PNHP

Lessons from Massachusetts Health Care Reform Health

Lessons from Massachusetts Health Care Reform Health

By Sylvia Thompson and Iyah Romm
The Huffington Post, December 4, 2009

As Massachusetts physicians-in-training, we’ve had a sneak preview of the future of health care in the United States. Across the country health policy-makers are looking to our state as a model. As in Massachusetts, the U.S. Senate and House bills preserve the role of private health insurers, while subsidizing coverage for the poor and near-poor, and imposes an individual mandate requiring everyone else to purchase insurance or pay a fine. Coverage has increased in Massachusetts, with five percent or less of residents now uninsured. The Connector, an Expedia-like marketplace of insurance plans, has offered residents a choice of coverage and is the archetype of a national exchange. When national reform proposals have been criticized for not bending-the-cost curve, proponents have pointed to the cover-now, pay-later strategy in Massachusetts, which is now considering a global-payment cost control proposal to curb unprecedented spending.

If Massachusetts is going to be a model for reform, however, we must consider both the successes and failures of the past three years. It has become painfully obvious both in our studies and clinical practice that coverage does not equal care. Despite boasting the strongest primary care workforce in the country, the newly-insured in Massachusetts report waiting months for appointments. Meanwhile, the Connector has added 4.5 percent overhead to the already crushing administrative costs of our private insurance companies. Premiums have increased drastically since 2006: care in Massachusetts now costs more than anywhere else in the history of the world. Since the Commonwealth has committed to subsidizing low-income residents, premium increases have often come directly from the state’s coffers.

Instead of enacting structural reform to rein in costs, the Governor and legislature have chosen to restrict access to care. In May, the legislature eliminated $130 million of health insurance subsidies for 28,000 legal immigrants (mostly green-care holders) who have been here for less than five years. Under pressure from national Democratic Party leaders to highlight Massachusetts’ ‘successes’, the legislature reinstated $40 million to cover this population as a bridge to the next fiscal year. Given the impossibility of ensuring care for this population on a shoestring budget, the state sold these Massachusetts residents’ healthcare to an out-of-state, for-profit HMO, CeltiCare. This single-source, anticompetitive contract was signed without the knowledge or consent of these patients.

So far, CeltiCare has restricted access by offering an unprecedented and dangerously limited provider network. CeltiCare has signed up enrollees and then contracted with too few physicians to care for them as a means of suppressing health care utilization and cost. The CeltiCare network excludes most of the safety-net health centers, hospitals, and primary care doctors that previously cared for these patients. CeltiCare has also dramatically increased copayments, amounting to a tax on some of the most vulnerable legal residents of the state.

In our work, we witness the medical consequences of this short-sighted and unjust policy. We see young women in emergency departments for possible ectopic pregnancies – a life threatening diagnosis requiring close monitoring – but now our colleagues cannot provide critical follow-up care in their clinics. So women are sent home and told to look elsewhere for care. Or, when a patient calls in excruciating pain, the only way we can do our jobs is to spend hours searching for barely-permissible loopholes in policy.

To add insult to injury, the Commonwealth has only guaranteed coverage for this cohort of legal residents until June 30, 2010, thus making CeltiCare a bridge to nowhere. What’s more, last week the Commonwealth announced that more than one million Medicaid recipients will soon be required to pay higher co-pays and obtain prior approval for critical medications in order to close the state’s $307 million Medicaid budget shortfall. As cutting care becomes a proxy for genuine cost-containment, we’re left wondering who will next be pushed down this slippery slope.

Health care for all is the moral issue of our generation. We have come of age in a globalizing world. Denying care to foreign-born patients who have played by the rules — who came here legally to work and pay taxes – is economically, medically, and morally senseless. If universal coverage is our goal, we must recognize that subsidies and individual mandates that exclude many people or leave them with prohibitively high co-payments can never truly be universal.

Architects of reform must not replicate the splintering Massachusetts system, but rather look to the innovative and excellent health systems across Europe and Asia. We must create a federally-funded, privately delivered single payer system, Medicare-for-All as proposed by Sen. Bernie Sanders (I-VT) this week. A single payer system could save $400 billion every year on administration, eliminating the need to “cover-now, pay-later” or place arbitrary restrictions on providers. Having all physicians under one network would eliminate fragmentation of care while empowering patients to have real choices – not just which insurance product to buy, but which doctor to visit.

Looking to a future that breaks the mold built by Massachusetts, we see the possibility of a single payer system that makes our fragmented care whole, that defines a new standard of inclusion, and provides comprehensive, secure, and inalienable rights to all. This is the system in which we, the next generation of America’s doctors, aspire to serve our patients.

