PNHP

Hacker says that public option/private exchange would EXPAND private insurance market

Hacker says that public option/private exchange would EXPAND private insurance market

Extended discussion of Lewin Group

By Jacob Hacker
Institute for America’s Future
April 11, 2009

Put simply, Health Care for America is a pure, undiluted proposal for public plan choice. So it’s notable that under my proposal, according to the Lewin Group’s analysis of a couple years ago, the public plan ends up with much lower enrollment in the public plan than projected in the Lewin Group’s new analysis (90 million versus over 131 million). (For aficionados, the national insurance exchange in my proposal would have larger enrollment, but around 38 million people in the exchange would choose private plans instead of the public plan.)

In short, the Lewin Group’s hypothetical proposal has three features that guarantee the public plan will be big. Whatever “131 million enrollees in the public plan” represents, it does not represent an accurate picture of Obama’s campaign pronouncements, or Max Baucus’s “White Paper,” or my plan, or any other proposal under serious consideration today.

To get an estimate of how many people will end up in the public plan, therefore, we need to go back to the Lewin Group’s analyses of proposals more or less like what Obama proposed during the campaign–namely, play-or-pay plans with an exchange that features a competing public plan, and without extensive new rules on employment-based insurance. Those analyses (of my proposal or the Commonwealth Fund proposal) show that enrollment in the public plan is likely to be much, much smaller than the Lewin Group’s analysis estimates. Indeed, if you look at the Lewin Group’s analysis of my proposal (again, the maximalist public plan choice approach), more Americans have private insurance after reform than do before–either through their employer or through the new national insurance exchange.

http://institute.ourfuture.org/healthcare/hacker/lewin-group-analysis%20

Comment:

By Don McCanne, MD

Offering a public plan option within a market of private health plans has been one of the more controversial proposals during the current national dialogue on health care reform.

The opponents of the public option, especially the private insurance industry and the Republican members of Congress, insist that a government-sponsored plan would be an unfair competitor and drive the private insurance industry out of business. Theoretically, the government would do this by extracting unfair concessions from the health care providers, pricing the public option at a lower level than the private insurance sector could ever meet. (This ignores the more important evidence such as the demonstrated greater efficiencies of our public Medicare program when contrasted with the private Medicare Advantage plans.)

The supporters of a public option, especially the progressive community, contend that the public option would be a superior product made more affordable by reducing administrative inefficiencies. They contend that competition would motivate a massive shift to the public option, bringing us much closer to the single payer model that many in the progressive community prefer. (Much has been said about why this approach actually sacrifices most of the single payer advantages and would likely never lead to a single payer system.)

Professor Jacob Hacker of the University of California at Berkeley (and formerly at Yale) has been a leading proponent of reform based on a national insurance exchange of private plans with the addition of a public plan option. And what does he have to say about the impact that a public plan option would have on market share for the private health plans? He says that under his proposal, “more Americans have private insurance after reform than do before — either through their employer or through the new national insurance exchange.”

Get That? Even with a Medicare-like public plan option, the market for the private insurers will expand! That is the real tragedy of this debate over a public plan option. It has led us away from the debate we should be having instead: an affordable single payer national health program for everyone, versus expansion of our over-priced, inequitable, and inefficient system of financing health care through private plans and public programs

Forget about the public plan option! Let’s get rid of the private health plans, and go with single payer!

Options for health care cost control

The Obama Administration’s Options for Health Care Cost Control: Hope Versus Reality

By Theodore Marmor, PhD; Jonathan Oberlander, PhD; and Joseph White, PhD
Annals of Internal Medicine
April 7, 2009
In short, if medical costs are to be controlled, no substitute exists for constraining prices and capping expenditures. Frank talk about these cost-control realities, however, is politically difficult. It immediately elicits alarms from the medical care and insurance industries about “rationing” (ignoring the fact that the United States could realize significant savings from lower prices and administrative costs). Others, particularly the pharmaceutical industry, raise alarms about the effect that cost control would have on the pace of medical innovation. In addition, spending targets constrain medical providers’ income and thereby prompt intense political struggles. The Obama team’s limited treatment of cost-control realities — including the absence of global budgets and spending targets or caps — seems to reflect a desire to avoid such political controversies.
We write this essay, then, as a cautionary tale. Claims of savings from health information technology, prevention, P4P, and comparative effectiveness research are politically attractive. Their political appeal lies largely in the embrace of widely supported goals, including better health and improved quality of medical care. In theory, these reforms — more research, more preventive screenings, and better organized patient data — sound like benign devices to moderate medical spending. For many purposes, such reforms are substantively very desirable. But these reforms are ineffective as cost-control measures. If the United States is to control health care costs, it will have to follow the lead of other industrialized nations and embrace price restraint, spending targets, and insurance regulation. Such credible cost controls are, in the language of politics, a tough sell because they threaten the medical industry’s income. The illusion of painless savings, however, confuses our national debate on health reform and makes the acceptance of cost control’s realities all the more difficult.
http://www.annals.org/cgi/content/full/150/7/485

High health care costs are the primary driving force behind the renewed effort for reform. Everyone agrees that high costs are straining personal, business and government budgets, and something must be done to make health care affordable for all of us.
Some of us are also concerned about health care justice. We want to see that everyone has affordable access to high quality care. It is more than fortuitous that the most effective methods of reducing excess health system spending also achieve the social justice goal of health care for everyone.
Much has been written on what does work and what doesn’t work in controlling spending. This paper provides an excellent, brief summary of the concepts being floated, and is well worth downloading. We should be very concerned that the leading mechanisms proposed, as summarized in this article, would not have a significant impact on slowing spending, and would likely actually increase our costs. Nor would they be effective in achieving health care justice for all.
If we are going to address costs seriously, there is no other option than to fundamentally restructure our health care financing system. As the authors state, “no substitute exists for constraining prices and capping expenditures.” We can never achieve that by relying on our wasteful, fragmented multi-payer system of financing health care. As all other nations have shown us, there is no other option than central, public control.
It is true that some nations do use private insurers. But private insurers in their countries organized into social insurance programs serving the public good have almost nothing in common with private insurers in the United States that shun organization in order to serve their own business interests. Adding a few regulations to our current fragmented system will increase costs but cannot transform a self-serving business model into a public-serving social insurance model.
We really have only two effective choices that would achieve both of our goals. We can dismiss our current private insurers and bring in new private insurers with a mission of serving the public good, but that is the most expensive model of reform, and it compromises equity and efficiency. Our other choice would be to eliminate our fragmented financing system and replace it with a single payer national health program. That would allow us to constrain prices and cap expenditures while achieving our other goal of providing all necessary care for everyone.
We can do it, but the people, through our elected representatives, are going to have to tell the special interests that we’ve had enough.

Options for health care cost control

The Obama Administration's Options for Health Care Cost Control: Hope Versus Reality

By Theodore Marmor, PhD; Jonathan Oberlander, PhD; and Joseph White, PhD
Annals of Internal Medicine
April 7, 2009

In short, if medical costs are to be controlled, no substitute exists for constraining prices and capping expenditures. Frank talk about these cost-control realities, however, is politically difficult. It immediately elicits alarms from the medical care and insurance industries about “rationing” (ignoring the fact that the United States could realize significant savings from lower prices and administrative costs). Others, particularly the pharmaceutical industry, raise alarms about the effect that cost control would have on the pace of medical innovation. In addition, spending targets constrain medical providers’ income and thereby prompt intense political struggles. The Obama team’s limited treatment of cost-control realities — including the absence of global budgets and spending targets or caps — seems to reflect a desire to avoid such political controversies.

