The Henry J. Kaiser Family Foundation

Report prepared by Public Opinion Strategies and Peter D. Hart Research Associates
July 2001

“1. Overall, seniors are VERY satisfied with the Medicare system.” “They do not want structural reform that they perceive might jeopardize what they are already getting.”

“2. The generally high levels of satisfaction have a significant impact on the way in which respondents react to words used to describe proposed ‘changes’ to the Medicare system.” “Words like ‘strengthened and improved’ elicit overwhelming favorable reactions, while words that suggest a more significant departure from the current Medicare structure, such as ‘changed’ or ‘privatized’ are very negatively perceived.”

“3. Participants suffer a severe case of sticker shock when they consider the price tag of a drug benefit program for seniors.” “Overall, participants were much more concerned with the costs to seniors than they were with the cost to the government in providing the benefit.”

“4. The budget surplus and the recent tax cut strongly influence perceptions about the affordability of a generous drug benefit.” “Given the current environment, participants do not blink at the idea of allocating significant government resources to pay for a new benefit.”

“7. Given their quite favorable views of Medicare, participants both presume and prefer that a new drug benefit would be administered within the framework of the current program.”

http://www.kff.org/content/2001/6002/Medicare%20Focus%20Group%20Report.pdf

Comment: Americans do want a prescription benefit for Medicare. They believe that the government can afford to pay for it. But they do not believe that drug benefits should be linked to privatization schemes. The message is clear: reject the Breaux-Frist premium support proposal, and enact a bona fide, comprehensive prescription benefit. (Then we can do focus groups on providing public insurance for all of us.)

The Orange County Register
July 22, 2001
by Margie Mason, The Associated Press

“About 250 students with dependents received letters earlier this month informing them a new health-care plan would be offered, but a premium increase of as much as 60% was expected. Many students said they can’t afford those rates and were embarrassed by an accompanying flyer detailing public-assistance plans available for low- or middle-income families in Santa Clara County.”

Jeffrey Martin, an engineering doctoral student with a wife and five children:

“I feel appalled that a world-class university like Stanford would let a situation come about whereby implying students should get public assistance for their dependents.”

Comment: Really? The university of such notables as Alain Enthoven and Milton Friedman is endorsing public-assistance health plans for family members of their own students? Surely it must be a practicum in applied economics. They wouldn’t really…. Naw, it must be a joke. Some sense of humor!

Medical Economics
July 9, 2001

A roundtable discussion

Moderator: “What about the proposal that Medicare be used as a model for a new American system?”

George D. Lundberg, M.D., Editor-in-chief of Medscape and former editor of JAMA:

“Medicare could certainly serve as part of our model. It’s not a new idea. Some people have said that it should be extended to cover the whole population. Then they made the terrible mistake of calling that a ‘single-payer system.’ There will never be a single-payer system in this country, because that presupposes people can’t or won’t use their own money to buy whatever they want outside the system.”

http://me.pdr.net/me/public.htm?path=content/journals/m/data/2001/0709/round2.html

Comment: All health care systems, including single payer, allow people to use their own money to buy whatever they want outside of the system. It is long past time to end fighting against reform based on semantic or rhetorical issues, and to begin supporting reform based on sound policy. The words, “single payer,” are not the enemy, but reflexive, stilted thinking is. The issues are straight forward. We all agree on the goals of universal access and coverage, free choice, quality, and value in health care. The structural changes required to achieve those goals are simple. Even Dr. Lundberg recognizes that publicly administered insurance, such as Medicare, will provide the reform we need. Call reform single payer or don’t call it single payer, just do it!

Medical Economics
July 9, 2001

A roundtable discussion

Moderator: “What about the proposal that Medicare be used as a model for a new American system?”

