Member Resource – Page 1103

Growth rate in health cost to employers slowed in ’04

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

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

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

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

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

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

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

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

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

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

Access, Quality and Cost in the Era of Consumerism

California Medical Association
8th Annual Leadership Academy
Acceleration: Access, Quality and Cost in the Era of Consumerism.
La Quinta, California
November 18-21, 2004

Keynote Presentation

Can a “Consumer-Driven” Health Care System Succeed?

Uwe E. Reinhardt, Ph.D., Professor of Political Economy, Princeton University:

“What should be the goal of a health system? It should improve health status. It should protect families from financial ruin over illness. It should leave people satisfied with the care they got. But it should also make them feel good about a sense of fairness in their society, as Canadians fiercely feel proud of the sense of fairness in their system, whatever problems they have. And the Germans and the Swiss are fiercely proud of the social contract of solidarity.

“Intermediate goals are access to timely care, that feeds into health status and that. See, these are not goals, they’re just instruments to reach these goals: efficiency and fairness, fairness in financing health care…

“We don’t talk enough about financial protection, about people who have cancer also going broke, and the insult and hurt that that represents.

But, you know, ‘It wasn’t my fault that I got cancer, now I have to sell my house.’ That’s an insulting thing for a Canadian and German like me to think about. And it happens. Many, many American families go broke over health care.

“We don’t ever talk enough about fairness and equity, not at all about the social ethic. We talk about the Judeo-Christian ethic as if it were something else. It should really be ours, and, incidentally, there is a confusion in all kinds of other ethics. But they all ask for the same.

“In the present instance, I think we should ask how these goals are affected relative to the status quo and relative to alternative policy options that we might consider, like traditional, comprehensive coverage with managed care, single payer system, and so on. And I think we need to have some debate; which of these approaches actually gets us closer to those goals…

“A major problem in the U.S. is we never discuss ethics; that’s somehow a taboo topic, because here we get ideological and then we get political. And I say, ‘Bullshine.’That is at the core of health care. That is the foundation that should surround health care, because that’s how physicians,among others, are trained.

“So, to me, we can’t really judge whether this will succeed. Some people will say, ‘It succeeds.’ It’s like beauty and honor, the evaluation of consumer-directed health care will be driven much more by ideology than by data. And that’s where we are right now. And I wish it were more driven by two things: data, to tell us what this thing really does, and, secondly, what would we like to be like as a people.

“Do we want to be the kind of people that treats soldiers the way we do ($8000/year pension after losing a limb)? Do we want to be the kind of people that leaves a mother, who raises three children for America, sitting there without health insurance or (with only) the policy that she can find on eHealthInsurance.com (leaving her with $20,000 out of pocket on $26,000/year income)? Is that what we’re about as a people? I’m just an immigrant here. I can’t tell you. This is your problem, not mine. I’m well to do; I buy out of this. But I urge you to reflect on those aspects of it before we get into the technique.

“We can do this. When you tell me the ethics; we can implement it, or the people who spoke yesterday (see comment). We know how to do this. But ethics first. And I think we put ethics last.”

For tape or CD recordings of the Leadership Academy:
http://www.audio-digest.org/cgi-bin/htmlos/01203.1.1018082396615917308/cma

Comment: The first day of the plenary sessions began with speakers well known to those of us who have studied consumer-driven health care (CDHC). John Goodman of the National Center for Policy Analysis and Grace-Marie Turner and Greg Scandlen of The Galen Institute explained consumer-driven health care, especially health savings accounts and high-deductible health coverage. They did not present any new information on CDHC.

The plenary sessions closed with Uwe Reinhardt’s presentation. Mentioned here are only a few of his many important points. He questioned whether patients could be empowered decision makers since current information systems are too primitive to allow individuals to make truly informed decisions about their health care. He provided considerable data to demonstrate that current high-deductible policies leave low income individuals exposed to the potential of insurmountable medical debt. He demonstrated how health savings accounts reward higher income individuals with progressive tax benefits to the detriment of lower income individuals. He showed that those in the lower one-third of income levels will bear
the financial brunt of the CDHC model. Then he ended his presentation with the message transcribed above.

The majority of those attending represented the leadership of medical associations and health care providers. I would describe their response to the presentations on CDHC as mixed, at best. Yes, some passionate supporters were in the audience.

