Chapter – Page 784

Leading economists' advice to President Obama on controlling costs

Letter to President Barack Obama urging four elements be included in health reform legislation to control costs

By Alan M. Garber, Victor R. Fuchs, Kenneth J, Arrow
November 17, 2009
President Barack Obama
The White House
Washington, DC 20500
Dear Mr. President,
As the full Senate prepares to debate comprehensive health reform legislation, we write as economists to stress the potential benefits of health reform for our nation’s fiscal health, and the importance of those features of the bill that can help keep health care costs under control. Four elements of the legislation are critical: (1) deficit neutrality, (2) an excise tax on high-cost insurance plans, (3) an independent Medicare commission, and (4) delivery system reforms.
Including these four elements in the reform legislation – as the Senate Finance Committee bill does and as we hope the bill brought to the Senate floor will do – will reduce long-term deficits, improve the quality of care, and put the nation on a firm fiscal footing. It will help transform the health care system from delivering too much care, to a system that consistently delivers higher-quality, high-value care. The projected increases in federal budget deficits, along with concerns about the value of the health care that Americans receive, make it particularly important to enact fiscally responsible and quality-improving health reform now.
In developing our analysis and recommendation, we received input and suggestions from Administration officials, including the Office of Management and Budget and others, as well as from economists who disagree with the Administration’s views.
The four key measures are:
* Deficit neutrality
Fiscally responsible health reform requires budget neutrality or deficit reduction over the coming years. The Congressional Budget Office (CBO) must project that the bill be at least deficit neutral over the 10-year budget window, and deficit reducing thereafter. Covering tens of millions of currently uninsured people will increase spending, but the draft health reform legislation contains offsetting savings sufficient to cover those costs and the seeds of further reforms that will lower the growth of spending. Deficit neutrality over the first decade means that, even during the start-up period, the legislation will not add to our deficits. After the first decade, the legislation should reduce deficits.
* Excise tax on high-cost insurance plans
The Senate Finance Committee’s bill includes an excise tax on high-cost health insurance plans. Like any tax, the excise tax will raise federal revenues, but it has additional advantages for the health care system that are essential. The excise tax will help curtail the growth of private health insurance premiums by creating incentives to limit the costs of plans to a tax-free amount. In addition, as employers and health plans redesign their benefits to reduce health care premiums, cash wages will increase. Analysis of the Senate Finance Committee’s proposal suggests that the excise tax on high-cost insurance plans would increase workers’ take-home pay by more than $300 billion over the next decade. This provision offers the most promising approach to reducing private-sector health care costs while also giving a much needed raise to the tens of millions of Americans who receive insurance through their employers.
* Medicare Commission
Rising Medicare expenditures pose one of the most difficult fiscal challenges facing the federal government. Medicare is technically complex and the benefits it underwrites are of critical importance to tens of millions of seniors and Americans with disabilities. We believe that a commission of medical experts should be empowered to suggest changes in Medicare to improve the quality and value of services. In particular, such a commission should be charged with developing and suggesting to Congress plans to extend the solvency of the Medicare program and improve the quality of care delivered to Medicare beneficiaries. Creating such a commission will make sure that reforming the health care system does not end with this legislation, but continues in future decades, with new efforts to improve quality and contain costs.
* Delivery system reforms
Successful reform should improve the care that individual patients receive by rewarding health care professionals for providing better care, not just more care. Studies have shown that hundreds of billions of dollars are spent on care that does nothing to improve health outcomes. This is largely a consequence of the distorted incentives associated with paying for volume rather than quality. Health care reform must take steps to change the way providers care for patients, to reward care that is better coordinated and meets the needs of each patient. In particular, the legislation should include additional funding for research into what tests and treatments work and which ones do not. It must also provide incentives for physicians and hospitals to focus on quality, such as bundled payments and accountable care organizations, as well as penalties for unnecessary re-admissions and health-facility acquired infections. Aggressive pilot projects should be rapidly introduced and evaluated, with the best strategies adopted quickly throughout the health care system.
As economists, we believe that it is important to enact health reform, and it is essential that health reform include these four features that will lower health care costs and help reduce deficits over the long term. Reform legislation that embodies these four elements can go a long way toward delivering better health care, and better value, to Americans.
Sincerely,
Dr. Henry Aaron, The Brookings Institution
Dr. Kenneth Arrow, Stanford University, Nobel Laureate in Economics
Dr. Alan Auerbach, University of California, Berkeley
Dr. Katherine Baicker, Harvard University
Dr. Alan Blinder, Princeton University
Dr. David Cutler, Harvard University
Dr. Angus Deaton, Princeton University
Dr. J. Bradford DeLong, University of California, Berkeley
Dr. Peter Diamond, Massachusetts Institute of Technology
Dr. Victor Fuchs, Stanford University
Dr. Alan Garber, Stanford University
Dr. Jonathan Gruber, Massachusetts Institute of Technology
Dr. Mark McClellan, The Brookings Institution
Dr. Daniel McFadden, University of California, Berkeley, Nobel Laureate in Economics
Dr. David Meltzer, University of Chicago
Dr. Joseph Newhouse, Harvard University
Dr. Uwe Reinhardt, Princeton University
Dr. Robert Reischauer, The Urban Institute
Dr. Alice Rivlin, The Brookings Institution
Dr. Meredith Rosenthal, Harvard University
Dr. John Shoven, Stanford University
Dr. Jonathan Skinner, Dartmouth College
Dr. Laura D’Andrea Tyson, University of California, Berkeley
Letter:
http://iis-db.stanford.edu/pubs/22739/Economist_Letter_to_the_President.pdf
The source of the letter:
http://bit.ly/13omUB
OECD Tax Database (Table 0.1):
http://www.oecd.org/document/60/0,2340,en_2649_34533_1942460_1_1_1_1,00.html
Bundled payments and ACOs:
https://pnhp.org/news/2009/november/rand-and-br-on-savings-through-bundled-payments

