PNHP

The Florida AFL-CIO unanimously approved a resolution supporting a statewide initiative in support of a single-payer health care system

The Florida AFL-CIO unanimously approved a resolution supporting a statewide initiative in support of a single-payer health care system

portsideMod
October 8, 2001

A copy of the resolution is available at: http://groups.yahoo.com/group/portside/message/1481
Comment: It has often been said that unions oppose single payer reform because they would lose a bargaining chip that might otherwise be used to promote union membership. Apparently the Florida AFL-CIO believes that the health of all residents of the state is more important.

Mark Hannay, Director, Metro New York Health Care for All Campaign:

Don’s suggestion of moving right to the negotiating table is a fine idea, except that it presumes that we are being invited, that there’s a chair for us there, and that the convenors of the table care about and want to hear what we have to say re: health care. Unfortunately, at the current point in time the political reality is that none of the above is true. We are going to have to force ourselves to the table, and the only way to force them to extend an invitation to us is if we create enough political noise and clout that they cannot afford to ignore us. What this means is that one of our very first steps MUST be to *build a broad movement*, centered around the demand for action in this area, centered around a set of principles which embodies but does not lay out a specific policy formulation on which many heretofore disparate forces can agree. I invite all to the UHCAN conference next month in Baltimore to join us in that renewing that objective. Full info at: http://www.uhcan.org

Mark Hannay

Deficit's Real Cause: Letter to the Editor

The New York Times
October 7, 2001
Letters

To the Editor:

While some of the disappearance of the federal surplus (front page, Oct. 1) may be attributable to slowing economic growth and the unaccountable amounts of money Congress is unquestioningly throwing at the military and intelligence complex, surely the largest factor is the huge, irresponsible Bush tax cut largely benefiting the rich that Congress passed earlier this year.

If those of us down in the valley are expected to make sacrifices for our new war on terrorism in the form of increased everyday inconveniences, more fragile civil liberties, a slowing economy and increased federal expenditures that will come out of our future Social Security and Medicare benefits, surely we can ask those living in the houses on the hill to sacrifice their newly acquired tax relief, which they didn’t need anyway.

Mark Hannay New York

Comment: Why is a letter on distributive tax policy being circulated as a quote of the day for health care reform? Mark Hannay is the Director of Metro New York Health Care for All Campaign, and an ardent supporter of health care equity. Issues of distributive tax policy are fundamental to the societal values that we must be supporting if we ever hope to inject equity into our health care system.

Prof. Donald Light responds to Gordon, Caplan, Griss and Oberlander:

Jeoffry Gordon and Art Caplan have, with somewhat different agendas, articulated well the special opportunity and need to address the long-standing, inherent inadequacies in “our lousy health care system.” Bob Griss has added still more reasons why this effort would be timely. While I agree with Jon Oberlander about the obstacles, the way around them, I think, is to get major stakeholders to sign on to a basic principle, to “simply state that every American will have access to [needed health] care.” Art is right to keep it vague, and from my international experience, the mistake would be for us experts to figure out just how. The only way around the serious obstacles that Oberlander describes is to get this basic consensus and then ask, “OK, how would you like to do it?” Then, let the small employers, the large employers, the health insurance companies, the for-profit health plans and hospitals, the public hospitals and health centers and the non-profit ones start working on an answer.

It won’t be easy, and one needs a neutral, prominent strong convenor. Let Art Caplan and the Center for Bioethics be the convenor. Bring together a hand-picked group of leaders from across the industry and sectors, close the doors, and have a sustained meeting on how to do it. Of course, it will take several such 2 or 3-day meetings. And if a plan of consensus arises, there will be subsequent back-sliding and the need to shore it up while widening the circle.

A real danger is that one group of us experts or another will oppose anything they come up with. If they go for universalizing Medicare, our experts will tell them five reasons why they’re doing it the wrong way, while the powerful pro-market coalition will tell them government-run programs always fail. If they go for a Karen Davis mix (quite interesting), nearly every faction of experts will pick apart one part or another. Advocates of a national health care program (at least, as they envision Britain’s NHS) will oppose almost anything the major stakeholders come up with. Maybe this means that in the meantime, we should have a parallel meeting to see if experts and advocates for universal health care can agree on a plan!

