PNHP

Bill Moyers on John Geyman's "HIJACKED"

Bill Moyers on John Geyman's "HIJACKED"

Bill Moyers on John Geyman’s “HIJACKED”

“You think the battle for real health care reform is over? John Geyman says ‘Not on your life!’ And, by the way, your life is what’s at stake. This former Republican country doctor and long-time respected scholar, editor, and advocate for reform that puts the patient, not the industry, first, has issued an informed, convincing, and passionate account of why the battle has just begun, and how we, the people, can win.”
Bill Moyers, author of “Moyers on Democracy”

HIGHJACKED – The Road to Single Payer in the Aftermath of Stolen Health Care Reform
by John Geyman
Everyone needs to read this book. Order your copy now. (I’m ordering ten copies – to share with others.):
To order:
http://www.commoncouragepress.com/index.cfm?action=book&bookid=402

Bill Moyers on John Geyman’s “HIJACKED”

Bill Moyers on John Geyman’s “HIJACKED”

“You think the battle for real health care reform is over? John Geyman says ‘Not on your life!’ And, by the way, your life is what’s at stake. This former Republican country doctor and long-time respected scholar, editor, and advocate for reform that puts the patient, not the industry, first, has issued an informed, convincing, and passionate account of why the battle has just begun, and how we, the people, can win.”

Bill Moyers, author of “Moyers on Democracy”

HIGHJACKED – The Road to Single Payer in the Aftermath of Stolen Health Care Reform
by John Geyman

Everyone needs to read this book. Order your copy now. (I’m ordering ten copies – to share with others.):

To order:
http://www.commoncouragepress.com/index.cfm?action=book&bookid=402

Soft-pedaling reform

Dems retreat on health care cost pitch

By Ben Smith
Politico
August 19, 2010

Key White House allies are dramatically shifting their attempts to defend health care legislation, abandoning claims that it will reduce costs and the deficit and instead stressing a promise to “improve it.”

The messaging shift was circulated this afternoon on a conference call and PowerPoint presentation organized by FamiliesUSA.

The Herndon Alliance, which presented the research, is a low-profile group that  coordinated liberal messaging in favor of the public option in health care.

http://www.politico.com/news/stories/0810/41271.html

And…

Implementing Health Reform: A Communications Perspective

By Lake Research Partners, Greenberg Quinlan Rosner Research, and The Herndon Alliance
August 19, 2010

Challenging Environment (Slide 4):

Straightforward “policy” defenses fail to be moving voters’ opinions about the law.

Public is disappointed, anxious, and depressed by current direction of country – not trusting.

Voters are concerned about rising health care costs and believe costs will continue to rise.

Women in particular are concerned that health law will mean less provider availability – scarcity an issue.

Many don’t believe health reform will help the economy.

Strategic Recommendations: The “Do Nots” (Slide 24):

Don’t assume public knows the  health reform law passed or if they know it passed understand how it will affect them

Don’t list benefits outside of any personal context

Don’t barrage voters with a long list of benefits

Don’t use complex language or insider jargon

Don’t use heated political rhetoric or congratulatory language

Don’t say the law will reduce costs and deficit

PowerPoint presentation
http://www.politico.com/static/PPM153_pp.html

And…

Herndon Alliance Statement on Politico Story

Herndon Alliance

Our research reaffirms that the more the public hears about the specific reforms in the law, the more they like it. The strategy of informing and educating the public about the law continues to be the right strategy.  The Politico story (Aug 19, 2010)  is wrong when it says groups supporting affordable health care for the American people are dramatically changing their strategy.  There is no reason to do so — our research reaffirms that the more the public hears about the specific reforms in the law, the more they like it.  And our research finds that there is a need to cut the political flak and give real information to the public.  Americans are tired of the partisan spin that many opponents continue to throw at the health reform law. Hard-working people are thinking about the economy and just want to know how the law will help them and their families. That is what the President and the administration have been doing — it is the approach we support.

http://herndonalliance.org/

Comment: 

By Don McCanne, MD

The conclusions and recommendations presented during the Families USA conference call were based on polls and focus groups conducted by Herndon’s research partners. In spite of Herndon’s positive spin, the research confirms that the Obama administration and the Democrats in Congress face a very “challenging environment” as they attempt to sell the benefits of the Patient Protection and Affordable Care Act.

Their recommendations for communicating the benefits of reform might best be characterized as “keep it simple, stupid,” relying heavily on personal anecdotes. Don’t confuse the public with the actual policies that are now law, and certainly don’t claim that the law will reduce costs or the deficit.

Many will remember that these are the same partners that pushed the message of choosing your own health plan, while actively suppressing any references to single payer or Medicare for all. They seemed to have the view that the message was of prime importance and policy be damned. Obviously they haven’t changed.

This next time, let’s first define optimal policy (single payer) and then develop a message that fits. As Herndon states, we “need to cut the political flak and give real information to the public.”