But there is great news. With this audience of physician leaders, Uwe Reinhardt was the only speaker to receive a standing ovation!

There is hope for the future of our health care system.

Letter to the editor of NY Times on Single-Payer

New York Times
Health Care Costs
November 23, 2004

To the Editor:

Increasing incentives and competition are not magic potions to control health care costs (Economic Scene, Nov. 18).

Independent studies in a number of states have demonstrated that a single-payer system would cover everyone and eliminate the wasteful profits and administrative costs of the middlemen that plague our current system.

When large corporations begin to see a single-payer system as the means by which they can be relieved of providing health care for their employees and thereby be more globally competitive, the political imperative for Medicare for all will be overwhelming.

Gerald Gollin, M.D.
Redlands, Calif., Nov. 18, 2004

Controlling Health Care Costs

The New York Times
November 18, 2004
Controlling Health Care Costs
By Hal R. Varian

Health care just keeps getting more expensive.It has been argued, with considerable justification, that a significant part of the increase in health care expense is a result of improved quality.

Economists have two magic potions to control prices and improve quality :
competition and incentives.

What is needed is experimentation with, and competition among, different ways of delivering health care: prepaid group practices, health maintenance organizations, traditional preferred providers, and other ways not yet thought of. The key is to give consumers a choice among different delivery systems, not just minor variations on a single theme.

Current practices offer perverse incentives. Employers often cover some fixed fraction of the cost of each plan. (Stanford economist Alain C.) Enthoven… argues that it would be better to have the employer cover the entire cost of the low-price plan, and let the employees who choose higher-priced plans cover the additional costs themselves.

…it seems clear that more choice, more competition and stronger incentives would be good medicine for the health care industry.

Comment: Just in case you believe that we have moved the reform debate beyond failed models, we haven’t. But Enthoven and colleagues are still beating the drum for an experiment with competition amongst health care middlemen, integrated with delivery systems.

The fact that this article was published in the business section of The New York Times implies that the concept has some credibility. But California has completed an extensive and expensive period of experimentation with this model and it has failed miserable.

Admittedly, Enthoven claims that the experiment wasn’t valid because comprehensive, integrated systems were under-represented in the experiment. But even large urban areas would have difficulty corralling providers into enough truly integrated but completely separate systems to be able to provide multiple, readily accessible, comprehensive systems. He believes that part of the problem lies in the fact that most providers contracted with many loose networks, and they really couldn’t effectively compete against themselves. As an example, in his model, a major hospital would be a part of a single integrated system. Since hospitals must be accessible, how many hospitals can compete in one service area when patients are limited to the hospital that is a part of their integrated system? Enthoven’s refinement of the failed model of competing plans simply cannot work because of the logistical hurdles.

And if Berkeley professor Varian (the author) believes that the primary reason for the increase in health care costs is quality, he must have isolated himself from the great body of health policy literature. It is no wonder that he supports such a highly flawed model that has already failed experimentation in the marketplace. He missed the whole show.

The business community should be interested in a model that controls costs
,improves efficiency, provides better incentives for quality, and eliminates the benefit plan problem for employers. The health policy literature indicates that a single payer plan would accomplish those goals. You would think that the editors of the business section of The New York Times might want to publish such a concept in the interest of promoting an informed discourse on reform, especially reform that serves the interests of business.

Or shall we simply continue on the easier path of living with our political preference for perpetuating a system characterized by waste, inefficiency, mediocrity, and staggering costs in health care?

Kip Sullivan, J.D.’s Slides on Disease Management, EMR’s and Report Cards

Memo on reform from a Medical Economics staff member

Medical Economics
November 5, 2004
Memo from the Staff

A crisis too loud to ignore
By Robert Lowes

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. 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-insurance 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.

Nationwide, millions of laid-off workers have lost insurance coverage. Millions more who’ve kept their jobs find it costlier. 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.

http://www.memag.com/memag/article/articleDetail.jsp?id=130910

Comment: The message is familiar. What is notable is the source: Medical
Economics. The rationale of national health insurance has not escaped anyone. The anti-government ideologues are becoming more shrill in their response.
But the good news is that concerned individuals of sound mind across the political spectrum now agree that we must have comprehensive reform. And they realize that options other than national health insurance do fall short of our goal of affordable, comprehensive coverage for everyone.

