PNHP

America’s Looming Health Care Disaster

America’s Looming Health Care Disaster

Rising Unemployment Threatens Health Care of Even Those Who Keep Their Jobs

By DAN CHILDS
ABC News Medical Unit
Nov. 24, 2008

Last year at this time, health coverage may well have been among the last things on Terri Rushing’s mind.

Her husband, David, was 55 years old and working for Champion Homes in McKenzie, Tenn. It was a job he had held for nearly a decade and a half. He had a good Blue Cross and Blue Shield health care plan through his employer, and it was also affordable. Terri Rushing said that she and her husband paid less than $200 in premiums each month.

“We never worried because we always had insurance,” she said. “My husband has worked all of his life. We’ve always had health care; we’ve never had to worry about not having it.”

But on Feb. 7, everything changed. Rushing said her husband went to work as usual, only to find that state troopers blocked his way. The factory had burned to the ground. And with the loss of the plant came the loss of the job David Rushing had worked for the past 14 years.

It is a story that is becoming more common as the country weathers the worst economic downturn in decades. And health policy experts say it may not be long before all Americans feel the impact of what is shaping up to be a national health care disaster.

Today, Terri Rushing’s job as an office worker affords her a catastrophic health coverage plan that only kicks in once she is hospitalized. David Rushing, an insulin-dependent diabetic, was able to maintain his health coverage through the health program known as COBRA. But even though it covers only him, the plan costs nearly $400 per month — twice what they were paying before.

As difficult as the situation is, eligibility for the COBRA program expires after 18 months.

“The COBRA is just going to last until the first of September of next year,” she said. “After that, we have no way to pay.”

The only way for the family to enjoy the same health coverage they had before would be for David Rushing to find another job that offers similar health coverage benefits as his old position. But now at age 56, and living in a community with two other major plant closings in recent months, David’s job prospects are grim.

Terri Rushing has started to shop around for health plans she and her husband can afford.

“I did call several plans when we found out that we were going to start paying for COBRA, basically because we could not afford coverage for both of us,” she said. “I was told over and over again that we couldn’t qualify.”

And she has encountered little sympathy. In one conversation with a health insurance company she contacted, she explained to the customer service representative her difficult situation.

“I asked him, ‘So, basically, what you’re telling me is that we have a choice between having a house payment and having health insurance.’ And he says, ‘It sounds like you have a problem.’

“That’s it. That’s all.”

No Longer an Isolated Story

While the number of Americans in a situation like the Rushings’ grows, solutions remain elusive.

“There is a huge, looming problem about what to do with people who are unemployed,” said Dr. David Nash, dean of the Jefferson School of Health Policy and Population Health in Philadelphia. “The short answer, regretfully, is that there is no good answer for these people.”

According to the Bureau of Labor Statistics of the U.S. Department of Labor, the unemployment rate rose to 6.5 percent in October, with the number of unemployed people increasing to 10.1 million. Since last year, unemployment rolls have increased by 2.8 million.

And more bad news arrived last week: the number of newly laid-off workers is officially at a 16-year high.

As these workers face the loss of their employer-provided health insurance, about 1 in 5 looks to COBRA (an acronym for the Consolidated Omnibus Budget Reconciliation Act of 1986) for help. Through COBRA, a laid-off worker can maintain the same insurance coverage he or she had through their previous employer, but at a cost. Specifically, they must pay the portion of their premiums that they had been responsible for, plus the portion that their employers previously paid — as well as an extra 2 percent of this combined premium.

The increases are a bitter pill to swallow for someone who has just lost a job and likely has less money to spread around. And the small relief provided is only temporary. Those who cannot find another option within 18 months face a new scramble for coverage once this window expires.

“Unfortunately, the COBRA legislation guarantees laid-off workers the right to continue coverage at their own expense, but does not make that coverage affordable,” said Dr. David Himmelstein, associate professor of medicine at Harvard Medical School and co-founder of Physicians for a National Health Program.

“Under COBRA, health insurers may charge higher premiums to sick individuals, so anyone with a chronic condition who really needs insurance will face astronomical premiums,” he added. “As a result, the vast majority are likely to become uninsured quite quickly.”

“The cost for coverage, coupled with no or substantially reduced [income], may force additional steps to secure cash flow, including mortgage leveraging, credit card and family borrowing, to the extent it is even available,” said Jay Wolfson, associate vice president of Health Law, Policy and Safety at the University of South Florida. “And then, without new employment — perhaps even before COBRA expires — there is no reservoir for cash, and the cascade of additional economic difficulties may create a deadly flood.”

Uwe Reinhardt, professor of economics and public affairs at Princeton University, has studied the U.S. health care system for the past two decades. He agreed that if the economic picture gets much worse, many families could be heading for disaster.

“If this recession gets any deeper and lasts several years, many Americans may lose whatever savings they have, should they or their family members get sick,” Reinhardt said.

