PNHP

Demonstration for Single-Payer Health Reform Draws Large Crowd outside Republican National Convention

Demonstration for Single-Payer Health Reform Draws Large Crowd outside Republican National Convention

Note from Dr. Walter Tsou, PNHP Board of Directors.

My impressions of the rally and march?

The turnout was amazing. You organize these things for a year and you never know how it would turn out. Even a week before, we weren’t sure how many would show up, but the word was that buses were coming in from as far away as . . .well Illinois! Turned out that we had probably between 2500-4000 people there.

The rally and march was timed out and to the great credit of Tim Lachman (PNHP), Larry Browne, MD, Travis Parchman (Labor Party) and probably 30 others, we raised close to $19,000 and actually pulled off the rally exactly on time and on budget. We stated that we would meet at 6th and Arch, walk along Chestnut Street and end up at a place outside City Hall for the rally about 12 blocks away. Close to 25 different speakers came up and spoke out for national health insurance and universal health care, including Ralph Nader (Green Party), Rosanna Pelizarri (Medical Reform Group of Canada), Steffie Woolhandler (PNHP), Nick Unger (UNITE), Henry Nicholas (National President of 1199C), Tony Mazzochi (Labor Party), Tim Lachman (local Ad Hoc Chair), Larry Browne (practicing internist), Paul Fink (Past President of the American Psychiatric Assoc), Pedro Rodriquez (Action Alliance of Senior Citizens), ACT-UP, Communist Party, West Virginia Council of Churches, Evonne Tisdale (Philadelphia Unemployment Project) and a few more. It was a stellar performance. And it all ended at 4 PM, just as we stated.

The most exciting part though was really marching down Chestnut Street. As the first demonstration of the Republican National Convention we had swarms of reporters, TV cameras, and radio people there. Helicopters were overhead watching and filming the march. From the front to the back of the group, we probably covered 4-5 city blocks. We couldn’t really tell because it seemed to go on and on.

The march was lead by a hand stitched cloth banner saying Health Care for All held by doctors and nurses in white coats. (The design can be found at www.phillyhealth.org). It included drill teams, senior citizens, children, all kinds of activists, people on stilts, megaphones shouting, “what do we want?” “Health care”, “When do we want it?” “Now”. Hundreds of signs with Universal, Single Payer Health Care; Patients, not Profits; and End racism in Health Care. There was a mock 10 foot Statue of Liberty behind me which was on the front page of the Inquirer. We went by one of the major hospitals, Jefferson and we noted that some of the workers jumped into the parade. Police lined the parade route and police sirens and cars blocked car traffic for us! In short it was very motivating and energizing!!

I caught coverage of the event on three of the local TV stations and the CBS news (15 seconds). We probably were covered on others. Were heard from some that it was picked up by the BBC and was seen in far away places like Jakarta and South Africa.

In short it was a great rally and march and very inspiring.

DATA UPDATES EXCERPTS (September 1998)

New England Journal of Medicine Editor Calls for Single Payer

The New England Journal of Medicine
June 1, 2000 — Vol. 342, No. 22
Patients’ Rights Bills and Other Futile Gestures

Health care reform is once more at the top of the political agenda, after some six years of neglect in the wake of the failure of the Clinton plan. During those six years, the issue was generally considered one of the third rails of American politics — not to be touched. What is causing the turnabout? There are three reasons. First, after a period of stagnation during the mid-1990s, inflation in health care costs is again sharply on the increase. Second, the number of Americans without any health care insurance at all, or with inadequate coverage, continues to rise. And third — and most important politically — middle-class voters are getting fed up with the abuses of managed care. They are frustrated by shorter hospital stays, restricted choices of doctors, arbitrary denials of coverage, increasing deductibles and copayments, and all the other methods by which the industry resists actually providing services to sick people.

Since the demise of the Clinton plan in 1994, it has been generally agreed that reform of the health care system cannot be full-scale. Conventional wisdom holds that the Clinton attempt failed in large part because it was too sweeping. According to this view, reform needs to be incremental to succeed. Thus, what few reforms we have seen since 1994 have merely nibbled at the edges of the access problem. For example, the Kennedy-Kassebaum statute, which permits employees who leave their jobs to continue their health insurance (if they can afford to pay for it), and the expansion of insurance coverage for children are quite modest in their scope and effects. Similarly, attempts to deal with the abuses of managed care have been piecemeal — for example, legislation to require 24-hour hospital stays after childbirth.