The drumming is growing ever louder.

Flu shot shortage: Health care woes in a nutshell

By Ellen Goodman
The Boston Globe, 11/15/04

BOSTON — Toward the end of the campaign, President Bush offered his small variation on JFK’s famous line: Ask not what your country can do for you, ask what you can not do for your country:
“My call to our fellow Americans is, if you’re healthy, if you’re younger, don’t get a flu shot this year.”

I have followed the patriotic edict to go unarmed into this flu season. In fact, unlike certain members of the Congress who shall remain nameless, I have no choice but to follow it. At the same time, I have been collecting various little anecdotes for the Flu Story 2004.

First is the tale of a New York friend who had to go to Toronto for work. She found the name of a doctor through the Canadian sister of a friend of a friend. Then, feeling vaguely like a mule in some illegal drug operation, she got her shot, wrapped the rest of the vial in ice and smuggled it back to her stateside doctor for distribution to seven high-risk patients.

There is another friend, a certified member of the greatest generation living in the capital of the free world, who ended up at 5:30 one morning in a drug-store line in search of a shot. Then there is a department store Santa, Nick Pallotto, 62,
of Denver, who couldn’t get the vaccine despite the fact that about 10,000 children will pass across his lap.

If we are lucky, if the flu season is mild and the crick don’t rise, this may not be a disaster. But for the moment, we have the Centers for Disease Control and Prevention rationing the last 10 million doses and we have New York City independently ordering its own vaccine.

In short, every American is getting a chance to see what life’s like for people without health care insurance and just how precarious the health care system really is. The strain of flu that is coming our way has been dubbed by one reporter as the Free Market Flu. This shortage is not, after all, a natural phenomenon, like say, a shortage in pomegranates or pineapples.

The entire debacle comes from the fact that preventing the flu isn’t as profitable as, say, treating erectile dysfunction.The major U.S. drug companies, who continuously tell us that their profits are for our benefit, don’t do flu anymore.
For some years, flu prevention has been outsourced without oversight. Chiron Corp., one of the vaccine manufacturers, had worried the FDA as long ago as 1999, but it was the Brits who blew the whistle on them in October when this year’s batch of vaccines was contaminated. We were left dependent — mon dieu! —
on a French company, Aventis Pasteur.

As James Morone, a political scientist and co-author of the upcoming “Healthy, Wealthy and Fair,” says, “When one company in England runs into trouble, the whole thing collapses. Private markets are as only as good as the public health system overseeing them. If there were a sudden run on watches or sofas it wouldn’t be a problem, but health care can’t work that way.”

Instead of sofas and watches, it might be life and death. About 36,000 people died from the flu last year and that was when vaccine was available. After Sept. 11 — with all the talk of bioterrorism, anthrax and smallpox — there was the beginning of a dialogue about strengthening the public health system. But today we rarely talk about the basics, such as vaccines, as a public good.

Americans have long been told that national health care would mean long lines, rationing and g second-class medicine. Despite spending more of our gross national product on health care than any other country, we rank 29th in life expectancy, right between Slovenia and Portugal. And what do we have? Long
lines and rationing. Not to mention lotteries, and a shot in the arm for Canadian tourism.

Maybe it takes the Free Market Flu to remind us that sometimes we need a public health system as much as we need a fire department or a military. For the moment, however, a casino in Las Vegas has generously donated its 5,000 doses to the local health department. A retirement home has given the Denver Santa his shot.

Meanwhile back home, I think I will tie a yellow ribbon around a great big pot of chicken soup.

Ellen Goodman (ellengoodman@globe.com) is an associate editor and columnist for The Boston Globe.

Honoring our troops

Berkshire Eagle, Lenox, MA
Monday, November 15, 2004
Honoring our troops
By Suzanne L. King M.D.

Last Week we celebrated Veterans’ Day. Parades and services honored veterans from past wars, even as American troops pushed forward against the Fallujah insurgency. Soldiers continue to die, and many more have been wounded as they fight in the current war in Iraq.

Meanwhile, a quiet and less publicized battle is being fought at home: the fight for health care by veterans of both the Vietnam and the Persian Gulf wars. A Harvard Medical School study recently reported that almost 1.7 million American veterans were uninsured in 2003. That means they did not have health insurance, and they were not able to receive care at Veterans Health Administration (VHA) hospitals or clinics.

