PNHP

Health Coverage for All Americans, Letter to the Editor

Health Coverage for All Americans, Letter to the Editor

The New York Times
April 8, 2001

To the Editor:

It is shocking that President Bush’s budget would gut the financing for health care access for the uninsured, specifically community access programs, especially after he campaigned in favor of expanding community and migrant health centers (front page, April 4).

Nearly 43 million Americans have no coverage at all. Some 30 million Americans are underinsured; when serious illness strikes, gaps in their coverage leave them with devastating out-of-pocket expenses. Employers are shifting more costs to employees as health costs spiral. With the economy softening, some employers may drop coverage, and many millions of newly unemployed people will be unable to afford to keep their coverage.

Congress should address the critical issue of providing all consumers with affordable, quality health coverage.

GAIL SHEARER
Director, Health Policy Analysis, Consumers Union
Washington, April 5, 2001

Medical Fees Are Often More for Uninsured by Gina Kolata

NYTimes

When patients go to Dr. Stephen Brenner, an internal medicine specialist, for a routine exam, their bills can vary by 45 percent. The uninsured pay the most and patients with insurance plans are charged the least.

It is not his doing, said Dr. Brenner, who practices in New Haven. He explains that it is because health insurance companies insist on hefty discounts. “It’s a take it or leave it situation for doctors,” Dr. Brenner said. But he said he knew that the insured paid much less than their share. For the insured, he said, “it’s almost like getting a BMW or Mercedes at half price.”

Other doctors cite more extreme price disparities. A New York gynecologist says he gets $25 for a routine exam for a woman insured by Group Health Insurance and charges $175 for the same exam for a woman without insurance.

“It’s horribly ironic,” said Paul Menzel, a professor of philosophy at Pacific Lutheran University in Tacoma, Wash. The care of the poor once was supported by the wealthy and the insured, but now the opposite is happening, he said. “It is the people who are most provided for, not the people who are least provided for, who get the benefit of cost-shifting,” Professor Menzel said.

In a medical emergency, uninsured people can get care, even if they walk away from their bills. But if it is not an emergency, doctors and hospitals may insist on payment, often requiring a deposit in advance. As a result, some uninsured people struggle for years to pay medical bills and others put off seeing a doctor until minor problems become major ones.

Some health policy experts like Uwe Reinhardt, an economics professor at Princeton University, see the situation as “brutal and inhumane.” But, Professor Reinhardt said, doctors and hospitals are trapped in it.

Despite the discounts they have negotiated, some large insurance companies have had their own financial troubles lately. For example, Aetna, the nation’s largest health insurer, reported in January that its fourth quarter earnings had declined by 65 percent.

Mark Pauly, a professor of health care systems at the Wharton School of the University of Pennsylvania, said there was no real villain. “I don’t think it’s exactly good versus evil,” he said, “it’s just business.”Ê The problem crept up on them, doctors and hospital administrators say, after they began agreeing to slash their prices for health insurers in return for a steady flow of patients. Then they found themselves scrambling to maintain their cash flow.

They found an answer with patients outside the managed care system, like those with fee-for-service plans in which the patients pay their own bills and are reimbursed by an insurance company. But the uninsured also are outside the system, and have no one to negotiate for them. So they end up charged the higher prices, too.

Most patients paying the full fare have no idea that their bill may be many times that of the people next to them in the doctor’s waiting room. And, in interviews, many doctors said they did not offer patients information on pricing disparities, however much they might agonize over the inequities of the system.

While this may not be a problem for people who can afford fee-for-service plans, which typically are far more expensive than other health insurance, it can be devastating for the uninsured.

“If you’re a partner in a law firm you can afford to pay more than your legal secretary can,” said Dr. Darcy Hansen, an internist in private practice in Washington. “But,” she said, “it’s the uninsured who really falter.”

Dr. Hansen said the pattern began about 10 or 15 years ago when she started negotiating with managed care companies. “I thought it was the wave of the future,” she said. “I have a lot of poor patients, a lot of single moms who don’t have a huge income. I thought that if they could pay $5 for an office visit they were more likely to come in than if they have to pay a $400 or $500 bill,” she said, referring to the co-payment, the amount a patient might have to pay when a managed care company covers virtually the entire bill.

