By PAUL KRUGMAN
Op-Ed Columnist
New York Times
Published: September 4, 2006

Let me tell you about two government-financed health care programs. One, the Veterans Health Administration, is a stunning success — but the administration and Republicans in Congress refuse to build on that success, because it doesn’t fit their conservative agenda. The other, Medicare Advantage, is a clear failure, but it’s expanding rapidly thanks to large subsidies the administration rammed through Congress in 2003.

I’ve written about the V.A. before; it was the subject of a recent informative article in Time. Some still think of the V.A. as a decrepit institution, which it was in the Reagan and Bush I years. But thanks to reforms begun under Bill Clinton, it’s now providing remarkably high-quality health care at remarkably low cost.

The key to the V.A.’s success is its long-term relationship with its clients: veterans, once in the V.A. system, normally stay in it for life.

This means that the V.A. can easily keep track of a patient’s medical history, allowing it to make much better use of information technology than other health care providers. Unlike all but a few doctors in the private sector, V.A. doctors have instant access to patients’ medical records via a systemwide network, which reduces both costs and medical errors.

The long-term relationship with patients also lets the V.A. save money by investing heavily in preventive medicine, an area in which the private sector — which makes money by treating the sick, not by keeping people healthy — has shown little interest.

The result is a system that achieves higher customer satisfaction than the private sector, higher quality of care by a number of measures and lower mortality rates — at much lower cost per patient. Not surprisingly, hundreds of thousands of veterans have switched from private physicians to the V.A. The commander of the American Legion has proposed letting elderly vets spend their Medicare benefits at V.A. facilities, which would lead to better medical care and large government savings.

Instead, the Bush administration has restricted access to the V.A. system, limiting it to poor vets or those with service-related injuries. And as for allowing elderly vets to get better, cheaper health care: “Conservatives,” writes Time, “fear such an arrangement would be a Trojan horse, setting up an even larger national health-care program and taking more business from the private sector.”

Think about that: they won’t let vets on Medicare buy into the V.A. system, not because they believe this policy initiative would fail, but because they’re afraid it would succeed.

Meanwhile, the Bush administration is pursuing a failed idea from the 1990’s: channeling Medicare recipients into private H.M.O.’s. The theory was that H.M.O.’s, by bringing private-sector efficiency and the magic of the marketplace to health care, would be able to do what the V.A. has achieved in practice: provide better care at lower cost.

But the theory was wrong. Years of experience show that H.M.O.’s actually have substantially higher costs per patient than conventional Medicare, because they add an expensive extra layer of bureaucracy and also spend heavily on marketing. H.M.O.’s for Medicare recipients prospered for a while by selectively covering relatively healthy older Americans, but when the government began paying less for those likely to have low medical costs, many H.M.O.’s dropped out of the Medicare market.

In 2003, however, the Bush administration pushed through the Medicare Advantage program, which offers heavy subsidies to H.M.O.’s. According to the independent Medicare Payment Advisory Commission, Medicare Advantage plans cost the government 11 percent more per person than traditional Medicare. Oh, and mortality rates in these plans are 40 percent higher than those of elderly veterans covered by the V.A. But thanks to the subsidy, membership in Medicare Advantage plans is surging.

On one side, then, the administration and its allies in Congress oppose expanding the best health care system in America, even though that expansion would save taxpayer dollars, because they’re afraid that allowing a successful government program to expand would undermine their antigovernment crusade and displease powerful business lobbies.

On the other side, ideology and fealty to interest groups make them willing to waste billions subsidizing private H.M.O.’s.

Remember that contrast the next time you hear some conservative going on about excessive spending on entitlements, and declaring that we need to cut back on Medicare and Medicaid benefits.

Vermont News – WCAX.com
August 30, 2006

MONTPELIER, Vt. — Vermont could offer health coverage to all its residents and spend $51 million less a year on health care under a single-payer system, according to a legislative consultant’s report released Tuesday.

