PNHP

Health plans’ costs set to jump: CalPERS is ready to increase premiums by about 17 percent in its two self-insured care plans.

Health plans’ costs set to jump: CalPERS is ready to increase premiums by about 17 percent in its two self-insured care plans.

The Sacramento Bee
May 16, 2001
by Lisa Rapaport

Bert Clark, a retired enrollee: “A lot of people will gripe and say these rates are hard to take. What gets me is I pay Medicare, then I pay CalPERS, and then I pay for drugs.”

David Thompson, a public agency representative: “We get a wonderful benefit structure that’s all you could want — it’s just expensive. It’s fair as long as we have a choice.”

Comment: A choice? Making health care unaffordable gives many retired folks the choice of not eating or paying rent as the price of health care. Some choice!

American Medical Association Policy and Advocacy

H-165.960 Health Access America Refinements

Excerpts:

(11) The AMA should achieve the right to negotiate for physicians program payment and the other conditions in government health entitlement programs, where legislative and/or administrative restrictions are unilaterally applied to physicians’ freedom to set their own fees. Any such fee restrictions should be limited to those patients who cannot reasonably afford to pay the difference between the physician fees and government reimbursement levels. In the private sector, where insurance arrangements for thousands of patients are increasingly controlled by single third party payers, physicians should have the ability to negotiate collectively on behalf of their patients and themselves.

(12) Single-payer systems are not in the best interests of the public, physicians or the health care of this nation and should be strenuously resisted.

http://www.ama-assn.org/apps/pf_online/pf_online (Check “House of Delegates” and enter “H-165.960”)

Comment: It is unfortunate that the leadership of the American Medical Association continues to endorse official AMA policies that protect physicians’ income while essentially neglecting the great, unmet, health care needs of the nation. As long as they continue to support grossly deficient policies such as tax credits and medical savings accounts, the AMA will have very limited legitimacy in the process of reforming health care in America.

Should the AMA ever take a strong advocacy role on behalf of physicians? The answer may be, “Yes.” I’ll explain.

Most of us engaged in compassionate reform activities firmly believe that our abundant health care resources can be allocated much more effectively, resulting in comprehensive, high quality care for everyone. But under our current sick structure, efforts to remove cost restraints for the purpose of embellishing physician wealth can only place additional stresses on our deficient mechanisms of delivering resources for care of the medically underserved. Physicians must advocate for structural reform that will improve resource allocation before they can legitimately advocate for their own financial interests.

Once we have in place an effective system that will assure comprehensive care for everyone, mechanisms of cost containment will be essential. At that time, physicians will need a strong and effective voice in negotiating rates and practice environment. Otherwise, those in control will divert physician resources into other sectors of the budget. Very soon medicine as an occupation would be appealing only to the Mother Teresas of this nation, and, frankly, there simply are not enough individuals that are so dedicated. So it is in the best interests of patients to be certain that physicians are rewarded at a level that will assure that prime candidates will continue to be attracted to the medical work force.

The AMA’s position that it should “achieve the right to negotiate (collectively) for physicians” is a proper stance, but not within our current sick system. If the AMA actively participates in bringing about the ethical reforms that will cure the ills of our system, than it will have earned its position as negotiator on behalf of the medical profession.

Don McCanne

Physicians Promote Universal Health Care

May 21, 2001

“Several prominent physicians, fed up with ‘market-based medicine’ have banded together to advocate for single-payer national health insurance.” by Amy Snow Landa

Quentin Young, M.D., commenting on a conversation he had with Rep. John Conyers Jr.:

“I represented to him that the leaders of medicine are no longer to be painted with one stripe as conservative, even reactionary obstacles to universal health care, but that leadership is taking quite a different tack, and he accepted my comments and challenged me to produce that group.”

http://www.ama-assn.org/sci-pubs/amnews/pick_01/gvsb0521.htm

Comment: This is yet another article on the pivotal, landmark meeting of several Congressional caucuses and the Physicians’ Working Group for Single-Payer National Health Insurance. The objectivity of this article is to be commended considering that this is a publication of the American Medical Association.

