PNHP

Lawrence Livermore retirees lose choice of keeping their health plan

Lawrence Livermore retirees lose choice of keeping their health plan

Lab retirees cry foul at health coverage switch

By Suzanne Bohan
San Jose Mercury News – Alameda County
December 5, 2008
One by one, Lawrence Livermore Laboratory retirees took the microphone at a forum this week, and described their confusion, anxiety and anger over dramatic changes under way with their retiree health care benefits.
The crowd of nearly 300 retired scientists, engineers, mechanics and other lab workers, along with some spouses, took to occasional taunts during a Wednesday morning presentation here by the new plan administrator and applauded at pointedly critical remarks.
This year, nearly 4,200 lab retirees and their spouses lose the group health coverage plan they have had. It was first provided by the University of California, which formerly managed Lawrence Livermore Laboratory. They then joined a group plan with virtually identical benefits offered by Lawrence Livermore National Security, or LLNS, a partnership including UC and Bechtel Corporation, which took over lab management in 2007.
And some 2,400 who took early retirement from the lab will also lose the lab’s group coverage when they turn 65 and become eligible for Medicare.
In its place, this year the lab’s Medicare-eligible retirees will join a new trend in the provision of health care benefits — called “defined contributions” — that allows employers to shift the cost of rising health care premiums onto recipients.
With defined contributions, an employer lays out a limited pot of money, typically annually, and the recipient uses it to purchase health care insurance on the open market, and to cover co-payments, deductibles and other health care expenses. Livermore lab retirees, and their spouses, will each get $2,400 annually. Any amount unused rolls over into the next year. But any costs beyond that are paid by the retiree.
Extend Health Inc., which is partly owned by America Online founder Steve Case’s Revolution Health, is now the contact point for lab retirees on Medicare. The firm acts as a health insurance broker, offering more than 170,000 plans nationwide from an array of insurers. Trained advisers work with retirees to sift though the options to find the best plan. Retirees then pay their premiums directly and are reimbursed from their $2,400 yearly allotment.
Alain Enthoven, an emeritus professor with Stanford University’s Graduate School of Business who sits on Extend Health’s advisory board, sympathized with the trauma of changing health plans but said the movement toward defined contributions is essential for controlling costs by making recipients more conscious of health care expenses, which have been rising every year since the late 1990s.
“What most people have is too good to be true,” said Enthoven, one of the early pioneers in the managed care movement.
“People are not going to go on having what they had in the past,” Enthoven continued. “It’s just not a sustainable model.”
Mark Beach, a spokesman for the AARP’s California office, agreed that health care reform requires more sharing of costs by individuals.
“Any intellectual worth their salt will say that’s a part of containing costs,” he said.
http://www.mercurynews.com/alamedacounty/ci_11151014

The current Democratic proposals for health care reform promise that you can keep the health insurance you have, if that’s what you prefer. This policy was included in the reform models to avoid losing the support of those who have been promised life-long coverage with very generous plans. Career scientists and engineers at the prestigious Lawrence Livermore Laboratory, managed by the University of California, were secure in knowing that nothing could happen to their excellent, life-long coverage offered as a perk to attract the best.
Enter Bechtel Corporation. After one year, their life-long retirement coverage is dropped, and they are given an annual defined contribution of $2400 to supplement the basic Medicare program. Just wait until the Medicare Advantage subsidies are cut back, and then see what they can purchase with that. None of them were given the option of keeping the plan they had.
Alain Enthoven says that their coverage was “too good to be true” and was “not sustainable.” So in his view what is sustainable is a shift to a defined contribution, which may make individuals better health insurance shoppers, but does so with the tradeoff of making access to actual health care less affordable. That has adverse health consequences.
Costs can be contained without creating financial barriers to care simply by adopting a single payer national health program. But according to AARP’s spokesman, apparently us intellectuals who would reduce patient cost sharing to improve access simply aren’t worth our salt. Now that really advances the health policy dialogue.
The important message here is that this is only one of thousands of examples where individuals who wanted to keep the insurance they had were not allowed to do so. It was not their choice. Some of the many reasons that individuals involuntarily lose their coverage were discussed in a previous Quote of the Day. Since our politicians are about to provide us with reform that allows us to keep the coverage we have, it would be of value to review that message now to see why keeping the coverage you have is only a fantasy for most of us.
https://pnhp.org/news/2008/july/keeping_the_insuran.php

Lawrence Livermore retirees lose choice of keeping their health plan

Lab retirees cry foul at health coverage switch

By Suzanne Bohan
San Jose Mercury News – Alameda County
December 5, 2008

One by one, Lawrence Livermore Laboratory retirees took the microphone at a forum this week, and described their confusion, anxiety and anger over dramatic changes under way with their retiree health care benefits.

The crowd of nearly 300 retired scientists, engineers, mechanics and other lab workers, along with some spouses, took to occasional taunts during a Wednesday morning presentation here by the new plan administrator and applauded at pointedly critical remarks.

This year, nearly 4,200 lab retirees and their spouses lose the group health coverage plan they have had. It was first provided by the University of California, which formerly managed Lawrence Livermore Laboratory. They then joined a group plan with virtually identical benefits offered by Lawrence Livermore National Security, or LLNS, a partnership including UC and Bechtel Corporation, which took over lab management in 2007.

And some 2,400 who took early retirement from the lab will also lose the lab’s group coverage when they turn 65 and become eligible for Medicare.