For socially conscious health care reform advocates, the primary goal of reform is to see that every individual receives the health care that he or she needs, But what has really driven the reform process has been the concern over the very high costs of health care that have challenged individuals, employers and the stewards of our government health programs.
In this late phase of the reform process many have expressed doubts over the adequacy of the various policies in the reform proposal that allegedly are designed to control health care costs well into the future. In response, twenty-three of the nation’s most distinguished economists have signed on to this letter addressed to President Obama expressing support for four elements that they believe are of critical importance and should be included in the reform legislation. Let’s look closer at these four elements.
* Deficit neutrality
The economists call for budget neutrality initially, to be followed by deficit reduction. Of course they are referring only to the federal government budget and not to private sector spending. The great risk of limiting consideration to public spending is that, in the absence of effectively controlling actual health care costs, the government budget can be controlled only by shifting the costs to the private sector. Individuals and businesses certainly do not want to see an increase in their health care spending, especially while the government is reducing its spending in the later phase, that of deficit reduction.
Isolating health care spending for budget neutrality while continuing with deficits in other government programs (war, financial institution bailouts, interest on the debt, expanding our prison population, etc.) does not seem just. Appropriate use of debt is fundamental to any business, and there is no reason that reasonable debt should not be a part of the government’s management of its financial obligations to health care.
That said, our total government debt is the result of prior devious efforts to reduce revenues (i.e., taxes) in order to force the reduction in funding of government programs. With inadequate revenues and with exploding debt, deficit hawks in Congress can be relied upon to underfund crucial programs such as health care, but theirs is a pathological process since they only look at spending and refuse to consider revenues.
Those who argue that taxes collected for government health care spending remove money from the economy are flat out wrong. Health care is one of the most important and beneficial components of our economy, constituting over 17 percent of our GDP (Gross Domestic Product). Those taxes are moved back into our economy.
Those who scream that we are being taxed to death need another dose of reality. The average total tax revenues of OECD nations (Organization for Economic Cooperation and Development) was 35.9 percent of GDP in 2006. For the United States, the total tax revenue was 28.0 percent of GDP, placing us near the bottom of OECD nations. (OECD Tax Database – link above)
Suppose we increased our tax revenues to the average of OECD nations, which would still be far, far short of those nations with more highly socialized systems. At 7.9 percent (35.9 average minus 28.0 U.S.) of our GDP of about $13.8 trillion, that would increase government revenues by about $1.1 trillion in a single year, ten times the amount they are considering for health care reform. Our entire federal spending is under $3 trillion. We could eliminate entirely the deficits and provide surpluses while keeping tax revenues at well below the OECD average, if only the deficit hawks would look at the revenue side of the ledger.
* Excise tax on high-cost insurance plans
Why would any health insurance plans have very high premiums? One reason is that insurers use medical underwriting to assess high premiums for individuals with preexisting disorders. It would be unfair to tax those premiums for an individual with other burdens, but with adequate regulatory reform medical underwriting should be eliminated anyway.
The more common reason for high premiums is that the plan covers other services and products such as dental care, eye care, maternity benefits, mental health services, and pharmaceuticals. Applying an excise tax to these premiums would result in eliminating such benefits from the plans and shifting these expenses to the individual in the form of greater out-of-pocket spending. The proposals under consideration place a cap on out-of-pocket expenses for covered services, but that cap is unaffordable for many, and these expenses would not apply to the cap. Thus they would impose an even greater financial burden.
Since the excise tax would discourage access to these important health care services, it should be rejected as the flawed policy concept that it is.
* Medicare Commission
Although the Medicare Commission purportedly would be to improve quality and value, its primary purpose would be to limit spending within the Medicare program. Medicare has already served as a leader in innovations to reduce health care spending, with the private insurance industry following. In fact, many providers believe that Medicare has been too aggressive, often resulting in lower reimbursement rates than in the private sector. Granting the Commission more power to use newer innovations to further reduce spending will inevitably increase the animosity held towards Medicare by the providers. A decline in willingness to accept Medicare beneficiaries could further impair access.
This is not to say that the concept of a commission is a bad idea. If the commission worked with the entire health care delivery system in applying potentially beneficial innovations, higher quality and greater value are possible. If the commission became too aggressive, the push-back by providers and their patients would moderate their excesses.
If the power of the Medicare Commission were limited only to Medicare, then there is a potential that cost-cutting aggressiveness might threaten to convert Medicare into a quasi-welfare program not unlike Medicaid, a transformation that would not please our Medicare beneficiaries. It is more likely that the Commission simply would be enmeshed in studies of relatively ineffectual measures that would have little net impact on costs.
We would need a universal Medicare for all program for the Commission to have a real impact that would be both beneficial and cost saving.
* Delivery system reforms
These economists recommend that we reward health professionals for providing better care. The problem is that we don’t know how to do that. They recommend funding research into what tests and treatments work and which ones do not, as if that isn’t what research has been all about anyway. Maybe it would be helpful to directly compare expensive patent drugs to generics, but the overall spending impact will be modest since this year’s patented drugs are next year’s generics.
They also recommend bundled payments, accountable care organizations, plus penalties for re-admissions, hospital acquired infections and other PACs (potentially avoidable costs). In my message two days ago I already discussed the reasons why these measures cannot be relied upon to reduce health care costs (Bundled payments and ACOs – link above).
Is this really the best that these noted economists can come up with? They have made the same mistake as the politicians. Their perception of reform is to build on our existing dysfunctional financing system (an egregiously flawed concept that you would think our leading economists would understand).
If we had an improved Medicare for all we could have 1) deficit neutrality through global budgeting, 2) rational tax policies that are equitable, 3) public administration using the guidance of commissions as appropriate, and 4) our own beneficent monopsony that can realign incentives to promote the delivery system reform that we need. And, oh yes, every single person would be included. It doesn’t take an economist to understand that.

Massachusetts physicians say reform in their state is no model for the nation

Nearly 200 sign ad urging single-payer health care reform

FOR IMMEDIATE RELEASE
Nov. 17, 2009

Contact:
Rachel Nardin, M.D.
Steffie Woolhandler, M.D., M.P.H.
Mark Almberg, Physicians for a National Health Program, (312) 782-6006, mark@pnhp.org

In a half-page advertisement appearing in Wednesday’s (tomorrow’s) Boston Globe, 196 Massachusetts physicians and physicians-in-training call the state’s 2006 health reform plan “bad medicine” and warn against adopting the state’s plan nationwide. The health bill recently passed by the U.S. House of Representatives is closely modeled after the Massachusetts reform.

According to the U.S. Census Bureau, the Massachusetts reform has left hundreds of thousands uninsured. The doctors’ ad, which takes the form of a letter to their patients, warns that the state’s plan is already failing. Health costs have escalated rapidly since the reform’s implementation. According to the Boston Globe, the state’s largest insurer will hit small businesses with average premium increases of 15 percent to 18 percent as of January 1.

As an alternative to Massachusetts-style reform, the letter proposes a single-payer health care plan – Medicare for All. Such reform would cover everyone and control costs through massive savings on bureaucracy as well as improved health planning.

“Physician voices have been conspicuously absent from the national debate on health care reform,” said Dr. Rachel Nardin, a neurologist at Harvard Medical School and one of the letter’s lead signers. “This letter is a chance to let our patients know that the current plans for reform will fail to control costs or to give American families real access to the health care they need.”

Another lead signer of the letter, Dr. Steffie Woolhandler, a primary care doctor who is a professor of medicine at Harvard, noted, “This reform has left many of my patients worse off than before. Co-payments and deductibles are sky high and premiums are unaffordable. A middle-class woman who’s 56 is forced to lay out at least $4,800 for a policy so skimpy that it pays nothing until she has paid another $2,000 in deductibles. Meanwhile, the state has drained funds from safety net hospitals and clinics to fund the reform, threatening the survival of the institutions that care for the hundreds of thousands who remain uninsured.”

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A PDF of the ad with its 196 signers can be found here:
https://pnhp.org/docs/2009/Mass-Ad-Boston-Globe.pdf

The full text of the original letter can be found here: www.pnhp.org/ma

For detailed price quotes on insurance available under the Massachusetts reform, see http://tinyurl.com/nv9vqb

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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.

Uninsured trauma patients

Downwardly Mobile - The Accidental Cost of Being Uninsured

By Heather Rosen, MD, MPH; Fady Saleh, MD, MPH; Stuart Lipsitz, ScD; Selwyn O. Rogers Jr, MD, MPH; Atul A. Gawande, MD, MPH
Archives of Surgery
November 2009

The Centers for Disease Control and Prevention estimate that in 2004, there were 112 012 deaths related to unintentional injuries alone in the United States. Unintentional injury is within the top 10 causes of death for every age group and is the leading cause of death among persons aged 1 to 44 years.

Uninsured trauma patients in the NTDB (National Trauma Data Bank) had a statistically significant higher adjusted odds of mortality compared with insured trauma patients. Our subgroup analyses strongly corroborated these findings. In younger patients (aged 18-30 years), the adjusted odds of mortality after trauma remained higher for uninsured patients compared with insured patients, indicating that the differences persist in a relatively healthy cohort. In the subgroup analyses of head-injured patients and those with 1 or more comorbidities in the NTDB, the adjusted odds of mortality in the uninsured population remained significantly high.

