PNHP

A primer on health care

A primer on health care

A primer on health care
In the first of a two-part series on the Japanese health insurance system, Tomoko Furukawa goes back to basics
By TOMOKO FURUKAWA
There are two main types of Japanese Health Insurance: National Health Insurance and Employees’ Health Insurance

Once you have joined the health insurance system, you will be issued with an insurance card (“hokensho”), which you must bring with you every time you pay a visit to a clinic or hospital or other medical facility. If you forget your card, you may have to pay the full amount for treatment, though this is refunded later.

National Health Insurance
All residents of Japan who are planning to stay in the country for at least one year and haven’t joined another health insurance program are entitled, and expected, to join the National Health Insurance Program.

This includes part-time workers, the self-employed, and those without full-time status at a company they work for (this often includes teachers at English schools).

Under this system, both the policy holder and dependents enjoy equal coverage.

The amount you must pay into the National Health Insurance System is based on local resident tax (which, in turn, is based on income), your assets, the number of people benefiting from coverage and, often, the number of people living in your area that have joined the system (eg. ward, city, town etc.).

At present, regardless of income and assets, the highest amount payable annually is 530,000 yen, though this can rise to 610,000 yen depending on the number of people over age 40 in your household. Payments are not automatically deducted from wages, but must be paid in installments at a post office or health insurance office.

Foreign residents are often shocked when they see a massive jump in their premium from the first year of joining the system to the next.

The reason for this jump is that, for the first year, the premium is set at a minimum of around 2,500 yen.

For the second year, however, it is calculated based on income.

Under National Health Insurance, the policy holder and his/her dependents must pay 30 percent of inpatient and outpatient fees, with 70 percent covered by insurance.

Those enrolled in all health insurance schemes can avail of some free or very low-costs general check-ups (chest X-ray, urinalysis, blood test etc.). Also available are dental checks (for cavities, gum disease etc.), TB tests and treatment if sick.

Health exams and check-ups are generally not covered by insurance. Local authorities and companies arrange yearly or twice-yearly check-ups at designated times for local residents and employees.

However, while a preventative check-up may not be covered, there’s nothing stopping the insured person from going to their doctor with a complaint (fictitious or otherwise) and having a check-up performed as part of diagnostic treatment.

The NHI reimburses amounts paid over 63,000 yen (35,400 yen for low-income families) for medical treatment in one month; amounts over 37,200 yen, starting from the fourth time, if a household receives high-cost medical care four or more times a year; amounts over 10,000 yen for treating long-term, government designated ailments such as diabetes. A list of these designated diseases and conditions is available from your local city/town office.

However, reimbursement details under national health insurance are decided by local governments, so specific details of benefits should be checked with your local insurance office.

You may also be reimbursed if you receive treatment at a facility that does not accept your insurance and consequently hits you with a hefty bill.

In order to qualify for the above, you must be able to show that you were forced, through an emergency or unavoidable situation, to go to that facility. However, applicants will not necessarily be reimbursed the full amount, but rather will receive repayment based on a government-fixed fee.

If you get prior permission from your local EHI office, you can be reimbursed for transportation costs to hospital.

The Japanese health insurance system does not cover costs incurred as a result of accident caused by a third-party, since in Japanese custom the third-party is expected to pay. However, if that person cannot pay, then the insurance system may reimburse your costs and bill the person involved themselves.

If you cause the accident you have no coverage under the health insurance system.

Employees Health Insurance

This plan is for company employees and their dependents. It covers those who work full-time or at least 3/4 of the hours that a full-time worker puts in for a company that has joined an EHI plan.

In order for your dependents (basically your extended family stretching back three generations) to benefit from your policy, they must rely on you for more than half of their livelihoods and have an annual income of less than half of yours — or up to 1,200,000 yen per annum.

Under the national pension plan, employer and employee each pay half the premium, which is based on a percentage of income.

Unlike the national health insurance system, the EHI policyholder pays 10 percent of costs, while dependents pay 20 percent of inpatient care costs, and 30 percent of outpatient costs.

For high-cost medical care, the EHI will reimburse any high-cost medical expenses or extraordinary medical expenses along the same lines as National Health Insurance.

Reimbursement usually occurs within two months of payment, though interest-free loans are available for those in need of funds to tide them over until the cash arrives.

Benefits are the same as those under NHI with the exception of coverage amount.

Getting out

It is essentially impossible to leave the Japanese health insurance system once you have joined, unless you are leaving the country, moving somewhere else, or starting a new job.

If you move jobs and go from full-time to part-time status you may decide to opt out of the health insurance system altogether and get private health insurance.

If you shift from EHI to NHI, you will be charged from the date you left the EHI.

You can receive an exemption from paying premiums if you have trouble paying due to unemployment, bankruptcy issues etc.

Health resources

There are several good resources for information on health insurance and health care in general in Japan.

One of the best is the Japan Health Handbook, published by Kodansha.

The book contains sections ranging from alternative medicine and mental health to old-age care, with lots more in between. Though Kodansha no longer prints the book, it may be still possible to find copies in English-language bookstores in major Japanese cities, and the book can certainly be found on Amazon and other online book retailers.

On the Web, many embassy homepages provide information on English-speaking hospitals and clinics around Japan. One particularly comprehensive list can be found on the homepage of the U.S. Embassy in Japan at japan.usembassy.gov/e/acs/tacs-7119.htm

Another good resource is the AMDA International Mediscal Information Center homepage ( homepage3.nifty.com/amdack)

This provides telephone services to foreign residents in eight languages, explaining the health care system in Japan to foreign residents and pointing them in the direction of medical facilities with staff who speak their language.

What’s not covered

Not covered under the two systems are normal childbirth; abortion for economic reasons; vaccinations; cosmetic surgery; orthodontics; alternative medicine. Also not covered are accidents that occur in or on the way to work.

Health resources

There are several good resources for information on health insurance and health care in general in Japan.

One of the best is the Japan Health Handbook, published by Kodansha.

The book contains sections ranging from alternative medicine and mental health to old-age care, with lots more in between. Though Kodansha no longer prints the book, it may be still possible to find copies in English-language bookstores in major Japanese cities, and the book can certainly be found on Amazon and other online book retailers.

On the Web, many embassy homepages provide information on English-speaking hospitals and clinics around Japan. One particularly comprehensive list can be found on the homepage of the U.S. Embassy in Japan at japan.usembassy.gov/e/acs/tacs-7119.htm

Another good resource is the AMDA International Mediscal Information Center homepage ( homepage3.nifty.com/amdack)

This provides telephone services to foreign residents in eight languages, explaining the health care system in Japan to foreign residents and pointing them in the direction of medical facilities with staff who speak their language.

Next week’s column will cover the above issues, aswell as those of tax deductions, coverage, high medical expenses, specialist treatment, back payments and more.

Send your questions and views, good and bad, on the Japanese health care system to community@japantimes.co.jp

The Japan Times: Nov. 9, 2004

Vets return, but not always with healthcare

Vets return, but not always with healthcare
Alexandra Marks Staff writer of The Christian Science Monitor
11/10/2004

After serving 410 days in Iraq with the 1st Armored Division, Spc.Stuart Wilf came home to Colorado on Oct. 2. He changed his clothes, borrowed his mother’s car, and went out with friends to celebrate. On the way home, he fell asleep at the wheel and had a head-on collision with a tree. He survived, but since he was newly discharged, he had no health insurance.

“That was a mind-boggling thing to find out the first day he’s out of the service,” says his mother, Becky Wilf. “His bill was $54,000 just for the hospital. That doesn’t include the surgeon.”