A picture of our Santa Barbara friends:

http://community.webshots.com/photo/14083539/14083762FJqxqmJZsP

Thanks to Robert Bernstein, Chair, Sierra Club – Santa Barbara Group

Reforming Medicare’s Benefit Package: Impact on Beneficiary Expenditures

The Commonwealth Fund
by Stephanie Maxwell, Marilyn Moon, and Matthew Storeygard
The Urban Institute
May 2001

“Expanding Medicare’s benefit package would enhance equity of coverage among beneficiaries, who currently obtain coverage through a patchwork of sources at varying costs. Coordinating coverage under a single source would allow for greater overall efficiency in furnishing health insurance coverage to Medicare beneficiaries and society as a whole. Moreover, administrative costs for public insurance programs are lower than those for private insurance plans: a public program does not need to maintain reserves to protect against adverse risk, nor does it need to pay marketing or sales commissions.”

“Expanded Medicare coverage would clearly result in decreased out-of-pocket costs for many beneficiaries, particularly those with the highest expenses.”

The full report is available at: http://www.cmwf.org/programs/medfutur/maxwell_reforming_medbenefits_461.pdf

Comment: This study demonstrates that improving Medicare benefits can eliminate the need for expensive Medigap coverage, and result in the reduction of out-of-pocket spending. This is the type of Medicare reform that we should be supporting, rather than the severely flawed Breaux-Frist premium support proposal.

Reforming Medicare's Benefit Package: Impact on Beneficiary Expenditures

The Commonwealth Fund
by Stephanie Maxwell, Marilyn Moon, and Matthew Storeygard
The Urban Institute
May 2001

“Expanding Medicare’s benefit package would enhance equity of coverage among beneficiaries, who currently obtain coverage through a patchwork of sources at varying costs. Coordinating coverage under a single source would allow for greater overall efficiency in furnishing health insurance coverage to Medicare beneficiaries and society as a whole. Moreover, administrative costs for public insurance programs are lower than those for private insurance plans: a public program does not need to maintain reserves to protect against adverse risk, nor does it need to pay marketing or sales commissions.”

“Expanded Medicare coverage would clearly result in decreased out-of-pocket costs for many beneficiaries, particularly those with the highest expenses.”

The full report is available at: http://www.cmwf.org/programs/medfutur/maxwell_reforming_medbenefits_461.pdf

Comment: This study demonstrates that improving Medicare benefits can eliminate the need for expensive Medigap coverage, and result in the reduction of out-of-pocket spending. This is the type of Medicare reform that we should be supporting, rather than the severely flawed Breaux-Frist premium support proposal.

Income gap in California gets wider

The Orange County Register
May 10, 2001
by Michelle Quinn

According to a study conducted by the Public Policy Institute of California, inflation adjusted family income at the 10th percentile dropped 14 percent, from $15,810 in 1969 to $13,600 in 1999. (The 90th percentile increased 58 percent – from $86,140 to $135,850.)

Deborah Reed, an economist and co-author of the study:

“When we have families with disparate income, how do we offer equal opportunity to the children? Children of the rich are afforded better schools and health care.”

Comment: Since our economic system supports and encourages the movement of capital from lower and middle income individuals to the wealthy, it becomes even more imperative that we have in place a system that will assure health care access and coverage for all of us, as health care is becoming less and less affordable.

'Superman' gives Canada super marks

The Province Vancouver, B.C.
May 7, 2001

Actor Christopher Reeve: “We look to Canada with the greatest respect and admiration. Clearly, in this country, there is a system in place which really takes into account what human suffering is.”

