PNHP

Part D insurers overcharging

Part D insurers overcharging

Insurers overcharged Medicare for prescriptions, report finds

By David Goldstein
The Miami Herald
February 1, 2009

If you buy medicine through Medicare’s prescription drug program, you could be paying too much.

The taxpayers who finance Medicare aren’t doing too well, either.

Insurance companies involved in the Medicare prescription drug benefit have overcharged subscribers and taxpayers by several billion dollars, according to the inspector general for the Department of Health and Human Services. Eighty percent of the participating insurance companies owe the program an estimated $4.4 billion for 2006 alone.

Medicare, however, has been slow to do something about it. In fact, the agency doesn’t even know how much money the insurance companies owe taxpayers because it hasn’t begun most of the financial audits needed to determine that.

Inspector General Daniel Levinson found a number of problems. Among them:

A quarter of all bid audits done for the years 2006 and 2007 had errors that resulted in higher profits for the insurance companies, higher costs for Medicare and higher premiums or fewer benefits for the beneficiaries.

Some administrative and marketing costs also were “unreasonably high.”

Costs charged by companies in some cases were questionable because the supporting financial data was “poor” and “inadequate.”

However, none of the findings resulted in changes to the program, the inspector general found, because the bid audits are done after the contracts with the insurance companies are signed and beneficiaries are enrolled.

The insurance companies never faced penalties for their mistakes and overcharges because the bid audits don’t say whether errors are “misrepresentations” or honest mistakes.

That means problems haven’t been fixed, the inspector general said.

“Bid audits are not designed to lead to sanctions,” the report says. “However, without any consequences … their deterrent effect is limited.”

http://www.miamiherald.com/news/politics/AP/story/882606.html

Comment:

By Don McCanne, MD

The determination of the Bush administration and the Republican-controlled Congress to turn the Medicare Part D drug program over to private insurers produced no surprises. Medicare was overcharged, and the patients were overcharged.

One more consequence of electing a president and members of Congress who don’t believe in government is that appropriate oversight has been lacking. Limiting oversight to sanction-free audits long after the fact is an open invitation to abuse and wink-of-the-eye fraud.

Even if rigid oversight were introduced, these private intermediaries will always find innovative ways of shifting an excessive amount of public funds and patient funds into their own coffers. Patch one leak in the system, and they’ll punch three more into it.

Those who believe in Medicare understand that we need to fold the drug benefit into the traditional Medicare program and eliminate these wasteful, intrusive intermediaries. Now that we have elected a Congress and an administration whose members believe in government, how can we distract them from their intense conversations with the insurance and pharmaceutical lobbyists who helped elect them?

Let's Expand Medicare

William Thar, MD
New York Times
Letter to the editor
February 1, 2009

To the Editor:

Paul Krugman (column, Jan. 30) is right: the time for universal health care is now! Universal health care would be a huge boost to the economy if done right.

Employers should stop paying for health care, and it should be paid for by tax revenues designed to spread the burden equitably. This would immediately reduce business expenses, and the savings would show up as increased salaries and investment. Health care cost burdens for individuals and families would be reduced, freeing more money for consumption and savings.

The best way to save a lot of money and provide universal coverage is to expand Medicare to everyone. The system, widely supported by more than 60 percent of Americans, has the lowest overhead in American health care and works for more than 40 million elderly people.

Let’s Expand Medicare

William Thar, MD
New York Times
Letter to the editor
February 1, 2009

To the Editor:

Paul Krugman (column, Jan. 30) is right: the time for universal health care is now! Universal health care would be a huge boost to the economy if done right.

Employers should stop paying for health care, and it should be paid for by tax revenues designed to spread the burden equitably. This would immediately reduce business expenses, and the savings would show up as increased salaries and investment. Health care cost burdens for individuals and families would be reduced, freeing more money for consumption and savings.

The best way to save a lot of money and provide universal coverage is to expand Medicare to everyone. The system, widely supported by more than 60 percent of Americans, has the lowest overhead in American health care and works for more than 40 million elderly people.

Thoughts on Health Care Reform

By Ewell G. Scott, M.D.
The Journal of the South Carolina Medical Association, February 2009

Bottled water and health care reform have a lot in common these days. How, you say? Well, let’s take a look. Americans now consume treated water in throw away, plastic and polluting containers with refreshing labels, the water itself costing two thousand times as much as that flowing from a water cooler, or our own faucets. In a word, absurd. Ditto for our insistence on continuing to include private health insurance companies as the mainspring of financing health care.

Organized medicine’s resistance to meaningful, sustainable and affordable health care reform is reaching that level of absurd incomprehension. Our medical associations persist in clinging to our failed for-profit patchwork system of employer-based private health care insurance. The official reasons of our largest physician organization are rather weak: To “preserve choice” and a “pluralistic system” are the two oft stated. Indeed, Dr. Arnold Relman, former editor-in-chief of The New England Journal of Medicine, states in his recent book[1] that he can find no evidence that the extra cost imposed on the system by the private for-profit health insurance companies has any benefit.

Thankfully, according to Dr. Aaron Carroll’s recent Indiana University poll of individual American physicians[2], judgments are changing. A majority of us now favor a single-payer program with progressive sustainable funding. Some specialties, such as psychiatry, often a victim of private insurance company negative bias favor single payer to the tune of 85 percent. Even surgeons as a group, for whom hospital insurance was devised, like it better than the present state of affairs.

Polling of regular folks has long shown the majority favor the single-payer approach. But politicians and organized medicine persist in pushing for “incremental” or “consumer driven” change. We all know these labels mean: “no change” and “have the employee pay a greater share of the cost,” respectively. Politicians are running scared of the deep pockets of the private health insurance companies when they tiptoe up to the problem by promising to continue and increase the huge costs of marketing, patient and doctor de-selection and denial of care. A recent survey revealed that only 7 percent of all of us felt secure about financing future health care needs. This astoundingly low fraction underscores and documents our national anxiety level.

