PNHP

Public option leads nosedive on reform

Public option leads nosedive on reform

Bait and switch: How the "public option" was sold

By Kip Sullivan
Physicians for a National Health Program
July 20, 2009

When the “public option” campaign began, its leaders promoted a huge “Medicare-like” program that would enroll about 130 million people. Such a program would dwarf even Medicare, which, with its 45 million enrollees, is the nation’s largest health insurer, public or private. But today “public option” advocates sing the praises of tiny “public options” contained in congressional legislation sponsored by leading Democrats that bear no resemblance to the original model.

According to the Congressional Budget Office, the “public options” described in the Democrats’ legislation might enroll 10 million people and will have virtually no effect on health care costs, which means the “public options” cannot, by themselves, have any effect on the number of uninsured. But the leaders of the “public option” movement haven’t told the public they have abandoned their original vision. It’s high time they did.

For reform advocates, the full article is a “must read:”
https://pnhp.org/blog/2009/07/20/bait-and-switch-how-the-“public-option”-was-sold/

Comment:

By Don McCanne, MD

What a mess.

The progressive community has really blown it. The decision was to make “choice” the rallying cry for comprehensive reform – choosing to keep the insurance you have if that’s what you want, or to choose a program like the members of Congress have. It seemed not to matter that the public didn’t understand that FEHBP was basically an exchange of private plans offered to government employees, much less how a Medicare-like program might play a role.

That decision secured a solid role for the private insurance industry in any comprehensive reform proposal. All the industry had to do was to be certain that any government option could not be an effective competitor to the private industry, and they have done just that. AHIP has already destroyed the original concept of the public option, although they continue to chisel away at what vestiges remain.

Although an effective public option is a dead issue, the opponents of social insurance are not finished. They have successfully blocked action before the August recess which will allow time to build opposition to some of the remaining elements of the reform proposals.

Perhaps the most important policy in the legislation is the provision of subsidies for the purchase of private plans. If health care is to be affordable, these must be very large subsidies for a very large number of people. But Congress is at an impasse on how to pay for them.

The principles of social insurance require a transfer from the wealthy since low- and moderate-income individuals can no longer pay their full actuarial share. Yet Republicans and conservative Democrats have blocked the tax surcharge on high-income individuals, pulling out one more plank from the platform of social insurance.

Another source would be to tax employer-sponsored plans, but that would threaten losing this important source of health care financing and coverage. Many in Congress recognize that this is a risk that cannot be taken under the current model proposed by the legislation. Unions are particularly concerned that employees would face unacceptably higher costs, so this tax source has been rejected.

Since the private insurers would gain the most by this legislation, some are suggesting that we should tax them. But those taxes would be passed back to us in the form of higher premiums, which would then require still higher subsidies.

Congress has selected the most expensive model of health care reform. When they go home on their break the anti-tax forces will be out in full strength to communicate loudly that we can’t pay for it.

In September, they will face the reality that the subsidies will have to be smaller and the eligibility thresholds lower than currently proposed, simply because they can’t find the revenues to pay for them. There is an easy fix for that, as President Obama stated. We’ll have to issue hardship waivers which will exempt us from the fines that would be assessed for not having the insurance that we can’t afford.

Even there, the number of hardship waivers that would have to be issued has been grossly underestimated. With a typical family income of $60,000 and average family health care costs of almost $17,000, the majority of Americans should qualify for a waiver.

You really should read Kip Sullivan’s article. He shows us that there still is hope. As he states in his article, “at this late date in the 2009 session, it is unlikely that a single-payer bill could be passed even if unity within the universal coverage movement could be achieved. But if the ‘public option’ wing and the single-payer wing join together to demand that Congress enact a single-payer system, December 2009 need not constitute a deadline.”

Why we must vote on the public health care plan

By Rep. Anthony Weiner
Politico
July 22, 2009

It seems that big legislation isn’t complete until it develops a collection of catchphrases. (“Shovel ready,” everyone? “Cash for clunkers,” perhaps?) The effort to tackle the long list of failings of our health care system and the way we pay for it has been no exception. This time, we are arguing over the so-called public option.

The phrase has become something of a Rorschach test for lobbyists, commentators and legislators. To the president and to bill writers in Congress, the public option has come to mean that a government-run plan is the only way to truly keep private insurance companies honest, by guaranteeing that at least one provider is focused on something more than the bottom line.

To insurance company lobbyists and — from the sound of it — nearly every Republican, the public option is more a confirmation of their fear that the Obama administration is out to nationalize another industry. They argue that the public option would soon become the only option because it would have too many advantages in the marketplace.

Without acknowledging it, both sides seem to agree with the argument for a single-payer system. But instead of having a debate about its value, both sides have turned the idea into an odd punching bag. The right uses the term “single-payer” to condemn the White House approach, while the White House — and my colleagues in the House and Senate — quickly decry the scurrilous charge and concoct legislative language to make their public option look less, well, public.

By conceding that the public option would have less overhead, be more efficient and have the freedom to focus on health care rather than profits, opponents of the public option are in fact arguing for it. Isn’t complaining about the marketplace “advantage” of the public plan just another way of saying that people are going to want it?

The public option would prompt Americans to ask a basic question of the insurance company that is chasing their business: “What is it that you guys do, exactly?” Insurance companies don’t really do anything to make people healthier. They need to be efficient gatekeepers on behalf of their shareholders. Profits at 10 of the country’s largest health insurance companies rose 428 percent from 2000 to 2007. So if you think that the private “option” won’t be selected by citizens, it stands to reason that they want a public one.

Democrats who have been tasked with drafting the health care bill have been going to great lengths to assure everyone that it will not be a single-payer system. This is more a testament to a branding problem than a policy one. (Remember: It wasn’t a “bailout”; it was a “recovery.”)