Specialist Wilf is just one of thousands of veterans returning home from Iraq and Afghanistan who advocates contend are falling through the cracks of a federal system unprepared to deal with so many soldiers. After spending months in a war zone, many of the 170,000 soldiers who’ve returned home are struggling with their transition to back to civilian life – from coping with a maze of red tape and contradictory messages on healthcare to finding affordable housing and jobs with adequate incomes to accessing disability payments.

One of the biggest problems, according to advocates and a report by the Government Accountability Office, is a lack of resources to deal with battle fatigue, or posttraumatic stress disorder, as it’s now called. Another is providing support for Reserve and National Guard troops, who make up 45 percent of the troops in Iraq.

“The bottom line is that the VA [Department of Veterans Affairs] wasn’t prepared for the 33,000 troops that have come back and gone to the VA needing care,” says Paul Rieckhoff of Operation Truth, a nonprofit advocacy group for veterans of Iraq and Afghanistan. “They’re definitely not ready for the flood that’s going to come back next year.”

View from the other side
The VA disputes that and says it has ordered its services so that returning veterans will receive top-priority care. Last year, it announced that it would no longer be able to provide health services to veterans who make more than $26,000 a year (on average) and have no service-connected health problems. As a result, VA spokeswoman Cynthia Church says that what were once “unbelievable wait times” have been reduced. That allows the VA to treat returning combat veterans who were wounded or have service-related problems for free for two years.

“No veteran now waits longer than 30 days for their first appointment,” she says. “In terms of access to facilities, we’ve got more than 158 hospitals and more than 800 clinics, and we contract with service providers in communities where there may be a need.”

The VA’s policy are less clear when it comes to vets like Wilf, who sustained injuries after he was discharged. He and his family spoke with four different VA representatives and were told that because his injuries were not combat related, he was ineligible for VA care.

After inquiries from reporters, the VA in Washington said that if Wilf had been enrolled in the VA system, he would have been eligible for treatment for noncombat problems because he had just returned from combat duty. But he would have to pay for a percentage of the cost if he were able, and he would not be a priority case. “Part of the problem is the way the law reads. It says it’s mandatory to provide care for a condition possibly related to service, but doesn’t really address treatment of an unrelated condition,” says Gary Baker, head of the Eligibility Center at the VA.

Wilf has since filled out the application to enroll but is still waiting for it to be processed. In the meantime, the hospital where he was treated has forgiven most of the $54,000 bill because he was technically indigent. But he still has another $24,000 in related bills to pay.

Wilf was active duty, but some returning troops in the National Guard and Reserves have also found themselves without healthcare. When they were activated, they were eligible for Tricare, the Defense Department’s health-insurance program, but they lost coverage when they returned home.

Last summer, however, Congress voted to extend Tricare coverage for 180 days after deactivation. And last month, it voted to extend the coverage again, this time allowing Guard and Reserve troops to receive a year of Tricare coverage for every 90 consecutive days they serve.

Mr. Rieckhoff of Operation Truth lauds Congress for the move, but he contends it’s still not enough. He points to his own situation. He was on active duty and served as an infantry platoon leader in central Baghdad for 11 months. But now he finds himself in a job with no insurance. He was also told that the VA would treat only service-related injuries.

“The ironic part is that I’m drilling in the National Guard. It’s not like I’m completely out of the military,” he says.

Harvard’s numbers

A study done at Harvard University has found that almost 1.7 million veterans of all wars lack health insurance, an increase of 13 percent since 2000. More than one in three vets under the age of 25, like Wilf, have no health insurance. “It’s particularly offensive to send people off to war and not take care of them when they come home,” says Dr. Steffie Woolhandler, a professor at Harvard Medical School and coauthor of the study.

The VA contends the number of veterans without healthcare coverage is far smaller. Ms. Church says 60 percent of those uninsured veterans would be eligible for care if they enrolled in the VA. The study’s authors dispute that, noting that many have incomes higher than $26,000, live in areas where there are no VA services, or were unable to receive care due to long waiting lists. Church charges that the study’s authors are using the issue of uninsured vets to further a political agenda of creating a national health-insurance system. Veteran activists discount that. “This is not a political issue; it’s a soldier issue,” says Steve Robinson of the National Gulf War Resource Center.

A Gulf War veteran, he retired from active duty in October 2001, applied for benefits in 2002, and has yet to be enrolled in the VA healthcare system. “What happens in Washington is that these important things get turned into political footballs to get kicked around,” he says. “Then the issue doesn’t get the attention it deserves.”
(c) Copyright 2004 The Christian Science Monitor.  All rights reserved.

Consumer-Directed Managed Care

Health Affairs
November/December 2004
Consumer-Directed Health Plans And The RAND Health Insurance Experiment
By Joseph P. Newhouse

What Was The RAND Experiment?

The RAND HIE (RAND Health Insurance Experiment) randomized families to health insurance plans that varied their cost sharing from none (“free care”) to a catastrophic plan that approximated a large family deductible with a stop-loss limit of $1,000 (in late-1970s dollars), which was scaled down for the low-income population. If one uses the rate of increase in per capita medical spending to convert late-1970s dollars into 2004 dollars, a $1,000 deductible then would be more than a $6,000 deductible is today.

The HIE participants in the large-deductible (95 percent coinsurance) plan used
25-30 percent fewer services than those in the free-care plan; on average,
they had just under two fewer face-to-face physician visits per person per
year and were 23 percent less likely to be hospitalized in a year. Substantial reductions in use were found among all income groups. But the heat in the hoary debate over the appropriate role for patient cost sharing was not the magnitude of any savings, but whether any reduction in use induced by increased cost sharing was among “necessary” or “unnecessary” services and therefore whether it adversely affected health. Those on the political left generally espoused the view that the services were necessary; those on the right, that they were unnecessary.

On this score, the results of the HIE had something for both sides. For most
people enrolled in the RAND experiment, who were typical of Americans covered by employment-based insurance, the variation in use across the plans appeared to have minimal to no effects on health status. By contrast, for those who were both poor and sick-people who might be found among those covered by Medicaid or lacking insurance-the reduction in use was harmful, on average. In particular, hypertension was less well controlled among that group, sufficiently so that the annual likelihood of death in that group rose approximately 10 percent. This adverse effect occurred in spite of the reduced cost sharing for low-income families, a feature generally not found in today’s plans.

http://content.healthaffairs.org/cgi/content/abstract/23/6/107

Comment: The RAND Experiment is of great importance because it is cited as
the rationale for creating consumer (patient) sensitivity to health care costs. This principle is the primary mechanism of controlling health care costs in the consumer-directed model of health care reform. We now have the advantage of having witnessed the debate, tempered by time, of the real impact of the RAND conclusions. Professor Newhouse provides us with an allegedly objective assessment of the RAND experiment from this historical perspective.

And what were the results? Most people, who are healthy and employed, remain
healthy even with cost sharing. But for those who are poor and sick, the reduction in use was harmful to their health, even resulting in death.

Although cost sharing does not have much of a negative impact on healthy people, it really does not decrease total health care spending much since most people are healthy and have much less need to access the health care delivery system. Keep in mind that 80% of individuals use only 20% of all health care services, and the reduction in utilization caused by cost sharing is a relatively small percentage of that 20% of total costs.

But what about the poor and sick? Cost sharing does reduce spending, but that reduction is in essential health care services. Significantly impaired health outcomes are absolutely inevitable.

