PNHP

California example of pending safety net collapse

California example of pending safety net collapse

California Association of Public Hospitals and Health Systems

On the Brink: How the Crisis in California’s Public Hospitals Threatens Access to Care for Millions

California’s public hospitals and health systems today confront a severe crisis. Driving this crisis is a steadily growing demand by uninsured and vulnerable patients for health care services matched against a shrinking pool of funds available to pay for that care. If the imbalance between rising costs and declining revenues is allowed to continue, draconian cuts will have to be made. Emergency rooms and trauma centers will close. Thousands of health care workers will be laid off. Entire public hospitals will close. At stake is access to health care for millions of Californians.

Based on analysis by CAPH, over the next five years California’s public hospitals and health systems will face a cumulative budget shortfall of at least $3 billion. This drastic divergence between revenues and expenses cannot be sustained without extensive reductions in services and loss of access to care for millions of Californians.

Why the Crisis in Public Hospitals Matters to EVERYONE

Although they make up only six percent of hospitals statewide, California’s public hospitals and health systems:

* Provide 55 percent of the cost of hospital care to the uninsured * Serve a patient population that is 76 percent people of color, including more than 50 percent Latino * Represent 62 percent of the state’s level I trauma centers * Train almost half of all medical residents in the state * Provide 54 percent of all hospital-based outpatient visits to the uninsured * Employ more than 70,000 health care workers

Without public hospitals, the state’s emergency and trauma care network would collapse, thousands of jobs would be lost and millions of Californians would be forced to go without needed health care.

Unstable Patchwork of Funding

Public hospitals and health systems are uniquely reliant on a tenuous patchwork of funding made up primarily of Medicaid revenues and state and local funds. This unstable patchwork is the result of the lack of a comprehensive public policy to ensure universal access to health care for everyone, particularly those least able to afford care.

For the full report: http://www.caph.org/publications/WhitePaperFINAL.pdf (Although the report is on California’s safety net system, the principles apply throughout the nation.)

Comment: Although there may be political support for improved funding of trauma centers, there is only a feeble squeak of a political voice for those least able to afford care. We are already spending enough to fully fund the public health care safety net. But we lack a rational system for allocating our resources.

We desperately need a single, publicly-administered program of social insurance that includes everyone.

B. Capell responds on safety net funding

Beth Capell, Ph.D. responds on safety net funding and the uninsured:

Don:

Your comment may unintentionally encourage those who wish to defund the safety net in order to fund coverage expansions for other Californians.

As the CAPH report demonstrates, the current safety net is badly underfunded. If the safety net for the uninsured were funded at the same level as care for the insured, California would spend $12-$14 billion on community clinics and public hospitals—instead of the $4-$6 billion now spent.

It is important to acknowledge, as you have in other Quotes of the Day, that the uninsured get half as much care as the insured–and that they pay more for less care.

Every reputable estimate of the cost of covering the uninsured includes the cost of doubling the amount of care they receive. This is incorporated in the Lewin analysis of the various single payer options reviewed in the Health Care Options Project.

The reason that a single payer system can absorb the increased cost of providing a decent level of care for all Californians is the dramatic cost savings achieved by eliminating the administrative overhead of an insurance model of financing.

Those who say the costs are already in the system are right–but only if they are talking about money spent on unnecessary overhead and administrative costs.

It is not true that the uninsured get the care they need. Not at the emergency room, not at doctor’s offices, not at underfunded community clinics and public hospitals, not anywhere.

The cost of care for the uninsured is absorbed by the uninsured—in premature deaths, in avoidable illnesses, in misery from untreated illnesses and chronic conditions. They don’t get the care they need and we should say it.

Beth Capell, MD

Seniors driven to poverty to gain affordable access to health care

Health Affairs
May/June 2003
High Out-Of-Pocket Health Care Spending By The Elderly
High spending coupled with the erosion of insurance coverage expose the
elderly to great financial risk.
by Dana P. Goldman and Julie M. Zissimopoulos

Disturbing Trends:
* Erosion of managed care – For the near-poor, who rely most on Medicare HMOs, benefits have probably eroded…
* Declines in drug coverage – The share of M+C enrollees in plans with drug coverage declined… Copayments have increased… (and 98% face caps on coverage)
* Cuts in retiree benefits – …provision of retiree benefits declined steadily… (with) a decrease in the generosity of benefits.