Aside from this recommendation, the first thing that advocates for universal health care need to do is to persuade the small employers, that fierce lobbying group that did serious damage to the Clinton proposal. On one hand, they are hurting the most (or not participating), they feel they have the most to lose, and they are the source of most workers without the partial, flawed voluntary health insurance that other employers offer. On the other hand, you can’t win without understanding their issues, taking in their value and language,and responding effectively. If we can persuade them that universal health insurance is a good deal for them, the large employers will be no problem, and together they constitute the clientele of the insurance industry, their agents and the health benefits industry.

Below are a set of REFORM RULES I circulated about two years ago and they may be helpful in thinking about strategies:

REFORM RULES FOR UNIVERSAL HEALTH CARE ACCESS (or “What is likely to Pass?”)

1. No nation has attained universal health insurance that has not built on the existing health care institutions.

Overlay or Add-on or Reconfiguration

2. Short of revolution, no universal health reform has passed over the opposition of more than one major power block.

Which one will you take on? Which one “has to go”?

What plan will gain the support of the other major power blocks? (Think of the huge battle over a few “patients’ rights.”)

3. Successful coalitions are not usually “made” but rather assembled out of existing large organized parties and groups.

Deficit’s Real Cause: Letter to the Editor

The New York Times
October 7, 2001
Letters

To the Editor:

While some of the disappearance of the federal surplus (front page, Oct. 1) may be attributable to slowing economic growth and the unaccountable amounts of money Congress is unquestioningly throwing at the military and intelligence complex, surely the largest factor is the huge, irresponsible Bush tax cut largely benefiting the rich that Congress passed earlier this year.

If those of us down in the valley are expected to make sacrifices for our new war on terrorism in the form of increased everyday inconveniences, more fragile civil liberties, a slowing economy and increased federal expenditures that will come out of our future Social Security and Medicare benefits, surely we can ask those living in the houses on the hill to sacrifice their newly acquired tax relief, which they didn’t need anyway.

Mark Hannay New York

Comment: Why is a letter on distributive tax policy being circulated as a quote of the day for health care reform? Mark Hannay is the Director of Metro New York Health Care for All Campaign, and an ardent supporter of health care equity. Issues of distributive tax policy are fundamental to the societal values that we must be supporting if we ever hope to inject equity into our health care system.

Prof. Donald Light responds to Gordon, Caplan, Griss and Oberlander:

Jeoffry Gordon and Art Caplan have, with somewhat different agendas, articulated well the special opportunity and need to address the long-standing, inherent inadequacies in “our lousy health care system.” Bob Griss has added still more reasons why this effort would be timely. While I agree with Jon Oberlander about the obstacles, the way around them, I think, is to get major stakeholders to sign on to a basic principle, to “simply state that every American will have access to [needed health] care.” Art is right to keep it vague, and from my international experience, the mistake would be for us experts to figure out just how. The only way around the serious obstacles that Oberlander describes is to get this basic consensus and then ask, “OK, how would you like to do it?” Then, let the small employers, the large employers, the health insurance companies, the for-profit health plans and hospitals, the public hospitals and health centers and the non-profit ones start working on an answer.

It won’t be easy, and one needs a neutral, prominent strong convenor. Let Art Caplan and the Center for Bioethics be the convenor. Bring together a hand-picked group of leaders from across the industry and sectors, close the doors, and have a sustained meeting on how to do it. Of course, it will take several such 2 or 3-day meetings. And if a plan of consensus arises, there will be subsequent back-sliding and the need to shore it up while widening the circle.

A real danger is that one group of us experts or another will oppose anything they come up with. If they go for universalizing Medicare, our experts will tell them five reasons why they’re doing it the wrong way, while the powerful pro-market coalition will tell them government-run programs always fail. If they go for a Karen Davis mix (quite interesting), nearly every faction of experts will pick apart one part or another. Advocates of a national health care program (at least, as they envision Britain’s NHS) will oppose almost anything the major stakeholders come up with. Maybe this means that in the meantime, we should have a parallel meeting to see if experts and advocates for universal health care can agree on a plan!

Aside from this recommendation, the first thing that advocates for universal health care need to do is to persuade the small employers, that fierce lobbying group that did serious damage to the Clinton proposal. On one hand, they are hurting the most (or not participating), they feel they have the most to lose, and they are the source of most workers without the partial, flawed voluntary health insurance that other employers offer. On the other hand, you can’t win without understanding their issues, taking in their value and language,and responding effectively. If we can persuade them that universal health insurance is a good deal for them, the large employers will be no problem, and together they constitute the clientele of the insurance industry, their agents and the health benefits industry.

Below are a set of REFORM RULES I circulated about two years ago and they may be helpful in thinking about strategies:

REFORM RULES FOR UNIVERSAL HEALTH CARE ACCESS (or “What is likely to Pass?”)