It is in this spirit that a number of “patients’ rights” bills are being offered, both in the U.S. Congress and in state legislatures. The proposals differ from one another in some respects, most notably in the population to which they would apply and the extent to which patients would be permitted to sue their managed-care companies. However, all have in common efforts to restore to patients and their doctors control over medical decisions — control that has increasingly been assumed by third-party payers and managed-care plans. For example, the bills provide for appeals mechanisms when services are denied, for treatment in hospital emergency departments when patients plausibly believe it is warranted, and for decisions about referrals to be made by doctors and patients, not by health plans and employers.

I very much agree with the aims of patients’ rights bills. But I also believe these bills will not achieve their ends. Rather, I am afraid they will have effects opposite from those intended. Patients’ rights bills will simply swell the ranks of the uninsured. Why such a perverse effect? The reason is that employers are not required by law to offer any health care benefits at all, and they will not do so if they believe the disadvantages to them outweigh the advantages. Patients’ rights bills will tend to tip that balance. Insofar as they have teeth, they will inevitably increase the costs of managed-care companies, which will simply pass their increased costs along to employers. Employers may then decide to drop health care coverage altogether, or to limit it sharply through stratagems such as “defined contributions,” rather than pay the higher premiums for standard benefits. Workers, for their part, may elect not to accept health care insurance, because of the growing direct costs to them. Thus, patients’ rights legislation will very probably increase the number of uninsured and underinsured people. The tougher the regulations, the more likely this outcome. The fundamental problem is that it is impossible to regulate health care in an employment-based system if employers can opt out.

The threat that patients’ rights legislation will increase the number of the uninsured and underinsured may not be fully realized in our present economy, when we have nearly full employment and many employers have a strong incentive to offer good benefits to attract workers. However, we need to remember that even in this booming economy, the ranks of the uninsured and underinsured are steadily increasing. Most of the newcomers to these ranks are employed. With a downturn in the job market, bargaining power would probably begin to shift from employees to employers. In that case, a very large number of employers might be quite willing to drop or reduce health care benefits, especially if premiums were rapidly increasing.

That is exactly what the managed-care industry and many of its allies in Congress argue in opposition to patients’ rights bills. I believe they are correct about the probable effects of such bills on the number of the uninsured and underinsured, but they are wrong in concluding that the present managed-care insurance system is essentially sound. (The only change the industry advocates from time to time is an expansion of coverage by managed care, but with premiums, of course, set by the private market and subsidized by government.) What we should instead conclude is that the private managed-care market has been a miserable failure at delivering health care. It has creamed off ever larger percentages of health care premiums in bloated administrative and marketing costs and profits, it has rewarded health plans that cherry-pick the healthy and avoid the sick, and it has resisted at every turn providing adequate services to those unfortunate enough to need them.

There is no question that patients’ rights — and doctors’ rights — are essential in any decent health care system. But they cannot be legislated in isolation in a system whose every incentive works against these rights and where the provision of health care insurance is purely voluntary. What needs to be changed is the system itself. Contrary to conventional wisdom, incremental changes, such as patients’ rights legislation, will not work. In a competitive private market, they simply provoke reactions that nullify the social objectives of the legislation.

This is not the place to present in detail a plan to overhaul our health care system. But there are three major changes that would address the difficulties in ensuring patients’ rights that I have discussed here.

First, employers should get out of the health care business altogether. There is no reason to believe they are good proxies for their workers when it comes to health care decisions. Indeed, they have a clear conflict of interest, since they have a strong incentive to keep premiums as low as possible.

Second, just as employers are not good proxies for their workers, so investor-owned managed-care companies are not good proxies for doctors. They, too, have a conflict of interest. They have obligations to their investors as well as to their enrollees. That the former often take precedence is evident from all the ways in which the industry limits medical services even while maintaining high profits and executive salaries. In my view, there is no place for these businesses in a good health care system.

Finally, health care insurance should not be optional, as it is in our employment-based system. Just as everyone over the age of 65 is covered by Medicare, so should everyone under that age be covered. In a 1993 editorial in these pages, I called for a universal, single-payer system and suggested that we could attain that goal by extending Medicare to all Americans. The need is even greater now. Those who worry that such a reform would increase taxes should remember that we all pay for health care anyway — through our paychecks, deductibles and copayments, and the prices of goods and services — and that Medicare is far more efficient than the market-based part of our health care system.

Election year 2000 is the time to look again at our health care system in its entirety, not just in bits and pieces. The insurance industry will once again mount a campaign to prevent that from happening. Harry and Louise will be back, perhaps with aliases. But can they convince the American public once again that government is the bogeyman and that the private sector will take care of their health care needs? I doubt it. We’ve had six years of hard experience, and we know better.

Marcia Angell, M.D.

