PNHP

AHIP's Campaign for an American Solution

AHIP's Campaign for an American Solution

Insurance industry forming activist army

By Chris Frates
POLITICO
July 16, 2008
Ahead of the approaching health care reform storm, the insurance industry is building an ark: a nationwide education campaign aimed at raising an activist army at least 100,000 strong.
The unprecedented effort by America’s Health Insurance Plans, called the Campaign for an American Solution, includes a nationwide listening tour, advertising and an intense recruitment effort aimed at signing up Americans who are satisfied with their private insurance coverage.
Often viewed in Washington as a faceless, profit-driven industry, health insurers hope that hitting the road and starting a fan club will help lawmakers better understand the value of their products.
The group is pushing for universal coverage through strengthened private/public partnership. The industry wants to expand access to Medicaid and the state Children’s Health Insurance Program; provide tax credits to parents covering their children with private insurance; and create more portable and flexible tax-free health savings accounts, (AHIP spokesman Michael) Tuffin said.
If states were to provide coverage for those too expensive to insure, he said, the industry would be willing to offer guaranteed coverage to everyone else…
http://www.politico.com/news/stories/0708/11814.html

So the insurance industry wants to sign up 100,000 individuals in its fan club to provide free marketing for the private insurance concept. In spite of criticisms, the industry has not changed its goals. They want taxpayers to provide coverage for those too expensive to insure – the 20 percent of people who are responsible for 80 percent of health care costs, but the industry is quite willing to offer guaranteed coverage to everyone else – the 80 percent of people who are quite healthy.
Just imagine the placards that these fan club members might carry at the demonstrations supporting the private insurance industry:
KEEP THE SICK OUT OF MY HEALTH PLAN!
SOCIAL INSURANCE SUCKS!
WE WANT CHEAP HEALTH INSURANCE – NOT EXPENSIVE HEALTH CARE!
MEDICARE MY A**!
NO PATIENCE FOR PATIENTS!
LONG LIVE PRIVATE INSURANCE MARKETS!
DON’T TAX ME – TAX THAT SICK ONE BEHIND THE TREE!

AHIP's Campaign for an American Solution

Insurance industry forming activist army

By Chris Frates
POLITICO
July 16, 2008

Ahead of the approaching health care reform storm, the insurance industry is building an ark: a nationwide education campaign aimed at raising an activist army at least 100,000 strong.

The unprecedented effort by America’s Health Insurance Plans, called the Campaign for an American Solution, includes a nationwide listening tour, advertising and an intense recruitment effort aimed at signing up Americans who are satisfied with their private insurance coverage.

Often viewed in Washington as a faceless, profit-driven industry, health insurers hope that hitting the road and starting a fan club will help lawmakers better understand the value of their products.

The group is pushing for universal coverage through strengthened private/public partnership. The industry wants to expand access to Medicaid and the state Children’s Health Insurance Program; provide tax credits to parents covering their children with private insurance; and create more portable and flexible tax-free health savings accounts, (AHIP spokesman Michael) Tuffin said.

If states were to provide coverage for those too expensive to insure, he said, the industry would be willing to offer guaranteed coverage to everyone else…

http://www.politico.com/news/stories/0708/11814.html

Comment:

By Don McCanne, MD

So the insurance industry wants to sign up 100,000 individuals in its fan club to provide free marketing for the private insurance concept. In spite of criticisms, the industry has not changed its goals. They want taxpayers to provide coverage for those too expensive to insure – the 20 percent of people who are responsible for 80 percent of health care costs, but the industry is quite willing to offer guaranteed coverage to everyone else – the 80 percent of people who are quite healthy.

Just imagine the placards that these fan club members might carry at the demonstrations supporting the private insurance industry:

KEEP THE SICK OUT OF MY HEALTH PLAN!

SOCIAL INSURANCE SUCKS!

WE WANT CHEAP HEALTH INSURANCE – NOT EXPENSIVE HEALTH CARE!

MEDICARE MY A**!

NO PATIENCE FOR PATIENTS!

LONG LIVE PRIVATE INSURANCE MARKETS!

DON’T TAX ME – TAX THAT SICK ONE BEHIND THE TREE!

AHIP’s Campaign for an American Solution

Insurance industry forming activist army

By Chris Frates
POLITICO
July 16, 2008

Ahead of the approaching health care reform storm, the insurance industry is building an ark: a nationwide education campaign aimed at raising an activist army at least 100,000 strong.

The unprecedented effort by America’s Health Insurance Plans, called the Campaign for an American Solution, includes a nationwide listening tour, advertising and an intense recruitment effort aimed at signing up Americans who are satisfied with their private insurance coverage.

Often viewed in Washington as a faceless, profit-driven industry, health insurers hope that hitting the road and starting a fan club will help lawmakers better understand the value of their products.

The group is pushing for universal coverage through strengthened private/public partnership. The industry wants to expand access to Medicaid and the state Children’s Health Insurance Program; provide tax credits to parents covering their children with private insurance; and create more portable and flexible tax-free health savings accounts, (AHIP spokesman Michael) Tuffin said.

If states were to provide coverage for those too expensive to insure, he said, the industry would be willing to offer guaranteed coverage to everyone else…

http://www.politico.com/news/stories/0708/11814.html

Comment:

By Don McCanne, MD

So the insurance industry wants to sign up 100,000 individuals in its fan club to provide free marketing for the private insurance concept. In spite of criticisms, the industry has not changed its goals. They want taxpayers to provide coverage for those too expensive to insure – the 20 percent of people who are responsible for 80 percent of health care costs, but the industry is quite willing to offer guaranteed coverage to everyone else – the 80 percent of people who are quite healthy.

Just imagine the placards that these fan club members might carry at the demonstrations supporting the private insurance industry:

KEEP THE SICK OUT OF MY HEALTH PLAN!

SOCIAL INSURANCE SUCKS!

WE WANT CHEAP HEALTH INSURANCE – NOT EXPENSIVE HEALTH CARE!

MEDICARE MY A**!

NO PATIENCE FOR PATIENTS!

LONG LIVE PRIVATE INSURANCE MARKETS!

DON’T TAX ME – TAX THAT SICK ONE BEHIND THE TREE!

