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Single-Payer, Health Savings Accounts, or Managed Care?

Single-Payer, Health Savings Accounts, or Managed Care?

Minnesota Physicians' Perspectives

CLINICAL & HEALTH AFFAIRS Minnesota Medicine February 2007, Volume 90 Published monthly by the Minnesota Medical Association By By Joel M. Albers, Pharm.D., Ph.D., Breanna Peterson Lathrop, Kirk C. Allison, Ph.D., Charles N. Oberg, M.D., and James F. Hart, M.D.

Abstract The United States is facing a health care crisis with the number of uninsured Americans exceeding 46 million and health care premiums and overall costs increasing at 3 to 4 times the rate of inflation. Proposed solutions include continuing managed care, moving to a single-payer financing system with universal coverage, and replacing traditional health plans with high-deductible policies that allow patients to draw from health savings accounts (HSAs) to pay out-of-pocket costs. Despite physicians’ vital role in health care, few studies have assessed their preferences regarding health care financing systems. We surveyed a random sample of licensed Minnesota physicians to determine their preferences regarding health care financing systems. Of 390 physicians, 64% favored a single-payer system, 25% HSAs, and 12% managed care. The majority of physicians (86%) also agreed that it is the responsibility of society, through the government, to ensure that everyone has access to good medical care. Less than half (41%) said that the private insurance industry should continue to play a major role in financing health care. The accumulating knowledge about physicians’ preferences for various health care financing mechanisms merits widespread inclusion in policy debates.

In 2001, the Institute of Medicine reported that the U.S. health care system is failing both clinicians and patients, that their frustration levels have never been higher, and that fundamental changes are needed.1 By 2005, more than 46 million Americans, including 400,000 Minnesotans, were uninsured, and health insurance premiums and overall costs were rising at a rate 3 to 4 times that of general inflation and wages.2-4 Employers have been forced to eliminate or cut back on health benefits, often increasing employee out-of-pocket costs beyond many households’ ability to pay. In 2004, the average Minnesota household spent $11,000 on health insurance premiums and out-of-pocket costs; that figure is projected to reach $22,000 by 2010 if current trends continue.4 For those reasons, the consensus among most observers is that urgent reform is needed. Proposed solutions to the health care financing crisis include continuing with the current managed care system, moving to a single-payer system, or moving toward one in which individuals rely on high-deductible health plans with health savings accounts (HSAs). Minnesota has one of the most established managed care systems in the United States, with 4 managed care companies insuring or handling administrative duties associated with insuring more than 90 percent of Minnesotans who have health coverage. These organizations often group physicians into price-tiered, competitive networks. Recent physician surveys document significant concerns about managed care including concern about ethical issues, physician satisfaction, effects on the physician/patient relationship and on the profession itself, quality of care, and cost-effectiveness.5-10 A Medline search produced 4 randomized studies published between 1993 and 2005 that examined physicians’ health care financing preferences. They indicate growing support for a single-payer model that is publicly financed and administered by a single, public payer.11-14 Such systems lower costs through economies and efficiencies of scale and streamlined administration yet still allow physicians to work in private practices and preserve quality care. State and national studies comparing financing models increasingly suggest the potential for a single-payer system to achieve universal, comprehensive coverage without increasing total health care spending.15-17 Health savings accounts, enacted by the 2003 Medicare Part D drug law, are tax-free savings accounts to which individuals and employers contribute. The money can be drawn out to pay for approved medical expenses. Individuals and families with high-deductible health insurance plans are eligible to open HSAs. Proponents of HSAs argue that patients with health insurance policies that require little or no deductible or co-pay perceive health care as being “free” and become insensitive to price. The belief is that these individuals overuse health care and drive up costs. The idea behind what is being called “consumer-directed health care” is that having a high-deductible health plan with an HSA forces consumers to spend their own money, prompting them to cut back on frivolous health care usage. This type of financing system is also designed to encourage physicians and hospitals to compete on price, theoretically lowering costs. Despite health care over-utilization by consumers being greatly overstated and the lack of evidence that consumer-directed health care actually lowers costs or improves quality, high-deductible plans with HSAs have been heavily marketed across the United States and in Minnesota.18,19 To date, no one has compared Minnesota physicians’ attitudes toward single-payer, consumer-directed, and managed care systems. Thus, we developed and conducted a survey to probe which financing system physicians believe will provide the best care to the most people for a given amount of money.