Medicare for All is the most Cost-Effective Health Care Option for America

Washington D.C. (July 29, 2010) – Representative John Conyers, Jr. (D-MI), Representative Dennis Kucinich (D-OH), and Senator Bernie Sanders (I-VT) are today reaffirming their efforts to provide all Americans with health care that would allow access to the doctor of choice without premiums, co-pays or deductibles.
 
The three Congressional leaders on Medicare for All health care sent an open letter calling on Americans to build on the momentum created by debate and passage of the Patient Protection and Affordable Care Act to make Medicare for All a reality.  They also renewed the call for states to take the lead on passing Medicare for All legislation.   
 
“As we honor Medicare’s 45th birthday today, I am proud to say that the movement for Medicare for All remains strong and vibrant.  I look forward to working with my colleagues, activists, and my other friends in the single payer community to improve H.R. 676 over the next few months, before reintroducing it in the 112th Congress.        
 
While we must continue to work for the passage of a true universal health care bill, we must also be vigilant in our efforts to protect the health care benefits many Americans count on today.  Over 47 million older adults and people with disabilities look to Medicare as a source of health and financial security.  During this period of increased concern over the size of the federal deficit, Medicare and other social insurance programs are increasingly at risk of being targeted for benefit cuts. I pledge to work with my colleagues in the Congress to defeat any proposal that threatens any of these critically important programs,” said Conyers.
 
“I celebrate Medicare’s birthday by pledging to continue the fight to implement Medicare for All nationally and at the state level, where there is so much promise” said Kucinich.
 
“In my view, the single-payer approach is the only way we will ever have a cost-effective, comprehensive health care system in this country,” said Sanders. “One of the reasons our current health care system is so expensive, so wasteful, so bureaucratic, so inefficient is that it is heavily dominated by private health insurance companies whose only goal in life is to make as much money as they can.”

Getting Personal: Without Medicare I'd Be Broke or Dead

By Saul Friedman
The Huffington Post, Aug. 17, 2010

It’s not too late to observe and celebrate the 45th anniversary of Medicare, for it’s a good occasion to wonder, in this time of economic distress, what life would have been like without it for the 45 million of us who are eligible because we are disabled or over 65.

One reason I ask is I suspect those deficit crazies have not thought about the consequences for Medicare if, as Republicans suggest, the Social Security retirement age is raised from 66 to 70 on the grounds that we’re all living longer. It does not occur to these loonies that Social Security and Medicare are among the reasons for the increase in longevity. But then members of Congress will always have all the coverage they need for themselves and their families, subsidized by your taxes and mine.

Nevertheless, by putting aside the human issues for a phony bottom line and a deficit that matters little to most of us, it would not be long before these lawmakers on Barack Obama’s deficit commission would raise the Medicare age eligibility. That, of course would sharply increase by at least a few million, the nearly 50 million Americans under 65, including 10 million children and babies, who are without adequate health coverage and are dependent on emergency rooms or free clinics.

If I may get personal, let me tell you what Medicare has meant for me, for my experience has not been unusual, although I’m lucky to have supplementary coverage through my wife’s former employer, which used to be free but now costs a bundle. Most other Medicare beneficiaries have similar secondary coverage through former employers or one of several Medigap policies sold by several insurers to cover some or all of the costs not covered by Medicare. I don’t mean to get too basic, but Medicare Part A, which pays for hospitalization, has rather high deductibles; Medicare Part B covers 80 percent of the cost of physician and lab services. Secondary insurance covers those Medicare gaps, and some may provide drug coverage.

Anyway, in 2003 I had a serious stroke, which partly paralyzed my right side and necessitated hundreds of hours of inpatient and outpatient rehabilitation at several of the nation’s finest facilities. The stroke was caused by a heart malfunction, which was cured with minor surgery. In 2005, after too many years as a smoker (I had quit in 1976), I was diagnosed with cancer of the esophagus, which is usually fatal. But chemotherapy, radiation and radical surgery at Johns Hopkins in Baltimore saved my life.

For all this, plus frequent checkups, Ct-Scans, routine doctor visits and a recent prostate procedure, I have paid nothing aside from the reasonable Medicare Part B premiums and the cost of secondary coverage. In short, I can say what millions of Medicare beneficiaries say — without Medicare, I’d be broke, bankrupt or dead. But that, alas, has been the experience of the millions, who because they are too young, have been denied Medicare. Nor do they yet have decent, dependable and affordable health care because a compromising president and a spineless Congress, mostly Republicans and conservative Democrats, have declined to give the rest of the nation what they and the rest of the world have, universal health coverage like Medicare.