Most recent research has concentrated on decreased (or lack of) access to care as a result of being uninsured. However, we found that, even after admission to a hospital, trauma patients can have worse outcomes based on insurance status. This concerning finding warrants more rigorous investigation to determine why such variation in mortality would exist in a system where equivalent care is not only expected but mandated by law.

We can only speculate as to the mechanism of the disparities we have exposed; the true causes are still unclear. Although the lack of insurance may not be the only explanation for the disparity in trauma mortality, the accidental costs of being uninsured in the United States today may be too high to continue to overlook.

http://archsurg.ama-assn.org/cgi/content/short/144/11/1006

Comment:

By Don McCanne, MD

Uninsured trauma patients are more likely to die than insured patients in spite of the fact that treatment is mandated by law. This study did not explain the reasons for the differences.

Delay? Different care? Lower health literacy? Or was there simply less enthusiasm on the part of the providers of care once it was realized that they would not be compensated for their efforts?

This study and several others have demonstrated that death can be a consequence of being uninsured. But there are other important consequences as well. Access to health care that can maintain or improve quality of life is impaired, with consequent adverse outcomes. Financial hardship is almost a given in uninsured individuals with significant health problems.

Instead of searching for alternative explanations for adverse outcomes in the uninsured, we should admit that being uninsured is bad for your health and bad for your finances, and then do something about it. Individual responsibility alone is not enough. Social solutions are required.

Study: Injured uninsured more likely to die in ER

By CARLA K. JOHNSON (AP)
November 16, 2009

CHICAGO — Uninsured patients with traumatic injuries, such as car crashes, falls and gunshot wounds, were almost twice as likely to die in the hospital as similarly injured patients with health insurance, according to a troubling new study.

The findings by Harvard University researchers surprised doctors and health experts who have believed emergency room care was equitable.

“This is another drop in a sea of evidence that the uninsured fare much worse in their health in the United States,” said senior author Dr. Atul Gawande, a Harvard surgeon and medical journalist.

The study, appearing in the November issue of Archives of Surgery, comes as Congress is debating the expansion of health insurance coverage to millions more Americans. It could add fodder to that debate.

The researchers couldn’t pin down the reasons behind the differences they found. The uninsured might experience more delays being transferred from hospital to hospital. Or they might get different care. Or they could have more trouble communicating with doctors.

The hospitals that treat them also could have fewer resources.

“Those hospitals tend to be financially strapped, not have the same level of staffing, not have the same level of surgeons and testing and equipment,” Gawande said. “That also is likely a major contributor.”

Gawande favors health care reform and has frequently written about the inequities of the current system.

The researchers took into account the severity of the injuries and the patients’ race, gender and age. After those adjustments, they still found the uninsured were 80 percent more likely to die than those with insurance — even low-income patients insured by the government’s Medicaid program.

“I’m really surprised,” said Dr. Eric Lavonas of the American College of Emergency Physicians and a doctor at Denver Health Medical Center. “It’s well known that people without health insurance don’t get the same quality of health care in this country, but I would have thought that this group of patients would be the least vulnerable.”

Some private hospitals are more likely to transfer an uninsured patient than an insured patient, said Lavonas, who wasn’t involved in the new research.

“Sometimes we get patients transferred and we suspect they’re being transferred because of payment issues,” he said. “The transferring physician says, ‘We’re not able to handle this.'”

Federal law requires hospital ERs to treat all patients who are medically unstable. But hospitals can transfer patients, or send them away, once they’re stabilized. A transfer could worsen a patient’s condition by delaying treatment.

The researchers analyzed data on nearly 690,000 U.S. patients from 2002 through 2006. Burn patients were not included, nor were people who were treated and released, or dead on arrival.

In the study, the overall death rate was 4.7 percent, so most emergency room patients survived their injuries. The commercially insured patients had a death rate of 3.3 percent. The uninsured patients’ death rate was 5.7 percent. Those rates were before the adjustments for other risk factors.

The findings are based on an analysis of data from the National Trauma Data Bank, which includes more than 900 U.S. hospitals.

“We have to take the findings very seriously,” said lead author Dr. Heather Rosen, a surgery resident at Los Angeles County Hospital, who found similar results when she analyzed children’s trauma data for an earlier study. “This affects every person, of every age, of every race.”

Solidarity, Individualism and Public Goods

Obama's Flawed Case Against Single Payer

By ALAN NASSER
Counterpunch
November 16, 2009

The liberal imagination has broadened the scope of what it wants to dismiss as unrealistic, utopian and unpragmatic, i.e. as for all practical purposes impossible. These claims have typically been accompanied by the assurance that “This is not something that Americans would go for – it’s not the American way.” There are countless variations on this theme. Obama’s case against a single payer health care system is a conspicuous case in point. What distinguishes Obama’s position on this issue is not merely the weakness of his “arguments”, but the straight-ahead factual falsehood of the some of the counterclaims he has put forward in order to turn the desirable into the impossible.

The Alleged Impossibility of Universal Health Care

In May and August, 2007 Obama stated his position on single payer:

“If you’re starting from scratch, then a single-payer system’-a government-managed system like Canada’s, which disconnects health insurance from employment-‘would probably make sense. But we’ve got all these legacy systems in place, and managing the transition, as well as adjusting the culture to a different system, would be difficult to pull off. So we may need a system that’s not so disruptive that people feel like suddenly what they’ve known for most of their lives is thrown by the wayside.” (May, 2007)

” [W]hen we had a healthcare forum before I set up my healthcare plan here in Iowa there was a lot of resistance to a single-payer system. So what I believe is we should set up a series of choices….Over time it may be that we end up transitioning to such a system. For now, I just want to make sure every American is covered…I don’t want to wait for that perfect system…” (August, 2007, at an Iowa roundtable)

Obama offers 5 reasons for not supporting single payer.

First: “..we’ve got all these legacy systems in place” simply means that our system is not single payer, and we’ve had it for a long time. Obama has turned himself into a bent sort of Burkean conservative: we have been marinating in a tradition which so permeates our way of being in the world that to do away with it would upset social life as we know it. This tradition includes…. insurance-industry-based health care! More mundanely: we haven’t got it, so we can’t have it.

Second: it would be hard to “manage the transition” from a deeply flawed system to a much better one. Harder than it was to effect the transition to Social Security, Medicare, Medicaid, desegregation, etc.? In each of these cases, what many people had “known for most of their lives” [was] “thrown by the wayside”. It belongs to the nature of any move from one way of doing things to a very different one that the transition will take some doing. That fact alone settles nothing. What matters is how urgent is the need for change. The US’s irrationally costly system which leaves millions uninsured, a fate suffered by the citizens of no other developed capitalist country, is surely intolerable. We have been given no reason to think that the cost of a transition to universal coverage is so great as to outweigh the massive benefits of this tried and tested arrangement. Obama’s excuses amount to a cleverly disguised a-priori argument against any consequential transformation of the status quo.

Third: the “difficulty” [i.e. costs] of “adjusting the culture to a different system”, given that there is “a lot of resistance to a single-payer system” , outweigh the benefits of single-payer. But what matters is not what a few selected Iowans are alleged to have felt about universal coverage. The demonstrated preferences of the democratic majority can’t be irrelevant.

On this issue Obama clearly means to imply that “Americans” don’t support single-payer. This is factually false. It’s improbable that Obama is unaware of the results of many surveys on this issue, the most recent, to my knowledge, having been conducted between December 14-20, 2007. The results of this Associated Press-Yahoo poll are worth reproducing as they were reported:

Subjects were asked which of the following 2 views comes closest to their own view:

1. The United States should continue the current health insurance system in which most people get their health insurance from private insurers, but some people have no insurance.