Immigrants Boost Economy's Health But Lack Access To Health Care Half Of Non-Citizens Working Full-Time Lack Health Insurance

New York City — While immigrants are credited with helping to fuel the nation’s long economic expansion, they aren’t sharing in all the benefits, particularly health benefits.

Among full-time workers who are non-citizens, fully half (51%) lack health insurance, according to a study in today’s American Journal of Public Health. Over 1/3 (34.3%) of the 26.2 million immigrants (citizens and non-citizens) residing in the U.S. are uninsured — 9 million people — including one million children, compared with 14.2% of U.S. born residents who are uninsured.

“The crisis in the U.S. health system — with 44.3 million people uninsured — is affecting everyone. However, that 10% of our population that is foreign-born has been particularly hard hit ” says study co-author Dr. Olveen Carasquillo, an internist at Columbia University.

“Almost half (43%) of all immigrants who are not citizens are uninsured, ” noted Carasquillo. “They are much less likely to receive health benefits at work and are also less likely to receive safety-net government-sponsored insurance programs such as Medicaid and the Children’s Health Insurance Program.”

Major findings of the study include:

* Immigrants have low-rates of employer-sponsored health coverage. Half (51%) of all non-citizen immigrants who work full-time are uninsured – 3.34 million people.

* Immigrants make up a small percentage (less than 5%) of people with government-sponsored health insurance.
43.3% of non-citizen immigrant children are uninsured – one million children. In addition, under current federal laws if these children entered the country after 1996 they are not eligible for Medicaid or the Children’s Health Insurance Program (CHIP).

* Country of origin makes a big difference. Immigrants are more like to be insured if they are from countries like Russia or Cuba (hence eligible for citizenship) or Europe or Canada. Immigrants from Central America, Haiti, Vietnam, and Korea are most likely to lack coverage. In fact, over 50% of all immigrants from Mexico and Central America did not have health insurance.

* Immigrants who are not citizens (62.9% of all immigrants) and their children are more likely to be uninsured. 43.6% of non-citizen immigrants are uninsured, compared with 18.5% of immigrants who have become US citizens. (The study used data from the 1998 Current Population Survey conducted by the Census Bureau. The CPS does not ask respondents if they are legal immigrants).

“The billions of dollars that the federal government is spending to eliminate racial and ethnic disparities in health care will only succeed when every person in this country, including all immigrants, has equal access to our health care system,” said Dr. Elena Rios, President of the National Hispanic Medical Association.

“Expecting people to work productively when they have no access to care for themselves or their children is not just inhumane, it’s bad economics,” said Dr. Quentin Young, National Coordinator of PNHP. “We need a not-for-profit, national health system that covers all residents, regardless of age, immigration status, employment, race, and ethnicity.

Copies of “Health Insurance Coverage of Immigrants Living in the United States: Differences by Citizenship Status and Country of Origin,” O. Carasquillo, A. Carasquillo and Steven Shea, American Journal of Public Health, June, 2000 are available from PNHP at (312) 554-0382.

Immigrants Boost Economy’s Health But Lack Access To Health Care Half Of Non-Citizens Working Full-Time Lack Health Insurance

New York City — While immigrants are credited with helping to fuel the nation’s long economic expansion, they aren’t sharing in all the benefits, particularly health benefits.

Among full-time workers who are non-citizens, fully half (51%) lack health insurance, according to a study in today’s American Journal of Public Health. Over 1/3 (34.3%) of the 26.2 million immigrants (citizens and non-citizens) residing in the U.S. are uninsured — 9 million people — including one million children, compared with 14.2% of U.S. born residents who are uninsured.

“The crisis in the U.S. health system — with 44.3 million people uninsured — is affecting everyone. However, that 10% of our population that is foreign-born has been particularly hard hit ” says study co-author Dr. Olveen Carasquillo, an internist at Columbia University.

“Almost half (43%) of all immigrants who are not citizens are uninsured, ” noted Carasquillo. “They are much less likely to receive health benefits at work and are also less likely to receive safety-net government-sponsored insurance programs such as Medicaid and the Children’s Health Insurance Program.”

Major findings of the study include:

* Immigrants have low-rates of employer-sponsored health coverage. Half (51%) of all non-citizen immigrants who work full-time are uninsured – 3.34 million people.

* Immigrants make up a small percentage (less than 5%) of people with government-sponsored health insurance.
43.3% of non-citizen immigrant children are uninsured – one million children. In addition, under current federal laws if these children entered the country after 1996 they are not eligible for Medicaid or the Children’s Health Insurance Program (CHIP).

