By Richard C. Dillihunt
Guest column
Bangor Daily News
6/25/09

I have been a proponent of universal health care and single payer since retiring from the practice of surgery more than 10 years ago. During this decade I have never waffled on my conviction that our nation should transition to a system in which every citizen has an equal opportunity to obtain their health care from practitioners of their choice.

Further, I am convinced that the for-profit form of health care has morphed into an uncontrolled hierarchy of greed that has escaped from the normal restraints of personal ethics, compassion, empathy and basic unqualified concern for one an other without reservation. I feel that social justice should leap to the forefront of our decisions when an individual — any individual — has a health problem. Accordingly, it is obvious that universal health care has my support, and it is not surprising that polls of physicians, nurses and the general population concur.

Now, we have arrived at a point in the history of our nation where it is reasonable to say that universal health care is near at hand, and after trying practically everything else, the vast majority are convinced that a reform has arrived. Black, white, Republican, Democrat, Green, young, old, Catholic, Jew, Muslim, Asian, Native American, rich or poor — a modern melting pot has come to be, and we are all in it together. After a 10-year wait, I am delighted, the bus has arrived. I hope.

Single payer usually tags along when universal health care is the subject at hand. At times when being discussed, they are wed, and health care reform may be referred to as “universal single payer.” That’s too fast for many who look upon this as two separate entities. Not me, though. I believe we, as a nation, deserve both. I fur-ther believe that single payer will happen, and we need to work diligently to make this happen sooner, rather than later.

Another decade of waiting, with its stymieing of small business, its shameful financial effects on the middle class, its drain on state treasuries, its primary etiology in bankruptcy and its continuous release of wealth to special interests, cannot be tolerated by a nation already brought to its knees by mammoth fraud, greed and incom-petence. We cannot add health care to the list that includes Enron, banks, brokerages, insurance companies, a protracted automotive industry collapse, and stunning Ponzi schemes. We, as a nation, are on the ropes. The time has come to learn to say no. No more rip-offs. No more robbery. We have come to a fork in the road with a hairpin turn. We need to take the high road regardless of forks and turns, regardless of the consequences to those who have taken advantage of us. We cannot tolerate another hit.

Single payer is a great way to start. A great way to express the confidence we have in our federal government to do the right thing on our behalf. To show that we are tough at home as well as abroad. All we want is a fair and inexpensive accounting of expenditure of health care dollars. This is single payer, not socialized medi-cine.

When we hear criticism of the federal government, with critics saying they do not trust the government to run health care, then we simply should remind such skeptics that our federal government already administers and funds well over 50 percent of total health care expenditures by this nation. We should remind them and our-selves that the government already runs a stable of health care agencies which are national jewels, and include: Medicare, Medicaid, military medicine, Food and Drug Administration, National Institutes of Health, Centers for Disease Control and Prevention, Public Health Service, health care aid to the Third World, World Health Organization participation and aerospace medicine.

We are fortunate to have such a list — a list whose executives are employed by us and whose compensation is Main Street, not Wall Street. A list that could be enhanced enormously simply by adding single payer.

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Richard C. Dillihunt, M.D., a retired general, vascular and transplant surgeon, lives in Portland.

By David S. Hilzenrath
Washington Post
Wednesday, June 24, 2009

Health insurers have forced consumers to pay billions of dollars in medical bills that the insurers themselves should have paid, according to a report released today by the staff of the Senate Commerce Committee.

The report is part of multi-pronged assault today on the trustworthiness of private insurers by Commerce Committee Chairman John D. Rockefeller IV (D-W.Va.). It comes at a time when the insurance industry is battling efforts to offer consumers a public alternative to private health plans.

At a hearing this afternoon, Rockefeller’s panel is slated to air allegations by a former industry insider that insurers have put profits before people’s health.

The report released this morning alleges that insurers have systematically underpaid for so-called out-of-network care. The issue has been brought to light in past litigation and investigations, including a probe by New York Attorney General Andrew Cuomo.

Cuomo described it last year as “a scheme by health insurers to defraud consumers by manipulating reimbursement rates.” A dozen insurers have reached settlements with Cuomo agreeing to change their practices.

