PNHP

Single-Payer: Good for Business

Single-Payer: Good for Business

by MORTON MINTZ
[from the November 15, 2004 issue of The Nation]

Business leaders complain endlessly that the current system of private healthcare insurance based on employment provides fewer and fewer people with less and less quality care at higher and higher cost. Yet Corporate America turns its back on a publicly financed system, which, by all indicators, the taxpayers would willingly support.

Publicly financed but privately run healthcare for all—including free choice of physicians–would cost employers far less in taxes than their costs for insurance. Universal coverage could also work magic in less obvious ways. For example, employers would no longer have to pay for medical care under workers’ compensation, which in 2002 cost them more than $38 billion. Auto-insurance rates would fall for them–and everyone–if the carriers were no longer liable for medical and hospital bills. You’d think that in its own selfish interest, Corporate America would be fighting to replace the existing system with universal health coverage. Yet it doesn’t lift a finger.

Meanwhile, under the Bush Administration healthcare coverage steadily shrinks. In 2000, according to the Census Bureau, 14 percent of Americans didn’t have it; in 2003, 15.6 percent–45 million–did not. Actually, 85 million Americans under age 65 were uninsured over varying periods during 2003-04, up from 81.8 million in 2002-03, according to Families USA, the consumer health organization. As more and more Americans become uninsured, spending on healthcare soars. By 2001 it accounted for 13.9 percent of US gross domestic product. (It constituted a much smaller share of GDP in countries with universal healthcare, such as Sweden, 8.7 percent; France, 9.5 percent; and Canada, 9.7 percent.) Average family premiums in 2005 are projected to be $12,485, up $1,768 from 2004. The federal Centers for Medicare & Medicaid Services expects healthcare outlays to rise from $1.8 trillion in 2004 to $2.7 trillion in 2010, nearly a trillion-dollar increase in six years. The forecast reflects annual increases of 14 percent to 18 percent. David Walker, head of the Government Accountability Office (GAO), the auditing arm of Congress, calls them “unsustainable.”

A simple fact largely explains why spending bloats while the ranks of the insured thin: Health insurance is increasingly unaffordable. After rising 38 percent between 2000 and the last quarter of 2003, the costs of providing healthcare to employees rose 11.2 percent between January and May of 2004, according to the Kaiser Family Foundation’s annual survey of 3,000 companies. “Close to 75 percent of 205 senior-level executives surveyed [in May] by the Detroit Regional Chamber rank employee health insurance as ‘unaffordable’ and 25 percent consider it ‘very unaffordable,'” the Detroit News reported. The Kaiser Family Foundation says that from 2001 to 2004 the proportion of workers receiving health coverage on the job dropped from 65 percent to 61 percent, a loss of 5 million jobs with health benefits.

“Double-digit increases in healthcare costs are a drag on economic growth,” says Henry Simmons, president of the National Coalition on Health Care, an alliance of groups working for healthcare reform. They “slow the rate of job growth,” “suppress wage increases for current workers,” “undercut the viability of pension funds,” “put American firms at a steep disadvantage in world markets” and produce “severe long-term budgetary problems” for the federal and state governments.

Two unrelated but mutually reinforcing reports coming out on a single day, August 19, validate the economic-drag theory. First was a study that found a “relationship between job growth and health-care costs” in eighteen industries between 2000 and 2003. It was done for the Kerry campaign by Sarah Reber, assistant professor of policy studies at the University of California, Los Angeles, and Laura Tyson, dean of the London Business School and former head of President Clinton’s Council of Economic Advisers and National Economic Council. The evidence, the authors write, “suggests that employers have reduced hiring in response to rising health insurance premiums,” and that rising premiums have led to a deterioration in the quality of jobs. In industries where health-insurance benefits accounted for a comparatively large share of total employee compensation, job growth was slower than in industries where they accounted for a smaller one.

Thus, in the accommodation and food services industry, “benefits constituted about 12 percent of total compensation for workers…and jobs grew…by about 2.5 percent. In manufacturing…the benefits share was 18.5 percent and job losses topped 18 percent.” [Emphasis in original.]

This picture was reinforced by a New York Times article based on “government data, industry surveys and interviews with employers big and small.” It said:

A relentless rise in the cost of employee health insurance has become a significant factor in the employment slump, as the labor market adds only a trickle of new jobs each month despite nearly three years of uninterrupted economic growth…. employers big and small…remain reluctant to hire full-time
employees because health insurance, which now costs the nation’s employers an average of about $3,000 a year for each worker, has become one of the fastest-growing costs…. Health premiums are sapping corporate balance sheets even more than the rising cost of energy.

Reacting to rising expenditures on insurance, corporate managements cut back on employee health benefits, triggering worker unrest. Consider the five-month strike against supermarket chains in Southern California–the longest in the industry’s history. It left about 60,000 union workers jobless, and it seriously hurt the owners as well. The central issue–in a state where half of all personal
bankruptcies are related to medical bills–was the demand by Safeway,Kroger and Albertsons that members of the United Food and Commercial Workers (UFCW) union pay much more for health benefits. The settlement, reached last February, sent a grim message to grocery workers everywhere.

The strike “would not have occurred if we had a system of universal healthcare coverage,” Greg Denier, assistant to the international president of the UFCW, told me. “All of our strikes in the past decade have occurred because of the absence of universal healthcare.” Moreover, universal health coverage would have narrowed the wide gap in operating costs between the unionized chains and nonunion competitors, particularly 800-pound gorilla Wal-Mart. Unlike the chains, the world’s biggest retailer charges so much for miserly health insurance that more than 60 percent of its poorly paid employees (averaging $8 an hour) don’t buy it. Denier saw the strike as a symptom of “the slow-motion collapse of the employment-based healthcare system.”

Lawyer Harry Burton represented Safeway and Giant Food in subsequent negotiations with the UFCW in the Washington, DC, region. Speaking “as an individual,” he essentially agreed with Denier. Universal health insurance would have “a profound effect” not just on the supermarket industry but “on nearly all collective bargaining,” he told me. Nonunion companies “virtually never” provide healthcare of the same quality as that provided by unionized competitors, thus creating “a vast disparity in costs.” That’s why a tax-supported national system would result in “a leveling of the playing field.” I asked Burton what explains the resistance or indifference of employers to universal health insurance. “Very frequently it’s ideology,” he replied.

Business leaders worship marketplace ideology “almost like religion,” says Raymond Werntz, who for nearly thirty years ran healthcare programs for Whitman Corporation, a Chicago-based multinational holding company. “It’s emotional.” In 1999 Werntz became the first president of the Consumer Health Education Council in Washington, a program of the Employee Benefit Research Institute, a nonprofit, nonpartisan group. He saw it as his mission to try to persuade employers to face the “huge, huge” issue of the uninsured because, he told me, “business has to be involved with the solution.” The problem that emerged was its “unwillingness to even think about a solution.”

Last year, after funding ran out, a disappointed Werntz became the council’s last and only president. Publicly financed universal health insurance comes in different forms. For Americans, however, none should hold more interest than
single-payer. It’s “one and the same thing” as Medicare for everybody, Werntz told me. Does the Corporate America that’s happy with Medicare understand this? I asked. “It’s a dialogue that hasn’t happened yet,” he replied. “My life for four years was trying to get business people in a room with single-payer people. I couldn’t do it.” CEOs of large corporations see it as something “that smacks of
socialism,” Werntz said, and therefore as “heresy.”

