PNHP

Single-payer health care plan isn't socialism

Single-payer health care plan isn't socialism

Saul Friedman
Gray Matters
Newsday
April 17, 2009

I was surprised during a recent conference for care- givers when several professionals, who should have known better, asked me if a “single-payer” health insurance system is “socialized medicine.”

The quick answer: No.

But the question suggests the specter of socialism that haunts efforts to bail out American financial institutions may be used to cast doubt on one of the possible solutions to the health care crisis: Medicare for All.

Webster’s online dictionary defines socialism as “any of various economic and political theories advocating collective or governmental ownership and administration of the means of production and distribution of goods.”

Britain’s socialized health care system is government-run. Doctors, nurses and other personnel work for the country’s National Health Service, which also owns the hospitals and other facilities. Other nations have similar systems, but no one has seriously proposed such a system here.

Newsweek suggested Medicare and its expansion (Part D) to cover prescription drugs smacked of socialism. But it’s nothing of the sort. Medicare itself, while publicly financed, uses private contractors to administer the benefits, and the doctors, labs and other facilities are private businesses. Part D uses private insurance companies and drug manufacturers.

In the United States, there are a few pockets of socialism, such as the Department of Veterans Affairs health system, in which doctors and others are employed by the VA, which owns its hospitals.

Physicians for a National Health Plan, a nonprofit research and education organization that supports the single-payer system, states on its Web site: “Single-payer is a term used to describe a type of financing system. It refers to one entity acting as administrator, or ‘payer.’ In the case of health care . . . a government-run organization – would collect all health care fees, and pay out all health care costs.” The group believes the program could be financed by a 7 percent employer payroll tax, relieving companies from having to pay for employee health insurance, plus a 2 percent tax for employees, and other taxes. More than 90 percent of Americans would pay less for health care.

The U.S. system now consists of thousands of health insurance organizations, HMOs, PPOs, their billing agencies and paper pushers who administer and pay the health care bills (after expenses and profits) for those who buy or have health coverage. That’s why the U.S. spends more on health care per capita than any other nation, and administrative costs are more than 15 percent of each dollar spent on care.

In contrast, Medicare is America’s single-payer system for more than 40 million older or disabled Americans, providing hospital and outpatient care, with administrative costs of about 2 percent.

Advocates of a single-payer system seek “Medicare for All” as the simplest, most straightforward and least costly solution to providing health care to the 47 million uninsured while relieving American business of the burdens of paying for employee health insurance.

The most prominent single-payer proposal, H.R. 676, called the “U.S. National Health Care Act,” is subtitled the “Expanded and Improved Medicare for All Act.”(View it online at http://thomas.loc.gov/cgi-bin/query/z?c111:H.R.676:) As proposed by Rep. John Conyers (D-Mich.), it would provide comprehensive medical benefits under a single-payer, probably an agency like the current Center for Medicare and Medicaid Services, which administers Medicare.

But while the benefits would be publicly financed, the health care providers would, for the most part, be private. Indeed, profit-making medical practices, laboratories, hospitals and other institutions would continue. They would simply bill the single-payer agency, as they do now with Medicare.

The Congressional Research Service says Conyers’ bill, which has dozens of co-sponsors, would cover and provide free “all medically necessary care, such as primary care and prevention, prescription drugs, emergency care and mental health services.”

It also would eliminate the need, the spending and the administrative costs for myriad federal and state health programs such as Medicaid and the State Children’s Health Insurance Program. The act also “provides for the eventual integration of the health programs” of the VA and Indian Health Services. And it could replace Medicaid to cover long-term nursing care. The act is opposed by the insurance lobby as well as most free-market Republicans, because it would be government-run and prohibit insurance companies from selling health insurance that duplicates the law’s benefits.

It is supported by most labor unions and thousands of health professionals, including Dr. Quentin Young, the Rev. Martin Luther King’s physician when he lived in Chicago and Obama’s longtime friend. But Young, an organizer of the physicians group, is disappointed that Obama, once an advocate of single-payer, has changed his position and had not even invited Young to the White House meeting on health care.

We’ll talk soon about Obama’s alternative to single payer.

http://www.newsday.com/news/health/ny-bzsaul1812648142apr17,0,721971.column

Testimony of David U. Himmelstein, M.D. before the HELP Subcommittee

The following text contains the testimony of Dr. David Himmelstein at a hearing on “Ways to Reduce the Cost of Health Insurance for Employers, Employees and their Families” organized by Health, Employment, Labor and Pensions Subcommittee of the House Committee on Education and Labor on April 23 in Washington.

April 23, 2009

Mr. Chairman, members of the Committee. My name is David Himmelstein. I am a primary care doctor in Cambridge, Massachusetts, and associate professor of medicine at Harvard. I also serve as national spokesperson for Physicians for a National Health Program. Our 16,000 physician members support nonprofit, single-payer national health insurance because of overwhelming evidence that lesser reforms will fail.

Health reform must address the cost crisis for insured as well as uninsured Americans. My research group found that illness and medical bills contributed to about half of all personal bankruptcies in 2001, and even more than that in 2007. Strikingly, three-quarters of the medically bankrupt were insured. But their coverage was too skimpy to protect them from financial collapse.

A single-payer reform would make care affordable through vast savings on bureaucracy and profits. As my colleagues and I have shown in research published in the New England Journal of Medicine, administration consumes 31 percent of health spending in the United States, nearly double what Canada spends. In other words, if we cut our bureaucratic costs to Canadian levels, we’d save nearly $400 billion annually — more than enough to cover the uninsured and to eliminate co-payments and deductibles for all Americans.

By simplifying its payment system, Canada has cut insurance overhead to 1 percent of premiums — one-twentieth of Aetna’s overhead — and eliminated mounds of expensive paperwork for doctors and hospitals. In fact, while cutting insurance overhead could save us $131 billion annually, our insurers waste much more than that because of the useless paperwork they inflict on doctors and hospitals.

A Canadian hospital gets paid like a fire department does in the U.S. It negotiates a global budget with the single insurance plan in its province, and gets one check each month that covers virtually all costs. They don’t have to bill for each Band-Aid and aspirin tablet. At my hospital, we know our budget on January 1, but we collect it piecemeal in fights with hundreds of insurers over thousands of bills each day. The result is that hundreds of people work for Mass General’s billing department, while Toronto General employs only a handful — mostly to send bills to Americans who wander across the border. Altogether, U.S. hospitals could save about $120 billion annually on bureaucracy under a single payer system.

And doctors in the U.S. waste about $95 billion each year fighting with insurance companies and filling out useless paperwork.

Significantly, these massive potential savings on bureaucracy can only be achieved through a single payer reform. A health reform plan that includes a “public plan option” might realize some savings on insurance overhead. However, as long as multiple private plans coexist with the public plan, hospitals and doctors would have to maintain their costly billing and internal cost tracking apparatus. Indeed, my colleagues and I estimate that even if half of all privately insured Americans switched to a public plan with overhead at Medicare’s level, the administrative savings would amount to only 9 percent of the savings under single payer.

While administrative savings from a reform that includes a Medicare-like public plan option are modest, at least they’re real. In contrast, other widely touted cost control measures are completely illusory. A raft of studies shows that prevention saves lives, but usually costs money. The recently completed Medicare demonstration project found no cost savings from chronic disease management programs. And the claim that computers will save money is based on pure conjecture. Indeed, in a study of 3,000 U.S. hospitals that my colleagues and I have recently completed, the most computerized hospitals had, if anything, slightly higher costs.

My home state of Massachusetts recent experience with health reform illustrates the dangers of believing overly optimistic cost control claims. Before its passage, the reform’s backers made many of the same claims for savings that we’re hearing today in Washington. Prevention, disease management, computers, and a health insurance exchange were supposed to make reform affordable. Instead, costs have skyrocketed, rising 23 percent between 2005 and 2007, and the insurance exchange adds 4 percent for its own administrative costs on top of the already high overhead charged by private insurers. As a result, 1 in 5 Massachusetts residents went without care last year because they couldn’t afford it. Hundreds of thousands remain uninsured, and the state has drained money from safety-net hospitals and clinics to keep the reform afloat.

In sum, a single-payer reform would make universal, comprehensive coverage affordable by diverting hundreds of billions of dollars from bureaucracy to patient care. Lesser reforms — even those that include a public plan option — cannot realize such savings. While reforms that maintain a major role for private insurers may seem politically expedient, they are economically and medically nonsensical.

Reinhardt’s Ways and Means testimony on insurance market reforms

Health Reform in the 21st Century: Insurance Market Reforms

Statement of Uwe E. Reinhardt, Ph.D.
House Committee on Ways and Means
April 22, 2009

A much mouthed mantra in our debate on health policy is that “we all want the same thing in health care, but merely quibble over the means to get there.” Nothing could be further from the truth. That debate has been and continues to be a tenacious ideological fight over the social ethic that ought to govern American health care; but we camouflage it as a technical debate strictly over means.

