PNHP

Health Insurance Exchange? Lessons from California

Health Insurance Exchange? Lessons from California

Building a National Insurance Exchange: Lessons from California

California HealthCare Foundation
Issue Brief
July 2009
Among the deliberations now taking place in the nation’s capitol regarding federal approaches to expanding health coverage, virtually all incorporate the idea of an insurance exchange – an entity to which people can go to select a health plan from a broad range of offerings. Over the past 15 years, California gained extensive experience in designing and operating just such an exchange, an effort that ultimately proved unsustainable.
The California Exchange
The Expectation
1. Provide an easy to navigate single point of entry where people could go to choose among several health plans.
2. Reduce the cost of coverage, using three primary mechanisms:
* Reduce administrative costs by achieving economies of scale
* Command lower prices
* Foster market competition
3. Enhance portability of coverage
The Reality
The actual experience of the California exchange taught some hard lessons. It showed that none of theses objectives is easily achieved.
The Participation Problem
… as long as the exchange is not the exclusive source of coverage for some populations, health plans may be reluctant to participate…
Insurers do not particularly like the head-to-head competition that is a feature of the exchange concept… Insurers always prefer to insure whole groups directly rather than compete in the exchange.
The Elusiveness of Savings
* Few administrative efficiencies
* A lack of pricing power
* Exposure to adverse selection
People involved in the operations of the California exchange agreed that when there is competition for the same customers within and outside the exchange, the exchange is in “extreme peril” of becoming a victim of adverse selection… Eventually the exchange will fail.
Choosing the Right Model
But once individual choice is part of the exchange design, insurers will prefer to generate business outside of the exchange, as occurred in the California experience… The insurers will still have an incentive to direct higher-risk people to the exchange rather than insuring them directly, in hopes that they might pass off some of the “bad” risks to other insurers.
http://www.chcf.org/documents/insurance/BuildingANationalInsuranceExchange.pdf
For a description of the Health Insurance Exchange proposed in the House Tri-Committee bill, insert H.R.3200 in the Thomas search box and read Title II:
http://thomas.loc.gov/

Most progressive policy wonks observing the reform process taking place in Washington have been quite smug. As the battles take place over a public option, over taxing employer-sponsored plans, or over the eligibility thresholds for government subsidies, these wonks are complacent knowing that the really important reform taking place is the establishment of the Health Insurance Exchange. Or so they believe.
Within the Exchange the regulated private insurance industry will have to provide standard benefit packages, at affordable premiums made possible by competition, and without the intrusive perversities that currently permeate the industry and its products. What could be wrong with this?
President Obama and the Democrats in Congress are currently facing a barrage of criticism for supporting the government takeover of health care. To fend off this criticism, what are the very first words out of President Obama’s mouth? “You can keep the insurance you have!” So much for an insurance exchange market of comprehensive, affordable private health plans.
Why would a phenomenally successful private insurer ever want to compete with itself by offering a heavily regulated Health Insurance Exchange product that has unaffordable premiums because of adverse selection? Because of the requirement of risk adjustment within the Exchange, and because individuals and employers with high health care costs will seek relief in the Exchange, all products offered by the Exchange will be too expensive.
The Health Insurance Plan of California (later PacAdvantage) was designed not unlike the current federal proposals – an insurance exchange especially geared for small businesses. Because of adverse selection, it became a victim of the death spiral, and closed in 2006.
The only way a Health Insurance Exchange could work would be if we moved all existing private plans into the Exchange, and established a system that would effectively pool risk. Even then it would be very expensive, partly because of the profound administrative inefficiencies, and it would still fall short on universality and equity. And at that we would still have to address the problem of the very large sector of our population who would not qualify for subsidies but who still could not afford the high premiums and out-of-pocket expenses of private insurance.
The least expensive, most efficient, and most effective method of ensuring that everyone has affordable access to the health care that they need is a single payer, Medicare-for-all, national health program. There will be a lot of noise on health care reform during the August recess. Just make sure that our noise is the loudest!

Health Insurance Exchange? Lessons from California

Building a National Insurance Exchange: Lessons from California

California HealthCare Foundation
Issue Brief
July 2009

Among the deliberations now taking place in the nation’s capitol regarding federal approaches to expanding health coverage, virtually all incorporate the idea of an insurance exchange – an entity to which people can go to select a health plan from a broad range of offerings. Over the past 15 years, California gained extensive experience in designing and operating just such an exchange, an effort that ultimately proved unsustainable.

The California Exchange

The Expectation

1. Provide an easy to navigate single point of entry where people could go to choose among several health plans.

2. Reduce the cost of coverage, using three primary mechanisms:

* Reduce administrative costs by achieving economies of scale
* Command lower prices
* Foster market competition

3. Enhance portability of coverage

The Reality

The actual experience of the California exchange taught some hard lessons. It showed that none of theses objectives is easily achieved.