The anniversary of Medicare’s adoption, by a liberal Democratic Congress and President (Lyndon B. Johnson), has give advocates an opportunity to list its lesser known accomplishments. While most of the new health reforms won’t become effective until 2014 (the Part D doughnut hole won’t close until six years later), Medicare was serving 19 million Americans a year after passage. In a paper written by June Eichner and Medicare’s first director, Bruce Vladek, they point out that beginning in 1966, as the nation’s largest purchaser of health care Medicare desegregated most hospitals as a condition for receiving Medicare reimbursement. Since then, they wrote, Medicare has contributed not only to the improvements to the lives and health of the disabled and older populations, but has gone far in erasing disparities between blacks and whites. More than 25 percent of Medicare beneficiaries were living in poverty in 1965.

The passage of Medicare came just after the Civil Rights Act of 1964. Which is why southern Democrats joined Republicans in resisting Medicare. But because of those two landmark pieces of legislation, the National Bureau of Economic Research found that “the gains in black access to hospitals (in Mississippi) coincide with a striking reduction in black post-neonatal deaths for causes considered preventable.” The cost for these improvement were borne by Medicaid, also passed, along with Medicare, to provide care for the very poor.

Another study noted that Medicare played a significant role in the education of today’s physicians. According to an April Wall Street Journal, there are about 110,000 resident positions in teaching hospitals that rely heavily on Medicare funding. Medicare pays $9.1 billion a year to teaching hospitals, which pays residents’ salaries as well as the higher operating costs associated with teaching hospitals, which tend to see the sickest, most costly and uninsured patients. Unfortunately conservative diehards kept out of the health reforms any increase in the number of funded residencies.

There are, too, a few glitches that have shown up lately in Medicare that need fixing. Under current law, persons over 65 who end their employment and employer health coverage must apply for Medicare during a “special enrollment period,” up to eight month after that coverage ceases. But if the workers chooses to get COBRA coverage, which usually lasts 18 months, they may not realize that they will be disqualified from the special enrollment period and will have to wait until the regular open enrollment period, from January through March 31. In that case, their Medicare coverage won’t begin until July 1. This rule is 24 years old, but because it’s happening frequently, legislation is pending to permit signing up for Medicare when COBRA runs out.

Here’s another glitch, discovered by Bloomberg News. Under current law, a person (who suffered a stroke or was injured) is entitled to skilled nursing care and rehabilitation, after three days in a hospital. But lately some hospitals, to save money, are keeping patients “under observation” and not admitting them, thus depriving them of the rehabilitation they need. Medicare auditors are challenging this practice, which should be reported as fraud to Medicare.

Finally the biggest necessary fix is the one Obama said he was for, before he became president; Medicare For All. It is the subject of a new appeal to the Congress by Reps. Dennis Kucinich (D, Ohio), John Conyers (D, Mich.), and Independent Sen. Bernie Sanders of Vermont. If Congress won’t pass it, they asked that states be permitted to adopt it. It would be better, of course, if Medicare for All was federal law. If Obama led the way, he could be in the same leagues as LBJ. But our president for change, who has yet to speak forcefully against cutting or tampering with Social Security benefits, is too busy to listen. Maybe it’s possible in a second term, if he gets one.

Write to saulfriedman@comcast.net Friedman also writes for www.timegoesby.net

http://www.huffingtonpost.com/saul-friedman/getting-personal-without_b_685665.html

Getting Personal: Without Medicare I’d Be Broke or Dead

By Saul Friedman
The Huffington Post, Aug. 17, 2010

It’s not too late to observe and celebrate the 45th anniversary of Medicare, for it’s a good occasion to wonder, in this time of economic distress, what life would have been like without it for the 45 million of us who are eligible because we are disabled or over 65.

One reason I ask is I suspect those deficit crazies have not thought about the consequences for Medicare if, as Republicans suggest, the Social Security retirement age is raised from 66 to 70 on the grounds that we’re all living longer. It does not occur to these loonies that Social Security and Medicare are among the reasons for the increase in longevity. But then members of Congress will always have all the coverage they need for themselves and their families, subsidized by your taxes and mine.

Nevertheless, by putting aside the human issues for a phony bottom line and a deficit that matters little to most of us, it would not be long before these lawmakers on Barack Obama’s deficit commission would raise the Medicare age eligibility. That, of course would sharply increase by at least a few million, the nearly 50 million Americans under 65, including 10 million children and babies, who are without adequate health coverage and are dependent on emergency rooms or free clinics.

If I may get personal, let me tell you what Medicare has meant for me, for my experience has not been unusual, although I’m lucky to have supplementary coverage through my wife’s former employer, which used to be free but now costs a bundle. Most other Medicare beneficiaries have similar secondary coverage through former employers or one of several Medigap policies sold by several insurers to cover some or all of the costs not covered by Medicare. I don’t mean to get too basic, but Medicare Part A, which pays for hospitalization, has rather high deductibles; Medicare Part B covers 80 percent of the cost of physician and lab services. Secondary insurance covers those Medicare gaps, and some may provide drug coverage.