But while businesses that currently offer health insurance to their employees would save money, those that don’t _ and their workers _ would see a combined new 13.4 percent payroll tax that even some single-payer advocates see as fatal to the plan.

Sen. James Leddy, D-Chittenden, and Rep. John Tracy, D-Burlington, co-chairs of the Legislature’s Vermont Commission on Health Care Reform, joined the consultant, Dr. Kenneth Thorpe of Atlanta’s Emory University, in describing the report’s findings at a news conference.

“I assume employers would pay about 75 percent of the total (10.1 percent payroll tax) and workers the remaining 3.4 percent,” Thorpe said. Those taxes would be a new expense for businesses and their workers that don’t have health coverage now, he said.

“On the other hand, some employers and families currently pay more than 10.1 percent and 3.4 percent of payroll respectively for insurance and would pay less,” he wrote.

For their money, they would get a “a benefit package modeled after the typical plan in the state,” he added, saying that half of those who currently have insurance have more generous coverage.

Thorpe said copays and deductibles would be set very low under his plan. “These low cost sharing obligations will result in substantial reductions in consumer out-of-pocket spending.”

The lawmakers said Thorpe’s report was not a formal proposal, but was merely informational and one option as they pursue the key goal of health care reform legislation passed in each of the last two years: moving Vermont from a state that has an estimated 61,000 uninsured and 180,000 underinsured to one that offers universal coverage.

Leddy called the report “one more step in our ongoing process that will continue.”

Thorpe, Leddy and Tracy acknowledged that the coverage would not be truly universal. It would exclude Medicare beneficiaries, who already get comprehensive health coverage for seniors from the federal government.

Also excluded would be Vermonters who work for out-of-state employers, whether private companies, national nonprofits or the federal government.

Jason Gibbs, a spokesman for Gov. James Douglas, said the single-payer plan envisioned in the Thorpe report would result in less comprehensive health coverage for many teachers, state employees and others whose employers currently offer more generous plans.

Gibbs said the state should concentrate on implementing health care reform already passed, including the Catamount Health plan designed to get coverage to the uninsured. He noted the legislation’s emphasis on managing chronic diseases, which he said account for 80 percent of health care costs.

“From the governor’s point of view our focus should be laserlike as we implement Catamount Health and these new reforms and our focus should not be on ways to increase taxes,” Gibbs said.

Dr. Deborah Richter, a Cambridge-based family physician and president of the single-payer advocacy group Vermont Health Care for All, called the payroll tax a “nonstarter” because of the opposition it would generate among Vermont’s small business owners.

But she called the report “a great way to open the discussion” about moving the state toward a single-payer system.

By George H. Lesser
The Washington Times
Published August 16, 2006

I have problems with our health insurance “provider,” as I suppose some of you reading this do as well.

I had a minor test done in my doctor’s office. He injected a little pain killer, did the test, and I was gone in about half an hour. The insurance company refuses to pay half the costs, because the doctor anesthetized me, rather than having an anesthesiologist come. Of course, that would have dramatically increased the cost, but that’s what the insurance company demands.

Not too long ago, another doctor sent me to a hospital to have two routine tests performed, which required a general anesthetic in an operating room. My wife went through the same thing a few months before, and the insurance company paid only half because the two tests were performed simultaneously. So I scheduled two visits, on separate days, in the full operating room with the doctor, anesthesiologists, nurses, and who knows what else. I missed two days of work. The insurance company paid twice as much, plus twice the administrative costs for processing two claims. And, of course, I had to run twice the risks of two procedures under general anesthetic. The insurance tail wags the medical dog.

The last time I sought medical help in Italy, I suffered from gastrointestinal distress to such an extent I wasn’t eating. If I can’t eat in Italy, that is serious. The night before I was due to fly to Washington, I was in a hotel near the Milan airport. I wanted to see my doctor in Washington as soon as possible, so I telephoned him to make an appointment. He questioned me about my symptoms and told me I was too sick to fly. We argued, and then he said I could fly, but only if I got a doctor to prescribe ciprofloxacin (“Cipro”) and metronidazole (“Flagyl”) for me to start taking that evening.

