By Jennifer Steinhauer
The New York Times
June 5, 2008

For thousands of residents of South Los Angeles who had depended on the large county-run King-Harbor hospital, the past 10 months have been a grueling exercise in cobbling together medical care. When King-Harbor was shut by federal officials, it became the 15th general acute care hospital to close in Los Angeles County since 2000, about half of which served residents in South Los Angeles.

The loss of King-Harbor was less a seminal moment than another episode in the continuing health care ordeal among this city’s sickest and poorest residents.

South Los Angeles is one of the most difficult places in the nation to both receive and give medical care. Family doctors are few and far between, and the area is one of the hardest to draw new doctors to, physician recruiters say.

The vast majority of residents in central Los Angeles are uninsured or are on the state’s Medicaid program — known as Medical — which offers the lowest reimbursement rates in the nation, and a growing population of illegal immigrants who are not eligible for government insurance have flooded the ranks of the uninsured.

Gov. Arnold Schwarzenegger, a Republican, has proposed another 10 percent cut in the state’s Medicaid program to balance the state’s budget while Congress contemplates a host of reductions to the program that, if approved, would mean $240 million less for Los Angeles.

From 2000 to 2006, the number of Medicaid-covered patients using the South Los Angeles hospitals on Medicaid increased 18 percent and the uninsured ranks rose more than 20 percent, while patients with commercial coverage fell 20 percent, according to the hospital association’s figures.

As a result, many hospitals in the South Los Angeles area are unable to stay afloat, and centers that once served 100,000 patients here have closed.

http://www.nytimes.com/2008/06/05/us/05southla.html

Comment:

By Don McCanne, MD

There are a great many problems that must be addressed if we are to ensure that people in underserved regions, such as South Los Angeles, have access to adequate health care services. But there is one absolutely essential resource that must be available to establish the necessary health care infrastructure: money.

When government budgets are perceived to be tight, where do our elected officials turn to try to reduce spending? Amongst the more vulnerable sections of budgets are the various health programs for low-income individuals – a sector of our society with only a feeble political voice. Reform proposals that would build on our current fragmented system of financing health care would continue to perpetuate this chronic underfunding stemming from the acquiescent anti-welfare mentality of those participating in the budget process.

Without adequate funding, health care will not be provided. The first step is to make sure that the money is there. A single payer national health program would do precisely that. All facilities and services would be fully funded. More work certainly would have to be done, but the financial barrier would have been removed.

There is reason for pessimism. A tour of the medical facilities in South Los Angeles is confirmation that, whatever makes America great, it is not our social solidarity. Maybe we need to start a campaign against acquiescence. Then maybe we’ll find the spark needed to ignite our social solidarity.

By Sarah Rubenstein
The Wall Street Journal
June 3, 2008

In a move that consumer groups say could increase pressure on people with unpaid medical bills, some hospitals are trying out a new tactic to recoup patients’ debts: They’re auctioning the debt online.

Hospitals have long relied on outside collection agencies to go after debtors. Under traditional arrangements, these agencies receive a percentage of any money they get from a debtor; the more they collect, the more they earn.

Now, some of the same collection agencies, as well as other firms that purchase debt outright, have begun participating as bidders in online auctions, in which they buy the debt or provide guaranteed payments to hospitals for access to the unpaid accounts. Some experts say this gives them more reason to aggressively pursue patients in arrears. Auctions can drive up the amount paid for debt, meaning a collector must recoup more money from patients to cover its initial investment and turn a profit. And the winning bidders often get to keep all the money they collect on the auctioned debt.

Many of the auctions of hospital debt have been done through Web site ARxChange.com — shorthand for “accounts receivable exchange” — owned by TriCap Technology Group. Another site is medipent.com, run by Medipent LLC.

“The hospital is an institution in the community, has a reputation, in many cases has a nonprofit mission to uphold,” says Anthony Wright, executive director of the consumer-advocacy coalition Health Access California. “Once it goes to collections, that starts a process that can get a lot more antagonistic, a lot more aggressive, and a lot more damaging to a family’s credit history and financial future.”

http://online.wsj.com/article/SB121244901525139563.html

Comment:

By Don McCanne, MD

By far, the highest per capita health care spending in the world… the money is already there… and, yet, we are unique amongst industrialized nations in forcing into debt individuals who have the misfortune of becoming ill or injured.

Of all of the problems we face, this is one of the simplest. We do not need more money. We merely need to reform our system of financing health care.

So what do we do? We continue to expand policies that make all of the numbers worse – more uninsured, more underinsured, more medical debt, greater impairment of access, greater administrative waste… while we continue to support the multitude of money-movers, trading off the health and financial security of patients.