Iyah Romm and Sylvia Thompson, M.D. are physicians-in-training in Boston, and national policy leaders in the American Medical Student Association (AMSA).

http://www.huffingtonpost.com/iyah-romm/lessons-from-massachusett_b_380718.html

250,000 FEHBP-eligible federal employees uninsured

How health care bills compare to lawmakers’ plan

By Ricardo Alonso-Zaldivar
The Washington Post
December 6, 2009
You should get the same health insurance deal that members of Congress get. That was the gist of President Barack Obama’s message as he tried to drum up enthusiasm for his health care overhaul.
Government workers and members of Congress belong to the nation’s largest employer-sponsored health plan, covering 8 million employees, dependents and retirees.
“We estimate there are about 250,000 federal employees who are uninsured. They’re eligible, but they can’t afford the premiums,” said Jacqueline Simon, policy director for the American Federation of Government Employees.
http://www.washingtonpost.com/wp-dyn/content/article/2009/12/06/AR2009120601136.html

And…

New Government-Run Health Proposal Eyed

Democrats, in Search of Compromise, Explore Federal Employee Plan as a Model

By Greg Hitt And Janet Adamy
The Wall Street Journal
December 7, 2009
Democrats on both sides of the issue who were assigned by Sen. Reid to find a compromise were nearing agreement on an alternative that would empower the government’s Office of Personnel Management to run a new national health plan, congressional aides said. The office already oversees the federal employee health plan, and administration officials have pointed to it as an example of how the government can successfully run a health-insurance program.
Under the proposal, the office would negotiate terms of the plan with private insurers, and contract with nonprofit entities set up by the private sector to run the program, aides said.
http://online.wsj.com/article/SB126004745673278523.html

And…

Federal Employees Health Benefits Program (FEHBP)

AmericanFederation of Government Employees
February 9, 2009
FEHBP has both structural and political flaws.
Those who must rely upon FEHBP for health insurance know its flaws well, and consider it anything but a model.
An estimated quarter of a million federal workers and their families are uninsured because FEHBP premiums are unaffordable to them on their modest federal salaries. The continued cost-shifting only increases the ranks of uninsured and underinsured Americans.
http://www.afge.org/index.cfm?page=2009ConferenceIssuePapers&Fuse=Content&ContentID=1742

Why shouldn’t we all have the same insurance that members of Congress have? They and all other federal employees are covered by the Federal Employees Health Benefits Program (FEHBP), an exchange of private health plans from which they can choose their coverage.
The FEHBP plans share many of the problems found in private health plans marketed to non-government employers. Simply the fact that a quarter million federal workers and their families remain uninsured, though eligible for FEHBP, demonstrates that it is a flawed program that should be rejected as a model for reform.
For those who say that subsidies would make the difference, these federal employees have already been offered subsidies in the form of the federal employer contribution to their premiums, yet they still can’t afford their share of the premium. Besides, because insurance is available through their employment, they would not be eligible for the subsidized exchange plans anyway.
So what is Congress doing? Because of the political impasse over a public plan to be offered as an option to private plans within the insurance exchange, senators are currently advocating for the compromise of a separate exchange of private plans modeled on FEHBP. This model allegedly would satisfy the moderates opposed to the public option because it would be limited to private, non-profit insurers, and allegedly would satisfy the progressives because they could claim that it’s like the government insurance that members of Congress have. Of course there’s nothing government about it.
What is more ridiculous is the structure of this phony public option. It would establish an exchange of private insurance plans within an exchange of private insurance plans with a market of private insurance plans outside of the exchanges. What insurer is going to compete against its successful plans on the open market by offering competing plans in the insurance exchange and then competing with its plans in the exchange by offering plans in the exchange within the exchange?
Besides, how many truly dominant insurers are there? They constitute an oligopoly. Just as they play by their own market rules now, they will continue to do so even if modified by guaranteed issue or whatever.
Ask those 250,000 uninsured federal workers who were promised the coverage that members of Congress have what they think about FEHBP. Then ask them if they would like to have Medicare paid for by equitable taxes they can afford rather than by premiums they can’t afford. Then ask them to march on Congress!

History in a Number: Senate Amendment 2837

By Donna Smith
CommonDreams.org, Dec. 3, 2009

The idea of a Medicare-for-All-type, single-payer health care system will be heard on the Senate floor. Late last evening, Senator Bernie Sanders of Vermont filed Senate Amendment No. 2837, and there are two additional original co-sponsors of this amendment, Senator Roland Burris of Illinois and Senator Sherrod Brown of Ohio.

The idea that health care is a basic human right that could and should be delivered to each and every person in this nation is not a new one. Our President knows that; our Congress knows that. But this struggle to reform the broken, profit-driven system has carried us a very long way from the spot that would allow us to finally extend that basic human right to all.

We’ve drifted off to talking about excise taxes and insurance exchanges and bending the cost curves. Amendment 2837 brings us back to the basics.