Somehow, they don’t see Medicare as heresy. Yet it’s largely why the tax-financed share of US health spending is “the highest in the world,” according to Drs. Steffie Woolhandler and David Himmelstein, associate professors at Harvard Medical School and founders of Physicians for a National Health Program. Writing in the July/August 2002 issue of Health Affairs , they put the share at 59.8 percent. No
wonder: Federal tax revenues pay for Medicare, Medicaid and the medical-care systems for the military, the Veterans Administration, federal employees and Congress; income-, sales- and property-tax revenues buy coverage for state and local public employees. Taxation also hugely subsidizes health insurance while benefiting mostly “the affluent,” the authors noted.

In 1991 the GAO made a stark finding regarding single-payer’s benefits: “If the universal coverage and single-payer features of the Canadian system [had been] applied in the United States” in that year, “the savings in administrative costs”–$66.9 billion–“would have been more than enough to finance insurance coverage for the millions of Americans who are currently uninsured,” the GAO said in a
report. The $3 billion left over “would be enough…to permit a reduction, or possibly even the elimination, of copayments and deductibles.”

Early this year, a comprehensive study published in the International Journal of Health Services reached this stunning conclusion: “The United States wastes more on health-care bureaucracy than it would cost to provide health care to all its uninsured.” The authors, Woolhandler, Himmelstein and Dr. Sidney Wolfe, director of Public Citizen’s Health Research Group, went on to write: “Administrative expenses will consume at least $399.4 billion of a total health expenditure of $1,660.5 billion in 2003. Streamlining administrative overhead to Canadian levels would save approximately $286 billion in 2002, $6,940 for each of the 41.2 million Americans who were uninsured as of 2001. This is substantially more than would be needed to provide full insurance coverage.”

Canada has had a single-payer system for more than thirty years. (Australia, Denmark, Finland, Iceland, Sweden and Taiwan also have one.) American executives who have run Canadian subsidiaries see it as a business boon. Take General Motors. In 2003 its costs of building a midsize car in Canada were $1,40 less than building the identical car in the United States (the comparable figures for DaimlerChrysler and Ford were $1,300 and $1,200). Such savings are no mystery. Canadian companies pay far less in taxes for health coverage for everyone than the premiums they would pay under the US system to provide their employees with comparable benefits.

Highly placed Canadian business executives affirm that single-payer nurtures free enterprise. A. Charles Baillie, while chairman and CEO of Toronto Dominion Bank, one of Canada’s six largest, hailed it in 1999 as “an economic asset, not a burden.” He told the Vancouver Board of Trade, “In an era of globalization, we need every competitive and comparative advantage we have. And the fundamentals of our health care system are one of those advantages.” He added: “The fact is, the free market…cannot work in the context of universal health care. While health care could be purchased like any other form of insurance…the risk and resource equation will always be such that, in some cases, demand will not be matched by supply. In other words, some people will always be left out.” (A recent report by the World Bank ranked welfare states like Denmark, Finland and Sweden high in international competitiveness. An author of the study said, “Social protection is good for business, it takes the burden off of businesses for health care costs.”)

In 2002, top executives of the Big Three automakers’ Canadian units joined Basil (Buzz) Hargrove, president of the Canadian Auto Workers (CAW) union, in signing a “Joint Letter on Publicly Funded Health Care.” At a press conference with Hargrove, Michael Grimaldi, president and general manager of GM Canada and a GM vice president, called single-payer “a strategic advantage for Canada.” The joint letter, also signed by Ford’s and DaimlerChrysler’s presidents and CEOs, Alain Batty and Ed Brust, said that while providing “essential and affordable healthcare services for all,” single-payer “significantly reduces total labour costs…compared to the cost of equivalent private insurance services purchased by US-based automakers” and “has been an important ingredient” in the success of Canada’s “most important export industry.” The Toronto Star explained how the CAW used “credible corporate data” to quantify “the competitive advantage that [single-payer] provides to the Canadian auto industry. The union compared the hourly labour costs of vehicle assembly in Canada and the United States. The Canadian rate, including wages, benefits and payroll taxes, was $29.90 per hour. The American rate was $45.60. (All figures are in US dollars.) Healthcare
accounted for more than a quarter of the difference. It saved Canadian employers $4 per hour per worker.” Monthly health-coverage costs for Canadian employers average about $50, mostly for items such as eyeglasses and orthopedic shoes; health-insurance costs for US employers average $552, the Washington Post has reported.

“The rising cost of health benefits is the biggest issue on our plate that we can’t solve,” Ford CEO William Clay Ford told a 2003 conference of Michigan business executives. “Healthcare is out of control–it’s a system that’s broken.” Last year the company spent $3.2 billion on healthcare for 560,000 employees and their dependents and surviving spouses, or more than six times net profits of $495
million. William Ford urged a national solution and assigned vice,chairman Allan Gilmour to craft a proposal. Early this year Gilmour told fellow industry executives that high healthcare costs have “created a competitive gap that’s driving investment decisions away from the US.” He told a subsequent investment conference, “We’re going to have to have a national solution,” only to add, “That national solution does not mean, necessarily, national healthcare.”
Why not? He didn’t say.

After Jack Smith, president and general manager of GM Canada, became president and CEO of the parent company, an ad in the New York Times placed by single-payer advocates in 1994 quoted him as saying, “I personally favor single-payer.” Now, however, GM “does not support” it, spokesperson Doris Powers told me. Because? “Much has changed in health care since Smith…made statements about universal, single-payer healthcare.” What’s changed? She didn’t say.

A General Motors that hugs single-payer in Canada would seem to have compelling reasons to hug it here. GM covers healthcare costs for 1.1 million Americans. Last year’s bill was $4.8 billion–$1 billion more than earnings. In its third-quarter report the company reduced its 2004 earnings forecast because rising US healthcare costs were hurting profits. GM’s projected costs for providing healthcare benefits to current and future retirees is $63 billion, a burden immensely heavier than is carried by competitors based in universal-coverage countries, the New York Times reported in September. Yet, as the Detroit Free Press has noted, GM “has set aside less than $10 billion for that obligation.”

In 2001 GM was reeling from a prescription-drug bill up to 22 percent above 2000’s $1.1 billion. “Prescription drugs are the fastest-growing part of GM’s health-care costs, accounting for more than 25 percent of its total medical spending last year,” Newsweek reported. GM was “seeing red” because in 2000 it had spent $52 million just for Prilosec, a brand-name ulcer medicine. “That is millions more than GM executives believe they should have spent,” the magazine said. “They blame much of the extra cost on savvy marketing by Prilosec’s maker AstraZeneca.” GM is fighting back with an “aggressive plan to curb drug spending,” Newsweek continued. “Point man” James Cubbin “has been taking his case to senior executives at some of the nation’s largest drug makers, including AstraZeneca.”

But Newsweek– and Powers–missed an embarrassing part of the story. AstraZeneca chairman Percy Barnevik joined GM’s board in 1996, while Smith was GM’s chairman. Pfizer executive vice president Karen Katen followed in 1997, and the noses of both of these price-gouging drug companies are still in GM’s tent. Surprise: The pharmaceutical houses “aren’t backing down,” Newsweek said. Rather than going hat in hand to pharmaceutical executives, Canada uses single-payer’s price controls to cap drug prices. In two other universal-coverage countries, Australia and New Zealand, pharmacies charge 20 percent to 30 percent less than in Canada, the Wall Street Journal reported in July.

