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Californians respond to Sacramento Bee editorial on health care reform

Californians respond to Sacramento Bee editorial on health care reform

Letters to the editor
Our social contract

Published 2:15 am PST Sunday, February 19, 2006
Story appeared in Forum section, Page E6

Re “The new shades of gray,” Forum, Feb. 12: For a multitude of unavoidable reasons, our population is aging, becoming more treatable and costing much more to treat.

The private health-care industry is preparing for this by expanding and adding facilities and services, not out of any real concern for our health but mainly to stay financially ahead of the game. While this is good for well-funded patients, none of it will help the growing numbers (in all age groups) who are unable to finance their access to essential care.

There remains only one “big idea” worth considering: a system of government-sponsored access to essential universal health care. Further, access to essential care must remain untarnished by private industry. For this we need to bite the bullet and pay a tax, but it will be less in taxes than we pay in premiums.

Government is the only institution with a valid social contract to protect our health and welfare.

– Lawrence A. Danto, M.D. , Truckee

A single-payer solution

Re “Health care needs big ideas but gets small ones,” editorial, Feb. 12: Health care already has the big idea – the California Health Insurance Reliability Act. SB 840 by Sen. Sheila Kuehl would establish a single-payer health insurance system for all Californians.

The health care system is in critical condition. Costs are escalating higher than the rate of inflation. Prescription drug costs have grown exponentially, as advertising consumes 31 percent of costs and profits exceed 20 percent. Employers are reducing coverage and demanding that employees pay higher costs. More people, including children, are uninsured or underinsured. Public funding has been cut. Competition among health plans has failed to demonstrate effectiveness in assuring access or contain costs.

The evidence is overwhelming that “profit and greed” are driving the system.

SB 840, which has already passed the Senate, enunciates a fundamental moral principle, that health care is a basic human right. It provides for universal access, comprehensive benefits, a wellness model, and significant cost savings.

The Lewin Group has done extensive economic analysis of SB 840, and documents that everyone in California would have coverage with less money spent.

– Emanuel Gale, Sacramento

Big ideas in health care

Apparently the editorial board has not heard of SB 840, the universal health care bill by state Sens. Shiela Kuehl and Deborah Ortiz, with several coauthors in the Senate and Assembly.
This bill would provide fiscally sound, affordable health insurance to all Californians, provide every Californian the right to choose his or her own physician and control health cost inflation.

The system would be paid for by federal, state and county monies already being spent on health care and by affordable insurance premiums that would replace those now paid by employers and consumers.

This plan would eliminate waste by consolidating the functions of many insurance companies into one comprehensive insurance plan, saving California about $20 billion and reducing total health spending by $8 billion in the first year alone.

For more information about this bill, visit www.healthcareforall.org.

– Lindy Tillement, Rio Linda

Disease management strikes out

By Laura Benko
Modern Healthcare
Originally published January 23, 2006

PREMATURE DEATH
PacifiCare ends program early, CMS cites rising costs

Raising further questions about the financial value of disease management, PacifiCare Health Systems plans to terminate a Medicare demonstration project for heart-failure care almost a year early amid mounting costs.

The health insurer, which was acquired by UnitedHealth Group last month, informed the CMS that it will end its HeartPartners disease-management demonstration on Feb. 28 instead of at year-end, as originally agreed upon.

PacifiCare–the nation’s largest Medicare HMO–launched the federally sponsored demonstration in January 2004 to help the CMS determine whether closely managing the care of seniors with congestive heart failure could improve outcomes, reduce hospitalizations and cut costs among beneficiaries in the Medicare fee-for-service program.

But according to the CMS, with PacifiCare’s fees factored in, HeartPartners has actually cost Medicare more than traditional care.

“From a financial perspective, the program has not generated Medicare savings as anticipated,” said Linda Magno, director of the Medicare demonstrations group at the CMS, adding that PacifiCare has borne all the financial risk. “We can’t force a company to continue with a program if their ability to support that program changes or their financial picture changes.”

Under its original three-year contract with the CMS, Cypress, Calif.-based PacifiCare guaranteed a minimum net reduction in Medicare expenditures because of its services. That means the insurer will be required to return a portion of its fees to cover any costs incurred by Medicare above “budget neutral” through Feb. 28. How much that will be won’t be known until later this year, after all claims have been received and processed, Magno said.

The program’s early halt casts further doubt over disease management’s ability to reduce medical costs, particularly among the older and sicker Medicare population. The economic value of such programs was thrown into question in October 2004, when the Congressional Budget Office released a report concluding there was “insufficient evidence” to prove disease management could actually save money. Hospitals, too, have been experiencing mixed success with efforts to run disease-management programs for insurers (Nov. 28, 2005, p. 6).

“Proponents often claim that disease-management programs not only improve quality but also pay for themselves by decreasing the use of acute-care services enough to offset the costs of the additional screening, monitoring and education services,” stated the CBO report, which analyzed 57 studies of disease-management programs. Unfortunately, “Improving health outcomes and mitigating healthcare costs do not necessarily go hand in hand.”

Since then, disease-management vendors have been scrambling to build a better business case for their programs, largely at the urging of employers (Aug. 8, 2005, p. 26).

Last week, for example, the Disease Management Association of America announced plans to establish an industrywide standard for measuring financial and clinical outcomes. The not-for-profit trade group said it will work with several public and private standards-setting organizations to develop a uniform measurement methodology, which it expects to unveil in early December.

“Our experience shows disease management works, but lack of agreement on how to measure that success has hampered our ability to convince skeptics,” said association Executive Director Tracey Moorhead, adding that the new measurement tools will help “erase any doubt that disease management benefits patients and payers alike.”

Meanwhile, PacifiCare’s decision to pull the plug comes just as the CMS is kicking off a far broader–and more financially stringent–pilot project aimed at testing how disease management could improve quality and contain costs among the nation’s 40 million fee-for-service Medicare beneficiaries. Under the three-year Medicare Health Support Program, launched in August 2005, vendors and insurers in eight regions will manage about 160,000 seniors with diabetes or congestive heart failure. Each company has guaranteed a 5% savings to Medicare net of their fees.

CMS officials, however, say they aren’t reading anything into HeartPartners’ early demise. “The two programs are so very different in their designs that we’re not drawing any direct conclusions or comparisons at this time,” said Barbara Hoffman, director of chronic-care improvement programs at the CMS.

The CMS was mandated under the federal Benefits Improvement and Protection Act of 2000 to study the effects of disease-management programs on some of the nation’s costliest chronic conditions. Congestive heart failure, a progressive condition in which the heart loses pumping power, affects just 14% of Medicare beneficiaries but accounts for a full 44% of the federal program’s annual expenditures, according to the CMS.