* Country of origin makes a big difference. Immigrants are more like to be insured if they are from countries like Russia or Cuba (hence eligible for citizenship) or Europe or Canada. Immigrants from Central America, Haiti, Vietnam, and Korea are most likely to lack coverage. In fact, over 50% of all immigrants from Mexico and Central America did not have health insurance.

* Immigrants who are not citizens (62.9% of all immigrants) and their children are more likely to be uninsured. 43.6% of non-citizen immigrants are uninsured, compared with 18.5% of immigrants who have become US citizens. (The study used data from the 1998 Current Population Survey conducted by the Census Bureau. The CPS does not ask respondents if they are legal immigrants).

“The billions of dollars that the federal government is spending to eliminate racial and ethnic disparities in health care will only succeed when every person in this country, including all immigrants, has equal access to our health care system,” said Dr. Elena Rios, President of the National Hispanic Medical Association.

“Expecting people to work productively when they have no access to care for themselves or their children is not just inhumane, it’s bad economics,” said Dr. Quentin Young, National Coordinator of PNHP. “We need a not-for-profit, national health system that covers all residents, regardless of age, immigration status, employment, race, and ethnicity.

Copies of “Health Insurance Coverage of Immigrants Living in the United States: Differences by Citizenship Status and Country of Origin,” O. Carasquillo, A. Carasquillo and Steven Shea, American Journal of Public Health, June, 2000 are available from PNHP at (312) 554-0382.

Insurers Are Major Investors in Big Tobacco Popular Mutual Funds Also Have Billions Invested in Tobacco

PHYSICIANS URGE INSURERS TO “KICK THE HABIT”

Despite calls to divest, insurers continue to be major shareholders in tobacco firms. Prudential has actually increased its stock holdings in tobacco nearly 400% — to $892 million — in the last 4 years, according to findings published in today’s Journal of the American Medical Association. “Insurance Firms’ and Mutual Funds’ Tobacco Habit,” by three researchers at Harvard, also finds that the popular mutual fund Fidelity has major stock holdings in tobacco, including over $6.6 billion of Philip Morris stock — 8% of the entire company.

“A health insurer that buys tobacco stocks cares more about profits than the health of its patients,” said lead author Dr. Wesley Boyd. “Teachers, physicians, and those who invest their savings in mutual funds are unwitting accomplices in causing 400,000 tobacco deaths a year.”

Insurers’ tobacco holdings include:

Cigna, the giant HMO firm, owns over $38 million in Philip Morris stocks and $4 million in Loews stocks.

MetLife’s stockholdings total $55 million in Philip Morris and almost $7 million in Loews.

Prudential Insurance owns $435 million of Philip Morris, nearly $320 million of Loews stock, and $137 million of RJ Reynolds.

Mutual funds’ tobacco holdings include:

Fidelity owns $6.6 billion of Philip Morris stock and $23 million of RJ Reynolds.
Vanguard owns stock in all 4 major tobacco companies, including over $1.1 billion in Philip Morris and over $100 million in Loews.

TIAA-CREF also owns stock in all 4 companies, holding $732 million worth of Philip Morris stock and over $37 million worth of Loews stock.

Sanford Bernstein stockholdings amounted to $912 million of Philip Morris and over $137.3 million of RJ Reynolds.
“It’s time to push insurers and mutual funds to kick their deadly habit,” said Dr. Quentin Young, National Coordinator of Physicians for a National Health Program. “Stronger physician and public protest and yes, government action against tobacco in the form of higher taxes and bans on marketing and exports, is needed.”

Medical Errors Higher at For-Profit than Not-for-Profit Hospitals, Harvard Study Finds

March, 2000

Journal of General Internal Medicine Editorial Cites Cuts in Nursing, Focus on Profits

According to a study and editorial released today, patients at for-profit hospitals are two to four times more likely than patients at not-for-profit hospitals to suffer adverse events such as complications following surgery or delays in diagnosing and treating an ailment.

“This study is another warning for those who would trust hospital care to the marketplace,” said Dr. Gordon Schiff, author of the editorial (“Fatal Distraction” JGIM, April, 2000).

Previous research has found death rates 25 percent higher at for-profit hospitals than at teaching hospitals and 6 to 7 percent higher than at non-profit, non-teaching hospitals. In addition, for-profit hospitals employ fewer nurses, charge higher prices (costing Medicare an additional $5.2 billion annually) and spend a higher percentage of their budgets on overhead.

A study published last year in the Journal of the American Medical Association also found that for-profit HMOs are lower quality than not-for-profit HMOs on 14 quality measures.