Many Americans pay higher premiums for the freedom to go outside an insurer’s network of doctors and hospitals. When they do, insurers typically pay a percentage of what they call the “usual and customary” rates for the services. How insurers determined the usual rates had long been opaque to consumers and difficult if not impossible for them to challenge.

As it turns out, insurers typically used numbers from Ingenix Inc., which was a wholly owned subsidiary of the big insurer UnitedHealth Group. As such, Ingenix had an incentive to produce benchmarks that low-balled usual and customary rates and shifted costs from insurers to their customers, the report said.

Making matters worse, Ingenix got all of its data from the same insurers that bought its benchmark information, the report said. Insurers that contributed data to Ingenix often “scrubbed” their data to remove high charges, and Ingenix further manipulated the numbers, removing valid high charges from its calculations, the report said.

Cuomo found that insurers systematically under-reimbursed New York consumers by up to 28 percent, the report said. Earlier this month, New York’s Department of Insurance issued a regulation prohibiting insurance companies in New York from obtaining data on usual and customary charges from anyone with a conflict of interest.

In March testimony to Rockefeller’s committee, UnitedHealth Group’s chief executive expressed regret that there was a conflict of interest inherent in his company’s relationship with Ingenix, the report said.

But chief executive Stephen J. Hemsley also said UnitedHealth stands by “the integrity of the Ingenix data” and the way UnitedHealth “used the data to make reimbursement decisions.” He said the company worked with Cuomo to transfer its databases to an independent, nonprofit entity.

Ingenix bought one of its original databases in 1998 from the Health Insurance Association of America, a precursor to the industry’s main trade association and lobbying group.

Letters
New York Times
Published: June 24, 2009

To the Editor:

Re “A Public Health Plan” (editorial, June 21):

A public plan option that competes with private insurers won’t fix health care. Competition in health insurance involves a race to the bottom, not the top. Insurers compete by not paying for care: by seeking out the healthy and avoiding the sick; by denying payment and shifting costs onto patients. These bad behaviors confer a decisive competitive advantage; a public plan would either emulate them — becoming a clone of private insurance — or go under.

Moreover, the savings on overhead from a public plan option are far smaller than you suggest. While it might cut insurers’ profits (which is why they hate it), that’s only 3 percent of the roughly $400 billion squandered on health bureaucracy annually.

Far more goes for armies of insurance administrators who fight over payment, and to their counterparts at hospitals and doctors’ offices — all of whom would be retained with a public plan option. In contrast, a single-payer reform would radically simplify the payment system and redirect the vast savings to care.

Steffie Woolhandler
Cambridge, Mass., June 21, 2009

The writer, an associate professor of medicine at Harvard, is a primary care doctor.

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To the Editor:

Your editorial suggests that primary care physicians are paid more by commercial health plans than by Medicare. In my practice as a family physician in the Bronx for almost 30 years, it just isn’t so.

Over the last few years the commercial plans have taken advantage of their one-sided contracts to pay about 70 percent of Medicare rates, or about $48 for a visit. CMS Medicare pays $71; the commercial Medicare Advantage plans pay me about $42, and require many administrative tasks.

Health Affairs reported last month that primary care doctors average $72,675 in annual costs for fulfilling commercial insurance’s authorizations, certifications and billing work ($14 a visit).

Medicare has proven far more efficient over 40 years for patients and primary care. That is why the New York State Academy of Family Practice has supported a single-payer plan.

Bob Morrow
Bronx, June 21, 2009

The writer is on the board of trustees of the New York State Academy of Family Practice.

A badly designed public plan could turn out to be the opposite of what progressives intend.

By Paul Starr
The American Prospect
June 24, 2009 (web)

In the current battle over health reform, progressives may have set themselves up for trouble by pinning all their hopes on the creation of a government-run insurance plan.

All the proposals receiving serious consideration in Congress allow employers to continue to insure their workers and dependents directly. They also call for new “insurance exchanges” as an alternative means for individuals and employee groups to purchase coverage. If there is a new government-run plan, it would be one of the options in those exchanges.

