PNHP

Roadblocks in the private insurance maze

Roadblocks in the private insurance maze

How U.S. Health System Can Fail Even the Insured

By John Carreyrou
The Wall Street Journal
November 16, 2007

Barbara Calder lives in nearly constant pain. Her limbs dislocate at the slightest movement, even when she turns over in bed at night. She wears her hair short because brushing it hurts too much.

Mrs. Calder suffers from Ehlers-Danlos Syndrome, a rare genetic disorder in which the connective tissue that binds the body together gradually falls apart. But, although she began suspecting she had the disease 16 months ago and had health insurance, she spent a year battling numerous roadblocks just to see a specialist who could diagnose her condition. Now Mrs. Calder says she is left wondering whether she’s going to die suddenly because she can’t get the test that would tell her whether she has the fatal form of the disease.

Mrs. Calder’s difficulties mirror those of millions of insured Americans who get lost in the U.S. health-care system’s giant maze. For many, the journey is frustrated by coverage limits, denied claims and impersonal service.

Polls show that health care has become Americans’ No. 1 domestic concern, thrusting it to the center of the presidential campaign. Every major candidate has introduced a health-care reform plan. But for the most part, these plans focus on providing coverage to the 45 million uninsured or reining in medical costs. They do little to address the myriad hurdles insured patients often encounter when they seek care.

Trying to navigate these obstacles can be especially maddening for patients like Mrs. Calder who have little-known genetic diseases. Insurers, for their part, argue that they are merely fulfilling employers’ demand to control medical costs.

http://online.wsj.com/article/SB119515792495794643.html

Comment:

By Don McCanne, MD

Although this article provides considerable detail, no attempt has been made here to extract from it some of the numerous barriers faced by Barbara Calder – barriers deliberately erected in our system of private insurance plans. Suffice it to say that our fragmented system resulted in “a year battling numerous roadblocks,” and her battle isn’t through.

Under ideal circumstances, rare disorders such as Ehlers-Danlos Syndrome create challenges for the health care delivery system. But other nations use their health care financing systems to enable better access to the care that people need, regardless of the complexity of their disorders. Yet our dysfunctional private insurance system is designed to impair access in a misdirected attempt to control medical spending.

As this WSJ article states, health care has been thrust to the center of the presidential campaign. But the leading proposed solutions, dependent on private health plans, “do little to address the myriad hurdles insured patients often encounter when they seek care.” The proposal to offer in addition a token public insurance option will be of little help since the public program surely will disintegrate under the death spiral of adverse selection.

The segregated risk pools of private and public programs have become a highly inequitable, inefficient and obsolete method of financing health care. We need a single, universal, efficiently-administered risk pool if we expect our financing system to assist us rather then hinder us in obtaining the health care that we need.

Renew it or lose it

Making the Most of Benefits

By Terri Cullen
The Wall Street Journal
November 15, 2007

It’s that time of year again: open-enrollment season.

The biggest decision for most workers is choosing a health-insurance plan. Ironically, this year the biggest mistake workers may make with health-plan choices is to not make a choice, says Sara Taylor, annual enrollment leader at human-resources company Hewitt Associates. In the past, if workers made no changes to their current health-care plan, they’d remain in the same plan the following year. But this year more companies are asking workers to re-enroll if they want to remain in their current plans.

“If they don’t enroll they may be assigned no coverage at all and employees will be stuck with that decision for a year,” unless they have a change in status, such as a marriage or new child, Ms. Taylor warns. “People need to understand what can happen if they do nothing.”

Why the switch? Health-plan options are changing, with many employers shifting to high-deductible health-insurance plans that include health savings accounts. With workers having to pay more of their own health-care costs, employers and plan providers are pushing them to better understand their plan options.

Indeed, a Hewitt survey estimates employees will contribute an average of $1,859 toward insurance premiums in 2008, compared with $1,690 this year. Out-of-pocket expenses are also expected to climb, thanks to higher co-pays and deductibles. According to Hewitt, employees can expect to pay an average $3,597 out of pocket in 2008, or about 10% more than last year.

http://online.wsj.com/article/SB119505443236192843.html.html

Comment:

By Don McCanne, MD

One crucial feature of a health care program that covers everyone is that enrollment must be automatic and permanent. Obviously we fall far short of that now, but disenrolling an employee because of passive inaction is certainly a further step backwards.

But is it really passive inaction? When an employee has to pay an average of $5456 for premiums plus out-of-pocket expenses, many simply cannot afford that. With a median household income of $48,000 it is understandable why so many forgo their coverage simply because the money is not there. It was spent on food, housing and transportation.

Well, we do keep going backwards. All numbers are worse. That’s too bad when all we really need is one single step forward to a comprehensive health care program that is automatic, permanent, affordable and includes everyone. Why do we continue to resist the obvious?