The Bush administration halted VHA enrollment for middle income veterans last year if their yearly income was above $25,000. In addition, veterans who did qualify for VHA benefits often could not obtain VHA care because of waiting lists, unaffordable co-payments, or lack of access to VHA facilities. (Veterans of World War II and the Korean War are covered by Medicare because of their age, and therefore have access to America’s single payer health care system for the elderly).

Twelve percent of all veterans were uninsured in 2003. Younger veterans were least likely to have health insurance, with more than one-third of veterans under 25 years of age uninsured, and one in seven aged 25-44 years without insurance. Of course, their families did not have insurance coverage either. Many of these veterans have major health problems, often related to their war duty; less than a quarter indicated they were in excellent health.

On television last night, a grateful father talked of his son’s return home from Iraq, a son whose skull had been broken into 500 pieces, and who lay in a coma, hospitalized for five months. He is slowly recovering, and feels guilty that he is safe at home and his friends are still fighting and in danger. With courage and dedication, he has risked his life for his country; will his health care needs be forgotten 10 years from now?

The Berkshire Eagle recently published an article about the thousands of Gulf War veterans who have been ill with a mysterious syndrome that includes chronic fatigue, dizziness, loss of muscle control and balance, memory problems, and gastrointestinal symptoms. Originally attributed to “stress,” current VA studies are focussing on the possibility the symptoms are secondary to neurotoxins like pesticides or nerve gases used in the war. Thirteen years later, these veterans are still having symptoms related to their war experience. They have sacrificed their health; how can we not provide health care for all of them?

Uninsured veterans are not nursing their wounds; 86 percent of them worked
within the last year. They had as much trouble getting medical care as other uninsured people, most of whom are also employed. Dr. David Himmelstein, a professor at Harvard Medical School and an author of the study, commented, “This administration professes great concern for veterans, but it’s all talk and no action. Since President Bush took office the number of uninsured vets has skyrocketed, and he’s cut VA eligibility, barring hundreds of thousands of veterans from care. Our president has put troops in harm’s way overseas and abandons them and their families once they get home.”

What is the solution for these uninsured veterans? It’s the same solution that everyone in our country, including 45 million uninsured Americans, needs: a universal single payer national health insurance program, funded and administered by the government (i.e., Medicare for everyone). How can we ask our soldiers to risk their lives, lose limbs, develop chronic illnesses, suffer post-traumatic stress disorders, and then not care for them when they return home? And how can we not provide health care for every citizen of the United States, a country founded to provide “life, liberty and the pursuit of happiness” for everyone? Other industrialized countries, all of whom have national health insurance, manage to provide universal health care at half the cost we pay for health care per person. The problems of rising health care costs and lack of
access to health care in America cannot be solved by incremental change and
continued reliance on market-based strategies. We need to change the system
itself. We need universal single payer health care. Then we can truly honor
our troops.

AMA members' opinions on reform

American Medical Association
Division of Market Research and Analysis
September 2004

2004 AMA Advocacy Agenda Setting Survey
(The survey was sent to all 202,777 members of the AMA. 8,323
responded, either by mail or online.)

Members’ Opinions of Approaches to Increase Health Insurance Coverage to the
Uninsured % Favor
(The first number is the percent of physicians in favor, and the second is the percent of medical students and resident physicians in favor. Multiple responses are possible.)

53/50 – Use of tax credits
38/49 – Expanding eligibility for public programs
41/40 – National single payer system
24/34 – Employer mandates
27/26 – Individual mandates
53/44 – Government-sponsored catastrophic coverage

Office-based physicians (56%) are more likely than administrative physicians
(49%), hospital-based physicians (45%), and physicians in medical teaching/
research (45%) to favor the use of tax credits. Psychiatrists (58%) are the
most likely and anesthesiologists (30%) are the least likely of all specialties to favor a national single payer system. Physicians in medical teaching/ research (57%), administrative physicians (52%) and hospital-based physicians (49%) are more likely than office based physicians (38%) to favor a national single payer system. Physicians 40 years of age or more (43%) are more likely than physicians less than 40 years of age (35%) to favor a national single payer system.

http://www.ama-assn.org/ama1/x-ama/upload/mm/363/agendasurvhighlights.pdf

Comment: The AMA’s conclusion: “AMA members are divided on the approaches
they favor to increase health insurance coverage to the uninsured.” That is true. But some aspects of this survey are worthy of comment.

