PNHP

Luring Customers From Medicare

Luring Customers From Medicare

By MILT FREUDENHEIM
New York Times, business section

For years, private insurers have offered alternatives to the federal Medicare program that are meant to give patients lower-cost options than the government coverage provides. More than 7 million people now subscribe to such plans, out of a total Medicare population of 42.5 million.

But suddenly a type of private insurance plan is gaining ground that looks very similar to the basic coverage long available to anyone with a federally issued Medicare card.

And the government is paying the private insurance industry a subsidy of 11 percent per patient, on average, to provide it.

Since the government substantially increased the subsidies two years ago for these most basic private industry plans — known as private fee-for-service — enrollment in the plans has grown tenfold to 820,000. About 18,000 people signed up in August alone, Medicare said yesterday in its latest update. And some analysts expect enrollments to double or even triple by 2009.

The $7 billion that Medicare will pay private industry this year to provide this fee-for-service coverage is at least $770 million higher than the government would spend covering those patients itself, based on the 11 percent calculation.

Critics see the trend as further evidence that the government is paying private industry to take Medicare off its hands.

It is a “back-door way of trying to privatize Medicare,” said Dr. Jack Lewin, the chief executive of the California Medical Association, a physicians’ group. But the Bush administration’s Medicare chief, Dr. Mark B. McClellan, insisted yesterday that the trend “is definitely not a ‘push to privatization,’ ” but simply a way to give people with Medicare more choices. “The original Medicare program is and remains an option for those who prefer it,” said Dr. McClellan, who plans to step down next month.

Private insurers can offer more choices and cost breaks to patients, he said, while providing overall better health care that will end up saving the government money.

The 11 percent calculation comes from the Medicare Payment Advisory Commission, an independent federal research body that advises Congress. And some insurance executives say the figure is an exaggeration. But there is little dispute that federal subsidies are encouraging the insurance industry to recruit members for the plans.

And while the current industry coverage can be a good deal for some patients, critics worry that Medicare patients reliant on private insurers could be left stranded if the federal money is eventually cut.

“We are very concerned that Congress is going to pull back on the funding,” Dr. Lewin said, “and we will be left with a private system that offers fewer benefits and is going to be influenced by Wall Street.”

Critics say the growing transfer of the nation’s $342 billion Medicare program to private industry has already been playing out through other means, like the new Medicare Part D drug program and various Medicare-linked managed care plans and H.M.O’s offered by private insurers.

Providing Medicare coverage in all its guises has become a $60 billion-a-year business and one of the few profitable growth areas for insurers. Medicare enrollees look especially attractive to insurers, as the industry’s other main clientele — corporate America — struggles to meet the growing cost of providing health benefits to working people.

The fee-for-service plans, the focus of the current controversy, are in many ways similar to the government’s own Medicare. Under the industry version, patients have the right to choose their own doctors and hospitals — as they have long been able to do with their federally issued Medicare cards.

And as with the federal program, enrollees in the private fee-for-service plans typically pay a monthly $88.50 premium to the government.

Under the industry plans, moreover, the hospitals and doctors receive the same rates as when they are paid through the basic federal Medicare program.

Experts say that because the administrative costs of providing the private policies are minimal, they represent easy income for the insurance companies, with profit margins of 4 percent or so.

But many see the private fee-for-service Medicare plans as mainly a feeder program in which insurance companies hope to gradually convert members into even more complex, more profitable private Medicare offerings that the government also subsidizes.

The more lucrative plans, like Medicare health maintenance organizations or doctor-network managed care programs, which have been available longer, can yield profits in the 10 percent range, analysts say.

The more basic private fee-for-service plans, around for less than a decade, were authorized through an amendment to the 1997 balanced budget act as a way to ensure that elderly people could obtain adequate health insurance. Now the plans are envisioned as primarily for rural Americans who typically have few medical choices.

The insurance industry largely ignored the fee-for-service plans until the insurers’ subsidies were increased by $14 billion over 10 years by the 2003 Medicare overhaul legislation. Insurance lobbyists had argued that expanding private Medicare programs would eventually lower the government’s costs.

But insurers “are not really being asked to do anything for additional subsidies,” said Marilyn Moon, a longtime Medicare researcher who served as a public trustee of the program — a watchdog role — during the Clinton years. She is now at the American Institutes for Research, a nonpartisan research center in Washington.

Insurers, though, say they provide benefits that basic Medicare does not cover.

The leader by far in private Medicare fee-for-service, with more than half the total members, is Humana. UnitedHealth and WellPoint are also big players.

John M. Bertko, a Humana vice president, says benefits included having nurses stay in touch with discharged hospital patients with chronic diseases to make sure they were following doctors’ orders.

Other selling points for the private insurance plans include predictable out-of-pocket co-payments — typically $5 to $20 for doctor visits. That compares with the uncertainties patients face under traditional federal Medicare, in which they are responsible for 20 percent of whatever the doctor charges.

Martin Smith and his wife, Donna, of Bristol, Ind., chose a fee-for-service plan from UnitedHealth’s Secure Horizons Medicare unit earlier this year.

The monthly premiums of $12.50 each for Mr. Smith, 68, and Mrs. Smith, 70, are in addition to their government Medicare premiums of $88.50 each. But the Smiths say the private plan is paying off.

Mrs. Smith recently had heart bypass surgery. And though the bill has not yet arrived, she knows that the hospital deductible for her Secure Horizons plan is $600, compared with the $952 she would be responsible for under traditional Medicare.

And instead of 20 percent of the approved doctors’ fees in traditional Medicare, the Smiths pay only $10 to a primary care doctor and $20 for specialists. Secure Horizons pays the rest out of its subsidies from Medicare — which are $692.29 a month, on average, for each fee-for-service member in that part of the country.

The Smiths chose to sign up for Medicare Part D drug coverage from a separate insurer, Humana.

Like the Smiths, more than half of the private fee-for-service enrollees so far have also chosen drug coverage, and many are choosing a plan that combines both.

One is Cathy Watts, 58, of Decatur, Ill., a former nurse who says she had to retire four years ago because of Parkinson’s disease and partial paralysis. Last January she signed up for a fee-for-service offering from Humana that included Part D drug coverage.

Other than the government’s $88.50 Medicare premium that is deducted from her monthly Social Security check, Ms. Watts pays no premium to Humana.

She says the drug coverage was the main lure for her because her drug bill last year was $6,000.

“I will probably pay $3,600 this year” for drugs, she said. “So that will be better.” And she can still see the doctors of her choice.

While insurers do run a risk of losing money on a patient if he or she has unexpectedly large health costs, the companies can consult county-by-county Medicare cost data and decide where to offer coverage and which high-cost areas to avoid.

In southern Illinois, where Mrs. Watts lives, the average monthly rate the government is paying an insurer to provide Medicare fee-for-service is $692.29 — the same as in Mr. Martin’s town in Indiana.