What’s in a number? 45,000 people die every year in this nation without access to health care.

Medicare has its flaws, but overall it has provided seniors and the disabled with the best access to care that this nation could offer since the 1960s. But the rest of us have not been so lucky with our access to health care. Among those not covered by Medicare or the VA, the numbers of unnecessary deaths have soared; personal bankruptcies due to medical crisis have soared.

What is a number? Poverty among seniors has dropped more than 60 percent since the adoption of Medicare.

The health care reform effort has largely ignored the single-payer solution. Public financing and private delivery of health care through a Medicare-for-All-type system would be an elegant, cost effective and proven way to fix much of what is broken while retaining that sense of personal choice over health care decisions that Americans value so highly. Yet, the discussion has been muted by the powerful profit-based insurance and health industry interests that stand to gain so very much by expanding and entrenching their hold over the U.S. health care system through this reform process.

What’s in a number? Millions of Americans file for personal bankruptcy – one every 90 seconds – because medical crisis hit them too hard. And of those bankrupt folks, two-thirds had health insurance.

We will not get to the point of granting health care to all during this legislative cycle. We just won’t. Our elected officials were less powerful than the profit-takers this time around. And we did not make our demands loud enough and clear enough. But we will find out in the Senate who stands for all of us and who stands for those who would profit from our continued suffering. And we will find that out by watching and listening as Senate Amendment 2837 is considered and debated – and voted upon.

The time draws short to weigh in clearly with your senators. We know they will not get to the point of passing a single-payer system this time around. But we also know they can begin setting the benchmarks for what we should do going forward. And with a yes vote on this amendment, senators send us the message that they heard us, that they will keep fighting with us until the day when this nation no longer leaves the weak, the sick and the poor behind in the delivery of its most basic human rights.

Call your senators. Tell them you want them to vote for Senators Sanders, Burris and Brown’s amendment number 2837. Call today. Call now. Insist on a vote for moral and fiscal sanity.

What’s in a number? Everything. Senate Amendment No. 2837.

Everyone in, nobody out.

Donna Smith is community organizer and legislative advocate for the California Nurses Association / National Nurses Organizing Committee.

Do the insurance industry reports totally lack all credibility?

Good News on Premiums

Editorial
The New York Times
December 3, 2009

The health insurance industry frightened Americans — and gave Republicans a shrill talking point — when it declared in October that proposed reform legislation would drive up insurance costs for virtually everyone by as much as thousands of dollars a year. The nonpartisan Congressional Budget Office persuasively contradicted that claim this week.

Undaunted, the industry issued a rebuttal report, claiming again that premiums would soar. We find this second industry report no more persuasive than the first.

The insurance industry is not giving up. On Thursday, the Blue Cross and Blue Shield Association issued a report contending that the C.B.O. underestimated the expected medical costs of people who will be buying policies on the individual (nongroup) market.

(CBO notes that) the legal mandate to obtain coverage, the penalties for noncompliance, and the generous subsidies for low- and middle-income people would encourage most people to enroll without waiting to become sick.

http://www.nytimes.com/2009/12/04/opinion/04fri1.html?_r=1&ref=opinion

And…

Coming Attractions: Insurance Industry Funded Study is Wrong on the Facts… Again…

Posted by Dan Pfeiffer, White House Communications Director
The White House
The White House Blog
December 3, 2009

Later today, the insurance industry releases their latest in a string of flawed analyses designed to confuse the debate around health reform.

In addition to ignoring Congress’s independent budget experts, the new report reaches its conclusions by cherry-picking which policies to analyze – a tactic we’ve seen the industry use repeatedly. Most egregiously, its alarmist headline conclusions leave out the impact that new tax credits will have on the cost of health insurance for families. That makes no sense.  In reality, the report itself acknowledges that: “[s]ubsidies will entirely or partially offset these premium increases for some individuals.”

http://www.whitehouse.gov/blog/2009/12/03/coming-attractions-insurance-industry-funded-study-wrong-facts-again

And…

Impact of the Patient Protection and Affordable Care Act on Costs in the Individual and Small-Employer Health Insurance Markets

By Jason Grau and Kurt Giesa
BlueCross BlueShield Association
Oliver Wyman
December 3, 2009

Impact of Subsidies

Subsidies would play an important role in reducing out-of-pocket costs for certain individuals, especially those below 200% of FPL, who are likely to purchase insurance under the proposed reforms. Subsidies will cover more than 90% of premium costs for individuals in this income range, significantly reducing financial barriers to purchasing coverage.

By contrast, our analysis of the Senate bill projects that 8.7 million will not be eligible for the subsidies. Another 3.3 million people who purchase coverage will have incomes of 300-400% FPL and will be eligible for average subsidies of 45% of their premiums (which would not fully offset the cost increases we predict). Finally, 13.3 million lower-income individuals who purchase coverage will have incomes of 100-300% FPL. They will have access to subsidies of 70-90% of their premiums, which will offset much if not all of the increased premiums they will face.