My plea before this Committee and to the Congress is that any health reform proposal put before the American people be preceded with a preamble that clearly articulates the social goals our health system is supposed to pursue and the social ethic it is to observe. Policy makers in other nations routinely do so and accept the constraints that this preamble imposes on their design of health reform. It would be helpful to have a clearly articulated statement on the social ethics for American health care as well.

http://waysandmeans.house.gov/hearings.asp?formmode=view&id=7672

Comment:

By Don McCanne, MD

In a comparatively brief statement, Uwe Reinhardt explained to the members of the House Ways and Means Committee the principles and rationale of social insurance. His statement should be downloaded as a valuable resource for supporting some of the important policies for reform, and for refuting those policies that perpetuate inequities and injustices and may cause even further harm.

Single payer supporters, like me, will be disappointed that he does not dismiss a role for private insurers. But at the same time, we should recognize that he is not talking about America’s private health plans as we know them. Although we will continue to advocate for a pure, publicly administered and publicly financed single payer system, it does not mean that we should remain silent as wrong-headed policies are adopted in the crafting of reform. We should complain loudly and clearly when the principles of social insurance are violated, and then add on why the single payer model would be superior.

Download Professor Reinhardt’s statement now while you have access to the link.

Single-payer health care plan isn’t socialism

Saul Friedman
Gray Matters
Newsday
April 17, 2009

I was surprised during a recent conference for care- givers when several professionals, who should have known better, asked me if a “single-payer” health insurance system is “socialized medicine.”

The quick answer: No.

But the question suggests the specter of socialism that haunts efforts to bail out American financial institutions may be used to cast doubt on one of the possible solutions to the health care crisis: Medicare for All.

Webster’s online dictionary defines socialism as “any of various economic and political theories advocating collective or governmental ownership and administration of the means of production and distribution of goods.”

Britain’s socialized health care system is government-run. Doctors, nurses and other personnel work for the country’s National Health Service, which also owns the hospitals and other facilities. Other nations have similar systems, but no one has seriously proposed such a system here.

Newsweek suggested Medicare and its expansion (Part D) to cover prescription drugs smacked of socialism. But it’s nothing of the sort. Medicare itself, while publicly financed, uses private contractors to administer the benefits, and the doctors, labs and other facilities are private businesses. Part D uses private insurance companies and drug manufacturers.

In the United States, there are a few pockets of socialism, such as the Department of Veterans Affairs health system, in which doctors and others are employed by the VA, which owns its hospitals.

Physicians for a National Health Plan, a nonprofit research and education organization that supports the single-payer system, states on its Web site: “Single-payer is a term used to describe a type of financing system. It refers to one entity acting as administrator, or ‘payer.’ In the case of health care . . . a government-run organization – would collect all health care fees, and pay out all health care costs.” The group believes the program could be financed by a 7 percent employer payroll tax, relieving companies from having to pay for employee health insurance, plus a 2 percent tax for employees, and other taxes. More than 90 percent of Americans would pay less for health care.

The U.S. system now consists of thousands of health insurance organizations, HMOs, PPOs, their billing agencies and paper pushers who administer and pay the health care bills (after expenses and profits) for those who buy or have health coverage. That’s why the U.S. spends more on health care per capita than any other nation, and administrative costs are more than 15 percent of each dollar spent on care.

In contrast, Medicare is America’s single-payer system for more than 40 million older or disabled Americans, providing hospital and outpatient care, with administrative costs of about 2 percent.

Advocates of a single-payer system seek “Medicare for All” as the simplest, most straightforward and least costly solution to providing health care to the 47 million uninsured while relieving American business of the burdens of paying for employee health insurance.

The most prominent single-payer proposal, H.R. 676, called the “U.S. National Health Care Act,” is subtitled the “Expanded and Improved Medicare for All Act.”(View it online at http://thomas.loc.gov/cgi-bin/query/z?c111:H.R.676:) As proposed by Rep. John Conyers (D-Mich.), it would provide comprehensive medical benefits under a single-payer, probably an agency like the current Center for Medicare and Medicaid Services, which administers Medicare.

But while the benefits would be publicly financed, the health care providers would, for the most part, be private. Indeed, profit-making medical practices, laboratories, hospitals and other institutions would continue. They would simply bill the single-payer agency, as they do now with Medicare.

The Congressional Research Service says Conyers’ bill, which has dozens of co-sponsors, would cover and provide free “all medically necessary care, such as primary care and prevention, prescription drugs, emergency care and mental health services.”

It also would eliminate the need, the spending and the administrative costs for myriad federal and state health programs such as Medicaid and the State Children’s Health Insurance Program. The act also “provides for the eventual integration of the health programs” of the VA and Indian Health Services. And it could replace Medicaid to cover long-term nursing care. The act is opposed by the insurance lobby as well as most free-market Republicans, because it would be government-run and prohibit insurance companies from selling health insurance that duplicates the law’s benefits.

It is supported by most labor unions and thousands of health professionals, including Dr. Quentin Young, the Rev. Martin Luther King’s physician when he lived in Chicago and Obama’s longtime friend. But Young, an organizer of the physicians group, is disappointed that Obama, once an advocate of single-payer, has changed his position and had not even invited Young to the White House meeting on health care.

We’ll talk soon about Obama’s alternative to single payer.

http://www.newsday.com/news/health/ny-bzsaul1812648142apr17,0,721971.column

Do Americans support an individual mandate?

Will Americans Support the Individual Mandate?

by Tara Sussman, Robert J. Blendon, and Andrea Louise Campbell
Health Affairs
April 21, 2009
Survey questions
A random half of the sample was asked about a “stand-alone individual mandate.” The survey set the context as follows: “This proposal would require all Americans to have insurance. Most people would still get insurance through their work. People who don’t get insurance from work would have to buy it themselves, or pay a fine if they don’t. People with lower incomes would get help from the government paying the cost of health insurance.”
The other half of the sample was asked about a “shared-responsibility” plan. The context here was as follows: “This proposal would place requirements on individuals, employers, the government, and insurance companies so that everyone shares in the responsibility. Individuals who don’t already have insurance would be required to buy it or pay a fine, with financial help from the government for people with lower incomes. Employers would be required to cover their workers, or pay money into a pool that helps people buy insurance. Government health insurance programs would be expanded. Insurance plans would be required to take anyone who applies, even if they have a prior illness.”
How does support for shared responsibility compare to that for a stand-alone mandate?
A shared-responsibility plan was more popular than the stand-alone mandate in 2008. Fifty-nine percent of the public supported it, compared to the 48 percent who supported the stand-alone mandate.
Do Republicans and Democrats have different reasons for their opinions on mandate-based reform?
Respondents who supported the stand-alone individual mandate plan or the shared-responsibility plan were asked to select from a list their major reasons for support. The most popular reasons were “making sure everyone has health insurance is the right thing to do”; “people with health insurance will get preventive and more continuous care”; and “by requiring the uninsured to get insurance, people won’t face higher health care costs to cover the unpaid medical bills of those who don’t have insurance.” A substantial majority of both Democrats and Republicans offered each of these reasons, but more Democrats than Republicans agreed with the first, principle-based reasoning. Also, more Democrats than Republicans related their support to redistributing the costs of the sick: “to get everyone into the same insurance pool, so we can spread the costs of sick and healthy people over the whole population.”
Similarly, reform opponents were asked to select major reasons for their opposition. Republicans’ and Democrats’ responses reveal their fundamental disagreements on government’s role in health care. Among those who did not support either mandate plan, many more Republicans than Democrats said that the reform would lead to government-run health care or higher taxes, or both. The Democrats who opposed the plans were significantly more likely than the Republicans to say that these reform options were the wrong approach because a single government health plan was needed. Republicans and Democrats also disagreed on the issue of the individual mandate itself. A higher percentage of Republican opponents than Democratic opponents disagreed with the principle of government requiring people to buy insurance. More Democrats than Republicans opposed mandates because they thought that people might not be able to afford the insurance they were being required to purchase.
http://content.healthaffairs.org/cgi/content/abstract/hlthaff.28.3.w501

If this article gains traction, the conclusion that likely will be reported is that Americans support an individual mandate to purchase insurance as long as it incorporates “shared responsibility.”
This interpretation would certainly please insurance industry executives since they have said that they can agree to sell insurance to anyone regardless of preexisting conditions (guaranteed issue), but only if everyone is required to have insurance (individual mandate). The insurance industry would be willing to share the responsibility with individuals, employers and the government.
But what is shared responsibility? The responsibility of the individual is to pay his/her portion of the premium plus all out-of-pocket expenses, including cost sharing and costs of products and services not covered by the insurance plan. The responsibility of the employer is to pay a portion of the employee’s insurance premium, but economists agree that it is really the individual’s forgone wage increases that pays the premium. The government’s responsibility is to pay for part or all of the care provided to individuals who do not have the funds to pay for care, but it is really ultimately individuals who are paying the taxes that fund the government programs. And the responsibility of the private insurance industry? They don’t pay into the system; they take a large amount of funds out of the system – funds that again are ultimately paid by individuals.
So “shared responsibility” is not a sharing of responsibility; all of the responsibility falls on individuals. “Shared responsibility” is merely a rhetorical framing that advances the interests of some of the stakeholders, especially the private insurance industry.
Even if the respondents to the survey accepted the concept of shared responsibility, it would be a real stretch to conclude that a 48 percent support of a stand-alone mandate means that the public is opposed, whereas a 59 percent support of a mandate with shared responsibility is a solid public endorsement (11 percent difference). This is not a ringing endorsement of a concept that is more of a marketing slogan than a genuine policy proposal.
That said, there is an important take-home message from this survey. Those opposed seemed to understand the policy principles involved. Republicans were opposed because of higher taxes and greater government involvement. Democrats were opposed because a single government health program was needed instead of a mandate to purchase private plans that might not be affordable.
Pretending that the marketing ploy of shared responsibility will bring us bipartisan consensus on reform will only reinforce the process that we are about to see. The Republicans have already gained the greatest concession – single payer is off the table – and they will continue to use the process to gain further concessions that will destroy any semblance of health care equity, and then they will vote against the final bill anyway.