But the arguments for a public option do leave you wondering why you would need or want a private insurance plan. We know that insurance companies rely on a formula to provide as little health care as possible for each dollar they take in. This isn’t because they are uncaring. It is because they are good business people.

With taxpayers, consumers and workers paying an enormous amount more than necessary because of this model, it seems odd that we would be so concerned about protecting it.

What would a public-only or a single-payer system look like? It would look like Medicare for everyone. We are all aware of the problems facing Medicare: looming deficits; incentivizing expensive institutional care rather than alternatives; squeezing doctors; etc.

But these are not a reflection of a failure of the single-payer system. They are failures to make smart decisions about what we pay for and how. There is no doubt that we must fix our present single-payer system, but none of its problems change the fact that Medicare is a popular, well-understood, amazingly efficient form of — wait for it — socialized medicine.

The dean of the House of Representatives, John Dingell, had it right when he introduced the notion of Medicare for all in 2006. We can correct the many gaps in today’s Medicare, not by buying stock in an insurance company or by staying on hold for a “benefits specialist” or by complaining to a state insurance commissioner. We do it by passing a law or a regulation that reflects the best interests of the nation.

Implicit in the Democratic plan — and the Republican opposition to it — is a tacit recognition that single-payer health plans like Medicare are the best way to go. I want to engage in this debate and will offer a single-payer plan to a vote as my colleagues and I mark up the health care bill. Maybe this issue is important enough that we can do the right thing even without a great catchphrase.

Rep. Anthony Weiner (D-N.Y.) is a member of the Energy and Commerce Committee’s Subcommittee on Health.

President Obama speaks the truth about single payer

News Conference

President Barack Obama
The White House
July 22, 2009
Question: …is this bill going to cover all 47 million Americans that are uninsured…?
President Obama: I want to cover everybody. Now, the truth is that unless you have a what’s called a single-payer system in which everybody is automatically covered, then you’re probably not going to reach every single individual…
There might still be people left out there who, even though there’s an individual mandate, even though they are required to purchase health insurance, might still not get it, or despite a lot of subsidies are still in such dire straits that it’s still hard for them to afford it, and we may end up giving them some sort of hardship exemption.
http://www.whitehouse.gov/the_press_office/News-Conference-by-the-President-July-22-2009/

Yes, but… why would hardship exemptions ever be preferred to automatic coverage of everyone under single payer?

President Obama speaks the truth about single payer

News Conference

President Barack Obama
The White House
July 22, 2009

Question: …is this bill going to cover all 47 million Americans that are uninsured…?

President Obama: I want to cover everybody. Now, the truth is that unless you have a what’s called a single-payer system in which everybody is automatically covered, then you’re probably not going to reach every single individual…

There might still be people left out there who, even though there’s an individual mandate, even though they are required to purchase health insurance, might still not get it, or despite a lot of subsidies are still in such dire straits that it’s still hard for them to afford it, and we may end up giving them some sort of hardship exemption.

http://www.whitehouse.gov/the_press_office/News-Conference-by-the-President-July-22-2009/

Comment:

By Don McCanne, MD

Yes, but… why would hardship exemptions ever be preferred to automatic coverage of everyone under single payer?

More of the Same Is Not Health Care Reform, It's a Placebo

Prepared by Leonard Rodberg, PhD, Professor of Urban Studies at Queens College/CUNY and Research Director of the NY Metro Chapter of Physicians for a National Health Program

Summary

There is little reform, and no serious cost control, in the health care reform plans that President Obama and the Congress are proposing:

Most people will continue to get their coverage through private insurance companies and will be forced to buy insurance of questionable value.

Employer-based insurance will continue unchanged, with employers free to change coverage at any time, insurers free to change their physician and hospital networks, and employees still locked into their jobs if they want to keep their coverage.

While the uninsured will be mandated by law to purchase health insurance, the Congressional bills place no limit on what the private insurance companies can charge for premiums or how great their deductibles and co-pays can be.

The structure of health care finance is in no way changed, and no serious cost control measures are built into these plans.

The “health insurance exchange” and its “public option,” the only new structural features of these plans, will affect little more than 10% of the population and will have no significant impact on the overall health care system. Those who receive insurance through their employer are not permitted to access the exchange or the public option.

The “public option” must be self-sustaining and follow the same rules as private insurers. Once set up, it will receive no government funds.
The subsidies for low- and moderate-income individuals and families are completely inadequate. Many will find insurance unaffordable, and underinsurance will continue.

Tens of millions of people will continue to be uninsured.

These plans are not reform; they are little more than a placebo, a detour from the path to true reform of our health care system.

President Obama has enunciated a set of goals for health care reform. These include (from his budget statement in February):

Aim for universality… put the United States on a clear path to cover all Americans.

Make health coverage affordable… reduce growing premiums and administrative costs.

Guarantee choice… provide a choice of physicians… keep your doctor.

Provide portability of coverage… workers not locked into their job just to secure health coverage.

We share the President’s goals. And yet the proposals coming out of Congress will not achieve them.

Unique among the nations of the world, the United States relies on private, for-private insurance companies to provide health insurance for the majority of its citizens. The plans that Congress is developing do not change this. In fact, they reinforce the very system that, in our view, is responsible for the problems we face. They simply delay movement toward the kind of system that can truly address them effectively. They are a detour on the path to true reform of our health care system.

In fact, employer-provided health insurance, on which 60% of us depend, will be little changed, even if Congress creates a “public option” or a new “health insurance exchange.” Actually, employer-based insurance will become even more prominent, as employers are required either to provide insurance to their employees or pay a fee to government that will fund subsidies that will enable them to purchase insurance through the “exchange.” (One change is proposed for employer-provided insurance: it could not include any annual or lifetime limits on coverage. While this is clearly desirable, by thus incorporating catastrophic insurance into basic plans, this will undoubtedly raise their cost).