Mr. Reeve was Honorary Chair this week of a symposium at the University of Montreal on “Spinal Cord Trauma: Neural Repair and Functional Recovery.” He praised Canadian researchers for their leadership, over the past two decades, in studying ways to regenerate damaged spinal cords, noting that such research was held back in the United States.

http://www.crsn.umontreal.ca/XXIIIs/home.html

Comment: Critics of universal health programs often state that universal systems stifle innovation and research. On the contrary, universal systems direct their research resources to where they can achieve the greatest good, in both advancing basic knowledge and in clinical applications. Private systems direct their efforts to where they can achieve the greatest profit. These missions have some elements in common, but they are definitely not the same.

‘Superman’ gives Canada super marks

The Province Vancouver, B.C.
May 7, 2001

Actor Christopher Reeve: “We look to Canada with the greatest respect and admiration. Clearly, in this country, there is a system in place which really takes into account what human suffering is.”

Mr. Reeve was Honorary Chair this week of a symposium at the University of Montreal on “Spinal Cord Trauma: Neural Repair and Functional Recovery.” He praised Canadian researchers for their leadership, over the past two decades, in studying ways to regenerate damaged spinal cords, noting that such research was held back in the United States.

http://www.crsn.umontreal.ca/XXIIIs/home.html

Comment: Critics of universal health programs often state that universal systems stifle innovation and research. On the contrary, universal systems direct their research resources to where they can achieve the greatest good, in both advancing basic knowledge and in clinical applications. Private systems direct their efforts to where they can achieve the greatest profit. These missions have some elements in common, but they are definitely not the same.

After Two Centuries, Washington Is Losing Its Only Public Hospital by

SHERYL GAY STOLBERGÊ

WASHINGTON, May 6 Ñ On the day that federal officials decided to put this city’s first and only public hospital out of business, business continued there as usual. A woman, hugely pregnant and a week past her due date, received an ultrasound examination in the sweltering heat, the still air moved about by a fan because the air-conditioning had not yet been turned on.

On the maternity ward, a 14-year-old girl gave birth in a room of peeling wallpaper and cracked paint; the baby swallowed its own stool during the delivery and was rushed to the neonatal intensive care unit for oxygen. On the cancer ward, a nurse made her rounds with dollar bills stuffed in her pockets. She never knew, she explained, when a patient might need bus fare home.

So has it ever been at the District of Columbia General Hospital. Since its founding as an almshouse nearly two centuries ago, D.C. General, as it is known, has embraced this city’s sick and poor, most of them African-Americans, when there was nowhere else for them to go. It has trained generations of black doctors; many, committed to serving the underserved, stayed on. But the hospital has also been sorely mismanaged, and it has bled red ink to the point of bankruptcy.

Last Monday, in a move that followed a nationwide trend, the federal control board that oversees the city’s financial affairs contracted with a consortium of private health care providers to run the hospital and six separate city clinics. The hospital’s own outpatient clinics and emergency room will remain open. But the inpatient and trauma wards Ñ in essence, the hospital itself Ñ will be shuttered.

“We are tossing public health into the trash,” said Dr. Michal Young, a neonatologist and president of the hospital’s medical and dental staff. “When you lose public health in the capital of the most powerful nation in the world, it is an indicator of what the rest of the country is going to do.”

Indeed, it is an indicator of what the rest of the country is already doing. Over the last two decades, as competition has forced hospital mergers and acquisitions, the number of public hospitals has dwindled. In 1999, the last year for which figures are available, that number was 1,197, down from 1,778 in 1980, according to the American Hospital Association. By comparison, the number of private hospitals dropped to 3,759 from 4,052.

Public hospitals offer free care for the indigent, typically at greater levels than private hospitals, and at taxpayers’ expense. Some, as in Boston and Baltimore, have been absorbed into nonprofit university hospitals, which remain committed to serving the poor. Others have become private entities; still others, as in St. Louis, have shut down.

And dozens, if not hundreds, of small rural public hospitals have closed, said Larry S. Gage, president of the National Association of Public Hospitals and Health Systems. “In cities and in rural areas, hospitals have an increasingly difficult time making it,” Mr. Gage said, “and public hospitals are often the most vulnerable institutions.”