In its place, this year the lab’s Medicare-eligible retirees will join a new trend in the provision of health care benefits — called “defined contributions” — that allows employers to shift the cost of rising health care premiums onto recipients.

With defined contributions, an employer lays out a limited pot of money, typically annually, and the recipient uses it to purchase health care insurance on the open market, and to cover co-payments, deductibles and other health care expenses. Livermore lab retirees, and their spouses, will each get $2,400 annually. Any amount unused rolls over into the next year. But any costs beyond that are paid by the retiree.

Extend Health Inc., which is partly owned by America Online founder Steve Case’s Revolution Health, is now the contact point for lab retirees on Medicare. The firm acts as a health insurance broker, offering more than 170,000 plans nationwide from an array of insurers. Trained advisers work with retirees to sift though the options to find the best plan. Retirees then pay their premiums directly and are reimbursed from their $2,400 yearly allotment.

Alain Enthoven, an emeritus professor with Stanford University’s Graduate School of Business who sits on Extend Health’s advisory board, sympathized with the trauma of changing health plans but said the movement toward defined contributions is essential for controlling costs by making recipients more conscious of health care expenses, which have been rising every year since the late 1990s.

“What most people have is too good to be true,” said Enthoven, one of the early pioneers in the managed care movement.

“People are not going to go on having what they had in the past,” Enthoven continued. “It’s just not a sustainable model.”

Mark Beach, a spokesman for the AARP’s California office, agreed that health care reform requires more sharing of costs by individuals.

“Any intellectual worth their salt will say that’s a part of containing costs,” he said.

http://www.mercurynews.com/alamedacounty/ci_11151014

Comment:

By Don McCanne, MD

The current Democratic proposals for health care reform promise that you can keep the health insurance you have, if that’s what you prefer. This policy was included in the reform models to avoid losing the support of those who have been promised life-long coverage with very generous plans. Career scientists and engineers at the prestigious Lawrence Livermore Laboratory, managed by the University of California, were secure in knowing that nothing could happen to their excellent, life-long coverage offered as a perk to attract the best.

Enter Bechtel Corporation. After one year, their life-long retirement coverage is dropped, and they are given an annual defined contribution of $2400 to supplement the basic Medicare program. Just wait until the Medicare Advantage subsidies are cut back, and then see what they can purchase with that. None of them were given the option of keeping the plan they had.

Alain Enthoven says that their coverage was “too good to be true” and was “not sustainable.” So in his view what is sustainable is a shift to a defined contribution, which may make individuals better health insurance shoppers, but does so with the tradeoff of making access to actual health care less affordable. That has adverse health consequences.

Costs can be contained without creating financial barriers to care simply by adopting a single payer national health program. But according to AARP’s spokesman, apparently us intellectuals who would reduce patient cost sharing to improve access simply aren’t worth our salt. Now that really advances the health policy dialogue.

The important message here is that this is only one of thousands of examples where individuals who wanted to keep the insurance they had were not allowed to do so. It was not their choice. Some of the many reasons that individuals involuntarily lose their coverage were discussed in a previous Quote of the Day. Since our politicians are about to provide us with reform that allows us to keep the coverage we have, it would be of value to review that message now to see why keeping the coverage you have is only a fantasy for most of us.

https://pnhp.org/news/2008/july/keeping_the_insuran.php

Firms see writing on the wall

Dr. Rachel Nardin
Boston Globe
Letter to the Editor
December 8, 2008

IN HER article “Lobbies backing health reforms,” Lisa Wangsness fails to explicitly note that the reason health insurance companies are participating in reform efforts this time around is that they can see the writing on the wall. Private insurers have been unable to control healthcare costs and, in fact, are a significant cause of wasted healthcare dollars because of their high administrative costs. They are increasingly unable to offer coverage that even middle-class Americans can afford, and the cost of their insurance products is hampering American businesses.

It’s remarkable that an insurance industry group’s website features an interview with a woman who says, “It’s time for the government to step in.” The American public increasingly realizes that we need real healthcare reform. We need national health insurance, which would cover everyone without deductibles or copays, be financed through payroll and income taxes, and give everyone free choice of doctor and hospital. The private insurance industry knows this would put them out of business, and they are determined to make sure it doesn’t happen.

Local man spearheads statewide health-care movement

By Shlomit Auciello
The Herald Gazette
Tuesday, December 8, 2008

Jerry Call is a man with a mission. Call, who lives in Rockland and is one of the five founders of Midcoast Healthcare Reform, first learned about single-payer health care about a year ago when Dennis Kucinich was running in the Democratic presidential primaries and mentioned House Resolution 676 during the debates.

“Finally it sunk in as to what he was proposing,” Call said Dec. 5. “After he was shut out of the debates, a bunch of us were sitting around at dinner and decided to do something about it.”

In January 2007, Congressman John Conyers introduced the current version of H.R. 676, which Kucinich referred to as the “Medicare for All” bill. Currently the bill is in the hands of the congressional Subcommittee On Health.

H.R. 676 would establish the U.S. National Health Insurance program to provide all residents of the United States and U.S. territories with free health care that includes all medically necessary care, such as primary care and prevention, prescription drugs, emergency care, and mental health services.

The law would allow nonprofit health maintenance organizations that deliver care in their own facilities to participate in the USNHI program and would give patients the freedom to choose from participating physicians and institutions.

Private health insurers would not be able to sell health insurance coverage that duplicates the benefits provided under H.R. 676, but would be allowed to sell benefits for care that is not medically necessary, such as coverage for cosmetic surgery or private hospital rooms.