Many physicians with progressive views have dropped out of the AMA, partly
because of a perception that it is controlled by relatively conservative physicians. There is some basis for this perception as is exemplified by the fact that 75% of AMA PAC contributions for the recent election went to Republican candidates. Also, the health reform policies supported by the AMA House of Delegates are very similar to those supported by President Bush. So the survey likely is heighted toward the conservative physicians in the United States.

It has been said that there are three primary models of universal coverage:
universal single payer, an employer mandate with a backup public program,
and an individual mandate with a backup public program. It is quite remarkable that, of these three choices, a national single payer system has the strongest support. There is even greater support for government-sponsored catastrophic coverage, which would have some features of the single payer model, albeit with a high deductible requirement.

Tax credits received high support, but they are not insurance models. They are
merely a mechanism of funding insurance.

The employer mandate and individual mandate leave in place our current private insurance programs. They have the least support in this survey. All other options involve government funding and government administration, and all of them received greater support from the physicians responding.

It may be a stretch to say that the conservative physicians of our nation prefer a government-run, taxpayer-financed health insurance program. But it’s not far from the truth.

The AMA and PNHP should sit down together and discuss health policy, devoid
of partisanship. We may not be as far apart as it would otherwise seem.

Headaches For All

Everybody knows it will take a lot more than diet and exercise to fix America’s health

AMERICANS are constantly told that their health care is the best in the world. In terms of research, technology and advances in surgery, the boast is undoubtedly true. In other ways, it is hard to justify. At any one time, more than 43m Americans under the age of 65 have no health insurance (the elderly are covered by Medicare, a federal insurance programme). The infant mortality rate for black Americans runs at 14 per 1,000 live births, double the rate for white Americans and over four times the rate in Japan. Indeed, in a 2000 study of the effectiveness of health-care systems around the world, the World Health Organisation ranked America only 37th (France came top).

If all that speaks ill of the nation as a whole–over half of America’s uninsured in 2002-03 were without cover for at least nine months–the situation in some states is far worse. Families USA, a health-consumer organisation, notes that in Texas–the state that George Bush likes to call home–some 43.4% of the “non-elderly” population were without health insurance for all or part of 2002 and 2003. In California the rate was 37.1%; in Florida 34.6%. The Kaiser Family Foundation (KFF) notes that infant-death rates across the South, from Arkansas to the Carolinas, are far higher than in the western states.

This is a poor reward for spending more on health than any other country. Health care accounts for almost 15% of America’s gross domestic product, compared with less than 8% for Japan and Britain. Moreover, where other countries pay for their health care mostly out of taxation (the OECD average in 2001 was 72%), over half of America’s spending is accounted for by private insurance–normally provided by an employer–and out-of-pocket payments. Indeed,America is the only industrialised democracy without publicly funded universal health cover.

To counteract the costs of medical advances and malpractice suits,insurance premiums have been rising by more than 10% a year. In 1998 the average health-care cost per employee for a private-sector company was $1 an hour; by last year, it had risen to $1.50. This has a perverse effect: employers either tend to cut or eliminate their workers’ coverage–thereby adding to the uninsured–or try not to hire new workers. With the cost of insuring a single worker now running at around $3,000 a year, the proportion of workers covered by a company health plan has fallen to 61% in 2004, according to KFF, compared with around 65% in 2001.

The Search For A Cure
Clearly, reform is needed. One reason is pressure from voters. Health care is consistently near the top of their concerns, especially if they are old; old people are both sicker, and vote more, than the average American. They note that many of their drugs are much cheaper in Canada than in the United States, and ask why the federal authorities are refusing to legalise imports from across the northern border. (In defiance of the Food and Drug Administration, Illinois has recently approved the importation of drugs from Canada; Vermont is suing the
FDA.) Seizing the moment, John Kerry says he backs such imports.

A second reason for reform is the inexorable pressure of demography. As baby-boomers retire, they will add to the burden of health care in general and Medicare in particular. Indeed, America’s total expenditure on health care is expected to rise from just under $2 trillion a year now to almost $3 trillion by the end of the decade.