Under Medicare’s complicated rules, though, the amount actually paid to a company for a patient can vary. Around the nation, depending on local medical costs and the health profile of Medicare-eligible residents, the monthly federal subsidy to the insurance company can range from $400 to $2,500, said Dr. Scott Latimer, a Humana executive based in Tampa, Fla.

Enrollments in the fee-for-service plans are still primarily, though not exclusively, concentrated in rural and small cities. Before the Medicare subsidies were increased in 2003, insurers had little incentive to focus on such places. With few doctors and sometimes only one or two hospitals in such areas, insurers typically have little bargaining power. And the health care providers have often balked at accepting the lower fees and second-guessing often associated with managed care insurance networks. But when enough patients in a local area have been enrolled in the private fee-for-service plans, the companies say local health care providers may have little choice but to join the insurers’ Medicare networks.

Rick Jelinek, the chief executive of UnitedHealth’s Secure Horizons Medicare business, acknowledged that the company’s strategy was “in the longer term, to build networks around our programs.”

With such networks in place, he said, the company could help manage patients’ health — and the insurer’s costs — through techniques like having nurses provide telephone health counseling aimed at helping keep patients with heart disease and diabetes avoid hospitalization.

Dan Mendelson, a former Clinton administration health official who is now the president of Avalere Health, a Washington research and consulting firm that advises insurance companies, said the private fee-for-service trend “should save money for Medicare by improving patient care.”

But Ms. Moon, the Medicare researcher, said she was “unconvinced by the logic that says, ‘If we are overpaying the health plans now, they will save us money later.'”

IOM report on rewarding performance

Rewarding Provider Performance: Aligning Incentives in Medicare
Institute of Medicine
September 2006

The health of senior citizens in the United States is not as good as it should be, given the billions of dollars spent on health care each year. This raises concerns that Medicare is not getting the best value for the services it purchases. Medicare’s current payment system places no emphasis on whether the care delivered is of high or low clinical quality or is appropriate. The system provides few disincentives for overuse of often high cost medical services and does little to encourage coordinated, preventive and primary care that could save money and produce better health outcomes.

This study is the third in the IOM’s Pathways to Quality Health Care series, which offers tools for implementing the vision of improved health care delineated in the Quality Chasm report. The first report in the Pathways series, Performance Measurement: Accelerating Improvement, recommended a strategy for developing and implementing a comprehensive performance measurement system, including a national board to coordinate that effort.
The second report, Medicare’s Quality Improvement Organization Program: Maximizing Potential, recommended an emphasis on technical assistance to providers for quality improvement. The present report builds on those studies and offers an operational plan for introducing into Medicare payment incentives that would encourage and reward high-quality care. While alignment can occur in many areas, this report is limited to examining the link between payment incentives and provider performance.

Recommendation 1: The Secretary of the Department of Health and Human Services (DHHS) should implement pay for performance in Medicare using a phased approach as a stimulus to foster comprehensive and systemwide improvements in the quality of health care.

Recommendation 2: Congress should derive initial funding (over the next 3-5
years) for a pay-for-performance program from existing funds.
* Congress should create provider-specific pools from a reduction in the base Medicare payments for each class of providers (hospitals, skilled nursing facilities, Medicare Advantage plans, dialysis facilities, home health agencies, and physicians.
* Congress should ensure that these pools are large enough to create adequate motivation for improved performance on selected measures. Because of unique challenges of physician payment relating to the SGR, investment dollars may be necessary to create adequate resources to effect change.
* Initial funding should be budget conscious in taking into account the resources needed for both funding the pools and implementing the program.

Recommendation 3: Congress should give the Secretary of DHHS the authority to aggregate the pools for different care settings into one consolidated pool from which all providers would be rewarded when the development on new performance measures allows for shared accountability and more coordinated care across provider settings.

Recommendation 4: In designing a pay-for-performance program, the Secretary of DHHS should initially reward care that is of high clinical quality, patient centered, and efficient.

Recommendation 5: The Secretary of DHHS should design a pay-for-performance program that initially rewards both providers who improve performance significantly and those who achieve high performance.

Recommendation 6: Because public reporting of performance measures should be an integral component of a pay-for-performance program for Medicare, the Secretary of DHHS should offer incentives to providers for the submission of performance data, and ensure that information pertaining to provider performance is transparent and made public in ways that are both meaningful and understandable to consumers.

Recommendation 7: The Secretary of DHHS should develop and implement a strategy for ensuring that virtually all Medicare providers submit performance measures for public reporting and participate in pay for performance as soon as possible. Initially, measure sets may need to be narrow, but they should evolve over time to provide more longitudinal and comprehensive assessments of provider and system performance. For many institutional providers, participation in public reporting and pay for performance can and should begin immediately. For physicians, a voluntary approach should be pursued initially, relying on financial incentives sufficient to ensure broad participation and recognizing that the initial set of measures and the pace of expansion of measure sets will need to be sensitive to the operational challenges faced by providers in small practice settings. Three years after the release of this report, the Secretary of DHHS should determine whether progress toward universal participation is sufficient and whether stronger actions – such as mandating provider participation – are required.

Recommendation 8: CMS should design the Medicare pay-for-performance program to include components that promote, recognize, and reward improved coordination of care across providers and through entire episodes of illness. Thus, CMS should (1) encourage beneficiaries and providers to identify providers who would be considered their principle responsible source of care, and (2) pay for and reward successful care coordination that meets specified standards for providers who take on that role.

Recommendation 9: Because electronic health information technology will increase the probability of a successful pay-for-performance program, the Secretary of DHHS should explore a variety of approaches for assisting providers in implementation of electronic data collection and reporting systems to strengthen the use of consistent performance measures.

Recommendation 10: The Secretary of DHHS should implement a monitoring and evaluation system for the Medicare pay-for-performance program in order to:
* Assess early experiences with implementation so timely corrective action can be taken.
* Evaluate the overall impact of pay for performance on clinical quality, patient-centeredness and efficiency.
* Identify the best practices of high-performing delivery settings that should be shared with others to improve care throughout the nation.

Report brief (4 pages):
http://www.iom.edu/CMS/3809/19805/37232/37236.aspx

Rewarding Provider Performance (full text):
http://darwin.nap.edu/books/0309102162/html/R2.html

Comment:

By Don McCanne, MD

Until now, conceptualizations of pay for performance have not proffered much more than the introduction of additional administrative intrusions that might motivate minimal tweaking of a few practice parameters, but would have a negligible impact on overall health care outcomes.

This Institute of Medicine report sheds further light on the subject. In elaborating on the pay-for-performance concept, the Institute of Medicine makes it very clear that the administrative burden is significant and will divert time and resources away from patient care. But what will that effort attain for us? Sampling of performance will always provide a very incomplete picture of overall performance, and it will favor those who master gaming of the system. The IOM proposal would attempt to improve provider behavior through public humiliation and financial penalties as funds are shifted to those who play the games better. There are already enough pressures on health care professionals without adding this insult.