The Participation Problem

… as long as the exchange is not the exclusive source of coverage for some populations, health plans may be reluctant to participate…

Insurers do not particularly like the head-to-head competition that is a feature of the exchange concept… Insurers always prefer to insure whole groups directly rather than compete in the exchange.

The Elusiveness of Savings

* Few administrative efficiencies
* A lack of pricing power
* Exposure to adverse selection

People involved in the operations of the California exchange agreed that when there is competition for the same customers within and outside the exchange, the exchange is in “extreme peril” of becoming a victim of adverse selection… Eventually the exchange will fail.

Choosing the Right Model

But once individual choice is part of the exchange design, insurers will prefer to generate business outside of the exchange, as occurred in the California experience… The insurers will still have an incentive to direct higher-risk people to the exchange rather than insuring them directly, in hopes that they might pass off some of the “bad” risks to other insurers.

http://www.chcf.org/documents/insurance/BuildingANationalInsuranceExchange.pdf

For a description of the Health Insurance Exchange proposed in the House Tri-Committee bill, insert H.R.3200 in the Thomas search box and read Title II:
http://thomas.loc.gov/

Comment:

By Don McCanne, MD

Most progressive policy wonks observing the reform process taking place in Washington have been quite smug. As the battles take place over a public option, over taxing employer-sponsored plans, or over the eligibility thresholds for government subsidies, these wonks are complacent knowing that the really important reform taking place is the establishment of the Health Insurance Exchange. Or so they believe.

Within the Exchange the regulated private insurance industry will have to provide standard benefit packages, at affordable premiums made possible by competition, and without the intrusive perversities that currently permeate the industry and its products. What could be wrong with this?

President Obama and the Democrats in Congress are currently facing a barrage of criticism for supporting the government takeover of health care. To fend off this criticism, what are the very first words out of President Obama’s mouth? “You can keep the insurance you have!” So much for an insurance exchange market of comprehensive, affordable private health plans.

Why would a phenomenally successful private insurer ever want to compete with itself by offering a heavily regulated Health Insurance Exchange product that has unaffordable premiums because of adverse selection? Because of the requirement of risk adjustment within the Exchange, and because individuals and employers with high health care costs will seek relief in the Exchange, all products offered by the Exchange will be too expensive.

The Health Insurance Plan of California (later PacAdvantage) was designed not unlike the current federal proposals – an insurance exchange especially geared for small businesses. Because of adverse selection, it became a victim of the death spiral, and closed in 2006.

The only way a Health Insurance Exchange could work would be if we moved all existing private plans into the Exchange, and established a system that would effectively pool risk. Even then it would be very expensive, partly because of the profound administrative inefficiencies, and it would still fall short on universality and equity. And at that we would still have to address the problem of the very large sector of our population who would not qualify for subsidies but who still could not afford the high premiums and out-of-pocket expenses of private insurance.

The least expensive, most efficient, and most effective method of ensuring that everyone has affordable access to the health care that they need is a single payer, Medicare-for-all, national health program. There will be a lot of noise on health care reform during the August recess. Just make sure that our noise is the loudest!

Health Debate: Costs and Benefits

Letter to the Editor
New York Times
August 5, 2009

To the Editor:

Universal coverage and cost control are not conflicting aims.

Canada spends 10 percent of gross domestic product on health care, and everyone is covered. The United States spends 16 percent of G.D.P., but tens of millions lack coverage. The cost difference is almost entirely due to higher administrative costs and higher prices, which are directly related to the economics of a multi-payer system.

The lessons from Canada and other countries are clear. If you focus on cost control, you will fail. If you cover everyone because it’s decent and just, you will also achieve economic sustainability.

America, it’s time to do the right thing and then reap the rich rewards of moral public policy.

Michael M. Rachlis
Toronto, Aug. 2, 2009

The writer, a doctor, is a health policy consultant.