“Then the fees slowly ratcheted down,” Dr. Hansen said.

In the meantime, she said, with fewer and fewer patients who pay the full rates, she has no choice but to keep prices for those patients high. Her take-home income, she said, is half that of two or three years ago.

Individual doctors are not the only ones in difficult straits. Hospital administrators say the same sequence of events happened to them, with often devastating effects.

The administrators said their problems began about a decade ago when insurance companies offered to make their hospitals “preferred providers,” meaning that patients insured by the companies would go to those hospitals en masse, if the hospitals slashed their prices.

It sounded workable Ñ volume in exchange for a discount. But soon the insurers discovered that their patients wanted a choice of providers. So instead of sending all their patients to one hospital, insurers offered choices. The hospitals were left with the low prices and without the steady stream of patients.

The next step was for hospitals to compete by offering even lower prices to insurers, not so much to get business but to avoid losing it.

Hospitals that tried to hold the line lost business. Then their revenues dried up. “Now the spiral gets deeper,” said James D. Shelton, the chairman and chief executive of Triad Hospitals Inc., a chain of for-profit hospitals and surgery centers.

Mr. Shelton said that he knew the uninsured had been victims of this situation. But, he said, what are hospitals supposed to do?

“There’s a limit to what these people can pay,” Mr. Shelton said. “But what is the greater good Ñ if the hospital goes bankrupt and it’s the only provider in the community or if you try to collect every bill you can within reason and the person goes bankrupt?”

At New York-Presbyterian Hospital in New York, Dr. Herbert Pardes, the president and chief executive, said that so few patients were paying undiscounted rates and the discounted rates were so low that it was becoming increasingly difficult to provide free care for poor people who could not pay.

“I like the fact that we help people who are poor,” Dr. Pardes said. But, he said, the financial pressures on his hospital are so great that “the last thing we want is to get a reputation as the place to go for somebody who’s poor.”

He recently got a call from a friend at another hospital who had a poor, uninsured patient who needed an expensive treatment. Dr. Pardes’s friend said his hospital could not afford to do it. Could New York- Presbyterian take it on? Dr. Pardes’ staff members advised him to say no, that they already were accepting too many charity cases.

“I’m left as the final decision maker,” Dr. Pardes said. “I told them to do it. Then I put the phone down and I started to cry.”

“It is a real ethical and personal dilemma for me,” Dr. Pardes said.

Kenneth E. Thorpe, the chairman of the department of health policy and management at Emory University’s School of Public Health, said he thought he knew about health care prices and the differences between what could be negotiated and what individuals might be charged.

Then his sister-in-law, who is 22 and without health insurance, was hit by a car as she walked along a road in California. She suffered a head injury so severe that she was in a coma. Her medical bills soared to more than $500,000. Yet the man who hit her had no job and no assets and less than $20,000 in insurance, so suing him would not help.

She was covered under an uninsured motorist clause in her father’s car insurance policy. Soon her lawyers started negotiating prices for her medical care. The insurance company’s cap was $300,000 and the lawyers, working on a contingency basis, would get a third of whatever the insurance company paid.

“Lo and behold, they got the rate down so that it fit below the cap,” Professor Thorpe said. The medical charges were reduced to $200,000. That meant that the lawyers got their maximum amount, $100,000, and the insurance company paid its full amount, $300,000.

Professor Thorpe said he was startled by how arbitrary medical pricing seemed to be. “It was a real eye- opener,” he said.

Irene Wielawski, who studied local efforts to provide care for the uninsured under a grant from the Robert Wood Johnson Foundation described pricing disparities in a recent issue of the journal Health Affairs.

When Ms. Wielawski’s son needed a hernia operation, she wrote, her insurance company, Aetna, paid $3,509.50 for a surgeon, the surgical suite, a pediatrician, laboratory tests and an X-ray. But an uninsured Sacramento carpenter she was following as part of her research also needed a hernia operation. Hospital officials told him that the surgeon’s bill alone would be $3,000 to $5,000 and that he needed to make a down payment of $1,500. Unable to pay, he put off the operation for a year until a charity project paid for it.

“That happens everywhere,” said Dr. Guy Clifton, the chief of neurosurgery at the University of Texas- Houston Medical School. “If it’s not an emergency and you can’t pay for it, you don’t get care.”