With the erosion of market areas and the generosity of Medicare HMO benefits, the risks of large catastrophic expenses have likely increased among a group least able to afford it. In addition to imposing additional private costs on less affluent seniors, these changes may also impose public costs. They will make Medicaid a more attractive option to the near-poor elderly, and some may spend down assets to qualify. This will increase Medicaid’s costs, while exposing other elderly people to more financial risk.

http://www.healthaffairs.org/1130_abstract_c.php?ID=/usr/local/apache/sites/healthaffairs.org/htdocs/Library/v22n3/s26.pdf

Comment: Are these our American values? We establish a health benefits program for our retired seniors. But then we gradually shift more of the costs to the beneficiaries, making health care unaffordable for many. We then drive them into poverty in order to allow them to regain affordable access to health care.

What kind of a nation are we? We already know how to provide affordable, comprehensive benefits for everyone. Why do we continue with inhumane policies that require financial ruin for so many with significant health care needs?

Support continues for single-payer insurance

By  PAUL CARRIER, Portland Press Herald Writer

AUGUSTA  —  Gov. John Baldacci’s proposed health-care plan, which would retain a strong role for private insurers, has not silenced talk of creating a fully state-run insurance system in the years ahead that would leave no room for commercial insurance companies. 

  While many reformers are uniting behind the governor’s proposal, which is designed to expand access to health care and cut costs without eliminating private insurance, the state Senate gave near-final approval Wednesday to a separate bill that would continue an ongoing, long-term study of a single-payer system.  

  That ongoing study, which also has won preliminary approval in the state House of Representatives, now needs only final votes of enactment in both the House and the Senate. And even though Baldacci’s plan does not call for a single-payer system, his spokesman said Wednesday the governor will sign the study bill into law if the Legislature sends it to him. 

  The governor’s legislation, which he wants the Legislature to pass this session, and the continuing study of a single-payer system “work hand in hand,” said Lee Umphrey, Baldacci’s spokesman. “The introduction of (the governor’s) plan is the start of a process,” Umphrey said. He said supporters of that proposal and backers of a single-payer system should work together to develop the best plan for Maine people. 

  Even supporters of a single-payer system, which Baldacci opposes, are endorsing the governor’s package. They see the governor’s plan as a step in the right direction because, they say, it will insure more Mainers and help control the cost of health care.  

  The governor’s plan “can act as a transitional system to get us to single-payer,” said Paul Volenik, a former state representative who co-chairs the Health Care System and Health Security Board, which the Legislature created in 2001 to investigate creating a single-payer system. That’s the same board that the Legislature and the governor are now prepared to extend, so it can continue its work until November 2004. 

  The board released a preliminary report in January that said a single-payer system could provide coverage for all Mainers and save money. Such a system would insure Mainers through a standard benefits plan administered and financed by the state, or by a group under contract with the state. Insurers quickly attacked the report, saying it seriously underestimated the cost of a single-payer system. 

  “I’d like to see the conversation on single-payer continue” even though the main focus now is on Baldacci’s bill, said state Rep. John Eder of Portland, the lone Green Independent in the Legislature. Eder has filed a bill in the Legislature to implement a single-payer system, but the Legislature’s Insurance and Financial Services Committee quickly voted 9-0 against the bill Wednesday after holding a hearing on it. 

  Like other supporters of a single-payer system, Eder said he does not believe Baldacci’s plan has killed the idea of a state-run insurance program. Backers of such a system say the fact that the Legislature and the governor will allow the Health Care System and Health Security Board to continue its work will keep the issue alive, at least until the board issues its final report late next year. 

  Baldacci’s bill is “a major step forward” but it may not be the last step, Rep. Arthur Lerman, D-Augusta, a supporter of a single-payer system, said Wednesday during the committee hearing on Eder’s bill. “I still think that, in the long run, we may end up moving in this direction” of a government-run system, Lerman said. 

  Many disagree, including some supporters of Baldacci’s plan who believe it will meet a key goal of a single-payer system by assuring that all Mainers have health insurance. Baldacci says his package would provide universal health care in four years, by relying on a combination of public and private insurance programs, but some skeptics who support a single-payer system say Baldacci’s plan would not guarantee that everyone has adequate coverage. 

