PNHP

Executives at health insurance giants cash in as firms plan fee hikes

Executives at health insurance giants cash in as firms plan fee hikes

By Noam N. Levey
Los Angeles Times, August 11, 2010

Reporting from Washington — The top executives at the nation’s five largest for-profit health insurance companies pulled in nearly $200 million in compensation last year — while their businesses prepared to hit ratepayers with double-digit premium increases, according to a new analysis conducted by healthcare activists.

The leaders of Cigna Corp., Humana Inc., UnitedHealth Group and WellPoint Inc. each in effect received raises in 2009, the report concluded, based on an analysis of company reports filed with the Security and Exchange Commission.

H. Edward Hanway, former chief executive of Philadelphia-based Cigna, topped the list of high-paid executives, thanks to a retirement package worth $110.9 million. Cigna paid Hanway and his successor, David Cordani, a total of $136.3 million last year.

Only one executive in the list actually saw his paycheck shrink last year: Ron Williams, the CEO of Hartford, Conn.-based Aetna Inc., earned nearly $18.2 million in total compensation, down from $24.4 million in 2008.

“Most families are struggling to hang on. Employers are struggling to stay in business. And these guys were giving themselves huge raises,” said Ethan Rome, executive director of Health Care for America Now, a coalition of advocacy groups that prepared the report.

A spokeswoman for WellPoint said executives’ compensation reflects their effort to improve care and hit corporate goals. Representatives of the other four insurers either declined to comment Tuesday on the report or did not respond to questions.

The executive packages were calculated by adding base salaries, bonuses, stock awards and other compensation reported on company financial statements. It did not include the value of exercised stock options.

Last year was highly profitable for most of the country’s big publicly traded insurers. In the first two quarters of this year, profits for many insurers have continued to soar more than 20%.

Aetna’s net income jumped more than 40% in the second quarter of 2010 compared with a year earlier. Indianapolis-based WellPoint recorded a 51% increase in its profit in the first quarter compared with the same period in 2009.

At the same time, the companies have sought major premium hikes. In Rhode Island, UnitedHealth of Minnetonka, Minn., this spring sought increases of up to 15.5%. In Utah, some customers of Humana of Louisville, Ky., reported increases of 29%.

In California, WellPoint subsidiary Anthem Blue Cross planned increases as high as 39% earlier this year. (The company later scaled them back, acknowledging errors in its rate-setting).

Industry officials have said the rate hikes are necessary because of rising medical costs, but insurance companies have faced added scrutiny as executive pay grows. After UnitedHealth CEO Stephen Hemsley cashed in nearly $99 million worth of stock options last year, a group of shareholders launched a bid to expand shareholder input on executive pay.

“It creates a culture of over-compensation,” said Lance E. Lindblom, president of the Nathan Cummings Foundation, which led the ultimately unsuccessful effort to increase oversight at UnitedHealth. “That takes eyes off the ball of performance.”

noam.levey@latimes.com

Copyright © 2010, Los Angeles Times

http://www.latimes.com/health/la-fi-insurance-salaries-20100811,0,7386070.story

Corporate perquisites and drug testing the left

Executives at health insurance giants cash in as firms plan fee hikes

By Noam N. Levey
Los Angeles Times
August 11, 2010
The top executives at the nation’s five largest for-profit health insurance companies pulled in nearly $200 million in compensation last year — while their businesses prepared to hit ratepayers with double-digit premium increases, according to a new analysis conducted by Health Care for America Now.
http://www.latimes.com/health/la-fi-insurance-salaries-20100811,0,7386070.story

And…

White House spokesman blasts liberal critics

By Peter Nicholas and Tom Hamburger
Los Angeles Times
August 11, 2010
Festering tensions between the White House and liberal activists flared Tuesday, with presidential Press Secretary Robert Gibbs scolding what he called “the professional left” for its vocal objections to President Obama’s record.
“These people ought to be drug tested,” Gibbs said. “They will be satisfied when we have Canadian healthcare and we’ve eliminated the Pentagon. That’s not reality. They wouldn’t be satisfied if Dennis Kucinich was president.”
The backlash against Gibbs was swift.
Dr. Quentin Young, a Chicago physician and national coordinator of Physicians for a National Health Program, which advocates for single-payer health insurance, said he was “incredulous” when he first heard of Gibbs’ comments. Young, an early supporter of Obama, immediately wrote Gibbs.
“I believe that unless you retract the insulting description of deeply committed citizens you will drive off those of us who supported the president’s campaign and have anguished over the fruitless lurches to the right that have characterized the first half of the president’s first term,” Young wrote.
http://www.latimes.com/news/nationworld/nation/la-na-gibbs-20100811,0,7297603.story