These GM retirees didn't have a choice

Retiree Benefits Take Another Hit

By Vanessa Fuhrmans and Theo Francis
The Wall Street Journal
July 16, 2008
General Motors Corp.’s move to eliminate retiree health benefits for salaried workers is a sobering signal to the rest of the U.S. work force: Even those who are in or near retirement shouldn’t count on keeping the company coverage they have built up.
Since the early 1990s, employers eager to get out from under the increasing burden of covering their retirees’ health care have been whittling away at those benefits. At some companies, new or younger workers have been excluded from retiree health benefits. Older workers and existing retirees often got to keep the benefits, but had to pay a larger share of the overall costs.
But GM’s announcement Tuesday that it would cease medical coverage for its salaried retirees age 65 and above signals that a new era of ever-shrinking benefits has arrived. Beginning in January, even former employees who are already in retirement will lose their benefits, which most of the company’s retirees use to supplement gaps in their traditional Medicare coverage. The auto maker will boost monthly pension payouts to help offset the cuts. The company’s unionized workers aren’t affected by the cut to retiree health benefits.
At this point, employees and retirees “have to feel lucky if they still have retiree [health-care] benefits, and have to start planning for when they won’t,” says Rick McGill, head of retiree medical consulting for employee-benefits firm Hewitt Associates. He says such benefits are “a dying breed.”
http://online.wsj.com/article/SB121617237912356653.html

And…

With Warning, G.M. Takes Wide Cost Cuts

By Bill Vlasic
The New York Times
July 16, 2008
While G.M. has been methodically cutting jobs since 2006, the decision to eliminate health care benefits for salaried retirees over the age of 65 was unexpected. The generous health plans for retirees has long been considered a pillar of the benefit system at G.M.
http://www.nytimes.com/2008/07/16/business/16auto.html?_r=2&hp&oref=slogin&oref=slogin

Last week, a Quote of the Day message discussed why the overwhelming majority of individuals, except those enrolled in the traditional Medicare program, do not have a choice of keeping indefinitely the private health insurance that they currently have. The largest private health benefit program in the nation, that of General Motors, was used as an example of how even the best could not provide absolute security that you could keep the insurance you have.
The message was not meant to be a prediction, but merely a confirmation that, even in the best of circumstances, you may not have the choice of keeping your coverage. The only surprise is how quickly close to 100,000 General Motors retirees lost their employer-sponsored coverage.
Last week’s message is very important. It lists a great many reasons why people do lose the coverage they have, and almost all of the reasons are beyond their control. The message should be used to counter those who contend that their proposal allows you to “keep the insurance you have.” It is available for downloading at:
https://pnhp.org/news/2008/july/keeping_the_insuran.php
Also, John Geyman, author of “Do Not Resuscitate: Why the Health Insurance Industry is Dying, and How We Must Replace It,” on July 16 posted on the PNHP Blog the entry, “Choice in Private Health Plans: Is It Real?”

These GM retirees didn't have a choice

Retiree Benefits Take Another Hit

By Vanessa Fuhrmans and Theo Francis
The Wall Street Journal
July 16, 2008

General Motors Corp.’s move to eliminate retiree health benefits for salaried workers is a sobering signal to the rest of the U.S. work force: Even those who are in or near retirement shouldn’t count on keeping the company coverage they have built up.

Since the early 1990s, employers eager to get out from under the increasing burden of covering their retirees’ health care have been whittling away at those benefits. At some companies, new or younger workers have been excluded from retiree health benefits. Older workers and existing retirees often got to keep the benefits, but had to pay a larger share of the overall costs.

But GM’s announcement Tuesday that it would cease medical coverage for its salaried retirees age 65 and above signals that a new era of ever-shrinking benefits has arrived. Beginning in January, even former employees who are already in retirement will lose their benefits, which most of the company’s retirees use to supplement gaps in their traditional Medicare coverage. The auto maker will boost monthly pension payouts to help offset the cuts. The company’s unionized workers aren’t affected by the cut to retiree health benefits.

At this point, employees and retirees “have to feel lucky if they still have retiree [health-care] benefits, and have to start planning for when they won’t,” says Rick McGill, head of retiree medical consulting for employee-benefits firm Hewitt Associates. He says such benefits are “a dying breed.”

http://online.wsj.com/article/SB121617237912356653.html

And…

With Warning, G.M. Takes Wide Cost Cuts

By Bill Vlasic
The New York Times
July 16, 2008

While G.M. has been methodically cutting jobs since 2006, the decision to eliminate health care benefits for salaried retirees over the age of 65 was unexpected. The generous health plans for retirees has long been considered a pillar of the benefit system at G.M.

http://www.nytimes.com/2008/07/16/business/16auto.html?_r=2&hp&oref=slogin&oref=slogin

Comment:

By Don McCanne, MD

Last week, a Quote of the Day message discussed why the overwhelming majority of individuals, except those enrolled in the traditional Medicare program, do not have a choice of keeping indefinitely the private health insurance that they currently have. The largest private health benefit program in the nation, that of General Motors, was used as an example of how even the best could not provide absolute security that you could keep the insurance you have.

The message was not meant to be a prediction, but merely a confirmation that, even in the best of circumstances, you may not have the choice of keeping your coverage. The only surprise is how quickly close to 100,000 General Motors retirees lost their employer-sponsored coverage.

Last week’s message is very important. It lists a great many reasons why people do lose the coverage they have, and almost all of the reasons are beyond their control. The message should be used to counter those who contend that their proposal allows you to “keep the insurance you have.” It is available for downloading at:

https://pnhp.org/news/2008/july/keeping_the_insuran.php

Also, John Geyman, author of “Do Not Resuscitate: Why the Health Insurance Industry is Dying, and How We Must Replace It,” on July 16 posted on the PNHP Blog the entry, “Choice in Private Health Plans: Is It Real?” It can be read at:

https://pnhp.org/blog/

Why Not the Best? Results from the National Scorecard on U.S. Health System Performance, 2008

Authors: The Commonwealth Fund Commission on a High Performance Health System
The Common Wealth Fund
July 17, 2008 | Volume 97

Overview

Prepared for the Commonwealth Fund Commission on a High Performance Health System, the National Scorecard on U.S. Health System Performance, 2008, updates the 2006 Scorecard, the first comprehensive means of measuring and monitoring health care outcomes, quality, access, efficiency, and equity in the United States. The 2008 Scorecard, which presents trends for each dimension of health system performance and for individual indicators, confirms that the U.S. health system continues to fall far short of what is attainable, especially given the resources invested. Across 37 core indicators of performance, the U.S. achieves an overall score of 65 out of a possible 100 when comparing national averages with U.S. and international performance benchmarks. Overall, performance did not improve from 2006 to 2008. Access to health care significantly declined, while health system efficiency remained low. Quality metrics that have been the focus of national campaigns or public reporting efforts did show gains.

Executive Summary

Every family wants the best care for an ill or injured family member. Most are grateful for the care and attention received. Yet, evidence in the National Scorecard on U.S. Health System Performance, 2008, shows that care typically falls far short of what is achievable. Quality of care is highly variable, and opportunities are routinely missed to prevent disease, disability, hospitalization, and mortality. Across 37 indicators of performance, the U.S. achieves an overall score of 65 out of a possible 100 when comparing national averages with benchmarks of best performance achieved internationally and within the United States.