Why are our professional organizations out of touch with their own membership? Are they afraid that things will get worse, or our offices will be flooded with the economically unwashed? Will we take a cut in pay? One thing is known for sure. If a simple, uncomplicated financing system were in place, overhead for the practicing physician would drop significantly. A back of the envelope ciphering in my own practice predicts a $30,000 decrease in my billing and collection expense.

As a humane society we must and should believe that access to health care is as much a right as is clear air to breath and pure water to drink. A corollary, and perhaps a bigger hurdle, is that a progressive method of financing must be in place. Is it not bottled water absurd to know that Mr. Bill Gates’ heath insurance premium is the same as your Wal-Mart greeter’s?

It is time for the most important cog in the health care machine, the physician, to get busy and become actively involved in solving this disgraceful situation.

Whatever system finally evolves must have the ability to restrain the cost of medical care, as our resources are indeed limited. Are imaging systems which provide a high definition view of our internal organs giving us better outcomes than a carefully performed history and physical examination? It would seem that our capacity to provide the former is increasing, while the numbers of us trained to do the latter are diminishing. Priorities are out of whack when we spend nearly twice as much per capita as other industrialized countries, and yet the World Health Organization ranking places our system in the mediocre range.

Based on results of our recent national election, it now seems clear that we believe in access to health care for all, and that poor folks have to have some economic assistance achieve this. So, we make a choice. We can accomplish it in an efficient way with a single-payer approach or we can continue with our current wasteful reliance on for-profit private health insurance companies. Subsidies and vouchers would be obviously required, and would be constantly changing. Can you imagine the complicated procedures these would involve?

And another thing: the system must be the same for each one of us. Who wants the “basic plan,” but not the “comprehensive “one? Nobody! We should all have competent medical care from the beginning of life until the end of it. It can be done.

Ewell G. Scott, M.D., F.A.C.P., practices internal medicine in Morehead, Ky.

1. Relman, Arnold, “A Second Opinion,” 2007
2. Carroll, Aaron and Ronald T. Ackermann, “Support for National Health Insurance among American Physicians: Five Years Later,” Annals of Internal Medicine, April 2008.

PNHP note: This is a slightly edited version of the article that appeared in The Journal of the South Carolina Medical Association, Vol. 105, No. 1, February 2009.

https://www.scmedical.org/content/journal

Waxman ready to move – but where?

Waxman to push ’09 health care reform

By Sean Lengell
The Washington Times
January 30, 2009
The top House lawmaker in charge of writing health care legislation said Thursday he is committed to passing a universal health care package by the end of the year…
“This is our time, we need to move forward, we need to get this job accomplished this year and get the bill to the president,” said House Energy and Commerce Committee Chairman Henry A. Waxman at a conference sponsored by Families USA…
“The economic times which are so difficult is another reason why we need to do it right away,” he told reporters after his speech. “The health of our economy depends on a great extent on our dealing with the health of our health care system.”
But Mr. Waxman said private insurers would play a significant role in the implementation of universal health coverage, adding that relying solely on a Canadian or European-style single-payer system is unrealistic in the United States.
“Reform in the health care system to achieve universal coverage has to come by building on the system that is in place – adjusting it, improving it to fill the gaps,” he said. “I believe we must have a significant role for private insurance, but I think it’s critically important that we have a public [health care] program alternative.”
http://www.washingtontimes.com/news/2009/jan/30/waxman-to-push-09-health-care-reform/

House Majority Whip James Clyburn (D-S.C.), obviously an insider, recently confused observers of the Washington scene by stating that health care reform would be incremental. This appeared to conflict with the position of other important players – Barack Obama, Tom Daschle, Ted Kennedy, Max Baucus, Pete Stark, amongst others – who have indicated that comprehensive reform would be as expeditious as possible – presumably this year or early 2010 at the very latest. The statement by Henry Waxman seems to confirm the fact that the House of Representatives is aligned with the Senate and The White House to move forward expeditiously with comprehensive reform.
They are also aligned on the position that single payer is unrealistic, and that reform will be based on private insurance. There is still confusion as to whether there is agreement that a public option must be a Medicare-like program, or if the public option would be satisfied by a pool of FEHBP-type private plans. The Republicans, AHIP, and the USCOC have said that the former is a non-starter, so the public option may well end up being just more private insurance in disguise.
If a U.S. model based on private plans were as effective as the Swiss and Dutch systems, it would still leave about 7,600,000 individuals without insurance, which certainly tests the definition of universal. With much higher health care spending in the United States, the premiums for private plans, even with generous subsidies, certainly would test the definition of affordability. U.S.-style private plans, designed to enhance business success by creating patient barriers to care and payment for care, certainly tests the definition of social insurance.
Maybe James Clyburn did let slip the dark secret of the Washington reformers. If we were to continue with only incremental reforms, we would end up with a system that will leave many without insurance, that will leave health care unaffordable for many more, and that will leave in place an industry that takes away health care access and choice to further its own financial interests. Hmmm… Looks like another con job. Go the incremental route, but call it universal.

Waxman ready to move – but where?

Waxman to push '09 health care reform

By Sean Lengell
The Washington Times
January 30, 2009

The top House lawmaker in charge of writing health care legislation said Thursday he is committed to passing a universal health care package by the end of the year…

“This is our time, we need to move forward, we need to get this job accomplished this year and get the bill to the president,” said House Energy and Commerce Committee Chairman Henry A. Waxman at a conference sponsored by Families USA…

“The economic times which are so difficult is another reason why we need to do it right away,” he told reporters after his speech. “The health of our economy depends on a great extent on our dealing with the health of our health care system.”