1. No nation has attained universal health insurance that has not built on the existing health care institutions.

Overlay or Add-on or Reconfiguration

2. Short of revolution, no universal health reform has passed over the opposition of more than one major power block.

Which one will you take on? Which one “has to go”?

What plan will gain the support of the other major power blocks? (Think of the huge battle over a few “patients’ rights.”)

3. Successful coalitions are not usually “made” but rather assembled out of existing large organized parties and groups.

Terrorism Reveals Our Common Needs that Only Health Care Reform Can Fix

Bob Griss, Director of the Center on Disability and Health, Washington, DC, responds to Drs. Gordon, Marmor, Oberlander and Caplan:

The objective opportunity is there for the emergence of National Health Insurance as Dr.Gordon reveals, but it is not a sure thing as Professors Marmor and Oberlander remind us.

Clearly, private insurers would prefer that Congress rely on COBRA continuation policies and CHIP expansions instead of creating a right to health care for everyone. But COBRA continuation does not guarantee adequate coverage, nor does it provide the leverage for cost containment or an information system that facilitates quality assurance in our fragmented health care system.

Now is the time to publicize the advantages of National Health Insurance at the national and state levels to all of the interest groups while:

(1) Employers lay off many of their workers as the economic recession deepens, and shift their rising health insurance premiums to their remaining employees;

(2) States seek to cut benefits and increase cost-sharing in their Medicaid programs which CMS (formerly HCFA) has enabled them to do through the recently imposed HIFA waiver and the even more pernicious gutting of consumer protections in Medicaid managed care by gutting the regulations designed to safeguard the needs of the most vulnerable Medicaid recipients with disabilities; and

(3) Medicare leaves a growing number of seniors and persons with disabilities without outpatient prescription drug coverage as drug profits continue to soar driving up health care prices throughout our health care system while drug companies continue to use their lobbying power to oppose the cost containment mechanisms that Medicare uses for all other health care providers.

Bioethicist Art Caplan correctly understood that terrorism has obliterated the distinction between soldiers and civilians making it imperative that all residents have access to medically necessary health care.

Meanwhile, Representative Jan Schakowsky (D-IL) stands poised to introduce a legislative mechanism called “First Things First Act” that would roll back the tax cut for the wealthiest Americans until various social objectives are achieved to ensure the unity and productivity of our nation. Among her objectives are:

(1) Adequate responses to the needs created by the terrorist attack, including impacts on workers,

(2) Extended solvency of the Social Security and Medicare Trust Funds,

(3) Medicare prescription drug coverage,

(4) Federal funding of school modernization, and

(5) Affordable housing.

Instead of arguing whether a Republican-dominated White House and House of Representatives would ever enact a right to health care, the challenge to health care reformers is to publicize the advantages that National Health Insurance could offer to all stakeholders in society, and mobilize support from mainstream advocacy groups like AARP, labor unions, employers, religious groups, and health care providers to get behind a political strategy like “First Things First” that could pave the way for “National Health Insurance”.

Bob Griss, Director Center on Disability and Health Washington, DC Email Address: Bgrisscdh@aol.com

Editorial

Quote of the Day

October 5, 2001

The response to Jeoffry Gordon’s call for a shift in strategy can be summarized best by Arthur Caplan’s statement, “Fifty years of waiting for a national health system has left tens of millions with nothing… Let’s get the damn thing done already.”

As expected, the call for moving forward with reform brought many suggestions for the specifics of reform, and many criticisms of the various proposals currently being floated. There is no consensus on the models for reform, but there is universal agreement that we must accomplish reform now.

But the precise models are not the urgent issue. Dr. Caplan is absolutely right. The urgent issue is that we must go to the negotiating tables IMMEDIATELY. We need to lay down on the table the fundamental issues of health policy – coverage, equity, affordability, access, cost containment, adverse selection, portability, continuity, etc., etc. Then we can hash out the policy applications that will address these issues.

The fights in the past have been over the concerns of special interests, such as viability of the private health plans, greed and ego needs of physicians, egalitarian issues of equality versus equity, protection of consumer advocacy litigation income, etc, etc. But these are not extraneous issues that interfere with reform; these are very real issues that must be considered as well. A few examples.

We desperately need an integrated information technology system in health care. Integration would be most effectively achieved and enforced by a public entity, but the application would be more effective through contracted vendors – opening a great opportunity for the health plans to transform themselves into something useful for our health care system. They can be relieved of the burden of risk pooling, which they are attempting to abandon anyway.