Do Americans support an individual mandate?

Will Americans Support the Individual Mandate?

by Tara Sussman, Robert J. Blendon, and Andrea Louise Campbell
Health Affairs
April 21, 2009

Survey questions

A random half of the sample was asked about a “stand-alone individual mandate.” The survey set the context as follows: “This proposal would require all Americans to have insurance. Most people would still get insurance through their work. People who don’t get insurance from work would have to buy it themselves, or pay a fine if they don’t. People with lower incomes would get help from the government paying the cost of health insurance.”

The other half of the sample was asked about a “shared-responsibility” plan. The context here was as follows: “This proposal would place requirements on individuals, employers, the government, and insurance companies so that everyone shares in the responsibility. Individuals who don’t already have insurance would be required to buy it or pay a fine, with financial help from the government for people with lower incomes. Employers would be required to cover their workers, or pay money into a pool that helps people buy insurance. Government health insurance programs would be expanded. Insurance plans would be required to take anyone who applies, even if they have a prior illness.”

How does support for shared responsibility compare to that for a stand-alone mandate?

A shared-responsibility plan was more popular than the stand-alone mandate in 2008. Fifty-nine percent of the public supported it, compared to the 48 percent who supported the stand-alone mandate.

Do Republicans and Democrats have different reasons for their opinions on mandate-based reform?

Respondents who supported the stand-alone individual mandate plan or the shared-responsibility plan were asked to select from a list their major reasons for support. The most popular reasons were “making sure everyone has health insurance is the right thing to do”; “people with health insurance will get preventive and more continuous care”; and “by requiring the uninsured to get insurance, people won’t face higher health care costs to cover the unpaid medical bills of those who don’t have insurance.” A substantial majority of both Democrats and Republicans offered each of these reasons, but more Democrats than Republicans agreed with the first, principle-based reasoning. Also, more Democrats than Republicans related their support to redistributing the costs of the sick: “to get everyone into the same insurance pool, so we can spread the costs of sick and healthy people over the whole population.”

Similarly, reform opponents were asked to select major reasons for their opposition. Republicans’ and Democrats’ responses reveal their fundamental disagreements on government’s role in health care. Among those who did not support either mandate plan, many more Republicans than Democrats said that the reform would lead to government-run health care or higher taxes, or both. The Democrats who opposed the plans were significantly more likely than the Republicans to say that these reform options were the wrong approach because a single government health plan was needed. Republicans and Democrats also disagreed on the issue of the individual mandate itself. A higher percentage of Republican opponents than Democratic opponents disagreed with the principle of government requiring people to buy insurance. More Democrats than Republicans opposed mandates because they thought that people might not be able to afford the insurance they were being required to purchase.

http://content.healthaffairs.org/cgi/content/abstract/hlthaff.28.3.w501

Comment:

By Don McCanne, MD

If this article gains traction, the conclusion that likely will be reported is that Americans support an individual mandate to purchase insurance as long as it incorporates “shared responsibility.”

This interpretation would certainly please insurance industry executives since they have said that they can agree to sell insurance to anyone regardless of preexisting conditions (guaranteed issue), but only if everyone is required to have insurance (individual mandate). The insurance industry would be willing to share the responsibility with individuals, employers and the government.

But what is shared responsibility? The responsibility of the individual is to pay his/her portion of the premium plus all out-of-pocket expenses, including cost sharing and costs of products and services not covered by the insurance plan. The responsibility of the employer is to pay a portion of the employee’s insurance premium, but economists agree that it is really the individual’s forgone wage increases that pays the premium. The government’s responsibility is to pay for part or all of the care provided to individuals who do not have the funds to pay for care, but it is really ultimately individuals who are paying the taxes that fund the government programs. And the responsibility of the private insurance industry? They don’t pay into the system; they take a large amount of funds out of the system – funds that again are ultimately paid by individuals.

So “shared responsibility” is not a sharing of responsibility; all of the responsibility falls on individuals. “Shared responsibility” is merely a rhetorical framing that advances the interests of some of the stakeholders, especially the private insurance industry.

Even if the respondents to the survey accepted the concept of shared responsibility, it would be a real stretch to conclude that a 48 percent support of a stand-alone mandate means that the public is opposed, whereas a 59 percent support of a mandate with shared responsibility is a solid public endorsement (11 percent difference). This is not a ringing endorsement of a concept that is more of a marketing slogan than a genuine policy proposal.

That said, there is an important take-home message from this survey. Those opposed seemed to understand the policy principles involved. Republicans were opposed because of higher taxes and greater government involvement. Democrats were opposed because a single government health program was needed instead of a mandate to purchase private plans that might not be affordable.

Pretending that the marketing ploy of shared responsibility will bring us bipartisan consensus on reform will only reinforce the process that we are about to see. The Republicans have already gained the greatest concession – single payer is off the table – and they will continue to use the process to gain further concessions that will destroy any semblance of health care equity, and then they will vote against the final bill anyway.

Jonathan Cohn interviews Taiwan's Dr. Michael Chen

TNRtv: The Case for Single-Payer Health Care

By Jonathan Cohn
The Treatment (TNR’s health care blog)
The New Republic
April 17, 2009
At the 2009 World Health Care Congress, TNR senior editor Jonathan Cohn sat down with Dr. Michael Chen, Vice President and CFO of Taiwan’s National Health Insurance Bureau, to discuss the results of Taiwan’s switch to a universal health care system.
Jonathan Cohn (JC): You have what most people refer to as single payer health insurance – the government is the main insurer for everybody.
Dr. Michael Chen (MC): Yes.
***
JC: How did you decide on that model – the single payer? Why did you go in that direction?
MC: Well, we sent our people around the world to learn their programs, including the United States. Actually, the program is modeled after Medicare. And there are so many similarities – other than that our program covers all of the population, and Medicare covers only the elderly. It seems the way to go to have social insurance…
JC: Now, one issue that comes up in the United States when people talk about a single payer system, or even any kind of a system where the government is defining the benefits, there’s a big concern that there’s not enough choice. People in America… we want to know that you can choose the kind of insurance you want – how much coverage, what services. Is that an issue you dealt with in Taiwan? Was that a concern?
MC: Not at all, because in Taiwan the benefit package is rather comprehensive… We maintain a very long list for prescription drugs – more than twenty thousand items. And the benefit package includes inpatient, outpatient, and dental service which is usually not covered in this country.
JC: Now the flip side is that if you are offering such a generous package, that’s very expensive, is it not? I mean, how do you pay for it?
MC: Not the case.
JC: Not the case. What percentage of GDP?
MC: Six percent of GDP, so that’s very affordable. The premium on average that the family pays is about two percent of the household income because the premium is shared by your employer.
JC: … In this country we spend far more than that, and even looking at Europe – Switzerland, France – they spend a lot more than that also. Are there waiting times for services in Taiwan? Is there something that people are going without? I mean that’s a lot of services for such a little amount of money. I’m trying to figure out what it is that you’re not getting.
MC: No waiting lines.
JC: No waiting lines? I can see a doctor any day I want…
MC: If you are not too particular.. you can visit even a specialist in a matter of minutes…
***
JC: … If I were to be sitting here with a doctor in private practice in Taiwan – I know in this country doctors worry a lot that Medicare doesn’t pay enough money and that it’s very bureaucratic – what kind of complaints would I hear from them?
MC: Of course, doctors would complain in public, but appreciate it in private – because, you know, especially in this economic downturn, how can you find an industry with assured growth rate annually? Right now they enjoy somewhere between four percent to five percent increased rate, and this is a sure thing.
http://blogs.tnr.com/tnr/blogs/the_treatment/archive/2009/04/17/tnrtv-the-case-for-single-payer-health-care.aspx