Presenting the results of the RAND Experiment as an objective debate between
two sides that have an equal claim to the debate turf provides objectivity that is about as cold and calculated as the surveyor of battle scenes who report collateral damage in terms of statistical body counts. To suggest that the cost sharing debate has something for both sides ignores the fundamental issue that there is only one side to providing affordable health care access to those with significant medical needs.

Unfortunately, Professor Newhouse doesn’t stop there. Although he acknowledges the “counterrevolution against managed care,” he states:”How will the increased initial cost sharing mesh with managed care? I see them as complementary. One result of the RAND HIE was that the variation in cost sharing affected the likelihood of seeing a physician or other health professional about a medical problem, but it had only a small effect on the costliness of an episode once care was sought. By contrast, the tools of managed care aim primarily at the costliness of an episode.”

And…

“… higher initial cost sharing may make the instruments of traditional managed care more effective.”

Thus we enter the age of the grand experiment with Consumer-Directed Managed
Care. The body of health policy literature has already written the outcome:
suffering and death for those with greater health care needs.

Wouldn’t it be better to spend more of our $1.8 trillion on those who need health care?

Fail Globally, Act Locally

Fail Globally, Act Locally:Hotel Workers, Family Medicine, and the Future of Health Care
Kevin Grumbach, MD
November 11, 2004

Earlier this year, the San Francisco Chronicle quoted me as saying that my motto was, “Fail globally, act locally.” This was in the context of discussing my frustrating legacy as a physician advocate for universal health care, affirmative action, and primary health care. I thought about this motto this week as I pondered a dilemma that brought global issues in health policy home to a personal and local level.

Months ago, I accepted an invitation to be a keynote speaker at a national conference of family doctors and educators in family medicine scheduled for this weekend in San Francisco at the Hyatt Regency Hotel. I was honored to be invited to address the conference. Then, on September 29, 1400 hotel workers at four of the City’s major hotels went on strike—largely over a dispute about proposed increases in employee contributions for health benefits. Two days later, the hotel consortium The San Francisco Multi-Employers Group responded by locking out 2600 union workers at 10 additional San Francisco hotels, including the Hyatt Regency.

As the date of the conference approached, I experienced a sinking feeling. I watched the hotels dig in their heels and continue the lock out despite Mayor Newsom’s call for a cooling off period. I saw TV clips of the housekeepers and banquet waiters and prep cooks out on the picket lines, about to lose their health insurance. I thought about hundreds of conference registrants arriving in San Francisco, expecting to hear me deliver my plenary address on the theme of “Humanizing Care.” I wondered what I should do. Cross the picket line and swallow hard when giving my talk on making health care more humane? Cancel my talk on short notice and leave the conference organizers and my colleagues in the lurch?

I have much sympathy for the hotel workers. It’s not that my family traces its roots back to Mother Jones and had me singing Solidarity Forever in grade school (both my parents are physicians). And as a head of a medical school department, I am a “manager” and sometimes find myself contending with union grievances that seem more senseless than substantive. But the issues at stake in the hotel workers labor dispute are deeply meaningful—both to the workers involved and to the future of our nation’s health care system. At the core of the dispute is whether hotel workers in lower income jobs will be able to earn a living wage and afford health insurance. According to a September 2004 study by the UC Berkeley Labor Center, a full-time hotel room cleaner in San Francisco earns $2,611 per month. The “self-sufficiency” income required to pay for basic necessities for a single parent with a preschool age child living in San Francisco is $4,003. Currently, unionized hotel workers in San Francisco contribute $10 per month towards the purchase of family health insurance coverage. The new contract proposal by the Multi-Employers Group would require employees to contribute $32.53 monthly next year, rising to $273.42 in the contract’s fifth year.

The number of Americans with employment-based private health insurance has plummeted in recent years as employers drop coverage altogether or compel workers to assume a larger share of the cost of premiums—with the result that low wage employees are increasingly unable to afford to participate in their company’s health benefit plan. Between 2001 and 2003, 5 million fewer Americans were covered by employment based health plans, contributing to the surge in the number of the nation’s uninsured that has now reached 45 million. In my own practice as a family physician at the Family Health Center at San Francisco General Hospital, I care for many uninsured and marginally insured San Franciscans. I see first hand the hotel housekeeper with arthritis in her knees from a lifetime of making 40 beds a day, the banquet server with chronic dermatitis of his hands from carrying stacks of hot plates. The hotel concierges may be doing all right and not showing up at San Francisco General. But there are a lot of service workers behind the scenes in our city who are barely making ends meet, experiencing deteriorating health, and struggling to afford health care.

I also feel badly for the organizers of the conference. Conference planning requires booking venues years in advance and getting locked into hotel contracts that leave the organizers financially liable in the event of cancellations. The organizers of the family medicine conference have suffered a string of bad luck lately. The organization’s major annual conference in the spring of 2003 was scheduled to be held in Toronto, Canada. The only problem was that the SARS outbreak hit Toronto a few weeks before the conference date. The conference was cancelled days before the opening session. Who on the conference planning staff could have anticipated that the Hyatt would take the lead in an offensive lock out of its workers in the very city planned for the November 2004 conference? Conference registrants purchase their plane tickets in advance and carefully arrange their work and family lives to be in San Francisco for a 3 day meeting. How should they respond when they find out that hotel workers are picketing their conference hotel?

Conference organizers and participants are in a no-win situation when hotels use these types of tactics. For the courageous organization willing to take on a hotel and demand a rebate of all payments on the grounds that the hotel violated the terms of its conference contract by locking out workers, good luck! You will be spending a lot of time in court battling a multinational corporation in the “hospitality” industry represented by a top-dollar legal firm.

The people I don’t have any sympathy for are the hotel owners. As Mayor Newsom has pointed out, hotels like the Hyatt are no longer local businesses in touch with the local environment. These hotels are operated by huge conglomerates headquartered in distant cities, and have posted handsome profits in recent years. In their view, holding the line on employee pay and benefits is essential for sustaining this financial performance. I believe that this is a narrow view, breeding both resentful employees and disgruntled customers.

I decided not to attend the conference to deliver my keynote address. I had hoped to find some middle ground that would have permitted the conference organizers to use the meeting as an opportunity to educate attendees about the issues at stake in the labor dispute, allowing me to cross the picket line in good conscience and talk about the general topic of humanizing care while also addressing the immediate matter of the human rights of the hotel workers. But conference organizers get skittish about politics intruding on conference plenaries and being perceived as taking sides against the hotel. (The organization has another conference already booked for the Hyatt Regency in 2006.) I was gratified by the support I received from many colleagues about my decision, several of whom have decided to join the picket line at the Hyatt, reaffirming my faith that many health professionals desperately desire a more just system of health care in our nation.

I wish the hotel workers luck in their negotiations with the hotel industry, especially when it comes to preserving affordable health benefits. However, it is difficult to be optimistic about the future of health benefits for our nation’s workers. The US is facing the “perfect storm” of escalating health care costs and decreasing insurance coverage. I am skeptical that workers on the lower end of the wage scale will be able to avert continued deterioration of benefits under our current market-driven health care system. Maybe we should all start picketing together for the national health insurance system that is so long overdue in the United States.

The Corporate Transformation of Health Care

The Corporate Transformation of Health Care
Can the Public Interest Still Be Served?
By John P. Geyman, M.D.