Dr. Schiff cited a remarkable study on blood donation by Dr. Richard Titmuss (“The Gift Relationship”), published three decades ago which found that for-profit blood centers were less efficient, more costly, and more dangerous to patients than voluntary, non-profit centers.

“Hospital managers and even medical staffs are preoccupied with survival in the marketplace,” said Dr. Schiff. “This preoccupation represents a “fatal distraction” from the real business of health care — caring for patients and improving quality.”

“We’re very concerned that non-profit hospitals will be forced to adopt the same cost- and quality-cutting measures of the for-profits,” continued Dr. Schiff. “It’s much easier to measure money than quality of care.”

Public non-teaching hospitals also had higher rates of adverse events than not-for-profit hospitals and teaching institutions, which the study suggests may be due to insufficient funding during the study period. The study examined 15,000 patients hospitalized in Utah and Colorado in 1992, and many small public Colorado hospitals experienced financial losses that year.

“The competitive free market described in textbooks doesn’t and can’t exist in health care,” says Dr. Claudia Fegan, an internist in Chicago and former medical director of Michael Reese hospital in Chicago. “Seriously ill patients can’t comparison shop or accurately judge quality. We need a not-for-profit national health system to increase access for the millions of uninsured, to strengthen our nation’s health care safety net, and to improve quality for all.”

Claim That HMO's Save Money Is Little More Than "Folklore," Health Affairs Study Finds

March, 2000 Lull in health inflation in mid-1990’s explained by other factors Washington, D.C. — While millions of Americans have been shunted into HMO’s over the past decade, there’s no evidence that managed care saves money, according to a study in today’s Health Affairs, the nation’s largest health policy journal. “HMO premiums are up nearly 20% in the past two years, but a lull in health inflation in the mid-1990’s is so often attributed to HMO’s as to have become ‘folklore,'” noted study author Kip Sullivan, who reviewed three decades of research for the study. “The claim that HMO’s are more ‘efficient’ than the fee-for-service (FFS) plans they replaced is typically based on one of two research errors,” said Sullivan. “Either the study didn’t take into account higher HMO administrative costs, and only looked at cuts in hospital or doctor care, or it didn’t take into account factors like cherry-picking healthier patients or cost-shifting to other payers as an explanation for lower premiums.” The study also notes that factors other than the spread of HMO’s explain the mid-1990’s lull in health inflation. These include the threat of price-controls and health reform in 1993, the well-documented insurance underwriting cycle (three years of high premiums followed by three years of low premiums), a low inflation rate in the rest of the economy, and HMO’s lowering premiums (short-term) to gain market share. “As managed care enrollment has soared so have administrative expenses,” said Dr. Steffie Woolhandler, Associate Professor of Medicine at Harvard. “The percentage of workers in the health system dealing with paperwork has increased from 18% to nearly 30%, belying the myth of HMO efficiency.” “The verdict is in on corporate control of health care. It has failed,” said Dr. Quentin Young, National Coordinator of Physicians for a National Health Program. “The US spends more on health care than any other country in the world yet leaves 45 million uninsured and ranks 37th in performance according to a recent study by the World Health Organization. It’s time for not-for-profit (single-payer) national health insurance.”

Less Than Half of Americans Have Health Insurance Paid for by Private Employers

September, 1999

New England Journal Study Finds Role of Private Employers Has Been Exaggerated: Government and Individuals Pay for Most Care

Cambridge, MA — While 61% of Americans get their health insurance on the job, private employers aren’t picking up that much of the tab, according to a study published in today’s New England Journal of Medicine. Excluding workers with insurance paid for by the government or by employees themselves, fewer than half of Americans (43%) have health insurance paid for by a private employer. Moreover, private employers pay for an even smaller share of total health spending, just over one-fifth (21.2%).
“On one hand, there’s a nearly universal misconception that private employers are paying for most Americans’ health care,” commented Dr. Steffie Woolhandler, Associate Professor of Medicine at Harvard and a co-founder of Physicians for a National Health Program. “On the other hand, it’s a well-kept secret how much health care taxes and individuals fund.”

The study found that 34% of Americans are covered by government-paid insurance, including 22 million government workers and 69 million persons with Medicare, Medicaid, Veteran’s Administration, or other government-paid insurance. In six states, more residents had government-funded insurance than had private employer-paid coverage (Alaska, D.C., Montana, New Mexico, Oklahoma, and Tennessee). Also, in only six states did more than half of the population receive coverage from a private employer (Connecticut, Illinois, Massachusetts, New Hampshire, Ohio, Wisconsin).

