By Arnold S. Relman, M.D.
Professor Emeritus of Medicine and Social Medicine, Harvard Medical School
Former Editor-in-Chief, New England Journal of Medicine
Tikkun Magazine
September 24, 2009

There are two interrelated critical issues in health reform right now: how to extend and improve insurance coverage, and how to control the unsustainable rise in health care expenditures. Virtually all of the current legislative attention is focused on the first issue but, notwithstanding claims to the contrary, none of the proposals now on the table offers any credible solution for the control of rising costs. Without control of health cost inflation, the present system will not be viable much longer.

Expansion of coverage is of course a highly desirable goal, but it inevitably increases expenditures even beyond today’s exorbitant levels. President Obama has repeatedly said he would veto any health proposal that is not “budget neutral” over the next decade. The legislation now under consideration claims to meet that requirement through savings promised by the insurance, drug and hospital industries and through reductions in Medicare expenditures (excessive payments to private insurers for Medicare Advantage plans would be a major target), possibly supplemented by taxes on employment-based health plans for high income employees. However, critics question whether these measures would fully pay for the almost one trillion dollars of new costs for covering most of the uninsured over the next decade.

But the estimate of the costs of expanded coverage does not include the cost of the constant inflationary rise in all medical expenditures, lately about 6 – 8 percent per year. This would increase total health spending by roughly another two trillion dollars over the next decade. Administration policy-makers speak hopefully of savings to be generated in the long term by switching to electronic records, using more preventive measures, and applying the information gained from studies of comparative effectiveness. But skeptics might call this “faith-based” savings, because there is no solid evidence to support such hopes. The sobering fact remains that something more must be done soon to slow medical inflation or the entire health system will inevitably slide into bankruptcy. And yet none of the legislation currently being considered addresses that problem. Adding more benefits to the system, and covering more people with public and private insurance, are certainly important, but even if those improvements were paid for, they would not slow down the numerous inflationary forces that make our medical care system unsustainable.

What are those inflationary forces? I believe the most important among them are the incentives in the payment and organization of medical care that cause physicians, hospitals and other medical care facilities to focus at least as much on income and profit as on meeting the needs of patients. I have discussed this subject in a recent book ( A Second Opinion . Rescuing America’s Health Care. Public Affairs, New York, 2007). The U.S., more than any other advanced country, has come to rely mainly on private markets to deliver medical care, and on fee-for-service to pay its physicians. The incentives in such a system reward and stimulate the delivery of more services. That is why medical expenditures in the U.S. are so much higher than in any other country, and are rising more rapidly. Our business-oriented system inevitably drives up expenditures because in medical care the balancing tensions between the suppliers and consumers of services that constrain costs in ordinary business markets do not exist. Physicians, who supply the services, control most of the decisions to use medical resources, and patients, who are the consumers of those resources, do not pay most of the costs.

The economic incentives in the medical market are attracting the great majority of physicians into specialty practice, and these incentives, combined with the continued introduction of new and more expensive technology, are a major factor in causing inflation of medical expenditures. Physicians and ambulatory care and diagnostic facilities, are largely paid on a piecework basis for each item of service provided. Hospitals also bill insurers according to the days of care and the services they provide, although payments for treatment of an illness may be aggregated. However, all providers compete for income and market share, often advertising and marketing for that purpose. They almost never compete on prices because public and private insurers, not patients, pay most of the costs. Competition in the current medical market therefore tends to drive up total costs because it results in greater use of services, while rarely lowering prices.

Control of medical expenditures is unlikely without a major reform of the payment and organization of medical care. Expanding and improving the medical insurance part of the health system will not solve the expenditures problem unless the perverse incentives in the delivery of care are also corrected. In fact, expansion of insurance benefits without this other reform would probably make matters even worse. A so-called “public option” will not solve this problem either, although its competition might force private insurers to reduce their premiums or increased benefits. But even if some sort of low-cost not-for-profit insurance plan were offered as an optional choice for the uninsured and those dissatisfied with their present coverage, the inflationary effects of fee-for-service payments and an entrepreneurial medical care system would still be operating. After all, Medicare is a low-overhead plan that costs its beneficiaries less than private plans, but the rate of inflation in its expenditures is nearly as rapid as the inflation in private medical insurance expenditures. The benefits of Medicare are just as threatened as those of the private insurance system because costs are rising rapidly in both the public and private sectors of health care.

