PNHP

How the Real HSA Stands Up

How the Real HSA Stands Up

BCBSNC Announces New Group HSA Offering with Mellon Financial
BlueCross BlueShield of North Carolina – December 2, 2004

Blue Cross and Blue Shield of North Carolina (BCBSNC) announced today that it is launching a new group Health Savings Account (HSA) product with Mellon Financial Corporation’s Human Resources & Investor Solutions (HR&IS) business for North Carolina employers. The new offering, called HSA BlueSM, consists of a high-deductible health plan (HDHP) from BCBSNC and a health savings account (HSA) administered by Mellon.

Here’s how it works:

1. Consumers purchase a high deductible health plan that carries a lower premium than many other health plans.

2. Consumers and their employers can contribute to an HSA to cover their qualified medical expenses up to the amount of their deductible each year.

3. When members use health care services, their physician or hospital files a claim with BCBSNC.

4. BCBSNC processes the claim, taking into account the company’s negotiated fees and how much the member has paid toward his or her deductible. BCBSNC sends this information to the member and the physician/hospital, along with any payment due on the claim.

5. The physician/hospital bills the member for the amount he or she owes.

6. The member pays the bill with funds from his or her HSA, using a check from their HSA account or HSA debit card.

http://www.bcbsnc.com/news/press-releases/PR2004-1202.cfm

Comment: Proponents of HSAs (health savings accounts) with HDHI (high deductible health insurance) have touted the benefits of having complete control of your own personal funds for routine medical expenses, while having the security of 100% coverage after a reasonable deductible is met.

But there was a major flaw in this concept. The insurance industry does not want to cover 100% of anything, particularly the bills of those with major medical expenses. They are doing everything they can to reduce their exposure to risk. High deductible, full indemnity coverage is not in their plans.

The insurance industry’s primary product is administrative services. They did not want to lose control over the administration of the innumerable, small, routine expenses of the large majority of the population who remain relatively healthy. HSAs presented a great opportunity: lots of little accounts with small charges, and with no risk to the insurers because it’s not even their money. And, of course, the money managers who have learned to profit from IRAs have found the HSAs to be a great addition to their product line.

Physicians thought that they would have their full routine fees paid by the HSAs and the deductible, and then 100% coverage by the HDHI. In fact, the insurance industry has countered with managed care PPOs (preferred provider organizations) with restricted provider lists and contracted fees. More importantly, they have applied the same restrictions to the HSA component of the coverage. Patients who elect not to go to contracted providers will face very severe financial penalties. And those penalties will not apply to the deductible for the HDHI. The net result is that either physicians will continue to be trapped in PPO contracts, or the patient will have to accept much more risk resulting in very high out-of-pocket expenses. And many studies have confirmed that access to care would then be unaffordable for many.

As long as we leave private insurers in charge, we can expect more of the same: higher administrative waste, more financial risk for those with needs, worse health care outcomes, and unhappy providers who will continue to stew in their misery simply because they don’t want the government involved.

For those who protest that they can’t do this, the applicable IRS provision on HSAs is covered in Question 4 of the following document: http://www.irs.gov/pub/irs-drop/n-04-2.pdf

Democrats need to reframe the debate on Social Security

By
Jonathan Tasini
December 03, 2004

George Bush is beginning to frame his Social Security reform agenda as a way to help workers. That leaves Democrats the opportunity to reframe the debate about the best way to do so. Jonathan Tasini argues what will help workers-and American employers-is a single-payer health plan. But if Dems get stuck in a classic denial defense on Social Security, they may lose big.

So, the Bush administration wants to help workers, make business more competitive and ensure a nice, comfortable retirement. If that is true, why is the conversation about privatizing Social Security, instead of about single-payer health care? Why are we debating a crisis that doesn’t exist (the “insolvency” of Social Security) instead of a crisis that clearly exists: the scandalous nature of our health care system?

