop. 106 is too broad and will push Arizona into an expensive court battle, as federal law trumps state law. Moreover, they say the provision allowing people to opt out of having insurance will result in others having to pay more to take care of them when they get sick or hurt.

A similar Novack initiative in 2008 – the Freedom of Choice in Health Care Act – failed narrowly. Its worst showing was in Pima County.

This time around, Novack says he’s got frustration over the national health legislation on his side. And he’s confident this version addresses the problems critics raised two years ago, particularly fears of unintended financial consequences for the Arizona Health Care Cost Containment System, Arizona’s form of Medicaid.

In 2008, AHCCCS officials opposed Prop. 101, saying language prohibiting government from restricting a person’s choice of private health-care systems could have been interpreted by a judge to include private contractors used by AHCCCS. Now, AHCCCS officials say they’re neutral.

“The world is a very different political place from 2008,” Novack said. “The public on both sides of the aisle feel health reform was rammed down the throats of the American people. A lot of people are angry.”

Arizona Gov. Jan Brewer has joined a multistate lawsuit challenging the new federal health law’s provisions. The Arizona-based Goldwater Institute has filed a separate lawsuit challenging the law.

Prop. 106 backers fear the national law will give bureaucrats more power to dictate physician choices and treatment options than insurance companies and HMOs already wield. Physicians’ practice habits and fees could be locked up by the same bureaucracy, they say.

Critics disagree

“Their message is that you need Prop. 106 so the government can’t come between you and your doctor. That is a totally false premise. People on Medicare don’t have the government coming between them and their doctors,” said Nancy Martin, a registered nurse in Prescott and co-chair of the Arizona Coalition for a State and National Health Plan, which opposes 106.

“As it is right now, the insurance companies basically come between patients and their doctors,” she said. “We believe everybody should have health care, and Prop. 106 does absolutely nothing for people who do not have insurance or who can’t afford insurance.”

The Arizona Legislature put Prop. 106 on the ballot, but Novack said he worked closely with legislators to create a version worded better than the original.

One point Novack and other supporters repeat is that mandating health insurance will not work. Even under the national law there will still be “free riders” who get their health care at others’ expense, they say.

“People are afraid for their health care,” said Dr. Donnie Sansom, a Tucson anesthesiologist. “I have a great problem with my government saying, ‘You have to purchase this.’ It’s unprecedented. …

“Prop. 106 is about ensuring you have individual freedoms in place.”

But Tucson pediatrician Dr. Eve Shapiro, a longtime advocate of health reform, says 106 does not address the real issues affecting health care – specifically people’s access to care and the cost and quality of care.

“Basically, I think the intent of 106 is not really clearly stated. It couches this as freedom of choice – baloney,” Shapiro said.

Saying you can opt out of buying health insurance does nothing to fix the real problems with the health-care system, she said.

When people don’t have health insurance and are in a bad accident, for example, we all end up paying, she noted. When everyone has health-insurance coverage, all costs go down.

Retired Phoenix physician Dr. George Pauk, past co-chair of the Arizona Coalition for a State and National Health Plan, charges the impetus behind Proposition 106 comes from just “a few selfish doctors” who want to be able to charge extra-high fees.

“This is not a freedom of choice issue. It is a very bad and broad change that would prohibit future reform in health care in Arizona,” Pauk wrote in an opposition statement he filed with the Arizona Secretary of State’s Office.

He says the law is a deliberately vague and confusing way to hide its main effects, and would actually turn back many protections the public now has.

Some of those unintended consequences, critics contend, are that the state may not have the right to require immunizations, and public-health officials may not be able to follow up on cases of contagious diseases such as AIDS and hepatitis.

People with contagious diseases could “opt out” of the health-care system designed to protect the public, the No on 106 website says. “They could then spread contagious diseases to the public, including you and your family.”

Not true, Novack insists.

“This doesn’t prevent regulation of public health,” he said. Framers of Prop. 106 listened to concerns about the previous initiative and addressed them, he said.

Regardless of the Arizona vote, Novack has been instrumental in starting a national trend. Besides the Missouri vote, lawmakers in Colorado and Oklahoma have put similar propositions on their November general election ballots.

The conservative, nonprofit American Legislative Exchange Council, which backs “free markets, limited government, federalism and individual liberty,” held up Novack’s Prop. 101 as a piece of “model legislation.” Novack says that’s how his idea began to catch on with like-minded people – those who don’t want government controlling their health choices.

Since September, the “Yes on 106” campaign has collected more than $1 million, mostly from the U.S. Health Freedom Coalition
– a national group Novack leads.

As of last week, the “No” campaign had raised about $1,400, in part because the campaign got off to a late start, Lopes said.