Employer-based insurance will continue unchanged: Private health insurance companies will continue to operate exactly as they do now. Employers will be free to change coverage at any time; insurers will be free to change their physician and hospital networks; and employees will still be locked into their jobs, if they want to keep the same doctor, hospital or insurance coverage they now have.

President Obama’s mantra “if you like what you have, you can keep it” has been converted into “if you already have insurance, you have to keep it.” Everyone is required to have insurance, and employees offered insurance by their employers are required (if the price is not too high) to take it. The House and Senate bills only allow access to the “exchange” to people who don’t have insurance through their employer, and employees have to accept whatever plans their employer offers. They cannot choose the public option.

Obama has said his goal is health reform that will “ensure that you won’t lose your coverage even if you lose your job, or if you change your job,” but nothing in these bills provides this assurance. Again, employer-provided insurance is not touched by these plans.


Everyone will be required (or “mandated”) to have health insurance, either from their employer or purchased on their own. If their incomes are below 133% of the Federal poverty level, they will be eligible for Medicaid. The rest will have to purchase insurance through the new health insurance “exchange” and will there have access to the new “public option.”

Congress is specifying that only those who are uninsured or who do not receive insurance from their employers will have access to the “exchange” and the subsidies available through it. The Congressional Budget Office (CBO) estimates that between 30 and 40 million people might obtain coverage through the exchange. These Congressional plans, which are supposed design to “overhaul a broken system,” actually will affect barely 10% of the American people.

Clearly, a health insurance exchange that affects only 10% of the population cannot have a great much impact on the rising cost of health care. In particular, a “public option” that is accessible only through the exchange will have such a small member base that it could have only a marginal impact on the overall health care system. Perhaps they understand that, if a public plan, that was less expensive than private insurance and better “behaved” in reimbursing for claims, were to be opened to everyone, that could well be the end of private insurance as we know it.

The subsidies to help the uninsured purchase private health insurance are likely to be totally inadequate. A family of four earning $88,000 per year will receive no subsidy. Since the average family policy today costs more than $12,500, a family without subsidy will have to spend 14% of their income on just the premium alone. Add in the co-pays and deductibles not covered by insurance, and health care will be completely unaffordable for this family. While the uninsured will be mandated by law to purchase health insurance, the Congressional bills place no limit on what the private insurance companies can charge for premiums, or how great their deductibles and co-pays can be. And no limits are placed on drug prices, nor is there any plan to have the government negotiate drug prices with the pharmaceutical companies, as many advocates have urged for the Medicare program.

If we look at what has happened in Massachusetts, whose “universal health care” plan is the model for the Congress, we can see how inadequate will be the insurance that the uninsured will be required to buy. Individuals in Massachusetts face deductibles of at least $2,000 per year, and families’ deductibles are $4,000 per year. Even after spending thousands of dollars on private health insurance premiums, they must spend thousands of dollars more before the insurance actually provides them with any coverage at all.

Would the existence of a “public option” change this? The public plan that the Congress has designed is required to be financially self-sustaining, just like the private insurance with which it competes. Why would such a plan be attractive to consumers, other than perhaps its “public” label and its likely lower cost, estimated by the CBO to be about 10% below the cost of comparable private plans? The proposed public option will provide three kinds of plans — “basic, enhanced, and premium plans” just like private insurance. Since the public option has to operate under the same financial rules as private insurance, it is, in fact, just private insurance masquerading as a public entity.

Finally, central to Obama’s goals is holding down health care costs. However, the structure of health care finance is in no way changed by these Congressional bills, and no serious cost control measures are built into them. Administrative costs will not be reduced. In fact, the director of the CBO has said, “We do not see the sort of fundamental changes that would be necessary to reduce the trajectory of federal health spending by a significant amount.”

Most people will continue to get their insurance coverage through multiple employer-provided private insurance companies, while those who are currently uninsured will be forced to buy insurance of questionable value. The “health insurance exchange,” the only new structural feature of these plans, will affect such a small portion of the population that it could have no significant impact on the overall cost of the health care system.

The CBO also finds that, even after spending more than $1 trillion in the next ten years, nearly twenty million people will remain uninsured. We estimate that, to cover everyone and remove all financial barriers to care would require that we spend between $200 and $300 billion more each year on health care. Where would we get that amount of money? The only answer, but one which the leading committees of the Congress have steadfastly ignored, is through adoption of a single payer system, that is, an improved and expanded Medicare-for-All. This would achieve, by our best estimates, as much as $400 billion savings each year by eliminating the excessive overhead and administrative costs of the private insurance industry, along with the administrative and billing costs which that industry imposes on physicians, hospitals, and every other health care provider.

A great deal of effort has gone into developing a plan that will manifestly fail. Had Congress focused instead on developing a single payer, Medicare for All program, which address both the need for broad access to care and the need to contain costs, they would have made much more progress toward the health care system that would really serve the American people. The struggle for real health care reform will go on.

More of the Same Is Not Health Care Reform, It’s a Placebo

Prepared by Leonard Rodberg, PhD, Professor of Urban Studies at Queens College/CUNY and Research Director of the NY Metro Chapter of Physicians for a National Health Program

Summary

There is little reform, and no serious cost control, in the health care reform plans that President Obama and the Congress are proposing:

Most people will continue to get their coverage through private insurance companies and will be forced to buy insurance of questionable value.

Employer-based insurance will continue unchanged, with employers free to change coverage at any time, insurers free to change their physician and hospital networks, and employees still locked into their jobs if they want to keep their coverage.