2. The United States should adopt a universal health insurance program in which everyone is covered under a program like Medicare that is run by the government and financed by taxpayers.

A majority of 65% supported 2, 34% supported 1 and 2% did not respond.

Those polled were also asked “Do you consider yourself a supporter of a single-payer health care system, that is a national health plan financed by taxpayers in which all Americans would get their insurance from a single government plan, or not?”

55% answered Yes, 44% No and 2% did not respond. Single-payer still has a majority here, but a smaller one, probably due to the pollsters’ use of (what is to some) the red-flag term ‘single payer’. [View the full poll results at http://news.yahoo.com/]

Taxpayer funded, government-run health care insurance for all is a public, not a private, good, and it is the only political project that most Americans are on record as willing to pay higher taxes to achieve. There is in fact not “a lot of resistance” to a rational health care system. Obama knows this. But the interests of those who have heavily invested (literally) in him carry more weight than do the most pressing interests of the rest.

The Ideology of Individual Choice and the Logic of Solidarity

Fourth: Obama claims that a health care plan based on “a series of choices” is superior to one that leaves no choice but instead saddles everyone with the burden of full and affordable coverage. Pity those poor Europeans, deprived of their right to liberty by forced access to first-rate health care. In the City on the Hill, few things are more important than the right to choose: which health care system gives us the most choice? This way of thinking is saturated with the ideology of individualism and its private goods, and functions to obliterate solidarity, as opposed to self-interest, as a political and moral value. This is especially pernicious since, as we shall see, it is only concerted action motivated by solidarity that can bring about a health care system from which no one is excluded because they can’t afford it.

When Obama contradistinguishes choice from universal coverage he unwittingly underscores the irrelevance of individual, self-interested choice to political goals motivated by a commitment to solidarity. Preoccupation with the choice between one doctor and another, one plan or another, conceals a crucial assumption, namely that the fundamental issue underlying the health care debate is one about choice and liberty. An individualist ontology implies that our collective fate is a function of whether or not each individual member of society is savvy enough to make the free choices most likely to promote his or her self-interest. But are people who worry about access to health care really concerned with choice? What weighs upon them is that they can’t afford health care. No individual can make on her own the choice to turn the US into a country that makes health care affordable, available to all. Such a choice is not a choice by an individual about her own well being. It is not even a choice about the aggregate sum of each and every individual’s well being. It is a choice we make together about the kind of society we want to live in. To worry about health care because one cannot affor
d it is, on reflection, to lament the non-existence of a public good, universally accessible health care, one that can’t be reduced to the sum of all individual goods. The survey discussed above indicates that most Americans implicitly know this. The majority endorse a universally applicable measure, taxation, as a means to institute a universally available, i.e. public, good, access to health care. A universal tax, as for education, roadways, health care, is not an individual cost; it is a social cost. Correspondingly, universally accessible health care is not an individual good, it is a public good. The majority would prefer to live in the kind of society that features that public good. It’s a different kind of society from the one we’re currently stuck with.

That kind of society, and the public goods it prioritizes, can be achieved only if it is pursued as a goal by people acting in concert. That’s where solidarity is on display: in collective action motivated by the desire to achieve a public good.

The kinds of goals/goods in question typically involve bringing about a certain kind of society. For example: the kind of society that provides all with affordable health care, the kind of society that makes access to the means of life -e.g. a living wage- available to all, the kind of society that makes the meeting of human needs the principal motivator of economic production, the kind of society that assigns sufficient resources to the reduction of pollution and the preservation of nature,… Prattling on about individual choice creates a conceptual space within which considerations of solidarity and public goods cannot arise. Talking about solidarity in the language of individualism is like trying to score a field goal in baseball.

Obama references affordability in spite of himself when he claims (falsely) that he wants to “make sure that every American is covered”. The fundamental virtue of single payer is that it detaches insurance from employment and thereby from one’s level of income, so that everyone can afford health care. The question of choice doesn’t even arise if you can’t afford to keep yourself healthy. And come to think of it, were health care universally available, the question of affordability would not arise. Talk of being able to “afford” access to health care would be as misplaced as talk of being able to afford access to elementary education.

Solidarity As a Familiar Phenomenon

The issue is worth dwelling on. In everyday life we are all familiar with the pursuit of irreducibly social goods. Think of a family with kids. A rare and highly desirable work opportunity, but far from home, arises for spouse #1. Spouse #2 has come upon a comparable golden opportunity, also far from home. The family wants to stay together. A decision based on the good of either individual spouse would break up the family. What to do? It’s not uncommon in such a situation for the adults to look to determine what would be good for the family. And what’s good for the family is not the sum of spouse #1’s good plus spouse #2’s good, plus the goods of each individual child. We cannot commensurate and then sum up these different and sometimes incompatible goods. The good of the family is irreducibly social, just like universally accessible health care. Families and households act in solidarity all the time.

Obama’s repeated insistence on the market as the primary agent in distributing resources precludes consideration of questions of solidarity from the outset. He is the instrument of domestic advisors benighted by preposterous economic theories hailing the efficiency and liberty-promoting virtues of the market. For these wags the pursuit of individual self-interest, plus competition, makes the world go round and secures for us all the freedom we (are allowed to) want. As we have seen above, the restriction of human-welfare-enhancing political choices to the realm of competition and self-interest deprives us of the freedom collectively to choose to live in the kind of society that provides copious public goods. That’s a big freedom lost.

The Political Psychology of Solidarity

A sense of solidarity is far more prevalent in much of Europe than it is in the Land of the Free. In a New York Times article titled “For the French, Solidarity Still Counts” (by Youseff M. Ibrahim, Dec. 20, 1995), the author describes public reaction in France to a three-week strike by public workers supported by “hundreds of thousands of demonstrators who filled the streets of every major city in France.” Workers were protesting then Prime Minister Juppe’s proposal to slash medical, social welfare and benefit payments. According to the Times:

“Polls showed an astonishing amount of sympathy on the part of those who did not participate in the strike and who suffered the paralysis of mass transit and essential services. Many people explained that they supported the strike because the Government’s austerity programs are stripping layer after layer of subsidies that permitted French families of even the most modest means to sample the cultural and culinary treasures that only the rich can afford.”

One recipient of the social wage was a woman receiving the standard subsidy extended to pregnant women. The subsidy will continue, for each child, until the child reaches 18. Said the woman: “This is the foundation of our Republican system… Equality and fraternity are not mere slogans here. For me the engagement by the state is an expression of solidarity that gives us values… I think most French people want France’s values to be decided by this spirit, not by cold, remote, economic summits that speak of deficits and competition. That was the message of the strikes.”

This past March one million demonstrated across France in protest of proposed cutbacks in the wake of the financial crisis. I am currently living in France for a stretch of time and have witnessed frequent strikes and other expressions of resistance to neoliberal austerity measures. A sad and stark contrast to the sitting-duck posture of so many US workers.

The Times article provides an implicit explanation of why it is that in France and other European countries there is no general resentment of social benefits available, for example, to single mothers, while in the US more than a few working people oppose this kind of support. The Times reports that the subsidy offered to the woman quoted above “is extended to every mother in France regardless of economic or marital status.” In France benefits to single mothers are not regarded as “special treatment” denied to the responsible and hard-working. There is neither social nor psychological soil in which to plant the seeds of resentment, since the single mother is the recipient of a public good available to all mothers.

Fifth and finally: “I just want to make sure every American is covered…I don’t want to wait for that perfect system…” If the president truly wanted to guarantee universal coverage he would not have taken single-payer off the table before discussions began. Whatever is finally settled upon, government will neither negotiate drug prices nor regulate premiums, so we know now that millions will remain uninsured. Obama has known that all along.