Pay for performance eventually may become a valuable tool to improve efficiency, quality, and health care outcomes, if anyone can figure out an effective model for doing that. Unfortunately, the gifted individuals at the Institute of Medicine have not yet provided us with that model. Until they do, we should proceed with reform that we know will dramatically improve resource allocation: single payer national health insurance.

Health care scorecard assigns numbers to our national disgrace

U.S. Health System Performance: A National Scorecard

by Cathy Schoen, Karen Davis, Sabrina K. H. How, and Stephen C. Schoenbaum
Health Affairs
September 20, 2006

This paper presents the findings of a new scorecard designed to assess and monitor multiple domains of U.S. health system performance. The scorecard uses national and international data to identify performance benchmarks and calculates simple ratio scores comparing U.S averages to benchmarks. Average ratio scores range from 51 to 71 across domains of health outcomes, quality, access, equity, and efficiency. The overall picture that emerges from the scorecard is one of missed opportunities and room for improvement. The findings underscore the importance of policies that take a coherent, whole-system approach to change and address the interaction of access, quality, and cost.

Access And Affordability

Studies repeatedly find that the single most important determinant of whether patients obtain essential health care is having health insurance. With insurance premiums rising at higher rates than wages and consumer cost sharing up sharply, the affordability of insurance and care is of increasing concern to middle- and low-income families and employers.

The insurance indicator tracks the percentage of adults who are adequately insured all year. Inadequate protection or being underinsured is defined as having expenses that exceed 10 percent of family income (5 percent for those with incomes below 200 percent of the federal poverty level) or being exposed to deductibles that alone constitute 5 percent of income. As of 2003, sixteen million U.S. adults (ages 19-64) were underinsured, and sixty-one million adults (35 percent) were either uninsured or underinsured. In 2004, 40 percent of U.S. adults reported that they went without care because of costs during the year, a rate four times higher than in the United Kingdom, the benchmark country.

Only 58 percent of the nonelderly population lives in a state where employer insurance premiums average less than 15 percent of this population’s median household income. One-third of nonelderly adults report having problems with medical bills, collection agencies, or medical debt. High out-of-pocket and premium costs compared to income affect 17 percent of all nonelderly families. Time trends on all three indicators have been moving toward less affordability.

Overall picture

Within the United States, there is often a substantial spread between the top and bottom groups of states, hospitals, or health plans as well as wide gaps between the national average and top rates. As a result, the U.S.
performance relative to benchmarks averages near 50 for efficiency to 70 for healthy lives, quality, access, and equity, for an overall average score of 66 across the main domains of performance. On multiple indicators, the United States would need to improve its performance by 50 percent or more to reach benchmark countries, regions, states, hospitals, health plans, or targets.

Interrelatedness of deficits

The results provide evidence of the potential net gain from strategies focused simultaneously on improving access, quality, and efficiency. Policies are needed that address the interaction of access, quality, and cost and take a coherent, whole-system view rather than a fragmented approach to change. Universal coverage and participation are essential to improving health care quality and cost performance. High and rising rates of the population that is under- and uninsured destabilize the delivery system, fuel inefficient use of resources, and put families and the nation at risk of losing ground on past gains in health and workforce productivity.

Fragmented and unstable coverage not only increases insurance overhead costs, it also undermines the nation’s ability to assess outcomes or costs over time. Medicare is often the only national program with the stability to track outcomes and costs over episodes of care and follow patients over multiple years.

In sum, the scorecard indicates that the United States has broad opportunities to improve. It can do better, given the level of resources it has committed to health care. There is also much risk in failing to act: Cost and coverage vital signs are moving in the wrong direction. To assure a healthy, productive nation, transformation of the health system is of great urgency.

http://content.healthaffairs.org/cgi/content/abstract/hlthaff.25.w457

For the release and helpful links from The Commonwealth Fund:
http://www.cmwf.org/publications/publications_show.htm?doc_id=401577

Comment:

By Don McCanne, MD

For the next two weeks, the article about this important new scorecard can be downloaded for free from the Health Affairs website. You should do so now. Also keep the link to The Commonwealth Fund’s page that provides important scorecard resources.

The first annual scores are now in. They’re not good. We need to address immediately the “single most important determinant” by eliminating the scourge of uninsurance and underinsurance.

Health-Care Consultants Reap Fees From Those They Evaluate

As Insurance, Drug Costs Rise, Employers Seeking Advice Often Discover Conflicts

A Superintendent’s Surprise

By BARBARA MARTINEZ
Wall Street Journal – September 18, 2006; Page A1

When Kevin Grady took over as an employee-benefits consultant for the Columbus Public Schools District in 2001, he signed a contract promising to act “in the best interest” of the schools. The Ohio district agreed to pay him $35,000 a year to help it choose a health insurer. Officials thought that was all Mr. Grady was getting out of the deal.

It wasn’t. After the district switched its health insurance to UnitedHealth Group Inc. on what it says was Mr. Grady’s recommendation, he started getting payments and other compensation from the big Minnetonka, Minn., insurer. “Thank you and United for the steaks,” Mr. Grady wrote in a Dec. 20, 2001, email to a UnitedHealth employee. “We’ll have those on Christmas eve.”

Aetna gives brokers a “retention bonus” for staying loyal. If a broker keeps 90% of his Aetna clients with the insurer for another year, he gets a bonus equal to 0.75% of the clients’ total premiums. If 100% stay, the bonus rises to 1.25% of total premiums. Though employers typically put their health-insurance contracts up for bid every few years, such bonuses are one factor encouraging brokers to keep their clients on the same plan.

A spokeswoman for Aetna said the insurer requires consultants and brokers to disclose such fees to customers. She said Aetna also makes its broker fees public via its Web site and in annual disclosures to clients. Many other insurers don’t detail their contingent commissions on public Web sites.

Consultants also may have financial ties with pharmacy-benefit managers, or PBMs, which administer prescription-drug benefits for employers. Mercer, the big benefits consultant, has done consulting work for a leading PBM, Medco Health Solutions Inc., even as it was advising employers choosing among PBMs including Medco, of Franklin Lakes, N.J. In a proposal for a 1998 job handled by Mercer Management Consulting, Mercer said it could help Medco “refine its pricing to increase its profitability.” Mercer also said it would help Medco “improve relationship with key benefit consultants to better position [Medco] for winning target accounts.”

In 2000, the top Mercer pharmacy-benefits consultant, Nicholas K. Vasilopoulos, gave a written declaration in a lawsuit by Medco clients who accused the PBM of overcharging them for drugs. In it he defended Medco as “forthright” in its business dealings. Mr. Vasilopoulos said he advised employers seeking advice on PBMs — and advised Medco in assessing its competitiveness against other PBMs.

In an email, Mr. Vasilopoulos said “there were no conflicts of interest” when he was a Mercer consultant. He said Mercer had no reason to favor any particular PBM because it provided advice to all the major ones over the years. This advisory role gave Mercer a “more thorough understanding” of each PBM’s offerings, which benefited Mercer’s employer clients, he said.

