PNHP

Insurers face consequences whether or not reform fails

Insurers face consequences whether or not reform fails

If Bills Fail, a Quandary for Insurers

By Reed Abelson
The New York Times
January 21, 2010
With the possible collapse of the Congressional health care effort, health insurers might seem to have reason to celebrate. The legislation threatened to remake much of their business, with the prospect of burdensome government regulation and less profit from selling coverage to individuals and small businesses.
But now, in the possible absence of forced change to their business, the insurers still face the daunting challenge of selling a product that is increasingly out of reach for more Americans as the cost of medical care — and thus premiums — continues to climb.
Moreover, the industry’s main business of selling coverage through employers has largely stalled, while the weak economy has speeded the loss of customers as people lose their jobs and their health insurance.
“People are still being crowded out of the market because they can’t afford it,” said Sheryl R. Skolnick, a health care analyst for Pali Capital in New York.
But without the aid of the government through some provisions of the legislation, some policy analysts say the insurers might be hard pressed to rein in the fees charged by hospitals and doctors.
“They’ve lost all the leverage reform would have given them,” said Len Nichols, a health care economist for the New America Foundation, a policy research organization that supports an overhaul.
And the insurers say they know they cannot fix many of the problems in the health care system without the support of the government.
For insurers, the largest risk may be that without a government-led overhaul, their industry faces an even bleaker future should medical costs and premiums continue to soar, perhaps eventually prompting draconian changes from the government.
By the time Congress dares to try again to overhaul health care, some analysts predict, the problems with the system might be so acute that Washington might regulate the insurers more heavily than has been considered for the current legislation — or flirt even more with the idea of the federal government becoming directly involved in providing insurance.
“It’s going to come back to the forefront again,” predicted Matthew Borsch, an analyst at Goldman Sachs who follows the industry and says the insurers face an increasingly daunting environment.
http://www.nytimes.com/2010/01/22/health/policy/22insure.html?hp=&pagewanted=all

We have stated repeatedly that health care costs are now so high that private insurers are no longer capable of providing health plans with affordable premiums if those plans are to be effective in preventing financial hardship in the face of medical need. Private health plans are an obsolete method of financing health care.
The health care reform process began with the goals of covering everyone and controlling health care costs. That would have been a straightforward task had they agreed to establish a single payer national health program. Instead it was decided to build reform on the foundation of our existing private insurance industry that is approaching obsolescence.
Keep in mind what health care now costs for our healthiest sector – the healthy workforce and their young healthy families. The average costs for a family of four is now $16,771 (Milliman Medical Index). This does not include insurer administrative costs. Considering that median household income is $50,303 (2008), the premium that must be charged for a private plan with adequate benefits, plus the out-of-pocket expenses, are totally out of reach for the average family.
The private insurance industry has survived to this point primarily for two reasons. Most important is that they have been able to sell their products to the healthiest of us – group plans for the healthy workforce, and individual plans for those who pass underwriting requirements. Also the tradition of employer sponsorship of plans has provided a revenue source that has been tolerated by workers who forgo their wage increases.
But the cost of these plans have reached a threshold such that employees are no longer tolerating stagnation of their wages, and employers are no longer tolerating the costs of their combined employee wage and benefit packages. Insurance plan innovations designed to slow the premium increases to keep them competitive have shifted costs to employees who actually need health care. The backlash against these unanticipated costs is sure to accelerate.
The insurance industry had no choice but to turn to the government for solutions that would ensure its survival. As Congress patched the reform proposal together, it became immediately obvious that the private insurance model was not capable of covering everyone, so they gave up on the goal of universal coverage. As they continued to work on the problem of high costs, the limitations of the private insurance model left them with wish-they-would-work policy options that would have very little impact on cost containment.
With abandonment of the two primary goals for reform, Congress was left with the job of patching together policies that would keep the insurance industry in play, as if protecting the private insurers was the primary goal in the first place. To greatly expand their market, the insurers would have to accept patients who actually needed health care, ending disqualification for preexisting disorders. To prevent adverse selection, everyone would be mandated to purchase health plans.
That would provide the plans with the market that they need, but it left one more problem. To make premiums affordable, even with subsidies, health care costs would have to be controlled. The insurers insist that the government must control the costs, but that does not work in a model designed to leave the private insurers in charge of health care financing.
If no reform is enacted, the entire insurance industry goes into the death spiral of ever higher premiums. If the Senate version is enacted, the insurers would get a temporary reprieve through the government subsidies, but it would not be long before rising costs would again be unbearable for the payers. The golden age of America’s private health insurance industry is about to end, whether or not a bill passes.
The Massachusetts election has given us a brief window in which we can step back and ponder, “What on earth are we doing!?” We can do it right. We can dismiss the obsolete model of private insurance plans and enact an equitably-financed, improved Medicare that really would include all of us, and provide an effective mechanism for slowing health care spending.

Will President Obama salvage his centerpiece?