It’s easy to show that turning Social Security over to the stock market speculators is a dumb, ideologically driven idea whose true costs are being hidden (surprise!) by the administration (see the Center for Economic and Policy Research http://www.cepr.net/publications/facts_social_security.pdf What’s more fun is to argue, plausibly, that we can do a lot more for business, workers and retirees by enacting a national health plan.

Here’s how the math works. This country will spend $1.8 trillion on health care in 2004, one-seventh of the entire gross domestic product-tops in the world; some estimates see that figure hitting 2.75 trillion by 2010. I know most people like to think that we live in a private insurance world, but actually 60 percent of health insurance money is already a public expense,paid by tax payers in the form of Medicare and Medicaid.

But 20 percent of that mammoth number is paid by business, so that’s a nice round $360 billion. According to Physicians http://www.tompaine.com/articles/www.pnhp.org for a National Health program, a single-payer system could be financed by a 7 percent payroll tax and a 2 percent income tax (with the income tax part potentially progressive). With one bold stroke, a single-payer system would do more to help the bottom line of companies than any tax break or so-called “free trade” agreement.

An Obvious Win-Win

Take General Motors. It spends 15 percent of its revenue on health care costs: 4.8 billion in 2003 and roughly $5.1 billion in 2004. Its future obligations for employee and retiree health care is more than $60 billion. Want to translate that into competitiveness? A GM car costs $1,400 more just because of its health care costs. If you figure, very roughly, that, right now, health care costs are rising 7 percent a year, under a single-payer system, GM would cut its health care costs in half. Hello?

As for the much-praised small business community, it would benefit even more from single-payer health care. Small businesses often pay 20 to 25 percent of revenues to pay for health care plans-and, then, are often forced to drop the coverage because they claim it’s too expensive.

And how about single-payer being an instant effective pay raise for millions of Americans? Every union negotiating a collective bargaining agreement could potentially win well-deserved pay hikes for workers whose wages have been falling behind inflation
http://www.epinet.org/content.cfm/webfeatures_snapshots_10292004; right now, every union’s main battle is fighting just to keep health care coverage in place. And individuals who are not lucky enough to have employer-based health care and who have been shelling out thousands of dollars in premiums for a bare-bones health plan (which encourages people never to get sick),would pocket a sizable chunk of change with a single-payer plan. Finally, by saving money for them on prescription drugs, among other benefits, single-payer would also be a guaranteed help to retirees-not the riverboat gamble a privatized Social Security system would be. Oh, I forgot: seniors won’t need that money because they will be kicking back and drinking cocktails thanks to their “private investment accounts” just bulging from huge profits they will have made from their stock-market picks.

Now, it’s pretty obvious why the administration is making certain choices. The pharmaceutical industry has been the single most profitable industry in the past decade. And the financial services industry can barely restrain its orgasmic delight at the thought of the hundreds of billions of dollars that will wash into the market if Social Security is turned over to the Street. Both industries, along with the health care companies, have showered tens of millions of dollars in political campaign contributions on the Republicans (and, to be fair, have written quite a few checks to Democrats, too).

Ways Forward

So, though the positive aspects of single-payer are nothing new, two things strike me as worth pointing out today. First, this is a ripe area for a new, concerted effort at shareholder activism. The argument is simple: companies who don’t advocate for a single-payer system are endangering share-holder value, throwing money into a system that is dragging down profits and competitiveness. And, in particular, it’s the huge public employee pension funds, representing hundreds of thousands of current and retired workers, who have a significant financial interest in seeing the system changed; the California Public Employees Retirement System alone has $177 billion.

Second, progressives are falling into a familiar trap. We’re arguing on the wrong turf. As long as we keep arguing about the Social Security “crisis,” we’re losing. The Republicans, their allies and too many Democrats have framed the debate as “fixing” Social Security. When we argue that Social Security “isn’t broken,” we are playing inside their debate terms-and losing.

