PNHP

In support of a single-payer system

In support of a single-payer system

Ann Troy, M.D., FAAP
San Rafael, Calif.
AAP News
March 2007

In his State of the Union address, President Bush acknowledged that we have a health care crisis in the United States. His plan for fixing it would keep the insurance industry in health care — to the detriment of us all.

The United States is the only developed nation without a national health program. We spend more than double per capita what any other nation spends on health care, yet we have almost 50 million people, including 9 million children, without health insurance, millions more with grossly inadequate coverage, and the worst health care statistics in the developed world.

How can this be? Approximately 50% of every health care dollar is spent on something other than health care. Insurance companies themselves admit that they spend about 30% of the money we pay in premiums on something other than health care — multimillion dollar salaries for their CEOs, profit for their shareholders, advertising and sales, screening applicants and claims, and generating mountains of paperwork and endless hassles for doctors and patients, alike. Then there is the money we have to spend dealing with them — in the creation of intermediary bodies and in hiring staff to do billing and to deal with authorizations.

In the 1960s, Canada and the United States spent about the same amount per capita on health care and had similar health care statistics. By 1971, all of Canada had a single-payer system. Thirty-five years later, it spends less than half of what we spend per capita, yet is able to provide health care for all of its citizens. Fur ther more, on almost every measure its health care statistics, like those of other developed nations, are better than ours. Our infant mortality rate is 50% higher than Canada’s, and our overall mortality rate is 30% higher.

The World Health Organization ranks the United States 37th, at the bottom of the developed world! If we get the insurance industry out of health care and establish a single-payer system, we would have more than enough money to provide health care for all and to pay doctors and hospitals fairly for their services. Under a single-payer system, patients would be able to choose their own doctors; doctors would remain private, able to practice the way they want, paid fairly and simply on a fee-for-service basis; and we would save billions of dollars.

No longer would people have to change doctors every time they change jobs or their employer finds a cheaper health plan. Nor will they have to worry about losing their access to health care if they lose their job or develop a chronic condition. No longer would families struggle to pay astronomical health insurance premiums, or worry about paying for prescription drugs. No longer will 50% of bankruptcies be due to medical debt. All patients would have a “medical home.” Continuity of care will be improved and problems will be treated earlier (when easier to treat) or prevented altogether. Rates for vaccinations and health screening will go up. Public health and productivity will improve and social problems associated with untreated mental health problems and addictions will decrease.

Single payer will be good for the economy. American companies are at a huge disadvantage when competing with companies in other developed nations, which are not burdened with the high cost of providing health care for their employees. Smaller companies and small businesses can’t afford to provide health care benefits and, thus, can’t compete for the best workers. Un happiness over health care benefits is the leading cause of labor unrest in the United States. A single-payer system would improve all of this and also decrease absenteeism and increase productivity (workers with access to health care are healthier and more pro ductive). Furthermore, worker’s comp would be reduced or even eliminated. All of these advantages would create more jobs and generate more tax revenue.

A single-payer bill, HR676, authored by Reps. Conyers (D-Mich.) and Kucinich (D-Ohio), will be introduced soon. With this bill, we have an opportunity to have the best health care system in the world and to enable all Americans to have access to health care that citizens of every other developed nation take for granted. Let’s be courageous and make it happen!

Editor’s note: At press time, the Academy had not taken a position on the single-payer bill.

Medicare for all would be a healthy move

By Saul Friedman
Newsday
March 31, 2007

I have not seen the case for publicly supported universal health care put any better than this, and by someone who knows what he’s talking about:

“I am proposing the federal government as the single payer of health care in this country. Only the federal government has the ability to fund one large risk pool through a payroll deduction. As the single payer, the federal government could negotiate hospital and physician payments even more effectively than it does now with Medicare.

“A single pool of funds, collected and administered by the government, would expand Medicare and replace Medicaid, SCHIP (State Children’s Health Insurance Program), the VA health-care system, and private health insurance, including the health care aspect of Worker’s Compensation. … Also eliminated would be the tax credit – or subsidy – given to companies for providing health insurance to their employees. In other words, the current, inefficient patchwork of payment systems would disappear, to be replaced by one nationwide program available to every citizen.”

The writer was Robert Gumbiner, an M.D. and a pioneer of the controversial concept of managed care, which has been a vain attempt to reduce the soaring costs of the volatile for-profit health-care system. Gumbiner founded FHP, in California, one of the nation’s earliest and largest HMOs, which was swallowed up in a merger with PacifiCare 10 years ago.

His present views, written for the Physicians for a National Health Program Web site, underscore what I’ve been reporting – that the American public, thousands of doctors and a number of business leaders, governors and members of Congress are arriving at the conclusion that it’s time the United States joined most other industrialized nations in adopting universal health care.

The issue is what path we should take.