The percentage of residents with insurance paid for by a private employer ranged from a low of 25.6% in New Mexico to 53.8% in Wisconsin. The proportion of residents with government-paid insurance ranged from a high of 51.7% in Alaska to 28.0% in Iowa. The study analyzed data from the Census Bureau’s 1997 survey of about 50,000 households.

Seven percent of Americans buy their own insurance, including 9.1 million workers who get insurance through work but pay the entire premiums themselves. 16% of Americans are uninsured. Including insurance premiums and out-of-pocket costs for care, individuals fund over one-quarter of total health costs (26%) previous studies show. Government pays for nearly half, (47%).

“Private employers’ influence over health care is way out-of-proportion to how much coverage they pay for,” said Dr. Olveen Carrasquillo, one of the study’s authors and an internist at New York’s Columbia Presbyterian Hospital. “We need a more democratic health policy debate.”

“Most developed countries make health insurance a right, not a job benefit,” said Dr. David Himmelstein, a co-author of the study and Associate Professor of Medicine at Harvard. “We should too.”

New England Journal of Medicine Editorial Says Evidence Against For-Profit Hospitals Now Conclusive

August, 1999

For-Profit Hospitals Deliver Inferior Care at Inflated Prices and Cost Medicare an Extra $5.2 Billion Annually

An editorial and study in today’s New England Journal of Medicine (NEJM) concludes that for-profit hospitals are more expensive than not-for-profit facilities. For-profit hospitals cost Medicare an additional $732 per enrollee, or an extra $5.2 billion, in 1995 alone (“The Association Between For-Profit Hospital Ownership and Increased Medicare Spending,” NEJM, August 5, 1999). The editorial also notes that substantial prior research confirms that for-profit hospitals are 3 to 11 percent more expensive and spend more on overhead and administration while hiring fewer nurses, providing less charity care, and providing patients with fewer hospital days than not-for-profit facilities.

The editorial also concludes that for-profit hospitals are lower in quality than not for- profit facilities, based on a review of nearly two decades of peer-reviewed literature (“When Money is the Mission -The High Costs of Investor-Owned Care,” NEJM, August 5, 1999). For example, two recent studies have found death rates 6 to 7 percent lower at private non-profit hospitals and 25 percent lower at teaching hospitals than at for-profit facilities. Other studies have found more post-operative complications and preventable adverse events at
for-profit facilities.

The editorial is authored by Harvard Medical School Associate Professors Steffie Woolhandler, MD and David U. Himmelstein, MD, co-authors of a July 14 study in the Journal of the American Medical Association showing that investor-owned HMOs are lower-quality than not-for-profits on every single one of 14 quality measures (Quality of Care in Investor-owned vs. Not-for-Profit HMOs). Dr. Himmelstein and Woolhandler are also co-founders of Physicians for a National Health Program.

The study on hospitals, performed by Dartmouth Medical School researchers Elaine Silverman, MD, MPH, Elliott Fisher, MD, MPH, and Jonathan Skinner, PhD finds substantially higher Medicare costs and more rapid price increases in communities dominated by for-profit hospitals. The authors may be reached at (802) 295-9363 x5545 (ES), (603) 550-1822 (EF), and (603) 646-2535 (JS).

According to an editorial in today’s New England Journal of Medicine, for-profit hospitals provide lower quality care while charging higher prices than not-for profit facilities. The editorial, which accompanies a study on the impact of investor-ownership on Medicare costs, comes just three weeks after the publication of research showing that investor-owned HMOs scored lower on every single one of 14 quality measures and spent 48 percent more on overhead and profits than not-for-profit HMOs.

Like their cousins in the HMO industry , “investor-owned hospitals are profit maximizers, not cost minimizers. Strategies that bolster profitability, like Columbia HCA’ s glitzy advertising, can worsen efficiency. The competitive free market described in textbooks doesn’t and can’t exist in health care,” says Drs. Steffie Woolhander . “Seriously ill patients can’t comparison shop or accurately judge quality, especially when for-profit HMOs and hospitals try to mislead consumers.

Co-author Dr. David Himmelstein notes that “for-profit medicine turns doctors and nurses into tools of Wall Street and patients into commodities . . . Our society recognizes that some things are too intimate or corruptible to trust to the market. We prohibit selling children and buying juries. Investors should not profit from suffering. For-profit hospitals and HMOs should be banned.”

“The editorial and study conclusively demonstrate -if there was any doubt left — that marketplace medicine is a failed experiment,” says Dr. Quentin Young, National Coordinator, Physicians for a National Health Program and an internist in Chicago. “We have 45 million people without any insurance and 125,000 additional people losing their insurance every month. Every day there’s more bad news about how rotten our health system is -prices rising, quality falling, and, just this month, an additional 250,000 seniors being dumped from Medicare HMOs.”