But Mr. Waxman said private insurers would play a significant role in the implementation of universal health coverage, adding that relying solely on a Canadian or European-style single-payer system is unrealistic in the United States.

“Reform in the health care system to achieve universal coverage has to come by building on the system that is in place – adjusting it, improving it to fill the gaps,” he said. “I believe we must have a significant role for private insurance, but I think it’s critically important that we have a public [health care] program alternative.”

http://www.washingtontimes.com/news/2009/jan/30/waxman-to-push-09-health-care-reform/

Comment:

By Don McCanne, MD

House Majority Whip James Clyburn (D-S.C.), obviously an insider, recently confused observers of the Washington scene by stating that health care reform would be incremental. This appeared to conflict with the position of other important players – Barack Obama, Tom Daschle, Ted Kennedy, Max Baucus, Pete Stark, amongst others – who have indicated that comprehensive reform would be as expeditious as possible – presumably this year or early 2010 at the very latest. The statement by Henry Waxman seems to confirm the fact that the House of Representatives is aligned with the Senate and The White House to move forward expeditiously with comprehensive reform.

They are also aligned on the position that single payer is unrealistic, and that reform will be based on private insurance. There is still confusion as to whether there is agreement that a public option must be a Medicare-like program, or if the public option would be satisfied by a pool of FEHBP-type private plans. The Republicans, AHIP, and the USCOC have said that the former is a non-starter, so the public option may well end up being just more private insurance in disguise.

If a U.S. model based on private plans were as effective as the Swiss and Dutch systems, it would still leave about 7,600,000 individuals without insurance, which certainly tests the definition of universal. With much higher health care spending in the United States, the premiums for private plans, even with generous subsidies, certainly would test the definition of affordability. U.S.-style private plans, designed to enhance business success by creating patient barriers to care and payment for care, certainly tests the definition of social insurance.

Maybe James Clyburn did let slip the dark secret of the Washington reformers. If we were to continue with only incremental reforms, we would end up with a system that will leave many without insurance, that will leave health care unaffordable for many more, and that will leave in place an industry that takes away health care access and choice to further its own financial interests. Hmmm… Looks like another con job. Go the incremental route, but call it universal.

From the Front Lines: Single-Payer System Is the Sole Solution

Statement of James Floyd, M.D., Health Researcher, Public Citizen

FOR IMMEDIATE RELEASE
January 28, 2009

CONTACT: Public Citizen
Phone: 202-588-1000

WASHINGTON – January 28 – Public Citizen has joined the Leadership Conference for Guaranteed Health Care because a single-payer national health insurance program is the only viable solution to our health care crisis.

We have a fragmented health care system that is driven by corporate profit and greed. Although private insurers provide coverage for less than two-thirds of Americans, they drive up administrative costs for everyone so that, on average, 30 cents of every health care dollar is spent on administration, much of this wasted. As a result, costs are skyrocketing and 50 million Americans are left without health insurance. Tens of millions more have insurance but are still unable to afford the care they need.

I am a health researcher with Public Citizen and a practicing internist. It is common for my patients to be taking 10 or more medications, some of which are life-sustaining, and for them to require frequent visits with their physicians. With frightening regularity, I see patients who cannot get their prescriptions filled or afford co-payments for office visits.

As a result, many become ill enough to require hospitalization, and some even die. I recall taking care of a veteran who developed nearly fatal kidney failure from an enlarged prostate because he was too poor to afford private coverage but made too much to be covered by Medicaid or the Veterans Health Administration. And I think of a young woman with diabetes who is admitted to the hospital every month with a complication or new infection because she cannot afford the insulin that keeps her out of the hospital. It is sad and unconscionable that cases like this have become commonplace.

During this recession, we can expect even more people to lose their health care coverage, resulting in more missed doctor appointments and unfilled prescriptions. The estimated 20,000 people who die each year because of a lack of health insurance will rise faster than we could have feared. Also, illness due to a lack of health care only feeds the cycle of missed work days and lost jobs, reducing our economic productivity. Our country cannot recover from this recession if we become sicker with every passing year.

The time for delaying meaningful health care reform because of narrow interests is over. We must eliminate private insurance companies as middlemen who divert health care dollars from real care and are responsible for massive administrative waste. Other proposals for health care reform do not address this fundamental problem of waste and will not reduce costs. A single-payer system is the only way to provide everyone with comprehensive care, regardless of their ability to pay, while keeping costs down. It is also the most just one.

###

Public Citizen is a national, nonprofit consumer advocacy organization founded in 1971 to represent consumer interests in Congress, the executive branch and the courts.

Single Payer Moment

By David Swanson

While a Democratic polling firm has just found, as pollsters always do, dramatic public support for public health coverage, Democratic leaders on Capitol Hill appear divided, as they have always been, over whether to take a comprehensive approach to health care.

House Majority Whip James Clyburn (D-S.C.) said on C-Span on Sunday that incrementalism would suit him better “than to go out and just bite something you can’t chew.” Clyburn said he opposes any comprehensive approach in 2009. Meanwhile House Majority Leader Steny Hoyer (D-MD) made a long speech about healthcare at a conference in D.C. on Thursday in which he said “I am committed to helping bring comprehensive reform to the floor of the 111th Congress.”

Now, on Capitol Hill, phrases like “comprehensive reform” and “universal healthcare” can mean almost anything, including proposals that would likely require comprehensive reform themselves by the time the ink was dry. But there is an opening right now for serious healthcare reform of the sort that has succeeded in almost every other wealthy country on earth: single payer. Here are three reasons why this is a moment in which single payer health coverage (private medicine paid for by the government, and the elimination of all health insurance companies) has become possible.