HeartPartners was modeled after a disease-management program that PacifiCare has offered its Medicare HMO members with much success since 2001.

The program has provided daily home-monitoring of participants’ weight and symptoms, nurse follow-ups and low-cost prescription-drug coverage to keep patients’ conditions in check.

PacifiCare spokesman Tyler Mason would say only that HeartPartners was stymied by a lack of interest among patients. Under its contract with the CMS, PacifiCare has received monthly payments of up to $525 for every senior enrolled in the program.

The insurer originally expected to collect $300 million in reimbursements over the three years; lagging enrollment has left the company woefully short of those projections.

According to Mason, HeartPartners currently has about 3,750 enrollees, or just 25% of the 15,000 beneficiaries originally expected to participate. The company has served 8,500 members over the life of the program, Magno said.

“After a considerable amount of energy on our part, the interest just isn’t there,” Mason said, adding that the program’s early termination has nothing to do with PacifiCare’s new ownership.

Mason declined to specify how much money PacifiCare has lost on the program other than to say the figure isn’t “anything substantial.”

Indeed, HeartPartners is just a drop in the proverbial bucket for UnitedHealth, which expects to post operating profits of $7 billion on $70 billion in revenue this year and to enjoy up to $250 million in annual savings, thanks to its $9.2 billion purchase of PacifiCare (July 11, 2005, p. 8).

But news of HeartPartners’ pending demise came as a blow to two companies, QMed and Alere Medical, that have handled various disease-management functions for the program since its inception.

Eatontown, N.J-based QMed, which provided decision support to HeartPartners’ participating physicians, said the program’s early halt will slash its 2006 revenue by $3.5 million, or roughly 18%.

Loss of the HeartPartners program will shave 8% to 10% off Reno, Nev.-based Alere’s annual revenue, said President and Chief Executive Officer Ronald Geraty.

Alere, which became PacifiCare’s exclusive disease-management vendor in June 2005, provided the electronic home-monitoring systems for the program. “We certainly believe in the project and are very disappointed that we’re not seeing it through to completion,” Geraty said.

Still, much could be learned from HeartPartners’ two-year stint. Magno said the CMS has hired an outside firm to evaluate the results of the program “to see what changed, what worked or didn’t work, and if (savings were generated) among specific subsets of beneficiaries.”

Those subsets could include heart-failure patients who also had diabetes or coronary artery disease or beneficiaries who received certain forms of outreach over other forms. Results of the evaluation will be contained in at least one of two reports that the CMS will submit to Congress in coming months, Magno said.

HeartPartners isn’t the first disease-management program to fall short of financial expectations.

According to a randomized clinical trial conducted by the University of Texas Health Science Center at San Antonio from 1999 to 2003, patients with heart failure who took part in a disease-management program lived an average of 76 days longer but saw no reduction in hospitalizations, office visits, procedures or pharmacy spending.

Another study, which analyzed outcomes for Kaiser Permanente’s four disease-management programs from 1999 to 2002, also found substantial quality improvement but no cost savings. Both studies were published in November 2004.

Program: HeartPartners is a CMS-sponsored demonstration project in Arizona and California
Focus: Disease management for congestive heart failure
Companies involved: PacifiCare Health Systems, QMed and Alere Medical
Current enrollees: About 3,750
Expected number of participants: 15,000
Start date: Jan. 1, 2004
Original end date: Dec. 31, 2006
New end date: Feb. 28, 2006
Source: CMS

Source: Modern Healthcare, 1/23/2006, Vol. 36 Issue 4, p8, 3p

No-Fault Compensation in New Zealand

Harmonizing Injury Compensation, Provider Accountability, and Patient Safety
Commonwealth Fund, February 2006

Executive Summary

In New Zealand, patients seek compensation for medical injuries not through malpractice suits as in the United States, but rather through a no-fault compensation system. Injured patients receive government-funded compensation, in turn relinquishing the right to sue for damages arising from personal injury except in rare cases of reckless conduct.

According to Marie Bismark and Ron Paterson, the authors of “No-Fault Compensation in New Zealand: Harmonizing Injury Compensation, Provider Accountability, and Patient Safety” (Health Affairs, Jan./Feb. 2006), the country’s Accident Compensation Corporation (ACC) offers distinct advantages over the often maligned U.S. tort law system. While acknowledging that New Zealand’s ACC has yet to demonstrate substantial gains in patient safety, the study finds that the popular system has produced more-timely compensation to a greater number of patients, as well as more effective processes for resolving disputes and ensuring provider accountability.

Benefits of New Zealand’s System
“The ACC system is one of the simplest in the world for patients to navigate,” write the authors, both former Harkness Fellows. Straightforward claims are processed in weeks, with all decisions made within nine months, and a fixed award structure ensuring that similar injuries receive similar compensation. Historically, the ACC has paid out about 40 percent of claims in four categories: 1) treatment and rehabilitation, including the cost of disability aids, home modifications, and vocational retraining; 2) compensation for loss of earnings (up to 80 percent of earnings at the time of injury, up to a set maximum); 3) one-time lump-sum compensation of up to US$70,000; and 4) support for surviving spouses and children under 18.

The system, funded through general taxation and an employer levy, is remarkably affordable. To date, compensation for medical injuries has cost just $29 million—for a population of about 4 million. Reforms enacted in 2005 are expected to incur additional costs of $5 million per year.

According to the authors, several factors contribute to the system’s affordability:
* New Zealanders benefit from strong health and welfare systems that cover many of the damages typically at issue in a U.S. claim.
* Compensation awards are generally lower than under a malpractice system.
* Many entitled patients never seek compensation.
* The ACC’s low administrative costs account for only 10 percent of expenditures, compared with a typical 50 to 60 percent under a malpractice system.

In the 1990s, New Zealand addressed concerns that a no-fault system amounted to a “no accountability” system. It did so by establishing the office of the Health and Disability Commissioner, which promotes patients’ rights and provides accountability, acts as gatekeeper to disciplinary proceedings in serious cases, and ensures that complaints serve to improve health service delivery and lessons learned are widely disseminated.

Remaining Concerns About the ACC
A few other major concerns about New Zealand’s no-fault system, however, remain unresolved, the authors say. First, many observers believe the compensation levels are inadequate, particularly for patients who are not employed at the time of their injury and are unable to claim earnings-related compensation. Second, compensating treatment injuries, but not other forms of illness, can produce tensions, since ACC assistance is higher than that available through the health and welfare systems.