Among those supporting the measure are Brewer, U.S. Sens. John McCain and Jon Kyl, the Arizona Federation of Republican Women, the Arizona Ophthalmological Society, the Arizona Orthopaedic Society and the Center for Arizona Policy.

Opponents include the Arizona Alliance for Retired Americans, the Arizona Education Association, the Arizona League of Women Voters, the Arizona National Organization for Women, the Arizona Public Health Association, National Nurses United and the Arizona Democratic Party.

Novack acknowledges there’s “no question” the measure, if passed, will wind up in court.

“But the job of our state government ought to be to fight for the rights of individual Arizonans and Arizona families,” he said.

On StarNet: For more election news go to azstarnet.com/elections

About Proposition 106

The “Arizona Health Care Freedom Act” will appear on the Nov. 2 general election ballot. It would amend the Arizona Constitution, adding this language:

• A law or rule shall not compel, directly or indirectly, any person, employer or health-care provider to participate in any health-care system.

• A person or employer may pay directly for lawful health-care services and shall not be required to pay penalties or fines for paying directly for lawful health-care services. A health-care provider may accept direct payment for lawful health-care services and shall not be required to pay penalties or fines for accepting direct payment from a person or employer for lawful health-care services.

• Supporters’ campaign: www.Yes106.com

• Opponents’ campaign: www.prop106endangersyourhealth.org

http://azstarnet.com/news/local/govt-and-politics/elections/article_e454bbdf-6200-5cc4-80f7-ce9605682f98.html

Doctors at Oct. 2 march: 'We need single payer'

FOR IMMEDIATE RELEASE
Oct. 1, 2010

Media Advisory

Contact:
Oliver Fein, M.D.
Margaret Flowers, M.D.
Andrew Coates, M.D.
Mark Almberg, PNHP, (312) 782-6006, mark@pnhp.org
 
Single-payer doctors speak out: ‘Why we’re marching on Oct. 2’

Members of Physicians for a National Health Program, an organization of 18,000 doctors who support a single-payer health system, will be marching behind a banner reading “Single Payer – Improved Medicare for All” at this Saturday’s “One Nation Working Together” rally in Washington, D.C.

While the primary focus of the Oct. 2 march in Washington is on jobs, other issues like health care will also be very much on the minds of the tens of thousands expected to assemble there, the doctors’ group says.

For members of PNHP and allied groups like Healthcare-Now and National Nurses United, the Obama administration’s new health law doesn’t fundamentally resolve the health care crisis, notwithstanding some of the law’s beneficial provisions. In fact, PNHP believes it will likely aggravate the crisis by further entrenching the harmful role of private insurance companies in the system.

They point out that according to the Congressional Budget Office, even if the law works as planned, 23 million people will remain uninsured in 2019 and health care costs will continue to rise.

PNHP is an official co-sponsor of the Oct. 2 march, a major theme of which is “demanding the change we voted for.” Here are a few comments from PNHP members who will be participating in the event and who are available for interview before and during the march, along with their cell phone numbers. Others will be available as well.

Oliver Fein, M.D., internist in New York City, president of PNHP: “Reforming our health care system is unfinished business. The Census Bureau just reported that nearly 51 million people are uninsured, up 4.3 million from last year. Regrettably, the new health law will only halve this number by 2019. Moreover, the new law is likely to expand the problem of underinsurance, where people have shoddy health insurance policies that are full of loopholes and fail to protect them when they get sick. We’re here today to say we need a massive movement to press forward to the only rational remedy for our nation’s health care crisis: single-payer Medicare for all.”

Margaret Flowers, M.D., pediatrician from Baltimore, congressional fellow of PNHP: “It’s clear that Congress is unable to address our current health care crisis without a loud demand from patients and providers. We are here today to let it be known that the majority of people in the U.S. want single payer. At least twice as many people think the health bill did not go far enough than think it went too far. We don’t have fundamental health reform yet and we need it now!”

Andrew Coates, M.D., internist in Albany, N.Y., secretary of PNHP’s Capital District chapter: “As a physician and a leader in my union, the 59,000-member Public Employees Federation, AFL-CIO, I’m committed to bringing about a health system that will make a real difference for all patients, that will make health care truly universal and affordable, that will take health care off the workplace bargaining table and make our state budgets solvent again. There’s only one program that can do that. It’s called single payer, an improved Medicare for all.”

The assembly point for the physicians and other single-payer advocacy groups is at West Potomac Park between Ohio Dr. and Independence Ave (Map). Look for doctors in white coats and nurses in red scrubs.

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

How can a family with $50,000 in income pay $18,000 in medical expenses?