While the uninsured will be mandated by law to purchase health insurance, the Congressional bills place no limit on what the private insurance companies can charge for premiums or how great their deductibles and co-pays can be.

The structure of health care finance is in no way changed, and no serious cost control measures are built into these plans.

The “health insurance exchange” and its “public option,” the only new structural features of these plans, will affect little more than 10% of the population and will have no significant impact on the overall health care system. Those who receive insurance through their employer are not permitted to access the exchange or the public option.

The “public option” must be self-sustaining and follow the same rules as private insurers. Once set up, it will receive no government funds.
The subsidies for low- and moderate-income individuals and families are completely inadequate. Many will find insurance unaffordable, and underinsurance will continue.

Tens of millions of people will continue to be uninsured.

These plans are not reform; they are little more than a placebo, a detour from the path to true reform of our health care system.

President Obama has enunciated a set of goals for health care reform. These include (from his budget statement in February):

Aim for universality… put the United States on a clear path to cover all Americans.

Make health coverage affordable… reduce growing premiums and administrative costs.

Guarantee choice… provide a choice of physicians… keep your doctor.

Provide portability of coverage… workers not locked into their job just to secure health coverage.

We share the President’s goals. And yet the proposals coming out of Congress will not achieve them.

Unique among the nations of the world, the United States relies on private, for-private insurance companies to provide health insurance for the majority of its citizens. The plans that Congress is developing do not change this. In fact, they reinforce the very system that, in our view, is responsible for the problems we face. They simply delay movement toward the kind of system that can truly address them effectively. They are a detour on the path to true reform of our health care system.

In fact, employer-provided health insurance, on which 60% of us depend, will be little changed, even if Congress creates a “public option” or a new “health insurance exchange.” Actually, employer-based insurance will become even more prominent, as employers are required either to provide insurance to their employees or pay a fee to government that will fund subsidies that will enable them to purchase insurance through the “exchange.” (One change is proposed for employer-provided insurance: it could not include any annual or lifetime limits on coverage. While this is clearly desirable, by thus incorporating catastrophic insurance into basic plans, this will undoubtedly raise their cost).

Employer-based insurance will continue unchanged: Private health insurance companies will continue to operate exactly as they do now. Employers will be free to change coverage at any time; insurers will be free to change their physician and hospital networks; and employees will still be locked into their jobs, if they want to keep the same doctor, hospital or insurance coverage they now have.

President Obama’s mantra “if you like what you have, you can keep it” has been converted into “if you already have insurance, you have to keep it.” Everyone is required to have insurance, and employees offered insurance by their employers are required (if the price is not too high) to take it. The House and Senate bills only allow access to the “exchange” to people who don’t have insurance through their employer, and employees have to accept whatever plans their employer offers. They cannot choose the public option.

Obama has said his goal is health reform that will “ensure that you won’t lose your coverage even if you lose your job, or if you change your job,” but nothing in these bills provides this assurance. Again, employer-provided insurance is not touched by these plans.


Everyone will be required (or “mandated”) to have health insurance, either from their employer or purchased on their own. If their incomes are below 133% of the Federal poverty level, they will be eligible for Medicaid. The rest will have to purchase insurance through the new health insurance “exchange” and will there have access to the new “public option.”

Congress is specifying that only those who are uninsured or who do not receive insurance from their employers will have access to the “exchange” and the subsidies available through it. The Congressional Budget Office (CBO) estimates that between 30 and 40 million people might obtain coverage through the exchange. These Congressional plans, which are supposed design to “overhaul a broken system,” actually will affect barely 10% of the American people.

Clearly, a health insurance exchange that affects only 10% of the population cannot have a great much impact on the rising cost of health care. In particular, a “public option” that is accessible only through the exchange will have such a small member base that it could have only a marginal impact on the overall health care system. Perhaps they understand that, if a public plan, that was less expensive than private insurance and better “behaved” in reimbursing for claims, were to be opened to everyone, that could well be the end of private insurance as we know it.

The subsidies to help the uninsured purchase private health insurance are likely to be totally inadequate. A family of four earning $88,000 per year will receive no subsidy. Since the average family policy today costs more than $12,500, a family without subsidy will have to spend 14% of their income on just the premium alone. Add in the co-pays and deductibles not covered by insurance, and health care will be completely unaffordable for this family. While the uninsured will be mandated by law to purchase health insurance, the Congressional bills place no limit on what the private insurance companies can charge for premiums, or how great their deductibles and co-pays can be. And no limits are placed on drug prices, nor is there any plan to have the government negotiate drug prices with the pharmaceutical companies, as many advocates have urged for the Medicare program.

If we look at what has happened in Massachusetts, whose “universal health care” plan is the model for the Congress, we can see how inadequate will be the insurance that the uninsured will be required to buy. Individuals in Massachusetts face deductibles of at least $2,000 per year, and families’ deductibles are $4,000 per year. Even after spending thousands of dollars on private health insurance premiums, they must spend thousands of dollars more before the insurance actually provides them with any coverage at all.

Would the existence of a “public option” change this? The public plan that the Congress has designed is required to be financially self-sustaining, just like the private insurance with which it competes. Why would such a plan be attractive to consumers, other than perhaps its “public” label and its likely lower cost, estimated by the CBO to be about 10% below the cost of comparable private plans? The proposed public option will provide three kinds of plans — “basic, enhanced, and premium plans” just like private insurance. Since the public option has to operate under the same financial rules as private insurance, it is, in fact, just private insurance masquerading as a public entity.

Finally, central to Obama’s goals is holding down health care costs. However, the structure of health care finance is in no way changed by these Congressional bills, and no serious cost control measures are built into them. Administrative costs will not be reduced. In fact, the director of the CBO has said, “We do not see the sort of fundamental changes that would be necessary to reduce the trajectory of federal health spending by a significant amount.”