If Not Now, When, for Universal Health Care?

Los Angeles Times
April 2, 2001
by Robert B. Reich, former Secretary of Labor

“Bill Clinton proposed his plan for universal health care when the nation was deeper in debt than it is now and faced annual deficits of almost $300 billion a year as far as the eye could see. Now we have a budget surplus even Alan Greenspan thinks is too big, and working families need affordable health care more than ever. You don’t have to
be rocket scientist — or even a politician — to figure out what has to be done.”

http://www.latimes.com/news/comment/20010402/t000028079.html

Medical Fees Are Often Higher for Patients Without Insurance

The New York Times
April 2, 2001
by Gina Kolata

“Most patients paying the full fare have no idea that their bill may be many times that of the people next to them in the doctor’s waiting room. And, in interviews, many doctors said they did not offer patients information on pricing disparities, however much they might agonize over the inequities of the system. While this may not be a problem for people who can afford fee-for-service plans, which typically are far
more expensive than other health insurance, it can be devastating for the uninsured.”

Mark V. Pauly, PhD, Professor of Health Care Systems at the Wharton School of the University of Pennsylvania:

“I don’t think it’s exactly good versus evil, it’s just business.”

Comment: Thank you, Dr. Pauly, for reminding us that “business” is inherently amoral, and cannot possibly serve as a force to move our health care system toward promoting the “good.” By extrapolation, you have reminded us that a public service model demands optimum utilization of public funds, an ideal model for our health care system. Dr. Pauly, I’m sure that you will endorse our proposal to throw out the egregiously wasteful, ineffective and “amoral” middleman health plans, and replace
them with an efficient, publicly administered, universal health insurance program that has a mandated mission of providing the greatest good in health care for all of us.

Former JAMA Editor Laments the State of Medical Care

Los Angeles Times
March 26, 2001
by Linda Marsh

An interview with George D. Lundberg, M.D., former editor of the Journal of the American Medical Association:

Question: To switch gears a bit, you’ve been highly critical of managed care….

Answer: Managed care is basically over. People hate it, and it’s no longer controlling costs. Health-care inflation is now back in the double digits. So if it’s not saving money, then why should we have it? But like an unembalmed corpse decomposing, dismantling managed care is going to be very messy and very smelly, and take awhile.

Question: What do you see taking its place?

Answer: In the future, I think we’ll see some form of government health insurance, along the Medicare model. Not necessarily socialized medicine but one large insurance pool or one single payer where people and employers can buy in. I think we should have some kind of mandated health insurance, where every American has to buy a policy with a high deductible, and the individual has to pay above a certain point. People won’t spend their money unless it’s justified. It’s the only way we can control costs.

Comment: “…one large insurance pool or one single payer…” …reality sinks in.

Although Dr. Lundberg needs to brush up on the health policy implications of mandates, buy-ins, employment linkage, high deductibles, caps, and alternatives for cost containment, nevertheless, it is very reassuring to see that a highly respected and very ethical traditionalist recognizes the inevitable.

Rationing or waiting?

Kip Sullivan, noted author on health policy:

We should undertake a campaign to stamp out the use of “rationing” to mean “waiting” where no harm is caused by waiting. “Rationing” in common parlance means “denial of a necessary service,” as in, “Cuba is
rationing electricity by shutting off power to whole neighborhoods for hours at a time.” Waiting nine months for a bone marrow transplant (US) or ten (Canada) is not rationing in the absence of evidence that this delay is harmful (George Silberman et al., “Availability and appropriateness of allogeneic bone marrow transplantations for chronic myeloid leukemia in ten countries,” New England Journal of Medicine 1994:331:1063-1067).

Those who use rationing to mean waiting for care put harmless waiting in the same category with denial. There oughta be a law against it.

Comment: Ida Hellander, commenting on the same study, notes that “the data show that some countries that have been characterized in the public debate as much more restrictive in the provision of sophisticated health care treatments actually had levels of transplantation that were equivalent to, if not greater than, those of the United States.”

