PNHP

Steve Burd’s Coalition to Advance Healthcare Reform

Steve Burd’s Coalition to Advance Healthcare Reform

Reforming health care

By Steve Burd
The Washington Times
May 7, 2007

Today, a large group of employers and business leaders are joining to form the Coalition to Advance Healthcare Reform.

We agree that any lasting solution must be based on five core principles.

First… market forces… consumer orientation and transparency…

Second… every American should be required to carry health insurance…

Third… assistance for low-income individuals…

Fourth… health-care plans must be designed to promote healthy behavior… prevention and wellness… full-care management programs for those with chronic and acute conditions…

Finally… individuals must be able to purchase health care in the same tax-advantaged way as businesses do…

Together we can force action and results from policies that create market-based solutions that solve the cost and coverage problems in this country.

http://www.washingtontimes.com/op-ed/20070506-095007-6584r.htm

Some of the coalition members: PepsiCo, General Mills, Pacific Gas and Electric, Wm. Wrigley Jr. Co., The Kroger Co., Aetna, Blue Shield of California, Cigna HealthCare, Eli Lilly and Co. and PacifiCare.

http://www.latimes.com/news/local/la-me-health7may07,0,4141456.story?coll=la-home-headlines

Comment:

By Don McCanne, MD

We emphatically welcome the business community into the national dialogue on reform. But does this effort really advance reform?

Burd’s proposal is an individual mandate to purchase unaffordable or inadequate private insurance, using regressive tax policies, with greater administrative excesses of care management programs, and it depends on the
fiction of consumer cost management through transparency.

Burd’s bird will never fly.

Single-payer system would give us the world's best care

By DR. JOHN DALEY
Union Leader
Commentary
May 2, 2007

THE APRIL 25 editorial “Rationing health care: Some want that for NH” represents another attempt by members of the health insurance industry, or someone with very good insurance, to torpedo the best choice for health care reform — a single payer system, or Medicare for all — by using scare words like rationing or socialized medicine.

As a family physician on the front lines of medicine I daily see the difficulties patients face due to lack of insurance or under-insurance. Generally these patients ration their own care, disappearing for a year or two when they lose their job and insurance, only to return with sky-high blood pressures or out- of-control diabetes, effectively taking years off their lives.

In New Hampshire, approximately 135,000 citizens lack health insurance, and for those who have it many can’t get all they need. The MRI wait may not be long, but many people can’t see their doctor, much less get an MRI. Now with health savings accounts and high deductible plans I have insured patients refusing their MRIs due to the cost.

It is estimated that 18,000 Americans die annually due to lack of insurance — which is a rather harsh effect of our present method of rationing. Shouldn’t the elimination of these deaths be a national priority?

The editorial mentions Canadians coming to the United States for surgery because of better and more readily available care. These numbers are rather small and the editorial fails to mention Americans going to Canada to get affordable drugs or the ever-increasing phenomenon of medical tourism where Americans travel abroad to get surgeries that are more affordable.

The bottom line is that Canadians enjoy longer, healthier lives than Americans, despite spending far less than we do, while covering every citizen. In a recent survey, only 3.5 percent of Canadians reported feeling that they waited too long for care, which is a much smaller number than our 15 percent uninsured who wait quite a bit. Long waits are a misleading myth.

Furthermore, a recent Harris Interactive poll of patients in the leading industrial societies found that Canada ranked first and the United States last in patient satisfaction with health care. You can’t just poll those with good insurance, after all!

Remember the term “single payer” as the best solution to our health care system’s problems. If one believes that health care is a human right and not a privilege, and if one wants to avoid having a health insurance company — which profits by denying care — choosing which tests you can have and which drugs you can take, it is the best answer.

The government pays for more than 50 percent of health care costs already through Medicare, Medicaid, federal employees, the military and the Veterans Administration, so it is not a radical stretch to extend Medicare to all Americans to cover the uninsured.

HR 676 has been introduced in the U.S. House of Representatives by (along with others) Democratic presidential candidate Dennis Kucinich. The New Hampshire House has shown great wisdom in introducing a resolution to study single-payer care for New Hampshire.

When discussing health care reform, don’t be scared by words like “rationed” or “socialized.” Be informed, be wise and be empathic — choose what’s best for America and all its citizens, not just those with good insurance.

If we took the money, structure and ingenuity in the current health care arena and applied it to the whole population via a single-payer system that eliminated the unfairness, complexities and waste, we truly would have the world’s best health care for our citizens.

Dr. John Daley of Londonderry is a physician in Derry and a member of Physicians for a National Health Program.

Single-payer system would give us the world’s best care

By DR. JOHN DALEY
Union Leader
Commentary
May 2, 2007

THE APRIL 25 editorial “Rationing health care: Some want that for NH” represents another attempt by members of the health insurance industry, or someone with very good insurance, to torpedo the best choice for health care reform — a single payer system, or Medicare for all — by using scare words like rationing or socialized medicine.

As a family physician on the front lines of medicine I daily see the difficulties patients face due to lack of insurance or under-insurance. Generally these patients ration their own care, disappearing for a year or two when they lose their job and insurance, only to return with sky-high blood pressures or out- of-control diabetes, effectively taking years off their lives.

In New Hampshire, approximately 135,000 citizens lack health insurance, and for those who have it many can’t get all they need. The MRI wait may not be long, but many people can’t see their doctor, much less get an MRI. Now with health savings accounts and high deductible plans I have insured patients refusing their MRIs due to the cost.

It is estimated that 18,000 Americans die annually due to lack of insurance — which is a rather harsh effect of our present method of rationing. Shouldn’t the elimination of these deaths be a national priority?