Lisa Zeitel, a senior consultant at Mercer’s pharmacy-benefits consulting practice, said much of the work for Medco was done by the management-consulting side of Mercer, which is “totally separate” from her unit. She said her own unit occasionally undertakes small assignments for PBMs, but this “in no way interferes with the work that we do for individual clients.”

Joseph Sawicki Jr., the comptroller of Suffolk County on Long Island, N.Y., discovered the ties between consultants and PBMs after the county sought a routine audit of its PBM, Express Scripts Inc., in 2003. The county hired Mercer for the job. Mr. Sawicki says officials didn’t realize at first that Mercer also serves as Express Scripts’s employee-benefits consultant and had other consulting arrangements with the PBM. Mercer says it did disclose the ties.

Mr. Sawicki wasn’t happy with the audit’s results, which initially found that Express Scripts had overbilled the county by more than $1.1 million but later suggested that the overbilling amounted to only $14,000. Mercer charged the county $93,000. Mr. Sawicki withheld half the payment and asked Mercer to return the half it already had received, saying he doesn’t pay for “shoddy” work. A spokeswoman for Mercer, Stephanie Poe, says Mercer made clear its initial estimate was likely to be reduced and it did a good job on the audit although it wasn’t allowed to complete its work. The dispute over the $93,000 is unresolved.

The county didn’t pursue any refunds from Express Scripts in connection with the billing Mercer had audited. It then hired another auditor to review Express Scripts’s billing in subsequent years. That review led to a settlement in which Express Scripts paid the county $865,000. A spokesman for Express Scripts said the company has saved “millions of dollars” for Suffolk County. He declined to comment on the settlement.

Back in Columbus, school-district human-resources chief Craig Bickley wants consultants who aren’t getting money from the same people they are supposed to be evaluating. He was annoyed to discover that under the previous consultant, Kevin Grady, the district switched to UnitedHealth from Anthem (now part of WellPoint) even though UnitedHealth’s administrative fees were $776,000 a year higher. Mr. Grady’s son, Joe, says UnitedHealth offered more coverage for the money.

Mr. Bickley says his first question to consultants nowadays is: “Who are you working in the best interest of, yourself or the client?” The district insisted that the consultant replacing Mr. Grady forgo commissions and bonuses it might otherwise receive from health insurers for bringing in the district’s business. Mercer won the contract and agreed to do so.

–Raymund Flandez contributed to this article.

GAO report – Don't choose an HSA if you need health care

Early Enrollee Experiences with Health Savings Accounts (HSA) and Eligible Health Plans (HDHP)
Consumer-Directed Health Plans
Government Accountability Office (GAO)
August 2006

GAO estimated that HSA-eligible plan enrollees would incur higher annual costs than PPO plan enrollees for extensive use of health care, but would incur lower annual costs than PPO plan enrollees for low to moderate use of health care.

HSA-eligible plan enrollees generally had higher incomes than comparison groups. Fifty-one percent of tax filers reporting HSA contributions had an adjusted gross income of $75,000 or more, compared with 18 percent for all tax filers under age 65 in 2004.

Most participants said they would recommend HSA-eligible plans to healthy consumers. Some participants said they enrolled in the HSA-eligible plan specifically because they did not anticipate getting sick, and many said they considered themselves and their families as being fairly healthy.
However, participants would not recommend these plans to people who use maintenance medication, have a chronic condition, have children, or may not have the funds to meet the high deductible.

http://www.gao.gov/new.items/d06798.pdf

Comment:

By Don McCanne, MD

Advocates of health savings accounts (HSA) with their HSA-eligible high-deductible plans (HDHP) refute the challenge that the plans primarily benefit the healthy and wealthy. They claim that they are suitable for everyone, including low-income individuals with greater health care needs.

The claim of opponents of HSAs that they benefit the healthy and wealthy is based specifically on the design of the plans. These plans use regressive tax policies that benefit the wealthy but not the poor. They also provide an additional retirement benefit, but only for those who remain healthy and are able to fund the accounts.

This GAO study confirms that the healthy-wealthy benefit of the plans is recognized by the participants. Not only do they understand the benefit for themselves, but they also understand the disadvantages for those with greater health care needs. The healthy and wealthy do not recommend these plans for the sick and poor. This GAO report should put an end to that debate.

Health policies that take good care of the healthy but not the sick are irrational. It’s time to abandon these policies and to become serious about adopting policies that would ensure that the sick will always have affordable access to the health care that they need. It’s time for national health insurance.

46 million uninsured focus of meeting

Mandatory insurance among plans debated

By Laura Ungar
lungar@courier-journal.com
The Courier-Journal

Celeste Vanskike has worked at preschools for 25 years but can’t afford health insurance — meaning she’s had to put off doctor visits and leave a thyroid condition untreated.

“Here I am, I’ve got a good work ethic and I’m barely eking out an existence. … And there’s so many of us out here without insurance,” said the 56-year-old Louisville woman, who earns less than $20,000 a year. “More has to be done. It has to be brought to light.”

Yesterday, the Kentucky Medical Association focused its annual meeting on the estimated 46 million uninsured Americans and more than half a million uninsured Kentuckians.

Called “Breaking the Barriers,” the meeting attempted to dissect the problem and present possible solutions, including a Massachusetts program mandating residents have insurance, an American Medical Association plan promoting “incremental” health-care reform, and a national health-care system like the one in Canada.

“For a number of our members, the issue of the uninsured in the state is a bigger problem” than the rising cost of malpractice insurance, said Daniel W. Varga, chief medical officer for Norton Healthcare and outgoing president of the KMA.

Dr. Stephanie J. Woolhandler, an associate professor at Harvard Medical School and co-founder of Physicians for a National Health Program, said America is morally bound to care for the uninsured. According to the Institute of Medicine, a nonprofit organization that advises the government on medical issues, about 18,000 Americans die each year because they lack insurance.

“We don’t just live in an economy,” she said. “We live in a society and we have a responsibility to protect and care for each other.”

Kentucky below average

About 14 percent of Kentuckians, and a similar portion of Indiana residents, lack health insurance. Although these figures are below the national average, speakers said the problem in Kentucky is compounded by poverty and one of the unhealthiest populations in the nation.

There’s also an increasing number of middle-class, underinsured Kentuckians facing some of the same problems as the uninsured in getting the care they need, said Michael E. Samuels, a University of Kentucky professor and rural health expert.

He pointed to statistics from a recent telephone survey of 2,100 households by the University of Kentucky, the University of Louisville and the Kentucky Long-Term Policy Research Center. It showed that 54 percent of uninsured residents and 21 percent of insured residents skipped a medical test because of cost.

“The one thing we don’t want to do is prevent people from getting necessary preventive care and the necessary screenings,” he said.

Samuels said several trends are converging: Employers are shifting more insurance costs to workers, fewer small companies offer health benefits and a growing number of personal bankruptcies are linked to medical costs.

Those most likely to be among the uninsured include low-wage workers, young people entering the labor force and those who retire early. About half of Kentuckians with no health insurance have done without it for more than three years, the survey found.