  “The governor’s bill really is front and center” and that places the single-payer system on the back burner, said Joseph Ditre of Consumers for Affordable Health Care, an activist group that backs Baldacci’s approach. Still, Ditre said, “it’s a little too early to tell how it’s all going to play out,” because key components of the governor’s plan would not even kick in until July 2004. 

  Sen. John Martin, D-Eagle Lake, who co-chairs the Health Care System and Health Security Board, said many people continue to support a single-payer system and it remains an option. “It’s not dead,” Martin said. 

Staff Writer Paul Carrier can be contacted at 622-7511 or at: 

pcarrier@pressherald.com

Copyright  2003 Blethen Maine Newspapers Inc.                       
http://business.mainetoday.com/news/030508healthcare.shtml

Taiwan's Single Payer System: A Phenomenal Success!

Health Affairs
May/June 2003
Does Universal Health Insurance Make Health Care Unaffordable? Lessons From
Taiwan
by Jui-Fen Rachel Lu and William C. Hsiao

…Taiwan’s single-payer NHI system enabled Taiwan to manage health spending inflation and that the resulting savings largely offset the incremental cost of covering the previously uninsured. Under the NHI, the Taiwanese have more equal access to health care, greater financial risk protection, and equity in health care financing.

Major Lessons

Taiwan offers an opportunity to study how an advanced economy can structure its health care system to advance societal goals. Taiwan learned from worldwide experience that while the free market can often produce products and goods efficiently, it is incapable of distributing the goods equitably because the income and wealth of households are not distributed equitably. Moreover, the health insurance market suffers major market failures from adverse selection and risk selection. When a society is seriously concerned about its people having equitable access to care and about pooling health risks efficiently, the free market is not a good choice. Evidence from the United States amply supports this conclusion also.

Taiwan established a compulsory national health insurance program that provided universal coverage and a comprehensive benefit package to all of its residents. Besides providing more equal access to health care and financial risk protection, the single-payer NHI also provides tools to manage health spending increases. Our data show that Taiwan was able to adopt the NHI without using measurably more resources than what it would have spent without the program. It seems that the additional resources that had to be spent to cover the uninsured were largely offset by the savings resulting from reduced overcharges, duplication and overuse of health services and tests, transaction costs, and other costs. The total increase in national health spending between 1995 and 2000 was not more than the amount that Taiwan would have spent, based on historical trends.

Additionally, Taiwan did not experience any reported increase in queues or waiting time under the NHI. Meanwhile, the government has taken regular public opinion polls every three months to gauge the public’s satisfaction with the NHI. It continuously enjoys a public satisfaction rate of around 70 percent, one of the highest for Taiwanese public programs.

One notable result that should interest Americans is that Taiwan’s universal insurance single-payer system greatly reduced transaction costs and also offered the information and tools to manage health care costs. Alex Preker, a leading health economist at the World Bank, came to a similar conclusion from his research of OECD countries. He concluded that universal health care led to cost containment, not cost explosion. Equally important, a single-payer system can gather comprehensive information on patients and providers, which can be used to monitor and improve clinical quality and health outcomes.

http://www.healthaffairs.org/1130_abstract_c.php?ID=http://www.healthaffairs.org/Library/v22n3/s15.pdf

Comment: Amazing! Single payer reform really does accomplish its intended goals. Taiwan now has equitable, affordable, comprehensive care for everyone. Taiwan has provided us with a real life laboratory for precisely the reform that we need in the United States.

So let’s fix our system… now!

Taiwan’s Single Payer System: A Phenomenal Success!

Health Affairs
May/June 2003
Does Universal Health Insurance Make Health Care Unaffordable? Lessons From
Taiwan
by Jui-Fen Rachel Lu and William C. Hsiao

…Taiwan’s single-payer NHI system enabled Taiwan to manage health spending inflation and that the resulting savings largely offset the incremental cost of covering the previously uninsured. Under the NHI, the Taiwanese have more equal access to health care, greater financial risk protection, and equity in health care financing.