How can we preserve what’s best in the nation’s current system and move as smoothly as possible to medicine that’s publicly financed? How can we avoid the Clintons’ mistake of 1993 in trying to please every interest and coming up with a complex, top-heavy system that could not get through even a friendly Congress and White House?

One popular answer, which we reported on nearly 10 years ago, came from Dr. Marcia Angell, in the New England Journal of Medicine, which she edited. We called it “Medicare For All.” Now a senior lecturer at Harvard Medical School, she repeated her suggestion recently in the Boston Globe.

Criticizing various proposals because they depend on private, for-profit insurance companies, Angell wrote: “They all have the same fatal flaw … no workable mechanism to control costs. … We need to change the system completely and get the insurance industry as well as employers out of it. … It would make much more sense to extend Medicare to everyone. …

“This could be done gradually by dropping the eligibility age a decade at a time, while phasing out the insurance companies. … Medicare is not perfect, but its problems are readily fixed. It is far more efficient than private insurance … and since it is administered by a single public agency, controlling costs would be possible.”

“Medicare for All,” is the subtitle of the most serious universal health-coverage bill before Congress, legislation that would turn her proposal into law: “The U.S. National Healthcare Insurance Act,” HR676, re-introduced in January by Rep. John Conyers (D-Mich.). It was supported in the last Congress by about 80 members, but the Republican leadership gave it no chance to move.

The bill isn’t yet high on the list of legislative priorities in the new Congress, primarily because most Republicans and President George W. Bush still are wedded to putting the insurance industry in charge. While every Democratic presidential candidate supports universal coverage, only Dennis Kucinich currently favors a “single-payer” solution like Medicare.

Nevertheless, Conyers and Sen. Edward M. Kennedy (D-Mass.), who favors another version of Medicare for All, now chair committees that could give their proposals some serious attention, perhaps readying for the day when they have the White House on their side. The mainstream press, and even AARP, have been ignoring their proposals, but you may study Conyers’ bill by entering its number, HR 676, at http://thomas.loc.gov/ or visit Conyers’ Web site: http://www.house.gov/conyers/.

Conyers’ brief summary of the legislation says it would establish “an American national health insurance program” that, like Medicare, would provide publicly financed but privately delivered free health care to all Americans, who would be free to choose their doctors and hospitals. Benefits, according to the Congressional Research Service summary, would include “all medically necessary care, such as primary care and prevention, prescription drugs, emergency care and mental health services.”

The legislation would put out of business the hundreds of profit-taking middlemen of the health care industry, especially insurance companies, by prohibiting “an institution from participating in the program unless it is a public or nonprofit institution.”

Conyers’ bill also would prohibit the sale of insurance that duplicates benefits provided by the legislation.

Finally, Conyers would finance the benefits mostly by adding 3.3 percent each for employees and employers to the 1.45 percent payroll tax each is now paying, thus relieving the heavy burden businesses now bear in paying expensive premiums for employee/retiree health insurance. It also would end the need for health insurance premiums for working families and provide coverage for the estimated 75 million who are uninsured or underinsured.

While Conyers’ bill has broad liberal and union support, “Medicare for All” is not the only proposal for universal health care, and we intend to look at others as well your ideas.

WRITE TO Saul Friedman, Newsday, 235 Pinelawn Rd., Melville, NY, 11747-4250, or by e-mail at saulfriedman@comcast.net.

Insurance may not be enough

By Dr. Susanne King
Berkshire Eagle
Wednesday, March 28

IT IS now common knowledge that 47 million people are uninsured in the United States, an increase of 5 million during the time President Bush has been in office. This health care issue is already a focus for the upcoming national election, as well as the impetus for health care reform in individual states. Massachusetts is currently implementing legislation to reduce the number of uninsured in our state, and to mandate universal health care coverage.

The plight of the underinsured is less well-known. “Underinsured” means insurance coverage is inadequate, or out-of-pocket costs are excessive. The Massachusetts Connector Board, created to implement the state health care
reform bill, has been struggling with the impossible — how to get insurance companies to offer health insurance policies that are affordable, yet also provide adequate health care coverage.

The Connector has decided that health care policies with individual medical deductibles of $2,000, and $250 prescription deductibles, meet these criteria. In the array of policies offered, there is a no-deductible plan, but patients would have to pay 35 percent of the total cost of hospitalization, x-rays, lab tests or outpatient surgery. This means that many people will be unable to afford to use their insurance, and therefore will be underinsured.

Health insurance companies have high administrative costs, which include marketing, shareholder profits, and exorbitant CEO salaries. The Springfield Republican reported this week that the CEO of Aetna received compensation in 2006 which was valued at $31 million. The reality is that insurance companies are not able to create affordable health plans. The current health care reform in Massachusetts is demonstrating just that — patients are socked with either high deductibles or high co-payments.