We have to shift the debate. We need to say that the real issue for Americans is that we want a society where everyone is in good health, a society where every person can have the opportunity to succeed and that that opportunity comes with the financial security and peace of mind that only a single-payer system can deliver. Wouldn’t it be better, we need to ask, if, instead of choosing the drug and insurances companies, we would stand for our families, for health security, for the wisest investment the government can make towards our collective well-being? And, finally, wouldn’t it be better to stand for the stability and competitiveness of American business, from big companies all the way to the small businesses everywhere who would like to have healthy, productive workers?

Jonathan Tasini
President
Economic Future Group
Jonathan Tasini is president of the Economic Future Group and writes his “Working In America” columns for TomPaine.com on an occasional basis.

Tracking Health Care Costs: Spending Growth Slowdown Stalls in 1st Half of 2004

By Bradley C. Strunk and Paul B. Ginsburg
Employee Benefit Research Institute and Center for Studying Health System Change – December 2004

The recent slowdown in health care spending growth stalled in the first half of 2004 as health care costs per privately insured American increased 7.5 percent-virtually the same rate of increase as in 2003.

Implications

Early 2004 health care cost data suggest the decline in spending growth has stalled and may be ending long before reaching the lower trend for overall economic growth, let alone the very low rates of health cost growth seen in the mid-1990s. Moreover, given the sluggish recovery of the U.S. economy in recent months, it is unlikely workers’ incomes will grow as rapidly in the second half of 2004 as they did in the first half, meaning the gap between income and health care cost growth may again be large.

Once again, this makes it more likely that the number of uninsured Americans- who receive fewer health care services and are in poorer health than those with health insurance-will continue to grow. Growth in health insurance premiums will likely slow somewhat in the coming years as a result of the recent slowdown in cost trends and an expected turn in the health insurance underwriting cycle, the insurance industry’s interdependent pattern of profitability and pricing. However, the premium trend is unlikely to fall much below the underlying cost trend in the short run and is determined almost entirely by the cost trend in the long run. Clearly, there is a continuing strong need for a candid public discussion about how to control underlying health care cost growth-not just how to make health insurance more affordable.

At the moment, the main tool to control costs remains greater financial responsibility for patients, whether in the form of higher cost sharing in health maintenance organizations (HMOs) and preferred provider organizations (PPOs) or through so-called consumer-directed health plans, which typically include a high deductible and an account to draw on to pay medical bills. These tools could encourage consumers to use health care services more judiciously, particularly over time. However, the most common patient financial incentives, such as deductibles, copayments and coinsurance, are often too crude to allow distinctions between needed and more discretionary care, how efficient health care providers are and how much of a financial burden some patients can afford. The result is a high potential of barriers to care for people with low incomes or high medical needs. This will limit the extent to which these tools can be used without sacrificing to an unacceptable degree the basic reasons for health insurance-access to needed care and financial protection.

Meanwhile, little attention is being paid to the most important long-term driver of health care costs-new medical technology and its enthusiastic acceptance into mainstream medical practice. Measures that can be taken to control this relentless force, such as greater adherence to evidence- based medicine, increased research on medical effectiveness and greater use of technology assessments, generally have received short shrift from policy makers. When the limitations in the extent to which patient financial incentives can be used become more apparent, policy makers may increase their interest in these and other measures designed to improve efficiency in the health care system.

Report available at either website:
http://www.ebri.org/EBRI_Notes_12-2004.pdf
http://www.hschange.org/CONTENT/721/?#ib6

Comment: A beneficent, public, monopsonistic purchaser of health care services could certainly improve efficiency in the health care system. Are there really any other practical options? If so, let’s look at them now. Waiting to observe the limitations in the extent to which patient financial incentives can be used will only result in more unnecessary disability and death.

Another Union for Single Payer Health Care!