House vote on single payer will be historic first, doctors group says

Physicians call on lawmakers to 'do the right thing' on health reform

FOR IMMEDIATE RELEASE Aug. 5, 2009 Contact: Quentin Young, M.D., (312) 782-6006, info@pnhp.org Mark Almberg, PNHP, (312) 782-6006, mark@pnhp.org David Lerner or Karmen Ross, Riptide Communications, (212) 260-5000 Hailing last week’s pledge by House Speaker Nancy Pelosi to hold a floor debate and vote on single-payer health reform this fall, a group of 16,000 physicians is launching an intensified campaign to educate lawmakers about the urgency of a “Medicare-for-All” solution to the nation’s health care crisis. Leaders of Physicians for a National Health Program (PNHP) say their campaign includes a stepped-up program of visits by doctors to House members in their home districts during the August recess. Last Friday’s commitment by Pelosi (D-Calif.) to Rep. Anthony Weiner (D-N.Y.) to put his single-payer amendment to H.R. 3200, the House leadership’s health reform bill, to an up-or-down vote before the full House has set the stage for first-ever floor vote of its kind. The House debate on the amendment could begin as early as September. “Single payer has gone from being ‘off the table’ to ‘on the floor,'” said Dr. Quentin Young, national coordinator of PNHP. “This dramatic turn of events is a striking indicator of our success. It shows the House leadership recognizes the strong public support – including among doctors – for removing the wasteful insurance company middlemen from our health system and redirecting the resultant savings into care.” Weiner’s amendment would delete most of the language in the House bill and instead substitute language from H.R. 676, the single-payer bill introduced by Reps. John Conyers Jr. (D-Mich.) and Dennis Kucinich (D-Ohio). The Weiner amendment, unlike the House leadership’s bill, assures universal, comprehensive, and high-quality coverage, free choice of doctor and hospital, and no co-pays or deductibles through a publicly financed system similar to Medicare. Young said that because of massive savings on private insurance overhead and paperwork, the amendment would entail no increase in U.S. health spending, in contrast to the House bill’s $1 trillion price tag over 10 years. “By recapturing the administrative waste associated with our present multi-payer, for-profit private insurance system, estimated to be $400 billion annually, a single-payer program would have more than enough resources to cover everyone who lacks insurance now and to upgrade everyone else’s coverage,” he said. “A single-payer system would also possess strong cost-control tools like bulk purchasing of drugs, negotiation of fees and global hospital budgeting, controls that are notably absent in the House bill,” he said. Young says many union, civic and faith-based groups will be watching how lawmakers vote with an eye to the 2010 election cycle. “Lawmakers now have a golden opportunity to stand up for the best interests of their constituents, to rebuff the private, for-profit health insurance industry, and to assure the health of our nation,” he said. He continued: “Many members of Congress – including Speaker Pelosi – have told constituents that they personally support a single-payer, Medicare-for-all approach, but claim they can’t vote for it because it’s not politically feasible. Yet polls that show they would have the public’s support for such a stand. Now we’ll be watching to see whether their votes match their words.” Single-payer bills have been introduced in Congress repeatedly over the past 60 years – starting with the Wagner-Murray-Dingell bill in the 1940s, and including the Kennedy-Griffiths bill of the 1970s and the Wellstone, McDermott and Russo bills of the 1990s – but none has ever reached the floor of the House or Senate.

Physicians for a National Health Program (www.pnhp.org) is an organization of 16,000 doctors who advocate for single-payer national health insurance. Several leaders of PNHP have testified before congressional committees in the current health reform debate. (See links below). To interview any of these or other spokespersons, please call (312) 782-6006. Testimony of Steffie Woolhandler, M.D., M.P.H., on medical bankruptcy and health reform before the House Judiciary Committee’s Subcommittee on Administrative and Commercial Law, July 28, 2009 https://pnhp.org/news/2009/july/testimony_of_steffie.php Testimony of Dr. Woolhandler before the Health Subcommittee of the House Energy and Commerce Committee, July 24 https://pnhp.org/news/2009/june/testimony_of_steffie.php Testimony of Quentin Young, M.D., M.A.C.P., before the House Ways and Means Committee, June 24 https://pnhp.org/news/2009/june/testimony_of_quentin.php Testimony of Margaret Flowers, M.D., before the Senate Health, Education, Labor and Pensions Committee, June 11 https://pnhp.org/news/2009/june/testimony_of_margare.php Testimony of Dr. Walter Tsou before the House Subcommittee on Health, Employment, Labor and Pensions, June 10 https://pnhp.org/news/2009/june/single_payer_bold_.php Testimony of David U. Himmelstein, M.D. before the Health, Employment, Labor and Pensions Subcommittee of the House Committee on Education and Labor, April 23 https://pnhp.org/news/2009/april/testimony_of_david_u.php

Why Single Payer Advocacy Matters Now More Than Ever

John Nichols
The Beat, a Nation blog
08/04/2009

How should serious supporters of health-care reform spend the month of August?

Not by getting trapped in the narrow “debate” between “party of no” Republicans who favor no reform at all, and Blue Dog Democrats, whose “reform” is to make a bad system worse.

And not by campaigning for “buzz words — “public option,” “employer mandates” — or whatever President Obama or Speaker Pelosi happen to favor this week. There will be plenty of advertising and organizing to that end, including a $15 million expenditure by the AFL-CIO.

Americans who want to tip the debate in the most progressive direction should take advantage an opening provided at the last minute during negotiations to get a bill approved by the House Energy and Commerce Committee.

And they should do so by advocating even more aggressively for single-payer health care.

One of the many side deals that House Speaker Nancy Pelosi, D-California, and Energy and Commerce chair Henry Waxman, D-California, had to cut to get the votes they needed for the compromise reform measure that was approved before the House broke for its August recess will allow a floor vote on real reform.

Waxman sidetracked a move by New York Congressman Anthony Weiner to replace his proposal with a single-payer plan by agreeing — with Pelosi’s approval — to schedule a vote by the full House on the plan to replace the current for-profit system with a Medicare-style plan that covers all Americans and controls costs.

