PNHP

A guide to changing the world

A guide to changing the world

The Democracy Owners’ Manual
A Practical Guide to Changing the World
By Jim Shultz

Another false notion in initiative politics is that initiative campaigns are
grand opportunities to shift public opinion to your side, even in the face
of special interests opposing you. In fact, initiative campaigns are a poor
time to educate the public, especially while you are being outspent ten to
one or more. Initiative campaigns are often big-money battles of quick sound
bites and images aimed at manipulating voters, not educating them. Most
experienced initiative campaigners will tell you that if an initiative
doesn’t start out with support (as measured by serious polling) in the range
of at least 65 to 70 percent, it has very little chance of maintaining 51
percent by election day. In almost every case, the “yes” vote for a measure
only falls as the election approaches.

Some advocates learn this lesson the hard way. In 1994, California health
care advocates qualified an initiative to establish a state-run health care
system, despite many polls showing the public’s strong skepticism about such
a move. Instead of the grand public education effort that proponents hoped
would sway voters to their side, they were crushed three to one following a
multimillion-dollar ad blitz by health insurers that set the cause backward,
not forward.

For information on “The Democracy Owners’ Manual”:
http://www.democracyctr.org/resources/manual/index.htm

Comment:  Most of us are uncomfortable when we read Jim Shultz’s words. But
reality often creates discomfort. We’d much prefer to live with our
fantasies of utopia.

But, as long as Jim Shultz has shocked us into reality, let’s look at what
he has to say. He says that it is absolutely essential for us to understand
the processes by which policy is translated into action. Without that
knowledge and understanding, many of our efforts are for naught.

Jim Shultz is a veteran of the California political scene. He understands
how the process works. We don’t like to hear about our past mistakes, but we
definitely must understand them. We must understand the processes that are
likely to bring us success and those that will assure our defeat. “The
Democracy Owners’ Manual” is must reading for those of us that want to
change the world.

The underwriting cycle is not to blame

The Kaiser Family Foundation and Health Research and Educational Trust
Employer Health Benefits
2002 Summary of Findings

Between spring of 2001 and spring of 2002, monthly premiums for
employer-sponsored health insurance rose 12.7%, the second consecutive year
of double-digit premium increases, and the largest increase since 1990.
Average annual premium costs rose to $3,060 for single coverage (up from
$2,650 in 2001) and $7,954 for family coverage (up from $7,053 in 2001).
Premiums increased substantially faster than overall inflation (1.6%) and
wage gains for non-supervisory workers (3.4%).

This high rate of growth appears to have been driven primarily by rapid
inflation in spending for health care services. Premium equivalents for
self-insured plans (the estimated cost of health care claims for an employee
whose employer self-insures) – which are a reflection of growth in
underlying health care costs – grew by 12.3% over the last year, or roughly
the same rate as premiums for insured plans. This suggests that insurers’
decisions about premiums are being influenced more by cost trends than by
catch-up pricing associated with the underwriting cycle.

What seems clear is that employees are likely to pay more for health
benefits and health care in the future. This year, 43% of all firms and 78%
of large firms (200 or more workers) report that they are very or somewhat
likely to increase the amount that employees pay in 2003. Thirty-two percent
of all firms and 42% of large firms report that they are very or somewhat
likely to increase deductibles, while 34% of all firms say they are very or
somewhat likely to raise employee costs for prescription drugs.

With a weakened economy and escalating premium inflation, the brief period
of increasing employer coverage – and concomitant drop in the number of
uninsured Americans – has come to a close.

http://www.kff.org/content/2002/20020905a/3252a.pdf

Comment:  The opponents of reform will not be able to pass this off as a
transient insurance underwriting blip. The increases in medical claims
expenses are real. Employers are no longer tolerating them. The resultant
increases in cost sharing by the employee-beneficiaries are making access to
health care truly unaffordable for an ever enlarging sector of our
population. Current policies will only increase rationing by ability to pay.
Yet most Americans believe that everyone should have access to essential
health care. The status quo is not acceptable.

Comprehensive private solutions do not exist. Employment linkage has
provided only a partial solution, and that is proving to be less and less
satisfactory as the numbers above indicate. Individually purchased health
plans have even greater deficiencies than the employment linked plans.
Individually designated accounts such as MSAs will not work for those with
significant health care needs. Charity will never be adequate simply because
health care costs greatly exceed the tolerated threshold of voluntary
contributions. We have depended on combinations of these private solutions,
and they have proven to be grossly inadequate.

If Americans really do want everyone to have access to a reasonable level of
care, then we must cooperate in deciding on which public solutions we should
adopt. Now, more than ever, there is a need to understand the impact of
various public policies in health care. The science is already there. Now is
the time to use it.