Methodology

Study Sample and Data Collection Following approval by the University of Minnesota’s Institutional Review Board, a list of all 17,766 physicians licensed in Minnesota was obtained from the Minnesota Board of Medical Practice; the number was reduced to 13,770 after eliminating those with out-of-state addresses. A random sample of 1,061 physicians was then generated using M initab Statistical Software. Surveys accompanied by a cover letter inviting participation and a consent form were mailed on December 6, 2005. Twenty-seven were returned undeliverable and randomly replaced. Physicians could fill out a paper survey or complete an online version. Those who did not respond were sent a second mailing in January of 2006. Altogether, 408 physicians responded by the February 13, 2006, cut-off. Those respondents closely approximate population parameters by sex (within 0.6%), by rural/metropolitan practice (within 1.3%), and across 4 practice categories (within 0.4% to 2.6%). Those categories were primary medicine (internal medicine and family medicine, pediatrics, general practice, and geriatrics), all other medical specialties, general surgery, and surgical specialty (anesthesiology, orthopedics, obstetrics, gynecology, pediatric surgery, and neurosurgery). Survey Design We updated an 11-item survey by McCormick et al. and expanded it to 16 questions in order to reflect current trends and maintain state-to-state comparability.11 Questions assessed physicians’ opinions about various health care financing structures (single payer, HSAs, and managed care) and gathered information about participants’ demographics, primary specialty, and geographic and primary practice settings. To elicit physicians’ preferences regarding health care financing structures, we asked, “Which of the following 3 structures would offer the best health care to the greatest number of people for a given amount of money?” Respondents could select “current competitive multi-payer managed care systems,” “single payer with universal coverage,” or “individualized insurance coverage utilizing health savings accounts” as answers. We defined those financing mechanisms as follows: Multi-payer managed care. The current market-based system in which individuals are enrolled in 1 of a variety of private insurance plans. Plans offer certain health care benefits and use utilization review to control costs and improve quality. Single-payer system. A single insurance plan administered by a government
al body or publicly accountable commission, guaranteeing coverage and access to necessary medical treatment. Under such a system, hospitals would remain privately owned and physicians would be employed by private groups and practices. Individualized coverage utilizing health savings accounts. Individuals with high-deductible health insurance plans can use pretax money from a health savings account to pay for current and future health expenses. Statistical Analysis We performed chi-square analysis to identify the demographic variables significantly associated with physician financing system preference (2-tailed, alpha .05) including sex, geographic location, primary specialty, and primary practice setting. To determine the influence of nonresponse bias, we performed a sensitivity analysis recalculating response proportions for managed care, single-payer, and HSA preference relative to Minnesota physician population parameters for specialty, sex, and geography (rural versus metropolitan). Using binary logistic regression models, we assessed the relationship between preferred system and chi-square significant variables (including general attitude, working environment, rural or urban setting, sex, salary system, and other demographic variables). The Likert scale responses “strongly agree” and “somewhat agree” were combined as were “strongly disagree” and “somewhat disagree.” Statistical analysis was performed using Minitab Statistical Software (Release 14) (chi-square, logistic regression) and Microsoft Excel 2000 (sensitivity analysis, binomials). Findings A majority of respondents (72%) were male with a median medical school graduation year of 1979. Nearly half (46%) practiced primary medicine, followed by medical specialty (35%), surgical specialty (12%), and general surgery (6%). More than three-quarters (79%) worked in a metropolitan setting, and nearly two-thirds (65%) practiced in a clinic. Of the 390 respondents who answered the question about which financing system would offer the best health care to the greatest number of people for a fixed amount of money, 64% said they favor a single-payer financing system, 25% preferred HSAs, and only 12% preferred managed care (Figure 1). Figures 2 through 4 offer a closer look at who prefers those financing structures by sex, geographic location, specialty, and type of practice. A single-payer system was favored by women physicians over men (female, 76%; male, 59%; p=.003); more male physicians than female preferred HSAs (male, 30%; female, 16%; p=.004). The percentage of male respondents who favored the current managed care system slightly exceeded that of female physicians (12% versus 9%; p=.553). Geographic setting was also significantly associated across the 3 choices. Urban physicians favored a single-payer system over their rural and suburban colleagues (71%, 60%, and 54%, respectively; p=.009). Rural physicians preferred HSAs over suburban and urban physicians (34%, 32%, 17%; p=.002). Managed care garnered less than 15% support overall, with 14% of suburban physicians, 12% of urban doctors, and 6% of rural respondents favoring it; p=.217). Thus, urban physicians had the most support for a single-payer system and the least for managed care. Rural physicians were relatively enthusiastic for HSAs but least supportive of managed care. When looking at physicians’ responses across medical specialty, those practicing primary medicine most favored a single-payer system (74%); general surgeons least favored such a system (36%). Conversely, general surgeons most favored HSAs (55%), and primary medicine physicians least favored them (20%). Managed care found greatest support among physicians who practiced a medical or surgical specialty (17% each) and the least among those who practiced primary medicine (6%). Of those who favored managed care, the significant split was specialists over generalists (17% and 7%; p=.001). Physicians also were asked who should be responsible for providing access to health care. Nearly all (86%) believed it is the responsibility of society through government to ensure access to good medical care for all, regardless of ability to pay. Only 41% held that the private insurance industry should continue to play a major role in medical care financing and delivery. Using a regression model, we found that physicians who agreed that it is the government’s responsibility to ensure access to medical care were significantly more likely to favor a single-payer financing system (OR 13.51; CI 2.85, 64.15; p=.001). Those who believed the private insurance industry should continue to play a major role in financing medical care were significantly less likely to favor a government-run system (OR 3.45; CI 1.35, 8.33; p=.009). Corroborating Results In order to corroborate our results about physicians’ preferences for various financing systems, we asked separate questions about their opinions of each of the 3 structures. We found 56% held a generally favorable view of single-payer systems, 46% of HSAs, and 20% of managed care systems in which physician groups compete for placement in cost-tiered networks. (The total exceeds 100% as some physicians were generally favorable toward more than 1 system.) Thus, more respondents said they preferred a single-payer system than held a favorable view of such a system. Among those with a favorable opinion of single-payer health care, 96% actually selected single payer as their preference for the way our health care system should be financed in the future; among those with a favorable view of HSAs, only 49% selected HSAs as their preferred model for a health care financing system. However, those who had a generally favorable opinion of competition based on price tiers split between their preference for a system based on managed care and one based on HSAs (36% and 39%); only 25% of those respondents said they preferred a single-payer system. Among those opposed to price-tier competition, 78% preferred a single-payer system and 18% preferred HSAs. Only 4% preferred managed care: Rejecting price-tier competition was largely co-extensive with rejecting managed care. Discussion Despite the prevalence of managed care in Minnesota, our study finds only 12% of sampled physicians favor such systems as a way to finance health care; 25% prefer HSAs, and 64% support a single-payer system. Eighty-six percent believe it is the responsibility of society through government to ensure access to good medical care for all. Only 41% say the private insurance industry should continue to play a major role in the financing and delivery of medical care, suggesting support for comprehensive public-sector initiatives rather than private-sector approaches. Stand-alone survey questions about various financing systems showed that nearly 56% of respondents had a generally favorable opinion of single-payer health care systems. Of all specialties, general surgeons had the lowest percentage of respondents who had a favorable view of such a system (36%). Forty-six percent thought favorably of HSAs, and 20% had a positive view of price-tiered competition. This suggests an unwillingness among physician groups to compete directly under managed competition. Yet 118,000 Minnesota state employees and as many as 150,000 employees whose coverage is obtained by a large, multiple-employer group purchaser are enrolled in such managed competition programs.20 Our findings are consistent with those of others who have seen a growing trend toward U.S. physicians saying they favor a single-payer health care system. In 1993, Millard et al. found only 25% of surveyed North Carolina physicians supported a single-payer system over managed competition.13 In 1996, Scanlan et al. compared the opinions of U.S. and Canadian physicians
and concluded that U.S. physicians might not easily accept a Canadian-style system because of reticence toward a central government role or centralized planning.12 By 1999, a national survey of medical school residents and faculty by Simon et al. found 56% favored a single-payer system over managed care.14 A 2004 survey by McCormick et al. concluded that 64% of surveyed Massachusetts physicians believed single-payer financing would provide the best care for the most people.11 In our study, we found that physicians’ views on health care financing reflect their experience with Minnesota’s concentrated oligopoly of 4 managed care insurers that either enroll or administer benefits for more than 90% of insured Minnesotans.21 In a 1997 report, Borowsky et al. found fewer than 20% of physicians in the Minneapolis-St. Paul metro area rated 3 managed care plans as either excellent or very good on 7 quality-of-care items.9 Such findings are consistent with less favorable views of managed care and more favorable views of other systems, including those that haven’t been tried. Study limitations must be considered. First, it is possible that only physicians who feel strongly about health care financing responded to our survey. However, differences between respondent characteristics and physician population are minimal and the results are robust under sensitivity analysis. Lack of response is unlikely to have affected validity. Second, it may not be possible to generalize the findings of our study to all U.S. physicians. However, as noted, results from a recent survey of physicians in Massachusetts, a state that also has high managed-care penetration, and a national survey of university physicians are similar to ours. Such studies should be replicated in other regions of the United States to get a more complete picture of U.S. physicians’ views on this important public policy matter. Conclusion Our survey suggests that the majority of Minnesota physicians have grown weary of the current managed care health system that places a huge administrative layer between them and their patients. Because physicians play a central role in health care, their experience with and views on system financing have the potential to significantly inform those heading reform initiatives. With more than 46 million Americans lacking health insurance and premiums and health care costs rising at 3 to 4 times the rate of inflation, reform is inevitable and necessary. Our survey shows that nearly two-thirds of Minnesota physicians favor a single-payer health care financing system. Such a majority view could be influential in public debate and in the movement of practitioners and patients toward implementing a universal health care system in Minnesota and the United States. MM Joel Albers is a clinical pharmacist and a health economics researcher with the Minnesota Universal Health Care Action Network. Breanna Peterson Lathrop is a graduate student in health care policy at Emory University. Kirk Allison is director of the program in human rights and health, Charles Oberg is an associate professor in and chair of Maternal and Child Health, and James Hart is director of the executive program in public health practice at the University of Minnesota. Funding and administrative support for this study was provided by the Department of Epidemiology, School of Public Health, University of Minnesota; Center for Integrative Research, St. Olaf College; and Jan Pearson, Research Assistant, University of Minnesota. References 1. Institute of Medicine. Crossing the quality chasm: a new health system for the 21st century. 2001. Washington D.C.: National Academy Press. 2. U.S. Census Bureau. Health insurance coverage. Available at http://www.census.gov/hhes/www/hlthins/hlthin05.html. Accessed January 9, 2007. 3. Minnesota Department of Health. Health insurance coverage in Minnesota: Trends from 2001 to 2004. Available at www.health.state.mn.us/healtheconomics. Accessed January 9, 2007. 4. Durenberger D. Listening to Minnesotans: Transforming Minnesota’s Health Care System. Report of the Minnesota Citizens Forum on Health Care Costs. 2004. Available at www.mncitizensforum.org. Accessed January 8, 2007. 5. Sulmasy DP, Blumen HE, Wellikson LD, Holm RP. Four views of managed care ethics. Panel discussion. Manag Care. 2001;10(8):41-5. 6. Lammers JC, Duggan A. Bringing the physician back in: communication predictors of physicians’ satisfaction with managed care. Health Commun. 2002;14(4):493-513; discussion 515-8. 7. Burdi M, Baker LC. Market-level health maintenance organization activity and physician autonomy and satisfaction. Am J Manag Care. 1997;3(9):1357-66. 8. Donelan K, Blendon RJ, Lundberg GD, et al. The new medical marketplace: physicians’ views. Health Aff (Millwood). 1997;16(5):139-48. 9. Borowsky SJ, Davis MK, Goertz C, Lurie N. Are all health plans created equal? The physician’s view. JAMA. 1997;278(11):917-21. 10. Skootsky SA., Slavin S, Wilkes MS. Attitudes toward managed care and cost containment among primary care trainees at 3 training sites. Am J Managed Care. 1999;5(11):1397-1404. 11. McCormick D, Himmelstein DU, Woolhandler S, Bor D. Single-payer national health insurance: physicians’ views. Arch Intern Med. 2004;164(3):300-4. 12. Scanlan A, Zyzanski SJ, Flocke SA, Stange KC, Grava-Gubins I. A comparison of U.S. and Canadian family physician attitudes toward their respective health-care systems. Med Care. 1996;34(8):837-44. 13. Millard PS, Konrad TR, Goldstein A, Stein J. Primary care physicians’ views on access and health care reform: the situation in North Carolina. J Fam Pract. 1993;37(5):439-44. 14. Simon SR, Pan RJ, Sullivan A, et. al. Views of managed care: a survey of students, residents, faculty and deans at medical schools in the United States. N Engl J Med. 1999;340(12):928-36. 15. Sheils J, Haught R. Analysis of the costs and impact of universal health care models for the state of Maryland: the single-payer and multi-payer models. May 2000. Available at http://www.lewin.com. Accessed January 8, 2007. 16. The Lewin Group. Cost and coverage analysis of nine proposals to expand health unsurance coverage in California. April 2002; California Health and Human Services. Available at 222.statecoverage.net/statereports/ca71.pdf. Accessed January 8, 2007. 17. Christensen S. Single-payer and all-payer health insurance systems using Medicare’s payment rates. April 1993;Washington, D.C.: Congressional Budget Office. Available at www.cbo.gov/showdoc.cfm?index=64428sequence=0. Accessed January 8, 2007. 18. Nyman J. Is “moral hazard” inefficient? The policy implications of a new theory. Health Aff (Millwood). 2004:23(5);194-9. 19. Covington S, Moore Jr. T. Hazardous Health Care: The impact of health savings accounts on Minnesota health care. A report to SEIU Local 113 by the Project for Strategic Health Purchasing, March 2005. 20. The Office of Legislative Auditor, State of Minnesota. Report: State Employee Health Insurance. 2002. 21. Minnesota Health Insurance Network 2006. MN Health Insurance Network, Inc. Available at: www.mnhealthnetwork.com/index.html. Accessed January 8, 2007.