Will Everyone Be Caught in the Collapse?

But the problems may not be limited to the growing ranks of unemployed. Nash said that even if you have a secure job with a good health care plan, there is still reason to worry. The massive uptick in job losses, he said, are setting into motion a domino effect within the health care system.

The first domino falls when those who lose their jobs seek assistance through COBRA. If they can afford it, they will remain under their old policy and still pay premiums. But if they cannot, they will join the ranks of the uninsured.

For every person who becomes uninsured, health insurance companies lose revenue from monthly premiums. The situation worsens 18 months later, when those who opted for COBRA but have not yet been able to find a new employer-based plan, become ineligible for coverage. The insurance companies will take yet another hit.

“Insurance carriers, even the not-for-profit Blue Cross plans, are going to suffer mightily as layoffs accrue,” Nash noted.

And this hit from lost revenue gets passed on to employers, who, in turn, pass it on to existing policyholders.

“Many employers have faced double-digit increases in the costs of their share of health benefits this year, and that is going to continue,” Wolfson said. “In response, many employers elect to shift or eliminate cost burdens associated with health benefits to employees.”

Nash calls this additional cost burden on the average family “catastrophic.”

“The average family of four with private health insurance in the U.S. already spends $10,000 a year [for health insurance coverage],” he said. “That’s in addition to what their employers provide. … It’s staggering.”

For such a family, an increase in premiums or a decrease in employer support could mean thousands of dollars more per year — even if none of the wage earners in the family suffer a layoff.

For the health industry, the outlook may be even bleaker, at least in the short term. Nash said the signs of the U.S. medical system’s imminent catastrophe are already being seen. Along with postponement and cancellation of elective surgeries and an increase in bad medical debt, more people are experiencing decreased access to medical services. Likewise, more people are unable to afford their medication.

Unpaid health care bills are the single leading cause of personal bankruptcy in the United States. A surge in this statistic, combined with unemployment and bad medical debt, could be enough to capsize some major players in the health care industry, Nash said — an industry that contributes 17 percent of the country’s GDP.

“Nobody ever thought of this toxic byproduct of health insurance being tied to the work place,” Nash said. “This is a really dreadful knockout punch that you are not hearing anybody in positions of authority talk about.

“Very soon you can predict that the American Hospital Association will be at the White House looking for the same kind of handouts that we’re giving the auto industry.”

‘There Is Not a Silver Lining’

Most health policy experts said that, while the future of the American health care system remains uncertain, what is clear is that a change is needed.

“As someone who grew up in Germany and lived for some years in Canada and got used to portable, life-cycle health insurance, I have always been amazed that Americans preferred the ephemeral health insurance that comes with the job at a particular firm and is lost with losing that job.” Reinhardt said. “Now, the foolishness of that preference is becoming clear to many middle-class Americans who spent their life denigrating ‘government’ health insurance.

“Frankly, I find it hard to muster much sympathy for people who are waking up only now.”

“There is not a silver lining,” Nash said. “What’s coming home to roost here is the historical accident of having private health care insurance tied to the place of employment. There is no way out if it is tied to the source of where you work.”

Some options still exist for those who need health care coverage, but still need to make ends meet after a layoff.

“One is a high-deductible plan, or a limited-benefits plan,” said Merrill Matthews, executive director of the Alexandria, Va.-based Council for Affordable Health Insurance. “In addition, there are what’s known as ‘bridge’ or ‘gap’ policies. These are very easy to get, with usually only one page to fill out and they will cover you immediately, assuming you don’t have AIDS or a life-threatening heart condition.”

“To be very clear: these aren’t comprehensive policies,” he added. “But they can be a good option for someone with limited means who needs some coverage.”

Nash said families should also plan to see health care spending encroach into other areas of the family budget.

“I would urge families to have an emergency health care cash fund available, and I would tell them to think very carefully about what they’re spending for Christmas,” he said. “I know retailers don’t want to hear that, but 18 months from now, there are people who are going to regret very much that Christmas spending.”

But for some, like the Rushings, frugal living proved to be no sanctuary.

“We don’t live extravagantly,” Terri Rushing said. “We have a three-bedroom, two-bath house. We don’t drive fancy cars; we drive older cars.”

Now, she and her husband have used the money in his 401(k) to keep up with their costs of living. David received his second to last unemployment check Thursday.

“As far as surviving, we’re looking at the possibility of losing our home,” Terri Rushing said. “It just feels like our lives have been turned upside down and put in a paper bag, and now we’re waiting for someone to come by and shake us out.”

Her advice for others who find themselves on the brink of a personal health care disaster is brief.

“Expect nothing. Prepare for everything. And pray,” she said.

Scott Mayerowitz contributed to this report.

