PNHP

Los Angeles Times series on private insurers

Los Angeles Times series on private insurers

An eroding model for health insurance

By Lisa Girion and Michael A. Hiltzik
Los Angeles Times
First of three parts
October 21, 2008

The health insurance system has become increasingly expensive and inaccessible. It leaves patients responsible for bills they understood would be covered, squeezes doctors and hospitals, and tries to avoid even minuscule risks, such as providing coverage to a newborn with no serious illness.

At the heart of the problem is the clash between the cost of medical care and insurers’ need to turn a profit.

During her pregnancy, Jennifer Danylyshyn’s regular visits to her obstetrician were covered by her Blue Shield policy. So was the delivery of Ava on March 24. The couple expected that Ava would be covered as a matter of course.

When the company rejected the baby because of the hip misalignment, her parents appealed with the help of their pediatrician.

Blue Shield refused to budge.

http://www.latimes.com/business/la-fi-insure21-2008oct21,0,2292699,full.story

Health insurers reinvent themselves as money managers

By Michael A. Hiltzik
Second of three parts
October 22, 2008

WellPoint Inc., the nation’s largest health insurance company, ran into a snag last year while pursuing an important new business initiative.

Federal banking regulators insisted on classifying WellPoint as a healthcare company. And that was interfering with its efforts to open a bank.

The Federal Reserve Board eventually agreed that the company’s core insurance business could be considered financial services.

That a medical insurer would agree to keep a lid on healthcare expenditures so it could get approval to open a bank illustrates a fundamental change in the industry: Insurers are moving away from their traditional role of pooling health risks and are reinventing themselves as money managers — providers of financial vehicles through which consumers pay for their own healthcare.

Because he has high blood pressure, (Alex Kipper, an engineer who lost his employer-provided health insurance during the dot-com bust) found himself virtually uninsurable. Fearing that he could be financially wiped out in a medical emergency, he signed up for a bare-bones policy that provides no coverage until his medical expenses exceed $8,000 in a year.

His health plan’s concession to preventive care was a $25 discount on a physical. Once diagnostic tests were included, the fee for the checkup came to more than $300, Kipper said — which the health plan declined to pay.

He hasn’t returned to a doctor’s office in three years.

Although the policy costs only $200 a month, “nothing is covered, absolutely nothing,” Kipper said.

http://www.latimes.com/business/la-fi-insure22-2008oct22,0,3603421,full.story

And…

The battle of the medical bills

By Daniel J. Costello, Lisa Girion and Michael A. Hiltzik
Third of three parts
October 23, 2008

“Insurers have found a very creative way of denying, delaying or slowing payments in a way that is having a real impact on patient care and some of our survival,” said Von Crockett, Centinela’s chief executive. “Every single doctor and hospital is writing off money they are legally owed but don’t collect. It’s an insane situation.”

In June, the American Medical Assn. released its first rating of insurers’ billing patterns. It found that United Healthcare paid physicians the contracted fee 62% of the time, Aetna paid 71% of the time and Medicare paid 98% of the time.

Dotti Smith, office manager for a group of surgeons affiliated with St. Mary’s Hospital in Long Beach, recently billed a major insurance company for a gallbladder operation. The insurer had preauthorized the surgery and the surgeon was a member of the insurer’s network of preferred physicians, Smith said. But the company refused to pay the $3,100 bill.

Why? The patient was enrolled in a subcategory of coverage with a smaller network of doctors that did not include the Long Beach surgeon.

http://www.latimes.com/business/la-fi-insure23-2008oct23,0,4914143,full.story

Comment:

By Don McCanne, MD

This important series of three articles published this week in the Los Angeles Times explains why the private insurance industry has neither the efficiency nor the moral authority to continue to manage our health care dollars. Each of the excerpts above provides an example of the management perversities of the industry, along with an example of the impact on a real-life patient. Much more can be found in the articles.

The private insurance industry has shifted from an amoral business model selling us administrative services to help manage our health care spending, to an immoral racketeering industry that is threatening the health and financial security of all of us.

We desperately need to reform health care financing in the United States, but not with a model that keeps these crooks in play.