I asked the hotel for a doctor. They said it would be faster to go to the clinic at the airport. I followed their advice and found a doctor. He wrote out two prescriptions for me, but said the airport pharmacy had just closed. He directed me to the nearest town with an open pharmacy.

I couldn’t find the drug store. I did find a hospital. I parked in the parking lot, walked in, and asked if I could get the prescriptions filled. The lady got testy and informed me this was a hospital not a pharmacy. I asked for her advice. She told me: “This is a hospital. We practice medicine. If you would like us to treat you, take a seat in the waiting room.” Unable to think of a better course, I went out to my car, grabbed my book, went back into the hospital and settled in for a nice, long read.

After at most five minutes, a male nurse interrupted me. I assumed it was to wrestle with insurance forms in Italian. Instead, the fellow escorted me into a hospital room, where we were joined immediately by a doctor. He spoke English about as well as I speak Italian, so we spoke my language until he ran into problems, then switched to his language until I couldn’t find a word. He questioned me closely about my symptoms. He had me lie down on the bed and started poking and asking me how it felt. He had the male nurse draw some blood, and he ran some other tests. He took a medical history and inspected parts of my anatomy that seemed to have nothing to do with the problem.

I was there six hours. The nurse was in the room with me for all but a few minutes. The doctor was there almost all the time. After a while, he got the test results, which showed I did not have food poisoning, but he wanted to observe me a while longer. Eventually, he concluded I had contracted some kind of intestinal bug, and he gave me a couple of days supply of Cipro and Flagyl.

I checked in with the waspish lady at the front desk to ask how much I owed. She asked me if I had parked in the hospital parking lot. I said yes. She said I owed one euro and 50 pence ($2). I asked how much for the medical care and the medicine. She said that was free. When I got back to Washington, I saw my doctor. He had a few tests run in the office, gave me full prescriptions for Cipro and Flagyl, and billed me $1,000.

Most Americans I talk to have a lot of screwy ideas about medical care. They think Americans have “The Best Health-Care System in the World.” They think “socialized medicine” doesn’t work, because people have to wait too long to get care, and the care isn’t very good and they don’t have any choices.

We have many wonderful doctors, hospitals and pieces of equipment in the U.S. However, statistically, we don’t do so well. Life expectancy, infant mortality, how long people live with a disease after it is diagnosed: You name the criterion, and we don’t compare well with any of the countries that have national health care. And we spend a whole lot more for a lot less health care.

Here are a few comparisons between the U.S. and France. According to the Organization for Economic Cooperation and Development: French women live 3-1/2 years longer than American women; French men live just over three years longer than American men. Our infant mortality rate is 72-1/2 percent higher than theirs. And 30 percent more Frenchmen smoke than we do, and they consume almost twice as much alcohol. Who knows how much more butter, cheese and fois gras?

Worried about waiting for a doctor? Or a hospital bed? The French have 37-1/2 percent more doctors than we, and way over twice as many hospital beds, per capita. Worried about choice? French hospitals are 65 percent government run and 35 percent privately run. Take your pick. The health-care system pays. You also get to choose your doctor.

The difference in the quality of service is difficult for Americans to comprehend. In France, doctors routinely make house-calls. Patients aren’t thrown out of hospitals because the insurance companies decide when it is time to go. They stay until doctors decide it is time to go. The French government pays 75 percent of all health care costs. Most of the rest is paid by private insurance. If somebody can’t afford private insurance, the government makes up the difference.

The bottom line: We pay 43 percent more for health care than the French do, and we get a whole lot less for our money.

George H. Lesser has reported for more than 30 years on international political and economic developments for both U.S. and European publications. He has been based in Washington, New York, London and Brussels, and lives in Washington D.C. and Florence, Italy.

