The New York Times
April 8, 2005

U.S. Plans New, Deep Cuts in Housing Aid
By David W. Chen

If the changes sought by the administration take effect, they will result in one of the biggest cuts since Washington first began subsidizing housing: as much as $480 million, or 14 percent, of the $3.4 billion federal budget for day-to-day operations, including labor, maintenance, insurance and utilities, at the nation’s 3,100 housing authorities.

“I’ve never seen anything this devastating occur in public housing,” said Stephanie W. Cowart, executive director of the Niagara Falls Housing Authority.

Michael Liu, HUD’s assistant secretary for public and Indian housing, said in an interview that housing agencies had been warned for months that “there was always the possibility of changes,” especially “in an era of tight budgets on the domestic front.”

“For a housing authority that has been on a particular diet for, say, 40 years, facing a different kind of diet, cutting out fats and sugars and other stuff that tastes good – well, it’s tough to change, and that’s a natural reaction,” he said. “But in the long run, it’s going to make us more effective, more efficient.”

“I’m confident that those who are concerned, once they sit down, they’ll get over it, and deal with it,” Mr. Liu said.

And…

Hunger-Based Lines Lengthen at the Faith-Based Soup Kitchens By Francis X. Clines. The sight of masses of Americans gratefully chowing down on free food
is indeed a show, an amazingly discreet one that is classified not as outright hunger but as “food insecurity” by government specialists who are busy measuring the growing lines at soup kitchens and food pantries across the nation. There were 25.5 million supplicants regularly lining up in 2002; they were joined by 1.1 million more the next year. And even more arrive as unemployment and other government programs run out.

Most immediately, food charities are pleading against further cuts in the federal emergency food and shelter program, which directly fights hunger. Last year, 48 soup kitchens closed in the city as supplies were exhausted, and hundreds of others reported to be making do by cutting back on daily portions.

Beyond that, however, administrators know that the myriad of severe program cuts looming in Washington – for everything from low-income wage supplements
to health care spending for poor people – can only lead to further cuts down the revenue food chain in statehouses and city halls and, finally, longer lines of people silently begging for food.

Comment: How could politicians possibly understand the need for a universal health program if they don’t even understand the need for basic housing and food? Or did the majority of Americans support these policies at the polling booths? If so, have they no shame?

Health Affairs
April 5, 2005
It’s The Premiums, Stupid: Projections Of The Uninsured Through 2013
By Todd Gilmer and Richard Kronick

Abstract:
Increases in the cost of health care from 1979 to 1999 accounted for the decline in health insurance coverage that occurred during that time period, as our earlier work demonstrated. Here we examine whether the model we presented adequately accounts for the observed changes in health insurance
coverage from 1999 through 2002, and we show that the model accurately
predicted the increase in uninsured people during that time period.

Using the model and projections for national health spending, we project that
the number of nonelderly uninsured Americans will grow from forty-five million
in 2003 to fifty-six million by 2013.

From the Discussion:
In 2001 we published a paper titled “The Calm Before the Storm,” projecting
that the number of uninsured Americans would increase rapidly as a result of
health insurance premiums rising more rapidly than personal incomes. It is clear that a full-force storm blew in from 1999 to 2002 and that the actual path of the percentage uninsured… followed the path we expected based on our estimated relationships between affordability and coverage.

We expect the storm to continue during the next decade. However, based on
CMS spending projections, its ferocity will lessen. The CMS predicts that health spending for insured people under age sixty-five will grow 2.4 percent per year faster than personal incomes from 2002 to 2013. At this “moderate” rate of spending growth, we expect that the number of uninsured people will increase “only” thirteen million over the next decade from its 2002 level, or eleven million from the estimate of forty-five million uninsured people in 2003. Based on estimates from the Institute of Medicine, this will lead to an increase of 4,500 deaths annually and to an increased annual loss of human capital of $16-$32 billion. If the estimated growth rates for health care prices and income are wrong (as they almost certainly are), it seems much more likely to us that affordability will decline more quickly than expected rather than more slowly, and it seems more likely that the number of uninsured people will increase more quickly than projected rather than more slowly.