Finally, and most importantly, the system has not fully realized potential gains in patient safety. Thirty years after the implementation of the ACC, New Zealand hospitals are no more or less safe than those in other Western countries—falling midway between the levels recorded in Australia and the United Kingdom—two countries with similar medical practices. While the recent reforms are expected to create a culture of learning, the process of making health care safer cannot be achieved through medical and legal reform alone, say the authors.

Facts and Figures
* In the U.S. medical malpractice system, most injured patients do not qualify for compensation, because their injuries were not negligently caused.
* The most costly claims in New Zealand—as in the United States—involve neurological injury to infants: fewer than 7 percent of claims yet more than 16 percent of spending.
* Per capita health spending was $1,886 in New Zealand in 2003, compared with $5,635 in the United States.

Comparison of the United States Medical Malpractice and the New Zealand No-Fault Systems

Eligibility for compensation
US: Negligence
NZ: Treatment injury

Expert adviser
US: Appointed by parties
NZ: Appointed by ACC

Decision maker
US: Lay jury
NZ: Administrative panel

US: Time to resolve a claim
NZ: Years Weeks to months

Administrative costs
US: High (under 50%)
NZ: Low (under 10%)

Average payment
US: High
NZ: Low (average payment less than US$30,000)

Physician indemnity insurance costs
US: High
NZ: Very low (less than $1,000, regardless of specialty)

Links to quality improvement processes Theoretical deterrent effect Claims analysis informs efforts to improve patient safety

Note: ACC is the Accident Compensation Corporation.

Citation
M. Bismark and R. Paterson, No-Fault Compensation in New Zealand: Harmonizing Injury Compensation, Provider Accountability, and Patient Safety, Health Affairs, January/February 2006 25(1):278–83

Statement for the Record of Dr. Don R. McCanne to Committee on Ways and Means (March 24, 2004)

Statement for the Record of Dr. Don R. McCanne,
Physicians for a National Health Program, Chicago, Illinois

House Committee on Ways and Means
Hearing on Board of Trustees 2004 Annual Reports
March 24, 2004

The 2004 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds describes the projected imbalances between the anticipated revenues and the expected growth in expenditures of the Medicare program. The Trustees call for prompt, effective, and decisive action to address this challenge.

As expected, a highly charged political debate rages over the causes of these anticipated net deficits in Medicare funding. Although we will hear much about factors such as the generous payments to Medicare Advantage plans, and the decline in tax revenues supporting the program, one factor predominates above all others: health care costs continue to escalate well beyond the level of inflation.

Health care cost increases are related to expanding and ever more expensive technological advances, along with unrestrained expansion in the capacity of our health care delivery system. We are spending more because we find more ways to spend health care dollars, and because we continue to expand the capacity that allows us to do it.

Approaching the Medicare deficit as an isolated problem will not address the fundamental cause of health cost increases. Rather, the integrity of the Medicare program would be threatened because solutions would be narrowly directed to substantially increasing revenues and/or dramatically reducing benefits. Either a reduction in benefits or an increase in cost sharing by the beneficiary would threaten to impair access to care because of lack of affordability for the individual beneficiary. The alternative of asking taxpayers to fund the increase in Medicare costs would be problematic when considering that they would also be facing the same escalating health care costs.

We already know that regions with higher health care capacity have increased intensity of services but without a commensurate improvement in medical outcomes. Hospitals with greater bed capacity in their intensive care units provide costly and relatively inhumane end-of-life care when less expensive and more compassionate care would be provided in a hospice environment. Physician owned specialty hospitals and medical group owned imaging systems significantly increase capacity and the level of services although there is negligible data available to demonstrate improved outcomes.

Other nations have demonstrated that planning and capital budgeting of capacity can prevent excessive utilization while ensuring adequate capacity to prevent unnecessary queues. The 15.5% of our Gross Domestic Product that we are currently spending on health care is more than enough to ensure appropriate capacity plus fund the operating expenses of our system, with the proviso that we do not waste resources on some of the current excesses of our system. Although health care planning declined after prior efforts, the current level of spending has reached a threshold that now makes it imperative.

The administrative costs of private health plans are significantly greater than those of public programs such as Medicare. But an even greater problem is the profound administrative burden placed on our health care delivery system by our fragmented system of a great multitude of private plans, large public programs, and, for some, no programs at all. In 2003 numbers, an estimated $286 billion in these administrative costs could be recovered and utilized for the deficiencies in health care coverage today. Eliminating administrative waste must be a part of our solution to rising costs.

Although our national policies protect and promote technological development, there is a pressing need to demand value for our private and public investment. Pharmaceutical firms that develop copycat drugs merely for the purpose of restarting the patent clock should no longer be disproportionately rewarded for such non-innovative efforts. Only new products with demonstrated value should be rewarded with higher prices. Also new products developed with public funding should return that investment to the taxpayer through lower prices. We should require that new technological innovations provide both significant medical benefit and value before funding them. And there is ample evidence to demonstrate that prices are much higher in the United States than in other nations. We clearly need a method of negotiating rates and prices to be sure that we are receiving a fair value for our health care investment while allowing a fair but not excessive profit for the manufacturer or provider.

To bring the level of health care cost increases down to near the rate of inflation, we need to control capacity and pay fair prices. Medicare alone cannot have a significant influence on capacity. Although Medicare does have some regulatory control over prices, acting alone inevitably results in inequitable results through cost shifting and unfairness in pricing, while failing to control global costs. And Medicare cannot further reduce administrative waste when it is adding to the administrative burden by being an additional player in our fragmented system.

Replacing our inefficient and wasteful system of funding care with a single public payer would control costs through global budgeting, planning and budgeting of capital improvements, and negotiation of rates and prices. And with the administrative savings made possible by eliminating the waste of the private bureaucracies, we could afford to fund care for everyone while controlling costs on into the infinite horizon. Instead of limiting Medicare reform considerations to revenue increases and benefit reductions, let us adopt systemic reforms that will enable the enactment of comprehensive, affordable coverage for everyone.

Medical debt is not created by deadbeats

Bankruptcy Reform’s Impact: Where are all the “deadbeats”?
National Association of Consumer Bankruptcy Attorneys
February 22, 2006

The following are key findings from a National Association of Consumer Bankruptcy Attorneys (NACBA) survey of six major credit counseling agencies that have dealt with a total of 61,335 consumers under the new federal bankruptcy law:

* Almost none of those seeking bankruptcy protection are able to repay their debts. Fewer than one out of 20 consumers (3.3 percent) were candidates for paying off what they owe under a debt management plan (DMP), with the remaining 96.7 percent requiring the same bankruptcy filing that they would have needed before the new bankruptcy law went into effect.

