PNHP

The "dual-eligibles" scam

The "dual-eligibles" scam

Medicare Part D: Drug Pricing and Manufacturer Windfalls

By the Majority Staff
United States House of Representatives
Committee on Oversight and Government Reform
July 2008

Conclusion

This analysis of confidential data on Medicare Part D and Medicaid drug prices shows that the private Medicare Part D insurers pay significantly higher prices for prescription drugs than does the Medicaid program. In the case of the six million dual eligible beneficiaries, the Medicare Part D insurers paid $3.7 billion more in 2006 and 2007 to purchase the top 100 drugs for dual eligible beneficiaries than they would have paid if they had access to the lower Medicaid drug prices. This increase in costs represents a windfall to drug manufacturers.

Eliminating the drug manufacturer windfall would realize substantial savings to federal taxpayers. Over the next ten years, taxpayers would save $86 billion if the Medicare Part D insurers paid Medicaid prices for drugs used by the dual eligible beneficiaries. If Medicare negotiated directly with drug manufacturers and obtained prices equivalent to the Medicaid prices for all Medicare beneficiaries, the potential savings to taxpayers increases to $156 billion.

http://oversight.house.gov/documents/20080724101850.pdf

And…

Apples, Oranges and “Windfalls”

Republican Staff Analysis

Conclusion

The Part D benefit was designed to offer choice in prescription drug insurance, value for seniors through low negotiated prices, and overall low program costs for taxpayers. It is achieving those goals and exceeding expectations. The Majority report fails to recognize these benefits and instead makes inappropriate and unrealistic price comparisons. Politically appealing but substantively flawed changes like those advocated by the Majority would have serious implications for the prices paid by employers, unions, health care providers, and the uninsured. Likewise, changing the financial incentives in Part D could have a negative impact in the type of drug research and development that is conducted.

Finally, it is worth noting that the Majority has written eight reports on Part D and the program is only in its third year. This represents a significant level of oversight. Without a doubt Medicare requires substantial oversight given its importance to seniors and its uncertain long-term financial prospects. However, the Majority’s criticisms of Part D seem misplaced. Part D costs substantially less than Part A (which primarily pays for hospital based care) and Part B (which primarily pays for physician services). The Hospital Insurance trust fund, Part A’s revenue source, is not adequately financed in the short-term and will be exhausted in 2019. This looming financial crisis has received scant oversight from the Majority.

http://republicans.oversight.house.gov/Media/PDFs/20080723PartDReport.pdf

Comment:

By Don McCanne, MD

To understand the basis for the problems with the Medicare Part D drug benefit, you need only to recall that the program was designed by the Medicare privatizers in Congress, with the support of two of the largest lobby interests in the nation: the private insurers and the pharmaceutical firms.

There are a great many problems that have been created by the privatization measures in the Medicare Modernization Act, but here we will limit the discussion not to just the Part D program, but to only one aspect of Part D: the application of Part D to dual-eligibles.

Dual-eligible Medicare beneficiaries are those individuals who not only qualify for Medicare based on age or long-term disabilities, but they also qualify for Medicaid based on their very low incomes. Before Medicare Part D was enacted, they received their drugs through the state-administered Medicaid programs. This worked well for the taxpayers because of the ability of the government to negotiate much lower drug prices, and it worked well for the patients because they received their necessary medications usually without any out-of-pocket expense.

The privatizers were successful in shifting the state-run Medicaid drug benefit into the Part D program. Because the drug benefit for the dual-eligibles is still subsidized, the cost impact was not that great for the beneficiaries, though the administrative hassles, including the need to comply with various formularies offered by the different plans, proved to be more than just an inconvenience.

The taxpayers did not fare at all well with this shift into the Part D program. This study by the Majority Staff demonstrates that taxpayers paid $3,739,000,000 more to the drug manufacturers for the top 100 drugs than they would have under the Medicaid drug program which this replaced. The Republican Staff response glosses over this very real additional cost foisted onto taxpayers.

The Republican response obfuscates and segues into Part A hospital funding – an important problem but not the subject at hand. Buried in their response, the Republicans do state that if the drug benefit for the dual-eligible population were returned to the Medicaid program, “this population would have access to Medicaid price controls and pharmaceutical manufacturers no longer would be benefiting from the purported windfall profits.” Of course they wouldn’t; the taxpayers would benefit.

This example shows once again that health policy science is not complicated. It’s the politics that are so difficult. One side is represented by individuals who want everyone to have affordable access to the health care that they need, and the other side is more interested in enhancing the private sector through measures such as ensuring windfall profits for the pharmaceutical firms.

One thing great about America is that it is our choice… but we do have to make a greater effort to be certain that everyone is making an informed choice.

Let's make a health care system that aids people, not insurance companies

Dr. Daniel D. Bennett
Austin American-Statesman
Wednesday, July 23, 2008

If you did not already believe that our current health care financing system is rigged to benefit insurance companies over patients, then President Bush’s recent veto of legislation to halt Medicare cuts to physicians should have changed your mind.

The president and a few Republicans did their best to kill the bill because it took money from Medicare HMOs. Fortunately, they failed. Medicare HMOs were sold to the American public as a mechanism for allowing the private sector to save tax dollars by “managing” the care of enrolled senior citizens. Sadly, since the day there were started, they have cost us more per enrollee than traditional Medicare, and this is despite the fact that they care for a healthier population of seniors when compared with traditional Medicare. Why would politicians defend so-called Medicare Advantage? Money. These plans are profitable to the insurance companies, and insurance company profits translate to campaign donations. There is no better example of how the health care market is manipulated to make money for a few.