Major Lessons

Taiwan offers an opportunity to study how an advanced economy can structure its health care system to advance societal goals. Taiwan learned from worldwide experience that while the free market can often produce products and goods efficiently, it is incapable of distributing the goods equitably because the income and wealth of households are not distributed equitably. Moreover, the health insurance market suffers major market failures from adverse selection and risk selection. When a society is seriously concerned about its people having equitable access to care and about pooling health risks efficiently, the free market is not a good choice. Evidence from the United States amply supports this conclusion also.

Taiwan established a compulsory national health insurance program that provided universal coverage and a comprehensive benefit package to all of its residents. Besides providing more equal access to health care and financial risk protection, the single-payer NHI also provides tools to manage health spending increases. Our data show that Taiwan was able to adopt the NHI without using measurably more resources than what it would have spent without the program. It seems that the additional resources that had to be spent to cover the uninsured were largely offset by the savings resulting from reduced overcharges, duplication and overuse of health services and tests, transaction costs, and other costs. The total increase in national health spending between 1995 and 2000 was not more than the amount that Taiwan would have spent, based on historical trends.

Additionally, Taiwan did not experience any reported increase in queues or waiting time under the NHI. Meanwhile, the government has taken regular public opinion polls every three months to gauge the public’s satisfaction with the NHI. It continuously enjoys a public satisfaction rate of around 70 percent, one of the highest for Taiwanese public programs.

One notable result that should interest Americans is that Taiwan’s universal insurance single-payer system greatly reduced transaction costs and also offered the information and tools to manage health care costs. Alex Preker, a leading health economist at the World Bank, came to a similar conclusion from his research of OECD countries. He concluded that universal health care led to cost containment, not cost explosion. Equally important, a single-payer system can gather comprehensive information on patients and providers, which can be used to monitor and improve clinical quality and health outcomes.

http://www.healthaffairs.org/1130_abstract_c.php?ID=http://www.healthaffairs.org/Library/v22n3/s15.pdf

Comment: Amazing! Single payer reform really does accomplish its intended goals. Taiwan now has equitable, affordable, comprehensive care for everyone. Taiwan has provided us with a real life laboratory for precisely the reform that we need in the United States.

So let’s fix our system… now!

Editorial: Universal health care only option

An editorial
May 3, 2003

Madison’s Social Justice Center last week honored an incredibly dedicated Dane County couple – Eugene and Linda Farley – for their tireless devotion to improving health care, especially for those who can least afford it in our nonsensical and brutally unfair health insurance system.

The two doctors have spent their retirement years not only advocating for a national universal health care system, but endlessly volunteering to help the hundreds of families right here in Dane County who have no insurance to pay medical bills, a reality that’s nothing short of tragic in this, the richest and most powerful nation in the world.

If the country’s collective eyes are ever going to be opened to the need for true health care reform, it will be because of people like the Farleys, who refuse to give up a fight for what they know is right.

Eugene and Linda Farley know firsthand what the lack of health care coverage does to families. Because they voluntarily treat folks at the community health center and at the Salvation Army, they know how children from uninsured families go without care for their eyes, for their teeth and for those nagging infections that in the end make it more difficult for them to cope not only in later life, but today in school.

The Farleys know that most of these families are not the stereotypical laggards of society, but working people whose employers cannot afford to provide them with health benefits.

They know that those employers are increasing each year as insurance premiums take another double-digit jump because the cost of everything from a visit to the doctor to the bill at the pharmacy is beyond control.

And they know that we’re wasting so much money – on convoluted insurance plans, costly administrative procedures at practically every step in our current system, and inane pricing policies for medicines – that we could easily afford a national single-payer system that would cover every American with what we’re spending on health care now.

More than 40 million Americans go without health care coverage every single day of the year. The Institute of Medicine estimates that 18,000 of those people die prematurely every year because they put off seeing a doctor and getting care simply because they don’t want to burden their families with bills they can’t afford to pay.

Why do we refuse to change the system?

Because special interests – from pharmaceutical companies to insurance conglomerates – have bought and paid for legislators and members of Congress to keep the system the way it is. Meanwhile, prices have spiraled so far out of control that working Americans, when they do have insurance, forgo pay raises just to keep health coverage. And the ranks of the uninsured keep on growing.

It’s time that we start listening to the likes of the Farleys. They have no financial interest in the outcome, only an interest in helping working people and their children get the health care that as Americans they not only deserve, but should be their right.

The system can be changed if, like Drs. Eugene and Linda Farley, we refuse to give up the fight.