George D. Lundberg, M.D., Editor-in-chief of Medscape and former editor of JAMA:

“Medicare could certainly serve as part of our model. It’s not a new idea. Some people have said that it should be extended to cover the whole population. Then they made the terrible mistake of calling that a ‘single-payer system.’ There will never be a single-payer system in this country, because that presupposes people can’t or won’t use their own money to buy whatever they want outside the system.”

http://me.pdr.net/me/public.htm?path=content/journals/m/data/2001/0709/round2.html

Comment: All health care systems, including single payer, allow people to use their own money to buy whatever they want outside of the system. It is long past time to end fighting against reform based on semantic or rhetorical issues, and to begin supporting reform based on sound policy. The words, “single payer,” are not the enemy, but reflexive, stilted thinking is. The issues are straight forward. We all agree on the goals of universal access and coverage, free choice, quality, and value in health care. The structural changes required to achieve those goals are simple. Even Dr. Lundberg recognizes that publicly administered insurance, such as Medicare, will provide the reform we need. Call reform single payer or don’t call it single payer, just do it!

Boston Globe
7/19/2001
by Benjamin Gedan

“The governor and state legislators will lose their publicly funded health care in 2004 if they do not provide the same coverage to all state residents – that is, if voters approve a ballot initiative to be unveiled today.”

Richard Lord, president of Associated Industries of Massachusetts:

“I think that it’s inappropriate to threaten the Legislature in that regard.”

Comment: Inappropriate? Why should the legislators be allowed to grant themselves publicly funded health care while denying the same to the voters? Is health care a right for all or only a right for elected officials?

Bush’s Pharmaceutical Cards
Institute for Public Accuracy Washington, D.C.
http://www.accuracy.org

Thursday, July 12, 2001

Responding to George W. Bush’s announcement today supporting discount cards for more Medicare recipients to use while buying pharmaceutical drugs, the following board members of Physicians for a National Health Program (www.pnhp.org) comment:

DON McCANNE, M.D. A retired family physician, McCanne said today: “White House spokesperson Ari Fleischer claims that ‘the president is committed to helping seniors get prescription drugs they need and deserve.’ But this plan is not a government program. It is merely a private, marketplace scheme that is receiving the personal endorsement of President Bush. The program will be administered by pharmacy benefit managers (PBMs), the prescription drug equivalent of managed care plans. These middleman businesses siphon off health care dollars that should be directed to patient care. The PBMs will sell memberships to Medicare beneficiaries. Providing everyone with a ‘discount’ is no discount at all. It is merely a price that is below an artificially inflated price set for the purpose of creating a fraudulent ‘discount’ price. If Mr. Bush really wants to help seniors ‘get prescription drugs they need and deserve,’ then he would support a bona fide Medicare prescription benefit that minimizes beneficiary cost sharing. Sadly, not even the leading congressional proposals would accomplish this goal.”

QUENTIN YOUNG, M.D. National coordinator of Physicians for a National Health Program, Young said today: “The pharmaceutical industry justifies its super profits by pointing to research and development costs, but it actually spends more on marketing than on R-and-D. Canada, Mexico and our own U.S. government Veteran’s Administration get deep discounts on pharmaceuticals by negotiating with manufacturers — up to 60 percent. The White House … could reduce costs sharply by allowing people in the U.S. to import pharmaceuticals from Canada, where they are substantially lower in cost, but this ‘free trade’ administration is suddenly for no trade and doesn’t want importing of low-cost pharmaceuticals when it curtails the drug companies’ profits.”

DAVID HIMMELSTEIN, M.D. Associate professor of medicine at Harvard Medical School, Himmelstein said today: “Medicare already covers some prescription drugs — those administered in a doctor’s office. And the Department of Defense, by law, gets the best prices from drug companies. If the administration were actually interested in covering people inexpensively, they could extend Medicare drug coverage to prescriptions administered outside a doctor’s office. If they, like the Defense Department, insisted on the lowest prices, this would cut drug prices dramatically. But instead, they are telling people they can go to private drug-buying firms, and these firms would negotiate prices with drug stores and distributors, not the drug manufacturers. This puts a squeeze on the retailers, but lets the big pharmaceutical companies off the hook. This is part of a pro-corporate agenda for health care that has no chance of actual progress. The thrust of where they are taking Medicare is to managed care, which has utterly failed in the Medicare program. Letting the HMOs into Medicare has actually cost money, between $2 billion and $3 billion per year according to the General Accounting Office. This is because the government gives HMOs 95 percent of the average cost for a Medicare recipient for each one an HMO signs up, but of course the HMOs cherry-pick the healthy ones; 18 percent of Medicare patients cost them nothing at all. Then, when HMO customers do get a major illness and start accruing serious bills, they’ve gone back to standard Medicare. Medicare is actually much more efficient than the HMOs — it has 2 percent overhead, whereas they have 15 percent overhead.”