We write this essay, then, as a cautionary tale. Claims of savings from health information technology, prevention, P4P, and comparative effectiveness research are politically attractive. Their political appeal lies largely in the embrace of widely supported goals, including better health and improved quality of medical care. In theory, these reforms — more research, more preventive screenings, and better organized patient data — sound like benign devices to moderate medical spending. For many purposes, such reforms are substantively very desirable. But these reforms are ineffective as cost-control measures. If the United States is to control health care costs, it will have to follow the lead of other industrialized nations and embrace price restraint, spending targets, and insurance regulation. Such credible cost controls are, in the language of politics, a tough sell because they threaten the medical industry’s income. The illusion of painless savings, however, confuses our national debate on health reform and makes the acceptance of cost control’s realities all the more difficult.

http://www.annals.org/cgi/content/full/150/7/485

Comment:

By Don McCanne, MD

High health care costs are the primary driving force behind the renewed effort for reform. Everyone agrees that high costs are straining personal, business and government budgets, and something must be done to make health care affordable for all of us.

Some of us are also concerned about health care justice. We want to see that everyone has affordable access to high quality care. It is more than fortuitous that the most effective methods of reducing excess health system spending also achieve the social justice goal of health care for everyone.

Much has been written on what does work and what doesn’t work in controlling spending. This paper provides an excellent, brief summary of the concepts being floated, and is well worth downloading. We should be very concerned that the leading mechanisms proposed, as summarized in this article, would not have a significant impact on slowing spending, and would likely actually increase our costs. Nor would they be effective in achieving health care justice for all.

If we are going to address costs seriously, there is no other option than to fundamentally restructure our health care financing system. As the authors state, “no substitute exists for constraining prices and capping expenditures.” We can never achieve that by relying on our wasteful, fragmented multi-payer system of financing health care. As all other nations have shown us, there is no other option than central, public control.

It is true that some nations do use private insurers. But private insurers in their countries organized into social insurance programs serving the public good have almost nothing in common with private insurers in the United States that shun organization in order to serve their own business interests. Adding a few regulations to our current fragmented system will increase costs but cannot transform a self-serving business model into a public-serving social insurance model.

We really have only two effective choices that would achieve both of our goals. We can dismiss our current private insurers and bring in new private insurers with a mission of serving the public good, but that is the most expensive model of reform, and it compromises equity and efficiency. Our other choice would be to eliminate our fragmented financing system and replace it with a single payer national health program. That would allow us to constrain prices and cap expenditures while achieving our other goal of providing all necessary care for everyone.

We can do it, but the people, through our elected representatives, are going to have to tell the special interests that we’ve had enough.

Indicting the insurance companies and the system that supports them

based on evidence from many sources including the SiCKO film

Denial of Access to Insurance

Count #1: That insurance companies charge such high insurance premiums that millions of Americans cannot afford to purchase any insurance at all, leading to 18,000 deaths every year.

Count #2: That insurance companies deny access to insurance for people who may have one of a long list of diseases, rather than make arrangements to see that they receive the care they need.

Count #3: That insurance companies drop people from coverage while they are sick, when they can no longer work at the job from which they get their insurance or can no longer pay their premiums.

Count #4: That insurance companies retroactively cancel insurance because of presumed undisclosed pre-existing conditions, even after the patient has received care and incurred financial liability for the care.

Denial of Coverage

Count #5: That insurance companies often cover such a small portion of necessary medical costs that millions of Americans with insurance end up bankrupt.

Count #6: That insurance companies require prior approval for large numbers of medically-necessary tests and procedures, adding needless expense, delay, and stress for doctors and hospitals. Prior approval is often required even in emergency situations when it is physically difficult or impossible to obtain such approval.

Count #7: That insurance companies deny access to care on the grounds that drugs or procedures are experimental, even when there is good evidence that the drug or procedure is potentially life-saving.

Count #8: That insurance companies deny coverage for tests or treatments without any review by the responsible Medical Director or other medically-qualified person on their staff.

Count #9: That pharmaceutical companies charge such high prices for drugs, and insurance companies cover such a small portion of their cost, that millions of Americans are denied the medications they need to recover, survive, and live comfortable lives.

Perversion of the Medical Profession

Count #10: That insurance companies pervert the medical profession by providing financial incentives that lead their Medical Directors and other medical personnel on their staff to deny access to care and thereby to harm patients.

Count #11: That insurance companies impose medical decisions without the direct interaction with patients required of treating physicians.

Misuse of Funds

Count #12: That insurance companies file fraudulent claims for payment from government insurance programs (Medicare and Medicaid).

Count #13: That insurance companies use our money to pay their CEOs hundreds of millions of dollars that could be used to provide us with more and better medical care.

Count #14: That insurance companies draft legislation behind the scenes and without public disclosure that include financial giveaways to themselves and their pharmaceutical company allies.

Count #15: That insurance companies use our money to make political contributions in order to avoid government regulation and to resist proposals that would replace them with a public program that would provide better, more comprehensive, life-saving care.

Count #16: That insurance companies use our dollars to support the publication of propaganda that provides false and distorted information on the health care programs of other countries.

Count #17: That insurance companies use our dollars to support the publication of propaganda that seeks to persuade the American people that they do not have a right to health care when they need it and that health care is a consumer commodity that only those with the ability to pay are entitled to receive.

Count #18: That insurance companies mislead the American public by offering choices of plans while denying them their choice of doctor and hospital, often including, in emergencies, denying them access to the nearest hospital.

Count #19: That insurance companies support a system that requires that Americans have the right job to qualify for health care.

Count #20: That insurance companies support a system that sets the price of medical tests and procedures out of reach of millions of Americans, even though little additional cost would be incurred by treating the patient.

Compiled by Len Rodberg, Research Director, New York Metro Chapter of Physicians for a National Health Program

New York Metro Chapter, Physicians for a National Health Program
PO Box 50193, Brooklyn, NY 11205. Tel: 718-222-9266 Fax: 718-222-1140
Email: pnhpnymetro@nyc.rr.com

Focusing on doctor pay misses point

By PAUL DEMARCO
The State, South Carolina
Monday, Mar. 23, 2009

I hate to disagree with my friend John Black, the president-elect of the S.C. Medical Association; he is a good man, a good clinician and a passionate advocate for primary care physicians. But his recent column, “Medicaid: a fair price must be paid,” misses the point.

Doctors complaining about Medicaid rates in the current health-care climate are about as tone-deaf as the crew of a sinking ship complaining to the passengers about their low pay. Yes, Medicaid rates are too low and need to be addressed, but Black approaches the problem from the wrong direction. We must put patients first, not doctors.

The Medical Association must make access to decent health care for all South Carolinians its central focus. When I took the Hippocratic Oath, I took it to mean that I would care for any patient who made it to the threshold of my office, no questions asked, and that my fellow physicians would do the same. The issue of how the patient was going to pay was only a secondary concern.

I don’t deny the business aspect of medicine. Physicians endure rigorous training for years, sometimes incurring tremendous debt. When we finally begin practice, we have a right to make a good living. Most physicians realize the privilege we have in serving our patients and provide free or low-cost care to some. Black rightly points out that there is a limit to physicians’ generosity; however, his comparison of physicians and car dealers is misplaced (“the car dealer is not expected to sell for a loss”). We chose medicine over selling cars for a reason. We wanted to take care of patients, to provide them healing and compassion impossible in the car business. And we knew that would involve taking all comers.