The views in this space are provided by The Capital Times, Wisconsin’s progressive daily newspaper.

http://www.madison.com/archives/read.php?ref=wsj:2003:05:04:266331:OPINION

Kaiser offering indemnity coverage!

Washington Post
May 5, 2003
No HMO Fits All Anymore
By Bill Brubaker

Kaiser (Mid Atlantic) is seeking regulatory approval to offer a plan, as soon as this fall, that would allow patients to visit the doctors and hospitals of their choice.

Kaiser did not have much choice… The nonprofit insurer, part of California-based Kaiser Foundation Health Plan Inc., has been losing members and money.

Patients could participate in an HMO and receive treatment in Kaiser’s 29 medical centers or at 12 hospitals in the Washington-Baltimore region. That is the least expensive option.

Members could choose from a PPO network of more than 10,000 non-Kaiser physicians. A primary-care visit typically would cost about $20, and patients would have a larger choice of hospitals…

Or they could receive treatment from any doctor or hospital in the United States. That option, known as an indemnity plan, is the most expensive: Patients would pay 30 percent of any charges.

“You can move among the three tiers,” (vice president of sales and marketing Bill) Little said.

http://www.washingtonpost.com/wp-dyn/articles/A10965-2003May3.html

Comment: Free choice… But with financial penalties for exercising that choice.

If we had a single payer system, financial penalties would be removed and the patient would truly have free choice of providers. Competition between providers would then be based on the patients’ perceptions of quality and service. Wouldn’t it be better if all providers were playing on the same financial field? Then Kaiser could concentrate on efforts to improve service, as would all other providers.

Fix the funding system, and then compete on quality and service.

Universal health care floated as solution

BY ROBIN BIESEN
Times Staff Writer

An increasing need for health care and an inability by government and employers to keep pace with spiraling medical costs has state Sen. Vi Simpson calling for change.

In place of the current system, Simpson, an announced candidate for Indiana governor next year, is calling on state leaders to come together to explore the notion of universal health care for Indiana.

While not a new idea — Sen. Evan Bayh floated the idea while he was governor and the Clinton administration backed it in a failed proposal to reform the nation’s health care system — Simpson said it is time to explore the issue anew.
“We are at a point when fewer small businesses can afford to offer health insurance,” Simpson, D-Bloomington, said. “What we need to do is look for an approach to pay for health care that is the most effective and cost efficient.”
She won’t get an argument from Rep. Charlie Brown, D-Gary.

Brown, who has been delving into the costs and benefits of a single-payer system, said the state has to get its arms around health care costs — for the sake of the people it insures and that of employers who find themselves strapped by annual increases that eclipse profits.

“Eventually we all pay for health care for those who seek it, whether they have insurance or not,” Brown said. “Deciding that everyone should have health insurance could help control costs. It’s a pay me now or pay me later situation.
Small-business owners, who have become accustomed to skyrocketing employee health insurance premiums, say it would be nice to think there could be less costly options.

“I would say that over the last three or four years, we have seen annual increases of 30 percent — minimum,” said Howard Weiss, owner of Trim-A-Seal of Indiana Inc., a window manufacturing and installation firm that employs 11. “Small-business owners are at a complete disadvantage. But, it’s not only the business owner who suffers. The individual employee suffers as much, if not more, than the company because they, too, are being asked to pay more for health care.”

Like Weiss, Larry Gough, of Gough & Gough Inc. of Valparaiso, was intrigued at the idea of a single-payer system for Indiana.

“I think it sounds good, in theory, because ultimately their buying power would be so much greater than any individual corporation on its own,” Gough said. “Spreading the risk should mean you would be able to insure a larger group at less cost. I would love to see it work.”

Daniel Lowery, executive director of Northwest Indiana Quality of Life Council, said health care was just put back on the nation’s public policy initiative list for the first time since the early 1990s.

“The reason is, the current situation is not sustainable,” he said. “It can’t work.”
Northwest Indiana’s steel industry has been hampered not only by capacity issues and dumping, but also by legacy costs it bears for retirees, Lowery said.
“We don’t spread health care costs across the entire population, like other countries do, so it’s affected our competitiveness in steel,” he said.

The current system is a drag on overall economic performance, he said.