First, the partisan dynamics have changed in Congress. While some Republicans might vote for single payer, they wouldn’t need to. The Democratic leadership could persuade enough Democrats to vote Yes to pass it without a single Republican, if they chose to. In the House, where the Democrats seriously worsened an economic stimulus bill this week in order to win irrelevant Republican votes and then didn’t get a single one, they might be in the mood to wake up and begin behaving as the majority they are. In the Senate, there is the ever-present scourge of the filibuster, which allows senators representing 11 percent of the public to block legislation, but the Democrats could change the rule to rid our republic of that antidemocratic blight if they choose to. This will require placing a great deal of pressure on Democratic senators to persuade them that losing important battles in which they vote well but don’t play to win will hurt them as much as it hurts the Republicans who vote against the public will.

That’s where the second reason comes in. A massive, well-organized public movement has been built that is pressing right now for single-payer. In the House of Representatives, the leading advocate is Congressman John Conyers whose bill H.R. 676 had 93 cosponsors in the last Congress. Conyers provides a useful FAQ on single payer here, and Physicians for a National Health Program has provided a longer one. Other advocates include Labor for Single Payer, Healthcare Now, the California Nurses Association, and the Leadership Conference for Guaranteed Health Care which boasts dozens of major organizational members. Progressive Democrats of America has mobilized tremendous grassroots pressure through its Healthcare Not Warfare campaign. This is essentially a campaign for single payer health coverage, but it both organizes the peace movement to participate and communicates an important selling point. The financial cost of creating a single payer system would be a fraction of what we spend each year merely on the occupation of Iraq, which Congress and the president have committed to ending. Compared to the cost of wasteful programs at the Pentagon or bailouts for bankers or even the new economic stimulus bill, single payer is a bargain, doesn’t kill anyone, saves and improves lives, and even stimulates the economy better than most of the measures being used toward that end. The movement for single payer has organized a lot more than numbers; it’s also marshaled persuasive arguments.

The third reason that this is the moment for single payer is that it is so obviously the best solution. When put into consideration with other proposals, single payer wins the debates hands down. The alternative to single payer is multiple payer. That means massive waste and inefficiency, not what a new government ostentatiously looking for solutions that really work should settle on. It also means maintaining the only things in America less popular than Dick Cheney: health insurance companies, and funding them with public money as well as money directly from citizens. In a multiple payer system, one of the payers is YOU. If you can’t pay, you may be out of luck. If you can and do pay, you are often out of luck as well. And the bureaucratic waste extends to your own life. You fill out forms for the privilege of paying through the nose for the privilege of being told you can’t be helped unless you get a second mortgage. Talking about “universal” systems that are “affordable” is all well and good, but they cannot actually exist as long as the for-profit health insurance companies are running the show. How does this alternative sound for affordable: go to whatever doctor you choose and then go home with no bill and no paperwork. What if such a system could be paid for with taxes on businesses that amounted to less than what most of them currently pay for health care? What if the removal of the profit motive allowed a shift to preventive and truly comprehensive medicine? This is not a dream. It’s far more possible right now than giving trillions of dollars to bankers would have seemed a year ago or polite debates over which torture techniques are acceptable would have seemed eight years ago.

Here’s what you can do. Listen to the Thom Hartmann Show on Friday. During the first hour, Thom will talk with Senator Bernie Sanders, who was a cosponsor of H.R. 676 when he was in the House. During the second and third hours, Thom will talk about how we can get single payer through Congress. And he’ll ask everyone to do two things on Friday:

Call Congressman James Clyburn and ask him to whip his colleagues for H.R. 676: (202) 225-3315.

Call your own Congress Member and ask them to cosponsor and promote H.R. 676: (202) 224-3121.

You can also help by signing the Healthcare Not Warfare petition.

David Swanson is the author of the upcoming book “Daybreak: Undoing the Imperial Presidency and Forming a More Perfect Union” by Seven Stories Press and of the introduction to “The 35 Articles of Impeachment and the Case for Prosecuting George W. Bush” published by Feral House and available at Amazon.com. Swanson holds a master’s degree in philosophy from the University of Virginia. He has worked as a newspaper reporter and as a communications director, with jobs including press secretary for Dennis Kucinich’s 2004 presidential campaign, media coordinator for the International Labor Communications Association, and three years as communications coordinator for ACORN, the Association of Community Organizations for Reform Now. Swanson is Co-Founder of AfterDowningStreet.org, creator of ConvictBushCheney.org and Washington Director of Democrats.com, a board member of Progressive Democrats of America, the Backbone Campaign, and Voters for Peace, a member of the legislative working group of United for Peace and Justice, and convener of the accountability and prosecution working group of United for Peace and Justice.

Cognitive Dissonance: The Healthcare Reform Battle's State of Mind

by Donna Smith

WASHINGTON, DC – It seems everyone in the healthcare reform movement is hitching up his or her britches and feeling mighty proud of the prospects for action under President Obama and the adoring Democrats in his Congressional arsenal. Even some prominent Republicans are inching ever closer to supporting change to the broken health system. But I’m feeling significant dissonance between the words spoken and the policy offered to move forward.

So listening to the speakers here at the Families USA Health Action meeting this week has been upsetting – OK, it is outrageous to watch these folks being self-congratulatory while also promoting those purporting the overhaul of the health system with the biggest bailout we’ve yet given any industry in recent months. The proposed mandates for all Americans to purchase private, for-profit health-insurance (or buy into a public pool that will be weakened by the insurance interests) is being sold to us as reform and it simply is not. And my brain hurts from the disconnect.