Important links to Mayes and Berenson's "Medicare Prospective Payment"

By Don McCanne, MD

A recent Quote of the Day message discussed the new book, “Medicare Prospective Payment and the Shaping of U.S. Health Care,” by Rick Mayes, Ph.D. and Robert Berenson, M.D. The authors have demonstrated that Medicare has not only slowed the excess growth in health care costs, but has actually improved quality and efficiency and has an even greater potential to further expand on health care value.

That qotd message is available at:
https://pnhp.org/news/2007/january/mayes_and_berenson_o.php

The authors have made available to us the Introduction, which provides a brief summary of the book, and the Conclusion, “How Medicare Does and Should Shape U.S. Health Care.” They are available at the following links:

Table of Contents:
http://www.richmond.edu/~bmayes/pdf/Mayes_Berenson_Title_Page.pdf

Introduction:
http://www.richmond.edu/~bmayes/Introduction.pdf

Conclusion:
http://www.richmond.edu/~bmayes/pdf/Mayes_Berenson_Conclusion.pdf

These chapters are an important contribution to our current national dialogue on reform. Everyone agrees that reform must address the costs of health care, yet few proposed reforms really do. Expanding private insurance programs actually increases administrative costs while failing to control wasteful spending. The cost sharing of consumer directed approaches may slow spending increases but at the terrible cost of making access to beneficial health care services much less affordable. Information technology systems and liability reform are important topics, but they are often presented as measures to control costs when it is more likely that such reforms will actually increase costs.

Our uniquely high health care costs are due to many factors, but one of the more important is quite simply our health care prices. This was described in a classic Health Affairs article by Gerard Anderson and others, “It’s the Prices, Stupid.” Last month, McKinsey & Company released a report, “Accounting for the Cost of Health Care in the United States,” which also demonstrated that our high costs were due to input costs (prices, etc.), delivery processes (overcapacity, etc.) and intermediation (multi-payer system administration, etc.).