Our political leaders keep telling us that Americans don’t want single payer, but instead we want a uniquely American solution for all Americans.
So what did Taiwan do? They looked at health care systems throughout the world, and they chose a uniquely American system for Taiwan! – Medicare! – except that they expanded its benefits and included everyone. And it really works well.
So Congress is returning from recess with health care reform at the top of its agenda. They have already decided that single payer is off the table, but they are having difficulty in addressing three issues: 1) the role of government in regulating the private insurance industry and offering a public insurance option, 2) the near impossibility of covering everyone in the fragmented, multi-payer system that they have selected, and 3) the difficulty in finding funds to pay for this model of reform – the most expensive ever devised.
But they’ve taken off the table the one model that would work – the uniquely American program: Medicare for All. Fixing Medicare and providing it for everyone would: 1) define the most effective and efficient role that government could have in health care financing, 2) make coverage completely automatic for absolutely everyone, and 3) reduce inefficiencies and waste that would eliminate the need to search for other funds.
Oh wait… There is that uniquely American industry that helped pay for the elections of our members of Congress: the private insurance industry (no relation to the social insurance private plans of other nations).
What a difficult decision for Congress: taxpayer dollars to support a uniquely American private insurance industry that remains incapable of ensuring affordable health care for all, or efficient financing of a uniquely American Medicare for All that would provide for the health care needs of everyone.
Actually, for Congress that decision is not so difficult. Medicare for All is already off the table.

Jonathan Cohn interviews Taiwan's Dr. Michael Chen

TNRtv: The Case for Single-Payer Health Care

By Jonathan Cohn

The Treatment (TNR’s health care blog)
The New Republic
April 17, 2009

At the 2009 World Health Care Congress, TNR senior editor Jonathan Cohn sat down with Dr. Michael Chen, Vice President and CFO of Taiwan’s National Health Insurance Bureau, to discuss the results of Taiwan’s switch to a universal health care system.

Jonathan Cohn (JC): You have what most people refer to as single payer health insurance – the government is the main insurer for everybody.

Dr. Michael Chen (MC): Yes.

***

JC: How did you decide on that model – the single payer? Why did you go in that direction?

MC: Well, we sent our people around the world to learn their programs, including the United States. Actually, the program is modeled after Medicare. And there are so many similarities – other than that our program covers all of the population, and Medicare covers only the elderly. It seems the way to go to have social insurance…

JC: Now, one issue that comes up in the United States when people talk about a single payer system, or even any kind of a system where the government is defining the benefits, there’s a big concern that there’s not enough choice. People in America… we want to know that you can choose the kind of insurance you want – how much coverage, what services. Is that an issue you dealt with in Taiwan? Was that a concern?

MC: Not at all, because in Taiwan the benefit package is rather comprehensive… We maintain a very long list for prescription drugs – more than twenty thousand items. And the benefit package includes inpatient, outpatient, and dental service which is usually not covered in this country.

JC: Now the flip side is that if you are offering such a generous package, that’s very expensive, is it not? I mean, how do you pay for it?

MC: Not the case.

JC: Not the case. What percentage of GDP?

MC: Six percent of GDP, so that’s very affordable. The premium on average that the family pays is about two percent of the household income because the premium is shared by your employer.

JC: … In this country we spend far more than that, and even looking at Europe – Switzerland, France – they spend a lot more than that also. Are there waiting times for services in Taiwan? Is there something that people are going without? I mean that’s a lot of services for such a little amount of money. I’m trying to figure out what it is that you’re not getting.

MC: No waiting lines.

JC: No waiting lines? I can see a doctor any day I want…

MC: If you are not too particular.. you can visit even a specialist in a matter of minutes…

***

JC: … If I were to be sitting here with a doctor in private practice in Taiwan – I know in this country doctors worry a lot that Medicare doesn’t pay enough money and that it’s very bureaucratic – what kind of complaints would I hear from them?

MC: Of course, doctors would complain in public, but appreciate it in private – because, you know, especially in this economic downturn, how can you find an industry with assured growth rate annually? Right now they enjoy somewhere between four percent to five percent increased rate, and this is a sure thing.

http://blogs.tnr.com/tnr/blogs/the_treatment/archive/2009/04/17/tnrtv-the-case-for-single-payer-health-care.aspx

Comment:

By Don McCanne, MD

Our political leaders keep telling us that Americans don’t want single payer, but instead we want a uniquely American solution for all Americans.

So what did Taiwan do? They looked at health care systems throughout the world, and they chose a uniquely American system for Taiwan! – Medicare! – except that they expanded its benefits and included everyone. And it really works well.

So Congress is returning from recess with health care reform at the top of its agenda. They have already decided that single payer is off the table, but they are having difficulty in addressing three issues: 1) the role of government in regulating the private insurance industry and offering a public insurance option, 2) the near impossibility of covering everyone in the fragmented, multi-payer system that they have selected, and 3) the difficulty in finding funds to pay for this model of reform – the most expensive ever devised.

But they’ve taken off the table the one model that would work – the uniquely American program: Medicare for All. Fixing Medicare and providing it for everyone would: 1) define the most effective and efficient role that government could have in health care financing, 2) make coverage completely automatic for absolutely everyone, and 3) reduce inefficiencies and waste that would eliminate the need to search for other funds.

Oh wait… There is that uniquely American industry that helped pay for the elections of our members of Congress: the private insurance industry (no relation to the social insurance private plans of other nations).

What a difficult decision for Congress: taxpayer dollars to support a uniquely American private insurance industry that remains incapable of ensuring affordable health care for all, or efficient financing of a uniquely American Medicare for All that would provide for the health care needs of everyone.

Actually, for Congress that decision is not so difficult. Medicare for All is already off the table.

Jonathan Cohn interviews Taiwan’s Dr. Michael Chen

TNRtv: The Case for Single-Payer Health Care

By Jonathan Cohn

The Treatment (TNR’s health care blog)
The New Republic
April 17, 2009

At the 2009 World Health Care Congress, TNR senior editor Jonathan Cohn sat down with Dr. Michael Chen, Vice President and CFO of Taiwan’s National Health Insurance Bureau, to discuss the results of Taiwan’s switch to a universal health care system.

Jonathan Cohn (JC): You have what most people refer to as single payer health insurance – the government is the main insurer for everybody.

Dr. Michael Chen (MC): Yes.

***

JC: How did you decide on that model – the single payer? Why did you go in that direction?

MC: Well, we sent our people around the world to learn their programs, including the United States. Actually, the program is modeled after Medicare. And there are so many similarities – other than that our program covers all of the population, and Medicare covers only the elderly. It seems the way to go to have social insurance…

JC: Now, one issue that comes up in the United States when people talk about a single payer system, or even any kind of a system where the government is defining the benefits, there’s a big concern that there’s not enough choice. People in America… we want to know that you can choose the kind of insurance you want – how much coverage, what services. Is that an issue you dealt with in Taiwan? Was that a concern?

MC: Not at all, because in Taiwan the benefit package is rather comprehensive… We maintain a very long list for prescription drugs – more than twenty thousand items. And the benefit package includes inpatient, outpatient, and dental service which is usually not covered in this country.

JC: Now the flip side is that if you are offering such a generous package, that’s very expensive, is it not? I mean, how do you pay for it?

MC: Not the case.

JC: Not the case. What percentage of GDP?

MC: Six percent of GDP, so that’s very affordable. The premium on average that the family pays is about two percent of the household income because the premium is shared by your employer.

JC: … In this country we spend far more than that, and even looking at Europe – Switzerland, France – they spend a lot more than that also. Are there waiting times for services in Taiwan? Is there something that people are going without? I mean that’s a lot of services for such a little amount of money. I’m trying to figure out what it is that you’re not getting.

MC: No waiting lines.

JC: No waiting lines? I can see a doctor any day I want…

MC: If you are not too particular.. you can visit even a specialist in a matter of minutes…

***

JC: … If I were to be sitting here with a doctor in private practice in Taiwan – I know in this country doctors worry a lot that Medicare doesn’t pay enough money and that it’s very bureaucratic – what kind of complaints would I hear from them?

MC: Of course, doctors would complain in public, but appreciate it in private – because, you know, especially in this economic downturn, how can you find an industry with assured growth rate annually? Right now they enjoy somewhere between four percent to five percent increased rate, and this is a sure thing.

http://blogs.tnr.com/tnr/blogs/the_treatment/archive/2009/04/17/tnrtv-the-case-for-single-payer-health-care.aspx

Comment:

By Don McCanne, MD

Our political leaders keep telling us that Americans don’t want single payer, but instead we want a uniquely American solution for all Americans.

So what did Taiwan do? They looked at health care systems throughout the world, and they chose a uniquely American system for Taiwan! – Medicare! – except that they expanded its benefits and included everyone. And it really works well.