I cannot reconcile Princeton’s Uwe Reinhardt’s message that we’ve become an aristocracy – not a middle-class society or even a democracy – with his embrace of the insurance industry and expansion of the broken healthcare system that clearly provides better healthcare protection for our American royalty and not the peasants among us. He carefully charts for us the rising debt of American families – including crushing medical debt assumed under the for-profit health insurance based system-and the lack of savings by Americans in recent years. But there is little acknowledgement that some of the debt and lack of savings directly relates to the increased costs American families and workers must shoulder for health coverage – health coverage that doesn’t adequately protect financial standing.

Sen . Charles Grassley of Iowa assured the crowd that there’s a big difference between the Hillary Clinton plans of years gone by and the Obama plan now – “He (Obama) will stick to his guns on a private-public mix (for insurance).” Grassley goes on to say everyone knows you get over-utilization when you have “gold-plated” plans. The implication is always that if you give access to care then millions of us will clamor to sit in doctors’ offices and get procedures and tests done simply because we have the means to do so. I actually think the gold-plated stuff will be reserved for Sen. Grassley and his cohorts – the rest of us will work hard to even get a plan that can assure minimal coverage or care. Grassley said they’d remind the Democrats that they said they’d adhere to a “pay as you go” with healthcare reform and other programs. Here’s the nod to the “bi-partisan” efforts we hear will guide the day for us all – the new agenda, the cooperation that will bring us all to the promised land of expansion of the insurance industry.

Then the Dems. I hear Rep. Steny Hoyer rightfully site his outrage about a Maryland child dying for want of a tooth extraction, yet stay safely and clearly away from angering the insurance industry. I listen as Sen. Debbie Stabenow of Michigan talk about her compassion for families struggling for care yet quickly adding when she talks about providing healthcare for immigrants that we should reward with healthcare those doing “the right thing.” I have a hard time reconciling the disconnect between the suffering unfolding every day – death by death by denial by denial – as the dance continues.

We want a “uniquely American” answer to the healthcare nightmare, they all say. I’ve heard that until my brain hurts just considering it. Oh, we’re unique all right. We’re the only industrialized nation on earth that tolerates the killing of its citizens on our own soil at the hands of this healthcare system and then wants to fix it all by handing more business, more money and more power to the same industry committing the murders. That’s unique enough.

None of this sounds like the language of basic human rights. And I think I heard our new President say that he clearly understood healthcare to be a human right in response to a debate question just a few months ago. That was such a gift just to hear the words spoken. I just know he knows that this basic human right is not going to be protected by hoodwinking the American people into bailing out the insurance industry.

The heavily funded activists (come on folks, that alone should send up big, red flags – heavily funded activists for human rights?) pushing for a private-public national healthcare policy are in and of themselves a conundrum to me. I hear on the one hand the message that the private, for-profit health insurance industry is very bad indeed – blocking healthcare through denials and high premiums and all the practices the American people have had to endure for years. But then I also see the activists and the industry folks co-mingling ever so deftly in a dance of political theater aimed at convincing us all that in response to demands for insurance regulation and restriction the industry will put up a fight but then capitulate to the demands or risk being left behind.

Look at the list of bedfellows and trust your instincts America. Like our moms and dads taught us, if it walks like a duck and quacks like a duck, guess what? It’s a duck. A bailout called healthcare reform is still a bailout even if we’re told otherwise. If AARP and UnitedHealth Care and Wal-Mart and SEIU and the others in the HCAN coalition are joining hands and forces, is there anyone among us who doesn’t know that’s about money and power and influence still? That’s a duck. And that’s going to be a very well treated duck.

So, let me get this straight… the insurance industry has been a big part of the problem. Worse. The industry has allowed the deaths of tens of thousands of Americans every year in order to protect profits.

I think of dead — 2-year-old Mychelle Keyes and dead 17-year-old Nataline Sarkisyan and dead 38-year-old Tracy Pierce, and that dead little boy with an infected tooth in Maryland — and I don’t wonder at all what the new for-profit insurance-friendly political coalitions are fighting to protect. And it isn’t the future Mychelle’s or Nataline’s or Tracy’s. They are fighting to protect the folks who killed them.

All of these dead were killed at the hands of the industry now being simultaneously chastised and coveted. This same greedy industry can be trusted to roll over just a little while helping craft their own industry’s regulations going forward? Oh, yes, that seat at the table is firmly fixed and being kept ever so warm for the insurance folks. In exchange for setting some of their own regulation, the insurance industry will be rewarded with the business of millions more of us who have had absolutely no say in the matter. None.

Those Americans not acting as political operatives for the quasi-activists organizing the reform transition for the insurance industry are not exactly anxious to hear from you and me. No, they have well-heeled and well-connected leaders who rub elbows and move easily within all of the halls of power where we can never go.

And unless we rise up and say we know what is going on and we smell a lot of big, fat rats, reform that expands the broken system and enriches the already elite of the healthcare profit-mongers will be sold to us by bipartisan bluffing and insurance company operatives slip-sliding us forward.

As for me, I will keep listening to Rep. John Conyers talk about human rights and healthcare for all and the long arc of history leaning towards justice. Oh, and his talk about how the automakers just barely across the river in Canada can build cars much more cheaply than in his native Michigan because they don’t suffer the health-insurance nightmare. Huh? Human rights and good business. I do like the quack of that. And my dissonance subsides…

Donna Smith is a community organizer for the California Nurses Association and National Co-Chair for the Progressive Democrats of America Healthcare Not Warfare campaign.

Review: Do Not Resuscitate

Do Not Resuscitate: Why The Health Insurance Industry is Dying and How We Must Replace it
by Dr. John Geyman
Common Courage Press

Reviewed by Theresa Welsh

DOES OUR INSURANCE ACTUALLY PROTECT US?

In this highly researched and well-written book, Dr. John Geyman lays out in clear language the repeated failure of the private health insurance industry to bring affordable and comprehensive coverage to the American people. He demonstrates with a wealth of facts and figures how the inexorable and continuous rise of health care costs have meant insurance companies must work hard at excluding anyone who might require expensive treatment, reduce coverage for everyone and constantly raise premium rates.