Fragmentation of family health care

Uninsured Children and Adolescents With Insured Parents

By Jennifer E. DeVoe, MD, DPhil; Carrie Tillotson, MPH; Lorraine S. Wallace, PhD
JAMA
October 22/29, 2008
The association between coverage for parents and their children has been widely reported. When entire families have access to health insurance, children and adolescents not only benefit from more consistent insurance coverage but also have improved access to a regular source of care and higher rates of preventive services. If entire families cannot gain consistent coverage, it is most often their children who have insurance while the parents go uncovered, especially since the creation of the State Children’s Health Insurance Program (SCHIP). Less is known, however, about how commonly this pattern is reversed.
Although the weighted results of this survey indicated that the largest group of uninsured children and adolescents had uninsured parents, an estimated 27.9% of the uninsured children and adolescents had parents with health insurance. When weighted, these estimates represent 3 million children who had a coverage gap despite having at least 1 parent who had full-year coverage. More than a million of these children were without coverage for the entire year.
Evidence suggests that when family members are covered separately under different plans or when certain individuals have coverage and others do not, children’s health declines. Furthermore, if the assumption that insurance coverage is a “household good” is abandoned and the system shifts toward defining it as an “individual good,” we add layers of complexity for vulnerable families who must simultaneously learn different systems for enrollment and utilization of multiple insurance plans. Discordant patterns of family health insurance may become the norm rather than the exception; the current trend is certainly moving in that direction.
If families are better off covered under one plan but US society rejects a public health insurance program for all members of the family, the question of whether the employer-based model is sustainable may need to be revisited. In this study, the private system did not do a good job of providing coverage for entire families.
Incremental expansions in public insurance programs for children will continue to improve insurance rates in the short term. However, the longer-term solutions to keeping all children insured are likely to be more complicated. Unless health insurance coverage models are designed to keep entire families covered, some children will continue to get left behind.
http://jama.ama-assn.org/cgi/content/full/300/16/1904

It has long been recognized that one of the deficiencies of the children’s health insurance program (SCHIP) is that parents in these lower income families often remain uninsured. This study demonstrates that the reverse also occurs. Even though one or both parents may be insured, often through their employment, the children may be left without coverage, primarily due to eligibility and affordability issues.
This study also reinforces the principle that simply increasing the numbers of insured through patchwork programs is not an adequate goal. Our goal should be to ensure comprehensive, coordinated, continuous care for each individual and each family by establishing equitably-financed medical homes for everyone.
Stable, continuous, coordinated family care is almost impossible under the current system. Both employer-sponsored and individual private plans continue to change based on employment status, employer decisions on plans, variations in participation in provider networks, comprehensiveness of the benefits, employee ability to contribute to the premium, and other factors largely not under control of the individual. Public programs also have similar variations in networks and coverage, and, in addition, have changing eligibility requirements for enrollment sometimes related to legislative and administrative budget decisions.
Today almost no family has the same stable coverage for all family members from birth until the children leave the home (and for the parents after the children have left). Nor can they be assured that they will be able to continue their care with the same physicians, hospitals and other health care professionals.
The future looks bleak. Congressional leaders have promised to expand the SCHIP program, which will tend to perpetuate the instability and fragmentation of care. Then they will begin the effort to patch together the great multitude of private plans into some semblance of a social insurance program. They will fail miserably because the U.S. private plans, based on a business model, have no glue to hold them together. The private insurers will continue to fight to insure only the healthy – the eighty percent of people who use only twenty percent of health care – while selling us an excess of superfluous administrative services. They will dump on us most of the actual costs of health care – the eighty percent of health care spending – through taxes, cost shifting, or simply relying on our stretched-thin charity.
It is astounding that the policy community continues to pursue these fragmented, incremental reforms that pump up costs while leaving health care in a tattered, dysfunctional state. With a single payer national health program, at least the entire family would have affordable access to the professionals and hospitals of their choice. That would be a great start.

Fragmentation of family health care

Uninsured Children and Adolescents With Insured Parents

By Jennifer E. DeVoe, MD, DPhil; Carrie Tillotson, MPH; Lorraine S. Wallace, PhD
JAMA
October 22/29, 2008

The association between coverage for parents and their children has been widely reported. When entire families have access to health insurance, children and adolescents not only benefit from more consistent insurance coverage but also have improved access to a regular source of care and higher rates of preventive services. If entire families cannot gain consistent coverage, it is most often their children who have insurance while the parents go uncovered, especially since the creation of the State Children’s Health Insurance Program (SCHIP). Less is known, however, about how commonly this pattern is reversed.

Although the weighted results of this survey indicated that the largest group of uninsured children and adolescents had uninsured parents, an estimated 27.9% of the uninsured children and adolescents had parents with health insurance. When weighted, these estimates represent 3 million children who had a coverage gap despite having at least 1 parent who had full-year coverage. More than a million of these children were without coverage for the entire year.

Evidence suggests that when family members are covered separately under different plans or when certain individuals have coverage and others do not, children’s health declines. Furthermore, if the assumption that insurance coverage is a “household good” is abandoned and the system shifts toward defining it as an “individual good,” we add layers of complexity for vulnerable families who must simultaneously learn different systems for enrollment and utilization of multiple insurance plans. Discordant patterns of family health insurance may become the norm rather than the exception; the current trend is certainly moving in that direction.

If families are better off covered under one plan but US society rejects a public health insurance program for all members of the family, the question of whether the employer-based model is sustainable may need to be revisited. In this study, the private system did not do a good job of providing coverage for entire families.

Incremental expansions in public insurance programs for children will continue to improve insurance rates in the short term. However, the longer-term solutions to keeping all children insured are likely to be more complicated. Unless health insurance coverage models are designed to keep entire families covered, some children will continue to get left behind.

http://jama.ama-assn.org/cgi/content/full/300/16/1904

Comment:

By Don McCanne, MD

It has long been recognized that one of the deficiencies of the children’s health insurance program (SCHIP) is that parents in these lower income families often remain uninsured. This study demonstrates that the reverse also occurs. Even though one or both parents may be insured, often through their employment, the children may be left without coverage, primarily due to eligibility and affordability issues.