Even more troubling, the U.S. health system is on the wrong track. Overall, performance has not improved since the first National Scorecard was issued in 2006. Of greatest concern, access to health care has significantly declined. As of 2007, more than 75 million adults–42 percent of all adults ages 19 to 64–were either uninsured during the year or underinsured, up from 35 percent in 2003. At the same time, the U.S. failed to keep pace with gains in health outcomes achieved by the leading countries. The U.S. now ranks last out of 19 countries on a measure of mortality amenable to medical care, falling from 15th as other countries raised the bar on performance. Up to 101,000 fewer people would die prematurely if the U.S. could achieve leading, benchmark country rates.

The exception to this overall trend occurred for quality metrics that have been the focus of national campaigns or public reporting. For example, a key patient safety measure–hospital standardized mortality ratios (HSMRs)–improved by 19 percent from 2000-2002 to 2004-2006. This sustained improvement followed widespread availability of risk-adjusted measures coupled with several high-profile local and national programs to improve hospital safety and reduce mortality. Hospitals are showing measurable improvement on basic treatment guidelines for which data are collected and reported nationally on federal Web sites. Rates of control of two common chronic conditions, diabetes and high blood pressure, have also improved significantly. These measures are publicly reported by health plans, and physician groups are increasingly rewarded for results in improving treatment of these conditions.

The U.S. spends twice per capita what other major industrialized countries spend on health care, and costs continue to rise faster than income. We are headed toward $1 of every $5 of national income going toward health care. We should expect a better return on this investment.

Performance on measures of health system efficiency remains especially low, with the U.S. scoring 53 out of 100 on measures gauging inappropriate, wasteful, or fragmented care; avoidable hospitalizations; variation in quality and costs; administrative costs; and use of information technology. Lowering insurance administrative costs alone could save up to $100 billion a year at the lowest country rates.

National leadership is urgently needed to yield greater value for the resources devoted to health care.

The National Scorecard

The National Scorecard includes 37 indicators in five dimensions of health system performance: healthy lives, quality, access, efficiency, and equity. U.S. average performance is compared with benchmarks drawn from the top 10 percent of U.S. states, regions, health plans, hospitals, or other providers or top-performing countries, with a maximum possible score of 100. If average U.S. performance came close to the top rates achieved at home or internationally, then average scores would approach 100.

In 2008, the U.S. as a whole scored only 65, compared with a score of 67 in 2006–well below the achievable benchmarks. Average scores on each of the five dimensions ranged from a low of 53 for efficiency to 72 for healthy lives.

On those indicators for which trend data exist, performance compared with benchmarks more often worsened than improved, primarily because of declines in national rates between the 2006 and 2008 Scorecards. Overall, national scores declined for 41 percent of indicators, while one-third (35%) improved, and the rest exhibited no change (or were not updated). Exhibit 2 lists indicators and summarizes scores and benchmark rates.

As observed in the first Scorecard, the bottom group of hospitals, health plans, or geographic regions is often well behind even average rates, with as much as a fivefold spread between top and bottom rates. On key indicators, a 50 percent improvement or more would be required to achieve benchmark levels.

Scorecard Highlights and Key Findings

The U.S. continues to perform far below what is achievable, with wide gaps between average and benchmark performance across dimensions. Despite some encouraging pockets of improvement, the country as a whole has failed to keep pace with levels of performance attained by leading nations, delivery systems, states, and regions. Following are major highlights from the Scorecard by performance dimension:

Healthy Lives: Average Score 72

* Preventable mortality: The U.S. fell to last place among 19 industrialized nations on mortality amenable to health care–deaths that might have been prevented with timely and effective care. Although the U.S. rate improved by 4 percent between 1997-1998 and 2002-2003 (from 115 to 110 deaths per 100,000), rates improved by 16 percent on average in other nations, leaving the U.S. further behind.

* Activity limitations: More than one of every six working-age adults (18%) reported being unable to work or carry out everyday activities because of health problems in 2006–up from 15 percent in 2004. This increase points to the need for better prevention and management of chronic diseases to enhance quality of life and capacity to work, especially among younger adults as they age.

Quality: Average Score 71

* Effective care: Control of diabetes and high blood pressure improved markedly from 1999-2000 to 2003-2004 for adults, according to physical exams conducted on a nationally representative sample. Among adults with diabetes, rates of at least fair control of blood sugar increased from 79 percent to 88 percent from 1999-2000 to 2003-2004. Among adults with hypertension, rates of control of high blood pressure increased from 31 percent to 41 percent over the same time period. Yet, a 30 to 60 percentage point difference remains between top- and bottom performing health plans. Hospitals’ adherence to treatment standards for heart attack, heart failure, and pneumonia also improved from 2004 to 2006, but with a persistent gap between leading and lagging hospital groups. Delivery rates for basic preventive care failed to improve: as of 2005, only half of adults received all recommended preventive care.

* Coordinated care: Heart failure patients were more likely to receive hospital discharge instructions in 2006 (68%) than in 2004 (50%), but rates varied widely between top and bottom hospital groups (from 94% to 36%). Hospitalizations increased among nursing home residents from 2000 to 2004, as did rehospitalizations for patients discharged to skilled nursing facilities–signaling a need to improve long-term care and transitions between health care providers.

* Safe care: One key indicator of patient safety–hospital standardized mortality ratios–improved significantly since the first Scorecard, with a 19 percent decline. Safety risks, however, remain high as one-third of adults with health problems reported mistakes in their care in 2007. Drug safety is of particular concern. Rates of visits to physicians or emergency departments for adverse drug effects increased by one-third between 2001 and 2004.

* Patient-centered, timely care: In 2007, as in 2005, less than half of U.S. adults with health problems were able to get a rapid appointment with a physician when they were sick. They also were the most likely among adults in seven countries surveyed to report difficulty obtaining health care after hours without going to the emergency department, and this rate increased from 61 percent to 73 percent since 2005. Within the U.S., there is wide variation among hospitals in terms of patient reports of how well staff responded to their needs.

For larger view click on image

Access: Average Score 58

* Insurance and access: As of 2007, 75 million working-age adults (42%) were either uninsured or underinsured, a sharp increase from 61 million (35%) in 2003. More than one-third (37%) of all U.S. adults reported going without needed care because of costs in 2007, versus only 5 percent in the benchmark country.

* Affordable care: As insurance premiums rose faster than wages, the share of nonelderly adults living in a state where group health insurance premiums averaged less than 15 percent of household income dropped sharply, from 58 percent in 2003 to 25 percent in 2005. By 2007, two of five adults (41%) reported they had medical debt or problems with medical bills, up from 34 percent in 2005.

Efficiency: Average Score 53

* Inappropriate, wasteful, or fragmented care: In 2007, as in 2005, U.S. patients were much more likely–three to four times the benchmark rate–than patients in other countries to report having had duplicate tests or that medical records or test results were not available at the time of their appointment.