Since January, Call has been traveling throughout Maine and beyond to promote Conyers’ bill. In March his organization coordinated showings of Michael Moore’s film “SiCKO” in seven locations throughout the state. MCHR maintains a mailing list of 250 interested parties in the local area and gathered more than 7,000 signatures at the polls statewide on Nov. 4.

The petitions Call is circulating ask the Maine Legislature to endorse the federal bill. While the resolution advanced by the petition is not binding on Maine’s elected officials, Call hopes a strong groundswell of support will encourage the federal delegation to sign onto H.R. 676.

So far, none of the state’s representatives in Washington, D.C. have joined the 93 congressional co-sponsors. In June the U.S. Conference of Mayors expressed its support of the bill and called upon federal legislators to work toward its enactment. And polls repeatedly show a majority of Americans supporting national health-care coverage.

In a letter to Call, Maine’s U.S. Sen. Susan Collins stated that she “continue[s] to have many reservations about a single payer system,” and that she instead supports S. 158, which would provide a tax credit of $1,000 to individuals earning up to $30,000 and $3,000 for those earning up to $60,000. According to the Web site smartmoney.com, private health insurance premiums cost upward of $4,000 a year for individuals and generally include co-pay requirements and high out-of-pocket deductibles.

Rep. Ed Mazurek of Rockland is sponsoring the single-payer resolution in the Maine Legislature, and Rep. Andrew O’Brien of Lincolnville has agreed to co-sponsor it, Call said.

On Dec. 5, Mazurek said he supports Call’s project. “The system we have now seems broken,” he said. “We have such high premiums for health insurance because it’s private.” He also said he hoped statewide efforts like Call’s would help average Americans by building support so that H.R. 676 would pass in Congress.

Congresswoman-elect Chellie Pingree of North Haven said throughout the election campaign that she would sign on to H.R. 676. If it comes to the Congress in this session, she said Dec. 8, she will support the bill. But she added that the election of Barack Obama has changed the discussion about health care.

“The new Democratic Congress will mean more movement,” she said. “It’s a different dynamic when you have a president with a vision.” Pingree said she didn’t think she’d have a lot of clout as a freshman in the House, but she will push for single-payer or the most comprehensive reform possible. “We don’t want Congress to end up passing another iteration of managed care,” she said.

According to an article in the Sept. 24, 2007, issue of the Palm Beach Post, businesses contributed $2,600 per employee, or $217 monthly, to employee health insurance in 2005. Under H.R. 676, employers’ average cost would be $1,425 annually, or $119 a month. According to a study by economist Dean Baker of the Center for Economic Research and Policy, a family of three making $40,000 annually would spend approximately $1,900 yearly for coverage. The Post article quotes the National Coalition on Health Care as saying that the average private insurance premium cost this same family $11,000.

The Web site for Republicans for Single-Payer states that close to a third of every health-care dollar is spent on administrative costs, and calls single-payer “the conservative approach to providing access to health care with informed choice of private providers.”

Call’s recent presentation pointed to a 2001 analysis by Health Affairs that showed 35 percent of drug companies’ costs going to advertising and marketing. He said 47 percent of the cost of workers’ compensation goes for medical payments that would be covered by the new program, thus saving employers even more.

The USNHI program would be funded through a payroll tax on employers and employees of 3.3 percent each, added to the 1.45 percent payroll tax each pays now, totaling 4.75 percent each. The top 5 percent of income earners, those earning $250,000 a year or more, would pay a 5 percent health tax and those at the top 1 percent would pay 10 percent. A small tax on stock and bond transactions amounting to one-third of 1 percent would also contribute to the USNHI program. Closing corporate tax loopholes and repealing the Bush tax cut for the highest income-earners would bring the estimated savings up to $56 billion.

With President-elect Obama’s emphasis on reforming the health-care system, Call said it’s important for citizens to express their preference for H.R. 676 as early and emphatically as possible.

“The thing that drives me is that a number of years ago I was diagnosed with cancer,” said Call. “I remember sitting in the doctor’s office and thinking, ‘If I can live with this I’m going to find a way to repay to society for my good fortune.’ This is the way.”

For information on H.R. 676, visit hr676.org. Call can be reached at midcoasthealthcarereform.org or by calling 596-7784.

http://knox.villagesoup.com/Community/story.cfm?storyID=137437

Can single payer revive our ailing emergency departments?

Andrew D. Coates, MD, Albany Medical Center
Empire State Emergency Physicians Interim Communique (EPIC)
Published by New York State Chapter of the American College of Emergency Physicians
Vol. 26:02:08

The emergency department provides a crucial vessel for our communities, an entity into which, on a moment’s notice, each of us might need to pour all of our hopes and fears. Yet our emergency departments share night and day, the frustrating, often tragic personal and social costs of our present predicament – the progressive failure of a system dominated by private health insurance. Patient demand for ED services soars, yet the number of 24-hour EDs declines and reimbursement for ED services dissipates. Ample study demonstrates that emergency department crowding undermines quality care, but still the problem worsens. In the words of the Institute of Medicine, “the nation’s emergency medical system as a whole is overburdened, underfunded, and highly fragmented.” A 2008 study in Health Affairs finds that ED wait times have lengthened. Ironically, the largest increase in waiting time was experienced by patients for whom EDs are pathways of expedited care — those with acute myocardial infarction. These patients waited an average of only 8 minutes in 1997, but 20 minutes by 2004, a 150% increase. One out of four patients with acute MI waited 50 minutes or more before seeing a doctor by 2004. Overall, ED wait times were found to be 36% percent longer in 2004 than in 1997.

