PNHP

Gov. Crist’s lesson on unsound policies for health reform

Gov. Crist’s lesson on unsound policies for health reform

Gov. Crist’s victory for unaffordable underinsurance

Quote of the Day
May 23, 2008

From the Sun-Sentinel.com:

Delivering on Gov. Charlie Crist’s top election-year priority, the Florida Legislature on (May 2, 2008) approved a health insurance package to extend no-frills coverage to the state’s 3.8 million uninsured. Crist called the health-care package “historic legislation” that will be a model for the rest of the nation.

From the Comment (Don McCanne):

Some model. It would reduce insurance premiums by stripping down benefits through measures such as limiting hospitalization and specialized services and by capping payments. Since this “doesn’t cost taxpayers a dime,” the premiums would still be unaffordable for most individuals currently without coverage. Obviously this model will not work for individuals who have health care needs.

https://pnhp.org/news/2008/may/gov-crists-victory-for-unaffordable-underinsurance

And…

Florida’s health plan for the uninsured has few takers

By Doug Trapp
American Medical News
February 1, 2010

Florida Gov. Charlie Crist didn’t establish a specific enrollment goal for Cover Florida, the state’s unsubsidized private insurance program for the uninsured, when he announced the start of enrollment in January 2009. But in a state with approximately 3.8 million uninsured adults, the fact that only 5,246 people signed up for one of the 27 plans in the program’s first 11 months appears to have defied all expectations.

The authorizing legislation instructed participating insurers to offer at least two types of plans: one with catastrophic and emergency department coverage, and one without.

Plan subscribers… must wait 12 months before their preexisting conditions are covered. Also, insurers balance the risk of covering such conditions by setting benefit limits as low as $25,000 each year and $50,000 in a lifetime for catastrophic plans, for example.

United HealthGroup — one of the two companies offering statewide Cover Florida plans — does not know why plan enrollment has been low, said spokesman Roger Rollman. Blue Cross and Blue Shield of Florida — the other company offering a statewide plan — directed questions to the state.

http://www.ama-assn.org/amednews/2010/02/01/gvsd0201.htm

Today’s message is not meant to be an “I told you so,” even if I did tell you. The point of the message is that health policy science has advanced to a level that the consequences of policies in various reform proposals are fully predictable. “Well, let’s try this and see how it goes” is no longer acceptable, especially for our entire $2.5 trillion health care industry.

Gov. Charlie Crist has provided us with a very valuable lesson with his “‘historic legislation’ that will be a model for the rest of the nation.” His “Cover Florida” program has left 99.9 percent of the uninsured without any coverage, while providing the other 0.1 percent with coverage that won’t work if you need health care.

This may an extreme example, but the cardinal principle is crucial. It is unsound to throw together a bunch of policies chosen based on political considerations, and then pretend that the flaws will be fixed later. You start with a core structure based on sound policies that have been proven to work.

The hybrid model before Congress, using private health insurance plans and public programs, is the most expensive model of reform, even though an important stated goal, when this process began, was to slow the increases in health care spending. The feeble measures included in the bill that allegedly would control costs do not pass basic tests of health policy science.

The hybrid model also was supposed to cover everyone, but health policy science has demonstrated that this model can’t do that. Tens of millions will be left without coverage, a number sure to increase with time.

Charlie Crist’s silly program may be an embarrassment, but that does not compare with the shame that members of Congress should be experiencing simply because they would bankrupt, maim, and kill people by walking away from sound health policy science, while they pursue what they believe will be a political victory. What a terrible, terrible shame.

CMS health spending projections

Health Spending Projections Through 2019: The Recession’s Impact Continues

From the Office of the Actuary, Centers for Medicare and Medicaid Services
Health Affairs
February 4, 2010

Projections for 2010:

National Health Expenditures (NHE): $2,569.6 billion

NHE per capita: $8,289.9

NHE as percent of GDP: 17.3%

NHE projected average annual growth, 2009-2019: 6.1%

Abstract:

The economic recession and rising unemployment—plus changing demographics and baby boomers aging into Medicare—are among the factors expected to influence health spending during 2009–2019. In 2009 the health share of gross domestic product (GDP) is expected to have increased 1.1 percentage points to 17.3 percent—the largest single-year increase since 1960. Average public spending growth rates for hospital, physician and clinical services, and prescription drugs are expected to exceed private spending growth in the first four years of the projections. As a result, public spending is projected to account for more than half of all U.S. health care spending by 2012.

http://content.healthaffairs.org/cgi/content/full/hlthaff.2009.1074v1

Woolhandler and Himmelstein: Paying For National Health Insurance — And Not Getting It (Health Affairs, July/August 2002):
https://pnhp.org/publications/payingnotgetting.pdf

Comment: 

By Don McCanne, MD

Same story every year. Health care spending continues to increase at rates well in excess of inflation, and health care continues to represent an increasing percentage of our gross domestic product.

One important technical point. The CMS authors report that public spending will soon account for more than half of all U.S. health care spending. But they leave out two important taxpayer sources of health care financing: 1) tax subsidies in the form of tax deductions for employer-sponsored plans, and 2) the purchase of health benefit programs for public employees. In their classic paper (link above), Woolhandler and Himmelstein demonstrated that this results in a figure of government spending about fifteen percentage points higher than the numbers reported in this annual CMS report.

Using a back-of-the-envelope update, the government is already using taxpayer funds to finance about two-thirds of our national health expenditures (NHE). In a financing system that only Americans would design, a significant portion of those funds, without much transparency, are funneled through to the inefficient, wasteful private insurance plans and recategorized as private spending.

Taxpayers should be outraged. We hold the stewards of our public funds to a higher standard for responsible spending than we do for those who are shuffling funds around in a market economy.

We should be receiving much greater value for our health care spending, but we won’t under the proposal before Congress. It has been designed to funnel even more taxpayer funds to the private insurance industry, with the guarantee that they can draw off for themselves fifteen to twenty percent of the funds they receive.

With that model of a financing system, we can anticipate that we will receive the same depressing report from CMS each year until finally our finances and our health are ruined by the imposition of the forces of Stein’s Law. With a single payer national health program – an improved Medicare for all – it doesn’t have to be that way.

CMS health spending projections

Health Spending Projections Through 2019: The Recession’s Impact Continues

From the Office of the Actuary, Centers for Medicare and Medicaid Services
Health Affairs
February 4, 2010
Projections for 2010:
National Health Expenditures (NHE): $2,569.6 billion
NHE per capita: $8,289.9
NHE as percent of GDP: 17.3%
NHE projected average annual growth, 2009-2019: 6.1%
Abstract:
The economic recession and rising unemployment—plus changing demographics and baby boomers aging into Medicare—are among the factors expected to influence health spending during 2009–2019. In 2009 the health share of gross domestic product (GDP) is expected to have increased 1.1 percentage points to 17.3 percent—the largest single-year increase since 1960. Average public spending growth rates for hospital, physician and clinical services, and prescription drugs are expected to exceed private spending growth in the first four years of the projections. As a result, public spending is projected to account for more than half of all U.S. health care spending by 2012.
http://content.healthaffairs.org/cgi/content/full/hlthaff.2009.1074v1
Woolhandler and Himmelstein: Paying For National Health Insurance — And Not Getting It (Health Affairs, July/August 2002):
https://pnhp.org/publications/payingnotgetting.pdf