Our modeling predicts that those who are eligible for subsidies will be more likely to purchase insurance than those who are not. However, subsidies will not ensure that young and healthy people participate. Short of achieving 100% coverage, adverse selection will always exist, and the young and healthy will be the most difficult to bring into the market.

Impact of Weak Individual Mandates

The Senate bill requires individuals to purchase insurance coverage or face financial penalties. An amendment accepted during mark-up of the Chairman’s Mark in the Finance Committee, and largely retained in the Senate leadership bill, substantially weakened the bill’s individual mandate. The individual mandate penalty in PPACA is set at just $95 in the first year insurance reforms become effective (2014). This penalty rises gradually, reaching a maximum of $750 per adult in 2016. This maximum penalty is likely to be only about 16 percent of an average premium in 2016, assuming current rates of medical cost inflation.

The amendment also exempts individuals whose premiums exceed 8% of their adjusted gross income (AGI). In 33 states, the average cost of health insurance exceeds eight percent of median state income. In fact, in the first year of reform 25% of the exchange-eligible population will face insurance costs in excess of the 8% AGI threshold and qualify for mandate exemption. Premium increases over a ten-year period will result in nearly half of the population qualifying for mandate exemption status.

Conclusion (excerpt)

The provision of subsidies alone will not offset the impact of insurance reforms on average premiums in the market. A balanced, sustainable insurance pool, that ensures everyone is covered, is critical to making healthcare affordable for all.

http://www.bcbs.com/issues/uninsured/background/patient-protection-affordable-care-act.html

Full report:
http://www.bcbs.com/issues/uninsured/background/Impact-of-the-Patient-Protection-and-Affordable-Care-Act-on-Costs.pdf

Comment:

By Don McCanne, MD

Recent reports from the insurance industry, including this report from the BlueCross BlueShield Association, have been targeted by proponents of the current leading reform model as biased reports without credibility – witness the comments by The White House and The New York Times (both also biased). But the fundamental message from the insurance industry is very valid: the reform proposal before Congress does not do nearly enough to control health care costs, and the mandates, subsidies and penalties are inadequate to ensure that all risks are adequately pooled.

This report confirms once again that the subsidies are inadequate, particularly for middle-income families, and likely will result in adverse selection as the healthier take their chances on remaining uninsured. It confirms that the penalty for being uninsured is too small to ensure compliance with the insurance requirement. It also confirms that a very large and rapidly growing number of individuals will be exempt from the mandate to purchase insurance simply because their incomes are inadequate to be able to afford the plans.

There is one statement in this report that the proponents of the proposal before Congress should take careful note of, and it is remarkable that it is coming from the insurance industry: “A balanced, sustainable insurance pool, that ensures everyone is covered, is critical to making health care affordable for all.”

The dysfunctional, fragmented model of health care financing that Congress is moving forward with can never create a balanced, sustainable risk pool, nor can it ensure that everyone is covered, nor can it make health care affordable for all.

We really do need a balanced, sustainable pool that includes everyone and is equitably financed: an improved Medicare for all.

The Price of Prescription Drugs Around the World

By D. Brad Wright
Doctoral candidate in the department of health policy and management at the University of North Carolina
Huffington Post
December 4, 2009

We’ve come to the end of the health care costs world tour and conclude today with a look at the price of three prescription drugs: Plavix, Nexium, and Lipitor. Please note that the $0 for the U.S. Medicare figures are outdated–I guess that Part D didn’t report to this group or something. But the rest of the numbers are interesting.

Really, what can I say about these figures? It all has to do with patent law and direct-to-consumer marketing (the U.S. is the only country on the chart that still permits this practice). If you’ve ever wondered what all the fuss over “drug reimportation” was about, now you know. Prices in Canada are one-half to one-fourth the prices in the United States. Show me one American (who doesn’t work for a pharmaceutical company) who would be opposed to getting their drugs at 50% to 75% off. I think you’ll be hard pressed to do so. And this says nothing of the high-end U.S. prices. They’re simply asinine.

Subscribe to Wright on Health to see what else I have to say during the week. You can also contact me here.

http://www.huffingtonpost.com/d-brad-wright/the-price-of-prescription_b_379918.html

Do the insurance industry reports totally lack all credibility?