Copyright (c) 2008 ABC News Internet Ventures

http://abcnews.go.com/print?id=6309491

Uwe Reinhardt on indefensible administrative costs

Why Does U.S. Health Care Cost So Much? (Part II: Indefensible Administrative Costs)

By Uwe E. Reinhardt
The New York Times
November 21, 2008
In my previous blog post, I showed that America suffers from “excess spending” in its health care system. Here I will discuss one factor that drives up that spending: indefensibly high administrative costs.
To review: “Excess health spending” in this context refers to the difference between what a country spends per person on health care, and what the country’s gross domestic product per person should predict that that country would spend. (The prediction is based on trends in other countries in the Organization for Economic Cooperation and Development.) The word “excess” here should not be taken as “excessive” unless one could demonstrate that what the other O.E.C.D. nations spend is appropriate and what we spend is ipso facto wasteful.
The United States spends nearly 40 percent more on health care per capita than its G.D.P. per capita would predict. Given the sheer magnitude of the estimated excess spending, it is fair to ask American health care providers what extra benefits the American people receive in return for this enormous extra spending. After all, translated into total dollar spending per year, this excess spending amounted to $570 billion in 2006 and about $650 billion in 2008. The latter figure is over five times the estimated $125 billion or so in additional health spending that would be needed to attain truly universal health insurance coverage in this country.
One thing Americans do buy with this extra spending is an administrative overhead load that is huge by international standards. The McKinsey Global Institute estimated that excess spending on “health administration and insurance” accounted for as much as 21 percent of the estimated total excess spending ($477 billion in 2003). Brought forward, that 21 percent of excess spending on administration would amount to about $120 billion in 2006 and about $150 billion in 2008. It would have been more than enough to finance universal health insurance this year.
The McKinsey team estimated that about 85 percent of this excess administrative overhead can be attributed to the highly complex private health insurance system in the United States. Product design, underwriting and marketing account for about two-thirds of that total. The remaining 15 percent was attributed to public payers that are not saddled with the high cost of product design, medical underwriting and marketing, and that therefore spend a far smaller fraction of their total spending on administration.
Two studies using more detailed bilateral comparisons of two countries illustrate even more sharply the magnitude of our administrative burden relative to that in other developed countries.
One of these is an earlier McKinsey study explaining the difference in 1990 health spending in West Germany and in the United States. The researchers found that in 1990 Americans received $390 per capita less in actual health care but spent $360 more per capita on administration.
A second, more recent study of administrative costs in the American and Canadian health systems was published in 2003 by Steffie Woolhandler and David Himmelstein in The New England Journal of Medicine. The study used a measure of administrative costs that includes not only the insurers’ costs, but also the costs borne by employers, health-care providers and governments – but not the value of the time patients spent claiming reimbursement. These authors estimated that in 1999, Americans spent $1,059 per capita on administration compared with only $307 in purchasing power parity dollars (PPP $) spent in Canada.
More and more Americans are being priced out of health care as we know it. The question is how long American health policy makers, and particularly the leaders of our private health insurance, can justify this enormous and costly administrative burden to the American people and to the harried providers of health care.
http://economix.blogs.nytimes.com/2008/11/21/why-does-us-health-care-cost-so-much-part-ii-indefensible-administrative-costs/?scp=2&sq=Uwe%20Reinhardt&st=cse

Professor Reinhardt already said it: “More and more Americans are being priced out of health care as we know it. The question is how long American health policy makers, and particularly the leaders of our private health insurance, can justify this enormous and costly administrative burden to the American people and to the harried providers of health care.”

Uwe Reinhardt on indefensible administrative costs

Why Does U.S. Health Care Cost So Much? (Part II: Indefensible Administrative Costs)

By Uwe E. Reinhardt
The New York Times
November 21, 2008

In my previous blog post, I showed that America suffers from “excess spending” in its health care system. Here I will discuss one factor that drives up that spending: indefensibly high administrative costs.

To review: “Excess health spending” in this context refers to the difference between what a country spends per person on health care, and what the country’s gross domestic product per person should predict that that country would spend. (The prediction is based on trends in other countries in the Organization for Economic Cooperation and Development.) The word “excess” here should not be taken as “excessive” unless one could demonstrate that what the other O.E.C.D. nations spend is appropriate and what we spend is ipso facto wasteful.

The United States spends nearly 40 percent more on health care per capita than its G.D.P. per capita would predict. Given the sheer magnitude of the estimated excess spending, it is fair to ask American health care providers what extra benefits the American people receive in return for this enormous extra spending. After all, translated into total dollar spending per year, this excess spending amounted to $570 billion in 2006 and about $650 billion in 2008. The latter figure is over five times the estimated $125 billion or so in additional health spending that would be needed to attain truly universal health insurance coverage in this country.

One thing Americans do buy with this extra spending is an administrative overhead load that is huge by international standards. The McKinsey Global Institute estimated that excess spending on “health administration and insurance” accounted for as much as 21 percent of the estimated total excess spending ($477 billion in 2003). Brought forward, that 21 percent of excess spending on administration would amount to about $120 billion in 2006 and about $150 billion in 2008. It would have been more than enough to finance universal health insurance this year.