Another Union for Single Payer Health Care!
Kay Tillow

Kentuckians for Single Payer Health Care
Nurses Professional Organization
1169 Eastern Parkway #2218
Louisville, KY 40217
502 459 3393
http://gciu.org/whatsnew/04j-a/convres04ja.shtml

General Board of the Graphics Communications International Union (AFL-CIO) Endorses National Universal Single Payer Health Care

GCIU General Board members meet to discuss and adopt resolutions for convention delegates to consider. From left are: Chattanooga 197M Pres. Robert Kelly, Detroit 2-289M Pres. David R. Jacobs, Vice Pres. Duncan K. Brown, Secy.-Treas. Gerald H. Deneau, Martin R. Ganzglass, GCIU legal counsel; Pres. George Tedeschi; Richard J. Whitworth, executive assistant to the GCIU president; vice presidents David A. Grabhorn and Robert L. Lacey; and Chicago 458-3M Pres. Charles R. Timmel.

“Regarding universal health care, the board in Resolution G-7 noted that “today 43 million Americans have no health care at all and millions more are under-insured, and this is a national disgrace when the Bush administration is spending over $200 billion on the war in Iraq.”

The board resolution added that “as more and more Americans are caught in the squeeze of increased costs, less accessibility, and declining quality, the Bush administration has done nothing to alleviate this crisis for working Americans except protect the profits of insurance companies and the pharmaceutical industry.” The resolution endorses a “just and fair health care single-payer, national and universal program for all Americans, allowing individuals to select their own health care providers and where premiums would be based on ability to pay and be subsidized by employers and the government.”

The resolution would also direct the International union to educate GCIU members on the advantages of a single-payer, universal health care program and to fight for the adoption of such legislation in the United States and to protect the existing Canadian system and to work with the AFL-CIO, CLC, and any coalitions to accomplish these goals.”

Making Tough Choices: Adults with Disabilities Prioritize their Medi-Cal Options

By Marjorie Ginsburg and Kathy Glasmire
California HealthCare Foundation – December 2004

In January, 2004, Governor Arnold Schwarzenegger proposed a major overhaul of Medi-Cal to contain costs… …the state requested assistance from the California HealthCare Foundation and The California Endowment to solicit, receive, and organize public input…

…Sacramento Healthcare Decisions… developed a simulation project to ask adult disabled Medi-Cal beneficiaries to design their own health benefits package when there were more options than dollars.

The project used CHAT (Choosing Healthplans All Together), a computer-based program developed by the University of Michigan and the National Institutes of Health. CHAT is a tool that engages individuals in the challenges of choosing health care benefits when choices exceed available resources.

The basic CHAT board is a pie chart consisting of up to 16 categories (with two or three tiers in each category). Each category tier costs a specific number of markers based on the proportional cost of that service… Altogether there were a total of 123 marker spaces on the CHAT board. Choosing all services at the current (Medi-Cal) level required 114 markers, but participants had only 100 markers to use in picking their benefits.

>From the findings:

* Given the nature of their health status, adult disabled Medi-Cal beneficiaries are often highly dependent on medical and supportive services. The CHAT decisions they make are heavily influenced by this basic fact.

* Maintaining a full range of Medi-Cal services is the most important consideration when CHAT participants design coverage that affects all disabled Medi-Cal beneficiaries.

* Having sufficient choice and availability of providers is essential for beneficiaries to feel secure about their health care services and confident that quality care is attainable.

Comparing CHAT responses between Medi-Cal beneficiaries and the privately insured:

* While health care plays a major role in the lives of disabled Medi-Cal beneficiaries, it is usually not central to the lives of most privately insured employees.

* Compromising on a benefits package was easier for privately insured employees than it was for those on Medi-Cal.

* Moderate cost sharing was more acceptable to privately insured employees than it was to those on Medi-Cal.

* Both groups felt that having a full range of health care services was the most important criterion for their coverage.

* Both groups consider choice to be the cornerstone of a quality health care system.

>From the Conclusion:
Agreeing to make trade-offs during the CHAT process is not the same as accepting those cutbacks in real life.