Judging from the current debate in Washington, there is little evidence that lawmakers are aware of these facts or, if they are, that they have the stomach for resisting the powerful vested interests that stand in the way of major reform. That is why the Goldman Sachs prediction of a compromised legislative outcome is likely to be correct. At the end of this Congress we will probably end up in a position not unlike that facing the Commonwealth of Massachusetts. Over three years ago it enacted legislation that greatly expanded insurance coverage, but from the outset it faced serious financial problems in funding the increased costs. A special state commission has recommended to the Massachusetts legislature that it consider ways to eliminate fee-for-service payment of physicians in favor of some type of system that would be based on organizations of physicians and hospitals that could accept global prepayments for comprehensive care. It remains to be seen whether and how these recommendations can be implemented, but it is telling that Massachusetts seems now to realize what our national lawmakers have not yet grasped: Sustainable universal, or near-universal, coverage requires more than fixing the insurance system. It needs major reform in the payment and organization of medical care as well.

In my book, and in a recent article in the New York Review of Books (July 2), I have proposed a system of medical reforms that would deal with the cost problems in both the insurance and medical care sectors of our health care system and would ensure good care for everyone. I recommend replacement of the current mix of public and private insurance plans with universal coverage for comprehensive care that would be funded by a progressive national health insurance tax. Medical care would be provided through community-based not-for-profit multi-specialty group practices, which would be staffed by salaried physicians. When medical insurance is no longer a for-profit business, when physicians no longer are paid on a fee-for-service basis, and when the entire health care delivery system is not-for-profit, economic incentives to over- or underserve the needs of patients can be eliminated by appropriate regulation and we can expect improved quality of care at lower costs. The total national expenditure on medical care can be controlled by the level of national funding, while decisions about the proper use of medical resources can be safely left where they belong, in the hands of physicians and their patients.

Carrying out such a transformation of the health care system would of course be a formidable task, probably achievable only in gradual steps. It would require a sea change in the current political climate. A large part of the public, supported by most business leaders who are outside the medical-industrial complex, and by an awakened medical profession, would have to be convinced that a major reform of this kind offers the only chance for an equitable but affordable medical care system of good quality. In a just-published commentary in the New England Journal of Medicine (“Doctors as the Key to Health Care Reform”, NEJM , September 24, 2009) I explain how crucial change in the organization and payment of medical services is to achieving a sustainable health care system. The medical profession will have to be a willing and active partner in carrying out these reforms.

Lawmakers need votes and public support even more than the money from vested interests, so they probably would act if a majority of voters were to make its wishes clear and if the medical profession were part of this awakening. But before public opinion can be galvanized to demand a sweeping change of this kind we may, unfortunately, have to experience a disastrous financial collapse of the health care system, with widespread loss of benefits. An expansion of coverage without changing the medical care delivery system and controlling medical inflation, might very well hasten such a collapse.

Comment by Rabbi Michael Lerner:

A different and shorter version of this article appeared today in the New England Journal of Medicine.

We at Tikkun believe that Dr. Reiman’s analysis is extremely important, because it helps people understand why the current plan to expand coverage by mandating coverage so that everyone has to buy an insurance policy, without creating a vigorous public option to lower costs, and without challenging the ability of health care profiteers to endlessly raise costs, will bankrupt the system and provide the insurance companies and other profiteers with the argument that “we tried government intervention in health care and all it succeeded in doing is to raise the costs for everyone an eventually lead to collapse.”

This is a perfect example of why the good is sometimes really IS the enemy of the best–because a “good” step forward in health care of the sort that is now being considered by the centrist Democrats could actually lead to a disastrous right-wing victory in the future that would lead to a further weakening of all social restraints on corporate profiteering at the expense of human needs–unless we get a health care reform that from the start challenges the profit motive and the Old Bottom Line thinking that the centrist Democrats are trying to accommodate in their various reform proposals.

The New Bottom Line proposed by the Network of Spiritual Progressives and more fully developed in its Spiritual Covenant with America (www.spiritualprogressives.org) calls for a whole new approach to medicine that incorporates the “single-payer plan” and the elimination of profit-motive from health care proposed by Dr. Relman as well as a call to include Western medicine but expand beyond it to emphasize other modalities with a more holistic approach.