The fact that 47 million Americans had no health insurance during all of 2006, and that tens of millions more have inadequate insurance and/or shorter periods without coverage, weighs especially heavily upon the ED. Non-urgent care in the emergency room has boomed, yet this is not the root cause of crowding in the ED. Instead, bottlenecks caused by the intense needs of a few patients result in ED crowding — even one critically ill patient waiting for an ICU bed can trigger a cascade leading to a significant back-up for all patients, for hours, even days.

Sadly, where the percentage of uninsured patients tends to begreat, specialist availability tends to be most scarce, increasing the likelihood that a severely ill patient will need to go on to another hospital for inpatient care. This introduces risks of delayed care and impacts upon the care of other patients. More depressing, some doctors try to avoid being on call to the ED. But how does our system of private health insurance reward physicians and surgeons who accept the responsibility for highly acute, complex, high-risk patients during off hours? Medical and surgical resources shift away from the hospital, away from the ED, with mighty financial incentives. Witness the development of surgical care facilities outside of the hospital and hospitalists inside the hospital, further fragmenting the continuity of care. And then where will we send the patient without health insurance, who has had no doctors, for follow-up? Meanwhile hospital administrators see the ED less as a “vessel of hopes and fears for the community”, and more as a failing “cost center”– a place to cut corners in order to limit losses; a place where everyone should be kept as busy as possible. The leaders of the hospital are merely obeying the rules of a system designed to serve insurance companies, whose leaders in turn serve shareholders, not patients.

Of course too many patients — patients with health insurance! — do seek primary (non-urgent) care at the ED. For we practice in the shadow of what the American College of Physicians has called “the impending collapse of primary care
medicine.” Witness the growth of “urgent care” walk-in clinics for these paying customers. Add the observation that the percentage of uninsured in America has risen steeply — but the percentage of uninsured who seek emergency care has remained relatively flat.

Consider how in the American “system”, private insurance companies dominate payment structures. Since one or two large private insurance firms dominate every local market, and most patients in the ED have private health insurance, these companies thus hold extraordinary power over ED resources, indeed the community’s resources.

Finally, consider that state-based and other incremental reforms, SCHIP for example, have failed to reverse these trends. SCHIP could not be expanded fast enough to keep up with the children whose parents lost their employer sponsored health insurance.

In a bellwether experiment that is headed toward disaster, Massachusetts has tried to mandate universal access by making it a crime to be uninsured. While the plan has succeeded in getting working families of meager means to sign up for state-subsidized plans, it will sink under burgeoning costs. The Massachusetts experience takes on extra significance this year, for both leading Democratic candidates center their health reform proposals on mandating the expansion of private health insurance, a notion originally put forward by Richard Nixon.

Massachusetts has been able to reduce the number of uninsured. But of the more than 340,000 new enrollees, the lion’s share receives state-subsidized coverage, including more than 55,000 new to Medicaid. Of the uninsured whose incomes are high enough to be “mandated” to pay for their own private health insurance (or else pay the state a fine), only 7% have done so. (But who can blame them, when cost of an individual plan is nearly $7,000 a year and a family plan twice as much as that?) Massachusetts now faces escalating premiums, co-pays and deductibles, a budget shortfall of at least $100 million dollars and the political impossibility of new taxes. Not only will the program fall far short of universal coverage, we may witness a collapse on the scale of TennCare, as Massachusetts discovers not only that it cannot afford to subsidize private health insurance companies, but that the system has no way to re-direct resources where they are needed, places like primary care offices and emergency departments.

Can we reform our health system in a way that recognizes the efforts already underway in our EDs, that won’t further alienate ED MDs, nurses and staff, that can begin to shift resources where our patients and communities need them most?

We need a proposal for reform that will take into account the interlocking issues of costs, quality, individual choice of physician or hospital and woeful disparities in care — in addition to the need to cover the uninsured and underinsured. It must not only be comprehensive in terms of the services provided each patient, but also in the capacity to shift resources to where they are needed. In 2008 the United States of America will spend nearly $7,800 per capita, $2.4 trillion, 16.6 % of GDP on health care. More than half of U.S. health spending already comes from government sources. And our nation spends far more per capita than any other (70% more than the median of OECD nations). More than enough resources are already in the system for a national health program. Yet health outcomes in the United States lag shamefully behind other nations.

Administrative waste accounts for at least $350 to $700 billion in the present system. Compare the Medicare overhead cost of 3% to private health insurers’ overhead which is 22%. These hundreds of billions of dollars spent on administration, advertising, handsome executive salaries and corporate profits, should be spent on health care.

The proposal by Physicians for a National Health Program has been endorsed by over 14,000 doctors. “The Proposal of the Physicians’ Working Group for Single-Payer National Health Insurance,” was published in JAMA in 2003. It starts from the ideas that (1) health care is a human right; (2) patient autonomy, the right to choose any licensed health care professional, must be protected; (3) profit-making has no place in the delivery of health care and (4) “In a democracy, the public should set overall health policies. Personal medical decisions must be made by patients with their caregivers, not by corporations or governments.”

The single payer proposal would not make our hospitals, clinics and offices government property.