The McKinsey team estimated that about 85 percent of this excess administrative overhead can be attributed to the highly complex private health insurance system in the United States. Product design, underwriting and marketing account for about two-thirds of that total. The remaining 15 percent was attributed to public payers that are not saddled with the high cost of product design, medical underwriting and marketing, and that therefore spend a far smaller fraction of their total spending on administration.

Two studies using more detailed bilateral comparisons of two countries illustrate even more sharply the magnitude of our administrative burden relative to that in other developed countries.

One of these is an earlier McKinsey study explaining the difference in 1990 health spending in West Germany and in the United States. The researchers found that in 1990 Americans received $390 per capita less in actual health care but spent $360 more per capita on administration.

A second, more recent study of administrative costs in the American and Canadian health systems was published in 2003 by Steffie Woolhandler and David Himmelstein in The New England Journal of Medicine. The study used a measure of administrative costs that includes not only the insurers’ costs, but also the costs borne by employers, health-care providers and governments – but not the value of the time patients spent claiming reimbursement. These authors estimated that in 1999, Americans spent $1,059 per capita on administration compared with only $307 in purchasing power parity dollars (PPP $) spent in Canada.

More and more Americans are being priced out of health care as we know it. The question is how long American health policy makers, and particularly the leaders of our private health insurance, can justify this enormous and costly administrative burden to the American people and to the harried providers of health care.

http://economix.blogs.nytimes.com/2008/11/21/why-does-us-health-care-cost-so-much-part-ii-indefensible-administrative-costs/?scp=2&sq=Uwe%20Reinhardt&st=cse

Comment:

By Don McCanne, MD

Professor Reinhardt already said it: “More and more Americans are being priced out of health care as we know it. The question is how long American health policy makers, and particularly the leaders of our private health insurance, can justify this enormous and costly administrative burden to the American people and to the harried providers of health care.”

Yikes!!! I'm a Slave to Socialized Medicine

by: Steve Weissman
t r u t h o u t | Perspective
Friday 21 November 2008

http://www.truthout.org/112108A

Growing up in Florida in the 1940s, I saw many of the doctors my family knew fighting against Harry Truman’s effort to enact what they called “Socialized Medicine.” Their immediate target was Sen. Claude Pepper, a New Deal Democrat who supported universal health care. Our doctor friends dubbed him “Red Pepper” and helped defeat him in the elections of 1950. Yet, for all this early “fight for freedom,” I now find myself in France enjoying single-payer, socialized medicine, which I would heartily recommend to all Americans.

The system here is surprisingly nonbureaucratic, at least for the patient. My wife Anna and I picked our own general practitioners (GPs), specialists and hospital care, with no insurance company restricting us to their list of doctors or hospitals. In fact, we found only two restrictions. The GPs could turn us down if they already had too many patients and they had to be within our geographical area so they would not have to travel too far when making a house call. Yes, under socialized medicine here in France, doctors still make house calls, even here in the boondocks where we live.

Nurses also make house calls to give shots or take blood for testing. Test results usually arrive in the next day’s mail.

For each visit to the GP, we write a check for 22 euros. The system then reimburses us for 70 percent with a direct deposit to our bank account. For some particularly debilitating conditions, the government system pays the full 100 percent. To pay whatever the government doesn’t, most people here have private top-up insurance, which is very reasonably priced. So, the single-payer system has more than a single payer, but the insurance companies exercise none of the control they would back home.

At the pharmacy, we don’t pay at all. We simply present our health service cards: the government and top-up insurance then pay the pharmacist directly. The system excludes certain nonnecessary medicines and requires that we use generic medicine when available.

For most visits to specialists, test facilities or hospitals, the GP acts as a gatekeeper, writing prescriptions and often a letter explaining particular problems. He or she does all this on the spot during office visits, and there’s none of the paper shuffling one sees in doctors’ offices everywhere in America.

Most specialists and test-givers also write up their reports on the spot and hand them directly to the patient, though x-rays and other test results will soon be transmitted to the GP by computer. Again, we’ve seen very little bureaucracy and no interference by either the government or insurance companies.

None of this is free, of course. Everyone in the workforce pays a percentage of their taxable income to cover this, their pensions, and other social charges. For Anna and me, the costs are covered by our British pensions from the time we lived and worked in England.

How good is the French medical care? Surveys by the World Health Organization rate the French system as the best in the world, and far better than average health care in the United States. Life expectancy and most other relevant rankings are also higher in France than in the United States.

From our own experience, we would agree that French medicine is much better and far cheaper than in the United States. When we lived in Florida, my very expensive heart specialist seemed content for me to have a bit of high blood pressure, which he saw as natural for a person of my age. Not so here in France, where the doctors kept changing my pills until they got me down to the normal 120 over 80. The French doctors also found a way to end a long-standing enlargement of my heart that never bothered my American doctors.