QoD: Medicare+Choice guided by markets, not patient need

Mathematica Policy Research, Inc.
September 2002
Medicare+Choice Withdrawals: Experiences in Major Metropolitan Areas
by Marsha Gold and John McCoy

Recent experience highlights the importance of local market features in
shaping beneficiaries’ experience with Medicare+Choice. Medicare managed
care developed unevenly across the country and is eroding unevenly as well.

Under current policy, it is likely that Medicare+Choice will continue to
diminish
nationally, with enrollment increasingly concentrated in those markets where
conditions are most hospitable. Since markets vary, often in ways that
federal policy can only marginally influence, a market-based insurance
strategy like Medicare+Choice will almost always mean that plan choices vary
substantially across the nation.

http://www.mathematica-mpr.com/PDFs/opinsights8.pdf

Comment:  Medicare+Choice was an attempt to control Medicare costs by using
private health plans competing in the marketplace. It was a dismal failure.
All studies demonstrated that costs actually increased and that access to
the plans varied greatly depending on local market conditions.

Now the Bush administration is introducing Medicare+Choice PPO plans. They
will pay the plans 99% of the costs of the traditional programs plus
one-half of the cost overruns. The plans most likely will demonstrate
initial success by directing their marketing to the healthy sector of
Medicare patients. Low cost patients will leave them with profits initially.
But, as their beneficiaries age and develop greater health care needs, the
private PPO Medicare plans also will be unable to meet the higher costs,
especially when adding in the greater administrative expenses of the PPO
plans. And the cost overruns will again be borne by the taxpayers. As the
current Mathematica study indicates, we can expect these plans to provide
unstable insurance support because of the continual need to modify their
targeted markets based on local market profitability.

It is particularly ironic that Bakersfield, California is one of the ten
worst markets for Medicare+Choice contracts since Bakersfield is the home of
William Thomas, Chairman of the House Ways and Means Committee and one of
the strongest supporters of  the plans to privatize Medicare. It is fair to
ask Congressman Thomas whether he is representing the interests of the
residents of his district or representing the interests of the health plans.

All of us should be asking our candidates for elective office precisely what
policies they support. Do they support policies that enhance the markets for
private health plan profitability, or do they support policies that enhance
mechanisms that improve allocation of our health care resources for the
benefit of patients? Knowing that answer, we’ll all be better informed
voters.

Rex Morgan's prescription: socialized medicine in U.S.

JAMES ADAMS
NATIONAL ARTS CORRESPONDENT

Supporters of socialized health care in Canada and the United States have a seemingly unlikely friend in Rex Morgan M.D., the handsome, deeply decent physician who has been a staple of newspaper comics since 1948.

So far there’s no record of the Romanow health care commission or the U.S. Secretary of Health having consulted the fictional doctor.

However, as any of the 30 million readers of the syndicated strip carried by 300 newspapers in 15 countries can tell you, Rex has come out foursquare in favour of what his creator calls “a single-payer, state-supported health care system.”

Interestingly, the man behind Rex Morgan’s position isn’t some “communist or liberal socialist” — although he has received plenty of mail calling him that, and worse. He’s Woody Wilson, a 55-year-old registered Republican from Tempe, Ariz., who voted for George W. Bush in the 2000 elections.

“I believe the country that is supposedly the richest and most powerful in the world shouldn’t be forcing its citizens to choose between paying their mortgage or saving their lives. Yet that is what is happening with millions of Americans right now,” Mr. Wilson said in an interview this week.

“What’s needed is health care for everyone instead of dividends for stockholders in pharmaceutical companies.”

Mr. Wilson has been writing Rex Morgan M.D., a sort of soap opera in comic form, since 1991, having worked as an apprentice under its originator, psychiatrist Nicholas Dallis (now deceased), since 1982.

Under Mr. Wilson, Rex Morgan hasn’t hesitated to tackle domestic violence, epilepsy, drug abuse, AIDS, organ transplants, asthma and sexual harassment.

“We’ve never made people laugh; we’re about informing and entertaining,” he likes to say, and, in fact, medical professionals and support groups have included some of his strips in their educational packages.

But in recent months Mr. Wilson has pulled his rock-jawed hero firmly into the far more dicey arena of health policy, even sending him to Washington, D.C., to testify before legislators.

The strip’s current storyline is dealing with the fallout from the death of Rex Morgan’s friend, Dick Coleman, who lost his job after being diagnosed with colon cancer. Losing the job resulted in the loss of his family’s health coverage and the threatened foreclosure on the mortgage on the Colemans’ home.

In the wake of Dick’s death — “the very week [in June this year] that Dubya got his colonoscopy,” Mr. Wilson noted — his wife Marsha became borderline suicidal and his daughter Dana started to use drugs and get involved with criminal elements.

“All because they couldn’t afford health insurance,” a sombre Rex Morgan mused in one recent strip.