HR 676, a bill in Congress, would establish a single payer health care system by expanding a greatly improved Medicare system to cover everyone. It would restore a patients’ right to choose healthcare providers and limit insurance company input into medical decisions. HR 676 would cover everyone for all necessary medical care including prescription drugs, hospital, surgical, outpatient services, primary and preventive care, emergency services, dental, mental health, home health, physical therapy, rehabilitation (including for substance abuse), vision care, chiropractic and long term care. It would end deductibles and co-payments and could save billions annually by reducing
overhead. It would convert for-profit health facilities to not-for-profit status, over a period of years.

When single payer financing has been studied (for example in California, Colorado, Georgia and many other states, as well as by the Congressional Budget Office in the 1990s) it emerges consistently as the only proposal with a means to reduce costs. One funding mechanism proposed recently in California would keep all existing government funding and add a 3 to 4% income tax on individuals and a 7 to 8% payroll tax on employers, with additional taxes on selfemployed business income, investment income and high incomes. For many working people and for employers who provide excellent health insurance, these taxes would be a significant savings compared with present premiums, co-pays for visits, labs and drugs, deductibles and other out-of-pocket expenses.

Under the proposal, physicians would be paid by the single payer on a fee-forservice basis or receive salaries and incentives through their institutions or physician groups, which in turn would be funded by the national health insurance program. Because doctors would not become employees of the government, but would know what to expect from the single payer, their administrative burden would be reduced.

Hospital services would be paid on a global rate based upon community needs. Community needs are the proper subject of public evaluation and debate in a democracy. The Certificate of Need process is an example of how community need defines healthcare capacity, thus limiting excess expenditure for unnecessary services and driving up healthcare utilization without improvement in quality. The certificate of need process in New York State has boasted superior cardiac surgery outcomes, compared with other States, at lower costs.

The single payer proposal would not make our hospitals, clinics and offices government property. But it would vastly empower existing quality improvement efforts by placing decisions about the allocation of health resources in the public domain. In this way, it is a transitional demand – a demand that would base future progress upon the excellent people and institutions we have now.

We know that single payer systems work in other nations, yet the United States spends much more yet lags far behind in health outcomes. We also know that the way to decrease cost is to share the risk as completely as possible, “Everybody in, nobody out.” But another crucial element of “everyone in, nobody out” we must see are the intolerable disparities in health care our system of private health insurance has cultivated in America, rural vs. urban, wealthy vs. poor, black vs. white, immigrant vs. native-born and so on. Only a federal reform will bring a starting point that is both practical and just.

Every emergency room must be staffed for the disaster that could come, not the minimum for the usual circumstances. Under a national health insurance program emergency medicine physicians and nurses would at last have the appropriate forum in which to explain to society their contribution – and to make a case for sufficient resources, including EMS networks, the need for on-call specialists, the need to expand primary care, the need to reduce wait times and improve quality. Viewed this way, the single payer alternative appears the best means for our profession to take proper social responsibility for the care of our communities.

Everyone uses the ED at one time or another. Proper resources for our EDs will improve us all. This must be recognized. A single payer program is only reform that can begin to do so.

Editor’s Note:
This essay was solicited from Dr. Coates, a strong proponent for single payer — universal access health care. It is written from the perspective of a primary care physician viewing the interaction between limited access to care and emergency medicine. There are many who believe that within 10 years, healthcare will not be structured or financed as it is presently. As we move forward, there is increasing attention being paid to universal healthcare. But there is also considerable concern regarding the consequences of single payer healthcare to a system that, for all of its failings, works well enough for many people (those with simple medical needs and who are well-insured). Yet we as emergency physicians live in a world that experiences a critical lack of access to primary care and specialty services. We also exist in a world dominated by the consequences of failure to effect healthcare changes when a change has clear advantages. To many, this appears to be the result of a system that exists to serve itself and not our population. Universal healthcare appears to successfully address these challenges in many developed countries. However, comparing the healthcare systems of the United Kingdom, Canada or France (with their culturally homogeneous populations of 30 to 50 million) with our healthcare system (servicing 300 million culturally diverse) may be problematic. There will be many voices influencing the shape of the future structure of our healthcare delivery system. It is important that each of us understand the realities of this multifaceted issue. It is also important that we speak from the standpoint of improving the health of our communities.

PNHP letter to Secretary-designate Tom Daschle, Health and Human Services

December 8, 2008

Mr. Tom Daschle
Secretary-designate, Health and Human Services
Transition Health Policy Team
Washington, DC

Dear Mr. Daschle,

Physicians for a National Health Program respectfully requests an opportunity for one or more of our members to meet with your health policy team to make the case for the swift enactment of a single-payer national health insurance plan (as embodied in the U.S. National Health Insurance Act, H.R. 676, which currently has the support of over 90 member of Congress) on a medical, moral and economic basis.

Candidly, we are alarmed by some comments by members of the Senate and by the Obama transition team that suggest that the single-payer option is being excluded from consideration — is “off the table” — in the health reform debate. We believe single payer is not only the best solution, but the only effective solution to our health care crisis.

Single-payer health reform, sometimes characterized as an improved “Medicare for All,” is the only reform model that offers $400 billion in annual savings in administrative costs. It is the only approach that contains effective cost-containment provisions, such as bulk purchasing and global budgeting. Such economies would allow for expanding health coverage to everyone — with no co-pays or deductibles — with no overall increase in health care spending.

The single-payer model is the only fiscally prudent proposal available, an especially important consideration at a time of economic distress. By basing itself (and improving upon) Medicare, it presents itself as a uniquely American way of guaranteeing care to all who need it. Such an approach has repeatedly proven its effectiveness.