Unfortunately, some physicians look for ways to avoid taking care of the poor and uninsured. It is a discouraging fact that part of the unraveling of the medical safety net has been physicians’ doing. Some physicians drop out of Medicaid and Medicare legitimately, but others do it to preserve a certain high salary expectation. This is an abdication of their duty to the medical profession and to their patients.

Black’s warning that the situation is grave and that physicians “can no longer pay essential bills to keep our offices open” is an overstatement. First, there is no evidence that significant numbers of physician practices are closing because of payment issues.

Second, plenty of high-paying openings are available to physicians looking for jobs in South Carolina. I found more than 100 on MDsearch.com. One listing for a family practitioner in Clinton advertised “excellent income potential in excess of $250,000.”

Third, it is not physicians who are most at risk in the current system; it is patients. Forty-six million have no coverage, and 25 million more are underinsured. According to one report, in 2001, medical expenses helped push an estimated 2 million Americans into bankruptcy.

As physicians, we must roll our sleeves up, but not in the service of padding our own pockets. We must work together to craft a system that covers all the patients that we care so deeply about. As we remake America’s health care system, we’ll ensure that its physicians are adequately compensated, but that must be a byproduct of our effort. The patient always, always, always comes first.

Dr. DeMarco is a spokesman for South Carolinians for Universal Health Care. Reach him at pvdemarco@bellsouth.net.

National call-in day on April 15

Dear Single-Payer Supporter:

On April 15th, the Leadership Conference for Guaranteed Health Care is launching a nationwide call-in day for single-payer national health care. Our message is clear: “Tax payer dollars should go to people, not profits. Support single-payer national health care now.”

Lesser reform proposals will have our taxes subsidizing insurance company profits, not paying for real health care. We must fix our health care system by putting everybody in, and removing for-profit interests that are responsible for the sky-rocketing cost of health care. The only plan that meets these criteria is a single-payer national health care system.

So on April 15th, 2009, we ask that you join with thousands of others to call Congress, to support single-payer legislation in both the House (HR 676) and the Senate (S703).

If you don’t know your Congresspersons, or want a script, all of the information you need is on our National Call-In Day page – http://www.healthcare-now.org/campaigns/call/

If you know your Representative and Senators, the Capitol Switchboard number is 866-338-1015*. Ask to be connected, and then ask him or her to support HR 676 or S703. If they are already a co-sponsor, thank them.

The injustice in our healthcare system must end. If our Congress is serious about health reform, they will support single-payer health care now.

Health and Justice,

Katie Robbins
Assistant National Coordinator, Healthcare-NOW!
Support Staff, Leadership Conference for Guaranteed Health Care
o: 800.453.1305
c: 330.618.6379
f: 212.475.8350
healthcarenow08@gmail.com
www.healthcare-now.org
339 Lafayette St
New York, NY 10012

*If you cannot make phone calls, information for your US Representatives and Senators can be found at www.votesmart.org

National call-in day on April 15

Dear Single-Payer Supporter:

On April 15th, the Leadership Conference for Guaranteed Health Care is launching a nationwide call-in day for single-payer national health care. Our message is clear: “Tax payer dollars should go to people, not profits. Support single-payer national health care now.”

Lesser reform proposals will have our taxes subsidizing insurance company profits, not paying for real health care. We must fix our health care system by putting everybody in, and removing for-profit interests that are responsible for the sky-rocketing cost of health care. The only plan that meets these criteria is a single-payer national health care system.

So on April 15th, 2009, we ask that you join with thousands of others to call Congress, to support single-payer legislation in both the House (HR 676) and the Senate (S703).

If you don’t know your Congresspersons, or want a script, all of the information you need is on our National Call-In Day page – http://www.healthcare-now.org/campaigns/call/

If you know your Representative and Senators, the Capitol Switchboard number is 866-338-1015*. Ask to be connected, and then ask him or her to support HR 676 or S703. If they are already a co-sponsor, thank them.

The injustice in our healthcare system must end. If our Congress is serious about health reform, they will support single-payer health care now.

Health and Justice,

Katie Robbins
Assistant National Coordinator, Healthcare-NOW!
Support Staff, Leadership Conference for Guaranteed Health Care
o: 800.453.1305
c: 330.618.6379
f: 212.475.8350
healthcarenow08@gmail.com
www.healthcare-now.org
339 Lafayette St
New York, NY 10012

*If you cannot make phone calls, information for your US Representatives and Senators can be found at www.votesmart.org

Why Has the Press Failed Us In Reporting on Health Care Reform?

An Open Letter to Bill Keller, Executive Editor, New York Times, and Clark Hoyt, Public Editor, New York Times

Benjamin Day
April 10, 2009

Dear Bill Keller and Clark Hoyt — For the first time in the span of a generation, national health care reform is back on the horizon, and I’m writing to you to step back for a moment into the history of the Times’s reporting on health care reform. Last year I began a research project with two researchers from Harvard Medical School, Drs. David Himmelstein and Steffie Woolhandler, to look at the history of major state health reforms such as TennCare, the Oregon Health Plan, MinnesotaCare, and many others. A sweeping health reform bill had been passed into law in Massachusetts in 2006 that was being hailed as a unique, first-of-its-kind bipartisan strategy to achieve universal or near-universal health coverage without raising taxes or adding new regulations on the health care industry. We initially set out to find how unique the Massachusetts health reform law really was compared to previous state efforts, and to see if by analyzing the outcomes of those earlier reform efforts we could learn some lessons about what to expect in Massachusetts.

What we found surprised us, and a summary write up of our findings was published in the International Journal of Health Services.[i] We found that, aside from the “individual mandate” in Massachusetts requiring many of the uninsured to purchase their own private health plan or face tax penalties, many reforms in other states — indeed, even in our own state in the recent past — were almost identical to the Mass plan in their goals and structure. They also all failed to achieve their stated goals of reducing the uninsured population in their respective states and/or of controlling rising health care costs. The most ambitious of these, TennCare in 1994 and a large Medicaid expansion in Massachusetts also in the mid-1990s, were able to reduce the uninsured in their respective states for a period of several years. However, the financing of these plans all proved unsustainable over time, enrollment was often capped or benefits eroded, and a few short years after passage every state found itself back where it started: with high and rising health care costs and a large and growing uninsured population. We titled our article “State Health Reform Flatlines.”

What we found even more surprising than this history of failed reform efforts, though, was media coverage of the legislation. Articles by our most respected news organizations hailed state reform after state reform as pioneering, likely to serve as models for the nation, and designed to control costs and extend health coverage to the uninsured. No reasonable reader of the news available at the time these laws were passed would expect that they might fail entirely to reduce the uninsured over time, or that they might not succeed in controlling costs at all.

Florida in April 1993 launched the first of what would be many “managed competition” plans for controlling costs and extending health coverage, a scheme that would serve as virtually the only cost control component of Bill Clinton’s proposed health reform bill of 1994. The New York Times wrote “The Florida Legislature approved a sweeping overhaul of the state’s overburdened health-care system early today, making Florida the first state in the nation to combine free market competition and government regulation in a way similar to the Clinton Administration’s plans for controlling soaring medical costsĆ¢ā‚¬Ā¦ Florida’s plan, which will try to cover most people eventually and at the same time to control health costs, is taking place on a larger scale than anything seen elsewhere.”[ii] Managed competition did not control costs in Florida or anywhere else, nor was the uninsured population reduced.