Some people argue, “Lets get what we can now, little reform by little reform, and then later we can deal with these larger issues.” But Reiman’s argument provides a reason to fear that there will be no such “later” because the reforms put in place now may prove so costly that people will feel they tried reform and it didn’t work, so abandon the entire effort and go back to the unregulated marketplace in health care that will still “work” for the upper middle class and wealthy while leaving even greater numbers of middle income and poor people without any ability to access decent health care.

By Holly Sklar
Distributed by McClatchy-Tribune News Service
Sept 25, 2009

More Americans die of lack of health insurance than terrorism, homicide, drunk driving and HIV combined.

Grandma could be dead from lack of health insurance before she turns 65 and gets Medicare – 80 percent of first-time grandparents are in their 40s and 50s.

America is the only country that rations the right to health care to those 65 and older.

Lack of health insurance kills 45,000 American adults a year, according to a new study published in the American Journal of Public Health. One out of three Americans under age 65 had no private or public health insurance for some or all of 2007-2008.

You can’t go the emergency room for the screening that will catch cancer or heart disease early, or ongoing treatment to manage chronic kidney disease or asthma. And even emergency care is different for the insured and uninsured. Studies show uninsured car crash victims receive less care in the hospital, for example.

Even with health insurance, many Americans are a medical crisis away from bankruptcy. Research shows 62 percent of all bankruptcies in 2007 were medical, a share up 50 percent since 2001. Most of the medically bankrupt had health insurance – the kind insuring profits, not health care.

Health insurance executives don’t worry about going bankrupt from getting sick. Forbes reports that CIGNA’s CEO made $121 million in the last five years and Humana’s CEO made $57 million.

We’re harmed by health industry and political leaders following the Hypocritic Oath: Promise a lot, and deliver as little as possible.

Wendell Potter, CIGNA’s chief of corporate communications until quitting in 2008, testified to Congress, “The status quo for most Americans is that health insurance bureaucrats stand between them and their doctors right now, and maximizing profit is the mandate.” He said, “Every time you hear about the shortcomings of what they call ‘government-run’ health care, remember this: what we have now … and what the insurers are determined to keep in place, is Wall Street-run health care.”

Premiums for employer-sponsored family health insurance jumped 131 percent between 1999 and 2009 – from $5,791 to $13,375 – hurting businesses, employees and families.

Contrary to myth, the United States does not have the world’s best health care. We’re No. 1 in health care spending, but No. 50 in life expectancy, just before Albania, according to the CIA World Factbook. In Japan, people live four years longer than Americans. Canadians live three years longer. Forty-three countries have better infant mortality rates.

One or two health insurance companies dominate most metropolitan areas in the United States.

Health industry lobbyists and campaign contributors have gotten between you and your congressperson so they can keep getting between you and your doctor. There are 3,098 health sector lobbyists swarming Capitol Hill – nearly six for every member of Congress.

As Business Week put it in August, “Health insurers are winning.” They “have succeeded in redefining the terms of the reform debate to such a degree that no matter what specifics emerge in the voluminous bill Congress may send to President Obama this fall, the insurance industry will emerge more profitable.”

President Obama should listen to his doctor. Dr. David Scheiner was Obama’s doctor for 22 years in Chicago. On the July 30 anniversary of Medicare, Scheiner said, “I have never encountered an instance where Medicare has prevented proper medical care … Insurance companies frequently interfere and block appropriate care.”

Scheiner belongs to Physicians for a National Health Program, which, like a majority of Americans, favors Medicare for All – 58 percent favored “Having a national health plan in which all Americans would get their insurance through an expanded, universal form of Medicare-for-all” in the July 2009 Kaiser Health Tracking Poll, for example.

Tell President Obama and Congress, Yes we can have Medicare for All. Rep. Anthony Weiner’s amendment would substitute the text of the Expanded and Improved Medicare for All Act (HR 676), which has 86 co-sponsors, for House legislation HR 3200. Like the even worse Baucus bill in the Senate, HR 3200 would feed for-profit insurers more customers without providing the universal health care Medicare could provide at much lower cost.

It’s time to stop peddling health reform snake oil.

Medicare for All won’t kill Grandma, but it may save her children and grandchildren.