Today’s message is particularly disturbing. Medical debt is a horrendous problem. Instead of trying to fix the financing system so that medical debt is prevented, we add yet another administrative layer that further burdens those with medical debt: the auctioneers who sell medical debt to the highest bidding collection agencies!

Have we no shame?

By Laura Meckler and Anna Wilde Mathews
The Wall Street Journal
June 2, 2008

John McCain’s plan for a health-care system built around consumers shopping for their own insurance comes with a significant downside: for people with a history of illness, it can be impossible to find coverage on their own.

The Republican presidential candidate’s main answer is to bolster the role of high-risk pools, which sell insurance to people with pre-existing conditions such as diabetes, cancer and AIDS.

These pools, typically created by state governments, require significant government subsidies, charge high premiums and sometimes sharply restrict benefits or enrollment. Nationally, fewer than 200,000 people are enrolled in such pools, while 47 million people in the U.S. are without insurance.

“They tend not to work particularly well,” said Sara Collins, an assistant vice president at the Commonwealth Fund, a nonprofit health-care-research group. “States have really struggled to finance these adequately.”

Sen. McCain… would rely on tax cuts, market forces and consumers themselves to broaden access to coverage, and give a smaller role to employers as a source of coverage.

To fill the gap, Sen. McCain proposed new high-risk pools that would scoop up those who can’t get insurance on their own. He called it a Guaranteed Access Plan. Premiums would be reasonable, with subsidies for low-income participants, but he has given few other details.

(Douglas Holtz-Eakin, Sen. McCain’s chief policy adviser) has suggested the federal government might need to spend $7 billion to $10 billion to subsidize these pools — an estimate he calls “extremely preliminary.” Many experts said that is nowhere near enough, particularly given the large number of people with pre-existing conditions who would need this help if employers send their workers out to the open market.

http://online.wsj.com/article/SB121236916701936663.html?mod=googlenews_wsj

Comment:

By Don McCanne, MD

Sen. John McCain’s initial proposal for health care reform was simply to change tax incentives, reducing support for moderately-regulated, employer-sponsored health plans, and providing tax credit incentives that would encourage individuals to shop in the less-regulated, individual insurance market – a market capable of providing a much greater choice of innovative health plans. It quickly became obvious that these innovative products would be designed to avoid paying for much of our health care. He had to come up with a proposal to answer critics of his plan.

Over half of us receive our coverage through employer-sponsored group plans. Although employer-sponsored plans cover a lower-cost, healthier segment of our population, health care has now become so expensive that premiums for these more comprehensive plans have become much less affordable. Employers have been attempting to reduce their costs by trimming benefits and expanding out-of-pocket expenses for their employees, but even these changes have failed to make premiums affordable.

Sen. McCain contends that a less-regulated individual insurance market is capable of offering innovative products with premiums that would be affordable for most of us if we were to use his proposed tax credit. In reality, the tax credit is not large enough to make premiums affordable for plans comparable to what most employers provide. For premiums to be competitive, the plans would have to reduce benefits and require much greater out-of-pocket cost sharing. These plans would work only for individuals who are healthy and who will remain healthy, defeating the purpose of insurance.

In a less-regulated market, more comprehensive coverage comparable to current employer-sponsored plans attracts individuals who have greater health care needs. It is unlikely that those plans would even be offered in the individual market under Sen. McCain’s proposal, but if they were, they would rapidly withdraw from the market because of the death spiral caused by the ever higher premiums that must be charged as the sick enroll and the healthy drop out. People who need care would be shut out of the individual market.

Sen. McCain could not really sit on a proposal that would cover only the 80 percent of us who are healthy. He had to propose some mechanism of paying for the 80 percent of health care that is used by the 20 percent of us who have significant health care needs. His solution is to promote state-run high-risk pools that would provide that coverage.

We do already have considerable experience with these pools, and it certainly is not good. The primary problem is that the cost per participant is extremely high. Most states severely restrict the number of participants, and many states haven’t even established such pools. The high premiums are even less affordable, and coverage is very skimpy, usually with very low lifetime caps.

In 2006, private plans, out-of-pocket expenses, and other private spending financed 54.7 percent of national personal health care expenditures (KFF/Urban Institute). CMS projects for 2008 a total personal health care expenditure of $1,999 billion. Thus private health care spending is projected to be $1,093 billion this year. The 20 percent of health care consumed by the 80 percent of us who are relatively healthy would cost about $218 billion. The 80 percent consumed by the 20 percent of individuals with significant health care needs would cost about $874 billion in private spending.

It is much of this $874 billion that would be transferred to the state high-risk pools under Sen. McCain’s proposal. His adviser, Douglas Holtz-Eakin, provides an “extremely preliminary” estimate of $7 billion to $10 billion in federal subsidies for these pools. Who pays the other $864 billion? The individual?