Meanwhile the Journal of the American Medical Association (JAMA) has published a timely study titled “Financial Barriers to Health Care and Outcomes After Acute Myocardial Infarction.” (A myocardial infarction or MI is the medical term for a “heart attack.”) The authors found that 1 in 5 patients reported they were unable to afford recommended health care after an acute MI, and that these patients had a higher prevalence of severe chest pain, a poorer quality of life, and a much greater risk of being hospitalized again.

But the most stunning finding was that two-thirds of those who reported avoiding health care services or medication because of cost, were insured. The bottom line is that high deductibles and co-payments deter people from seeking needed health care or buying medications, and this results in poorer outcomes for patients when they become ill.

The answer to underinsurance is single-payer health care, funded and administered by the state or federal government. A single-payer health care system would remove financial barriers to health care, and provide the same comprehensive care to everyone. Eliminating the insurance companies with their excessive administrative costs, would provide the funds ($300 billion) to pay for this universal comprehensive health care.

Physicians for a National Health Program (PNHP) and Healthcare-NOW are national organizations that advocate for federal legislation for single-payer health care (the bill is HR 676). During the month of April, there will be meetings across the country to support this legislation, and to educate citizens about single-payer national health care.

A meeting will be held in Lenox on April 4 at 7 p.m. at the Lenox Community Center. April has been chosen as National Healthcare Month, to advocate for HR 676 and to commemorate Rev. Martin Luther King, who said, “Of all the forms of inequality, injustice in health care is the most shocking and inhumane.”

High Deductible Plans Penalize Women, Middle-Aged Adults, Sick Children

For Immediate Release
April 02, 2007

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

A study by Harvard Medical School researchers finds that the increasingly popular high deductible health plans are discriminatory against women, leaving them with far higher out-of-pocket health bills than men. The researchers also found that adults 45-64, those with any chronic condition (such as asthma or high blood pressure) and children taking even one medication were likely to suffer financially in high deductible plans. The study, appearing in the July 2007 issue of the Journal of General Internal medicine, analyzed nationwide health spending data from the Medical Expenditure Panel Survey. The researchers calculated the median annual medical costs of men, women, various age groups, and of people with a variety of medical conditions. (Half of people spend more than the median and half spend less).

Under high deductible health plans, patients are responsible for at least $1,050 (often $5000) in medical bills before insurance kicks in. High deductible plans are a cornerstone of the new Massachusetts’ health reform; most of the newly-mandated, unsubsidized plans have deductibles of $2000, with co-payments and coinsurance after that. Such plans carry lower premiums than traditional coverage. Employers and politicians have touted high-deductible plans as a cost-saving strategy, hoping that they will make patients more cost conscious when they seek care. It has previously been recognized that young and healthy individuals stand to gain under high deductible policies, because few of them incur the high out-of-pocket costs.

The Harvard study is the first to show that most women will be financial losers under high deductible plans. In 2006, the median health costs for women age 18-64 was about $1000 higher than for men ($1,844 vs. $847). The difference was particularly striking among young adults (18-44), with median expenditures for women being nearly threefold higher than for men ($1,266 vs. $463). As expected, middle-aged adults had far higher expenses than did the young, making most of them financial losers in high deductible plans. For those aged 45-64, the median expenditure was $1,849 for men and $2,871 for women.

The researchers also found that most individuals with even mild chronic conditions were likely to suffer financially in high deductible plans. For the 26.9 million Americans with high blood pressure, median expenditure was $3,161. The median for the 9.7 million receiving any treatment for arthritis was $5,425, while the figure for the 5.2 million diabetics (on any medication) was $5,774. Strikingly, the 12.1 million children who took even a single prescription medication had median expenditures of $1,305.

Dr. Steffie Woolhandler, Associate Professor of Medicine at Harvard and lead author of the study commented: “High deductible plans punish women for having breasts and uteruses. Our costs are higher than men’s because we need Pap tests, cervical cancer vaccine, mammograms and birth control, and because pregnancy is expensive. When employers raise deductibles, they’re giving women a pay cut. And when politicians offer tax breaks for high deductible plans, they’re discriminating against women.”

“High deductible health insurance penalizes anyone who’s sick. Even common, mild problems like arthritis and high blood pressure make you a loser in a high deductible plan. And these financial penalties keep people from getting the routine care they need to prevent disastrous illness later on”, said Dr. David U. Himmelstein, study co-author and a Harvard Medical School Associate Professor. “High deductible plans are mean spirited and unfair, and they won’t save our failing health system. We need to care for everyone and spread the costs over men and women, young and old, healthy and sick. We need better coverage, not the ever-skimpier plans that politicians are pushing. In short, we need national health insurance with first dollar coverage for all Americans.”

A copy of this study can be accessed at the following URL: https://pnhp.org/PDF_files/CDHC_Unwise.pdf

###

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.