We have identified the wasteful excesses in health care spending. We now have many decades of experience that have proven that our fragmented system of private plans and public programs has been incapable of eliminating most of this waste. Mandates to purchase even more competing private plans can never succeed in bringing us the mechanisms we need to improve health care value.

On the other hand, Mayes and Berenson have shown us that Medicare has been somewhat effective even though it covers less than 15 percent of our population. Imagine the power of a social insurance program that adds in the other 85 percent of us. Through our own public insurance program we would be in a position to demand fair prices, demand improved allocation of our spending, and demand elimination of private bureaucratic administrative waste.

Anderson, et al, “It’s the Prices, Stupid,” Health Affairs, 22, no. 3 (2003): 89-105
http://www.healthaffairs.org/

McKinsey & Company, “Accounting for the Cost of Health Care in the United States”
http://www.mckinsey.com/mgi/rp/healthcare/accounting_cost_healthcare.asp

But if you have time to access only one of the links listed above, be sure that it is the “Conclusion” from Mayes and Berenson. We really can shape our health care system to make it work much better for all of us.
http://www.richmond.edu/~bmayes/pdf/Mayes_Berenson_Conclusion.pdf

Beware of ill-thought-out solutions to health care crisis

By Malinda Markowitz, RN
Mercury News, 2/16/07

As the hearings on the governor’s health proposal begin this week, many politicians and interest groups want us to believe there’s a public consensus in favor of an insurance-based reform model.

But Californians may recall another time when many of the same experts united behind a sweeping change.

In 1996, Gov. Pete Wilson and legislators from both parties enthusiastically pushed through a plan to deregulate energy in California. They promised huge savings for consumers in reduced rates. As everyone knows, it didn’t quite work out.

Instead, there were huge increases in prices and reduced supplies, followed by blackouts affecting millions of Californians. There was a near-bankruptcy for the state and a recall election. Enron and others made millions, until the roof caved in.

Then, as now in health care, the private market was touted as the solution, a fool’s gold that became a nightmare. Let’s not let it happen again. Instead, we should examine proposed legislation that will achieve universal care through a simple, single-payer system.

Gov. Schwarzenegger’s proposal, as well as versions by the leaders of the state Assembly and Senate, also see the private market as the cure for our health care meltdown. All three plans are premised on a massive expansion of the role of HMOs and insurance companies. Schwarzenegger even wants to deregulate what few requirements health insurers have now.

But like energy deregulation before it, we’re being promised snake oil. Just consider a little reported comment from one HMO chief executive, Stephen Hemsley of UnitedHealth. He called the Schwarzenegger plan “an interesting set of proposals that represent real opportunities for our business.”

Schwarzenegger’s plan would force all individuals to buy health insurance if they don’t already have it, and tax businesses to purchase insurance for employees who aren’t covered. There’s even a tax on doctors and hospitals, also to pay for more insurance.

But there’s no limit on premium increases that rose by 87 percent the past six years. Most individuals and families will likely opt for cheaper plans with bare-bones benefits and huge out-of-pocket costs for medical care they actually use, in addition to the premiums the state would force them to pay. And that’s at a time when medical bills account for half of personal bankruptcies and a third of credit card debt.

For anyone opting out, the proposed penalties are severe, from withheld wages to tax penalties to an inability to enroll children in school. What’s next, debtor’s prison?

Similarly, since the proposed payroll tax is less than half of what most businesses now pay for benefits, there’s an obvious enticement for employers to reduce coverage. Californians could lose what they have now, or pay a lot more for fewer services and less care.

As with the energy marketers before them, the insurers stand to make a killing. HMOs, which hardly need the help, are expected to reap hundreds of millions more dollars from the additional 4 million to 5 million new customers marched into their offices. It was just such profiteering that created our current health care crisis by sacrificing quality, access and affordability for higher revenues and profit.

Rather than trying to stampede everyone into accepting a plan that could make the present mess worse, our legislators should support a more universal, comprehensive solution that bypasses wasteful insurers.

State Sen. Sheila Kuehl will introduce the California Universal Health Care Act this month. This legislation sets up a single-payer system with one public entity that pays all the bills, with health care delivered by our present system of doctors, hospitals and clinics. It’s genuinely universal, controls costs, guarantees choice of physician, ends insurance industry waste and denial of care, and assures a single standard of quality care for all. It does nothing to increase insurance profits, but works a whole lot better for the rest of us.

MALINDA MARKOWITZ is a registered nurse at Good Samaritan Medical Center in San Jose and secretary of the California Nurses Association. She wrote this article for the Mercury News.

Protect patients not health insurers

JACK E. LOHMAN
Capital Times, Madison, WI
February 16, 2007

Of all of our health care needs, government protection of insurance company mega-profits should not be on the list of needed reforms.

But that apparently won’t stop President Bush, who is now proposing an annual $7,500 single and $15,000 family tax credit for citizens who are either unemployed or whose employer has dumped their health insurance. This would enable them to purchase directly from the insurance company to help them retain their profits.

Bush also made his usual plug for health savings accounts, for which Wall Street, the credit card industry and bankruptcy attorneys will forever be in his debt.

Tax credits are not the answer. We should be providing health care directly to the patient, not through third-party insurance companies.

Follow the money. These are taxpayer assets being given to the insurance industry for non-health care services – when the insurance industry shouldn’t be getting a penny of our health care dollars. Much of their services are an unnecessary part of the process and are largely dispensable. They consume 20 percent of health care dollars yet provide absolutely zero health care benefits to the patient.

That’s a shameful waste.

We need administration; not insurance. We should totally eliminate the unnecessary costs that are consumed by marketing, broker commissions, huge executive salaries, and high corporate profits.

None of these would exist under a single-payer system like Canada’s. With a strong political will we could mimic Canada’s system and extend health care to 100 percent of the public, and we’d spend the same amount of dollars we are spending today to cover only 85 percent of the people.

To boot, we can do it without Canada’s wait times! The money saved would be spent on more doctors and more nurses to serve more patients.

The state must implement a universal health care system, and the proposal by Sen. Mark Miller, D-Monona, and Rep. Chuck Benedict, D- Beloit, provides the mechanism to bring health care to all residents by July 1, 2008.

The logical approach would be to contract with an administrative service, like Medicare does with WPS in Madison, and any of the current insurance companies would be candidates to serve the state in that capacity.

But whenever waste is trimmed people are displaced, and some of those people can be used in administering the new program and others retrained for more critical jobs like nursing, medical technologists, and even by moving some into higher paying programming positions that will be needed to convert our massive paper-based medical records system to an electronic patient database.

There are other health care proposals, but none are as extensive and none are as simple.

With added complexity comes costly administration, the very thing we must eliminate if we are to afford the system. With single-payer, the patient receives services and the administrator writes the check. It’s that simple.