Excluding those covered by Medicare, Medicaid and other public programs, 225 million of us have private insurance or are uninsured. Twenty percent of those, or 45 million people, theoretically would be in the high-risk pool if everyone were to obtain coverage under his program. If the high-risk individuals were responsible for the remaining $864 billion, each would have to pay $19,200. Obviously, that can’t work.

Others propose that high-risk pools be funded by an assessment on commercial insurers. But that moves the financing for high-risk individuals back into the private insurance risk pools. Not only would that drive up premiums, which are already unaffordable, it would also add another layer of administrative costs in a system that is already overburdened with administrative excesses.

Now you know why state high-risk pools don’t work. There is only one reason to propose them in the first place – that is to relieve the private insurance industry of its responsibility of paying for necessary health care, merely to enhance its successful business model of selling insurance primarily to the people who don’t need care now, and hopefully won’t in the future.

As John Geyman says, the private insurance industry is dying, and we shouldn’t try to resuscitate it – certainly not if we we taxpayers are the ones who are going to be indemnifying those who actually need health care.

McCain’s Free-Market Health Plan Would Boost Role of High-Risk Pools

By Laura Meckler and Anna Wilde Mathews
The Wall Street Journal
June 2, 2008

John McCain’s plan for a health-care system built around consumers shopping for their own insurance comes with a significant downside: for people with a history of illness, it can be impossible to find coverage on their own.

The Republican presidential candidate’s main answer is to bolster the role of high-risk pools, which sell insurance to people with pre-existing conditions such as diabetes, cancer and AIDS.

These pools, typically created by state governments, require significant government subsidies, charge high premiums and sometimes sharply restrict benefits or enrollment. Nationally, fewer than 200,000 people are enrolled in such pools, while 47 million people in the U.S. are without insurance.

“They tend not to work particularly well,” said Sara Collins, an assistant vice president at the Commonwealth Fund, a nonprofit health-care-research group. “States have really struggled to finance these adequately.”

Sen. McCain… would rely on tax cuts, market forces and consumers themselves to broaden access to coverage, and give a smaller role to employers as a source of coverage.

To fill the gap, Sen. McCain proposed new high-risk pools that would scoop up those who can’t get insurance on their own. He called it a Guaranteed Access Plan. Premiums would be reasonable, with subsidies for low-income participants, but he has given few other details.

(Douglas Holtz-Eakin, Sen. McCain’s chief policy adviser) has suggested the federal government might need to spend $7 billion to $10 billion to subsidize these pools — an estimate he calls “extremely preliminary.” Many experts said that is nowhere near enough, particularly given the large number of people with pre-existing conditions who would need this help if employers send their workers out to the open market.

http://online.wsj.com/article/SB121236916701936663.html?mod=googlenews_wsj

Comment:

By Don McCanne, MD

Sen. John McCain’s initial proposal for health care reform was simply to change tax incentives, reducing support for moderately-regulated, employer-sponsored health plans, and providing tax credit incentives that would encourage individuals to shop in the less-regulated, individual insurance market – a market capable of providing a much greater choice of innovative health plans. It quickly became obvious that these innovative products would be designed to avoid paying for much of our health care. He had to come up with a proposal to answer critics of his plan.

Over half of us receive our coverage through employer-sponsored group plans. Although employer-sponsored plans cover a lower-cost, healthier segment of our population, health care has now become so expensive that premiums for these more comprehensive plans have become much less affordable. Employers have been attempting to reduce their costs by trimming benefits and expanding out-of-pocket expenses for their employees, but even these changes have failed to make premiums affordable.

Sen. McCain contends that a less-regulated individual insurance market is capable of offering innovative products with premiums that would be affordable for most of us if we were to use his proposed tax credit. In reality, the tax credit is not large enough to make premiums affordable for plans comparable to what most employers provide. For premiums to be competitive, the plans would have to reduce benefits and require much greater out-of-pocket cost sharing. These plans would work only for individuals who are healthy and who will remain healthy, defeating the purpose of insurance.

In a less-regulated market, more comprehensive coverage comparable to current employer-sponsored plans attracts individuals who have greater health care needs. It is unlikely that those plans would even be offered in the individual market under Sen. McCain’s proposal, but if they were, they would rapidly withdraw from the market because of the death spiral caused by the ever higher premiums that must be charged as the sick enroll and the healthy drop out. People who need care would be shut out of the individual market.

Sen. McCain could not really sit on a proposal that would cover only the 80 percent of us who are healthy. He had to propose some mechanism of paying for the 80 percent of health care that is used by the 20 percent of us who have significant health care needs. His solution is to promote state-run high-risk pools that would provide that coverage.

We do already have considerable experience with these pools, and it certainly is not good. The primary problem is that the cost per participant is extremely high. Most states severely restrict the number of participants, and many states haven’t even established such pools. The high premiums are even less affordable, and coverage is very skimpy, usually with very low lifetime caps.