Pew report on political values and core attitudes

Trends in Political Values and Core Attitudes: 1987-2007

The Pew Research Center
March 22, 2007

The study of the public’s political values and attitudes by the Pew Research Center for the People & the Press — the most recent in a series of such reports dating back to 1987 — finds a pattern of rising support since the mid-1990s for government action to help disadvantaged Americans. More Americans believe that the government has a responsibility to take care of people who cannot take care of themselves, and that it should help more needy people even if it means going deeper into debt.

These attitudes have undergone a major change since 1994, when the Republicans won control of Congress. In particular, 54% say the government should help more needy people, even if it adds to the nation’s debt, up from just 41% in 1994. All party groups are now more supportive of government aid to the poor, though Republicans remain much less supportive than Democrats or independents if it means adding to the deficit.

More broadly, the poll finds that money worries are rising. More than four-in-ten (44%) say they “don’t have enough money to make ends meet,” up from 35% in 2002. While a majority continues to say they are “pretty well satisfied” with their personal financial situation, that number is lower than it has been in more than a decade.

In addition, an increasing number of Americans subscribe to the sentiment “today it’s really true that the rich just get richer while the poor get poorer.” Currently, 73% concur with that sentiment, up from 65% five years ago. Growing concerns about income inequality are most apparent among affluent Americans; large percentages of lower-income people have long held this opinion.

http://people-press.org/reports/display.php3?ReportID=312

Full report (112 pages):
http://people-press.org/reports/pdf/312.pdf

Comment:

By Don McCanne, MD

This highly credible report does confirm that there has been a genuine shift in political values and core attitudes of the American public. Increasing concerns about personal financial security and about the plight of the disadvantaged add further support to the prevailing view that we have reached yet another point in history wherein comprehensive health care reform may be achievable.

However, for the public’s concerns to be translated into political action, changes will have to take place in Washington. The following quote from the report confirms that the Republicans have lost the confidence of many of the voters, but, perhaps more importantly, the Democrats have much more work to do if they expect to capture that confidence:

“Yet the Democrats’ growing advantage in party identification is tempered by the fact that the Democratic Party’s overall standing with the public is no better than it was when President Bush was first inaugurated in 2001. Instead, it is the Republican Party that has rapidly lost public support, particularly among political independents. Faced with an unpopular president who is waging an increasingly unpopular war, the proportion of Americans who hold a favorable view of the Republican Party stands at 41%, down 15 points since January 2001. But during that same period, the proportion expressing a positive view of Democrats has declined by six points, to 54%.”

N.H. House stands behind single-payer plan

By Shir Haberman
Portsmouth Herald
Thursday, March 29, 2007
shaberman@seacoastonline.com

PORTSMOUTH — The lack of federal action in finding solutions to the multitude of problems that have led to the national health care crisis has frustrated states suffering from the results of that crisis.

Nowhere is that more evident than in New Hampshire, where no less than 250 individual pieces of legislation were filed this year in an attempt to address various aspects of the problem. They range from a bill that would establish a committee to study just what is driving the cost of health care up in the state, to extending insurance coverage for the use of midwives, to establishing an electronically controlled drug prescription monitoring program.

However, the strongest indication of the bind the state finds itself in as a result of the inactivity of federal lawmakers may have been the passage of House Concurrent Resolution 5, which endorses the National Health Insurance Act put forth by Rep. John Conyers, D-Mich. The resolution passed the New Hampshire House on March 21 by almost a 2-to-1 margin.

“It’s very exciting,” said Portsmouth physician Thomas Clairmont, who was the impetus for the resolution. “It will open up the debate, because now when these (presidential candidates) come to speak before the Legislature, they will know where that body stands on health care.”

Conyers’ legislation establishes a new American national health insurance program by creating a single-payer health care system. The bill would create a publicly financed, privately delivered health care program that uses the already existing Medicare program, aiming to expand and improve the program for all U.S. residents.

The reasons for the overwhelming New Hampshire support for Conyers’ legislation were listed in the body of the resolution. They included:

* The fact that approximately 135,000 New Hampshire citizens lacked health insurance in 2006, and those insured now often experience burdensome medical debt.

* An estimate that half of all personal bankruptcies in the state are due to illnesses or medical bills, among other issues.

State Rep. Jim Splaine, D-Portsmouth, said he and state Rep. Paul McEachern, D-Portsmouth, sponsored HCR 5 “because we wanted to make it clear that a single-payer, national health care system is what New Hampshire and the nation need.”

“There were some concerns about cost,” he said of the House State-Federal Relations and Veterans Affairs Committee, which considered the bill. “But most saw the eventual savings a single-payer system would result in.” The committee voted 9-6 to recommend passage of the resolution.