“People stay in jobs because they don’t want to lose their insurance when they might be productive somewhere else,” Lowery said. “Others can’t be hired over a fear of what their hiring might do to insurance costs.”

Thomas McDermott, president and chief executive of Northwest Indiana Forum Inc., said businesses — especially those in Lake County — are saying they can’t afford their property taxes and health care.

“If the situation isn’t corrected, I think we’ll begin to see health care looked at as the option they drop before they go out of business,” McDermott said.

One national solution to the “health care fiasco” involves a proposal to mandate companies provide health coverage for their employees and give them a tax credit for doing so, McDermott said. The idea has merit, he said.

“If one company provides insurance, and the other does not, they’re put at a competitive disadvantage. You need to create a balanced playing field.”

Times staff writer Debra Gruszecki contributed to this story.

Robin Biesen can be reached at biesen@nwitimes.com or (219) 933-4168.

http://www.thetimesonline.com/articles/2003/05/05/news/top_news/2e5f720b8707982c86256d1d000c343a.txt

Government-sanctioned bare-bones uninsurance

Sixty-fourth General Assembly
State of Colorado
House Bill 03-1164
A Bill for an Act Concerning the Expansion of Access to Health Insurance…

The commissioner shall promulgate rules to implement a basic health benefit plan and a standard health benefit plan to be offered by each small employer carrier as a condition of transacting business in this state.

The commissioner shall implement a basic plan that approximates the lowest level of coverage offered in small group health benefit plans and shall implement a standard plan that approximates the average level of coverage offered in small group health benefit plans.

(a) The standard health benefit plan shall reflect the benefit design of common plan offerings in the small group market…

(b) The basic health benefit plan shall NOT INCLUDE COVERAGE PURSUANT TO THE MANDATORY COVERAGE PROVISIONS OF SECTION 10-16-104 (4), (5), AND (8) TO (12).

http://www.leg.state.co.us/2003a/inetcbill.nsf/fsbillcont/360CC2703C66247E87256C5A00673004?Open&file=1164busn_01.pdf

Comment: This bill was passed by the Colorado State House, and then was amended (capital letters, above) and approved by the Colorado Senate. It now returns to the House for approval of the Senate amendments.

With this benign-sounding amendment, the bill creates state-sanctioned, bare-bones insurance plans which are stripped of “mandated” benefits. In the name of “affordability,” Colorado would be authorizing plans that will provide neither health security nor financial security.

This is a national issue. Legislation has been proposed to create association health plans (AHPs), which would be designed to allow small businesses to offer similar bare-bones coverage that would be exempt from state-mandated benefits. Affordability of health care coverage for small businesses and for the uninsured is a crucial issue. But creating affordability by destroying the security that should be offered by private plans is not the answer. And other current reform proposals to fund private plans through tax credits will only increase pressures to strip plans of their benefits.

We need affordable, comprehensive coverage for everyone. The only model of reform that promises that is a single, publicly-administered program of social insurance.

For-profit hospital problems in England and Canada

`P3′ disasters elsewhere should be a warning

May. 4, 2003
MICHELE LANDSBERG

The SARS outbreak in Toronto was sad and scary enough. But imagine this: A new outbreak occurs, spreading across Ontario. Patients in Brampton and in Ottawa find, to their horror, that their lives depend on their spanking new “public-private partnership” hospitals. And the private owners don’t want to deal with the crisis, thank you very much.

Contracted-out maintenance crews balk at entering the hospital. Privatized cleaning staff demand danger pay, which the hospital owners can’t or won’t pay.

The public board of directors, responsible only for clinical care, finds itself at loggerheads with the private owners, who don’t want to pay for beefed-up security, screening, cleaning, dietary and maintenance crews. The board doesn’t even have access to the hospital’s books, let alone any power over the management of the physical plant.

Fighting back in defence of its threatened profits, the hospital sues the Ontario government for billions of dollars in unanticipated costs.

Bogged down in legal battles and unable to pass even minimal preventive hygiene standards, both hospitals dramatically shut down.

Yes, this scenario is a fantasy, but not so far-fetched. This year, the Ontario government is pushing ahead stubbornly with its Brampton and Ottawa “P3” arrangements — the friendly little nickname for “public-private partnerships.”

If they get away with it, they plan on creating lots more, in reckless disregard of the consequences.