Vanskike, who has an associate’s degree, lives in an apartment and has no car, said she’s been uninsured since 2003. Although her current employer offers health insurance, she said she can’t afford the premiums.

When she was insured, she took medication for an underactive thyroid. But she said she hasn’t been able to get a clinic appointment to get her prescription renewed and can’t afford a private doctor. Without treatment, she said, the condition causes her to gain weight and saps her energy.

Vanskike said she would support a national health-insurance plan. “I’m all for the government helping people.”

Financial incentives

Woolhandler said there are many financial reasons for adopting national health care. For instance, she said, health-care costs for auto companies were $1,309 per car for Ford but only $97 per car for Toyota in Japan, which has a system of universal health coverage.

She said administrative health-care costs have risen dramatically in the United States and are much lower in countries with national health care. Meanwhile, life expectancy is higher in several of these countries.

She acknowledged problems with national systems, such as some waits for care in Canada. But she said the percentage of people with unmet health-care needs is about the same for Canadians as for insured Americans.

“The problems have been grossly exaggerated in the U.S. media,” Woolhandler said.

Other speakers provided different remedies for the nation’s health-care woes.

Dr. Jack T. Evjy, of the Massachusetts Medical Society’s task force on universal access, said that state is putting into place a program that mandates residents have insurance and helps them by expanding Medicaid eligibility and providing subsidies for low-income residents to buy insurance. The program, modeled on the requirement for car insurance, penalizes those who don’t get insurance by July 2007.

“I think it’s going to succeed,” Evjy said. “A lot of our experience can apply here in Kentucky.”

Dr. Jeremy A. Lazarus, vice speaker of the AMA House of Delegates, outlined that group’s approach, which boils down to giving people money to buy health insurance through tax credits. The plan also involves giving people a choice of coverage plans and rewarding them for staying insured.

Lazarus said the AMA will work to make coverage of the uninsured one of the top priorities in the 2008 national elections.

He said, “There’s really a moral imperative to get something done and get something done soon.”

Reporter Laura Ungar can be reached at (502) 582-7190.

Why do the uininsured decline to buy individual plans?

Squeezed: Why Rising Exposure to Health Care Costs Threatens the Health and Financial Well-Being of American Families

By Sara R. Collins, Jennifer L. Kriss, Karen Davis, Michelle M. Doty, and Alyssa L. Holmgren
The Commonwealth Fund
September 2006

Low participation in the individual market likely reflects the difficulty people have finding affordable and suitable coverage. The survey asked adults whether they had sought coverage in the individual market in the past three years. About 58 million adults ages 19 to 64 reported either that they had coverage purchased through the individual market or had considered buying, or tried to buy, a plan. Of these, nearly 90 percent never bought a plan.

The survey asked respondents about particular challenges they encountered in attempts to purchase a health plan in the individual market. These included ease of finding a plan with suitable or affordable coverage or being turned down for a preexisting condition. One-third (34%) of those in the individual market said they found it very difficult or impossible to find a plan with the coverage they needed. This problem was particularly pronounced among people with health problems: 48 percent of those with health problems (fair or poor health status, any one of four chronic conditions, or a disability) found it very difficult or impossible to find a plan with the coverage they needed.

Even greater numbers of people had difficulty finding an affordable plan.
Nearly three of five (58%) adults who had ever shopped for coverage in the individual market found it very difficult or impossible to find a plan they could afford. This problem was especially evident among those with health problems and low incomes. More than 70 percent of people with health problems or incomes under 200 percent of the federal poverty level found it very difficult or impossible to find an affordable plan.

http://www.cmwf.org/usr_doc/Collins_squeezedrisinghltcarecosts_953.pdf

And…

Most Consumers Seeking Health Insurance in Individual Market Approved for Affordable Coverage Commonwealth Fund study based on flawed methodology

America’s Health Insurance Plans (AHIP)
September 14, 2006

The Commonwealth report… claims that “most adults who seek to purchase insurance coverage through the individual market never end up buying a plan, finding it either very difficult or impossible to find one that met their needs or is affordable.” However, those defined as “seeking” coverage include any respondent who “ever thought about” buying individual coverage in the past three years.

AHIP’s member survey, however, is based on the experiences of several million consumers who actually did seek coverage in the individual market, and it found that even in states that allow insurers to consider an applicant’s medical history, nearly nine out of ten people who completed the application process for non-group insurance were offered coverage.

“The data could not be clearer: coverage purchased in the individual market is accessible and affordable,” said AHIP President Karen Ignagni.

http://www.ahip.org/content/pressrelease.aspx?docid=17543

Comment:

By Don McCanne, MD

Last week, The Commonwealth Fund released their widely-quoted report demonstrating that, of those adults who “had sought coverage in the individual market in the past three years… nearly 90 percent never bought a plan” primarily because they had difficulty finding affordable and suitable coverage.

Immediately, the opponents of reform released statements based on AHIP’s press release stating that Commonwealth’s finding was flawed because “nearly nine out of ten people who completed the application process for non-group insurance were offered coverage.”

The facts are clear. Most individuals who are confronted with a health insurance premium that they cannot afford do not bother to submit an application. Karen Ignagni’s statement that “coverage purchased in the individual market is accessible and affordable” applies to only the very small percentage of individuals who actually purchased coverage because they could afford it.

The statements in the AHIP release are not lies, but they are blatantly dishonest because they leave the reader with the belief that almost any of the uninsured can afford to buy comprehensive coverage, when, in fact, most of them cannot. How long are we going to leave these flimflammers in charge?

Albany Med chief calls for hospital reform and single-payer system

The Business Review (Albany)
September 8, 2006

As chief executive officer of Albany Medical Center, James Barba has a unique perspective on the health care industry both regionally and nationally. What he sees is a broken system in which costs are rising and competition is increasing, with no cure in sight.

That has led Barba to the conclusion–unpopular with many–that universal, government-run health care is the only solution.

Barba recently sat down with Business Review reporter Barbara Pinckney to share his thoughts and ideas on the future of health care.

What is your general view of the health care system?

There is no American health care system. What we have, at best, is a loose configuration of various interest groups who even when they operate in absolute good faith–and I think, for the most part, they do–cannot bring sense, order or rationality to what we call American health care and what I refuse to call an American health care system. You can’t make it a system. I think that’s the bottom line.

What’s the answer?

Well, I think the answer lies in understanding the problems. And even once one does that analysis, I’m certain that many will not agree with where I come out on it, because I think you can come out in a couple different places. But I think, after you analyze the problems, I break them into two convenient categories: the problems of cost and the problems of constituencies. Why can’t we control the costs? Why are the costs running away? Two trillion dollars in 2005. And who are the constituencies of American health care and why have we not been able to align their interests and their goals?

I come out and say that what we have now is a market-driven system and it has failed us terribly. And the opposite of that is what I think we will inevitably move toward, and that is a regulated system. So once I make that leap–based, I hope, on decent analysis–the answer is you have to look at the government and say “What is its track record in delivering health care? What might we reasonably expect in the future? And can it work?”

