PNHP

Do the insurance industry reports totally lack all credibility?

Do the insurance industry reports totally lack all credibility?

Good News on Premiums

Editorial
The New York Times
December 3, 2009
The health insurance industry frightened Americans — and gave Republicans a shrill talking point — when it declared in October that proposed reform legislation would drive up insurance costs for virtually everyone by as much as thousands of dollars a year. The nonpartisan Congressional Budget Office persuasively contradicted that claim this week.
Undaunted, the industry issued a rebuttal report, claiming again that premiums would soar. We find this second industry report no more persuasive than the first.
The insurance industry is not giving up. On Thursday, the Blue Cross and Blue Shield Association issued a report contending that the C.B.O. underestimated the expected medical costs of people who will be buying policies on the individual (nongroup) market.
(CBO notes that) the legal mandate to obtain coverage, the penalties for noncompliance, and the generous subsidies for low- and middle-income people would encourage most people to enroll without waiting to become sick.
http://www.nytimes.com/2009/12/04/opinion/04fri1.html?_r=1&ref=opinion

And…

Coming Attractions: Insurance Industry Funded Study is Wrong on the Facts… Again…

Posted by Dan Pfeiffer, White House Communications Director
The White House
The White House Blog
December 3, 2009
Later today, the insurance industry releases their latest in a string of flawed analyses designed to confuse the debate around health reform.
In addition to ignoring Congress’s independent budget experts, the new report reaches its conclusions by cherry-picking which policies to analyze – a tactic we’ve seen the industry use repeatedly. Most egregiously, its alarmist headline conclusions leave out the impact that new tax credits will have on the cost of health insurance for families. That makes no sense. In reality, the report itself acknowledges that: “[s]ubsidies will entirely or partially offset these premium increases for some individuals.”
http://www.whitehouse.gov/blog/2009/12/03/coming-attractions-insurance-industry-funded-study-wrong-facts-again

And…

Impact of the Patient Protection and Affordable Care Act on Costs in the Individual and Small-Employer Health Insurance Markets

By Jason Grau and Kurt Giesa
BlueCross BlueShield Association
Oliver Wyman
December 3, 2009
Impact of Subsidies
Subsidies would play an important role in reducing out-of-pocket costs for certain individuals, especially those below 200% of FPL, who are likely to purchase insurance under the proposed reforms. Subsidies will cover more than 90% of premium costs for individuals in this income range, significantly reducing financial barriers to purchasing coverage.
By contrast, our analysis of the Senate bill projects that 8.7 million will not be eligible for the subsidies. Another 3.3 million people who purchase coverage will have incomes of 300-400% FPL and will be eligible for average subsidies of 45% of their premiums (which would not fully offset the cost increases we predict). Finally, 13.3 million lower-income individuals who purchase coverage will have incomes of 100-300% FPL. They will have access to subsidies of 70-90% of their premiums, which will offset much if not all of the increased premiums they will face.
Our modeling predicts that those who are eligible for subsidies will be more likely to purchase insurance than those who are not. However, subsidies will not ensure that young and healthy people participate. Short of achieving 100% coverage, adverse selection will always exist, and the young and healthy will be the most difficult to bring into the market.
Impact of Weak Individual Mandates
The Senate bill requires individuals to purchase insurance coverage or face financial penalties. An amendment accepted during mark-up of the Chairman’s Mark in the Finance Committee, and largely retained in the Senate leadership bill, substantially weakened the bill’s individual mandate. The individual mandate penalty in PPACA is set at just $95 in the first year insurance reforms become effective (2014). This penalty rises gradually, reaching a maximum of $750 per adult in 2016. This maximum penalty is likely to be only about 16 percent of an average premium in 2016, assuming current rates of medical cost inflation.
The amendment also exempts individuals whose premiums exceed 8% of their adjusted gross income (AGI). In 33 states, the average cost of health insurance exceeds eight percent of median state income. In fact, in the first year of reform 25% of the exchange-eligible population will face insurance costs in excess of the 8% AGI threshold and qualify for mandate exemption. Premium increases over a ten-year period will result in nearly half of the population qualifying for mandate exemption status.
Conclusion (excerpt)
The provision of subsidies alone will not offset the impact of insurance reforms on average premiums in the market. A balanced, sustainable insurance pool, that ensures everyone is covered, is critical to making healthcare affordable for all.
http://www.bcbs.com/issues/uninsured/background/patient-protection-affordable-care-act.html
Full report:
http://www.bcbs.com/issues/uninsured/background/Impact-of-the-Patient-Protection-and-Affordable-Care-Act-on-Costs.pdf