Best health coverage is single-payer

BY ERIC COOK
Kalamazoo Gazette
Wednesday, November 14, 2007

KALAMAZOO — Insurance-company profits and increases in administrative staff have helped push up the cost of health care so steeply over the years that many Americans can’t afford coverage, a proponent of health-care change said Tuesday in Kalamazoo.

Dr. James C. Mitchiner said single-payer health insurance can greatly reduce health care costs by removing the profits and broadening the risk pool. Mitchiner is an emergency-room physician at St. Joseph Mercy Hospital in Ann Arbor and president-elect of the Washtenaw County Medical Society.

“By broadening the risk pool, you have more healthy people paying for the sick, and less support staff is required,” said Mitchiner, speaking Tuesday evening during a forum titled “Single Payer Health Insurance: What It Is, What It Isn’t and Why We Need It.” Sponsored by the WMU Center for the Study of Ethics in Society, the free event was held in the Fetzer Center’s Putney Auditorium.

Mitchiner advocated a single-payer health-care system funded by the federal government but not owned or controlled by it.

“This isn’t socialized medicine,” said Mitchiner, who serves on the
Michigan State Medical Society Committee on Health Care Quality, Efficiency and Economics. “It is just simply health care that is financed publicly with private delivery.”

Instead of relying on insurance companies with dozens of claims departments, the health-care system would use a single company that would have much lower administrative costs, Mitchiner said.

He described a health-care plan similar to the governmentally funded health-care system in Canada and said it could easily be implemented by the American government.

“We already have a plan similar to this in place which covers a large amount of Americans successfully — Medicare,” he said.

The key to successfully implementing the program would be to do so gradually, he said.

“We would start the program by covering children and then slowly raise the age in which we cover them from 16 to 18 to 21 while simultaneously lowering the eligibility age of Medicare,” Mitchiner said.

Private health insurance would still be available, he said.

“The program would make sure everyone was covered in an essential-benefits package, but people would still use insurance companies for supplemental insurance,” Mitchiner said. People would have the option of buying additional insurance, as they do now in Medicare, he said.

The AMA and single payer policies

Reference Committee highlights

AMA House of Delegates
2007 Interim Meeting

Reference Committee J

The AMA adopted several principles to guide in the evaluation of state health system reform proposals. Health insurance coverage for state residents should be universal, continuous and portable. Coverage should be mandatory only if health insurance subsidies are available for those living below a defined poverty level. The health care system should emphasize patient choice of plans and health benefits, including mental health, which should be value-based. Existing federal guidelines regarding types of health insurance coverage (e.g. Title 26 of the U.S. Tax Code and Federal Employees Health Benefits Program regulations) should be used as references when considering if a given plan would provide meaningful coverage. The delivery system should ensure choice of health insurance and physician for patients, choice of participation and payment method for physicians and preserve the patient/physician relationship. The delivery system should focus on providing care that is safe, timely, efficient, effective, patient-centered and equitable. The administration and governance system should be simple, transparent, accountable, efficient and effective in order to reduce administrative costs and maximize funding for patient care. Health insurance coverage should be equitable, affordable and sustainable. The financing strategy should strive for simplicity, transparency and efficiency. It should emphasize personal responsibility as well as societal obligations.

Reference Committee K

The AMA adopted a recommendation in Council on Medical Service Report 2 to reaffirm policy supporting the principle that risk-related subsidies, such as those for high-risk pools, reinsurance and risk adjustment, should be financed through general tax revenues rather than strict community rating or premium surcharges. The AMA also adopted a recommendation to support the principle that health insurance coverage of high-risk patients be funded through direct risk-based subsidies such as high-risk pools, reinsurance and risk adjustment, rather than through indirect methods that rely heavily on market regulation. The AMA also will support state-based demonstration projects to subsidize coverage of high-risk patients through mechanisms such as high-risk pools, reinsurance, risk adjustment and other risk-based subsidies.

http://www.ama-assn.org/ama1/pub/upload/mm/469/refcommhighlightsi07.pdf

Comment:

By Don McCanne, MD

The AMA proposal for reform depends heavily on providing choice of private health plans and using tax credits for lower-income individuals. Such an approach is more expensive than enacting a universal national health program, and falls short on important goals such as universality and comprehensiveness.

Although the AMA has rejected the single payer model of reform, they have approved the support of important policy goals that would be very difficult to attain through their proposal for reform but would almost be a given if single payer were to be enacted.

The AMA calls for coverage to be universal, continuous and portable. Those goals would be automatic with a single payer system, but they would be almost impossible to achieve with a fragmented market of private plans that change their benefits frequently and enter and leave various markets at their own discretion. The only person who can say that he or she has the same continuous, portable plan for the past forty years is a 105 year old Medicare beneficiary.