Unlike GM and Ford, DaimlerChrysler supports single-payer. “A lot of people think a single-payer system is better,” vice president Thomas Hadrych told the Washington Post . Since 1990 Chrysler—and DaimlerChrysler after the merger–has regularly endorsed it, in a letter appended to its contracts with the United Automobile Workers.

No matter how urgently needed, no matter how common-sensical, no matter how much bottom lines would be fattened, single-payer or other fundamental healthcare reforms stall unless backed by the business organizations that govern the government. The Clinton Administration learned this to its sorrow after proposing its complex, comprehensive plan. Business organizations “effectively killed the bill,” Walter Maher, former vice president for public policy of DaimlerChrysler, wrote last year in the American Journal of Public Health . The bill aroused formidable opposition from businesses such as fast-food chains like McDonald’s. It mostly hired young people, worked them less than full time, paid them little and provided scant if any health coverage. Of the PepsiCo chains’ hourly employees, a survey indicated, 71 percent were covered by someone else’s health insurance. If that someone was a parent employed by, say, an automaker facing global competition, the manufacturer was effectively subsidizing chains that had no such competition. Free-riding defeated a primary goal of the bill, which was to spread healthcare costs throughout the economy by letting no employers escape paying their fair share.

The bill received a big boost when the US Chamber of Commerce and the National Association of Manufacturers (NAM) let pragmatism trump ideology and endorsed it. And the mighty Business Roundtable (BRT), an association of 150 CEOs of the country’s biggest corporations, with multitrillion-dollar revenues, was “at least prepared not to oppose” the mandate, Maher said in the article.

But insurers and other businesses that profited from preserving the healthcare status quo exerted fierce counterpressures. The Chamber “suddenly reversed course and totally rejected the Clinton Plan,” Maher wrote. The NAM abruptly withdrew its endorsement six weeks after granting it. At the BRT several politically powerful members, including the CEOs of eight major and a few lesser pharmaceutical manufacturers, and of a dozen insurers and healthcare providers, opposed the bill. It got only a single vote–Chrysler’s, Maher told me. “It’s definitely fair to say that CEOs are very reluctant to take unpopular positions against their colleagues in the BRT,” he added. “If a huge majority of them are staunch conservatives who have no interest in health reform, or in using the government to control costs, or to expand coverage, or even to moderate health costs using regulatory tools, it’ll be a rare CEO who will want to take on his CEO buddies. That’s absolutely true.”

Today, BRT executive director Patricia Hanahan Engman contends that”public financing cannot provide the same level of quality doctors, hospitals and prescription drugs generated by the competition inherent in the private market.” She should tell that to GM president and CEO G. Richard Wagoner Jr. Judged by sixteen top health indicators, he said in June, the United States ranks twelfth among thirteen industrialized countries. “It will be a cold day in hell
when the BRT leads the charge for universal health coverage in the United States,” Maher told me.

If the Democrats win the White House and take control of Congress, John Kerry could pass his employer-based healthcare plan, which calls for expanding coverage to nearly 95 percent of Americans, including all children, and for a federal insurance pool that would pay 75 percent of “catastrophic” illness bills. Crucial elements might survive even if the GOP continues to control the House–mainly
because of forceful backing from pragmatic business leaders. For example, the Chamber of Commerce signed on early to Kerry’s pool idea, calling it “a seed for bipartisan reform.” In late October the New York Times reported that the Chamber was acclaiming the idea as “a worthy concept, an excellent use of federal tax dollars,” while some Senate Republicans are pushing it, and “lawmakers and lobbyists say that regardless of who wins the presidential election, Congress will soon take up the idea.” To be sure, Kerry’s scheme may face attacks by the usual suspects and the lawmakers they buy. One influential critic, the National Business Group on Health, has more than 200 members, including at least a dozen drug and medical-device manufacturers plus three dozen healthcare providers and insurers. A Wal-Mart vice president sits on its board.

Advocating universal health coverage while the GOP controls the White House and Congress would be “tilting at windmills,” DaimlerChrysler’s Dennis Fitzgibbons told me. Maher said any industry subject to government regulation “has got to be concerned about irritating the regulator,” meaning the Bush Administration. A single-payer reform proposal, by seeking to eliminate the insurance industry, he warned in his article, would make it and many other businesses “instant and
unnecessary opponents.” He recommends other forms of tax-financed universal health coverage that would use the industry. An example would be a system in which employer/employee payroll taxes would finance coverage for the working population, with employees offered several choices of health plans, as the Federal Employees Health Benefits Plan does. A Medicare equivalent would provide for the elderly and nonworking population.

“I don’t believe [single-payer] will be achievable in my lifetime,” says Ron Pollack, executive director of Families USA. Ideologues “will never support it.” Industries heavily invested in the present system “will spend every last dollar to stop it.” He recognizes that on “a blank slate,” employer-based coverage “absolutely” makes no sense. But “in terms of political feasibility,” trying to dismantle the present system would make matters “much worse,” he told me. “The most important thing is the achievement of affordable, high-quality health coverage for everybody.” To him, the crucial question is: “At what point are we willing to say that there’s a higher principle in truly moving toward universal coverage than in knocking our heads against a stone wall, in absolute frustration about a methodology [single-payer] that is not going to be achievable in our lifetime?”

Surely in a Republican Washington the prospects for publicly financed universal health insurance are remote. But Washington isn’t everywhere. Deborah Richter, a Vermont physician, believes it could still be enacted in every state. As president of Vermont Health Care for All, she’s been campaigning to that end in her own state for five years, with impressive results. Universal access to affordable, high-quality healthcare should be conceived “as a public good, as are roads, education, and police and fire protection,” she says. Making it “a practical issue works. Trying to win support for it by making it a moral issue never works.” By resisting the merger of practicality with morality that universal health care embodies, Corporate America is blowing a supreme opportunity to do well by doing good. Enlightened self-interest this is not.

The View From Vermont

by MORTON MINTZ

[from the November 15, 2004 issue of The Nation]

Dr. Deborah Richter has advocated state-sponsored health insurance for every Vermonter, at nearly fifty Rotary Clubs plus chambers of commerce and boardrooms. The reservations she heard from the business community are (1) they don’t trust the government with healthcare, and (2) they fear that initially acceptable tax rates would soar as people came to view universal health coverage as a “blank check.” “I agree with the business community to some extent,” Richter told me.

Under universal healthcare, decisions would have to be made about “egalitarian rationing,” so as to meet everyone’s basic needs while denying some things to anyone.

To pay the bills, public funds now financing Medicare, Medicaid and other government programs would, with a federal waiver, be funneled into a unified system. Payroll taxes–5.8 percent on employers, 2.9 percent on employees–would replace premiums and deductibles. There would be a $10 co-payment for most services. The annual cost to employers would be about $1,450 per worker, far less than the cost of insurance premiums. “Savings could go to prevention and public-health improvement, further reducing long-term costs,” Richter said. “Losing or changing jobs would not mean losing or changing health insurance. Most families and employers now paying for insurance would have decreased costs. Family impoverishment and bankruptcy due to illness would be eliminated. The cost-shifting that plagues our hospitals would be eliminated.”

Richter senses “an increasingly positive response” to this plan because business people, especially manufacturers, are “getting killed” by the rising costs of healthcare. And they are disturbed–“feel like they’re reneging”–when they must cut back benefits, she said. One employer of 100 Vermonters, hit by a 58 percent rise in a single year and expecting a 15 percent increase on top of that the next, told Richter he was thinking of moving his operation to Canada.