It is unlikely that we will be able to solve the problem of the uninsured without some form of universal health insurance coverage requiring contributions from some combination of employers, employees, and taxpayers. It is also unlikely that either our current system of employer-sponsored coverage or an alternative system of universal coverage will be sustainable without more effective efforts at cost containment.

http://content.healthaffairs.org/cgi/content/abstract/hlthaff.w5.143

Comment: Professors Gilmer and Kronick have provided objective evidence of
what we instinctively knew. Lack of affordability of insurance premiums has
prevented tens of millions from being covered, and, without major change, the problem will only get worse. A few comments are warranted.

The term “affordability” is often avoided by economists because it is not well defined and includes an element of subjectivity based on varying opinions on what is and what is not affordable. Gilmer and Kronick have demonstrated that there is a degree of objectivity in the concept of affordability since the
“affordability index” (per capita health spending for nonelderly insured adults divided by the median income of nonelderly adult workers) does correlate quite predictably with the percentage uninsured among nonelderly workers. This article provides us with credibility when we state that health care is becoming less and less affordable.

This article also provides us with a prediction of what would happen if we were able to bring the rate in growth of health spending down to the rate of inflation, assuming no other structural reform of health care financing. They project that an additional 13 million will be without insurance in 2013. Of those, 4.4 million would be due merely to the increase in the population, whereas 8.6 million would be due to a further deterioration in affordability. Though many suggest that all will be well if we merely control health care costs, the numbers of uninsured would still expand by 4.4 million. Obviously structural reform must involve more than merely containing costs.

Another crucial point is that the authors’ model implicitly assumes that health insurance premiums will continue to purchase coverage that would provide financial protection against significant medical losses. Unfortunately, current trends could change their model. Competition based on premiums is resulting in a shift of risk to patients. Reports such as the recent Harvard bankruptcy study are demonstrating that we are facing an epidemic of underinsurance. Although this could reduce the upward pressure on premiums and lessen the growth in the uninsured, it could also have the paradoxical affect of causing even more to drop coverage when they recognize that it no longer protects against financial catastrophe. Why invest large sums in insurance premiums when major illness will drain all of your resources anyway?

Gilmer and Kronick are quite right that we need both universal coverage and
more effective cost containment. But our current demand side efforts utilizing private plans can only increase the problem of underinsurance and affordability of health care. We need to change to supply side economics if we expect to have affordable, comprehensive care for everyone.

A single payer system, by design, is universal, comprehensive, and utilizes supply side mechanisms to contain costs. In the United States, the $6423 per
capita that we are already spending on health care supplies some of us with too much care that is not beneficial, while leaving many with unmet needs. But we won’t get our spending right until we decide to adopt supply side funding of a universal system. It won’t be perfect (no system is), but it’ll be vastly superior to what we have.

Or we can continue to do nothing. The lack of insurance will then cost us 22,500 nonelderly adult lives per year. Is that a price that we are willing to pay for our inaction? Before grumbling about another stupid rhetorical question, think about the consequences of merely walking away and going about your usual business. Tens of thousands of people will continue to die.

The Christian Science Monitor
April 04, 2005
Congress’ implicit healthcare rationing
By John Kitzhaber

As an emergency physician and former governor, I am struck by the towering contradictions – and indeed the hypocrisy – in the controversy over the tragic plight of Terri Schiavo. On the same day that the US House of Representatives voted to involve the federal courts in her case, it also approved a 10-year $92-billion cut in Medicaid funding – $30 billion deeper than the cut recommended by President Bush.

The relationship between these two decisions – virtually unreported by most media – goes to the very heart of why we’re unable to resolve the growing crisis in our healthcare system. While involving the federal courts in an attempt to save the life of one highly visible individual, Congress made a fiscal decision that will deny thousands of other Americans timely access to healthcare, some of whom may die as a result.

http://www.csmonitor.com/2005/0404/p09s02-coop.html

And…

The Daily Princetonian
April 1, 2005
Seeking to understand life, death
By Uwe Reinhardt

Terri Schiavo dies, reads the Washington Post’s news alert on my desktop. After gradually starving her to death, in accordance with American law and our jurists’ interpretation thereof, Schiavo finally has left us.

Unwittingly, she has helped us understand, once again, what a confused, ill-informed, sometimes opportunistically cynical, but ever bizarre nation we are.