So Congress is returning from recess with health care reform at the top of its agenda. They have already decided that single payer is off the table, but they are having difficulty in addressing three issues: 1) the role of government in regulating the private insurance industry and offering a public insurance option, 2) the near impossibility of covering everyone in the fragmented, multi-payer system that they have selected, and 3) the difficulty in finding funds to pay for this model of reform – the most expensive ever devised.

But they’ve taken off the table the one model that would work – the uniquely American program: Medicare for All. Fixing Medicare and providing it for everyone would: 1) define the most effective and efficient role that government could have in health care financing, 2) make coverage completely automatic for absolutely everyone, and 3) reduce inefficiencies and waste that would eliminate the need to search for other funds.

Oh wait… There is that uniquely American industry that helped pay for the elections of our members of Congress: the private insurance industry (no relation to the social insurance private plans of other nations).

What a difficult decision for Congress: taxpayer dollars to support a uniquely American private insurance industry that remains incapable of ensuring affordable health care for all, or efficient financing of a uniquely American Medicare for All that would provide for the health care needs of everyone.

Actually, for Congress that decision is not so difficult. Medicare for All is already off the table.

Briefing on single payer national health insurance, April 1, 2009, Washington, D.C.

Mr Chairman, Members of the Committee,

On April 1, 2009, a Congressional forum organized by the Leadership Conference for Guaranteed Healthcare and chaired by Congressman Eric Massa [NY-29], critically examined insurance mechanisms in the private sector. The expert panel included doctor, nurse, patient, researcher, labor, and economic perspectives.

The Leadership Conference for Guaranteed Health Care is a coalition of more than 20 million doctors, nurses and other health care providers; labor unions; nonprofit agencies; reform advocates and faith-based organizations who support guaranteed comprehensive, high quality, and affordable health care coverage for everyone. The coalition specifically advocates for a publicly funded and privately delivered national health care system structured around a single-payer financing mechanism.

Legitimate health care debate must include discussion of a single-payer financing mechanism for national health insurance. It is the only approach that introduces effective cost-containment provisions, such as bulk purchasing and global budgeting and would greatly simplify administration, allowing the U.S. to slash spending on overhead by $400 billion annually. Such economies would allow for expanding health coverage to everyone — with no co-pays or deductibles — with no overall increase in health care spending, an especially important consideration at a time of economic distress.

We are deeply concerned that they Ways and Means Committee has not heard testimony from a single payer expert in an official congressional hearing. We urge the Committee to review the testimony below, and include a single payer advocate on all future hearing panels.

What follows is the written testimony of the April 1 forum panelists, followed by a two-page summary of the event.

Louis Balizet, MD, Oncologist, Pueblo, Colorado (http://www.youtube.com/watch?v=mrvqSft8j7U)

I am a Medical Oncologist who has practiced in Pueblo, Colorado since 1976. As do my two partners and the majority of America’s physicians, I favor single-payer universal health care. I would like to share with you the stories of some patients I have cared for recently that illustrates why I believe the current system is broken and unfixable.

1. Mrs. A is an 80-year old woman with breast cancer. She takes Arimidex, a helpful but very expensive ($12/pill) medicine, in hopes of preventing a recurrence of her disease (what we oncologists call adjuvant therapy). When I saw her several weeks ago she confided in me that when she reached the “doughnut hole” in her Medicare Part D coverage last year, she took her pills only every other day, instead of daily, as prescribed. Arimidex taken daily is an effective deterrent to breast cancer; Arimidex taken every other day is of uncertain value.

2. Mrs. B is a 51-year old woman who was discovered to have advanced metastatic colon cancer last year. Her treatment consisted of three chemotherapy drugs, one of which is given by a 48-hour infusion. This is usually accomplished in the outpatient setting, using a battery-powered portable infusion pump. Mrs. B was indigent and uninsured, as are many people in Pueblo. The only way she could get her treatment was to be admitted to the hospital where she stayed for 2 days every 2 weeks. After 4 months she finally got Medicaid, which paid for treatment in our office. Not only was treatment in the hospital much more expensive (to all of us, in the final analysis), but it took precious time from her life that she could have much better spent with her family.

3. Mr. X was a 49 year old married schoolteacher who was faced with pressing household expenses when it came time to sign up for continuation of his health insurance. He elected to forego health insurance to save his portion of the premium. He gambled that he would not get sick and require expensive health care. He lost. He developed rectal bleeding, but put off seeking care, hoping it was just hemorrhoids. When he had bled enough to be unable to go to work, he was taken to the emergency room; subsequent evaluation revealed a very advanced cancer of the colon. He spent a total of three of the next twelve months in the hospital. After chemotherapy and several surgeries, his cancer disappeared, and he worked for several more years. Inevitably, however (because we cannot cure very advanced colon cancer), his cancer returned, and he recently passed away. There is a relationship between insurance status and outcome from cancer (and, incidentally, from heart disease as well). Mr. X serves as an unfortunate illustration of this connection. Had he been insured, it is very likely that he would be alive today. In addition, the enormous, largely uncompensated, hospital expenses could have been reduced immensely.

4. Mr. Y is a 60-year old man who developed lymphoma during a period when he was between jobs and uninsured. He responded initially to chemotherapy (given, out of necessity, in the hospital) but then relapsed. A bone marrow transplantation can be lifesaving in this situation; he now has insurance, but with a six-month exclusion on pre-existing conditions. We are hoping that stop-gap chemotherapy can keep his lymphoma in check until his six-month waiting period is over; however, I am doubtful this will happen. As long as we insist on a health care system based on private health insurance, we will have to accept the consequences of intermittent and patchy coverage. The consequences to Mr. Y may prove fatal.

5. Mrs. Z is a 75 year old woman who developed an aggressive breast cancer that had spread to her lymph nodes — serious, but potentially curable by the successive application of surgery, chemotherapy, radiation therapy, and hormonal therapy (Arimidex). She made it through the first three treatments, but was stymied when she came to the fourth, since she could not afford the $300/month co-pay required by her prescription drug plan. Help came from a mail-order Canadian pharmacy working in cooperation with a local pharmacy service; she was able to get the medicine for one-third of that amount. Without this “back door” supply, she would have been unable to complete a crucial part of her treatment.

How do I envision life changing for me and my patients under single payer universal health care?

1. Approved oral drugs would be available for all. Our office staff would no longer spend hours begging (usually unsuccessfully) for free drugs from pharmaceutical companies. The volume purchasing power of a single payer system would reduce drug prices. Mrs. A would be able to take her Arimidex as prescribed, instead of scrimping and jeopardizing effectiveness. Mrs. Z would no longer have to rely on a Canadian pharmacy.

2. Intravenous chemotherapy that could be given through the office would be available to all. Mrs. B could get her therapy using a portable infusion pump at less cost to the system, and without paying the personal penalty of intermittent hospitalization.

3. Health coverage would not be optional. Mr. X would not be faced with the agonizing choice of health insurance premiums versus solvency. The financial disincentives to obtaining life-saving screening procedures like mammography and colonoscopy would disappear. Participation in these measures would increase, and mortality from breast and colon cancer would decline even further.

4. Health coverage would be freed from its connection to employment; loosing one’s job would no longer entail the risk of loosing one’s life. Mr. Y could get timely evaluation for a bone marrow transplant without giving his cancer a head start.

5. Marginally effective but outrageously expensive cancer treatments would not be available. Effective central planning, feasible only under single payer, would require the establishment of an American equivalent of Britain’s National Institute for Health and Cli
nical Excellence (NICE), charged with evaluating the value, not just the effectiveness, of new drugs, procedures and devices. If a drug offers not cure but only a few weeks to a cancer patient’s life expectancy, and is prohibitively costly, society will not be harmed by its exclusion.

6. Our office operation would be more efficient and less costly. Our billing clerks tell me that, if all patients had Medicare, their work would be reduced by at least half. My 2 partners and I have 25 employees, of whom I count at least 4 who would be unnecessary under a single payer system.

My experience and that of my patients are not unique. A recent report by the Kaiser Family Foundation and the American Cancer Society confirm that the present system is hazardous to cancer patients nationwide, for reasons not limited to those depicted above. Medical Oncology thrives on new drugs; they are one reason it is such an attractive specialty. Even more important to me than new drug development, however, is the prospect of being able to apply what we now have to all Americans without the deterrence of unemployment, poverty, or age. Medical Oncology as a specialty is young enough, and I am old enough, that I was able to get in on the ground floor of what was to become an exciting, vibrant medical discipline. I fervently hope that, before I retire, I can experience the joy of seeing all my patients benefit fully from the successes of the past four decades, not just the wealthy and the lucky.

Marilyn Cawthon, ICU RN, Pennsylvania Association of Staff Nurses and Allied Professionals

My name is Marilyn Cawthon. I have been privileged to be a registered nurse for over 36 years. I have spent most of my career in critical care. I have always felt that my first duty as a nurse was to advocate for my patients’ needs. I have come to realize that this is not just a responsibility during their hospital stay, but a commitment to advocate for all patients, every day. This is why I am here today.