It is no secret what the Democrats under the leadership of President Obama did when it came time to fix our health care system. They left the big corporations in charge of the health care funds. The report on the very high compensation for the top executives of the nation’s five largest for-profit health insurance companies at a time of double digit premium increases leaves no doubt as to who the financing infrastructure is designed to benefit. It is a sickening example of our national priorities which result in a massive transfer from the ordinary people to the wealthy.
Liberals who care are becoming less tolerant. The message has been received by The White House. Their response? We should be “drug tested” for wanting “Canadian healthcare.”
PNHP’s Quentin Young has responded appropriately to presidential Press Secretary Robert Gibbs, as quoted above.
It isn’t that those on the left who wanted a better deal for all Americans are poor losers. It’s that the administration of Change who greased the conduits for the upward flow of societal funds are bad winners.
How effective the mind is in dealing with perceptions and realities brings us to asking another question. Who is it that needs to be drug tested?

Private insurers' double contracting

Dropping an insurer requires care and analysis

By Victoria Stagg Elliott
American Medical News
August 9, 2010

Approximately 55.8% of medical practices surveyed earlier this year by the Medical Group Management Assn. said they were renegotiating or eliminating low-paying commercial payer contracts as a way of dealing with the recession.

But deciding which insurer to drop and then, if appropriate, actually taking them off the rolls requires careful analysis and handling.

Questions to consider include: What are the rates that a particular insurer is paying? How does what the insurer actually pays compare with what is billed? How long does it take an insurer to pay? What is the denial rate? Are preauthorization procedures onerous and frequently required? Is there something about a payer that makes it more difficult to work with than others?

Experts suggest next looking at how many patients would be affected.

Other issues to consider include how dropping an insurer may affect referrals from other clinicians, and whether cutting a plan from the rolls means that another will cover more than a quarter of a practice’s patient volume. Most experts say that particular ratio would give one insurer too much sway over a practice. However, they acknowledge that it may be unavoidable in some areas of the country because of insurance industry consolidation.

Physicians should then contact referring physicians as well as affected patients.

Any communication with patients should avoid badmouthing a particular insurance company and include information about possible options, such as staying with the practice and paying an out-of-network rate, or transferring to another physician, experts said.

http://www.ama-assn.org/amednews/2010/08/09/bica0809.htm

Comment: 

By Don McCanne, MD

Had President Obama and Congress selected an improved version of Medicare to provide stable, life-long health care financing for everyone, they would have eliminated the injustices, inequities, and especially the instability of the double contracting processes required by the private insurance model of health care financing.

What is meant by double contracting? Much attention has been given to the purchase of a health care contract – a private health insurance plan – but little attention is paid to the private insurer contracts extracted from physicians and other providers in the health care delivery system.

Whether it is individuals or employers who purchase the private plans, everyone is acutely aware of the perpetual changes in premiums, benefits and cost sharing, which often requires a change in plans or even a change in insurers. Contracting on the patient side is quite unstable, which has allowed the insurers to surreptitiously shift ever more of the financial responsibility to the patient who needs to access care.

Now look at the other contract – the one that the provider of health care services signs with the private insurer. As insurers adopt ever more innovations, the desire and even the ability of the physician or other providers to accept or renew the contracts diminishes. That creates instability in the physician and hospital networks which can very directly impact the insurer/patient contract. Patients may end up stuck with insurance plans that have terminated relationships with their health care professionals.

Instead of being stuck with a single, one-size-fits-all, government program (that would cover all legitimate beneficial services for all of us), we were given choice – choice of unstable, double-contracted private plans offered by the double-crossing private insurance industry. Nice choice.

Private insurers’ double contracting

Dropping an insurer requires care and analysis

By Victoria Stagg Elliott
American Medical News
August 9, 2010

Approximately 55.8% of medical practices surveyed earlier this year by the Medical Group Management Assn. said they were renegotiating or eliminating low-paying commercial payer contracts as a way of dealing with the recession.

But deciding which insurer to drop and then, if appropriate, actually taking them off the rolls requires careful analysis and handling.

Questions to consider include: What are the rates that a particular insurer is paying? How does what the insurer actually pays compare with what is billed? How long does it take an insurer to pay? What is the denial rate? Are preauthorization procedures onerous and frequently required? Is there something about a payer that makes it more difficult to work with than others?

Experts suggest next looking at how many patients would be affected.