If health care as a profession is to remain attractive to some of our more gifted individuals, we will need to compensate them adequately, and we can do this by establishing collective negotiating rights for providers. And restoring the traditional physician-patient relationship will meet the ego needs of physicians. This can be done by eliminating the micromanagement of the middleman money managers, and replacing them with quality improvement programs based on assessment of applications of evidence-based medicine.

Litigation reform is in order, but accountability must be assured by allowing access to appeals and to recourse. We can restore consumer rights to patients while reducing the waste inherent in our poorly targeted litigation system.

The liberal-progressive wing in the reform movement can continue to advocate for equity or fairness in our health care system, without misdirecting efforts to establish equality, which sometimes can be inequitable (a subject appropriate for another editorial).

All special interests have real concerns that must be addressed. Instead of attempting to achieve compromises that inevitably result in mediocrity, we should be looking for the strengths that the special interests bring, and weave them into our system, while rejecting the weaknesses that would compromise reform.

Let’s all move immediately to the negotiating tables. Let’s leave our junk policy science behind. Let’s put down on the table the real issues that need to be addressed with real policy science. Let’s bring ALL of the special interests to the table. Let’s begin with only one rule: Advocates of each position are mandated to keep foremost in mind at all times what is best for the American patient. If we create a model that is best for the patient, it will be the model that is best for any special interests that have a rightful place at the table. Those that don’t belong there will rapidly reveal themselves to the rest of us.

There is far more than enough genius amongst the recipients of this message to initiate this process. Who volunteers as the convener?

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A message from Jeoffry Gordon, MD, MPH, a San Diego member of Physicians for a National Health Program (PNHP) and California Physicians Alliance (CaPA):

Subject: Shift in strategy

Dear Friends:

It seems to me that our current world crisis has changed the political playing field and opened the probable opportunity for a swift move to a national health program. We ought to adjust our rhetoric, strategies, and thoughts accordingly.

(1) The terrorist attack has the unintended byproduct of curing the civil society malaise described by Robert Putnam in BOWLING ALONE (an outcome he predicted), and people are not just rallying around the flag, they are esteeming the government, depending on it for safety and solutions. This is a tectonic shift in attitudes.
(2) We are in a recession; businesses are going to be doing poorly and watching their pennies very closely.
(3) Health insurance companies are at a point in their business cycle where, after competitively driven price cuts and consolidation, they will be requiring repeated >10% price increases to maintain viability (Aetna or PacifiCare/Secure Horizons) or profitability.
(4) The health insurance premium costs are going to be very onerous to all businesses who will be passing on costs to employees or dropping benefits or health insurance altogether.
(5) As people are laid off (and have been in huge numbers in the service industries as a result of 9/11), the number of uninsured is going to explode and many of the newly uninsured are going to be middle class.

Thus the stage is set for an as yet publicly unanticipated crisis – the final breaking point – in the health care system in the USA. The federal government is going to have to step in (and can with the rationale of protecting the public welfare during wartime). The simplest solution and easiest to promote is to expand Medicare to everyone (and not to get into much of the details about how the providers organize themselves). This will have great public support from the newly uninsured and unemployed, and maybe even from the AMA, etc., as doctors and hospitals feel even more squeezed by falling income and will be eager for public subsidy for “a physician full employment program,” and by the states who will now be too poor to subsidize their own reformed health systems. As unlikely as it seems, the Republicans (like Bismarck and Lloyd George) are likely to be more successful at pulling off a national health program than the liberals and the Democrats as a way to help the business and corporate classes (except for the health insurance industry) save money (overhead costs) and as a way to reward, support and calm a worried and activated civil society.

PNHP can have a pivotal role in promoting these changes, especially if we anticipate the need, publicize it, and organize around it with a simple implementation strategy. What do you think?

Please circulate this message to whomever you think will be interested.

Jeoffry Gordon, MD, MPH
paradocs2@home.com

Comment: If you wish to respond, you may reply directly to Dr. Gordon at: paradocs2@home.com If you wish to have your comments considered for distribution to this list, send them to: mccanne1@home.com A couple of responses may be selected for distribution, although, strictly because of the volume, most will not be. If you respond, please indicate (1) if you do NOT want your comments shared (otherwise consent will be assumed), and (2) whether or not you wish to have your e-mail address included with your comments. Without explicit consent, your e-mail address will not be distributed.