Let us start with the seemingly pious politicians and pundits who saw in this case an opportunity to proclaim the sanctity of human life. Really? In a recent series of books on the plight of the millions of Americans without health insurance, the medical and social scientists working with the prestigious institute of Medicine of the U.S. National Academy of Sciences reminded the nation that 18,000 people die each year as a direct result of the lack of health insurance, making it the sixth leading cause of death among people aged 25-64, after cancer, heart disease, injuries, suicide and cerebral vascular disease, but before HIV/AIDS or diabetes. The nation’s infant mortality rate is one of the highest in the OECD nations. Citing the CIA Fact Book 2005, economics professor Alan Krueger reminds us in The New York Times (March 31) that our infant mortality rate is higher even than Cuba’s.

It can fairly be asked what the pundits and politicians who waxed so pious on the sanctity of Schiavo’s life have ever done to avoid this tragic, avoidable loss of human life in the rest of America. If we searched their records, we would discover that many and probably most of them either have countenanced that loss with equanimity, doing little to avoid that loss, or, worse still, have opposed as “socialism” any attempt to provide health insurance to all American children and, indeed, to all people living in this land.

http://www.dailyprincetonian.com/archives/2005/04/01/opinion/12531.shtml

Comment: For Congress to hear, voices must speak.

Star Tribune
March 30, 2005
Bill mandates health coverage for Minnesotans
By Patricia Lopez

Every Minnesotan would be required to have at least minimal health insurance and every insurer would have to offer such a plan under a far-ranging health care overhaul bill offered by the Minnesota Medical Association on Tuesday… which was introduced with bipartisan support in the House and Senate…

Dr. Michael Gonzalez-Campoy, MMA president, said that the plan was the result of “months of work,” and that health providers briefed on it had been enthusiastic.

At its core, the plan would set out an as yet undefined set of “essential benefits” that would provide minimal coverage with an emphasis on prevention.

Dr. Judith Shank, a dermatologist and former MMA president who led the organization’s health reform committee, said that while no guarantee of a subsidy exists in the bill, there is a presumption that “there would have to be subsidies for people who cannot afford” even the essential benefits coverage on their own.

Some additional money would come from the thousands of young people who are uninsured either by chance or choice. Shank has argued that “it is unfair for people who assume they are young and healthy to opt out” of health insurance, as some do. By requiring them to have some type of coverage, risk would be spread as broadly as possible, she said.

(Sen. Sheila) Kiscaden said that under the bill Minnesotans might be required to offer proof of coverage when they filed their income taxes or applied for a driver’s license. By the same token, insurers would have to offer the essential benefits and could not reject anyone because of age, gender or health history. Preexisting health conditions, a common reason for rejection for traditional policies, could not be taken into account.

Gonzalez-Campoy said the mandatory requirement would bring another 374,000 uninsured Minnesotans into the system, resulting in earlier treatment, more prevention and more affordable care. Ultimately, he said, “health care costs will be lower.”

http://www.startribune.com/stories/587/5318643.html

Comment: The Minnesota Medical Association and the Minnesota state legislature are to be commended for placing comprehensive health care reform on the political agenda. My critique of their proposal should not be allowed to detract from their sincere support of much needed reform. But we should look at what their “months of work” on the policy issues has produced.

The plan begins with a core of “‘essential benefits’ that would provide minimal coverage” for everyone. But this presumes that there are additional beneficial health care services to which lower-income individuals are not entitled. Rather than defining a core of basic benefits, it would be more appropriate to define those health care services that should not be universally accessible.

Once you list items such as vanity cosmetic surgery or hospital penthouse suites, it becomes more difficult to define the care that you would deny. Since the purpose of reducing access to care is to control spending, it would be much more rational to use mechanisms that shift spending from useless or detrimental services to spending on all beneficial services for everyone. The spending on useless administrative services, on high tech excesses, and on other inappropriate services have been estimated to be 50% of our health care budget. Single payer policies would recover more of that waste than would be required to pay for the current gap in universal access to beneficial services.

Perhaps the most difficult political hurdle is to broker an agreement on how you pay for universal coverage. Acknowledging that subsidies will be necessary for people who cannot afford even the essential benefits is important, but there already is near universal agreement on that point. Leaving funding out of the bill reveals the fear of advancing a proposal that involves the government and taxes. Again, there is agreement across the political spectrum that reform must involve both government and taxes since there is no other way to equitably fund access to reasonably comprehensive services. That bull is charging us, and we have no choice but to grab it by the horns… now!