Most health insurance companies exist to make a profit for their shareholders. Profit motives are great when applied to commodities, but health care is not a commodity, and the health insurance market is not good for the health and well-being of Americans. Medicare was established as our taxpayer-supported health care financing system for senior citizens, and it has been a resounding success. The establishment of Medicare HMOs was a perfect experiment to test the hypothesis that the private market could do better. The results are clear: Medicare HMOs cost more and deliver less care than traditional Medicare. It is time to start expanding rather than assaulting Medicare.

Imagine our country without Medicare: Senior citizens are forced to obtain insurance coverage on the open market or through continued employment. A few wealthy seniors can pay out-of-pocket, but the majority find themselves unable to afford care.

This would be a catastrophe, and such a catastrophe is already occurring among tens of millions of uninsured Americans.

Now imagine that all of us have insurance similar to Medicare. Working parents no longer worry about the health of their families when they are “downsized.” Patients have a genuine choice of physicians and hospitals, rather than a choice of insurance providers. Small businesses can compete equally with large corporations for employees. Those with serious illness or injury get necessary care, even when they can no longer work. Everyone is covered everywhere, and coverage decisions are not based on profit.

Now stop imagining these things, and make them happen.

Some problems require the actions of a great nation. Would we have interstate highways connecting all corners of this country without the intervention and funding of the federal government? The same should be asked of the moon landings, the establishment of the National Institutes of Health, Social Security and the D-Day invasion. We are headed in the wrong direction, and there are many countries we can look to for inspiration and ideas. We are a great nation, and we can do better. We can do better than Canada, France, the United Kingdom and others whose health care systems are outperforming ours by most measures.

House Resolution 676, which has 90 co-sponsors, seeks to establish true universal health care by enhancing Medicare and expanding coverage to all Americans. The money we spend now on insurance premiums and other out-of-pocket costs will be more than enough to fund this proposal, especially once we eliminate the high administrative costs and excessive profits of the private health insurance industry. HR 676 deserves our support.

We have the physicians, nurses, hospitals, medical schools and the money. There is no excuse for the wealthiest nation in the world to have among the worst-performing health care systems. We can do better.

Bennett, who lives in Temple, practices dermatology and teaches medical students.

Obama's Health Plan, Dissected

Letter to the Editor
New York Times
July 25, 2008

To the Editor:

Barack Obama proposes to make health care affordable for all Americans with an injection of cash from the repeal of the Bush tax cuts and with savings realized from electronic health information technology and programs to improve disease prevention and chronic disease management. While better record-keeping and prevention and management programs would improve the quality of our medical system, there is little data that they would actually save money. They certainly would not do so for many years.

Most waste in our health care system is a result of our reliance on private health insurers. Having multiple competing insurers results in costs for marketing, underwriting, billing, claims adjudication, executive salaries and profit.

Administrative costs account for 31 percent of all health care spending in the United States, but only 17 percent in Canada’s single payer system. The administrative costs of America’s own single-payer system, Medicare, are only about 3 percent, compared with 12 to 15 percent for private insurers.

If Mr. Obama wants to save enough to provide health care for every American, he needs to open the debate to include consideration of Medicare for all in the United States.

Rachel Nardin
Cambridge, Mass.

The writer, an assistant professor of neurology at Harvard Medical School, is chairwoman of the Massachusetts chapter of Physicians for a National Health Program.

The “dual-eligibles” scam

Medicare Part D: Drug Pricing and Manufacturer Windfalls

By the Majority Staff
United States House of Representatives
Committee on Oversight and Government Reform
July 2008

Conclusion

This analysis of confidential data on Medicare Part D and Medicaid drug prices shows that the private Medicare Part D insurers pay significantly higher prices for prescription drugs than does the Medicaid program. In the case of the six million dual eligible beneficiaries, the Medicare Part D insurers paid $3.7 billion more in 2006 and 2007 to purchase the top 100 drugs for dual eligible beneficiaries than they would have paid if they had access to the lower Medicaid drug prices. This increase in costs represents a windfall to drug manufacturers.

Eliminating the drug manufacturer windfall would realize substantial savings to federal taxpayers. Over the next ten years, taxpayers would save $86 billion if the Medicare Part D insurers paid Medicaid prices for drugs used by the dual eligible beneficiaries. If Medicare negotiated directly with drug manufacturers and obtained prices equivalent to the Medicaid prices for all Medicare beneficiaries, the potential savings to taxpayers increases to $156 billion.

http://oversight.house.gov/documents/20080724101850.pdf

And…

Apples, Oranges and “Windfalls”

Republican Staff Analysis

Conclusion

The Part D benefit was designed to offer choice in prescription drug insurance, value for seniors through low negotiated prices, and overall low program costs for taxpayers. It is achieving those goals and exceeding expectations. The Majority report fails to recognize these benefits and instead makes inappropriate and unrealistic price comparisons. Politically appealing but substantively flawed changes like those advocated by the Majority would have serious implications for the prices paid by employers, unions, health care providers, and the uninsured. Likewise, changing the financial incentives in Part D could have a negative impact in the type of drug research and development that is conducted.