Richter believes the current system focuses excessively on payment for care of the sick–“pay as you go,” she calls it. The “nutshell problem” with this is that it demands “a massive bureaucracy to limit individual utilization and to administer payments,” she says. “The number of healthcare administrators needed to limit individual utilization” increased 2,500 percent between 1970 and 2000, while the number of doctors increased by only 150 percent, she pointed out.

“Yet pay-as-you-go does not guarantee healthcare to each of us should we get sick or be injured,” Richter continued. “People who need disease management to avert, delay or moderate serious medical disorders don’t get it. Diabetics are an example. How can they get disease-management without health insurance? And how can they get that insurance when for insurers–businesses whose first obligation is to the shareholders–the game is to insure healthy people? “We’re headed for a train wreck,” Richter warned. “We must replace pay-as-you-go, with its emphasis on individuals, with the ‘investment model,’ in which the whole society invests in a public good that we all may need but cannot provide for.”

It's the Taj Mahal of Health Insurance Schemes

By Susan Dentzer
Sunday, October 31, 2004;

Three months ago, Howard Staab learned that he suffered from a life-threatening condition and would have to undergo surgery at a cost of up to $200,000 — an impossible sum for the 53-year-old carpenter from Durham, N.C., who has no health insurance. So he outsourced the job to India. Taking his cue from cost-cutting U.S. businesses, Staab last month flew about 7,500 miles to the Indian capital [of New Delhi], where doctors . . . replaced his balky heart valve with one harvested from a pig. Total bill: about $10,000, including round-trip airfare and a planned side trip to the Taj Mahal.

— Washington Post news story, Oct. 21

Good grief, why didn’t someone think of this earlier! Forty-five million Americans lack health insurance, and covering every one of them would be costly. Why not outsource them all to India?

The Institute of Medicine, a component of the National Academy of Sciences, calculates that because so many Americans lack health insurance, as many as 18,000 of them die prematurely every year. Of course, this is a drop in the bucket compared with how many die from inadequate health care in really squalid places like . . . well, like parts of India. But now there are apparently lots of slick new hospitals in India, run by Western-trained doctors and catering to foreigners who, The Post reports, want “First World health care at Third World prices.” Since we apparently can’t — won’t? — give our uninsured First World health care at the First World prices the rest of us pay, why not go for the Third World solution?

Think about it. President Bush has plans for covering somewhere between 2 million and 6 million of the uninsured at costs to the federal government variously estimated at $90 billion to $227 billion over 10 years. Sen. John Kerry has plans that could cover 25 million to 27 million at federal costs variously estimated at $650 billion to $1.5 trillion over 10 years. Now to the back of the envelope: If all those people could get the Third World deal that Howard Staab got — a 95 percent discount, including travel and that Taj Mahal side trip — Bush’s plan would cost no more than $11 billion over 10 years and Kerry’s would total just $75 billion. Either way, it’s a steal (and need we point out, a fraction of the cost of the war in Iraq).

Opponents will immediately say this idea is impractical. I say, don’t be health coverage girlie men! First, not all the uninsured would have to travel to India to get health care. For example, when an uninsured person first got the sniffles, he or she could pick up the phone and talk with someone at a call center in, say, Bangalore. An Indian nurse making $10 a day would listen (sympathetically, of course) and offer advice. Through the miracle of telemedicine, people needing to be “seen” could visit a walk-in center stateside and have a videoconference with a medical team in India. Prescriptions could be filled by the burgeoning Indian pharmaceutical industry — now busily producing cheap generic knockoffs of patented Western drugs — and sent directly to U.S. patients via international express mail. (That would also solve that pesky Canadian drug importation problem.)

For those uninsured in need of hands-on medical care, here’s an idea: What if some of those failing U.S. airlines converted to running medical air shuttle services between, say, New York and New Delhi, or Boston and Bombay? Uncle Sam could hire them as private contractors, then pay them to ferry the uninsured back and forth. It would be less risky than putting up taxpayer money for more loan guarantees, and it might even create a few new jobs here at home. If we can farm out parts of the war in Iraq to private contractors, why not the far easier task of transporting the uninsured?

The more I think about this idea, the better I like it. Just imagine all the problems it would solve: No more overcrowded emergency rooms choked with uninsured patients. No more worries about a nursing shortage; by transferring our patients to India, we’d outsource nursing care there, too. Hospitals and doctors here would be freed up to do what makes most sense for them economically: treat well-insured patients at steep prices — even to the point of giving them care that they probably don’t need! Perform the most lucrative elective surgeries on relatively healthy patients, rather than giving high-cost care to the sickest loss leaders!

We all know the uninsured are a terrible problem, an embarrassment, really, for such a rich country as ours. Every other major industrialized nation has figured out how to provide health coverage to most, if not all, of its citizens. At last, here’s a twist on globalization that could really work for everybody. So let’s get started. Who says Americans can’t take care of their own?

Author’s e-mail:

sdentzer@newshour.org

It’s the Taj Mahal of Health Insurance Schemes

By Susan Dentzer
Sunday, October 31, 2004;

Three months ago, Howard Staab learned that he suffered from a life-threatening condition and would have to undergo surgery at a cost of up to $200,000 — an impossible sum for the 53-year-old carpenter from Durham, N.C., who has no health insurance. So he outsourced the job to India. Taking his cue from cost-cutting U.S. businesses, Staab last month flew about 7,500 miles to the Indian capital [of New Delhi], where doctors . . . replaced his balky heart valve with one harvested from a pig. Total bill: about $10,000, including round-trip airfare and a planned side trip to the Taj Mahal.

— Washington Post news story, Oct. 21

Good grief, why didn’t someone think of this earlier! Forty-five million Americans lack health insurance, and covering every one of them would be costly. Why not outsource them all to India?

The Institute of Medicine, a component of the National Academy of Sciences, calculates that because so many Americans lack health insurance, as many as 18,000 of them die prematurely every year. Of course, this is a drop in the bucket compared with how many die from inadequate health care in really squalid places like . . . well, like parts of India. But now there are apparently lots of slick new hospitals in India, run by Western-trained doctors and catering to foreigners who, The Post reports, want “First World health care at Third World prices.” Since we apparently can’t — won’t? — give our uninsured First World health care at the First World prices the rest of us pay, why not go for the Third World solution?

Think about it. President Bush has plans for covering somewhere between 2 million and 6 million of the uninsured at costs to the federal government variously estimated at $90 billion to $227 billion over 10 years. Sen. John Kerry has plans that could cover 25 million to 27 million at federal costs variously estimated at $650 billion to $1.5 trillion over 10 years. Now to the back of the envelope: If all those people could get the Third World deal that Howard Staab got — a 95 percent discount, including travel and that Taj Mahal side trip — Bush’s plan would cost no more than $11 billion over 10 years and Kerry’s would total just $75 billion. Either way, it’s a steal (and need we point out, a fraction of the cost of the war in Iraq).

Opponents will immediately say this idea is impractical. I say, don’t be health coverage girlie men! First, not all the uninsured would have to travel to India to get health care. For example, when an uninsured person first got the sniffles, he or she could pick up the phone and talk with someone at a call center in, say, Bangalore. An Indian nurse making $10 a day would listen (sympathetically, of course) and offer advice. Through the miracle of telemedicine, people needing to be “seen” could visit a walk-in center stateside and have a videoconference with a medical team in India. Prescriptions could be filled by the burgeoning Indian pharmaceutical industry — now busily producing cheap generic knockoffs of patented Western drugs — and sent directly to U.S. patients via international express mail. (That would also solve that pesky Canadian drug importation problem.)