By Louis Porter
Vermont Press Bureau
August 30, 2006

MONTPELIER — A Legislative study released Tuesday concludes that Vermont could save money by adopting a single-payer health care system.

But key lawmakers who authorized the study said they want more information before endorsing or rejecting such a system.

Implementing single-payer health care would pose political and financial challenges by forcing a “substantial redistribution of who pays for health care,” said Kenneth Thorpe, a national consultant hired by lawmakers to conduct the study.

Vermonters who lack insurance now and companies that do not offer coverage to their employees would pay more under a single-payer system, the study found. People who already have health insurance, and employers that offer it to their workers, would pay less.

When state lawmakers passed a reform bill last year to change the way health care is delivered and financed in Vermont, they promised to continue examining one alternative — a single-payer system, run by the state, that would pay hospital and doctor bills for all Vermonters.

Such a system would be more complex than it might seem, lawmakers and experts said.

For example, even the single-payer system studied by Thorpe would be funded by at least three sources. In addition to money provided by the state, the federal Medicare program would continue to cover eligible Vermonters. And private insurance companies would keep paying bills on behalf of out-of-staters who receive medical care while visiting the state.

Even with multiple funding sources, such a system could save $51 million in administrative costs, Thorpe said.

A single-payer system in Vermont would be financed by a payroll tax on companies and workers of about 13.5 percent, Thorpe said. Companies would pay about 75 percent of those costs, while employees would pick up the rest.

Companies that offer their employees health insurance, and workers who have coverage, would see a net savings under that system. But the roughly 40 percent of companies that offer no coverage to their workers would pay more, Thorpe said.

Rep. John Tracy, D-Burlington and Sen. James Leddy, D-Chittenden, who run the Legislature’s Health Care Commission, said they aren’t prepared to endorse the single-payer system outlined in Thorpe’s report. They said they need to see additional studies, including an analysis of all the economic effects such a system would have on the state.

Tracy and Leddy said a single-payer system could be a complement, rather than an alternative, to the “Catamount Health” measure lawmakers passed last year to increase the number of Vermonters covered by health insurance and improve care of chronic illnesses.

“We are not at the end of the road,” said Tracy, who is a Democratic candidate for lieutenant governor. His primary opponent is state Sen. Matthew Dunne. “As we continue to go forward we need to look at all the options to finance it.”

The report quickly drew fire from two sides: from those who don’t believe last year’s measure went far enough, and from those who believe it went too far.

“Imposing a payroll tax will drown Vermont’s job providers, who are a backbone of Vermont’s economy,” Vermont Chamber of Commerce President Duane Marsh said in a prepared statement.

Jason Gibbs, a spokesman for Gov. James Douglas, said the governor “negotiated and signed the most comprehensive health care legislation in the country.”

“The governor’s focus is on implementing those reforms, assuring universal access to affordable health insurance and lowering the cost of care for those who currently have health insurance,” Gibbs said. “We find it very troubling that, just a few months after landmark legislation has been passed, the Legislature is contemplating how to raise the payroll tax.”

But Marvin Malek, a Progressive Party candidate running for lieutenant governor, said Vermont’s new law does little to address the problems of information management and administrative waste. Lt. Gov. Brian Dubie, a Republican, also is running for lieutenant governor.

“That bill is hardly the answer,” Malek said. “I don’t even think it is funded.”

Taxpayers fund the health insurance plans provided to federal, state and local government workers, Malek said. “We are already paying so much for these government plans, why not just say all right, everybody is in,” Malek said.

Increasing the number of Vermonters eligible for government-subsidized health insurance fails to go far enough, he said.