We’d incorporate BadgerCare and Medicaid patients and funds, and we’d cut worker compensation and auto insurance rates in half because the medical portions of those are handled by the universal system. And we’d not be hampered by federal laws that prohibit negotiating for lower drug prices, so our single-risk pool would enable us to maximize the economies of scale.

The Miller-Benedict proposal is not just the best system for the public, it is also the most business friendly proposal on the table. It will attract more companies and more jobs to the state than the others, and fewer businesses and jobs will be lost. Initially it would be funded by a payroll tax and the transfer of funds from the other systems it replaces.

What’s not to like about that?

Our current problem is not funding, it is political.

Some politicians claim that the government can’t do anything right and they will fight to privatize the system. I’d probably buy that argument were it not for the fact that government-run entities cannot give campaign contributions and private corporations and their executives can. And they do, because the last thing in the world they want to see is our health care system made more efficient.

But it is time for politicians to put politics aside and do what’s right for the people.

Important links to Mayes and Berenson’s “Medicare Prospective Payment”

By Don McCanne, MD

A recent Quote of the Day message discussed the new book, “Medicare Prospective Payment and the Shaping of U.S. Health Care,” by Rick Mayes, Ph.D. and Robert Berenson, M.D. The authors have demonstrated that Medicare has not only slowed the excess growth in health care costs, but has actually improved quality and efficiency and has an even greater potential to further expand on health care value.

That qotd message is available at:
https://www.pnhp.org/news/2007/january/mayes_and_berenson_o.php

The authors have made available to us the Introduction, which provides a brief summary of the book, and the Conclusion, “How Medicare Does and Should Shape U.S. Health Care.” They are available at the following links:

Table of Contents:
http://www.richmond.edu/~bmayes/pdf/Mayes_Berenson_Title_Page.pdf

Introduction:
http://www.richmond.edu/~bmayes/Introduction.pdf

Conclusion:
http://www.richmond.edu/~bmayes/pdf/Mayes_Berenson_Conclusion.pdf

These chapters are an important contribution to our current national dialogue on reform. Everyone agrees that reform must address the costs of health care, yet few proposed reforms really do. Expanding private insurance programs actually increases administrative costs while failing to control wasteful spending. The cost sharing of consumer directed approaches may slow spending increases but at the terrible cost of making access to beneficial health care services much less affordable. Information technology systems and liability reform are important topics, but they are often presented as measures to control costs when it is more likely that such reforms will actually increase costs.

Our uniquely high health care costs are due to many factors, but one of the more important is quite simply our health care prices. This was described in a classic Health Affairs article by Gerard Anderson and others, “It’s the Prices, Stupid.” Last month, McKinsey & Company released a report, “Accounting for the Cost of Health Care in the United States,” which also demonstrated that our high costs were due to input costs (prices, etc.), delivery processes (overcapacity, etc.) and intermediation (multi-payer system administration, etc.).

We have identified the wasteful excesses in health care spending. We now have many decades of experience that have proven that our fragmented system of private plans and public programs has been incapable of eliminating most of this waste. Mandates to purchase even more competing private plans can never succeed in bringing us the mechanisms we need to improve health care value.

On the other hand, Mayes and Berenson have shown us that Medicare has been somewhat effective even though it covers less than 15 percent of our population. Imagine the power of a social insurance program that adds in the other 85 percent of us. Through our own public insurance program we would be in a position to demand fair prices, demand improved allocation of our spending, and demand elimination of private bureaucratic administrative waste.

Anderson, et al, “It’s the Prices, Stupid,” Health Affairs, 22, no. 3 (2003): 89-105
http://www.healthaffairs.org/

McKinsey & Company, “Accounting for the Cost of Health Care in the United States”
http://www.mckinsey.com/mgi/rp/healthcare/accounting_cost_healthcare.asp

But if you have time to access only one of the links listed above, be sure that it is the “Conclusion” from Mayes and Berenson. We really can shape our health care system to make it work much better for all of us.
http://www.richmond.edu/~bmayes/pdf/Mayes_Berenson_Conclusion.pdf

Bernanke on health care reform

Hearing on the Economy, the Labor Market and Monetary Policy

Ben S. Bernanke, Chairman of the Board of Governors of the Federal Reserve System
U.S. House of Representatives
Committee on Financial Services
February 15, 2007

Rep. Deborah Pryce, R-Ohio: (excerpt) … the greatest problem is that people just can’t find health insurance that they afford. Therefore, they don’t get the medical treatment that they need.

And it occurs to me and many others that one of the reasons for this is because there’s really no consumer factor in health care in this country. We don’t shop for our benefits; we take what our insurance companies provide for us.

Market forces seem to work very well in all other aspects of our society. And is this what is wrong with our health care delivery system, this lack of market forces, so to speak, in it?

Chairman Ben Bernanke: Congresswoman, you’re correct in pointing out a very, very serious problem.

And I think you’re also correct that one of the main reasons why health care is so expensive in the United States has to do with the fact that we’re always buying with somebody’s money and not with our on money.

We have a system where technology is advancing rapidly, where our ability to do new and sophisticated tests, to provide new and sophisticated drugs through procedures is advancing rapidly

In most industries, new technologies save costs in medicine because — again, because of third-party payment. And the doctor and the patient are not making a cost-based decision. The cost-efficiency is not perhaps what it should be.

Now, one approach to this is to increase market forces in determination of what tests to order and what costs and how much to shop and so on. There are ways to do that. The health savings accounts, for example, create a catastrophic coverage — ask for a catastrophic coverage and ask people to save money within this account to buy coverage — to buy, sorry, medical care below the catastrophic level.

Some people may be uncomfortable with having to make those kinds of decisions. And so an alternative is to have competition between, say, HSA catastrophic plans and other types of medical management: HMOs, PPOs, traditional insurance and the like.

By creating more competition, I think there would be some benefits. But, again, it’s a complex subject.

There’s a lot of other things we could do. I think we could increase the transparency in terms, you know, of hospitals and doctors letting us know what they charge, what their quality is; improving information technology in health care, which would, I think, reduce errors and create more consistency across parts of the country.

We currently have very big differences in the costs of managing a certain kind of condition in different parts of the country. More uniformity and more best practice would help reduce costs as well.

So I think markets could have a useful role to help reduce and control — at least control costs.

Portability is a difficult question. One approach to portability is to have insurance companies insure workers rather than insure employers, so to speak. That would require somehow creating different kinds of pools, rather than employer-based pools, because you need pools in order to share risk. And there are some issues associated with that.

The main alternative would be to have people have the ability to take their policy from their current employer and then move over to another employer with the same policy.