The AMA states that coverage should be mandatory, but only if health insurance subsidies are available for those living below a defined poverty level. The problem with this concept is that adequate insurance plans are now no longer affordable, not only for those in poverty, but also for average-income individuals. The subsidies required would have to be close to the amount of premiums now paid by employers for their employee health benefit programs. The subsidies would be so great that they would likely be enough to fund the balance (over our current tax spending for health care) that would be required for a single payer system. There would be no reason to waste funds on the highly inefficient, fragmented system of private plans. But one important health policy principle implicit in this recommendation is that the AMA recognizes that health care financing must involve progressive tax policies.

Their emphasis on patient choice of plans and benefits is not rational for two reasons. No individual can possibly predict his or her own future acute or chronic medical needs; everyone needs comprehensive coverage. Also, an effective insurance program requires pooling of all risks in order to effect a transfer from the many who are healthy to the fewer with health care needs; the healthy need to contribute equitably to a pool that provides full benefits for all participants.

The AMA states that federal guidelines such as the Federal Employees Health Benefits Program (FEHBP) should be used as references when considering if a given plan would provide meaningful coverage. Although the FEHBP plans fall short of benefits that would be covered under a single payer model, most of the FEHBP plans are far better than the newer innovative, underinsurance products. The AMA does acknowledge that meaningful coverage requires at least a minimal standard as set by the federal government. Skeletal insurance won’t do.

The AMA states that the system should ensure choice of health insurance and physician. But the majority of private plans today limit the choice of physicians, which is the choice that patients actually want. If the plans were to grant unlimited choice of physicians then they would lose the only real function that they serve: controlling fees through exclusive contracting. Without this function, private plans would be truly superfluous.

The AMA calls for providing care equitably. Although a single payer system would be only the first step toward achieving equitable access, at least it does remove the inequitable financial barriers that are characteristic of the private plans.

The AMA calls for reducing administrative costs and maximizing funding for patient care. No contest here. That is precisely what a single payer system accomplishes, whereas the private plans and the burden they place on providers are the sources of these inefficiencies.

The AMA states that health insurance coverage should be equitable, affordable and sustainable. Again, those are characteristics of the single payer model that the private insurance industry cannot provide.

The AMA states that the financing strategy should strive for simplicity, transparency and efficiency. Once again, the single payer model beats the private insurance industry hands down on these measures precisely because that is inherent in the single payer design.

The AMA supports the emphasis on personal responsibility as well as societal obligations. Everyone agrees that individuals should assume a personal responsibility to take good care of their own health. But we also have a societal obligation to see that the health care needs of everyone are met. That is the purpose of a single payer system, whereas private health plans deliberately establish financial and administrative barriers to care.

The most difficult issue in reform is how to pay for the 80 percent of health care that is used by the 20 percent of the population with greater health care needs. The AMA supports the principle that risk-related subsidies, such as those for high-risk pools, reinsurance and risk adjustment, should be financed through general tax revenues. They recommend against indirect methods that rely heavily on market regulation. Wow. Leave the private plans alone, but shift the real costs of health care to the taxpayers. Obviously, with a massive, tax-payer funded risk pool, we would have a de facto single payer system and would no longer need the private insurers.

It is amazing how close the AMA is to supporting the single payer model. It’s too bad that they don’t yet realize it.

Myth buster

Indira Dammu
Indiana Daily Student
11/14/2007

Repeat a lie often enough and people will believe it, or so the saying goes. No group is more guilty of this charge than conservatives.

Whether declaring global warming a “hoax” or bemoaning the social security “crisis,” conservatives have the art of lying down to a science. This is especially evident in matters related to health care reform, which conservatives reserve a special disdain for. A mere mention of Michael Moore has them frothing at the mouth.

So I was naturally excited to hear that the SiCKO-Cure National Road Show would be stopping in Bloomington today. The Road Show aims to lobby members of congress to support House Resolution 676, a bill that calls for the creation of a single-payer health care plan. On this occasion, I decided to bust some common myths offered in defense of our broken system.

Myth: The United States has the best health care system in the world.

Wrong. In spite of spending more per capita on health care than other countries, the U.S. ranks only 37th in the overall quality of health care. We also boast the second-worst newborn mortality rate in the developed world.

Myth: People without health insurance are lazy good-for-nothings.

Again, wrong. In 2004, about half of uninsured Americans worked full time. Even more surprising, 28 percent of middle and upper-middle class individuals are uninsured.

Myth: We can’t trust the government with such an important issue like health care.

It is my contention that apart from hating kids, another reason why Republicans strongly opposed the SCHIP bill is that it demonstrates to the public how efficient the government can be. Historically, programs like Medicaid, Social Security and public broadcasting have been extremely successful and calls for reform have been met with derision. Remember the public furor when President Bush tried to privatize social security in 2005? As long as government agencies are adequately staffed and funded (unlike the DMV), we can trust a government-run health care system to run smoothly.