Same story every year. Health care spending continues to increase at rates well in excess of inflation, and health care continues to represent an increasing percentage of our gross domestic product.
One important technical point. The CMS authors report that public spending will soon account for more than half of all U.S. health care spending. But they leave out two important taxpayer sources of health care financing: 1) tax subsidies in the form of tax deductions for employer-sponsored plans, and 2) the purchase of health benefit programs for public employees. In their classic paper (link above), Woolhandler and Himmelstein demonstrated that this results in a figure of government spending about fifteen percentage points higher than the numbers reported in this annual CMS report.
Using a back-of-the-envelope update, the government is already using taxpayer funds to finance about two-thirds of our national health expenditures (NHE). In a financing system that only Americans would design, a significant portion of those funds, without much transparency, are funneled through to the inefficient, wasteful private insurance plans and recategorized as private spending.
Taxpayers should be outraged. We hold the stewards of our public funds to a higher standard for responsible spending than we do for those who are shuffling funds around in a market economy.
We should be receiving much greater value for our health care spending, but we won’t under the proposal before Congress. It has been designed to funnel even more taxpayer funds to the private insurance industry, with the guarantee that they can draw off for themselves fifteen to twenty percent of the funds they receive.
With that model of a financing system, we can anticipate that we will receive the same depressing report from CMS each year until finally our finances and our health are ruined by the imposition of the forces of Stein’s Law. With a single payer national health program – an improved Medicare for all – it doesn’t have to be that way.

Labor Campaign for Single-Payer's Letter to President Obama

February 3, 2010

Dear President Obama,

The lives and livelihoods of a vast majority of Americans have been held hostage for decades by this country’s failure to provide an equitable, socially just health care system. Your Administration should be commended for identifying the need and pushing for a comprehensive solution to this uniquely American dilemma. But this year’s rancorous, special interest driven Congressional debate is now stalemated over differing House and Senate passed Bills, which do not meet the test of either equity or justice.

As grassroots representatives of millions of this country’s union members and in the interest of all working people, we respectfully submit that taking the single-payer solution off the table was both a strategic and tactical mistake. Medicare is an example of a successful single payer model and it is a very popular health care program. A “Medicare-for-All” system would be far more cost effective than any of the proposed current reforms based on the continuation of for-profit, market-based insurance. And it is a program that Americans are already familiar with–a solution right at our fingertips.

The rising cost of health care is one of the biggest issues in the collective bargaining process. Many working families have given up wage increases and are being asked to cover more of their health care costs. Others are losing their health care benefits altogether because more employers are dropping individual and family coverage. This is a crisis and a moral issue. People currently covered by private health insurance are understandably apprehensive when it is suggested that their only alternative to degrading that coverage is not to be covered at all–as is the current situation for approximately 50 million of our fellow citizens today.

Our current jobs crisis is further aggravated since the cost of health care in the U. S. is almost double that in other industrial countries, making our export sector increasingly uncompetitive and a major cause of the off-shoring of jobs.

At this past year’s AFL-CIO Convention in Pittsburgh, on the very day that you, Mr. President, addressed the Convention and were so warmly received, the delegates unanimously adopted a detailed resolution in support of a Single-Payer, “Medicare for All” system in America.

We welcome your call for a better approach that will “bring down premiums, bring down the deficit, cover the uninsured, strengthen Medicare and stop insurance company abuses.” We submit to you that a “Medicare-for-All” health care system accomplishes all of these worthy goals, contrary to the untruths that have been advanced by opponents of true health care reform.

The American people deserve better. We want our leaders to solve the health care crisis and to do so in a transparent way. No one in this country should have to fear losing their health care coverage or face bankruptcy. This is simply unacceptable for the United States of America. The time for single payer health care is now. We urge you to use this impasse as the time to put single payer health care on the table and into the health care reform discussions as the real solution.
Millions of working people and an overwhelming majority of unionists voted their confidence in your call for “change we can believe in.”

Respectfully Submitted,

The Labor Campaign for Single-Payer Health Care Steering Committee & Advisory Board

cc: Nancy Pelosi
Harry Reid

Labor Campaign for Single-Payer’s Letter to President Obama

February 3, 2010

Dear President Obama,

The lives and livelihoods of a vast majority of Americans have been held hostage for decades by this country’s failure to provide an equitable, socially just health care system. Your Administration should be commended for identifying the need and pushing for a comprehensive solution to this uniquely American dilemma. But this year’s rancorous, special interest driven Congressional debate is now stalemated over differing House and Senate passed Bills, which do not meet the test of either equity or justice.

As grassroots representatives of millions of this country’s union members and in the interest of all working people, we respectfully submit that taking the single-payer solution off the table was both a strategic and tactical mistake. Medicare is an example of a successful single payer model and it is a very popular health care program. A “Medicare-for-All” system would be far more cost effective than any of the proposed current reforms based on the continuation of for-profit, market-based insurance. And it is a program that Americans are already familiar with–a solution right at our fingertips.

The rising cost of health care is one of the biggest issues in the collective bargaining process. Many working families have given up wage increases and are being asked to cover more of their health care costs. Others are losing their health care benefits altogether because more employers are dropping individual and family coverage. This is a crisis and a moral issue. People currently covered by private health insurance are understandably apprehensive when it is suggested that their only alternative to degrading that coverage is not to be covered at all–as is the current situation for approximately 50 million of our fellow citizens today.

Our current jobs crisis is further aggravated since the cost of health care in the U. S. is almost double that in other industrial countries, making our export sector increasingly uncompetitive and a major cause of the off-shoring of jobs.

At this past year’s AFL-CIO Convention in Pittsburgh, on the very day that you, Mr. President, addressed the Convention and were so warmly received, the delegates unanimously adopted a detailed resolution in support of a Single-Payer, “Medicare for All” system in America.

We welcome your call for a better approach that will “bring down premiums, bring down the deficit, cover the uninsured, strengthen Medicare and stop insurance company abuses.” We submit to you that a “Medicare-for-All” health care system accomplishes all of these worthy goals, contrary to the untruths that have been advanced by opponents of true health care reform.

The American people deserve better. We want our leaders to solve the health care crisis and to do so in a transparent way. No one in this country should have to fear losing their health care coverage or face bankruptcy. This is simply unacceptable for the United States of America. The time for single payer health care is now. We urge you to use this impasse as the time to put single payer health care on the table and into the health care reform discussions as the real solution.
Millions of working people and an overwhelming majority of unionists voted their confidence in your call for “change we can believe in.”

Respectfully Submitted,

The Labor Campaign for Single-Payer Health Care Steering Committee & Advisory Board

cc: Nancy Pelosi
Harry Reid

Single-Payer-Minded

Local health-care practitioners explain why they're willing to go to jail in the name of health-care reform

By Erin Sullivan
Baltimore City Paper, Feb. 3, 2010

No matter how strongly we may feel about the health-care debate–and no matter which side of the debate we’re on–most of us stay safely out of it. Aside from a few boisterous town-hall meetings, we monitor the dealings in Congress from couches, desks, and smartphones, where we can keep tabs on the action, make donations to the activist groups of our choice, and post our opinions on FaceBook or Twitter.

Carol Paris
Dr. Carol Paris

Charles Loubert

Dr. Eric Naumburg

Dr. Margaret Flower
Photographs by Frank Klien

But as the discussion about health care has shifted from coverage for all citizens to a system that will force people to purchase private health insurance–without the controversial “public option” that would offer some kind of government-run health plan for those who wanted it–pockets of unlikely activists are mobilizing. Health-care practitioners are expressing their opinions via old-fashioned civil disobedience. Many of these protestors say the solution to the nation’s health-care dilemma is in what’s known as single-payer health-care–a government-funded medical system, much like Medicare, that would cover all citizens from birth to death. So far, the notion of single-payer health care has not gotten much serious play in the current discussion. But this new breed of professionals-turned-activists feels strongly enough about the topic that some of them are putting themselves on the line to draw attention to it.