The cost of Conyers’ bill has been estimated at $1.86 trillion a year. However, it is estimated that Conyers’ plan would save more than $150 billion on paperwork alone in the first year and another $50 billion by allowing Medicare to negotiate a bulk purchasing discount for medications.

Splaine said the HCR 5 must now go to the Senate for passage. He said he is optimistic about its chances there.

As a lead-up to the visit by Illinois Sen. Barack Obama Tuesday for a “Community Meeting on Health Care,” an article on this issue will appear each day in the Portsmouth Herald. We invite readers with stories to tell to contact Shir Haberman at 570-2230 or shaberman@seacoastonline.com.

In health care reform, California needn't settle for second best

By Kay McVay, RN
San Jose Mercury News
03/29/2007

Anyone worried about the cost and availability of health care should be very wary of some of what’s being said about health care reform in California.

SB840, state Sen. Sheila Kuehl’s bill providing guaranteed health care as an expanded and improved version of Medicare for all Californians, is the gold standard reform. It’s the most comprehensive – and the only plan that controls costs by eliminating administrative waste rather than limiting care and shifting costs to families.

But, Sacramento insiders insist, SB840 is not palatable for a governor who has vetoed the bill once before.

Instead, the voices of political expediency are browbeating us to lower our standards and accept an inferior approach such as Gov. Arnold Schwarzenegger’s proposal to force Californians to buy unaffordable, substandard health plans.

Under this plan, a typical Santa Clara County family could end up spending more than $12,000, nearly one-fifth of their annual income, on insurance premiums and deductibles before their insurance company spends a dime on their medical care.

If a medical emergency occurs, out-of-pocket costs could rise to 25 percent of household income, and this minimal insurance would probably exclude such basics as dental, vision, mental health and long-term care. They would all cost extra.

There is a better path: SB840.

Since Schwarzenegger vetoed a similar proposal last year, momentum for a real solution has grown in California and across the nation.

A recent New York Times-CBS poll shows 64 percent of Americans believe the government should guarantee health insurance for all; 55 percent identified it as the top domestic priority for Congress and the president. In California, 60 percent favor a publicly funded universal health care system, like SB840 and Medicare, over the current system. The public is ahead of the politicians and policy wonks.

Schwarzenegger now says he’s for a “universal” system, although it’s cloaked in mandated, high-deductible insurance policies.

With majorities in both the Senate and Assembly, the Democrats call the shots on health care reform. It’s their decision, not the governor’s, what health care reform will pass the Legislature.

If they unite behind SB840 – which Senate President Pro Tem Don Perata in January called the “benchmark” and “ultimate solution” for our health care crisis – they have the power to make that the only plan that Schwarzenegger can sign or veto, just as they did last year.

Why should the Legislature take that step?

Premiums have jumped 87 percent in six years. SB840 is the only reform that contains costs while increasing benefits, primarily by curbing administrative waste and insurance industry profits. In California, that’s $20 billion per year.

The insurers are the principal opposition to any systemic reform. To successfully counter their elephantine influence – through the millions of dollars the insurers spend on campaign contributions – legislators need the public support generated by a guaranteed health program of quality care for all.

Would Schwarzenegger ever sign a bill detested by his insurance industry donors, who don’t want anyone interfering with their profits? A recent Datamar poll found that voters who support what the governor says he wants to accomplish also favor SB840; they want a solution that works, not a windfall for insurers.

Registered nurses are used to fighting the insurance companies for the care our patients need.

In 2004, the governor issued an emergency regulation to roll back key portions of the state’s landmark law requiring minimum safe nurse staffing levels in hospitals. The same experts who argue Schwarzenegger will never sign SB840 counseled nurses not to fight for patient safety because the governor was too popular and could not be challenged.

Instead, California’s nurses launched a spirited campaign and, with public support, ultimately persuaded Schwarzenegger to end his efforts to erode patient care standards.

There are dozens of other examples – from Social Security to women’s suffrage to ending legal segregation – that were achieved despite the perceived wisdom of the time.

Today, the public interest can prevail again. Schwarzenegger, who wants a grand accomplishment on health care for his legacy and on his re`sume` if he runs for another office, can be encouraged to sign a bill that will make all Californians proud, end our health care nightmare and set another model for the nation.

KAY MCVAY is president emeritus of the California Nurses Association. She wrote this article for the Mercury News

In health care reform, California needn’t settle for second best

By Kay McVay, RN
San Jose Mercury News
03/29/2007

Anyone worried about the cost and availability of health care should be very wary of some of what’s being said about health care reform in California.

SB840, state Sen. Sheila Kuehl’s bill providing guaranteed health care as an expanded and improved version of Medicare for all Californians, is the gold standard reform. It’s the most comprehensive – and the only plan that controls costs by eliminating administrative waste rather than limiting care and shifting costs to families.