It’s estimated that nearly 40 million Americans share the plight of Dick Coleman. Meanwhile, “We’re adding a million or more people to the rolls of the uninsured each year,” Mr. Wilson said.

Mr. Wilson likes to call himself “just a comic-strip guy,” but he’s a guy whose wife happens to have a PhD in health-care policy from Massachusett’s Brandeis University and who “sits and talks with me about my stories.”

Moreover, it’s a measure of Mr. Wilson’s perceived clout that he has been invited to speak in November at the annual convention of the 9,000-member U.S. Physicians for a National Health Program.

Despite the flak Mr. Wilson has received from some readers, no newspaper has pulled Rex Morgan M.D. from its comics section.

“Our problem goes to something else,” Mr. Wilson said.

“Strips like ours — they’re called continuity strips — are perceived to be old-fashioned these days. So we have to work harder to keep them fresh.”

Rex Morgan, he added,”will always have to be about hot issues, will always have to try to be a bit ahead of the curve, if only because we’re syndicated in so many countries.”

Mr. Wilson said Rex’s campaign for a national, state-financed health-care regime “is going to be a recurring theme for years to come.”

Right now the fight for a comprehensive medical program “isn’t a national priority,” he acknowledged, “nor is there the political will for it.”

But this could change in two or three years, if the ranks of the uninsured swell to, say, 50 million.

“That’s a political party, in effect, right there,” he said. “If someone can mobilize those people . . . that’s a major force.”

Unsurprisingly, those Americans critical of Mr. Wilson’s position like to ask him, “Do we want to have a Canadian health-care system? Do we want rationing? Do we want to wait in line for hip-replacement surgery?”

Mr. Wilson chuckled. “My wife and I were talking about this and she said, ‘Well, in Canada, [health care] is about waiting; in America, it’s about money.’ I want the waiting.”

Rex Morgan’s prescription: socialized medicine in U.S.

JAMES ADAMS
NATIONAL ARTS CORRESPONDENT

Supporters of socialized health care in Canada and the United States have a seemingly unlikely friend in Rex Morgan M.D., the handsome, deeply decent physician who has been a staple of newspaper comics since 1948.

So far there’s no record of the Romanow health care commission or the U.S. Secretary of Health having consulted the fictional doctor.

However, as any of the 30 million readers of the syndicated strip carried by 300 newspapers in 15 countries can tell you, Rex has come out foursquare in favour of what his creator calls “a single-payer, state-supported health care system.”

Interestingly, the man behind Rex Morgan’s position isn’t some “communist or liberal socialist” — although he has received plenty of mail calling him that, and worse. He’s Woody Wilson, a 55-year-old registered Republican from Tempe, Ariz., who voted for George W. Bush in the 2000 elections.

“I believe the country that is supposedly the richest and most powerful in the world shouldn’t be forcing its citizens to choose between paying their mortgage or saving their lives. Yet that is what is happening with millions of Americans right now,” Mr. Wilson said in an interview this week.

“What’s needed is health care for everyone instead of dividends for stockholders in pharmaceutical companies.”

Mr. Wilson has been writing Rex Morgan M.D., a sort of soap opera in comic form, since 1991, having worked as an apprentice under its originator, psychiatrist Nicholas Dallis (now deceased), since 1982.

Under Mr. Wilson, Rex Morgan hasn’t hesitated to tackle domestic violence, epilepsy, drug abuse, AIDS, organ transplants, asthma and sexual harassment.

“We’ve never made people laugh; we’re about informing and entertaining,” he likes to say, and, in fact, medical professionals and support groups have included some of his strips in their educational packages.

But in recent months Mr. Wilson has pulled his rock-jawed hero firmly into the far more dicey arena of health policy, even sending him to Washington, D.C., to testify before legislators.

The strip’s current storyline is dealing with the fallout from the death of Rex Morgan’s friend, Dick Coleman, who lost his job after being diagnosed with colon cancer. Losing the job resulted in the loss of his family’s health coverage and the threatened foreclosure on the mortgage on the Colemans’ home.

In the wake of Dick’s death — “the very week [in June this year] that Dubya got his colonoscopy,” Mr. Wilson noted — his wife Marsha became borderline suicidal and his daughter Dana started to use drugs and get involved with criminal elements.

“All because they couldn’t afford health insurance,” a sombre Rex Morgan mused in one recent strip.

It’s estimated that nearly 40 million Americans share the plight of Dick Coleman. Meanwhile, “We’re adding a million or more people to the rolls of the uninsured each year,” Mr. Wilson said.

Mr. Wilson likes to call himself “just a comic-strip guy,” but he’s a guy whose wife happens to have a PhD in health-care policy from Massachusett’s Brandeis University and who “sits and talks with me about my stories.”

Moreover, it’s a measure of Mr. Wilson’s perceived clout that he has been invited to speak in November at the annual convention of the 9,000-member U.S. Physicians for a National Health Program.