* The vast majority of Americans seeking bankruptcy protection are victims of unfortunate circumstances, not imprudent spenders seeking to cancel their debts. Four out of five consumers (79 percent) seen by credit counseling agencies are suffering from debt “caused by circumstances beyond their control (e.g., loss of a job, medical expenses, death, divorce or other change in marital status, increased minimum payments on credit cards, predatory lending, and so on). Only about one in five of the respondents (21 percent) were identified as suffering from debt due to “circumstances within their control”. The credit counselors included in this group all of those individuals who did not deliberately seek to accumulate excessive debt and, instead, through creditor blandishments and lack of financial sophistication, “got in over their heads” as finance charges and other fees mounted over a period of years. Thus, the masses of expected deadbeats who were supposed to be identified under the new law and forced into debt management plans have not materialized.

Testimony of Elizabeth Warren, U.S. Senate Judiciary Committee:

“Overwhelmingly, American families file for bankruptcy because they have been driven there – largely by medical and economic catastrophe – not because they want to go there.”

http://nacba.com/news/022206NACBAbankruptcyreformstudy.pdf

Comment: By Don McCanne, M.D.

The bankruptcy reform legislation was a solution designed to address a fictional problem. Had the bankruptcy issues been carefully defined, the resulting legislation would have had virtually no resemblance to what was produced.

This issue is important to health care reform advocates for two important reasons.

Specifically, our flawed insurance system is resulting in medical debt that has compounded the problem of personal debt. When the cause of medical debt is correctly defined, the solution would have been to reinforce the insurance system so that it would prevent financial hardship in the face of medical need.

More generally, we are now seeing a drive toward a solution based on the fiction that much medical spending is unnecessary, spending that would not occur if individuals were personally sensitive to the costs. Thus the solution proposed results in the increase of medical debt for individuals with greater health care needs. The real problem is that beneficial health care services are becoming less and less affordable, affecting disproportionately those with greater needs. The appropriate solution is to adopt a system that prevents financial hardship while reducing waste through improved resource allocation. This, of course, is precisely what the single payer model of national health insurance is designed to do.

More about medical debt soon. Stay tuned.

Vanquishing the American Dream

By Jim Hightower, Hightower Lowdown
AlterNet.org
Posted January 24, 2006.

As General Motors shuts down well-paid middle-class jobs, the old slogan ‘What’s good for G.M. is good for America’ no longer applies.

People like Robert Paulk and Jerry Roy are the heart of corporations like General Motors. Paulk, 58, and Roy, 49, are longtime, highly skilled hourly employees who’ve been working-class proud of being part of GM. Over the years, they’ve known their share of the hard labor, heavy lifting, and stress that come with being an autoworker, but they’ve stayed loyal, taken great pride in their work, and kept increasing their skills and productivity, doing their part to help General Motors become the largest car seller in the world — and helping GM’s investors pocket years of profits.

The job has been good to Paulk and Roy, too. Under the contracts negotiated by the United Auto Workers, Paulk, his wife, and their two teenagers have been able to enjoy a slice of middle-class comfort. Likewise, Roy, a third-generation GM worker, has done well enough to afford a modest but pleasant house on a lake near Flint, Mich., where his job is.

The Paulks and Roys represent a common story that can be told by millions of Americans of their generation. It’s the story of our country’s “social contract” — an implicit agreement between working stiffs like them and corporations like GM. This is a remarkable success story, embodying our nation’s egalitarian ideals and our commitment to the common good. In practice, America’s historic social contract has established within our huge, diverse and fragile society something essential: a stable middle class. While the Constitution and Bill of Rights are the legal glue of our nation, this contract is the social glue — it binds us as one people, giving tangible evidence that “we’re all in this together.” Those who produced this democratic advance were not the founders back in 1776, but our parents and grandparents — and doing so did not come easily for them.

In the 1920s and ’30s, working families in industry after industry openly rebelled against the rampant corporate greed, workplace abuses and political corruption of the day. As they organized, marched, and held sit-ins and strikes, they were bludgeoned, shot and often killed by corporate bosses, Pinkerton goons, police and even the National Guard. It was a hellacious period of bloody labor war, deep social unrest and spreading political upheaval. Finally, fearing for the very survival of capitalism, corporate chieftains began to signal to union leaders that they were ready to negotiate for labor peace and a new social order.

The ensuing bargain was straightforward: Corporations would get labor, loyalty and productivity in exchange for assuring job and retirement security. From the New Deal until the mid-1980s, unions, corporations and government hammered out a series of explicit agreements, rules and laws that gave legal structure to this implicit contract. The result was a new balance of power that made ordinary people like autoworkers the first decently paid, decently treated working class in the world.

Work was still hard and demanding, but the development of our social contract meant that, for the first time, tens of millions could find the American dream within their reach. By no means would you be a millionaire, but you could buy a modest home, have health care for your family, take a vacation and not have to fear retirement — in other words, have the work ethic fairly rewarded. Such a contract also enabled working folks like Paulk and Roy to feel positive about America’s commitment to the common good, to pride themselves as being a valued part of the economy and the larger community, and to have hope for the next generation. Such feelings are more than touchy-feely niceties — they determine whether people support the social order. This is why the feelings of workaday folks like Paulk and Roy are a crucial baromenter of America’s well-being, and why today’s corporate and political elite had better begin tuning in to them. “We’re all worried. Everybody is worried,” Paulk says of GM’s workers. “There are a lot of people that are really mad. They think this is the thing that revolutions are made of.”

The thing

What has the majority of America’s working families worried, angry and in a mood to revolt is that the Powers That Be have unilaterally decided to walk away from the social contract, and in so doing, to kiss off our country’s middle class. The evidence of their abandonment is everywhere:

* Cut-backs, take-backs and downsizings have become routine corporate practice, even in a time of soaring corporate profits.

* Wages have been deliberately depressed (now not even keeping up with inflation), while workers have dramatically increased the productivity, profitability and competitiveness of their corporations.

* While CEOs slash wages, cut health care and eliminate pensions for workers, they wallow in extravagant pay packages for themselves, get Cadillac health coverage for life and grab rich pensions they haven’t earned.

* Not only are most manufacturing corporations shifting their investments and middle-class jobs offshore (mostly to China), but the high-tech industry is also abandoning the American middle class, shifting even its professional work to low-paid countries (mostly to India).

* Corporate money has bought the White House and Congress (including too many moneysoaked Democrats), so Washington has been aggressively dismantling the framework of rules and laws that allowed labor to achieve some fairness in the workplace.