The Canadian Cure

The New Rules
Winter 2001
by Daniel Kraker

Morton Lowe, M.D., coordinator of health sciences at the University of British Columbia:

“Canada rations by queuing. You have to wait your turn for a hip transplant even if there are three poorer people in front of you. Which I think is damn fine. In the U.S., if you’re rich, you get it fast, and if you’re poor, you don’t get it at all. That’s how they ration.”

Comment: Even if we had universal coverage, queuing should not be as much of an issue in our system that is characterized by abundant resources and excess capacity. According to David Himmelstein, M.D., scheduling delays are common and expected in the United States, but, whereas they are called a queue in Canada, in our country they are not called anything.

The full article, which suggests that the United States should take another look at the Canadian model, is available at: http://www.newrules.org/journal/nrwin01health.html

"World Trade Organization Targets Canadian Health Care System" by Stuart Laidlaw

Despite its failure to get a mandate in Seattle, the World Trade Organization has been progressing with free trade talks in Geneva for more than a year.

The talks, required to start by 2000 under past trade deals, have been held with very little fanfare, behind closed doors and with little input from those affected.

This week, three more days of talks will take place – again in Geneva, again behind closed doors and again without input from those affected.

And make no mistake about it: health care will be on the table.

Ottawa, of course, has vigorously claimed otherwise. It has, after all, invoked a feature of existing world trade deals allowing countries to specifically exempt parts of their economies from international free trade rules. On the face of it, this would seem to protect our cherished health care services from foreign and private incursion.

A closer look, however, reveals several concerns.

First off, both the U.S. and Europe have said they will be demanding an end to such exemptions. If they are successful – and these two working together make a powerful team – Canada’s protection will be gone. Canada’s own bargaining position at these talks – demanding the right to export health care while not allowing any imports – dangerously undermines our credibility in arguing to keep health care off the table.

But even if the U.S. and Europe are not successful, and even if we can successfully negotiate our import-banning, export-pushing trade position, there is still plenty of reason to worry. That’s because, while health care itself is exempted, much of what makes it up is not.

Take public health insurance. Canada has registered health insurance at the World Trade Organization as a financial service, leaving the very heart of medicare vulnerable to trade deals requiring Canada to open the field to foreign and private investors.

You would hope that this classification applies only to the private health insurance plans many of us enjoy at work to cover dental care or medication, but there’s nothing in Canada’s WTO commitments to spell that out. It just says “health insurance,” leaving it up to the WTO to define for us.

There’s more. The Canadian Centre for Policy Alternatives – echoing sentiments by more conservative trade experts such as John Kirton of the University of Toronto – argues that Canada could see much of its medicare
system whittled away under the WTO’s General Agreement on Trade in Services.

Services such as labs, food services, janitorial services, accounting, data processing, telecommunications (such as Ontario’s new phone-a-nurse service) and even hospital administration in the form of management consulting are already under the purview of the WTO’s agreement on trade in services.

A foreign company could argue that it is not trying to tell Canada how to run its health-care system, but just wants a shot at managing parts of it. If the WTO agrees – and it tends to favour free market arguments – we would be forced to allow private companies into our health-care system.

Not that private companies aren’t already in the health business in Canada – which further weakens the government’s assertion that medicare is safe from the WTO.

Here’s how: The WTO allows governments to exempt any service provided “in the exercise of government authority,” as long as such services are not also available commercially.

In other words, if a service is exclusively provided by the government, it is exempt. But if that service is provided through a mix of both government and private interests, it is open to the full force of the WTO.

Health care is such a service. The government, through medicare, obviously plays a huge role. But much of the health-care system is, in fact, privately run. Doctors’ offices operate as private businesses. So do the labs in many hospitals, after-hours clinics, dental offices, homecare providers and nursing homes. Even the hospitals themselves are often private, non-profit corporations. This makes our health-care system a mixed private-public system, and therefore subject to WTO rules.

Ottawa’s trade negotiators have characterized such concerns as “hypothetical,” and doubt any such challenges would ever materialize.

That is folly, and we need only look as far as the recent death of the Auto Pact to see the threat to health care.

The 35-year-old pact regulating the manufacturing of cars in North America was struck down by the WTO last year under its General Agreement on Trade in Services, the deal being refined and expanded this week in Geneva.

The Auto Pact required that the Big Three automakers make as many cars in Canada as they sold. Japan and Europe successfully argued before the WTO that the deal actually regulated the marketing of cars, not the manufacture.