* Avoidable hospitalizations: Average rates of hospital readmissions within 30 days remained high, at 18 percent in both 2003 and 2005. Rates in the highest regions were 50 percent higher than in the lowest regions. Rates of hospitalizations for preventable conditions decreased somewhat from 2002-2003 to 2004-2005, but continued to vary two- to fourfold across hospital regions and states.

* Variation in quality and costs: Among Medicare patients treated for heart attacks, hip fractures, or colon cancer, a high proportion of regions with the lowest mortality rates also had lower total costs, indicating that it is possible to save lives and lower costs through more effective, efficient systems. The total costs of caring for patients with chronic disease varied twofold across regions.

* Administrative costs: U.S. health insurance administrative costs as a share of total health spending are 30 percent to 70 percent higher than in countries with mixed private/public insurance systems and three times higher than in countries with the lowest rates.

* Information systems: U.S. primary care physicians’ use of electronic medical records (EMRs) increased from 17 percent to 28 percent from 2001 to 2006. Still, the U.S. lags far behind leading countries, where EMRs are now used by nearly all physicians (98%) to improve care.

Equity: Average Score 71

* Disparities: Compared with their white, higherincome, or insured counterparts, minorities, lowincome, or uninsured adults and children were generally more likely to wait when sick, to encounter delays and poorly coordinated care, and to have untreated dental caries, uncontrolled chronic disease, avoidable hospitalizations, and worse outcomes. They were also less likely to receive preventive care or have an accessible source of primary care.

* Reducing gaps: Among blacks and Hispanics, it would require a 19 percent to 25 percent decrease in the risk of poor health outcomes and inadequate or inefficient care to reach parity with whites. Gaps for uninsured and low-income populations are still wider: it would require a 34 percent to 39 percent improvement on indicators of health care access, quality, and efficiency to achieve equity with insured and higher-income populations.

Systgem Capacity to Innovate and Improve: Not Scored

The capacity to innovate and improve is fundamental to a high-performing health care system. It includes:

* a care system that supports a skilled and motivated health care workforce, with an emphasis on primary care and population health;

* a culture of quality improvement and continuous learning that promotes and rewards recognition of opportunities to reduce errors and improve outcomes; and

* investment in public health initiatives, research, and information necessary to inform, guide, and drive health care decisions and improvement.

On all three aspects, the U.S. currently under-invests in the capacity of the health system to innovate and improve. U.S. payment systems undervalue primary care and fail to support providers’ efforts to manage and coordinate care. Studies indicate that health care teams and well-organized work processes can achieve significant gains in quality and safety with more efficient use of resources. Yet, health professionals are rarely trained to work in teams, and larger organized delivery systems that employ multidisciplinary health professionals are not the norm. There is little investment in spreading best practices, and incentives are rarely designed to reward or support improved quality and greater efficiency. In an era of rapid medical advances, national investment in research regarding clinical and cost-effectiveness–what works well for which patients and when–has failed to keep pace to inform health care decision-making.

Summary and Implications

Potential for Improvement

Overall, the National Scorecard on U.S. Health System Performance, 2008, finds that the U.S. is losing ground in providing access to care and has uneven health care quality. The Scorecard also finds broad evidence of inefficient and inequitable care. Average U.S. performance would have to improve by more than 50 percent across multiple indicators to reach benchmark levels of performance.

Closing performance gaps would bring real benefits in terms of health, patient experiences, and savings. For example:

* Up to 101,000 fewer people would die prematurely each year from causes amenable to health care if the U.S. achieved the lower mortality rates of leading countries.

* Thirty-seven million more adults would have an accessible primary care provider, and 70 million more adults would receive all recommended preventive care.

* The Medicare program could potentially save at least $12 billion a year by reducing readmissions or by reducing hospitalizations for preventable conditions.

* Reducing health insurance administrative costs to the average level of countries with mixed private/public insurance systems (Germany, the Netherlands, and Switzerland) would free up $51 billion, or more than half the cost of providing comprehensive coverage to all the uninsured in the U.S. Reaching benchmarks of the best countries would save an estimated $102 billion per year.

Studies further document the cost in lives and lost productivity from the nation’s failure to provide secure health insurance to all. Based on areas within the U.S. that achieve superior outcomes at lower costs, it should be possible to close gaps in health care quality and access, and to reduce costs significantly.

Several implications for policy emerge from the Scorecard findings:

What Receives Attention Gets Improved

Notably, all of the quality indicators showing significant improvement have been targets of national and collaborative efforts to improve, informed by data with measurable benchmarks and indicators reached by consensus. Conversely, there was failure to improve in areas such as mental health care, primary care, hospital readmission rates, or adverse drug events for which focused efforts to assess and improve at the community or facility level are lacking. Further, the continued failure to adopt interoperable health information technology makes it difficult to generate the information necessary to document performance and monitor improvement efforts.

Better Primary Care and Care Coordination Hold Potential for Improved Outcomes at Lower Costs

Hospital readmission rates and rates of potentially preventable hospitalizations for ambulatory care-sensitive conditions remain high and variable across the country, as do total costs for the chronically ill. Studies indicate that it is possible to prevent hospitalization or rehospitalizations with better primary care, discharge planning, and follow-up care–an integrated, systems approach to care.

Multiple indicators highlight the fact that the U.S. has a weak primary care foundation. Investing in primary care with enhanced capacity to provide patients with round-the-clock access, manage chronic conditions, and coordinate care will be key steps in moving to more organized care systems.

However, current payment incentives for hospitals, physicians, and nursing homes do not support coordination of care or efficient use of expensive, specialized care. information also fails to flow with patients across sites of care due to lack of health information technology and information exchange systems. These inefficiencies require innovative payment policies as well as care delivery approaches to improve outcomes for patients and use resources more efficiently.

Aiming Higher

The 2008 National Scorecard documents the human and economic costs of failing to address the problems in our health system. Recent analysis suggests it could be possible to insure everyone and achieve significant savings with improved value over the next decade. Health care expenditures are projected to double to $4 trillion, or 20 percent of national income, over the next decade, and millions more U.S. residents are on a path to becoming uninsured or underinsured, absent new policies. We need to change directions, starting with the recognition that access to care, health care quality, and efficiency are interrelated.

Aiming higher and moving on a more positive path will require strategies targeting the multiple sources of poor health system performance. These strategies include:

* universal and well-designed

* coverage that ensures affordable access and continuity of care, with low administrative costs;

* incentives aligned to promote higher quality and more efficient care;

* care that is designed and organized around the patient, not providers or insurers;

* widespread implementation of health information technology with information exchange;

* explicit national goals to meet and exceed benchmarks and monitor performance; and

* national policies that promote private-public collaboration and high performance.

Rising costs put families, businesses, and public budgets under stress, pulling down living standards for middle- as well as low-income families. New national policies that take a coherent, whole-system, population view are essential for the nation’s future health and economic security.