With a single-payer national health insurance program we can assure lifelong, high quality, comprehensive and affordable coverage for everyone. Such a program will lift the heavy burden of crushing medical expenses off the shoulders of our population, expenses that often lead to personal bankruptcy. And we can save lives: the Institute of Medicine estimates that more than 18,000 Americans die each year from lack of health insurance.

The proposals made to date by Sen. Max Baucus (D-Mont.), like those associated with Sen. Edward Kennedy (D-Mass.) and President-elect Barack Obama, share the fatal flaw of preserving a central role for the investor-owned health insurance industry in a private-public financing mix. This approach simply won’t work, as numerous state-based experiments patterned after this model have shown. These plans always fail because they are unable to control costs.

In sum, from the standpoint of what benefits our patients, single payer is the health policy model that best reflects their needs and values.

Support for single payer is extensive. In a peer-reviewed statistical study in the Annals of Internal Medicine, 59 percent of U.S. physicians said they would support government action to establish national health insurance. In a recent Associated Press poll, 65 percent of the respondents said, “The United State should adopt a universal health insurance program in which everyone is covered under a program like Medicare that is run by the government and financed by taxes.”

In addition, over 480 labor organizations, including 39 state federations of the AFL-CIO, have endorsed single payer legislation, as have numerous professional associations, city and state governments, and religious denominations.

We therefore expect that single-payer proponents will be invited to testify before the Committee and we look forward to your affirmative response. You can telephone me at (312) 782-6006 or reach me via e-mail at info@pnhp.org.

Sincerely,

Quentin Young, MD, MACP
National Coordinator
Physicians for a National Health Program
29 E. Madison St., Suite 600
Chicago, IL 60602
(312) 782-6006
www.pnhp.org

Sen. Daschle's "Critical"

Critical: What We Can Do About the Health-Care Crisis

By Senator Tom Daschle, with Scott S. Greenberger and Jeanne M. Lambrew
Thomas Dunne Books, February 2008
The key question for any health-care reform plan is, “How will it cover people?” Most of the world’s highest-ranking health-care systems employ some kind of “single-payer” strategy – that is, the government, directly or through insurers, is responsible for paying doctors, hospitals, and other health-care providers. Supporters say single-payer is brilliantly simple, ensures equity by providing all people with the same benefits, and saves billions of dollars by creating economies of scale and streamlining administration. But pure single-payer system is politically problematic in the United States, at least right now. Even though polls show that seniors are happier with Medicare than younger people are with their private insurance, opponents of reform have demonized government-run systems as “socialized medicine.”
I have strong views on what an “ideal” system would look like. But I’m not willing to sacrifice worthy improvements on the altar of perfection. I find it encouraging that the leading Democratic presidential contenders appear to share this attitude. The proposals that Obama, Clinton, and Edwards put forward would improve our current system rather than scrapping it, using the Massachusetts reform plan as a model.
The Federal Health Board
I believe a Federal Health Board should be charged with establishing the system’s framework and filling in most of the details. This independent board would be insulated from political pressure and, at the same time, accountable to elected officials and the American people.
First, it would set the rules for the expanded FEHBP, placing conditions on the private insurers wishing to participate.
Second, the Federal Health Board would promote “high-value” medical care by recommending coverage of those drugs and procedures backed by solid evidence.
A third function of the Federal Health Board would be to align incentives with high-quality care.
Finally, the Federal Health Board might also play a role in rationalizing our health-care infrastructure.
http://us.macmillan.com/critical

When it was announced that Tom Daschle was Barack Obama’s choice to be Secretary of Health and Human Services, it was also announced that he would not only be an administrator, but also he would lead the team that is crafting the definitive health care reform proposal for the Obama administration. That is why Sen. Daschle’s book, “Critical,” is important to us. It provides us with the views of the person who will be working with Congress to reform our health care system.
The fundamentals of his proposal are essentially the same as those proposed by Barack Obama, Max Baucus, and most of the other Democrats who have been advocating for reform. He would continue employer-sponsored coverage, expand public programs, and provide an FEHBP-type program, including a Medicare-like option. He would attempt to achieve universal coverage through an individual mandate with financial assistance for lower-income individuals.
Daschle also includes other concepts that are making the political rounds, such as information systems, community health centers, quality measurements, and “shared responsibility.”
One essential reform that seems to be missing from his proposal is the need to reinforce our primary care infrastructure, providing everyone with a medical home. Maybe that could be extrapolated from his call for rationalizing our health care infrastructure, but, if so, it is of such great importance that he should advocate for it explicitly.
What is relatively unique in Daschle’s proposal is the recommendation for a Federal Health Board, based on a model similar to the Federal Reserve System. One of the more important functions would be to provide oversight of the private insurance industry in his multi-payer system, a role that would be unnecessary in a single payer system. The other functions he describes can easily be or already are provided by existing agencies, though introduction of a single payer system would certainly be accompanied with appropriate bureaucratic reform.
Although he recommends that this board be quasi-independent, insulated from political influence, there is still risk that ideological extremists could gain control. Think of the failure of the Federal Reserve System to provide adequate oversight of our financial system, contributing to our current financial meltdown. That might not have occurred if free-market ideologues such as Alan Greenspan had not been in charge of the Federal Reserve. The Supreme Court is also insulated from political interference, yet obviously it too is controlled by ideologues, over whom we have no control. Imagine if we had a Federal Health Board composed of those individuals who, through the Medicare Modernization Act, damaged our public Medicare program. If they had been in control of such a board, we could have been much further down the road toward their goal of a totally privatized Medicare system.
Most troubling is Sen. Daschle’s conclusions on single payer. He describes it as the model used by the “world’s highest-ranking health care systems.” He acknowledges, without dispute, that supporters say that it is “brilliantly simple, ensures equity by providing all people with the same benefits, and saves billions of dollars by creating economies of scale and streamlining administration.” Yet he rejects it merely because it is “politically problematic.” He would sacrifice the “ideal” system because he is “not willing to sacrifice worthy improvements on the altar of perfection.”
It certainly is true that opportunities for enacting beneficial policies can be missed when the politics are not in alignment. But it is also true that bringing the politics into alignment can eliminate the opportunity to enact ideal policies. For success in achieving a high-performance health care system, we shouldn’t sacrifice policy; we should change the politics.