Anyway, in 2003 I had a serious stroke, which partly paralyzed my right side and necessitated hundreds of hours of inpatient and outpatient rehabilitation at several of the nation’s finest facilities. The stroke was caused by a heart malfunction, which was cured with minor surgery. In 2005, after too many years as a smoker (I had quit in 1976), I was diagnosed with cancer of the esophagus, which is usually fatal. But chemotherapy, radiation and radical surgery at Johns Hopkins in Baltimore saved my life.

For all this, plus frequent checkups, Ct-Scans, routine doctor visits and a recent prostate procedure, I have paid nothing aside from the reasonable Medicare Part B premiums and the cost of secondary coverage. In short, I can say what millions of Medicare beneficiaries say — without Medicare, I’d be broke, bankrupt or dead. But that, alas, has been the experience of the millions, who because they are too young, have been denied Medicare. Nor do they yet have decent, dependable and affordable health care because a compromising president and a spineless Congress, mostly Republicans and conservative Democrats, have declined to give the rest of the nation what they and the rest of the world have, universal health coverage like Medicare.

The anniversary of Medicare’s adoption, by a liberal Democratic Congress and President (Lyndon B. Johnson), has give advocates an opportunity to list its lesser known accomplishments. While most of the new health reforms won’t become effective until 2014 (the Part D doughnut hole won’t close until six years later), Medicare was serving 19 million Americans a year after passage. In a paper written by June Eichner and Medicare’s first director, Bruce Vladek, they point out that beginning in 1966, as the nation’s largest purchaser of health care Medicare desegregated most hospitals as a condition for receiving Medicare reimbursement. Since then, they wrote, Medicare has contributed not only to the improvements to the lives and health of the disabled and older populations, but has gone far in erasing disparities between blacks and whites. More than 25 percent of Medicare beneficiaries were living in poverty in 1965.

The passage of Medicare came just after the Civil Rights Act of 1964. Which is why southern Democrats joined Republicans in resisting Medicare. But because of those two landmark pieces of legislation, the National Bureau of Economic Research found that “the gains in black access to hospitals (in Mississippi) coincide with a striking reduction in black post-neonatal deaths for causes considered preventable.” The cost for these improvement were borne by Medicaid, also passed, along with Medicare, to provide care for the very poor.

Another study noted that Medicare played a significant role in the education of today’s physicians. According to an April Wall Street Journal, there are about 110,000 resident positions in teaching hospitals that rely heavily on Medicare funding. Medicare pays $9.1 billion a year to teaching hospitals, which pays residents’ salaries as well as the higher operating costs associated with teaching hospitals, which tend to see the sickest, most costly and uninsured patients. Unfortunately conservative diehards kept out of the health reforms any increase in the number of funded residencies.

There are, too, a few glitches that have shown up lately in Medicare that need fixing. Under current law, persons over 65 who end their employment and employer health coverage must apply for Medicare during a “special enrollment period,” up to eight month after that coverage ceases. But if the workers chooses to get COBRA coverage, which usually lasts 18 months, they may not realize that they will be disqualified from the special enrollment period and will have to wait until the regular open enrollment period, from January through March 31. In that case, their Medicare coverage won’t begin until July 1. This rule is 24 years old, but because it’s happening frequently, legislation is pending to permit signing up for Medicare when COBRA runs out.

Here’s another glitch, discovered by Bloomberg News. Under current law, a person (who suffered a stroke or was injured) is entitled to skilled nursing care and rehabilitation, after three days in a hospital. But lately some hospitals, to save money, are keeping patients “under observation” and not admitting them, thus depriving them of the rehabilitation they need. Medicare auditors are challenging this practice, which should be reported as fraud to Medicare.

Finally the biggest necessary fix is the one Obama said he was for, before he became president; Medicare For All. It is the subject of a new appeal to the Congress by Reps. Dennis Kucinich (D, Ohio), John Conyers (D, Mich.), and Independent Sen. Bernie Sanders of Vermont. If Congress won’t pass it, they asked that states be permitted to adopt it. It would be better, of course, if Medicare for All was federal law. If Obama led the way, he could be in the same leagues as LBJ. But our president for change, who has yet to speak forcefully against cutting or tampering with Social Security benefits, is too busy to listen. Maybe it’s possible in a second term, if he gets one.