Recent reports from the insurance industry, including this report from the BlueCross BlueShield Association, have been targeted by proponents of the current leading reform model as biased reports without credibility – witness the comments by The White House and The New York Times (both also biased). But the fundamental message from the insurance industry is very valid: the reform proposal before Congress does not do nearly enough to control health care costs, and the mandates, subsidies and penalties are inadequate to ensure that all risks are adequately pooled.
This report confirms once again that the subsidies are inadequate, particularly for middle-income families, and likely will result in adverse selection as the healthier take their chances on remaining uninsured. It confirms that the penalty for being uninsured is too small to ensure compliance with the insurance requirement. It also confirms that a very large and rapidly growing number of individuals will be exempt from the mandate to purchase insurance simply because their incomes are inadequate to be able to afford the plans.
There is one statement in this report that the proponents of the proposal before Congress should take careful note of, and it is remarkable that it is coming from the insurance industry: “A balanced, sustainable insurance pool, that ensures everyone is covered, is critical to making health care affordable for all.”
The dysfunctional, fragmented model of health care financing that Congress is moving forward with can never create a balanced, sustainable risk pool, nor can it ensure that everyone is covered, nor can it make health care affordable for all.
We really do need a balanced, sustainable pool that includes everyone and is equitably financed: an improved Medicare for all.

Sanders offers Medicare-for-All amendment in Senate

FOR IMMEDIATE RELEASE
Dec. 3, 2009

Contact:
Quentin Young, M.D., (312) 782-6006
Margaret Flowers, M.D., PNHP Congressional Fellow
Mark Almberg, PNHP, (312) 782-6006, mark@pnhp.org

Challenging head-on the powerful private insurance and pharmaceutical industries, Sen. Bernie Sanders introduced an amendment to the Senate health reform bill Wednesday that would replace the bulk of the Senate bill’s language with provisions establishing a single-payer, Medicare-for-All program.

Joining with Sanders, I-Vt., in co-sponsoring the measure, known as Senate Amendment 2837, were Senators Sherrod Brown, D-Ohio, and Roland Burris, D-Ill. Other senators, including Tom Harkin, D-Iowa, chair of the Senate Health, Education, Labor and Pensions Committee, have previously declared their support for single-payer health reform. The vote on the measure could take place in the next few days.

“This amendment starts from the premise that health care is a human right, and that every citizen, rich or poor, should have access to health care, just as every citizen has access to the fire department, the police or public schools,” a statement from Sanders’ office said.

The single-payer approach embodied in Sanders’ amendment stands in sharp contrast to the reform models being offered by the Senate and House leadership and the White House. Those bills would enhance the central role of private health insurers.

Sanders’ amendment, on the other hand, would replace the present crazy-quilt array of for-profit insurers with a single nonprofit, public financing agency, thereby slashing administrative waste in the system and redirecting the savings to clinical care.

Dr. Quentin Young, national coordinator of Physicians for a National Health Program, said, “This historic move by Sen. Sanders and his colleagues – it’s the first time single payer will be voted upon on the floor of the Senate – is yet another sign of the strong and growing support for an improved Medicare for All among the public and the medical profession.

“In contrast, the Senate leadership’s deeply flawed bill doesn’t expand coverage until 2014, would still leave 24 million uninsured, and would place no effective constraints on exploding costs,” he said. “Sanders’ amendment would cover everyone from the start and allow for effective cost-containment.

“Physicians and patients alike stand to gain enormously from the adoption of this measure,” Young said. “No effort should be spared to ask every senator to vote yes on Senate Amendment 2837.”

Sanders’ measure, which is largely patterned after a bill he introduced last March, the American Health Security Act (S. 703), would cover all of the 46 million Americans who currently lack coverage and improve benefits for all Americans by eliminating co-pays and deductibles and restoring free choice of physician.

Highlights of the amendment include the following:

* Patients go to any doctor or hospital of their choice.

* Comprehensive benefits, including coverage for dental, mental health, and prescription drugs.