Myth: There is no such thing as a free lunch.

Actually, this is right. Contrary to Republican claims, however, no Democratic presidential candidate has advocated a “free” universal health care system. Sen. John Edward’s health care plan, the most promising within the field, calls for a small tax increase and repeal of Bush’s tax cuts for the wealthy. Sixty percent of Americans support such a tax increase if it means universal access to health care.

It is evident by now that the numbers are on my side. Yet, Republicans are able to distort facts and resort to cheap shots. Case in point — Rep. Steve King, R-Iowa, in a display of sheer stupidity, coined a nifty acronym for the SCHIP plan — “Socialized Clinton-style Hillarycare for Illegals and their Parents.” While it is easy to get discouraged by such a classic case of Republican wingnuttery, now isn’t the time to give up. Call your congressmen and ask him or her to support H.R. 676. Educate those around you about a universal health care plan. Republicans have monopolized the discussion for too long.

Is reform to benefit underwriters, or patients?

A very recent Quote of the Day message included the comments of Janet Trautwein who represents the National Association of Health Underwriters. She stated that we need to consider “free-market reform, and just say no to single payer.” It was followed by my criticism of underwriters whose role is to deny coverage of individuals with health care needs in order to protect insurers from the costs of that care.

Jeffrey Aaron provided us with his response to that message:

This is not a personal attack on Ms. Trautwein. However, let me speak plainly: she personally benefits from having private insurers in charge of American health care, and her letter plays on fears of “government-run” healthcare that she must know are false.

As a Type 1 diabetic I have had first-hand experience with health care in America, Canada and most recently, Japan.

In America when I became diabetic I lost my job (it was a medical disqualification) which meant that I also lost my employer -provided health care. With what was now a pre-existing condition and no income I was unable to afford health insurance. I paid cash for my medical care and I paid full price, not the reduced rate that insurance companies negotiate with doctors and hospitals. Major diabetic complications (which I have so far been spared) could mean bankruptcy.

By contrast, in Canada I went to any doctor I chose, received excellent care paid for through the single-payer system there, and never had to worry about filing claims or denial of a claim by an insurer. I met no Canadians who were interested in converting to an American-style system. Ms. Trautwein would have us believe that Canada has “substandard care, long waiting lists, loss of physicians, forced outsourcing and healthcare rationing.” Surely there would be hordes of Canadians clamoring to do away with the “inferior” single-payer system.

In Japan I get prompt, competent care without worry about bankruptcy. The citizens seem satisfied with the system.

Ms. Trautwein tells us that black is white and night is day while she benefits from a system that causes pain and misery to those around her. Why should she have any credibility?

Thanks for telling the truth, Don.

Best regards,

Jeff Aaron

Comment:

By Don McCanne, MD

And thanks, Jeff, for showing us that health policy is not just nebulous theory discussed by biased academics; it’s about real people and their actual health care.

Other countries do it; so can we

Modern Healthcare
November 12, 2007

Despite having good doctors and good hospitals, U.S. healthcare outcomes do not compare very favorably with those of other industrialized nations.

A national single-payer plan–paid for with our tax dollars–would be as “socialized” as Homeland Security, the Centers for Disease Control and Prevention, or the Transportation Department. The proper role of “our” government is to take care of needs that “we the people” cannot do as individuals. We have tried to manage healthcare through a market-based system, and we have failed. The market strategy has made billions for insurers but over 47 million Americans remain uninsured, and 18,000 people ages 18-64 die each year in the U.S. because of a lack of access to care. That’s six times as many people as died in the Sept. 11, 2001, terrorist attacks.

I have family members in Canada–various ages and income levels. They have been receiving timely, innovative and excellent care–all prepaid by their own tax dollars. One hears that Canadians have to wait for nonurgent surgeries, but they do eventually get that surgery. Is that rationing? In the U.S., we see the ultimate form of rationing–denial of care.

Canada and other free-market democracies have done the math and they have opted for a single payer system. As the recent Nobel winners in economics have shown–sometimes government must do what markets cannot. Saving lives and saving tax dollars may fall into that category.

Harriette Seiler
Louisville, Ky.

Universal health care would be a boon to the free market

Robyn Blumner
Salt Lake Tribune
11/12/2007

Rudy Giuliani has been called ”Bush with brains” by those who fear that the former New York City mayor shares a penchant for unbridled executive power. But the Republican presidential primary frontrunner seems to have a screw loose when it comes to campaigning. His attack of Hillary Clinton’s health care proposal with the bugaboo of European-style ”socialized” medicine is not only full of factual holes, but it will surely bite him in the butt if he makes it to the general election.