* The courts and regulatory agencies have been stacked with former corporate minions who are consistently ruling against worker rights and protections.

* Wall Street’s powerhouse investors are now demanding that every corporation and the overall American economy be organized on the low-wage, no-benefit, antiunion model of Wal-Mart.

* The media establishment (itself corporate) has obligingly adopted the corporate spin that the day of unionism is long gone, that workers must learn to accept insecurity and a lowered lifestyle, that the social contract is simply too much of a burden on corporations and governments in this age of global competitiveness, and that, for success, tomorrow’s workers “must take on the responsibility” to identify and acquire — “on their own” — “the emerging skill sets” that will be “valued in the marketplace” (believe it or not, this glob of gobbledygook actually came out of the mouth of an IBM executive, quoted approvingly in the New York Times).

What’s good for GM …

The middle class is not simply “vanishing” (as some well-paid scribes of the establishment media so blithely put it) — the middle class is being vanquished! The auto industry, for example, which once took pride in its work force and in being America’s economic engine for a shared prosperity, has now launched a particularly gruesome assault. Late last year, just before the holidays, General Motors (whose president once famously declared that what’s good for GM is good for America) announced that it was closing 12 of its U.S. plants, eliminating 30,000 hourly jobs and whacking a billion dollars a year out of the health-care benefits it owes to its blue-collar workers and retirees. Two weeks later, GM announced that it was going to triple the number of cars it makes in low-wage India.

At about the same time, Delphi Corporation went even further. A division within GM until it was spun off in 1999, Delphi is the nation’s largest supplier of dashboards, brakes, doors, power trains and other components assembled by auto companies, hauling in more than $28 billion a year in sales. It announced last October that it plans to close some of its 31 U.S. plants, terminate its health-care plan and life-insurance coverage for blue-collar retirees, reduce pension payments, and — get this — force its 34,000 hourly workers to take a two-thirds cut in their wages. Skilled workers there, who make as high as $30 an hour, would be knocked down to as low as $10 an hour. Asserting that the middle-class wages and benefits earned by autoworkers are unaffordable luxuries these days, millionaire executives have begun the Wal-Martization of automaking. This is not just another industry, and the severing of the social contract by GM and Delphi is not just another in a long string of corporate downsizings. This is one of our nation’s premier industries, a symbol of America’s economic vitality and can-do spirit and a pacesetter for our entire economy.

In 1914, only a year after he opened his first assembly line, Henry Ford stunned the manufacturing world by more than doubling the hourly wage of workers on the line. At $5 a day, he explained, they could afford to buy a Ford. Moreover, James Couzens, Ford’s corporate treasurer at the time and the man credited with the $5-a-day idea, said: “We want those who have helped us to produce this great institution and are helping to maintain it to share our prosperity.”

Ninety-one years later, the managerial heirs to Ford and Couzens are disowning any corporate commitment to shared prosperity as they arbitrarily abrogate the good-faith contracts negotiated with autoworkers. Today’s industry executives are cutting off the top rungs of America’s middle-class ladder, lowering the best-paid jobs to a level where employees will no longer have the income to buy the products they make.

In the name of “competitiveness” with third-world countries, these executives are creating a poorer, less secure — and angry — working class in our country, stealing the American Dream from millions of people. Their actions raise a number of Big Questions for the future of our society:

Around what shall we gather? Learned from early childhood, the importance of fairness and sharing is central to our becoming social beings. Indeed, these were the basic values behind the social contract, which pledged that loyalty, productivity, cooperation and quality work would be fairly rewarded. But these values are nowhere in sight when GM dumps 30,000 loyal workers whose productivity record, according to the very CEO who did the dumping, “has been dramatic,” doubling in the past 10 years. These values are also absent when GM shuts down 12 facilities, including two that were ranked among the industry’s best in quality and another at GM’s Tennessee Saturn plant that was renowned as a model of labor-management cooperation. GM has now emphatically declared that those virtues are no longer to be honored. If our society can no longer gather around the shared economic values of loyalty, productivity, cooperation, quality and fairness, then what? The only answer being offered by the elites is “survival of the strongest,” but that’s the law of the jungle, not a social ethic.

Why shouldn’t workers be well paid? The CEOs (and the compliant media) keep hammering autoworkers as the “aristocrats” of labor, claiming that their wages and benefits are excessive and must be slashed so that U.S. auto manufacturers can become competitive again. A New York Times reporter, in a tone of tongue-clucking criticism, noted that GM’s American employees are earning far more than autoworkers “in countries like Mexico and China.” Well, gosh — I would hope so! Isn’t getting ahead part of the American ethic? What’s wrong with a blue-collar factory worker making $30,000 or even $60,000 a year, plus health care and a good pension? That’s success — for the workers and for America — and it ought to be held up as a model for a well-run economy, not a target of derision. Oh, by the way, how ludicrous is it for the pay of middle-class workers to be attacked by CEOs hauling away millions of dollars each and living in platinum cocoons?

What about the abject failures in the executive suite? Top management has become highly creative at blaming, reducing and stealing from its work force. If management put a tenth of that creativity into designing cars that the buying public might actually want, there would be no need for the massive cutbacks we’re getting. Contrast Detroit’s performance with the competition. Toyota, for example, makes cars here in America, paying wages and benefits comparable to Detroit’s. But its high-quality, good-mileage, reliable cars are selling — American consumers are snapping up Toyotas faster than the company can roll them out. Far from cutting back, Toyota and other foreign competitors are opening new plants in America, while the geniuses running GM are trying to shrink their way to prosperity. U.S. auto chieftains do not keep up with market demands or design quality cars. Instead, they run top-heavy corporate structures, engage in fraud (much of Delphi’s present financial troubles come from its three-year, Enron-like accounting scandal that cost investors more than $1 billion), launch new “turnaround” schemes every few months, rely on money-losing discounts to move inventory and dump money into silly advertising campaigns to try to cover up their production failures. Then, with revenues down, they demand more cutbacks for the blue-collar workers while merrily giving everyone in the executive suite promotions and raises.

Doesn’t this cry out for a national health-care program? A constant refrain from the auto companies is that the soaring cost of health care is crushing their bottom line. For example, GM honchos wail loudly that covering their autoworkers and retirees adds $1,500 to the cost of each car. The only answer, they say, is to slash or even eliminate this protection for working families. But wait — before our country callously agrees to yank the health-care rug out from under the middle class, let’s consider fundamentally reforming our bloated, bureaucratic, exorbitantly expensive, inadequate and unjust health-care system. Again, check the competition: Japan has a national health program that doesn’t leave its population dependent on whether an employer wants to or can afford to cover employees. No matter what their job is (or if they don’t have a job), the Japanese people have the security of health coverage. Thus Toyota’s workers enjoy health care without the cost being added to the price of the cars they make.