Good News on Premiums

Editorial
The New York Times
December 3, 2009
The health insurance industry frightened Americans — and gave Republicans a shrill talking point — when it declared in October that proposed reform legislation would drive up insurance costs for virtually everyone by as much as thousands of dollars a year. The nonpartisan Congressional Budget Office persuasively contradicted that claim this week.
Undaunted, the industry issued a rebuttal report, claiming again that premiums would soar. We find this second industry report no more persuasive than the first.
The insurance industry is not giving up. On Thursday, the Blue Cross and Blue Shield Association issued a report contending that the C.B.O. underestimated the expected medical costs of people who will be buying policies on the individual (nongroup) market.
(CBO notes that) the legal mandate to obtain coverage, the penalties for noncompliance, and the generous subsidies for low- and middle-income people would encourage most people to enroll without waiting to become sick.
http://www.nytimes.com/2009/12/04/opinion/04fri1.html?_r=1&ref=opinion

And…

Coming Attractions: Insurance Industry Funded Study is Wrong on the Facts… Again…

Posted by Dan Pfeiffer, White House Communications Director
The White House
The White House Blog
December 3, 2009
Later today, the insurance industry releases their latest in a string of flawed analyses designed to confuse the debate around health reform.
In addition to ignoring Congress’s independent budget experts, the new report reaches its conclusions by cherry-picking which policies to analyze – a tactic we’ve seen the industry use repeatedly. Most egregiously, its alarmist headline conclusions leave out the impact that new tax credits will have on the cost of health insurance for families. That makes no sense. In reality, the report itself acknowledges that: “[s]ubsidies will entirely or partially offset these premium increases for some individuals.”
http://www.whitehouse.gov/blog/2009/12/03/coming-attractions-insurance-industry-funded-study-wrong-facts-again

And…

Impact of the Patient Protection and Affordable Care Act on Costs in the Individual and Small-Employer Health Insurance Markets

By Jason Grau and Kurt Giesa
BlueCross BlueShield Association
Oliver Wyman
December 3, 2009
Impact of Subsidies
Subsidies would play an important role in reducing out-of-pocket costs for certain individuals, especially those below 200% of FPL, who are likely to purchase insurance under the proposed reforms. Subsidies will cover more than 90% of premium costs for individuals in this income range, significantly reducing financial barriers to purchasing coverage.
By contrast, our analysis of the Senate bill projects that 8.7 million will not be eligible for the subsidies. Another 3.3 million people who purchase coverage will have incomes of 300-400% FPL and will be eligible for average subsidies of 45% of their premiums (which would not fully offset the cost increases we predict). Finally, 13.3 million lower-income individuals who purchase coverage will have incomes of 100-300% FPL. They will have access to subsidies of 70-90% of their premiums, which will offset much if not all of the increased premiums they will face.
Our modeling predicts that those who are eligible for subsidies will be more likely to purchase insurance than those who are not. However, subsidies will not ensure that young and healthy people participate. Short of achieving 100% coverage, adverse selection will always exist, and the young and healthy will be the most difficult to bring into the market.
Impact of Weak Individual Mandates
The Senate bill requires individuals to purchase insurance coverage or face financial penalties. An amendment accepted during mark-up of the Chairman’s Mark in the Finance Committee, and largely retained in the Senate leadership bill, substantially weakened the bill’s individual mandate. The individual mandate penalty in PPACA is set at just $95 in the first year insurance reforms become effective (2014). This penalty rises gradually, reaching a maximum of $750 per adult in 2016. This maximum penalty is likely to be only about 16 percent of an average premium in 2016, assuming current rates of medical cost inflation.
The amendment also exempts individuals whose premiums exceed 8% of their adjusted gross income (AGI). In 33 states, the average cost of health insurance exceeds eight percent of median state income. In fact, in the first year of reform 25% of the exchange-eligible population will face insurance costs in excess of the 8% AGI threshold and qualify for mandate exemption. Premium increases over a ten-year period will result in nearly half of the population qualifying for mandate exemption status.
Conclusion (excerpt)
The provision of subsidies alone will not offset the impact of insurance reforms on average premiums in the market. A balanced, sustainable insurance pool, that ensures everyone is covered, is critical to making healthcare affordable for all.
http://www.bcbs.com/issues/uninsured/background/patient-protection-affordable-care-act.html
Full report:
http://www.bcbs.com/issues/uninsured/background/Impact-of-the-Patient-Protection-and-Affordable-Care-Act-on-Costs.pdf

Recent reports from the insurance industry, including this report from the BlueCross BlueShield Association, have been targeted by proponents of the current leading reform model as biased reports without credibility – witness the comments by The White House and The New York Times (both also biased). But the fundamental message from the insurance industry is very valid: the reform proposal before Congress does not do nearly enough to control health care costs, and the mandates, subsidies and penalties are inadequate to ensure that all risks are adequately pooled.
This report confirms once again that the subsidies are inadequate, particularly for middle-income families, and likely will result in adverse selection as the healthier take their chances on remaining uninsured. It confirms that the penalty for being uninsured is too small to ensure compliance with the insurance requirement. It also confirms that a very large and rapidly growing number of individuals will be exempt from the mandate to purchase insurance simply because their incomes are inadequate to be able to afford the plans.
There is one statement in this report that the proponents of the proposal before Congress should take careful note of, and it is remarkable that it is coming from the insurance industry: “A balanced, sustainable insurance pool, that ensures everyone is covered, is critical to making health care affordable for all.”
The dysfunctional, fragmented model of health care financing that Congress is moving forward with can never create a balanced, sustainable risk pool, nor can it ensure that everyone is covered, nor can it make health care affordable for all.
We really do need a balanced, sustainable pool that includes everyone and is equitably financed: an improved Medicare for all.