My dad died at 45 from heart disease. It is part of the reason I went into nursing. In August of 2000, I told my doctor I was experiencing shortness of breath with exercise and he scheduled me for a stress test. It was positive. I needed to have a cardiac catheterization to check the valves and arteries in my heart.

A lot of thoughts went through my mind when I first heard this. I was scared. I didn’t want to die. I wanted to be there to see my 13 and 15 year olds grow up. I wanted to be there for my daughter and the birth of my first grandchild. I put my affairs in order and scheduled the catheterization for January 2001.

As the time neared for the procedure, I knew I wanted more time with my family. I had been working 12 hour days, 5 days a week. I decided to become a contract nurse and work 40 hours a week. I was going to COBRA my benefits, but I was also looking into outside health plans. A few weeks before the catheterization, I spoke with Independence Blue Cross about their individual family plans. Under this plan, I would save $100 a month. I explained to Blue Cross that I had a procedure scheduled in a few weeks. I said I did not want any questions about coverage. I was told there would be no problem, the procedure would be covered as there would be no gap in coverage. I asked for it in writing. No problem, said Blue Cross.

On the day before the procedure, I received a form letter from Independence Blue Cross: “the requested service has been approved.” On January 3rd, 2001, I had a cardiac catheterization. A blockage was found, ballooned open and a stent placed. I was back to work in 3 days and very grateful. I know this prevented a heart attack. Three weeks later, I received a form letter from the hospital where I was treated stating that Blue Cross denied benefits due to a pre-existing condition. I immediately called Blue Cross and was assured this was a mistake and that they were “in the process of making payment,” “not to worry.” Nine months later I received an official denial of services letter from Blue Cross “due to a pre-existing condition.”

I immediately called Blue Cross and sent a certified letter to appeal the decision. This was the beginning of many calls and certified letters. On the phone I was always told that a mistake had been made and would be looked into, to call back in a week and it would be corrected. I was always given the same line whenever I called and my certified letters were ignored. I was stuck with a $24,471 hospital bill that had already been turned over to a collection agency and my credit was ruined. I paid 2 to 3 times in interest for car and student loans. The fall out from this continued and the stress was something you can’t put a price tag on.

On November 20th, 2004 there was an article in the Philadelphia Inquirer about G. Fred Di Bona, president and CEO of Independence Blue Cross. It was about his fight with cancer. I wrote him that day and hoped that he would win his battle. I also told him what his company had done to me. I received a letter back saying he’d look into it. He died not long after.

In January 2005, I received a letter from Independence Blue Cross: “A decision has been made to have the claim reprocessed for payment. This is a one time exemption.”I was relieved and grateful that the hospital and professionals who had helped me were reimbursed. But, the chain of events this insurance debacle caused in my life could not be compensated. I don’t want anyone else to go through this.

During this experience, I looked up national healthcare reform on the internet and found an explanation of single-payer healthcare. A single-payer system would offer the most comprehensive healthcare. It would save money. I’ve been a registered Republican all my life. I don’t see this problem in terms of politics but in terms of what kind of healthcare system would help others avoid the struggle I endured. Under single-payer, I would have been able to go to my own private doctor and hospital. And, my life and finances would not have been turned upside down by a private insurance company.

As a registered nurse, I see people every day who delayed care because they were uninsured or underinsured, only to seek help when it’s catastrophic or too late. I see insurance companies dictating decisions over doctors on what medications a patient can take, what procedures they can or cannot have, and how long they can stay in the hospital. I’m old enough to remember when the patient was the bottom line, not profits.

As a healthcare professional, I deal with people. People at their most vulnerable. People who are sick, dying, or in pain. Their most basic thoughts aren’t about the trillions going to banks on Wall Street or about wars in Iraq or Afghanistan. They want to be taken care of now. They deserve to be given the best care available. They can get this care now if we passed House Bill 676. Give all Americans a chance at healthcare!

Leonard Rodberg, PhD, Professor and Chair of Urban Studies Queens College, http://www.youtube.com/watch?v=oM9v0EWZ51M, http://www.youtube.com/watch?v=X_NGLM_hZvQ

Annette Ramirez de Arellano, DrPH, Public Citizen Health Research Group

Dr. Atul Gawande has described American health care as “an appallingly patched-together ship, with rotting timbers, water leaking in, mercenaries on board, and 15 percent of the passengers thrown over the rails to keep it afloat.” And those thrown overboard are not a cross-section of the population as a whole; rather, they are more likely to be minorities and poor. Thus, in 2007 approximately one-third of Latinos, one-fifth of African-Americans, and one-sixth of Asians in the US were uninsured, compared to one-tenth of non-Hispanic whites. Moreover, the disparities are likely to become sharper with the economic downturn, which is already having a strong negative effect on blacks and Hispanics in the labor market. And insurance does matter, as a recent Institute of Medicine report stresses when it points out that “despite the availability of some safety net services, there is a chasm between the health care needs of people without health insurance and access to effective health care services. This gap results in needless illness, suffering, and even death.”

To compound the situation, the cost of keeping the health care ship afloat represents a rising percentage of the gross domestic product, with no end in sight. There is general consensus that health care is uneven in access and quality, leaves too many people out, and costs too much. There is less agreement on what should be done to fix it. In my brief remarks this afternoon, I would like to address why incremental approaches are short-sighted and ineffectual, and why a single payer is the only viable solution to controlling costs.

There are serious issues with focusing on just parts of the problem and calling it “incremental reform”. That is what we have done up to now. Indeed, “Health for some” appears to have been the prevailing slogan for much health care planning in the US. Medicare and Medicaid were designed to cover the elderly and the poor, which were the populations most identifiably in need. And we are still discussing the possibility of mandating care for just certain groups, leaving the rest behind. “Health for some” seems to have political currency even when we have run out of specific identifiable groups to cover. But sifting and sorting the population further will only pit one group against the other, undermine equality, and exacerbate the disparities in access and quality that are already prevalent and unacceptable. For several reasons, we should avoid any approach that is short of universal.

First, it does not make practical sense. The fact is that lack of coverage for all affects everyone in the United States, including those with health insurance. Lack of access cannot be seen solely as a problem of the poor, or of children, or of selected minorities. In many ways, everyone pays for the gaps in service and the neglect of specific groups. In communities with high uninsurance rates, even the insured are likely to have difficulty obtaining needed health services. Health providers of every type gravitate to well-insured areas, which in turn attract new technologies and promote additional services. Moreover, the uninsured who need care end up generating expenditures that are covered by others. This “implicitly subsidized care” (defined as the difference between the amount a privately insured person would be expected to pay for the same care and the uninsured person’s actual payment) is estimated at $536 per person for the full-year uninsured, and care provided by other private and private sources adds another $567. As a result, the care that is not paid for out of pocket comes to $1103 per person. Three-fourths of this is covered by the government, through different pathways. And some of these services may come too late. Such services also tend to cost more, which limits the cost-effectiveness of the expenditure. This is suggested by a study of Medicare decedents published last month, which showed that black and Latinos have substantially higher costs than whites in the last 6 months of life.

Secondly, incrementalism militates against a broad-based sense of community and shared responsibility among members of society. Our current system is highly stratified; one’s place in the hierarchy largely determines not only access to care but also the quality of care received. The top tier includes those with comprehensive private insurance or Medicare. The second tier is made up of those who rely on means-tested safety-net programs such as Medicaid and SCHIP. Those in the second tier often face complicated hurdles to gain access care. Moreover, because the scope of services and the availability of providers may vary widely from state to state, there is a kind of geographical determinism at work here: what one gets depends on where one lives. And there is no stability in coverage, as states make constant adjustments to balance needs against revenues, modifying eligibility requirements and changing the services covered over time. The final tier is composed of the uninsured, most of whom are poor and who often forgo necessary care. This hierarchy leads to de facto health segregation that undermines the “United” part of the United States. And because minorities are disproportionately represented in the lower two tiers, this widens the racial and ethnic health disparities that have been repeatedly documented.

Third, the incremental approach lacks political appeal. “Health for some” is hardly a ringing motto under which to mobilize support, and it certainly does not represent the change that most Americans want. Access to health should be a right, and health care a social good which should be available to all. We’re all stakeholders in this and need to come together to ensure that the currently “patched together ship” is redesigned or replaced. Universal coverage would provide a standard set of benefits to all, thereby eliminating the discriminatory stratification that exists now. It would also lead to a more equitable distribution of health resources, as providers would not have the current incentive to confine their practices to areas where there are covered patients. And a single-payer system would streamline administrative costs for providers, cut back on the bureaucracy, and ensure that a higher proportion of our health expenditures is spent on health services rather than paperwork. At present, the multiplicity of payers means that between 12 and 20% of premiums are devoted to marketing and advertising, profits, and the complicated processes insurers use to protect themselves against higher risks. And the labor costs of hospitals and practitioners rise when they have to deal with multiple billing forms, fees, reporting requirements, and when they have to seek authorization for given procedures. A single payer system would be better able to leverage its purchasing power, obtaining better prices. In addition, a single payer would be better placed to monitor health care at the national level, providing the public sector with important intelligence on patient needs and demands, consumption patterns for different types of services, provider behaviors, and rising costs and their distribution. Having a single payer does not preclude health care being provided and organized in a variety of ways. But it makes explicit the trade-offs that are often obscured by the different funding streams that support our patched-up services.