On May 5, 2009, eight representatives of several activist groups, including Physicians for a National Health Program, Healthcare-Now of Maryland, and Single Payer Action–three of whom were doctors, two of them from Maryland–sat in on a Senate Finance Committee roundtable discussion chaired by Sen. Max Baucus (D-Montana). They observed that no representatives at the roundtable supported single-payer health care, and repeatedly requested that they be permitted to speak at the hearing. Baucus had all of them arrested.

On May 12, at a second roundtable sponsored by Baucus’ committee, five more health-care practitioners who were not given a seat at the table crashed the hearing, spoke out in favor of single-payer health care, and were arrested.

And in a series of actions that took place across the country this fall, more than 150 people–many of them working health-care providers–were arrested for staging sit-ins at the offices of health-insurance companies and Congressional representatives, such as senators Joe Lieberman (I-Conn.) and Nancy Pelosi (D-Calif.). One such action took place in Baltimore on Oct. 29, 2009, resulting in the arrest of two doctors, a retired psychologist, and a schoolteacher.

City Paper asked some of these individuals to tell us what made them feel so strongly about health-care reform that they were willing to go to jail for it.

Dr. Carol Paris is a practicing psychiatrist from Leonardtown. She was arrested during the May 5 incident at Sen. Max Baucus’ Finance Committee meeting, one of eight people locked up. Paris was charged with unlawful conduct on Capitol grounds. She received six months’ probation, though the charges were diverted in January. She is a member of Physicians for a National Health Care Program.

Prior to last year, I was working, via volunteer time primarily, with the [physicians’ group] Maryland State Medical Society. I did some work for about three years on their legislative committees, and I did a lot of work on pieces of legislation that were designed to try to get the [insurance] industry to play fairly. And what I realized . . . is that it doesn’t matter what you get passed in the law. What matters is what the regulations are, and who writes the regulations and enforces the regulations. In the state of Maryland, the regulations were written in large part by the insurance lobby themselves. . . . And the Maryland Insurance Administration is tapped with enforcement of the regulations. And what I’ve come to realize is that the Maryland Insurance Administration is ineffective. . . . The only trigger for the Maryland Insurance Administration to enforce a law is a complaint. They are not even monitoring, and they don’t even enforce unless somebody complains.

We had this bill that was passed in the Maryland Legislature called the Clean Claims Act. It said if you as a physician submit a claim to an insurance company, and you’ve dotted your “I”s and crossed your “T”s, your forms are all filled out correctly, they have either 30 or 45 days to pay the claim. And if they don’t pay in that amount of time, they have to give you interest on the money. . . . I had a case where, the [patient] had two insurers, Medicare and a private insurer. I submit the claim to Medicare, they pay what they are going to pay, then they send the paperwork to the private insurance company, and they are supposed to pay me the rest. I sent $3,000 worth of claims to Medicare. Medicare sent them to CareFirst BlueCross BlueShield. CareFirst put in the wrong provider number [on the forms] and sent my money to a doctor in Fredericksburg, Va. My staff identified the problem within a month, and it took two years to fix it. I kept a list of every interaction with CareFirst over those two years, and I determined that at a rate of $13 an hour, it cost me $13,000 to collect the $3,000 owed to me. I didn’t even get interest on the money.

All of this is to paint the picture of the frame of mind I was in last January, when I met Margaret Flowers and realized there were organizations out there that were advocating for a single-payer plan. I was a case in point as a physician of how bureaucratic and wasteful the private insurance industry is in so many ways. It just resonated with me all over the place, and that’s why I joined.

It was a combination of that and of being a practicing physician and just seeing day after day after day how the system is abusing doctors and abusing my patients. That reinforces my determination every single day. . . . I jokingly have come up with a new psychiatric diagnosis called PIISD–private insurance-induced stress disorder. When Margaret called me and said, “Do you want to protest at the Senate Finance Committee hearing?” I didn’t have to think about it. I said yes.

We decided we weren’t going to disrupt in the middle of the proceedings . . . So as soon as Sen. Baucus pounded his gavel, Russell Mokhiber [of Single Payer Action] got up and said basically, “You have repeatedly refused to allow a single-payer spokesperson to address the committee . . . . We have three doctors here, any one of whom could speak to this issue. Will you give them a seat at the table?” And Baucus said that proceedings would adjourn until order can be restored and had Russell arrested. As soon as order was restored, Margaret Flowers got up and spoke for a minute or so, and she was arrested. As soon as order was restored . . . someone else got up and spoke and was arrested, same thing. I was number four. And there were eight of us total. [Activist] Katie Robbins got up and said “We need single payer in this country,” and Baucus’ reply was “We need more police.”

[They] put us in a paddy wagon and we spent five ho
urs sitting on a bench handcuffed to a wall in jail. While we were sitting there talking to the Capitol police, they were telling us their stories of health-insurance woes with their families. They completely got it, what we were doing and why we were doing it. In fact, there was a sign in the jail that said if you are having a medical problem, let us know and we’ll get you medical care. In fact, the Supreme Court has ruled that its cruel and unusual punishment to deny a prisoner health care. In Baltimore, you get medically cleared before they will even put you in the general population [at] the jail. So think about it: You have more rights to health care as a prisoner in this country than you do as a law-abiding citizen.

Charles Loubert is a retired counseling psychologist who lives in Southwest Baltimore. Loubert, who is 81 years old, was arrested on Oct. 29, 2009, when he and a group of 30 supporters of single-payer health care held a rally outside the offices of CareFirst BlueCross BlueShield in Canton. Loubert was one of four people arrested that day. He was charged with trespassing and disorderly conduct. Despite the fact that his case was nolle prosequi–not prosecuted–by the State’s Attorney’s Office, a warrant was issued for Loubert’s arrest in December 2009. Officers showed up on his doorstep early one morning, handcuffed him, and hauled him down to Central Booking again, where he was held until a court commissioner determined that the warrant was issued in error. Loubert is a member of Veterans for Peace, as well as Healthcare-Now of Maryland.

I’m a retired psychological counselor. I was a school counselor and I worked with adults, as well, in the community and at a health clinic.

I can do this because I pretty much have my time as my own.  And that’s not heroic, that’s just convenience. There are many people that I know who feel the same way I do, but they’ve got jobs, they’ve got families. I’m a little bit of a rabble-rouser, you know, and at my age what do I have to lose?

We went to CareFirst, to their office is at the 1st Mariner Tower [in Canton]. About 30 of us went there. We were protesting at the front door, and they had the doors locked because they didn’t want us to come in.

We were protesting and so on, and then Margaret Flowers and Eric Naumburg, two doctors, and Kevin Zeese and Del. Jill Carter [D-41st District] went to the back door and talked to a representative of CareFirst and asked them to stop denying doctor-ordered procedures, and said they wanted to speak with the CEO of the company.  And the representative said, “Well, we’ll put it in writing and we’ll consider it.”  Fat chance was my silent answer when they came back.

So anyway the four of us decided, including Margaret and Eric and another lady who is a teacher, we decided we’re going to risk arrest if necessary to get the point across. The plan was we were going to go into the lobby, all 30 of us, and then when they asked us to leave, four of us would not leave.  Well, what they had done is, apparently, they had notified the police. So as soon as we rounded the corner to go to the door, the 30 of us were surrounded. Out of the blue came about 40, I think–there were more of them than there were of us–Baltimore police. They came racing to the door to keep us out.

