PNHP

CBO looks at Wyden/Bennett S. 334

CBO looks at Wyden/Bennett S. 334

Letter to Sen. Ron Wyden and Sen. Robert Bennett from CBO Director Peter Orszag and JCT Chief of Staff Edward Kleinbard

Congressional Budget Office
Joint Committee on Taxation
May 1, 2008

At your request, the staffs of our two organizations have collaborated on a preliminary analysis of a modified proposal for comprehensive health insurance based on S. 334, the “Healthy Americans Act,” which you introduced last year. That modified proposal includes various clarifications and changes that you have indicated you would like to examine as part of the consideration of that bill.

Attachment B – Key Differences Between the Current Proposal and S. 334

The minimum value of covered benefits that all participating health plans had to provide would initially be set equal to the value of the Blue Cross/Blue Shield standard option offered to Federal employees in 2011; in future years, that average value would be indexed to the overall growth rate of gross domestic product per capita.

The premiums collected through the tax system — and the premium subsidy for lower-income households — would be tied to the cost of the least expensive plan available in an area that provided the required benefits, not to the average premium amount. Individuals could choose a more expensive health plan or one with more extensive benefits, but amounts in excess of that lowest-cost premium would not be collected through the tax system or be liabilities of the Federal government.

The new tax deduction would be a fixed amount per year and would not vary with the premium of the insurance policy actually purchased.

http://www.cbo.gov/ftpdocs/91xx/doc9184/05-01-HealthCare-Letter.pdf#page=5

Comment:

By Don McCanne, MD

S. 334, the Wyden/Bennett Healthy Americans Act, would “require individuals to purchase private health insurance and to establish state-run purchasing pools and a system of Federal premium collections and subsidies to facilitate those purchases.”

Although the bill has provisions that nominally would slow the increase in health care costs, they are similar to the cost-containing provisions of the proposals of the presidential candidates that actually would have very little impact, if any, on slowing cost escalation. It became apparent that adjustments would have to be made in S. 334 to prevent increasing demands on future federal budgets.

Under this proposal, the value of the basic standard option would be indexed to the overall growth rate of the gross domestic product (GDP). Since the growth rate of actual health care costs has always exceeded the growth rate of the GDP, the difference between actual costs and GDP growth will have to be met either by a reduction in the benefits of the basic option or by an increase in the premium paid by the insured, or by a combination of both. This has the impact of shifting some of the responsibility of paying for care from pooled government funds to the individual.

The premiums to be collected would no longer be tied to the average premium amount as they would have been in the original proposal, but they would be tied to the least expensive plan available. The difference between the minimum premium and the average premium would have to be paid by the individual. This also has the impact of shifting some of the responsibility of paying for care from pooled government funds to the individual.

Since the tax deduction allowed would be a fixed amount rather than varying with the premium, the difference would lose its tax advantage and shift more costs to the individual. Once again, this has the impact of shifting some of the responsibility of paying for care from pooled government funds to the individual.

Over time, health care spending for the government would be stabilized to a greater degree, but at the cost of shifting more of the responsibility of paying for care to the individual.

What we really need is a system that removes the financial burden from patients and more effectively pools our funds into a public program that is able to address costs much more effectively by introducing greater efficiency and value into our health care system. Depending on private plans, while placing a lid on government spending, won’t do it.

Missing: Single-Payer in Pennsylvania

What David Brancaccio, and the rest of the press, left out

By Trudy Lieberman
Columbia Journalism Review
Wed 30 Apr 2008 03:01 PM

The Pennsylvania primary may be over, but one of the campaign’s hottest and most fiercely contested issues–whether the state on its own can reform health care and cover some portion of the uninsured–is not. Right before the primary, David Brancaccio on his weekly public affairs show NOW recognized that this reform debate is very much alive in Pennsylvania. Called “Health Care Meltdown: Looking for Solutions,” the NOW segment began by citing an all-important and alarming stat–health-care costs in the state are running 11 percent higher than the national average, and they’re rising twice as fast as the average wage. To personalize the numbers, Brancaccio offered up Philadelphia coffee bar owner Joe Cesa, who said he could not afford to cover his baristas, though he does help them pay small doctor bills. To personalize the numbers even more, NOWpresented a couple in the insurance business, Diane and Sean Doherty, who pay $1,000 a month for coverage and still face higher deductibles, larger co-payments, and more out-of-pocket expenses. Many Americans feel similar pain.

What to do about all this? NOW’s message: Pennsylvania Governor Ed Rendell, a Democrat and Clinton backer, is trying to fix health insurance with what Brancaccio called “a bold but controversial new experiment in health-care reform that could offer a glimpse at things to come nationally.” Brancaccio told his audience that the one thing they needed to know about the governor’s plan was that it would cover nearly 70 percent of the uninsured, even those with preexisting conditions. There’s nothing wrong with the governor trying to fix a serious problem, but a bold, new experiment? Has Brancaccio not heard that a similar plan was pushed by California Gov. Arnold Schwarzenegger last year, only to die an agonizing death when an independent state agency declared that it was way underfunded? Has he not heard of the troubles in Massachusetts, a state struggling to provide health insurance to everyone under a similar kind of law?