George Stephanopoulos' Exclusive Interview with President Obama

ABC News
January 20, 2010

President Obama:  I would advise that we try to move quickly to coalesce around those elements of the package that people agree on. We know that we need insurance reform, that the health insurance companies are taking advantage of people. We know that we have to have some form of cost containment because if we don’t, then our budgets are going to blow up and we know that small businesses are going to need help so that they can provide health insurance to their families. Those are the core, some of the core elements of, to this bill.

Later…

President Obama:  If you ask the American people about health care, one of the things that drives them crazy is insurance companies denying people coverage because of preexisting conditions. Well, it turns out that if you don’t — if you don’t make sure that everybody has health insurance, then you can’t eliminate insurance companies — you can’t stop insurance companies from discriminating against people because of preexisting conditions. Well, if you’re going to give everybody health insurance, you’ve got to make sure it’s affordable. So it turns out that a lot of these things are interconnected.

http://blogs.abcnews.com/george/2010/01/transcript-george-stephanopoulos-exclusive-interview-with-president-obama.html

Comment: 

By Don McCanne, MD

It looks like there are four choices: 1) walk away and accept the status quo, 2) use alternative political maneuvers to move the bill through Congress,  3) attempt to salvage at least a portion of the less controversial components of the current proposal, or 4) start over. Let’s look at these.

1) Walk away

Far too many individuals and businesses are no longer capable of paying the very high costs of our health care system. The existing spending controls in government and in the marketplace show no evidence of ameliorating the excessive growth of our total national health expenditures. The status quo is unacceptable. On this everyone agrees, so we cannot walk away.

2) Move the bill through Congress anyway

The strategy that has been advanced to pass the bill relatively intact would be to have the House approve the Senate version, and then make corrections in a budget reconciliation process. We can forget this approach since the bill managers’ head count in the House has come up far short of the votes needed. Also, cramming the bill through before Sen. Kirk is replaced by Scott Brown has been rejected by President Obama and other Democratic leaders. But the overriding reason why this bill will not clear Congress intact is that a majority of Americans are very displeased with it – that includes all conservatives, most liberals, and a majority of moderates. Sometimes we question the collective wisdom of Congress, but they’re not that dense.

3) Salvage a portion of the legislation

Crafting a health care financing system and integrating it with the health care delivery system creates a dysfunctional system if it is done piecemeal. That’s what we’ve been doing over the past century, and it’s obvious where that has led. As President Obama said, “it turns out that a lot of these things are interconnected.”

President Obama and some members of Congress would still like to salvage the centerpiece of this legislation – making health insurance markets work for us. They would like to do that without including the policies that offended so many in Massachusetts and throughout the nation – new taxes, and an individual mandate to purchase private insurance. If there is no mandate then there is less need for the taxes that would be required to pay for the private insurance subsidies. Of course, without a mandate, many more will be left uninsured, but that seems to be the price that many members of Congress are willing to pay simply to pass something that looks like reform.

President Obama shows that he understands the greatest difficulty with reforming the private insurance market as a stand-alone process. The insurer abuses that he wants to eliminate were there for a reason. They are designed to reduce the amount of health care that the insurers fund. Once the insurers are required to cover all risks, insurance premiums increase. With no mandate, many of the healthy will decide they cannot afford the higher premiums and will remain uninsured. The adverse selection that would result could send our entire private insurance industry into a death spiral of skyrocketing premiums.

Obviously, as we’ve been saying all along, the centerpiece based on private insurance plans is inherently a dysfunctional model that can never achieve efficiency, equity, universality, and affordability for all of us.

That said, there are some measures in this legislation that could be salvaged and enacted on an emergency basis until we finish the task of delivering a just health care system for all. As prime examples, we should move immediately to expand Community Health Centers and to reinforce our primary care infrastructure. We should also recover the overpayments to the Medicare Advantage plans that are wasted on excess administration and investor profits. There are many other beneficial measures that could be enacted without requiring that they be part of an omnibus bill.

4) Start over

The policy work has already been done. We know what we need – an improved Medicare for all national health program. President Obama and most of the Democrats in Congress know that as well.

Even the conservatives certainly understand that it would work for all of us and that, once enacted, it would be in place forever because of its popularity. Since they can’t oppose it based on its sound policies, they simply oppose it based on their ideological opposition to social solidarity. That is perhaps the saddest reality in this whole debate.

Single Payer on Stronger Constitutional Ground

Insurance Mandate Feeds GOP's Attack on Legal Front

By JESS BRAVIN
The Wall Street Journal
January 11, 2010

WASHINGTON — As congressional Democrats try to iron out differences in the House and Senate health-care bills, Republicans are attacking the legal premise of the legislation, saying Congress has no power to make people carry health insurance or pay a penalty or tax.

Constitutional-law scholars say that if the health-care overhaul becomes law, it could give courts an opportunity to test the limits of congressional authority in areas that haven’t been examined since the New Deal era. However, courts usually defer to lawmakers, and Democrats could smooth the way further by using language in the final version that clearly asserts Congress’s power under the Constitution to levy taxes — which the House bill already does.