Finally, it is worth noting that the Majority has written eight reports on Part D and the program is only in its third year. This represents a significant level of oversight. Without a doubt Medicare requires substantial oversight given its importance to seniors and its uncertain long-term financial prospects. However, the Majority’s criticisms of Part D seem misplaced. Part D costs substantially less than Part A (which primarily pays for hospital based care) and Part B (which primarily pays for physician services). The Hospital Insurance trust fund, Part A’s revenue source, is not adequately financed in the short-term and will be exhausted in 2019. This looming financial crisis has received scant oversight from the Majority.

http://republicans.oversight.house.gov/Media/PDFs/20080723PartDReport.pdf

Comment:

By Don McCanne, MD

To understand the basis for the problems with the Medicare Part D drug benefit, you need only to recall that the program was designed by the Medicare privatizers in Congress, with the support of two of the largest lobby interests in the nation: the private insurers and the pharmaceutical firms.

There are a great many problems that have been created by the privatization measures in the Medicare Modernization Act, but here we will limit the discussion not to just the Part D program, but to only one aspect of Part D: the application of Part D to dual-eligibles.

Dual-eligible Medicare beneficiaries are those individuals who not only qualify for Medicare based on age or long-term disabilities, but they also qualify for Medicaid based on their very low incomes. Before Medicare Part D was enacted, they received their drugs through the state-administered Medicaid programs. This worked well for the taxpayers because of the ability of the government to negotiate much lower drug prices, and it worked well for the patients because they received their necessary medications usually without any out-of-pocket expense.

The privatizers were successful in shifting the state-run Medicaid drug benefit into the Part D program. Because the drug benefit for the dual-eligibles is still subsidized, the cost impact was not that great for the beneficiaries, though the administrative hassles, including the need to comply with various formularies offered by the different plans, proved to be more than just an inconvenience.

The taxpayers did not fare at all well with this shift into the Part D program. This study by the Majority Staff demonstrates that taxpayers paid $3,739,000,000 more to the drug manufacturers for the top 100 drugs than they would have under the Medicaid drug program which this replaced. The Republican Staff response glosses over this very real additional cost foisted onto taxpayers.

The Republican response obfuscates and segues into Part A hospital funding – an important problem but not the subject at hand. Buried in their response, the Republicans do state that if the drug benefit for the dual-eligible population were returned to the Medicaid program, “this population would have access to Medicaid price controls and pharmaceutical manufacturers no longer would be benefiting from the purported windfall profits.” Of course they wouldn’t; the taxpayers would benefit.

This example shows once again that health policy science is not complicated. It’s the politics that are so difficult. One side is represented by individuals who want everyone to have affordable access to the health care that they need, and the other side is more interested in enhancing the private sector through measures such as ensuring windfall profits for the pharmaceutical firms.

One thing great about America is that it is our choice… but we do have to make a greater effort to be certain that everyone is making an informed choice.

Let’s make a health care system that aids people, not insurance companies

Dr. Daniel D. Bennett
Austin American-Statesman
Wednesday, July 23, 2008

If you did not already believe that our current health care financing system is rigged to benefit insurance companies over patients, then President Bush’s recent veto of legislation to halt Medicare cuts to physicians should have changed your mind.

The president and a few Republicans did their best to kill the bill because it took money from Medicare HMOs. Fortunately, they failed. Medicare HMOs were sold to the American public as a mechanism for allowing the private sector to save tax dollars by “managing” the care of enrolled senior citizens. Sadly, since the day there were started, they have cost us more per enrollee than traditional Medicare, and this is despite the fact that they care for a healthier population of seniors when compared with traditional Medicare. Why would politicians defend so-called Medicare Advantage? Money. These plans are profitable to the insurance companies, and insurance company profits translate to campaign donations. There is no better example of how the health care market is manipulated to make money for a few.

Most health insurance companies exist to make a profit for their shareholders. Profit motives are great when applied to commodities, but health care is not a commodity, and the health insurance market is not good for the health and well-being of Americans. Medicare was established as our taxpayer-supported health care financing system for senior citizens, and it has been a resounding success. The establishment of Medicare HMOs was a perfect experiment to test the hypothesis that the private market could do better. The results are clear: Medicare HMOs cost more and deliver less care than traditional Medicare. It is time to start expanding rather than assaulting Medicare.

Imagine our country without Medicare: Senior citizens are forced to obtain insurance coverage on the open market or through continued employment. A few wealthy seniors can pay out-of-pocket, but the majority find themselves unable to afford care.

This would be a catastrophe, and such a catastrophe is already occurring among tens of millions of uninsured Americans.

Now imagine that all of us have insurance similar to Medicare. Working parents no longer worry about the health of their families when they are “downsized.” Patients have a genuine choice of physicians and hospitals, rather than a choice of insurance providers. Small businesses can compete equally with large corporations for employees. Those with serious illness or injury get necessary care, even when they can no longer work. Everyone is covered everywhere, and coverage decisions are not based on profit.

Now stop imagining these things, and make them happen.

Some problems require the actions of a great nation. Would we have interstate highways connecting all corners of this country without the intervention and funding of the federal government? The same should be asked of the moon landings, the establishment of the National Institutes of Health, Social Security and the D-Day invasion. We are headed in the wrong direction, and there are many countries we can look to for inspiration and ideas. We are a great nation, and we can do better. We can do better than Canada, France, the United Kingdom and others whose health care systems are outperforming ours by most measures.

House Resolution 676, which has 90 co-sponsors, seeks to establish true universal health care by enhancing Medicare and expanding coverage to all Americans. The money we spend now on insurance premiums and other out-of-pocket costs will be more than enough to fund this proposal, especially once we eliminate the high administrative costs and excessive profits of the private health insurance industry. HR 676 deserves our support.