This study also reinforces the principle that simply increasing the numbers of insured through patchwork programs is not an adequate goal. Our goal should be to ensure comprehensive, coordinated, continuous care for each individual and each family by establishing equitably-financed medical homes for everyone.

Stable, continuous, coordinated family care is almost impossible under the current system. Both employer-sponsored and individual private plans continue to change based on employment status, employer decisions on plans, variations in participation in provider networks, comprehensiveness of the benefits, employee ability to contribute to the premium, and other factors largely not under control of the individual. Public programs also have similar variations in networks and coverage, and, in addition, have changing eligibility requirements for enrollment sometimes related to legislative and administrative budget decisions.

Today almost no family has the same stable coverage for all family members from birth until the children leave the home (and for the parents after the children have left). Nor can they be assured that they will be able to continue their care with the same physicians, hospitals and other health care professionals.

The future looks bleak. Congressional leaders have promised to expand the SCHIP program, which will tend to perpetuate the instability and fragmentation of care. Then they will begin the effort to patch together the great multitude of private plans into some semblance of a social insurance program. They will fail miserably because the U.S. private plans, based on a business model, have no glue to hold them together. The private insurers will continue to fight to insure only the healthy – the eighty percent of people who use only twenty percent of health care – while selling us an excess of superfluous administrative services. They will dump on us most of the actual costs of health care – the eighty percent of health care spending – through taxes, cost shifting, or simply relying on our stretched-thin charity.

It is astounding that the policy community continues to pursue these fragmented, incremental reforms that pump up costs while leaving health care in a tattered, dysfunctional state. With a single payer national health program, at least the entire family would have affordable access to the professionals and hospitals of their choice. That would be a great start.

Marcia Angell on U.S. lessons for Canada

Privatizing health care is not the answer: lessons from the United States

By Marcia Angell, MD
Canadian Medical Association
CMAJ
October 21, 2008

There are strong moves within Canada to make the Canadian health care system more like the US system by partially privatizing it. Those who favour this approach claim that the US system offers more choice and better quality of care and spares the public purse. Some proponents even go so far as to claim that it is more efficient. My purpose here is to disabuse Canadians of these myths by taking a close look at how the US system works and comparing it with the Canadian system.

http://www.cmaj.ca/cgi/content/full/179/9/916?etoc

PDF version:
http://www.cmaj.ca/cgi/reprint/179/9/916

Comment:

By Don McCanne, MD

Those who are well informed on health policy are quite aware of the advantages and disadvantages of the health care financing systems in both the United States and Canada. Although the greater effectiveness and efficiency of the Canadian single payer system are well understood by supporters of a national health program in the United States, there has been a reluctance to use the positive features of the Canadian experience as an example of what we could achieve here. Why? Inevitably, bringing up Canada results in challenges that are a distraction from the primary message on reform.

The opponents of reform in the United States, along with their reactionary Canadian colleagues, are driven by ideology. They will not allow health policy science to interfere with their anti-government message. They do not seek the truth. Instead, they craft messages that paint a terribly inaccurate picture of the Canadian health care system. Sometimes their messages are based on exceptions or on minutia that may represent real problems, but then they present those facts as if they taint the entire health care system with rot. Other times, they simply do not tell the truth. You can cite several examples of lies that have been told so often about the Canadian system that they have been accepted as the truth here in the United States.

This is why Marcia Angell’s article is so important. She presents a broad overview of the two systems, explaining why the U.S. system is so expensive yet ineffective when compared to the Canadian system. She does address some of the failings in Canada, but also explains why the Canadian financing system is better equipped to address those problems than is the dysfunctional, fragmented U.S. financing system.

This article should be downloaded so that it can be used to help inform those who have been misled by the intense anti-government propaganda campaign of the opponents of single payer reform.

Health-care control at issue in Prop. 101

Doctor seeking to keep gov't from taking over

By Stephanie Innes
ARIZONA DAILY STAR, Oct. 20, 2008

A Glendale doctor who believes health-care reform in Arizona is both necessary and inevitable is also determined, via a ballot proposition, to make sure government doesn’t take over the process.

Dr. Eric Novack, an orthopedic surgeon and former Phoenix radio-show host, came up with the idea for Proposition 101, which appears on Arizona’s Nov. 4 election ballot. The measure would amend the state constitution to include language restricting Arizona’s ability to limit or dictate individual health-care choices, and to make government-mandated universal health care illegal.

Officially titled the Freedom of Choice in Health Care Act, Proposition 101 includes four specific health-care changes, including making a single-payer, universal health-care system — like Canada’s, for example — illegal in Arizona.

The exact wording prohibits laws that “restrict (a) person’s choice of private health-care systems or private plans; interfere with (a) person’s or entity’s right to pay directly for lawful medical services; impose a penalty or fine for choosing to obtain or decline health-care coverage or for participation in any health-care system or plan.”