Sen. John Ensign, a Nevada Republican, tried last month to hold up the bill on grounds that Congress lacked authority to enact it. The move failed, with 60 Senate Democrats and independents outvoting 39 Republicans.

Last week, the Texas attorney general, Republican Greg Abbott, wrote that a federal mandate to carry health insurance “threatens individual liberty.” Florida Attorney General Bill McCollum, a Republican running for governor, held a press conference in December to make the same point.

Democrats dismiss the Republican arguments as a last-ditch effort by the minority party to block the majority’s will. They say the plan is grounded in basic powers the Constitution grants Congress: to regulate interstate commerce, collect taxes and “provide for the general Welfare.”

Since the New Deal era, the Supreme Court has broadly interpreted congressional authority under the Commerce Clause. Congress has successfully invoked that power to limit the amount of wheat farmers can grow, ban racial discrimination at restaurants and prosecute medical patients for raising marijuana to alleviate their symptoms.

But the court has never considered a federal program structured like the health overhaul, which would require people without insurance to buy it or face a tax or penalty. The nonpartisan Congressional Research Service said in July that it was a “challenging question” whether the commerce power extends that far.

Democrats and their allies say that despite its novelty, the insurance mandate falls within the definition of interstate commerce. The Senate bill cites data to show the importance of the health-care industry to the national economy and the damage caused by leaving millions of Americans uninsured.

Requiring the uninsured to buy coverage will “create economies of scale” and “is essential to creating effective health-insurance markets,” the bill says.

Republicans argue that while Congress can regulate economic activity, the failure to buy insurance amounts to inactivity — and the Constitution doesn’t give Congress power to regulate that.

“Anything we have ever done, somebody actually had to have an action before we could tax or regulate it,” Mr. Ensign said on the Senate floor.

Democrats say that failing to buy insurance is a form of economic activity, because it shifts costs to others in the marketplace through higher insurance premiums, and onto the public when the uninsured use emergency rooms to obtain primary care.

The Senate bill imposes a penalty of up to $750 for people who fail to comply with the insurance mandate. Although it would be collected by the Internal Revenue Service, Senate Democrats avoided calling it a tax.

The House version explicitly includes a “tax on individuals without acceptable health-care coverage.”

Congress has broad power to tax — and courts have been highly deferential to the way it is exercised.

In 1919, the Supreme Court upheld a federal narcotics law even though a key provision — imposing a $1-per-year tax on heroin dealers and requiring that sales of the drug be registered with the commissioner of internal revenue — clearly did little to boost the public treasury.

Opponents said the tax was just a smoke screen for a crackdown on what the court called “dope fiends.” The ruling, by Justice William Day, held that simply having “another purpose as well as raising revenue” didn’t make the law unconstitutional.

Although the bottom line of both health-care bills may be similar, the clear use of the taxing power might make the House bill harder to attack, said Yale law professor Jack Balkin.

Randy Barnett, a Georgetown University law professor, said neither version is really a tax, and therefore falls outside congressional power. “You’re fining people for failing to enter a private insurance contract,” he said.

Mr. Barnett argued that Congress would be on stronger constitutional ground had it taken a far more radical approach to restructuring the health-care system, such as raising taxes and creating a single payer for all Americans akin to the Medicare program that covers the elderly and disabled.

“Given the precedent of Medicare, courts are likely to uphold Congress if it imposes an income tax to pay for a government health-care system,” Mr. Barnett said.

Write to Jess Bravin at jess.bravin@wsj.com
Printed in The Wall Street Journal, page A4

Health insurance companies masters of risk avoidance

Letter to the Editor
Gazette Times (Corvallis, Ore.)
Thursday, January 21, 2010

Sixty percent of all our health care costs are directly or indirectly taxpayer money. Because premiums paid by employers are tax-deductible, insurance companies receive a taxpayer subsidy to cover employees. Actuarially, working people are among our healthiest. Others, who want to purchase health insurance outside the workplace must, first, demonstrate health, then pay exorbitant rates. Seniors, who are at the greatest risk for high health care costs, are covered by the taxpayer through Medicare.

Poor people and those on disability are covered by the taxpayer. Actuarially, poor people are among our sickest. People who don’t have insurance and accrue huge un-payable bills are covered by ALL of us, but only after they declare bankruptcy.

For every dollar insurance companies spend carefully calculating who NOT to cover and canceling policies of those who become unexpectedly ill, they earn five extra dollars in profits. They are the masters of making money off healthy people, with taxpayer subsidies, while the taxpayer cares for those who are ill.

Every other developed country in the world starts the discussion with a basic understanding that health care is a human right and insurance companies should not profit from offering a package of essential health care services. Ironically, they cover everybody, at less cost, with better results.

On our current path, the financial barrier to accessing care causes 45,000 excess deaths every year, bankrupts individuals, and threatens the solvency of our government.

As proposed, the “individual mandate” with more taxpayer subsidies to for-profit insurance companies is NOT going to solve the problem and costs will continue to sky rocket because we don’t have a system. Publicly financed, single payer health care is the only fiscally conservative solution to our health care crisis.