You may also wish to contact the following:

Physicians for a National Health Program
Ida Hellander, MD, Executive Director
pnhp@aol.com

California Physicians Alliance
Carla Woodworth, Executive Director
capa@jps.net

Theodore R. Marmor, Ph.D., Professor of Public Policy and Management, Yale University School of Management, responds to Jeoffry Gordon, MD, MPH:

Gordon’s call for a shift in strategy of reformers seems to me eminently sensible. The landscape of American politics has certainly been altered and it is surely the case that the reliance on government has been newly noted and accepted. Furthermore, we are likely to have a crush on health coverage, though it is just as likely that the demand will be for extensions of COBRA as Medicare for all. Nonetheless, if ever there will be a dramatic shift in setting–short of depression and short of a l964 electoral avalanche–this is one of them. And advancing Medicare for all–absent endless details –is certainly more appealing post-9/11 than in August of 2001.

But there is also a need for attention to details–like how to price a premium for voluntary enrollment in Medicare. Does one advocate using the present Part B structure, mostly general revenues and a premium? Or, do we rely on Part A financing? If so, there will be a big shift to Part A from employer-based insurance. In short, the rhetorical opportunity is there, but the incremental steps remain complicated. Pay or Play in the l992 period was one answer.

I do not know how to answer the questions I posed, but I do think them worth posing even as I agree with Gordon about the significance of the change in context.

TRM

Theodore R. Marmor, Ph.D.
Professor of Public Policy & Management Professor of Political Science
Yale University School of Management
P. O. Box 208200, 135 Prospect Street
New Haven, CT 06520-8200

Arthur Caplan, Ph.D., director of the Center for Bioethics at the University of Pennsylvania, responds by referring to his opinion article on msnbc.com.

From the msnbc.com article:

“In the past, efforts to create a national health care plan have foundered when private interests have defeated the public good. Americans can no longer afford to put the public good behind private interest. No mother should be worrying about how to pay for her kids’ medical bills because her husband has been killed by terrorists. President Bush and Congress ought to announce a plan to mandate that every American will have access to high quality health care.”

The full article is available at:
http://www.msnbc.com/news/635352.asp?0si

Jonathan Oberlander, Ph.D., Assistant Professor of Social Medicine, University of North Carolina – Chapel Hill, responds:

Jeffrey Gordon’s suggestion that in the aftermath of September 11 there is a potential opportunity to pass a Medicare for All program seems quite improbable to me. It is far to early to judge the political implications of what happened as well as the military campaign ahead. I agree that with Dr. Gordon that the development of a communitarian national ethos is one possible outcome. But there is a long way from this to adoption of Medicare for All. The political reality after September 11 is still that you have a president opposed to universal health insurance, a Congress without much appetite for health reform, and most importantly a Republican party fervently opposed to Medicare as a model for public insurance. Moreover, with higher inflation rates, American businesses are less likely to pressure the GOP to pass national health insurance than they are to drop coverage. If momentum does develop to expand health coverage in response to economic woes, it is much more likely to come in the form of the already-on-the-table tax credits or extending CHIP, than Medicare for All or single payer. The most ambitious goal for reformers would be to expand the scope of these instruments; pushing for Medicare for All is simply not feasible for the moment.

Jon Oberlander
Assistant Professor of Social Medicine
University of North Carolina – Chapel Hill
oberland@med.unc.edu

Bioethicist Arthur Caplan, responding to a personal e-mail from Ida Hellander, M.D., Executive Director of PNHP, on single payer reform (prompted by today’s discussion):

“Single payer will not fly. Period. I favor it but it has no chance, none, nada, zero, with Bush in and the Republicans in Congress. It did not even fly with Clinton and an all-Dem Congress.
“The AMA position is as relevant as that of the Taliban on this issue. No one credits their views on this.
“My view is forget about doing best. It is time to do better. Let’s get something. Fifty years of waiting for a national health system has left tens of millions with nothing. Mandate coverage, let the private sector have its piece, and let’s get the damn thing done already.”

Martin Donohoe, MD, Senior Scholar, Center for Ethics in Health Care, Oregon Health and Science University, responds to Arthur Caplan’s comments on single payer:
Major social changes in the US have come about through radical changes, not piecemeal. Otherwise, in the US we would have outlawed slavery but only say for Africans from certain nations or only for first and second generation African-Americans; or we would have given women the vote, but only women making over a certain amount of money or those with a college education; or we would have outlawed child labor but only for kids working in the mines (granted I realize that child labor still exists in the US, particularly in agriculture). I say we need visionary policymakers and ethicists who will go for the whole enchilada – a single payer system, and that physicians and patients say, “For God’s sake, it is about time.”
Passionately,
Martin

Martin Donohoe, MD, FACP
Assistant Professor of Medicine and
Senior Scholar, Center for Ethics in Health Care
Oregon Health and Science University
General Internal Medicine (L-475)
3181 SW Sam Jackson Park Road
Portland, OR 97225

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Does Managed Care Need to Be Replaced?