The proposition is being driven in part by concerns that the continued escalation in health-care costs, and the fact that many people can’t afford even basic care, will eventually push the state to create its own mandatory system guaranteeing everyone the same coverage.

Supporters of the measure fear such a system could give cost-conscious state bureaucrats more power to dictate physician choices and treatment options than the insurance companies and HMOs already wield. Physicians’ practice habits and fees could be locked up by the same bureaucracy, they say.

Their concerns about government involvement are not totally without basis: State lawmaker Phil Lopes, a Tucson Democrat, has unsuccessfully introduced single-payer legislation three times, and indicates he will continue proposing it.

Opponents of Proposition 101, even those who acknowledge the concerns behind the measure, say it’s overkill.

Gov. Janet Napolitano and Tucson pediatrician Dr. Eve Shapiro, who are among those leading the charge against it, say Proposition 101 is worded too broadly and could have consequences Novack doesn’t foresee.

Prohibitions on government interference in patient choice could force the state to pay for whatever patients in government-run programs want, they say — and that would be prohibitively expensive.

It could also block the Legislature’s ability to consider other health-care options, besides universal care, they say.

A recent memo written by Arizona Health Care Cost Containment System director Anthony D. Rodgers said the language prohibiting government from restricting a person’s choice of private health-care systems is so broad a judge could interpret it to include the private contractors used by AHCCCS.

Since AHCCCS, the state’s alternative to Medicaid, works on a managed-care model, it’s not financially possible to allow those in the plan to always choose their providers.
“The mandatory managed-care model under which AHCCCS has been operating successfully since 1982 could be redesigned to a far more costly fee-for-service model,” Rodgers wrote. “The fiscal impact of such an unintended consequence would be astronomical.”

The constitutional amendment is ambiguous, poorly written and will wind up in the courts, critics including Napolitano say.

Other opponents include Tucson-based University Physicians Healthcare, Church Women United in Tucson, the Pima County Medical Society, the Arizona Chapter of the American Academy of Pediatrics, the Tucson Chamber of Commerce, the Arizona Academy of Family Physicians and the Arizona Hospital and Healthcare Association.

Novack insists Proposition 101 would change nothing about the way health care is currently delivered, and would not impose new obligations on AHCCCS.

Such a constitutional amendment is unprecedented — Novack could not find a single model in any other state or jurisdiction.

Instead, he’d like Arizona to provide the model. He believes the nation’s founders erred by not including freedom of health-care choice in the First Amendment, and that Americans are in danger of having that freedom taken away by government interests.

Supporters of Proposition 101 include Tucson car dealer Jim Click, the Arizona Dental Association, the Arizona Restaurant Association, the Arizona Osteopathic Medical Association, the Arizona Chiropractic Society, the Arizona Homeopathic & Integrative Medical Association and the conservative-leaning Goldwater Institute.

The “yes” side sees health-care reform happening soon and views universal health care as a very real possibility. Novack says he wants to prevent that before it happens.

Lopes, the House minority leader, said his effort to get a universal health-care bill through the Legislature could be the sole reason Novack undertook the initiative drive to put the proposition on this year’s ballot.

Novack began his career in medicine as an emergency medical technician answering 911 calls in Bridgeport, Conn., “the innermost of inner cities,” he said. He earned his medical degree from University of California, San Francisco, in 1996 and has practiced medicine in Arizona since 2001.

He came up with Proposition 101 after spending 2005 to 2007 hosting a Phoenix radio program about health care.

“That was like getting an advanced degree in health-care policy,” Novack said. “We need health-care reform. No reasonable person doesn’t think that. And there is no larger thing in this country than health care when it comes to money.”

The measure has already hit the courts: Supporters from the yes on 101 campaign, called Medical Choice for Arizona, have filed a court action against AHCCCS. Novack’s camp wants an injunction against the state agency, saying it should not be using taxpayer money to campaign against a ballot proposition.

AHCCCS officials maintain they have done nothing wrong.

“We have a responsibility to the taxpayers we serve to educate them,” AHCCCS spokeswoman Rainey Daye Holloway said of Rodgers’ memo, adding that the agency has not yet seen the court action filed against it.

Napolitano said in a prepared statement, “We simply can’t afford the unintended consequences of Proposition 101, which could take away benefits from thousands of Arizona families and drive up costs for taxpayers.”

Novack says he feels as though his plan is being railroaded by people who want to protect government interests in health care.

“It allows the option to opt out of any government-controlled health-care scheme,” Novack said. “This amendment will help every single person in Arizona regardless of how they got to Arizona. The only ones who will get hurt are the government bureaucrats who have more interest in political power than in the decisions and control you and I have over our own health care…

“There is nothing in this that makes me or any doctors more money.”

But Shapiro, a longtime local advocate of health-care reform, and a critic of the proposition, said amending the constitution is an extremely serious step.

“It ties the hands of the Legislature. It limits options instead of giving us freedom of choice,” said Shapiro, who also sits on the board of the Arizona Medical Association.
She, and other critics, say the open-ended language in the measure is a big red flag.