To be fair, not all doctors here are as good as the ones who’ve treated us, and we’ve heard the same kind of horror stories we heard in the States about doctors who buried their mistakes. We also hear threats to cut back funding, which is already far less per head than spending on medical care in the United States. But, so far, we’ve gotten the best of care, as do all our neighbors, including workmen, farmers and retirees on limited budgets.

Why, then, can’t Americans have the same kind of socialized medicine? Mostly, because of the health maintenance organizations and insurance companies, who take such a big slice off the top. So strong is their influence that almost no one of any clout in American politics dares to talk of a single-payer system that would simply do away with private medical insurance, except perhaps as the kind of top-up they have here.

Hopefully, if enough Americans get to know what exists here in France, the debate will open up. Something like the French system would certainly save Americans a great deal of money and provide much better care.

But, for Anna and me, it’s already too late. We’ve become so enslaved by the great medical care we now have that we cannot see ever moving back to the United States or anywhere else. That, I suppose, is the true horror of socialized medicine that all those Florida doctors warned about back in the 1940s.

A veteran of the Berkeley Free Speech Movement and the New Left monthly Ramparts, Steve Weissman lived for many years in London, working as a magazine writer and television producer. He now lives and works in France.

Why I won't join the American Medical Association

by donag
Daily Kos
Sat Nov 22, 2008 at 11:17:57 AM PST

I read the 2008 AMA Reform Proposal. As a result I sent an unsolicited comment to their Member Center. I thought I would share this with you. It was longer than their 1,000 characters and couldn’t contain non-alphabeltical characters (e.g. hyperlinks), so I sent them part 1 and part 2.

Comment: Part 1. I have not joined the AMA in the past 18 years of medical practice for 3 reasons:

1. not subscribing to a single-payer/universal access health care insurance system.

2. poor ethics of the AMA in terms of receipt of outside sponsorship

3. putting the profession in a bad light with its unseemly lobbying on The Hill in concert with Big Pharma and HMOs/insurance industry.

The 2008 AMA proposal on reform is too little to late. It does not focus on universal access, affordability or quality. It is just another way of maintaining high fees for physicians who do procedures and benefits its unholy association with big pharma and HMOs/insurance industry.

Comment: Part 2: I am a local leader in healthcare and will not endorse your organization, but will continue to advocate for Physicians for a National Health Program. It is my advice to my colleagues to support that organization and not the AMA who are now one of the biggest obstructions to healthcare justice. I am unable to include hyperlinks to some excellent critiques of your Proposal on Reform in this note as you can’t include non-alphabetic characters.

I will continue to watch future AMA proposals, but it is time the AMA stopped this PR approach to their tarnished image and proposed some real healthcare reform.

Yikes!!! I’m a Slave to Socialized Medicine

by: Steve Weissman
t r u t h o u t | Perspective
Friday 21 November 2008

http://www.truthout.org/112108A

Growing up in Florida in the 1940s, I saw many of the doctors my family knew fighting against Harry Truman’s effort to enact what they called “Socialized Medicine.” Their immediate target was Sen. Claude Pepper, a New Deal Democrat who supported universal health care. Our doctor friends dubbed him “Red Pepper” and helped defeat him in the elections of 1950. Yet, for all this early “fight for freedom,” I now find myself in France enjoying single-payer, socialized medicine, which I would heartily recommend to all Americans.

The system here is surprisingly nonbureaucratic, at least for the patient. My wife Anna and I picked our own general practitioners (GPs), specialists and hospital care, with no insurance company restricting us to their list of doctors or hospitals. In fact, we found only two restrictions. The GPs could turn us down if they already had too many patients and they had to be within our geographical area so they would not have to travel too far when making a house call. Yes, under socialized medicine here in France, doctors still make house calls, even here in the boondocks where we live.

Nurses also make house calls to give shots or take blood for testing. Test results usually arrive in the next day’s mail.

For each visit to the GP, we write a check for 22 euros. The system then reimburses us for 70 percent with a direct deposit to our bank account. For some particularly debilitating conditions, the government system pays the full 100 percent. To pay whatever the government doesn’t, most people here have private top-up insurance, which is very reasonably priced. So, the single-payer system has more than a single payer, but the insurance companies exercise none of the control they would back home.

At the pharmacy, we don’t pay at all. We simply present our health service cards: the government and top-up insurance then pay the pharmacist directly. The system excludes certain nonnecessary medicines and requires that we use generic medicine when available.

For most visits to specialists, test facilities or hospitals, the GP acts as a gatekeeper, writing prescriptions and often a letter explaining particular problems. He or she does all this on the spot during office visits, and there’s none of the paper shuffling one sees in doctors’ offices everywhere in America.