The great danger is that the public plan could end up with a high-cost population in a system that fails to compensate adequately for those risks. Private insurers make money today in large part by avoiding people with high medical costs, and in a reformed system they’d love a public plan where they could dump the sick.

Entry into the public plan for the eligible employed would be a two-stage process. First, employers would choose between paying into the exchange and buying insurance directly to cover their workers. Unless the exchange is such a good deal that nearly all employers take it, firms with a young, healthy work force would tend to buy insurance on their own, while those with higher-cost employees would go into the exchange’s pool. As a result, the pool would suffer “adverse selection” — it would get stuck with a higher-risk population.

Second, within the exchange, the government-run plan would compete against private insurers, yet it would likely abstain from the marketing strategies used by private plans to avoid high-risk enrollees. This double jeopardy of adverse selection could then more than nullify the advantage the public plan derives from its lower overhead (as a result of less money going for salaries, profits, and marketing).

Here’s the delicate political problem: Unconstrained, the public plan could drive private insurers out of business… Over-constrained, the public plan could go into a death spiral itself as it becomes a dumping ground for high-risk enrollees, its rates rise, and it loses its appeal to the public at large. Creating a fair system of public-private competition — giving the public plan just enough power to offset its likely higher risks — wouldn’t be easy even if it were up to neutral experts, which it isn’t.

There are a lot of ways to defeat reform, not just by blocking it entirely, but by setting it up for failure. Those who think a public plan is a good idea no matter how badly designed are not thinking ahead.

(Paul Starr received the Pultizer Prize for “The Social Transformation of American Medicine.”)

http://www.prospect.org/cs/articles?article=perils_of_the_public_plan

And…

Will a Public Plan Bring Better Care?

The New York Times
June 24, 2009

To the Editor:

Re “A Public Health Plan” (editorial, June 21):

A public plan option that competes with private insurers won’t fix health care. Competition in health insurance involves a race to the bottom, not the top. Insurers compete by not paying for care: by seeking out the healthy and avoiding the sick; by denying payment and shifting costs onto patients. These bad behaviors confer a decisive competitive advantage; a public plan would either emulate them — becoming a clone of private insurance — or go under.

Moreover, the savings on overhead from a public plan option are far smaller than you suggest. While it might cut insurers’ profits (which is why they hate it), that’s only 3 percent of the roughly $400 billion squandered on health bureaucracy annually.

Far more goes for armies of insurance administrators who fight over payment, and to their counterparts at hospitals and doctors’ offices — all of whom would be retained with a public plan option. In contrast, a single-payer reform would radically simplify the payment system and redirect the vast savings to care.

Steffie Woolhandler
Cambridge, Mass., June 21, 2009

The writer, an associate professor of medicine at Harvard, is a primary care doctor.

Comment:

By Don McCanne, MD

The heated debate over the proposal to offer a public plan option is certainly warranted, but the much of the debate misses the point. While most people are arguing over the design of the public option, they are neglecting the fundamental flaws of our multi-payer system.

Adding a public option to this system, no matter the design of the option, can only result in a perpetuation of the waste, inequities and unaffordable costs that should be the primary drivers of reform.

Some say that private plan regulation will resolve these problems, but you need only look at the perversities of the regulated Medicare Advantage plans to understand that this is a fiction.

Decisions have already been made to include hardship waivers that would leave tens of millions without insurance, and to require only the lowest tier of coverage – the very definition of underinsurance.

The intensive labor and political capital that is being frittered away on the public option is a tragic diversion of human resources that should be directed toward resolving the fundamental flaws in our financing system. Once we get the financing right, we can use that power to ensure that all of us receive higher quality health care.

By David Whelan
Forbes
06.18.09

David Scheiner, an internist based in the Chicago neighborhood of Hyde Park, has a diverse practice of lower-income adults from the nearby housing projects mixed with famous patients like U.S. Sen. Carol Mosely Braun, the late writer Studs Terkel and, most notably, President Barack Obama.