In 2006, private plans, out-of-pocket expenses, and other private spending financed 54.7 percent of national personal health care expenditures (KFF/Urban Institute). CMS projects for 2008 a total personal health care expenditure of $1,999 billion. Thus private health care spending is projected to be $1,093 billion this year. The 20 percent of health care consumed by the 80 percent of us who are relatively healthy would cost about $218 billion. The 80 percent consumed by the 20 percent of individuals with significant health care needs would cost about $874 billion in private spending.

It is much of this $874 billion that would be transferred to the state high-risk pools under Sen. McCain’s proposal. His adviser, Douglas Holtz-Eakin, provides an “extremely preliminary” estimate of $7 billion to $10 billion in federal subsidies for these pools. Who pays the other $864 billion? The individual?

Excluding those covered by Medicare, Medicaid and other public programs, 225 million of us have private insurance or are uninsured. Twenty percent of those, or 45 million people, theoretically would be in the high-risk pool if everyone were to obtain coverage under his program. If the high-risk individuals were responsible for the remaining $864 billion, each would have to pay $19,200. Obviously, that can’t work.

Others propose that high-risk pools be funded by an assessment on commercial insurers. But that moves the financing for high-risk individuals back into the private insurance risk pools. Not only would that drive up premiums, which are already unaffordable, it would also add another layer of administrative costs in a system that is already overburdened with administrative excesses.

Now you know why state high-risk pools don’t work. There is only one reason to propose them in the first place – that is to relieve the private insurance industry of its responsibility of paying for necessary health care, merely to enhance its successful business model of selling insurance primarily to the people who don’t need care now, and hopefully won’t in the future.

As John Geyman says, the private insurance industry is dying, and we shouldn’t try to resuscitate it – certainly not if we we taxpayers are the ones who are going to be indemnifying those who actually need health care.

Celinda Lake and Drew Westen
Families USA, Herndon Alliance, Westen Strategies, Lake Research Partners
May 22, 2008

If you want to see universal health care enacted, stop using that phrase.

Message development: Using focus groups of swing voters and online dial-groups

Conservative message:

Families should be in charge of their health care dollars. Rising health care costs are a problem, and the best way to bring them down is to increase competition among health care providers and put an end to these million dollar lawsuits that drive up insurance costs and put doctors out of business. The best solution to our health care problems is to let the free market work, foster more competition, and help people deal with the rising costs of coverage with health savings accounts that allow people to manage their own health care decisions. The last thing we need is the government taking over health care and creating a massive bureaucracy that will cost us billions of dollars a year. Sure, we have problems, but what the naysayers always seem to forget is that Americans still have the best health care in the world. Europe and Canada have government run health care, and their patients come here for treatment due to long waits and poor quality care. The answer to our health care problems is a freer market, not socialized medicine.
MEAN DIAL RATING (0-100) = 55

Progressive message I:

I believe that people who work for a living ought to be able to take their kids to a doctor, and people who are retired, ill, or temporarily out of work shouldn’t risk losing their life savings because of one illness. We’re not just talking about poor people. We’re talking about middle class Americans who are getting squeezed. Too many people have to think twice before switching jobs or starting a business because they’re worried they won’t be able to get insurance. We need comprehensive reform, not a band-aid. That means putting government to work for taxpayers again, not for special interests, by requiring insurance companies to put more money into patient care and less into efforts to deny it. It means preventing insurance companies from excluding patients because of “pre-existing conditions” and overriding doctors’ decisions about what their patients need. It means giving us choices among plans so we can decide what’s best for our own families, including the choice to keep our current doctor. It means limiting the amount anyone has to spend out of pocket, so no one loses their life’s savings because of a sick child or a hospital bill. And it means giving small businesses tax breaks to offset the costs of covering their employees, and requiring big businesses to offer coverage to their employees instead of sticking middle class taxpayers with the tab.
MEAN DIAL RATING (0-100) = 71

Progressive message II:

I believe in a family doctor for every family. It’s not right that hard-working Americans are struggling to afford health care and prescription drugs, while we’re strangling small businesses with the cost of their employees’ health care. The market hasn’t solved this problem, and it’s not going to as long as big insurance and drug companies are profiting at our expense. But we don’t need to replace managed care bureaucracy with government bureaucracy. We need common sense reform that gives people more choices, not less, including the choice to stay with the doctor they have now. We need to make insurance companies compete with each other to keep costs down and quality up, and give people the option to buy into the same plan members of Congress get, because if it’s good enough for Congress, it’s good enough for the people they represent. And we need government to set high standards to keep deductibles low, stop insurance companies from cherry-picking patients by excluding people with “pre-existing conditions,” and guarantee preventive care like cancer screening that cuts long-term costs and saves lives.
MEAN DIAL RATING (0-100) = 69