And because marketing is a service, the Auto Pact fell under the General Agreement on Trade in Services, which requires that countries treat foreign companies the same way they treat domestic companies. That forced Canada to lift the tariff on Japanese and European imports.

If the World Trade Organization is willing to stretch the coverage of its service deal to include auto manufacturing, you can bet it will be willing to bring Canada’s health-care system under its umbrella, too.

Brave words by our negotiators and doubts that it will ever happen are simply not enough.

Four weeks ago in this space, John Core, former head of the milk marketing board, urged farmers to keep a close eye on the agricultural talks in Geneva to ensure that Ottawa’s negotiators stick to their commitments to protect Canadian farmers.

“It will not be acceptable at the end of the talks for our negotiators to say, `We tried,'” he wrote.

It’s a warning we all should heed.

Stuart Laidlaw is a member of The Star’s editorial board.
Copyright 1996-2001. Toronto Star Newspapers Limited

The Convention on the Rights of the Child

Adopted by the General Assembly of the United Nations on November 20, 1989

Summary of Article 24: Health and health services

“The child has a right to the highest standard of health and medical care attainable. Nations shall provide special emphasis on the provision of primary and preventive health care, public health education and the reduction of infant mortality. They shall encourage international cooperation in this regard and strive to see that no child is deprived of access to effective health services.”

Comment: The Convention on the Rights of the Child has been ratified by every nation except two. Somalia is unable to proceed to ratification as it has no recognized government. The only other nation that has failed to ratify the Convention is… the United States! The ratification process has been halted at the Senate Foreign Relations Committee.

Where is the outrage? Americans certainly would support the concepts of the Convention, but they remain uninformed. It is our responsibility to disseminate information about the Convention and about the political
process that is suppressing social justice in our nation. Start writing those articles, letters and editorials now.

Complete information on the Convention is available at: http://www.unicef.org/crc/crc.htm

(Thanks to Jane G. Schaller, M.D., President-elect of the International Pediatric Association, for today’s quote.)

“World Trade Organization Targets Canadian Health Care System” by Stuart Laidlaw

Despite its failure to get a mandate in Seattle, the World Trade Organization has been progressing with free trade talks in Geneva for more than a year.

The talks, required to start by 2000 under past trade deals, have been held with very little fanfare, behind closed doors and with little input from those affected.

This week, three more days of talks will take place – again in Geneva, again behind closed doors and again without input from those affected.

And make no mistake about it: health care will be on the table.

Ottawa, of course, has vigorously claimed otherwise. It has, after all, invoked a feature of existing world trade deals allowing countries to specifically exempt parts of their economies from international free trade rules. On the face of it, this would seem to protect our cherished health care services from foreign and private incursion.

A closer look, however, reveals several concerns.

First off, both the U.S. and Europe have said they will be demanding an end to such exemptions. If they are successful – and these two working together make a powerful team – Canada’s protection will be gone. Canada’s own bargaining position at these talks – demanding the right to export health care while not allowing any imports – dangerously undermines our credibility in arguing to keep health care off the table.

But even if the U.S. and Europe are not successful, and even if we can successfully negotiate our import-banning, export-pushing trade position, there is still plenty of reason to worry. That’s because, while health care itself is exempted, much of what makes it up is not.

Take public health insurance. Canada has registered health insurance at the World Trade Organization as a financial service, leaving the very heart of medicare vulnerable to trade deals requiring Canada to open the field to foreign and private investors.

You would hope that this classification applies only to the private health insurance plans many of us enjoy at work to cover dental care or medication, but there’s nothing in Canada’s WTO commitments to spell that out. It just says “health insurance,” leaving it up to the WTO to define for us.

There’s more. The Canadian Centre for Policy Alternatives – echoing sentiments by more conservative trade experts such as John Kirton of the University of Toronto – argues that Canada could see much of its medicare
system whittled away under the WTO’s General Agreement on Trade in Services.

Services such as labs, food services, janitorial services, accounting, data processing, telecommunications (such as Ontario’s new phone-a-nurse service) and even hospital administration in the form of management consulting are already under the purview of the WTO’s agreement on trade in services.