Scheiner, 71, was Obama’s doctor from 1987 until he entered the White House; he vouched for the then-candidate’s “excellent health” in a letter last year. He’s still an enthusiastic Obama supporter, but he worries about whether the health care legislation currently making its way through Congress will actually do any good, particularly for doctors like himself who practice general medicine. “I’m not sure he really understands what we face in primary care,” Scheiner says.

Scheiner takes a few other shots too. Looking at Obama’s team of health advisors, Scheiner doesn’t see anyone who’s actually in the trenches. “I have a suspicion they pick people from the top echelon of medicine, people who write about it but haven’t been struggling in it,” he says.

Scheiner is critical of Obama’s pick for Health and Human Services secretary–Kansas Gov. Kathleen Sebelius, who used to work as the chief lobbyist for her state’s trial lawyers association.

“He doesn’t see all the pain, it’s so tragic out here,” he says. “Obama’s wonderful, but on this one I’m not sure if he’s getting the right input.”

What should the president be focused on? Scheiner thinks that a good health reform would be “Medicare for all,” a single-payer system where the government would cover everyone and pay for it by cutting out waste in the system. “A neurosurgeon gets paid $20,000 for cutting into the neck of my patient. Have him get paid $1 million a year instead of $2 million or $3 million. He won’t starve,” Scheiner says.

Scheiner thinks that Obama’s “public plan” reform doesn’t go far enough. He supports the idea of that option for people who don’t like or can’t afford their HMO. But he worries that it will be watered down or not happen at all. “It’s nonsense that the private insurance companies need to be protected,” he says. “Why? Because they’ve done such a good job?”

He thinks that Americans have been scared into believing that they will lose the coverage they already have if a public plan is created. And he worries that nobody cares about the 50 million uninsured. “I have people who have lost their jobs and come to me and I give them drug samples,” he says.

Scheiner says he thinks that Obama probably sees the virtues of a single-payer system but has decided it would be politically impossible to create one.

Reid Cherlin, an assistant White House press secretary who covers health issues, wrote in an e-mailed statement, “The President has been clear that while a single-payer system may work in some countries, it makes the most sense for us to build on what works in the system we have and to fix what’s broken.

“He would certainly agree that there’s too much waste in the system–where families, businesses and governments pay too much for too little,” he added, “and that’s why he’s committed not just to expanding coverage but to reforming the health system to provide high-quality care at a lower cost to more Americans.”

Scheiner says he never thought it was appropriate to talk about health policy with Obama, especially once he became a U.S. Senator. The one exception was medical malpractice reform. “I once briefly talked to him about malpractice, and he took the lawyers’ position,” he says.

Obama reiterated his opposition to caps on medical malpractice-related damages when he addressed an audience of doctors earlier this week at the American Medical Association’s annual meeting. (See “Will Doctors Buy Obamacare?”)

Scheiner, like most others in his profession, thinks that it should be harder to sue doctors and that awards should be capped. He says that he and other doctors must order too many tests and imaging studies just to avoid being sued.

Scheiner graduated from Princeton and then started at Columbia University’s College of Physicians and Surgeons 50 years ago. After training in internal medicine in Chicago he joined a practice in Hyde Park. His partner was Quentin Young, a doctor known for supporting universal coverage and for briefly being the personal physician of Martin Luther King Jr.

Before selling his practice, he watched his income decline over the years to what he calculated to be $22 an hour ($2,100 every two weeks after withholding for taxes, health insurance and malpractice insurance.)

Scheiner thinks that any health reform should involve paying primary-care doctors better so they don’t have to rush through appointments to make ends meet. He says that the medical students he encounters are no longer even taught how to do a patient history and physical exam. Patients get imaging studies and lab work instead of actual work-ups. “It’s like in Star Trek where Bones had the thing he would wave up and down. They don’t even talk to patients,” he says.

[The following testimony is the prepared text of the remarks given by Dr. Steffie Woolhandler at a hearing on health care reform conducted by the Health Subcommitee of the House Energy and Commerce Committee on June 24 in Washington.]

Testimony of Steffie Woolhandler, M.D., M.P.H.