Paul Hochfeld, M.D.
Corvallis

http://www.gazettetimes.com/news/opinion/mailbag/article_da39642e-0663-11df-8bac-001cc4c002e0.html

Selling the Obama Plan: Mistakes, Misunderstandings, and Other Misdemeanors

By Howard Waitzkin, MD
American Journal of Public Health, Jan. 14, 2010

First I congratulate all people in the United States who are working hard to reform our health care system. Although I support these efforts, I want to clarify what single-payer health care is and is not, and how it differs from the “public option” proposed by the Obama administration and various advocacy organizations.1–3

A single-payer health care program basically would extend Medicare to the entire US population. Although Medicare is not without problems, people aged 65 years or older widely support the system and express satisfaction with it. Under Medicare, the government occupies a very small role. The government collects payments from workers and employers and then distributes funds to health care providers for the services that Medicare patients receive.

Because it is such a simple system, the administrative costs under Medicare average between 3 percent and 5 percent, according to most studies. This small percentage means that the vast majority of Medicare expenditures pay for clinical services as opposed to administrative expenses.

On the other hand, private insurance generally shows administrative expenses between 20 percent and 30 percent. This much larger percentage means that about one-quarter of every dollar spent on health care goes toward administrative costs. Many of these expenditures pay for activities such as billing, denial of claims, supervision of co-payments and deductibles, scrutiny of preexisting conditions that disqualify people from care, and exorbitant salaries for executives (in some cases totaling between $10 million and $20 million per year).

A single-payer national health program would achieve universal access to care by drastically reducing administrative waste.3,4 Because private insurance companies no longer could spend money keeping people out of the system, all of us would receive the care that we need without co-payments, deductibles, or other expenses at the point of service. Under a single-payer system, the average family and the average business would spend the same or less than they currently spend on medical expenses. Unfortunately, the Obama administration and many of our congressional representatives do not support the single-payer proposal, even though national polls consistently show that a majority or plurality (depending on the poll) of people in the United States favor this approach. 4,5

The Obama administration has proposed a “mixed approach,” which includes a “public option,” organized along the lines of a single-payer system.2 However, the overall national health program would include the current private insurance industry and would therefore maintain a much higher level of administrative costs than would a single-payer approach. Because the mixed approach will not significantly reduce administrative waste, the projected costs of the proposal predictably become prohibitive, despite some assurances to the contrary. Concern about these high costs has become a key focus of the debate in Congress and around the country.

President Obama consistently has argued that it is important to preserve the for-profit private insurance industry as part of his proposal – with even more tax subsidies for the industry. The Obama proposal essentially will compel families and individuals to buy insurance, from either the private industry or the government, with the poor assisted through a means-testing approach requiring huge administrative costs. The mixed private and public approach has failed to achieve universal coverage in multiple states (most recently Massachusetts, frequently cited as a model for the Obama proposal).6

Other countries that have implemented mixed private-public systems have encountered challenging problems. Although some European systems have received critical attention,7 several middle-income countries in Latin America also have tried to implement mixed systems. These initiatives have resulted largely because of the requirements of international financial institutions like the World Bank and International Monetary Fund, which have demanded a reduction of public sector services and an expansion of private sector services as a requirement of new or renegotiated loans.8

In these countries, neither the conversion of public sector to private sector insurance, nor the expansion of private insurance through enhanced public financing and participation by corporate entrepreneurs, has succeeded in assuring access to needed health services. Expansion of private insurance often has generated additional co-payments. Privatization of social security and other public sector trust funds for health services in Latin America generally have enhanced private corporations by providing publicly subsidized insurance and by increasing the capital held by these corporations. In addition, privatization led to higher administrative costs.

The impact of mixed private-public systems has varied across countries. In Argentina, these policies led to increasing economic crisis and major cutbacks of services, especially for older and disabled people. In Chile, where privatization occurred largely during the military dictatorship, private managed care organizations (subsidized by public tax funds) prospered as they covered relatively healthy groups in the population, while a constricted public sector continued to provide services to the uninsured. Mexico faced pressures from the World Bank to privatize its social security system, including public sector health services; as avenues opened to the participation of private corporations, public sector institutions encountered budget reductions that led to eroded services.

If we are serious about working to improve the devastating problems of access to services in the United States and other countries, we need to move beyond conventional wisdom about the value of market-based policies like mixed private-public systems. Strategies that channel public funds into private insurance corporations have failed to achieve the goal of universal access. Unfortunately, such policies may worsen even further the conditions faced by vulnerable groups. Based on empirical realities, our work must find ways to enhance the delivery of public sector services, rather than continuing to implement the mostly failed policies of privatization.

Two important bills in Congress would achieve a single-payer system. In the House of Representatives, the bill is H.R. 676, introduced by Rep. John Conyers (D-Mich.) and, as of late 2009, co-sponsored by 88 other representatives.9 Sen. Bernard Sanders (I-Vt.) has introduced a similar bill, S. 703, in the Senate.10 These bills deserve our support because they actually would achieve a single-payer national health program that would guarantee universal access.