Obama rigs the game by characterizing single-payer as “that perfect system”. One of the major weapons in the party-liners’ arsenal is to portray those who believe in greater possibilities as naïve utopians blind to the truism that a “perfect world” is impossible in what William F. Buckley liked to call “this veil of tears”. The logic is fine: since there are no finite limits to the greater possibilities of goodness, and perfection is conceived, as Anselm reminds us, as that greater than which none can be conceived, it follows that perfection is impossile down here. But whoever introduced mumbo-jumbo about perfection in the first place? Isn’t the elimination of a
great deal of unnecessary suffering enough? Last I recall, single-payer advocates claim merely (sic) that it is way better than what we are offered. That’s pretty good.

Obama’s case against single-payer frames health-care priorities in the language of atomic individualism. Hence, the range of possible outcomes is determined for the worse before discussion begins. I am suggesting that a good part of our resistance and organizing should consist in reminders that an alternative way of thinking and acting is already on display in some of our common practices, and in already existing benefits won for other populations by aiming at public goods to be achieved by concerted action in solidarity.

Hope that helps.

Alan Nasser is professor emeritus of Political Economy and Philosophy at The Evergreen State College in Olympia, Washington. He can be reached at nassera@evergreen.edu

http://www.counterpunch.org/nasser11162009.html

Clarifying what single-payer health care is and is not

By Howard Waitzkin
Taos News
Thursday, 18 July 2009

First I congratulate Justin Bailey, Erich Kuerschner, and all other people in the Taos area 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. In their articles, both Bailey and Kuerschner argued on behalf of a single-payer system but did not address several of its key features.

A single-payer health program basically would extend Medicare to the entire population. Although Medicare is not without problems, people over 65 years of age 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 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 and 30 percent. This much larger percentage means that about one quarter of every dollar spent on health care goes for administrative costs.

Many of these expenditures pay for activities such as billing, denial of claims, supervision of co-payments and deductibles, scrutiny of pre-existing conditions that disqualify people from care, and exorbitant salaries for executives (in many cases totaling between $10 and 20 million per year).

A single-payer national health program would achieve universal access to care by drastically reducing administrative waste. 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 the majority of people in our country favor this approach.

The Obama administration has proposed a “mixed approach,” which includes a “public option,” organized along the lines of a single-payer system. 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 a single payer approach.

Because the mixed approach will achieve much less savings by reducing administrative waste, the projected costs of the system have become prohibitive. Concern about these high costs has become the focus of the current debate in Congress.

On the other hand, there are two important bills in Congress that would achieve a single-payer system. In the House of Representatives, the bill is HR676, introduced by Rep. John Conyers and cosponsored currently by 85 other representatives. Sen. Bernard Sanders recently introduced a similar bill, S703, in the Senate.

These bills deserve our support because they truly would achieve a single-payer national health program that would guarantee universal access for all of us.

It is wonderful to realize that our own Rep. Ben Ray Lujan became a cosponsor of HR676 shortly after he entered Congress in early 2009.
Carlos Cisneros and Roberto (Bobby) Gonzales have introduced similar single payer legislation in the New Mexico Legislature.

Although Sen. Tom Udall did cosponsor single-payer legislation in previous sessions of Congress, he has not yet cosponsored 5703 since he entered the Senate this year.

Sen. Jeff Bingaman has not cosponsored S703, even though he generally supports improved access to health care.

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 with huge administrative costs.

The mixed private and public approach has failed to achieve universal coverage in multiple states (most recently Massachusetts) and countries.

Let’s focus our attention and organizing 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.

As Winston Churchill said, “Americans will always do the right thing – after they’ve tried every other option.”

Howard Waitzkin, M.D., a professor at the University of New Mexico-Albuquerque, lives and practices medicine in Taos. He helped write the single-payer proposal of Physicians for a National Health Program, a professional organization with about 20,000 members www.pnhp.org. This proposal led to the current legislative bills in Congress that would enact a single-payer national health program (HR676 and S703).

Why Health Care Should Be a Right

By Jamie Eldridge
Jamie’s Blog: The Dridge Report
November 2nd, 2009

On the morning of October 7th, 2009, I suffered a one-minute seizure that broke some of the bones in my back, strained my spine, and tore my right shoulder out of its socket. Given the seriousness of the injuries that I sustained, I was rushed to Mass. General Hospital.

I don’t remember any of the above — but I do remember being relieved that I was at MGH once I became aware of what was going on, because I knew that I’d be getting arguably the best medical care in the world to fix my injuries. Just taking in the scene of doctors and nurses looking after me, I felt extremely relieved to live in Massachusetts and have access to such excellent health care.

The reason I had access to this care was, of course, because I am lucky enough to have comprehensive health care through the state GIC, which would cover the three surgeries, extended care, and rehab necessary for me to recover from my injuries. It is impossible to overstate what peace of mind this gave me, my family and loved ones.

But what about those patients at MGH, and across the country, who don’t have health insurance as comprehensive as mine, or health insurance at all? What peace of mind is there for their families at an incredibly difficult time?

As a patient, I wanted to be sure I would receive the highest quality medical care possible, and that I would be able to enjoy the same basic quality of life I had before my injury. And of course my fellow patients at MGH, many of whom were less well-off than I was, had the same hopes and expectations.

But as I lay in bed, knowing that I was lucky enough to have excellent health insurance that would cover my treatment, I couldn’t help but thinking over and over about those who weren’t so lucky.

I’ve been a strong proponent of a “Medicare for All” health care system since first joining the Massachusetts Legislature seven years ago. I believe a single-payer system like this will best achieve the health care reform goals that many of us share, from providing health care coverage for the uninsured to improving coverage for current health insurance members, reducing health care costs, and simplifying the country’s health care delivery system.

But over the past month, as I have been focused on health care as a patient, rather than as an elected official, I’ve become more and more convinced that any health care reform we make – single payer or otherwise – must start with the agreement that access to quality health care should be a right in this country.

There is a basic quality of care we all deserve when we are sick or injured. Yet without establishing health care as a right, there is no guarantee that every other Massachusetts citizen would be treated like I have been. In fact, absence government intervention, there are strong market, financial, and societal incentives that make it highly likely that no basic standard of treatment will exist.

As a society, we all benefit when individual members have access to quality health care. In my case, had I not received the right treatment within a relatively short amount of time, my life would have been changed dramatically, limiting my ability to be the most productive citizen that I could possibly be, and my ability to contribute to society, .

It’s the same for anyone else in a similar situation: good health care improves productivity, and the lack of it worsens the quality of life for each of us.

In the United States, within the basic framework of positive and negative rights found in our U.S. or state constitutions, the establishment of a right ensures that regardless of a person’s background (economic circumstances, race, religion, ethnicity, gender, sexual orientation, etc.), he or she is able to freely access certain services from the government. In Massachusetts, this ranges from the right to free speech and assembly to the right to public education, with guaranteed equal treatment of all people by the government.

The facts that I have excellent health insurance, live in a state that has long prioritized health care towards its citizens and that is home to the best doctors and nurses in the country, and have a job that provides paid sick leave to allow me the time to properly recover without falling into deep economic insecurity all but guarantees I will make the best recovery possible (in my case, a full recovery). However, not every Massachusetts resident – and certainly not every American – is as fortunate as I am.

Until we define health care as a right, there will continue to be Americans like those I have met over the past month, whose lives will be irreversibly thrown off-track by an accident or illness, whose financial insecurity will lead to greater physical problems, whose lives will be changed forever because they lacked access to quality health care.