The other three got in because they were quicker [than me], but my old bones beat this one younger cop to the door, and we got in and we sat on the floor, and the manager of the building asked us to leave, the police asked us, and we said no. They handcuffed us and took us out into the paddy wagon, and they took us off to Central Booking.

I hate to say it, but I was a little ashamed of our country. We do so many good things, and we are a haven for people from all over the world to come here to be citizens of this country, and yet we do this kind of thing.

Eric Naumburg is a retired pediatrician from Columbia. Today, he says he sees more and more doctors in the Howard County area getting out of traditional medical practices and setting up “concierge” practices, where individuals pay a large membership fee each year for guaranteed access to the physicians of their choice–a luxury for those who can afford it, an impossibly expensive proposition for most. Naumburg was arrested at the Oct. 29 protest in the lobby of CareFirst BlueCross BlueShield’s offices in Canton. He was charged with trespassing and disorderly conduct. The charges were eventually nolle prossed. Naumburg is a member of Physicians for a National Health Program and Healthcare-Now of Maryland.

Most people don’t understand what the term single-payer means, because it’s a technical term, but it’s a one-payer system, like Medicare used to be, that pays for the care, but the care is provided privately. . . . Since this debate has gone on, single-payer has been systematically taken off the table. It’s not included at all. When the Baucus [Senate Finance] committee had hearings on health reform back in May, the room was filled with lobbyists, health insurers, pharmacies, all the people you would expect. But there was not one person representing patients’ interests in the room. Nor was there anybody there representing doctors’ interests.

The people who were struggling, in my practice, were the ones who didn’t qualify for Medicaid. They had jobs and they were doing what they should be doing. And they were the people you had to go back and look in the sample closet to see if you could find antibiotics for a child who was sick, that kind of thing. A lot of them would just stop coming because they just couldn’t afford it.

We have a very expensive, very poorly run health system. And there’s no system to it–it’s a mishmash. And the biggest waste in the system is all this administrative stuff. It makes practicing medicine very unpleasant because at every turn you have to worry about, Well what does this person’s insurance cover? What forms am I going to have to fill out to make the insurance company happy, so they’ll pay? To make the pharmaceutical plan happy so they’ll give out the drug that I think the patient needs? You’re fighting with the private insurers to get care for people. . . . fighting with people who don’t really understand.

One of my last cases was a real frustration for me. I had a 3-month-old who had noisy breathing and his mother was working and she had private insurance, Aetna. I wanted to get this child seen by two or three specialists, and they had the family going to–instead of the people that I know and know were good–they had them going to a cardiologist that I’d never heard of at one place and a pulmonary clinic at another, then finally they ended up at an ENT [ear, nose, throat specialist] down in Washington. They had them going all over the place. . . . And the bottom line is I didn’t know he ended up in Washington, I never got a chance to talk to the ENT doctors down there. They ended up doing a tonsillectomy, which on a 3-month-old is pretty unusual. I wanted them to just look for an underlying cause, and I never got a chance to tell them what I was thinking about. When I got a chance to talk to the surgeon three days later, I told them “I was hoping you guys happened to get a biopsy,” and he said “No, if you’d told us that we would have done it, that’s a good idea.” . . . It’s that kind of thing. That’s just an example, but it happens all the time.

When we were doing the protest at the CareFirst building, there were a lot of police around. We started talking to them about their medical coverage, and they have issues, they have gaps in their coverage. The people arrested in Washington had the same experience with the guards. When I was in Central Booking in Baltimore, there were two of us in the cell, we were wearing our T-shirts, and . . . the minute they found out what we were doing, they were very supportive of us. It’s all levels of society who know that their health insurance is not working for them. It’
s universal.

[Physicians] are leaving primary care in droves. It’s a real problem here. The health commissioner in Howard County has been having meetings about the lack of primary-care providers. Howard County is the richest county in the richest state in the nation, and they’re having trouble finding enough primary-care providers. People aren’t going into primary care anymore–they want to become specialists because it’s very hard to make a go of it as a primary care provider, because of the insurance reimbursement issues. Doctors want to be able to practice medicine without feeling like being in a mill, which is what it’s like. You have to churn out so many patients just to get enough reimbursements.

In a wealthy country like this, everybody should have access to health care without having to worry about how to pay for it.

Dr. Margaret Flowers is a pediatrician from Sparks. She stopped practicing medicine two years ago to devote herself full-time to advocating for single-payer health care. She serves as co-chair for Physicians for a National Health Program, and is also a member of Healthcare-Now of Maryland. Flowers was arrested twice in her effort to push for health-care reform: She was one of the so-called Baucus Eight who were arrested at the May Senate Finance Committee hearing, and she violated her probation on that arrest to participate in the CareFirst protest in Baltimore, where she was again hauled off in handcuffs. Flowers was charged with unlawful conduct on Capitol grounds for her Baucus committee arrest, for which she received six months’ probation, and with trespassing and disorderly conduct for her arrest at CareFirst. Those charges were eventually nolle prossed.

I went into the practice of medicine thinking it was the doctors and patients who made the decisions about what was the best care for patients, and that there would be a certain amount of respect for the knowledge that physicians gained after many years of studying and training. But instead what I found is the insurance companies that you bump into at every level–in the hospital, in your practice, in the pharmacy–are not making decisions based on sound medical practice. Initially, I was surprised by it, and then I started to get curious about why it was that way. One thing led to another, and it’s been about five or six years now that I’ve been trying to educate myself and others about health-care reform and fighting for it.

One of the things we learned this year is that the regular physician’s voice is not heard in Congress. They hear from special-interest groups, and many of those have somewhat corporate affiliations. And many of the people that were involved in devising the numbers about health policies didn’t really understand health policy. So we brought doctors and nurses and other health providers into Congress and we met with members of Congress and we presented them with packets of information about health policy and we also spoke to them about our real experiences with real patients, about what the reality is, why we are losing primary-care doctors, why our health outcomes are bad, just a voice they haven’t heard before.

We spoke to everybody, we didn’t limit it to any kind of affiliation. People who believe in a free-market [health-care] model would say, “Well, we think that there should be competition.” So we would say, “Well, explain to us how that would work, how does competition improve health care?” And they couldn’t. Then, we would say, “This is what it actually does to health care, and this is why the real competition we want to have is between doctors and hospitals. If everybody can come to see you, then you are competing based on who’s the best [provider], not which insurance company covers you.”

The first committee to take up health care was Sen. Baucus’ Finance Committee, and so the Leadership Conference [for Guaranteed Healthcare] sent a letter and requested that one of our representatives be present. They had 41 people testifying over three days at these roundtables. It became very clear that they did not want our voice to be included. [But] if you talk about universality, single-payer wins, if you talk about cost saving, single-payer wins. They didn’t want to hear that.

We were actually prepared to testify that day if need be, and as the roundtable was opening, the first member stood up and he said, “Why aren’t you allowing single-payer on the table? We have three doctors here, will you let one of them testify?” And he was arrested. I stood up next and said, “I’m Dr. Margaret Flowers, and I speak on behalf of the true stakeholders,” because they kept calling the people at the table the stakeholders, and we’re going, “The pharmacy [representatives] are not the stakeholders.” So I said, “It’s the patients and the providers who want a national health program.” And they arrested me.