Most people will continue to get their insurance coverage through multiple employer-provided private insurance companies, while those who are currently uninsured will be forced to buy insurance of questionable value. The “health insurance exchange,” the only new structural feature of these plans, will affect such a small portion of the population that it could have no significant impact on the overall cost of the health care system.

The CBO also finds that, even after spending more than $1 trillion in the next ten years, nearly twenty million people will remain uninsured. We estimate that, to cover everyone and remove all financial barriers to care would require that we spend between $200 and $300 billion more each year on health care. Where would we get that amount of money? The only answer, but one which the leading committees of the Congress have steadfastly ignored, is through adoption of a single payer system, that is, an improved and expanded Medicare-for-All. This would achieve, by our best estimates, as much as $400 billion savings each year by eliminating the excessive overhead and administrative costs of the private insurance industry, along with the administrative and billing costs which that industry imposes on physicians, hospitals, and every other health care provider.

A great deal of effort has gone into developing a plan that will manifestly fail. Had Congress focused instead on developing a single payer, Medicare for All program, which address both the need for broad access to care and the need to contain costs, they would have made much more progress toward the health care system that would really serve the American people. The struggle for real health care reform will go on.

Single-payer Advocates Make Case in Health Reform

NewsHour with Jim Lehrer
June 26, 2009

JUDY WOODRUFF: The business of passing health care legislation also remained front and center in Washington this week. Health correspondent Betty Ann Bowser has our update. The Health Unit is a partnership with the Robert Wood Johnson Foundation.

BETTY ANN BOWSER, NewsHour Correspondent: Health care reform moved on two fronts this week in Washington: on Capitol Hill and at the White House, where President Obama was once again in campaign mode, this time pushing for elements he wants in health care reform legislation.

Yesterday, Democratic Senator Max Baucus announced his Finance Committee had found a way to cut the projected 10-year cost of its health care reform draft, saying, “We have options that would enable us to write a $1 trillion bill fully paid for.” But the senator did not spell out where the money would come from.

The bill reportedly would tax workers on their insurance benefits and cut the number of low-income people who would qualify for government subsidies to buy insurance.

The other Senate committee working on a bill, the Health Committee, spent the week marking up its draft. But by week’s end, lawmakers were still behind in their original timeline for completion and still worried about how much it was going to cost.

SEN. TOM COBURN ®, Oklahoma: Why is it that we’re writing a bill that increases the cost for health care when, in fact, 50 percent — the cost of health care in this country is 50 percent higher than anywhere else in the world?

Differing views on reform

BETTY ANN BOWSER: The lawmakers also talked about ways to make Americans healthier.

SEN. TOM HARKIN (D), Iowa: We have to change not just the way we do medicine, but the medicine we do, not just the way we pay our bills, but, really, the medicine we do. And the medicine we do ought to be more preventative, and more upfront, and more wellness types of programs, and interventions.

But it has to be comprehensive. You can’t just do a little bit here and say, “Well, we’ve taken care of it in the workplace or we have clinical and we take care of it in the clinical.” It has to broad. It has to be pervasive in our society that we gear ourselves towards a wellness structure.

BETTY ANN BOWSER: On Thursday, several hundred people rallied in the shadow of the Capitol Dome, making it clear they were growing impatient for legislation.

PROTESTORS: We want, we want health care.

BETTY ANN BOWSER: Included in the group health care providers.

EDIE FALCO, Actress: Hi. I’m a nurse.

BETTY ANN BOWSER: Actress Edie Falco.

EDIE FALCO: We can no longer wait for a health care system that every individual, business, family in this country can afford.

BETTY ANN BOWSER: And union workers from across the country.

UNION WORKER: I’m here to support health care for everyone.

UNION WORKER: I’m worried about them taxing my health care.

BETTY ANN BOWSER: Most Republicans and moderate Democrats also oppose taxing employer-sponsored benefits. And the House Republican leadership has consistently hammered away at the House’s so called tri-committee bill drafted by Democrats.

Minority Leader John Boehner.

REP. JOHN BOEHNER (R-OH), House Minority Leader: When it comes to the issue of health care, the Congress shouldn’t rush through health care like we did with the stimulus plan several months ago. A Washington takeover of health care I think will limit the flexibility of our states and hurt working families around our country.

Single-payer system

BETTY ANN BOWSER: This spring, a group of people who support the concept of a single-payer plan were ejected from a hearing and arrested. But this week, they got a chance to be heard in a House committee.

Harvard Professor Dr. Steffie Woolhandler spoke on behalf of the organization Physicians for a National Health Plan.

DR. STEFFIE WOOLHANDLER, Physicians for a National Health Program: Our 16,000 physician members support nonprofit, single-payer national health insurance because of overwhelming evidence that lesser reforms, even with a robust public plan option, lesser reforms will fail. Private insurance is a defective product.

BETTY ANN BOWSER: A single-payer plan would make the federal government the sole payer for all health care services using revenue from taxes. Dr. Woolhander says that would fix the broken U.S. health care system.

DR. STEFFIE WOOLHANDLER: A single-payer lets you have administrative simplification that saves you about $400 billion a year. And then you take that $400 billion and use it to cover the uninsured and plug the gaps in coverage for people who now have private coverage so you can improve coverage for everyone without increasing total health care spending by a single penny.

Single-payer system debate

BETTY ANN BOWSER: But a hearing is all single-payer advocates got. No committee writing health care reform legislation is considering including it.

LEN NICHOLS, New America Foundation: They’re just not willing to spend time debating it since they know it cannot pass.

BETTY ANN BOWSER: Len Nichols directs health policy at the New America Foundation.