Sanders offers Medicare-for-All amendment in Senate

FOR IMMEDIATE RELEASE
Dec. 3, 2009

Contact:
Quentin Young, M.D., (312) 782-6006
Margaret Flowers, M.D., PNHP Congressional Fellow
Mark Almberg, PNHP, (312) 782-6006, mark@pnhp.org

Challenging head-on the powerful private insurance and pharmaceutical industries, Sen. Bernie Sanders introduced an amendment to the Senate health reform bill Wednesday that would replace the bulk of the Senate bill’s language with provisions establishing a single-payer, Medicare-for-All program.

Joining with Sanders, I-Vt., in co-sponsoring the measure, known as Senate Amendment 2837, were Senators Sherrod Brown, D-Ohio, and Roland Burris, D-Ill. Other senators, including Tom Harkin, D-Iowa, chair of the Senate Health, Education, Labor and Pensions Committee, have previously declared their support for single-payer health reform. The vote on the measure could take place in the next few days.

“This amendment starts from the premise that health care is a human right, and that every citizen, rich or poor, should have access to health care, just as every citizen has access to the fire department, the police or public schools,” a statement from Sanders’ office said.

The single-payer approach embodied in Sanders’ amendment stands in sharp contrast to the reform models being offered by the Senate and House leadership and the White House. Those bills would enhance the central role of private health insurers.

Sanders’ amendment, on the other hand, would replace the present crazy-quilt array of for-profit insurers with a single nonprofit, public financing agency, thereby slashing administrative waste in the system and redirecting the savings to clinical care.

Dr. Quentin Young, national coordinator of Physicians for a National Health Program, said, “This historic move by Sen. Sanders and his colleagues – it’s the first time single payer will be voted upon on the floor of the Senate – is yet another sign of the strong and growing support for an improved Medicare for All among the public and the medical profession.

“In contrast, the Senate leadership’s deeply flawed bill doesn’t expand coverage until 2014, would still leave 24 million uninsured, and would place no effective constraints on exploding costs,” he said. “Sanders’ amendment would cover everyone from the start and allow for effective cost-containment.

“Physicians and patients alike stand to gain enormously from the adoption of this measure,” Young said. “No effort should be spared to ask every senator to vote yes on Senate Amendment 2837.”

Sanders’ measure, which is largely patterned after a bill he introduced last March, the American Health Security Act (S. 703), would cover all of the 46 million Americans who currently lack coverage and improve benefits for all Americans by eliminating co-pays and deductibles and restoring free choice of physician.

Highlights of the amendment include the following:

* Patients go to any doctor or hospital of their choice.

* Comprehensive benefits, including coverage for dental, mental health, and prescription drugs.

* By eliminating the high overhead and profits of the private, investor-owned insurance industry, along with the burdensome paperwork imposed on physicians, hospitals and other providers, the plan saves at least $400 billion annually – enough money to provide comprehensive, quality care to all.

* Community health centers are fully funded, giving the 60 million Americans now living in rural and underserved areas access to care.

* To address the critical shortage of primary care physicians and dentists, the bill provides resources for the National Health Service Corps to train an additional 24,000 health professionals.

* The program is paid for by combining current sources of government health spending into a single fund with modest new payroll and income taxes amounting to less than what most businesses and people now pay for insurance premiums and out-of-pocket expenses.

* While federally funded, the program is to be administered by the states.

Sanders, who serves on the Senate Committee on Health, Education, Labor, and Pensions, is a longtime advocate of fundamental health care reform.

*****

Physicians for a National Health Program (www.pnhp.org) is an organization of 17,000 doctors who advocate for single-payer national health insurance. To contact a physician-spokesperson near you, visit www.pnhp.org/stateactions or call (312) 782-6006.

Sanders Amendment to Create a Universal, Single Payer Health Insurance System

From the office of Sen. Bernie Sanders

Summary: This amendment would establish a single payer health insurance system that would cover every person legally residing in the United States.  The single payer system would be regulated and funded by the federal government through a payroll tax and an income tax, but it would be administered by the states.  It would replace the coverage and revenue titles of the current bill, but it would leave in place most of the provisions in the quality, prevention, and workforce titles of the bill.  This amendment starts from the premise that health care is a human right, and that every citizen, rich or poor, should have access to health care, just as every citizen has access to the fire department, the police, or public schools.