Americans were taken in by health insurance industry foils Harry and Louise the first time Clinton offered this country decent health care reform, but they won’t be fooled again. If Giuliani wants to make this election a referendum on America’s health care system, he’s going to flame out faster than a hospital can dump an uninsured patient.

Polls regularly show that Americans are disgusted with the current state of affairs. In a 2007 CBS News/New York Times poll, nine in 10 respondents said the U.S. health care system needs fundamental changes and two-thirds said it was up to the federal government to guarantee that all Americans have health care coverage.

If the next president does nothing else but add this country to the pantheon of advanced nations that provide universal coverage, it will be a successful tenure, one that will be remembered fondly by generations to come, like that of FDR for Social Security and LBJ for Medicare.

But guaranteed health care will not only serve to relieve the anxieties of tens of millions of American families, it will also be a shot of adrenaline to our economy. Giuliani is so busy offering dissembled statistics on how lethal England’s health care system is to men with prostate cancer, he fails to see just how free-market-friendly universal coverage would be. (And as I was just in England, Mr. G., I can tell you that no one I asked would trade their national health service for America’s system.)

Economists and business leaders talk about a phenomenon called ”job lock,” when a person stays in a job primarily due to its attendant health benefits. Maybe they’re stuck because one of their children has a pre-existing condition that won’t be covered right away by a different insurer. Maybe it’s because they take expensive prescription drugs that may not be on the formulary of another employer’s plan.

Whatever the reason, this tethering of an employee to his job reduces job mobility by about 25 percent, says Brigitte Madrian, professor of public policy and corporate management at the Kennedy School of Government at Harvard University.

”The economic cost of job lock is that individuals do not move to jobs where they could be more productive,” Madrian says. ”Job change is part of the engine of economic growth.”
In a Business Week article earlier this year, Kelly Services Inc. chief executive Carl Camden echoed Madrian’s sentiments, saying that, increasingly, people ”don’t leave a job even though they’re unhappy and would be more productive somewhere else” because they feel they have to cling to their employer’s health coverage.

”Nobody worries when they leave one job to go to the next that their Social Security will be interrupted,” Camden told Business Week.

And then there is the entrepreneurial energy that would be unleashed if people felt free to leave their big company jobs in order to invest in their own ideas. A recent study conducted by Philip DeCicca, an assistant professor of economics at McMaster University in Hamilton, Ontario, suggests that there is pent-up entrepreneurialism in the U.S. that is being held back by the prohibitive cost and unavailability of individual health coverage.

DeCicca’s ”Health Insurance Availability and Entrepreneurship: Evidence from New Jersey” looked at the differing rates of self-employment among residents of New Jersey and Pennsylvania. New Jersey was of particular interest because in 1993 it established a program that guaranteed individuals access to renewable health insurance, with a community rating on premiums. The program allowed for a decoupling of employment and health coverage with rates based on a large group.

DeCicca found that New Jersey’s program increased self-employment among various populations ”by roughly 15 to 25 percent.”

Employer-sponsored health insurance is a historical accident that is now crippling American competitiveness. We’ve all heard by now that health care adds $1,500 to the cost of every General Motors car.

All this is to suggest that, from a macroeconomic perspective, universal coverage would not weaken the free market as Giuliani asserts, but rather bolster and energize just about every aspect of it.

And if you’re one of those employees stuck in a miserable job year after year for the health benefits, Giuliani has good new for you: At least you aren’t likely to die of prostate cancer.

–ROBYN BLUMNER can be reached by e-mail sent to blumner@sptimes.com.

The Market Made Me Do It: Health Insurance That Disappears When You Need It

Donald Cohen
Huffington Post blog
Posted November 12, 2007

Health Net, one of California’s largest health insurers, saved $35.5 million in medical expenditures for people that needed life-saving care. They did it the easy way — they just stopped paying, ejecting the sick from their health plans.

Health Net says that they are just catching fraud. The law allows insurers to deny covering people with pre-existing conditions and Health Net claims that those they cut off — in some cases cancer patients in the middle of critical treatment – are simply those that failed to disclose their conditions when enrolling in their system. It almost makes you want to give them the benefit of the doubt, since of course it’s really the competitive system they have to live within. It’s not their fault that the rules and laws allow discrimination and segregation of the sick. You know, “the market made me do it.”

Never mind that the health insurance industry has consistently fought to allow the pre-existing condition exclusion in the law. The insurers are well heeled and potent political players and have so-far succeeded. For example, California health insurers spent more than $1 million in lobbying in just the first 90 days of 2004. Health Net alone spent $2.7 million in Federal campaign contributions and Federal lobbying expenses between 1997 and 2004.