For those uninsured in need of hands-on medical care, here’s an idea: What if some of those failing U.S. airlines converted to running medical air shuttle services between, say, New York and New Delhi, or Boston and Bombay? Uncle Sam could hire them as private contractors, then pay them to ferry the uninsured back and forth. It would be less risky than putting up taxpayer money for more loan guarantees, and it might even create a few new jobs here at home. If we can farm out parts of the war in Iraq to private contractors, why not the far easier task of transporting the uninsured?

The more I think about this idea, the better I like it. Just imagine all the problems it would solve: No more overcrowded emergency rooms choked with uninsured patients. No more worries about a nursing shortage; by transferring our patients to India, we’d outsource nursing care there, too. Hospitals and doctors here would be freed up to do what makes most sense for them economically: treat well-insured patients at steep prices — even to the point of giving them care that they probably don’t need! Perform the most lucrative elective surgeries on relatively healthy patients, rather than giving high-cost care to the sickest loss leaders!

We all know the uninsured are a terrible problem, an embarrassment, really, for such a rich country as ours. Every other major industrialized nation has figured out how to provide health coverage to most, if not all, of its citizens. At last, here’s a twist on globalization that could really work for everybody. So let’s get started. Who says Americans can’t take care of their own?

Author’s e-mail:

sdentzer@newshour.org

U.S. Performs Poorly on Patient-Centered Care

Primary Care And Health System Performance: Adults’ Experiences In Five Countries
By Cathy Schoen, Robin Osborn, Phuong Trang Huynh, Michelle Doty, Karen Davis, Kinga Zapert, and Jordon Peugh
Health Affairs – October 28, 2004

This paper reports on a 2004 survey of primary care experiences among adults in Australia, Canada, New Zealand, the United Kingdom, and the United States.

Across multiple dimensions of care, the United States stands out for its relatively poor performance. With the exception of preventive measures, the U.S. primary care system ranked either last or significantly lower than the leaders on almost all dimensions of patient-centered care: access, coordination, and physician-patient experiences. These findings stand in stark contrast to U.S. spending rates that outstrip those of the rest of the world. The performance in other countries indicates that it is possible to do better. However, moving to a higher-performing health care system is likely to require system redesign and innovative policies.

The challenge in all five countries is finding the right combination to improve primary care and move to a high-performance care system. The lack of a strong patient-centered or primary care orientation in the United States emerges throughout the survey and underscores the importance of examining international strategies that could be adapted and instituted at home.

The full report:
http://content.healthaffairs.org/cgi/content/abstract/hlthaff.w4.487

The Commonwealth Fund release:
http://www.cmwf.org/publications/publications_show.htm?doc_id=245178

Comment: Never again can you allow to stand unchallenged the statement that the United States has the greatest health care system on earth. We may have the most expensive system, but it’s a lousy system.

This article does reconfirm the well documented concept that the United States lacks an adequate primary care infrastructure. We certainly have the funds that could ensure stable, timely, and coordinated access to care for everyone. But we can do that only if we establish a system that will ensure that our health care dollars are used to support incentives that would strengthen the primary care base. Our current market based system establishes preferential incentives for high priced, high tech services that are selected based more on marketing successes rather than on improved health care outcomes.

Single payer funding alone won’t solve all of the problems in health care. But it would certainly set us off in the right direction by giving us control of our health care budget. Without such control, mediocrity will continue to be the best that we can ever hope for.

Bartlett & Steele – "Critical Condition"

How Health Care in America Became Big Business – And Bad Medicine
By Donald L. Barlett & James B. Steele

Politicians love to say that the United States has the best health care system in the world. In truth, it doesn’t come close. Certainly, no one disputes that the nation has many talented, highly trained professionals who work with the latest equipment, who are knowledgeable and capable of delivering first-rate care. But what kind of system shuts out forty-four million Americans? What kind of system excludes people with illnesses beyond their control? What kind of system insures a husband but denies coverage to his wife? What kind of system forces people to choose between risking financial ruin and risking their lives?

Much of the turmoil is a direct result of a national policy to run health care like a business, a misguided notion promoted by Washington over the last two decades that the free market and for-profit health care would restrain costs and bring high-quality care to all. On both counts, the experiment has failed miserably.

As long as Washington remains wedded to the illusion that market-based medicine will cure health care’s woes, tens of billions of dollars a year will continue to vanish in waste, inefficiency, fraud, and in profits to companies that make money by denying care.

It doesn’t have to be this way. America’s health care crisis can be cured, and, unlike almost every other major challenge facing the nation, it can be solved without spending more money. We already invest enough of our national wealth on medical care. The plan should be to treat this crisis as seriously as if it were an epidemic, and to redirect resources where they belong – into taking care of the health needs of every American.

http://www.randomhouse.com/doubleday/catalog/display.pperl?isbn=0-385-50454-3

Comment: This book is yet another excellent resource on the profound deficiencies in the most expensive health care system on earth. But what is unique about this book is the qualifications of the authors. From the Doubleday website:

“Donald L. Barlett and James B. Steele are America’s most widely acclaimed investigative journalism team. They have worked together for three decades, first at the Philadelphia Inquirer, and, since 1997, as editors at large for Time. They are the only journalists in history to have won two Pulitzer Prizes and two National Magazine Awards, as well as dozens of other national awards. They are the coauthors of six books, including America: What Went Wrong?, which spent eight months on the New York Times bestseller list.”

And what solution do they propose? I’ll give you a hint in the form of a very brief quote that comes from their chapter, THE REMEDY:
“Under a single-payer system…”

Bartlett & Steele – “Critical Condition”

How Health Care in America Became Big Business – And Bad Medicine
By Donald L. Barlett & James B. Steele

Politicians love to say that the United States has the best health care system in the world. In truth, it doesn’t come close. Certainly, no one disputes that the nation has many talented, highly trained professionals who work with the latest equipment, who are knowledgeable and capable of delivering first-rate care. But what kind of system shuts out forty-four million Americans? What kind of system excludes people with illnesses beyond their control? What kind of system insures a husband but denies coverage to his wife? What kind of system forces people to choose between risking financial ruin and risking their lives?

Much of the turmoil is a direct result of a national policy to run health care like a business, a misguided notion promoted by Washington over the last two decades that the free market and for-profit health care would restrain costs and bring high-quality care to all. On both counts, the experiment has failed miserably.

As long as Washington remains wedded to the illusion that market-based medicine will cure health care’s woes, tens of billions of dollars a year will continue to vanish in waste, inefficiency, fraud, and in profits to companies that make money by denying care.

It doesn’t have to be this way. America’s health care crisis can be cured, and, unlike almost every other major challenge facing the nation, it can be solved without spending more money. We already invest enough of our national wealth on medical care. The plan should be to treat this crisis as seriously as if it were an epidemic, and to redirect resources where they belong – into taking care of the health needs of every American.

http://www.randomhouse.com/doubleday/catalog/display.pperl?isbn=0-385-50454-3

Comment: This book is yet another excellent resource on the profound deficiencies in the most expensive health care system on earth. But what is unique about this book is the qualifications of the authors. From the Doubleday website:

“Donald L. Barlett and James B. Steele are America’s most widely acclaimed investigative journalism team. They have worked together for three decades, first at the Philadelphia Inquirer, and, since 1997, as editors at large for Time. They are the only journalists in history to have won two Pulitzer Prizes and two National Magazine Awards, as well as dozens of other national awards. They are the coauthors of six books, including America: What Went Wrong?, which spent eight months on the New York Times bestseller list.”