From the Preface:
The economic boom of the 1990s, though it served many health care corporations and their investors well, has not been kind to U.S. health care. With more than 43 million uninsured Americans, and tens of millions underinsured, the health care system is collapsing around us. Inflation of health care costs continues unabated, rendering health care increasingly unaffordable to a large and growing part of the population, currently estimated at about 50%. Yet we are being told by corporate interests and many politicians in both parties that incremental reforms of our market-based system will be effective if we just give them more time.

This book provides an up-to-date analysis of the failing medical marketplace and suggests an approach to urgently needed structural reform.

Springer Publishing Company:
http://www.springerpub.com/books/public_health/pub_2466_6.html

Comment: John Geyman’s book provided my “escape literature” this weekend during my air travel between California and the national PNHP conference in
Washington, DC. How could a book that so aptly describes our very expensive but highly wasteful system that fails to provide quality outcomes ever be considered escape literature? Simply because it provides hope. There will be affordable, high quality, comprehensive health care for everyone once we adopt single payer reform. Books such as this make it clear that a universal social insurance program is an absolute inevitability.

Companies Sue Union Retirees To Cut Promised Health Benefits

Firms Claim Right to Change Coverage, Attempt to Pick Sympathetic Jurisdictions
The Process Server Pays a Call
By Ellen E. Schultz

Staff Reporter of THE WALL STREET JOURNAL
November 10, 2004; Page A1

When a deputy sheriff came to his door with a court summons, George Kneifel, a retiree in Union Mills, Ind., was mystified. His former employer was suing him. The employer, beverage-can maker Rexam Inc., had agreed in labor contracts to provide retirees with health-care coverage. But now the company was asking a federal judge to rule that it could reduce or eliminate the benefit.

Many companies have already cut back company-paid health-care coverage for retirees from their salaried staffs. But until recently, employers generally were barred from touching unionized retirees’ benefits because they are spelled out in labor contracts. Now, some are taking aggressive steps to pare those benefits as well, including going to court.

In the past two years, employers have sued union retirees across the country. In the suits, they ask judges to rule that no matter what labor contracts say, they have a right to change the benefits. Some companies also argue that contract references to “lifetime” coverage don’t mean the lifetime of the retirees, but the life of the labor contract. Since the contracts expired many years ago, the promises, they say, have expired too.

The companies taking such steps remain a minority. Most big employers continue to provide the retiree health coverage spelled out in labor contracts. But the number of employers using the courts to attempt to reduce benefits for union retirees is rising, and some have been successful. “There’s absolutely no doubt that there’s been an increasing number of cases over the past three years,” says Richard Brean, associate general counsel of the United Steelworkers of America.
They have little to lose by trying. Typically, as such legal cases drag on, the employers save money as some of the retirees, who have to pay growing portions of their health-care costs, forgo costly care, drop out of the plans or die. If companies lose in court, the worst that happens is they have to resume paying benefits. They don’t face punitive damages or penalties. And they may not have to resume benefits for those retirees who dropped out of the health plans. What’s more, their earnings get a pop. That’s because at the same time as they sue, employers typically announce reductions in the retirees’ benefits. Doing so entitles them to lessen the liabilities carried on their books. Lower liabilities translate to higher earnings.

The retirees, by contrast, often find themselves in a bind — unsure of their recourse and facing, as they age, the court system’s typical long waits for legal resolution. The U.S. Labor Department is of little help. Retired workers “aren’t our constituents anymore,” says a spokeswoman for the department.

Unions often do go to bat for retirees. The United Auto Workers and the Steelworkers have been the most active in filing suits to protect retirees whose benefits a company has unilaterally changed. But unions aren’t allowed to strike or file unfair-labor-practice complaints on behalf of retirees.

Employers that want to cut union retirees’ health coverage or make retirees pay a larger portion could just impose changes and wait to be sued. But by suing first, they stand a chance of choosing the jurisdiction. This is important, because federal circuits’ appellate courts tend to take differing positions in these disputes. Indeed, the unsettled nature of the law on these issues — with employers’ arguments sometimes succeeding and sometimes not — may be a factor prompting some companies to have a go at gaining the legal right to change benefits.

One afternoon last December, Basil Chapman was sitting on his porch in Barboursville, W.Va., with his dog, Bo, when a union representative phoned the retiree to say an executive of his former employer wanted to speak to him. Mr. Chapman called the executive, at ACF Industries Inc., a railroad-car maker where Mr. Chapman worked for 38 years. He was told ACF was going to change health coverage, making retirees pay for a portion that previously was free.
“We have a contract. You can’t do that,” Mr. Chapman said, according to court papers later filed by ACF. “We will file in federal court against you b—–ds.” Asked about this, Mr. Chapman, who is 60, says he didn’t swear on the phone.

The next Monday, ACF, which financier Carl Icahn controls through an investment vehicle, sued Mr. Chapman in federal district court in St. Louis. The company asked the court to rule that it had the right to change or terminate health coverage for 678 retirees and their dependents. ACF said it was suing to protect itself, noting that “defendant Chapman has already informed ACF that he plans to file a lawsuit concerning the amendments of the plan.”

“I can’t understand why they’re picking on me,” Mr. Chapman says. “I’m just a retired guy who was sitting on my porch.”

CO-PAY BLUES
This week, the Online Journal looks at the financial burdens facing health-care consumers who have insurance and offers advice on handling medical expenses.
Do you have questions or ideas about selecting health-care coverage and managing your family’s costs? We invite you to participate in a discussion2 with health-insurance and benefits experts.

Monday: The lines between HMOs and PPOs are blurring. Here’s how to choose3 the right plan option for you.

Tuesday: Dr. Benjamin Brewer, in his Doctor’s Office column, talks about how insurance coverage affects the patients4 that doctors agree to service.

Thursday: Fiscally Fit columnist Terri Cullen focuses on the quandary patients face when health-care providers charge more than what insurers will pay.

Employers that sue retirees name one person or a handful. They may choose people at random, retirees who have complained, or people who were active in the union that negotiated the contract at issue. Mr. Chapman, who repaired equipment and stenciled names on railroad cars at ACF, also headed a Steelworkers bargaining committee. The named defendants represent the “class” of retirees.

Key Contract Element
Mr. Chapman says health coverage for retirees was a key element of labor contracts he helped negotiate in 1995. Up to then, although the company paid 100% of hospitalization and surgical coverage, retirees paid for major medical. But their premiums for that coverage had risen so high that many had dropped it.
To make health coverage affordable for future retirees, the union accepted lower starting pay for new workers in exchange for lower-cost major medical coverage for retirees. According to the contract, any employee retiring during the term of the agreement “will contribute a flat $100 per month for life towards the cost of such coverage. The Company will pay any additional required costs.”

The company doesn’t dispute that the contract says that, but it says that “$100 per month for life” referred only to the major medical coverage, not explicitly to the hospital/surgical portion.

In addition, it believes the agreements to provide health coverage to retirees expired with the contracts, said Marc Weitzen, general counsel for ACF at Icahn & Co. in New York, in an interview.

The retirees, represented by the union, countersued to dismiss the complaint. They contended ACF had gone through “the charade of telephoning retiree Mr. Chapman about the cuts, just so it could provoke a predictable negative reaction and then use the reaction to immediately sue.”

The retirees said ACF had sued in St. Louis, which is part of the 8th federal circuit, because it “apparently believes that the 8th Circuit is more favorable to employers in retiree medical benefits cases, and apparently feels that its chances are improved if it makes the retirees litigate hundreds of miles from their homes.”

CREATIVE STRATEGIES

Companies that cut retiree health benefits promised in writing may use one or more arguments or tactics:
” Escape Clause: Insert sentence in benefit plan saying company “reserves the right” to change benefits.
 