* By eliminating the high overhead and profits of the private, investor-owned insurance industry, along with the burdensome paperwork imposed on physicians, hospitals and other providers, the plan saves at least $400 billion annually – enough money to provide comprehensive, quality care to all.

* Community health centers are fully funded, giving the 60 million Americans now living in rural and underserved areas access to care.

* To address the critical shortage of primary care physicians and dentists, the bill provides resources for the National Health Service Corps to train an additional 24,000 health professionals.

* The program is paid for by combining current sources of government health spending into a single fund with modest new payroll and income taxes amounting to less than what most businesses and people now pay for insurance premiums and out-of-pocket expenses.

* While federally funded, the program is to be administered by the states.

Sanders, who serves on the Senate Committee on Health, Education, Labor, and Pensions, is a longtime advocate of fundamental health care reform.

*****

Physicians for a National Health Program (www.pnhp.org) is an organization of 17,000 doctors who advocate for single-payer national health insurance. To contact a physician-spokesperson near you, visit www.pnhp.org/stateactions or call (312) 782-6006.

Sanders Amendment to Create a Universal, Single Payer Health Insurance System

From the office of Sen. Bernie Sanders

Summary: This amendment would establish a single payer health insurance system that would cover every person legally residing in the United States.  The single payer system would be regulated and funded by the federal government through a payroll tax and an income tax, but it would be administered by the states.  It would replace the coverage and revenue titles of the current bill, but it would leave in place most of the provisions in the quality, prevention, and workforce titles of the bill.  This amendment starts from the premise that health care is a human right, and that every citizen, rich or poor, should have access to health care, just as every citizen has access to the fire department, the police, or public schools.

Why is this Important?

  • The United States spends $7,129 per person on health care, which is almost double the amount spent by nearly any other industrialized country.  Despite this fact, we still do not insure all of our citizens.
  • There are currently 46 million Americans without health insurance, 100 million Americans who cannot access dental care, and 60 million Americans who do not have access to primary care.
  • The United States ranks among the lowest of developed countries are far as health outcomes, according to both life expectancy and disease metrics.
  • One reason we spend our money so ineffectively is that there is tremendous waste in our system.  Healthcare providers spend $210 billion on administrative costs, mostly to deal with insurance paperwork, and the ranks of administrative personnel have grown by 25 times the number of physicians in the past 30 years.
  • This waste and the high costs of insurance associated with it place a tremendous burden on American employers and makes it difficult for them to compete internationally.

Why Support the Sanders Single Payer Amendment?            

  • Single payer systems have consistently shown lower administrative costs and higher quality health outcomes.  For example, as compared to the United States’ per capita health spending of $7,129, Canada spends $3,895 and Austria spends $3,763 on health care costs.  Both of these countries have higher quality health care outcomes than the United States.
  • By creating a single payer, Medicare-for-all type system, this amendment would provide every United States citizen with comprehensive health care and dental coverage in a cost-effective manner. It would save our country money, improve our health outcomes, and, at the same time, fulfill the administration’s promise of universal coverage.

Cost: This amendment pays for itself through progressive payroll and income taxes.

CRS on the health insurance market

The Market Structure of the Health Insurance Industry

By D. Andrew Austin and Thomas L. Hungerford
Congressional Research Service
November 17, 2009

Evidence suggests that health insurance markets are highly concentrated in many local areas. Many large firms that offer health insurance benefits to their employees have self-insured, which may put some competitive pressure on insurers, although this is unlikely to improve market conditions for other consumers. The exercise of market power by firms in concentrated markets generally leads to higher prices and reduced output — high premiums and limited access to health insurance — combined with high profits. Many other characteristics of the health insurance markets, however, also contribute to rising costs and limited access to affordable health insurance. Rising health care costs, in particular, play a key role in rising health insurance costs.

Health costs appear to have increased over time in large part because of complex interactions among health insurance, health care providers, employers, pharmaceutical manufacturers, tax policy, and the medical technology industry. Reducing the growth trajectory of health care costs may require policies that affect these interactions. Policies focused only on health insurance sector reform may yield some results, but are unlikely to solve larger cost growth and limited access problems.

http://www.fas.org/sgp/crs/misc/R40834.pdf

About the Congressional Research Service:
http://www.loc.gov/crsinfo/whatscrs.html

Comment:

By Don McCanne, MD

The Congressional Research Service (CRS) has an outstanding reputation for authoritative, objective and nonpartisan analyses, providing Congress with the analytical support it needs to address the most complex public policy issues facing the nation.