Mr. Gage says he is not overly concerned about the privatization of government-run hospitals, so long as what he calls their “safety-net mission” is retained. And in many cases it has been, experts say. But others mourn the loss of the institutions that have historically been the nation’s health care providers of last resort.

“These are a treasure and we shouldn’t let them go,” said Sandra Opdycke, author of “No One Was Turned Away” (Oxford University Press, 1999), about the New York City public hospital system. “They have never had the kind of care and respect that they deserve, and especially now, they are not getting it.”

Alan Sager, a professor of public health at Boston University who consulted with the unions at D.C. General in an effort to keep the hospital open, said, “What is lost is a guaranteed open door, a room at the inn.”

D.C. General sits in the city’s depressed Southeast section, at the end of a forlorn stretch of Massachusetts Avenue, a street that in the prosperous Northwest area is home to the elegant mansions of Embassy Row. The hospital is a collection of mostly aging brick buildings, sprawled over a 68-acre riverfront site that includes the city morgue and jail. At its peak, after World War II, D.C. General had enough patients to fill 1,600 beds.

Last Monday, the patient count was 119, a reflection of staffing cuts, uncertainty about the hospital’s future and the reality, faced by all hospitals, that patients today are sent home sooner and often not admitted at all.

The hospital had been in dire financial straits for more than a decade, as was the city, which is why the control board was established in 1995. Michael Barch, until last week the hospital’s chief executive (he took that job just six months ago, after his predecessor was fired amid accusations of fraud), said the hospital’s budget dance had been the same for several years. Each year, the city offered a $45 million subsidy. Each year, the hospital overspent it by many millions, with the city making up the difference.

Of Washington’s 550,000 residents, an estimated 80,000 lack insurance. At the same time, the city’s health statistics are abysmal.

“We have a life expectancy for African-American men that is 59, the lowest in the country,” said Dr. Ivan C. A. Walks, the city’s health commissioner. The infant mortality rate, 12.5 per 1,000 births, is nearly double the national average.

The city in 1996 put the hospital and the city clinics under the auspices of a new body, the Public Benefits Corporation, which was supposed to act like a business. That strategy worked in Denver. But it failed here.

The corporation “never integrated the clinics with the hospital,” said Alice M. Rivlin, an economist at the Brookings Institution who is chairwoman of the federal control board. Some clinic doctors were not qualified to admit patients to the hospital. Nurses at the clinics and the hospital earned different salaries. Antiquated computers made it impossible to track patients.

The hospital’s financial records were a mess. Sixty percent of D.C. General’s patients were insured, Mr. Barch said, yet often they were not billed. “It was a culture that said, `We’re here to serve patients, not to harass them about paying,’ ” he said.

In January 1999, a new mayor, Anthony A. Williams, took office. “We talked,” Ms. Rivlin said, “and I urged him to get on top of the hospital problem.”

Mr. Williams, previously the city’s chief financial officer, is regarded here as something of a technocrat and politically na•ve. At a recent news conference, his press secretary had to remind him to look at the cameras. He did not expect the deep resentment he would engender by stepping into the hospital’s affairs.

“Thank God for four-year terms,” Mr. Williams said in a recent interview.

By last year, city auditors had warned that the hospital was about to run out of money and would soon be forced to shut down. “We were in a crisis,” Ms. Rivlin said. The solution, the mayor and his staff concluded, was to get the city out of the health care business.

“We began looking around the country at other jurisdictions,” said Dr. Walks, the health commissioner. “San Diego, Detroit, Tampa. What we found is that if you do these transitions correctly, you can expect three things: increased access, increased quality and cost savings.”

According to a 1999 report by the Kaiser Family Foundation, for every 100 public hospitals in the United States, one closes and two convert to private ownership or management each year. But for Washington, finding a private partner was not easy. About 200 people turned out for a bidder’s conference, Dr. Walks said. Two bids were submitted.