I can think of few other instances of government assistance that would have as dramatic an impact on people’s lives as a right to health care, and that would make every community richer.

http://www.senatoreldridge.com/the-dridge-report/1039/why-health-care-should-be-a-right

Uninsured trauma patients

Downwardly Mobile – The Accidental Cost of Being Uninsured

By Heather Rosen, MD, MPH; Fady Saleh, MD, MPH; Stuart Lipsitz, ScD; Selwyn O. Rogers Jr, MD, MPH; Atul A. Gawande, MD, MPH
Archives of Surgery
November 2009
The Centers for Disease Control and Prevention estimate that in 2004, there were 112 012 deaths related to unintentional injuries alone in the United States. Unintentional injury is within the top 10 causes of death for every age group and is the leading cause of death among persons aged 1 to 44 years.
Uninsured trauma patients in the NTDB (National Trauma Data Bank) had a statistically significant higher adjusted odds of mortality compared with insured trauma patients. Our subgroup analyses strongly corroborated these findings. In younger patients (aged 18-30 years), the adjusted odds of mortality after trauma remained higher for uninsured patients compared with insured patients, indicating that the differences persist in a relatively healthy cohort. In the subgroup analyses of head-injured patients and those with 1 or more comorbidities in the NTDB, the adjusted odds of mortality in the uninsured population remained significantly high.
Most recent research has concentrated on decreased (or lack of) access to care as a result of being uninsured. However, we found that, even after admission to a hospital, trauma patients can have worse outcomes based on insurance status. This concerning finding warrants more rigorous investigation to determine why such variation in mortality would exist in a system where equivalent care is not only expected but mandated by law.
We can only speculate as to the mechanism of the disparities we have exposed; the true causes are still unclear. Although the lack of insurance may not be the only explanation for the disparity in trauma mortality, the accidental costs of being uninsured in the United States today may be too high to continue to overlook.
http://archsurg.ama-assn.org/cgi/content/short/144/11/1006

Uninsured trauma patients are more likely to die than insured patients in spite of the fact that treatment is mandated by law. This study did not explain the reasons for the differences.
Delay? Different care? Lower health literacy? Or was there simply less enthusiasm on the part of the providers of care once it was realized that they would not be compensated for their efforts?
This study and several others have demonstrated that death can be a consequence of being uninsured. But there are other important consequences as well. Access to health care that can maintain or improve quality of life is impaired, with consequent adverse outcomes. Financial hardship is almost a given in uninsured individuals with significant health problems.
Instead of searching for alternative explanations for adverse outcomes in the uninsured, we should admit that being uninsured is bad for your health and bad for your finances, and then do something about it. Individual responsibility alone is not enough. Social solutions are required.

RAND and BR on "savings" through "bundled payments"

Health Care Reform: Creating a Sustainable Health Care Marketplace

By Hewitt Associates
Business Roundtable
November 2009

Payment Bundling

Establishing bundled payments would create more incentives for efficient treatments and could be adjusted based on outcomes. Health care reform proposals are moving toward bundled payments. Both the House and the Senate include provisions that focus on improved quality of care and patient outcomes.

The pilot program may cover the following services: acute-care inpatient hospitalizations; physician services delivered inside and outside of the acute-care hospital setting; outpatient hospital services, including emergency department visits; services associated with acute-care hospital readmissions; home health; skilled nursing; inpatient rehabilitation; and long-term care. The episode of care established in the pilot program would start three days prior to a qualifying admission to the hospital and span the length of the hospital stay and 30 days following the patient discharge.

The pilot program’s bundled payment would be made to a Medicare provider or another entity composed of multiple providers to cover the costs of acute-care inpatient and outpatient hospital services, physician services, and post-acute care. The bundled payment for each of the eight selected conditions would be based on the average hospital, physician, and post-acute-care payments made over the hospitalization period for the patient.

CBO does not score savings for this provision, mainly because the language above suggests that Medicare will pay the same as it would otherwise have paid, instead of some lower amount per episode. Over time, however, we believe substantial savings can be achieved by both removing the financial incentive to provide marginally effective services, as well as through the active management of the rate of increase in the bundled reimbursement rate.

http://www.businessroundtable.org/system/assets/drupal/Hewitt_BRT_Sustainable%20Health%20Care%20Marketplace_Final.pdf

And…

Controlling U.S. Health Care Spending — Separating Promising from Unpromising Approaches

By Peter S. Hussey, Ph.D., Christine Eibner, Ph.D., M. Susan Ridgely, J.D., and Elizabeth A. McGlynn, Ph.D.
The New England Journal of Medicine
November 11, 2009

We identified 8 options that evidence suggests have the potential to reduce spending and are broadly applicable to the United States. For these options, we developed high and low estimates of cumulative cost savings over 10 years. The graph (clink on link below) lists the options, ranked according to their savings potential, and shows the percentage change in spending that we estimate could be achieved if that policy alone were implemented.

Among the most promising options are those related to changing the payment methods for health care services. (In the graph, bundled payment stands out as the option that would have by far the greatest impact in reducing spending.)

A “bundled-payment” approach would provide a single payment for all services related to a given treatment or condition, causing providers to assume risk for preventable costs; this approach has proved effective in limited demonstration projects. Bundled payment provides a mechanism for reducing both the volume of services and the prices charged for them. We estimate that under optimistic scenarios and with broad use of the Prometheus model of bundled payment for six chronic conditions and four acute conditions or procedures requiring hospitalization, national health care spending could be reduced by 5.4% between 2010 and 2019. This estimate assumes that providers can achieve a reduction of 25 to 50% in the costs associated with avoidable complications by providing higher-quality, more collaborative care.

http://healthcarereform.nejm.org/?p=2301&query=home

And…

Building a Bridge from Fragmentation to Accountability — The Prometheus Payment Model

By François de Brantes, M.S., M.B.A., Meredith B. Rosenthal, Ph.D., and Michael Painter, J.D., M.D.
The New England Journal of Medicine
September 10, 2009

Most experts agree that some sort of bundled, episode-based payment would help to move the system in the right direction. Our own approach, the Prometheus Payment model, for instance, bundles services and provides a budget with three components: evidence-informed base payment with patient-specific severity adjustments and an allowance for potentially avoidable complications.

The model encourages two behaviors that fee for service discourages: collaboration of physicians, hospitals, and other providers involved in a patient’s care; and active efforts to reduce avoidable complications of care (and the costs associated with them). It accomplishes these goals by paying for all the care a patient needs over the course of a defined clinical episode or a set period of management of a chronic condition, rather than paying for discrete visits, discharges, or procedures.

When incentives are used to drive changes in behavior, it is important that people and organizations are held accountable only for the variables that are actually under their control. That’s why, in designing the Prometheus model, we decided to focus on the potentially avoidable costs of patient care. We separated the costs attributable to patient-related factors from those attributable to providers’ actions. These latter costs are critically important in terms of accountability. In Prometheus, these potentially avoidable costs are called PACs and are recognized as the result of “care defects” — problems necessitating technical care that are under the professionals’ control and that, with the best professional standards, could have been avoided. PACs might include the cost of hospitalization of a patient with uncontrolled diabetes or the readmission for a wound infection of a patient who had recently been discharged after cardiac bypass surgery.

Unlike the current payment system, Prometheus provides larger profit margins for providers who can eliminate these complications, since they keep any unused PAC allowance — they profit by delivering optimal care, not a greater volume of care.

One lesson from our pilots is that hospital-centric provider organizations can expect increased internal tension when they implement an episode-of-care payment system. Prometheus does provide a sort of bonus to the hospital and physicians for working together to avoid readmission. However, physician groups that are paid under the model for managing chronic conditions have substantial opportunities to increase the profits that come from avoiding expensive hospitalizations. This incentive can highlight potential conflicts between the financial interests of physicians and those of hospitals and cause us to question the proposition that hospital-centric provider organizations will deliver the best results for the country.