>From the perspective of the participants, there is no low-hanging fruit in Medi-Cal. Every service category has its advocate; every higher level tier has its promoter. While many acknowledged that Medi-Cal may have to change in response to California’s budget problems, participants were concerned that the state will make life considerably harder for them than it is now.

http://www.chcf.org/documents/policy/MediCalCHAT.pdf

Comment: Today, more attention is being given to health care costs than to other concerns such as the growing numbers of uninsured. The CHAT tool was developed to assist in providing consumer input into the debate over the perceived need to reduce health care spending.

The problem with CHAT is that it begins with the presumption that health care spending must be reduced, and it can be done so only by decreasing benefits and increasing individual cost sharing. The obvious risk of this approach is that policymakers will use it to further reduce the financial protection afforded by health care coverage.

California ranks at the bottom of funding in it’s Medicaid (Medi-Cal) program, yet Gov. Schwarzenegger wants to use the CHAT process to slash Medi-Cal spending even more. But when there is no place to cut, distributing 100 markers for 123 spaces cannot ever result in rational health policy decisions.

It is very instructive to look at the CHAT game board in the original article (link above). Nowhere on the board can you find rational choices for cost containment. Reducing administrative waste, enhancing a higher quality and lower cost primary care base, reducing supply side technological excesses that fail to provide benefit, and establishing an integrated information technology system are only a few of the measures that would tackle health care costs while actually improving benefits and coverage.

When we approach the patient-consumer for input on addressing health care costs, shouldn’t we provide them with information on beneficial options, or should we merely continue to expose them to the CHAT game and use the results as an excuse to slash and burn what we do have?

A National Health Insurance Program for the U.S.

A National Health Insurance Program for the United States – The country must abandon its fragmented system
By Don R. McCanne
PLoS Medicine – November 2004

The continuing deterioration of affordability, coverage, and quality in health care makes it imperative that United States policymakers broaden their reform efforts beyond the ineffectual tinkering of incrementalism. A universal, single-payer, publicly funded and publicly administered program of social insurance would ensure access to affordable, comprehensive, high-quality health care for all. It should be the standard by which any other proposals are judged. If a better proposal can be crafted, now is the time to do it. People are dying while we delay.

http://medicine.plosjournals.org/archive/1549-1676/1/2/pdf/10.1371_journal.pmed.0010039-S.pdf

Comment: This article discusses the characteristics of the U.S. health care system that result in mediocrity in spite of our very high spending. And then it discusses options for reform.

As an open access journal, readers are encouraged to download articles and use them for their own purposes. Some may find this article to be useful in educating the public on the rationale of national health insurance.

This is the second issue of PLoS Medicine, a peer reviewed, open access, international, multidisciplinary journal of medicine from the Public Library of Science, founded by Nobel Laureate Harold Varmus and his colleagues. Their goal is to have PLoS Medicine become recognized as a premier journal of medicine, but with an important difference. All published material will be immediately available online without cost to anyone. This ensures that the very latest information and research in medicine is always available, without financial barriers, even to poor third world countries.

For more information, including free online subscribing:
http://medicine.plosjournals.org/perlserv/?request=index-html

Uwe Reinhardt on what makes America great

Uwe Reinhardt, Ph.D., Professor of Economics and Public Affairs, Princeton
University (personal communication):

Don: Attached is a portrait of what makes America great. Instead of using the coercive power of government to make you and me pay for her dental
care, this lady uses a pair of pliers to pull her own tooth. One just has to admire it. It keeps our tax rate (as % of GDP) the lowest in the OECD and our economy strong.

Best,

Uwe

(Rather than being included as an attachment to this message, the photograph can be viewed at this link to The New York Times:
http://www.nytimes.com/2004/12/28/business/28dental.html)

Comment: It is astounding that, in the world’s wealthiest nation, aversion to taxes is a more important driver of policy than is the health of its people. This is particularly troublesome as we witness the debate over the “stinginess” of our response to the unfathomable tragedy of the Tsunami.