Note: Holly Sklar is the author of “Raise the Floor: Wages and Policies That Work for All of Us” and “Streets of Hope: The Fall and Rise of an Urban Neighborhood.” Readers may write to her at hsklar[at]aol.com.

Copyright (c) 2009 Holly Sklar

Three articles on the connection between Sen. Max Baucus and three current and former Wellpoint executives/lobbyists, Liz Fowler, Stephen Northrup, and Michelle Easton.

The Max Baucus WellPoint/Liz Fowler Plan

By: emptywheel
Tuesday September 8, 2009

All this time I’ve been calling Max Tax health care Max Baucus’ health care plan.

But, as William Ockham points out, it’s actually Liz Fowler’s health care plan (if you open the document and look under document properties, it lists her as author). At one level, it’s not surprising that Bad Max’s Senior Counsel would have authored the Max Tax plan. Here’s how Politico described her role in Bad Max’s health care plan earlier this year:

If you drew an organizational chart of major players in the Senate health care negotiations, Fowler would be the chief operating officer.

As a senior aide to Baucus, she directs the Finance Committee health care staff, enforces deadlines on drafting bill language and coordinates with the White House and other lawmakers. She also troubleshoots, identifying policy and political problems before they ripen.

“My job is to get from point A to point B,” said Fowler, who’s training for four triathlons this summer in between her long days on Capitol Hill.

Fowler learned as a sophomore at the University of Pennsylvania that the United States was the only industrialized country without universal health care, and she decided then to dedicate her professional life to the work.

She first worked for Baucus from 2001 through 2005, playing a key role in negotiating the Medicare Part D prescription drug program. Feeling burned out, she left for the private sector but rejoined Baucus in 2008, sensing that a Democratic-controlled Congress would make progress on overhauling the health care system.

Baucus and Fowler spent a year putting the senator in a position to pursue reform, including holding hearings last summer and issuing a white paper in November. They deliberately avoided releasing legislation in order to send a signal of openness and avoid early attacks.

“People know when Liz is speaking, she is speaking for Baucus,” said Dean Rosen, the health policy adviser to former Senate Majority Leader Bill Frist (R-Tenn.).

What neither Politico nor Bad Max himself want you to know, though, is that in the two years before she came back to the Senate to help Max craft the Max Tax plan, she worked as VP for Public Policy and External Affairs at WellPoint.

So to the extent that Liz Fowler is the Author of this document, we might as well consider WellPoint its author as well.

http://emptywheel.firedoglake.com/2009/09/08/liz-fowlers-plan/

Chief health aide to Baucus is former Wellpoint executive

By Kevin Connor
Eyes on the Ties Blog
Sep 01, 2009 at 09:32 EST

Senator Max Baucus’s chief health adviser, Elizabeth Fowler, has been called the “chief operating officer” of the healthcare reform process by Politico — the staffer who sets legislative deadlines, coordinates with the White House on policy, and is understood to speak for Baucus on health policy issues. Washington Post blogger Ezra Klein has called her the most influential health staffer in the Senate.

Fowler, as it turns out, is also fresh off a lucrative stint working for the insurance industry: from 2006 to 2008, she was VP of public policy for Wellpoint, the insurance giant.

That’s right, an insurance industry hack is the quiet name directing the healthcare reform process on Capitol Hill.

It gets worse. Baucus’s chief health advisor prior to Fowler, Michelle Easton, currently lobbies for Wellpoint as a principal at Tarplin, Downs, & Young.

Fowler worked for Baucus as chief health aide from 2001 to 2005, as well. The revolving door is spinning so fast, in this particular case, that it’s hard to tell whether Baucus prefers hiring directly from Wellpoint, or vice versa (or maybe they use the same headhunter?).

These ties were uncovered through our project with citizen journalists at the Huffington Post Investigative, which aimed to track down Congressional staffers-turned-healthcare lobbyists. We’re in the process of wrapping up the project, which so far has identified 450 staffers-turned-lobbyists. Analyst @sundin was the first to notice Easton’s trips from Capitol Hill to K Street and back.

Klein and the Politico both failed to mention Fowler’s insurance industry ties, while hailing her as an important figure in the healthcare reform process. The Politico mentioned her time in the private sector without getting into specifics, and Klein called her hiring by Baucus reason for hope, without mentioning where she was hired from.