“The so-called “Patient Bill of Rights” defeated last month was so threadbare it didn’t even include the right to health care” continues Dr. Young. “The good news is, there’s an obvious solution to this chaos, and one we must study hard a single payer not-for-profit national health program like they have in Canada (our much poorer neighbor to the north) or Scandinavia {where doctors still make house calls). The American people rate “insuring everyone” their top health care priority (CBS poll, July, 1999). In the 2000 Presidential elections, let’s ensure that at least one candidate will have the courage to insist that health care be a human right and refuse to accept any campaign funding from for-profit HMOs, hospitals, physicians’ groups, nursing homes and drug companies. If that candidate emerges, he or she will be our next President.”

Quality of Care Lower in For-Profit HMOs than in Non-Profits

July, 1999

Harvard Study in Journal of American Medical Association Finds Investor-owned HMOs Worse on All Quality Measures

A study published in today’s Journal of the American Medical Association (JAMA) finds that investor-owned HMOs scored worse than non-profit HMOs on all 14 quality indicators reported to the National Committee for Quality Assurance in 1997. The quality measures ranged from routine preventive care (e.g. childhood immunizations, pap smears, prenatal care, and mammography) to care for patients with serious illness (e.g. eye examinations to prevent blindness in diabetics, follow-up visits for patients released from psychiatric hospitals, and prescriptions of life-saving beta blocker drugs for patients surviving heart attacks).
Between 1985 and 1998 the proportion of HMO members enrolled in investor-owned plans increased from 26% to 62%. Until now little has been known about the quality of care in investor-owned plans. Previous research comparing HMOs with fee-for-service care has generally found similar outcomes for healthy enrollees, but sick patients have fared poorly in managed care. Most of this older research examined non-profit HMOs, whose quality is far higher than the newly dominant for-profit plans. Hence, the new research indicates that average HMO quality is lower than previously believed, and significantly worse than fee-for-service care.

Some of the biggest quality differences between investor-owned and non-profit plans were in the care of seriously ill patients. As compared to non-profit plans, investor-owned HMOs had a 27% lower rate of eye examinations for diabetics; a 16% lower rate of appropriate drug treatment for heart attack survivors; and a 9% lower rate of follow-up for patients released from mental hospitals. Childhood immunization rates were 12% lower, pap smear rates 9% lower and mammography rates 8% lower in investor-owned plans.

“Investor-owned HMOs pay more attention to their profits than to their patients,” said Dr. Steffie Woolhandler, Associate Professor of Medicine at Harvard and one of the authors of the study. “Mammography rates in investor-owned plans are 8% lower. If all American women were enrolled in for-profit HMOs instead of non-profits, 5,925 more would die from breast cancer.”

While the study found that costs in investor-owned and non-profit plans were similar ($128 per member, per month, vs. $127.50), investor-owned plans spent 48 percent more of their revenues on administrative costs and profits (19.4% of revenues vs. 13.1%). Hence, investor-owned HMOs spent significantly less for patient care.

“It’s a simple equation,” said study co-author Dr. Sidney Wolfe, Director of the Public Citizen Health Research Group. “The quest for profit endangers medical care. The more money that goes for profit, the less goes on health care.”

The study analyzed 1996 quality-of-care data from 248 investor-owned and 81 not-for-profit HMOs that provided coverage to 56% of all Americans enrolled in HMOs that year. The data were submitted in 1997 to the National Committee for Quality Assurance (NCQA) from the Health Plan Employer Data and Information Set (HEDIS) Version 3.0. Fewer data are likely to be available in the future. The number of plans refusing to allow release of their data grew from 41 in 1997 (the data analyzed for the JAMA study) to 155 in 1998. The NCQA reports that lower quality plans are most likely to refuse public release of their data.

“Our decade-old experiment with market medicine is a failure,” said study co-author Dr. Ida Hellander, Executive Director of Physicians for a National Health Program. “Investor-owned plans have worse quality than non-profits, and non-profits are increasingly forced to mimic the for-profits. It’s time to end our race to the bottom in health care and implement nationwide quality improvement and universal coverage through single-payer national health insurance.”

For-Profit HMOs Invading Latin America with Help From World Bank

Aetna, CIGNA Expanding South of the Border, New England Journal Study Finds

Some of the nation’s largest managed care companies have started looking south in search of greater profits, according to a study in this week’s New England Journal of Medicine. Unfortunately, say the authors, they’re bringing their problems with them — like “cherry picking” healthy patients, increased bureaucracy, and reduced access to health care for vulnerable patients.