Write to saulfriedman@comcast.net Friedman also writes for www.timegoesby.net

http://www.huffingtonpost.com/saul-friedman/getting-personal-without_b_685665.html

Soft-pedaling reform

Dems retreat on health care cost pitch

By Ben Smith
Politico
August 19, 2010
Key White House allies are dramatically shifting their attempts to defend health care legislation, abandoning claims that it will reduce costs and the deficit and instead stressing a promise to “improve it.”
The messaging shift was circulated this afternoon on a conference call and PowerPoint presentation organized by FamiliesUSA.
The Herndon Alliance, which presented the research, is a low-profile group that  coordinated liberal messaging in favor of the public option in health care.
http://www.politico.com/news/stories/0810/41271.html

And…

Implementing Health Reform: A Communications Perspective

By Lake Research Partners, Greenberg Quinlan Rosner Research, and The Herndon Alliance
August 19, 2010
Challenging Environment (Slide 4):
Straightforward “policy” defenses fail to be moving voters’ opinions about the law.
Public is disappointed, anxious, and depressed by current direction of country – not trusting.
Voters are concerned about rising health care costs and believe costs will continue to rise.
Women in particular are concerned that health law will mean less provider availability – scarcity an issue.
Many don’t believe health reform will help the economy.
Strategic Recommendations: The “Do Nots” (Slide 24):
Don’t assume public knows the  health reform law passed or if they know it passed understand how it will affect them
Don’t list benefits outside of any personal context
Don’t barrage voters with a long list of benefits
Don’t use complex language or insider jargon
Don’t use heated political rhetoric or congratulatory language
Don’t say the law will reduce costs and deficit
PowerPoint presentation
http://www.politico.com/static/PPM153_pp.html

And…

Herndon Alliance Statement on Politico Story

Herndon Alliance
Our research reaffirms that the more the public hears about the specific reforms in the law, the more they like it. The strategy of informing and educating the public about the law continues to be the right strategy.  The Politico story (Aug 19, 2010)  is wrong when it says groups supporting affordable health care for the American people are dramatically changing their strategy.  There is no reason to do so — our research reaffirms that the more the public hears about the specific reforms in the law, the more they like it.  And our research finds that there is a need to cut the political flak and give real information to the public.  Americans are tired of the partisan spin that many opponents continue to throw at the health reform law. Hard-working people are thinking about the economy and just want to know how the law will help them and their families. That is what the President and the administration have been doing — it is the approach we support.
http://herndonalliance.org/

The conclusions and recommendations presented during the Families USA conference call were based on polls and focus groups conducted by Herndon’s research partners. In spite of Herndon’s positive spin, the research confirms that the Obama administration and the Democrats in Congress face a very “challenging environment” as they attempt to sell the benefits of the Patient Protection and Affordable Care Act.
Their recommendations for communicating the benefits of reform might best be characterized as “keep it simple, stupid,” relying heavily on personal anecdotes. Don’t confuse the public with the actual policies that are now law, and certainly don’t claim that the law will reduce costs or the deficit.
Many will remember that these are the same partners that pushed the message of choosing your own health plan, while actively suppressing any references to single payer or Medicare for all. They seemed to have the view that the message was of prime importance and policy be damned. Obviously they haven’t changed.
This next time, let’s first define optimal policy (single payer) and then develop a message that fits. As Herndon states, we “need to cut the political flak and give real information to the public.”

Insurance trade group sues to protect rescissions

Trade group sues over new Calif. insurance rules

By Shaya Tayefe Mohajer
San Francisco Chronicle
August 19, 2010

A new regulation that makes it harder for health insurance companies to drop individual policyholders in California is being challenged in court by an industry trade group.

The California Department of Insurance’s new regulations, which took effect Wednesday, require insurers to investigate the medical histories of those seeking individual policies before accepting any premiums.

The Association of California Life and Health Insurance Companies sued to stop the rules on Monday, accusing the state of acting “in excess of its jurisdiction and authority” by creating regulation that conflicts with the state’s insurance code.

Insurance Commissioner Steve Poizner on Thursday called the lawsuit “shortsighted and morally wrong.”

“Sometimes I think representatives in this industry have their heads permanently stuck in the sand. Illegal rescissions are a repugnant industry practice,” said Poizner.

http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2010/08/19/financial/f132925D03.DTL

Comment: 

By Don McCanne, MD

One of the most egregious offenses of the health insurance industry has been to retroactively revoke an insurance policy after the insured individual files a medical claim, a process known as rescission. Public outrage over this injustice helped to drive the process that brought us the Patient Protection and Affordable Care Act (PPACA).

Apparently the insurance industry has learned nothing. Their trade organization in California has the gall to infuriate all of us by suing to protect their right to do their underwriting after a claim is filed rather than before the policy is issued, whacking the patients when they are down.

Since PPACA will make rescissions more difficult, you would think that the industry would be quiet and accept the inevitable. No. Instead they reveal that they are not simply an amoral industry but rather a truly immoral one by insisting on their right to retroactively deny payment of medical bills run up by the hapless patient, merely to save the costs of timely underwriting.

This is not the industry that should be managing our health care financing. We need our own public financing entity – a single payer national health program.