Let’s focus our attention and organization on the real single-payer approach, which is the only way to avoid the failure to achieve universal health care which has plagued us for so many years. In the long run, we might take hope from Winston Churchill’s much quoted observation, “The United States invariably does the right thing, after having exhausted every other alternative.”11

References

1. Kaiser Family Foundation. Side-by-side comparison of major health care reform proposals. Available at: http://www.kff.org/healthreform/sidebyside.cf m?gclid=COnG3vD985wCFRkpawod4gzjiw. Accessed Nov. 17, 2009.

2. The White House. The Obama Plan: Stability and security for all Americans. Available at: http://www.whitehouse.gov/issues/health-care. Accessed Nov. 17, 2009.

3. Physicians
for a National Health Program. Single-payer national health insurance. Available at: http://www.pnhp. org/facts/single_payer_resources.php.

Accessed Nov. 17, 2009. 4. Western PA Coalition for Single- Payer Healthcare. Single-payer poll, survey, and initiative results. Available at: http://www.wpasinglepayer.org/PollResults. html. Accessed Nov. 17, 2009.

5. Healthcare-Now. Another poll shows majority support for single-payer. Available at: http://www.healthcare-now.org/ another-poll-shows-majority-support-forsingle-payer/. Accessed Nov. 17, 2009.

6. Woolhandler S, Day B, Himmelstein DU. State health reform flatlines. Int J Health Serv. 2008;38:585–592.

7. Bodenheimer TS, Grumbach K. Understanding Health Policy: A Critical Approach. Stamford, CT: Appleton & Lange; 2009.

8. Waitzkin H, Jasso-Aguilar R, Iriart C. Privatization of health services in less developed countries: an empirical response to the proposals of the World Bank and Wharton School. Int J Health Serv. 2007;37:205–227.

9. Conyers J, Christensen D, Norton E, et al. To provide for comprehensive health insurance coverage for all United States residents, and for other purposes. HR 676. Available at: http://www. govtrack.us/congress/bill.xpd?bill=h111-676. Accessed Nov. 17, 2009.

10. Sanders B. A bill to provide for health care for every American and to control the cost and enhance the quality of the health care system. S 703. Available at: http://www.govtrack.us/congress/bill.xpd?bill=s111-703. Accessed Nov. 17, 2009.

11. Churchill W. Collected quotations, unsourced. Available at: http://en.wikiquote. org/wiki/Winston_Churchill. Accessed Nov. 17, 2009.

Howard Waitzkin is with the Departments of Sociology, Family and Community Medicine, and Internal Medicine, University of New Mexico, Albuquerque. Correspondence should be sent to Howard Waitzkin, MSC 05-3080, University of New Mexico, Albuquerque, NM 87131- 0001 (e-mail: waitzkin@unm.edu).

doi: 10.2105/AJPH.2009.187641

Acknowledgments: The author acknowledges the influence of Rebeca Jasso-Aguilar and Physicians for a National Health Program.

Will President Obama salvage his centerpiece?

George Stephanopoulos’ Exclusive Interview with President Obama

ABC News
January 20, 2010
President Obama:  I would advise that we try to move quickly to coalesce around those elements of the package that people agree on. We know that we need insurance reform, that the health insurance companies are taking advantage of people. We know that we have to have some form of cost containment because if we don’t, then our budgets are going to blow up and we know that small businesses are going to need help so that they can provide health insurance to their families. Those are the core, some of the core elements of, to this bill.
Later…
President Obama:  If you ask the American people about health care, one of the things that drives them crazy is insurance companies denying people coverage because of preexisting conditions. Well, it turns out that if you don’t — if you don’t make sure that everybody has health insurance, then you can’t eliminate insurance companies — you can’t stop insurance companies from discriminating against people because of preexisting conditions. Well, if you’re going to give everybody health insurance, you’ve got to make sure it’s affordable. So it turns out that a lot of these things are interconnected.
http://blogs.abcnews.com/george/2010/01/transcript-george-stephanopoulos-exclusive-interview-with-president-obama.html