The Prometheus model, by contrast, can be implemented in a fragmented, largely fee-for-service delivery system if the payer retains the role of financial integrator. Over time, as providers collaborate to improve patient care and optimize their margins, they could more formally integrate into accountable organizations. However, it will and should be their choice to do so.

http://content.nejm.org/cgi/content/full/361/11/1033

Comment:

By Don McCanne, MD

Peter Hussey and his colleagues at RAND, in their NEJM article, try to make the case that a “bundled payment” approach would be one of the
most promising options for controlling health care spending. The Prometheus model of bundled payment, described the other NEJM article cited above, would shift the risk for preventable costs from the payer to the providers of health care services.

Here’s how it would work. The payer (e.g., Medicare) would determine what the costs of all services would be for a given clinical problem under the current system (fee-for-service plus DRGs). All services would be bundled under a single fee that would be discounted by about five percent. That discount represents current preventable costs such as “excessive” days of hospitalization, “unnecessary” imaging studies, “preventable” complications such as wound infections, and “unnecessary” re-hospitalizations for “inadequate” post-discharge followup. If the medical team of professionals and institutions failed to prevent these or other “additional” costs, the team would bear the loss.

Well fine. But how many of these costs are truly preventable? At the time that services are rendered, almost all decisions are clinically appropriate. It is only in retrospect that an occasional decision might have been changed, but most would not have been. Then there is the fallibility of the human mind. Just as no person could be expected to have a perfect score on every exam taken throughout life, no health care professional can be expected to have a perfect score on all clinical decisions, especially when the perfect response is often still an unknown.

Another problem is that bundling requires organizing individuals and institutions together based on a single clinical entity. The composition of the team would vary depending on the nature of the clinical problem. The team would accept the one bundled payment but then internal disputes over the distribution of the funds certainly would be inevitable. Although the payer is relieved of the administrative services of allocating these funds, the process does not bode well for creating a harmonious, collaborative environment for high quality patient care. Those who believe that these arrangements could evolve into “accountable care organizations” are delusional.

In spite of RAND’s optimism, “bundling payments” will not reduce costs. It will only reduce prices, while actually increasing costs by introducing yet greater administrative complexity.

Purists in written composition might contend that I’ve overused “quotation marks” in my comments. My defense is that health care reform should not be based on “quotation marks” and a “wink.” It should be based on sound health policy science (no quotation marks).

RAND and BR on “savings” through “bundled payments”

Health Care Reform: Creating a Sustainable Health Care Marketplace

By Hewitt Associates
Business Roundtable
November 2009

Payment Bundling

http://www.businessroundtable.org/sites/default/files/Hewitt_BRT_Sustainable%20Health%20Care%20Marketplace_Final.pdf

And…

Controlling U.S. Health Care Spending — Separating Promising from Unpromising Approaches

By Peter S. Hussey, Ph.D., Christine Eibner, Ph.D., M. Susan Ridgely, J.D., and Elizabeth A. McGlynn, Ph.D.
The New England Journal of Medicine
November 11, 2009

http://healthcarereform.nejm.org/?p=2301&query=home

And…

Building a Bridge from Fragmentation to Accountability — The Prometheus Payment Model

By François de Brantes, M.S., M.B.A., Meredith B. Rosenthal, Ph.D., and Michael Painter, J.D., M.D.
The New England Journal of Medicine
September 10, 2009

http://content.nejm.org/cgi/content/full/361/11/1033

Comment:

By Don McCanne, MD

Peter Hussey and his colleagues at RAND, in their NEJM article, try to make the case that a “bundled payment” approach would be one of the most promising options for controlling health care spending. The Prometheus model of bundled payment, described the other NEJM article cited above, would shift the risk for preventable costs from the payer to the providers of health care services.

In spite of RAND’s optimism, “bundling payments” will not reduce costs. It will only reduce prices, while actually increasing costs by introducing yet greater administrative complexity.

U.S. Needs Health Care, Not Insurance

By Carol Miller
Albuquerque Journal
Sunday, November 15, 2009

A very complex, mandatory private insurance scheme recently passed the U.S. House. The public is being overwhelmed by sound bites on one hand about how great it is, on the other, how terrible. We are hearing few of the details that are actually in the bill. Having read the bill, it is clear now that what started as health reform has emerged from the political process as health “deform,” building on the worst, not the best of the current system.

It is still a toss-up as to whether the Senate will pass any bill this year. However, due to intense political pressure, the Senate is likely to pass a bill that will make some House provisions better and others worse. What actually comes out in the final conference-committee bill is anyone’s guess at this point — so little time, so many deals still to be made, so many political funders to be appeased.

A careful analysis of the bill shows that it is designed more for political goals than to eliminate financial barriers to health care. For example, the actual coverage doesn’t even begin until 2013, opportunistically after the next presidential election, in 2012. Run on having accomplished “historic reform” but before anyone actually experiences how bad it is? How cynical is that?

Yes, there are some good provisions. The best relate to improving existing programs like the Indian Health Service, community health centers, and health professionals education and training; all are important for New Mexico.

But there bad provisions, which comprise most of the 1,990 pages of the bill. Five key reasons this legislation must be stopped:

• If passed, this law will move the U.S. farther from universal health care, making it harder than ever to accomplish health care justice in the future. If Congress does not have the courage to stand up to the private insurance industry now, it will be even more difficult in the future, especially after giving the industry trillions of new dollars through this terrible legislation. Let’s call this what it is: another corporate bailout on the backs of working people.

Pay attention to your federal representatives as they carefully talk about “health insurance reform.” They aren’t talking about health reform any more. Congress could have defended and built up a system based on popular, high-quality government-run health programs like the military and veterans fully socialized health systems or Medicare, a single-payer program. Instead, the president and Congress let the corporations and government-haters take control of the agenda.

• The legislation institutionalizes permanent inequality in health care. Unlike Medicare where all beneficiaries have a single plan, this bill further divides the U.S. system into tiers based on ability to pay. It creates basic, enhanced, premium and premium-plus plans. A basic plan will provide only 70 percent of the coverage of a “reference benefit package,” one that includes even fewer services than most insured people have today. The bill doesn’t even mention coverage for essential services like vision and adult dental care except in the most costly premium-plus plan.

• Out-of-pocket costs remain sky high. Everyone will be required to pay monthly insurance premiums. Some low-wage workers will receive taxpayer subsidies on a sliding scale. The lowest income people will have full subsidies. But remember, this is not money for care, it is support only to buy insurance.

Almost everyone will have to meet a deductible, capped in the bill at $1,500 a year, higher than most insurance-plan deductibles today. On top of this, insurance companies can charge even more under various “cost sharing” schemes for items like co-pays and co-insurance.

The bill puts a cap on cost sharing, but the total amount is obscene. The cap for an individual is $5,000 a year and for a family it is $10,000 before the plan must cover everything. Well, not exactly everything. Even after paying this huge amount of money, the legislation still allows the corporations to make us pay, billing for non-network providers and, since it is not a comprehensive benefit package, we are still on our own to pay for health care that the plans refuse to cover.

The legislation creates a law to let these corporations increase what they charge people as they get older. In fact, they can be charged up to twice as much as younger people for identical coverage.

• The legislation makes it illegal to not buy health insurance. The penalties are described in a section of the legislation called “Shared Responsibility.” This will let the IRS impose a tax of up to 2.5 percent of modified adjusted gross income for not having health insurance. People on the financial edge, people fighting foreclosure to stay in their homes or people who are unemployed all or part of a year will not be able to afford the insurance premiums or the penalties for not having insurance.