Despite the flak Mr. Wilson has received from some readers, no newspaper has pulled Rex Morgan M.D. from its comics section.

“Our problem goes to something else,” Mr. Wilson said.

“Strips like ours — they’re called continuity strips — are perceived to be old-fashioned these days. So we have to work harder to keep them fresh.”

Rex Morgan, he added,”will always have to be about hot issues, will always have to try to be a bit ahead of the curve, if only because we’re syndicated in so many countries.”

Mr. Wilson said Rex’s campaign for a national, state-financed health-care regime “is going to be a recurring theme for years to come.”

Right now the fight for a comprehensive medical program “isn’t a national priority,” he acknowledged, “nor is there the political will for it.”

But this could change in two or three years, if the ranks of the uninsured swell to, say, 50 million.

“That’s a political party, in effect, right there,” he said. “If someone can mobilize those people . . . that’s a major force.”

Unsurprisingly, those Americans critical of Mr. Wilson’s position like to ask him, “Do we want to have a Canadian health-care system? Do we want rationing? Do we want to wait in line for hip-replacement surgery?”

Mr. Wilson chuckled. “My wife and I were talking about this and she said, ‘Well, in Canada, [health care] is about waiting; in America, it’s about money.’ I want the waiting.”

Attitudes toward the United States' Health Care System

Friends of PNHP:  Please don’t miss the special message at the end of
today’s quote.

Harris Interactive
Volume 2, Issue 17
August 21, 2002
Attitudes toward the United States’ Health Care System: Long-Term Trends
Views of the public, employers, physicians, health plan managers are closer
now than at any time in the past

In the more than twenty years since Harris Interactive (or Louis Harris &
Associates, as it was then) first asked the American people what they
thought of the nation’s health care system, there have been many changes,
both up and down. And when we have asked the same questions of other groups
(physicians, employers, hospital managers and health plan managers), we have
usually found quite big differences among the views of those different
groups. This year these differences have narrowed; the level of support for
radical change is somewhat similar in all these groups.

The Big Picture

While legislators in Washington are still deeply scarred by the 1994 debate
and the defeat of the Clinton health care reform proposal, it is clear that
only very small minorities of any of the five groups’ surveyed hold a good
opinion of the health care system as it is now. Those who believe that “on
the whole the health care system works pretty well and only minor changes
are necessary” include only 19% of physicians and smaller percentages of all
other groups surveyed.

If our survey data were to serve as our only guide, there are several other
reasons why one might expect a big push for health care reform. Employers
are more hostile toward the system now than they were in any of our previous
surveys. So are health plan managers. While physicians’ attitudes are a
little bit less negative than they were two years ago, they are more
negative than they were at any time between 1984 and 1997.

The public also has a considerable appetite for health care reform, even if
the radical change score is lower than it was in some previous years,
particularly in the early 1990s. But only 17% of the public thinks that “the
system works pretty well and only minor changes are necessary.” Almost twice
as many (31%) think that “we need to completely rebuild the system,” with
almost everyone else (49%) thinking that “fundamental changes are needed.”

Overall, therefore, a stronger consensus for radical reform is building.

http://www.harrisinteractive.com/news/newsletters/healthnews/HI_HealthCareNe
ws2002Vol2_Iss17.pdf

Comment:  Over four-fifths of physicians, employers, hospital managers,
health plan managers, and the public now all agree that either “fundamental
changes are needed” in our health care system or “that we need to completely
rebuild it.” Less than one-fifth believe that “only minor changes are
necessary.” The most dramatic change is that “doctors became much more
negative in 1999 and have remained more negative ever since.”

Physicians can now do something about it. We have launched a campaign to
invite every physician and medical student in the United States to endorse a
proposal for national health insurance, a proposal that would eliminate
wasteful administrative excesses and assure that health care dollars are
directed more equitably to the health care delivery system. The proposal and
the endorsement form can be accessed at:
http://www.physiciansproposal.org/

The form also provides the option of joining Physicians for a National
Health Program and becoming an active part of the growing physician movement
demanding that we change our policies and priorities from those that are
directed to creating a friendly and profitable environment for health plans
to those that channel our health care resources directly to patient care…
all patients.

A printer friendly version of the full proposal is available at:
https://pnhp.org/pproposal.doc

Again, for the endorsement form:
http://www.physiciansproposal.org/

Special message to our friends who share our vision:

Please distribute this message to any physician or medical student whom you
believe is ready to take action to reform the flawed system of funding
health care in the United States. Refer them to these websites, or print out
the proposal and endorsement form and distribute copies, as appropriate. The
crescendo of the physicians’ voices must be heard.

Attitudes toward the United States’ Health Care System

Friends of PNHP:  Please don’t miss the special message at the end of
today’s quote.