These are all things we should be looking at, but none of them is a completely simple problem, because in each case you want to make sure that people are buying as part of a pool — a risk pool, rather than buying on an individual basis, where they might be, if they’re ill or a pre-existing condition, they won’t be able to afford insurance.

http://www.washingtonpost.com/wp-srv/content/article/2007/02/15/bernanke_021507.html

Comment:

By Don McCanne, MD

It is unfortunate that Federal Reserve Chairman Ben Bernanke used the framing of the conservatives to define the problems with our health care system, as he seemed to stumble through an explanation of why we need more market competition in health care. He might have been more convincing had he used the framing of his Princeton colleague, Paul Krugman.

There is a reassuring tone to his response. It is quite clear that he believes that the problems are much more complex than a mere lack of adequate market competition. His bottom line is that risk pooling is essential.

Markets dodge risk. Public policies distribute risk. If asked again, hopefully he will have prepared his answer better and start from the position of pooling risk. Paul Krugman could help him.

Excess administration of administrative excesses

Fights Over Health Claims Spawn a New Arms Race

By Vanessa Fuhrmans
The Wall Street Journal
February 14, 2007

Doctors increasingly complain that the insurance industry uses complex, opaque claims systems to confound their efforts to get paid fairly for their work. Insurers say their systems are designed to counter unnecessary charges and help keep down soaring health-care costs. Like many tug-of-wars over the health-care money pot, the tension has spawned a booming industry of intermediaries.

It’s called “denial management.” Doctors, clinics and hospitals are investing in software systems costing them each hundreds of thousands of dollars to help them navigate insurers’ systems and head off denials. They’re also hiring legions of firms that dig through past claims in search of shortchanged payments and tussle with insurers over rejected charges. “Turn denials into dollars,” promises one consultant’s online advertisement.

The imbroglio is costing medical providers and insurers around $20 billion — about $10 billion for each side — in unnecessary administrative expenses, according to a 2004 report by the Center for Information Technology Leadership, a nonprofit health-technology research group based in Boston.

Some companies are profiting from arming both sides. Ingenix, a unit of UnitedHealth Group Inc., the country’s second-biggest health insurer, sells insurers systems to screen doctor’s claims while promising doctors its software for them will “help you take a more assertive stance on fair and accurate payment.”

The denial-management industry’s rise shows how much of medical spending is consumed by propping up and doing battle over an arcane patchwork of claims systems. Roughly 30% of physicians’ claims are denied the first time around. Sales of physician-billing and practice-
management technology grew 25% to more than $7.5 billion last year, estimates Jewson Enterprises, a health information-technology research firm in Austin, Texas.

Some doctors say they see insurers stepping up efforts to keep a lid on reimbursements. One increasingly popular tactic among health insurers is to hire “health-care claims recovery” teams or software to dig through claims, some as old as two years, to see if they overpaid and seek redress. That’s partly because more states have been adopting “prompt pay” laws that require health insurers to reimburse claims within 30 or 60 days, says UnitedHealth spokesman Tyler Mason, which sometimes doesn’t leave enough time to review them first. “We need to have a way to still thoroughly review whether a claim’s paid correctly or not,” Mr. Mason says. Some insurers demand the money back. More, though, simply deduct it from future claim payments. That forces doctors to appeal the claim all over again.

http://online.wsj.com/article/SB117141549626107896.html

Comment:

By Don McCanne, MD

Let’s see. Our health care system is plagued with highly burdensome, expensive, inefficient, wasteful administrative excesses due to our ineffective, fragmented system of financing health care.

So what is the response from the industry? They provide highly burdensome, expensive, inefficient, wasteful administrative services to administer the highly burdensome, expensive, inefficient, wasteful administrative services that they are already providing.

And our policymakers want to reform health care by mandating more of this? Get real!

The Health Care Racket

By PAUL KRUGMAN
Op-Ed Columnist
New York Times
Published: February 16, 2007

Is the health insurance business a racket? Yes, literally — or so say two New York hospitals, which have filed a racketeering lawsuit against UnitedHealth Group and several of its affiliates.

I don’t know how the case will turn out. But whatever happens in court, the lawsuit illustrates perfectly the dysfunctional nature of our health insurance system, a system in which resources that could have been used to pay for medical care are instead wasted in a zero-sum struggle over who ends up with the bill.

The two hospitals accuse UnitedHealth of operating a “rogue business plan” designed to avoid paying clients’ medical bills. For example, the suit alleges that patients were falsely told that Flushing Hospital was “not a network provider” so UnitedHealth did not pay the full network rate. UnitedHealth has already settled charges of misleading clients about providers’ status brought by New York’s attorney general: the company paid restitution to plan members, while attributing the problem to computer errors.

The legal outcome will presumably turn on whether there was deception as well as denial — on whether it can be proved that UnitedHealth deliberately misled plan members. But it’s a fact that insurers spend a lot of money looking for ways to reject insurance claims. And health care providers, in turn, spend billions on “denial management,” employing specialist firms — including Ingenix, a subsidiary of, yes, UnitedHealth — to fight the insurers.

So it’s an arms race between insurers, who deploy software and manpower trying to find claims they can reject, and doctors and hospitals, who deploy their own forces in an effort to outsmart or challenge the insurers. And the cost of this arms race ends up being borne by the public, in the form of higher health care prices and higher insurance premiums.

Of course, rejecting claims is a clumsy way to deny coverage. The best way for an insurer to avoid paying medical bills is to avoid selling insurance to people who really need it. An insurance company can accomplish this in two ways, through marketing that targets the healthy, and through underwriting: rejecting the sick or charging them higher premiums.

Like denial management, however, marketing and underwriting cost a lot of money. McKinsey & Company, the consulting firm, recently released an important report dissecting the reasons America spends so much more on health care than other wealthy nations. One major factor is that we spend $98 billion a year in excess administrative costs, with more than half of the total accounted for by marketing and underwriting — costs that don’t exist in single-payer systems.

And this is just part of the story. McKinsey’s estimate of excess administrative costs counts only the costs of insurers. It doesn’t, as the report concedes, include other “important consequences of the multipayor system,” like the extra costs imposed on providers. The sums doctors pay to denial management specialists are just one example.

Incidentally, while insurers are very good at saying no to doctors, hospitals and patients, they’re not very good at saying no to more powerful players. Drug companies, in particular, charge much higher prices in the United States than they do in countries like Canada, where the government health care system does the bargaining. McKinsey estimates that the United States pays $66 billion a year in excess drug costs, and overpays for medical devices like knee and hip implants, too.

To put these numbers in perspective: McKinsey estimates the cost of providing full medical care to all of America’s uninsured at $77 billion a year. Either eliminating the excess administrative costs of private health insurers, or paying what the rest of the world pays for drugs and medical devices, would by itself more or less pay the cost of covering all the uninsured. And that doesn’t count the many other costs imposed by the fragmentation of our health care system.

Which brings us back to the racketeering lawsuit. If UnitedHealth can be shown to have broken the law — and let’s just say that this company, which is America’s second-largest health insurer, has a reputation for playing even rougher than its competitors — by all means, let’s see justice done. But the larger problem isn’t the behavior of any individual company. It’s the ugly incentives provided by a system in which giving care is punished, while denying it is rewarded.