We have the physicians, nurses, hospitals, medical schools and the money. There is no excuse for the wealthiest nation in the world to have among the worst-performing health care systems. We can do better.

Bennett, who lives in Temple, practices dermatology and teaches medical students.

Obama’s Health Plan, Dissected

Letter to the Editor
New York Times
July 25, 2008

To the Editor:

Barack Obama proposes to make health care affordable for all Americans with an injection of cash from the repeal of the Bush tax cuts and with savings realized from electronic health information technology and programs to improve disease prevention and chronic disease management. While better record-keeping and prevention and management programs would improve the quality of our medical system, there is little data that they would actually save money. They certainly would not do so for many years.

Most waste in our health care system is a result of our reliance on private health insurers. Having multiple competing insurers results in costs for marketing, underwriting, billing, claims adjudication, executive salaries and profit.

Administrative costs account for 31 percent of all health care spending in the United States, but only 17 percent in Canada’s single payer system. The administrative costs of America’s own single-payer system, Medicare, are only about 3 percent, compared with 12 to 15 percent for private insurers.

If Mr. Obama wants to save enough to provide health care for every American, he needs to open the debate to include consideration of Medicare for all in the United States.

Rachel Nardin
Cambridge, Mass.

The writer, an assistant professor of neurology at Harvard Medical School, is chairwoman of the Massachusetts chapter of Physicians for a National Health Program.

Is preventing genetic discrimination enough?

The Genetic Information Nondiscrimination Act — A Half-Step toward Risk Sharing

By Russell Korobkin, J.D., and Rahul Rajkumar, M.D., J.D.
The New England Journal of Medicine
July 24, 2008
Consider three Americans — one with an increased genetic risk for colon cancer, one with a family history of colon cancer, and one with a colonoscopic finding of several large adenomatous polyps. Under the Genetic Information Nondiscrimination Act (GINA), which was recently signed into law by President George W. Bush, health insurance companies may not refuse to cover and may not raise premiums for the first two people, whose genetic information or family history puts them at higher risk for colon cancer. Insurers could, however, refuse to sell the third person an individual policy or could quadruple his or her premiums. If the third person is enrolled in an employer-sponsored group health plan, insurers could raise the rates for everyone in the group.
In making such distinctions, GINA is emblematic of this country’s piecemeal and inconsistent approach to health care policy, which makes little sense and leaves many Americans without access to care or in danger of financial ruin if they seek care. Our recent history is replete with examples of similar half-measures in health policy.
One response would be to retreat from the egalitarian impulse of GINA and leave health insurance to market forces, as we do with consumer goods. Health insurance risk would be priced as accurately as technology permitted, and patients would pay their own expected medical costs in premiums.
The better solution is to fully embrace the basic ethic of GINA and admit that the law’s distinction between genetic information and other immutable characteristics is arbitrary.
The arbitrary nature of the categories GINA creates suggests that we should fully commit ourselves to the step that the legislation approaches but is too hesitant to take: the prohibition of medical underwriting — the rating and pricing of health insurance on the basis of any health information, not just genetic information. Health insurance premiums should be assessed on the basis of a “community rate” and should be set the same for all people within a given age group — possibly with exceptions somehow made for risk factors that are deemed to be within each person’s reasonable control.
Moreover, to ensure that the costs of bad health are shared equitably, all Americans would have to be in the same risk pool. This would mean enacting a health insurance mandate either for employers or, if health insurance could be made affordable, for individuals — and specifying a minimum set of benefits that everyone would be required to have. Given the growing disparity between the cost of modern medicine and the incomes of many Americans, enforcing such a mandate would be difficult. Even with income-based subsidies, an individual mandate could place an undue financial burden on many families. Nonetheless, bringing everyone into the same risk pool is an important long-term goal.
With such reforms, GINA could become the first step toward a just and sustainable health insurance system. This approach would recognize that, because many of the most important determinants of health are beyond people’s reasonable control, no one should have to bear the costs of health care alone.
http://content.nejm.org/cgi/content/full/359/4/335

The need for the Genetic Information Nondiscrimination Act was obvious. The members of Congress recognized that it would be unfair for private insurers to discriminate against individuals based on their family history or genetic makeup. What is perhaps not so obvious is why Congress chose to ignore all other forms of discrimination by private insurers.
As this article states, medical underwriting should be prohibited in order to permanently eliminate private insurer discrimination. Then a universal risk pool must be established to distribute risk equitably. But for that to work, the authors acknowledge that there must be a mandate that everyone participates.
In recommending community rating and a mandate to participate, the authors further acknowledge that, even with subsidies, reform based on private plans will still place an undue financial burden on many families. That is still a form of discrimination.
What is it that holds back these authors, members of Congress, and others in the health policy community from stating the obvious? Legislating and regulating the private insurance industry may reduce but will never eliminate insurer discrimination; adopting a publicly-funded, single payer national health program would. Why do they choke up when that’s what they need to say?

Is preventing genetic discrimination enough?

The Genetic Information Nondiscrimination Act -- A Half-Step toward Risk Sharing

By Russell Korobkin, J.D., and Rahul Rajkumar, M.D., J.D.
The New England Journal of Medicine
July 24, 2008

Consider three Americans — one with an increased genetic risk for colon cancer, one with a family history of colon cancer, and one with a colonoscopic finding of several large adenomatous polyps. Under the Genetic Information Nondiscrimination Act (GINA), which was recently signed into law by President George W. Bush, health insurance companies may not refuse to cover and may not raise premiums for the first two people, whose genetic information or family history puts them at higher risk for colon cancer. Insurers could, however, refuse to sell the third person an individual policy or could quadruple his or her premiums. If the third person is enrolled in an employer-sponsored group health plan, insurers could raise the rates for everyone in the group.