In his Christmas message to the nation, President Bush said, “By volunteering our time and talents where they are needed most, we help heal the sick, comfort those who suffer, and bring hope to those who despair, one heart and one soul at a time.”

And today the president said, “In this case, I think it’s very important for Americans who want to give to provide cash to organizations that will be able to focus resources and assets to meet specific needs,” and, “There are many NGOs now involved that understand what is specifically needed to meet the needs of these countries.”

Volunteers and nongovermental organizations (NGO) do play an important role
in society and are to be praised for their very noble efforts. But they can never replace the duty of the government to make every effort to adequately address these very vital issues. The impact of charity and volunteerism remains miniscule when compared to the capability of a wealthy nation and its government resources.

We can bring hope to one heart and one soul at a time by volunteering to lend our pliers when the need is great. Or we can adopt national policies that would bring hope to all hearts and all souls. With tax rates in line with other OECD nations, we would still have the greatest personal wealth, but would also have the capability to do much more to ensure the health of all of our citizens and of the citizens of the world.

Addendum: On a positive note, the article, “U.S. Health Care Spending In An
International Context” by Uwe E. Reinhardt, Peter S. Hussey and Gerard F.
Anderson, tops the list as the most frequently viewed article on the Health
Affairs website. At least the health policy community is interested in learning why we spend so much and receive such mediocrity in health care. The article can be accessed at: http://content.healthaffairs.org/cgi/content/abstract/23/3/10

There is hope.

This year, Ontario may pass Michigan in making vehicles

The New York Times
November 27, 2004
This Year, Ontario May Pass Michigan in Making Vehicles
By Danny Hakim

Michigan has been the heart of the auto industry since Henry Ford started mass-producing the Model T a century ago, but the Midwestern state is poised to be surpassed by Ontario.

The Canadian province is on course to pass Michigan this year and become the
biggest auto-producing state or province in North America, according to Ward’s Automotive, which tracks auto production data.

Canada is attractive, in part, because of its nationalized health care system, which negates perhaps the largest competitive burden faced by domestic manufacturers. G.M. spends roughly $1,400 a vehicle produced in the United States on health care, more than it spends on steel.

http://www.nytimes.com/2004/11/27/business/worldbusiness/27ontario.html?ex=1102605931&ei=1&en=60fbf9a152ab4bec

Comment: Old news. The costs of the health benefit programs of U.S. auto
manufacturers result in less competitive pricing of their products. But this remains in the news because the saga grows worse day by day.

How long will U.S. businesses continue to tolerate this burden?

—————————————————————————–

Message: 2
Date: Tue, 30 Nov 2004
Subject: PLoS Medicine – National Health Insurance for the United States

PLoS Medicine
November 2004
A National Health Insurance Program for the United States
The country must abandon its fragmented system
By Don R. McCanne

The continuing deterioration of affordability, coverage, and quality in health care makes it imperative that United States policymakers broaden their reform efforts beyond the ineffectual tinkering of incrementalism. A universal, single-payer, publicly funded and publicly administered program of social insurance would ensure access to affordable, comprehensive, high-quality health care for all. It should be the standard by which any other proposals are judged. If a better proposal can be crafted, now is the time to do it. People are dying while we delay.

http://medicine.plosjournals.org/archive/1549-1676/1/2/pdf/10.1371_journal.pmed.0010039-S.pdf

Comment: This article discusses the characteristics of the U.S. health care system that result in mediocrity in spite of our very high spending. And then it discusses options for reform.

As an open access journal, readers are encouraged to download articles and use them for their own purposes. Some may find this article to be useful in educating the public on the rationale of national health insurance.

This is the second issue of PLoS Medicine, a peer reviewed, open access, international, multidisciplinary journal of medicine from the Public Library of Science, founded by Nobel Laureate Harold Varmus and his colleagues. Their goal is to have PLoS Medicine become recognized as a premier journal of medicine, but with an important difference. All published material will be immediately available online without cost to anyone. This ensures that
the very latest information and research in medicine is always available, without financial barriers, even to poor third world countries.