” ‘Life’ Line: Argue that “lifetime coverage” refers to life of the contract, not lives of retirees.
 
” Fine Print: Say that retirees signing health-plan enrollment forms waived prior agreements.
 
” Trip to Court: Sue retirees, ask court to declare company has right to cut benefits.
 
Source: WSJ research

Most of ACF’s retirees live in West Virginia, in the 4th Circuit, where a court favored union retirees in an earlier decision. The retirees asked the judge to dismiss the case or transfer it to the southern district of West Virginia.

Mr. Weitzen at Icahn & Co. said ACF sued in Missouri because it administers the benefits plans from there. He added, “As with many other U.S. businesses, ACF believes it has the right to pass along certain of its health-insurance costs to retirees.”

It is legal and common for litigants to try to pick a favorable jurisdiction. If two parties sue each other, the courts generally hear the case that’s filed first. But a court can dismiss or transfer a case if it believes a company is “forum shopping” or suing retirees as a pre-emptive strike to deprive them of their rights, as “natural plaintiffs,” to sue in the court they would choose.

That happened in this case. In August, the court in St. Louis — saying it appeared ACF’s move “resulted in a proverbial race to the courthouse in order to deprive defendants of their choice of forum” — moved the suit to federal court in Huntington, W.Va. The case is ongoing.

But a different court came to the opposite conclusion regarding Rexam, illustrating why employers make these legal thrusts at retirees.

In early 2002, Rexam raised retirees’ share of the cost of prescription drugs. “For people getting a pension of $300 to $400 a month, it ate their whole pension,” says Mr. Kneifel, the retiree in Union Mills, Ind., who is 65.

For more than a year, retirees complained to the company that it had no right to change negotiated agreements, which stated that “Company-paid major medical coverage will be provided for all retirees,” and specified what the retirees’ costs would be.

‘Reserves the Right’
Rexam responded that a booklet describing the coverage contained a clause that said the company “reserves the right to amend, modify or discontinue the plan in the future in conformity with applicable legislation.”

The retirees said the clause meant that if government legislation or regulations changed, then the plan might have to be modified accordingly. It didn’t give the company a right to unilaterally change the agreement, retirees said, pointing to another clause specifically stating that the right to modify the benefits “was subject to any applicable collective bargaining agreement.”

In May 2003, Rexam sued the retirees, asking a federal court to declare that it had the right to change their benefits.

It filed in Minneapolis. The appearance of a deputy sheriff bearing a summons to court 475 miles away was a shock to Mr. Kneifel. “I’m glad I was home when they came, because my wife had a stroke about six years ago,” he says. “Suing retirees is a cowardly way to go about the whole thing.”

The retirees, represented by the Steelworkers, countersued in Toledo, Ohio, asking that the case be dismissed or transferred there. They said Minnesota was home to only 100 of the 3,600 retirees and that Rexam had made a pre-emptive legal strike to choose the jurisdiction. The business, which was called American National Can Co. before its 2000 purchase by Rexam Inc., is based in Chicago and has offices in Charlotte, N.C. It is a subsidiary of Britain’s Rexam PLC. The judge in Minneapolis rejected the retirees’ arguments. Because they had not been planning to sue Rexam, they couldn’t claim Rexam was suing in a pre-emptive strike, said Judge Ann Montgomery. She let the case stay in Minneapolis because Rexam employs 115 people in St. Paul and has retirees in Minnesota.

Judge Montgomery also said she was allowing the suit to move forward “in the interests of justice.” She cited a liability for the benefits on Rexam’s balance sheet and said the company was harmed “because it cannot lower the liability unless it reduces the retirees’ benefits.” The case is pending.

A Rexam spokesman said with health-care costs rising, the company “must do what we can to address these costs” to remain competitive, but will continue to provide retirees with fair coverage.

Gradual Erosion

The erosion of legal protection for retiree health benefits has been gradual. When medical costs began to rise steeply in the 1980s, employers first started to cut benefits for salaried retirees. If sued, employers pointed to clauses they had added to the health plans’ technical documents. The clauses said the employer reserved the right to change the benefits.

Retirees complained that the clauses were buried in long technical documents they often didn’t know existed. (Companies must provide employees a summary of these documents when they first become health-plan participants; the summaries may or may not include the clauses at issue.) The retirees also pointed to employer literature referring to lifetime coverage. Nonetheless, courts began accepting company arguments.

A key case involved cuts by General Motors Corp. in coverage it had offered to 50,000 salaried employees over the years to induce them to retire early. A 6th Circuit appellate court ruled in 1998 that what mattered weren’t brochures that advised prospective retirees that health coverage would be provided “at GM’s expense for your lifetime,” but a clause in which GM reserved the right to alter benefits. Although dissenting judges assailed this reasoning, and the federal circuits remain divided about it, salaried retirees have steadily lost in benefits cases ever since.

Union retirees were more secure because their benefits were part of negotiated contracts. But after the GM ruling, more employers began to argue that that decision’s logic applied to union retirees, as well, and some courts agreed.

Meanwhile, over the years some employers also have argued that promises of lifetime coverage expired when the contracts expired, or were canceled out by clauses noting how long the contracts would run. Initially, courts rejected those arguments, saying general “duration clauses” in contracts refer simply to the period of the contract, and pertain to salary and benefits for active employees, not to benefits for retirees.

But some courts in the past decade have accepted these employer arguments. The federal circuits are split. Retirees who go to court on their own to contest cuts in their benefits face a hard road. Employers generally use a combination of arguments when they unilaterally change union retirees’ health coverage and file suit against the retirees.

Serving Papers
Asarco Inc. told retirees in mid-2003 that it was raising their health-care premiums. As it did so, the copper company sent summonses to some retirees in Arizona, where many live, telling them they were defendants in a suit it was filing in Phoenix.

The suit pointed to a clause in health-plan documents saying, “The Company reserves the right to amend or terminate the Plans at any time for any reason….even after you retire.”

In addition, Asarco pointed to general “duration clauses” in the contracts, which said the agreements expired when the labor contracts did. The agreements that expired, the company said, included the one to provide retirees with health coverage until they qualify for Medicare.

Retired Asarco miner Chuck Yarter learned he was being sued when he got a call from a process server trying to find his remote home in the Sonora Desert near Marana, Ariz. Mr. Yarter, 61, says he told the man how to find his modest 625-square-foot house, which sits at the end of a dirt road, with a distant view of the open-pit Silver Bell copper mine where Mr. Yarter was a mechanic on heavy equipment.

He smiles recalling the visit: His black dog, Lady, wouldn’t let the visitor out of his car. The process server handed the papers through the car window before trundling away through the saguaro and mesquite. “I’ve never been served papers in my life,” Mr. Yarter says.

In its July 8, 2003, letter to him and other retirees, Asarco, a unit of Grupo Mexico SA, said: “As you know, the past several years have been very difficult for the copper industry. The continuing low copper prices and escalating medical costs force us to make these changes.”

Mr. Yarter, who monitors copper prices on the Internet, says Asarco is just making excuses. Copper prices have nearly doubled since the July 2003 letter, to about $1.36 a pound from 76 cents.

Asarco, in a statement, said it acted in response to “the constantly escalating” cost of providing medical and drug coverage, saying it must control costs because it can’t control what it gets for its copper. It said it continues to make coverage available “at a reasonable cost,” declining further comment because the case is in litigation.