Harris Interactive
Volume 2, Issue 17
August 21, 2002
Attitudes toward the United States’ Health Care System: Long-Term Trends
Views of the public, employers, physicians, health plan managers are closer
now than at any time in the past

In the more than twenty years since Harris Interactive (or Louis Harris &
Associates, as it was then) first asked the American people what they
thought of the nation’s health care system, there have been many changes,
both up and down. And when we have asked the same questions of other groups
(physicians, employers, hospital managers and health plan managers), we have
usually found quite big differences among the views of those different
groups. This year these differences have narrowed; the level of support for
radical change is somewhat similar in all these groups.

The Big Picture

While legislators in Washington are still deeply scarred by the 1994 debate
and the defeat of the Clinton health care reform proposal, it is clear that
only very small minorities of any of the five groups’ surveyed hold a good
opinion of the health care system as it is now. Those who believe that “on
the whole the health care system works pretty well and only minor changes
are necessary” include only 19% of physicians and smaller percentages of all
other groups surveyed.

If our survey data were to serve as our only guide, there are several other
reasons why one might expect a big push for health care reform. Employers
are more hostile toward the system now than they were in any of our previous
surveys. So are health plan managers. While physicians’ attitudes are a
little bit less negative than they were two years ago, they are more
negative than they were at any time between 1984 and 1997.

The public also has a considerable appetite for health care reform, even if
the radical change score is lower than it was in some previous years,
particularly in the early 1990s. But only 17% of the public thinks that “the
system works pretty well and only minor changes are necessary.” Almost twice
as many (31%) think that “we need to completely rebuild the system,” with
almost everyone else (49%) thinking that “fundamental changes are needed.”

Overall, therefore, a stronger consensus for radical reform is building.

http://www.harrisinteractive.com/news/newsletters/healthnews/HI_HealthCareNe
ws2002Vol2_Iss17.pdf

Comment:  Over four-fifths of physicians, employers, hospital managers,
health plan managers, and the public now all agree that either “fundamental
changes are needed” in our health care system or “that we need to completely
rebuild it.” Less than one-fifth believe that “only minor changes are
necessary.” The most dramatic change is that “doctors became much more
negative in 1999 and have remained more negative ever since.”

Physicians can now do something about it. We have launched a campaign to
invite every physician and medical student in the United States to endorse a
proposal for national health insurance, a proposal that would eliminate
wasteful administrative excesses and assure that health care dollars are
directed more equitably to the health care delivery system. The proposal and
the endorsement form can be accessed at:
http://www.physiciansproposal.org/

The form also provides the option of joining Physicians for a National
Health Program and becoming an active part of the growing physician movement
demanding that we change our policies and priorities from those that are
directed to creating a friendly and profitable environment for health plans
to those that channel our health care resources directly to patient care…
all patients.

A printer friendly version of the full proposal is available at:
https://www.pnhp.org/pproposal.doc

Again, for the endorsement form:
http://www.physiciansproposal.org/

Special message to our friends who share our vision:

Please distribute this message to any physician or medical student whom you
believe is ready to take action to reform the flawed system of funding
health care in the United States. Refer them to these websites, or print out
the proposal and endorsement form and distribute copies, as appropriate. The
crescendo of the physicians’ voices must be heard.

Dividing up health care by income class

By Uwe E. Reinhardt

FEDERAL BUDGETS can be viewed as memorand ums in which the president and the majority of the Congress tell God about the moral tradeoffs they have made on behalf of the nation. From that perspective, last year’s memo was illuminating for health policy.

When President Bush and the new Congress began their terms in January 2001, they faced a projected 10-year federal surplus of $3.1 trillion (excluding a projected Social Security surplus of $2.5 trillion). Even before Sept. 11, by August 2001, that surplus had melted to merely $847 billion, primarily as a result of the huge tax cut enacted in the preceding months. By January 2002, the budget had deteriorated further to a projected 10-year deficit of $742 billion.

Evidently, then, last year’s memo to God read in part: ”Thank you, Lord, for gracing us with a 10-year projected surplus of $3.1 trillion. If it’s a choice of spending that surplus on (A) providing health insurance to the 40 million or so hard-working Americans now without it or (B) providing tax relief to the nation’s overtaxed well-to-do, we’ll take the tax cut. Respectfully yours, George W. Bush and the majority of the US Congress.”

As an ex-Christian with only a vague memory of the New Testament, I have no idea how well that memo may sit with the good Lord. As an economist trained in the Theory of Revealed Preference, however, I can infer clearly the preferences of the nation’s politically dominant elite. If that elite could not find it in its heart and mind to extend health insurance to uninsured Americans when the nation was awash in budget surpluses, it is unlikely to do so as the government once again faces red ink as far as the eye can see.

After chatting about the problem but leaving it unresolved for more than half a century, the political elite last year gave the clearest signal yet that upwards from 30 million to 40 million uninsured will remain a permanent feature of our health system, deep into the current century.