And what solution do they propose? I’ll give you a hint in the form of a very brief quote that comes from their chapter, THE REMEDY:
“Under a single-payer system…”

Is reinsurance the solution?

The New York Times
October 23, 2004
Momentum Builds for U.S. Role in Paying Highest Health Costs
By Milt Freudenheim and Robert Pear

In seeking to rein in the costs of the runaway insurance premiums paid by employers and their workers – nearly $520 billion this year and rising- politicians of both parties and some business groups are pushing an idea known as reinsurance.

Where the politicians differ is in the details – and the cost to the government.

Senator Kerry says his proposal would reduce health insurance premiums by about 10 percent… Senate Republican leader, Bill Frist… envisions a federally chartered but privately run reinsurance organization, analogous to the Freddie Mac and Fannie Mae mortgage companies… The proposal is in such early form
that cost estimates are not available. But it assumes a large role for the insurance industry, which already offers reinsurance policies without government backing.

The United States Chamber of Commerce, which represents many small businesses and has long called for government action on health care costs,
describes reinsurance as “a worthy concept, an excellent use of federal dollars.”

The health insurance industry is also studying the reinsurance proposals along with various government options like tax credits and other subsidies. “People are starting to think about these concepts,” said Karen M. Ignagni, president of America’s Health Insurance Plans, a trade group in Washington.

http://www.nytimes.com/2004/10/23/business/23care.html

Comment: As we assess the various proposed solutions for reform, we should
carefully examine precisely which problem or problems the solution is designed to solve. Does the rhetoric being used to support the proposal match the true intent?

Reinsurance is designed to transfer risk from an insurer to another insurer. Its purpose is to strengthen the primary insurer by reducing its risk. So proposals to provide reinsurance are to address the problem of the weakened status of the insurers. But is that a major problem in health care today? Health insurers are the darlings of Wall Street. Many have converted from non-profit to for-profit, and have merged to gain near monopolistic control of many health insurance markets. Their profits are setting records.

The primary function of insurers is to pool risk, protecting those with greater health care needs from financial ruin. Now we want to relieve the insurers of this crucial function as we provide them with even more security for their profits? It’s the patients, not the insurers, who need to benefit from health care reform!

The current rhetoric is that reinsurance would insulate employers against higher costs of employer-sponsored health care coverage. But the most ambitious proposal would provide only a 10% reduction in premiums. Premiums have been increasing at double digit rates for the past few years. A 10% reduction would give us only a one year relief from premium escalation. And it would provide absolutely no relief from true increases in health care costs since the reinsurance would be funded by federal tax increases or premiums paid to the federally chartered reinsurers.

Its no wonder that America’s Health Insurance Plans (AHIP) and the United States Chamber of Commerce (USCOC) are in support of reinsurance. The insurers receive an infusion of tax dollars, and the employers are relieved
of the need to fund a portion of their health benefit programs. Its a win-win for AHIP and USCOC, but, alas, once again, the patient-employee-taxpayers are the losers.

Tommy Douglas A Remarkable Canadian

Tommy Douglas A Remarkable Canadian
Kevin Wong
Winner of the Norm Quan Bursary

When considering the giants of Canadian politics, T.C. Douglas surely stands at the forefront. Tommy Douglas was a remarkable Canadian whose contributions have helped to shape our great nation. Although he is most famous as the founding father of Medicare, the most advanced health-care system in the world, Douglas’ contributions to Saskatchewan and Canada were tremendous. Douglas established democratic socialism as a mainstream in Canadian politics and his CCF government became the first socialist government in North America. A visionary who achieved his dreams, Douglas changed the face of Canadian politics. More importantly, Tommy Douglas was a politician who put the good of the people he represented first and foremost.

Tommy Clement Douglas was born on October 20, 1904 in Falkirk, Scotland. In 1911, Tommy, his mother and his sister moved to Winnipeg to join his father who had moved there the previous year. Shortly after settling in Winnipeg, Tommy was diagnosed with osteomyelitis in his right leg. Tommy’s family was not healthy and subsequently his family could not pay for the best or most immediate treatment. The delay nearly cost Tommy his leg. This experience marked the beginning of Tommy’s quest for universal, public health care. By the time he was 18, Tommy set his sights on a career as a preacher.

In 1924, when Tommy reached 20 years of age, he enrolled at Brandon College in Manitoba. Brandon College, which was founded by the missionary Baptists of Ontario, provided young ministers with the opportunity to receive an educational background. In college, Tommy was active in elocution classes, drama, and debating. His peers accepted Douglas as a natural leader and scholar. During weekends and summer months, Tommy would speak at rural churches. At one such trip Tommy met Irma Dempsey, his future wife. By the time he had left Brandon College, Tommy had earned his Bachelor’s degree in the Faculty of Arts.

In the fall of 1929, Tommy became a minister at Calvary Baptist church in Weyburn, Saskatchewan. The town immediately opened its arms to the young preacher who possessed boundless energy and eloquence. His time in Weyburn allowed Douglas a first hand perspective of the harshness of the Depression in the prairies. Douglas knew that something had to be done for the common man. His experience with the vast unemployment and poverty transformed T.C. Douglas, the clergyman, into a social activist.

By 1932, Douglas helped organize an Independent Labour Party in Weyburn of which he became president. Saskatchewan’s Independent Labour movement was not large in numbers but they began raising awareness for socialist politics. The movement soon evolved into the Farmer Labour Party. The Farmer Labour Party offered hospital care for everyone on an equal basis, including unemployment insurance and universal pension. By July of 1932, the labour parties of the four western provinces formed an alliance under the name Cooperative Commonwealth Federation. The CCF became Canada’s first national socialist party. The Farmer Labour Party now had something it desperately lacked, the backing of a national movement. In 1934, Douglas made his first foray in the Saskatchewan provincial election. Although he lost, this sparked an internal flame which could not be extinguished.

In 1935, Douglas was elected into parliament under the CCF. This was a time of great turmoil for Canadian politics. Nearly all the provincial governments had been tossed out of office as Canadians turned to anyone who promised to lead them out of the troubled times. Along with Douglas, there were only four other members of the CCF caucus. At the tender age of 31, the young Douglas impressed the House of Commons with his fiery, yet relevant, speeches. The CCF, with only five seats, did not have much political clout, but that did not stop Douglas from fighting for legislation to support the western provinces. By the end of the 193 Os, the Depression and World War II had created an opening for popular support towards the CCF and its socialist ideas.

By the end of World War II, Douglas found a new way to support his socialist solution to Canada’s economic problems. Canada had successfully financed a war against a foreign aggression but could not do the same against poverty. “Surely,” said Douglas in a radio broadcast, “if we can produce in such abundance in order to destroy our enemies, we can produce in equal abundance in order to provide food, clothing, and shelter for our children.”

In his two terms in cabinet, Douglas often argued that Ottawa had no effective western farm policy. The CCF, a socialist party, had begun to build momentum at this time. By the early 1940s Douglas began to move away from Federal politics after being frustrated with the slow legislation and lack of progress. By 1942 Tommy Douglas became the leader of the Saskatchewan provincial CCF party although he remained a MP for the Weyburn constituency.