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Contact Louis Porter at louis.porter@timesargus.com

FOR IMMEDIATE RELEASE
August 29, 2006

Contacts:
Steffie Woolhandler, M.D. (617) 497-1268
Nicholas Skala (312) 782-6006
Olveen Carrasquillo, M.D. (917) 882-7997 cell
Don McCanne, M.D. (949) 493-3714

Uninsured Ranks Swell as Private Coverage Deteriorates

Middle-Class Losing Coverage at Fastest Rate

14,000 Doctors: “National Health Insurance is the Only Solution”

CHICAGO — Responding to newly-released data from the U.S. Census Bureau showing that the number of uninsured Americans increased by 1.3 million in 2005, members of Physicians for a National Health Program (PNHP) condemned the sharp increase in the number of uninsured and called for a national health insurance program to provide comprehensive coverage to all Americans.

The number of uninsured rose from 45.3 million in 2004 to 46.6 million in 2005 (15.9 percent of the population), the fifth straight year of increases. The number of uninsured has increased by 6.8 million since 2000. The number of uninsured children rose from 7.9 million in 2004 to 8.3 million (11.2 percent of all kids) in 2005, despite continued expansions of the Medicaid and SCHIP programs.

“Virtually all of the people who lost their coverage were solidly middle-class, full-time working American citizens,” said PNHP co-founder Dr. Steffie Woolhandler, Associate Professor of Medicine at Harvard Medical School. “Additionally, there are the tens of millions more whose insurance is so skimpy they’d be bankrupted if they got sick. The mainstream of America is suffering.”

The Physicians’ group noted that the large increase in the number of uninsured Americans was a result of the continued erosion of employer-based coverage. A million full time workers lost their coverage between 2004 and 2005 (in 2005, 21.5 million of the uninsured worked full-time). The proportion of Americans covered by employer-based coverage continues to plummet, from 63.6 percent in 2000, to 59.8 percent in 2004, and 59.5 percent in 2005.

Almost all the rise in the uninsured was in families with incomes over $50,000 per year; there was a modest decline in the number of uninsured poor, those families with incomes under $25,000 per year (partly due to the expansion of public coverage to another 857,000 people). The number of uninsured people making between $50,000 and $75,000 per year rose the fastest, by 600,000 people, to 8.3 million (14.1 percent of this income group). Additionally, the number of uninsured making over $75,000 rose by 800,000, to 8.7 million.

“The number of uninsured is going to continue to climb as long as health care costs continue to rise unchecked,” said Dr. Don McCanne, senior health policy fellow for PNHP. “We can no longer afford the waste and inefficiency, the high overhead and outrageous executive salaries of the private insurance industry.”

Hispanics continue to be hardest hit among minorities. The number of uninsured Hispanics increased from 13.5 million in 2004 to 14.1 million in 2005. 32.7 percent of all Hispanics are uninsured, compared with 19.6 percent of Blacks (7.2 million people), 17.9 percent of Asians (2.3 million people), and 11.3 percent of non-Hispanic whites.

“Lack of coverage among Hispanics is the greatest health disparity issues for the Latino population” said Dr. Olveen Carrasquillo, Director of the Center for Health of Urban Minorities at Columbia University. “Band-aid solutions are clearly failing the Latino community and are no longer tolerable. Already, eleven Latino Congressmen have signed on to The National Health Insurance Act (HR 676) and a growing list of Latino organizations and groups are calling for such reforms. Most recently, the National Hispanic Medical Organization, representing 36,000 licensed Hispanic physicians in the U.S., expressed their support for National Health Insurance.”

The doctors’ group said that the only solution to the rising number of uninsured and underinsured is a single-payer national health insurance program, publicly financed but delivered by private doctors and hospitals. Such a program could save more than $400 billion annually in administrative waste, enough to provide high-quality coverage to all and halt the erosion of the current private system. On Monday, the California Assembly voted 43-30 in favor of a statewide single-payer program.