Citation

The Commonwealth Fund Commission on a High Performance Health System, Why Not the Best? Results from the National Scorecard on U.S. Health System Performance, 2008, The Commonwealth Fund, July 2008

Insurance industry forming activist army

By: Chris Frates
Politico
July 16, 2008 08:31 PM EST

Ahead of the approaching health care reform storm, the insurance industry is building an ark: a nationwide education campaign aimed at raising an activist army at least 100,000 strong.

The unprecedented effort by America’s Health Insurance Plans, called the Campaign for an American Solution, includes a nationwide listening tour, advertising and an intense recruitment effort aimed at signing up Americans who are satisfied with their private insurance coverage. AHIP President and CEO Karen Ignagni plans to launch the campaign Tuesday by hosting a discussion among a group of uninsured people in Columbus, Ohio.

“On an issue as big and far-reaching as health care reform, you need to be working with real people and you need to have a reach outside the Beltway,” AHIP spokesman Michael Tuffin told Politico in an interview outlining the industry’s strategy. “The issue isn’t going to be settled just by lobbyists in Washington. The American people are going to have their say.”

The massive outreach is AHIP’s attempt to drive debate in a political climate that has had the industry on the defensive since Democrats took control of Congress last year.

Democrats have been critical of insurance company practices such as denying coverage based on pre-existing conditions. And just this week, Congress cut billions of dollars from industry-administered Medicare plans to better fund doctors who treat traditional Medicare patients. When President Bush sided with the industry and vetoed the cuts — a veto that Congress promptly overturned — insurers won few new friends.

“There will be a mix of cynicism and hope in reaction to [the industry’s campaign]. To a large degree, the onus will be on the health plans to be a constructive force. I think they get this, but the proof will be in the pudding,” said Chris Jennings, a Democratic health care strategist.

The let’s-all-play-together approach is a marked departure from the Dr. No persona that helped insurers kill President Bill Clinton’s health care reform plan nearly 15 years ago, even after insurers and the administration had initially struck a collaborative stance.

This time, though, the industry’s collaborative attitude is more than a nod to political realities; it’s also an acknowledgement that spiraling costs are threatening its business models. Universal coverage could increase the market and lower costs, which might make reform smart politics and good business.

Often viewed in Washington as a faceless, profit-driven industry, health insurers hope that hitting the road and starting a fan club will help lawmakers better understand the value of their products.

To spread the AHIP gospel and sign up true believers, the group has planned dozens of unscripted roundtables in cities from Albuquerque, N.M., and Denver to Boston and New York. The discussions will include union members, working families, faith and community leaders, and small-business owners and employees. The roundtables are an opportunity for the industry to hear feedback on its ideas, Tuffin said.

Group officials have been quietly briefing health care leaders about the coming campaign, including former Health and Human Services Secretary Donna Shalala, who gave it a positive review.

The industry’s efforts and others are crucial, she said, to push health care reform to the forefront of the presidential debate so that it becomes a top priority for the next administration.

“Look, [insurers] already have considerable clout. They don’t actually need to do this. I think they believe that they’re going to learn something by doing this,” Shalala said. “They want to get a feel for how the public is feeling out there.”

Field staffers will organize volunteers and work with local leaders in up to 20 states. To run the grass-roots activity, AHIP hired Beth Leonard, who was John Edwards’ state director in New Hampshire during his recent presidential campaign.

The effort also boasts e-mail and snail mail outreach, as well as print, radio and television advertising. The first print ads will hit papers inside the Beltway next week. Online messaging, including Web advertising and blog outreach, will be a permanent feature once nwww.americanhealthsolution.org launches.

The group would not disclose the costs of its efforts, but Tuffin said it’s the most expensive campaign the industry has launched in the past decade, with “unprecedented” spending on grass roots and outreach.

“We’re going to spend the resources necessary to make sure that we hear the American people and the American people hear us,” Tuffin said.

By giving voice to the customers who benefit from their products, the campaign completes an employer-insurer-consumer lobbying trifecta that has been taking shape inside the Beltway.

“What you’re seeing is the alignment of the key constituencies for building and strengthening the employer-based system,” said Republican health care strategist Phil Blando.

The insurance industry’s outreach builds on a policy foundation that AHIP has been laying for almost two years. Just days after the 2006 elections and facing a difficult political environment, the group released a plan to cover the nation’s 47 million uninsured. Since then, the group has released proposals to reduce health care costs and increase quality and safety.

The group is pushing for universal coverage through strengthened private/public partnership. The industry wants to expand access to Medicaid and the state Children’s Health Insurance Program; provide tax credits to parents covering their children with private insurance; and create more portable and flexible tax-free health savings accounts, Tuffin said.

If states were to provide coverage for those too expensive to insure, he said, the industry would be willing to offer guaranteed coverage to everyone else and allow consumers to appeal denied coverage to an independent review board.

(c) 2008 Capitol News Company, LLC

Expanding healthcare, cutting costs

By Rep. Dennis Kucinich (D-Ohio)
The Hill
Posted: 07/15/08 05:38 PM [ET]

Every child has an inherent right to healthcare. Without access to a structured system of healthcare, children are burdened with social, educational, financial and personal health disadvantages. Lack of access is directly connected to lack of insurance. Over 9 million children were uninsured in 2006 and their ranks are growing. Sixty-nine percent of the increase in uninsured children was from families whose income was more than 200 percent of the federal poverty level, which means they were unlikely to be covered by SCHIP or Medicaid. Most were from the middle class.

Data on underinsured children are scarcer but underinsured adults have increased by 20 million since 2000, to 51 million. Besides the obvious health problems that stem from being denied care, underinsurance is a responsible for families entering and staying in poverty. Roughly half of all bankruptcies in the U.S. are related to medical bills. Of those medical bankruptcies, over three-quarters had insurance before they got sick. Having insurance is not the same thing as being “covered” in the event of a serious illness.

In fact, as long as insurance companies make money by denying care, there will be underinsurance. Insurance companies further drive up costs by fragmenting risk pools, selling plans to the profitable healthy while abandoning the unhealthy and unprofitable to be covered by government plans. It takes enormous redundancy and bureaucracy to deny care and drive up costs. No other industrialized nation has administrative costs that approach that level.

When you consider that Americans pay about twice as much or more per capita for healthcare costs and that a third of the healthcare dollar goes to administrative activities you become aware that our system is really about insurance care more than healthcare. It is a racket benefiting a few insurance companies at the expense of the health of the American people, particularly our children.

Most major legislative fixes under consideration are incremental or fail to address the insurance industry problem. This may be because the insurance companies have great influence with both political parties. It also may be because private insurers wield so much clout on Wall Street.

Take SCHIP as an example. It rightly prioritizes the poor, but leaves out most of the middle class.

Covering kids is not enough. Covering parents maximizes the chances a child will get care. Tax breaks for individual insurance plans help the wealthy and subsidize a financially unsustainable healthcare model. Even a minimum of expansion of healthcare to children must strive to increase quality and lower costs.