Other issues to consider include how dropping an insurer may affect referrals from other clinicians, and whether cutting a plan from the rolls means that another will cover more than a quarter of a practice’s patient volume. Most experts say that particular ratio would give one insurer too much sway over a practice. However, they acknowledge that it may be unavoidable in some areas of the country because of insurance industry consolidation.

Physicians should then contact referring physicians as well as affected patients.

Any communication with patients should avoid badmouthing a particular insurance company and include information about possible options, such as staying with the practice and paying an out-of-network rate, or transferring to another physician, experts said.

http://www.ama-assn.org/amednews/2010/08/09/bica0809.htm

Comment: 

By Don McCanne, MD

Had President Obama and Congress selected an improved version of Medicare to provide stable, life-long health care financing for everyone, they would have eliminated the injustices, inequities, and especially the instability of the double contracting processes required by the private insurance model of health care financing.

What is meant by double contracting? Much attention has been given to the purchase of a health care contract – a private health insurance plan – but little attention is paid to the private insurer contracts extracted from physicians and other providers in the health care delivery system.

Whether it is individuals or employers who purchase the private plans, everyone is acutely aware of the perpetual changes in premiums, benefits and cost sharing, which often requires a change in plans or even a change in insurers. Contracting on the patient side is quite unstable, which has allowed the insurers to surreptitiously shift ever more of the financial responsibility to the patient who needs to access care.

Now look at the other contract – the one that the provider of health care services signs with the private insurer. As insurers adopt ever more innovations, the desire and even the ability of the physician or other providers to accept or renew the contracts diminishes. That creates instability in the physician and hospital networks which can very directly impact the insurer/patient contract. Patients may end up stuck with insurance plans that have terminated relationships with their health care professionals.

Instead of being stuck with a single, one-size-fits-all, government program (that would cover all legitimate beneficial services for all of us), we were given choice – choice of unstable, double-contracted private plans offered by the double-crossing private insurance industry. Nice choice.

Private insurers' double contracting

Dropping an insurer requires care and analysis

By Victoria Stagg Elliott
American Medical News
August 9, 2010
Approximately 55.8% of medical practices surveyed earlier this year by the Medical Group Management Assn. said they were renegotiating or eliminating low-paying commercial payer contracts as a way of dealing with the recession.
But deciding which insurer to drop and then, if appropriate, actually taking them off the rolls requires careful analysis and handling.
Questions to consider include: What are the rates that a particular insurer is paying? How does what the insurer actually pays compare with what is billed? How long does it take an insurer to pay? What is the denial rate? Are preauthorization procedures onerous and frequently required? Is there something about a payer that makes it more difficult to work with than others?
Experts suggest next looking at how many patients would be affected.
Other issues to consider include how dropping an insurer may affect referrals from other clinicians, and whether cutting a plan from the rolls means that another will cover more than a quarter of a practice’s patient volume. Most experts say that particular ratio would give one insurer too much sway over a practice. However, they acknowledge that it may be unavoidable in some areas of the country because of insurance industry consolidation.
Physicians should then contact referring physicians as well as affected patients.
Any communication with patients should avoid badmouthing a particular insurance company and include information about possible options, such as staying with the practice and paying an out-of-network rate, or transferring to another physician, experts said.
http://www.ama-assn.org/amednews/2010/08/09/bica0809.htm

Had President Obama and Congress selected an improved version of Medicare to provide stable, life-long health care financing for everyone, they would have eliminated the injustices, inequities, and especially the instability of the double contracting processes required by the private insurance model of health care financing.
What is meant by double contracting? Much attention has been given to the purchase of a health care contract – a private health insurance plan – but little attention is paid to the private insurer contracts extracted from physicians and other providers in the health care delivery system.
Whether it is individuals or employers who purchase the private plans, everyone is acutely aware of the perpetual changes in premiums, benefits and cost sharing, which often requires a change in plans or even a change in insurers. Contracting on the patient side is quite unstable, which has allowed the insurers to surreptitiously shift ever more of the financial responsibility to the patient who needs to access care.
Now look at the other contract – the one that the provider of health care services signs with the private insurer. As insurers adopt ever more innovations, the desire and even the ability of the physician or other providers to accept or renew the contracts diminishes. That creates instability in the physician and hospital networks which can very directly impact the insurer/patient contract. Patients may end up stuck with insurance plans that have terminated relationships with their health care professionals.
Instead of being stuck with a single, one-size-fits-all, government program (that would cover all legitimate beneficial services for all of us), we were given choice – choice of unstable, double-contracted private plans offered by the double-crossing private insurance industry. Nice choice.