In contrast to the United States, most Latin American countries have social security systems that include health care benefits. They also have free public hospitals and clinics, and, while spending far less on health care per capita than the U.S., have achieved important successes, such as improving infant mortality and life expectancy.

“Two factors are leading to the rise of managed care in Latin America,” according to Dr. Howard Waitzkin, co-author of The Exportation of Managed Care to Latin America and a Professor of Family and Community Medicine at the University of New Mexico.

“First, the World Bank is pressuring governments to turn health care — and their multi-billion-dollar social security pension funds — over to the private sector, regardless of the consequences. Secondly, there is growing economic inequality in the region. With an expanding upper-middle class eager for more services, but governments forced to cut back on public spending as a condition of new loans by the International Monetary Fund, managed care executives are seeing dollar signs.”

The study focuses on the growth of managed care in four countries: Chile, Argentina, Brazil, and Ecuador. In Chile, for-profit HMOs started under Pinochet’s dictatorship are now partially owned by Aetna. CIGNA is also involved in managed care in Chile, as well as Brazil, Argentina, and Ecuador.

HMOs in the region seem to be emulating the “bad” side of managed care over the “good” aspects, the article finds. By and large, the Latin American ventures are for-profit, physicians receive financial incentives to reduce services, and there is little emphasis on preventive health care. HMO co-payments and bureaucratic confusion have created barriers to care, increasing the strain on public hospitals and clinics. Administrative and promotional costs are rising, diverting funds from clinical services.

Chile has the longest history of for-profit, publicly-subsidized managed care in the region – and some big problems. Every year, about 24 percent of the patients in Chile’s HMOs receive services in public clinics and hospitals because they cannot afford their HMO’s co-payments.

“Like tobacco companies exporting cigarettes, the HMOs are rushing into Latin America now that their rate of profit is falling in the U.S.,” said Dr. Waitzkin. “In the process, there’s a real fear that Latin Americans will lose their constitutional right to health care.”

Majority (57%) of Academic Medicine Physicians Favor Single-Payer

March, 1999

Study in New England Journal of Medicine Finds Medical School Deans, Faculty, Residents and Students Favor Single-Payer 3 to 1 Over Managed Care

Managed care is bad for your health, according to the first comprehensive survey of physicians involved in research and teaching published in this week’s New England Journal of Medicine. But the nation’s best and brightest physicians don’t want to return to the old fee-for-service system, either.

So what does this prestigious group think would make a good health system? According to the study, “all groups [Deans, department chairs, residency training directors, physician faculty at medical schools, resident physicians, and medical students] expressed a preference for a single-payer health care system over both managed-care and fee-for-service systems. Overall, 57.1 percent thought that a single-payer system with universal coverage was the best health care system…. A total of 21.7 percent favored managed care, and 18.7 percent preferred a fee-for-service system.”

“I’m not surprised at all by these findings,” said Dr. Douglas Robins, Chair of the D.C. chapter of Physicians for a National Health Program. “A survey of all physicians members of the D.C. medical society found that 69 percent support single payer. The academic medicine physicians are just the tip of the iceberg.”

In an accompanying editorial in the Journal, Dr. Robert Michels strongly disagreed with the view that the purpose of medical education should be to “prepare students to fit into the new world of health care, to work in it effectively and presumably happily.” Dr. Michels noted that “the unhappiness of academic physicians…reflects the recognition that managed care threatens medicine’s core values,” and that “medical education is working well…by underlining the urgent need to change managed care [emphasis added].” He also noted that physicians support single payer national health insurance even though physicians know that “a single-payer system would be unlikely to increase the financial rewards of medical practice.”

“We know physicians support single-payer national health insurance because of the increasing numbers of medical associations and prominent physicians that are endorsing it,” said Dr. Steffie Woolhandler, Associate Professor of Medicine at Harvard.

They include: The D.C. branch of the American Medical Association (AMA), the American Medical Women’s Association (AMWA), the National Medical Association (NMA), the Gay and Lesbian Medical Association (GLMA), the American Medical Student Association (AMSA), the American Public Health Association (APHA), the Islamic Medical Association (IMA), the American Association of Community Psychiatrists (AACP), the American Family Therapy Association, and others. The Maryland and Massachusetts branches of the AMA are studying single payer, and the American College of Surgeons’ Dr. David Murray testified before Congress in 1994 that single payer would “probably provide the best assurance that patients would be able to seek care from any doctor of their choice.”

Dr. Christine Cassel, the first woman president of the American College of Physicians, the nation’s second-largest medical association, is a strong advocate of single payer and a founding member of Physicians for a National Health Program.