We knew we were risking arrest. It was a public hearing, but they weren’t allowing the public to speak. They gave us unlawful conduct and disruption of Congress. That actually caries a six-month sentence, it was a little more than we expected. We just had our probation hearing last week. But the effect was actually rather positive. Sen. [Ted] Kennedy [D.-Mass.] was still alive at that point, and his office reached out to us, and I was the first person to testify at his committee hearing when they brought up health care.

The more you learn about what is going on and why we don’t have real reform, and what health-insurance companies are able to get away with, I came to a point where I felt like if I was going to make a difference, I was going to have to do this full-time. So many of my friends were leaving their practices and just giving up. I now do this full-time.

This is a matter of life or death for people. My outrage is at the fact that our government is not acting in the best interests of the people, and they are getting away with it. It’s just unacceptable. You can work a job, you can pay your premiums, you can do all the things you are supposed to do, and then you get sick, and you lose everything. And it can happen to any one of us.

Part of the reason I became a doctor is because I care about people. So I can’t see this happening and not do something about it.

© 2010 Baltimore City Paper

http://www.citypaper.com/news/story.asp?id=19708&p=1

Higher Medicare managed care copayments cause increased hospital use

Increased Ambulatory Care Copayments and Hospitalizations among the Elderly

By Amal N. Trivedi, M.D., M.P.H., Husein Moloo, M.P.H., and Vincent Mor, Ph.D.
The New England Journal of Medicine
January 28, 2010

We examined the consequences of increasing copayments for ambulatory care in a large, nationally representative sample of elderly Medicare enrollees in managed-care plans. As compared with matched control plans in which copayments for ambulatory care were unchanged, Medicare plans that increased these copayments by an average of 95% for primary care and 74% for specialty care had a reduction in the number of outpatient visits but an increase in hospital admissions, in the number of days of hospital care, and in the proportion of enrollees who used hospital care. According to our estimates, for every 100 elderly enrollees exposed to this level of increased cost sharing for ambulatory care, there would be 20 fewer outpatient visits during the first year after the increase but more than 2 additional admissions for acute care and approximately 13 additional inpatient days in the year after the increase. The effects of copayment increases on the subsequent use of inpatient care were magnified for enrollees living in areas with low income and low educational levels, for black enrollees, and for enrollees who had hypertension, diabetes, or a history of acute myocardial infarction as compared with the effects observed for the entire study cohort.

http://content.nejm.org/cgi/content/full/362/4/320

Cracks in the moral hazard foundation:
https://pnhp.org/news/2007/september/cracks-in-the-moral-hazard-foundation

Comment:

By Don McCanne, MD

This is an important study. It demonstrates, once again, that requiring already insured patients to pay more out of pocket if they access care can have a detrimental impact on both their health and on total health care spending. This is the opposite of what we should be striving for as we attempt to reform health care. Yet Congress and the administration are including this ill-considered policy of cost sharing in the unfounded belief that it would be a harmless method of slowing health care spending.

In order to reduce premiums for private insurance plans offered by the proposed insurance exchanges, the current legislation calls for plans with actuarial values 50 to 100 percent lower than typical employer-sponsored plans (with limited exceptions). These lower values are achieved partly by requiring patients who need to use health care to pay an even larger amount out-of-pocket in the form of deductibles, copayments, and coinsurance.

Those who defend cost sharing usually cite the RAND HIE – an experiment that supposedly demonstrated that patients were not harmed by not receiving care that required out-of-pocket spending – the moral hazard argument. One problem with that study was that it was limited to the relatively healthy workforce, their young, healthy families, during a short, healthy interval in their lives. The conclusions of the study do not have external validity for an entire population, with all their ills, covered in a universal program. The study was further flawed by the fact that participants were allowed to drop out at any time and return to their prior insurance, and the cost-sharing wing did so at an eighteen-fold rate over the control wing. These individuals, many of whom were no doubt facing higher costs, were excluded from the results of the study. How can they possibly claim that the cost-sharing group fared no worse than the control group? (See the “Cracks in the moral hazard foundation” link above for further information.)

The problem of ever-increasing health care costs must be addressed, but assessing financial penalties (cost sharing) against individuals for having  accessed necessary health care is one of the very worst ways to do it. This and other studies demonstrate that it can actually increase total health care spending, not to mention impairing health outcomes.

A single payer system – an improved Medicare for all – uses much more effective policies to control health care spending while removing financial barriers to the care that patients need. Aren’t you tired of hearing the President and members of Congress tell us that single payer is the program that would work, but we’re not going to do it?

Higher Medicare managed care copayments cause increased hospital use

Increased Ambulatory Care Copayments and Hospitalizations among the Elderly

By Amal N. Trivedi, M.D., M.P.H., Husein Moloo, M.P.H., and Vincent Mor, Ph.D.
The New England Journal of Medicine
January 28, 2010
We examined the consequences of increasing copayments for ambulatory care in a large, nationally representative sample of elderly Medicare enrollees in managed-care plans. As compared with matched control plans in which copayments for ambulatory care were unchanged, Medicare plans that increased these copayments by an average of 95% for primary care and 74% for specialty care had a reduction in the number of outpatient visits but an increase in hospital admissions, in the number of days of hospital care, and in the proportion of enrollees who used hospital care. According to our estimates, for every 100 elderly enrollees exposed to this level of increased cost sharing for ambulatory care, there would be 20 fewer outpatient visits during the first year after the increase but more than 2 additional admissions for acute care and approximately 13 additional inpatient days in the year after the increase. The effects of copayment increases on the subsequent use of inpatient care were magnified for enrollees living in areas with low income and low educational levels, for black enrollees, and for enrollees who had hypertension, diabetes, or a history of acute myocardial infarction as compared with the effects observed for the entire study cohort.
http://content.nejm.org/cgi/content/full/362/4/320
Cracks in the moral hazard foundation:
https://pnhp.org/news/2007/september/cracks-in-the-moral-hazard-foundation

This is an important study. It demonstrates, once again, that requiring already insured patients to pay more out of pocket if they access care can have a detrimental impact on both their health and on total health care spending. This is the opposite of what we should be striving for as we attempt to reform health care. Yet Congress and the administration are including this ill-considered policy of cost sharing in the unfounded belief that it would be a harmless method of slowing health care spending.
In order to reduce premiums for private insurance plans offered by the proposed insurance exchanges, the current legislation calls for plans with actuarial values 50 to 100 percent lower than typical employer-sponsored plans (with limited exceptions). These lower values are achieved partly by requiring patients who need to use health care to pay an even larger amount out-of-pocket in the form of deductibles, copayments, and coinsurance.
Those who defend cost sharing usually cite the RAND HIE – an experiment that supposedly demonstrated that patients were not harmed by not receiving care that required out-of-pocket spending – the moral hazard argument. One problem with that study was that it was limited to the relatively healthy workforce, their young, healthy families, during a short, healthy interval in their lives. The conclusions of the study do not have external validity for an entire population, with all their ills, covered in a universal program. The study was further flawed by the fact that participants were allowed to drop out at any time and return to their prior insurance, and the cost-sharing wing did so at an eighteen-fold rate over the control wing. These individuals, many of whom were no doubt facing higher costs, were excluded from the results of the study. How can they possibly claim that the cost-sharing group fared no worse than the control group? (See the “Cracks in the moral hazard foundation” link above for further information.)
The problem of ever-increasing health care costs must be addressed, but assessing financial penalties (cost sharing) against individuals for having  accessed necessary health care is one of the very worst ways to do it. This and other studies demonstrate that it can actually increase total health care spending, not to mention impairing health outcomes.
A single payer system – an improved Medicare for all – uses much more effective policies to control health care spending while removing financial barriers to the care that patients need. Aren’t you tired of hearing the President and members of Congress tell us that single payer is the program that would work, but we’re not going to do it?