Private insurers’ double contracting

Dropping an insurer requires care and analysis

By Victoria Stagg Elliott
American Medical News
August 9, 2010

Approximately 55.8% of medical practices surveyed earlier this year by the Medical Group Management Assn. said they were renegotiating or eliminating low-paying commercial payer contracts as a way of dealing with the recession.

But deciding which insurer to drop and then, if appropriate, actually taking them off the rolls requires careful analysis and handling.

Questions to consider include: What are the rates that a particular insurer is paying? How does what the insurer actually pays compare with what is billed? How long does it take an insurer to pay? What is the denial rate? Are preauthorization procedures onerous and frequently required? Is there something about a payer that makes it more difficult to work with than others?

Experts suggest next looking at how many patients would be affected.

Other issues to consider include how dropping an insurer may affect referrals from other clinicians, and whether cutting a plan from the rolls means that another will cover more than a quarter of a practice’s patient volume. Most experts say that particular ratio would give one insurer too much sway over a practice. However, they acknowledge that it may be unavoidable in some areas of the country because of insurance industry consolidation.

Physicians should then contact referring physicians as well as affected patients.

Any communication with patients should avoid badmouthing a particular insurance company and include information about possible options, such as staying with the practice and paying an out-of-network rate, or transferring to another physician, experts said.

http://www.ama-assn.org/amednews/2010/08/09/bica0809.htm

Had President Obama and Congress selected an improved version of Medicare to provide stable, life-long health care financing for everyone, they would have eliminated the injustices, inequities, and especially the instability of the double contracting processes required by the private insurance model of health care financing.

What is meant by double contracting? Much attention has been given to the purchase of a health care contract – a private health insurance plan – but little attention is paid to the private insurer contracts extracted from physicians and other providers in the health care delivery system.

Whether it is individuals or employers who purchase the private plans, everyone is acutely aware of the perpetual changes in premiums, benefits and cost sharing, which often requires a change in plans or even a change in insurers. Contracting on the patient side is quite unstable, which has allowed the insurers to surreptitiously shift ever more of the financial responsibility to the patient who needs to access care.

Now look at the other contract – the one that the provider of health care services signs with the private insurer. As insurers adopt ever more innovations, the desire and even the ability of the physician or other providers to accept or renew the contracts diminishes. That creates instability in the physician and hospital networks which can very directly impact the insurer/patient contract. Patients may end up stuck with insurance plans that have terminated relationships with their health care professionals.

Instead of being stuck with a single, one-size-fits-all, government program (that would cover all legitimate beneficial services for all of us), we were given choice – choice of unstable, double-contracted private plans offered by the double-crossing private insurance industry. Nice choice.

The Importance of Palliative Care and Single Payer Health Reform

By Beverly Alves
July 28, 2010

During our lifetime, many of us will face life-threatening or life altering illnesses or injuries, or perhaps we will watch those we love face them.  Everyone is going to pass from this world (hopefully to a better place).  We need a system in place that can provide support, guidance and direction to those who are facing these challenges. This system is called palliative care.

Palliative care is a medical specialty which provides coordinated, comprehensive care to reduce pain and suffering for anyone who is given a life-threatening or life altering diagnosis.  It is care to provide comfort and support for the patient and for the patient’s loved ones.  This medical specialty differs from hospice in that you are not required to have a six month or less, prognosis, and curative/restorative treatment is allowed and provided.  Palliative care does not just provide care to those who are dying (which is an essential hospice service); it also provides care to those who are ill, and can be or might be, healed or cured.

It is very difficult to understand another’s suffering.  No one can feel another person’s pain.  Our brains have been wired this way in order for us to survive.  Although we may not understand another’s suffering we can and must provide treatment to reduce it.  Because medical treatment has become so complicated and demanding of providers, often it’s too much to expect those who are focused on the complex technical aspects of treatment to also be focused on easing the pain and suffering of the patient and the patient’s family members. It now takes another field of expertise. This is why palliative care is so essential. According to the Joint Commission, “Palliative care is an approach designed to improve the quality of life of patients and their families by relieving the pain, symptoms and stress of serious illnesses such as cancer or AIDS.”  The Joint commission proposed standards for palliative care certification that became effective in August 2008.  (It would also be a good idea to make palliative care part of the curriculum in all medical schools. Then, even if doctors don’t specialize in it, they would be aware of its importance.)