This link will download the Lake/Westen PowerPoint presentation, but you will be able to open it only if you have an appropriate program on your computer:
https://wadmin5.getactive.com/system/ga/redirect.jsp?redirectURL=http%3A%2F%2Fwww.familiesusa.org%2Flink-redirect.jsp%3FitemID%3D39611471%26domain%3Dfamiliesusa&hostgroupID=27078647

And…

Key Highlights from Herndon Alliance research

Celinda Lake, David Mermin, Dan Spicer
Lake Research Partners
November 15, 2007

A strong majority of voters favor Guaranteed Affordable Choice (GAC), and voters prefer it to other health care reform alternatives tested like HSAs, tax credits, or a single payer plan.

(Note: In the survey, the rhetoric of “Guaranteed Affordable Choice” was paired with the rhetoric of each of the other three options: “Health Savings Account,” “Tax Credits,” and “Single Payer.” In each pairing, Guaranteed Affordable Choice was preferred by about two-thirds of the participants, whereas each of the other options was preferred by about one-fifth. Only their rhetoric of “Guaranteed Affordable Choice” and “Single Payer” are included here since they relate to today’s message.)

Guaranteed Affordable Choice (GAC): An approach that would guarantee affordable health insurance coverage for every American with a choice of private or public plans that cover all necessary medical services, paid for by employers and individuals on a sliding scale. (64% preferred)

Single Payer (SP): A single government-financed health insurance plan for all Americans financed by tax dollars that would pay private health care providers for a comprehensive set of medical services. (22% preferred)

http://herndonalliance.org/pdf/PollingSummaryLRP-Nov07.pdf?PHPSESSID=51de02f649a54470d01f6e2a5ae6ccbb

Comment:

By Don McCanne, MD

There is currently an intensive effort within the progressive community to establish unity in support of a message on health care reform that will resonate with swing voters as well as progressives. Those driving that effort contend that the policy debate is over, and it is now time to move forward unified behind one message.

What is that message? CHOICE! “It means giving us choices among plans so we can decide what’s best for our own families,” according to the progressive message above. You’ve heard the Democratic candidates say repeatedly that “you can keep the insurance you have if that’s your choice.”

People like choice. The conservatives understand that. They contend that government programs take away your choice. Of course a single payer system allows you to choose your health care professionals, whereas the private plans supported by the conservatives take away your freedom to choose your physicians and hospitals. But what about the progressives? They are now using the framing of the conservatives! You can have your choice of health plans! But then why deal with the real issues when the rhetoric works so well?

Now let’s look at the survey data on Guaranteed Affordable Choice (GAC). When GAC was paired with Single Payer (SP), 64% preferred the rhetoric of GAC and 22% preferred the rhetoric of SP. Let’s look specifically at the rhetoric, from a policy perspective.

Both of the GAC and SP sentences flow very well, and even members of the policy community might not detect any bias at first glance. But when you study the statements, you can see several problems with the rhetoric. As mentioned, people like the word “choice.” It’s in the GAC description but not SP, even though the SP choice of physicians and hospitals is much more important than choice of health plans. GAC has a “guarantee,” but SP does not, even though SP is automatic for everyone – the ultimate guarantee. GAC is “affordable,” but SP is silent on this even though it is the model that actually is designed to be affordable. GAC has an option of a “public” plan, but SP is a “government” plan – meant as a rhetorical pejorative. GAC is paid on a “sliding scale,” but the even more equitable progressive nature of SP tax financing is not mentioned. Someone else (“employers”) are paying a large part of the GAC premium, whereas you pay your own (“taxes”) in the SP model. Even “paid for” (GAC) is a more comfortable phrase than the sterile term “financing” (SP). SP uses “providers” whereas GAC is silent and presumably uses physicians and other health care professionals. GAC has “all necessary” medical services, whereas SP has only “a comprehensive set.”

What happened here? The policy was set in advance, frozen in the model supported by the Democratic candidates. Then a message was developed to precisely coincide with that model. This was not a survey of which policies swing voters would prefer. This was a survey of what message produces a more supportive response of a model already fixed in concrete, at least fixed from the perspective of many of those supporting unity. The problem is that the policy debate is not over.

That said, the progressive community is right in one very important regard. It is time for unity. It is time for us to unite together in support of health policies that would ensure that every individual would have access to reasonably comprehensive health care services in an equitably funded system that is affordable for each and every individual and affordable for society. Unity is fragile. Trading away these principles would divide us, but by uniting behind them, we can finally get the job done.