“I don’t see how it would benefit anybody. I’ve been in practice for 30 years and I know that patients want freedom to choose their doctor, not their insurance plans,” Shapiro said. “It solves a problem that doesn’t really exist and pu
ts something in the constitution that will be incredibly difficult to overturn.”

If 101 does pass, there is a potential problem: If Congress were to adopt a national health-care program with a single-payer system, it could trump Arizona law on medical choice and make the state amendment meaningless.

Proposition 101 by the numbers

• Money raised by supporters through Medical Choice for Arizona: $483,631 as of Sept. 22.

• Contributors include: Tucson car dealer Jim Click, $25,000; Houston developer Charles Burnett, $20,000; New Jersey investors Frayda and Ken Levy, $100,000; Norman McClelland, Phoenix resident and chairman of Shamrock Foods, $15,000; Oro Valley financial manager Paul Clifton of the Robert A. Hansen Family Trust, $15,000; and The Benjamin Rush League, a non-profit corporation formed by 101 backers Dr. Eric Novack and Dr. Jeffrey Singer, $42,000. (Benjamin Rush, a Pennsylvania physician, was a signer of the Declaration of Independence.)

• Money raised by opponents: None as of the end of the last official reporting period. However, the “no” campaign officially launched Oct. 14 and officials say they’ve raised about $250,000 so far, to be reported in the next filing period for campaign-finance records, including bigger donations from University Physicians Healthcare in Tucson and the Greater Phoenix Chamber of Commerce.

• A previous No on 101 committee was terminated and its only contribution of $50,000 from California-based SCAN Health Care was refunded, records from the Arizona Secretary of State’s Office show.

What Prop. 101 says

Would amend the Arizona Constitution to mandate that Arizona law may not:
1. Restrict a person’s freedom to choose a private health-care plan or system of their choice.
2. Interfere with a person’s or entity’s right to pay directly for lawful medical services.
3. Impose a penalty or fine, of any type, for choosing to obtain or decline health-care coverage.
4. Impose a penalty or fine, of any type, for participation in any particular health-care system or plan.

The yes side
http://www.medicalchoiceforaz.com/

The no side
http://www.stoptheprop101.com/

● Contact reporter Stephanie Innes at 573-4134 or at sinnes@azstarnet.com.

http://74.125.47.132/search?q=cache:UwqSEOiUyroJ:www.azstarnet.com/sn/printDS/263218+medical+choice+for+arizona+novack&cd=2&hl=en&ct=clnk&gl=us&client=firefox-a

Hawaii's "crowd out" crowds out children

Hawaii ending universal child health care

By Mark Niesse
The Miami Herald
October 17, 2008
Hawaii is dropping the only state universal child health care program in the country just seven months after it launched.
Gov. Linda Lingle’s administration cited budget shortfalls and other available health care options for eliminating funding for the program. A state official said families were dropping private coverage so their children would be eligible for the subsidized plan (Keiki Care).
“People who were already able to afford health care began to stop paying for it so they could get it for free,” said Dr. Kenny Fink, the administrator for Med-QUEST at the Department of Human Services. “I don’t believe that was the intent of the program.”
http://www.miamiherald.com/living/health/healthAP/story/729860.html

Although Hawaii’s Keiki Care for uninsured children was promoted as a program that would ensure that all children had health care coverage, it never would have achieved universality, partly because of various eligibility and enrollment issues. Also the coverage was not as comprehensive as coverage under Medicaid. Nevertheless, it did provide limited coverage for about 2,000 of the state’s uninsured children (out of an uncertain number estimated between 3,500 and 16,000).
In designing incremental reform measures, many in the policy community insist that programs must be designed to prevent crowd out. Crowd out is a phenomenon in which individuals will drop out or be pushed out of an existing program, such as employer-sponsored coverage, in order to be enrolled in another program, such as Keiki Care. Administrators who wish to minimize spending in public programs frown upon crowd out.
Although this program is only seven months old, and, to be eligible, children must have been uninsured for at least six months, it is unlikely that crowd out was a significant contributor to the very modest enrollment rates.
Most economists consider crowd out to be undesirable because the numbers of individuals crowded out of existing coverage are subtracted from the total in the alternative program to determine the net gain in numbers covered. That might be important if your only goal were to increase the numbers with coverage, but aren’t there other desirable goals? Hint: In 1966, was it really detrimental that Medicare crowded out coverage in the private insurance sector for those over 65?
Keiki Care is yet another example of an incremental program designed to approach the goal of universal coverage a single step at a time. Although these programs are reported as successes, the long-term trend is that almost all measurements continue to demonstrate deterioration in affordability and coverage.
As long as we continue down the path of patch-work incremental reform, we are going to continue to hear alarms sounded over crowd out, adverse selection, moral hazard, medical loss ratios, investor return, lack of price transparency, high premiums due to excess regulation of private plans, and on and on, and we will never reach our goal of affordable health care for everyone.
It’s time to dump the perverse policies that serve the interests of others, and adopt policies that would serve the interests of patients – a single payer national health program.