In making such distinctions, GINA is emblematic of this country’s piecemeal and inconsistent approach to health care policy, which makes little sense and leaves many Americans without access to care or in danger of financial ruin if they seek care. Our recent history is replete with examples of similar half-measures in health policy.

One response would be to retreat from the egalitarian impulse of GINA and leave health insurance to market forces, as we do with consumer goods. Health insurance risk would be priced as accurately as technology permitted, and patients would pay their own expected medical costs in premiums.

The better solution is to fully embrace the basic ethic of GINA and admit that the law’s distinction between genetic information and other immutable characteristics is arbitrary.

The arbitrary nature of the categories GINA creates suggests that we should fully commit ourselves to the step that the legislation approaches but is too hesitant to take: the prohibition of medical underwriting — the rating and pricing of health insurance on the basis of any health information, not just genetic information. Health insurance premiums should be assessed on the basis of a “community rate” and should be set the same for all people within a given age group — possibly with exceptions somehow made for risk factors that are deemed to be within each person’s reasonable control.

Moreover, to ensure that the costs of bad health are shared equitably, all Americans would have to be in the same risk pool. This would mean enacting a health insurance mandate either for employers or, if health insurance could be made affordable, for individuals — and specifying a minimum set of benefits that everyone would be required to have. Given the growing disparity between the cost of modern medicine and the incomes of many Americans, enforcing such a mandate would be difficult. Even with income-based subsidies, an individual mandate could place an undue financial burden on many families. Nonetheless, bringing everyone into the same risk pool is an important long-term goal.

With such reforms, GINA could become the first step toward a just and sustainable health insurance system. This approach would recognize that, because many of the most important determinants of health are beyond people’s reasonable control, no one should have to bear the costs of health care alone.

http://content.nejm.org/cgi/content/full/359/4/335

Comment:

By Don McCanne, MD

The need for the Genetic Information Nondiscrimination Act was obvious. The members of Congress recognized that it would be unfair for private insurers to discriminate against individuals based on their family history or genetic makeup. What is perhaps not so obvious is why Congress chose to ignore all other forms of discrimination by private insurers.

As this article states, medical underwriting should be prohibited in order to permanently eliminate private insurer discrimination. Then a universal risk pool must be established to distribute risk equitably. But for that to work, the authors acknowledge that there must be a mandate that everyone participates.

In recommending community rating and a mandate to participate, the authors further acknowledge that, even with subsidies, reform based on private plans will still place an undue financial burden on many families. That is still a form of discrimination.

What is it that holds back these authors, members of Congress, and others in the health policy community from stating the obvious? Legislating and regulating the private insurance industry may reduce but will never eliminate insurer discrimination; adopting a publicly-funded, single payer national health program would. Why do they choke up when that’s what they need to say?

"The Measure of America"

Development: US fails to measure up on ‘human index’

By Ashley Seager
The Guardian
July 17, 2008
Despite spending $230m (£115m) an hour on healthcare, Americans live shorter lives than citizens of almost every other developed country. And while it has the second-highest income per head in the world, the United States ranks 42nd in terms of life expectancy.
These are some of the startling conclusions from a major new report which attempts to explain why the world’s number-one economy has slipped to 12th place – from 2nd in 1990- in terms of human development.
The American Human Development Report, which applies rankings of health, education and income to the US, paints a surprising picture of a country that spends well over $5bn each day on healthcare – more per person than any other country.
The report, Measure of America, was funded by Oxfam America, the Conrad Hilton Foundation and the Rockefeller Foundation. It shows each of the 11 countries that rank higher than the US in human development has a lower per-capita income.
Those countries score better on the health and knowledge indices that make up the overall human development index (HDI), which is calculated each year by the United Nations Development Programme.
One of the main problems faced by the US, says the report, is that one in six Americans, or about 47 million people, are not covered by health insurance and so have limited access to healthcare.
The US has a higher percentage of children living in poverty than any of the world’s richest countries.
It also reveals 14% of the population – some 40 million Americans – lack the literacy skills to perform simple, everyday tasks such as understanding newspaper articles and instruction manuals.
Inequality remains stark. The richest fifth of Americans earn on average $168,170 a year, almost 15 times the average of the lowest fifth, who make do with $11,352.
The US also ranks first among the 30 rich countries of the Organisation of Economic Cooperation and Development in terms of the number of people in prison, both in absolute terms and as a percentage of the total population. It has 5% of the world’s people but 24% of its prisoners.
“Human development is concerned with what I take to be the basic development idea: namely, advancing the richness of human life, rather than the richness of the economy in which human beings live, which is only a part of it,” said the Nobel laureate economist Amartya Sen, who developed the HDI in 1990.
“We get in this report … an evaluation of what the limitations of human development are in the US but also … how the relative place of America has been slipping in comparison with other countries over recent years.”
http://www.guardian.co.uk/society/2008/jul/17/internationalaidanddevelopment.usa

And…

Testimony before the Joint Economic Committee

By Kristen Lewis
American Human Development Project
July 23, 2008
It is important to note that the U.S. has higher income scores than every country but Luxembourg on the global scale – we’re still #2 in income. But the eleven countries ahead of us – particularly fast-moving countries like Australia and Ireland – have been more successful and efficient in transforming income into positive health and education outcomes for their people.
Based on the data in the American Human Development Index and the information and analysis in the American Human Development Report, a steady, broad-based advance of human development in the United States as well as greater security for middle class families will require attention to several priorities.