But, Sacramento insiders insist, SB840 is not palatable for a governor who has vetoed the bill once before.

Instead, the voices of political expediency are browbeating us to lower our standards and accept an inferior approach such as Gov. Arnold Schwarzenegger’s proposal to force Californians to buy unaffordable, substandard health plans.

Under this plan, a typical Santa Clara County family could end up spending more than $12,000, nearly one-fifth of their annual income, on insurance premiums and deductibles before their insurance company spends a dime on their medical care.

If a medical emergency occurs, out-of-pocket costs could rise to 25 percent of household income, and this minimal insurance would probably exclude such basics as dental, vision, mental health and long-term care. They would all cost extra.

There is a better path: SB840.

Since Schwarzenegger vetoed a similar proposal last year, momentum for a real solution has grown in California and across the nation.

A recent New York Times-CBS poll shows 64 percent of Americans believe the government should guarantee health insurance for all; 55 percent identified it as the top domestic priority for Congress and the president. In California, 60 percent favor a publicly funded universal health care system, like SB840 and Medicare, over the current system. The public is ahead of the politicians and policy wonks.

Schwarzenegger now says he’s for a “universal” system, although it’s cloaked in mandated, high-deductible insurance policies.

With majorities in both the Senate and Assembly, the Democrats call the shots on health care reform. It’s their decision, not the governor’s, what health care reform will pass the Legislature.

If they unite behind SB840 – which Senate President Pro Tem Don Perata in January called the “benchmark” and “ultimate solution” for our health care crisis – they have the power to make that the only plan that Schwarzenegger can sign or veto, just as they did last year.

Why should the Legislature take that step?

Premiums have jumped 87 percent in six years. SB840 is the only reform that contains costs while increasing benefits, primarily by curbing administrative waste and insurance industry profits. In California, that’s $20 billion per year.

The insurers are the principal opposition to any systemic reform. To successfully counter their elephantine influence – through the millions of dollars the insurers spend on campaign contributions – legislators need the public support generated by a guaranteed health program of quality care for all.

Would Schwarzenegger ever sign a bill detested by his insurance industry donors, who don’t want anyone interfering with their profits? A recent Datamar poll found that voters who support what the governor says he wants to accomplish also favor SB840; they want a solution that works, not a windfall for insurers.

Registered nurses are used to fighting the insurance companies for the care our patients need.

In 2004, the governor issued an emergency regulation to roll back key portions of the state’s landmark law requiring minimum safe nurse staffing levels in hospitals. The same experts who argue Schwarzenegger will never sign SB840 counseled nurses not to fight for patient safety because the governor was too popular and could not be challenged.

Instead, California’s nurses launched a spirited campaign and, with public support, ultimately persuaded Schwarzenegger to end his efforts to erode patient care standards.

There are dozens of other examples – from Social Security to women’s suffrage to ending legal segregation – that were achieved despite the perceived wisdom of the time.

Today, the public interest can prevail again. Schwarzenegger, who wants a grand accomplishment on health care for his legacy and on his re`sume` if he runs for another office, can be encouraged to sign a bill that will make all Californians proud, end our health care nightmare and set another model for the nation.

KAY MCVAY is president emeritus of the California Nurses Association. She wrote this article for the Mercury News

Administrative costs of tax credits

Administrative Costs for Advance Payment of Health Coverage Tax Credits: An Initial Analysis

By Stan Dorn
The Commonwealth Fund
March 2007

New federal initiatives to cover the uninsured are under serious discussion by national policymakers and interest groups. Such initiatives include many proposals to use fully refundable federal income tax credits to subsidize uninsured individuals’ purchase of coverage. In considering the merits of his approach, policymakers can learn from the country’s only current use of tax credits to cover the uninsured–namely Health Coverage Tax Credits (HCTCs), which were created under the Trade Act of 2002. HCTCs pay 65 percent of health insurance premiums for certain workers displaced by international trade and early retirees. The credits can either be claimed after the end of the year, when annual income tax forms are filed, or advanced monthly to health insurers to help pay premiums.

This issue brief examines an aspect of the HCTC program that has received little attention in prior research: the extent to which public dollars are spent on administrative costs, rather than on health care services.

During FY 2007, an estimated 13 percent of federal funding related to HCTC advance payment will be spent for health plan administration, 21 percent will pay IRS administrative costs, and 66 percent will purchase health care. This analysis raises serious questions about the efficiency of using federal income tax credits as a strategy to subsidize health coverage for millions of uninsured Americans.

http://www.cmwf.org/usr_doc/1017_Dorn_admin_costs_advance_payment_HCTC.pdf

Comment:

By Don McCanne, MD

One of the more important objections that many of us have had to the concept of using tax credits to help with the purchase of private insurance is that it would add to the administrative burden of a system already sinking from administrative overload. This study confirms that the increased administrative costs are not merely theoretical, but are very real.