By Don McCanne
October 1, 2010

In the Quote of the Day for September 28, 2010, I wrote, “The $18,000 in average health care costs for a family of four is already over one-third of the median household income of $50,000.” Understandably, some readers perceived that I was implying that the average family with an income of $50,000 was paying an average of $18,000 out of that income for health care. That wasn’t my intent. I was trying to make the point that our current level of spending on health care is already far beyond the capability of the members of a typical household to pay their equally allocated share.

Also I should have refined the numbers a little bit more. The median household income is now $50,221, but the Census Bureau does not include the value of the employer contribution to the insurance premium in that number. According to the Hewitt report in my September 28 message, employers contribute $7612 per employee (including dependents if covered). So the median income with the employer insurance contribution added would be $57,833. The population with a median household income is not identical to the family of four described by the Milliman Medical Index (the average amount spent on actual health care for a family of four covered by an employer-sponsored PPO), but there is considerable overlap.

For purposes of describing how high health care spending is in relation to income, dividing the the Milliman Index of $18,074 by the adjusted median household income of $57,833 does provide a rough approximation of how much that is. It is still over 31 percent, though short of the “over one-third” I reported previously. Again, I can’t overemphasize that $18,074 is not the average amount that each family of four is paying directly out of its income, but it is the average amount that is being spent on health care on its behalf.

Even these numbers seem unbelievable. How could we possibly be spending that much when incomes are so low comparatively?

A very good friend of mine responded in appropriate disbelief. He wrote, “The information on the average health care costs that a family pays is difficult to determine, but the link here shows an average about $6,000 which is about 14% of the median household income.”

The link to an article on the cost of heath insurance:
http://healthinsurance.about.com/od/healthinsurancebasics/a/cost_of_health_insurance.htm

Because it has been so difficult for many of us (including me) to grasp just how much we are spending on health care, I decided to provide a more detailed response. Since this reality check is so important, I decided to share my comments with others by making this the Quote of the Day for today (and you may wish to share it with others):

Response to a Dear Friend:

I knew that you would have a problem with these numbers. It doesn’t seem reasonable that the average health care costs for a family of four with employer-sponsored insurance is $18,000 when the median household income is $50,000. These numbers don’t seem to compute, but they are very real.

Let me start with the $6,000 (actually $6,328) for family insurance as cited in the article you sent. That number came from a report by AHIP (America’s Health Insurance Plans – the lobby organization that helped to orchestrate the reform bill).

AHIP – Individual Health Insurance 2009:
http://www.ahipresearch.org/pdfs/2009IndividualMarketSurveyFinalReport.pdf

From page 4 of the report: “Nationwide, annual premiums averaged $2,985 for single coverage and $6,328 for family plans in mid-2009.”

That $6,328 is not health care costs, but rather it is the premium paid for family coverage in the individual insurance market. It is not the premium paid for an employer-sponsored family plan. That’s a very important distinction and here’s why.

The individual insurance market is highly dysfunctional, and was one of the primary motivators for the regulatory changes in the Patient Protection and Affordable Care Act (ACA). About 30 percent of individuals who apply for individual plans are denied coverage. The private insurers will cover only individuals with an unblemished health record. Most health care costs for those individuals are very low and often below the deductible. This is why the insurers can sell an individual family policy for only $6,328 – these are healthy people who rarely file significant claims. In fact, when they do file larger claims, the private insurers routinely look to see if they could find an omission in the application such as a prior yeast infection not reported, and then they would reject all claims and rescind the coverage.  Both of these practices are illegal for employer-sponsored group coverage, which is partly why group coverage is more expensive, but they were very effective in limiting claims losses in the individual market. The new law requires guaranteed issue (all applicants accepted) and prohibits rescission (retroactive revocation of insurance). These two changes will wipe out the individual insurance market as we know it, and will result in skyrocketing insurance premiums.

Another reason that individual plans are so cheap (if you call $6,328 cheap) is that they do not provide nearly as good coverage – both in benefits and cost sharing. Individual plans frequently omit pharmaceuticals, mental health services, maternity benefits, etc. Also they tend to have larger deductibles ($1,000 to $25,000) and high coinsurance (a percentage of fees which is usually much higher than co-pays would be). The bankruptcy studies have shown that medical debt contributes to about 60 percent of personal bankruptcies, and three-fourths of those with medical debt had health insurance. Individual plans have deteriorated to a degree that they don’t keep people out of bankruptcy when they develop significant medical problems. The new law will establish a standard benefit package which will also drive premiums up, though it will still permit excessive cost sharing (at an actuarial value of 60 to 70 percent).

Another study done for AHIP by PriceWaterhouseCoopers:
http://www.ahip.org/content/default.aspx?bc=174|28536

From page 5: “This analysis shows that the cost of the average family coverage is approximately $12,300 today.”

Once again, this is not the costs of health care, but it is the average of family premiums paid by those in both the individual and employer-sponsored group market. Already you can see that group coverage is going to be higher when you remove the individual plans from the calculations.