Most specialists and test-givers also write up their reports on the spot and hand them directly to the patient, though x-rays and other test results will soon be transmitted to the GP by computer. Again, we’ve seen very little bureaucracy and no interference by either the government or insurance companies.

None of this is free, of course. Everyone in the workforce pays a percentage of their taxable income to cover this, their pensions, and other social charges. For Anna and me, the costs are covered by our British pensions from the time we lived and worked in England.

How good is the French medical care? Surveys by the World Health Organization rate the French system as the best in the world, and far better than average health care in the United States. Life expectancy and most other relevant rankings are also higher in France than in the United States.

From our own experience, we would agree that French medicine is much better and far cheaper than in the United States. When we lived in Florida, my very expensive heart specialist seemed content for me to have a bit of high blood pressure, which he saw as natural for a person of my age. Not so here in France, where the doctors kept changing my pills until they got me down to the normal 120 over 80. The French doctors also found a way to end a long-standing enlargement of my heart that never bothered my American doctors.

To be fair, not all doctors here are as good as the ones who’ve treated us, and we’ve heard the same kind of horror stories we heard in the States about doctors who buried their mistakes. We also hear threats to cut back funding, which is already far less per head than spending on medical care in the United States. But, so far, we’ve gotten the best of care, as do all our neighbors, including workmen, farmers and retirees on limited budgets.

Why, then, can’t Americans have the same kind of socialized medicine? Mostly, because of the health maintenance organizations and insurance companies, who take such a big slice off the top. So strong is their influence that almost no one of any clout in American politics dares to talk of a single-payer system that would simply do away with private medical insurance, except perhaps as the kind of top-up they have here.

Hopefully, if enough Americans get to know what exists here in France, the debate will open up. Something like the French system would certainly save Americans a great deal of money and provide much better care.

But, for Anna and me, it’s already too late. We’ve become so enslaved by the great medical care we now have that we cannot see ever moving back to the United States or anywhere else. That, I suppose, is the true horror of socialized medicine that all those Florida doctors warned about back in the 1940s.

A veteran of the Berkeley Free Speech Movement and the New Left monthly Ramparts, Steve Weissman lived for many years in London, working as a magazine writer and television producer. He now lives and works in France.

Why I won’t join the American Medical Association

by donag
Daily Kos
Sat Nov 22, 2008 at 11:17:57 AM PST

I read the 2008 AMA Reform Proposal. As a result I sent an unsolicited comment to their Member Center. I thought I would share this with you. It was longer than their 1,000 characters and couldn’t contain non-alphabeltical characters (e.g. hyperlinks), so I sent them part 1 and part 2.

Comment: Part 1. I have not joined the AMA in the past 18 years of medical practice for 3 reasons:

1. not subscribing to a single-payer/universal access health care insurance system.

2. poor ethics of the AMA in terms of receipt of outside sponsorship

3. putting the profession in a bad light with its unseemly lobbying on The Hill in concert with Big Pharma and HMOs/insurance industry.

The 2008 AMA proposal on reform is too little to late. It does not focus on universal access, affordability or quality. It is just another way of maintaining high fees for physicians who do procedures and benefits its unholy association with big pharma and HMOs/insurance industry.

Comment: Part 2: I am a local leader in healthcare and will not endorse your organization, but will continue to advocate for Physicians for a National Health Program. It is my advice to my colleagues to support that organization and not the AMA who are now one of the biggest obstructions to healthcare justice. I am unable to include hyperlinks to some excellent critiques of your Proposal on Reform in this note as you can’t include non-alphabetic characters.

I will continue to watch future AMA proposals, but it is time the AMA stopped this PR approach to their tarnished image and proposed some real healthcare reform.

Is administrative savings a myth?

5 Myths on Our Sick Health Care System

By Shannon Brownlee and Ezekiel Emanuel
The Washington Post
November 23, 2008 (Web posting Nov. 21)
… we dispel a few myths about how health care works and how much reform Americans are willing to stomach.
3. We would save a lot if we could cut the administrative waste of private insurance.
The idea that we could wring billions of dollars in savings this way is seductive, but it wouldn’t really accomplish that much. For one thing, some administrative costs are not only necessary but beneficial. Following heart-attack or cancer patients to see which interventions work best is an administrative cost, but it’s also invaluable if you want to improve care. Tracking the rate of heart attacks from drugs such as Avandia is key to ensuring safe pharmaceuticals.
Let’s just say that we could wave a magic wand and cut private insurers’ overhead by half, to what the Canadian government spends on administering its health-care system — 15 percent. How much would we save? Not as much as you may think. Private insurers pay a little more than a third of what we spend on health care, which means that we’d cut a little more than 5 percent from our total budget, or about $124 billion. That’s not peanuts, but it’s not even enough to cover everybody who’s currently uninsured.
More to the point, we only get to save it once. That’s because administrative waste isn’t what’s driving health-care costs up faster than inflation. Most of the relentless rise can be attributed to the expansion of hospitals and other health-care sectors and the rapid adoption of expensive new technologies — new drugs, devices, tests and procedures. Unfortunately, only a fraction of all that new stuff offers dramatically better outcomes. If we’re worried about costs, we have to ask whether a $55,000 drug that prolongs the lives of lung cancer patients for an average of a few weeks is really worth it. Unless we find a cure for our addiction to the new but not necessarily improved, our national medical bill will continue to skyrocket, regardless of how efficient insurance companies become.
http://www.washingtonpost.com/wp-dyn/content/article/2008/11/20/AR2008112002420.html