Exactly one year previous in April of 1992 Minnesota passed its “HealthRight” plan — later renamed “MinnesotaCare.” USA Today wrote of it: “Minnesota is about to embark on a plan to solve the health-insurance crisis that could hold lessons for other states and the nationĆ¢ā‚¬Ā¦ HealthRightĆ¢ā‚¬Ā¦ will begin signing up families with children in the fall and will be fully open to Minnesota’s estimated 370,000 eligible uninsured by 1994.”[iii] The Associated Press wire coverage of the law repeated state estimates that almost 40 percent of those uninsured should be covered by 1997, and quoted the head of the National Conference of State Legislatures calling the bill “the first complete reform proposal in the United States.” MinnesotaCare did not reduce the percentage of uninsured in Minnesota even in the short-term.

A few other quotes should be enough to convey the sense that there is a recurring problem in the news we receive on health reform in America. A Vermont bill also passed in 1992 elicited this opening description in the New York Times: “Gov. Howard Dean, the only governor who is a physician, signed a law Monday in Bennington that sets in motion a plan to give Vermont universal health care by 1995.”[iv] The Oregon Health Plan of 1992, which attempted to reduce benefits for Medicaid beneficiaries in order to expand coverage to the uninsured, was described in a Washington Post article as “The most far-reaching health care reform in the nation.”[v] The New York Times began its coverage by stating that “The Clinton Administration today approved Oregon’s proposal to guarantee health services for poor people by rationing care.”[vi] Neither Vermont’s reform nor Oregon’s reduced the percentage of uninsured in the state, and the poor in Oregon were not covered.

These are selective quotes: the broader coverage has often provided good descriptions of what the laws are intended to accomplish. Moreover, they have included extremely effective reporting on the politics of the health reform process — particularly when the process is contentious, or where well-organized groups have mobilized opposition. However, in the United States we have a long history of reforms that have survived the political process only to fail economically, and it is clear in retrospect that the media sources — both local and national — with large market share have not done their due-diligence in reporting on the economic viability of health reform efforts. I believe this would be borne out by analyzing coverage of many other significant reforms in Washington, Tennessee, Massachusetts, Hawaii, Maine, California, Utah, and nationally.

This becomes particularly clear by comparing coverage of health care reform with medical reporting in virtually any paper. The Christian Science Monitor on April 8, for example, carried a story that is typical of this approach to health politics reporting entitled “Healthcare battle brewing: political groups gear up: A public insurance alternative is likely to be the most contentious of the reform proposals.”[vii] The story states that the Obama administration hopes to introduce a Medicare-like public buy-in plan available to individuals and businesses as an alternative to private health coverage. It goes on to cite the Heritage Foundation’s opposition to the plan, the support of groups such as MoveOn.Org and Democracy for America, and public polling from Harvard Professor Robert Blendon. The article follows a “he-said/she-said” format, with the Heritage Foundation contending that such a plan would not allow private insurance to compete on a level playing field, advocates urging that it will bring down costs and hold the private insurance industry accountable, and the CEO of Families USA urging that both sides attempt to find a common ground.

What is missing from this narrative of contending arguments is a discussion of evidence about the likely impacts of a public plan option. There have been forms of public-private health insurance competition implemented under Medicare for a number of years, and there are many other countries that allow competition between public and private health insurers. Peer-reviewed studies of public-private competition are not hard to find, nor are experts with varying opinions. Compare the CSM discussion with almost any medical news story in the New York Times Health Section on the same day: there is a report on a new study by two Stanford professors assessing the impact of George W. Bush’s AIDS Relief program in Africa; two studies about the impact of light exercise for heart failure patients; three reports on the role of “brown fat” in burning calories; and others. In short, medical reporting and the coverage of public disagreements revolve around evidence, there are standards for credible sources, and it is common to read about the limitations of available evidence. Although I am personally an advocate and an organizer coming from a single-payer health care perspective, what strikes me most after reading hundreds of news reports on health reform is the lack of academic perspectives, held to academic standards, concerned with basic questions of the economic efficacy and sustainability of health policy proposals.

At the state level this has often been exacerbated by bi-partisan legislation. Many of the reforms that have failed to achieve or even approach their stated goals have been passed with support from the Democrats and Republicans holding one or both legislative houses or the governor’s office. This has a particularly chilling effect on politics-based health reform coverage. Reporting on the Oregon Health Plan, for example, focused almost exclusively on the attempt to ration services for Medicaid enrollees — would this plan harm the disabled or the poor, was it just? — while the basic question of whether the law, even taking rationing for granted, would succeed in reducing the uninsured in the state, went unasked. In Tennessee, similarly, the spectacle of almost one million Medicaid enrollees being moved into managed care plans occluded the basic question of whether the proposal to extend coverage to another half a million uninsured residents was economically viable, or if it would succeed in reducing the state’s uninsured over time — these latter goals being the entire point of moving Medicaid recipients into managed care plans in the first place.

This shortcoming has also been exacerbated by the subject material. Increasing access to health care is what makes health reform morally compelling for most people, but financing and cost controls are what make efforts to expand access sustainable or unsustainable. These are topics not well-suited to personal interest stories, and they are often bewilderingly complex. In Massachusetts alone, residents have been promised universal health care or dramatic reductions in the uninsured at least four times in the last twenty years. A few years after each reform passes, the dry logic of costs and financing has left residents back where they started, and yet when the politics of health reform begin again we are provided with very little information in the public sphere to sort out the snake-oil from the genuine, sustainable reform proposals.

I write to you not because I believe the New York Times is particularly at-fault in leaving its reading public unprepared to determine the viability of different health reform proposals, but because the scope of the Times’s coverage has meant that it has reported on a wide range of state and national efforts, which gives us a good window on the history of health reform coverage in the United States. This year, many national commentators are measuring the ongoing process of health policy development against the failed Health Security Act of the Clinton era. This has led many advocates to be particularly concerned with crafting politically viable proposals. I believe this makes the burden on reporters to effectively assess whether the proposals are likely to achieve their stated goals sustainably all the more important.

I would urge the Times not to report health policy disputes in a he-said/she-said format divorced from evidence-based standards. Reporters should challenge interviewees to source their economic claims, include those sources in their write-ups, and not shy away from evaluating the quality of evidence offered from different perspectives. Furthermore, we have learned time and again that where there is political harmony, there is not necessarily economic rationality. The burden of evidence-based evaluation of health policy cannot stop at the borders of political skirmishes.

I thank you for your consideration of this open letter,

Sincerely,

Benjamin Day
Executive Director
Mass-Care: The Massachusetts Campaign for Single Payer Health Care
33 Harrison Ave — 5th floor
Boston, MA 02111
Phone: 617-723-7001
Fax: 617-723-7002
Email: info@masscare.org

This is the first of seven open letters on national health reform. Subsequent letters will address the politics of cost control; a discussion on whether public-private health insurance competition is likely to control costs; a report on the “cost control industry” in the United States and the problem with trying to do more to spend less; a discussion of whether we want the health care Congress has, and whether a public clearinghouse for private insurance would be an effective proposal; whether individual mandates are a viable road to universal health care; and a discussion of what the chances are that national health reform will reduce health disparities.