Okay, now the Milliman Medical Index does not represent premiums paid, but rather it represents the average amount paid for health care for a family of four with an employer-sponsored PPO plan (Blue Cross, Blue Shield, etc.). It does not include the administrative costs and profits for the insurer; it includes only the average amount that was paid for actual health care for the family. It is an important number for business entities because it shows what health care actually costs. You should read the first couple of pages of their report since it really brings home what we are paying in health care. (Note that Milliman is an actuarial consulting firm for industry – so these are not numbers that we concocted.)

Milliman Medical Index:
http://publications.milliman.com/periodicals/mmi/pdfs/milliman-medical-index-2010.pdf

From page 1 (3rd page of document): “The total 2010 medical cost for a typical American family of four is $18,074.”

But it’s even worse. This is what businesses and their employees are paying for health care. Keep in mind that this sector is the relatively healthy workforce and their young healthy families.

When you think about it, the private insurance industry has skimmed off the largest and healthiest sector of our society and is selling insurance to them – America’s workforce. The private insurers are having great difficulties selling affordable plans to employers because these costs even for the healthy are so high. They have been shifting more costs to patients through higher deductibles and other cost sharing, but they still can’t keep their premiums affordable. This is why Karen Ignagni of AHIP said over and over again during the debate on reform that this is not going to work unless the GOVERNMENT does something to control costs – a tacit admission that the insurers are incapable of controlling costs.

But think about this. If $18,074 is the average amount that health care costs for a relatively healthy family of four, then what is average cost if you include everyone in the calculation? That is, what is the cost per capita if you add up all health care spending in the nation and divide that by our population of 310,000,000? That number is available from the Office of the Actuary, Centers for Medicare and Medicaid Services (CMS).

Health Spending Projections:
http://content.healthaffairs.org/cgi/reprint/29/3/522

From the table on page 523:
Projected National Health Expenditures (NHE) for 2010: $2,589.6 billion
NHE as percent of GDP: 17.3%
NHE per capita: $8,289.9

So if we put all of our health spending dollars into one giant insurance fund, we would be paying out an average of $8,290 for each man, woman and child in this nation. For that family of four, their share is $33,160. Think about what that means when the median household income is $50,000.

These numbers are very accurate, yet how could that be? How could we be spending so much per capita and yet the average family does not see health bills of that magnitude?

First of all, we fragment our insurance risks into multiple pools. The less healthy 20 percent of people consume 80 percent of our health care. Workers fall into the 80 percent of people who use only 20 percent of the care. Thus isolating the healthy workers and their families into employer-sponsored pools dramatically reduces the per person insurance premiums because of the much lower per person costs of these healthy individuals.

Let’s see what that would be for this healthy family of four. Milliman shows that their average health care costs are about $18,000. The new health care bill says that the plans should have an actuarial value of 60 or 70 percent, but let’s use 70 percent (the insurance pays an average of 70 percent of health care costs and the family pays an average of 30 percent out of pocket). Thus the insurer pays an average of $12,600, and the family pays an average of $5,400. The law also allows the insurer to keep 15 percent of the premium to pay the bills and the administrative costs, so the premium for the family would be $14,824 ($12,600 divided by .85). Thus the family pays, under the new law, an average of $20,223 (the premium plus the out-of-pocket expenses). Again, with a median household income of $50,000 no middle income family could afford that. That is why the law provides subsidies for both the premiums and for the out of pocket expenses. However these subsidies will not be adequate for most, so, under the new law, financial hardship is an almost inevitable consequence for those who face significant medical problems.

There is a much more important reason why families are not paying an average of $33,000. Although they receive their health care financing through risk pools for the healthy, most higher cost patients have their care financed through expensive risk pools for the sick. Some examples include Medicare, Medicaid, the VA system, state high risk health pools, safety-net institutions for the uninsured, and so forth. What do these have in common? They are financed by us – the taxpayers! In fact, if you add those together, and include the tax subsidies we are providing for employer-sponsored coverage, and include the private health insurance that tax payers purchase for federal, state and local government employees, we are already paying 60 percent of our entire national health expenditures through the tax system. That is largely invisible to most of us. Also, it shows that our health care financing is much more progressive than most realize. The wealthy are paying much more than average-income families.

If that’s already true, then why don’t we leave it like it is? The reason is that this fragmented system of financing health care wastes hundreds of billions of dollars each year – money that could be going to pay for health care. Perhaps worst of all, from our perspective, is that the current law will leave tens of millions uninsured; it will establish underinsurance as the norm (60 to 70 percent actuarial value); and it will do very little to slow the outrageous escalation in health care costs. A single payer national health program – an improved Medicare that covers everyone – would control costs and cover everyone. How that works is another story.

Peace,

Don