One came from a group led by Mr. Barch, who proposed building a smaller hospital on the site of D.C. General. That plan was rejected. The other came from a consortium led by Greater Southeast Community Hospital, a Washington hospital that went bankrupt in late 1999 but has been bought and turned around by an Arizona company.

For $90 million each year from taxpayers (the Public Benefits Corporation spent $120 million last year), Greater Southeast has promised to increase medical services Ñ including hospital admissions, surgeries and primary care Ñ for uninsured patients by 34 percent.

The big question, of course, is whether it can live up to that commitment. The company’s financial history leaves many residents as well as the City Council, which voted unanimously to oppose the privatization, uneasy.

Mayor Williams is confident that the uninsured will get more, and better, care. “I’m going to sleep like a baby at night,” he said, “because I’ve done the right thing.”

But Dr. Sager, the Boston University professor, says the mayor underestimates the intimate relationship between patients and hospitals. When a hospital closes, he said, 30 percent of its patients simply cease seeking care for a time.

“Hospitals are not interchangeable parts in some health care machine,” Dr. Sager said. “It takes a while to reweave a connection.”

That connection is keenly felt at D.C. General, by both patients and doctors.

“I feel that I was led by the Lord to come here,” said Dr. Steven Tucker, director of obstetrics and gynecology, who arrived three years ago. Once, he had dreams of renovating the maternity ward. “This institution,” Dr. Tucker said, “has never been given a fair shake.”

To whites in Washington, the hospital symbolized everything that was wrong with the city. But to blacks, it stood as a symbol of culture and history. With its privatization, conspiracy theories abound. Some blacks say they believe the mayor, who is himself African-American, wants the riverfront land for redevelopment.

“The eradication of D.C. General is a statement that there is no place for the black community, for the low-income residents, the people that have lived here through thick and thin, ups and downs,” said the Rev. Graylan Hagler, pastor of the Ply mouth Congregational United Church of Christ. “Not only is the hospital being removed, but those populations are being removed.”

But more than a symbol, D.C. General was a medical home for the disenfranchised. Last month, a homeless man became ill during a court hearing on misdemeanor charges and died a short while later in a holding cell. While he was still in court, gasping for breath, he begged of the judge, “Just take me to D.C. General.”

Copyright 2001 The New York Times Company

Seniority: In the Middle on Medicare

The New York Times
May 6, 2001
by Fred Brock

“… Mr. Breaux hopes to use his negotiating skills to push Medicare legislation -including limited prescription coverage – through Congress this summer.”

Sen. John Breaux:

“No one has a health plan as inadequate as the 40 million people on Medicare. Nobody has a health plan that does not cover 47 percent of their average costs.”

“I’m trying to combine the best of what government can do and the best of what the private section can do. The best that government can do is pay for Medicare and help make sure that nobody tries to scam it. The best of what the private section can do is bring about the innovations and new technology quickly without having to get an act of Congress to cover something that’s new. The private section can also bring about real competition to hopefully slow rising costs.”

Comment: Sen. Breaux clearly understands that we need to add prescription coverage to Medicare and that we need to dramatically reduce out-of-pocket expenses. He also understands that Medicare will function best by properly balancing the roles of the government and the private sector. What he fails to acknowledge is the overwhelming evidence that competition, as a mechanism to control costs, has been a dismal failure. In fact, costs have actually increased through the excesses of the private bureaucracies of the “competing” health plans. There is a consensus that something must be done about the anticipated increases in the Medicare budget, and there is great risk that Sen. Breaux’s plan may be enacted by default for “want of something better.” We cannot allow this to happen. We must protect Medicare now, and then begin to enact the reforms that we really need.