In 1944, the CCF, under Douglas, won the provincial election to become the first socialist government in North America. The CCF election slogan was “Humanity First” and his government’s budget was to have 70% of expenditure to social services. Douglas’s emphasized that his brand of socialism depended on political and economic democracy. Saskatchewan listened. In 1944, the old age pension plan included medical, hospital and dental services. Douglas’ government radically changed the education system and established larger school units and provided the University of Saskatchewan with a medical school. In his first four years in government, Douglas paid off the provincial debt, created a province wide hospitalization plan, paved the roads, and provided electricity and sewage pipes to the common man.

In 1948, when time for a re-election had come, opponents took advantage of the cold war and the widespread fear of communism. This was dirty politics at it’s worst and it swayed the public. Douglas fought back with radio telecasts, a medium which he could reach the public with his oratory skill. In one such telecast Douglas said “Don’t let them deceive you again. If you let them fool you once, shame on them. If you let them fool you twice, shame on you.”Although he defended his government’s outstanding record, it was Douglas’ sincerety and his committment to the people of Saskatchewan which prevailed. Douglas’ first re-election proved to be the most difficult. He would be re-elected for three more terms to serve Saskatchewan as Premier for 17 years. In his latter terms as Premier, Douglas saw the province through prosperous times. Douglas would not see great changes in legislation like his first term until the inception of Medicare.

In 1961, the CCF joined with big labour unions to create the New Democratic Party in which Douglas was elected leader. The NDP platform remained consistent with that of the CCF with minor changes. The forming of a new party provided the CCF with a self-renewal. The NDP attracted new supporters and triggered a new movement of democratic socialism. Douglas’ New Democratic Party was gaining momentum on a national level but there were troubles at home.

The North American Medical Establishment tried to defy Medicare, Douglas’s top priority project, and Saskatchewan became an intense battleground. This turbulent time was marked by the Doctor’s Strike as the physicians of the province protested socialized healthcare. However, the striking doctors were no match for Douglas. When the dust settled with the resolution of the strike, Medicare in Saskatchewan was born. Douglas showed Canada two things: that it was possible to develope and finance a universal Medicare system and that the medical profession could be confronted. Had Douglas not have made these first ground breaking steps, national Medicare would never have happened.

In 1962, Douglas was struck with a devastating blow. Running in the Regina contituency, Douglas, the leader of the NDP party, was defeated. Fortunately, a New Democrat MP in British Columbia resigned his seat in favour of Douglas. Immediately Douglas began his by-election campaign on the west coast. By mid October, he was back in the House of Commons representing the Burnaby- Coquitlam riding. As leader of the NDP, Douglas fought hard for socialist legislature on federal level but never achieved the success he found as Premier of Saskatchewan under the CCF. By 1971, Douglas resigned as Leader of the NDP, although he remained the party’s energy critic which he took on in 1969.

In 1976, Douglas announced that he would not seek re-election and bowed out of Canadian politics. Douglas spent much of his retirement in the national NDP headquarters as an independent missionary for the cause of socialism. Weeks before his death, weakened by cancer, Douglas made one final trip to Parliment Hill. Tommy Douglas passed away on February 24, 1986. At his memorial service, the Liberal leader, John Turner, and the Conservative prime minister, Brian Mulroney, led a standing ovation for this courageous man.

During his 42 years in politics, Tommy Douglas proved himself as an outstanding Canadian leader. He is largely responsible for our central banking, old age pensions, unemployment insurance, and our universal Medicare. When asked why he stayed with NDP when he could have done better with a more powefful party, Douglas simply replied, ” I have watched politicians for the last forty years drop their principles in order to get power only to find that those who paid and controlled the party which they joined prevented them from all the things they really believed in.” To the end of his days Tommy Douglas was true to himself, to what he stood for, and to the people he represented.

Endnotes

1. McLeod, Thomas. & McLeod, Ian. (1987) Tommy Douglas: The Road to Jerusalem Hurtig Publishers. Pg. 42

2. Elsie Swerhone (1980) Tommy Douglas: Keeper Of The Flame National Film Board of Canada

3. Elsie Swerhone (1980) Tommy Douglas: Keeper Of The Flame National Film Board of Canada

Bibliography

1. McLeod, Thomas. & McLeod, Ian. (1987) Tommy Douglas: The Road to Jerusalem Hurtig Publishers.

2. Whelan, Ed. & Whelan, Pemrose. (1990) Touched by Tommy Whelan Publications.

3. Lovick, L.D. (1975) Tommy Douglas Speaks Oolichan Books.

4. Thomas, Lewis H. (1982) The Making of a Socialist: The Recollections of T.C. Douglas The University of Alberta Press.

5. Elsie Swerhone (1980) Tommy Douglas: Keeper Of The Flame National Film Board of Canada

The Health of Nations

The New York Times

The Health of Nations
By Donald L. Barlett and James B. Steele

For years the people in Washington have offered one plan after another that they said would provide health care for all Americans and rein in costs. Each plan has failed. Today more people than ever have inadequate coverage or no insurance at all. And still costs continue to spin out of control.

Notably absent from the rhetoric has been any mention of the existing system’s inherent flaw – the inability of market-based, for-profit medicine to deliver on the political promises.

Two decades ago, when Washington embraced the for-profit model to curb escalating charges, health care spending represented 10.5 percent of gross domestic product. Now it is approaching 16 percent. We spend more per capita on health care than any other developed country. Yet on the important yardsticks, like life expectancy measured in healthy years, we don’t even rank among the top 20 nations. In fact, according to the World Health Organization, we come in an embarrassing 29th, sandwiched between Slovenia and Portugal.

The explanation for this abysmal record is one that politicians decline to discuss. The market functions wonderfully when we want to sell more cereals, cosmetics, cars, computers or any other consumer product. Unfortunately, it doesn’t work in health care, where the goal should hardly be selling more heart bypass operations. Instead, the goal should be to prevent disease and illness. But the money is in the treatment – not prevention – so the market and good health care are at odds. Just how much at odds is seen in the current shortage of flu vaccine, as men and women in their 80’s and 90’s line up for hours at a time, hoping to get the shot they have been told they need, but may not receive because not nearly enough has been manufactured.

The reason for the shortage is this: Preventing a flu epidemic that could kill thousands is not nearly as profitable as making pills for something like erectile dysfunction, a decidedly non-fatal condition. Viagra, for example, brings in more than $1 billion a year for its maker, Pfizer. The profits to be made from selling flu vaccine are measly in comparison. If selling flu vaccine were as lucrative as marketing Viagra, sports broadcasts and the nightly news would be flooded with commercials warning that “winter is almost here; ask your doctor about flu vaccine” – and it would be available to anyone who wanted it. Instead, while many of those at risk of the flu go without the vaccine, primetime programs are sponsored by the makers of Viagra (“Get back to mischief”), Cialis (“Will you be ready?”) and Levitra (“Stay in the game”).

To understand what has gone wrong in health care, one need only look at the booming market for prescription drugs. Once upon a time, drugs were a needs-based product. You received a prescription when you were truly ill. Now many drugs are demand-driven, just like Froot Loops and Lucky Charms. Instead of using the cartoon characters that sell cereals, the drug companies employ celebrities.