With a national health program for America, not only would GM improve its competitiveness by some $1,500 per car, but our nation would also be made stronger by replacing the inefficiencies and greed of the massive corporate structure (insurance giants, HMOs, drug peddlers, etc.) separating us patients from our doctors. America spends far more per person on health care than do Japan and other countries with a national plan — and they get superior care. It’s time for the auto bosses to show leadership. Rather than retreating on the social contract, they should use their political and media clout to advance a national health-care program that’ll truly be good for the country — and for General Motors.

A dangerous betrayal

Today’s corporate leadership is playing with fire. The elites are so focused on enriching themselves — knocking down the workaday majority’s wages and benefits in order to grab more of the nation’s wealth, for example, and getting Bush to keep piling on the tax giveaways for the rich at the expense of everyone else — that they have become blind to the looming threat that their avarice poses to the social order and to their own well-being. Until recently, the Wal-Mart model has been taking advantage of low-skilled, low-income workers, but moving that model upward to autos, steel, high-tech, and other industries ensnares highly skilled middle-income workers. There’s a big difference between holding people down and knocking them down. Middle-class working families are people who’ve had a slice of the American pie — and for them to be told now that their slice will be taken from them and their children is not merely to shred the social contract and throw it in their faces, but to dissolve the social glue that holds our big, sprawling, brawling country together. It’s the betrayal of the middle class. And, as Robert Paulk put it, “This is the thing that revolutions are made of.” The elites who are so smugly dismissing middle-class wages and benefits as “excessive” will not be able to build walls and gates high enough to stem the tide of anger coming at them.

From The Hightower Lowdown, edited by Jim Hightower and Phillip Frazer, January 2006.

Jim Hightower is the author of “Let’s Stop Beating Around the Bush” (Viking Press). He publishes the monthly Hightower Lowdown; for more information about Jim, visit jimhightower.com.

Canada's Health IT Investments Outpace the United States

Originally published February 16, 2006

Canada Health Infoway by March will have invested $562 million in health IT projects, Richard Alvarez, CEO of the federally funded not-for-profit corporation leading e-health in Canada, said at the annual Healthcare Information and Management Systems Society conference, Government Health IT reports. Canada Health Infoway is a federally funded not-for-profit corporation leading health IT adoption in Canada.

Canada has invested $151 million in electronic health records systems and $130 million in diagnostic imaging systems development, investments that provincial, regional or local health care organizations have matched.

Alvarez estimates that the country’s health IT investments will save $6 billion annually in health care costs. Alvarez said Canada still has more than $500 million to invest in health IT projects, with the goal of providing 50% of Canadians with EHRs by 2009.

Canada, which has a population of 31 million, is outpacing the United States, which has a population of 295 million, in health IT investment, according to Government Health IT. The U.S. Office of the National Coordinator for Health IT, which was formed two years ago, has a budget of $111 million for fiscal year 2006. President Bush has asked for $169 million for health IT in the FY 2007 budget (Brewin, Government Health IT, 2/15).

iHealthBeat is published daily for California HealthCare Foundation by The Advisory Board Company.

Desperation over medical bills drives woman to crime

Online armor sales net prison, fine
By Steve Liewer
The San Diego Union-Tribune
February 23, 2006

A Vista woman was sentenced to prison yesterday for buying from Camp Pendleton Marines stolen body armor meant for Iraq-bound troops, then selling it to undercover agents posing as foreign arms dealers.

Erika Jardine, 47, was arrested in November 2004. Jardine pleaded guilty a year later in U.S. District Court in Philadelphia to charges of violating the Arms Control Export Act and selling stolen U.S. property, said Dean Boyd, a spokesman for U.S. Immigration and Customs Enforcement.

During her sentencing hearing yesterday, Jardine tearfully apologized to the government and to U.S. District Judge Michael M. Baylson. Jardine said she sold the vests to make money to buy health insurance that her multiple jobs, including one as a licensed real estate agent, did not provide.

Jardine worked several full-and part-time jobs in the Vista area, according to a court document. She experienced financial distress after suffering health problems that included thyroid, ulcer and knee troubles.

“She was apparently badly in need of money,” Boyd said.

http://www.signonsandiego.com/uniontrib/20060223/
news_7m23kevlar.html

Comment: By Don McCanne, M.D.

The opponents of single-payer national health insurance frequently use isolated anecdotes to “prove” that a government insurance program would lead to impaired health outcomes and financial ruin. If they were on our side of the debate, organizations such as The Fraser Institute, Pacific Research Institute, and the National Center for Policy Analysis might use this anecdote to prove that national health insurance would reduce crime in the United States. At Physicians for a National Health Program, our positions are based on solid policy science rather than isolated anecdotes, so we would never go there on this one.

Although anecdotes do not establish policy science, they do serve another purpose. They can illustrate a specific example of principles already firmly established in the policy literature.

We know that millions of Americans with significant medical problems are facing financial hardship because of an inability to pay their out-of-pocket medical expenses. Many of them are desperate. There is no acceptable excuse for Ms. Jardine’s criminal acts, but we can acknowledge that the failure of our health insurance system either created or compounded her desperation.

A national health insurance program will not solve all of society’s problems, but it would dramatically reduce the desperation caused by mounting medical bills, and without any additional spending over our current levels. Ms. Jardine’s desperation “proves” that we need a single-payer national health insurance program.

I guess I did “go there,” but on the issue of desperation rather than crime reduction. Maybe it’s time for a study on personal medical debt and crime, beginning with the portion of the policy community that supports shifting health care costs to those who have greater health care needs. Now that’s a crime!

Brailer implicitly supports Wygod's next big thing

WebMD Wants to Go Beyond Information
By Milt Freudenheim
The New York Times
February 23, 2006

Marty Wygod, the entrepreneurial deal maker who built WebMD Health into one of the most-visited medical information sites on the Internet, is promoting the site as the next big thing in health care.

By helping people enrolled in employer health plans compile personal health information online, Mr. Wygod wants to tap into the growing corporate trend of having employees pay more, if not all, of their own health costs.

WebMD says it has signed contracts with big health insurers and employers to operate private-access sites where employees can keep track of their medical records, look up information about diseases and compare costs and ratings for doctors and hospitals. Employers or their insurers pay licensing fees to WebMD, based on the services and number of health plan members.