Stein's Law – hitting the wall

Herb Stein's Unfamiliar Quotations

By Herbert Stein
Slate
May 16, 1997

If something cannot go on forever, it will stop.
–Stein’s Law, first pronounced in the 1980s

This proposition, arising first in a discussion of the balance-of-payments deficit, is a response to those who think that if something cannot go on forever, steps must be taken to stop it–even to stop it at once.

http://www.slate.com/id/2561/

And…

Huge Deficits May Alter U.S. Politics and Global Power

By David E. Sanger
The New York Times
February 1, 2010

… as Prof. James K. Galbraith of the University of Texas puts it, “Forecasts 10 years out have no credibility.”

Simply projecting that health care costs will rise unabated is dangerous business.

His greatest hope, Mr. Galbraith said, was Stein’s law, named for Herbert Stein, chairman of the Council of Economic Advisers under Presidents Richard M. Nixon and Gerald R. Ford.

Stein’s law has been recited in many different versions. But all have a common theme: If a trend cannot continue, it will stop.

http://www.nytimes.com/2010/02/02/us/politics/02deficit.html?hp

And…

The Long-Term Outlook for Health Care Spending

Congressional Budget Office
November 2007

Projections of Health Spending

Over the past 30 years, total national spending on health care has more than doubled as a share of GDP. Under the assumptions described (in this CBO report), according to CBO’s projections, that share will double again by 2035, to 31 percent of GDP. Thereafter, health care costs continue to account for a steadily growing share of GDP, reaching 41 percent by 2060 and 49 percent by the end of the 75-year projection period.

http://www.cbo.gov/ftpdocs/87xx/doc8758/Intro.shtml
Graph: http://www.cbo.gov/ftpdocs/87xx/doc8758/Figure4.gif

And…

GOP House Issues Conference

January 29, 2010

Congressman Paul Ryan (speaking to President Obama):  … Medicare, as you know, is a $38 trillion unfunded liability…

http://www.whitehouse.gov/the-press-office/remarks-president-gop-house-issues-conference

Comment: 

By Don McCanne, MD

At over $2.5 trillion (almost 18 percent of our GDP), the level of health care spending in the United States this year is almost intolerable. Yet we hear predictions that health care will represent half of our GDP by 2082, and that Medicare will accumulate a deficit of $38 trillion.

Thank goodness for Stein’s Law. We will never see these numbers for the simple reason that this rate of increase cannot go on forever. It will stop once it hits the wall.

Herbert Stein, being from the Chicago School of Economics (think Milton Friedman), did not believe that steps must be taken to intervene since the problem would take care of itself. Although that is true, the problem with this sterile, amoral view, common amongst those of the Chicago School, is that it ignores the consequences of a spontaneous economic process devoid of the input from the heart and soul of beneficent public stewards.

To be clear, in the economics of health care, Stein’s Law does not represent one point in the expansion of health care spending at which everything stops and the health care system collapses. Nor does it represent a single point at which expansion stops and spending becomes static. Rather it represents a multitude of various walls for various payers, including individuals, employers and the various levels of government, each of which has its own wall as a barrier represented by Stein’s Law.

In our fragmented system of financing health care, Stein’s Law is already in play. Tens of millions are no longer able to afford health insurance. Tens of millions more are no longer able to afford adequate insurance products and must face the financial hardships of the underinsurance products that have been the response of competing insurers in our market economy in health care. The rate of employer-sponsored coverage has been declining because too many businesses, especially small businesses, have already hit the wall. Many states are struggling with the need to reduce Medicaid payments to providers in order to try to include more under the umbrella, while watching the safety-net of providers crumble from protracted financial losses. Even the federal government is struggling to find ways to fill the void in the face of massive budget deficits.

With Stein’s Law, we can predict that the rate of spending increases will very soon slow down, but under our current financing system, that will inevitably result in more financial hardship, suffering, and even death as health care access becomes ever less affordable.

Suppose the Senate bill passes, along with the reconciliation tweaks, then what will happen? Since our beneficent stewards in Congress neglected their duties, failing to adopt policies that would slow the growth in health care spending, health care costs will continue to test Stein’s Law.

Some of the multitude of walls will move, but none of them will go away. The states will see their walls move further out with the infusion of Medicaid funds. The federal government will see its wall move closer, signaled by the shrill cacophony of the budget hawks. Employers will not see their wall move much, but they will continue to barrel forward, eventually hitting it one by one.

But what about our hard-working, middle-income Americans? The wall will be moved much closer. For several reasons, mostly related to costs, there will be an attrition of employer-sponsored plans. Since the subsidies to purchase private plans will be less than the employer contributions, fewer individuals and families will be able to afford the plans. To slow the rise in premiums, more benefits will be stripped out. The Obama administration would accelerate this deterioration in benefits by imposing an excise tax on the plans as “the most effective way to control costs.” The Obama/Orszag policy of controlling costs by erecting financial barriers to necessary health care is a very sick policy indeed. The legislation before Congress adds afterburners to middle-income Americans only accelerating their trip to Stein’s impenetrable wall.

When our economic models have immoral consequences, we should abandon the amoral models of the Chicago School, and move to normative economics. It is not a sin for an economist to have a heart.

Under a single payer national health program – an improved and expanded Medicare for all – Stein’s wall will still be there. But instead of letting the entire system crash into the wall, our own beneficent public stewards – if we elect ones with a heart – will be there to make sure that everyone receives the care that they need. The resources that we use may take us up to the wall, but we won’t be crashing into it.

Every other industrialized nation has an impenetrable Stein wall, but by using normative economics, they don’t sacrifice their citizens by slamming them into that wall.

Stein’s Law – hitting the wall

Herb Stein’s Unfamiliar Quotations

By Herbert Stein
Slate
May 16, 1997

If something cannot go on forever, it will stop.
–Stein’s Law, first pronounced in the 1980s

This proposition, arising first in a discussion of the balance-of-payments deficit, is a response to those who think that if something cannot go on forever, steps must be taken to stop it–even to stop it at once.

http://www.slate.com/id/2561/

And…

Huge Deficits May Alter U.S. Politics and Global Power

By David E. Sanger
The New York Times
February 1, 2010

… as Prof. James K. Galbraith of the University of Texas puts it, “Forecasts 10 years out have no credibility.”

Simply projecting that health care costs will rise unabated is dangerous business.

His greatest hope, Mr. Galbraith said, was Stein’s law, named for Herbert Stein, chairman of the Council of Economic Advisers under Presidents Richard M. Nixon and Gerald R. Ford.

Stein’s law has been recited in many different versions. But all have a common theme: If a trend cannot continue, it will stop.

http://www.nytimes.com/2010/02/02/us/politics/02deficit.html?hp

And…

The Long-Term Outlook for Health Care Spending

Congressional Budget Office
November 2007

Projections of Health Spending

Over the past 30 years, total national spending on health care has more than doubled as a share of GDP. Under the assumptions described (in this CBO report), according to CBO’s projections, that share will double again by 2035, to 31 percent of GDP. Thereafter, health care costs continue to account for a steadily growing share of GDP, reaching 41 percent by 2060 and 49 percent by the end of the 75-year projection period.

http://www.cbo.gov/ftpdocs/87xx/doc8758/Intro.shtml
Graph: http://www.cbo.gov/ftpdocs/87xx/doc8758/Figure4.gif

And…

GOP House Issues Conference

January 29, 2010

Congressman Paul Ryan (speaking to President Obama):  … Medicare, as you know, is a $38 trillion unfunded liability…

http://www.whitehouse.gov/the-press-office/remarks-president-gop-house-issues-conference

Comment: 

By Don McCanne, MD

At over $2.5 trillion (almost 18 percent of our GDP), the level of health care spending in the United States this year is almost intolerable. Yet we hear predictions that health care will represent half of our GDP by 2082, and that Medicare will accumulate a deficit of $38 trillion.