Three unions filed a counterclaim on retirees’ behalf against Asarco: the Steelworkers, the International Brotherhood of Electrical Workers and the International Chemical Workers. The retirees’ suit says that the duration clauses weren’t meant to limit the retirement benefits of people who had already retired, “as such retirement benefits were meant to last during retirement independent of the expiration of agreements applicable to active employees.”

It added that the “alleged ‘severe financial distress’ has not prevented the Company from paying its top management quite handsomely.” And it said that ” ‘unforeseen circumstances’ do not justify a breach of contractual obligations … to persons living on fixed income who can ill-afford to pay the costs the company has shifted upon them.”

Since Asarco imposed the changes, Mr. Yarter’s share of premiums, deductibles and co-payments has grown to consume half of his $1,005 monthly pension. He says he is staying in the plan anyway, because his wife, Frances, has diabetes.
But Larry Bracamonte, 64, with a pension of $448 a month, is among Asarco retirees who have dropped the plan as a result of the increase. He works at a furniture store, and twice a month, he drives a van full of Arizona retirees five hours to Algodones, Mexico, to buy prescription drugs more cheaply than in the U.S. He says a neighbor can’t afford even the lower-cost Mexican drugs on her Asarco widow’s pension of $54 a month, so she gets drugs from a state program for low-income people.

Mr. Yarter says he’s in better shape than many Asarco retirees. “I did all the retirement planning you’re supposed to do,” he says. “I decided I could afford to retire.” After retiring, he studied computer programming and obtained an associate’s degree in systems administration.

Now he’s looking for work, so far without success. “If the company kept its promise, I’d be all right,” he says. “Nobody ever thought the company would try to renege on a contract like that.”

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Plaintiff Cry: When Retirees Sue an Ex-Employer

Sue an Ex-Employer
By Ellen E. Schultz
Staff Reporter of The Wall Street Journal
November 10, 2004; Page A12

When retirees of GenCorp Inc. were told the company was going to start charging them for health insurance, despite a labor contract they say promises coverage for life, John Van Dyke thought fighting back in court was the answer. “I was sure that once the judge saw the contract, it would be over,” the 76-year-old says. “How long could it take?”

So far, almost five years. What happened to the retirees shows the daunting challenges faced by the oldest Americans, union and salaried, if they go to court on their own to recover health benefits.

In January 2000, the former General Tire & Rubber began charging 2,063 hourly retirees health-care premiums. Mr. Van Dyke, a former millwright who once was active in the Rubber Workers union, quickly learned that it couldn’t help. In negotiating a contract in 1994, the union had agreed not to represent retirees in any future lawsuit.

On their own, the retirees faced their first challenge: finding a lawyer. Few lawyers take cases involving health benefits, because under the Employee Retirement Income Security Act, or Erisa, there are no punitive damages that contingency-fee attorneys can use to finance cases. All a plaintiff can win is restoration of the disputed benefit, and the judge may or may not let the plaintiff’s lawyer be reimbursed from that for the cost of preparing the case, thanks to a quirk in Erisa.

So Mr. Van Dyke passed the hat. He collected $12,000 from fellow retirees of a GenCorp plant in Jeanette, Pa. They chipped in $100 per couple, widows $50. While this would cover only a fraction of the cost of mounting a suit, he found lawyers who were willing to take the case. In August 2000, he met them at a diner in Pittsburgh, taking along a cardboard box full of union literature going back decades.

Told the suit needed named plaintiffs, he volunteered, along with fellow retirees Stanley Wotus and Ed Peksa. All three are World War II veterans who served in either Iwo Jima or Okinawa. (Veterans may qualify for some health care from Veteran’s hospitals, but there can be long waits for care and their spouses don’t qualify.)

In October 2000, they sued GenCorp in federal court in Akron, Ohio. The suit cited labor contracts promising lifetime coverage. But GenCorp, in court documents, responded that lifetime didn’t mean “at no cost.”

GenCorp also pointed to enrollment cards retirees filled out a decade ago. The cards asked the retirees either to pick a plan that had high deductibles and co-payments or continue in one that had no cost. They chose the no-cost option. But at the bottom of the form was fine print saying the signer acknowledged that “I am choosing the benefits selected on this form to replace any medical benefits available under any prior GenCorp retiree medical plan.” By signing the forms, GenCorp now argued, the retirees had released it from its obligation under the union contract.

In April 2001 came the first meeting with a judge. The retirees left early in the morning, first heading to a rendezvous with their lead lawyer. At the wheel was Mr. Van Dyke, who had the best eyesight. Still, at 5 a.m. in the dark on the Pennsylvania turnpike, he missed his turn, he recalls.

The retirees linked up with the lawyer, William Payne of Pittsburgh, who drove them the last 180 miles in his minivan, usually used to take his sons to hockey practice. Because of their various infirmities, they had to pull over several times. Mr. Van Dyke had part of his stomach removed following a bout of cancer in the 1990s. Mr. Wotus was taking several medications for blood pressure and heart problems. In the back seat, Mr. Van Dyke recalls, the diabetic Mr. Peksa had taken one insulin shot too many and was passing out. “I was worried about Ed. He’s got the sugar real bad,” Mr. Van Dyke says. They pulled over and gave Mr. Peksa some juice.

They finally made it to Akron in time for the 9 a.m. court session. There, the judge pressed the two parties to settle their differences. With nothing resolved, the retirees headed home.

GenCorp then said the plaintiffs should include retirees from other plant locations besides Jeanette, Pa. The judge agreed. So the retirees recruited more volunteers to serve as plaintiffs.

A year later, a larger group headed out, this time to a mediation meeting in Cleveland. Several retirees traveled from Kentucky and Ohio, booking senior-discount rooms at the Holiday Inn. Coming farthest was Kenneth Bottolfs, now 83. He made the three-flight trip from Waco, Texas, in eight hours. Mr. Bottolfs says the health-care premium for him and his wife is now $685 a month, more than erasing his GenCorp pension of $460. “A lot have dropped out because of the inability to pay” for the health coverage, he says. “My wife says they’re waiting for everyone to die.”

Fine Print

GenCorp argues it can change union retirees’ health benefits because of a line in enrollment forms they signed nearly a decade ago:
I have read the brochure which explains my retiree medical benefit options under the GenCorp plan, and I am electing to enroll in the coverages stated on this form.
I agree to pay any contributions, deductibles, and copayments required under the plan, and I authorize release of information on all claims submitted for payment.
I understand that I may change coverages only under limited circumstances. I acknowledge that I have choices available, and that I am choosing the benefits selected on this form to replace any medical benefits available under any prior GenCorp retiree medical plans.
The Cleveland meeting was to see whether the retirees and the company could resolve their dispute. It failed. The retirees began their long trips home. Eight months later, the retirees went to another mediation meeting, minus Mr. Wotus, who’d had a stroke. It failed too. The judge said the case should move to trial.
The retirees traveled to Cleveland on May 14, 2003, for depositions by GenCorp. The sessions took several hours each. The retirees whiled away their waits playing cards and trading war stories, says Mr. Van Dyke.

The following August, their lawyers filed to have the suit certified as a class action. Without this, even if the named plaintiffs won, no others would get their benefits restored.

Although GenCorp had insisted the plaintiff group be expanded to include people from around the country, and this was done, GenCorp opposed its certification as a class. It said the men didn’t qualify as representatives of the whole group of retirees. The reasons: Depositions showed some had forgotten what they were thinking when they signed enrollment forms. One didn’t remember what was in GenCorp’s slide presentation explaining the benefit options eight years earlier.
What’s more, the retirees had mixed their paper work when they pooled their brochures in a cardboard box while searching for a lawyer. That constituted “spoliation,” or destroying evidence, GenCorp said, adding it would “seek appropriate remedies at a later date.” Remedies in these situations can include charging retirees for a company’s legal fees.