Is universal health care a realistic possibility?

Is it realistic that we might have a government-run system? It is. In the end, I think it’s going to be the only practical answer.

I always like to start an explanation of that answer by pointing to the Medicare system. Medicare has been around for 40 years now. It is, I think, universally regarded as a good system for delivering health care to people 65 and older. Not perfect, but we’ll never have a perfect system. The cost for administering the program is 3 percent–the cheapest administrative cost of any health care payer in the nation. So the federal government–the bureaucracy, if you can believe it–spends 3 cents on administering Medicare and 97 cents on actually delivering health care, both in the hospital and through physician payments. That’s extraordinarily efficient. If we could replicate that efficiency in a system that was national, I think we would have achieved something. We actually will have created an American health care system.

What’s kind of interesting to me–and I like to just sometimes theorize about what we could have done and what we can still do, I guess–we have this Medicare system which covers everyone 65 and older. We have in New York state Child Health Plus, but there’s a similar program in virtually every state of the union which covers those 18 and younger whose families meet certain income criteria. If we had started, let’s say, 15 years ago when the Clintons were trying to “reform” health care, to “up-age” Child Health Plus and “down-age” Medicare [and had] taken off two years in each direction in each of the last 14 years, we’d be there by now.

And I guess once I get to that point I say well, OK, the last 15 years have not been wasted; they’ve just taught us, I think that we are not going to solve the problems of costs and constituencies by doing more of the same. It only gets worse. So why don’t we start now and start “up-aging” Child Health Plus and “down-aging” Medicare and see when they meet in the middle, and that analysis will be a matter of how much we can afford it.

Would you like to see the whole private payer system–the Blues, the HMOs–done away with?

Well, they’re going. I don’t know how we can justify a payer system with hundreds, if not thousands, of insurance companies, each one of which has a completely different set of rules for what it will pay, and who it will pay, and how it will pay, and when it will pay, and why it will pay, etc. That replication in and of itself costs hundreds of billions of dollars every year. If we could do away with it all, all of that waste, and just concentrate on a single payer with a single set of rules, and everyone understood what they are and knew what was covered and what wasn’t, some experts estimate that we could save between $300 billion and $400 billion. That’s a lot of money!

As I’ve thought about it, the best I can come up with is transitional roles for [the insurers], having them continue to serve the role that they serve as we go to a single-payer system. We’re struggling under the weight of all these extraneous costs. I don’t want to leave myself, the hospitals, out because hospitals add to it as well. We just happen to be talking about the HMOs right now. But, ultimately, I don’t see any role for them. I know that’s not a popular position but my prediction is it is one that we’ll get to.

Would the role of the hospitals change?

I think in terms of hospitals, we have to take a hard look at ourselves and ask a couple of fairly fundamental questions. One, do we need as many hospitals as we currently have? And the answer to that is “No, we do not need as many hospitals as we have currently throughout the country.”

And second, is there a way to more intelligently design a hospital delivery system than the way we’ve designed it now? Why is it that hospitals in any given region–and I’ll use this one because this is the one with which I’m most familiar–why is it that we’re engaged in an arms race, for example, a technology arms race? [Albany Med makes a purchase and] predictably that will set off in the board rooms and CEO offices of other hospitals in the region the conversation that says “Do we need a new X type of scan or Y type of scan? Albany Medical Center is going to do that and they’ll get ahead of us competitively.” All of that adds unnecessarily and wastefully to costs.

Now, why can’t I just sit down with my fellow CEOs and agree to divide up the market so we don’t do it that way? Albany Med does one thing and St. Peter’s does another? The answer is because we’d all go to jail. That violates the federal anti-trust laws. We cannot do it and so, there again, if hospitals are to be reformed we’re going to need some guidance from the federal government as to how we can intelligently design the services that are being offered. We can’t do it without some help from Congress because it’s all illegal otherwise.

On a statewide level, what are you hoping to see from the Commission on Health Care Facilities for the 21st Century?

I’m hoping to see a sober, analytic document that speaks about what we should be doing vis-à-vis the hospitals in the state. Apparently, from what I read, if the next governor is Eliot Spitzer–and it appears sitting here today it’s going to be–he’s made some statement, I believe, that he’s not going to be bound by that report, and that’s understandable. The question is, can the report in and of itself have sufficient gravitas, or weight, so that even a new governor and a new administration will have to say, “This is pretty important stuff and while we may not want to implement every last recommendation, we have to take it seriously because serious people spent a lot of time thinking and listening and analyzing and came up with these conclusions.” So I think that’s the best thing we’re going to get out of the commission’s report.

What keeps you awake at night?

There is one thing I worry about. As I think most of the country now understands and appreciates, we’ve been working with a nursing shortage for at least a half-dozen years. But I don’t think the public is yet appreciating that there is an impending physician shortage and that shortage is going to happen at the worst possible time in the history of this country, namely at a time when that huge demographic–the baby boomer generation–is moving into an age when they are going to require more and more medical assistance.

The Association of American Medical Colleges for quite a few years was saying that it did not see a physician shortage coming and then, maybe six months ago, it just changed its mind and said, “Yes, in fact, it is going to happen and we’re asking the 125 medical colleges over the next 10 years to increase their enrollment by 30 percent.” Leaving aside the virtual impossibility of just overnight increasing class size by 30 percent, the underlying issue–a physician shortage at a time of enhanced demand–is going to be something that could cause some real dislocation in American health care and it provides another reason for us to try to create something more rational than what we have currently.

What in the health care system gives you the most hope?

There are tremendous bright spots. Look at this medical center. We call it an academic health sciences center–the only one in the region. Ten years ago when I became CEO, I said–and I think people thought I was exaggerating–“This is a place where miracles are performed every day.” I wasn’t exaggerating then and I’m not exaggerating today. I think the statement is more pertinent and more accurate today than it was 10 years ago.

We do wonderful things with science and with medicine to treat conditions that were either totally untreatable and terminal only a decade ago, or that were chronic and wasteful and now they are no longer.

Take a look at the work, for example, that we’ve done with AIDS. I’m very, very proud of the role this specific institution has played with that particular disease. We worked with the science a dozen or more years ago–the protease inhibitors–and now, by and large, these new medications and the treatments that were developed here and elsewhere, and delivered here, are turning what was an absolute death sentence, by and large, into a chronic disease.

We could go down the list: Look at the transplant programs, look at the advances in childhood cancer; those are all good-news stories.

Sacramento Bee attacks Schwartzenegger on "Socialized" Bogeyman

Editorial: Socialized bogeyman

Government has real role in providing health care solutions for residents
Sacramento Bee
10-SEP-06

Careful, Gov. Arnold Schwarzenegger. Your ghostwriter seems to have just made you an opponent of Medicare.

The opinion piece in question was designed to detail your reasons for vetoing Senate Bill 840 by Sheila Kuehl, D-Santa Monica. SB 840 would have revolutionized the state’s health care system. Private insurers would have gone out of business. The state would have started paying directly for the health care of millions of Californians.