The idea, and the only idea, behind P3 public facilities is that it gets the capital costs of building hospitals, schools and even police stations and city halls off the government’s books.

Private companies build and own the facilities and lease them back to the public for 30, 40 or 60 years — at the end of which, the private owners, not the public, usually own the building.

P3s are different from the usual mode of construction, because the people who put up the capital also own and manage the building. And they certainly don’t intend to open their books to the public or be responsive to public demands.

In fact, in a blood-chilling example of capitalist thinking, P3 lawyers in Vancouver, in a city hall presentation, deplored what they called “the Inherent Diseases” of the public sector. The diseases? An emphasis on process, transparency and public justification. In other words, the P3s think that democratic accountability is a “disease” akin to typhoid.

Everywhere these P3s have been tried, they’ve crashed in disaster. In England, shoddy construction in P3 hospitals has led to grotesque accidents, ceiling cave-ins and frightening mechanical failures, along with emergency sale of public land and assets to ensure private profit.

Britain’s auditor-general, looking at the P3 accounting schemes, called them “pseudo-scientific mumbo-jumbo.” The British Royal College of Nurses says that privatization of hospital cleaning services is closely related to a rise in infections. The British Medical Journal reports that P3 hospitals have cut medical and service staff by 30 per cent.

Costs have been astronomical. Hundreds of millions of dollars have been spent on consultant fees alone; legal costs are a bottomless pit as the private owners try to wiggle out of contractual obligations in patient care. And because all these deals are done in secrecy, in the interests of “corporate privacy,” corruption is rampant. Just what we need for the next globalized epidemic: dirtier hospitals, management secrecy, shoddy building practices and profit-taking at the expense of patient well-being.

Apparently, Health Minister Tony Clement hasn’t read all those alarming reports — especially last year’s McMaster University study showing that private for-profit hospitals have a higher death rate because they skimp on care.

Listen, Mr. Minister, stop long enough to consider the Canadian evidence that P3 really means Profligate, Perilous and Profiteering.

Nova Scotia cancelled its P3 schools project but is stuck with costly 35-year leases, plus $32 million in extra costs.

Construction was shoddy, siting arbitrary and public access limited. Students had to drink bottled water for a year after arsenic was found in one school’s water supply, and the school’s private owner refused to take responsibility.

In P.E.I., the government cancelled a P3 hospital when it realized how expensive it would be.

In B.C., a P3 information system in Vancouver General Hospital racked up an extra $82 million in costs instead of the $72 million it was supposed to save.

In Alberta, the public board of a P3 school is grimly shouldering the extra expense caused by cheap and hazardous building techniques.

In every case, from England to Australia, government auditors have found that the sole reason for building P3 facilities is to get capital costs off the government’s books in order to fool the public into believing the budget was “balanced.”

When Tories argue that we can’t afford health care or hospitals without private money, they are playing three-card monte. Believe their sleight-of-hand accounting at your peril. Huge sums of public money are poured into those P3 long-term leases, going straight into private pockets instead of public service. But those costs show up on the books of some future government — and that’s their sole point.

Most of Ontario’s citizens believe firmly in public medical care and public hospitals. They’d be horrified to see our public institutions slip away into private hands, where we can’t demand answers, insist on access or hold the owners to account.

We do, however, have one last way to fight back.

On Saturday, May 10, the Ontario Health Coalition will launch its Caravan of Protest at the corner of Front and Bay Sts. at 2:30 p.m.

The march will wind through the financial district, stopping at the Bank of Montreal and Borealis Building, two of the bidders on P3 medical facilities.

Join in, even if you’ve never marched before. The weather forecast looks fine, there will be a double-decker bus to symbolize two-tier medicine (but also to make it easy for tired walkers), and there will be entertainment by Samba Allegra, Sizzlestick Theatre, Tintower Puppets, Judith Thompson, clowns and street theatre.

Make a noise to save our public system. If we can’t do that much, we’ll deserve what we get when the next epidemic strikes.

Michele Landsberg’s column usually appears in the Star Saturday and Sunday. Her e-mail address is mlandsb@thestar.ca.