In this 65 page report to Congress on the market structure of the health insurance industry, CRS concludes that “policies focused only on health insurance sector reform may yield some results, but are unlikely to solve larger cost growth and limited access problems.”

The conclusions are certainly no surprise. Every reasonable economist agrees that free market principles do not apply to health care. Yet where is Congress on this? They are moving forward with a proposal that relies heavily on the market of private health plans.

Don’t the members of Congress read their own reports? They need to read this one!

CRS on the health insurance market

The Market Structure of the Health Insurance Industry

By D. Andrew Austin and Thomas L. Hungerford
Congressional Research Service
November 17, 2009
Evidence suggests that health insurance markets are highly concentrated in many local areas. Many large firms that offer health insurance benefits to their employees have self-insured, which may put some competitive pressure on insurers, although this is unlikely to improve market conditions for other consumers. The exercise of market power by firms in concentrated markets generally leads to higher prices and reduced output — high premiums and limited access to health insurance — combined with high profits. Many other characteristics of the health insurance markets, however, also contribute to rising costs and limited access to affordable health insurance. Rising health care costs, in particular, play a key role in rising health insurance costs.
Health costs appear to have increased over time in large part because of complex interactions among health insurance, health care providers, employers, pharmaceutical manufacturers, tax policy, and the medical technology industry. Reducing the growth trajectory of health care costs may require policies that affect these interactions. Policies focused only on health insurance sector reform may yield some results, but are unlikely to solve larger cost growth and limited access problems.
http://www.fas.org/sgp/crs/misc/R40834.pdf
About the Congressional Research Service:
http://www.loc.gov/crsinfo/whatscrs.html

The Congressional Research Service (CRS) has an outstanding reputation for authoritative, objective and nonpartisan analyses, providing Congress with the analytical support it needs to address the most complex public policy issues facing the nation.
In this 65 page report to Congress on the market structure of the health insurance industry, CRS concludes that “policies focused only on health insurance sector reform may yield some results, but are unlikely to solve larger cost growth and limited access problems.”
The conclusions are certainly no surprise. Every reasonable economist agrees that free market principles do not apply to health care. Yet where is Congress on this? They are moving forward with a proposal that relies heavily on the market of private health plans.
Don’t the members of Congress read their own reports? They need to read this one!

Reform 2.0

By Michael J. Klag
Johns Hopkins Public Health Magazine
Fall 2009

I have to find a new doctor.

Last month, my primary care physician wrote me a letter. He said he was leaving private practice. He’s an outstanding physician—a doctor’s doctor whom I’ve known since he was a medical student. His reason for closing up shop? The sheer frustration of getting paid by private insurance companies.

When a physician of his stature and skills departs private practice for a reason like that, it is an indictment of our health care system—that is, if we had a health care system. We all know the U.S. has great physicians and the world’s best medical technology. But the best health care system? Not in the least. Our crazy patchwork quilt is an accident of history and one that we need to fix. It fails us in so many ways, from its gross inefficiencies to the fact that it has left 47 million Americans without health insurance.

The evidence of our ailing health care system is pretty clear: Despite spending twice as much (more than $7,100 per capita) as the rest of the industrialized countries, we have poor health outcomes. Our life expectancy is below many other industrialized countries’ and perhaps more significantly our life expectancy has improved less than that of nearly all industrialized countries in the last 20 years. On some health status indicators the U.S. is near the top, on many near the middle and on some near the bottom. Not very good value for the extra money we spend. Where does the money go? Some of it is lost to in- efficiency. We all know you get 10 pieces of mail for every procedure or hospital visit and almost certain confusion about what you’re supposed to pay. In addition, our fee-for-service model encourages utilization of resources, especially expensive technology. Lastly, systems that emphasize primary care have lower costs and better outcomes than those that don’t, but we have created incentives that push physicians away from primary care and into increasing specialization.

We have inherited a system that doesn’t work and desperately needs to be fixed.

This was the challenge that President Barack Obama vowed to address. Six months ago, his administration’s leadership on health care looked like our best chance in a generation for genuine reform. However, the political compromises that have been made thus far make it clear this historic opportunity will probably increase the number of Americans with insurance coverage but not reduce growth in costs.