Sen. Daschle's "Critical"

Critical: What We Can Do About the Health-Care Crisis

By Senator Tom Daschle, with Scott S. Greenberger and Jeanne M. Lambrew
Thomas Dunne Books, February 2008

The key question for any health-care reform plan is, “How will it cover people?” Most of the world’s highest-ranking health-care systems employ some kind of “single-payer” strategy – that is, the government, directly or through insurers, is responsible for paying doctors, hospitals, and other health-care providers. Supporters say single-payer is brilliantly simple, ensures equity by providing all people with the same benefits, and saves billions of dollars by creating economies of scale and streamlining administration. But pure single-payer system is politically problematic in the United States, at least right now. Even though polls show that seniors are happier with Medicare than younger people are with their private insurance, opponents of reform have demonized government-run systems as “socialized medicine.”

I have strong views on what an “ideal” system would look like. But I’m not willing to sacrifice worthy improvements on the altar of perfection. I find it encouraging that the leading Democratic presidential contenders appear to share this attitude. The proposals that Obama, Clinton, and Edwards put forward would improve our current system rather than scrapping it, using the Massachusetts reform plan as a model.

The Federal Health Board

I believe a Federal Health Board should be charged with establishing the system’s framework and filling in most of the details. This independent board would be insulated from political pressure and, at the same time, accountable to elected officials and the American people.

First, it would set the rules for the expanded FEHBP, placing conditions on the private insurers wishing to participate.

Second, the Federal Health Board would promote “high-value” medical care by recommending coverage of those drugs and procedures backed by solid evidence.

A third function of the Federal Health Board would be to align incentives with high-quality care.

Finally, the Federal Health Board might also play a role in rationalizing our health-care infrastructure.

http://us.macmillan.com/critical

Comment:

By Don McCanne, MD

When it was announced that Tom Daschle was Barack Obama’s choice to be Secretary of Health and Human Services, it was also announced that he would not only be an administrator, but also he would lead the team that is crafting the definitive health care reform proposal for the Obama administration. That is why Sen. Daschle’s book, “Critical,” is important to us. It provides us with the views of the person who will be working with Congress to reform our health care system.

The fundamentals of his proposal are essentially the same as those proposed by Barack Obama, Max Baucus, and most of the other Democrats who have been advocating for reform. He would continue employer-sponsored coverage, expand public programs, and provide an FEHBP-type program, including a Medicare-like option. He would attempt to achieve universal coverage through an individual mandate with financial assistance for lower-income individuals.

Daschle also includes other concepts that are making the political rounds, such as information systems, community health centers, quality measurements, and “shared responsibility.”

One essential reform that seems to be missing from his proposal is the need to reinforce our primary care infrastructure, providing everyone with a medical home. Maybe that could be extrapolated from his call for rationalizing our health care infrastructure, but, if so, it is of such great importance that he should advocate for it explicitly.

What is relatively unique in Daschle’s proposal is the recommendation for a Federal Health Board, based on a model similar to the Federal Reserve System. One of the more important functions would be to provide oversight of the private insurance industry in his multi-payer system, a role that would be unnecessary in a single payer system. The other functions he describes can easily be or already are provided by existing agencies, though introduction of a single payer system would certainly be accompanied with appropriate bureaucratic reform.

Although he recommends that this board be quasi-independent, insulated from political influence, there is still risk that ideological extremists could gain control. Think of the failure of the Federal Reserve System to provide adequate oversight of our financial system, contributing to our current financial meltdown. That might not have occurred if free-market ideologues such as Alan Greenspan had not been in charge of the Federal Reserve. The Supreme Court is also insulated from political interference, yet obviously it too is controlled by ideologues, over whom we have no control. Imagine if we had a Federal Health Board composed of those individuals who, through the Medicare Modernization Act, damaged our public Medicare program. If they had been in control of such a board, we could have been much further down the road toward their goal of a totally privatized Medicare system.

Most troubling is Sen. Daschle’s conclusions on single payer. He describes it as the model used by the “world’s highest-ranking health care systems.” He acknowledges, without dispute, that supporters say that it is “brilliantly simple, ensures equity by providing all people with the same benefits, and saves billions of dollars by creating economies of scale and streamlining administration.” Yet he rejects it merely because it is “politically problematic.” He would sacrifice the “ideal” system because he is “not willing to sacrifice worthy improvements on the altar of perfection.”

It certainly is true that opportunities for enacting beneficial policies can be missed when the politics are not in alignment. But it is also true that bringing the politics into alignment can eliminate the opportunity to enact ideal policies. For success in achieving a high-performance health care system, we shouldn’t sacrifice policy; we should change the politics.