It is time to let doctors return to the practice of medicine instead of having to fight with insurance companies. When Taiwan decided to overhaul its healthcare system, it chose a model that put the health of the Taiwanese people above the profits of insurance companies. Canada has had great success with their system even though underfunding by conservatives caused an increase in wait times for non-urgent care. If the U.S. also made that transition, studies have repeatedly shown that we would save at least $400 billion per year while guaranteeing all medically necessary healthcare to everyone. We now spend $2.1 trillion.

H.R. 676 embodies such a plan. Everyone in the U.S. would get a card that would allow access to any doctor at virtually any hospital. It saves money by dramatically lowering administrative costs, putting everyone in the same risk pool, and removing the perverse profit-seeking motive from healthcare. It would provide for a single high-quality standard of care that would replace the highly inequitable and regressive system that reserves the best healthcare for those who can pay.

It can be done without spending another dime beyond current levels. In other words, we’re already paying for high-quality, guaranteed healthcare; we’re just not getting it.

Independent healthcare experts will usually admit in hushed tones that a model for doctor- and patient-run healthcare like H.R. 676 is by far the best way to go. Then they shrug their shoulders as they echo the myth that it could never pass for political reasons. After all, the health insurance industry donates heavily to Democrats and Republicans in Washington.

The reality is that there has been a major groundswell of support. No other healthcare reform bill before Congress has more cosponsors, now at 91. A 2008 poll published in the Annals of Internal Medicine showed that 59 percent of all doctors and over 70 percent of pediatric subspecialties support a plan like H.R. 676. So do the American College of Physicians, deans of major medical schools, former editors of the New England Journal of Medicine, and former surgeons general.

They are joined by groups like the Presbyterian Church USA, the U.S. Conference of Mayors, state legislatures in Kentucky and New Hampshire, the AFL-CIO and SEIU. Finally, thousands of advocates all over the country represent the American people whose support for a plan like H.R. 676 is consistently greater than 50 percent.

It is not easy to stand up to the insurance industry but I have confidence that my colleagues can do it. I look forward to working with them to accelerate the momentum behind the bill until all children, and their parents, get the care they deserve and need.

Kucinich is a member of the House Education and Labor Committee.

Presidential foes both fall short on reforming health

Mason woman is example of need for change

By Malinda Markowitz
Lansing State Journal
July 17, 2008

If you’re wondering why health care has been such a central issue of the presidential campaign this year, meet Karyn McCartney of Mason.

In February, Karyn, then nine months pregnant, and her husband were hit by another car “from the passenger side where I was sitting,” wrote Karyn recently to the National Nurses Organizing Committee.

The accident left Karyn with broken ribs, collapsed lungs, pelvic fractures, and severe nerve damage. Her daughter had similar injuries.

Though the young couple had no health insurance, their car insurance paid much of the costs. “But we have to live every day praying we’ll make the bills. Due to family, friends, and complete strangers giving us donations we’ve been able to make all our payments and give our daughter the things she needs.”

Karyn is still battling with seizures and worries about who will pay for needed medication and her daughter’s ongoing bills. She says she’s been lucky to have the help of her rehab doctors “who will fight for me to get the insurance to pay for things I need.”

The past eight years have seen a big jump in the number of Americans under 29 without health coverage, along with other increases in the uninsured and under insured. Meanwhile, the cost of employer-based health insurance has ballooned 10 times faster than workers’ income since 2000, the year President Bush was elected.

Sen. John McCain’s health plan doesn’t seem to offer much change. His prescription of once a year tax credits to buy insurance won’t help those living paycheck to paycheck. His proposal to eliminate tax deductions for employer-sponsored health benefits would likely shift more of the risk and cost to families.

Sen. Barack Obama would offer more public subsidies for health care and tougher oversight on insurers, and says everyone should have a plan comparable to what members of Congress receive.

But his plan, like McCain’s, still leaves too much control over our health and our pocketbooks in the hands of the insurance giants who created this mess.

“It’s scary to even think of ‘what if I didn’t have auto insurance’ or ‘what if this wasn’t from a car accident’,” says Karyn. “We’re saving all we can hoping to some day move to a better place.”

Where might they go? Just about any other industrialized country in the world has a health care system with full, universal coverage that is not dependent on your job, that doesn’t impose crippling co-pays and deductibles, that doesn’t drop you when you are sick, and puts care decisions in the hands of you and your doctor, not insurance agents.

It’s possible here as well. HR 676, by Rep. John Conyers of Michigan with 90 co-sponsors would essentially improve and expand Medicare and extend it to cover everyone.

Families like Karyn’s shouldn’t have to count on their auto insurance, or have to talk about moving elsewhere, to receive the humane health coverage all of us deserve.

Malinda Markowitz of San Jose, Calif., is a co-president of the National Nurses Organizing Committee/California Nurses Association (www.guaranteedhealthcare.com)

These GM retirees didn’t have a choice

Retiree Benefits Take Another Hit

By Vanessa Fuhrmans and Theo Francis
The Wall Street Journal
July 16, 2008

General Motors Corp.’s move to eliminate retiree health benefits for salaried workers is a sobering signal to the rest of the U.S. work force: Even those who are in or near retirement shouldn’t count on keeping the company coverage they have built up.

Since the early 1990s, employers eager to get out from under the increasing burden of covering their retirees’ health care have been whittling away at those benefits. At some companies, new or younger workers have been excluded from retiree health benefits. Older workers and existing retirees often got to keep the benefits, but had to pay a larger share of the overall costs.

But GM’s announcement Tuesday that it would cease medical coverage for its salaried retirees age 65 and above signals that a new era of ever-shrinking benefits has arrived. Beginning in January, even former employees who are already in retirement will lose their benefits, which most of the company’s retirees use to supplement gaps in their traditional Medicare coverage. The auto maker will boost monthly pension payouts to help offset the cuts. The company’s unionized workers aren’t affected by the cut to retiree health benefits.

At this point, employees and retirees “have to feel lucky if they still have retiree [health-care] benefits, and have to start planning for when they won’t,” says Rick McGill, head of retiree medical consulting for employee-benefits firm Hewitt Associates. He says such benefits are “a dying breed.”

http://online.wsj.com/article/SB121617237912356653.html

And…

With Warning, G.M. Takes Wide Cost Cuts

By Bill Vlasic
The New York Times
July 16, 2008

While G.M. has been methodically cutting jobs since 2006, the decision to eliminate health care benefits for salaried retirees over the age of 65 was unexpected. The generous health plans for retirees has long been considered a pillar of the benefit system at G.M.

http://www.nytimes.com/2008/07/16/business/16auto.html?_r=2&hp&oref=slogin&oref=slogin

Comment:

By Don McCanne, MD

Last week, a Quote of the Day message discussed why the overwhelming majority of individuals, except those enrolled in the traditional Medicare program, do not have a choice of keeping indefinitely the private health insurance that they currently have. The largest private health benefit program in the nation, that of General Motors, was used as an example of how even the best could not provide absolute security that you could keep the insurance you have.