To put things in perspective, let’s look back on another historic opportunity that our government did embrace. Almost half a century ago, our government committed to improving the health and economic welfare of older people in the U.S. by creating Medicare. And Medicare has been a tremendous success. Before it was instituted, 29 percent of those 65 and older lived in poverty. After Medicare, that proportion fell to about 10 percent because it provided health insurance coverage to all Americans over age 65. Since then, the health status of older people has improved markedly. Even its critics admit that Medicare’s administrative costs are a fraction of those of private insurers.

Medicare is not perfect, of course. Despite its warts, however, Medicare has been a success and a huge benefit to our older population. Now, we need to take that kind of step for the rest of Americans.

As I write this, I am not sure what the outcome of health care reform efforts will be. The sausage will go through the grinder, and we’ll get, in my view, a suboptimal solution. Far from  wallowing in disappointment, however, I’m moving on and so should our country. President Obama’s reforms can serve as the foundation  for the more comprehensive fix that’s needed. Call it Reform 2.0.

If we want true health care reform, we need a single-payer system. In this system, the government would act as administrator, paying for all patient visits, prescription drugs, medical procedures, and so on. Instead of thousands of different insurance companies, HMOs and others with all of their separate forms and billing contacts, doctors, hospitals and others would deal with a single administrator—eliminating waste in our system. At a large hospital, this would dramatically reduce overhead costs, allowing hundreds of people to be retrained so that their talents could be directed to ways that would have greater societal benefit than paper shuffling.

Those of you shaking your heads and saying it can’t be done should know that it has been done—repeatedly. Korea in the 1980s and Taiwan in the 1990s, for example, revamped their health care systems. They have multiple insurers but all follow the same rules. Korea’s and Taiwan’s leadership (including many of our alumni) scrutinized health care programs around the world and chose a system that works best. It is not socialized medicine. The hospitals and providers do not work for the government, they work for private organizations. They just don’t have to deal with the time-sapping, unnecessary administrative burdens of our inefficient system.

Every system is perfectly designed to obtain the results it produces. Ours produces poor outcomes, inadequate access and great inefficiency. It places tremendous burden on both providers and payers and drives great doctors like mine to other careers. As hard as it is, we must completely reform our system. Otherwise we risk bequeathing to the next generation the same problems we struggle with today.

http://magazine.jhsph.edu/2009/fall/departments/open_mike/index.html

Study Canada, not Germany

Letter to the Editor
San Francisco Chronicle, Dec. 2, 2009

In “Lessons on health care from Europe” (Nov. 29), Carolyn Lochhead points to lessons to learn from the “private,” multi-payer health care systems in Germany, Switzerland and the Netherlands.

She is right that we can learn from others. Unfortunately, she draws the wrong lessons. Switzerland and Germany have social insurance. For-profit insurance for medically necessary care is banned. Private insurers are tightly regulated by the government, and plans that enroll healthier patients must financially compensate those enrolling sicker patients. And while all European and other systems deliver health care according to need and not ability to pay, the multi-payer varieties have much higher administrative costs than single-payer ones.

In the Netherlands, the recently introduced for-profit insurance applies only to a small portion of services, and the results are mixed at best. As money is diverted from care to advertising, health care needs go unmet, and costs are steadily rising, as is popular discontent.

We should study the impressive achievements of publicly financed, privately delivered single-payer systems in Canada or Taiwan.

CLAUDIA CHAUFAN
San Francisco

Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/12/02/EDFQ1AT7RP.DTL#ixzz0YYsNqdFY

An Early Holiday Gift for the Big Pharma

By Stephen Sokol, M.D.
African House Calls Blog
Thursday, November 26, 2009

Well it is now the holiday season and we all look forward with gratitude for what we have to a wonderful season with family and friends-the true gifts of this time.

Our friends at “Big Pharma” evidently have been so excited that they could not wait and decided to give themselves an early gift by raising prices this year so far a whopping 8.9% despite the fact that the Consumer Price Index (CPI) has fallen 1.3%.

It would seem that after careful reflection they were very uneasy about the 8 billion dollars that they promised President Obama in yearly price reductions over the next 10 years if the government would not start negotiating prices for medicare or other government programs. A bit like going into the local store when they have those end of year sales-10% off the 25% mark-up.