So the question is not so much whether to reform, but how. The Clinton plan a decade ago for universal coverage was defeated by doctors and insurance companies, as well as by Republicans. In its place came health-maintenance organisations (HMOs), health-care-management companies that contract with doctors and hospitals to manage treatment and costs. The proportion of employees with employer-provided care enrolled in managed health-care plans rose from 27% in 1988 to 92% in 2000.

But HMOs succeeded only for a time in slowing the rise in health-care costs. Some politicians, such as the former Democratic presidential candidate, Dennis Kucinich, believe the only workable solution is to replace the private-sector insurance companies with a government-run “single-payer” system, as in Canada. This, however, would guarantee the same lobbying that defeated Mr Clinton–which is why neither Mr Kerry nor Mr Bush is talking about dramatic change.

Mr Bush’s remedy is particularly modest. He proposes extending the new Health Savings Accounts to allow individuals to deduct from their taxes the cost of premiums for major medical coverage. According to the Treasury Department, this would extend insurance to an extra 1m Americans. Similarly, there are tax credits to help workers laid off “due to international trade” to find insurance; other credits would make insurance affordable for around 4.5m workers with no employer-provided or public insurance. Meanwhile, a five-year plan is already under way to fund 1,200 new or expanded community health centres to serve an additional 6.1m people, and association Health Plans are proposed to allow small businesses to band together to provide cover to another 600,000.

The centrepiece of the president’s reform, however, is to make prescription drugs available to the 40m elderly and disabled Americans covered by Medicare. From 2006 (a discount card will in the meantime offer savings off retail prices), a Medicare recipient will pay the first $250 in a year, Medicare most of the next $2,000 and the recipient the next $2,850 (after which Medicare will again pick up the tab). The plan is both complicated and expensive: over $570 billion, according to the latest estimates, over ten years. Embarrassingly for the president, the price tab is rising not just for the government but also for Medicare recipients: their premiums are set to rise by 17% in 2005.

These are not the only problems with Mr Bush’s proposals. The tax credits, aimed at helping the poor and worth some $90.5 billion over ten years, would actually benefit the rich, who need no help, and would be little help to the low-paid, who pay little or no tax and are most at risk of losing insurance. As for Medicare reform, the congressional Budget Office reckons that, as an unintended side-effect, a third of retired people whose drugs are now covered by their former employers will lose that coverage (why should the bosses pay if the government will pick up the tab?) and be forced to accept inferior cover from Medicare. The most damning criticism of the proposals, however, is that their impact will be too limited: according to the Kaiser Family Foundation, the ranks of the uninsured will fall by just 1.8m.

THE 95% SOLUTION
By contrast, Mr Kerry aims to reduce the number of uninsured by 26.7m and so bring health insurance to 95% of America’s population. That ambition carries a hefty price-tag of $653 billion over nine years, which a President Kerry would finance mainly by repealing Mr Bush’s tax cuts for Americans earning over $200,000. In the Kerry vision, all Americans would have the right to the same health plans as their congressmen and some 9m federal employees and their dependents. Tax credits would help find cover for 55-64-year-olds, who are too old to be good insurance risks for an employer but too young to qualify for Medicare. To help poor families, Mr Kerry would make the government assume all the costs of the 20m children who now benefit from state Medicaid plans. In return, the states would have to expand insurance to those poor families who do not qualify for Medicaid.

Mr Kerry’s biggest claim is that he can cut insurance costs by up to two-thirds for small businesses: the federal government would act as a reinsurer, reimbursing employee health plans for 75% of costs above $50,000. This alone would lower employee premiums by 10%. In addition, there would be tax credits of up to 50% of the cost of covering employees, and employers would profit from buying into the federal worker-insurance programme. Meanwhile, everyone–firms, employees and states–would benefit from discounts gained by the bulk purchasing of drugs. (At the moment, the drug companies are loth to co-operate with any buyer except Medicaid, the federal/state programme for the poor.)

Add in a “quality bonus” to give hospitals a financial incentive to reduce medical errors; add, too, a “technology bonus” to favour computerisation and so cut non-medical costs (now running at $350 billion a year) from $12-25 per health-care transaction to less than a cent. The result is a health plan which the 35m-strong AARP, the formidable lobby group for the elderly–which supported Mr Bush’s Medicare scheme–finds much more convincing than the president’s.