This has led to awareness on the part of the public that their insurance may not protect them from medical bankruptcy. Americans now see that a serious illness can run up huge debt, wipe out their retirement savings and even mean selling their home to pay the bills. With this new public awareness, it is more and more difficult for health insurance companies to paint themselves as having the answer to our health care woes.

FOCUS ON PROFITS, NOT PEOPLE

The insurance industry was not always as focused on profits as it is now. Geyman takes us on a tour through the history of private coverage, showing how the original Blue Cross/Blue Shield plans were about spreading risk across a broad pool and keeping coverage affordable. As commercial carriers came into the market, they brought with them “medical underwriting” which looks at applicants in terms of how much they might cost the company. For-profit companies structured their coverage to minimize their risk (by denying coverage to those who need it the most) and maximize their profits. The Blues could not survive without doing the same thing. Today, most of the Blue Cross companies are for-profit, many having been acquired by one of the big players in health insurance.

While Congress has required employer-sponsored group insurance to take everyone in the group and charge them all the same rate, companies are free to deny coverage to people who apply on their own and to offer unaffordable rates to older, sicker people. Companies have a long list of risk factors that trigger a denial. Some of these: leukemia, schizophrenia, emphysema, obesity, high blood pressure, AIDS… and the list goes on. Here’s some reasons used by California insurers in 2006 to deny coverage: attention deficit disorder, breast implants, infertility, herpes, gender reassignment, migraines, miscarriage, bed-wetting, ringworm, varicose veins… and more.

PUBLIC HEALTH INSURANCE PROFITING PRIVATE COMPANIES

Health insurance is largely regulated by the states, so there is great variation in what insurers can do. In many states, for example, coverage can include a lifetime dollar limit. The large players in health insurance operate nationally and can find many ways to game the system. While these companies like to disparage government health care programs, they have been quick to jump on the bandwagon of these same programs when they could profit from them. The Bush administration didn’t think it worthwhile to increase funding for SCHIP (the Children’s Health Insurance program) but allowed private insurance to profit by offering “Medicare Advantage” policies to Medicare recipients that pays companies an override over the cost of original Medicare, and it gave a windfall to the pharmaceutical industry through its so-called drug benefit; this is a boondoggle that is totally structured to “benefit” only the insurance and drug companies. Insurance companies have also been allowed into Medicaid, which is administered by the states, and, though it is supposed to cover health care for the poor, often has such a low threshhold that few qualify (and when they qualify, they have to constantly requalify).

It is partly this rush to profit from government programs that leads Geyman to his conclusion that the health insurance industry is a dying industry. With Americans demanding reform, the current health insurance industry has two enormous costs that are not present in publicly-funded coverage: The huge profits they take out and their lower efficiency.

AVOIDING “MEDICAL LOSS”

Health insurance companies regard the payments they make for subscribers’ health care as “medical loss.” Most try to keep this “loss” at under 80% (meaning they keep 20% of premium payment for administration and profit). This reminds me of another practice that I found outrageous when I first read about it. Pharmaceutical companies see opportunity in illness. They refer to various diseases as “markets” – as in “the cancer market” or the “diabetes market.” Our disease is their profit center. For insurance companies, their profit center is healthy, younger people, certainly not those who actually need health care – insuring them would increase their “medical loss.” These companies operate to retain their profit centers, and profits trump helping people.

Private insurance is massively less efficient than public insurance because of the large workforce needed to do underwriting, claims processing and denials. Some companies even do “rescissions” — canceling someone’s insurance when they get sick by claiming they lied or misrepresented something on their application. Between 2000 and 2005, despite a drop in the number of people with private insurance, their workforce grew by one third. How can this industry possibly bring down the cost of health care and provide affordable coverage? They can’t. Geyman explains that the industry “is pricing itself beyond the reach of a declining private market, even as it seeks out a broader, subsidized role in public programs.”

WHAT VALUE?

Geyman discusses something not mentioned by supporters of reform that involves keeping private insurance, and that is the fact that they are allowed to offer so-called “insurance” that is so skimpy it really provides no protection. Many are marketing “Limited Benefit Policies” (LBP) to younger and lower-paid workers. Aetna Affordable Health Choices caps hospital benefits at $2000 and accident/ER benefits at $1000. I know from my own experience in an ER a few years ago that bills are typically much higher than that (mine was around $2500 for 4 hours in the ER!) and that $2000 hospital cap will barely pay for the aspirin and bed pan.

Interestingly, Geyman also mentions “Medigap” plans as low value. My husband turned 65 one year ago and we studied the government Medicare website to get information on these plans. I was delighted to find that these plans are regulated according to what’s covered and identified by letter (plan A, plan B, etc). We looked at all of them, got costs from different companies and looked at my husband’s usual use of medical services and concluded that these plans were not a good deal. Over the long run, we would be better off paying out of pocket costs not covered by Medicare. We concluded the same thing about the so-called drug benefit. None of the plans were cheaper than just paying for the relatively inexpensive medications my husband takes.

Another sleazy trend not mentioned by Geyman is the rise of “health care discount” programs that often masquerade as insurance. People sign up at reasonable rates, get a nice plastic card for their wallet, then find all they have is a discount on health care services, if they can find a provider who will actually give them the discount (it may be the same discount they could negotiate on their own). I am also personally alarmed at the ads on TV that exploit the rising fear over health care costs. These commercials openly cite high health care costs and one even quotes the Harvard study showing that medical bills are the leading cause of personal bankruptcy. They hope your fear of being a health care victim will get you to buy whatever they are selling. Beware!