On one level, the insurers are right. The current system, regardless of their role in keeping it that way, allows for (and may even depend on) such criminal denial of care to those that need it most. It’s straight-up American-style health rationing — you don’t get care if you can’t afford to pay or if you’re too sick and expensive to cover. It makes you wonder just how many more than the 47 million uninsured that currently have insurance are really under-insured (i.e. not covered for what they need most) or provisionally insured (i.e. insured until they need it.)

But the benefit of the doubt evaporates and becomes outraged blame with the discovery that Health Net set cancellation goals and was giving bonuses to staff based on the number of people whose policies were revoked. One Health Net analyst was given more than $20,000 in bonuses by revoking over 1600 insurance policies and saving millions for the insurer. Never mind the irony of a health care company that rewards the denial of needed medical services. That’s the market working in health care: sell insurance plans and collect premiums until the policy holder gets cancer, has a heart attack, or any other expensive disease.

American economic ideology today is dominated by new kinds of religious fundamentalists. Not those that believe in a supreme being, but those that profess religious, almost fanatical, belief in the unregulated “market” as the ultimate provider of all things good. “Supply and demand” is the supreme directive. Profitability and stock prices are the alter that determines virtue or sin.

And they promote so-called “market mechanisms” as the only way to ensure high quality outcomes. “Market mechanism” is the benign-sounding term that implies that only financial gain and competition produce the outcomes we want. In this case, ‘market mechanism’ is just another term for the perverse financial incentives Health Net used to make sure their “cancellation department” was squeezing every unprofitable policy holder out of the system. And, in pure market terms the sick are just an unrecoverable cost for which there are only two responses — heal the patient or eject the patient. The “market” says heal if it’s cheap enough and eject if cuts into the bottom line.

This isn’t an indictment of all markets — they can bring new-fangled cell phones to consumers, give people choices about what kinds of clothing to buy and helps encourage producers to innovate and continually improve service and sometimes keep prices in check.

There are simply areas in which the market stunningly fails to live up to the pronouncements of the “market fundamentalists.” The unregulated market is simply unable to provide public goods that require universal, equal access.

Health care presents the classic case where the market fails and where we need other mechanisms to meet our public needs. America’s market based system of health care relies on people to have enough money (individually or through their job) to pay for insurance. Only Medicare, a primarily tax-financed system takes ability to pay out of the equation and gives every American over 65 equal access to medical care. The result for those under 65 years of age: 47 million uninsured, millions more underinsured and if Health Net’s revocation bonuses become the norm, then millions more with health care that disappears when you need it.

Donald Cohen is the Executive Director of the Center on Policy Initiatives, a San Diego-based research and policy center.

Does universal health care suppress innovation?

Creative Destruction

The best case against universal health care.

By Jonathan Cohn
The New Republic
November 12, 2007

But one argument against universal health insurance isn’t so easy to dismiss: the argument about innovation and the cutting edge of medical care. It goes more or less along the lines of my conversation with Mike Kinsley: In a universal coverage system, the government would seek to limit spending by forcing down payments to doctors and pharmaceutical companies, while scrutinizing treatments for cost-effectiveness. This, in turn, would lead to both less innovation and less access to the innovation that already exists.

But it’s one thing to say that universal coverage could lead to less innovation or reduce the availability of high-tech care. It is quite another to say that it will do those things, which is the claim that opponents frequently make. That argument requires several leaps of logic, many of them highly suspect. The forces that produce innovation in medicine turn out to be a great deal more complicated than critics of universal coverage seem to grasp. Ultimately, whether innovation would continue to thrive under universal health care depends entirely on what kind of system we create and how well we run it. In fact, it’s quite possible that universal coverage could lead to better innovation.

The single biggest source of medical research funding, not just in the United States but in the entire world, is the National Institutes of Health (NIH): Last year, it spent more than $28 billion on research, accounting for about one-third of the total dollars spent on medical research and development in this country (and half the money spent at universities). The majority of that money pays for the kind of basic research that might someday unlock cures for killer diseases like Alzheimer’s, aids, and cancer. No other country has an institution that matches the NIH in scale. And that is probably the primary explanation for why so many of the intellectual breakthroughs in medical science happen here.

There’s no reason why this has to change under universal health insurance. NIH has its own independent funding stream. And, during the late 1990s, thanks to bipartisan agreement between President Clinton and the Republican Congress, its funding actually increased substantially–giving a tremendous boost to research. With or without universal coverage, subsequent presidents and Congress could ramp up funding again–although, if they did so, they would be breaking with the present course. It so happens that, starting in 2003, President Bush and his congressional allies let NIH funding stagnate, even though the cost of medical research (like the cost of medicine overall) was increasing faster than inflation. The reason? They needed room in the budget for other priorities, like tax cuts for the wealthy. In this sense, the greatest threat to future medical breakthroughs may not be universal health care but the people who are trying so hard to fight it.