“I cannot support a government-run health care system,” you wrote (or, more accurately, someone wrote for you).

Hmm. So what exactly is Medicare? Or, more important, what are Republicans and Democrats really fighting about when it comes to providing affordable health care to more Californians, and how can anyone find the elusive political compromise?

SB 840 sought to create one payer of health care _ the state _ for residents of California. That would be the so-called “single-payer”
solution to our health care ills. The very term “single payer” tends to create political divides. And along those divides, the very real role of government in health care gets misunderstood.

“Socialized medicine is not the solution to our state’s health care problems,” wrote Schwarzenegger in vetoing SB 840. Actually, socialized medicine is as American as apple pie. No greater example is Medicare.

Medicare is essentially a single-payer form of health care. One payer _ the federal government _ provides the bulk of the funds to hospitals and doctors for the necessary care of millions of senior citizens.

Yes, those over the age of 65 pay part of the cost. Some can join HMOs as an alternative. But the federal government “runs” Medicare. And it also “runs” Medicaid (known as Medi-Cal in California), the single-payer program that underwrites care to the poor and disabled.

The political mainstream isn’t clamoring to get rid of those established forms of socialized U.S. medicine. So why do hard philosophical viewpoints suddenly emerge when the same solution is discussed for working Americans and their children?

Our problem with SB 840 was how the Democrats dangled it as veto bait from the get-go. No quest for common ground ever appeared evident, either by Democrats or Schwarzenegger. It was all about Democrats embracing government as the solution and Republicans denouncing it. In vetoing SB 840, Schwarzenegger followed the script.

Real progress in lowering health care costs and insuring more Californians will take a far more serious effort than the theater surrounding SB 840. It will start with the recognition that government is not the bad guy, and that government has an indispensable role in any solution.

Medicare Costs to Increase for Wealthier Beneficiaries

By ROBERT PEAR
New York Times
September 11, 2006

WASHINGTON, Sept. 9 — Higher-income people will have to pay higher Medicare premiums than other beneficiaries next year, as the government takes a small but significant step to help the financially ailing program remain viable over the long term.

The surcharge is a major departure from the traditional arrangement under which seniors have generally paid the same premium.

It is expected to affect one million to two million beneficiaries: individuals with incomes exceeding $80,000 and married couples with more than $160,000 of income. For individuals with incomes over $200,000, the premium, now $88.50 a month, is expected to quadruple by 2009.

The surcharge was established under a little-noticed provision of the 2003 law that added a prescription drug benefit to Medicare.

Supporters of the surcharge say it makes sense for wealthy people to pay more at a time when Medicare costs are soaring. But some Medicare experts worry that wealthy retirees will abandon the program and rely on private insurance instead, leaving poorer, sicker people in Medicare.

The premium in question is for Part B of Medicare, a voluntary program that covers doctors’ services, diagnostic tests and outpatient hospital care.

“The higher premiums could drive people with higher incomes out of Medicare,” said Samuel M. Goodman, a 73-year-old retiree in Derwood, Md. “Medicare would then become a welfare program, rather than a universal social insurance program, and it would be easier to attack.”

Federal officials have repeatedly said that Medicare is financially unsustainable in its current form.

Congress said the surcharge would “begin to address fiscal challenges facing the program.”

Joanne S. Shulman, who worked at the Social Security Administration for 35 years, said, “The surcharge will come as a shock to many people because they have not received any warning.”

Most beneficiaries now pay the same premium for Part B of Medicare. That amount has been increasing rapidly even without a surcharge. The standard premium has shot up an average of 12 percent a year since 2001, when it was $50 a month.

The premium is set each year to cover about 25 percent of projected spending under Part B of Medicare, which has been growing because of increases in the number and complexity of doctors’ services. General tax revenues pay 75 percent of the cost.

The Bush administration plans to announce the standard premium for 2007 later this month. In July, Medicare officials estimated that it would be $98.40 a month. The surcharge will be phased in from 2007 to 2009.

Here is how it will work: The surcharge for 2007 will be computed by the Social Security Administration, using income data obtained by the Internal Revenue Service from tax returns for 2005. If an individual has modified adjusted gross income of $80,000 to $100,000, the surcharge will be 13.3 percent, which adds about $13 to the monthly premium, for a total of about $111.50. For a single person with income of more than $200,000, the surcharge will be 73.3 percent, or about $72 a month, for a total premium of about $170.50.

When the transition is complete in January 2009, according to Medicare actuaries, the total premium for a person with income of $80,000 to $100,000 will be 1.4 times the standard premium. A person with income of $100,000 to 150,000 will pay twice the standard premium. A person with income of $150,000 to $200,000 will pay 2.6 times the standard premium, and a beneficiary with more than $200,000 of income will pay 3.2 times the standard amount.

If the basic premium rises 10 percent a year — a relatively conservative forecast — the most affluent beneficiaries will be paying premiums of more than $375 a month in 2009.

Under current law, the $80,000 threshold and the income brackets will be adjusted each year to keep pace with inflation, as measured by the Consumer Price Index.

President Bush recently proposed eliminating these annual adjustments, so that more people would pay a surcharge. “This change gives beneficiaries increased participation in their health care,” he said.

More than 40 million people are in Part B. Medicare officials estimate that 2 percent of them will have to pay a surcharge next year. The Congressional Budget Office says 5 percent of beneficiaries will be affected. The Social Security Administration puts the figure at 4 percent to 5 percent. Most people have their premiums deducted from monthly Social Security checks.

Fiscally conservative Republicans supported the surcharge. But so did some Democrats, who saw it as a progressive way to finance Medicare without cutting benefits or raising payroll taxes.

Senator Dianne Feinstein, Democrat of California, argued that “high-income beneficiaries can afford to pay a larger share of Medicare’s costs,” in part because Congress has cut their taxes in recent years.

The Congressional Budget Office estimates that the surcharge will raise $15 billion from 2007 to 2013.

Representative Nita M. Lowey, Democrat of New York, recently introduced a bill to repeal the surcharge, which she says will hit “more and more middle-class seniors.” Some advocates for older Americans, including the Senior Citizens League, with 1.2 million members, are lobbying for repeal.

A beneficiary can obtain relief from the surcharge by showing that the I.R.S. data was incorrect or that the person’s income declined because of a “major life-changing event” like the death of a spouse or the loss of pension benefits.

Theodore R. Marmor, a professor of political science at Yale, said the surcharge was more important for the politics of Medicare than for the financing of the program.

“The new income-related premium is fundamentally at odds with the premises of social insurance,” Mr. Marmor said. “Large numbers of upper-income people will eventually want to find alternatives to Part B of Medicare and will no longer be in the same pool with other people who are 65 and older or disabled. Congress will then have less reluctance to cut the program.”