The usual argument is heard round the corporate tables. If we do not do this, why then research and development (R&D) of those vital lifesaving drugs will stop and we will all suffer unspeakable consequences. Let’s take a closer look at this claim, as who would be so selfish and un-American as to want to be responsible for all that misery.
The ten biggest pharmaceutical companies had total sales of 269 billion dollars in 2008. Of this only 42 billion (15%) went for R&D. The vast majority of R&D money comes from the National Institutes of Health, our tax dollars at work. The other 30% comes from foreign laboratories. Additionally the vast majority of these drugs were “me too” products that added nothing to health care. Of the 667 new drugs approved from 2000-2007 only 75 (11%) were either new important additions or a significant improvement on an existing product. “Big Pharma” made 49 billion in profits (18%) in 2008. Now that’s good business as the average for all Fortune 500 companies was a paltry 0.9%.

To ensure it’s place “in the sun”, “Big Pharma” spent 55 billion for lobbying, political contributions, front groups as “patient advocacy”and” independent” think tanks.
Education is a major part of this money. Hundreds of “detailers” scurry around the country to educate doctors that their drug is the best and has the least side effects. As part of this process free meals are given, meetings are sponsored and gifts with the drug name inscribed are distributed. For the consumer ads and free first prescription offers abound on television and on the Internet. While researching this Blog entry, I have bumped into Lipitor at least 5 times.

One of the most fascinating aspects of this (for me) is the creation of new disease entities to expand a particular drug’s market. We now have “Social Phobia Disorder” and that can be treated. A few years back, those folks were just shy and considered normal. Up to 7% of American children now have Attention Deficit Hyperactivity Disorder and are medicated with who knows what long term effects. Years back they were considered variations of normal and sent out to the playground to “run of some steam”. Interestingly in Great Britain, the estimate is only 1%. We now have children as young as 3-4 being labelled as Bipolar and treated again with unknown long term effects on the developing brain. Turns out that the physician that did the studies was funded by the very pharmaceutical firm that manufactures the medication.

And so in this season of joy and gratitude, we should all reflect on our health care chaos, realizing that all too many of our fellow citizens and other folks that we invited here have no regular means of getting help when they are ill. We must change this. Then this season will have a real meaning.

http://sas-africanhousecalls.blogspot.com/2009/11/early-holiday-gift-for-big-pharma.html

Flashback: Republicans Opposed Medicare In 1960s By Warning Of Rationing, ‘Socialized Medicine’

By Igor Volsky
The Wonk Room, Think Progress
Jul 29th, 2009

Tomorrow is the the 44th anniversary of Medicare, a government-sponsored health care program that provides health coverage to virtually all of the nation’s elderly and a large share of people with disabilities. While Medicare is not without its problems, it has dramatically improved access to health care, allowed seniors to live longer and healthier lives, contributed to the desegregation of southern hospitals, and has become one of the most popular government programs.

At the time, conservatives strongly opposed Medicare, warning that a government-run program would lead to socialism in America:

Ronald Reagan: “[I]f you don’t [stop Medicare] and I don’t do it, one of these days you and I are going to spend our sunset years telling our children and our children’s children what it once was like in America when men were free.” [1961]

George H.W. Bush: Described Medicare in 1964 as “socialized medicine.” [1964]

Barry Goldwater: “Having given our pensioners their medical care in kind, why not food baskets, why not public housing accommodations, why not vacation resorts, why not a ration of cigarettes for those who smoke and of beer for those who drink.” [1964]

Bob Dole: In 1996, while running for the Presidency, Dole openly bragged that he was one of 12 House members who voted against creating Medicare in 1965. “I was there, fighting the fight, voting against Medicare . . . because we knew it wouldn’t work in 1965.” [1965]

Despite Medicare’s success and the unrealized fears of its detractors, Republican lawmakers are still regurgitating the claim that Medicare would create a “Soviet-style model” of health care. As Rep. Roy Blunt (R-MS), chairman of the GOP Health Solutions Group, explained during a recent radio interview, “you could certainly argue that government should have never have gotten in the health care business…Government did get into the health care business in a big way in 1965 with Medicare, and later with Medicaid, and government already distorts the marketplace.”