Mr. Chairman, members of the Committee. I’m Steffie Woolhandler. I am a primary care doctor in Cambridge, Massachusetts, and associate professor of medicine at Harvard. I also co-founded 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 – will fail.

Private insurance is a defective product. Unfortunately, the Tri-Committee health reform plan would keep private insurers in the driver’s seat, and, indeed, require Americans to buy their shoddy goods. Once failure to buy health insurance is a federal offense, what’s next? A Ford Pinto in every garage? Lead-painted toys for every child? Melamine-laced chow for every puppy?

Even middle-class families with supposedly good coverage are just one serious illness away from financial ruin. My colleagues and I recently found that medical bills and illness contribute to 62 percent of all personal bankruptcies — a 50 percent increase since 2001. Strikingly, three-quarters of the medically bankrupt had insurance — at least when they first got sick.

In case after case, the insurance families bought in good faith failed them when they needed it most. Some were bankrupted by co-payments and deductibles, and loopholes that allowed their insurer to deny coverage. Others got too sick to work, leaving them unemployed and uninsured. And insurance regulations like those proposed in the tri-committee bill cannot fix these problems.

We in Massachusetts have seen in action a plan like the one you’re considering. In my state, beating your wife, communicating a terrorist threat and being uninsured all carry $1,000 fines. Yet despite these steep fines, most of the new coverage in our state has come from expanding Medicaid-like programs at great public expense. According to the state’s disclosure to its bondholders, our health reform has cost about $5,000 annually for each newly insured adult. That’s equivalent to over $200 billion annually to cover all of America’s uninsured.

But even such vast expenditures haven’t made care affordable for middle-class families in Massachusetts. If I were to lose my Harvard coverage I’d be forced to lay out $4,800 for a policy with a $2,000 deductible before it pays for any care, and 20 percent co-payments after that. Skimpy, overpriced coverage like this left 1 in 6 Massachusetts residents unable to pay their medical bills last year.

Meanwhile, rising costs have forced the Legislature to rob Peter in order to pay Paul. Funding cuts have decimated safety-net hospitals and clinics, and the current budget drops coverage for 28,000 people.

As research I published in the New England Journal of Medicine showed, a single-payer reform could save about $400 billion annually by shrinking health care bureaucracy — enough to cover the uninsured and to provide first dollar coverage for all Americans. A single-payer system would also include effective cost-containment mechanisms like bulk purchasing and global budgeting. As a result, everyone would be covered with no net increase in U.S. health spending. But these savings aren’t available unless we go all the way to single payer.

Adding a public insurance plan option can’t fix the flaws in Massachusetts-style reform. A public plan might cut private insurers’ profits, which is why they hate it. But their profits account for only about 3 percent of the money squandered on bureaucracy. Far more goes for marketing (to attract healthy, profitable members) and demarketing (to avoid the sick). And tens of billions are spent on the armies of insurance administrators who fight over payment and their counterparts at hospitals and doctors offices. All of these would be retained with a public plan option.

And overhead for even the most efficient competitive public plan would be far higher than Medicare’s, which automatically enrolls seniors when they turn 65 and disenrolls them only at death, deducts premiums directly from Social Security checks, and does no marketing.

Unfortunately, competition in health insurance involves a race to the bottom, not the top. Insurers compete by NOT paying for care: by denying payment and shifting costs onto patients or other payers. These bad behaviors confer a decisive competitive advantage. A public plan option would either emulate them — becoming a clone of private insurance — or go under. A kinder, gentler public plan option would quickly fail in the marketplace, saddled with the sickest, most expensive patients, whose high costs would drive premiums to uncompetitive levels.

In contrast, a single-payer reform would radically simplify the payment system and redirect the vast savings to care. Hospitals could be paid like a fire department, receiving a single monthly check for their entire budget, eliminating most billing. Physicians’ billing could be similarly simplified.

Eight decades of experience teach that private insurers cannot control costs or provide families with the coverage they need. A government-run clone of private insurers cannot fix these flaws. Only single payer national health insurance can assure all Americans the care they need at a price they can afford.

Thank you.