It looks like there are four choices: 1) walk away and accept the status quo, 2) use alternative political maneuvers to move the bill through Congress,  3) attempt to salvage at least a portion of the less controversial components of the current proposal, or 4) start over. Let’s look at these.
1) Walk away
Far too many individuals and businesses are no longer capable of paying the very high costs of our health care system. The existing spending controls in government and in the marketplace show no evidence of ameliorating the excessive growth of our total national health expenditures. The status quo is unacceptable. On this everyone agrees, so we cannot walk away.
2) Move the bill through Congress anyway
The strategy that has been advanced to pass the bill relatively intact would be to have the House approve the Senate version, and then make corrections in a budget reconciliation process. We can forget this approach since the bill managers’ head count in the House has come up far short of the votes needed. Also, cramming the bill through before Sen. Kirk is replaced by Scott Brown has been rejected by President Obama and other Democratic leaders. But the overriding reason why this bill will not clear Congress intact is that a majority of Americans are very displeased with it – that includes all conservatives, most liberals, and a majority of moderates. Sometimes we question the collective wisdom of Congress, but they’re not that dense.
3) Salvage a portion of the legislation
Crafting a health care financing system and integrating it with the health care delivery system creates a dysfunctional system if it is done piecemeal. That’s what we’ve been doing over the past century, and it’s obvious where that has led. As President Obama said, “it turns out that a lot of these things are interconnected.”
President Obama and some members of Congress would still like to salvage the centerpiece of this legislation – making health insurance markets work for us. They would like to do that without including the policies that offended so many in Massachusetts and throughout the nation – new taxes, and an individual mandate to purchase private insurance. If there is no mandate then there is less need for the taxes that would be required to pay for the private insurance subsidies. Of course, without a mandate, many more will be left uninsured, but that seems to be the price that many members of Congress are willing to pay simply to pass something that looks like reform.
President Obama shows that he understands the greatest difficulty with reforming the private insurance market as a stand-alone process. The insurer abuses that he wants to eliminate were there for a reason. They are designed to reduce the amount of health care that the insurers fund. Once the insurers are required to cover all risks, insurance premiums increase. With no mandate, many of the healthy will decide they cannot afford the higher premiums and will remain uninsured. The adverse selection that would result could send our entire private insurance industry into a death spiral of skyrocketing premiums.
Obviously, as we’ve been saying all along, the centerpiece based on private insurance plans is inherently a dysfunctional model that can never achieve efficiency, equity, universality, and affordability for all of us.
That said, there are some measures in this legislation that could be salvaged and enacted on an emergency basis until we finish the task of delivering a just health care system for all. As prime examples, we should move immediately to expand Community Health Centers and to reinforce our primary care infrastructure. We should also recover the overpayments to the Medicare Advantage plans that are wasted on excess administration and investor profits. There are many other beneficial measures that could be enacted without requiring that they be part of an omnibus bill.
4) Start over
The policy work has already been done. We know what we need – an improved Medicare for all national health program. President Obama and most of the Democrats in Congress know that as well.
Even the conservatives certainly understand that it would work for all of us and that, once enacted, it would be in place forever because of its popularity. Since they can’t oppose it based on its sound policies, they simply oppose it based on their ideological opposition to social solidarity. That is perhaps the saddest reality in this whole debate.

Was the Massachusetts election about health reform?

Exit poll: Health care mattered

By David Catanese
Politico
January 20, 2010

Scott Brown’s opposition to congressional health care legislation was the most important issue that fueled his U.S. Senate victory in Massachusetts, according to exit poll data collected following the Tuesday special election.

Fifty-two percent of Bay State voters who were surveyed as the polls closed said they opposed the federal health care reform measure and 42 percent said they cast their ballot to help stop President Obama from passing his chief domestic initiative.

“I’m not surprised it was the top issue, but I was surprised by how overwhelming an issue it was. It became a focal point for the frustration that has been brewing with voters, and it’s a very personal issue that affects everyone,” said Tony Fabrizio of Fabrizio, McLaughlin & Associates, a Republican firm that conducted the exit poll of 800 voters.

According to Fabrizio’s findings, 48 percent of Massachusetts voters said that health care was the single issue driving their vote and 39 percent said they voted for Brown specifically because of his vocal opposition to the measure.

Massachusetts has had a law in place for the past four years that requires every resident to purchase health insurance, and reaction among residents to the mandate has been mixed.

But Fabrizio said that program remains controversial with voters who have not seen their medical costs drop significantly. “It is grossly over budget and causing the state severe fiscal problems. In short, Massachusetts voters know the shortcomings of government health care,” he said.

http://www.politico.com/news/stories/0110/31708.html

And…

NBC News/Wall Street Journal Survey

Hart/McInturff
January 10-14, 2010

12. I’m going to read you two statements about the role of government, and I’d like to know which one comes closer to your point of view.

43% – Statement A: Government should do more to solve problems and help meet the needs of people.
48% – Statement B: Government is doing too many things better left to businesses and individuals.
6% – Some of both
3% – Not sure

30. From what you have heard about Barack Obama’s health care plan, do you think his plan is a good idea or a bad idea? If you do not have an opinion either way, please just say so.

33% – Good idea
46% – Bad idea
18% – Do not have an opinion
3% – Not sure

32. Thinking about efforts to reform the health care system, which would concern you more?

40% – Not doing enough to make the health care system better than it is now by lowering costs and covering the uninsured.
53% – Going too far and making the health care system worse than it is now in terms of quality of care and choice of doctor.
7% – Not sure

http://msnbcmedia.msn.com/i/MSNBC/Sections/NEWS/A_Politics/___Politics_Today_Stories_Teases/FI9500.pdf

Comment: 

By Don McCanne, MD

Oh no! Not another commentary on the significance of the Massachusetts special election for U.S. Senator.