LEN NICHOLS: If you actually did single-payer, you would be outlawing private insurance, you would be outlawing any form of nonprofit health insurance, you would be ending health insurance as we know it all across the country, so, A, there would be a lot of capital that would have to be disposed of that would at some level become worthless overnight. Second, an awful lot of people would lose their jobs.

BETTY ANN BOWSER: Nichols says there might be initial cost reductions, but…

LEN NICHOLS: You would take a big chunk out of our current costs, probably 15 percent, maybe 20 percent, but that’s a one-year, one-time kind of thing.

The president’s argument

BETTY ANN BOWSER: At the White House, President Obama ramped up his public profile on health care reform, devoting almost an entire day to national television coverage on ABC, including a live town hall meeting where he once again pressed his argument for a public insurance plan.

BARACK OBAMA, President of the United States: Unfortunately, government, whether you like it or not, is going to already be involved. You know, we pay for Medicare and we pay for Medicaid. There are a whole host of rules both at the state and federal level governing how health care is administered.

And so the key is for us to try to figure out, how do we take that involvement, not to completely replace what we have, but to build on what works and stop doing what doesn’t work? And I think that we can do that through a serious health care reform initiative.

BETTY ANN BOWSER: Lawmakers will resume their work on health care reform after they return from next week’s July 4
th recess.

Would a MedPAC-like IMAC effectively control costs?

Centrists Win Backing on Medicare Cost Cuts

By Greg Hitt and Naftali Bendavid
The Wall Street Journal
July 22, 2009
Democratic centrists said they won a tentative commitment from the White House to back a proposal to curb the growth of Medicare costs, as party leaders braced for a vote next week on health-care legislation.
One proposal pushed both by President Barack Obama and some centrists is to give the executive branch the authority to implement cuts to Medicare spending that would be recommended by independent experts. Congress could stop the cuts, but only if it acted swiftly. Fiscal conservatives say that under the current system, which gives Congress more power, lawmakers shy away from politically tough votes to restrain Medicare costs.
After a more-than-two-hour meeting at the White House Tuesday, centrists said they secured a verbal commitment to add such a mechanism on Medicare cost-cutting to the House bill.
White House budget chief Peter Orszag was among those at the meeting, and said the mechanism was a big focus of discussion. He said adding it would alleviate the concerns of fiscally conservative “Blue Dog” Democrats. “I think it’s probably the most important piece that could be added to the House legislation,” he said.
http://online.wsj.com/article/SB124822098850870337.html?mod=googlenews_wsj

And…

IMAC, UBend

By Peter Orszag, Director
Office of Management and Budget (OMB)
July 17, 2009
… one of the most potent reforms is a change in the process of health care policymaking: empowering an independent, non-partisan body of doctors and other health experts to make recommendation about Medicare payment rates and other reforms.
Today, the Administration sent a letter to congressional leaders outlining our support for this approach, with a proposal for an Independent Medicare Advisory Commission (as well as Senator Rockefeller’s similar proposal to accomplish this through the existing MedPAC) to detail how one might accomplish this goal.
The Independent Medicare Advisory Council (IMAC) would be an independent, non-partisan body of doctors and other health experts, appointed by the President, confirmed by the Senate, and serving for five-year terms. The IMAC would issue recommendations as long as their implementation would not result in any increase in the aggregate level of net expenditures under the Medicare program; and either would improve the quality of medical care received by the program’s beneficiaries or improve Medicare’s efficiency.
http://www.whitehouse.gov/omb/blog/09/07/17/IMACUBend/

And…

OMB proposed legislation to create IMAC

Short Title
This Act may be cited as the “Independent Medicare Advisory Council Act of 2009.”
(The four pages of the proposed act describe the establishment of the Council, its authority to make annual Medicare payment updates, and its authority to recommend Medicare reforms.)
http://issuu.com/thenewrepublic/docs/section-by-section_analysis?mode=embed&viewMode=presentation&layout=http%3A%2F%2Fskin.issuu.com%2Fv%2Flight%2Flayout.xml&showFlipBtn=true

And…

Report to the Congress: Improving Incentives in the Medicare Program

Medicare Payment Advisory Commission (MedPAC)
June 2009
In this report, the Commission:
* describes Medicare’s role in graduate medical education and offers future directions;
* examines ways accountable care organizations could affect the growth in service volume;
* lays out principles for reporting resource use to physicians so they can actively and collaboratively participate in appropriately constraining service volume;
* provides new information on the role of self-referral in imaging use and the effect of imaging use on Medicare cost growth;
* explores ideas to ensure that pricing for follow-on biologics produces value for Medicare;
* examines restructuring Medicare’s benefit design to provide beneficiaries with better incentives and protections;
* analyzes various aspects of Medicare Advantage payment, fulfilling a requirement mandated by Section 169 of the Medicare Improvements for Patients and Providers Act of 2008; and
* discusses care management for beneficiaries with chronic conditions, as required by Section 150 of the Medicare Improvements for Patients and Providers Act of 2008.
Entire “Report to the Congress” (299 pages):
http://www.medpac.gov/documents/Jun09_EntireReport.pdf

And…

Providing Better Health Care For Less Money

By Julie Rovner
NPR
July 22, 2009
An even larger problem is that while there is relative consensus that Medicare’s current payment system encourages doctors and hospitals to provide too much of the wrong care, no one is quite sure how to revise it to encourage just the right amount of care.
“I guess the way I would put it is even if I was a benevolent dictator for a day, I wouldn’t feel comfortable at this point, given the state of knowledge, completely overhauling the Medicare payment system,” said White House Budget Director Peter Orszag, who has been studying the issue for several years.
That has led to a conundrum in lawmakers’ efforts to try to achieve long-term savings in the health care system. They know that overhauling Medicare payments is a key means to achieving that goal. They also know that if they do it wrong, they could leave the health care system — and the patients it serves — worse off than it is now.
http://www.npr.org/templates/story/story.php?storyId=106875583