Insurance trade group sues to protect rescissions

Trade group sues over new Calif. insurance rules

By Shaya Tayefe Mohajer
San Francisco Chronicle
August 19, 2010
A new regulation that makes it harder for health insurance companies to drop individual policyholders in California is being challenged in court by an industry trade group.
The California Department of Insurance’s new regulations, which took effect Wednesday, require insurers to investigate the medical histories of those seeking individual policies before accepting any premiums.
The Association of California Life and Health Insurance Companies sued to stop the rules on Monday, accusing the state of acting “in excess of its jurisdiction and authority” by creating regulation that conflicts with the state’s insurance code.
Insurance Commissioner Steve Poizner on Thursday called the lawsuit “shortsighted and morally wrong.”
“Sometimes I think representatives in this industry have their heads permanently stuck in the sand. Illegal rescissions are a repugnant industry practice,” said Poizner.
http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2010/08/19/financial/f132925D03.DTL

One of the most egregious offenses of the health insurance industry has been to retroactively revoke an insurance policy after the insured individual files a medical claim, a process known as rescission. Public outrage over this injustice helped to drive the process that brought us the Patient Protection and Affordable Care Act (PPACA).
Apparently the insurance industry has learned nothing. Their trade organization in California has the gall to infuriate all of us by suing to protect their right to do their underwriting after a claim is filed rather than before the policy is issued, whacking the patients when they are down.
Since PPACA will make rescissions more difficult, you would think that the industry would be quiet and accept the inevitable. No. Instead they reveal that they are not simply an amoral industry but rather a truly immoral one by insisting on their right to retroactively deny payment of medical bills run up by the hapless patient, merely to save the costs of timely underwriting.
This is not the industry that should be managing our health care financing. We need our own public financing entity – a single payer national health program.

Why are large employers unable to control their costs?

Large Employers’ 2011 Health Plan Design Changes

By Karen Marlo, Dannel Dan, and Craig Lykens
National Business Group on Health
August 2010

The National Business Group on Health conducted its annual plan design survey with members in the spring/summer of 2010.

Changes as a Result of Health Care Legislation

While there was uncertainty about the regulations determining grandfathered plan status, the majority of employers (53%) were still planning to make changes to their plan designs.

Medical Plan Costs

Employers estimated an average increase in health care costs of 7.0% for 2010, with reported estimates ranging from a 2.7% decrease to a 14.0% increase. For 2011, employers are estimating a slightly larger increase, an average trend of 8.9%.

In 2011, 63% of employers will be increasing the employee percentage contribution to premium costs, and 46% will increase out-of-pocket maximums, while 44% will increase in-network deductibles.

Consumer-Directed Health Care

Of the respondents, 61% will offer a CDHP in 2011. Of those offering a CDHP, 20% indicated that they will or have moved to a full replacement plan (i.e., no other option), up from 10% in 2010. The most common type of CDHP employers will offer in 2011 is a high-deductible health plan (HDHP) with a health savings account (HSA) (64%).

Pharmacy Benefits

To manage pharmacy benefits, the techniques employers are most likely to use are prior authorization (73%), followed by step therapy (63%), three-tier design (63%), and mandatory mail order for maintenance medications (47%).

Retiree Health

Very few employers offer retiree health benefits for new hires, with 18% offering coverage to pre-65 retirees and 11% offering post-65 supplemental coverage to new hires.

The top strategies being used to control retiree health care costs are caps on company contributions (46%), increasing employee contributions (37%), and eliminating coverage for future retirees (33%).

http://www.businessgrouphealth.org/pdfs/Plan%20Design%20Survey%20Report%20Public.pdf

Comment:

By Don McCanne, MD

The National Business Group on Health represents primarily Fortune 500 companies and large public-sector employers with self-insured health benefit programs. Because of their market power and their ability to eliminate the risk pooling function of private insurer intermediaries, you would think that these large employers would be immune from the high health care costs inflicted on the rest of us by our dysfunctional system of financing health care, but you would be wrong.

This report shows that escalating health care costs continue to plague our nation’s largest employers, so much so they they are turning to some of the same ill-advised cost containment measures used throughout our system. Amongst the most perverse is that they are shifting ever more costs to those individuals who most need to be protected by the benefit programs – their employees and family members who have health care needs. It is bad enough to have health problems, but it is even worse to be financially penalized for having them.

Why is it that these large employers, with their tremendous purchasing power and ability to bypass the extortion of risk-bearing private insurers, have been unable to control their health care costs? The reason is quite simple. Our fragmented, dysfunctional, multi-payer system permeates the entire health care delivery system, and these employers are unable to function in an isolated delivery system that has not been damaged by the financing perversities.

Let’s look at some of the excess costs that they face. First, U.S. health care prices are the highest in the world. Even with their purchasing clout, the employers are not able to slow the unrelenting escalation in health care prices; they still have to pay prices close to those negotiated by the private insurance industry. In fact, most of them use private insurers for administrative functions such as claims processing, so they’re playing the same ball game.

Second, and most importantly, the health care delivery system has built into it very high administrative costs due to the necessity of interacting with a multitude of payers, each with different contract requirements. There is no way that large employers can avoid paying these excess costs because they are fixed costs built into the delivery system.