Whatever the reason for the omissions, it’s a good illustration of why LittleSis matters, and why research projects like this one will play an important role in the emerging news ecosystem.

We’ll have more on the dynamic duo at the Baucus-Wellpoint nexus, and potential policy implications, over the next week.

http://blog.littlesis.org/2009/09/01/chief-health-aide-to-baucus-is-former-wellpoint-executive/

Wellpoint lobbyist & ex-Enzi staffer wrote key parts of Baucus plan

By Kevin Connor
Eyes on the Ties Blog
Sep 11, 2009 at 10:32 EST

Still more evidence that Wellpoint wrote the Baucus plan: the insurance company’s lobbying efforts in DC are headed up by Senator Mike Enzi’s former chief health adviser at Senate HELP, Stephen Northrup. Enzi is a member of Baucus’s so-called “Gang of Six” shaping the bipartisan compromise bill.

In fact, key provisions in the Baucus plan apparently draw on industry-inspired legislation first introduced by Enzi in 2006, while Northrup was still his chief health aide.

Consumer Watchdog first called attention to the similarities, particularly with respect to a part of the plan that would help insurance companies avoid state regulation:

The plan would result in a “race to the bottom” in health care regulation by allowing insurance companies that participate in “health care compacts” to choose the weakest state law to govern all their policies, regardless of which state the policies are sold in. Currently, insurance companies must abide by the state laws of any state where they sell insurance. The Baucus plan resembles an industry proposal carried by Mike Enzi (R-WY) in 2006 discussed below.

So this bill really did get written by insurance industry VPs — past and present. Liz Fowler, the current Baucus staffer who wrote the plan, was a Wellpoint executive last year. And Northrup, the former Enzi staffer who wrote the original iteration of this bill, is now on the Wellpoint payroll.

Northrup, who is on the growing LittleSis list of Congressional staffers-turned-healthcare lobbyists, was Enzi’s chief health aide from 2003 to 2006. He joined Wellpoint as vice president of federal affairs in Washington in 2007, and is “responsible for leading WellPoint’s advocacy efforts before Congress and various federal government agencies,” according to Modern Healthcare.

Northrup had been through the revolving door before, joining Enzi’s staff after serving as executive director of the Long Term Care Pharmacy Alliance — just in time to help craft Part D, the Medicare reform widely considered a giveaway to pharmaceutical interests.

Even the trigger-shy White House has spoken out against Enzi, who has established himself as the most recalcitrant member of the Gang of Six (with Grassley a close second). There has been some question about whether the group would hold together, given the pair’s apparent unwillingness to compromise. But again and again, the gang has stuck together. On Wednesday, MSNBC reported that Grassley and Enzi were still at table.

Editorial
Louisville Courier-Journal
September 22, 2009

Forty-five thousand a year.

That’s not a salary. That’s a statistic.

And behind every number in that statistic is the life of a human being that ended because the person was uninsured.

So says a new study issued by Harvard-based researchers associated with Physicians for a National Health Program, a 17,000- member network of doctors who support single-payer insurance in the United States.

The study says almost 45,000 Americans die each year because they lack health insurance, a number that outpaces annual rates of killers such as kidney disease. The reason: The uninsured lack preventive care and screenings and go longer without treatment.

The researchers analyzed data from national health surveys conducted by the federal government, which tracked 9,000 adults for eight years and followed up with them later. The researchers extrapolated those results with Census data and produced results that show that the uninsured have a 40 percent higher risk of premature death.

Given the tempo and tone of the raging health care debate, the results had barely been made public before critics began to slam it as flawed. Free-market reform groups such as the National Center for Policy Analysis attacked the study’s death risk as “significantly overstated.”

The PNHP numbers are higher than those of other studies, but other reports also have shown markedly increased risks for the uninsured. A 2002 study from the Institute of Medicine, for example, showed 18,000 people died every year from lack of health insurance. The American Cancer Society in 2007 said cancer patients without insurance were more than one-and-a-half times more likely to die within five years than those with insurance.

Twenty thousand? Forty-five thousand? Are Americans willing to settle for these numbers of dead, for lack of insurance, in the world’s wealthiest nation?

http://www.courier-journal.com/article/20090922/OPINION01/909220313/Fatal-statistics