There has been intense interest in providing the administration with greater control over Medicare spending in order to bend down the trajectory of projected increases in spending. Members of Congress and the administration have been considering an Independent Medical Advisory Council (IMAC) much like the Medicare Payment Advisory Commission (MedPAC), but with one very important difference.
Currently MedPAC serves only in an advisory capacity to Congress, and any recommendations must be specifically enacted by Congress. Under this proposal, IMAC would have the power to put into force these recommendations, with the approval of the President. Congress’s power would be limited to the ability to reject, by a joint resolution of Congress, the intact, full package of IMAC reforms and updates.
To get an idea of what IMAC might be able to accomplish in controlling spending through independent decisions, we might look at an example of a MedPAC function that was enacted by Congress. The Sustainable Growth Rate (SGR) was a sincere effort to slow the increases in aggregate physician payments by making adjustments based on 1) changes in physician fees, 2) changes in the number of Medicare beneficiaries, 3) change in GDP per capita, and 4) changes due to new laws or regulations. This seemed to be a very reasonable approach that was fair for physicians and fair for taxpayers.
What was not anticipated was the degree to which physicians would increase the frequency and intensity of services. Growth in imaging services was especially problematic. This resulted in a measured excess growth in aggregate physician payments, with calculations requiring a reduction in physician payments, now for several consecutive years. Each year, Congress has overridden the scheduled reductions, but the deficits have been carried forward. This is the source of the $245 billion excess deficit scored by the CBO but that the administration and Congress don’t count because they were going to give it back anyway.
This is not a criticism of the intent of the SGR adjustments. It merely demonstrates an example of how the MedPAC/Congress interaction has not been nearly as effective in slowing Medicare cost increases as had been hoped.
Imagine if MedPAC had already been converted to IMAC. Look at the report MedPAC released last month on the recommendations to improve incentives in the Medicare program. Now imagine that these recommendations were accepted by the President and placed into effect.
As only one example in this 299 page report, value-based insurance design is discussed as a method of motivating patients to consider value by varying the amount of patient cost-sharing based on the value of the service or product. Think about the difficulties they would have in attempting to accomplish that. Then imagine such a policy becoming the national standard merely on the action of one committee and the stamp of approval of the President. Scary.
An Independent Medical Advisory Council might have some legitimate role in our dysfunctional multi-payer system, but no matter how noble the recommendations, it cannot begin to correct the severe deficiencies in both our health care financing and our health care delivery system. To do that it would take the fundamental structural reform of a single payer national health program.
The Blue Dogs have demanded an IMAC or independent MedPAC, and the amendments are being prepared to include the concept in the tri-committee legislation. It will be yet another patch on a financing framework that is structurally unsound. Those still wanting to move the proverbial deck chairs around need to be reminded of the condition of the framework of the Titanic.

Would a MedPAC-like IMAC effectively control costs?

Centrists Win Backing on Medicare Cost Cuts

By Greg Hitt and Naftali Bendavid
The Wall Street Journal
July 22, 2009

Democratic centrists said they won a tentative commitment from the White House to back a proposal to curb the growth of Medicare costs, as party leaders braced for a vote next week on health-care legislation.

One proposal pushed both by President Barack Obama and some centrists is to give the executive branch the authority to implement cuts to Medicare spending that would be recommended by independent experts. Congress could stop the cuts, but only if it acted swiftly. Fiscal conservatives say that under the current system, which gives Congress more power, lawmakers shy away from politically tough votes to restrain Medicare costs.

After a more-than-two-hour meeting at the White House Tuesday, centrists said they secured a verbal commitment to add such a mechanism on Medicare cost-cutting to the House bill.

White House budget chief Peter Orszag was among those at the meeting, and said the mechanism was a big focus of discussion. He said adding it would alleviate the concerns of fiscally conservative “Blue Dog” Democrats. “I think it’s probably the most important piece that could be added to the House legislation,” he said.

http://online.wsj.com/article/SB124822098850870337.html?mod=googlenews_wsj

And…

IMAC, UBend

By Peter Orszag, Director
Office of Management and Budget (OMB)
July 17, 2009

… one of the most potent reforms is a change in the process of health care policymaking: empowering an independent, non-partisan body of doctors and other health experts to make recommendation about Medicare payment rates and other reforms.

Today, the Administration sent a letter to congressional leaders outlining our support for this approach, with a proposal for an Independent Medicare Advisory Commission (as well as Senator Rockefeller’s similar proposal to accomplish this through the existing MedPAC) to detail how one might accomplish this goal.

The Independent Medicare Advisory Council (IMAC) would be an independent, non-partisan body of doctors and other health experts, appointed by the President, confirmed by the Senate, and serving for five-year terms. The IMAC would issue recommendations as long as their implementation would not result in any increase in the aggregate level of net expenditures under the Medicare program; and either would improve the quality of medical care received by the program’s beneficiaries or improve Medicare’s efficiency.

http://www.whitehouse.gov/omb/blog/09/07/17/IMACUBend/

And…

OMB proposed legislation to create IMAC

Short Title
This Act may be cited as the “Independent Medicare Advisory Council Act of 2009.”