It is true that large employers escape some of the costs of private insurance, such as the expense of marketing health plans, or the necessity of paying profits to investor-owned insurance companies. However they are exposed not only to the massive indirect administrative costs imposed on the health care delivery system, they also have their own excessive administrative costs.

The U.S. model of health care financing depends on provider networks, and these large employers must either establish their own networks, or, much more likely, rent these networks from the private insurers. It defies logic that they should pay extra to take choice away from patients, but they do. (Keep in mind that Medicare controls prices without the need of establishing restrictive provider networks.)

They also must either establish their own claims processing system, or again more likely, use private insurers or claims processing managers which profit from the services they are selling to the employers.

With the increase in consumer-directed health care plans employers have increased administrative responsibility for managing the various cost sharing provisions, ranging from tallying services before the deductible is met to management of payments from health savings accounts.

It is easy to see why being self-insured has not protected these large businesses. Their direct insurance-type administrative costs may be comparatively low, but the costly burden of our dysfunctional financing infrastructure has been placed upon the entire health care delivery system, and they must pay for that. (Yes, I repeat myself, but this is the crucial take-home message.)

Although some might want to give the private insurers a pass because the employers are not dependent on them for risk pooling, that would be a mistake. The private insurers and their political supporters are very much to blame because they have perpetuated this dysfunctional financing system that the large employers have been unable to penetrate. The politicians perhaps bear the greatest blame because they have supported the private insurance industry at a great cost to the rest of us.

What the United States lacks that all other industrialized nations have is a monopsony (single purchaser) to purchase health care. Even in those nations with multiple payers, government oversight pulls them together as a de facto single purchasing entity. In the private sector, a monopsony can be as evil as a monopoly, but a public monopsony is different because it purchases health care for the benefit of the nation’s patients.

Our nation’s largest employers, with all of their purchasing power, still lack the strength of a monopsony. They are making a tragic mistake in trying to solve their problems by passing more of the health care burden onto their workers.

If the leadership of the business community had just a little bit more vision, they would realize that it is time to establish a monopsony that would not only control their costs, but would work for all of us. The ideal monopsony for this nation, of course, would be an improv
ed Medicare that covers everyone.

For Cost Control, Vouchers and Medicare Don't Mix

By Austin Frakt
Kaiser Health News, Aug 19, 2010

With the ambition of reducing the federal debt, Congressman Paul Ryan has offered a proposal to convert Medicare to a voucher-based program. Under the plan, in time all Medicare beneficiaries would receive program benefits from private plans subsidized by government payments (vouchers). In principle, such a system could reduce federal Medicare costs if the subsidy grows more slowly than medical inflation, shifting more of the costs to care to individuals. The history of Medicare and its politics suggest it is unlikely to work out that way.

About Ryan’s plan, economist Paul Krugman wrote in the New York Times, “[W]e already know, from experience with the Medicare Advantage program, that a voucher system would have higher, not lower, costs than our current system.” Krugman is correct: When it comes to Medicare, vouchers and cost control, it seems you can’t get all three.

Though rarely described this way, the private Medicare Advantage plans are a (voluntary) voucher system. When covering a beneficiary, an Advantage plan receives a fixed monthly payment from Medicare that depends on the beneficiary’s county of residence and health status. That fixed monthly payment is tantamount to a voucher. With it, beneficiaries can select from any Advantage plan operating in their county. They can also stick with traditional fee-for-service Medicare–and about three in four beneficiaries do so.

But today, the market-based arm of the program costs more, not less, per beneficiary. Those fixed monthly payments to Advantage plans are, on average, 13 percent above fee-for-service Medicare costs. It didn’t start out that way. Originally, private Medicare plans were paid 95 percent of per beneficiary fee-for-service costs. The logic was that private plans ought to be able to provide Medicare services more efficiently than traditional Medicare through a combination of controlling utilization and driving hard bargains with providers. So, Medicare used to take five percent off the top.

Then Congress began to ratchet up payments, first with the 1997 Balanced Budget Act and more recently with the 2003 Medicare Modernization Act. (This year’s health reform law aims to reduce Advantage payments, though still not below 100 percent of fee-for-service costs on average.) Ironically, traditional Medicare payment regulatory reforms–like the prospective payment of hospitals and home health agencies–have been more successful (even if not anywhere near successful enough) in mollifying the rate of growth in the program’s costs.

What’s going on? Why is the market-based Advantage voucher system not helping to control Medicare costs? The answer is that health care cost control is tough, technically and politically. Provider groups typically resist it. When it pertains to Medicare, beneficiaries resist it too. By adding another private-sector layer to the program–health insurers–the Advantage program invites a third source of political pressure. Rent-seeking by providers and insurers, as well as the power of the beneficiary constituency, align in their encouragement of higher Advantage payments. Congress, apparently, is willing to yield to that encouragement.