University of California, Irvine
Graduate School of Management
Health Care Management Distinguished Speaker Program
October 2, 2001

Dr. Paul Ellwood, “The Father of HMOs”

The following comments are not absolutely verbatim quotes, but were reconstructed from notes taken by me during Dr. Ellwood’s presentation:

Dr. Ellwood stated that he has written off managed care companies. But he is ready to try refrom again. He believes that reforms will be far more complex, and that the task will be much more difficult.

He has developed a new acronym for his concepts of future reform, although he states that this is a work in progress.

His acronym: HEROIC, as follows:

H: Health system, with an emphasis on the health component rather than on financial incentives. We should consider that the new form be not-for-profit. (He mentioned that he is disgusted when a managed care executive goes to Wall Street and brags about raising premiums and reducing benefits.)

E: Evidence based medicine. Physicians must agree to follow principles of evidence based medicine. Consumers must agree that evidence based care is sufficient. As an example, they should not an MRI when evidence based medicine does not support its use.

R: Responsibility. Patents need to assume more responsibility for their own health and for the costs of health care. He did state that there is danger that the defined contribution will be too low.

O: Outcomes accountability. Outcomes accountability is absolutely necessary to assure high quality.

I: Information technology. Health care is lagging in information technology. Information technology is demanding, complex and costly. It interferes with “clinical productivity” (i.e., income generation). But information technology provides the glue that holds the health care system together.

C: Commitment. We will be able to identify individuals that will acquire specific disorders. A health care relationship will need to be sustained, with a lifetime tracking and alerting system.

He said that we can design a better health care system, but the problem is getting there. We do not want to put cost containment in front of the system that assures health. We must develop an American health system that hails who we are.

Comment: Listening to Dr. Ellwood, he was obviously very disappointed that the managed care revolution did not fulfill his dreams of quality, efficiency and integration, that would improve outcomes through evidence based health care. He is disappointed that his concepts were developed primarily into a business model rather than a health care model. He believes that we can go back and design a model that will incorporate his concepts, although the implementation will be difficult. It is interesting that in informal conversations after his presentation, a few individuals commented that he had implicitly (but not explicitly) endorsed single payer reform.

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Letting Empire Go For-Profit

The New York Times
October 1, 2001
Editorial

“Sound management led Empire (Blue Cross and Blue Shield) from near-insolvency to a strong balance sheet in the late 1990’s. Even now, Empire is managed much as a for-profit company would be. Yet lately it has struggled to compete with New York’s big for-profit insurers. Their market shares have increased almost every year, leaving Empire behind. A takeover by another not-for-profit might help, but only at the cost of hundreds, perhaps thousands of New York jobs, including those of Empire’s proven managers.”

“If Empire becomes a for-profit company and raises money by selling stock, it will keep its successful management team and gain the ability to grow by acquiring other insurers in nearby states. Expanding into other geographical areas would allow Empire to exploit economies of scale without threatening competition or taking on worse risks.”

“The sticking point on conversion is exactly what to do with the proceeds from Empire’s sales of stock. Part of the money will help Empire to cover claims, build new offices and grow. Because the company began as a state-subsidized insurer, it has also agreed to put a big chunk of the proceeds of its stock sales to charitable purposes.”

“If lawmakers in Albany cannot decide what Empire should do with the $1 billion, they could allow it to sell shares immediately and put the proceeds in escrow pending an agreement. But there is no reason to make Empire wait any longer.”
http://www.nytimes.com/2001/10/01/opinion/01MON3.html

Comment: Why is there a big push to convert Empire Blue Cross and Blue Shield from a not-for-profit to a for-profit entity? The oft stated reason is that it opens capital markets (selling shares of stock) which would provide funds to “make investments needed to compete with other insurers.” This would enable growth through the acquisition of other insurers in other markets. Then “economies of scale could be exploited.” This is the same reasoning that was given when Blue Cross of California converted into a for-profit insurer, WellPoint Health Networks. The California conversion is hailed as a great success, and it is from the shareholders perspective. But what has happened to patients in California?