America’s Health Insurance Plans (AHIP)
May 29, 2008

The U.S. could reduce total health care spending and improve the quality of patient care if the plan proposed today by America’s Health Insurance Plans (AHIP) was implemented. PricewaterhouseCoopers reviewed AHIP’s proposals and estimates and concluded that if these proposals are fully implemented, the nation’s total health care expenditures could be $145 billion lower than currently projected by the year 2015.

Principle #1: Patients and their doctors must have the information and tools they need to evaluate treatment options and make health care decisions on the basis of safety, quality and cost.

AHIP Proposal: Access to information that compares the effectiveness and cost of treatments: Give providers, patients and purchasers access to a trusted source where they can find up-to-date and objective information on which health care services are most effective and provide the best value.

Principle #2: Patients and doctors want an efficient, interconnected health care delivery system that reduces medical errors.

AHIP Proposal: Health information technology: Encourage widespread adoption of tools such as electronic health records (EHRs), personal health records (PHRs), secure e-visits with physicians, and e-prescribing.

Principle #3: Doctors and nurses need the freedom to practice medicine without worrying about frivolous lawsuits.

AHIP Proposal: Reforming the legal system: Replace the current medical liability system with a dispute resolution process consisting of an objective, independent administrative process to provide quick and fair resolution to disputes while promoting evidence-based medicine.

Principle #4: Health insurance plans are transitioning to a system that more closely aligns payments with the quality of care patients receive.

AHIP Proposal: Build health care reform around quality improvement by rewarding safety, value and effectiveness: Work for the broader adoption of value-based reimbursement mechanisms and provide consumers with more actionable information about health care value.

Principle #5: The nation must move towards a system of care that focuses on keeping people healthy, detects disease at the earliest possible stage and rewards chronic care management.

AHIP Proposal: Enhanced disease management, care coordination and prevention programs: Deploy a new generation of strategies that emphasize prevention, improve chronic care and tailor healthcare for patients to help them live longer and stay healthier.

AHIP press release
http://www.ahip.org/content/pressrelease.aspx?docid=23426

Full report: A Shared Responsibility: Advancing Toward a More Accessible, Safe, and Affordable Health Care System for America
http://www.ahip.org/content/default.aspx?docid=23427

Comment:

By Don McCanne, MD

Health care costs have become intolerable for most individuals, employers, and the government, and the prospect is that costs will continue to increase well in excess of the rate of inflation. Most current political proposals are focused on expanding coverage. Although the proposals include token programs for cost containment, most are not much more than rhetorical fluff except for the consumer-directed proposals that would make health care access even less affordable by shifting payment responsibility to patients in need of care. This is not the direction in which we should be headed.

The majority of Americans now receive their health care coverage through private health plans. While the private insurance industry has been in control for decades, they have been unable to restrain the escalation in health care costs. They understand that the viability of their industry is threatened if the issue of affordability is not adequately addressed. Let’s look at their proposal released today that theoretically would control health care spending.

Of their five proposals, the PricewaterhouseCoopers analysis shows that only three of them are projected to provide any significant savings: (2) Health information technology, (3) Medical liability reform, defensive medicine, and (5) Disease management, chronic care, prevention. How effective would these be?

Health information technology certainly can provide benefits such as increased efficiency and error reduction, but the problem of maintaining patient confidentiality within an integrated network has not been solved and may never be. Even if we did move forward with such a system, the private industry is poised to produce and control the technology for medical records and integrated systems. When you consider who the wealthiest person on earth is, it is difficult to imagine that such a system, which will certainly not be free, will reduce health care costs in the future. That technology will be expensive and it will be designed to continue to generate an enormous amount of user fees.

The direct costs of medical liability are only a very small part of our national health expenditures. If totally eliminated, it would have only a negligible impact on reducing spending. The important question is whether or not defensive medicine is wasting resources. When physicians decide to order tests to prevent lawsuits, they are not tests that couldn’t possibly provide any information that might help the patient. Most defensive medicine tests are ordered to be certain that a less likely but very real threat does not exist. These tests may be approaching the flat of the curve, but they are tests which occasionally do reveal a threat for which intervention can be effective, even life saving. Do we really want to abandon the use of lower-yield tests merely because they also happen to provide liability protection from having missed a serious disorder?

Substituting our current tort approach to malpractice with a dispute resolution process may be a good idea, but we should not expect major cost savings from that change. Currently, the overwhelming majority of medical-injury victims do not sue and never receive compensation for their injuries. If we were to establish a process in which medical injury is automatically compensated, it is likely that it would be considered to be an entitlement program, much like workers compensation. Imagine the costs of a program in which almost all medical injury is compensated. Even if it’s a good idea, based on the number of individuals to be compensated, it would increase rather than decrease health care costs.