After very high start-up costs, this program of advanced payments of tax credits continued to consume 34 percent of health care spending merely for the administrative costs of the health plans and the IRS. This did not include the costs of the administrative burden of the providers of health care, and it did not include the administrative costs of other involved entities such as labor unions, community agencies, State Workforce Agencies, volunteers, and others.

Those who contend that the private sector would be more efficient might have their enthusiasm mollified by the knowledge that 91 percent of start-up costs went to private contractors. Even if it were possible to improve the efficiency of this program, it would still involve very significant administrative expenses added on to the profound administrative waste that already uniquely characterizes our system.

There is a much more efficient mechanism of making health care coverage affordable for each individual than the use of tax credits. Simply establish a universal risk pool and fund it equitably through the tax system. The marginal administrative costs would be very low since we already have a tax system, and the high administrative costs of the complex, private-insurance premium system would disappear (except perhaps for elective supplemental coverage of non-essential services).

Tax credits are only one more scheme to try to protect the private insurance industry from its demise. When it is serving us so poorly, why would we want to do that?

Plug the health care drain

Spiraling insurance premiums threaten the state’s economic security. Moving to a single-payer system – public funding, private providers – just makes sense.

By Ron Forthofer
The Rocky Mountain News
March 24, 2007

Although health care is the top domestic concern of Americans, neither the Bush administration nor congressional leaders are willing to provide the leadership necessary to solve the crises confronting uninsured and underinsured Americans and U.S. businesses. Leading politicians continue to put campaign contributions from the health insurance and pharmaceutical industries ahead of the interests of other businesses and the American public. However, as U.S. businesses are faced with ever increasing health insurance premiums, more are willing to tackle the crisis and become a part of the solution.

In an October address, Dr. Henry E. Simmons, president of the National Coalition on Health Care, the nation’s largest health care alliance, said: “The escalation of health care costs is no longer only a health care issue. It has now created a gigantic national economic problem. For as these costs rise, they slow the rate of economic growth. By cutting into corporate operating margins, they reduce the capacity of firms to grow by investing in research, plant and equipment. And they put American firms at a steep disadvantage in world markets, where they have to compete against companies in countries with much lower health care costs.”

Ever-increasing health insurance premiums put small businesses in a bind. They often face the impossible choice of providing jobs or health insurance. In addition to the direct costs of insurance, each small business pays staff to deal with health insurance brokers/companies. Employers who can’t afford a staff person often conduct negotiations themselves. All this time and money spent on the complex array of health insurance “gotchas,” multiplied across thousands of small businesses in Colorado, represent millions of dollars that could be invested elsewhere.

Health insurance coverage also impacts the ability to attract and retain employees:

* If a small business doesn’t offer health insurance, potential employees may not consider its job openings.

* A business that offers insurance must be careful whom it hires since one person with a serious health problem could drive premiums sky high.

* A business providing health insurance is likely to have higher labor costs than a nonproviding competitor, putting it at a disadvantage in bidding situations.

Large businesses also are stymied. S. Gary Snodgrass, executive vice president of Exelon Corp., one of the country’s largest public utilities, said health coverage for its employees and retirees is its fastest-growing expense. Between 2001 and 2004, he said, those costs rose 70 percent, forcing the company to shift more of the burden to workers.

Ford Motor Co. spent almost $12,500 per hourly employee and retiree on health care expenses in 2002. William Clay Ford Jr., executive chairman of the board, said the rising cost of health benefits is the “biggest issue on our plate that we can’t solve. Health care is out of control. It’s a system that’s broke.”

In the fall of 2002, the Big Three automakers in Canada said: “The (Canadian) public health care system significantly reduces total labor costs for automobile manufacturing firms, compared to the cost of equivalent private insurance services purchased by U.S.-based automakers; these health insurance savings can amount to several dollars per hour of labor worked. Publicly funded health care thus accounts for a significant portion of Canada’s overall labor cost advantage in auto assembly, vs. the U.S., which in turn has been a significant factor in maintaining and attracting new auto investment to Canada.”

In June 2005, Toyota placed a new plant in Ontario instead of the United States, and health care costs were a key consideration.

The Canadian system reduces the role of the insurance industry – and, hence, the administrative burden on the health care system. Applying the Canadian model to the U.S. means that instead of having more than 1,200 private health insurers – each with its own costly bureaucracy and concomitant expenses – there would be only one group in each state dealing with administration. The Canadian health care delivery system is private, but the financing is public. It is a tax-based system costing far less than we pay in the U.S.

Health care expenses in the U.S. consume about 16 percent of our GDP vs. about 10 percent in Canada. The U.S. “system” is wasteful, with as much as 25 percent of premiums used for things other than health care. More importantly, the Canadian system covers everyone with comprehensive medical care, whereas our “system” fails to cover almost 47 million Americans, and another 30 million to 50 million are underinsured.