It has been contended that the for-profit versus not-for-profit status has little meaning other than that the for-profit model is much more effective from a business perspective. But is that really the only difference? As a not-for-profit insurer, the mandated mission is to provide the best services possible for the beneficiary-patient. All resources are devoted to that. The for-profit model is absolutely mandated to enhance shareholder value. The mission under the for-profit corporate culture is to direct resources toward providing the greatest value for the shareholder. But wait. It is even more than this. The senior management and board of directors in a for-profit corporation are compensated handsomely for directing a successful business model. Usually not only are salaries much higher than in not-for-profit entities, but they are also given generous ownership positions through stock options. Now is the management team really interested in being sure that most revenues are distributed as medical benefits, or might they be tempted to increase the bottom line (higher beneficiary cost-sharing and fewer benefits) considering the great financial rewards that they would receive for doing so? It might be instructive to look at Leonard Schaeffer’s compensation before and after he converted Blue Cross of California to a for-profit; the numbers suggest that altruism was nowhere in sight, but that the motivating factor seems to have been pure, simple greed.

Since the tax payers have a vested interest through the years of favorable tax treatment as a not-for-profit, some funds raised by selling shares should be used for the public benefit. In California two foundations were established for that very reason. And some of those funds are being spent for the public good. But the Blue Cross-WellPoint board members remained very influential. Hundreds of millions of dollars are available for research on methods to improve health care delivery in California. But the funds have been directed to studies on how to “make managed care work” and other aspects of the “business” of health care, whereas proposals to study universal, publicly administered coverage have been rejected. Is it really in the interests of the citizens of California to limit studies to those that will enhance current business models (supplemented with public “welfare” programs)? Are the foundations primarily dedicated to benefiting health plans, or patients?

And what about the concept of selling stock for merger and acquisition activities? Is that necessarily a good thing? Blue Cross-WellPoint wasted a lot of funds in its failed attempt to acquire Aetna. It’s probably a blessing for Blue Cross-WellPoint that the attempt failed (as Aetna’s prior merger with US Healthcare proved to be disastrous) . But if it had been successful for shareholders, how could that benefit those insured by Blue Cross? M & A might offer some lucrative opportunities for shareholders, but it really isn’t the most important mechanism of enhancing shareholder value. The fundamental principle in business is still foremost to simply increase profits. Blue Cross-WellPoint has been a leader in demonstrating innovative methods of enhancing profits. Their primary thrust is to create innovative benefit packages (reduced benefits) and increased cost sharing (increased out-of-pocket expenses). In other words, they are abandoning the traditional insurance role of pooling risk as they are passing that risk on to the beneficiary-patients. To do otherwise would be to fail the obligation to the shareholders to maximize value. The for-profit model has been very beneficial for the shareholders that were brought into the picture by the conversion, but that success has been at the expense of the health plan beneficiaries.

Does New York really want to follow California’s lead? Maybe instead, New York should consider dumping all of the health plans, and adopt a universal, publicly administered program. Until that can be accomplished, New York should concentrate on making the existing system work better for patients rather than sacrificing health care for the benefit of new investors injected into the picture.

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Re "Aid for a Terrorized Economy"

The New York Times
October 1, 2001
Letters

To the Editor:

(editorial, Sept. 28):

An additional indirect but major economic effect of the Sept. 11 terrorist attacks may be in health care policy. The economic slowdown that had dramatically increased unemployment in August has been accelerated by the attack to the point of inducing a full-fledged recession.

Most Americans who have health insurance get it through their work. When the slowdown began, 43 million Americans had no health insurance.

As unemployment grows, the families of laid-off workers will add many more millions to the ranks of the uninsured. Perhaps when we get to 50 million or 60 million uninsured, it may at last be politically acceptable to discuss universal health insurance.
JAMES J. FLORIO
Metuchen, N.J.
The writer was governor of New Jersey, 1990-94.

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Re “Aid for a Terrorized Economy”

The New York Times
October 1, 2001
Letters

To the Editor:

(editorial, Sept. 28):

An additional indirect but major economic effect of the Sept. 11 terrorist attacks may be in health care policy. The economic slowdown that had dramatically increased unemployment in August has been accelerated by the attack to the point of inducing a full-fledged recession.

Most Americans who have health insurance get it through their work. When the slowdown began, 43 million Americans had no health insurance.

As unemployment grows, the families of laid-off workers will add many more millions to the ranks of the uninsured. Perhaps when we get to 50 million or 60 million uninsured, it may at last be politically acceptable to discuss universal health insurance.
JAMES J. FLORIO
Metuchen, N.J.
The writer was governor of New Jersey, 1990-94.