Much has been written about disease management, chronic care, and prevention. Appropriate disease management and chronic care should be provided by our primary care professionals rather than by wasteful third-party administrators. An advantage of introducing processes that improve care is that ongoing needs for diagnostic and therapeutic interventions are more readily identified and acted upon. Prior studies have shown that even people with the best of care are not receiving all of the services that they should be. Improving care by providing these additional, appropriate services will not reduce costs, it will increase costs.

Prevention is important, but most important preventive measures fall outside of the realm of the health care delivery system. Even AHIP states that recommended steps include the “development of a national approach to consumer education and physical fitness, leading with a national discussion aiming to develop new strategies to promote early intervention of preventable disease.”

The insurance industry’s proposals to make health care affordable will more likely increase costs, so we should ask ourselves if they really provide us with any services that actually are of value. In this report they list services that they say are worth the extra cost that we pay over and above the publicly-administered Medicare program. According to AHIP, in contrast to Medicare, “private insurers develop a range of products, sell them to an under-65 population, develop and support provider networks, promote wellness and prevention, offer disease management services, access to health information, and offer consumer support services related to choice of providers and treatment plans.”

Well let’s break this out. They “develop a range of products,” which means that they market undesirable products that reduce benefits and increase cost sharing – measures that make access to health care less affordable. They sell their products to the “under-65 population,” certainly a healthier population than those over 65, but does that mean that we should be paying more for these marketing services that Medicare doesn’t face? They “develop and support provider networks,” which take away your freedom to choose your hospitals and health care professionals. They “promote wellness and prevention,” but who doesn’t? They “offer disease management services,” which are a costly administrative intrusion into primary care. They provide “access to health information,” as if they haven’t heard of the Internet. They “offer consumer support services related to choice of providers and treatment plans,” which are decisions to be made by patients and their health care professionals, not by an intrusive private bureaucracy.

So AHIP is attempting to legitimize the continued existence of the private health insurance industry by proposing cost containment measures that can’t work, and by trying to convince us that their expensive, detrimental administrative services are worth the extra we are paying. Why should we be paying extra for services that make affordability and access worse?

This report from AHIP is a desperate attempt to convince us that the worthless services of the private insurance industry somehow provide us with value. John Geyman is right. The insurance industry is in its death throes, and we should not attempt to resuscitate it.

John Geyman, “Do Not Resuscitate:”
http://www.commoncouragepress.com/index.cfm?action=book&bookid=396

AHIP Outlines Plan to Reduce Health Care Costs by $145 Billion

America’s Health Insurance Plans (AHIP)
May 29, 2008

The U.S. could reduce total health care spending and improve the quality of patient care if the plan proposed today by America’s Health Insurance Plans (AHIP) was implemented. PricewaterhouseCoopers reviewed AHIP’s proposals and estimates and concluded that if these proposals are fully implemented, the nation’s total health care expenditures could be $145 billion lower than currently projected by the year 2015.

Principle #1: Patients and their doctors must have the information and tools they need to evaluate treatment options and make health care decisions on the basis of safety, quality and cost.

AHIP Proposal: Access to information that compares the effectiveness and cost of treatments: Give providers, patients and purchasers access to a trusted source where they can find up-to-date and objective information on which health care services are most effective and provide the best value.

Principle #2: Patients and doctors want an efficient, interconnected health care delivery system that reduces medical errors.

AHIP Proposal: Health information technology: Encourage widespread adoption of tools such as electronic health records (EHRs), personal health records (PHRs), secure e-visits with physicians, and e-prescribing.

Principle #3: Doctors and nurses need the freedom to practice medicine without worrying about frivolous lawsuits.

AHIP Proposal: Reforming the legal system: Replace the current medical liability system with a dispute resolution process consisting of an objective, independent administrative process to provide quick and fair resolution to disputes while promoting evidence-based medicine.

Principle #4: Health insurance plans are transitioning to a system that more closely aligns payments with the quality of care patients receive.

AHIP Proposal: Build health care reform around quality improvement by rewarding safety, value and effectiveness: Work for the broader adoption of value-based reimbursement mechanisms and provide consumers with more actionable information about health care value.

Principle #5: The nation must move towards a system of care that focuses on keeping people healthy, detects disease at the earliest possible stage and rewards chronic care management.

AHIP Proposal: Enhanced disease management, care coordination and prevention programs: Deploy a new generation of strategies that emphasize prevention, improve chronic care and tailor healthcare for patients to help them live longer and stay healthier.

AHIP press release
http://www.ahip.org/content/pressrelease.aspx?docid=23426

Full report: A Shared Responsibility: Advancing Toward a More Accessible, Safe, and Affordable Health Care System for America
http://www.ahip.org/content/default.aspx?docid=23427

Comment:

By Don McCanne, MD

Health care costs have become intolerable for most individuals, employers, and the government, and the prospect is that costs will continue to increase well in excess of the rate of inflation. Most current political proposals are focused on expanding coverage. Although the proposals include token programs for cost containment, most are not much more than rhetorical fluff except for the consumer-directed proposals that would make health care access even less affordable by shifting payment responsibility to patients in need of care. This is not the direction in which we should be headed.