“The mainstream of American is now experiencing the human suffering that results from being uninsured. It makes any illness a potential economic and social catastrophe,” said Dr. Woolhandler. “The Administration’s proposed reforms fail to address the systemic problems of the health system. Health savings accounts and schemes like the Massachusetts plan will only intensify the failure. By contrast, the experience of other industrialized nations teaches us that high-quality, comprehensive care can be provided to all our citizens without increasing health spending. A single-payer national health insurance system has emerged as only solution to the nation’s health system debacle.”

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Physicians for a National Health Program is an organization of 14,000 American physicians advocating for non-profit national health insurance. PNHP has chapters and spokespersons across the country. For contacts, call (312) 782-6006

By Nancy Remsen
Burlington Free Press
August 30, 2006

MONTPELIER — Vermont’s total health care bill would decrease by about $51 million if all residents except those on Medicare were covered under one state-financed health care plan, an Emory University researcher reported Tuesday to the Vermont Commission on Health Care Reform.

Supporters of a single-payer plan for all Vermonters have long argued it would produce significant administrative savings. This new analysis suggested reduced paperwork and processing at hospitals might shrink administrative expenses from 23.5 percent to 17 percent of total spending. Administrative expenses for doctors could drop from 27 percent of gross spending to 20 percent.

If such a statewide health plan were financed using a payroll tax, the rate would have to be 13.5 percent. That would raise $1.6 billion, the portion of the $2.7 billion total cost of a state health care plan that wouldn’t be covered by the state’s government-funded Medicaid program, said Kenneth Thorpe, researcher and consultant hired by the Legislature a year ago to assist with the analysis of health care options.

“The change in who pays for health care would be substantial,” Thorpe said Tuesday during a briefing on his research.

Employers who provide health insurance could pay less under a payroll-tax plan, especially if workers paid a share of the payroll tax, he said. Employers who don’t offer insurance — 9,282 mostly small businesses — would be hit with a new tax that would collectively cost them $388 million or more, depending on how the cost was split with workers.

John Tracy, co-chairman of the Legislature’s health reform commission, said Thorpe had provided analysis of just one option for organizing and financing health care. “There will be more,” Tracy said. “When you make a business decision, you have to look at all the options.”

Thorpe said he would look at other ways to pay for a statewide health insurance program and analyze their economic impacts. His next report is due in December.

Duane Marsh, president of the Vermont Chamber of Commerce, said he didn’t think the commission was considering all the options. He rejected the suggestion that a government-run and financed health care program would cost less in the long term. He said he believes high-deductible health insurance plans would encourage individuals to make better health care choices. Fewer mandates for coverage would make private insurance less expensive, too, he said.

“I would like Dr. Thorpe to see how that kind of system would work,” Marsh said.

Dr. Deborah Richter, longtime advocate for a single state-financed health insurance program, cheered Thorpe’s report as the start of an important conversation.

“This model would be a whole lot easier to practice under,” said Richter, a primary care physician with a practice in Cambridge. Vermont doesn’t have as many health insurance companies as other states, but those in business here offer dozens of plans. Richter said, “There is a huge amount of administrative complexity to what we do.”

Cornelius Hogan, who co-wrote a book with Richter about the state’s health care choices, also applauded the analysis of administrative savings, but criticized the selection of a payroll tax as an option to pay for a state-financed plan.

A payroll tax of 10 percent or more is a “non-starter,” Hogan said. “They ought to be looking at scenarios that take the burden off businesses.”

Craig Fuller, consultant for Business Resource Services, noted the impact of the payroll tax on workers. “The winner is the highly paid employee,” Fuller said, noting these people likely work for employers already providing insurance. They could pay less under the plan.

“The losers are the low-paid workers,” who would now pay a portion of their salary for health insurance, Fuller said. That wouldn’t be an easy sell in the Legislature.

“We waste an inordinate amount of time talking about this,” Fuller said of a single-payer health care system. The remedy for the problem of rising health care costs, he said, is to deal with obesity, chronic diseases and inappropriate utilization of expensive treatment.

Contact Nancy Remsen at 651-4888 or nremsen@bfp.burlingtonfreepress.com