THE SAME OLD IDEAS: THEY DON’T WORK

Geyman explores the various incremental reforms that have been tried and shows how none have solved the problem. During the 2008 presidential campaign, we heard about “mandates” that, along with community rating (charging everyone the same rate) and guaranteed issue (having to take all who apply), was supposed to insure everyone and bring down costs. But employer mandates are ineffective because of the inherent weaknesses and unfairness in a system relying on employer-sponsored insurance. The “individual mandate” as implemented in Massachusetts has proved unworkable as well, as the state agency (the Connector) tasked with making sure everyone has coverage has exempted thousands of people from the fines because they cannot offer these people any coverage they can actually afford.

The idea that insurance companies will “compete for your business” is an absurdity, given the priorities of health insurance companies (low “medical loss” and high profits for shareholders). Geyman states the problem clearly:

“…private insurers don’t compete with each other by delivering better care at lower cost. That would be in line with what is understood as a classical form of competition where the consumer comes out on top. Insurance competition is different: Who can avoid the most enrollees with higher medical costs, and who is most effective at delaying or denying payment when they can?”

READ THIS BOOK!

This book was written before the financial meltdown and the election of President Obama, but Geyman mentions the possibility of serious recession a number of times in the book. Geyman has done his homework. Every chapter has a huge bibliography, with all sources listed. The book is full of charts and tables. Geyman is not just expressing his own negative opinion of the industry, but writes from facts. I highly recommend this book as the best exposition of why private insurance cannot get us to universal, affordable health care.

Americans have never needed health care reform more than they do today, with so many on fragile financial ground. Most of us are one illness away from financial disaster. The insurance industry, the pharmaceutical industry and the medical device industry will all fight any meaningful reform, and we will probably see a rollout of Harry and Louise type ads once again, warning us about the dangers of “socialized medicine.” But this time, the public might be a bit more aware of how insurance companies actually operate and in whose interests. Harry and Louise might have changed their tune as well and maybe they are ready to reject the false promises of a failed industry.

Cognitive Dissonance: The Healthcare Reform Battle’s State of Mind

by Donna Smith

WASHINGTON, DC – It seems everyone in the healthcare reform movement is hitching up his or her britches and feeling mighty proud of the prospects for action under President Obama and the adoring Democrats in his Congressional arsenal. Even some prominent Republicans are inching ever closer to supporting change to the broken health system. But I’m feeling significant dissonance between the words spoken and the policy offered to move forward.

So listening to the speakers here at the Families USA Health Action meeting this week has been upsetting – OK, it is outrageous to watch these folks being self-congratulatory while also promoting those purporting the overhaul of the health system with the biggest bailout we’ve yet given any industry in recent months. The proposed mandates for all Americans to purchase private, for-profit health-insurance (or buy into a public pool that will be weakened by the insurance interests) is being sold to us as reform and it simply is not. And my brain hurts from the disconnect.

I cannot reconcile Princeton’s Uwe Reinhardt’s message that we’ve become an aristocracy – not a middle-class society or even a democracy – with his embrace of the insurance industry and expansion of the broken healthcare system that clearly provides better healthcare protection for our American royalty and not the peasants among us. He carefully charts for us the rising debt of American families – including crushing medical debt assumed under the for-profit health insurance based system-and the lack of savings by Americans in recent years. But there is little acknowledgement that some of the debt and lack of savings directly relates to the increased costs American families and workers must shoulder for health coverage – health coverage that doesn’t adequately protect financial standing.

Sen . Charles Grassley of Iowa assured the crowd that there’s a big difference between the Hillary Clinton plans of years gone by and the Obama plan now – “He (Obama) will stick to his guns on a private-public mix (for insurance).” Grassley goes on to say everyone knows you get over-utilization when you have “gold-plated” plans. The implication is always that if you give access to care then millions of us will clamor to sit in doctors’ offices and get procedures and tests done simply because we have the means to do so. I actually think the gold-plated stuff will be reserved for Sen. Grassley and his cohorts – the rest of us will work hard to even get a plan that can assure minimal coverage or care. Grassley said they’d remind the Democrats that they said they’d adhere to a “pay as you go” with healthcare reform and other programs. Here’s the nod to the “bi-partisan” efforts we hear will guide the day for us all – the new agenda, the cooperation that will bring us all to the promised land of expansion of the insurance industry.

Then the Dems. I hear Rep. Steny Hoyer rightfully site his outrage about a Maryland child dying for want of a tooth extraction, yet stay safely and clearly away from angering the insurance industry. I listen as Sen. Debbie Stabenow of Michigan talk about her compassion for families struggling for care yet quickly adding when she talks about providing healthcare for immigrants that we should reward with healthcare those doing “the right thing.” I have a hard time reconciling the disconnect between the suffering unfolding every day – death by death by denial by denial – as the dance continues.

We want a “uniquely American” answer to the healthcare nightmare, they all say. I’ve heard that until my brain hurts just considering it. Oh, we’re unique all right. We’re the only industrialized nation on earth that tolerates the killing of its citizens on our own soil at the hands of this healthcare system and then wants to fix it all by handing more business, more money and more power to the same industry committing the murders. That’s unique enough.

None of this sounds like the language of basic human rights. And I think I heard our new President say that he clearly understood healthcare to be a human right in response to a debate question just a few months ago. That was such a gift just to hear the words spoken. I just know he knows that this basic human right is not going to be protected by hoodwinking the American people into bailing out the insurance industry.

The heavily funded activists (come on folks, that alone should send up big, red flags – heavily funded activists for human rights?) pushing for a private-public national healthcare policy are in and of themselves a conundrum to me. I hear on the one hand the message that the private, for-profit health insurance industry is very bad indeed – blocking healthcare through denials and high premiums and all the practices the American people have had to endure for years. But then I also see the activists and the industry folks co-mingling ever so deftly in a dance of political theater aimed at convincing us all that in response to demands for insurance regulation and restriction the industry will put up a fight but then capitulate to the demands or risk being left behind.