Thank goodness for Stein’s Law. We will never see these numbers for the simple reason that this rate of increase cannot go on forever. It will stop once it hits the wall.

Herbert Stein, being from the Chicago School of Economics (think Milton Friedman), did not believe that steps must be taken to intervene since the problem would take care of itself. Although that is true, the problem with this sterile, amoral view, common amongst those of the Chicago School, is that it ignores the consequences of a spontaneous economic process devoid of the input from the heart and soul of beneficent public stewards.

To be clear, in the economics of health care, Stein’s Law does not represent one point in the expansion of health care spending at which everything stops and the health care system collapses. Nor does it represent a single point at which expansion stops and spending becomes static. Rather it represents a multitude of various walls for various payers, including individuals, employers and the various levels of government, each of which has its own wall as a barrier represented by Stein’s Law.

In our fragmented system of financing health care, Stein’s Law is already in play. Tens of millions are no longer able to afford health insurance. Tens of millions more are no longer able to afford adequate insurance products and must face the financial hardships of the underinsurance products that have been the response of competing insurers in our market economy in health care. The rate of employer-sponsored coverage has been declining because too many businesses, especially small businesses, have already hit the wall. Many states are struggling with the need to reduce Medicaid payments to providers in order to try to include more under the umbrella, while watching the safety-net of providers crumble from protracted financial losses. Even the federal government is struggling to find ways to fill the void in the face of massive budget deficits.

With Stein’s Law, we can predict that the rate of spending increases will very soon slow down, but under our current financing system, that will inevitably result in more financial hardship, suffering, and even death as health care access becomes ever less affordable.

Suppose the Senate bill passes, along with the reconciliation tweaks, then what will happen? Since our beneficent stewards in Congress neglected their duties, failing to adopt policies that would slow the growth in health care spending, health care costs will continue to test Stein’s Law.

Some of the multitude of walls will move, but none of them will go away. The states will see their walls move further out with the infusion of Medicaid funds. The federal government will see its wall move closer, signaled by the shrill cacophony of the budget hawks. Employers will not see their wall move much, but they will continue to barrel forward, eventually hitting it one by one.

But what about our hard-working, middle-income Americans? The wall will be moved much closer. For several reasons, mostly related to costs, there will be an attrition of employer-sponsored plans. Since the subsidies to purchase private plans will be less than the employer contributions, fewer individuals and families will be able to afford the plans. To slow the rise in premiums, more benefits will be stripped out. The Obama administration would accelerate this deterioration in benefits by imposing an excise tax on the plans as “the most effective way to control costs.” The Obama/Orszag policy of controlling costs by erecting financial barriers to necessary health care is a very sick policy indeed. The legislation before Congress adds afterburners to middle-income Americans only accelerating their trip to Stein’s impenetrable wall.

When our economic models have immoral consequences, we should abandon the amoral models of the Chicago School, and move to normative economics. It is not a sin for an economist to have a heart.

Under a single payer national health program – an improved and expanded Medicare for all – Stein’s wall will still be there. But instead of letting the entire system crash into the wall, our own beneficent public stewards – if we elect ones with a heart – will be there to make sure that everyone receives the care that they need. The resources that we use may take us up to the wall, but we won’t be crashing into it.

Every other industrialized nation has an impenetrable Stein wall, but by using normative economics, they don’t sacrifice their citizens by slamming them into that wall.

Stein's Law – hitting the wall

Herb Stein’s Unfamiliar Quotations

By Herbert Stein
Slate
May 16, 1997
If something cannot go on forever, it will stop.
–Stein’s Law, first pronounced in the 1980s
This proposition, arising first in a discussion of the balance-of-payments deficit, is a response to those who think that if something cannot go on forever, steps must be taken to stop it–even to stop it at once.
http://www.slate.com/id/2561/

And…

Huge Deficits May Alter U.S. Politics and Global Power

By David E. Sanger
The New York Times
February 1, 2010
… as Prof. James K. Galbraith of the University of Texas puts it, “Forecasts 10 years out have no credibility.”
Simply projecting that health care costs will rise unabated is dangerous business.
His greatest hope, Mr. Galbraith said, was Stein’s law, named for Herbert Stein, chairman of the Council of Economic Advisers under Presidents Richard M. Nixon and Gerald R. Ford.
Stein’s law has been recited in many different versions. But all have a common theme: If a trend cannot continue, it will stop.
http://www.nytimes.com/2010/02/02/us/politics/02deficit.html?hp

And…

The Long-Term Outlook for Health Care Spending

Congressional Budget Office
November 2007
Projections of Health Spending
Over the past 30 years, total national spending on health care has more than doubled as a share of GDP. Under the assumptions described (in this CBO report), according to CBO’s projections, that share will double again by 2035, to 31 percent of GDP. Thereafter, health care costs continue to account for a steadily growing share of GDP, reaching 41 percent by 2060 and 49 percent by the end of the 75-year projection period.
http://www.cbo.gov/ftpdocs/87xx/doc8758/Intro.shtml
Graph: http://www.cbo.gov/ftpdocs/87xx/doc8758/Figure4.gif

And…

GOP House Issues Conference

January 29, 2010
Congressman Paul Ryan (speaking to President Obama):  … Medicare, as you know, is a $38 trillion unfunded liability…
http://www.whitehouse.gov/the-press-office/remarks-president-gop-house-issues-conference