An article on the flawed concept of containing Medicare costs through health plan competition is available at: https://pnhp.org/publications/competition_medicare2_29_00.htm

Proposal of the Physicians' Working for Single-Payer Health Insurance

Executive Summary

The United States spends more than twice as much on health care as the average of other developed nations, all of which boast universal coverage. Yet over 42 million Americans have no health insurance whatsoever, and most others are underinsured, in the sense that they lack adequate coverage for all contingencies (e.g., long-term care and prescription drug costs).

Why is the U. S. so different? The short answer is that we alone treat health care as a commodity distributed according to the ability to pay, rather than as a social service to be distributed according to medical need. In our market-driven system, investor-owned firms compete not so much by increasing quality or lowering costs, but by avoiding unprofitable patients and shifting costs back to patients or to other payers. This creates the paradox of a health care system based on avoiding the sick. It generates huge administrative costs, which, along with profits, divert resources from clinical care to the demands of business. In addition, burgeoning satellite businesses, such as consulting firms and marketing companies, consume an increasing fraction of the health care dollar.

We endorse a fundamental change in America’s health care – the creation of a comprehensive National Health Insurance (NHI) Program. Such a program – which in essence would be an expanded and improved version of Medicare – would cover every American for all necessary medical care. Most hospitals and clinics would remain privately owned and operated, receiving a budget from the NHI to cover all operating costs. Investor-owned facilities would be converted to not-for-profit status, and their former owners compensated for past investments. Physicians could continue to practice on a fee-for-service basis, or receive salaries from group practices, hospitals or clinics.

A National Health Insurance Program would save at least $150 billion annually by eliminating the high overhead and profits of the private, investor-owned insurance industry and reducing spending for marketing and other satellite services. Doctors and hospitals would be freed from the concomitant burdens and expenses of paperwork created by having to deal with multiple insurers with different rules – often rules designed to avoid payment. During the transition to an NHI, the savings on administration and profits would fully offset the costs of expanded and improved coverage. NHI would make it possible to set and enforce overall spending limits for the health care system, slowing cost growth over the long run.

A National Health Insurance Program is the only affordable option for universal, comprehensive coverage. Under the current system, expanding access to health care inevitably means increasing costs, and reducing costs inevitably means limiting access. But an NHI could both expand access and reduce costs. It would squeeze out bureaucratic waste and eliminate the perverse incentives that threaten the quality of care and the ethical foundations of medicine.

Marcia Angell, MD
Spokesperson
Past Editor
New England Journal of Medicine
Quentin Young, MD
Convener
National Coordinator
Physicians for a National Health Program
Past President
American Public Health Association
Joel Alpert, MD
Past President
American Academy of Pediatrics 
Ron Anderson, MD
President and CEO
Parkland Health & Hospital System
Peter Beilenson, MD, MPH
Commissioner
Department of Health, Baltimore City
Olveen Carrasquillo, MD, MPH
Advisory Committee Member
National Hispanic Medical Association
Christine Cassell, MD
Past President
American College of Physicians
Elinor Christiansen, MD
President Elect
American Medical Women’s Association
Gary Dennis, MD
Past President
National Medical Association		 Merlin Du Val, MD
Former Assistant Secretary for Health
Department of Health, Education and Welfare
David Himmelstein, MD
Co-Founder
Physicians for a National Health Program
Rodney Hood, MD 
President
National Medical Association
Edith Rasell, MD, PhD
Director
Economic Analysis and Research Network
Economic Policy Institute
Helen Rodriguez-Trias, MD
Past President
American Public Health Association
Sindhu Srinivas, MD
National President
American Medical Student Association
Gerald Thomson, MD
Past President
American College of Physicians
Walter Tsou, MD, MPH
Commissioner 
Department of Health, Philadelphia
Steffie Woolhandler, MD, MPH
Co-Director
Center for National Health Program Studies
The Cambridge Hospital/Harvard Medical School

*The participants hold a number of distinguished positions, which are not limited to those listed above. The participants’ positions and affiliations listed here are provided for identification purposes only.