The editorial mentions Canadians coming to the United States for surgery because of better and more readily available care. These numbers are rather small and the editorial fails to mention Americans going to Canada to get affordable drugs or the ever-increasing phenomenon of medical tourism where Americans travel abroad to get surgeries that are more affordable.

The bottom line is that Canadians enjoy longer, healthier lives than Americans, despite spending far less than we do, while covering every citizen. In a recent survey, only 3.5 percent of Canadians reported feeling that they waited too long for care, which is a much smaller number than our 15 percent uninsured who wait quite a bit. Long waits are a misleading myth.

Furthermore, a recent Harris Interactive poll of patients in the leading industrial societies found that Canada ranked first and the United States last in patient satisfaction with health care. You can’t just poll those with good insurance, after all!

Remember the term “single payer” as the best solution to our health care system’s problems. If one believes that health care is a human right and not a privilege, and if one wants to avoid having a health insurance company — which profits by denying care — choosing which tests you can have and which drugs you can take, it is the best answer.

The government pays for more than 50 percent of health care costs already through Medicare, Medicaid, federal employees, the military and the Veterans Administration, so it is not a radical stretch to extend Medicare to all Americans to cover the uninsured.

HR 676 has been introduced in the U.S. House of Representatives by (along with others) Democratic presidential candidate Dennis Kucinich. The New Hampshire House has shown great wisdom in introducing a resolution to study single-payer care for New Hampshire.

When discussing health care reform, don’t be scared by words like “rationed” or “socialized.” Be informed, be wise and be empathic — choose what’s best for America and all its citizens, not just those with good insurance.

If we took the money, structure and ingenuity in the current health care arena and applied it to the whole population via a single-payer system that eliminated the unfairness, complexities and waste, we truly would have the world’s best health care for our citizens.

Dr. John Daley of Londonderry is a physician in Derry and a member of Physicians for a National Health Program.

Lack of insurance puts too many at risk

By Dr. Richard G. Younge
The Journal News
Sunday, March 18, 2007

I am a family physician, and I work in the Fordham neighborhood of The Bronx.

One day last week as I drove to work I heard a news report about a medical study that had just been published. The study showed that people who come to the emergency room with a heart attack on the weekend do much worse than those patients who develop chest pain during regular business hours. When someone has a heart attack during the week he or she has a better chance of going quickly right from the emergency department to the cardiac care department for an emergency procedure, balloon angioplasty. This treatment can restore blood flow the heart muscle before extensive damage is done. You get better care depending on when you get sick.

The story concluded with the observation that these differences in treatment results could be reduced by assuring that more hospitals have emergency angioplasty available 24 hours a day, 7 days a week. I agree that the health-care system needs to move us toward eliminating the differences in treatment that result from when a person happens to have a heart attack. But this news item got me thinking more broadly about many of the ways that health-care services differ depending on the circumstances under which people get sick – where they live, their income, their age, race or ethnicity and, very importantly, their insurance coverage.

How could the health-care system change to improve care? For a start, we could make the treatment and preventive services of modern health care available to everyone. A national health insurance program that replaced our current system based on private insurers would improve access to care for the 47 million uninsured people in the United States.

Many of the uninsured are children. Providing coverage for all kids would not even be prohibitively expensive, because most children do not get that sick or need expensive services such as angioplasty. Adults – whether they are parents or not – also require comprehensive health insurance, and national health insurance would cover them too. Some people imagine that a national program that covers everyone would be too big and bureaucratic and inefficient. It surprises them to learn that the government insurance program, Medicare that covers the elderly and disabled, spends about 2 percent of its budget on administrative costs. This compares very favorably to private insurers who spend 15 percent or more of the premiums they collect on administration and marketing.

By going to a national health insurance, essentially an improved and expanded Medicare for All system, we could cover all U.S. residents – literally everyone in this country – without spending any more than we already do. We could save the dollars insurance companies spend expensively marketing and advertising their services. We could also save the enormous resources we providers spend trying to sort out who is eligible for which of the existing patch-work system of employment based, government and individual coverage programs. And of course a health-care system that automatically covered everyone would be much simpler, fairer and less nerve-wracking for patients.

In my daily practice, having one insurer working under a national health plan would reduce many of my headaches and frustrations. I would not have to waste precious time and energy figuring out which referral form to use, which specialist takes my patient’s insurance, or which 800 number to call or which rules to follow to try to get approval for services that my patients need. I would not have to rewrite scores of prescriptions because my patients’ employer changed plans. I could focus on patient care. And people would not drop in and out of care or skip important preventive care services because of insurance coverage changes. Nor would they have to worry if they would lose their health insurance if they are so unfortunate as to lose their job.

The neighborhood where I practice has one of the highest rates of uninsured adults in New York City according to the Department of Health and Mental Hygiene’s neighborhood health profile reports. Almost every day I see someone who tells me that they have not seen a doctor in a while because they lost their insurance coverage. Some of them have not had treatment for diabetes, high cholesterol or blood pressure. These health problems put them at increased risk for having a heart attack. Hopefully, if that unfortunate event happens, it will not be over the weekend.

Eliminating private health insurance our only good option

BY NICHOLAS SKALA AND QUENTIN YOUNG, M.D.
The Chicago Sun Times
April 30, 2007

Rod Blagojevich wants to be remembered as Illinois’ “health care governor,” and his focus on our state’s millions of uninsured and underinsured is commendable. Unfortunately, he has come up with the wrong prescription. Blagojevich would hike taxes to pay insurance companies for meager benefits. But eliminating private insurers altogether would save enough to provide health care for all Illinoisans for no more than we’re spending now.