It would be nice to believe that a significant source of funding would be the young and healthy who are uninsured by choice. But since most of them actually are uninsured because they cannot afford coverage, no juice will be forthcoming from that turnip. For the few free riders who can afford to pay, an equitable system would ensure their compliance.

Requiring individuals to offer proof of coverage is the equivalent of requiring uninsured individuals to pay for their own coverage (individual mandate), an impossibility for those who do not have the funds yet fall above the levels qualifying for subsidies. An effective policy would be to automatically cover everyone, then the need to provide proof of coverage would be eliminated.

With our current system of multiple private plans, community rating and guaranteed issue drive up premiums, making plans unaffordable for those with low or even modest incomes. Again, the problems of community rating and guaranteed issue would be eliminated by the adoption of a single payer system.

The primary reason for providing comprehensive coverage for the uninsured is that it does improve health care outcomes. But does it really save money? Earlier intervention does prevent spending on some more expensive interventions that would otherwise result from deferred access to essential care, but there is an offset through the costs of improved access to care.

Although the net financial impact is difficult to quantify, any savings would not be enough to rely on to fund the gaps in coverage. Either we will have to spend much more money, or we will have to adopt a system that spends what we already have much more effectively, providing us with greater health care value. Of course, that’s what a single payer system is all about.

Another quote from this article is appropriate:

“Rep. Jim Abeler, R-Anoka, the bill’s House sponsor, said that even if the MMA proposal does not pass this year, it ‘puts a whole lot of ideas on the table for us to look at.'”

We just hope that their aversion to politically charged policies do not prevent them from looking at all policy options, including those that would provide affordable, comprehensive health care coverage for everyone.

American Medical News
April 4, 2005
Underinsured and overlooked: The growing problem of inadequate insurance
By Joel B. Finkelstein

Tens of millions of Americans have coverage that still leaves medical bills they cannot afford to pay, according to estimates by Consumers Union.

Now some physicians fear the problem is growing. They are seeing it regularly in their practices, often in the form of unpaid bills.

The culprit is increasing deductibles and other forms of cost sharing that employers are turning to in the face of steeply rising health care costs.

“Underinsurance is going to become a dramatic issue in the next two or three years,” predicted Thomas Bodenheimer, MD, MPH, an adjunct professor in the Family and Community Medicine Dept. at the University of California, San
Francisco, School of Medicine.

“More and more people are going to have plans that have huge deductibles and very large co-pays. Even HMOs now are beginning to have co-pays for hospital care that are quite significant, in addition to the deductible,” Dr.Bodenheimer said.

Just because someone has health insurance doesn’t necessarily mean they are covered, said Karen Pollitz, project director at the Institute for Health Care Research and Policy at Georgetown University, Washington, D.C. In an anecdotal study conducted in conjunction with the American Diabetes Foundation, Georgetown researchers found that some people with diabetes keep paying their health insurance premiums even if that means they will not be able to afford their routine medical costs, Pollitz said.

They couldn’t simultaneously pay for test strips and their insurance, but were too afraid of going without any coverage to stop paying premiums. In those cases, having insurance actually led to their diabetes worsening, she said.

“Something is not always better than nothing,” Pollitz said. In the future, politics has to play a bigger role in ensuring that people not only have health insurance, but that it offers appropriate coverage, Dr.(Alan) Sager said.

http://www.ama-assn.org/amednews/2005/04/04/gvsa0404.htm

Comment: Although we continue to fret about the tragic consequences of allowing 45 million Americans to remain uninsured, we have not really made the commitment to effect change. But there is a prevailing issue that has provoked major policy changes. Those who are paying for health insurance coverage are very concerned about the dramatic increases in insurance premium prices. Ignoring the problem of the uninsured, and ignoring the problem of the explosion in actual health care costs, almost all policy activity has now been narrowly limited to efforts to control the price of premiums.

The obvious consequence of controlling premium prices in the face of the escalating costs of health care delivery is that out-of-pocket expenses must increase for the individuals utilizing health care services. Thus we are facing a massive epidemic of underinsurance due to this large coverage gap. The irony is that this will largely spare those of us who are healthy but threaten the financial security of those with greater health care needs.

Our policymakers have managed to change the crisis in health care from the single problem of covering the uninsured to the dual problem of both covering everyone and providing financial security for those with health care needs. We can and should have both. But we need to fire our current policymakers and replace them with those who really care.