Bush’s Pharmaceutical Cards
Institute for Public Accuracy Washington, D.C.
http://www.accuracy.org

Thursday, July 12, 2001

Responding to George W. Bush’s announcement today supporting discount cards for more Medicare recipients to use while buying pharmaceutical drugs, the following board members of Physicians for a National Health Program (www.pnhp.org) comment:

DON McCANNE, M.D. A retired family physician, McCanne said today: “White House spokesperson Ari Fleischer claims that ‘the president is committed to helping seniors get prescription drugs they need and deserve.’ But this plan is not a government program. It is merely a private, marketplace scheme that is receiving the personal endorsement of President Bush. The program will be administered by pharmacy benefit managers (PBMs), the prescription drug equivalent of managed care plans. These middleman businesses siphon off health care dollars that should be directed to patient care. The PBMs will sell memberships to Medicare beneficiaries. Providing everyone with a ‘discount’ is no discount at all. It is merely a price that is below an artificially inflated price set for the purpose of creating a fraudulent ‘discount’ price. If Mr. Bush really wants to help seniors ‘get prescription drugs they need and deserve,’ then he would support a bona fide Medicare prescription benefit that minimizes beneficiary cost sharing. Sadly, not even the leading congressional proposals would accomplish this goal.”

QUENTIN YOUNG, M.D. National coordinator of Physicians for a National Health Program, Young said today: “The pharmaceutical industry justifies its super profits by pointing to research and development costs, but it actually spends more on marketing than on R-and-D. Canada, Mexico and our own U.S. government Veteran’s Administration get deep discounts on pharmaceuticals by negotiating with manufacturers — up to 60 percent. The White House … could reduce costs sharply by allowing people in the U.S. to import pharmaceuticals from Canada, where they are substantially lower in cost, but this ‘free trade’ administration is suddenly for no trade and doesn’t want importing of low-cost pharmaceuticals when it curtails the drug companies’ profits.”

DAVID HIMMELSTEIN, M.D. Associate professor of medicine at Harvard Medical School, Himmelstein said today: “Medicare already covers some prescription drugs — those administered in a doctor’s office. And the Department of Defense, by law, gets the best prices from drug companies. If the administration were actually interested in covering people inexpensively, they could extend Medicare drug coverage to prescriptions administered outside a doctor’s office. If they, like the Defense Department, insisted on the lowest prices, this would cut drug prices dramatically. But instead, they are telling people they can go to private drug-buying firms, and these firms would negotiate prices with drug stores and distributors, not the drug manufacturers. This puts a squeeze on the retailers, but lets the big pharmaceutical companies off the hook. This is part of a pro-corporate agenda for health care that has no chance of actual progress. The thrust of where they are taking Medicare is to managed care, which has utterly failed in the Medicare program. Letting the HMOs into Medicare has actually cost money, between $2 billion and $3 billion per year according to the General Accounting Office. This is because the government gives HMOs 95 percent of the average cost for a Medicare recipient for each one an HMO signs up, but of course the HMOs cherry-pick the healthy ones; 18 percent of Medicare patients cost them nothing at all. Then, when HMO customers do get a major illness and start accruing serious bills, they’ve gone back to standard Medicare. Medicare is actually much more efficient than the HMOs — it has 2 percent overhead, whereas they have 15 percent overhead.”

The Associated Press
July 11, 2001
by Ron Fournier

“The plan relies on companies that manage drug benefits to buy prescription drugs in bulk. The companies would sell the cards to Medicare patients, who could use them at any pharmacy to purchase their medicine at a reduced rate.”

Ari Fleischer, White House spokesperson:

“The president is committed to helping seniors get prescription drugs they need and deserve.”

Comment: The reality:

** The fact that this plan “does not require congressional approval” confirms that this is not a government program. It is merely a private, marketplace scheme that is receiving the personal endorsement of President Bush.

** The plan will “not require federal money.” Without use of federal funds, the plan totally depends on the charity of the marketplace to reduce prescription drug costs, a principle based on a law of economics that does not exist.

** The program will be administered by pharmacy benefit managers (PBMs), the prescription drug equivalent of managed care plans. These middleman businesses siphon off health care dollars that should be directed to patient care.