This one will be brief, and include input from the current NBC News/Wall Street Journal Survey.

The election confirmed that there is significant opposition to the health care reform bill before Congress.

When expressed in generalities, people remain divided on the appropriate role of government in solving our problems. That conclusion cannot be extrapolated to specific programs and policies.

Question # 32 (NBC/WSJ) requires individuals to choose between “lowering costs and covering the uninsured” on the one hand and “quality of care and choice of doctor” on the other, when most individuals support all four concepts. The implication is that you can’t have it all, but an improved Medicare program covering everyone would achieve all of these goals.

We must be very careful to not misinterpret the rejection of the highly flawed reform proposal before Congress. It does not mean that comprehensive reform has been rejected.

There is overwhelming support for our Medicare program. If the public understood that all of us could benefit from an improved Medicare program for everyone, the political dynamics could shift. But we have much more work to do to deliver that message.

Was the Massachusetts election about health reform?

Exit poll: Health care mattered

By David Catanese
Politico
January 20, 2010
Scott Brown’s opposition to congressional health care legislation was the most important issue that fueled his U.S. Senate victory in Massachusetts, according to exit poll data collected following the Tuesday special election.
Fifty-two percent of Bay State voters who were surveyed as the polls closed said they opposed the federal health care reform measure and 42 percent said they cast their ballot to help stop President Obama from passing his chief domestic initiative.
“I’m not surprised it was the top issue, but I was surprised by how overwhelming an issue it was. It became a focal point for the frustration that has been brewing with voters, and it’s a very personal issue that affects everyone,” said Tony Fabrizio of Fabrizio, McLaughlin & Associates, a Republican firm that conducted the exit poll of 800 voters.
According to Fabrizio’s findings, 48 percent of Massachusetts voters said that health care was the single issue driving their vote and 39 percent said they voted for Brown specifically because of his vocal opposition to the measure.
Massachusetts has had a law in place for the past four years that requires every resident to purchase health insurance, and reaction among residents to the mandate has been mixed.
But Fabrizio said that program remains controversial with voters who have not seen their medical costs drop significantly. “It is grossly over budget and causing the state severe fiscal problems. In short, Massachusetts voters know the shortcomings of government health care,” he said.
http://www.politico.com/news/stories/0110/31708.html

And…

NBC News/Wall Street Journal Survey

Hart/McInturff
January 10-14, 2010
12. I’m going to read you two statements about the role of government, and I’d like to know which one comes closer to your point of view.
43% – Statement A: Government should do more to solve problems and help meet the needs of people.
48% – Statement B: Government is doing too many things better left to businesses and individuals.
6% – Some of both
3% – Not sure
30. From what you have heard about Barack Obama’s health care plan, do you think his plan is a good idea or a bad idea? If you do not have an opinion either way, please just say so.
33% – Good idea
46% – Bad idea
18% – Do not have an opinion
3% – Not sure
32. Thinking about efforts to reform the health care system, which would concern you more?
40% – Not doing enough to make the health care system better than it is now by lowering costs and covering the uninsured.
53% – Going too far and making the health care system worse than it is now in terms of quality of care and choice of doctor.
7% – Not sure
http://msnbcmedia.msn.com/i/MSNBC/Sections/NEWS/A_Politics/___Politics_Today_Stories_Teases/FI9500.pdf

Oh no! Not another commentary on the significance of the Massachusetts special election for U.S. Senator.
This one will be brief, and include input from the current NBC News/Wall Street Journal Survey.
The election confirmed that there is significant opposition to the health care reform bill before Congress.
When expressed in generalities, people remain divided on the appropriate role of government in solving our problems. That conclusion cannot be extrapolated to specific programs and policies.
Question # 32 (NBC/WSJ) requires individuals to choose between “lowering costs and covering the uninsured” on the one hand and “quality of care and choice of doctor” on the other, when most individuals support all four concepts. The implication is that you can’t have it all, but an improved Medicare program covering everyone would achieve all of these goals.
We must be very careful to not misinterpret the rejection of the highly flawed reform proposal before Congress. It does not mean that comprehensive reform has been rejected.
There is overwhelming support for our Medicare program. If the public understood that all of us could benefit from an improved Medicare program for everyone, the political dynamics could shift. But we have much more work to do to deliver that message.

California's lesson on promptness of corrective legislation

California limits HMO wait times

By Duke Helfand
Los Angeles Times
January 19, 2010

Seeking to reduce the long waits many people endure to see a doctor, California regulators are implementing new rules that specify how quickly patients in health maintenance organizations must be seen.

The regulations by the California Department of Managed Health Care, in the works for much of the last decade, will require that patients be treated by HMO doctors within 10 business days of requesting an appointment, and by specialists within 15.

The managed healthcare department acted in response to a 2002 law that mandated more timely access to medical care. The law left it to state officials to work out the details, which became subject to protracted negotiations with HMOs, doctors, hospitals, consumer groups and other healthcare activists.

In all, it took seven years to finally reach agreement amid intensive talks, bureaucratic hurdles and a lengthy rule-writing process, participants said.