“A lot of members on our committee want a vote on that,” Waxman, a California Democrat who has worked closely with the Speaker to advance a moderate reform agenda, said of single-payer. “I believe their wishes will be accommodated.”

Weiner is declaring a sort of victory, saying that: “Single-payer is a better plan and now it is on center stage. Americans have a clear choice. Their Member of Congress will have a simpler, less expensive and smarter bill to choose. I am thrilled that the Speaker is giving us that choice.”

Of course, getting a September vote on single-payer does not mean that single-payer will get the votes.

With the Obama administration and congressional leaders determined to compromise rather than fight, it is unlikely in the extreme that the current debate will end with the adoption of a single-payer plan. Even if the House approved one, it would still face a fight in the Senate.

But just as Republicans are willing to just say “no” to any reform, progressives should just say “yes” to real reform.

Campaigning for single-payer in August — by demanding that members of the House agree to support such a plan when it comes up for a vote, and by urging senators to schedule and support a similar vote in their chamber — is the best was to assure that whatever reform ultimately comes will err on the side of Americans who need health care rather than insurance companies that would deny them that care.

At the very least, single-payer advocacy should preserve an amendment sponsored by Congressman Dennis Kucinich, D-Ohio, which would allow states to experiment with single-payer programs even if the federal government refuses to do so. That’s a significant matter, since Canada’s national health care program began with single-payer experiments at the provincial level.

The worst mistake that progressives could make in August would be to put their time and energy into getting members of Congress to agree to back a barely-acceptable compromise that could end up being unacceptable by the time the lobbyists and their political handmaidens finish with it.

Better to get representatives and senators to commit to back single-payer bills.

That does not prevent them from ultimately agreeing to compromise measures.

But it gets them to begin on the side of real reform, and lessens the likelihood that the eventual deals will be as bad as the schemes that the Blue Dogs tried to impose before the break.

Perhaps just as importantly, a strong vote for single-payer will remind the Obama administration that the president was right when he said six years ago that single-payer was the right response to the mess that private insurers and their allies have made of our health-care system.

Groups that back single-payer are gearing up for August activism.

Keep track of the most important advocacy on the health care issue by following the work of Physicians for a Natonal Health Program at www.pnhp.org, the California Nurses Association at http://www.pdamerica.org.

Activist David Swanson is suggesting that this should be “Single-Payer Summer.”

Swanson’s right.

Only if Americans who favor real reform make this “Single-Payer Summer” will we have anything worth considering in the fall.

http://www.thenation.com/blogs/thebeat/458046/why_single_payer_advocacy_matters_now_more_than_ever

We need a single payer

By Laura McClure
The Daily Star (Oneonta, NY)
Published: August 01, 2009

People in our area, and across the country, desperately need health-care reform. If the reforms President Obama is urging pass Congress, many uninsured people will get access to some kind of insurance, and that could be a great thing for them. But it’s hard to exaggerate what a hash Congress and Obama have made of fixing our famously dysfunctional health-care system.

What we need is a single federal insurance plan that covers everyone from birth to death. An improved version of Medicare that stays with you no matter where you work — and once you’ve retired. We’d have complete choice of doctors and the full range of private and public hospitals to choose from.

What we wouldn’t have is 1,200 private insurance companies feeding off our need for health care — forcing hospitals and doctors to hire paper-pushers instead of people who actually provide care. Almost a third of the money we spend on health care in the U.S. can be attributed to insurance industry-generated waste.

One of the great virtues of such a “single-payer” system is that it would actually be cheaper than what we have now — and way cheaper than the trillion-dollar plan our politicians are now cooking up. Every industrialized country with a version of single-payer spends about half what we do — or less — for health care, and they have better health outcomes and more satisfied citizens.

Obama knows this. He used to be a vocal supporter of single-payer health care. He still says it would be the best system if we were starting from scratch. Instead, we’re starting with an antiquated employment-based system, a cobbled together mishmash of private and public health plans.

The sheer bureaucracy of it is driving us all insane. Yet now we’re thinking we should shovel a trillion more into this system to prop it up for awhile.

This is a staggering failure of political leadership. What are the politicians so afraid of? Well, the insurance industry. Republicans and Democrats, including Obama (big-time), were elected in part through the massive support of the insurance companies and other corporate interests with a stake in our current system. The guy who is ferrying legislation through the Senate to finance health-care reform, Max Baucus of Montana, a Democrat, is swimming in a sea of health industry money.

But I think it’s more than just money. It’s timidity — fear of real change. And that’s not just a problem politicians have. We’ve all got it. We get locked into our mind-sets and can’t get out.

Republicans tend to be imprisoned by their idea that government can’t do anything right and that all it does it waste money. Dear Republicans: If you are concerned about fiscal responsibility, please examine single-payer health care. It’s a bargain — and it’s the only way to cover everyone well without spending more money.

Republicans and some Democrats are also stuck on the idea that “competition” is always good.