The message was not meant to be a prediction, but merely a confirmation that, even in the best of circumstances, you may not have the choice of keeping your coverage. The only surprise is how quickly close to 100,000 General Motors retirees lost their employer-sponsored coverage.

Last week’s message is very important. It lists a great many reasons why people do lose the coverage they have, and almost all of the reasons are beyond their control. The message should be used to counter those who contend that their proposal allows you to “keep the insurance you have.” It is available for downloading at:

https://www.pnhp.org/news/2008/july/keeping_the_insuran.php

Also, John Geyman, author of “Do Not Resuscitate: Why the Health Insurance Industry is Dying, and How We Must Replace It,” on July 16 posted on the PNHP Blog the entry, “Choice in Private Health Plans: Is It Real?” It can be read at:

https://www.pnhp.org/blog/

Response to TNR's Jonathan Cohn

Disputations: Is Single-Payer Health Care The Best Option?

The problem with split-the-difference incremental reform.

by Don McCanne
The New Republic
July 16, 2008
The enthusiasm for the model of reform described by Jacob Hacker and endorsed by the Health Care for America Now (HCAN) coalition, which Jonathan Cohn wrote about in his recent New Republic piece “Single-Minded,” is understandable. It is a model that attempts to align policy with politics, allegedly meeting the previously unattainable threshold of feasibility. But is it feasible, and will it even work?
Anyone who really believes in this model understands that the private insurance plans would have to be very tightly regulated to reduce the profound deficiencies in our current insurance markets. The current private insurance business model depends on selling the insurers’ products to the large numbers of us who are healthy, especially the healthy workforce and their healthy families, while avoiding the need to contribute to the risk pools that cover those who have greater health care needs. Those costs are largely passed on to taxpayers through government programs.
Other nations that use private plans require effective pooling between plans through various regulatory mechanisms, reducing the problem of adverse selection and ensuring that premiums or taxes are adequate to pay for the care for those with greater needs. Even if the pools are nominally segregated, they function more like a universal risk pool through mechanisms such as risk adjustment and post-claims inter-insurance transfers.
The United States has a unique problem that would make it much more difficult to require private insurers to participate in a quasi-universal risk pool. On a per capita basis, we pay far more for health care than do other nations. Average-income individuals in other nations that use private plans can still afford premiums (or their tax equivalents). In those countries, only low-income individuals require some form of government subsidy for their care.
Compare that with the United States. For healthy risk pools, such as those of employer-sponsored plans, premiums are no longer affordable for average-income individuals and families, whether paid directly by the insured, or nominally by the employer. Imagine a tightly regulated insurance market that ended adverse selection and required benefits at a level that would prevent financial hardship for those with health care needs. The private insurers would find it absolutely impossible to provide us with compliant products that had affordable premiums.
Because of our very high costs, we must accept the fact that the insurance function is no longer simply a transfer from the many who are healthy to the fewer with health care needs, but it now must also include a partial transfer from the wealthy to middle- and lower-income individuals with needs. There is no alternative to this wealth transfer, and that alone creates doubt as to whether a model of highly regulated private plans is politically feasible.
We have to get over the idea that financing should be through premiums set by the actuarial value of the benefits in the insurance products. Those premiums are no longer affordable for most of us, and the complexities of income-related adjustments, whether through premium adjustments or tax credits, create an administrative nightmare. It is time that we separate the financing of the universal risk pool from the health care benefit package. The tax system provides us with the most equitable and efficient method of financing our global health care costs.
Perhaps a more compelling reason that the private insurance model no longer works is that it is very ineffective in slowing the increases in health care costs, and everyone agrees that affordability is now a major problem. Most of the current political cost-saving proposals would have very little impact on total costs. We need to address the true major cost drivers: the profound administrative excesses, the lack of an adequate primary care infrastructure, the waste of non-beneficial high-tech excesses, and the lack of a rational system of health care pricing. Even in a regulated environment, it would be very difficult for a multitude of private insurers and public programs to have much impact on these excess costs. Most economists agree that a monopsony, or single purchaser of health care products and services, would be most effective in extracting value through a negotiated realignment of incentives in our health care purchasing.
This debate that is taking place within the progressive community is missing the center of the feasibility dispute. It is implied that the Hacker/HCAN progressive model would be just fine if the single payer advocates would come to their senses and join in. It ignores the fact that this model is simply not politically feasible: it loses the support of market enthusiasts because of its dependency on tight regulatory control, intrusion by a government insurance program, and the necessity of a massive infusion of tax funds.
If you are going to accept that those changes are necessary to provide adequate coverage for everyone, then you might as well go ahead and establish a much more efficient and effective single payer national health program. Some may argue that explicit calls for income transfer and bureaucratic control of spending are what limit the political feasibility of the single payer model, but the private plans/public option model would have to incorporate the same principles, and their advocates should be very frank about that upfront.
So, the bottom line? We need reform that provides everyone the health care that they need, without financial barriers that would impede access. We can attempt to maneuver around the ubiquitous mines and trap doors of the political common ground of Hacker/HCAN, and still end up short if we survive. Or we can go straight to a proven model that would accomplish all of our financing goals–a single payer national health program.
For the full article:
http://tnr.com/politics/story.html?id=7aa401b5-f1f4-4564-921c-00f97b917605%20

The real debate over health care reform today centers over one fundamental choice. Are we going to continue to try to finance health care through private plans competing in the marketplace, a guarantee that access and equity problems would only grow worse, or are we going to use our own government resources to fix our financing system so that it works for everyone?
This shouldn’t even be a debate. Financial hardship, physical suffering and even death will increase without significant government intervention.
Unfortunately, a much less important debate has erupted within the community of those supporting a government role in ensuring that everyone has affordable access to all necessary health care. That debate is over whether or not private health plans should play a role in a reformed health care financing system.
Eliminating a socialized-medicine national health service from the list of options, that leaves us with two basic choices. We can either radically transform the private health plans into a system of social insurance, or we can replace the plans with a Medicare-like single payer national health program. Either would work, but the trade-offs are significant.
Systems using private plans are more expensive, largely because of greater administrative complexity. Equity is more difficult to achieve in a multi-payer system. A system of universal risk pooling would have to be superimposed on the private plans, making us wonder why we would even want to keep them since they would no longer be providing their insurance function of transferring risk.
Today, affordability is a concern for everyone. Health care will never again be affordable for all of us unless we adopt structural changes within our health care delivery system. As stated in the TNR article, “We need to address the true major cost drivers: the profound administrative excesses, the lack of an adequate primary care infrastructure, the waste of non-beneficial high-tech excesses, and the lack of a rational system of health care pricing.” Realigning incentives to accomplish these goals would be a relatively straightforward task for a single payer government monopsony. In contrast, a market of competing private plans would not have the power of a monopsony and would have to rely on the government to achieve these same goals.
Those supporting the private plan/public option model need to be explicit in describing their model, beginning with simple concepts such as how they would prevent adverse selection in the public option. If we are going to have an equitable and effective health care financing system for all of us, then their task of radically transforming the private insurance industry so that it would actually work is far greater than our task of improving Medicare and then providing it to everyone. Let’s hear how they would do it.