(The four pages of the proposed act describe the establishment of the Council, its authority to make annual Medicare payment updates, and its authority to recommend Medicare reforms.)

http://issuu.com/thenewrepublic/docs/section-by-section_analysis?mode=embed&viewMode=presentation&layout=http%3A%2F%2Fskin.issuu.com%2Fv%2Flight%2Flayout.xml&showFlipBtn=true

And…

Report to the Congress: Improving Incentives in the Medicare Program

Medicare Payment Advisory Commission (MedPAC)
June 2009

In this report, the Commission:

* describes Medicare’s role in graduate medical education and offers future directions;
* examines ways accountable care organizations could affect the growth in service volume;
* lays out principles for reporting resource use to physicians so they can actively and collaboratively participate in appropriately constraining service volume;
* provides new information on the role of self-referral in imaging use and the effect of imaging use on Medicare cost growth;
* explores ideas to ensure that pricing for follow-on biologics produces value for Medicare;
* examines restructuring Medicare’s benefit design to provide beneficiaries with better incentives and protections;
* analyzes various aspects of Medicare Advantage payment, fulfilling a requirement mandated by Section 169 of the Medicare Improvements for Patients and Providers Act of 2008; and
* discusses care management for beneficiaries with chronic conditions, as required by Section 150 of the Medicare Improvements for Patients and Providers Act of 2008.

Entire “Report to the Congress” (299 pages):
http://www.medpac.gov/documents/Jun09_EntireReport.pdf

And…

Providing Better Health Care For Less Money

By Julie Rovner
NPR
July 22, 2009

An even larger problem is that while there is relative consensus that Medicare’s current payment system encourages doctors and hospitals to provide too much of the wrong care, no one is quite sure how to revise it to encourage just the right amount of care.

“I guess the way I would put it is even if I was a benevolent dictator for a day, I wouldn’t feel comfortable at this point, given the state of knowledge, completely overhauling the Medicare payment system,” said White House Budget Director Peter Orszag, who has been studying the issue for several years.

That has led to a conundrum in lawmakers’ efforts to try to achieve long-term savings in the health care system. They know that overhauling Medicare payments is a key means to achieving that goal. They also know that if they do it wrong, they could leave the health care system — and the patients it serves — worse off than it is now.

http://www.npr.org/templates/story/story.php?storyId=106875583

Comment:

By Don McCanne, MD

There has been intense interest in providing the administration with greater control over Medicare spending in order to bend down the trajectory of projected increases in spending. Members of Congress and the administration have been considering an Independent Medical Advisory Council (IMAC) much like the Medicare Payment Advisory Commission (MedPAC), but with one very important difference.

Currently MedPAC serves only in an advisory capacity to Congress, and any recommendations must be specifically enacted by Congress. Under this proposal, IMAC would have the power to put into force these recommendations, with the approval of the President. Congress’s power would be limited to the ability to reject, by a joint resolution of Congress, the intact, full package of IMAC reforms and updates.

To get an idea of what IMAC might be able to accomplish in controlling spending through independent decisions, we might look at an example of a MedPAC function that was enacted by Congress. The Sustainable Growth Rate (SGR) was a sincere effort to slow the increases in aggregate physician payments by making adjustments based on 1) changes in physician fees, 2) changes in the number of Medicare beneficiaries, 3) change in GDP per capita, and 4) changes due to new laws or regulations. This seemed to be a very reasonable approach that was fair for physicians and fair for taxpayers.

What was not anticipated was the degree to which physicians would increase the frequency and intensity of services. Growth in imaging services was especially problematic. This resulted in a measured excess growth in aggregate physician payments, with calculations requiring a reduction in physician payments, now for several consecutive years. Each year, Congress has overridden the scheduled reductions, but the deficits have been carried forward. This is the source of the $245 billion excess deficit scored by the CBO but that the administration and Congress don’t count because they were going to give it back anyway.

This is not a criticism of the intent of the SGR adjustments. It merely demonstrates an example of how the MedPAC/Congress interaction has not been nearly as effective in slowing Medicare cost increases as had been hoped.

Imagine if MedPAC had already been converted to IMAC. Look at the report MedPAC released last month on the recommendations to improve incentives in the Medicare program. Now imagine that these recommendations were accepted by the President and placed into effect.

As only one example in this 299 page report, value-based insurance design is discussed as a method of motivating patients to consider value by varying the amount of patient cost-sharing based on the value of the service or product. Think about the difficulties they would have in attempting to accomplish that. Then imagine such a policy becoming the national standard merely on the action of one committee and the stamp of approval of the President. Scary.

An Independent Medical Advisory Council might have some legitimate role in our dysfunctional multi-payer system, but no matter how noble the recommendations, it cannot begin to correct the severe deficiencies in both our health care financing and our health care delivery system. To do that it would take the fundamental structural reform of a single payer national health program.

The Blue Dogs have demanded an IMAC or independent MedPAC, and the amendments are being prepared to include the concept in the tri-committee legislation. It will be yet another patch on a financing framework that is structurally unsound. Those still wanting to move the proverbial deck chairs around need to be reminded of the condition of the framework of the Titanic.

Medicare for all

Letter to the Editor
Salt Lake Tribune
07/17/2009

Because I am a physician and attorney with many years of experience in both fields, I can say unequivocally that the best way to solve the escalating cost in health care is also the best way to reduce medical errors and nearly eliminate medical malpractice lawsuits. It is also the simplest solution and it pays for itself without resorting to budgetary tricks.

The solution I refer to is single-payer Medicare for all, embodied in Rep. John Conyers’ bill, HR676. Simply put, single-payer Medicare for all eliminates health insurance companies as the middleman. Health care that is publicly financed and privately delivered returns health decisions to their proper place — solely between the doctor and the patient.

People who don’t have to worry about paying for their future medical care are much less likely to sue, even when injured by negligence. Doctors who don’t have to spend 30 percent of their time and income dealing with bills to 1,200 different insurance companies, and with unjustified denials or limitations of care, will have more time to treat their patients carefully and adequately.

Single-payer Medicare for all is a simple solution that already works for seniors, and it will work for all of us.

Clark Newhall
Salt Lake City