A foreign company could argue that it is not trying to tell Canada how to run its health-care system, but just wants a shot at managing parts of it. If the WTO agrees – and it tends to favour free market arguments – we would be forced to allow private companies into our health-care system.

Not that private companies aren’t already in the health business in Canada – which further weakens the government’s assertion that medicare is safe from the WTO.

Here’s how: The WTO allows governments to exempt any service provided “in the exercise of government authority,” as long as such services are not also available commercially.

In other words, if a service is exclusively provided by the government, it is exempt. But if that service is provided through a mix of both government and private interests, it is open to the full force of the WTO.

Health care is such a service. The government, through medicare, obviously plays a huge role. But much of the health-care system is, in fact, privately run. Doctors’ offices operate as private businesses. So do the labs in many hospitals, after-hours clinics, dental offices, homecare providers and nursing homes. Even the hospitals themselves are often private, non-profit corporations. This makes our health-care system a mixed private-public system, and therefore subject to WTO rules.

Ottawa’s trade negotiators have characterized such concerns as “hypothetical,” and doubt any such challenges would ever materialize.

That is folly, and we need only look as far as the recent death of the Auto Pact to see the threat to health care.

The 35-year-old pact regulating the manufacturing of cars in North America was struck down by the WTO last year under its General Agreement on Trade in Services, the deal being refined and expanded this week in Geneva.

The Auto Pact required that the Big Three automakers make as many cars in Canada as they sold. Japan and Europe successfully argued before the WTO that the deal actually regulated the marketing of cars, not the manufacture.

And because marketing is a service, the Auto Pact fell under the General Agreement on Trade in Services, which requires that countries treat foreign companies the same way they treat domestic companies. That forced Canada to lift the tariff on Japanese and European imports.

If the World Trade Organization is willing to stretch the coverage of its service deal to include auto manufacturing, you can bet it will be willing to bring Canada’s health-care system under its umbrella, too.

Brave words by our negotiators and doubts that it will ever happen are simply not enough.

Four weeks ago in this space, John Core, former head of the milk marketing board, urged farmers to keep a close eye on the agricultural talks in Geneva to ensure that Ottawa’s negotiators stick to their commitments to protect Canadian farmers.

“It will not be acceptable at the end of the talks for our negotiators to say, `We tried,'” he wrote.

It’s a warning we all should heed.

Stuart Laidlaw is a member of The Star’s editorial board.
Copyright 1996-2001. Toronto Star Newspapers Limited

Hearing on Living without Health Insurance: Solutions to the Problem

United States Senate
Finance Committee
March 15, 2001

Senator John Rockefeller, responding to proposals for tax credits:

“So that if you’re going to do health insurance for people, then you have to do it properly. And the tax credit is the wrong approach. It is the wrong approach, period. That’s all there is to it. It will not work. It will not work at the figures that are being offered by you…the figures that’ll come in part from the other side, maybe some from
our side. It won’t work. And I think we have to decide on this committee do we want people to get health insurance or do we not?”

http://www.kaisernetwork.org/admin/healthcast/uploaded_files/sfi031501.pdf

As ER visits climb, hospitals react

The Philadelphia Inquirer
March 16, 2001
by Stacey Burling

“Some experts say the emergency room is being transformed from a last recourse in desperate moments to a place where people can get all sorts of care at all hours.”

“Rather than fighting the trend, some hospitals are accommodating the increased traffic by adding physicians’ assistants and nurse practitioners to ER staffs and offering ‘fast track’ care.”

Ted Christopher, ER director at Thomas Jefferson University Hospital:
“I think emergency medicine is probably misnamed. It should probably be named 24-hour-access care.”

Uwe Reinhardt, Princeton University health economist:
“Using the emergency room for routine procedures is actually quite efficient.”

Michael Carius, president-elect of the American College of Emergency Physicians:
“You can either try to change demand, or you can try to meet demand.”

Comment: There is a great need for night and weekend clinical services. The emergency rooms are filling this role by default. Emergency room costs are high, in part because of the numbers of uninsured that resort to this source of care. Shunting the non-life threatening cases to more efficient care within the same facility improves the utilization of resources. In addition, if we were to adopt universal health insurance, we would end the cost-shifting that makes emergency services outrageously expensive for the rest of us.