They hope that competition _ including between private insurance companies and a public insurance plan — will save us money. Hmm. Don’t we already have plenty of insurance company competition — and a health-care system that costs way more than any other on the planet?

As for private-public competition, we’ve got that in the Medicare Advantage program, which allows private companies to pick off some Medicare recipients. This has caused the cost of Medicare to spiral up. Two international agencies _ the World Health Organization and the Organization for Economic Cooperation and Development — did studies of what happened when different countries tried introducing private competition into their health care systems with the aim of reducing cost. Both studies found that it increased costs and decreased the level of fairness in the system.

But there’s a larger philosophical problem here, Republicans. (I’ll get to Democrats soon!) Imagine someone is breaking into your house. You flip desperately through the yellow pages for private cops who will accept your crime insurance plan. You call seven of them. Unfortunately, they’ve all got data on you, and it turns out you were recently laid off from your job and aren’t that great a prospect. So only one private cop shows up (way too late), and makes a bid to provide some law enforcement — for a huge sum you can’t afford.

Thank goodness for our publicly funded, universal police force! There’s only one number to call, and the service is free at point of use. Yes, we pay taxes to support our cops. But we’re glad to, because they help keep us safe. Everyone’s covered. And nobody is making a calculation about whether you “deserve” police protection or not.

So what’s so different about a medical crisis? Instead of someone breaking into your house, you’ve got cancer or heart disease stalking you. You need care. You don’t need bills, deductibles, co-pays, or competing private companies angling for your money — or worse, denying you care.

But Republicans aren’t the only ones locked inside an ideological box. Many Democrats have the idea that any amount of money is okay to spend on “human needs.” We just need to swallow that bitter trillion-dollar pill in the interests of health care for all.

But this is one case where spending more money is not the answer. We need to spend less money — or at least no more than we are right now. The average family health care premium has jumped to almost $13,000. How much higher can it go? Health care is literally eating up the budget on the national level as well: The U.S. now spends 16 percent of its GDP on health care — compared to, say, less than 6 percent for education. By comparison, Canada spends 10 percent. Taiwan, which adopted a single-payer system in 1995 after a lot of shopping around, spends 6 percent of GDP on health care and has better health outcomes than we do. I wish we were that smart!

We’ve got to ask where all our money will be going. The current health-care proposals will use our tax dollars to help people buy private health insurance. This may increase the number of people who are considered “insured,” but it will also increase exponentially the profits and paper-pushing of insurance companies — which is why the insurance industry largely supports this reform. Providing more money for this system is like continually putting change in a pocket with a hole.

Another question we have to ask: Who suffers most from continually spiraling health-care costs? Even if the plan is partly financed through a tax on the very rich (which I’d be for), the real victims of rising costs will be poor and working class people. Just look at the state of Massachusetts, which passed a health reform bill not unlike the ones Congress is now considering. More people now have some kind of insurance coverage, but the plan is busting the budget.

The state has had to cut social services and ramped up premiums and co-pays for the health plan. The out-of pocket costs are so high, many of the newly “insured” can’t afford to go to the doctor or get their prescriptions filled. In a 2009 survey, 44 percent of low-income residents said they were hurt by the plan; 33 percent said they were helped. (Question: Are you “insured” if you don’t get that lump in your breast checked out because you just can’t swing the $1,000 deductible?)

Obama and others maintain that their reform plans will lower costs through things like computerized record-keeping and moving away from a fee-for-service approach. These are good ideas, but there’s little evidence they will save money any time soon. And unfortunately trying to implement any rational money-saving plan under our current system is like herding cats. There are so many players, many of whom are in it for themselves, and no one has sufficient clout to enforce the rules. Under a single-payer plan, money-saving reforms would be a lot easier to implement and ultimately more effective.

Some people — both Democrats and Republicans — just can’t fathom a reform that would involve eliminating an entire industry, namely the health insurance industry. What would happen to all those workers?

It’s a good question, and one that has been raised by Obama and many others, including local Rep. Michael Arcuri. Any Medicare-for-All program we enact needs to include a major transition plan for workers in this industry. The bill I support, HR 676, would give displaced insurance workers first dibs on jobs in the new health-care system and two years of unemployment benefits if they don’t find one. (Note: Even a more generous transition plan would be a drop in the bucket compared to the costs the insurance industry now imposes on us all.)

But is that really what our fear of true reform comes down to? An insistence on a jobs program for health insurance industry workers? Personally, I would support a major jobs program. But I’d want the jobs to be useful ones. And though I’m sure most insurance company employees are good people who do the best job they can, their role in our health-care system is to help their company make a profit off people’s desperate need for medical care. And we just can’t have that. We can’t afford it, and it’s wrong.

Whether the current health-care reform plans pass or fail, when it’s all over, we’re still going to have a big health-care mess on our hands. Someday we’re going to have to summon up all our courage and go for the real thing.