[i] Steffie Woolhandler, Benjamin Day, and David U. Himmelstein, “State Health Reform Flatlines,” International Journal of Health Services, Volume 38, Number 3, Pages 585–592, 2008. Available online at https://pnhp.org/states_flatline/

[ii] Larry Rohter, “Florida Blazes Trail to a New Health-Care System,” The New York Times, April 4, 1993, Sunday.

[iii] Kevin Anderson, USA Today, April 21, 1992.

[iv] Fox Butterfield, “UNIVERSAL HEALTH CARE ADOPTED IN VERMONT,” New York Times News Service, May 12, 1992.

[v] Michael Abramowitz, “Oregon Blazes a Trail; Doctor/Legislator John Kitzhaber Sets Off Political Fireworks With His Plan to Ration Medical Services While Expanding Coverage,” The Washington Post, June 9, 1992, Tuesday.

[vi] ROBERT PEAR, “U.S. Backs Oregon’s Health Plan for Covering All Poor People,” The New York Times, March 20, 1993, Saturday.

[vii] Alexandra Marks, “Healthcare battle brewing: political groups gear up: A public insurance alternative is likely to be the most contentious of the reform proposals,” The Christian Science Monitor, April 8, 2009.

A System From Hell

By Kate Michelman
The Nation

This article appeared in the April 27, 2009 edition of The Nation.

It was a crisp and brilliant autumn day last October when the medical and financial crises with which my family had successfully, if barely, coped for seven years became a catastrophe.

My husband had been diagnosed with Parkinson’s disease in 2002, a year after our daughter was paralyzed in a horse-riding accident. His balance had deteriorated until he fell two or three times at home last summer. In the face of his diminishing physical condition, a single fall could result in disastrous injury. We scheduled an appointment with his neurologist in Washington.

We pulled up to the main entrance of the hospital after the two-hour drive from our home near Gettysburg, Pennsylvania. My husband opened his door, grabbed the roof of the car and began to pull himself out as I walked around to help him. I was too late. In an instant–time slowed enough for me to see the danger but raced ahead too fast for me to reach him–he lost his grip and fell to the concrete, shattering his hip, breaking his femur and causing internal bleeding that kept him in the hospital for months.

My husband is a retired college professor, and what the teaching profession lacks in salary it often makes up for with generous benefits. His health insurance would cover most of the emergency costs related to the fall–the surgeries, the hospitalization, the drugs. But in the astronomical sums the cost of medical care often entails, “most” is not a reassuring word. Months later, as his discharge from the hospital drew near, I sat in my living room looking at the bills piling up on the table. The co-pays, uncovered care and other costs had already reached $8,000, and we had virtually nothing left.

Seven years of caring for my husband and our daughter, who had no insurance at the time of her accident, had all but exhausted our savings. As my husband’s condition deteriorated, I was caught in a trap. We needed my income, but the kind of political consulting work that was my forte was incompatible with the demands of caring for him. It was simply not possible for me to be available for him 24/7 and simultaneously to work overtime, traveling for days or weeks on the campaign trail, to bring in the income that would keep us afloat.

The fraying financial thread by which we were already hanging was now certain to snap. When I heard the awful sound of my husband’s body hitting the concrete outside the hospital, I knew the modicum of independence to which he had clung for so long was gone. He was discharged into an assisted-living facility, where most of the cost was excluded from both his private long-term-care insurance and Medicare. At $9,000 a month, the bills accumulated quickly.

Recently, we decided to bring him home, although the doctors would have preferred that he stay at a facility with full-time supervision. But this was a mathematical decision, not a medical one: we do not have the money it costs to keep him there. I had already stopped working, to care for him; our savings are nearly depleted; and his pension is not nearly large enough to pay the bills.

Today he needs nearly round-the-clock professional help at home–less than the cost of the assisted-living facility but still far more than we have. I have spent recent weeks looking for a job that can add at least enough to my husband’s pension and our Social Security benefits to cover the cost of his care. It is a dilemma familiar to so many women–finding work that can pay for care but also leave time for providing it.

The time is drawing near when, job or no job, the expenses will simply be more than we have. I am coming full circle, back to where so many women’s lives begin and end–and where my career as an activist began: jobless, unsure how to pay the next month’s bills, caring for a family that depends on me for survival–and utterly and deeply determined that something about our country must fundamentally change.

That was in 1969. My first husband had abruptly left my three young girls and me, stranding us without financial support. Our family was in crisis, and when I found out a few weeks later that I was pregnant too, I knew it was impossible to give a new baby–whose father had already deserted it–what it deserved while also giving my daughters what they needed. So in 1969 I made the difficult decision to have an abortion. Because state law radically restricted access to the procedure, that decision had humiliating consequences. I was forced to obtain permission both from the man who had abandoned my daughters and me and from an all-male hospital review board. The board’s interrogation in a hospital conference room covered subjects like whether I was capable of dressing my children in the mornings and whether I had been satisfying my husband sexually.

That experience sparked a lifetime of activism that eventually took me to the front ranks of the prochoice movement, where I forged deep and lasting friendships with some of the most powerful political figures of the past thirty years.

Not many Republicans were among them. But there ought to have been more–because in a distant era fast receding in time, theirs was the party of moderation and individual rights, and also because, ironically enough, I have led precisely the life Republicans claim to value. I started as a single welfare mother, then worked my way through college en route to a successful career. My second husband and I have sustained a traditional and loving marriage for thirty-five years. He purchased quality health insurance, including long-term-care insurance, so he would not be a financial burden to others. He enjoyed a long and steady career at an institution that would pay healthcare costs and a modest pension for life. Between his salary and mine, we achieved a reasonable degree of economic comfort–never wealthy but independent, self-sufficient, responsible.

Then came our daughter’s accident.

We got the call in 2001. She was pursuing her lifelong love of horses as a trainer in upstate New York. One day in May her horse got spooked, reared up and fell over backward on top of her, crushing three of her vertebrae and paralyzing her for life.

The weeks and months that followed included multiple surgeries, a long hospitalization and extensive rehab. The bills were exorbitant, to say nothing of the fact that our daughter probably would never again be able to support herself through full-time work.

When the bills came in, it never occurred to me that walking away from them was an option. I cashed in the IRA on which we were depending for retirement and paid them myself.

My husband’s diagnosis followed just as our daughter was beginning to stabilize. Eventually I had to leave work to care for him, and our financial independence deteriorated on a parallel track with his health. The story is familiar: the medical crisis that becomes a financial one. Still, we were able to hold things together, moving from one crisis to the next but finding a way to get by.

That ended in October. We quickly learned that not even the most frugal planning is enough to cope with surging healthcare costs. The long-term-care insurance barely covers a fraction of his long-term care. I will care for him at home, but a time will come when even our home might be at risk: if he needs nursing home care, Medicaid will pay for it only after we have liquidated most of our assets. Consequently, a blessing–my husband could live like this for years to come–is also likely to bankrupt us.

I do not tell this story because it is unique. On the contrary, the point is precisely that countless people across the country are living it. And millions more are a crisis away from joining them–one lost job, a diagnosis, an accident. Most people do not have the luxury of being able to call, as I do, on powerful friends for help. Not even these friends, of course, can change the predicament my husband and I face. Nor will the situation change for anyone until political leaders get serious about comprehensive healthcare reform.

By “comprehensive,” I mean that piecemeal approaches will not work–not economically, not morally. The healthcare crisis is not a series of isolated problems. The problem is not just the uninsured. It is not only the underinsured. It is not the young or the old. My husband had excellent health coverage; our daughter had none. He faces chronic illness in the twilight of life; she suffered a terrible injury just as her adult life was beginning. Between them, they span the complete spectrum of healthcare economics in America, but when crisis struck, they found themselves in the same place.