** The PBMs will sell memberships to Medicare beneficiaries. Paying a fee for a “discount” card further strains the budgets of lower income beneficiaries. The Medicare card could be used to establish eligibility for the “discount,” without adding further administrative burdens and fees.

** Providing everyone with a “discount” is no discount at all. It is merely a price that is below an artificially inflated price created for the purpose creating a fraudulent “discount” price.

** Bulk purchasing is not unique to PBMs, but is characteristic of the industry. Only patients using the services of the small retailer pay inflated prices since those retailers are not allowed bulk rates. This is yet another example of unfair price discrimination characteristic of this industry.

** Many pharmacies are dependent on the PBM contracts. The PBMs are in a position to force the retailers, contractually, to honor the discount cards, while requiring them to accept the burden of the discounts, threatening the solvency of the retailers.

** Beneficiaries are to have choice between at least two PBMs in each region. Competition didn’t stop health care inflation under managed care plans; it won’t work for PBMs either.

“Discount” cards are a marketing scheme that have no beneficial impact on true costs. In fact, the administrative burden of these programs actually result in a modest increase in overall costs. Medicare beneficiaries need prescription drug coverage, and they need relief from ever-increasing out-of-pocket expenses that are impairing access to care. If Mr. Bush really wants to help seniors “get prescription drugs they need and deserve,” then he would support a bona fide Medicare prescription benefit that minimizes beneficiary cost sharing. Sadly, not even the leading congressional proposals would accomplish this goal.

http://www.washingtonpost.com/wp-dyn/articles/A42753-2001Jul10.html http://www.washingtonpost.com/wp-dyn/politics/news/latestap/A45734-2001Jul11.html

http://www.nytimes.com/2001/07/11/politics/11MEDI.html

Los Angeles Times
July 8, 2001
Commentary
by John Balzar

“I’ve been researching opinion polls. Nowhere do I see that Americans are clamoring for more courtroom tedium to heal what ails them. For that matter, nowhere do I see that they’re feeling healthier thanks to bewildering insurance paperwork. But in poll after poll, a Top 10 concern of Americans is health care, plain and simple.

“The fan dance now underway in the capital will do nothing except make worse what is already occurring in the nation. Employer-based health insurance plans are eroding. Premiums are soaring. The number of Americans without insurance is climbing, perhaps to 45 million of us. Many cannot afford their medicine.”

“Insurance companies do not deliver health care. They are profit-driven bureaucracies. If they had their way, they would insure only the healthy. As soon as we got unhealthy, we’d be uninsured.”

“I say, let’s collectively hire our own doctors and civil service health administrators. Private sector profits have no place in a business so important as life and death.

“Why are we so afraid of managing our own health care through our government, anyway? Because we don’t want heavy-handed, slow-moving decisions. Yet what could be more heavy-handed and slow-moving than the system we have?

“Actually, we are afraid of just the words: Socialized Medicine.

“So let’s start by changing terms. Let’s call it, American Health Care.”

Los Angeles Times
July 8, 2001
Commentary
by John Balzar

“I’ve been researching opinion polls. Nowhere do I see that Americans are clamoring for more courtroom tedium to heal what ails them. For that matter, nowhere do I see that they’re feeling healthier thanks to bewildering insurance paperwork. But in poll after poll, a Top 10 concern of Americans is health care, plain and simple.

“The fan dance now underway in the capital will do nothing except make worse what is already occurring in the nation. Employer-based health insurance plans are eroding. Premiums are soaring. The number of Americans without insurance is climbing, perhaps to 45 million of us. Many cannot afford their medicine.”

“Insurance companies do not deliver health care. They are profit-driven bureaucracies. If they had their way, they would insure only the healthy. As soon as we got unhealthy, we’d be uninsured.”

“I say, let’s collectively hire our own doctors and civil service health administrators. Private sector profits have no place in a business so important as life and death.

“Why are we so afraid of managing our own health care through our government, anyway? Because we don’t want heavy-handed, slow-moving decisions. Yet what could be more heavy-handed and slow-moving than the system we have?

“Actually, we are afraid of just the words: Socialized Medicine.

“So let’s start by changing terms. Let’s call it, American Health Care.”