The ideal would be to come up with some way of achieving the best of both worlds–paying for innovation when it yields actual benefits, but without neglecting less glitzy, potentially more beneficial forms of health care. And that is precisely what the leading proposals for universal health care seek to do. All of them would establish independent advisory boards, staffed by leading medical experts, to help decide whether proposed new treatments actually provide clinical value.

Of course, the idea of involving the government in these decisions is anathema to many conservatives–since, they argue, the private sector is bound to make better decisions than a bunch of bureaucrats in Washington. But, while that’s frequently true in economics, health care may be an exception. One feature of the U.S. insurance system is its relentless focus on short-term good. Private insurers have little incentive to pay for interventions that don’t yield immediate benefits, because they are gaining and losing members all the time. As a result, money invested on patient health may very well help a competitor’s bottom line. What’s more, the for-profit insurance industry–like the pharmaceutical and device industries–responds to Wall Street, which cares more about quarterly filings than long-term financial health. So there’s relatively little incentive to spend money on the kinds of innovations that yield long-term, diffuse benefits.

The government, by contrast, has plenty of incentive to prioritize these sorts of investments. And, in more centralized systems, it can do just that. Several European countries are way ahead of us when it comes to establishing electronic medical records.

Another virtue of more centralized health care is its ability to generate savings by reducing administrative waste. A universal coverage system that significantly streamlined billing (either by creating one common form or simply replacing basic insurance with one, Medicare-like program) and cut down on the need for so many insurance middle-men would leave more resources for actual medical care–and real medical innovation.

… the truth about universal health insurance: You don’t have to choose between universal access and innovation. It’s possible to have both– as long as you do it right.

http://www.tnr.com/politics/story.html?id=51faeaa7-5021-40d0-95d3-0f260b25edd4

Comment:

By Don McCanne, MD

You should immediately download the entire article and save it for a time that you can read it in its entirety. More importantly, the full article should be used in your advocacy work to explain why innovation would not be suppressed – and actually may be made more efficient – by enactment of a universal health care program.

The fundamental flaw in the argument that optimal innovation is possible only in a privately financed health system is the presumption that the quest for profit – the hugh profits characteristic of Wall Street supported firms – is the primary driving force behind innovation. It ignores the fact that the health professions really do aim for a higher goal than mere maximal profit. Individuals involved in research and in health care delivery are driven primarily by their altruistic goals of providing the best health care attainable.

Jonathan Cohn’s article helps us to understand this difference. Reducing suffering and saving lives through innovation is a much greater reward than the mere creation of personal mega-wealth.

Healthcare for vets – and all others

Rachel Nardin
The Boston Globe
November 11, 2007

EVEN AS our government puts members of our armed services in harm’s way, it is failing to care for them once they return home. Soldiers get excellent acute care when injured on active duty, but as revelations of poor conditions for soldiers receiving ongoing outpatient care at the Walter Reed Army Medical Center highlighted, service members often have trouble getting the care they need once active duty ends.

According to a study by some of my colleagues at Harvard Medical School, to be published in next month’s American Journal of Public Health, nearly 1.8 million veterans had no health insurance in 2004, up 290,000 since 2000. An additional 3.8 million members of their households were also uninsured and ineligible for care at hospitals and clinics run by the Veterans Health Administration of the Department of Veterans Affairs. The 2006 data released this year show little change in these numbers.

Many uninsured veterans are barred from VA care because of a 2003 Bush administration order that halted enrollment of most middle-income veterans. Others are unable to obtain VA care because of unaffordable copayments for VA specialty care, waiting lists at some facilities or the lack of VA facilities in their communities. Almost two-thirds of uninsured veterans were employed, and nearly 9 out of 10 had worked within the past year. Most uninsured veterans were in working families. Many earned too little to afford health insurance, but too much to qualify for free care under Medicaid or VA rules.

The VA is a rare success story in our healthcare system. The system offers more equitable and higher quality care than the average care in the private sector, and has become a medical leader in research, primary care, and computerization. Studies in the Annals of Internal Medicine and elsewhere have shown that compared with patients in HMOs, a higher percentage of patients at VA facilities have adequate control of high blood pressure and diabetes, and receive appropriate medications after a heart attack. So it’s not the quality of care that veterans receive that’s the problem; rather, it’s their restricted access to care.

What can we do to ensure that all our veterans have access to affordable, high-quality healthcare? In the short term the government can roll back the income restrictions on VA care. However, this would still leave many veterans unable to access care because they live far from VA facilities. Moreover, even complete coverage of veterans would leave 3.8 million of their family members uninsured. In this regard, these families are in the same position as civilian families who cannot get care because they are uninsured, are denied care by their insurance companies or can’t afford the necessary copays and deductibles.