UnitedHealth's lab contract disruptive

Doctors Fear New UnitedHealth Policy

By Theresa Agovino
Houston Chronicle
February 14, 2007

Doctors say UnitedHealth Group Inc. is threatening to fine them over something they can’t control: patients’ behavior.

Beginning March 1, UnitedHealth said it could fine a doctor $50 if a patient has tests done in facilities besides Laboratory Corp. of America or other labs that the company has selected. Doctors with patients who go out of network could also be subject to lower reimbursement and to exclusion from United’s network.

Last October, UnitedHealth announced that effective Jan. 1, 2007, its major national carrier would be Lab Corp. instead of Quest Diagnostics Inc. and began communicating with physicians about the switch. The fines don’t go into effect until next month to give both doctors and patients an opportunity to adjust to the change.

Some physicians say the size of the new network is too small.

The American Medical Association said this is the first time a doctor could be financially punished for a patient’s behavior. AMA trustee Dr. James Rohack said doctors can refer patients to in-network labs but patients may choose to go elsewhere because of convenience or preference.

Rohack remains skeptical about UnitedHealth’s pledge to work with doctors to avoid fines and other financial penalties. He said the current policy is more about saving UnitedHealth money than providing the best coverage for patients.

“They (United) always say they are going to play nice in the sandbox,” Rohack said. “But if the stock price starts to get shaky, they don’t place nice anymore.”

http://www.chron.com/disp/story.mpl/ap/fn/4554211.html

Comment:

By Don McCanne, MD

Except for single payer (Medicare for All), most of the leading proposals for reform would require individuals and/or employers to contract with this uncaring, wasteful, middleman insurance industry in order to gain access to health care.

Isn’t it long past time for us to take our health care system out of the insurers’ sandbox? How much sand in your face can you tolerate?

A Health Care Plan So Simple, Even Stephen Colbert Couldn't Simplify It

By ROBERT H. FRANK
New York Times
Published: February 15, 2007

In his State of the Union address, President Bush proposed tax cuts to make health insurance more affordable for the uninsured. The next day, Stephen Colbert had this to say on his show on Comedy Central: “It’s so simple. Most people who can’t afford health insurance also are too poor to owe taxes. But if you give them a deduction from the taxes they don’t owe, they can use the money they’re not getting back from what they haven’t given to buy the health care they can’t afford.”

Just so. As health economists have long known, market incentives induce private insurers to spend vast sums to avoid people who may actually require health care. This problem is mitigated (though not eliminated) by employer-provided group policies. Because Mr. Bush’s proposal would steer people toward individual policies, it would actually strengthen the incentive to shun unhealthy people. Such people can now keep their insurance by not changing jobs. But no private company would want them as individual policyholders at a price anyone could afford.

That Mr. Bush’s proposal will not shrink the ranks of the uninsured is not its most serious problem. Far more troubling is its embrace of a system under which we spend more than twice as much on health care, on average, as the 21 countries in which life expectancy exceeds ours. American costs are so high in part because the reliance on private insurance multiplies administrative expenses, currently about 31 percent of total outlays.

Most health economists agree that government-financed reimbursement is the only practical way to control these expenses, many of them stemming from insurers’ efforts to identify and avoid unhealthy people. Canada’s single-payer health system, which covers everyone, spends less than 17 percent on administrative expenses.

Annual health spending in the United States currently exceeds $2 trillion. A single-payer system that did nothing more than reduce administrative expenses to the levels of other countries would save roughly $300 billion annually.

Some critics worry that expensive but ineffective medical interventions may proliferate if health care becomes a federal responsibility. But Victor Fuchs, a respected health economist at Stanford University, and Dr. Ezekiel Emanuel, chairman of the department of clinical bioethics at the National Institutes of Health, have outlined a single-payer plan that would limit such interventions far more effectively than the current system. (A copy of their plan is on the links page of my Web site, www.robert-h-frank.com.)

If the single-payer system embraced by virtually all other developed countries is clearly the best solution, why doesn’t the United States adopt it? Some analysts concede its merits, but characterize it as either unaffordable or politically unrealistic. But why should a policy that promises better results for less money be considered a nonstarter?

There are two obstacles, which could both be overcome by intelligent political leadership. One is that the single-payer system would require additional tax revenue. In the current climate, that’s a tough political hurdle, to be sure. Yet how complicated would it be to explain to voters that because the single-payer plan would reduce costs substantially, every additional tax dollar would be offset by an even larger reduction in private insurance spending? Given that such a system is so much cheaper over all, calling it unaffordable makes no sense.

The second obstacle is opposition from private insurers, who would be understandably reluctant to abandon multibillion-dollar annual profit streams. Those who stand to lose from policy changes always battle harder than those who stand to gain — an asymmetry that is exaggerated when losses would be concentrated and gains diffuse. So, yes, the insurance industry would bitterly resist.

But intelligent leadership could overcome that resistance. Whenever a pie gets bigger, everyone can get a larger slice than before. Because moving to a single-payer system would make the economic pie bigger, it should be possible for everyone, including the insurance industry, to come out ahead.

The first step is to acknowledge that insurance companies are not evil, that they invested in good faith under tax laws that favored employer-provided private health insurance. To put them out of business with an overnight switch would be unjust.

Even so, they are not entitled to a permanent license to operate a system that has become economically unsustainable. The move to a single-payer plan would save far more than enough to compensate insurance companies for lost profits. Compensation for losses could start at 100 percent, then be gradually phased out as companies shifted investments elsewhere.

Selling this argument in an era of 15-second sound bites would be challenging, but hardly impossible. Indeed, forceful advocacy of the single-payer approach offers a golden opportunity for any serious presidential candidate. Voters are fed up with rising insurance costs and dwindling coverage. On the merits, single-payer coverage is an unassailable solution to both problems. Its rationale is simple enough to articulate clearly during a long campaign. And if the proposal were devised so that everyone stood to win, corporate interests would have little reason to attack it.

Critics of the single-payer plan have long railed against the specter of socialized medicine, suggesting that it means being treated by government functionaries. Yet people who have experienced single-payer coverage firsthand seem unconcerned. When one of my sons needed surgery for a broken arm during a sabbatical in Paris, for example, the medical system we encountered was just as professional as the American one and far less bureaucratic. And in France, which spends half as much on health care as the United States and has more doctors and hospital beds per capita, everyone is covered.

We live in challenging times. Does a candidate who couldn’t persuade voters to embrace the single-payer approach deserve to be president?

Robert H. Frank, an economist at the Johnson School of Cornell University, is the author of “The Economic Naturalist,” which will be published this spring. Contact: www.robert-h-frank.com

Note from PNHP: The Fuchs Plan is actually not a single-payer plan. It is a quite regressive proposal that involves vouchers and maintaining the private insurance industry. A side from this error, Frank’s article is right on.