In the fall of 2006, my husband Joseph was diagnosed with pancreas cancer.  From the moment we learned of the mass on his pancreas to the day that he passed on, we were confronted and confounded by a medical (non) system that was uncoordinated and unable to deal effectively with his excruciating pain, our anxiety, stress and impending loss.  Although Joe had full medical coverage, there was no system in place to help us get the care he needed.  We were left on our own, without guidance, without support (to secure even essential tests and treatments),   and without adequate pain medication.  We were alone.  Palliative care would have provided an essential support network, directing us to get him the treatment and care he so desperately needed, right from the beginning. 

In practice, palliative care would be the medical equivalent of an IEP, an individual education plan.  It could be considered an IMP, an individual medical plan, for anyone with a serious or potentially serious medical diagnosis.   When a patient and his family are in crisis there needs to be a plan to help them locate appropriate services, provide the best treatment options and help them transition to the most appropriate environment. There was none.

Because of medical complications which his cancer produced, Joe wound up in Albany Med. According to data from CAPC (The Center to Advance Palliative Care), Albany Med is one of only four teaching hospitals in the entire United States that does not provide this type of care.  Although the staff there was basically good, there was no coordination of care there.  The analogy I use is, it should have been a ballet; instead there were a whole bunch of great ballroom dancers.  If there was a comprehensive plan in place with specified criteria which would indicate if/when services were needed, it would have done a lot to help us deal more effectively with the overwhelming crisis of Joe’s illness and his impending death.  Perhaps I could have even taken him home for the last few days of his life, as was his/our wish. 

Joe was a remarkable man.  He was not bitter or angry when he became ill; instead he tried to make it easier for those who were helping him.  During the course of his terrible illness he barely complained, even though his pain level in the hospital was never less than 8 and at times it was “off the charts”. He also had a lot of anxiety.  As it was explained to me by experts (not affiliated with the hospital), Joe’s pain was feeding his anxiety and his anxiety was exacerbating his pain. No one should have to be in this much pain and anxiety in a hospital.   A palliative care program would have gone a long way in helping to ease Joe’s suffering and my grief at seeing it.
 
Two years ago, during my first trip abroad, I went to Israel.   While there, I had the opportunity to speak with Dr. Shragit Greenberg, from Ben Gurion University in the Negev.  She is one of Israel’s leading experts on palliative care (and a wonderful person too).  We discussed the importance of alleviating pain and suffering.  She told me as others had, that “It is known that if a person has less pain, less anxiety and fewer problems they can fight more and do better”.  She emphasized that “Palliative care should be initiated from the beginning, increasing the intensity of care as an illness progresses”.  She also said palliative care does not preclude restorative treatment.  It is an adjunct to treatment, helping a person to heal if possible.  Its main purpose is to alleviate pain and suffering, whether a cure is possible or not.

There is a tremendous need for education for both the medical establishment (the providers), and the public who are unaware that this type of essential care even exists.   When people are ill they need help and support to navigate the system, as well as to find pain relief, comfort and cure if possible. It is a sign of our humanity that we provide necessary support to those who are ill, and to those who love them and/or care for them.

In January 2009, palliative care was included as a covered benefit in the single payer bill, HR 676, Expanded and Improved Medicare for All.  It is covered benefit number 8.   (Unfortunately, the new health care bill that has recently been passed, ironically titled, The Patient Protection and Affordable Health Care Act, still does not include palliative care as a covered benefit.)  Due to ignorance and fear, some people have actually labeled this essential care as “death panels”. It is essential that we first educate ourselves about palliative care, and then advocate for its inclusion in any bill that calls itself Healthcare Reform. The United States is the only industrialized nation in the world that does not have a healthcare system.  On the basis of equality, we must demand that quality healthcare be available to us all.  Critically, chronically ill people just can not wait.

Private equity funds are out to make money

Health plan acquisitions target small- to medium-sized companies

By Emily Berry
American Medical News
August 9, 2010

As a newly reformed health system takes shape, private equity firms are eyeing investments in health plans.

“Private equity funds are out to make money, to invest money, and they’ve got money they want to put to work now,” said Chip Clark, partner in the provider care sector in Ernst & Young’s North America Transaction Advisory Services practice.

Investments are likely to target small- to medium-size plans that won’t elicit intense regulatory scrutiny, as well as Medicaid contractors likely to continue making money from growing Medicaid rolls and cash-strapped states, observers said.

“Sustainability is going to require companies that can operate on thinner margins with a wider portfolio of products and services,” said Paul Keckley, PhD, executive director of the Deloitte Center for Health Solutions, the health research services arm of Deloitte LLP. “A substantial amount of consolidation is very likely.”