  • For Americans to live longer, healthier lives as well as remain solvent when serious illness strikes, it is obvious from the report that progress depends in large part on a comprehensive resolution of the problem of health insurance.
  • The days when basic skills were sufficient to ensure a life of reasonable economic security and full participation in society are past; the labor market today is unkind to those who lack high school diplomas, and jobs that afford financial security increasingly require college degrees.
  • For Americans to sustain, or obtain, a decent standard of living, the wages and opportunities of millions of Americans must improve. Growing inequality in income distribution and wealth raises a profound question for Americans: Can the uniquely middle-class nation that emerged in the twentieth century survive into the twenty-first century? Or is it fracturing into a land of great extremes?

http://jec.senate.gov/index.cfm?FuseAction=Hearings.HearingsCalendar&ContentRecord_id=4b4275bc-d7b2-8563-4faf-a21bf4898ba4
American Human Development Project:
http://www.measureofamerica.org/
“The Measure of America,” Executive Summary:
http://measureofamerica.org/wp-content/uploads/2008/07/ahdr-execsumm.pdf

“The American Human Development Project’s mission is to stimulate fact-based public debate about and political attention to human development issues in the United States and to empower people to hold elected officials accountable for progress on issues we all care about: health, education and income.”
From the testimony of Harvard Law School Professor Elizabeth Warren (also available at the jec.senate.gov link above): “Seven years of flat or declining wages, seven years of increasing costs, and seven years of mounting debts have placed unprecedented stress on the ordinary families. By every critical financial measure, these families are losing ground. Without changes in critical economic policies, the strong middle class that has been the backbone of the American economy and the American democracy is in jeopardy.”
When we are addressing the narrower problem of health insurance for everyone, does the broader issue of human development really matter? Well, yes, and here’s why.
The current national debate on reform has concentrated on various models designed to provide insurance coverage to more people. Several policies would fall short of universal coverage, but, to make matters worse, other recommendations accelerate the transition to a market of underinsurance products. Increasing the number of individuals with nominal but inadequate health care coverage defeats one major goal of improving human development within the United States.
In this political season, we need to assess candidates based on whether their policies are merely gimmicks designed to look like they are addressing problems such as the uninsured, or if their policies truly are based on the fundamental goal of improving human development.
Those who are dedicated to human development will make every effort to see that everyone does have health care coverage that actually works. They’ll also support policies that address our serious deficiencies in education and in income levels.
Providing health care alone without improving human development will only serve to be certain that we will remain number one in incarcerating our people. We have more than enough national wealth to be number one in human development.
We should ask our politicians to show us precisely how their policies would improve human development – realizing the dreams of the middle class for a greater number of us. If they don’t provide us with truly concrete proposals, then ask them what plans they have to increase the capacity of our prisons. If they have a well-thought-out answer for that, then maybe we should look elsewhere for candidates with a greater sense of social solidarity.

"The Measure of America"

Development: US fails to measure up on 'human index'

By Ashley Seager
The Guardian
July 17, 2008

Despite spending $230m (£115m) an hour on healthcare, Americans live shorter lives than citizens of almost every other developed country. And while it has the second-highest income per head in the world, the United States ranks 42nd in terms of life expectancy.

These are some of the startling conclusions from a major new report which attempts to explain why the world’s number-one economy has slipped to 12th place – from 2nd in 1990- in terms of human development.

The American Human Development Report, which applies rankings of health, education and income to the US, paints a surprising picture of a country that spends well over $5bn each day on healthcare – more per person than any other country.

The report, Measure of America, was funded by Oxfam America, the Conrad Hilton Foundation and the Rockefeller Foundation. It shows each of the 11 countries that rank higher than the US in human development has a lower per-capita income.

Those countries score better on the health and knowledge indices that make up the overall human development index (HDI), which is calculated each year by the United Nations Development Programme.

One of the main problems faced by the US, says the report, is that one in six Americans, or about 47 million people, are not covered by health insurance and so have limited access to healthcare.

The US has a higher percentage of children living in poverty than any of the world’s richest countries.

It also reveals 14% of the population – some 40 million Americans – lack the literacy skills to perform simple, everyday tasks such as understanding newspaper articles and instruction manuals.

Inequality remains stark. The richest fifth of Americans earn on average $168,170 a year, almost 15 times the average of the lowest fifth, who make do with $11,352.

The US also ranks first among the 30 rich countries of the Organisation of Economic Cooperation and Development in terms of the number of people in prison, both in absolute terms and as a percentage of the total population. It has 5% of the world’s people but 24% of its prisoners.

“Human development is concerned with what I take to be the basic development idea: namely, advancing the richness of human life, rather than the richness of the economy in which human beings live, which is only a part of it,” said the Nobel laureate economist Amartya Sen, who developed the HDI in 1990.

“We get in this report … an evaluation of what the limitations of human development are in the US but also … how the relative place of America has been slipping in comparison with other countries over recent years.”

http://www.guardian.co.uk/society/2008/jul/17/internationalaidanddevelopment.usa

And…

Testimony before the Joint Economic Committee

By Kristen Lewis
American Human Development Project
July 23, 2008

It is important to note that the U.S. has higher income scores than every country but Luxembourg on the global scale — we’re still #2 in income. But the eleven countries ahead of us — particularly fast-moving countries like Australia and Ireland — have been more successful and efficient in transforming income into positive health and education outcomes for their people.