Finally, GenCorp said the retirees should be denied class status because they were too dispersed, and because the named plaintiffs were too sick to adequately represent everybody.

Indeed, after GenCorp filed its brief, one plaintiff, Robert Berger, 69, died in October 2003. Plaintiff Frank Polumbo, who joined the company at 16, and as a youth took part in a 1934 strike that gave birth to the Rubber Workers union, died in November. He was 89. “He was a fighter, says his widow, Mary Elizabeth, 88, who volunteered to take his place.

In December 2003, Judge Dan Polster agreed with GenCorp and denied retirees’ request to be certified as a class. “I just couldn’t believe it,” Mr. Van Dyke says.
The retirees, fearing they’d all be dead by the time the case was resolved, and worried about a statute of limitations that the company said was running out, signed up an additional 294 plaintiffs and filed another suit in July 2004. In August, the judge dismissed that case. Now the 294 retirees, most in their 80s, must file individual suits by the end of January 2005, and each pay a $150 filing fee.

The original suit continues. In its latest quarterly filing, GenCorp said it didn’t expect a trial until after next summer. Its filings also show that over five years, GenCorp’s liabilities for retiree health care have declined 16%. The company declined to comment, citing ongoing litigation.

Mr. Van Dyke got out of the hospital last February after treatment for colon cancer. He had been caring for his wife of 58 years, June, who earlier this year had a stroke and a heart attack, but in September she died.

“A lot of people want to drop out” of the suits to restore company-paid health care, he says, “but I keep telling them to hang on.”

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Our 'Kindness Deficit' of Care

Newsweek, November 8 
Jane Bryant Quinn
 
Our ‘Kindness Deficit’ of Care

After the third presidential debate, the plight of those without health insurance vanished from political sight. No surprise there. Lack of medical care represents a moral lapse that voters love to tut-tut about but aren’t moved to fix. Fixing it might cost money, at which point the moralists usually change the subject to the weather. Besides, the uninsured tend to be powerless people whom America’s comfortable middle can ignore.
 
A cynical judgment? Sure, but true. If we cared, public policy would have changed long ago. When the elderly scream about the cost of prescription drugs, ears prick up. But 80 percent of the 45 million uninsured are what Princeton health-care analyst Uwe Reinhardt calls “low-income, hardworking stiffs “waitresses, taxi drivers, clerks, nursing-home aides, gas-station attendants. They swing no weight among policymakers; no lobby represents them; their pockets aren’t deep enough to buy congressional attention. Working stiffs have to depend on the kindness of strangers and we’re running a kindness deficit.
What’s more, failing to cover 45 million people is, indisputably, a bargain.

The uninsured received $48 billion in free or government-paid care last year (less than they needed, but so what?). Insuring them could cost about $96 billion more. Ooooh, that would raise taxes, so we look away.But does it have to raise taxes? Imagine, for a blessed moment, that we ditched our costly, inefficient, bureaucratic, paper-pushing, interfering private health insurers in favor of a single government-run system for example, Medicare for everyone. The savings in administrative costs alone could reach $325 billion, says Dr. David Himmelstein of the Harvard Medical School. Taxpayers already cover 61 percent of American health-care spending (counting both subsidies and direct payments). If that money didn’t have to be funneled through private insurers, who take 20 percent or more off the top, we could have universal care at no increase in cost.

Any rant against our carelessness toward the uninsured requires statistics, so here they are: among all working people, 61 percent receive employer coverage, down from 65 percent in 2001 (Kaiser Family Foundation). One out of three people under 65that’s 85.2 millionwent uninsured at some point during 2002-03 (Families USA). The proportion of doctors giving charity care dropped to 71.5 percent in 2001, from 76.3 percent in 1997 (Center for Studying Health System Change). Among people 51 to 61, the uninsured are 63 percent more likely to suffer declining health, over a four-year period, than the insured (Center on an Aging Society). All of us “comfortables” stay insured only because we keep our jobs or can afford to pay private-insurance premiums, whose cost has been soaring at three times the rate of earnings over the past four years.

Nevertheless, Big Medicine holds enough power to beat down true reform. You
can still be spooked by phrases like “government-run health care,” even though that defines Medicare, which you want more of. You’re also hearing a fierce assault on Canada’s universal coverageclaims that patients get poor care, wait months for treatment and flee to the United States for surgery. In truth, only a fraction of 1 percent of Canadians seek care in the United States, says health expert Steven Lewis of Access Consulting in Saskatoon, Saskatchewan. Canada does have waiting lines of eight to 12 weeks for surgery not considered urgent, owing to ceilings on what the government will spend. Maybe more patients would come south if they could afford it. But for most, the wait seems a reasonable trade-off for coverage that’s broad, universal and secure. Anyway, the United States doesn’t have to go that route. We spend nearly twice what Canada does per person. If that same money were applied to a universal program here, no one would wait. Canada outscores the United States in such basic health measures as longevity and infant mortality (not to mention cheap drugs and flu shots). “If the purpose of a health-care system is to improve health,” Lewis says, “Canada wins hands down.”

All health systems have pluses and minuses; all ration health care in some way. We ration it, harshly, by income and price. People with money and access command topnotch care. Those without scramble for what they can get. Big businesses negotiate good group-health insurance. Small businesses are pushed against the wall. The healthy find private policies, the sick get kicked out. That’s the American Way.The next Congress may give a nod to the uninsured, says Karen Davis, head of the Commonwealth Fund, which studies health policy. Maybe tax credits for people who lose their jobs, to help them buy interim, COBRA coverage, or eliminating the two-year waiting period that keeps the disabled from Medicare.

But will we make a fundamental fix? Nah. Too many rich, corporate players have a stake in the status quo. Princeton’s Reinhardt distills our chosen policy this way: the suffering of a few million Americans, while regrettable, is a price well worth paying for fine coverage for the rest of us. What’s really regrettable is that that sounds, to most Americans, OK.

Our ‘Kindness Deficit’ of Care

Newsweek, November 8 
Jane Bryant Quinn
 
Our ‘Kindness Deficit’ of Care

After the third presidential debate, the plight of those without health insurance vanished from political sight. No surprise there. Lack of medical care represents a moral lapse that voters love to tut-tut about but aren’t moved to fix. Fixing it might cost money, at which point the moralists usually change the subject to the weather. Besides, the uninsured tend to be powerless people whom America’s comfortable middle can ignore.
 
A cynical judgment? Sure, but true. If we cared, public policy would have changed long ago. When the elderly scream about the cost of prescription drugs, ears prick up. But 80 percent of the 45 million uninsured are what Princeton health-care analyst Uwe Reinhardt calls “low-income, hardworking stiffs “waitresses, taxi drivers, clerks, nursing-home aides, gas-station attendants. They swing no weight among policymakers; no lobby represents them; their pockets aren’t deep enough to buy congressional attention. Working stiffs have to depend on the kindness of strangers and we’re running a kindness deficit.
What’s more, failing to cover 45 million people is, indisputably, a bargain.