For more information, including free online subscribing:
http://medicine.plosjournals.org/perlserv/?request=index-html

Employers try shifting health costs

The Boston Globe
November 25, 2004
Employers try shifting health costs
Plans ease sting for those at lower end of pay scale
By Kimberly Blanton

To make healthcare more affordable to employees of all incomes, companies like Wachovia Corp… are adopting what are called salary-based health plans. Under the plans, employers pass on more of their rising healthcare costs to well- compensated executives than they pass on to lower-paid workers who can’t absorb the dramatic premium increases. Beginning Jan. 1, Wachovia will pass on larger premium increases to its executives around the country than to, say, its bank tellers.

Liberty Mutual is putting in place a salary component in an overhaul of its entire employee health plan designed to rein in future health expenses… Employees on the family plan who earn less than $50,000 will pay a $300 annual deductible, and their out-of-pocket costs for treatments will be capped at $1,500 per year. If their salaries fall between $50,000 and $99,999, the family deductible rises to $750, and maximum out-of-pocket costs rise to $2,250.

Executives earning $100,000 or more pay the most for a family plan: a $1,500 deductible and $4,500 out-of-pocket. In contrast to Liberty, most employers use tiered salaries only to set premium levels or annual premium increases.

“We wanted something that would not be way out there in terms of peoples’ ability to pay,” said Helen Sayles, senior vice president of human resources. “We felt it was the right thing to do.”

http://www.boston.com/business/articles/2004/11/25/employers_try_shifting_health_costs/

Comment: One of the more important goals of comprehensive health care reform is that the funding of health care should be equitable. Considering the relatively high costs of health care today, lower income individuals are not able to fully fund their portion of an appropriate level of health care utilization. To achieve equity, higher income individuals would pay more into the system.

It is certainly admirable that employers are attempting to establish equity within our fragmented system of funding care. Unfortunately, these efforts within small microcosms will amount to only a tiny mini-step towards health care equity for all of us.

The tax system provides the most effective agency for equitable funding of health care for everyone. Tax policies such as tax deductibility or tax credits can be developed to improve equity. But if applied to our current fragmented system, we would see a perpetuation of the inequities of thousands of plan designs with varying deficiencies in coverage or even total lack of coverage. Also our fragmented system is not adept at reducing the waste of administrative excesses nor the waste of ineffectual technological excesses.

Let’s follow the example set by these compassionate employers, but go them one better. Let’s support an equitable health care system for everyone:publicly funded social insurance with simplified public administration.

Healthcare as a moral imperative

The Boston Globe, November 27, 2004
Healthcare as a moral imperative
By James J. Mongan  

This article was adapted from remarks made Nov. 16 at the Blue Cross Blue Shield Foundation Summit on Access.

AFTER AN ELECTION season in which health care took a back seat to the Iraq war and gay marriage, it is refreshing to see that universal coverage for the uninsured has moved to center stage in Massachusetts.

The most important thing to do to move the universal health insurance issue forward in Massachusetts and across the country is to start with a frank discussion about funding. And I would argue, to address the funding issue, we ought to start a real dialogue about values.

As an analysis by the Urban Institute for Blue Cross Blue Shield Foundation’s Roadmap to Coverage points out, providing universal coverage costs money, beyond what we are currently spending — in the form of taxes to pay for subsidies, or employer mandates which are in effect taxes.

The elephant in the room in this discussion is, and has been for 30 years, how to get public support for additional revenue.

This is not just a public finance issue, it is a real values issue. Specifically, in a supposed time of ascendancy for “moral values,” I’d ask what happened to “social justice” as a moral value. I’d ask why we aren’t focused on social justice issues such as poverty, retirement security, and health insurance at the same time that we focus on issues like gay marriage and abortion. You see, I think I know why social justice issues get left behind — because dealing with these issues takes money — our tax money to help other people.