Over the years, Republicans proposed numerous schemes to slash funding or privatize Medicare. Most notably, in 1995, under the leadership of then House Speaker Newt Gingrich (R-GA), Republicans proposed cutting 14% from projected Medicare spending over seven years and forcing millions of elderly recipients into managed health care programs or HMOs. The cuts were to ensure that Medicare is “going to wither on the vine,” Gingrich explained. Similarly, during the 2008 Presidential campaign, Sen. John McCain (R-AZ) proposed cutting $1.3 trillion from Medicare and Medicaid.

But while Republicans have sought to undermine the program, seniors have benefited from it. Since 1965, “the health of the elderly population has improved, as measured by both longevity and functional status.” In fact, according to a study from Health Affairs, life expectancy at age 65 increased from 14.3 years in 1960 to 17.8 years in 1998 and the chronically disabled elderly population declined from 24.9 percent in 1982 to 21.3 percent in 1994.”

Prior to Medicare, “about one-half of America’s seniors did not have hospital insurance,” “more than one in four elderly were estimated to go without medical care due to cost concerns,” and one in three seniors were living in poverty. Today, nearly all seniors have access to affordable health care and only about 14 percent of seniors are below the poverty line.

Moreover, a recent survey from the Commonwealth Fund, found that “elderly Medicare beneficiaries reported greater overall satisfaction with their health coverage, better access to care, and fewer problems paying medical bills than people covered by employer-sponsored plans.” In fact, Medicare is so popular that most Americans support expanding Medicare coverage to Americans aged 55 to 64. According to a recent Kaiser Family Foundation poll, “over half of Americans (53 percent) “strongly” support such a proposal and an additional 26 percent say they support it somewhat, totaling 79 percent backing.”

http://wonkroom.thinkprogress.org/2009/07/29/medicare-44/

Health study accurate [on 45,000 deaths annually], had no assumptions

Letter to the Editor
Orlando Sentinel
November 28, 2009

Congressman Cliff Stearns in his My Word column Tuesday (“Use facts in health-care debate”) repeats misinformation spread by a conservative think-tank about our study that found that nearly 45,000 Americans die annually because they lack health insurance.

The study was based on a survey conducted by the National Center for Health Statistics (not by us, as Stearns claims) of more than 9,000 people. They were interviewed, examined by a doctor and given blood tests. They were then followed for up to 12 years to see who lived and who died.

After taking into account many factors, including age, race and baseline health status, we found that the uninsured had 40 percent higher odds of dying.

Contrary to Stearns’ statements, our analytic approach requires no assumptions about health coverage in the intervening years, although we know that being uninsured one year predicts being uninsured the next.

The study’s methods have previously been accepted by the Institute of Medicine of the National Academy of Sciences. The article underwent extensive review by other scientists and was published in the world’s leading public-health journal.

Like the other 17,000 doctors who are members of Physicians for a National Health Program, we believe that every sick person deserves our care.

We also believe the private health-insurance industry cannot control costs or provide Americans with the coverage they need; hence, we support a single-payer, Medicare-for-all approach to health reform.

Unfortunately, U.S. Rep. Alan Grayson has not endorsed this approach.

He did, however, cite our findings accurately in his My Word column on Nov. 18.

Steffie Woolhandler, Professor of medicine, Harvard University Medical School
David U. Himmelstein, Associate professor of medicine, Harvard University Medical School

MedPAC on variation in service use

Report to the Congress: Measuring Regional Variation in Service Use

MedPAC (Medicare Payment Advisory Commission)
December 2009

In this paper, we present data on the difference between regional variation in Medicare spending and regional variation in the use of Medicare-covered services. Regional variation in Medicare spending per beneficiary reflects many factors, including differences in beneficiaries’ health status, Medicare payment rates, service volume (number of services), and service intensity (e.g., MRI versus simple X-ray). In contrast, regional variation in the use of Medicare services reflects only differences in the volume and intensity of services that beneficiaries with comparable health status receive.

… raw per capita spending is 55 percent higher for beneficiaries in the area at the 90th percentile than for beneficiaries in the area at the 10th percentile.

Service use in higher use areas (90th percentile) is about 30 percent greater than in lower use areas (10th percentile).

… the correlation between rate of growth in adjusted spending from 2000 to 2006 and the level of service use in an MSA is slightly negative.