… the company says it has signed multiyear licensing contracts with big health insurers that include Aetna, Cigna and the nation’s largest, Wellpoint, and with nearly three dozen of the nation’s biggest employers, including Bank of America, Cisco Systems, Dell Computer, I.B.M., Pfizer, Shell Oil and the state of North Carolina.

“Corporate America is looking for a way to educate its employees about health care costs, and hopefully to move a substantial amount of those costs off their books,” Mr. Wygod said in a telephone interview. But for investors in WebMD Health, which will post its quarterly results today after the stock market’s close, the big question is how much of the potential upside might be theirs to share.

Mr. Wygod, who sold his earlier venture, the pharmacy benefits manager Medco Containment Services, to Merck for $6 billion in 1993… took charge of Healtheon in 2000…

Under the personalized WebMD service, employees go to private Web sites to fill out health status questionnaires. At some employers, like Pfizer and Dell and North Carolina, employees use WebMD programs to combine the answers with medical payment data from doctor visits and hospital stays to create personal health histories.

WebMD is also holding talks with banks and financial giants like Fidelity. The banks view the trend to so-called consumer-directed health care as a huge opportunity to manage tax-sheltered health savings accounts that many workers are now being offered in tandem with low-premium, high-deductible health insurance.

When WebMD posts its financial results later today, analysts are expecting quarterly earnings of 9 cents per share. What they are waiting to hear is the company’s guidance on the business prospects for Mr. Wygod’s next big thing.

http://www.nytimes.com/2006/02/23/business/23place.html?_r=1&oref=slogin

And…

Remarks by David Brailer, MD PhD, National Coordinator for Health Information Technology Healthcare Information and Management Systems Society (HIMSS)
2005 Keynote
United States Department of Health and Human Services

The Certification Commission for Health IT (CCHIT) is on track to develop a standard for EHRs in ambulatory settings by summer 2005. This is a multi-stakeholder group that exemplifies the very best of private sector leadership – broadly supported, transparent and deliberative, yet urgent and narrowly focused. The work of the Certification Commission is critical to physician and hospital buyers who want to know what product to buy, to established vendors who want to grow their markets, to new technology innovators who want to offer a module within a broader solution, to investors who want to know where to put their capital, and to policy-makers who want to make sure that public funds are invested wisely. About the only people who don’t benefit from the Certification Commission’s work are pro-regulatory zealots who would rather have the government make new rules for the industry.

http://www.hhs.gov/healthit/BrailerSpch05.html

And…

Brailer opens HIMSS06
2006 Keynote
HIMSS Daily News
February 13, 2006

“Only the marketplace can ensure that we have sustained innovation,” (David Brailer) said. “A marketplace approach will result in faster and bigger change because it aligns the key drivers. We have ensured that the federal government will not build, own or operate the infrastructure of America’s health information.”

http://www.healthimaging.com/content/view/3839/85/

Comment: By Don McCanne, M.D.

Does this really need a comment? Perhaps a few obligatory words…

At 16.5 percent of our GDP, our health care system is a logical target for entrepreneurs. The primitive state of our health care information systems offers a golden opportunity for entrepreneurs to move in and gain control of as much of our $2.1 trillion health care budget as they possibly can. Their obligation to their investors is, above all, to design health care information systems that will move the maximum number of dollars possible to their own corporations. Marty Wygod no doubt welcomes this opportunity to at least fantasize about becoming a trillionaire.

Other nations and our own government are already far ahead of the U.S. private sector in developing such systems. Some believe that the Veterans Administration’s system has contributed to the significant improvement in quality at the VA. Government owned and operated systems are designed to serve patients and their health care providers, while using health care dollars as efficiently as possible. Government goals have little in common with entrepreneurial goals.

When affordability of health care is the number one health concern of most Americans, it is unfortunate that, by rejecting public administration of the health information infrastructure, Brailer is supporting the transfer of more dollars away from health care and into private, administrative enterprises. Worse, 60 percent of health care is funded through the tax system, yet Brailer does not want pro-regulatory zealots to set up rules for the industry. Handing tax dollars over to private enterprises without regulatory oversight is public policy malpractice.

Woman Fences Stolen Goods to Pay for Health Insurance

Woman Fences Stolen Goods to Pay for Health Insurance

The San Diego Union-Tribune
February 23, 2006

By Steve Liewer
STAFF WRITER

February 23, 2006

A Vista woman was sentenced to prison yesterday for buying from Camp Pendleton Marines stolen body armor meant for Iraq-bound troops, then selling it to undercover agents posing as foreign arms dealers.

Erika Jardine, 47, was arrested in November 2004. Jardine pleaded guilty a year later in U.S. District Court in Philadelphia to charges of violating the Arms Control Export Act and selling stolen U.S. property, said Dean Boyd, a spokesman for U.S. Immigration and Customs Enforcement.

During her sentencing hearing yesterday, Jardine tearfully apologized to the government and to U.S. District Judge Michael M. Baylson. Jardine said she sold the vests to make money to buy health insurance that her multiple jobs, including one as a licensed real estate agent, did not provide.

As part of her plea agreement, she has helped investigators gather evidence against 15 other people, including 12 Marines and three civilians, according to court documents. Besides the six-month prison sentence, Jardine must spend three years on probation, perform 750 hours of community service and pay a $6,500 fine.

Boyd said eight of the suspects were arrested in the past year at Camp Pendleton. He said he didn’t know the Marines’ names and ranks or the status of their cases.

Camp Pendleton’s public affairs office did not answer questions about the cases, but it issued a brief statement acknowledging that military authorities are investigating them.

“Evidence does not indicate that several Camp Pendleton Marines were part of a ring or organization that stole and resold ballistic vests and other controlled U.S. military items,” the statement said. “Rather, current evidence indicates that these were individual cases. In addition, many of the cases . . . were prosecuted months ago and resulted in courts-martial.”

Jardine worked several full-and part-time jobs in the Vista area, according to a court document. She experienced financial distress after suffering health problems that included thyroid, ulcer and knee troubles.

“She was apparently badly in need of money,” Boyd said.

In late spring 2004, Jardine placed an ad in Camp Pendleton’s newspaper offering to buy surplus military gear, Boyd said.

It was a time when body armor, including protective inserts called SAPI plates, were in short supply. Several Marines offered to sell Jardine the ones they had been issued for use in Iraq, Boyd said. Then in June, Jardine put them up for sale on the online auction site eBay.

A man named “Patrick” from eastern Pennsylvania won the auction.