So, it’s really no surprise that Advantage plans have not, to date, been part of a Medicare cost control solution. Congress has not consistently been willing to say no to the combination of powerful interests that advocate for higher payments to private plans. Given the track record, it is also not unreasonable to conclude the mandatory voucher program Ryan advocates wouldn’t save money either. As Krugman suggests, it could even be worse because in time 100% of beneficiaries would be enrolled in vouchers, not the 24 percent that are enrolled today.

The politics of Medicare are such that Ryan’s idea, paying for care entirely through private plans, costs more. That’s not due to a market failure, but a political one. Congress likes to spend money; insurers, providers and beneficiaries like to receive it. Congress spends even more when it can satisfy those interests under the guise of a seemingly pro-market, pro-competitive program.

When it comes to cost control and considering the political calculus of Congress, vouchers and Medicare don’t add up.

Austin Frakt is a health economist and an Assistant Professor of Health Policy and Management at Boston University’s School of Public Health. He blogs at The Incidental Economist .

http://www.kaiserhealthnews.org/Columns/2010/August/081910Frakt.aspx

For Cost Control, Vouchers and Medicare Don’t Mix

By Austin Frakt
Kaiser Health News, Aug 19, 2010

With the ambition of reducing the federal debt, Congressman Paul Ryan has offered a proposal to convert Medicare to a voucher-based program. Under the plan, in time all Medicare beneficiaries would receive program benefits from private plans subsidized by government payments (vouchers). In principle, such a system could reduce federal Medicare costs if the subsidy grows more slowly than medical inflation, shifting more of the costs to care to individuals. The history of Medicare and its politics suggest it is unlikely to work out that way.

About Ryan’s plan, economist Paul Krugman wrote in the New York Times, “[W]e already know, from experience with the Medicare Advantage program, that a voucher system would have higher, not lower, costs than our current system.” Krugman is correct: When it comes to Medicare, vouchers and cost control, it seems you can’t get all three.

Though rarely described this way, the private Medicare Advantage plans are a (voluntary) voucher system. When covering a beneficiary, an Advantage plan receives a fixed monthly payment from Medicare that depends on the beneficiary’s county of residence and health status. That fixed monthly payment is tantamount to a voucher. With it, beneficiaries can select from any Advantage plan operating in their county. They can also stick with traditional fee-for-service Medicare–and about three in four beneficiaries do so.

But today, the market-based arm of the program costs more, not less, per beneficiary. Those fixed monthly payments to Advantage plans are, on average, 13 percent above fee-for-service Medicare costs. It didn’t start out that way. Originally, private Medicare plans were paid 95 percent of per beneficiary fee-for-service costs. The logic was that private plans ought to be able to provide Medicare services more efficiently than traditional Medicare through a combination of controlling utilization and driving hard bargains with providers. So, Medicare used to take five percent off the top.

Then Congress began to ratchet up payments, first with the 1997 Balanced Budget Act and more recently with the 2003 Medicare Modernization Act. (This year’s health reform law aims to reduce Advantage payments, though still not below 100 percent of fee-for-service costs on average.) Ironically, traditional Medicare payment regulatory reforms–like the prospective payment of hospitals and home health agencies–have been more successful (even if not anywhere near successful enough) in mollifying the rate of growth in the program’s costs.

What’s going on? Why is the market-based Advantage voucher system not helping to control Medicare costs? The answer is that health care cost control is tough, technically and politically. Provider groups typically resist it. When it pertains to Medicare, beneficiaries resist it too. By adding another private-sector layer to the program–health insurers–the Advantage program invites a third source of political pressure. Rent-seeking by providers and insurers, as well as the power of the beneficiary constituency, align in their encouragement of higher Advantage payments. Congress, apparently, is willing to yield to that encouragement.

So, it’s really no surprise that Advantage plans have not, to date, been part of a Medicare cost control solution. Congress has not consistently been willing to say no to the combination of powerful interests that advocate for higher payments to private plans. Given the track record, it is also not unreasonable to conclude the mandatory voucher program Ryan advocates wouldn’t save money either. As Krugman suggests, it could even be worse because in time 100% of beneficiaries would be enrolled in vouchers, not the 24 percent that are enrolled today.

The politics of Medicare are such that Ryan’s idea, paying for care entirely through private plans, costs more. That’s not due to a market failure, but a political one. Congress likes to spend money; insurers, providers and beneficiaries like to receive it. Congress spends even more when it can satisfy those interests under the guise of a seemingly pro-market, pro-competitive program.

When it comes to cost control and considering the political calculus of Congress, vouchers and Medicare don’t add up.

Austin Frakt is a health economist and an Assistant Professor of Health Policy and Management at Boston University’s School of Public Health. He blogs at The Incidental Economist .

http://www.kaiserhealthnews.org/Columns/2010/August/081910Frakt.aspx