HMS Sees Inequity in Organ Donations

Uninsured patients 20 times more likely to donate an organ than to receive one

By DANIELLE J. KOLIN
The Crimson
Contributing Writer
12/5/2008

Americans who lack health insurance are about 20 times more likely to donate a liver or kidney than to receive one, according to a new study by researchers at Harvard Medical School.

The findings, published in the latest issue of the International Journal of Health Services, show that 17 percent of organ donors did not have health insurance in 2003, while only 0.8 percent of organ recipients were uninsured.

“It’s a way of highlighting how unfair what goes on in our health care system is,” said Medical School Professor David U. Himmelstein, one of the study’s authors. “It’s immoral what we’re doing. Everybody should have insurance.”

The lead author of the study, Andrew A. Herring, was a third-year student at the Medical School when he treated a 25-year-old uninsured day laborer suffering from cardiomyopathy. When the patient died from lack of a heart transplant, Herring was inspired to explore the role of insurance coverage in whether or not a patient can receive an organ.

“People donate irrespective of their insurance,” said Herring, who is now doing a residency in emergency medicine in Oakland, Calif. “They donate from an altruistic sense of wanting to help someone else. Out of respect for that motive, the health care system needs to reflect the same altruism, which means allocation of organs irrespective of ability to pay.”

The authors made their conclusions by analyzing data from the 2003 National Inpatient Sample, a random representative sample of hospital stays.

The doctors emphasized that the discrepancy between organs received by the uninsured and the insured does not reflect the “values or intentions of the transplant community.”

“The vast majority of transplant surgeons want to give organs to those who get the greatest benefit from them, but the system around them is failing them,” Herring said.

According to the study, the discrepancy is due to the expensive post-surgical care required after organ transplantation. For successful organ transplantation, the patient must undergo long-term immunosuppressive therapy. If the patient is unable to pay–and uninsured patients seldom are–the transplantation is less likely to succeed.

Himmelstein and the paper’s third author, Medical School Professor Stephanie J. Woolhandler, are the co-founders of Physicians for a National Health Program, an organization dedicated to supporting a universal, single-payer national health system.

“My hope is that papers like this are part of a growing consensus that a universal health care system is necessary,” Herring said.

Himmelstein said that the study represents additional evidence to support such a health care system, and he criticized President-elect Barack Obama’s health insurance reform proposals for not going far enough because it continues to rely on private health insurance companies.

“Unfortunately, what’s being proposed by President-elect Obama and the leading Democrats is very disappointing,” Himmelstein said. “We know that it won’t work.”

Programs similar to the Democratic proposal have been tried at least five times previously at the state level, Himmelstein said, and have always failed.

“It makes good politics but it’s economically nonsensical to say we’ll rely on the private health insurance industry,” Himmelstein said.

http://www.thecrimson.com/article.aspx?ref=525740

Why Does U.S. Health Care Cost So Much? (Part III: An Aging Population Isn't the Reason)

By Uwe E. Reinhardt
New York Times
December 5, 2008

Graphs courtesy of Uwe Reinhardt.

Not a conference on health care goes by without someone’s asserting that the aging of our population is a major driver of the annual growth in health spending. It sounds intuitively appealing if one contemplates the following two graphs, which are regularly trotted out on such occasions.

The first graph depicts what is commonly described as the “Baby Boom Tsunami.” The second depicts age-specific health spending per capita in 1999, relative to the spending of Americans in the age group 35 to 44, which is set to 1. These age-specific relative spending profiles do not change much over time for a given country, and they do not much differ among industrialized nations. They show that after age 60 or so, health spending per capita rises sharply with age.

Yet, research around the world has shown that the process of the aging of the population by itself adds only a very small part — usually about half a percentage point — to the annual growth in per-capita health spending in industrialized societies, which tends to range between 5 and 8 percent, depending on the country and the period in question. The bulk of annual spending growth can be explained by overall population growth (about 1.1 percent per year), increases in the prices of health care goods and services, and the availability of ever more new, often high-cost medical products and treatments used by all age groups.

Because this proposition is so counterintuitive, readers may wish to consult two recent research papers on the topic, one penned by the present author, and the other penned by other researchers.

These papers are based on American data. Similar studies have appeared also for Canada, Australia and many other countries in the Organization for Economic Cooperation and Development. Indeed, it may surprise readers that knowing the percentage of a nation’s population that is over age 65 cannot help one explain cross-national differences in health spending per capita, as is shown in the graph further on. As the graph shows, the per-capita health spending of nations is virtually independent of the age structure of its population.

Why, then, is the aging of the population such a small driver of annual increases in health spending? The answer can be found in the last graphical display of this commentary. That graph contains the same data as the first graph in this commentary, but the vertical axis is scaled as it should be scaled: from 0 percent to 100 percent. Letting it run from 12 percent to 22 percent stretches the vertical axis and creates the image of the famous Baby Boom Tsunami. It is a form of lying with statistics.

As this graph illustrates, the aging of our population is a very gradual process and does not come even close to resembling a tsunami. It is at best a demographic ripple.

Furthermore, current population projections have the fraction of elderly in the United States population peak at around 20 percent. Along with Canada and Australia, we shall be for a very long time the youngest nation in the O.E.C.D. Only in 2025 will the American population be as “old” as many European populations are already today.

As the song goes, relative to other nations we shall be “forever young”!

Uwe E. Reinhardt is an economist at Princeton.

http://economix.blogs.nytimes.com/2008/12/05/why-does-us-health-care-cost-so-much-part-iii-an-aging-population-isnt-the-reason/