The uninsured received $48 billion in free or government-paid care last year (less than they needed, but so what?). Insuring them could cost about $96 billion more. Ooooh, that would raise taxes, so we look away.But does it have to raise taxes? Imagine, for a blessed moment, that we ditched our costly, inefficient, bureaucratic, paper-pushing, interfering private health insurers in favor of a single government-run system for example, Medicare for everyone. The savings in administrative costs alone could reach $325 billion, says Dr. David Himmelstein of the Harvard Medical School. Taxpayers already cover 61 percent of American health-care spending (counting both subsidies and direct payments). If that money didn’t have to be funneled through private insurers, who take 20 percent or more off the top, we could have universal care at no increase in cost.

Any rant against our carelessness toward the uninsured requires statistics, so here they are: among all working people, 61 percent receive employer coverage, down from 65 percent in 2001 (Kaiser Family Foundation). One out of three people under 65that’s 85.2 millionwent uninsured at some point during 2002-03 (Families USA). The proportion of doctors giving charity care dropped to 71.5 percent in 2001, from 76.3 percent in 1997 (Center for Studying Health System Change). Among people 51 to 61, the uninsured are 63 percent more likely to suffer declining health, over a four-year period, than the insured (Center on an Aging Society). All of us “comfortables” stay insured only because we keep our jobs or can afford to pay private-insurance premiums, whose cost has been soaring at three times the rate of earnings over the past four years.

Nevertheless, Big Medicine holds enough power to beat down true reform. You
can still be spooked by phrases like “government-run health care,” even though that defines Medicare, which you want more of. You’re also hearing a fierce assault on Canada’s universal coverageclaims that patients get poor care, wait months for treatment and flee to the United States for surgery. In truth, only a fraction of 1 percent of Canadians seek care in the United States, says health expert Steven Lewis of Access Consulting in Saskatoon, Saskatchewan. Canada does have waiting lines of eight to 12 weeks for surgery not considered urgent, owing to ceilings on what the government will spend. Maybe more patients would come south if they could afford it. But for most, the wait seems a reasonable trade-off for coverage that’s broad, universal and secure. Anyway, the United States doesn’t have to go that route. We spend nearly twice what Canada does per person. If that same money were applied to a universal program here, no one would wait. Canada outscores the United States in such basic health measures as longevity and infant mortality (not to mention cheap drugs and flu shots). “If the purpose of a health-care system is to improve health,” Lewis says, “Canada wins hands down.”

All health systems have pluses and minuses; all ration health care in some way. We ration it, harshly, by income and price. People with money and access command topnotch care. Those without scramble for what they can get. Big businesses negotiate good group-health insurance. Small businesses are pushed against the wall. The healthy find private policies, the sick get kicked out. That’s the American Way.The next Congress may give a nod to the uninsured, says Karen Davis, head of the Commonwealth Fund, which studies health policy. Maybe tax credits for people who lose their jobs, to help them buy interim, COBRA coverage, or eliminating the two-year waiting period that keeps the disabled from Medicare.

But will we make a fundamental fix? Nah. Too many rich, corporate players have a stake in the status quo. Princeton’s Reinhardt distills our chosen policy this way: the suffering of a few million Americans, while regrettable, is a price well worth paying for fine coverage for the rest of us. What’s really regrettable is that that sounds, to most Americans, OK.

A crisis too loud to ignore

A crisis too loud to ignore
Nov 5, 2004
By: Robert Lowes
Medical Economics

I began writing this in a hotel bathroom in San Francisco. Only there could I escape the racket of a picket line 20 floors below and hear myself think: Maybe doctors shouldn’t view national health insurance as a dirty idea.

The pickets were bellhops, waiters, room cleaners, and the like. Their union had struck four hotels; 10 other hotels had locked out their union employees in response.

I had a window on this war from my room at the Renaissance Parc 55. Its workers weren’t striking, but I could see picketers across the street at the Hilton. Some carried signs reading “Healthcare is a Right” while others drummed buckets, blew whistles, and chanted from 7 a.m. to 10 p.m., the limits set for noise-making. A renegade drummer woke me up at 2 a.m. Earplugs courtesy of the hotel were useless.

The din was unnerving but understandable. A proposed contract would increase a worker’s health in-surance premium from $10 a month, an unbelievably low amount, to $273.42 a month in five years, an unbelievably high amount. That’s more than my premium, and I make more than they do.

I asked Violeta Sarmiento, a 58-year-old housekeeping supervisor, whether she could afford $273.42 a month in premiums.

“Oh, my God, no,” said Sarmiento. “It’s too much; we can hardly pay our mortgage now.”

But shouldn’t employees assume a bigger share of the healthcare tab?

“No, no, no,” she said. “We’re not going to give Hilton anything from our pocket. They earn billions.”

Sarmiento has a point. Like other businesses, Hilton faces skyrocketing healthcare costs, but it earned $112 million in the first half of 2004.

Nationwide, millions of laid-off workers have lost insurance coverage. Millions more who’ve kept their jobs find it costlier. You, of course, encounter this crisis every day. If you’re like the doctors I know, you respond quietly but heroically by treating that hard-pressed, uninsured patient and tearing up the bill.

But this generosity applies the proverbial Band-Aid to a systemic problem. So what’s the systemic solution? “We don’t have national health insurance,” said Tim Miller, a waiter turned picket captain. “Shame on America.”

Maybe national health insurance strikes you as socialized medicine. But our society must replace the current system with something that’s fairer and more compassionate. I was heartened by the report of a surgeon who grabbed a sign and joined the hotel strikers. If anybody has the moral authority to provide leadership on this issue, it’s the healing profession.

The presidential election is over, but the crisis remains. Whatever we do, we can’t succumb to the temptation to stick in earplugs. Otherwise, the drumming will only get louder.

The Defeat of California's Employer Mandate

Other changes in health care may be sought
By Barbara Feder Ostrov
The Mercury News – Nov. 4, 2004

These comments are in response to the relatively narrow defeat of Proposition 72, California’s play or pay employer mandate.

Any “son of Proposition 72” proposals would need to incorporate cost controls and ease the financial burden on smaller businesses, said Rick Brown, who heads the University of California-Los Angeles Center for Health Policy Research.

“Everybody knows that the one option we don’t have is the status quo,” said Anthony Wright, executive director of the advocacy group Health Access. “The health care system is unraveling. People see it every time an employer scales back and drops coverage, every time an emergency room closes.”

http://www.mercurynews.com/mld/mercurynews/living/health/10096491.htm

Comment: The majority of voters are healthy and they have insurance coverage. They are concerned about health care costs, but they are even more concerned about disruption of their current perceived health security. Our message to them will have to be crafted to show them that we can provide significantly greater financial and health security. Let’s work on it.

The Defeat of California’s Employer Mandate

Other changes in health care may be sought
By Barbara Feder Ostrov
The Mercury News – Nov. 4, 2004

These comments are in response to the relatively narrow defeat of Proposition 72, California’s play or pay employer mandate.

Any “son of Proposition 72” proposals would need to incorporate cost controls and ease the financial burden on smaller businesses, said Rick Brown, who heads the University of California-Los Angeles Center for Health Policy Research.

“Everybody knows that the one option we don’t have is the status quo,” said Anthony Wright, executive director of the advocacy group Health Access. “The health care system is unraveling. People see it every time an employer scales back and drops coverage, every time an emergency room closes.”

http://www.mercurynews.com/mld/mercurynews/living/health/10096491.htm

Comment: The majority of voters are healthy and they have insurance coverage. They are concerned about health care costs, but they are even more concerned about disruption of their current perceived health security. Our message to them will have to be crafted to show them that we can provide significantly greater financial and health security. Let’s work on it.