As in the past, the uninsured will continue to forgo the timely, early medical interventions that well-insured Americans take for granted. In case of serious illness, however, most of them probably will be able to scrounge up critical needed care from kindly doctors and hospitals, albeit in the undignified posture of health-care beggars. In the process, they will severely stress the finances and the morale of these kindly providers of care.

Many other uninsured will be hounded by medical bills and slide into personal bankruptcy. In research by Harvard law professor Elizabeth Warren, medical bills were found to be the second most frequently cited reason for family bankruptcy in the United States, behind loss of employment.

The next tier up in our health system will be HMOs catering to Medicaid beneficiaries. In principle, they should be able to offer patients better coordinated care than the traditional Medicaid program could, but only as long as the federal and state governments pay premiums high enough to cover the cost of well-managed modern health care. It remains to be seen how well the legislators will own up to that contract in the tight budgetary climate ahead.

For Americans receiving insurance as part of the labor contract there will be a wide array of private insurance products, ranging all the way from tightly managed HMOs for low-wage workers to more open-ended Preferred Provider arrangements for middle-income families to the completely open-ended, no-holds-barred health care that moneyed elite has always taken for granted.

Many of the private insurance products, however, are currently being changed to shift larger fractions of health care costs into the patients’ own budgets, providing quite explicitly for rationing health care by price and ability to pay.

Sitting on the sideline will be the Medicare program for the elderly, whose spotty benefit package always has explicitly called for the rationing of important components of health care (e.g., prescription drugs) by price and ability to pay. The program may be absorbed one day into the income-tiered private health insurance products, although that prospect remains uncertain.

This income-tiered health system will remain an inexhaustible source of confusion and rancor, primarily as a result of a built in dissonance over the distributive ethic for health care. The American public still expects physicians and hospitals to deliver health care on a strictly egalitarian basis. Woe to the physicians or hospitals thought to dabble in boutique medicine for the well-to-do or to deny the uninsured health care.

On the other hand, the nation’s policy-making elite clearly signals through the payment system it put in place that the health-care experience of Americans can be let to vary by income class. For example, when federal and state legislators are willing to offer pediatricians, say, $75 per visit with their own children, but pay pediatricians seeing children of poor inner-city family fees that may not even cover practice costs – or simply leave such children uninsured – do they sincerely expect the delivery of health care to all Americans on an egalitarian basis?

One sympathizes with health professionals who must practice within this sea of dissonance. It makes ours the messiest and, in some ways, the most dishonest health system anywhere in the world.

As last year’s federal budget memo to the good Lord makes clear, however, the providers of health care must learn to live with this dissonance as one more chronic condition they confront. It is as good as it will get in our latitudes.

Uwe E. Reinhardt is the James Madison professor of political economy at Princeton University.

(c) 2002 Boston Globe

Texas Public Policy Survey Statewide Survey on Health Care Survey

University of Houston
Center for Public Policy
conducted June 20-29, 2002

Q8. I’m going to read you some different ways to guarantee health care for more Americans and Texans. As I read each one, please tell me whether you would favor or oppose it.

52% favor – A national health plan, financed by taxpayers, in which all Americans would get their insurance from a single government plan.

72% favor – Requiring businesses to offer private health insurance for their employees.

69% favor – Offering uninsured Americans income tax deductions, tax credits, or other financial assistance to help them purchase private health insurance on their own.

72% favor – Expanding state government programs for low-income people, such as the Medicaid and the Children’s Health Insurance Program, to provide coverage for people without health insurance.

75% favor – Expanding the neighborhood health clinics.

http://www.uh.edu/cpp/healthcare.pdf

Comment: The University of Houston poll used precisely the same phrasing for a national health plan as does Professor Robert Blendon of Harvard in his polls. Including the terms “financed by taxpayers” and “a single government plan” invariably results in a low percentage of positive responses. The 52% favorable response in this poll is especially remarkable in that Texas is not exactly noted for its liberal-progressive activism.

Texans apparently really do want to see that everyone is guaranteed access to health care. There is even stronger support for various “incremental” proposals, as the numbers above indicate. All of them involve some form of tax subsidy (including the regressive taxation of the employer mandate). It is most likely that there is some degree of awareness that these proposals represent egalitarian ideals made possible by public funding (although maybe not expressed in these terms).

It would be interesting to see the response if the public understood more of the policy behind the proposals. They are willing to support these tax funded expansions, but they are probably not aware that the increased costs are greater than would be the costs of a national health insurance program. Also, they are probably not aware that they could have more health care benefits with fewer out-of-pocket expenses with national health insurance.

Do you suppose that there might be a different response to the national health insurance option if the respondents were asked if they supported a program that increased their benefits, gave them free choice of providers, provided coverage for everyone, and controlled our health care costs? Naw… they don’t want the government involved. After all, what’s really important here?