The authors understand that a single payer or “Medicare for all” model of reform is the most rational competitor to their preferred model of reform – thus their attack on the administrative savings that a single payer system would bring us. They concede that the savings are not a myth as they are considerable, but they still understate the savings because they exclude the tremendous financial burden that our dysfunctional, fragmented, multi-payer system places on the health care delivery system. They also incorrectly state that the administrative savings are a one-time event. In fact, the efficiencies that are achieved are permanent, shifting the trajectory of health care cost increases downward.
Their dismissal of single payer reform (see Emanuel’s “Healthcare, Guaranteed”) as merely an inadequate administrative measure, considering the complexity of the systemic problems in our health care delivery system, ignores the most important benefit of the single payer model. A single payer system creates our own public monopsony, or single purchaser of health care services. Many economists agree that, by controlling the spending of our health care dollars, we can finally demand value in our health care purchasing, introducing infrastructure changes that will lead to the high-performance system for which we are already paying, but not experiencing.
Because Medicare controls health care spending for only about 15 percent of our population, it is a very weak monopsony. Nevertheless it has been able to introduce some spending efficiencies. Think of how effective it would be if it covered all of us.
Medicare is our most popular, most efficient, and most equitable health care financing program, yet it is being dismissed as a model for all of us because of the idea that it somehow represents an ideological extreme. In health care, political compromise based on ideology is not only bankrupting individuals, it is killing them.
http://www.washingtonpost.com/wp-dyn/content/article/2008/11/20/AR2008112002420_Comments.html
11/21/2008 12:36:15 PM

Is administrative savings a myth?

5 Myths on Our Sick Health Care System

By Shannon Brownlee and Ezekiel Emanuel
The Washington Post
November 23, 2008 (Web posting Nov. 21)

… we dispel a few myths about how health care works and how much reform Americans are willing to stomach.

3. We would save a lot if we could cut the administrative waste of private insurance.

The idea that we could wring billions of dollars in savings this way is seductive, but it wouldn’t really accomplish that much. For one thing, some administrative costs are not only necessary but beneficial. Following heart-attack or cancer patients to see which interventions work best is an administrative cost, but it’s also invaluable if you want to improve care. Tracking the rate of heart attacks from drugs such as Avandia is key to ensuring safe pharmaceuticals.

Let’s just say that we could wave a magic wand and cut private insurers’ overhead by half, to what the Canadian government spends on administering its health-care system — 15 percent. How much would we save? Not as much as you may think. Private insurers pay a little more than a third of what we spend on health care, which means that we’d cut a little more than 5 percent from our total budget, or about $124 billion. That’s not peanuts, but it’s not even enough to cover everybody who’s currently uninsured.

More to the point, we only get to save it once. That’s because administrative waste isn’t what’s driving health-care costs up faster than inflation. Most of the relentless rise can be attributed to the expansion of hospitals and other health-care sectors and the rapid adoption of expensive new technologies — new drugs, devices, tests and procedures. Unfortunately, only a fraction of all that new stuff offers dramatically better outcomes. If we’re worried about costs, we have to ask whether a $55,000 drug that prolongs the lives of lung cancer patients for an average of a few weeks is really worth it. Unless we find a cure for our addiction to the new but not necessarily improved, our national medical bill will continue to skyrocket, regardless of how efficient insurance companies become.

Comments:

By Dr. Don McCanne, MD

The authors understand that a single payer or “Medicare for all” model of reform is the most rational competitor to their preferred model of reform – thus their attack on the administrative savings that a single payer system would bring us. They concede that the savings are not a myth as they are considerable, but they still understate the savings because they exclude the tremendous financial burden that our dysfunctional, fragmented, multi-payer system places on the health care delivery system. They also incorrectly state that the administrative savings are a one-time event. In fact, the efficiencies that are achieved are permanent, shifting the trajectory of health care cost increases downward.

Their dismissal of single payer reform (see Emanuel’s “Healthcare, Guaranteed”) as merely an inadequate administrative measure, considering the complexity of the systemic problems in our health care delivery system, ignores the most important benefit of the single payer model. A single payer system creates our own public monopsony, or single purchaser of health care services. Many economists agree that, by controlling the spending of our health care dollars, we can finally demand value in our health care purchasing, introducing infrastructure changes that will lead to the high-performance system for which we are already paying, but not experiencing.