Regional variation in service use is not equivalent to regional variation in Medicare spending. The two should not be confused.

http://www.medpac.gov/documents/Dec09_RegionalVariation_report.pdf

Comment:

By Don McCanne, MD

This paper is an important addition to the work of John Wennberg and his colleagues at Dartmouth on regional variation in spending in the Medicare program. It separates the variation in use of services by individuals with comparable health status from other factors that influence spending, especially Medicare payment policies.

The differences are important because they lead to different policy solutions. Policies to ensure adequate but not excessive volume and intensity of services are separate from, though must be integrated with, policies that establish proper levels of spending for services that Medicare beneficiaries should be receiving.

The complexities of these interdependent policies that would improve spending can be mastered only with a concerted effort by public agencies. The private insurance industry has no capability to create and apply the essential policies that would transform our health care delivery system into the efficient, affordable system that we desperately need.

MedPAC, the Medicare Payment Advisory Commission, currently provides advice to Congress on proposals to improve spending policies in the Medicare program. Congress is free to reject that advice and often does, more for political reasons than for reasons based on sound policy.

The health care reform proposal before Congress includes provisions to reduce the often perverse politics of Medicare financing by creating a commission, sometimes referred to as MedPAC-on-steroids, with much greater power to enforce its recommendations on spending.

The problem with the proposal is that the recommendations would be limited to the Medicare program alone. Unless the revisions applied to the other five-sixths of our population, it would be difficult to establish policies that would improve the overall use of health care services. Although reform of our financing system is essential, we may not get very far if we don’t have policies that would improve the structure of the health care delivery system.

We really do need an improved Medicare for all. We need to jettison the wasteful, ineffectual private insurers and get on with reform that will use our health care dollars to pay for an efficient health care system that serves all of us well.

MedPAC on variation in service use

Report to the Congress: Measuring Regional Variation in Service Use

MedPAC (Medicare Payment Advisory Commission)
December 2009
In this paper, we present data on the difference between regional variation in Medicare spending and regional variation in the use of Medicare-covered services. Regional variation in Medicare spending per beneficiary reflects many factors, including differences in beneficiaries’ health status, Medicare payment rates, service volume (number of services), and service intensity (e.g., MRI versus simple X-ray). In contrast, regional variation in the use of Medicare services reflects only differences in the volume and intensity of services that beneficiaries with comparable health status receive.
… raw per capita spending is 55 percent higher for beneficiaries in the area at the 90th percentile than for beneficiaries in the area at the 10th percentile.
Service use in higher use areas (90th percentile) is about 30 percent greater than in lower use areas (10th percentile).
… the correlation between rate of growth in adjusted spending from 2000 to 2006 and the level of service use in an MSA is slightly negative.
Regional variation in service use is not equivalent to regional variation in Medicare spending. The two should not be confused.
http://www.medpac.gov/documents/Dec09_RegionalVariation_report.pdf

This paper is an important addition to the work of John Wennberg and his colleagues at Dartmouth on regional variation in spending in the Medicare program. It separates the variation in use of services by individuals with comparable health status from other factors that influence spending, especially Medicare payment policies.
The differences are important because they lead to different policy solutions. Policies to ensure adequate but not excessive volume and intensity of services are separate from, though must be integrated with, policies that establish proper levels of spending for services that Medicare beneficiaries should be receiving.
The complexities of these interdependent policies that would improve spending can be mastered only with a concerted effort by public agencies. The private insurance industry has no capability to create and apply the essential policies that would transform our health care delivery system into the efficient, affordable system that we desperately need.
MedPAC, the Medicare Payment Advisory Commission, currently provides advice to Congress on proposals to improve spending policies in the Medicare program. Congress is free to reject that advice and often does, more for political reasons than for reasons based on sound policy.
The health care reform proposal before Congress includes provisions to reduce the often perverse politics of Medicare financing by creating a commission, sometimes referred to as MedPAC-on-steroids, with much greater power to enforce its recommendations on spending.
The problem with the proposal is that the recommendations would be limited to the Medicare program alone. Unless the revisions applied to the other five-sixths of our population, it would be difficult to establish policies that would improve the overall use of health care services. Although reform of our financing system is essential, we may not get very far if we don’t have policies that would improve the structure of the health care delivery system.
We really do need an improved Medicare for all. We need to jettison the wasteful, ineffectual private insurers and get on with reform that will use our health care dollars to pay for an efficient health care system that serves all of us well.