Underinsured in America: Is Health Coverage Adequate?

Kaiser Commission on Medicaid and the Uninsured
July 2002

Though health insurance is one of the most important factors in assuring access to health care, gaps in coverage can create access problems even among the insured. Thirty-eight percent of insured individuals report that they or their families experienced at least one problem accessing medical services in the past year. Nearly one-fifth (18%) report that they postponed seeking medical care, 15% had a problem paying medical bills, 10% did not get a prescription drug they felt they needed, 8% were contacted by a collection agency about a medical bill, and 6% didn’t get care they felt they needed.

Many of these problems arise because some individuals’ health plans do not cover all the services they need. In other cases, individuals cannot afford the cost sharing associated with covered benefits.

While the uninsured are most at risk, researchers estimate that about a fifth of insured individuals are underinsured and face limits on coverage or substantial financial costs if faced with an illness. Given the recent increase in health care costs, it is likely that this problem will escalate in coming years.

http://www.kaisernetwork.org/health_cast/uploaded_files/4060.pdf

Comment: Current trends in health insurance include defined contributions, greater price sensitivity through cost sharing, splitting risk pools into individual accounts, introduction of Spartan “basic” benefit plans, greater tiering of insurance options, and other measures that are moving away from the traditional role of assuring financial security through risk pooling.

Why this shift? These policies are designed to protect employers against increased costs. Yet employers pay only about 19% of the nation’s health care bill. These policies are designed to reduce risk for the insurance companies, assuring the financial security of this industry, at the cost of the financial security of patients. They are designed to support the views of those that are ideologically opposed to a government role in issues of social justice.

Do we really want to expand policies that protect an insurance industry noted for egregiously wasting our health care resources? Do we really want to continue to rely on employer “good will” to struggle to provide 19% of the funding of our health care system, when we have the capability of relieving them of this burden? Do we really want to cater to ideological elements that believe that funding through a tax system is more evil than funding through the private sector, even when it has been demonstrated that public funding provides greater value for health care dollars?

We already have more than enough resources to provide comprehensive health care benefits for everyone. Isn’t it time to establish policies that would enable us to utilize our resources much more effectively? We can continue with our existing private and public health care delivery system, but we desperately need a single risk pool that is publicly funded and publicly administered.

HHS Report Shows More American Children with Health Coverage

HHS News U.S Department of Health and Human Services
July 15, 2002

HHS Secretary Tommy G. Thompson today released an HHS report that shows American children are significantly more likely to have health insurance today than in 1997, when the bi-partisan State Children’s Health Insurance Program (SCHIP) was enacted into law.

The CDC report also found that overall health insurance coverage has improved. The percentage of Americans without health insurance fell to 14.1 percent in 2001 from 15.4 percent in 1997.

http://www.cdc.gov/nchs/releases/02news/release200207.htm

Table on the number and percent without health insurance: http://www.cdc.gov/nchs/about/major/nhis/released200207/table01_1.htm

Comment: The success of the SCHIP program in expanding health insurance coverage for children is gratifying. But what did not appear in the news release, but only in the table accessible through a link, is the fact that for ages 18-64 years, 30.8 million were uninsured in 1997, and 30.9 million were uninsured in 2001. Most experts agree that this number has become even larger since the onset of the recession.

More disconcerting news is that the recession has negatively impacted the funding of Medicaid and SCHIP, since most states must produce a balanced budget. That means program cuts since politicians are refusing to increase taxes. On July 15, CMS administrator Tom Scully told the National Governors Association, “We can’t always give you more money. But we are trying to help you… make the money you have go as far as you can.”

We have enough funds in health care to provide comprehensive services for everyone. Isn’t it time for a policy change?

(Scully quote: Arrillaga, Associated Press, July 15)

The Changing Political and Economic Environment of Health Care in Canada

Commission on the Future of Health Care in Canada
Discussion Paper No. 1 July 2002
By Gerard W. Boychuck, University of Waterloo

Executive Summary

In the post-deficit political context, the political sustainability of public health care seems precarious. While the tension between health care as a large public expenditure program and a broader political context oriented towards balanced budgets, debt retirement and tax reduction seems relatively obvious, the political fragility of public health care in Canada is neither the automatic nor necessary result of this broader context. Rather, the linkage between health care and fiscal issues has been politically and institutionally constructed. As a result, the sustainability of public health care in Canada at the current time is, fundamentally, a political – rather than simply a fiscal – issue. The existence of a fiscal crisis of health care in Canada is not evident in current expenditure patterns; however, public beliefs that there is a funding crisis in health care are, nonetheless, real. The crucial question is how and why this linkage between health care spending and fiscal issues such as deficits, debt and taxes, so clearly captured in current understandings of sustainability, has become so firmly embedded in Canadian policy debates over the past half decade. While the contemporary political orientation towards balanced budgets, deficit/debt reduction and lower taxes does not necessarily undermine the sustainability of the current health care system, more robust political support is required to sustain the current system of public health care in this context and the potential for current institutional arrangements to undermine support of the health care system is magnified.