Hawaii's "crowd out" crowds out children

Hawaii ending universal child health care

By Mark Niesse
The Miami Herald
October 17, 2008

Hawaii is dropping the only state universal child health care program in the country just seven months after it launched.

Gov. Linda Lingle’s administration cited budget shortfalls and other available health care options for eliminating funding for the program. A state official said families were dropping private coverage so their children would be eligible for the subsidized plan (Keiki Care).

“People who were already able to afford health care began to stop paying for it so they could get it for free,” said Dr. Kenny Fink, the administrator for Med-QUEST at the Department of Human Services. “I don’t believe that was the intent of the program.”

http://www.miamiherald.com/living/health/healthAP/story/729860.html

Comment:

By Don McCanne, MD

Although Hawaii’s Keiki Care for uninsured children was promoted as a program that would ensure that all children had health care coverage, it never would have achieved universality, partly because of various eligibility and enrollment issues. Also the coverage was not as comprehensive as coverage under Medicaid. Nevertheless, it did provide limited coverage for about 2,000 of the state’s uninsured children (out of an uncertain number estimated between 3,500 and 16,000).

In designing incremental reform measures, many in the policy community insist that programs must be designed to prevent crowd out. Crowd out is a phenomenon in which individuals will drop out or be pushed out of an existing program, such as employer-sponsored coverage, in order to be enrolled in another program, such as Keiki Care. Administrators who wish to minimize spending in public programs frown upon crowd out.

Although this program is only seven months old, and, to be eligible, children must have been uninsured for at least six months, it is unlikely that crowd out was a significant contributor to the very modest enrollment rates.

Most economists consider crowd out to be undesirable because the numbers of individuals crowded out of existing coverage are subtracted from the total in the alternative program to determine the net gain in numbers covered. That might be important if your only goal were to increase the numbers with coverage, but aren’t there other desirable goals? Hint: In 1966, was it really detrimental that Medicare crowded out coverage in the private insurance sector for those over 65?

Keiki Care is yet another example of an incremental program designed to approach the goal of universal coverage a single step at a time. Although these programs are reported as successes, the long-term trend is that almost all measurements continue to demonstrate deterioration in affordability and coverage.

As long as we continue down the path of patch-work incremental reform, we are going to continue to hear alarms sounded over crowd out, adverse selection, moral hazard, medical loss ratios, investor return, lack of price transparency, high premiums due to excess regulation of private plans, and on and on, and we will never reach our goal of affordable health care for everyone.

It’s time to dump the perverse policies that serve the interests of others, and adopt policies that would serve the interests of patients – a single payer national health program.

Massachusetts needs universal health care

By Pat Berger
West Roxbury Transcript
Wed Oct 15, 2008, 10:29 AM EDT

WEST ROXBURY, Mass. — Voters in parts of West Roxbury, Roslindale and Brookline (Michael Rush’s district) will have the opportunity to vote on a non-binding ballot question on Election Day — Nov. 4. The ballot question was initiated by Mass-Care, the organization that sponsors the campaign for single-payer health care reform in Massachusetts.

The wording of the ballot question is as follows:

“Shall the representative from this district be instructed (1) to support legislation that establishes health care as a human right regardless of age, state of health or employment status, by creating a single-payer health insurance system that is comprehensive, cost effective, and publicly provided to all residents of Massachusetts, and (2) to oppose any laws penalizing the uninsured for failing to obtain health insurance.”

Voters may wonder why they should vote “yes” on the ballot question that asks support for a universal single-payer health care system. Don’t we have universal health care now? Didn’t we pass a new law in 2006 that gives everyone health insurance coverage?

The fact is that we don’t have universal coverage now. Over 400,000 people have signed up for subsidized and non-subsidized health insurance plans, but there are still around 300,000 uninsured people who haven’t bought private commercial insurance policies largely because the premiums and out-of-pocket expenses are not affordable.

Even residents with “good” employer-based private health insurance are vulnerable to crushing medical debt if they lose their jobs whether from serious illness or economic problems.

Only a single-payer system guarantees health care for all Massachusetts’ residents continuously.

Our present law was designed to cover the uninsured by having the state subsidize the health care premiums for families earning below 300 percent of the federal poverty level and helping people in higher income brackets find “affordable” insurance through the Connector.

Many other states including Tennessee, Vermont, Washington, Oregon, California and Hawaii have tried similar plans in the past, but all have failed in the long term because the annual 10 to 15 percent escalation of health insurance premiums have made the subsidies unaffordable for the state.

The basic problem with the new law is that it leaves the health insurance industry (with its profit motive) in control of our health care system. The insurers set the premiums for their “products,” not the state.

Furthermore the insurance industry wastes 20 to 30 percent of the health care dollars on high CEO salaries, administrative waste, marketing, underwriting and an endless round of claims denials.

In the spring of 2008, the 12 percent to 15 percent hike in proposed health insurance premiums prompted the state’s Connector to protest and demand that the insurance companies find a way to lower their premiums. The insurers came back with a 7 percent to 8 percent rise in premiums but shifted the costs to the patients by raising co-pays and deductibles and reducing benefits.