Laura McClure is a member of the Healthcare Work Group of the Coalition for Democracy of Central New York.

QOTD: A Canadian doctor diagnoses U.S. health care

A Canadian doctor diagnoses U.S. healthcare

By Michael M. Rachlis
Los Angeles Times
August 3, 2009
Universal health insurance is on the American policy agenda for the fifth time since World War II. In the 1960s, the U.S. chose public coverage for only the elderly and the very poor, while Canada opted for a universal program for hospitals and physicians’ services. As a policy analyst, I know there are lessons to be learned from studying the effect of different approaches in similar jurisdictions. But, as a Canadian with lots of American friends and relatives, I am saddened that Americans seem incapable of learning them.
The U.S.’ and Canada’s different health insurance decisions make up the world’s largest health policy experiment. And the results?
On coverage, all Canadians have insurance for hospital and physician services. There are no deductibles or co-pays. Most provinces also provide coverage for programs for home care, long-term care, pharmaceuticals and durable medical equipment, although there are co-pays.
On the U.S. side, 46 million people have no insurance, millions are underinsured and healthcare bills bankrupt more than 1 million Americans every year.
Lesson No. 1: A single-payer system would eliminate most U.S. coverage problems.
Lessons No. 2 and 3: Single-payer systems reduce duplicative administrative costs and can negotiate lower prices.
Lesson No. 4: Single-payer plans can deliver the goods because their funding goes to services, not overhead.
The Canadian system does have its problems, and these also provide important lessons.
However, according to the New York-based Commonwealth Fund, both the American and the Canadian systems fare badly in these areas.
On closer examination, most of these problems have little to do with public insurance or even overall resources.
Lesson No. 5: Canadian healthcare delivery problems have nothing to do with our single-payer system and can be fixed by re-engineering for quality.
U.S. health policy would be miles ahead if policymakers could learn these lessons. But they seem less interested in Canada’s, or any other nation’s, experience than ever. Why?
American democracy runs on money.
Compounding the confusion is traditional American ignorance of what happens north of the border, which makes it easy to mislead people. Boilerplate anti-government rhetoric does the same. The U.S. media, legislators and even presidents have claimed that our “socialized” system doesn’t let us choose our own doctors. In fact, Canadians have free choice of physicians. It’s Americans these days who are restricted to “in-plan” doctors.
Unfortunately, many Americans won’t get to hear the straight goods because vested interests are promoting a caricature of the Canadian experience.
(Michael M. Rachlis is a physician, health policy analyst and author in Toronto.)
http://www.latimes.com/news/opinion/la-oe-rachlis3-2009aug03,0,538126.story

August will be the month of sound bites on health care reform.
One of these sound bites is “unfair competition.” It is really a silly argument designed to suppress even the most feeble of reform efforts.
But the really unfair competition this month will be between those who can explain the relatively complex health policies that can benefit everyone (except those who are wasting our resources), and those who have at their command the very effective tool of simple sound bites. These sound bites relieve the listener of any responsibility to try to understand these complex issues.
Should the dialogue on reform move into discussions of effective health policies, the opponents will be ready with their sound bite diversions, including those based on the caricature of the Canadian experience suggesting that their government takeover of health care has caused Canadians to flee to the United States should they need health care – a lie supposedly “proven” by rare, bizarre anecdotes.
When the distortions and lies about Canada are brought up, interrupt (they do) with the response that Canada has a health care financing system that includes everyone and keeps health care affordable.
The United States needs the same. We need to include everyone in a system that is affordable. The problem for single payer advocates is that the program that the administration is trying to sell us will leave five percent of us out and make affordability even worse.
The real tragedy is that this war on health care financing reform will be settled by sound bites. On that war, the bad guys always win.

QOTD: A Canadian doctor diagnoses U.S. health care

A Canadian doctor diagnoses U.S. healthcare

By Michael M. Rachlis
Los Angeles Times
August 3, 2009

Universal health insurance is on the American policy agenda for the fifth time since World War II. In the 1960s, the U.S. chose public coverage for only the elderly and the very poor, while Canada opted for a universal program for hospitals and physicians’ services. As a policy analyst, I know there are lessons to be learned from studying the effect of different approaches in similar jurisdictions. But, as a Canadian with lots of American friends and relatives, I am saddened that Americans seem incapable of learning them.

The U.S.’ and Canada’s different health insurance decisions make up the world’s largest health policy experiment. And the results?

On coverage, all Canadians have insurance for hospital and physician services. There are no deductibles or co-pays. Most provinces also provide coverage for programs for home care, long-term care, pharmaceuticals and durable medical equipment, although there are co-pays.

On the U.S. side, 46 million people have no insurance, millions are underinsured and healthcare bills bankrupt more than 1 million Americans every year.

Lesson No. 1: A single-payer system would eliminate most U.S. coverage problems.

Lessons No. 2 and 3: Single-payer systems reduce duplicative administrative costs and can negotiate lower prices.