Look at the list of bedfellows and trust your instincts America. Like our moms and dads taught us, if it walks like a duck and quacks like a duck, guess what? It’s a duck. A bailout called healthcare reform is still a bailout even if we’re told otherwise. If AARP and UnitedHealth Care and Wal-Mart and SEIU and the others in the HCAN coalition are joining hands and forces, is there anyone among us who doesn’t know that’s about money and power and influence still? That’s a duck. And that’s going to be a very well treated duck.

So, let me get this straight… the insurance industry has been a big part of the problem. Worse. The industry has allowed the deaths of tens of thousands of Americans every year in order to protect profits.

I think of dead — 2-year-old Mychelle Keyes and dead 17-year-old Nataline Sarkisyan and dead 38-year-old Tracy Pierce, and that dead little boy with an infected tooth in Maryland — and I don’t wonder at all what the new for-profit insurance-friendly political coalitions are fighting to protect. And it isn’t the future Mychelle’s or Nataline’s or Tracy’s. They are fighting to protect the folks who killed them.

All of these dead were killed at the hands of the industry now being simultaneously chastised and coveted. This same greedy industry can be trusted to roll over just a little while helping craft their own industry’s regulations going forward? Oh, yes, that seat at the table is firmly fixed and being kept ever so warm for the insurance folks. In exchange for setting some of their own regulation, the insurance industry will be rewarded with the business of millions more of us who have had absolutely no say in the matter. None.

Those Americans not acting as political operatives for the quasi-activists organizing the reform transition for the insurance industry are not exactly anxious to hear from you and me. No, they have well-heeled and well-connected leaders who rub elbows and move easily within all of the halls of power where we can never go.

And unless we rise up and say we know what is going on and we smell a lot of big, fat rats, reform that expands the broken system and enriches the already elite of the healthcare profit-mongers will be sold to us by bipartisan bluffing and insurance company operatives slip-sliding us forward.

As for me, I will keep listening to Rep. John Conyers talk about human rights and healthcare for all and the long arc of history leaning towards justice. Oh, and his talk about how the automakers just barely across the river in Canada can build cars much more cheaply than in his native Michigan because they don’t suffer the health-insurance nightmare. Huh? Human rights and good business. I do like the quack of that. And my dissonance subsides…

Donna Smith is a community organizer for the California Nurses Association and National Co-Chair for the Progressive Democrats of America Healthcare Not Warfare campaign.

Recession is good news for WellPoint

Recession Slows Medical Inflation, Helping Insurers

By Avram Goldstein
Bloomberg.com
January 28, 2009
The recession may restrain growth in medical expenses this year as fewer people visit doctors, buy drugs or have surgery, helping health insurers such as WellPoint Inc. safeguard profits, analysts said.
WellPoint, which covers one in nine Americans, rose the most in four weeks after reporting that medical expenses climbed less than 8 percent in the fourth quarter. The increase was at the low end of a forecast given in October, and the report sparked a rally for managed-care companies.
During an economic slump, people who are worried about costs hesitate to tend to their health needs because of out-of-pocket expenses. The U.S. entered a recession in December 2007, and the economy suffered the biggest job losses last year since the end of World War II.
“Many analysts, me included, think that the recession will lead to lower health-care utilization, which could benefit managed-care companies or at least help stabilize their margins,” said Matt Perry, an analyst with Wachovia Securities Inc., in a note to clients today.
WellPoint rose even though it reported a 61 percent drop in net earnings. Besides investment losses, WellPoint had 288,000 fewer customers, mostly because of job cuts by its clients. The easing in costs outweighed the loss of subscribers.
The insurers “have very thin margins, so margin expansion is much more important to earnings per share than changes in enrollment,” said Ana Gupte, an analyst with Sanford C. Bernstein & Co., in a telephone interview today. “Everyone is expecting the recession will moderate” policyholders’ use of benefits this year, she said.
The cost of living fell in the U.S. in December as the recession deepened, capping the smallest annual gain in a half century, according to Labor Department data released this month. Consumers’ medical-care prices rose 2.6 percent last year, compared with a 5.2 percent increase in 2007.
WellPoint forecast in October that medical-cost inflation, which affects the setting of premium rates, would range from 7.5 to 8.5 percent and that it could speed up in 2009. The company said it was raising 2009 prices to stay ahead of that trend.
“We’re not ready to declare the trend has slowed down, and we’ve maintained our higher pricing levels,” said Wayne DeVeydt, WellPoint’s chief financial officer, in a conference call today.
http://www.bloomberg.com/apps/news?pid=20601202&sid=aAeilLHULubY

Let’s see. It’s really good news that 288,000 people lost their WellPoint insurance primarily due to job cuts, because the resultant reduction in spending on health care “outweighed the loss of subscribers.” So the expanded profit margins made possible by paying for less health care “is much more important to earnings per share than changes in enrollment.”
More good news for WellPoint is that medical care prices rose only 2.6 percent last year. In a message to investors, WellPoint’s chief financial officer announced that, quite conveniently, they would not accept the government numbers as a “trend,” and go ahead with their plans to increase the premiums at over three times the rate of health care inflation.
The Democrats promised us comprehensive reform that would provide affordable health care for everyone. Yet they are crafting reform based on an industry that celebrates the loss of coverage for another quarter of a million people, and, at the same time, gouges the rest of their clients with outrageously excessive premium increases.
We have no greater ethical duty than to abandon this nefarious health care financing industry that defines good news as what works best for investors, and replace it with our own public financing system that strives for the good news of what works best for patients. After all, doesn’t that represent the ethics behind change you can believe in?