As we as a nation moved beyond the Depression, World War II, and the poverty program and civil rights struggles of the 1960s, we became, over the past 30 years, a relatively affluent, consumer nation and began to focus more on our own needs and wants.

It has been an age of individualism or self-centeredness or perhaps even selfishness. This culture fed the driving political force of the past 30 years — the antitax movement.

The antitax tide swept social justice issues aside, and left them behind in its wake. As a result, in recent years, every politician from the Courthouse, to the State House, to the White House feels they must run on an antitax platform. Just look at the consequences:

Our national tax level, as a percent of the gross domestic product, is at the lowest level since 1959.

In our state, tax cuts over the past 12 years have left us with $3.8 billion less in state revenue, which could have been available for covering the uninsured. We now rank 47th out of 50 in taxes and fees paid as a share of personal income.

Let’s look at what happened in Washington three years ago, when we passed a $1.6 trillion tax cut. We could have taken another path, and passed a $1 trillion tax cut, the largest in history, and used $600 billion to fund a comprehensive health insurance program for a decade.

When Uwe Reinhart, professor of economics at Princeton University, talks about that tax cut, he says budget decisions like this are like a memo to God. Reinhart says our nation’s memo said, “Dear God, we had to decide between health insurance and a tax cut, and we took all the money as a tax cut. We hope this pleases you — signed a grateful nation.”

After 30 years of waging the battle for broader health insurance, I am convinced the debate over universal coverage is more about values than it is about specific plans. If the resources were made available, we could easily develop a plan. We should focus on the question of what happened to social justice in an era of moral values. We should all look in the mirror.

Dr. James J. Mongan, who was associate director of the White House domestic policy staff in the Carter Administration, is President and CEO of Partners HealthCare.  
            
    

 

Growth rate in health cost to employers slowed in '04

The New York Times
November 22, 2004
Growth Rate in Health Cost to Employers Slowed in ’04
By Reed Abelson

After years of double-digit cost increases, the rate of growth in what employers pay for employee health insurance slowed significantly this year, according to an annual survey to be released today.

The average employer cost for health benefits for an employee rose 7.5 percent in 2004, to $6,679, the lowest increase since 1999 in a survey of about 3,000 employers by Mercer Human Resource Consulting.

But this slowing rate was largely the result of employers shifting more of the cost onto their employees and changing the kinds of plans they offer, said Barry Schilmeister, a senior health care consultant for Mercer.

“What we’ve seen for a couple of years running now is that employers have made very significant changes to their programs to cut three to four points off that inflation rate,” he said.

The overall growth in health care costs remains a concern, Mr.Schilmeister said. “Underneath it all, while general inflation is 2 percent, medical inflation continues to be 10-plus percent,” he said. “We still have a significant problem to deal with.”

http://www.nytimes.com/2004/11/22/business/22care.html

Comment: Rather than being good news for employers, this is terrible news for employees, and for the rest of us. Health care costs continue to increase, but those costs are being shifted from employers and insurers to individuals, especially those with greater health care needs. Having health insurance no longer means that you have protection against financial hardship in the event of significant medical need.

It’s not that we don’t have enough money. We have plenty. We are already spending enough to pay for comprehensive care for everyone. The problem is that we are slowly shifting away from the insurance principle wherein the many who are healthy contribute a modest amount to pay for the care of the few who are sick.

Up to the present, we have refused to enact policies that would address cost issues by reducing the profound waste in our system. At the same time we are adopting policies that will hold down the modest amounts contributed by the many who are healthy, that is, we are holding down premiums paid for coverage. This means that insurance will offer fewer benefits and will increase cost sharing. Thus, by default, we are making the few who are sick pay even greater amounts for their care.

Where is our social contract of solidarity? I guess we can cross that one off of our lists as we give thanks tomorrow. No sense wasting our “prayer capital” on that one.