Studies by the Government Accounting Office and the Congressional Budget Office show that the single-payer system – public funding and private health care – can provide universal comprehensive coverage here and save money over the current failed market-based approach. These studies are supported by a May 2005 report by Kenneth Thorpe for the National Coalition on Health Care. Thorpe is the former top economist at the Department of Health and Human Services and now is chairman of the Health Policy and Management Department of Emory University in Atlanta. The report projected a saving of $1.1 trillion in the first 10 years under a universal, publicly financed system – even while insurance coverage is extended to every American and stronger quality measures are put in place, a far larger savings than other proposals for reforming the U.S. market-based health insurance system.

Under the single-payer approach, business saves because it would not waste resources researching health insurance decisions, and workers compensation costs would drop due to removal of the health care component. The playing field would be leveled in hiring and in competitive bidding. Uncertainty about health care costs would be eliminated. Large companies would boost their competitiveness in international markets.

Business can best protect its interests by supporting the single-payer bill now in Congress, H.R. 676. Among the 55 co-sponsors of this bill, none is from Colorado. If major surgery is not performed on the U.S. health care system, U.S. businesses and tens of millions of Americans will continue to pay a steep price for the failure to act.

Ron Forthofer is a retired professor of biostatistics at the University of Texas School of Public Health in Houston. A resident of Longmont, he was the Green Party candidate for governor of Colorado in 2002 and won 4 percent of the vote in Colorado’s 2nd Congressional District in 2000. He can be reached at ron_forthofer@yahoo.com.

The Corporate Crime of Selling Private Health Insurance

by The Corporate Crime Reporter

In most of the world, it is a corporate crime to sell private health insurance.That’s because most countries insure their citizens as a matter of right.

Private insurers dilute the public pool.

One nation, one payer.

Medicare for all.

Everybody in, nobody out.

No bills from the doctor.

No bills from the hospital.

No deductibles.

No co-pays.

No in network.

No out of network.

No corporate profits.

No threat of bankruptcy from health bills.

Health insurance will be the number one domestic political issue in the USA in 2008.

Polls indicate that the majority of the American people want single payer.

But who will deliver?

On Saturday, the Center for American Progress Action Fund and Service Employees International Union (SEIU) sponsored a forum in Las Vegas for presidential candidates to discuss health care.

No Republicans accepted.

Seven Democrats accepted.

All the candidates at the forum agreed that universal health care was the goal. (Even the Business Roundtable and the insurance industry now say they want “universal health care.”)

But only one – Congressman Dennis Kucinich (D-Ohio) – accepts the only answer that will work – single payer.

Medicare for all.

The rest – including Barack Obama, Hillary Clinton, Chris Dodd, Bill Richardson, Mike Gravel, and John Edwards – want some mixture of public and private health insurance.

They know this public/private mix won’t work – the healthy wealthy will buy private insurance, the sick poor will sign on with the government – and the government program will be crippled.

But they don’t have the guts to stand up to the private insurance industry and say – get out.

Kucinich has introduced single payer legislation (HR 676) in Congress that would make it unlawful to sell private health insurance for benefits that are medically necessary.

Last week, we entered the belly of the beast – the American Health Insurance Plans (AHIP) 2007 National Policy Forum at the Capital Hilton in Washington, D.C.

AHIP is the trade association for the companies that will be sacked if single payer becomes law.

We walked into a session titled – Coverage for All Americans: Putting Access at the Top of the National Agenda.

The session was moderated by AHIP President Karen Ignagni.

Not once during the 90-minute session was single payer mentioned.

Universal coverage, yes.

Single payer, no.

But during the discussion, the geography of nowhere was laid out.

On one side, Ron Pollack, executive director of Families USA had teamed up with AHIP’s Ignagni.

On the other, Bill Novelli, CEO of AARP and John Catsellani, president of the Business Roundtable.

AARP and the Business Roundtable have joined with SEIU to form something called Divided We Fail.

Divided We Fail is a corporate liberal answer to single payer.

All Americans should have access to affordable quality health care.

All Americans should have peace of mind about their future long-term financial security.

Families USA and AHIP do a separate dance but mouth similar platitudes.

But both Divided We Fail and Families USA/AHIP dismiss single payer as unworkable.

On the single payer side is Kucinich, about 60 members of the House of Representatives, the California Nurses Association, Physicians for a National Health Program, and Health Care Now.

Kucinich is now the single payer champion.

The problem with Kucinich, of course, is that if he doesn’t get the nomination, he will take the stage at the Democratic Convention in 2008 in Denver – as he did in 2004 in Boston – raise the hand of the corporate nominee and endorse the corporate platform.

Then where will we be?

Nowhere.

Again.

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