At over $2.5 trillion (almost 18 percent of our GDP), the level of health care spending in the United States this year is almost intolerable. Yet we hear predictions that health care will represent half of our GDP by 2082, and that Medicare will accumulate a deficit of $38 trillion.
Thank goodness for Stein’s Law. We will never see these numbers for the simple reason that this rate of increase cannot go on forever. It will stop once it hits the wall.
Herbert Stein, being from the Chicago School of Economics (think Milton Friedman), did not believe that steps must be taken to intervene since the problem would take care of itself. Although that is true, the problem with this sterile, amoral view, common amongst those of the Chicago School, is that it ignores the consequences of a spontaneous economic process devoid of the input from the heart and soul of beneficent public stewards.
To be clear, in the economics of health care, Stein’s Law does not represent one point in the expansion of health care spending at which everything stops and the health care system collapses. Nor does it represent a single point at which expansion stops and spending becomes static. Rather it represents a multitude of various walls for various payers, including individuals, employers and the various levels of government, each of which has its own wall as a barrier represented by Stein’s Law.
In our fragmented system of financing health care, Stein’s Law is already in play. Tens of millions are no longer able to afford health insurance. Tens of millions more are no longer able to afford adequate insurance products and must face the financial hardships of the underinsurance products that have been the response of competing insurers in our market economy in health care. The rate of employer-sponsored coverage has been declining because too many businesses, especially small businesses, have already hit the wall. Many states are struggling with the need to reduce Medicaid payments to providers in order to try to include more under the umbrella, while watching the safety-net of providers crumble from protracted financial losses. Even the federal government is struggling to find ways to fill the void in the face of massive budget deficits.
With Stein’s Law, we can predict that the rate of spending increases will very soon slow down, but under our current financing system, that will inevitably result in more financial hardship, suffering, and even death as health care access becomes ever less affordable.
Suppose the Senate bill passes, along with the reconciliation tweaks, then what will happen? Since our beneficent stewards in Congress neglected their duties, failing to adopt policies that would slow the growth in health care spending, health care costs will continue to test Stein’s Law.
Some of the multitude of walls will move, but none of them will go away. The states will see their walls move further out with the infusion of Medicaid funds. The federal government will see its wall move closer, signaled by the shrill cacophony of the budget hawks. Employers will not see their wall move much, but they will continue to barrel forward, eventually hitting it one by one.
But what about our hard-working, middle-income Americans? The wall will be moved much closer. For several reasons, mostly related to costs, there will be an attrition of employer-sponsored plans. Since the subsidies to purchase private plans will be less than the employer contributions, fewer individuals and families will be able to afford the plans. To slow the rise in premiums, more benefits will be stripped out. The Obama administration would accelerate this deterioration in benefits by imposing an excise tax on the plans as “the most effective way to control costs.” The Obama/Orszag policy of controlling costs by erecting financial barriers to necessary health care is a very sick policy indeed. The legislation before Congress adds afterburners to middle-income Americans only accelerating their trip to Stein’s impenetrable wall.
When our economic models have immoral consequences, we should abandon the amoral models of the Chicago School, and move to normative economics. It is not a sin for an economist to have a heart.
Under a single payer national health program – an improved and expanded Medicare for all – Stein’s wall will still be there. But instead of letting the entire system crash into the wall, our own beneficent public stewards – if we elect ones with a heart – will be there to make sure that everyone receives the care that they need. The resources that we use may take us up to the wall, but we won’t be crashing into it.
Every other industrialized nation has an impenetrable Stein wall, but by using normative economics, they don’t sacrifice their citizens by slamming them into that wall.

Stein’s Law – hitting the wall

Herb Stein’s Unfamiliar Quotations

By Herbert Stein
Slate
May 16, 1997

If something cannot go on forever, it will stop.
–Stein’s Law, first pronounced in the 1980s

This proposition, arising first in a discussion of the balance-of-payments deficit, is a response to those who think that if something cannot go on forever, steps must be taken to stop it–even to stop it at once.

http://www.slate.com/id/2561/

And…

Huge Deficits May Alter U.S. Politics and Global Power

By David E. Sanger
The New York Times
February 1, 2010

… as Prof. James K. Galbraith of the University of Texas puts it, “Forecasts 10 years out have no credibility.”

Simply projecting that health care costs will rise unabated is dangerous business.

His greatest hope, Mr. Galbraith said, was Stein’s law, named for Herbert Stein, chairman of the Council of Economic Advisers under Presidents Richard M. Nixon and Gerald R. Ford.

Stein’s law has been recited in many different versions. But all have a common theme: If a trend cannot continue, it will stop.

http://www.nytimes.com/2010/02/02/us/politics/02deficit.html?hp

And…

The Long-Term Outlook for Health Care Spending

Congressional Budget Office
November 2007

Projections of Health Spending

Over the past 30 years, total national spending on health care has more than doubled as a share of GDP. Under the assumptions described (in this CBO report), according to CBO’s projections, that share will double again by 2035, to 31 percent of GDP. Thereafter, health care costs continue to account for a steadily growing share of GDP, reaching 41 percent by 2060 and 49 percent by the end of the 75-year projection period.

http://www.cbo.gov/ftpdocs/87xx/doc8758/Intro.shtml
Graph: http://www.cbo.gov/ftpdocs/87xx/doc8758/Figure4.gif

And…

GOP House Issues Conference

January 29, 2010

Congressman Paul Ryan (speaking to President Obama):  … Medicare, as you know, is a $38 trillion unfunded liability…

http://www.whitehouse.gov/the-press-office/remarks-president-gop-house-issues-conference

At over $2.5 trillion (almost 18 percent of our GDP), the level of health care spending in the United States this year is almost intolerable. Yet we hear predictions that health care will represent half of our GDP by 2082, and that Medicare will accumulate a deficit of $38 trillion.

Thank goodness for Stein’s Law. We will never see these numbers for the simple reason that this rate of increase cannot go on forever. It will stop once it hits the wall.

Herbert Stein, being from the Chicago School of Economics (think Milton Friedman), did not believe that steps must be taken to intervene since the problem would take care of itself. Although that is true, the problem with this sterile, amoral view, common amongst those of the Chicago School, is that it ignores the consequences of a spontaneous economic process devoid of the input from the heart and soul of beneficent public stewards.

To be clear, in the economics of health care, Stein’s Law does not represent one point in the expansion of health care spending at which everything stops and the health care system collapses. Nor does it represent a single point at which expansion stops and spending becomes static. Rather it represents a multitude of various walls for various payers, including individuals, employers and the various levels of government, each of which has its own wall as a barrier represented by Stein’s Law.

In our fragmented system of financing health care, Stein’s Law is already in play. Tens of millions are no longer able to afford health insurance. Tens of millions more are no longer able to afford adequate insurance products and must face the financial hardships of the underinsurance products that have been the response of competing insurers in our market economy in health care. The rate of employer-sponsored coverage has been declining because too many businesses, especially small businesses, have already hit the wall. Many states are struggling with the need to reduce Medicaid payments to providers in order to try to include more under the umbrella, while watching the safety-net of providers crumble from protracted financial losses. Even the federal government is struggling to find ways to fill the void in the face of massive budget deficits.

With Stein’s Law, we can predict that the rate of spending increases will very soon slow down, but under our current financing system, that will inevitably result in more financial hardship, suffering, and even death as health care access becomes ever less affordable.

Suppose the Senate bill passes, along with the reconciliation tweaks, then what will happen? Since our beneficent stewards in Congress neglected their duties, failing to adopt policies that would slow the growth in health care spending, health care costs will continue to test Stein’s Law.

Some of the multitude of walls will move, but none of them will go away. The states will see their walls move further out with the infusion of Medicaid funds. The federal government will see its wall move closer, signaled by the shrill cacophony of the budget hawks. Employers will not see their wall move much, but they will continue to barrel forward, eventually hitting it one by one.

But what about our hard-working, middle-income Americans? The wall will be moved much closer. For several reasons, mostly related to costs, there will be an attrition of employer-sponsored plans. Since the subsidies to purchase private plans will be less than the employer contributions, fewer individuals and families will be able to afford the plans. To slow the rise in premiums, more benefits will be stripped out. The Obama administration would accelerate this deterioration in benefits by imposing an excise tax on the plans as “the most effective way to control costs.” The Obama/Orszag policy of controlling costs by erecting financial barriers to necessary health care is a very sick policy indeed. The legislation before Congress adds afterburners to middle-income Americans only accelerating their trip to Stein’s impenetrable wall.

When our economic models have immoral consequences, we should abandon the amoral models of the Chicago School, and move to normative economics. It is not a sin for an economist to have a heart.

Under a single payer national health program – an improved and expanded Medicare for all – Stein’s wall will still be there. But instead of letting the entire system crash into the wall, our own beneficent public stewards – if we elect ones with a heart – will be there to make sure that everyone receives the care that they need. The resources that we use may take us up to the wall, but we won’t be crashing into it.

Every other industrialized nation has an impenetrable Stein wall, but by using normative economics, they don’t sacrifice their citizens by slamming them into that wall.