The fiscal crisis of health care is not merely an ideological construct; rather, it has firm and enduring institutional underpinnings. It is rooted in the paradoxical situation by which the public health care system’s institutional framework – especially the nature and dynamics of federal-provincial fiscal relations – are structured such that they fundamentally undermine rather than bolster public support for the system. The current political fragility of the system is the result of political dynamics generated out of nearly a decade of federal-provincial wrangling over funding in a context of fiscal restraint. The incentives created by federal-provincial fiscal arrangements and the resulting patterns of interaction have led to widespread perceptions both among the elite and the broader Canadian public that the public health care system in Canada is of rapidly declining quality, is wracked by a funding crisis, is unable to control costs, and is, ultimately, fiscally unsustainable.

Current expenditure patterns provide slim grounds for arguments that the system is fiscally unsustainable. Provincial health expenditures relative to GDP are the same now as they were a decade ago and recent patterns of expenditure increases are, in part, a response to pent-up demand created by expenditure restraint in the mid-1990s. Arguments that the system is fiscally unsustainable are only plausible if based on assumptions of cost acceleration above and beyond cost increases driven by aging, population growth and moderate cost increases in services now offered or, alternatively, on the claim that current levels of tax effort are unsustainable. The former issue can be plausibly debated; however, arguing that the potential for future cost increases poses a threat to sustainability is fundamentally different than arguing that existing expenditure patterns demonstrate that the current system is unsustainable. The sustainability of current provincial tax efforts in the face of increasing global and continental economic integration is also an open question in the longer term; however, to this point, there is no evidence of downward harmonization in provincial fiscal efforts.

Despite this, there is now a widespread perception of an existing fiscal crisis in public health care. The roots of this perception lie, to some significant degree, in the institutional underpinnings of health care -especially federal-provincial fiscal arrangements. In the context of more generalized restraint, these arrangements began to generate dynamics with serious potential to undermine public support for the system of public health care. First, the illusion of the rapid growth in the overall fiscal burden of health expenditures (relative to the economy) is primarily an artifact of federal-provincial financing arrangements. Secondly, the manipulation of the fiscal system so that the burden of government debts and deficits is borne primarily at the provincial level, whose primary program responsibility is health care, has strongly reinforced the linkage in public debates between health care spending and the issue of debt and deficits. Finally, current fiscal arrangements provide provinces with strong incentives to emphasize the failings of their own health care systems and the broader fiscal unsustainability of public health care in an attempt to maximize leverage for their demands on the federal government to enrich transfers.

These dynamics have had important impacts on public perceptions of health care including the striking decline in public perceptions of the quality of health care that exists despite the prevalence of positive personal health care experiences. In addition, there also are widespread public perceptions that the public health system is experiencing a major funding crisis (despite the fact that the fiscal burden of public health care relative to the economy is no heavier than at the outset of the 1990s) and that increased funding must be a central component of improving the health care system. Finally, public confidence in the handling of health care issues by both levels of government is decreasing and the belief that governments are falling further and further behind in terms of addressing the problems facing health care is becoming more prevalent.

Current expenditure patterns do not suggest that the fiscal sustainability of the public health care system in Canada is in jeopardy in the immediate term. This does not mean that future cost acceleration poses no threat to the sustainability of health care or that there is no need for a concern with fiscal restraint in health management. Nor does it mean that the issue of sustainability should be dismissed as a transitory phenomenon that will fade as the politics of fiscal restraint ease. The conditions resulting in broad perceptions of an existing fiscal crisis of health care have very real and enduring institutional underpinnings that can be expected to continue into the foreseeable future regardless of whether there are objective grounds for it, and regardless of whether solutions to containing future cost pressures are implemented. Under current arrangements, a continuing and not easily reversible decline in public perceptions both of the quality and sustainabilility of the existing system public health care in Canada seems likely. It is here that the real potential for crisis lies.

http://www.healthcarecommission.ca/Suite247/Common/GetMedia_WO.asp?MediaID=890&Filename=Boychuk_E.pdf

Kip Sullivan clarifies the message on his response to the Miller-Luft HMO Plan Performance Update:

“Implicitly, HMO quality is as good as it appears only because HMOs use more resources than FFS plans use.”

This statement appears in the excerpt from the literature review by Miller and Luft in the latest Health Affairs that Don sent out last week. Miller and Luft name no author, and cite no paper, but given the context, it appears to be directed at me. For the record, I have never made such a statement. Anyone familiar with the literature would not make the blanket statement that “HMOs use more resources than FFS plans.”

Kip Sullivan