Based on the data in the American Human Development Index and the information and analysis in the American Human Development Report, a steady, broad-based advance of human development in the United States as well as greater security for middle class families will require attention to several priorities.

* For Americans to live longer, healthier lives as well as remain solvent when serious illness strikes, it is obvious from the report that progress depends in large part on a comprehensive resolution of the problem of health insurance.

* The days when basic skills were sufficient to ensure a life of reasonable economic security and full participation in society are past; the labor market today is unkind to those who lack high school diplomas, and jobs that afford financial security increasingly require college degrees.

* For Americans to sustain, or obtain, a decent standard of living, the wages and opportunities of millions of Americans must improve. Growing inequality in income distribution and wealth raises a profound question for Americans: Can the uniquely middle-class nation that emerged in the twentieth century survive into the twenty-first century? Or is it fracturing into a land of great extremes?

http://jec.senate.gov/index.cfm?FuseAction=Hearings.HearingsCalendar&ContentRecord_id=4b4275bc-d7b2-8563-4faf-a21bf4898ba4

American Human Development Project:

Measure of America Home Page

“The Measure of America,” Executive Summary:
http://measureofamerica.org/wp-content/uploads/2008/07/ahdr-execsumm.pdf

Comment:

By Don McCanne, MD

“The American Human Development Project’s mission is to stimulate fact-based public debate about and political attention to human development issues in the United States and to empower people to hold elected officials accountable for progress on issues we all care about: health, education and income.”

From the testimony of Harvard Law School Professor Elizabeth Warren (also available at the jec.senate.gov link above): “Seven years of flat or declining wages, seven years of increasing costs, and seven years of mounting debts have placed unprecedented stress on the ordinary families. By every critical financial measure, these families are losing ground. Without changes in critical economic policies, the strong middle class that has been the backbone of the American economy and the American democracy is in jeopardy.”

When we are addressing the narrower problem of health insurance for everyone, does the broader issue of human development really matter? Well, yes, and here’s why.

The current national debate on reform has concentrated on various models designed to provide insurance coverage to more people. Several policies would fall short of universal coverage, but, to make matters worse, other recommendations accelerate the transition to a market of underinsurance products. Increasing the number of individuals with nominal but inadequate health care coverage defeats one major goal of improving human development within the United States.

In this political season, we need to assess candidates based on whether their policies are merely gimmicks designed to look like they are addressing problems such as the uninsured, or if their policies truly are based on the fundamental goal of improving human development.

Those who are dedicated to human development will make every effort to see that everyone does have health care coverage that actually works. They’ll also support policies that address our serious deficiencies in education and in income levels.

Providing health care alone without improving human development will only serve to be certain that we will remain number one in incarcerating our people. We have more than enough national wealth to be number one in human development.

We should ask our politicians to show us precisely how their policies would improve human development – realizing the dreams of the middle class for a greater number of us. If they don’t provide us with truly concrete proposals, then ask them what plans they have to increase the capacity of our prisons. If they have a well-thought-out answer for that, then maybe we should look elsewhere for candidates with a greater sense of social solidarity.

Expand successful Medicare program to all

Edith Kenna
Fort Wayne Journal Gazette
July 21, 2008

July 30 is the 43rd anniversary of the passage of Medicare. Medicare began because no one except the government was willing to cover the oldest and sickest of us. Medicare now covers 34 million Americans. Consumer ratings of Medicare remain higher than that of private insurance companies. Medicare itself remains a model of effectiveness and efficiency, publicly funded and privately delivered, operating with administrative cost between 3 percent and 5 percent. If you don’t believe that Medicare is a success, try asking those covered by Medicare, friends, parents or grandparents if they want to give it up and go back to private insurance.

One wonders, then, why some politicians are opposed to building upon Medicare’s success. Rex Nutting of Dow Jones MarketWatch suggested in January that none of the major presidential candidates has endorsed such a simple solution as expanding Medicare. Instead, they generate elaborate Rube Goldberg plans that bring a few more people under insurance coverage but do not fundamentally change our deeply flawed health care system. Medicare has become the proverbial elephant in the room – very few politicians want to notice its successes or its popularity with consumers.

As a result, most health care proposals simply add more layers of complexity to our health care system and do not address the need for basic change. There is one bill, however, that stands out: HR 676, The United States National Health Insurance Act. The goal of HR 676 is to provide true universal coverage by improving and building upon the original Medicare program introduced 43 years ago. HR 676 provides a system of health care that is accessible, affordable, portable, equitable and provides a high standard of quality. This bill has never been granted a public hearing under either a Republican or a Democratic administration, which is not surprising because true social change never takes place from the top. If history proves anything, it is that Washington only enacts major social change when the people get involved and demand it. When it comes to health care, despite what Washington thinks, such a movement is well under way.

Last month the U.S. Conference of Mayors endorsed HR 676.

Religious organizations are also beginning to realize the importance of advocating for health reform as a moral issue. For instance, the Los Angeles Council of Religious Leaders, the Presbyterian National Assembly and the Unitarian Universalists National Assembly also endorse HR 676.

The American College of Physicians, the nation’s largest specialty group of 124,000 internists now supports a national insurance plan like Medicare. In April 2008, the Annals of Medicine reported that 59 percent of all U.S. doctors now support national health insurance as a way to ensure that everyone has access to care.

HR 676 has 91 co-sponsors in the House of Representatives. HR 676 has been endorsed by 438 union organizations in 48 states including 110 Central Labor Councils and Area Labor Federations and 34 state AFL-CIOs.