Returning to the metaphor of the ship, we need more than replacing a few rotting timbers. This is the time for bold solutions and significant steps towards universal coverage and single-payer health care. Here, it is appropriate to recall the words of David Lloyd George, who said “Don’t be afraid to take a big step if one is indicated. You can’t cross a chasm in two small jumps.” Thank you very much.

Cindy Young, Senior Health Policy Advisor California School Employees Association

I have worked at California School Employees Association since 1988. I started a career in health policy as the Research Director for HERE Local 2 in San Francisco in the early eighties. I’ve had almost thirty years working with employee healthcare benefits at the bargaining table and have seen first hand that our employer based health insurance system is failing for three reasons, there is uncontrolled inflation in health care costs, premiums and health care are increasingly unaffordable for employers and employees, and the levels of insurance coverag
e are decreasing for everyone.

Healthcare benefits are a mandatory subject of bargaining under the National Labor Relations Act. When I first started bargaining healthcare benefits in 1984, it was common for employers to provide health insurance, which provided full family coverage for workers. Generally, workers had a $1.00 co-payment for physician visits and prescription drug benefits. In the hotel and restaurant business, a worker had to work a minimum three — three hour shifts, and received health coverage for the entire family.

But by the early nineties insurance premiums were rising far faster than the Consumer Price Index. Unable to afford healthcare costs, employers began demanding that it cap its premium payment for health insurance. This meant workers had to pay more toward the cost of the insurance premium – a phenomenon known as cost shifting.. Single employees rebelled because they did not want to have to pay for the composite rate for families. Families could not afford their share of the premium because it increased substantially.

Today private health insurance costs continue to rise, they are increasing by 6.7 percent a year while out-of-pocket payments grow by 6.1 percent, more than double the rise in the cost-of —living. The insurance industry passes these increases onto employers who shift then shift the costs to employees. The costs of health insurance premiums alone have far outstripped overall inflation and the growth in workers’ earnings for most of the last 20 years making healthcare progressively more unaffordable for a growing number of Americans.

To best illustrate the effect of the healthcare cost escalation, and the resulting cost-shifting, we need look no further than one of the largest school districts in the U.S.; the Los Angeles Unified School District (LAUSD). Last month the unions in LAUSD just completed bargaining for health insurance benefits. The average cost to insure a family in 2009 is $12,000 per year. The Los Angeles Unified School District is spending $930 million for insurance benefits (health, dental and vision). When I first started working with the LAUSD in 1992, it spent $330 million on health, dental and vision. In 17 years, insurance premium have almost tripled. Because healthcare is so expensive, this District can’t insure 9,000 employees that cook for our children, drive them to school on buses, and provide instructional assistance to students.

For the first time in history, the LAUSD had to “cap it contributions” for health insurance, and has agreed to pay only 3.54% of what is projected to be an 8% increase in health insurance premiums. That means in 2010, workers will be required to pick up far more. Nationally, workers pay about 25% of premiums; federal employees pay 28%. And because the same cost will be shifted onto workers at the highest and lowest end of the pay scale. The impact of that on a worker who makes $40,000 a year, will end up paying more proportional to their take home savings than a school district management employee who makes close to $100,000 (or more) per year

Today eighty five percent of the CSEA collective bargaining agreements have an employer cap for health insurance. Costs they can’t afford. CSEA represents thousands of part-time employees who are paying hundreds of dollars a month for health insurance. We are now beginning to identify workers who are actually writing a check to the school district at the end of the month because their share of the insurance premium is more than their paycheck.

I think my last point is critical: Keeping the insurance you have is not going to help my membership. We are paying more and getting less coverage. In 1984, at HERE, Local 2, if you worked three — three hour shifts, and you would receive full family coverage. Today 100,000 classified school employees in the State of California do not qualify for employer paid coverage because they work part-time.

I represent workers who earn, on average, approximately $30,000 per year. Because the cost of health insurance, California’s school districts now pay approximately 16% of its budget on employee benefits (medical, dental and vision). The CSEA Research Department is identify more collective bargaining agreement that have $20 co-payment for physician visits, and $30 co-payment for prescription drug benefits. For lower wage income earners, the monthly contributions that workers have to make equates to a regressive tax on working families. That is low income workers are paying a greater portion of their income toward insurance costs, while higher paid workers and executive are paying less of their income toward the cost of insurance. .

The U.S. Healthcare System penalizes companies like GM or employers like LAUSD who want to provide decent benefits to its workers. By American standards, these employers have an old workforce: its average worker is much older than the average worker at a company like Google. That has an immediate effect: health-care costs are a linear function of age. The average cost to insure a worker between the ages of thirty-five and forty is $5,400, and for someone between the ages of sixty and sixty-four it is $6,400.
This goes a long way toward explaining why LAUSD has an enormous GASB 45 (employers having to account for post retirement medical benefits) liability. The insurance system discourages employers from hiring or retaining older workers. If they do, they are penalized by having to pay more expensive insurance premium. Yet another example of the fatal flaws in employer based insurance.

If the U.S. moved to a single payer national health insurance system, employees would benefit by knowing that everyone would pay proportional to their income, benefits would not be lost if workers were to be laid-off, people could move to jobs they enjoy instead of staying in jobs they hate because they provide benefits. The employer and the union could stop spending hours at the bargaining table talking about insurance benefits with an end result of a zero sum gain. We could finally get control of the cost, which would free up billions of tax payer dollars that could go back into teaching our children. Thank you.

David L Rabin MD, MPH, Professor of Community Medicine, Georgetown University Medical Center, http://www.youtube.com/watch?v=qrbqXZadUjg (starting at 2:50 min), http://www.youtube.com/watch?v=-LSaAN02dPo

I am pleased to discuss the Medicare Advantage program. It is medical care costs, as President Obama said, that are the greatest barrier to extending coverage to everyone. One experience, from which we can learn about cost containment as we consider health care reform, is the history of private plans in Medicare.

Single payer Medicare began because private insurers withdrew from insuring the elderly, who could not afford insurance at a cost profitable for the insurer. When Medicare began, non profit HMOs,like Kaiser, were permitted. But 6 years later, in 1972, with the first Medicare Amendments, for-profit private plans—HMOs—were permitted—the reason—to save money. To make that reason explicit, in 1982, the Tax Equity and Fiscal Responsibility Act began paying HMOs at 95 % of the average per capita cost for a Medicare beneficiary and additional benefits. But studies showed that HMO enrollees were healthier than average Medicare beneficiaries; therefore, Medicare was paying more for these HMO enrollees than for similar beneficiaries in traditional Medicare. Despite these findings, the 1997 Balanced Budget Act created Medicare+Choice, expanding availability of private plans other than HMOs by (1) including private provider organizations (PPO) and private fee-for-service plans (PFFS)and (2) increasing payments in areas with low fee-for-service costs—mostly rural areas. In 2000, payments were increased to encourage inclusion of low-cost beneficiaries in urban areas. Nevertheless these additional payments proved insufficient for private plans. Many private plans withdrew from participation, some abruptly, leaving enrollees without supplemental Medigap insurance; other plans reduced benefits. Private plan enrollment dipped from 6.9 million beneficiaries in 1999 to 5.3 million by 2003.

The 2003 Medicare Modernization Act, renamed Medicare private plans Medicare Advantage, legislated additional plan types (regional private provider organizations and Special Needs Plans). Plan payments were increased. Private plans incorporate supplementary Medigap benefits and 66% incorporate Part D drug plans into a single plan and premium. By March 2009 10.9 Medicare beneficiaries, had enrolled in private plans, 83% in plans with individual enrollment. Aggressive marketing by some private Medicare Advantage plans was documented with violation of Medicare advertising guidelines. Supporters of private plans speak of choice and the average beneficiary has 44 plans to chose from, but every private plan limits choice of providers compared with traditional Medicare. Restricted provider choice is associated with lower costs — HMO’s cost least and PPO’s most, on average. But for most beneficiaries the choice they want is choice of providers, not plans. Nearly all institutional care providers and well over 90% of physicians accept Medicare, many more then within an HMO or network plan. Premium cost seems to be the most important attraction for enrollees — 54% selected plans with no premium. Enhanced Part D benefits with gap coverage are also attractive to enrollees. These features imply lower out of pocket costs though there may be a trade off with quality as initial quality evaluation of Medicare Advantage plans, have not been reassuring. However cost sharing for benefits can be as much as $3559 for those chronically ill. The most critical issue however for Congress is program costs

The private plans are being paid an average of 14% more than the cost of care for a traditional Medicare beneficiary. Among Medicare Advantage plans, the PFFS plans, which have grown the most rapidly; cost 17% more than for traditional Medicare beneficiaries. PFFS plans neither manage care nor develop provider networks though are now required to by 2010. They assume providers will accept their reimbursement levels. Some reimbursement levels are less than Medicare’s some e.g. for physicians, may be more. However, if providers do not accept the private fee-for-service plans, patients are uninsured at the point of service. Some plans have provided extra benefits unavailable to traditional Medicare beneficiaries. But other PFFS plans do not provide benefits as required by the rebates Medicare gives them—thereby increasing profits, not services. OMB’s Peter Orzag estimates that Medicare Advantage supplementary benefits costs Medicare $1.30 for every $1.00 of coverage with no evidence of improved quality.