Illinois has only two options for health reform: preserve private insurance companies (and the huge systemic waste they generate), or scrap them and use the savings to cover everyone. Sadly, Blagojevich has joined President Bush, former North Carolina Sen. John Edwards, Massachusetts Gov. Mitt Romney and California Gov. Arnold Schwarzenegger in offering the private insurance route.

The better approach would be to replace insurance companies with Medicare-like universal public health insurance, a system that has afforded the rest of the industrialized world better health for half our per-capita cost (or less).

The Blagojevich approach has little hope of remedying our state’s health crisis: Decent coverage would remain unaffordable for most Illinoisans while costs would continue to rise. Despite the governor’s promises of affordable insurance, the only way to get inexpensive policies is to strip them down with huge co-payments and deductibles. In Massachusetts, the first state to experiment with such a scheme, a 56-year-old making $30,000 annually will have to spend $7,164 in premium and deductible payments before insurance kicks in, and still pony up 20 percent of hospital costs after that.

Such skimpy plans are insurance in name only. Beleaguered Illinois families would remain unable to get care and as costs continue to rise, employers will push more and more middle-class families from more comprehensive plans into the new, paper-thin coverage.

The only way to simultaneously expand coverage and lower costs is through a single-payer system: “Medicare for All Illinois.” The state single-payer bill (HB 311) introduced by Representatives Mary Flowers and Mike Boland has garnered considerable support. But this plan would terminate, rather than sustain, private health insurers.

Every other developed nation has some form of public health insurance, yet most spend less than half per person than we do. Nearly a third of our $2.3 trillion in health spending this year will go for administration. In their drive to enroll healthy (and therefore profitable) patients and screen out the sick, private insurers waste vast sums on marketing, billing, underwriting, utilization review and other activities that enhance profits but divert resources from care. The paperwork they inflict on doctors and hospitals costs hundreds of billions more each year. In contrast to the roughly 20 percent overhead of insurance companies, Canada’s single-payer program runs for 1 percent overhead. And Canada’s hospitals and doctors face little paperwork burden.

Illinoisans get scant return for our outsized spending. Brits and Canadians have lower rates of nearly every chronic disease. Americans have higher infant mortality and shorter life expectancy than people in most other industrialized countries.

Harvard researchers have shown that streamlining our health finances through a single public payer — a kind of “Improved Medicare for All” — could save Illinois more than $13 billion a year, enough new money to provide comprehensive benefits for all the people in Illinois. Through rational planning and the elimination of wasteful duplication, it also would establish a stable, long-term cost control mechanism, ensuring that the new benefits are sustainable in the future.

A single-payer system is the only economically viable reform option. Yet opposition from insurance and drug industry giants continues to intimidate lawmakers and even aspirants to the presidency. We need leaders committed to the health of all people of Illinois.

Nicholas Skala is co-founder of Health Care for All Illinois; Dr. Quentin Young is national coordinator of Physicians for a National Health Program.

Quality of Healthcare at Least as Good in Canada as in U.S.

Comprehensive Analysis Finds Slightly Lower Death Rates in Canada
(Despite Far Lower Health Spending)

EMBARGOED UNTIL:
April 18 2007 — 8:30 A.M. EST

Contacts:
Steffie Woolhandler, M.D. 617-497-1268, 617-312-2766
David Himmelstein, M.D. 617-665-1032, 617-312-0970
Nick Skala 312-782-6006
Gordon Guyatt, M.D. 905-521-2100 x22160

Article: https://pnhp.org/PDF_files/ReviewUSCanadaOpenMedicine.pdf

A comprehensive study by a team of 17 leading Canadian and U.S. researchers finds that the quality of care in Canada is at least as good as that in the U.S. The research, which appears in the inaugural issue of the on-line journal Open Medicine, is a rigorous statistical compendium of every direct comparison of the outcomes of U.S. and Canadian patients with identical illnesses ever published.

The researchers analyzed every study that met two pre-specified criteria: 1) a comparison of patients with identical diagnoses in Canada and the U.S.; and 2) clearly measured outcomes, such as death rate. Medical librarians collaborating in the study identified 4,923 journal articles that might meet these criteria. The researchers reviewed abstracts and titles of these articles to winnow them to 498 articles that might possibly meet the pre-specified criteria. In order to eliminate any potential bias in study selection, librarians then blacked out the results of each of these 498 studies. Only then did a second team of reviewers decide which studies should be included in the final analysis. Finally, the 38 studies fully meeting both inclusion criteria were analyzed statistically.

Overall, 14 of the 38 studies showed better outcomes in Canada, while only 5 favored the U.S. The remaining 19 studies showed equivalent or mixed results in the two nations. When the studies were combined statistically, the mortality rate was 5% lower in Canada. However, the researchers urged caution in interpreting this small Canadian advantage. Among the highest quality studies examined, 5 favored Canada while only 2 favored the U.S. The one group of patients who clearly fared better in Canada were those with end stage kidney disease.

The findings are particularly striking since few uninsured patients in the U.S. — who probably suffer the worst quality care – were included in the studies examined. Indeed, all kidney failure patients in the U.S. have insurance,

Per capita health spending in the U.S. in 2006 was $7,129 — more than double Canada’s spending of $2,956 (U.S.) per capita. All Canadians are covered under that nation’s non-profit national health insurance program. The study comes on the heels of recent findings from the Joint U.S. Canada Health Survey that Canadians enjoy access to care similar to that for insured Americans, and far better than for the uninsured in the U.S.