One of the earliest was Lauren Hutton, the supermodel whose enthusiastic endorsement of Wyeth’s hormone replacement therapy helped propel prescriptions for all such drugs from 58 million in 1995 to 90 million in 1999. Ms. Hutton made the rounds of the talk shows, telling her “personal” story. She said her doctor warned her that if she didn’t take estrogen, “I was up for colon cancer, eye loss, osteoporosis, shrinkage, lots of things.”

More recently, Merck recruited Dorothy Hamill, the Olympic gold medalist, to pitch Vioxx. “This is my favorite time to skate,” Ms. Hamill said in a commercial. “I guess it’s from all those years of 5 a.m. practices. But it’s also the time when the pain and stiffness of osteoarthritis can be at their worst.”

As has been the case with so many other drugs, estrogen therapy and Vioxx proved to be a triumph of marketing over science. Not only did the hormone replacement drugs fail to provide the promised protection, studies found they increased the risk for developing cancer and heart disease. Vioxx was withdrawn last month after evidence from clinical trials showed that it increased the risk of heart attacks and strokes.

Since 1997, when the Food and Drug Administration loosened restrictions on television commercials for prescription drugs, the marketing departments of pharmaceutical companies have exercised ever-greater influence on which drugs will be brought to market. That’s why we have three drugs to treat erectile dysfunction, a condition that once was called “impotence.” The name change was essential for the products to be sold by the likes of Bob Dole or Mike Ditka, the former Chicago Bears coach.

Aggressive marketing and pricing have made pharmaceutical companies America’s most profitable industry. On the whole, Americans pay higher prices for prescription drugs than anyone else in the world because the United States is the only industrialized nation that does not exert influence over prices.

What’s needed to control the costs and to provide basic health and hospitalization coverage for all Americans is an independent agency that would set national health care policy, collect medical fees, pay claims, reimburse doctors fairly and restrain runaway drug prices – a single-payer system that would eliminate the costly, inefficient bureaucracy generated by thousands of different plans. It’s not such a radical idea; a single-payer system already exists for Medicare.

Such an agency would need to be free of politics and could be modeled on the Federal Reserve System, whose members are appointed to terms that do not coincide with the terms of either the president or the Senate. It could be financed through two taxes, a gross-receipts business tax and a flat tax, similar to Medicare, but on all individual income.

Under a single-payer system, never again would you be asked, when calling to make a medical appointment, “What type of insurance do you have?” Never again would doctors need bloated office staffs to track what is and is not covered under thousands of insurance plans. Never again would you have to worry about being bankrupted by a medical emergency. Never again would American business be saddled with the responsibility for providing health insurance.

A unified, single-payer system could do more than pay the bills. It could gather information to more accurately identify the surgical procedures and drugs that work, and those that don’t. It could funnel research money to where it will do the most good rather than to those areas with the largest and most vocal constituency, thereby treating the victims of various diseases and conditions more equitably.

It could make possible a centralized computer network to reduce the 100,000 deaths each year from adverse drug reactions – a number of fatalities five times greater than those caused by street drugs like cocaine and heroin. Similarly, a nationwide network could track medical errors across the country to increase accountability and to identify hospitals or surgeons who make repeated mistakes. And it could guarantee supplies of needed medications. In short, over time such a system could transform the practice of medicine and give all Americans the first-class health care they deserve – without breaking the bank.

Donald L. Barlett and James B. Steele are editors at large at Time and the authors, most recently, of “Critical Condition: How Health Care in America Became Big Business-And Bad Medicine.”

New report shows nearly half of Americans in medicare at risk of losing coverage

FOR IMMEDIATE RELEASE
OCTOBER 22, 2004
1:16 PM
CONTACT:  Families USA
Geraldine Henrich (202) 628-3030
 
New Report Shows Nearly Half of Americans in Medicare at Risk of Losing Coverage
Millions of Seniors and People with Disabilities will Experience Temporary or Long-Term Reductions in Care Under New Medicare Law

WASHINGTON- A careful analysis of the new Medicare law and the Administration’s proposed regulations shows that approximately half of the program’s beneficiaries are at risk of being worse off than they are today, according to a special report released by Families USA, the voice for health care consumers.

Seniors and people with disabilities may lose drug coverage altogether, lose access to needed drugs, have higher out-of-pocket costs for their medicines, find their retiree coverage scaled back, or enjoy fewer consumer protections. As a result, they will experience temporary or long-term reductions in care that is vital to their health.

Those at risk of being worse off include:

* The 6.4 million so-called “dual eligibles,” those who qualify for both Medicare and Medicaid. America’s poorest seniors and people with disabilities will lose their current drug coverage provided by Medicaid on December 31, 2005.

* The 13 million retirees with drug coverage from their previous employers, who are at risk of losing at least portions of that coverage.

* The 4.7 million seniors currently enrolled in Medicare Managed Care Plans, who will receive fewer protections than they have today.

Families USA is the national organization for health care consumers. It is nonprofit and nonpartisan and advocates for high-quality health care for all Americans. www.familiesusa.org Families USA Foundation

###

Who Uses Emergency Departments?

Poor Health, Not Lack of Primary Care or Medical Insurance Found to Drive Emergency Visits
American College of Emergency Physicians
News Release – October 18, 2004

The first large-scale study of its kind finds the majority of individuals who use emergency departments have a usual source of care, medical insurance and are not poor. The biggest factor driving people to seek emergency care is poor physical and mental health…

In this study, based on a sample of nearly 50,000 adults interviewed between 2000 and 2001, 83 percent of emergency department visits were made by people who reported having a usual source of health care other than an emergency department, 85 percent reported having medical insurance, and 79 percent reported having incomes exceeding the poverty threshold. Individuals without health insurance were no more likely to have had an emergency visit than those with private health insurance, and individuals without a usual source of care were 25 percent less likely to have had an emergency visit than those with a private physician.

“Contrary to popular perception, individuals who do not have a usual source of care are actually less likely to have visited an emergency department than those who have such care,” said the study’s lead author Ellen J. Weber, MD, Professor of Clinical Medicine in the division of emergency medicine at the University of California, San Francisco. “Many insurance programs, and particularly public and private HMOs, require beneficiaries to have a primary care physician, which may be expected to improve overall health and health care, but the continued rise in emergency visits implies that such programs have not had a substantial impact on overall emergency department use.”

“The mistaken belief that emergency departments are overcrowded by a small disenfranchised portion of the U.S. population can lead to misguided policy decisions and a perception by hospital administrators that emergency patients are not as valuable to the institution as patients having elective surgeries,” said Dr. Weber. “But our findings indicate that emergency departments serve as a safety net, not just for the poor and uninsured, but for mainstream Americans, and in particular those with serious and chronic illness.”

http://www.acep.org/1,34130,0.html

Comment: Clearly, the primary role of emergency departments is to serve as a safety net for mainstream Americans. Although much concern is expressed over the use of emergency departments by the disenfranchised poor and uninsured, this study confirms that emergency facilities are not being used as convenience clinics by this group. These people are simply not receiving the care that they need.

When the need for comprehensive reform is so obvious, we should not be distracted by efforts to enact misguided policies based on fundamental misperceptions.

Let’s first provide comprehensive coverage for everyone. Once health care funding is no longer the overriding issue, we can concentrate on policies that would ensure timely access to a usual source of care. Because of work conflicts and transportation issues, that might include enabling access to integrated convenience clinics. Whatever. But, at a current spending level of $1.8 trillion, we don’t need to increase funding; we need to start spending our funds more effectively.