HMOs will be given until January 2011 to comply.

http://www.latimes.com/news/la-fi-health-access19-2010jan19,0,3456276,full.story

Comment: 

By Don McCanne, MD

Remember the managed care revolution in the latter part of the last century? Remember how angry everyone became over the interventions designed to control spending by preventing patents from having timely access to care?

As a leader in managed care, California, very early on, began the process to enact corrective legislation to reduce some of the abuses. However it took them until 2002 to pass a law as simple as limiting the delays for appointments for medical care, and the law won’t even apply until 2011.

What have they done to correct other abuses such as the refusal to pay after bungled prior authorization requests, or the refusal to even authorize recommended care, or gouging made possible by tiering of benefits, or exposing patients to high out-of-pocket expenses through innovations in insurance product design, especially high deductibles, or, one of the worst, taking away patents’ choice of physicians and hospitals by limiting care within contracted networks of providers?

Our legislators initially jumped on the managed care bandwagon by enacting laws establishing the enabling regulatory framework that the managed care entities required. Those of us who raised alarms about the flawed policies were told that any problems could be fixed later. They never were fixed, and we’re still living with that mess.

And now we’re shouting as loud as we can that the policies contained the current legislation will leave too many uninsured, many more underinsured, and health care costs will keep increasing at intolerable rates. And what are we told now? Let’s pass this and we can fix the problems later.

We already know what the problems are, but they will not be officially acknowledged until many years after the program formally begins a few years from now. Then we will see many more years of fighting over tweaks to the system, but with no substantial reform.

Everyone understands the problems of managed care, and this reform theoretically should be replacing that flawed system with substantial reform. But what is this reform proposal? More managed care! And now with a mandate to purchase these plans or be assessed penalties.

Really. Think of what they would be doing many years from now to fix this system. Pass a federal law to specify the maximum number of days that can elapse before your provider must grant you an appointment? Come on!

This system can’t be fixed. It will have to be replaced with an improved Medicare for everyone. Why delay for maybe decades, prolonging the physical and financial suffering of those who need care now? We need to replace the system now – in 2010!

California’s lesson on promptness of corrective legislation

California limits HMO wait times

By Duke Helfand
Los Angeles Times
January 19, 2010

Seeking to reduce the long waits many people endure to see a doctor, California regulators are implementing new rules that specify how quickly patients in health maintenance organizations must be seen.

The regulations by the California Department of Managed Health Care, in the works for much of the last decade, will require that patients be treated by HMO doctors within 10 business days of requesting an appointment, and by specialists within 15.

The managed healthcare department acted in response to a 2002 law that mandated more timely access to medical care. The law left it to state officials to work out the details, which became subject to protracted negotiations with HMOs, doctors, hospitals, consumer groups and other healthcare activists.

In all, it took seven years to finally reach agreement amid intensive talks, bureaucratic hurdles and a lengthy rule-writing process, participants said.

HMOs will be given until January 2011 to comply.

http://www.latimes.com/news/la-fi-health-access19-2010jan19,0,3456276,full.story

Comment: 

By Don McCanne, MD

Remember the managed care revolution in the latter part of the last century? Remember how angry everyone became over the interventions designed to control spending by preventing patents from having timely access to care?

As a leader in managed care, California, very early on, began the process to enact corrective legislation to reduce some of the abuses. However it took them until 2002 to pass a law as simple as limiting the delays for appointments for medical care, and the law won’t even apply until 2011.

What have they done to correct other abuses such as the refusal to pay after bungled prior authorization requests, or the refusal to even authorize recommended care, or gouging made possible by tiering of benefits, or exposing patients to high out-of-pocket expenses through innovations in insurance product design, especially high deductibles, or, one of the worst, taking away patents’ choice of physicians and hospitals by limiting care within contracted networks of providers?

Our legislators initially jumped on the managed care bandwagon by enacting laws establishing the enabling regulatory framework that the managed care entities required. Those of us who raised alarms about the flawed policies were told that any problems could be fixed later. They never were fixed, and we’re still living with that mess.

And now we’re shouting as loud as we can that the policies contained the current legislation will leave too many uninsured, many more underinsured, and health care costs will keep increasing at intolerable rates. And what are we told now? Let’s pass this and we can fix the problems later.

We already know what the problems are, but they will not be officially acknowledged until many years after the program formally begins a few years from now. Then we will see many more years of fighting over tweaks to the system, but with no substantial reform.

Everyone understands the problems of managed care, and this reform theoretically should be replacing that flawed system with substantial reform. But what is this reform proposal? More managed care! And now with a mandate to purchase these plans or be assessed penalties.

Really. Think of what they would be doing many years from now to fix this system. Pass a federal law to specify the maximum number of days that can elapse before your provider must grant you an appointment? Come on!

This system can’t be fixed. It will have to be replaced with an improved Medicare for everyone. Why delay for maybe decades, prolonging the physical and financial suffering of those who need care now? We need to replace the system now – in 2010!