The majority of Americans now receive their health care coverage through private health plans. While the private insurance industry has been in control for decades, they have been unable to restrain the escalation in health care costs. They understand that the viability of their industry is threatened if the issue of affordability is not adequately addressed. Let’s look at their proposal released today that theoretically would control health care spending.

Of their five proposals, the PricewaterhouseCoopers analysis shows that only three of them are projected to provide any significant savings: (2) Health information technology, (3) Medical liability reform, defensive medicine, and (5) Disease management, chronic care, prevention. How effective would these be?

Health information technology certainly can provide benefits such as increased efficiency and error reduction, but the problem of maintaining patient confidentiality within an integrated network has not been solved and may never be. Even if we did move forward with such a system, the private industry is poised to produce and control the technology for medical records and integrated systems. When you consider who the wealthiest person on earth is, it is difficult to imagine that such a system, which will certainly not be free, will reduce health care costs in the future. That technology will be expensive and it will be designed to continue to generate an enormous amount of user fees.

The direct costs of medical liability are only a very small part of our national health expenditures. If totally eliminated, it would have only a negligible impact on reducing spending. The important question is whether or not defensive medicine is wasting resources. When physicians decide to order tests to prevent lawsuits, they are not tests that couldn’t possibly provide any information that might help the patient. Most defensive medicine tests are ordered to be certain that a less likely but very real threat does not exist. These tests may be approaching the flat of the curve, but they are tests which occasionally do reveal a threat for which intervention can be effective, even life saving. Do we really want to abandon the use of lower-yield tests merely because they also happen to provide liability protection from having missed a serious disorder?

Substituting our current tort approach to malpractice with a dispute resolution process may be a good idea, but we should not expect major cost savings from that change. Currently, the overwhelming majority of medical-injury victims do not sue and never receive compensation for their injuries. If we were to establish a process in which medical injury is automatically compensated, it is likely that it would be considered to be an entitlement program, much like workers compensation. Imagine the costs of a program in which almost all medical injury is compensated. Even if it’s a good idea, based on the number of individuals to be compensated, it would increase rather than decrease health care costs.

Much has been written about disease management, chronic care, and prevention. Appropriate disease management and chronic care should be provided by our primary care professionals rather than by wasteful third-party administrators. An advantage of introducing processes that improve care is that ongoing needs for diagnostic and therapeutic interventions are more readily identified and acted upon. Prior studies have shown that even people with the best of care are not receiving all of the services that they should be. Improving care by providing these additional, appropriate services will not reduce costs, it will increase costs.

Prevention is important, but most important preventive measures fall outside of the realm of the health care delivery system. Even AHIP states that recommended steps include the “development of a national approach to consumer education and physical fitness, leading with a national discussion aiming to develop new strategies to promote early intervention of preventable disease.”

The insurance industry’s proposals to make health care affordable will more likely increase costs, so we should ask ourselves if they really provide us with any services that actually are of value. In this report they list services that they say are worth the extra cost that we pay over and above the publicly-administered Medicare program. According to AHIP, in contrast to Medicare, “private insurers develop a range of products, sell them to an under-65 population, develop and support provider networks, promote wellness and prevention, offer disease management services, access to health information, and offer consumer support services related to choice of providers and treatment plans.”

Well let’s break this out. They “develop a range of products,” which means that they market undesirable products that reduce benefits and increase cost sharing – measures that make access to health care less affordable. They sell their products to the “under-65 population,” certainly a healthier population than those over 65, but does that mean that we should be paying more for these marketing services that Medicare doesn’t face? They “develop and support provider networks,” which take away your freedom to choose your hospitals and health care professionals. They “promote wellness and prevention,” but who doesn’t? They “offer disease management services,” which are a costly administrative intrusion into primary care. They provide “access to health information,” as if they haven’t heard of the Internet. They “offer consumer support services related to choice of providers and treatment plans,” which are decisions to be made by patients and their health care professionals, not by an intrusive private bureaucracy.

So AHIP is attempting to legitimize the continued existence of the private health insurance industry by proposing cost containment measures that can’t work, and by trying to convince us that their expensive, detrimental administrative services are worth the extra we are paying. Why should we be paying extra for services that make affordability and access worse?

This report from AHIP is a desperate attempt to convince us that the worthless services of the private insurance industry somehow provide us with value. John Geyman is right. The insurance industry is in its death throes, and we should not attempt to resuscitate it.

John Geyman, “Do Not Resuscitate:”
http://www.commoncouragepress.com/index.cfm?action=book&bookid=396