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Public Is Unyielding in War Against Terror

The Washington Post
September 29, 2001
“”by Dana Milbank and Richard Morin

“And, for the first time in three decades, a majority of Americans said they trust the federal government to do the right thing – a sharp but perhaps temporary reversal in the way citizens view their political institutions. Nearly two in three respondents said they trust the government in Washington to do the right thing either ‘just about always’ or ‘most of the time,’ the poll found. That is more than double the percentage who expressed such confidence in a Post-ABC News survey in April 2000, and more than three times the proportion who said they trusted the federal government at the low point in 1994.”

“Some see hope for a lasting change in public attitudes. ‘I think there is the potential that Sept. 11 will turn out to be a turning point for civic America,’ said Harvard political scientist Robert Putnam, whose book ‘Bowling Alone’ last year documented the decline in civic engagement and trust. ‘It’s a horrible tragedy, but there could be some good coming from it if it causes us to become . . . more aware of the obligations we have to other people and more open-minded about the role of government.'”

Robyn Webb, 26, a high school math teacher who lives in Mount Laurel, N.J.:

“I have a renewed respect for the federal government, absolutely. People see that the government is one of the only avenues we have to get some things done. It puts renewed hope about the government and their capabilities to do things.”

http://www.washingtonpost.com/wp-dyn/articles/A42864-2001Sep28.html

From the poll, conducted September 25-27:

16. How much of the time do you trust the government in Washington to do what is right? Would you say just about always, most of the time, or only some of the time?

13% – Just about always
51% – Most
35% – Only some
01% – None

http://www.washingtonpost.com/wp-srv/politics/polls/vault/stories/data092801.htm

Comment: The Washington Post has listed the responses over the years to this inquiry. The current responses supporting trust in the government are a very dramatic turnaround from prior polls. In fact, the last time that there was this level of support was 1966, the year Medicare was initiated. Although this poll was primarily directed toward our military response, the one medical question asked suggests that this trust may be very real. Three-fourths of respondents opposed postponing action on prescription drugs for seniors.

It may be that tragic, shocking events evoke introspection and values clarification. Clearly, we do understand again what really is important. We recognize our own personal needs as we recognize our needs as a community. We place values over substance. The lines separating the private element from government blur when we look at our values. We see a need not only for ourselves but for all of us to have adequate food, shelter, education, health care, and the enjoyment of our varied arts. At times like this we see that the private sector alone has not been able to assure that these fundamental needs will be there for all of us. Perhaps the government, our government, does have a role in assuring that the private sector ensures, not equality, but equity in meeting these needs. Equity is not a construct of the marketplace, but rather it is a construct of a society joining together as a government. In health care, the marketplace can excel at delivering health care, but the government is needed to inject equity. Universal health insurance is possible only with government action. Shouldn’t we take a serious look at that, when trust in our government is at a 35 year high?

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Number of Uninsured Drops for 2nd Year

The New York Times
September 28, 2001
by Robert Pear

Over all, the number of people without health insurance declined by 551,000, to 38.7 million last year, from 39.3 million in 1999, the bureau said. The proportion of people without coverage declined to 14 percent, from 14.3 percent.

The Census Bureau said it had made technical changes that tended to reduce the number of people listed as uninsured, so the figures for 1999 and 2000 are not directly comparable with those for earlier years. In conducting interviews, the bureau said, it now asks follow-up questions to help people recall whether they have insurance.

Several economists and health policy experts said the declines were unlikely to continue this year. Tens of thousands of people have been laid off, the economy has weakened, and the cost of health care and health insurance has shot up.

Kate Sullivan, director of health care policy at the United States Chamber of Commerce:

“We now have very different economic conditions. Employers are experiencing the highest premium increases in a decade. I expect to see an increase in the number of uninsured in 2001 because people have been losing their jobs. An unemployed worker cannot easily afford coverage.”

http://www.nytimes.com/2001/09/28/national/28INSU.html

Comment: HHS Secretary Tommy Thompson stated yesterday that current proposals for the uninsured include modifying COBRA benefits for the recently unemployed, and expanding the Medicaid program. Although both of these efforts should be supported, they will hardly impact the problems of inequity, cost containment, affordability and access. In these difficult times, reform that will contain health care costs is clearly in the national interest. We can contain costs, while improving access and reducing inequity, by enacting a program of publicly-administered universal health insurance. This should be elevated to the status of emergency legislation.