As Dr. Marcia Angell, former Editor of the New England Journal of Medicine said, “The health insurers try to keep premiums down and profits up by stinting on medical services. We are the only nation in the world with a health care system based on dodging sick people.”

What we all want is easy access to affordable high quality medical care and regular preventive care that promotes good health and gives us full choice of providers. We want our health care system to be sustainable on the long term and be equitable so that access to medical care is not based on race, ability to pay, gender, religion or sexual orientation but is based on medical need.

We oppose the punitive individual mandate in our present law that fines the most vulnerable residents for not purchasing health insurance.

As Martin Luther King, Jr. said, “Of all the forms of inequality, injustice in health care is the most shocking and inhumane.”

Vote “YES” on Question #4 Nov. 4th!

Pat Berger is Co-Chair of Mass-Care. For further information, visit www.masscare.org

http://www.wickedlocal.com/west-roxbury/news/lifestyle/columnists/x1272969173/Massachusetts-needs-universal-health-care

Health insurance for a bad economy

Tough times justify national health care plan

By Phil Kadner
Southtown Star
Oct. 16, 2008

I suggested to someone the other day that now would be a good time for the government to launch a national health insurance program.

“That would be socialism!” the person exclaimed.

Our government plans to spend hundreds of billions bailing out Wall Street, including $250 billion for ownership in private banking institutions.

But the woman I was talking to was worried that capitalism would be destroyed if every Joe Six-pack in America knew that he and his children were covered by health insurance.

I don’t get it.

Listen, as this economy continues to tank, people are going to lose their jobs. Many of those folks are going to end up working for a lot less money for businesses that don’t offer health insurance.

About 40 million Americans are already in that predicament.

But I can tell you three men who are not worried about that situation. George W. Bush, Barack Obama and John McCain have wonderful insurance plans. There’s no better plan in America than that offered by the federal government.

And if Bush, McCain and Obama really believe that insurance is not important or that they can find a better plan for themselves on the open market, they should set an example for the rest of us and drop out of the federal plan.

McCain is proposing a $5,000 refundable tax credit so American families can go out and buy their own plans. Try finding a really good plan, like the one McCain has, for $5,000.

Better yet, ask a friend or neighbor who has tried to buy a plan on the free market what it really costs.

Most of the plans available for $5,000 have huge deductibles. Many don’t accept people with pre-existing conditions.

You can find out that sort of information easily enough if you’re interested. What’s harder to find out is what the insurance would really pay for in the event you were sick.

Would it pay for a long hospital stay? If you’re having a baby? What about physical and occupational therapy in the event of an accident? Would your prescriptions be paid for if you needed insulin or chemotherapy?

After mishandling my 401(k) retirement fund, I’m not going to give anyone advice on how to pick a health insurance plan out of the thousands of options available.

If you already have a health insurance plan through an employer, McCain would make that benefit taxable for the first time in American history.

The $5,000 tax credit, which would be paid to the health insurance company, would make up for that, but this would be a new tax, and you should be aware of that.

As for Obama, his plan would basically channel billions of dollars in federal money to private insurance firms to pay for insurance benefits for children and others who don’t have such benefits today.

Those health insurance companies, which have opposed national health insurance, would make bigger profits than ever before. No wonder they opposed national health care.

What people seem to forget is that health insurance companies are in the business to make a profit.

That’s why many of them deny claims instead of paying in a timely manner. The longer they delay, the more money they make.

If they deny claims repeatedly, a percentage of clients will just give up and try to pay the claims out of their own pockets.

And how many Americans can afford to sue an insurance company that refuses to pay for their cancer treatment? How many families, facing an emotional crisis, have the will to go through something like that?

The insurance companies know the answers.

Their CEOs make money. Their lawyers make money. Their investors make money. All of that money, billions of dollars, could be going to pay for health care. Instead, it’s their profit margin.

Here’s another reason to launch national health care during an economic crisis: Health care costs are one of the largest expenses faced by businesses in America today.

Studies show that the cost of health insurance is typically from 12 percent to 15 percent of the cost of payroll. From 2001 to 2007, while wages were going up 19 percent, businesses saw the cost of health insurance increase 78 percent, according to the Kaiser Family Foundation.

So by taking even a portion of that burden off the backs of business, the government may be saving thousands of jobs during economic hard times.

Every industrialized nation in the world has national health care except the United States.

The cost of health care in the U.S. is higher than anywhere else in the world. Why? Well, the insurance companies here have to make a profit.

But I can understand if you consider that socialism.

Better to give hundreds of billions to the Wall Street firms and banks. They need the help.

That’s why, even in a bad economy, health insurance stocks remain a good bet.

Phil Kadner can be reached at pkadner@southtownstar.com or (708) 633-6787.

http://www.southtownstar.com/news/kadner/1224470,101608Kadner.article

Local surgeon tells audience at Greater Fort Wayne Chamber of Commerce: Health reform is crucial

America desperately needs a national health care program.