Dr. Gordon Guyatt, Professor of Medicine at McMaster University and lead author of the study said “These results should be a wake up call to Americans. Canadian-style universal health care can deliver as good or better health outcomes at half the price.” Dr. Guyatt, who coined the term “evidence based medicine” is a leading expert on research methodology.

Dr. Steffie Woolhandler, Associate Professor of Medicine at Harvard and a study co-author commented: “Americans pay inflated prices for inferior care. The extra $4000 each American spends annually isn’t buying us better quality. Most of it is pure waste, going for paperwork and insurance and drug company profits. National health insurance would maintain or even improve quality for those who now have coverage, cover the uninsured and still cost less than we’re now spending.”

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Physicians for a National Health Program is an organization of 14,000 physicians that support single-payer national health insurance. PNHP is headquartered in Chicago and has chapters and spokespeople across the U.S. To contact a physician-spokesperson in your area, contact nick@pnhp.org or call 312-782-6006. www.pnhp.org.

Kennedy/Dingell Medicare for All Act

The time is now: Medicare for all

By Senator Edward M. Kennedy
The Politico
April 24, 2007

If there is ever a time to solve our national crisis, it is now. I believe that the best plan for the nation is to build on a program that all Americans know and respect by creating Medicare for All. Medicare administrative costs are low. Patient satisfaction is high. Patients can choose their doctors and hospitals. And all Americans will be free from the fear of medical expenses and able to seek the best possible care when illness strikes.

Today, House Committee on Energy and Commerce Chairman John Dingell (D-Mich.) and I are introducing legislation to extend Medicare to all Americans, from birth to the end of life. In addition, our plan will reduce costs and improve quality, including more effective use of health information technology. It also puts a new emphasis on preventive care, because preventing illness before it occurs is always better and less expensive than treating patients after they become ill.

Our proposal will be entirely voluntary. Americans who wish to stay in their current employer-sponsored plans can do so, and employers can tailor their health plans to provide additional services to their employees that wrap around Medicare coverage. Those who prefer private insurance can choose any of the plans offered to members of Congress and the president.

http://www.politico.com/news/stories/0407/3676.html

For the full text of S1218 & HR2034, the “Medicare for All Act:”
http://thomas.loc.gov/ (Insert “HR2034” into the search box, click “Bill Number” and click “Search”. S1218 is the same bill, but it has not yet been posted on Thomas.)

Comment:

By Don McCanne, MD

Congressman Dingell and Senator Kennedy for decades have been leaders in the effort to obtain comprehensive health care coverage for everyone. The introduction of their Medicare for All Act is a very welcome addition to the national dialogue on reform. Their proposal would result in a definite improvement over our current dysfunctional system of financing health care. That’s the good news.

So what could be bad about this? Well, first a brief word about the respective roles of those of us involved in the health care reform movement. John Dingell and Ted Kennedy are politicians, in fact, master politicians. Their role is to negotiate the political process, carefully traversing the minefields, to make reform a reality.

The role of those of us in the policy community is quite different. We advocate for the most effective policies that will bring high-quality, comprehensive health care services to everyone. Policy and politics frequently can clash. The political process involves compromise so that the perfect does not become the enemy of the good. The policy community advocates for the perfect, unrelentingly so, so that the good does not become the enemy of the perfect. The policy community informs, but does not compromise. It is imperative that when the political community is negotiating compromise, the policy community be there to inform the participants of the process on the tradeoffs that are being made that will have an adverse impact on the health and/or finances of patients.

There is much to complain about in this bill, but my brief comments will be limited to the general structure of the reform proposed.

The bill leaves in place the private insurance industry. In fact, it encourages a greater participation by private insurers by creating a new insurance program optionally available to everyone, designed after the private plans in FEHBP (Federal Employees Health Benefits Program). This satisfies the political rhetoric of offering to everyone the same coverage that members of Congress have.

They even included in the legislation an explicit call for cost sharing in the form of deductibles, coinsurance, copayments, and even premiums. Previous studies have demonstrated that the cost sharing levels in FEHBP can create financial hardships for individuals with modest incomes and significant medical needs. Other nations that provide comprehensive services to everyone at a much lower total cost than in the United States have been able to do so without the necessity of using cost sharing to control health care spending. There are far more effective and more humane methods of containing costs that won’t be covered here (hint: single payer).

If we are going to fund our health care system equitably and efficiently, it is essential to establish a universal risk pool. This proposal not only perpetuates the private plans, it also isolates the pool of the new FEHBP program from the established program. It does call for risk adjustment of pools, but that has proven to be a difficult and imperfect process and opens the system to nefarious gaming.

The proposal leaves in place our welfare programs such as Medicaid and SCHIP. Chronic underfunding plagues both the beneficiaries of these programs and the providers. A Medicare program accessible to everyone risks becoming a welfare program for individuals with higher health care costs, and risks underfunding due to the “death spiral” characteristic of high risk pools.

Their proposal perpetuates the administrative complexity of our current dysfunctional, multipayer system, resulting in a profound waste of resources that should be used for health care instead.

Should we oppose this bill? Going back to defining the relative roles of supporters of health care reform, it is not the job of policy wonks to engage in political activity in an effort to obstruct measures that would have a modest beneficial impact on our health care system. But if you consider continual harping on the best policies that would have the most favorable impact to be political, than maybe we are guilty of that. But that’s our job.

When the politicians privately concede that a single payer system is the ideal, but tell you go away because your concepts aren’t “feasible,” don’t do it. Stay there and remind them of the financial hardship, suffering and death that each one of their politically-feasible compromises would cause.

Don’t let the good be the enemy of the perfect.