Because Medicare controls health care spending for only about 15 percent of our population, it is a very weak monopsony. Nevertheless it has been able to introduce some spending efficiencies. Think of how effective it would be if it covered all of us.

Medicare is our most popular, most efficient, and most equitable health care financing program, yet it is being dismissed as a model for all of us because of the idea that it somehow represents an ideological extreme. In health care, political compromise based on ideology is not only bankrupting individuals, it is killing them.

11/21/2008 12:36:15 PM

http://www.washingtonpost.com/wp-dyn/content/article/2008/11/20/AR2008112002420.html

Officials advocate for single payer health care

By Scott Merzbach
Amherst Bulletin
Published on November 21, 2008

If a new presidential administration in Washington, D.C., could do one thing to help Amherst’s budget problems, it might be to solve the issue of rising health care costs for municipal employees, according to town officials.

Town Manager Larry Shaffer said the expected cash shortfall Amherst has experienced in recent years is being driven almost exclusively by escalating health care costs. Shaffer estimates that 12 to 13 cents of every dollar the town spends goes toward health care.

If the country had a single-payer health care system or some other form of nationalized health care, this would provide the most immediate financial relief possible to a town like Amherst, which is facing a projected $2.66 million gap between revenues and expenses in next year’s budget. “If you’re looking for the home run, that’s the home run,” Shaffer said.

Select Board member Diana Stein said the municipal health budget is $2.7 million, and rises to $11 million when school employees are added in. Having a universal, publicly financed health care would help.

Stein said these health care costs could be removed from the budget through a single-payer system.

A letter to our new president

By Susanne L. King, M.D.
Berkshire Eagle
Wednesday, November 19

Dear President-elect Obama:

As you prepare to begin your presidency during a period of severe recession, you will be searching to make financially sound decisions for our country. You have promised to reform the health care system, and only one solution will enable you to create an effective system and save money: a single-payer national health program.

During your campaign, you proposed a health plan to extend coverage to the 45 million uninsured Americans by expanding private and public programs, with the help of federal subsidies and mandates. This will only add to the cost of our health insurance system, currently a hefty $7,129 per person. However, if we adopt a single-payer national health program rather than attempting to expand our dysfunctional multiple payer, private insurance system, we would save money.

Drs. David Himmelstein and Steffie Woolhandler, health care researchers at Harvard Medical School, have calculated that the United States could save $350 billion/year by adopting a single-payer national health program. A single-payer program would eliminate private insurance companies and the enormous expense of their administrative costs and profits.

Every other industrialized country in the world has a national health plan that covers everyone and is administered by the government. And other countries spend less than half as much per person on health care as we do in the United States. One reason they are able to provide health care for everyone for much less money is because their administrative costs are a small fraction of the costs in our country.

A single-payer national health program would also be a real boon to individuals faced with rapidly rising health insurance costs, and would rescue people who are falling into bankruptcy and are losing their homes because of medical debts. American automakers might not need bailouts if they didn’t have to provide insurance for their workers and retirees. Small businesses would no longer shoulder the expense and administrative burden of providing health insurance for their workers.

Not only would we save money for the government, business, and the individual, but a single-payer national health program would also cover everyone, and we would all have access to more comprehensive benefits. These benefits would include medical care, mental health care, dental care, prescription drugs, and long-term care, which is a primary concern for the baby boomers who have been watching their life savings and retirement funds evaporate with the collapse of Wall Street.

A group of 15,000 U.S. doctors in the organization Physicians for a National Health Program have called on you to enact a single-payer program. A Massachusetts poll revealed that 64 percent of doctors support single-payer health care, and the American College of Physicians has voted its support for a national health program as well.

As a Massachusetts resident, I am witnessing an attempt at health care reform that has similarities to your proposed plan, and is being touted as a model for our country. This program has expanded health insurance coverage to people who were previously uninsured, but it is not economically sustainable for our state government or for individuals. Many people are unhappy with the current health insurance program in Massachusetts, which has not reduced rapidly rising premium costs, co-payments and deductibles for the working individual. Massachusetts residents who were able to vote on local ballot initiatives in their legislative districts on Nov. 4, supported single-payer health care by landslide margins. Opinion polls also show that two-thirds of the public supports this kind of reform.

You have a mandate from the American people, and from many doctors and other health care professionals who actually provide our care. You have the opportunity to seize this moment of economic crisis, and create financially sound, sustainable health care reform. As Dr. Quentin Young, a long-time single-payer advocate, has said, “Adopting a nationwide single-payer system will build on the great achievement of Medicare, further unify our people, strengthen our country’s economic competitiveness and assure President Obama’s legacy as an American hero.”

Susanne L. King is a Lenox-based practitioner.