Response to TNR's Jonathan Cohn

Disputations: Is Single-Payer Health Care The Best Option?

The problem with split-the-difference incremental reform.

by Don McCanne
The New Republic
July 16, 2008

The enthusiasm for the model of reform described by Jacob Hacker and endorsed by the Health Care for America Now (HCAN) coalition, which Jonathan Cohn wrote about in his recent New Republic piece “Single-Minded,” is understandable. It is a model that attempts to align policy with politics, allegedly meeting the previously unattainable threshold of feasibility. But is it feasible, and will it even work?

Anyone who really believes in this model understands that the private insurance plans would have to be very tightly regulated to reduce the profound deficiencies in our current insurance markets. The current private insurance business model depends on selling the insurers’ products to the large numbers of us who are healthy, especially the healthy workforce and their healthy families, while avoiding the need to contribute to the risk pools that cover those who have greater health care needs. Those costs are largely passed on to taxpayers through government programs.

Other nations that use private plans require effective pooling between plans through various regulatory mechanisms, reducing the problem of adverse selection and ensuring that premiums or taxes are adequate to pay for the care for those with greater needs. Even if the pools are nominally segregated, they function more like a universal risk pool through mechanisms such as risk adjustment and post-claims inter-insurance transfers.

The United States has a unique problem that would make it much more difficult to require private insurers to participate in a quasi-universal risk pool. On a per capita basis, we pay far more for health care than do other nations. Average-income individuals in other nations that use private plans can still afford premiums (or their tax equivalents). In those countries, only low-income individuals require some form of government subsidy for their care.

Compare that with the United States. For healthy risk pools, such as those of employer-sponsored plans, premiums are no longer affordable for average-income individuals and families, whether paid directly by the insured, or nominally by the employer. Imagine a tightly regulated insurance market that ended adverse selection and required benefits at a level that would prevent financial hardship for those with health care needs. The private insurers would find it absolutely impossible to provide us with compliant products that had affordable premiums.

Because of our very high costs, we must accept the fact that the insurance function is no longer simply a transfer from the many who are healthy to the fewer with health care needs, but it now must also include a partial transfer from the wealthy to middle- and lower-income individuals with needs. There is no alternative to this wealth transfer, and that alone creates doubt as to whether a model of highly regulated private plans is politically feasible.

We have to get over the idea that financing should be through premiums set by the actuarial value of the benefits in the insurance products. Those premiums are no longer affordable for most of us, and the complexities of income-related adjustments, whether through premium adjustments or tax credits, create an administrative nightmare. It is time that we separate the financing of the universal risk pool from the health care benefit package. The tax system provides us with the most equitable and efficient method of financing our global health care costs.

Perhaps a more compelling reason that the private insurance model no longer works is that it is very ineffective in slowing the increases in health care costs, and everyone agrees that affordability is now a major problem. Most of the current political cost-saving proposals would have very little impact on total costs. We need to address the true major cost drivers: the profound administrative excesses, the lack of an adequate primary care infrastructure, the waste of non-beneficial high-tech excesses, and the lack of a rational system of health care pricing. Even in a regulated environment, it would be very difficult for a multitude of private insurers and public programs to have much impact on these excess costs. Most economists agree that a monopsony, or single purchaser of health care products and services, would be most effective in extracting value through a negotiated realignment of incentives in our health care purchasing.

This debate that is taking place within the progressive community is missing the center of the feasibility dispute. It is implied that the Hacker/HCAN progressive model would be just fine if the single payer advocates would come to their senses and join in. It ignores the fact that this model is simply not politically feasible: it loses the support of market enthusiasts because of its dependency on tight regulatory control, intrusion by a government insurance program, and the necessity of a massive infusion of tax funds.

If you are going to accept that those changes are necessary to provide adequate coverage for everyone, then you might as well go ahead and establish a much more efficient and effective single payer national health program. Some may argue that explicit calls for income transfer and bureaucratic control of spending are what limit the political feasibility of the single payer model, but the private plans/public option model would have to incorporate the same principles, and their advocates should be very frank about that upfront.

So, the bottom line? We need reform that provides everyone the health care that they need, without financial barriers that would impede access. We can attempt to maneuver around the ubiquitous mines and trap doors of the political common ground of Hacker/HCAN, and still end up short if we survive. Or we can go straight to a proven model that would accomplish all of our financing goals–a single payer national health program.

For the full article:
http://tnr.com/politics/story.html?id=7aa401b5-f1f4-4564-921c-00f97b917605%20

Comment:

By Don McCanne, MD

The real debate over health care reform today centers over one fundamental choice. Are we going to continue to try to finance health care through private plans competing in the marketplace, a guarantee that access and equity problems would only grow worse, or are we going to use our own government resources to fix our financing system so that it works for everyone?

This shouldn’t even be a debate. Financial hardship, physical suffering and even death will increase without significant government intervention.

Unfortunately, a much less important debate has erupted within the community of those supporting a government role in ensuring that everyone has affordable access to all necessary health care. That debate is over whether or not private health plans should play a role in a reformed health care financing system.

Eliminating a socialized-medicine national health service from the list of options, that leaves us with two basic choices. We can either radically transform the private health plans into a system of social insurance, or we can replace the plans with a Medicare-like single payer national health program. Either would work, but the trade-offs are significant.

Systems using private plans are more expensive, largely because of greater administrative complexity. Equity is more difficult to achieve in a multi-payer system. A system of universal risk pooling would have to be superimposed on the private plans, making us wonder why we would even want to keep them since they would no longer be providing their insurance function of transferring risk.

Today, affordability is a concern for everyone. Health care will never again be affordable for all of us unless we adopt structural changes within our health care delivery system. As stated in the TNR article, “We need to address the true major cost drivers: the profound administrative excesses, the lack of an adequate primary care infrastructure, the waste of non-beneficial high-tech excesses, and the lack of a rational system of health care pricing.” Realigning incentives to accomplish these goals would be a relatively straightforward task for a single payer government monopsony. In contrast, a market of competing private plans would not have the power of a monopsony and would have to rely on the government to achieve these same goals.

Those supporting the private plan/public option model need to be explicit in describing their model, beginning with simple concepts such as how they would prevent adverse selection in the public option. If we are going to have an equitable and effective health care financing system for all of us, then their task of radically transforming the private insurance industry so that it would actually work is far greater than our task of improving Medicare and then providing it to everyone. Let’s hear how they would do it.