Presidential candidates on health care reform

Presidential candidates on health care reform:

Hillary Clinton:

…three things… …control and decrease costs… … improve quality. We can save money within the existing system. I am not ready to put new money into a system that doesn’t work until we’ve tried to figure out how to get the best outcomes from the money we already have.

Barack Obama:

…provide subsidies for those who can’t afford the group rates that are available. …control costs. The third thing is catastrophic insurance to help businesses and families avoid the bankruptcies that we’re experiencing all across the country and reduced premiums for families.

John Edwards:

Give people a choice, including a government choice; no pre- existing conditions — banned as a matter of law. And the law actually requires that every single American be covered.

John McCain:

Promises made to previous and current generations have placed the United States on an unsustainable budget pathway. Unchecked, Social Security, Medicaid and Medicare obligations will grow as large as the entire federal budget is now in just a few decades. Without comprehensive bipartisan reform to America’s entitlement programs, the nation will be unable to meet the challenges of providing vital medical and social security assistance to future generations.

Mitt Romney:

The health of our nation can be improved by extending health insurance to all Americans, not through a government program or new taxes, but through market reforms.

Rudy Giuliani:

According to Jonine Bernstein, a Memorial Sloan-Kettering epidemiologist who was among more than 100 donors attending… (an April 26 fundraiser at the Yale Club in Manhattan), “He gave this analogy about plasma TVs. He said that in the very beginning plasma TVs were so expensive and only very few people could afford it. And now with greater volume and greater demand the price has dropped, and that could be a model for healthcare — in the sense of privatization of healthcare. That if the government keeps supporting the healthcare industry it would just crush us.”

Clinton, Obama and Edwards: April 26 debate in South Carolina:
http://www.wcnc.com/news/local/stories/wcnc-042607-krg-debate_part1.1023b3ba.html

McCain: John McCain 2008 website:
http://www.johnmccain.com/Informing/Issues/4a3ab6fe-b025-42b1-815b-13c696a61908.htm

Romney: Romney for President website:
http://www.mittromney.com/Issue-Watch/Health_Care

Giuliani: The New York Observer, April 26:
http://www.observer.com/2007/rudy-iraq-just-pre-rudy-ny

Comment:

By Don McCanne, MD

The American people are ready for reform. What we now need is leadership.

Only one of these leading candidates has a serious proposal for reform, and that is John Edwards. Of other candidates, Dennis Kucinich has a proposal that is already before Congress, HR 676, which has 67 cosponsors in the House. In fact, HR 676, by providing affordable, comprehensive health care for everyone, is the golden standard against which all other proposals should be judged.

It’s past time for mere rhetoric. It’s time for real policies. Every candidate needs to step up to the plate with their specific proposals on how we can achieve health care justice for everyone in the United States. Refusal to do so should disqualify the candidate from our lists of serious contenders.

Plasma TVs? Get real!

Reinhardt does the math on HSAs

Insurance: A Closer Look at HSAs

By Uwe Reinhardt
Health Affairs Blog
April 12, 2007

(In this article, Princeton economist Uwe Reinhardt takes a closer look at the financial impact of alternative scenarios for cost sharing under HSAs, which then leads to his comments about the policy implications of HSAs.)

Implication for Health Policy

Those who believe that our health system will never be efficient until patients feel serious fiscal pain as they suffer physical pain, so to speak, will find the preceding analysis reassuring. A Bloomberg wire service story reacting to the Remler-Glied article, for example, treated the low cost sharing reported by these authors as a newsworthy discovery of a “flaw” in HSA design, since if less is spent out-of-pocket, incentives to conserve costs under HSA plans must be weaker.

Rationing by income class: As my analysis illustrates, however, the very high degree of out-of-pocket spending visited on individuals and families by many of the HSA products now on the market guarantees that especially low-income Americans are very likely to tighten their belts und forego health care they would have wanted under the more comprehensive, conventional insurance products. This self-rationing by price is doubly guaranteed, because the tax-preference accorded to HSAs effectively makes health care more expensive for low-income persons than for high-income persons.

On the other hand, as Remler and Glied, and the present analysis, show clearly as well, the HSA/high-deductible construct is not likely to alter significantly the health-care behavior of high income people – for example, the readers of the Bloomberg news wire. For one, high-income individuals and families will be able to absorb high deductibles with relative ease into their higher incomes. Furthermore, as noted, the tax code actually makes health care cheaper for high-income families, relative to Americans with lower incomes. With the government picking up close to half of the health care cost of high income people under HSAs, it can be doubted that self-rationing of health care by price will play any significant role among such families if they were forced to switch from the comprehensive baseline policy to an HSA product. It is fair to wonder whether the advocates of HSAs, who usually live in high income brackets, are aware of this asymmetric impact of HSAs on the rationing of health care by price and ability to pay.

These are ethical policy issues that economists can identify but on which they cannot offer normative dicta. Policy makers, on the other hand, might wish to explore these issues further, before shifting the nation wholesale toward the HSA/high-deductible health insurance, as this product is currently designed.

http://healthaffairs.org/blog/2007/04/12/insurance-a-closer-look-at-hsas/

Comment:

By Don McCanne, MD

The numbers in Professor Reinhardt’s article cannot be disputed. (Use the link above to access the analysis.) The policy implications automatically follow.

The ethical issues raised require normative dicta and thus are beyond the realm of pure economic science. But health care reform advocates must interject ethics into the dialogue since the health of people is at stake.

Dr. Reinhardt’s objective analysis provides us with a more than adequate basis for booting from the forums on reform the HSA advocates who would require those feeling physical pain also feel fiscal pain. Once they are out of the way, we can then get serious about reform that actually benefits patients.