Our story also illustrates the unique challenges women face in the healthcare system, as in the economy at large. Women are paid less and given benefits less frequently–yet they are the ones on whom the responsibility of caretaking disproportionately falls. In addition, women disproportionately, but hardly exclusively, understand the perverse economic choices the healthcare system imposes. In my case, I had to quit working to care for my husband, only to arrive at a point at which he needs care I can afford only if I can find a job. The bills, meanwhile, are often inexplicable, sometimes contain mistakes and are always impossible to resolve without encountering a thicket of red tape.

Even on the other side of that thicket, the insurance companies cannot answer the most vexing question my husband and I–and so many others–ask: if “health insurance” does not pay for healthcare when people need it, then what exactly do those words mean? And all this says nothing about the fact that my husband had the foresight to purchase long-term-care coverage. The problem is that it nominally covers long-term care but does not cover its actual cost.

I am often told there is a shocking quality to our story–it prompts a realization that if this could happen to someone like me, it could happen to anyone. But of course there is little that ought to surprise us; political connections are bound to be of little avail in the face of a problem politics has refused to address.

If there is an upside to the country’s healthcare crisis, it is that the problem is hurtling toward a point at which it absolutely cannot be ignored without immediate and disastrous consequences. If there is an upside for me, it is this: returning to those difficult days of poverty and fear in 1969 also means returning to a place where anger inspires activism. I was a young woman then, of course, with a lifetime of battles ahead. I am not so young now. But I have enough years left to have one more fight in me. Healthcare is it.

About Kate Michelman: Kate Michelman was president of NARAL Pro-Choice America from 1985 to 2004. She is the author of With Liberty and Justice for All: A Life Spent Protecting the Right to Choose (Penguin/Hudson Street Press, 2005).

Josh Freeman on the question of a national policy on the right to health care

Does the nation need a clear policy on a right to basic health care?

By Josh Freeman
Medicine and Social Justice
April 10, 2009
At a recent conference, I was asked to be a “thought provocateur” (!!) on the topic “The nation needs a clear policy on the basic right to health care”.
This is an interesting question, since my first reaction is: “Of course, we need a clear policy on the basic right to health care! I mean, I have a pretty clear idea of what that policy should be, but certainly even those who would disagree with me would agree that we need a policy!”
But, on reflection, I don’t know that they do. I think that a great deal of the perseverance of our “non-system” of health care has been a result of a consensus among our leaders to NOT talk about this issue, to NOT grapple with it, to not have to take a position one way or another on whether health care is a basic right.
This is because, if one does take a position, there are implications, and things that we would then have to do.
If health care is a basic right, then we need to provide it to everyone. We can no longer diddle around with partial fixes, tinkering around the edges, covering (maybe) children but not their parents, covering people who are poor — as long as they are children and their mothers and are really poor and not working — but not those who are poor, or nearly-poor, depending on which state you are in. Or, for that matter, working-class, or, in increasing numbers, middle class.
But the problem is most people in power, including most politicians including the President, don’t want to have to take a position against health care being a basic right. It sounds, well, mean. There aren’t many people, except, well, mean people (and maybe some reactionary ideologues), who are willing to defend this position.
So we have shows such as “Sick Around America”, the Frontline “sequel” to T.R. Reid’s “Sick Around the World” (which Reid disassociated himself from). It interviewed insurance company executives who said “sure we can insure everyone”. If we make it mandatory and can make a profit, everyone. Hmm. The cost would be ridiculous. And the option of single payer was never mentioned. There is a lot more that has to be decided if we agree that health care is a basic right, like how to provide it, how to pay for it, and what will be and will not be covered. I mean, sure, other countries seem to have solved that problem, and we could model a system on one or more of theirs, but where’s the fun in that?
And if we agree that health care is not a basic right, we solve that problem, but we have other ones — like all these uninsured, and underinsured people.

  • And folks not getting preventive care but rather incredibly expensive curative care.
  • And companies like our automobile companies going bankrupt in some part because of the cost of health insurance.
  • And, oh yeah, people dying in the streets.

For the record, I do believe that we need a policy on health care as a basic right, and my belief is that it should be. Perhaps the most important reason is social justice; we all share in the public good. This is what virtually every other nation of the first world has long realized. When T.R. Reid asked the leaders of the countries he visited for “Sick Around the World” how many of their citizens went bankrupt as a result of health care debts, they all said none. The most dramatic response was from the President of the Swiss Confederation, a conservative who had originally opposed the Swiss program in the early 90s. “No one,” he boomed in his French-accented English, “why, it would be a national scandal!”
The health of our society depends upon the health of all of us.

  • When people crowd our emergency rooms, not with minor illnesses, but with serious illnesses that could have been prevented with earlier treatment, that is a scandal.
  • When parents cannot afford their own health care and their illnesses threaten their ability to keep providing for their children, that is a scandal.
  • When people stay in jobs they hate, or forego the opportunity to start a new business, because they rightfully fear being uninsured, that is a scandal.
  • When our friends and neighbors, parents and children, only take partial doses of their medicine because it is a choice between that and not eating, that is a scandal.
  • When a hard-working man with chest pain can see the billboards advertising the superb heart care available at our local hospitals and know they are not meant for him because he is uninsured, that is a scandal.

When we are all in it together, we all have an interest in making the system be as good as it can be. The efforts of those of us who are more educated, more financially able, more vocal, more empowered will ensure that the needs of those who are less able to lobby for themselves are also met.
Just as our nation cannot survive half-slave and half-free, or with only half of adults having the vote, we cannot survive with only some of us having access to health care.
We need to do this for all of us, for, after all, ultimately, we are our brother’s and sister’s keepers.
http://medicinesocialjustice.blogspot.com/2009/04/does-nation-need-clear-policy-on-right.html
The Coastal Research Group
http://coastalresearch.org/about/

Joshua Freeman, MD is Professor and Chair of the Department of Family Medicine at the University of Kansas School of Medicine. I was fortunate to have been in the audience when Josh delivered his comments above at the Twentieth National Conference on Primary Health Care Access, sponsored by The Coastal Research Group.
Words on paper (or on a computer monitor screen) can express concepts, but they fall short in expressing the passion and inspiration communicated to the audience during the presentation of the speaker. This was one of those moments I’ll remember forever.
Josh had to leave before the discussion of a reactor panel assembled to respond to his comments. One physician from Nebraska expressed his views of health care as a matter of justice – comments which also moved me deeply. Another physician from Texas was not inclined to support health care as a right, and then he read us a passage from the Bible.
I’ll ask you, does the nation need a clear policy on a right to basic health care?

Josh Freeman on the question of a national policy on the right to health care

Does the nation need a clear policy on a right to basic health care?

By Josh Freeman
Medicine and Social Justice
April 10, 2009

At a recent conference, I was asked to be a “thought provocateur” (!!) on the topic “The nation needs a clear policy on the basic right to health care”.

This is an interesting question, since my first reaction is: “Of course, we need a clear policy on the basic right to health care! I mean, I have a pretty clear idea of what that policy should be, but certainly even those who would disagree with me would agree that we need a policy!”

But, on reflection, I don’t know that they do. I think that a great deal of the perseverance of our “non-system” of health care has been a result of a consensus among our leaders to NOT talk about this issue, to NOT grapple with it, to not have to take a position one way or another on whether health care is a basic right.