He said private equity investors he advises are watching for good opportunities in the health care industry, including health insurance plans. A business in the midst of a wave of change isn’t necessarily a bad thing in their eyes, he said. “It’s exactly what private equity looks for: sectors that are volatile, sectors where there’s tremendous opportunity for synergy, sectors where you could pick up a pretty strong management team.”

http://www.ama-assn.org/amednews/2010/08/09/bisa0809.htm

Comment: 

By Don McCanne, MD

The Patient Protection and Affordable Care Act (PPACA) has provided expanded investment opportunities for the private equity firms. Two of the greatest opportunities include: 1) consolidation through acquisition of small and medium-size health insurance companies, and 2) takeover of Medicaid contractors in an environment of expanding programs in cash-strapped states.

As Ernst and Young’s Chip Clark says, “Private equity funds are out to make money, to invest money, and they’ve got money they want to put to work now.”

Health care money managers very understandably have always placed business first, even if it harms patients and the original sources of payments – be it individuals, employers or government. Instead of giving us a financing infrastructure that placed patients first, PPACA has greatly expanded the business opportunities for the money managers.

This theme is getting old.

Private equity funds are out to make money

Health plan acquisitions target small- to medium-sized companies

By Emily Berry
American Medical News
August 9, 2010
As a newly reformed health system takes shape, private equity firms are eyeing investments in health plans.
“Private equity funds are out to make money, to invest money, and they’ve got money they want to put to work now,” said Chip Clark, partner in the provider care sector in Ernst & Young’s North America Transaction Advisory Services practice.
Investments are likely to target small- to medium-size plans that won’t elicit intense regulatory scrutiny, as well as Medicaid contractors likely to continue making money from growing Medicaid rolls and cash-strapped states, observers said.
“Sustainability is going to require companies that can operate on thinner margins with a wider portfolio of products and services,” said Paul Keckley, PhD, executive director of the Deloitte Center for Health Solutions, the health research services arm of Deloitte LLP. “A substantial amount of consolidation is very likely.”
He said private equity investors he advises are watching for good opportunities in the health care industry, including health insurance plans. A business in the midst of a wave of change isn’t necessarily a bad thing in their eyes, he said. “It’s exactly what private equity looks for: sectors that are volatile, sectors where there’s tremendous opportunity for synergy, sectors where you could pick up a pretty strong management team.”
http://www.ama-assn.org/amednews/2010/08/09/bisa0809.htm

The Patient Protection and Affordable Care Act (PPACA) has provided expanded investment opportunities for the private equity firms. Two of the greatest opportunities include: 1) consolidation through acquisition of small and medium-size health insurance companies, and 2) takeover of Medicaid contractors in an environment of expanding programs in cash-strapped states.
As Ernst and Young’s Chip Clark says, “Private equity funds are out to make money, to invest money, and they’ve got money they want to put to work now.”
Health care money managers very understandably have always placed business first, even if it harms patients and the original sources of payments – be it individuals, employers or government. Instead of giving us a financing infrastructure that placed patients first, PPACA has greatly expanded the business opportunities for the money managers.
This theme is getting old.

Medicare: Improve it, expand it

By Johnathon S. Ross
Toledo Blade, Aug. 8, 2010

Medicare, which just turned 45, is a uniquely American program that should have been the model for health reform: no overwhelming bills, no denial of services, no limitations on what hospital patients can use or what doctor they can see.

But instead of expanding and improving Medicare, Congress has added a third floor to a house with a crumbling foundation – our private, for-profit, insurance-based system of financing health care.

As nonprofit community-service organizations, health insurers were once effective in spreading medical costs across the community. Today, private insurance is a very bad bargain.

Private insurers make money by denying claims. They cause Americans to waste enormous amounts of money on excess paperwork and bureaucracy – their own and what they inflict on hospitals, patients, and doctors like me.

An estimated 31 cents of every U.S. health-care dollar go to administration, at least half of it unnecessary. The number of administrative personnel working in health care has jumped by more than 3,000 percent over the past three decades. In the same period, the number of doctors, nurses, and other direct caregivers has grown by less than 200 percent.

Health care has been overtaken by bureaucracies stuffed with money-changers and paper-pushers, whose CEOs get astronomical salaries. Instead of delivering care, they chase the money to pay for it. In our complex, multipayer system, that is expensive work.

Rather than remedy this waste, the new health-care law creates “insurance exchanges” whose public and private bureaucrats will determine eligibility for subsidies and enforce fines against those who fail to buy insurance. Private insurers will continue to advertise and market their products, bill for premiums, establish eligibility for coverage, coordinate benefits, manage a multitude of contracts with brokers, businesses, individuals, doctors, hospitals, and other providers – and pay stockholders a high rate of return.