Presidential hopefuls skip best plan for health care

By MILES WEINBURGER
Des Moines Register
IOWA VIEW
April 26, 2007

We have in America outstanding health-care facilities, excellent doctors and world-class research. What we lack is the universal health-care coverage present in all other industrial nations that provides assurance that health care will be available to us when we need it.

Many of you reading this may say, “I’ve got good insurance that my employer provides.” Let’s hope your insurer stays in business and that you never have to change jobs or go into business for yourself.

Or if you do, hope that you don’t have asthma, high cholesterol, migraine or any kind of headaches, depression or anxiety disorders or the myriad of other common clinical problems that will either make you uninsurable, raise your rates or provide exclusions from coverage.

An article published in a 2005 issue of the Health Affairs journal reported that more than half of the almost 12,000 bankruptcies in Iowa were medically related, a ratio similar to the national average. Most of the people involved had health insurance of some kind, and less than 3 percent of those uninsured had been without insurance voluntarily.

Beneath the fog and rhetoric of the early stages of the presidential campaign, the main contenders for the presidency, other than Democrat Dennis Kucinich, are offering alternatives that preserve the inefficiencies and inequities of the current system. They don’t adequately consider the solutions that could most effectively eliminate the deficiencies that place all of us at risk for joining the one-third of Americans who are uninsured or underinsured.

The plans proposed by the spectrum of politicians fail because they concede to insurance firms a continuing dominant role in health care. The much-publicized plan for universal coverage in Massachusetts, for example, mandates all to buy insurance. However, a 56-year-old making $30,000 annually will have to spend $7,164 in premium and deductible payments before insurance kicks in, and still pony up 20 percent of hospital costs after that, assuming no pre-existing conditions that would either increase costs further or exclude those conditions from coverage.

Such plans are insurance in name only. They leave people unable to get care and unprotected from financial ruin. The only way to simultaneously expand coverage and lower costs is through single-payer national health insurance. Every other developed nation has some form of this, yet most spend less than half what we do per person.

Nearly a third of our $2.3 trillion in health spending this year will go for administration. In their drive to enroll healthy, profitable patients and screen out the sick, private insurers waste vast sums on marketing, billing, underwriting, utilization review and other activities that sustain profits but divert resources from care. The paperwork they inflict on doctors and hospitals costs hundreds of billions more each year.

In contrast to the roughly 20 percent overhead of insurance companies, U.S. Medicare has only 3 percent overhead. Canada’s single-payer program runs for 1 percent overhead. And Canada’s hospitals and doctors face little paperwork burden.

Americans get scant return for our outsized spending. We already pay the highest health-care taxes in the world, and total per-capita spending is twice that of countries with better health outcomes. We already spend enough that the sum should cover universal health coverage – we just don’t get it.

Studies in the prestigious New England Journal of Medicine and elsewhere have shown that streamlining our health bureaucracy through a single public payer – a kind of “Improved Medicare for All” – would save enough new money to provide comprehensive benefits for all Americans.

We deserve better than we’re getting. A single-payer system is the only economically viable reform option that will serve us better as a nation. Yet opposition from insurance and drug-industry giants continues to intimidate lawmakers and aspirants to the presidency. It is time for our leaders to stand up for the health of the American people rather than the wealth of our richest firms.

Dr. MILES WEINBERGER is a professor of pediatrics at the University of Iowa.

CostRx: Kucinich's not-for-profit plan

By LAURA GILCREST
UPI Health Business Editor
April 25, 2007

WASHINGTON April 25 (UPI) — Rep. Dennis Kucinich of Ohio, a Democratic presidential contender, tells United Press International about his plan for national healthcare reform, which is centered on covering all Americans by taking the profit factor out of the equation.

Q: The bill that you co-authored, Medicare for All, uses the present Medicare program as a model for a national plan for universal healthcare. The bill would require private entities providing healthcare to convert to not-for-profit. Is there any role left for the private sector under the plan envisioned in this bill?

A: The understanding is, if you have for-profit medicine, it actually ends up precluding full coverage for all Americans. Under this plan, you’re talking about ending the rationing of healthcare, which is really what’s happening as a result of having for-profit medicine. So (the) short answer is that any for-profit insurance company that would duplicate Medicare for All would not be in business. All hospitals would be converted to not-for-profit.

Q: Would they then come under government control?

A: No, (they’d be) not-for-profit. It’s not that the government (would be) running the hospitals. What we’re talking about is that all of the healthcare assets in America would be converted to not-for-profit. You have Spain and the U.K and other countries that have a system where doctors are salaried by the government, and the government owns the hospitals.

Under Medicare for All, hospitals and doctors remain private, though they do become not-for-profit. And that’s important because there’s a lot of research that shows that for-profit healthcare is more expensive and more wasteful and has worse quality outcomes, including death rates.

You’ve got a lot of these free-market ideologues who try to attack this, but the truth is, that … countries that have a system that is not-for-profit have less red tape and less waste than the private system we have. And under this system, people would be able to choose their own doctor.

Q: One of your Democratic rivals, former Sen. John Edwards, admits he would raise taxes to pay for his healthcare plan. Would you also have to raise taxes?

A: John Edwards’ plan is to have the government subsidize the insurance companies. The truth of the matter is, I’m not talking about (doing) that, so there’s a difference immediately. What I’m saying is that, we’re already paying for healthcare for everyone, we’re just not getting it, and here’s how: About 31 cents out of every healthcare dollar goes to something other than providing healthcare (such as) corporate profits, stock options, executive salaries, advertising, marketing, the cost of paperwork. The cost of this bill is exactly what we’re currently spending on healthcare, $2.1 trillion dollars a year.