Lesson No. 4: Single-payer plans can deliver the goods because their funding goes to services, not overhead.

The Canadian system does have its problems, and these also provide important lessons.

However, according to the New York-based Commonwealth Fund, both the American and the Canadian systems fare badly in these areas.

On closer examination, most of these problems have little to do with public insurance or even overall resources.

Lesson No. 5: Canadian healthcare delivery problems have nothing to do with our single-payer system and can be fixed by re-engineering for quality.

U.S. health policy would be miles ahead if policymakers could learn these lessons. But they seem less interested in Canada’s, or any other nation’s, experience than ever. Why?

American democracy runs on money.

Compounding the confusion is traditional American ignorance of what happens north of the border, which makes it easy to mislead people. Boilerplate anti-government rhetoric does the same. The U.S. media, legislators and even presidents have claimed that our “socialized” system doesn’t let us choose our own doctors. In fact, Canadians have free choice of physicians. It’s Americans these days who are restricted to “in-plan” doctors.

Unfortunately, many Americans won’t get to hear the straight goods because vested interests are promoting a caricature of the Canadian experience.

(Michael M. Rachlis is a physician, health policy analyst and author in Toronto.)

http://www.latimes.com/news/opinion/la-oe-rachlis3-2009aug03,0,538126.story

Comment:

By Don McCanne, MD

August will be the month of sound bites on health care reform.

One of these sound bites is “unfair competition.” It is really a silly argument designed to suppress even the most feeble of reform efforts.

But the really unfair competition this month will be between those who can explain the relatively complex health policies that can benefit everyone (except those who are wasting our resources), and those who have at their command the very effective tool of simple sound bites. These sound bites relieve the listener of any responsibility to try to understand these complex issues.

Should the dialogue on reform move into discussions of effective health policies, the opponents will be ready with their sound bite diversions, including those based on the caricature of the Canadian experience suggesting that their government takeover of health care has caused Canadians to flee to the United States should they need health care – a lie supposedly “proven” by rare, bizarre anecdotes.

When the distortions and lies about Canada are brought up, interrupt (they do) with the response that Canada has a health care financing system that includes everyone and keeps health care affordable.

The United States needs the same. We need to include everyone in a system that is affordable. The problem for single payer advocates is that the program that the administration is trying to sell us will leave five percent of us out and make affordability even worse.

The real tragedy is that this war on health care financing reform will be settled by sound bites. On that war, the bad guys always win.

Single payer plan the only solution that will work

By Dorothy Sistrom
Opinion
The Register Guard
Thursday, Jul 30, 2009

Our health care system has failed. Church Women United of Eugene/Springfield has endorsed “single payer” health care for America. We have asked our members to contact our congressional representatives and the president to support House Resolution 676 and Senate Bill 703.

Our Church Women United board believes the biblical imperative to heal the sick and to serve the least of us and the call for the common good demand a single payer system where everyone receives health care. We agree with the resolution on health care reform by the United States Conference of Catholic Bishops that “Every person has the right to adequate health care. This right flows from the sanctity of human life and the dignity of all persons, who are made in the image of God.”

A single payer plan such as HR 676 takes health care out of the hands of profit-driven insurance plans and puts it in the hands of a public agency such as the one that runs Medicare so efficiently. Medicare operates with overhead costs of less than 3 percent, compared with 30 percent in private insurance plans. By doing so patient care and health care come before insurance company profit.

Under HR 676 every resident is covered, regardless of income, job status, age or health status. You may have your choice of doctor without co-payments, deductibles or premiums. All health care services are covered: hospital stays, doctor visits, lowered prescription costs, mental health, long term care, dental care. A doctor, not the insurance companies, will be in charge of your care. Every person will receive a national health card.

Who will pay for this? If we were living in any other industrial country, our current taxes would have paid for it. American taxpayers already pay more than 60 percent of our health care costs, and this is twice the amount needed to pay for those sick in other countries. HR 676 would eliminate spending to private insurers and reduce out-of-pocket costs to consumers by 75 percent.

To replace current sources, revenue is needed: a modest 4.5 percent employer payroll tax and a 3.3 percent employee tax (average workers now pay 24 percent of their health care insurance premium). There would also be a 5 percent health tax on the top 5 percent of income earners and a 10 percent tax on the top 1 percent, plus a 0.1 percent tax on stock and bond transfers as well as a repeal of the tax cut for the highest 1 percent of income earners. Savings will amount to $350 billion in the first year due to reduced administration and marketing costs, removal of for-profit interests, and bulk purchasing of drugs.

Single payer is not socialized medicine. Doctors and hospitals can remain in private practice. You can choose your own doctor or health care provider, without having an insurance company limit your choice. Providers will send claims to one national office using one accepted form, not the thousands of forms required by insurance companies today.