By Bob Caylor
The News-Sentinel
Fri. Oct. 17, 2008

Even a few years ago, a Fort Wayne physician laying out an impassioned argument for national health insurance – at the Greater Fort Wayne Chamber of Commerce, no less – might have seemed like an elaborate put-on.

Dr. Jonathan Walker, a retinal surgeon, wasn’t kidding anyone. In his own highly specialized practice, he sees a toll in people with disabilities and avoidable catastrophic expenses, and he knows that it’s only a minuscule fraction of the human suffering and economic damage caused by tens of millions of Americans lacking health insurance.

As he began his talk Thursday before an audience of about 40 people, he said that the provisions for the uninsured – the network of hospitals and clinics providing charity care – too often fails. “The safety net is full of holes. That’s why they call it a net,” he said.

“America is the only developed country where you have to worry about getting sick and going bankrupt,” Walker said. “You are only one diagnosis away from bankruptcy, from loss of access to health care.”

Not having a system of national health insurance causes thousands of unnecessary deaths a year, he said. That’s only the beginning of the impact. Paying for the uninsured through uncompensated emergency care raises prices for everyone else. Paying excessive health-care costs puts American companies at a financial disadvantage in competing with many foreign companies.

Walker acknowledged that many factors contribute to Americans spending more on health care, per capita, than any other developed country, but he focused on two factors: private, for-profit health insurance and drug companies.

He cited a 2003 analysis that found 31 percent of total health-care spending went to “layer after layer of administration.”

“It just creates this strange, bizarre system where all we’re doing is filling out paperwork,” Walker said.

He said that through the American approach to health care, “we get quadruple-dipped:”

* We pay for the poorest and sickest people through Medicaid

* We pay for the uninsured

* We pay our own co-pays and deductibles

* We pay for private insurance

Walker did not advocate a particular program of national health insurance. His talk, sponsored by the Fort Wayne Medical Society, was the first of four planned in the next six months or so, said Dr. Steve Smith, who introduced Walker. The point of the series, Smith said, is “to prepare this community … for probably what will be the certainty of health-care reform sometime this next year.”

Walker’s case certainly didn’t go unchallenged.

One listener said 55 percent of all medical care is necessary because of “stress, weight or substance abuse” – factors individuals can control on their own. (One of the later programs in this medical society series will be devoted to the impact of such risk factors on health care.)

Another suggested that requiring mandatory private health insurance, just as carrying automobile insurance is mandatory, would alleviate many of the problems.

Hawaii’s “crowd out” crowds out children

Hawaii ending universal child health care

By Mark Niesse
The Miami Herald
October 17, 2008

Hawaii is dropping the only state universal child health care program in the country just seven months after it launched.

Gov. Linda Lingle’s administration cited budget shortfalls and other available health care options for eliminating funding for the program. A state official said families were dropping private coverage so their children would be eligible for the subsidized plan (Keiki Care).

“People who were already able to afford health care began to stop paying for it so they could get it for free,” said Dr. Kenny Fink, the administrator for Med-QUEST at the Department of Human Services. “I don’t believe that was the intent of the program.”

http://www.miamiherald.com/living/health/healthAP/story/729860.html

Comment:

By Don McCanne, MD

Although Hawaii’s Keiki Care for uninsured children was promoted as a program that would ensure that all children had health care coverage, it never would have achieved universality, partly because of various eligibility and enrollment issues. Also the coverage was not as comprehensive as coverage under Medicaid. Nevertheless, it did provide limited coverage for about 2,000 of the state’s uninsured children (out of an uncertain number estimated between 3,500 and 16,000).

In designing incremental reform measures, many in the policy community insist that programs must be designed to prevent crowd out. Crowd out is a phenomenon in which individuals will drop out or be pushed out of an existing program, such as employer-sponsored coverage, in order to be enrolled in another program, such as Keiki Care. Administrators who wish to minimize spending in public programs frown upon crowd out.

Although this program is only seven months old, and, to be eligible, children must have been uninsured for at least six months, it is unlikely that crowd out was a significant contributor to the very modest enrollment rates.

Most economists consider crowd out to be undesirable because the numbers of individuals crowded out of existing coverage are subtracted from the total in the alternative program to determine the net gain in numbers covered. That might be important if your only goal were to increase the numbers with coverage, but aren’t there other desirable goals? Hint: In 1966, was it really detrimental that Medicare crowded out coverage in the private insurance sector for those over 65?

Keiki Care is yet another example of an incremental program designed to approach the goal of universal coverage a single step at a time. Although these programs are reported as successes, the long-term trend is that almost all measurements continue to demonstrate deterioration in affordability and coverage.

As long as we continue down the path of patch-work incremental reform, we are going to continue to hear alarms sounded over crowd out, adverse selection, moral hazard, medical loss ratios, investor return, lack of price transparency, high premiums due to excess regulation of private plans, and on and on, and we will never reach our goal of affordable health care for everyone.

It’s time to dump the perverse policies that serve the interests of others, and adopt policies that would serve the interests of patients – a single payer national health program.