Medicare Advantage pays more to private plans, sometimes providing additional benefits, even though plan enrollees are healthier – physically and mentally – than traditional Medicare beneficiaries. The 5% of Medicare beneficiaries in poor health account for 43% of Medicare costs, so very small differences in the proportion of enrollees in poor health, has large implications for total MA costs. Paying for healthier people adds to the profitability of private plans, but exacerbates the financial viability of traditional Medicare, now increasingly serving those most in need. Since Medicare receives general tax revenues, all tax payers, as well as all Medicare beneficiaries pay for the MA subsidy, decreasing the fiscal viability of their own program. The congressional focus on MA has diverted attention from program cost containment, sustainability and improving benefits for those most in need, to subsidizing care for those least in need.

A quarter century of experience with Medicare private plans shows that private plans using public monies are a shameless giveaway—with no clear social benefit—to private insurers. For the nation, Medicare Advantage is Medicare Disadvantage! We must learn from this experience as we discuss health reform for the non elderly. The overwhelming national interest in health care reform for the non elderly is to contain health care costs. One proposal is to introduce a public single payer Medicare like plan to compete with private plans. Experience with Medicare private plans shows they have not contained costs as well as the public plan. They cost more even while undermining the public plan by adverse selection of enrollees. Over time they manipulate the legislature, the market, and providers to increase their profitability at the expense of the public good. Continuation of private plans assures continued high administrative costs for insurers averaging 25% and for providers dealing with numerous private plans, another 10%. Health expenditures can best be contained by establishing a single payer public plan for all, which would save $400 billion annually in administration, decrease provider expenses by simplifying reimbursement, assure continuity of coverage, provide universal access and initiate essential system reforms that contain costs. A combination of private and a competing public plan is a mirage, assuring continuing health care inflation and exploitation of the public good to serve private interests.

Affordable, functional health care

By Phil Caper and Joe Lendvai
Bangor Daily News
4/15/09

The health care reform bandwagon is rolling in Washington. Committees in both houses of Congress are at work on health care reform, and many politicians are saying “now is the time.” But meaningful reform is about a lot more than getting a few more people “covered.” It must also be about reining in the out-of-control cost, making sure health care is affordable and accessible to everyone and assuring that the right number and types of health professionals are there to care for the millions who are doing without decent health care.

Some in Congress want to require every American to buy private health insurance as a way to reach the goal of universal coverage. But private for-profit insurance is the wrong way to finance a universal system of health care. Contrary to their branding efforts, health insurance companies are not really in the health care business. They are financial services companies. Their business model resembles those of banks more than those of health care companies.

As if they were trying to prove this, when Maine enacted legislation some years ago requiring insurers to accept anybody who applied (guaranteed issue) and charge all policyholders in the same class the same premiums (community rating), most health insurers withdrew from the state. Anthem, Maine’s only remaining for-profit insurer offering policies to individual policyholders, is now asking for permission to raise premiums between 17 and 34 percent above their already high levels.

Health insurers lack the capacity to control underlying medical costs. They also lack the will to do so, as their profitability is closely linked to their cash flow — the more money they process, the higher their opportunities for profits.

They maximize profits by “managing risk,” that is, by avoiding insuring sick people and by denying the claims for payment of people they do insure. That is not an aberration but a core part of their business model. That business model is fundamentally incompatible with the goals of a humane health care system.

America needs a system that does not rely on the insurance industry to provide basic health care. We need a system more like Canada’s. Even though there is some minor grumbling by a few Canadians about waiting times for some discretionary services, their system is enormously popular. No Canadian faces crushing health care bills or bankruptcy due to unexpected medical costs. Canadians proudly view their health care system as being “the highest expression of caring for each other.”

We already spend almost twice as much per person as the Canadians. That should be enough to provide high-quality health care to all Americans. Sixty percent of the total costs of the dysfunctional U.S. health care system is already publicly financed. This figure includes huge tax subsidies that now amount to more than $250 billion a year for the purchase of private insurance, but only if it is a fringe benefit of employment.

Only a simple tax-based system administered by an independent national health care trust fund is capable of controlling overall health care costs. The fund would negotiate standard, reasonable and timely payments with all health care providers. No exclusions, no denials, no hassles. Everyone would have access to guaranteed health care. Instead of wasting time arguing with insurance companies about payments, doctors and nurses could focus on providing services to patients. A publicly financed, privately delivered system would also make the real costs of our system more visible and make true accountability possible.

It is time for the American health care system to return to its roots — driven by mission rather than money. There are proposals in the Congress that would begin to move us toward that goal and rescue our failing health care system. They are the Conyers bill, HR 676 in the House, and the Sanders bill, S 703 in the Senate. Rep. Chellie Pingree is already a co-sponsor of HR 676. We urge you to contact Rep. Mike Michaud and ask him to join her as a cosponsor of HR 676, and Sens. Olympia Snowe and Susan Collins to urge them to cosponsor S 703.

In that way, we can join every other industrial country in the world in making access to affordable health care a right.

Phil Caper is a retired physician and former health care policy adviser to Sen. Edward Kennedy, D-Mass. Joe Lendvai is a retired audiovisual producer and small-business owner. Both live in Brooklin.

LION AND THE LAMB: How good is your health insurance?

By R.C. Braun, M.D.
Crossville Chronicle
April 14, 2009

For the past 60 years access to health care through private insurance plans has been a mainstay of our society. Especially during the past 20 years the health care industry has expanded tremendously. There are many factors for this burgeoning, most notably the great advances in the science and technology of health care.

With new possibilities of care, costs have increased exponentially, and the health insurance industry has been a major player. Originally health insurance policies were almost entirely underwritten by not-for-profit organizations. Today the vast majority of health insurance plans are with for-profit companies, which means that the primary obligation is not to their enrollees, but to the investors who want to make a profit.

Today there are thousands of private insurance plans available and advertised as giving “choice” to the buyers. I am not infrequently asked for advice in purchasing a plan. But even with my medical background I cannot make sense out of the mishmash of plans. I cannot help but think that the confusion is intentional.

Today health insurance companies refer to their “loss ratio,” referring to the amount of money they lose providing health care. And the figures are astonishing — some health insurance firms use as little as 50% of their income in actually providing health care. The rest goes into high salaries for executives, advertising, and reams of paper work trying to figure out how to avoid paying for health care. Letters of “denial” are increasingly common.

Requiring health care recipients to pay large “deductibles” and “co-pays” was considered a means of limiting frivolous and nonessential care. The result has been quite the opposite — encouraging sick persons to neglect needed medical attention in the hope that the problem would go away, ultimately being both more expensive and less assured of a good outcome.

The problems of our health care have been receiving a lot of attention in the new administration and Congress. Some consider it priority No. 1. A major effort is going into promoting a dual system, giving individuals a choice between a public system, patterned after Medicare, and the private health insurance market.

It is unclear from proponents whether it is considered that such a system could solve the problems of access and cost, or whether the political strength of the health insurance industry is too strong to fight and must be accommodated. I would envision that in such a system the sickest people with the most medical expenses would gravitate to the public system, leaving the private insurance industry free to reap the harvest by insuring the more healthy.

An outcry of “socialized medicine” is often heard, ignoring the fact that already more than 50% of health care expenses in our country come through government at some level. I know of no one who advocates for our country a system such as England, where medical personnel are government employees and health care institutions are government owned.

The proposed “single-payer” health care system for our country would merely unify payment systems, and would in effect make the government the insurance carrier for all Americans. Already a majority of physicians support such a program, as well as a sizable majority of the general public. Can Congress be far behind? Let your voice be heard.

This column is sponsored by Cumberland Countians for Peace and Justice, an organization composed of representatives from various churches in the area, and dedicated by the local writers to the theme that the lion and the lamb can and must learn to live together and grow in their relationship toward one another to ensure a better world. Opinions expressed in “Lion and the Lamb” columns are not necessarily those of the Crossville Chronicle publisher, editor or staff. For more information, contact Emerson Abts, editor, at 277-5101.