• We will all be drowning in paperwork, which will continue to drive up administrative costs. Right now, insurance administrative waste is about 30 percent of every health care dollar— or about $1 billion a day. Adding more people to an insurance-based system will result in even more money going into this bottomless pit.

As if this isn’t bad enough, the government will be setting up many new agencies to oversee the whole process including, at the top, the Orwellian Health Choices Administration, headed by the Health Choices Commissioner. This is not an agency to help us make health care choices, but to choose a health insurance company. The IRS will play a very large role in everything from certifying our income for subsidies to monitoring and taxing people who don’t buy insurance.

Health Insurance Exchanges will be created across the country with at least one in every state offering both Web sites and telephone assistance. This is where we will go every year to pick our insurance plan in an open enrollment period of at least 30 days between September and November. We can add this unpleasant task to all of our other fall chores.

It is hard to imagine the chaos and wasted resources with the entire country picking insurance plans at the same time, attended by marketing, billboards, advertising and misinformation. We will gamble as we choose a plan, decide which corporation will be the best for us, hoping we pick one that is not dominated by corporate bureaucrats focused on rationing care to maximize their profits. It is not an easy task and if a wrong plan is selected, we are stuck for a year, until the next national open enrollment cycle.

The United States can do better. We can build on a strengthened and well-funded Medicare program. In Medicare, when a person reached the age of eligibility or is determined to qualify because they have a permanent disability, they are in, and there is no re-enrollment.

Imagine real reform, as simple as adding people ages 55 to 65 years old to Medicare in 2010, 35-55 in 2011, and so on until everyone is included by 2013. The bills that promote this kind of reform are under 200 pages, they are simple to implement, cost effective and equitable. Choose a doctor, choose a hospital when needed and let the government pay the bills. Everyone in one system.

That is what real health reform would look like.

Miller is a long-time public health professional and health care advocate. She lives in Ojo Sarco.

Originally published under the title “N.M. Needs Health Care, Not Insurance”

http://www.abqjournal.com/north/opinion/1523131northopinion11-15-09.htm

In House, Many Spoke With One Voice: Lobbyists’

By ROBERT PEAR
New York Times
November 15, 2009

WASHINGTON — In the official record of the historic House debate on overhauling health care, the speeches of many lawmakers echo with similarities. Often, that was no accident.

Statements by more than a dozen lawmakers were ghostwritten, in whole or in part, by Washington lobbyists working for Genentech, one of the world’s largest biotechnology companies.

E-mail messages obtained by The New York Times show that the lobbyists drafted one statement for Democrats and another for Republicans.

The lobbyists, employed by Genentech and by two Washington law firms, were remarkably successful in getting the statements printed in the Congressional Record under the names of different members of Congress.

Genentech, a subsidiary of the Swiss drug giant Roche, estimates that 42 House members picked up some of its talking points — 22 Republicans and 20 Democrats, an unusual bipartisan coup for lobbyists.

In an interview, Representative Bill Pascrell Jr., Democrat of New Jersey, said: “I regret that the language was the same. I did not know it was.” He said he got his statement from his staff and “did not know where they got the information from.”

Members of Congress submit statements for publication in the Congressional Record all the time, often with a decorous request to “revise and extend my remarks.” It is unusual for so many revisions and extensions to match up word for word. It is even more unusual to find clear evidence that the statements originated with lobbyists.

The e-mail messages and their attached documents indicate that the statements were based on information supplied by Genentech employees to one of its lobbyists, Matthew L. Berzok, a lawyer at Ryan, MacKinnon, Vasapoli & Berzok who is identified as the “author” of the documents. The statements were disseminated by lobbyists at a big law firm, Sonnenschein Nath & Rosenthal.

In an e-mail message to fellow lobbyists on Nov. 5, two days before the House vote, Todd M. Weiss, senior managing director of Sonnenschein, said, “We are trying to secure as many House R’s and D’s to offer this/these statements for the record as humanly possible.”

He told the lobbyists to “conduct aggressive outreach to your contacts on the Hill to see if their bosses would offer the attached statements (or an edited version) for the record.”

In recent years, Genentech’s political action committee and lobbyists for Roche and Genentech have made campaign contributions to many House members, including some who filed statements in the Congressional Record. And company employees have been among the hosts at fund-raisers for some of those lawmakers. But Evan L. Morris, head of Genentech’s Washington office, said, “There was no connection between the contributions and the statements.”

Mr. Morris said Republicans and Democrats, concerned about the unemployment rate, were receptive to the company’s arguments about the need to keep research jobs in the United States.

The statements were not intended to change the bill, which was not open for much amendment during the debate. They were meant to show bipartisan support for certain provisions, even though the vote on passage generally followed party lines.

Democrats emphasized the bill’s potential to create jobs in health care, health information technology and clinical research on new drugs.

Republicans opposed the bill, but praised a provision that would give the Food and Drug Administration the authority to approve generic versions of expensive biotechnology drugs, along the lines favored by brand-name companies like Genentech.

Lawmakers from both parties said it was important to conduct research on such “biosimilar” products in the United States. Several took a swipe at aggressive Indian competitors.

Asked about the Congressional statements, a lobbyist close to Genentech said: “This happens all the time. There was nothing nefarious about it.”

In separate statements using language suggested by the lobbyists, Representatives Blaine Luetkemeyer of Missouri and Joe Wilson of South Carolina, both Republicans, said: “One of the reasons I have long supported the U.S. biotechnology industry is that it is a homegrown success story that has been an engine of job creation in this country. Unfortunately, many of the largest companies that would seek to enter the biosimilar market have made their money by outsourcing their research to foreign countries like India.”

In remarks on the House floor, Representative Phil Hare, Democrat of Illinois, recalled that his family had faced eviction when his father was sick and could not make payments on their home. He said the House bill would save others from such hardship.

In a written addendum in the Congressional Record, Mr. Hare said the bill would also create high-paying jobs. Timothy Schlittner, a spokesman for Mr. Hare, said: “That part of his statement was drafted for us by Roche pharmaceutical company. It is something he agrees with.”

The boilerplate in the Congressional Record included some conversational touches, as if actually delivered on the House floor.

In the standard Democratic statement, Representative Robert A. Brady of Pennsylvania said: “Let me repeat that for some of my friends on the other side of the aisle. This bill will create high-paying, high-quality jobs in health care delivery, technology and research in the United States.”

Mr. Brady’s chief of staff, Stanley V. White, said he had received the draft statement from a lobbyist for Genentech’s parent company, Roche.

“We were approached by the lobbyist, who asked if we would be willing to enter a statement in the Congressional Record,” Mr. White said. “I asked him for a draft. I tweaked a couple of words. There’s not much reason to reinvent the wheel on a Congressional Record entry.”

Some differences were just a matter of style. Representative Yvette D. Clarke, Democrat of New York, said, “I see this bill as an exciting opportunity to create the kind of jobs we so desperately need in this country, while at the same time improving the lives of all Americans.”

Representative Donald M. Payne, Democrat of New Jersey, used the same words, but said the bill would improve the lives of “ALL Americans.”

Mr. Payne and Mr. Brady said the bill would “create new opportunities and markets for our brightest technology minds.” Mr. Pascrell said the bill would “create new opportunities and markets for our brightest minds in technology.”

In nearly identical words, three Republicans — Representatives K. Michael Conaway of Texas, Lynn Jenkins of Kansas and Lee Terry of Nebraska — said they had criticized many provisions of the bill, and “rightfully so.”

But, each said, “I do believe the sections relating to the creation of a market for biosimilar products is one area of the bill that strikes the appropriate balance in providing lower cost options.”

http://www.nytimes.com/2009/11/15/us/politics/15health.html

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