Why is this Important?

  • The United States spends $7,129 per person on health care, which is almost double the amount spent by nearly any other industrialized country.  Despite this fact, we still do not insure all of our citizens.
  • There are currently 46 million Americans without health insurance, 100 million Americans who cannot access dental care, and 60 million Americans who do not have access to primary care.
  • The United States ranks among the lowest of developed countries are far as health outcomes, according to both life expectancy and disease metrics.
  • One reason we spend our money so ineffectively is that there is tremendous waste in our system.  Healthcare providers spend $210 billion on administrative costs, mostly to deal with insurance paperwork, and the ranks of administrative personnel have grown by 25 times the number of physicians in the past 30 years.
  • This waste and the high costs of insurance associated with it place a tremendous burden on American employers and makes it difficult for them to compete internationally.

Why Support the Sanders Single Payer Amendment?            

  • Single payer systems have consistently shown lower administrative costs and higher quality health outcomes.  For example, as compared to the United States’ per capita health spending of $7,129, Canada spends $3,895 and Austria spends $3,763 on health care costs.  Both of these countries have higher quality health care outcomes than the United States.
  • By creating a single payer, Medicare-for-all type system, this amendment would provide every United States citizen with comprehensive health care and dental coverage in a cost-effective manner. It would save our country money, improve our health outcomes, and, at the same time, fulfill the administration’s promise of universal coverage.

Cost: This amendment pays for itself through progressive payroll and income taxes.

CRS on the health insurance market

The Market Structure of the Health Insurance Industry

By D. Andrew Austin and Thomas L. Hungerford
Congressional Research Service
November 17, 2009

Evidence suggests that health insurance markets are highly concentrated in many local areas. Many large firms that offer health insurance benefits to their employees have self-insured, which may put some competitive pressure on insurers, although this is unlikely to improve market conditions for other consumers. The exercise of market power by firms in concentrated markets generally leads to higher prices and reduced output — high premiums and limited access to health insurance — combined with high profits. Many other characteristics of the health insurance markets, however, also contribute to rising costs and limited access to affordable health insurance. Rising health care costs, in particular, play a key role in rising health insurance costs.

Health costs appear to have increased over time in large part because of complex interactions among health insurance, health care providers, employers, pharmaceutical manufacturers, tax policy, and the medical technology industry. Reducing the growth trajectory of health care costs may require policies that affect these interactions. Policies focused only on health insurance sector reform may yield some results, but are unlikely to solve larger cost growth and limited access problems.

http://www.fas.org/sgp/crs/misc/R40834.pdf

About the Congressional Research Service:
http://www.loc.gov/crsinfo/whatscrs.html

Comment:

By Don McCanne, MD

The Congressional Research Service (CRS) has an outstanding reputation for authoritative, objective and nonpartisan analyses, providing Congress with the analytical support it needs to address the most complex public policy issues facing the nation.

In this 65 page report to Congress on the market structure of the health insurance industry, CRS concludes that “policies focused only on health insurance sector reform may yield some results, but are unlikely to solve larger cost growth and limited access problems.”

The conclusions are certainly no surprise. Every reasonable economist agrees that free market principles do not apply to health care. Yet where is Congress on this? They are moving forward with a proposal that relies heavily on the market of private health plans.

Don’t the members of Congress read their own reports? They need to read this one!

CRS on the health insurance market

The Market Structure of the Health Insurance Industry

By D. Andrew Austin and Thomas L. Hungerford
Congressional Research Service
November 17, 2009
Evidence suggests that health insurance markets are highly concentrated in many local areas. Many large firms that offer health insurance benefits to their employees have self-insured, which may put some competitive pressure on insurers, although this is unlikely to improve market conditions for other consumers. The exercise of market power by firms in concentrated markets generally leads to higher prices and reduced output — high premiums and limited access to health insurance — combined with high profits. Many other characteristics of the health insurance markets, however, also contribute to rising costs and limited access to affordable health insurance. Rising health care costs, in particular, play a key role in rising health insurance costs.
Health costs appear to have increased over time in large part because of complex interactions among health insurance, health care providers, employers, pharmaceutical manufacturers, tax policy, and the medical technology industry. Reducing the growth trajectory of health care costs may require policies that affect these interactions. Policies focused only on health insurance sector reform may yield some results, but are unlikely to solve larger cost growth and limited access problems.
http://www.fas.org/sgp/crs/misc/R40834.pdf
About the Congressional Research Service:
http://www.loc.gov/crsinfo/whatscrs.html

The Congressional Research Service (CRS) has an outstanding reputation for authoritative, objective and nonpartisan analyses, providing Congress with the analytical support it needs to address the most complex public policy issues facing the nation.
In this 65 page report to Congress on the market structure of the health insurance industry, CRS concludes that “policies focused only on health insurance sector reform may yield some results, but are unlikely to solve larger cost growth and limited access problems.”
The conclusions are certainly no surprise. Every reasonable economist agrees that free market principles do not apply to health care. Yet where is Congress on this? They are moving forward with a proposal that relies heavily on the market of private health plans.
Don’t the members of Congress read their own reports? They need to read this one!