That does not mean it is without problems. Mr Bush’s team notes that while Mr Kerry claims it will be harder to bring undeserving malpractice suits, he refuses to cap the awards–even though the Bush camp says that the “broken medical liability system” drives up costs by at least $28 billion a year for the federal government alone. (It certainly pushes up the cost of doctors’ malpractice insurance.)

The Bush team also attacks Mr Kerry for adding to the burden of regulation. Small businesses would have to offer costly benefits in order to join the federal employees’ health-benefits programme. Overall, say the Republicans, the Kerry plan simply shifts the burden to the taxpayer. But given the unpopularity of the present system, this is a burden that taxpayers sometimes seem ready to bear.

Greetings From The Disunited “United States Of Canada”

November 14, 2004
WASHINGTON — I pledge allegiance to the flag of the disunited states of America.

Now is the winter of some people’s discontent following the stormy election of President Bush. The Internet is all abuzz with residue resentment. Canada’s immigration Web site reports a sharp increase in inquiries from Americans seeking information on how they can defect to our chilly neighbor. Other Webheads are offering a “Boycott Ohio” petition.

That in particular saddens me, since I grew up in Ohio and still have friends and relatives living behind the Buckeye curtain.

But the wackiest idea I have run across so far is the option offered by Web sites that are calling for secession.

That’s right. Secession, you may recall, didn’t work out very well the last time it was tried in this country. (For the benefit of those of you who snoozed through history class, I point out that secession resulted in the Civil War.)

Nevertheless, several Web sites are offering color maps of a new North American political landscape in which the so-called “blue states” that voted for Democratic Sen. John Kerry are joined to our northerly neighbor in a new, blue country called the “United States of Canada.”

The remaining states–the “red states” that voted for Bush–are renamed “Jesusland,” which sounds like a good name for some televangelist’s Christian amusement park.

Well, count me out.

I think the best revenge for blue-state Americans is to continue to stand with our red-state brothers and sisters to hold Washington accountable, no matter which party happens to be in charge.

Besides, as much as I like to visit Canada, I don’t see much advantage to having Canada permanently visit me–except maybe national health insurance.

That’s not a small thing. As you may have heard Kerry mention repeatedly during the recent presidential campaign, an estimated 45 million Americans in this, the world’s most powerful and prosperous country, lack health insurance.

Back in the early 1990s, only about 30 million Americans lacked health insurance and President Bill Clinton and First Lady Hillary Clinton took a stab at trying to close that gap.

Their push for universal coverage was beaten back quite impressively by the health insurance industry’s “Harry and Louise” ads.

Those scary little attack ads painted horror scenarios of skyrocketing costs, shrinking coverage and Americans no longer able to choose their own doctors.

A decade later? Surprise, surprise. We have the higher costs and shrinking coverage that “Harry and Louise” warned us about, except that we also have even more uninsured patients.

Now the same insurance industry tells us scary stories about Canadians rushing to the U.S. for elective surgery and other procedures they can’t get quickly enough in Canada. You have to turn to the news to hear the other side of that story, like the Americans now turning to Canada to get their flu shots or to find cheaper prices for American-made pharmaceuticals.

And you also might hear in the news about how Americans are more dissatisfied than citizens of other major industrial nations with their basic health care even while paying more of their own money for treatment, according to a recent five-nation survey by the non-profit Commonwealth Fund.

One-third of Americans told the pollsters that the U.S. health-care system should be completely rebuilt, which was far more than residents of Australia, Canada, New Zealand, or the United Kingdom. Just 16 percent of Americans said that the U.S. health-care system needs only minor changes, the lowest number expressing approval among the countries surveyed.

Want to see President Bush’s plan for insuring the uninsured? Hold up a blank sheet of paper.

Well, OK, it’s not quite that bad, but it’s close. He has offered tax-free health savings accounts for those who can afford to put money aside for their health-care costs. The business-oriented Bush seems never to have witnessed a social problem that cannot be solved with a tax break.

But what if you’re a minimum-wage waitress with kids, and you can’t afford to put money aside for health-care costs? Well, I guess there’s always prayer.

Of course, no country’s health-care system is perfect, and America does offer the best health care that money can buy, if you can afford it. The problems come when you can’t afford it.

We’re problem solvers. That’s the American way. We can build a better system, if we want to. The first step is to demand what we have not had, a fair and balanced national health-care debate, not just dueling campaign ads.

AMA members’ opinions on reform