This is because, if one does take a position, there are implications, and things that we would then have to do.

If health care is a basic right, then we need to provide it to everyone. We can no longer diddle around with partial fixes, tinkering around the edges, covering (maybe) children but not their parents, covering people who are poor — as long as they are children and their mothers and are really poor and not working — but not those who are poor, or nearly-poor, depending on which state you are in. Or, for that matter, working-class, or, in increasing numbers, middle class.

But the problem is most people in power, including most politicians including the President, don’t want to have to take a position against health care being a basic right. It sounds, well, mean. There aren’t many people, except, well, mean people (and maybe some reactionary ideologues), who are willing to defend this position.

So we have shows such as “Sick Around America”, the Frontline “sequel” to T.R. Reid’s “Sick Around the World” (which Reid disassociated himself from). It interviewed insurance company executives who said “sure we can insure everyone”. If we make it mandatory and can make a profit, everyone. Hmm. The cost would be ridiculous. And the option of single payer was never mentioned. There is a lot more that has to be decided if we agree that health care is a basic right, like how to provide it, how to pay for it, and what will be and will not be covered. I mean, sure, other countries seem to have solved that problem, and we could model a system on one or more of theirs, but where’s the fun in that?

And if we agree that health care is not a basic right, we solve that problem, but we have other ones — like all these uninsured, and underinsured people.

* And folks not getting preventive care but rather incredibly expensive curative care.

* And companies like our automobile companies going bankrupt in some part because of the cost of health insurance.

* And, oh yeah, people dying in the streets.

For the record, I do believe that we need a policy on health care as a basic right, and my belief is that it should be. Perhaps the most important reason is social justice; we all share in the public good. This is what virtually every other nation of the first world has long realized. When T.R. Reid asked the leaders of the countries he visited for “Sick Around the World” how many of their citizens went bankrupt as a result of health care debts, they all said none. The most dramatic response was from the President of the Swiss Confederation, a conservative who had originally opposed the Swiss program in the early 90s. “No one,” he boomed in his French-accented English, “why, it would be a national scandal!”

The health of our society depends upon the health of all of us.

* When people crowd our emergency rooms, not with minor illnesses, but with serious illnesses that could have been prevented with earlier treatment, that is a scandal.

* When parents cannot afford their own health care and their illnesses threaten their ability to keep providing for their children, that is a scandal.

* When people stay in jobs they hate, or forego the opportunity to start a new business, because they rightfully fear being uninsured, that is a scandal.

* When our friends and neighbors, parents and children, only take partial doses of their medicine because it is a choice between that and not eating, that is a scandal.

* When a hard-working man with chest pain can see the billboards advertising the superb heart care available at our local hospitals and know they are not meant for him because he is uninsured, that is a scandal.

When we are all in it together, we all have an interest in making the system be as good as it can be. The efforts of those of us who are more educated, more financially able, more vocal, more empowered will ensure that the needs of those who are less able to lobby for themselves are also met.

Just as our nation cannot survive half-slave and half-free, or with only half of adults having the vote, we cannot survive with only some of us having access to health care.

We need to do this for all of us, for, after all, ultimately, we are our brother’s and sister’s keepers.

http://medicinesocialjustice.blogspot.com/2009/04/does-nation-need-clear-policy-on-right.html

The Coastal Research Group
http://coastalresearch.org/about/

Comment:

By Don McCanne, MD

Joshua Freeman, MD is Professor and Chair of the Department of Family Medicine at the University of Kansas School of Medicine. I was fortunate to have been in the audience when Josh delivered his comments above at the Twentieth National Conference on Primary Health Care Access, sponsored by The Coastal Research Group.

Words on paper (or on a computer monitor screen) can express concepts, but they fall short in expressing the passion and inspiration communicated to the audience during the presentation of the speaker. This was one of those moments I’ll remember forever.

Josh had to leave before the discussion of a reactor panel assembled to respond to his comments. One physician from Nebraska expressed his views of health care as a matter of justice – comments which also moved me deeply. Another physician from Texas was not inclined to support health care as a right, and then he read us a passage from the Bible.

I’ll ask you, does the nation need a clear policy on a right to basic health care?

Jacob Hacker provides details for public option

Institute for America’s Future and Berkeley Center on Health, Economic & Family Security
Policy Brief
April 2009

Healthy Competition: How to Structure Public Health Insurance Plan Choice to Ensure Risk-Sharing, Cost Control, and Quality Improvement

By Jacob S. Hacker, Ph.D.
Executive Summary
The debate over health care reform has increasingly centered on the issue of “public plan choice”–whether Americans younger than 65 who lack employment-based coverage should have the choice of enrolling in a new public health insurance plan modeled after Medicare. The central argument for public plan choice is that such a plan, offered as a choice within a new national insurance “exchange,” provides an essential set of security guarantees, ensuring that Americans without insurance from their place of work can find a plan that offers them quality, affordable health care through a broad choice of providers in all parts of the country.
For public plan choice to provide such guarantees, however, the public plan must be properly structured, compete on a truly “level playing field” with private plans, and have the authority to use its bargaining power as one of many tools to encourage greater value in health care delivery. The most effective and easily implemented model for the new public plan is a “Medicare-like” plan that builds on Medicare’s administrative infrastructure and basic framework of coverage but is separate from Medicare’s risk pool and departs from Medicare in a number of key respects regarding payment and benefits.
To create a level playing field requires attention to the “three R’s” of workable public-private competition: rules that are the same for both the public plan and private plans, risk adjustment that protects plans from being competitively disadvantaged if they enroll a less healthy group of people, and regional pricing that allows private plans and the public plan to compete within regions on the same terms, rather than having the public plan compete on a national basis with regionally based private plans (whose premiums may be lower or higher in any given region).
Finally, giving the public plan the authority to bargain for reasonable rates is an essential item on the menu of cost control — and one that the Congressional Budget Office (CBO) and other budget watchdogs are likely to “score” as producing savings (in contrast with many other currently favored cost-control strategies). Nonetheless, there are reasonable concerns about how the new public plan will use its bargaining power — concerns reflected in current proposals for a price-taking (rather than price-making) public plan that would have limited ability to secure fair rates. However, a watered-down public plan would be a grave mistake. Instead, the public plan should include safeguards designed to ensure that providers are fairly represented and that bargaining for lower prices does not negatively affect patients’ access to care or shift costs onto private insurers. Indeed, a better alternative to a public plan without price-setting authority would be allowing private fee-for-service-style plans to piggyback on the public plan in setting their own prices.
Public plan choice is rooted in existing precedents that have shown themselves to work, rather than speculative convictions about how a delicately balanced new system will operate. It must be part of any successful reform package. Without public plan choice, Americans without workplace insurance will be put in jeopardy, private insurers will lack an effective check on their actions, and the opportunity to place our crumbling framework of health financing on a secure foundation will be lost.
http://www.ourfuture.org/files/Hacker_Healthy_Competition_FINAL.pdf