Each hospital and doctor must mirror this administrative mess to get paid. The new law perpetuates wasteful overhead and guarantees insurers more profits. Meanwhile, we will spend $447 billion over 10 years to subsidize the mandatory purchase of shoddy private insurance by 16 million Americans who are now uninsured.

Massachusetts and several other states have already tried insurance exchanges. They don’t control costs; Massachusetts has the highest health-care costs in the world.

Market competition just doesn’t work well in health care. Medical care isn’t an ordinary product that people want; it’s a necessity that they must have. The most expensive care is often neither optional, predictable, nor negotiable.

Under the new law, tens of millions of Americans will remain uninsured while tens of thousands will die each year because of a lack of coverage. Bankruptcy caused by medical costs will decrease by only 15 percent, because the new subsidized coverage will be so skimpy. Meanwhile, administrative complexity and waste will continue to grow.

A better alternative would build on the solid foundation of our tax-financed, low-overhead Medicare system, extending it to cover all Americans. Administrative savings would approach $400 billion a year, enough to provide comprehensive coverage to the uninsured and to improve coverage for the rest of us.

Negotiating pharmaceutical prices, as the Veterans Administration does, would lower drug costs by about 40 percent. Effective cost control also would occur through global budgeting for health facilities, negotiated fees, bulk purchasing, and rational – rather than profit-driven – allocation of capital expenditures and health resources.

With a single, comprehensive source of health data, quality of care could be reliably measured and improved. The ability to detect fraud and billing abuse would increase. Employer health-care costs would be predictable and easier to control.

Bankruptcy and foreclosure because of medical debt would be eliminated. Americans would have true health security. None of us would be forced to choose between medical care and other necessities such as food and housing.

It’s not too late to do the right thing. The sooner we enact Medicare for all, the better off our patients and our economy will be. Polls suggest that most Americans, including physicians, support improving and expanding Medicare.

The best way to celebrate Medicare’s birthday is to build on its ability to save lives, save money, and make us all proud by becoming one of the best health systems in the world.

Johnathon S. Ross of Toledo is a past president of Physicians for a National Health Program and a member of the executive committee of the Single Payer Action Network of Ohio.

http://www.toledoblade.com/article/20100808/OPINION04/8070349

We can 'save' Medicare by expanding it

By Claudia Chaufan, M.D.
Santa Cruz Sentinel, Aug. 8, 2010

As Medicare celebrated its 45th anniversary July 30, the White House sent its present: a Deficit Commission, composed by some of the very folks who were unable, or unwilling, to see the $8 trillion housing bubble that brought the financial system to a halt. Nope. It’s no joke: these folks are now at the forefront of the campaign to “save” Medicare and the budget.

But, does Medicare need to be saved? Let’s do a little history.

When Medicare was signed into law by President Lyndon Johnson, almost overnight millions of seniors, and later disabled Americans, were able to meet their health care needs, and rates of poverty among them dramatically decreased. Eventually, Medicare added benefits, laid the foundation of studies of health care quality, and provided a model of administrative efficiency still unmatched by for-profit insurers. Today, Medicare meets the health care needs of over 45 million Americans.

To be sure, aging baby boomers will add pressure to Medicare, and the program can be improved: rather than allowing dubious “Advantage” plans, benefits in traditional Medicare could be expanded; gaps, now covered through Medigap policies, a source of profit for insurers yet a financial burden for seniors, could be eliminated; the Kafka-esque Part D could be dumped and Medicare could be allowed to use its huge purchasing power to negotiate prices directly with drug companies, rather than banned from doing so; and doctors’ payments could stop being subject to flawed accounting formulas liable to political manipulation.

But all this is a far cry from the privatizing trends pushed by Congress and President Obama, who famously has said that when it comes to the deficit, “everything is on the table,” including the two bedrocks of America’s social safety net, Social Security and Medicare.

So if everything is on the table, how about saving Medicare by expanding it to include everyone living in America? How about replacing the insane patchwork of thousands of plans and paper-pushing designed not to provide access to care, but to undermine it, with a single paying public agent? Over $400 billion could be saved with this move alone, without adding a dime to overall costs. This amount would generously cover all — not “near” all — the uninsured, and improve the coverage of a growing number of Americans who must settle for skimpy policies and unaffordable out-of-pocket costs that drag thousands to bankruptcy annually.