The only health care solution: single-payer system

By Aaron E. Carroll, M.D.
The Indianapolis Star, Sept. 10, 2006
 
The new uninsured statistics released recently by the U.S. Census provide a sobering reminder of the failures of the U.S. health-care system. In Indiana the number of uninsured has risen to 871,000: Nearly one of every seven residents lacks coverage. Even for those lucky enough to be insured, ever-skimpier private policies helped push an estimated 28,000 Indiana families into medical bankruptcy in 2001.
 
As a physician who faces our state’s health care crisis day in and day out, I support a single-payer “Medicare for All” system for Indiana and for the nation.
 
Nearly everyone, regardless of ideology, agrees that reform to establish universal coverage is necessary. But the most important question is “how,” and here not all proposals are created equal. Because our current non-system is based on insurance companies whose natural market behavior is to compete to cover healthy people while shunning the sick, proposals that preserve our reliance on them are destined for failure:
 
* “Individual Mandates” (like the much-celebrated Massachusetts plan) simply force the poor and near poor to buy overpriced policies that offer grossly inadequate coverage, guaranteeing an epidemic of medical bankruptcies.
 
* Reforms which force employers to contribute more for coverage, encourage them to cut jobs, wages, or other benefits.
 
* “Consumer-directed” health plans are nothing but a euphemism for substandard coverage, offering families no protection in the event of medical need.
 
Other countries have figured out how to provide higher-quality coverage to all their citizens for far less than we spend. Recent studies have detailed how Brits and Canadians have lower rates of nearly every chronic disease and enjoy superior access to care. An exhaustive 2004 study of 21 international health quality indicators in five countries found that – despite double the outlay on health care – the U.S. performed noticeably better on only two.
 
How can the U.S. spend so much more and get so much less? Anyone who has ever had to deal with the nightmarish paperwork of giant insurance companies already knows the answer: It’s our reliance on private insurers.
 
Insurance companies stay profitable by keeping those who actually need health care from getting it. To do this, they erect a giant, expensive bureaucracy whose only purpose is to fight claims, issue denials and screen out the sick. They consume care dollars, but produce only paperwork headaches. Doctors and hospitals must maintain costly staffs to deal with insurance hassles, and businesses are saddled with the burden of administering their own health benefits. In total, this administrative waste consumes nearly one-third of our health spending.
 
Research has shown that streamlining payment through a single public payer could save the U.S. more than $350 billion per year. Such a system could have saved Indiana $6 billion in 2003. That’s $8,266 per uninsured resident, enough to provide high-quality coverage to everyone. Everyone would be covered for all doctor, hospital, long-term, mental health, dental and vision care, and prescription drugs. Patients would have free choice of doctor and hospital, and physicians would be unleashed from corporate dictates over patient care.
 
In the U.S. opponents resort to cries of “socialized medicine,” but don’t be fooled. In a “socialized” system (like the U.S. Veterans’ Administration) the government employs the doctors and owns the hospitals. In a single-payer system, they stay private.
 
Similarly, much hysteria has been printed about alleged “rationing” of care in other nations. The truth is that the U.S. rations care more harshly than any other country. According to the Institute of Medicine’s most conservative data, 18,000 Americans die every year due to lack of insurance. Millions more go without needed care due to cost. Now that’s rationing. What’s more, Canadians don’t even wait very long for care. The median wait time for non-emergency, elective surgery was four weeks in 2005. Service was so fast that in a recent survey only 3.5 percent of Canadians reported feeling they waited too long for care. Considering we spend twice what they do, a U.S. system should be able to eliminate waits entirely.
 
Single-payer offers the only real solution for Indiana and for our nation. It’s time for politicians to stand up to the insurance giants – as they have in California – in the interest of the public.
 
Dr. Aaron E. Carroll is assistant professor of pediatrics and director of the Children’s Health Services Research Fellowship at the Indiana University School of Medicine in Indianapolis.

BC/BS of Minnesota's individual mandate proposal

BlueCross BlueShield of Minnesota
Unfinished Business
A discussion paper on the need for universal health coverage in Minnesota

A Universal Coverage Model (a few selected features)

* A mandate for all Minnesotans to have coverage

* People who do not comply with the mandate to have coverage are subject to a “fair share” penalty based on income and related to what they would pay for coverage. As an added incentive to comply when the mandate takes effect, people who are noncompliant could be subject to a pre-existing condition limitation for a specified time period when they do apply for coverage.

* Enforcement through employers and the tax reporting system, with a mechanism created to which employers can refer their uninsured employees to asses subsidy eligibility or what their fair-share penalty is. Employers could then deduct this amount from payroll.

* All insurers doing business in the small and large group markets must participate in the individual market by offering at least three pre-defined products.

* Losses for insurers’ high-risk pool are subsidized through a fund that is subsidized by the state.

* Continued support for disease management programs

* Regulatory flexibility to allow for new benefit structures and cost-sharing models

* The proposal assumes a set of benefits for modeling purposes, but the ethical discussion of how a coverage mandate can be made affordable must be undertaken by all Minnesotans, to have a chance of successfully achieving universal coverage.

http://www.bluecrossmn.com/bc/wcs/groups/bcbsmn/@mbc_bluecrossmn/documents/public/mbc1_univ_cov_paper.pdf

And…

Will Mandatory Health Insurance Work?
by Greg Scandlen
National Center for Policy Analysis
September 6, 2006

Policymakers can get an idea of how well mandatory health insurance would work to reduce the number of uninsured by looking at another type of mandated coverage. Consider:

* All but three states mandate automobile insurance, but 14.6 percent of America’s drivers remained uninsured in 2004, according to the Insurance Research Council.

* No state mandates health insurance, but 17.2 percent of the population lacked health coverage in 2004, according to the Employee Benefit Research Institute.

…perhaps the biggest lesson from these comparative statistics is the success of a completely voluntary market. Not one state yet mandates health insurance, but people are covered anyway – at virtually the same rate as auto insurance.

States should not consider mandating the purchase of something unaffordable and inefficient before pursuing policies that make coverage more affordable for more Americans.

Conclusion. There are no easy solutions to America’s health insurance problem. The current notion that a state legislature can solve the problem through mandatory coverage is naïve at best and a distraction from the hard work of finding real solutions.

http://www.ncpa.org/pub/ba/ba569/

Comment:

By Don McCanne, MD

The BC/BS of Minnesota plan is obviously self-serving. It would expand their market to everyone, allow them to sell innovative plans with increased administrative income but decreased protection for patients, and would shift the losses of high-risk patients to the taxpayers. In this report, BC/BS specifically acknowledges the fundamental problem of all individual mandate programs: they have not been able to figure out the ethics of making an individual mandate affordable. Do they make insurance premiums affordable and expose patients to great financial risk? Or do they provide bona fide insurance coverage that many cannot afford, and then punish them for failing to buy it?

Greg Scandlen is an advocate of consumer-directed health care, especially health savings accounts and high-deductible health plans. Although we certainly disagree on our respective models of reform (single payer versus consumer-directed), we do agree that the concept of an individual mandate in the private insurance market should be laid to rest.