This is a very important paper because addresses one of the most controversial issues in the current health care reform debate: Should a Medicare-like plan be offered in competition with a market of private health plans? UC Berkeley Professor Jacob Hacker adds to his previous contributions on the private plan/public option model of reform by describing in detail what a properly-designed Medicare -like option would look like.
To understand this fairly complex model, you really need to read this 31 page report. But looking at just a few of the problems that he addresses can give you an idea of where this approach is headed.
How would the public option control costs?
From the report: “The great virtue of public plan choice as a means of cost control is that it proposes relatively minimal disruption to existing arrangements compared with other comprehensive reform proposals. It only says that a public health insurance plan will be offered alongside private plans as a coverage option for those without insurance through their employer. It is the competition between private plans and public health insurance, with its distinctive cost-control advantages, that presses both public and private plans to provide more for less and ensures that the goal of affordable quality coverage can be maintained over time at a price the nation can bear.”
DM: In the Medicare Advantage program we have already tested this concept, and the private plans required more money, not less, than the “competing” traditional Medicare program. With a single, universal public program, cost efficiencies would apply to our entire health care system.
How would this proposal spur improved quality?
From the report: “… a new public health insurance plan for the nonelderly (and Medicare, through its association with the new plan) can and should be centrally involved in obtaining better information to improve physician and patient decisions, as well as insurer decisions about coverage, pricing, and benefit structure. Because of its broad and national reach, the stability of its enrollment, and the unparalleled opportunity for data collection and use, the new public health insurance plan is the player in the system that will have the largest incentives to make these investments.”
DM: So the public program would bear the costs on research and data collection. Would those costs be allocated exclusively to the patients in the public program? Would the private insurers have a free ride? Since the mission and income needs of the private insurers are different from the public plan, would they even use the results of the research, especially if greater spending would ensue? Would the government even have access to the proprietary information of these plans competing in the private marketplace? Obviously a single, universal public program would have a more complete and accurate information database that could be applied to improve the quality of our entire health care delivery system, rather than allowing private plans to pick and choose based on bottom line issues rather than optimal quality.
What should the public plan look like?
From the report: “More specifically, the new public plan should be national (with the same basic terms nationwide for patients and providers), governmental (a true public health insurance plan, not, say, a nonprofit insurer operating under federal charter), comprehensive (providing defined benefits on the same basic administrative platform), and built on Medicare’s infrastructure.”
DM: So a bona fide public program is proposed, but…
How could the public and private plans compete “on a level playing field”?
From the report: “… a level playing field requires a set of safeguards that are easily remembered as the “three R’s”: rules, risk adjustment, and regional pricing.”
Rules: “Both the public and private plans should also have to abide by the same fundamental rules, the main purpose of which is to prevent plans from profiting by selecting healthy people rather than delivering value. These rules include: community rating, guaranteed issue, limits on marketing, standardized and defined benefits, reserve requirements, transparency…”
Risk adjustment: “…there is also a need for risk adjustment. That is, plans should be paid different amounts by the exchange based on the expected and realized risk of their enrollees. Enrollees and plans should not be penalized when a plan attracts less healthy enrollees. While prospective risk adjustment technologies have come a long way, they are still imperfect. Thus any risk-adjustment system should mix prospective risk adjustment with a retrospective risk-adjustment process at the end of the year that redistributes funds among the plans to ensure that those with very unfavorable mixes of risk are protected. Of course, the public health insurance plan must be part of this arrangement.”
Regional pricing: “… the bids made by both the public plan and private plans should be made on a regional basis. In other words, although the exchange should be nationally administered, the bids should be regionally specific. Many private plans will only wish to provide benefits in certain regions where they operate. The public health insurance plan will of course be truly national. Without regional bidding, the public plan will be disadvantaged in areas where private premiums are low and advantaged where they are high. Neither is conducive to a truly level playing field.”
DM: Merely to counter the attack that the government doesn’t play on a level field, we would have to establish a set of administratively complex rules of competition with which the government must comply, include the difficult task of determining and adjusting for the relative risks in the public and private pools in spite of the private insurers proclivity to game these risks, and then require our national public program to bid in each region to provide fairness for the government program? This adds considerable administrative inefficiency to a government program that should be offering greater efficiency. A single, universal national health program would not require these extra rules, risk adjustments and health plan competitive bidding processes.
How would the premium for the public plan be established?
From the report: “A strong argument can be made for the federal government setting subsidies on the basis of the average weighted premium of plans, as opposed to the cost of the least expensive plan. First, this would reduce the chance that lower-income enrollees would feel pressured by costs to enroll in the least expensive plan. Second, it would at least crudely adjust subsidies to reflect the variance of plan premiums as well as the level. In areas where the range of plan premiums is larger, subsidies based on the average will much better protect enrollees against premium costs than subsidies based on the lowest-cost plan. For these two reasons, the weighted-average-premium approach is preferable to the lowest-cost-plan approach for setting subsidies, and the graphics that follow focus on showing how this approach would work. However, either approach would create the necessary incentive for enrollees to prefer less expensive plans.”
DM: Instead of a complex process to determine a premium for a public program based on the actuarial value of the benefits provided, a single payer program would do away with premiums. The system would be financed with a simpler and much more equitable tax. Also, everyone who believes in health care justice should be deeply troubled by the statement that this approach “would create the necessary incentive for enrollees to prefer less expensive plans.”
Since premiums would be unaffordable for the majority, how would subsidies be administered?
From the report: “… the subsidy could vary with the income of the enrollee. Low-income enrollees would certainly receive even greater assistance, as well as help with cost-sharing. Because most enrollees through the exchange will be workers whose employers have contributed on their behalf, and because coverage should be kept affordable, the subsidies should cover a good portion of the premium for all enrollees. Since the average employer/employee split of health premiums is roughly 80/20 in the private market today, 80 percent seems a reasonable baseline contribution.”
DM: The purpose of government subsidies is to transfer payment for health care from the wealthy to those who cannot afford to pay for their full, evenly-divided allocation of our national health care bill. That now includes middle-income Americans. A subsidy system requires a separate administrative task for everyone included within the system of health care coverage, with further adjustments depending on out-of-pocket expenses, and periodic reevaluation of eligibility requirements. These administrative excesses are made necessary only because we couple the payment of health care to the specific benefit package – the insurance plan. A single payer system eliminates this administrative nonsense by replacing premiums and cost-sharing with tax financing – again, a much simpler and more equitable approach.
What about the all-payer alternative?
From the report: “…allow private plans that pay providers on a more or less fee-for-service basis to piggyback on the public plan in setting their own prices… In practice, all-payer rate setting of this sort would mean that private fee-for-service plans within the exchange would use the same fee schedule that the public plan did. Allowing private plans that use fee-for-service payment to piggyback on the public plan’s rate thus would have broader benefits than simply reducing the opposition of private insurers to the idea of a public plan. It would make cost control more effective, encourage administrative simplification and care improvement, and increase the degree of coordination in American health financing.”
DM: Okay. So we combine the public and private payers into an all-payer program. Then why would any individual in his/her right mind, other than an insurance executive or shareholder, want to keep this worthless, wasteful, expensive industry in play?
PNHP has been under attack by our friends in the progressive community for being opposed to the public Medicare-like option. That is a misstatement of our position. We are opposed to a fragmented, dysfunctional health care financing system that is causing financial hardship, physical suffering, and, all too often, death. Adding a public option will have only a negligible impact on the fundamental flaws that are causing so much personal grief.
Our friends and our enemies know what would fix our system: a single payer national health program. We think we understand the position of our enemies – largely based on greed. Why else would they support such a cruel system?
But our friends? Why do they attack us as they retreat to a secure position within the ranks of the private insurance industry? Besides, just wait and see what the insurers and their purchased representatives in Congress will do with Jacob Hacker’s “Healthy Competition” proposal. You’ll have to look quick because the window of opportunity for reform will have slammed shut.