He actually was a government agent posing as an arms dealer, according to a court document. He contacted Jardine and suggested in an e-mail that they do business off of eBay because “the U.S. government does not look favorably on shipping these out of the country and the less attention we draw to our deals the better,” a court document said.

During the next several months, Jardine shipped several sets of SAPI plates to “Patrick” in Austria and Pennsylvania with the understanding that some of them would be shipped to Lithuania, court documents said. They frequently talked about the illegality of the shipments, and Jardine wrote on customs forms that they were ceramic plates or picture frames.

“Clearly, when she began selling these on eBay to us, she knew it was illegal,” Boyd said.

After her arrest, Jardine helped investigators for Immigration and Customs Enforcement and the Naval Criminal Investigative Service by placing fake newspaper ads and negotiating more sales. Several suspects remain at large, Boyd said, and some of the Marines who allegedly sold her goods are serving in Iraq.

Jardine has helped authorities recover other apparently stolen military goods, including 104 SAPI plates, 14 vests, seven Kevlar helmets and 74 M-16 rifle magazines.

She took an active role in her community and baby-sat neighborhood children in her home, a court document said. Several neighbors wrote letters to the court describing her as hard-working, conscientious and helpful.

At yesterday’s sentencing, the judge told Jardine that despite her cooperation and lack of a criminal record, she still deserved prison because she knew what she did was wrong.

“This was a serious crime that took SAPIs away from American soldiers fighting in Iraq and Afghanistan,” said Assistant U.S. Attorney Todd Schulman.

Knight-Ridder/Tribune News Service contributed to this report.

Health care spending in 2006

Health Spending Projections Through 2015: Changes On The Horizon
By Christine Borger, Sheila Smith, Christopher Truffer, Sean Keehan, Andrea Sisko, John Poisal, M. Kent Clemens (from the Office of the Actuary, Centers for Medicare and Medicaid Services)
Health Affairs
February 22, 2006

Projections for 2006

$2.164 trillion – National health expenditures (NHE)

$7,110 – NHE per capita

16.5% – NHE as percent of GDP

Health spending is expected to consistently outpace gross domestic product (GDP) over the coming decade, accounting for 20 percent of GDP by 2015.

Stable trends through 2015 likely mask important changes to the U.S. health care system across payers and types of care.

http://content.healthaffairs.org/cgi/content/full/hlthaff.25.w61/DC1

Comment: By Don McCanne, M.D.

These numbers should be downloaded since they represent our current level of health care spending and can be very useful in your advocacy work.

Current trends indicate that spending growth will continue well in excess of the rate of inflation. The greatest uncertainty is not how much we’ll be paying, but rather who will be paying it.

Health-care overhaul urged at rally

By Richard Halstead
Marin Independent Journal
February 19, 2006

Guy Esberg of San Anselmo said he recently traveled to Germany for an operation and is contemplating going to Thailand for a second operation because he can’t afford to have the procedures performed in the United States.Don Cohon of Sausalito said he received a $24,000 bill after he fell off his bike and was taken by ambulance to Marin General Hospital, where he received minimal treatment and was released less than three hours later.

David Brody, a Mill Valley psychiatrist, said he is seriously considering moving to Cambodia or New Zealand because the medical system in this country is “falling apart.”

These were just a few of the testimonials presented Saturday at the Marin Civic Center during a political rally for adopting a government-run health-care system.

The meeting was sponsored by Health Care for All-California, a statewide organization working toward a single, nonprofit health-insurance system that will cover all Californians equally.

More than 200 people turned out on a cold, rainy Saturday to listen to local health-care professionals, government officials, union representatives and others make the case for the change.

If attendance at Saturday’s rally is any indication, support in Marin for a government-managed system runs strong. Rep. Lynn Woolsey, D-Petaluma, kicked off the meeting, and Assemblyman Mark Leno, D- San Francisco, wrapped it up.

All five candidates competing in the June Democratic primary for the 6th District State Assembly seat were there. Each has expressed support for a government-run system.

Supervisor Cynthia Murray, who had voiced skepticism about government-managed health care, said Saturday that she had undergone something akin to a “religious conversion” on the issue.

An estimated 46 million Americans, one in every five Californians, lack health insurance, said Larry Meredith, director of Marin County’s Department of Health and Human Services. Meredith said health insurance premiums currently are rising 10 percent per year and are expected to double over the next decade.

There is a particular urgency now because SB840, a bill that would create a state-run system in California, is wending its way through the state Legislature. Andrew McGuire, director of Health Care for All-California, said that in July, his organization will initiate a campaign to boost public awareness of the bill in 365 cities throughout the state.

Woolsey said she is supporting SB840, which was introduced by State Sen. Sheila Kuehl, D- Santa Monica, “because I think if it passes, it will create a momentum for national, single-payer solutions around the country.”

Woolsey also is supporting the United States National Health Insurance Act, which has been introduced by Rep. John Conyers, D-Michigan. The legislation would create a national system of universal single-payer health-care insurance.

Past efforts to reform the health-care system didn’t fail because Americans are disinterested in the issue, Woolsey said.

“It lost,” Woolsey said, “because the industry that profits from the current system launched a massive negative campaign unprecedented in both its cost and its level of deception.”

With more and more employers eliminating health-care benefits or boosting co-payments, the health-care system is caught in a vicious circle, said John Severson, director of Coastal Health Alliance, a clinic that serves mostly uninsured and underinsured West Marin residents.

People without health coverage get treated after their condition reaches a crisis, and that drives treatment costs up, Severson said. To pay for the treatment of these patients, often in hospital emergency rooms, insurance companies raise everyone’s rates.

“And all of that is a huge dead weight that is working its way straight down our health-care delivery system,” Severson said, “putting our hospitals, physicians and outpatient clinics under a tremendous amount of strain.”

Leno outlined how spiraling health-care costs trigger negative social effects. Health-care bills are the most common cause of personal bankruptcy, and new federal laws have made it more difficult to file for bankruptcy, he said.

“That means more families break up and we have more children in our foster-care system,” Leno said. Only half of all foster children finish high school, and many end up in prison, he said.

“Seventy-five percent of those in the Department of Corrections have come through a foster home,” Leno said.

Rising prison populations mean higher state costs. Gov. Arnold Schwarzenegger’s proposed budget would devote more than 8 percent of state discretionary spending to prisons, Leno said.

“That means the elderly, the indigent and the frail are relying more and more on health services at the local level,” Leno said. “Which means there are fewer dollars for libraries, parks and filling potholes.”

Leno said the health system was unlikely to collapse all at once.

“It is this slow drip, drip, drip,” he said, “as our quality of life slowly disappears.”