Thousands and thousands of citizens across the country have signed petitions in favor of HR 676 and have sent e-mail, cards and letters to their representatives urging its passage. Congress could at least have a hearing on the merits of the bill so the concept can be opened to public debate. Such a hearing could look at how Medicare can be improved to cover us all. It could look carefully at how private health insurers cherry pick the healthy and deny coverage to the sick. It could try to explain why we cling to a patchwork quilt of employer-based insurance that is hard to get and easy to lose.

Hoosiers for a Commonsense Health Plan is a grass-roots citizens’ movement that fully supports HR 676. President Bush and Sen. Barack Obama tell us change is hard. We tell them being sick without access to affordable health care is even worse. It is truly mind-boggling to observe Washington politicians swerve and dodge the elephant in the room of HR 676. The United States National Health Insurance Act deserves a hearing on its merits because Americans deserve a chance to have access to the health care they need.

Edith Kenna is licensed clinical social worker in Fort Wayne and a member of Northeast Indiana Hoosiers for a Commonsense Health Plan. She wrote this for The Journal Gazette.

Mayors join those lined up behind national health care

By Steve Porter
Northern Colorado Business Report
July 18, 2008

Another major group recently endorsed a federal bill that would expand the nation’s Medicare system to include everyone in America in a universal health-care plan.

The U.S. Mayors Conference, meeting in Miami in late June, voted for a resolution in support of HR676, also known as the United States National Health Insurance Act.

The resolution noted that 47 million Americans are currently without health insurance and that millions of others have coverage so inadequate that one major illness could lead to financial ruin.

The resolution also noted that:

* Managed care systems like HMOs and other so-called market reforms have failed to contain health-care costs, a situation that now threatens the international competitiveness of U.S. manufacturers;

* Administrative costs of private insurers consume one-third of private health-care spending while Medicare has administrative costs of less than 5 percent;

* U.S. hospitals spend 24.3 percent of their budgets on billing and administration while hospitals in Canada – which has a single-payer system – spend only 12.9 percent;

* Harvard researchers estimate that more than $300 billion could be saved annually by replacing private insurance companies with a single public-payer system;

The United States remains the only advanced nation in the world without universal health coverage while premiums for workers who get their health insurance through their employer – the vast majority – continue to rise by 10 percent, 12 percent or more every year.

And at the same time, private insurance companies continue to reap record profits. In 2006, the nation’s six biggest health insurers earned almost $11 billion in profits, according to ConsumerReports.org.

It’s a situation that can’t continue much longer, universal health-care advocates say. And it’s a system that business can’t carry much longer, according to Nathan Wilkes, a co-founder of the Business Coalition for Single-Payer Healthcare.

“Basically, everybody in the group – we all have different backgrounds in business and political leanings – but we all recognize the current health-care system is crushing business and it’s making us not competitive globally,” said Wilkes, an Englewood resident who helped form the group in 2007.

Wilkes said his group helped formulate the message sent to the mayors that changing to a single-payer system would benefit them through cost savings to their respective cities by no longer dealing with multiple insurance companies, each taking their own profits, and by buying drugs and medical supplies in bulk.

“It doesn’t take a rocket scientist to figure that part out,” Wilkes said.

HR676, sponsored by Rep. John Conyers, D-Mich., and co-sponsored by 70 other representatives, would basically expand the Medicare program – an existing single-payer plan now restricted to those 65 and over – to include every citizen. The bill has been endorsed by numerous medical organizations, including the National Medical Association and the American Nurses Association.

Others lining up behind it include several faith-based organizations, the Kentucky and New Hampshire houses of representatives, 20 cities and counties, the League of Women Voters, AFL-CIO organizations in 33 states and more than 400 labor groups across America, including the Boulder Area Labor Council and the Southern Colorado Labor Council in Pueblo.

Opposed by industry

So with all these groups coming together behind HR676, what’s keeping it from being enacted?

Wilkes says any real change in the current system is strongly opposed by the private insurance industry, big pharmaceutical companies and manufacturers of medical devices. “Anybody that’s making big profits today is against it,” he said.

Last year, Colorado tried to take a step toward insuring all of its residents – about 800,000 aren’t insured – through the 208 Blue Ribbon Commission on Health Care Reform. Five proposals were forwarded to the Legislature in January, including a proposal from Health Care for All Colorado that would have provided coverage for all through a single-payer plan.

Eliza Carney, chair of the Northern Colorado chapter’s steering committee, said she was “disappointed but not surprised” by the legislature’s failure to adopt any of the proposals.

Carney said financial constraints were part of the inaction but also a lack of political will.

“I think some of the (Democratic) legislative leaders were swayed by pundits who said it was a controversial issue and they would be hammered by the Republicans at election time,” she said.

Both Carney and Wilkes strongly support HR676 but say getting momentum behind a national health-care plan probably won’t happen without successful state-level programs. Both said they would like to see Colorado develop a pilot program that could serve as a possible prototype for a national health care program.

“It’s not going to happen without a lot of grassroots action,” Carney said.

Asked whether a change in the White House this year might increase HR676’s chances of passing in Congress, Wilkes said he holds out hope under a Barack Obama presidency.

“I’m always hopeful,” he said. “It’s definitely getting better for something like that to happen. I would love to see a situation where Barack Obama is president with a filibuster-proof Congress to finally pass a universal health-care plan.

“That would be phenomenal.”

Steve Porter covers health care issues for the Northern Colorado Business Report. He can be reached at 970-221-5400, Ext. 225 or at sporter@ncbr.com.