"The Year of Health Reform" in California Gets Another Boost From New Group

Congress of California Seniors Joins New Coalition, "It's OUR Healthcare!"

By Gary Passmore
Director, Congress of California Seniors
February 14, 2007
CaliforniaProgressReport.com

At the instigation of our state political leadership, 2007 is shaping up to be the year of health reform in California. The central issue is how to provide quality, affordable coverage to more than six million Californians who are not covered by employer-based health insurance, public insurance programs (such as Medicare, Medi-Cal, or Healthy Families), or who purchase their own coverage.

In addition to expanded access, there are other key goals which are important to millions of Californians such as controlling costs that threaten the coverage of people with insurance, expanding prevention programs, and improving the quality and safety of health services.

Although most seniors are covered by Medicare, we have a huge stake in the reforms being advanced. Of course we care deeply about people under age 65, but we also recognize the need to control health inflation to preserve the level of benefits under Medicare…and we are vitally concerned about quality care and consumer protections. Because of these concerns, we will speak out in the public debate which lies ahead. That is why the Congress of California Seniors has joined a broad-based consumer coalition to speak out on the needs of California families. The group is called “It’s OUR Healthcare!” and we will engage in a vigorous advocacy campaign to educate people and push policymakers for an effective solution…not a band-aid approach.

Very different ideas for dealing with health reform have been advanced, ranging from Senator Sheila Kuehl’s expansive single-payer universal coverage proposal to Senate President pro Tem Don Perata’s plan to create a large state pool for the uninsured combined with employer and individual mandates, and House Speaker Fabian Nunez’s call for insuring all California children and creating a public insurance pool for the uninsured to the Governor’s broad proposal to force greater shared responsibility, place closer restrictions on private health insurers, and expand public coverage. There are other legislative proposals to fix specific pieces of the problem.

In this mix are some ideas that are bad. Health savings accounts don’t help the vast number of uninsured people…they only drain resources needed to fix the access problem. Cutting back on existing consumer protections (such as hospital safety and HMO regulation) to lower costs would be a setback rather than an advance. And high deductible coverage or individual mandates that shift responsibility to families that cannot afford coverage accomplishes nothing.

The goal is not to pretend to solve the problem, but rather to guarantee that everyone gets the health care they need when they need it and at a price they can afford.

Last November, voters made clear that they expect bipartisan problem solving in Sacramento, and health coverage reform will test the capacity of our system to find workable compromises. Ultimately, political leaders may have to turn to the voters to make some of the decisions.

Whatever happens, we believe that the effective, lasting reforms will recognize that we must eventually move from an employer-based health insurance model to a broader tax-based model to keep American business competitive, to allow people to move between jobs or to change careers, and to allow families to live with greater security and peace of mind.

Background Information on Where We Stand

Principles of Concern to the Congress of California Seniors in the Implementation of Health Care Reform

1. Avoid actions that may negatively impact on Medicare or MediCal…cost structure, access, or quality.
2. Encourage cost controls to rein in health care inflation that threatens benefits to people already insured, including Medicare recipients. Focus especially on overhead costs and excess profits.
3. If single payer, universal health insurance is not immediately achievable, develop a system which begins to blend coverage into a few options and marshals all possible financial resources so that a reformed model can eventually “morph” into broad-based Medicare type universal coverage system with less disruption in the future.
4. Recognize that, in the not too distant future, health insurance must shift from an employer-based model to some form of broad tax-based model if the United States is to remain economically competitive.
5. Use public insurance programs to promote information technology (electronic medical records) and to force standardization of forms and reports.
6. Do not further restrict access to the courts or the legal system as a means of reducing costs.
7. Avoid repeal or diminution of consumer protections in HMO regulations, hospital staffing ratios and the like.
8. Maximize federal funding for coverage expansion and improved services through Medicare, Medicaid and Healthy Families.
9. Recognize that solutions such as health savings accounts rarely help the majority of those who are uninsured because of income tax liability disparities, and they reduce public revenues needed to expand access for those who cannot afford health coverage.
10. Don’t simply “cherry pick” easy-to-cover populations such as children or healthy young adults.
11. Develop different coverage options which recognize that people with diagnosed chronic diseases need access to special plans providing more services and are unlikely to get coverage in the private market.
12. Make any coverage as inclusive as possible by including chronic disease management, health prevention, mental health, oral health and vision care.
13. Recognize that good nutrition and quality home and community-based care giving for elderly and dependent adults can lower costs by reducing reliance on high cost in-patient hospital care, doctor visits and remedial therapy.
14. Build incentives into the funding system to promote robust discharge planning and stronger transition to long term care.
15. Avoid creating the appearance of a solution with limited coverage or high deductible plans that technically give people insurance but do not provide them with needed health care.

Gary Passmore has been the Director of the Congress of California Seniors, a nonprofit advocacy/education organization with over 500,000 members, whose goal is to advance the interests of seniors and their families since January of 2003. He is retired from active employment. In the 1970’s and 80’s, before coming to California, he served as the Chief Executive Assistant to the Governor of Missouri and was the State Budget Director for Missouri.

UnitedHealth’s lab contract disruptive

Doctors Fear New UnitedHealth Policy

By Theresa Agovino
Houston Chronicle
February 14, 2007

Doctors say UnitedHealth Group Inc. is threatening to fine them over something they can’t control: patients’ behavior.

Beginning March 1, UnitedHealth said it could fine a doctor $50 if a patient has tests done in facilities besides Laboratory Corp. of America or other labs that the company has selected. Doctors with patients who go out of network could also be subject to lower reimbursement and to exclusion from United’s network.

Last October, UnitedHealth announced that effective Jan. 1, 2007, its major national carrier would be Lab Corp. instead of Quest Diagnostics Inc. and began communicating with physicians about the switch. The fines don’t go into effect until next month to give both doctors and patients an opportunity to adjust to the change.

Some physicians say the size of the new network is too small.

The American Medical Association said this is the first time a doctor could be financially punished for a patient’s behavior. AMA trustee Dr. James Rohack said doctors can refer patients to in-network labs but patients may choose to go elsewhere because of convenience or preference.

Rohack remains skeptical about UnitedHealth’s pledge to work with doctors to avoid fines and other financial penalties. He said the current policy is more about saving UnitedHealth money than providing the best coverage for patients.

“They (United) always say they are going to play nice in the sandbox,” Rohack said. “But if the stock price starts to get shaky, they don’t place nice anymore.”

http://www.chron.com/disp/story.mpl/ap/fn/4554211.html

Comment:

By Don McCanne, MD

Except for single payer (Medicare for All), most of the leading proposals for reform would require individuals and/or employers to contract with this uncaring, wasteful, middleman insurance industry in order to gain access to health care.

Isn’t it long past time for us to take our health care system out of the insurers’ sandbox? How much sand in your face can you tolerate?