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Congressional testimony on Medicare cost sharing

House of Representatives
Committee on Ways and Means Subcommittee on Health
May 1, 2003
Hearing on Medicare Cost-Sharing and Medigap

Statement of Patricia Neuman, Sc.D., Vice President and Director, Medicare Policy Project, Kaiser Medicare Policy Project, Henry J. Kaiser Family Foundation:

I am testifying today on behalf of myself and Thomas Rice, Ph.D., Professor and Vice Chair of the Department of Health Services at the UCLA School of Public Health. This testimony reviews the evidence on the effects of cost-sharing on health-care utilization, and the implications for proposals that would modify Medicare’s cost-sharing structure.

Medicare plays a critical role in the lives of 41 million elderly and disabled Americans, offering a reliable source of health insurance at a time in their lives when they are most likely to need medical care. Medicare pays for much-needed basic medical services, such as physician and hospital care. However, with high cost-sharing requirements and no outpatient prescription drug coverage, Medicare is substantially less generous than plans typically offered by large employers.

Gaps in Medicare’s benefit package are increasingly problematic for beneficiaries given that many have relatively modest incomes and limited assets, and face declining access to affordable supplemental coverage. Four in ten Medicare beneficiaries live on incomes below twice the federal poverty level – about $18,000 per person and $24,000 per couple in 2003, and the same number have less than $12,000 in countable assets, leaving them with little capacity to pay for unexpected medical expenses. On average, Medicare beneficiaries spend more than a fifth of their income on health expenses, including Part B premiums; Medicare cost-sharing; non-covered services, such as prescription drugs; and premiums for supplemental insurance.

The evidence now suggests that access to supplemental coverage is on the decline… Between 1996 and 1999, while the share of beneficiaries with supplemental coverage remained stable due to the increase in Medicare+Choice enrollment, the number of beneficiaries with Medigap policies declined by 1.5 million, bringing the share of all Medicare beneficiaries with Medigap coverage from 29% to 24%. Since then, enrollment in Medicare+Choice plans has also dropped by roughly the same number.

In addition, results from several surveys point to an erosion of employer-sponsored retiree health benefits.

One key consideration in redesigning Medicare’s benefit package is an understanding of the effects of cost-sharing on beneficiaries’ access to care. Some have suggested, for example, that beneficiaries should bear a greater share of their health-care costs to deter use of non-essential services. A review of the literature, however, identifies several concerns associated with proposals that would raise cost-sharing under Medicare: (1) higher cost-sharing requirements are likely to lower use of medically necessary services and may have a negative impact on beneficiaries’ health status; (2) higher cost-sharing is inequitable, hitting the most financially vulnerable beneficiaries the hardest; and (3) many if not most seniors do not appear to have sufficient information and knowledge to navigate the health-care system and assess their options when faced with high cost-sharing requirements.

Increased cost-sharing can therefore be viewed, colloquially speaking, as a “triple jeopardy” for elderly and disabled beneficiaries with modest incomes:

* Those with low incomes are more likely to be without any form of supplemental insurance that covers Medicare’s cost-sharing requirements; * Since those with low incomes also tend to be in poorer health and need more medical services, Medicare’s cost-sharing requirements will account for a greater portion of their limited incomes if they use the necessary additional services; and * If they do not use the additional services they need, their health is likely to suffer as a result.

In summary, there is substantial evidence showing that cost-sharing leads to lower utilization of health-care services – both necessary and potentially non-essential services. A number of studies show that cost-sharing (or lack of supplemental coverage) deters people from seeking diagnostic and preventive services, as well as services that are often used to treat chronic illness. Lower utilization may reduce health-care spending in the short term, but could ultimately result in poorer health outcomes for seniors and younger beneficiaries with disabilities.

http://waysandmeans.house.gov/hearings.asp?formmode=view&id=338

Comment: This important report should be downloaded. It contains an excellent discussion of the impact of cost-sharing on the use of services, and it explains why proposals to shift more of the burden of funding Medicare to the beneficiaries would result in impaired medical outcomes for many Medicare beneficiaries. The discussion is supported by solid data and informative charts and graphs.

It is much more important to understand the actual impact of policy decisions than it is to listen to advocates of “consumer sensitive” cost sharing state how they “wish” it would work, as if health policy science had confirmed that simply decreasing utilization improves the functioning of our health care system. It doesn’t. Let’s end “wishing” and instead deal with reality. Let’s move forward with reform that really benefits patients.