In the long term, the difficulty returning veterans have in obtaining healthcare cannot be solved on its own. Across the health field, costs are spiraling. Payers, whether the government or private insurers, are trying to stay within budget by offering less care, offering care to fewer people or shifting costs of care to patients. If we do nothing, there’s no improvement in sight.

The problems with veterans’ healthcare offer further evidence of why the US healthcare system needs to be reformed. Because we pay for healthcare through a patchwork of private insurance companies, nearly one-third of our health spending goes to administration. Replacing private insurers with national health insurance would recover money currently squandered on billing, marketing, underwriting, and other activities. Eliminating this waste has been estimated to save $350 billion per year. Combined with what we’re already spending, this is enough to provide comprehensive coverage for everyone.

With a national health insurance program, all veterans who desired could continue to receive care at VA facilities, or they could choose to receive care in the private sector. None of our veterans, or their families, would fall through the cracks.

Ultimately, only active government intervention can guarantee that veterans have the healthcare they need. They and their families – and, in fact, all Americans – deserve equal access to high-quality, affordable healthcare.

Dr. Rachel Nardin is assistant professor of neurology at Harvard Medical School.

Health Care Excuses

By PAUL KRUGMAN
The New York Times
Op-Ed Columnist
November 9, 2007

The United States spends far more on health care per person than any other nation. Yet we have lower life expectancy than most other rich countries. Furthermore, every other advanced country provides all its citizens with health insurance; only in America is a large fraction of the population uninsured or underinsured.

You might think that these facts would make the case for major reform of America’s health care system — reform that would involve, among other things, learning from other countries’ experience — irrefutable. Instead, however, apologists for the status quo offer a barrage of excuses for our system’s miserable performance.

So I thought it would be useful to offer a catalog of the most commonly heard apologies for American health care, and the reasons they won’t wash.

Excuse No. 1: No insurance, no problem.

“I mean, people have access to health care in America,” said President Bush a few months ago. “After all, you just go to an emergency room.” He was widely mocked for his cluelessness, yet many apologists for the health care system in the United States seem almost equally clueless.

We’re told, for example, that there really aren’t that many uninsured American citizens, because some of the uninsured are illegal immigrants, while some of the rest are actually entitled to Medicaid. This misses the point that the 47 million people in this country without insurance are an ever-changing group, so that the experience of being without insurance extends to a much broader group — in fact, more than one in every three people in America under the age of 65 was uninsured at some point in 2006 or 2007.

Oh, and finding out that you’re covered by Medicaid when you show up at an emergency room isn’t at all the same thing as receiving regular medical care.

Beyond that, a large fraction of the population — about one in four nonelderly Americans, according to a Consumer Reports survey — is underinsured, with “coverage so meager they often postponed medical care because of costs.”

So, yes, lack of insurance is a very big problem, a problem that reaches deep into the middle class.

Excuse No. 2: It’s the cheeseburgers.

Americans don’t have a bad health system, say the apologists, they just have bad habits. Overeating and teenage sex, not the huge overhead of America’s private health insurance companies — the United States spends almost six times as much on health care administration as other advanced countries — are the source of our problems.

There’s a grain of truth to this claim: Bad habits may partially explain America’s low life expectancy. But the big question isn’t why we have lower life expectancy than Britain, Canada or France, it’s why we spend far more on health care without getting better results. And lifestyle isn’t the explanation: the most definitive estimates, such as those of the McKinsey Global Institute, say that diseases that are associated with obesity and other lifestyle-related problems play, at most, a minor role in high U.S. health care costs.

Excuse No. 3: 2007 is better than 1950.

This is an argument that baffles me, but you hear it all the time. When you point out that America spends far more on health care than other countries, but gets worse results, the apologists reply: “Sure, we spend a lot of money on health care, but medical care is a lot better than it was in 1950, so it’s money well spent.” Huh?

It’s as if you went to a store to buy a DVD player, and the salesman told you not to worry about the fact that his prices are twice those of his competitors — after all, the machines on offer at his store are a lot better than they were five years ago. It is, in other words, an argument that makes no sense at all, yet respectable economists make it with a straight face.

Excuse No. 4: Socialized medicine! Socialized medicine!

Rudy Giuliani’s fake numbers on prostate cancer — which, by the way, he still refuses to admit were wrong — were the latest entry in a long, dishonorable tradition of peddling scare stories about the evils of “government run” health care.

The reality is that the best foreign health care systems, especially those of France and Germany, do as well or better than the U.S. system on every dimension, while costing far less money.

But the best way to counter scare talk about socialized medicine, aside from swatting down falsehoods — would journalists please stop saying that Rudy’s claims, which are just wrong, are “in dispute”? — may be to point out that every American 65 and older is covered by a government health insurance program called Medicare. And Americans like that program very much, thank you.

So, now you know how to answer the false claims you’ll hear about health care. And believe me, you’re going to hear them again, and again, and again.