Our current U.S. health care system is too expensive and inefficient, and leaves 47 million people with no health care and 80 million underinsured. Every day, 14,000 workers lose their employee health care. Despite the fact that we spend twice as much for health care as any other industrialized country (equal to 16 percent of all goods and services), we have a lower life expectancy and higher infant mortality. Thirty cents of every U.S. health care dollar go toward insurance paperwork, marketing and profits, not health care. The more than 1,000 insurance companies involved have different plans, rules and reimbursement plans. Doctors’ offices and hospitals must hire more clerical workers than nurses to manage the complex paperwork.

The United States is the only advanced country in the world without universal health care, and as a consequence 101,000 die every year.

Physicians for a National Health Program endorses HR 676. Spokesperson David Himmelstein, M.D., of Harvard Medical School and Sidney Wolfe of Public Citizen featured on the May 22 “Bill Moyer’s Journal” on PBS argued that passage of anything but a single payer plan will bankrupt the United States. Such a plan will save $400 billion a year ($4 trillion over 10 years). They cited the Canadian system as an excellent model where everyone is covered and can choose their own care-givers. They acknowledge there must be some restrictions or delays in receiving nonemergency procedures. Americans are far more likely to forgo treatment because they can’t afford it, and 40 percent fail to fill prescriptions because of costs. Canadians have care regardless of employment, illness, disability or rising costs.

The health insurance industry routinely spends half a billion dollars per year lobbying Congress and currently is spending $1.4 million a day against a single payer or a public option. Oregon Sen. Ron Wyden was among the top 10 percent of the health care industry’s beneficiaries of campaign contributions ($1.4 million). Sen. Max Baucus of Montana, current chairman of the Senate Finance committee, received the third largest campaign support. Neither senator favors a single payer plan. In fact, Baucus has refused to schedule a committee hearing on HR 676 or SB 703 saying he “won’t waste time debating a plan which Congress cannot pass.” President Obama received $19 million in campaign contributions from the health industry.

We must act immediately. Call your congressmen and the president: Sen. Ron Wyden, 431-0229; Sen. Jeff Merkley, 465-6750; Rep. Peter DeFazio, 465-6732; President Obama, (202) 456-1414. Tell your friends and relatives to call and join us in demanding HR 676, the U.S. national health insurance “Improved Medicare for All” plan.

Dorothy Sistrom is co-president of Church Women United.

http://www.registerguard.com/csp/cms/sites/web/opinion/17507763-47/story.csp

Obama's Personal Doctor Speaks Against Health Plan

Dr. David Scheiner Was President's Physician For 22 Years

CBS News, Channel 2, Chicago
Jul 31, 2009

WASHINGTON (CBS) — President Obama’s very own doctor thinks his proposed health care reform pushing government-run insurance is “a bad program,” according to media reports.

Dr. David Scheiner, Obama’s personal physician for 22 years when the then-senator lived in Illinois, told the Chicago Tribune, “I don’t think it’s what he feels in his heart is necessary. I think it’s what he feels politically is the best way.”

The 70-year-old doctor based in the Chicago area is an advocate of single-payer health care systems — through which a single entity, like the federal government, pays fees to hospitals and doctors.

He said he is troubled the president has consulted with private industry executives more than primary care physicians and has not talked more about the benefits of single-payer coverage, according to CBS News.

Obama years ago said he was a proponent of a single-payer system but has since said such a program is not feasible given the current, employer-based structure of the nation’s health care system. The president has left many of the details of health care reform up to Congress, encouraging them to come up with a bipartisan plan.

Scheiner issued a statement July 30 arguing for a single-payer approach to health care reform:

“Some critics attack single-payer, arguing that under such a program, government bureaucrats will be between the patient and the physician. In the 40 years I have been practicing under Medicare, I have never encountered an instance where Medicare has prevented proper medical care. On the other hand, insurance companies frequently interfere and block appropriate care.

“There are multiple problems with the present congressional health reform proposals, but allowing private insurance to continue being involved is the most egregious. The insurance companies actually like many of the proposed reforms, including the requirement that every American purchase insurance or suffer a tax penalty, which would be a windfall to the insurance industry. That alone should be a warning.”

In the meantime, lawmakers were still trying to hammer out a plan that would please all parties. Democrats sought to limit increases in the cost of insurance sold under the sweeping health care bill Friday as they labored to clear the final obstacle to a September showdown on President Obama’s top domestic priority.

Several officials said a last-minute agreement among Democrats on the Energy and Commerce Committee also included authority for the federal government to negotiate directly with pharmaceutical companies for lower drug prices under Medicare.

The changes were part of an intensive effort Democrats have made in recent days to satisfy the conflicting demands of liberals and conservatives on the panel. “We have agreed we need to pull together,” said Rep. Henry Waxman, D-Calif., the committee chairman. He said he hoped for a vote by early evening.

Several officials said the cost of insurance to be sold widely under the bill could not rise by more than 4 percent a year unless the government approved.

The officials who disclosed the terms of the last-minute agreement did so on condition of anonymity, saying they were not authorized to discuss private deliberations.

The White House declined to state a position on the changes.