And whatever taxes were needed to finance Medicare-for-All would be generously offset by eliminating increasingly unaffordable out-of-pocket costs and premiums. American families and individuals would see their health care costs precipitously fall and their health care fears vanish. Imagine the change this move would unleash — Americans no longer worried that their dream jobs offer no “health benefits” and businesses finally able to compete internationally with countries guaranteeing public health care.

There is nothing to “wait and see” about the Orwellian Patient Protection and Affordable Care Act signed into law this past March. Close to a century of failed experiments with for-profit insurance for everybody but the most vulnerable among us, who are dumped on taxpayers’ shoulders, should suffice. While millions continue to suffer and die unnecessarily, we already pay for universal health care yet not get it.

Let’s not be misled by propaganda and demand our legislators support a financially sustainable and socially just, publicly funded, privately delivered, universal health care system — a single payer national health program. It’s not too late to do things right. Let’s not take no for an answer so that we can soon sing together “Happy Birthday, Medicare for All!”

Claudia Chaufan received her medical degree in Argentina and her doctorate in sociology at UC Santa Cruz. She is an assistant professor of Sociology and Health Policy at the Institute for Health and Aging at UC San Francisco and vice president of Physicians for a National Health Program — California.

http://www.santacruzsentinel.com/opinion/ci_15708814

We can ‘save’ Medicare by expanding it

By Claudia Chaufan, M.D.
Santa Cruz Sentinel, Aug. 8, 2010

As Medicare celebrated its 45th anniversary July 30, the White House sent its present: a Deficit Commission, composed by some of the very folks who were unable, or unwilling, to see the $8 trillion housing bubble that brought the financial system to a halt. Nope. It’s no joke: these folks are now at the forefront of the campaign to “save” Medicare and the budget.

But, does Medicare need to be saved? Let’s do a little history.

When Medicare was signed into law by President Lyndon Johnson, almost overnight millions of seniors, and later disabled Americans, were able to meet their health care needs, and rates of poverty among them dramatically decreased. Eventually, Medicare added benefits, laid the foundation of studies of health care quality, and provided a model of administrative efficiency still unmatched by for-profit insurers. Today, Medicare meets the health care needs of over 45 million Americans.

To be sure, aging baby boomers will add pressure to Medicare, and the program can be improved: rather than allowing dubious “Advantage” plans, benefits in traditional Medicare could be expanded; gaps, now covered through Medigap policies, a source of profit for insurers yet a financial burden for seniors, could be eliminated; the Kafka-esque Part D could be dumped and Medicare could be allowed to use its huge purchasing power to negotiate prices directly with drug companies, rather than banned from doing so; and doctors’ payments could stop being subject to flawed accounting formulas liable to political manipulation.

But all this is a far cry from the privatizing trends pushed by Congress and President Obama, who famously has said that when it comes to the deficit, “everything is on the table,” including the two bedrocks of America’s social safety net, Social Security and Medicare.

So if everything is on the table, how about saving Medicare by expanding it to include everyone living in America? How about replacing the insane patchwork of thousands of plans and paper-pushing designed not to provide access to care, but to undermine it, with a single paying public agent? Over $400 billion could be saved with this move alone, without adding a dime to overall costs. This amount would generously cover all — not “near” all — the uninsured, and improve the coverage of a growing number of Americans who must settle for skimpy policies and unaffordable out-of-pocket costs that drag thousands to bankruptcy annually.

And whatever taxes were needed to finance Medicare-for-All would be generously offset by eliminating increasingly unaffordable out-of-pocket costs and premiums. American families and individuals would see their health care costs precipitously fall and their health care fears vanish. Imagine the change this move would unleash — Americans no longer worried that their dream jobs offer no “health benefits” and businesses finally able to compete internationally with countries guaranteeing public health care.

There is nothing to “wait and see” about the Orwellian Patient Protection and Affordable Care Act signed into law this past March. Close to a century of failed experiments with for-profit insurance for everybody but the most vulnerable among us, who are dumped on taxpayers’ shoulders, should suffice. While millions continue to suffer and die unnecessarily, we already pay for universal health care yet not get it.

Let’s not be misled by propaganda and demand our legislators support a financially sustainable and socially just, publicly funded, privately delivered, universal health care system — a single payer national health program. It’s not too late to do things right. Let’s not take no for an answer so that we can soon sing together “Happy Birthday, Medicare for All!”

Claudia Chaufan received her medical degree in Argentina and her doctorate in sociology at UC Santa Cruz. She is an assistant professor of Sociology and Health Policy at the Institute for Health and Aging at UC San Francisco and vice president of Physicians for a National Health Program — California.

http://www.santacruzsentinel.com/opinion/ci_15708814