Q: So your plan could be accomplished for the same price?

A: Yeah, absolutely. The difference is that my bill gets rid of all the waste and uses the savings and the new efficiency to cover the uninsured and the underinsured completely. It’s important to note that we spent $2.1 trillion on healthcare in America in 2006 and 31 percent of that is bound up in the for-profit system; that’s about $650 billion dollars a year. And if you compare that to the administrative costs in Canada, Canada’s administrative costs are about 17 percent. And Medicare’s administrative costs are about 3 percent.

Q: But wouldn’t a tax hike be inevitable for such an ambitious plan?

A: No, not necessarily. This is not about a tax increase. I’m saying that people can get this care now without a tax increase by eliminating for-profit medicine. That’s the key point. You have over $650 billion a year going for corporate profits, stock options, executive salaries, advertising, marketing, the cost of paperwork. So you take those savings, put them into healthcare and suddenly, you have got enough money to cover 46 million people who don’t have insurance, and another 50 million who are underinsured. There’s so much money available when you make that transition, you then have enough money for vision care, dental care, mental health, prescription drugs and long-term care. This is the reason why you have 14,000 physicians backing (the bill) because what they’re saying is, “Hey, the money’s already there.” There’s no other nation that allows so much waste.

Q: What groups are backing your bill?

A: Fourteen thousand physicians in the Physicians for a National Health Program are backing this, 250 labor unions are backing it.

The fake debate in 2008 is over universal healthcare. Everyone running (for president) says they’re for universal healthcare and even the insurance companies are for universal healthcare, as long as the government is subsidizing them to provide it.

Sen. Edwards and Sen. (Hillary) Clinton are both talking about plans that would involve the government subsidizing the insurance companies, and those plans have fatal flaws because they don’t control costs, they do little to improve quality and they do little for access.

Q: What do you say to the skeptics who argue that more government involvement in healthcare will lead to rationing?

A: We have a rationing system right now, because you’re got 46, 47 million people uninsured; and you’ve got another 50 million who are underinsured. So self-rationing is what we actually have. We’re making costs so high that people avoid care. In other single-payer countries where they do have rationing, the problem is, they’re paying so much less than we are. If we pay more than they pay per person, but much less than we do now, rationing wouldn’t be a problem.

For (the United States), the problem is not the money, it’s the system. We spend more per capita than all these other countries. So the money is there, that’s the point. In some of these other countries, the problem for them is not the system, it’s (a lack of) money.

Q: The Democrats’ attempt to change Medicare’s Part D prescription drug benefit to allow the government to negotiate with drug companies for lower prices failed last week to muster enough votes in the Senate. Does this signal there is still resistance to what is viewed as government-imposed price controls?

A: With respect to this (bill), the government would negotiate the prices; that’s true, and it would have massive purchasing power to do so. The government currently negotiates prices with the Veterans Administration (U.S. Department of Veterans Affairs), so that’s been well-established and it has saved taxpayers, over a period of time, billions of dollars.

(What happened in the Senate) is a reflection of the power of the pharmaceutical companies, and the for-profit insurance companies. That’s one of the reasons why Sen. Edwards and Sen. Clinton are saying that the plan I’m talking about isn’t politically feasible.

(Healthcare) is far and away the No. 1 social and economic issue in this country. Anyone running for president who is conceding control of the system to the for-profit insurers raises serious questions about their ability to lead the nation.

What I’m saying is, those who are advocating the position of the insurance companies, (and) who are saying, “We’re going to cover more people, but the government is going to subsidize the insurance companies,” that (position) protects the insurance companies’ profits.

Q: But critics argue that putting the federal government in control of pricing will kill innovation by the drug industry. How would you respond?

A: We have to take our healthcare system back, we have to take it back from the for-profit insurance companies and from the pharmaceutical companies, who currently control the system for their own profit. This is not about innovation, because the truth of the matter is, a lot of the innovation begins with government-supported research.

What I’m saying is that a significant part of the program is cost control and you cannot control costs if the pharmaceutical companies can charge whatever they want for their drugs.

American companies are losing their competitive edge because they’re paying so much more for healthcare than other developed countries. You look at GM, you look at Ford, and our manufacturing power is being undercut by these insurance companies and by the pharmaceutical companies.

So I raise the question, “Who’s in charge here?” Is this a government of the people or is it a government run by the for-profit insurance companies and by the pharmaceutical companies? That’s why my election will be a powerful change in the direction of a non-for-profit system.

CostRx: Kucinich’s not-for-profit plan

By LAURA GILCREST
UPI Health Business Editor
April 25, 2007

WASHINGTON April 25 (UPI) — Rep. Dennis Kucinich of Ohio, a Democratic presidential contender, tells United Press International about his plan for national healthcare reform, which is centered on covering all Americans by taking the profit factor out of the equation.

Q: The bill that you co-authored, Medicare for All, uses the present Medicare program as a model for a national plan for universal healthcare. The bill would require private entities providing healthcare to convert to not-for-profit. Is there any role left for the private sector under the plan envisioned in this bill?

A: The understanding is, if you have for-profit medicine, it actually ends up precluding full coverage for all Americans. Under this plan, you’re talking about ending the rationing of healthcare, which is really what’s happening as a result of having for-profit medicine. So (the) short answer is that any for-profit insurance company that would duplicate Medicare for All would not be in business. All hospitals would be converted to not-for-profit.

Q: Would they then come under government control?

A: No, (they’d be) not-for-profit. It’s not that the government (would be) running the hospitals. What we’re talking about is that all of the healthcare assets in America would be converted to not-for-profit. You have Spain and the U.K and other countries that have a system where doctors are salaried by the government, and the government owns the hospitals.