Reform 2.0

By Michael J. Klag
Johns Hopkins Public Health Magazine
Fall 2009

I have to find a new doctor.

Last month, my primary care physician wrote me a letter. He said he was leaving private practice. He’s an outstanding physician—a doctor’s doctor whom I’ve known since he was a medical student. His reason for closing up shop? The sheer frustration of getting paid by private insurance companies.

When a physician of his stature and skills departs private practice for a reason like that, it is an indictment of our health care system—that is, if we had a health care system. We all know the U.S. has great physicians and the world’s best medical technology. But the best health care system? Not in the least. Our crazy patchwork quilt is an accident of history and one that we need to fix. It fails us in so many ways, from its gross inefficiencies to the fact that it has left 47 million Americans without health insurance.

The evidence of our ailing health care system is pretty clear: Despite spending twice as much (more than $7,100 per capita) as the rest of the industrialized countries, we have poor health outcomes. Our life expectancy is below many other industrialized countries’ and perhaps more significantly our life expectancy has improved less than that of nearly all industrialized countries in the last 20 years. On some health status indicators the U.S. is near the top, on many near the middle and on some near the bottom. Not very good value for the extra money we spend. Where does the money go? Some of it is lost to in- efficiency. We all know you get 10 pieces of mail for every procedure or hospital visit and almost certain confusion about what you’re supposed to pay. In addition, our fee-for-service model encourages utilization of resources, especially expensive technology. Lastly, systems that emphasize primary care have lower costs and better outcomes than those that don’t, but we have created incentives that push physicians away from primary care and into increasing specialization.

We have inherited a system that doesn’t work and desperately needs to be fixed.

This was the challenge that President Barack Obama vowed to address. Six months ago, his administration’s leadership on health care looked like our best chance in a generation for genuine reform. However, the political compromises that have been made thus far make it clear this historic opportunity will probably increase the number of Americans with insurance coverage but not reduce growth in costs.

To put things in perspective, let’s look back on another historic opportunity that our government did embrace. Almost half a century ago, our government committed to improving the health and economic welfare of older people in the U.S. by creating Medicare. And Medicare has been a tremendous success. Before it was instituted, 29 percent of those 65 and older lived in poverty. After Medicare, that proportion fell to about 10 percent because it provided health insurance coverage to all Americans over age 65. Since then, the health status of older people has improved markedly. Even its critics admit that Medicare’s administrative costs are a fraction of those of private insurers.

Medicare is not perfect, of course. Despite its warts, however, Medicare has been a success and a huge benefit to our older population. Now, we need to take that kind of step for the rest of Americans.

As I write this, I am not sure what the outcome of health care reform efforts will be. The sausage will go through the grinder, and we’ll get, in my view, a suboptimal solution. Far from  wallowing in disappointment, however, I’m moving on and so should our country. President Obama’s reforms can serve as the foundation  for the more comprehensive fix that’s needed. Call it Reform 2.0.

If we want true health care reform, we need a single-payer system. In this system, the government would act as administrator, paying for all patient visits, prescription drugs, medical procedures, and so on. Instead of thousands of different insurance companies, HMOs and others with all of their separate forms and billing contacts, doctors, hospitals and others would deal with a single administrator—eliminating waste in our system. At a large hospital, this would dramatically reduce overhead costs, allowing hundreds of people to be retrained so that their talents could be directed to ways that would have greater societal benefit than paper shuffling.

Those of you shaking your heads and saying it can’t be done should know that it has been done—repeatedly. Korea in the 1980s and Taiwan in the 1990s, for example, revamped their health care systems. They have multiple insurers but all follow the same rules. Korea’s and Taiwan’s leadership (including many of our alumni) scrutinized health care programs around the world and chose a system that works best. It is not socialized medicine. The hospitals and providers do not work for the government, they work for private organizations. They just don’t have to deal with the time-sapping, unnecessary administrative burdens of our inefficient system.

Every system is perfectly designed to obtain the results it produces. Ours produces poor outcomes, inadequate access and great inefficiency. It places tremendous burden on both providers and payers and drives great doctors like mine to other careers. As hard as it is, we must completely reform our system. Otherwise we risk bequeathing to the next generation the same problems we struggle with today.

http://magazine.jhsph.edu/2009/fall/departments/open_mike/index.html