Under Medicare for All, hospitals and doctors remain private, though they do become not-for-profit. And that’s important because there’s a lot of research that shows that for-profit healthcare is more expensive and more wasteful and has worse quality outcomes, including death rates.

You’ve got a lot of these free-market ideologues who try to attack this, but the truth is, that … countries that have a system that is not-for-profit have less red tape and less waste than the private system we have. And under this system, people would be able to choose their own doctor.

Q: One of your Democratic rivals, former Sen. John Edwards, admits he would raise taxes to pay for his healthcare plan. Would you also have to raise taxes?

A: John Edwards’ plan is to have the government subsidize the insurance companies. The truth of the matter is, I’m not talking about (doing) that, so there’s a difference immediately. What I’m saying is that, we’re already paying for healthcare for everyone, we’re just not getting it, and here’s how: About 31 cents out of every healthcare dollar goes to something other than providing healthcare (such as) corporate profits, stock options, executive salaries, advertising, marketing, the cost of paperwork. The cost of this bill is exactly what we’re currently spending on healthcare, $2.1 trillion dollars a year.

Q: So your plan could be accomplished for the same price?

A: Yeah, absolutely. The difference is that my bill gets rid of all the waste and uses the savings and the new efficiency to cover the uninsured and the underinsured completely. It’s important to note that we spent $2.1 trillion on healthcare in America in 2006 and 31 percent of that is bound up in the for-profit system; that’s about $650 billion dollars a year. And if you compare that to the administrative costs in Canada, Canada’s administrative costs are about 17 percent. And Medicare’s administrative costs are about 3 percent.

Q: But wouldn’t a tax hike be inevitable for such an ambitious plan?

A: No, not necessarily. This is not about a tax increase. I’m saying that people can get this care now without a tax increase by eliminating for-profit medicine. That’s the key point. You have over $650 billion a year going for corporate profits, stock options, executive salaries, advertising, marketing, the cost of paperwork. So you take those savings, put them into healthcare and suddenly, you have got enough money to cover 46 million people who don’t have insurance, and another 50 million who are underinsured. There’s so much money available when you make that transition, you then have enough money for vision care, dental care, mental health, prescription drugs and long-term care. This is the reason why you have 14,000 physicians backing (the bill) because what they’re saying is, “Hey, the money’s already there.” There’s no other nation that allows so much waste.

Q: What groups are backing your bill?

A: Fourteen thousand physicians in the Physicians for a National Health Program are backing this, 250 labor unions are backing it.

The fake debate in 2008 is over universal healthcare. Everyone running (for president) says they’re for universal healthcare and even the insurance companies are for universal healthcare, as long as the government is subsidizing them to provide it.

Sen. Edwards and Sen. (Hillary) Clinton are both talking about plans that would involve the government subsidizing the insurance companies, and those plans have fatal flaws because they don’t control costs, they do little to improve quality and they do little for access.

Q: What do you say to the skeptics who argue that more government involvement in healthcare will lead to rationing?

A: We have a rationing system right now, because you’re got 46, 47 million people uninsured; and you’ve got another 50 million who are underinsured. So self-rationing is what we actually have. We’re making costs so high that people avoid care. In other single-payer countries where they do have rationing, the problem is, they’re paying so much less than we are. If we pay more than they pay per person, but much less than we do now, rationing wouldn’t be a problem.

For (the United States), the problem is not the money, it’s the system. We spend more per capita than all these other countries. So the money is there, that’s the point. In some of these other countries, the problem for them is not the system, it’s (a lack of) money.

Q: The Democrats’ attempt to change Medicare’s Part D prescription drug benefit to allow the government to negotiate with drug companies for lower prices failed last week to muster enough votes in the Senate. Does this signal there is still resistance to what is viewed as government-imposed price controls?

A: With respect to this (bill), the government would negotiate the prices; that’s true, and it would have massive purchasing power to do so. The government currently negotiates prices with the Veterans Administration (U.S. Department of Veterans Affairs), so that’s been well-established and it has saved taxpayers, over a period of time, billions of dollars.

(What happened in the Senate) is a reflection of the power of the pharmaceutical companies, and the for-profit insurance companies. That’s one of the reasons why Sen. Edwards and Sen. Clinton are saying that the plan I’m talking about isn’t politically feasible.

(Healthcare) is far and away the No. 1 social and economic issue in this country. Anyone running for president who is conceding control of the system to the for-profit insurers raises serious questions about their ability to lead the nation.

What I’m saying is, those who are advocating the position of the insurance companies, (and) who are saying, “We’re going to cover more people, but the government is going to subsidize the insurance companies,” that (position) protects the insurance companies’ profits.

Q: But critics argue that putting the federal government in control of pricing will kill innovation by the drug industry. How would you respond?

A: We have to take our healthcare system back, we have to take it back from the for-profit insurance companies and from the pharmaceutical companies, who currently control the system for their own profit. This is not about innovation, because the truth of the matter is, a lot of the innovation begins with government-supported research.

What I’m saying is that a significant part of the program is cost control and you cannot control costs if the pharmaceutical companies can charge whatever they want for their drugs.

American companies are losing their competitive edge because they’re paying so much more for healthcare than other developed countries. You look at GM, you look at Ford, and our manufacturing power is being undercut by these insurance companies and by the pharmaceutical companies.

So I raise the question, “Who’s in charge here?” Is this a government of the people or is it a government run by the for-profit insurance companies and by the pharmaceutical companies? That’s why my election will be a powerful change in the direction of a non-for-profit system.