Brancaccio failed to include context that would have helped viewers understand whether the Pennsylvania governor really has a novel plan that might work. Instead, he larded his show with bites from Republican legislator Karen Breyer, who appeared on camera not once but eight times, subtly and not-so-subtly pumping the governor’s compromise approach. As a Republican, she may have added balance, but to me she seemed like a Rendell cheerleader. Brancaccio did say the governor’s plan was controversial and showed one state senator alluding to the huge costs of funding any reform. Brancaccio also laid out the proposed funding sources–the usual suspects: tobacco taxes, federal dollars, premiums paid by the newly insured–without mentioning they were basically the same ones considered in California and Massachusetts. Context wasn’t Brancaccio’s only omission. He gave no airtime to the state’s active single-payer movement, a serious grassroots group called Healthcare for All Pennsylvania, which has more than four thousand members who have been holding rallies, forums, and panels to promote a state-funded system that covers everyone. It’s one of the most active single-payer organizations in the country and has been challenging the governor’s plan. It hasn’t gotten a lot of press. This spring when the single-payer bill was up for a hearing in the state House of Representatives Health and Human Services Committee, a state representative who supports the governor’s approach called a press conference down the hall at the same time to talk about future anticrime legislation, which drew away the capital press corps. Only the Philadelphia Evening Bulletin published a story about the hearing.

Legislative maneuvering happens in the rough and tumble of politics, but on national television, one might expect higher standards of fairness. By chance, a medical student named Kevin Hauck walked into Joe’s Coffee Bar as the NOW crew was filming, and he was interviewed for the show. Hauck, who is also a board member of Healthcare for All Pennsylvania, said he talked about the single-payer plan, but those comments didn’t make the final cut. Instead the segment showed Hauck talking about a doctor bargaining with an uninsured patient over which lab tests to perform and saying, “This is really an issue about patients and about getting treatment.” No kidding. A researcher for the show did interview several people who support a single-payer plan but told one of them that the show was going in a different direction. The closest NOW came to giving a nod to that approach was a comment from Brancaccio: “Reformers contend it [the governor’s plan] falls far short of providing what they consider the holy grail of health-care reform: universal coverage.”

Slanting a story by omission is not cool. Shutting out an important viewpoint hardly fosters robust discussion of a subject that every American has a stake in. Chuck Pennacchio, who heads Pennsylvania’s single-payer group, vows that the fight to educate the state about their plan will continue “through word of mouth, fliers, e-mail, and bloggers,” old fashioned tools and new ones. But what does that say for the mainstream media?

National health insurance best way to ensure care for all Americans

By DAVID MCLANAHAN and DONALD MITCHELL
GUEST COLUMNIST
Seattle Post-Intelligencer
April 30, 2008

The need for meaningful health care reform remains one of the hottest topics in the public as we approach our national election. An important new study, in the prestigious Annals of Internal Medicine, reveals a growing consensus among practicing physicians that our broken health care system would be best fixed by legislation establishing national health insurance (NHI).

Researchers at Indiana University, in a study of randomly chosen physicians representing the total population of U.S. physicians across all specialties, found a shift in the thinking over the past five years. Now a solid majority of doctors, almost 60 percent, support government legislation to establish NHI — a 10 percent increase in support since 2002.

In another indication that doctors’ attitudes are changing, in December 2007 the nation’s largest medical specialty group, the 124,000-member American College of Physicians, endorsed a single-payer NHI program for the first time.

NHI plans typically involve a single-payer federally administered social insurance fund that guarantees health care coverage for everyone, much like Medicare provides for seniors. Such plans allow patients to go to the doctors and hospitals of their choice, but eliminate or substantially reduce the role of private insurance companies in the health care financing system.

This growing consensus is one more indication that physicians are increasingly rejecting the “marketplace medicine” that has eroded the American value of caring for and supporting one another and that has frustrated our traditional professional ethics. It is in no doubt connected to the daily witnessing of the suffering caused by inequities in health care delivery as well as the waste and inefficiency associated with a private insurance industry that consumes 31 percent of every U.S. health care dollar on bureaucratic paperwork and overhead.

As doctors, we see more and more of our patients experiencing a deterioration in the quality of their employer-based coverage, or losing such coverage altogether, often leading to their financial ruin. Families USA now estimates that one working-age Washingtonian dies each day because of lack of health insurance. In Washington we waste $5.2 billion on excess administrative expenses, more than enough to cover our 746,000 uninsured. Surely we can and must do better.

The Washington Legislature recently took a step forward in passing the Health Working Group legislation, which authorizes a comparative economic/quality analysis of four state health care reform proposals, including a single-payer plan. Washingtonians will have an opportunity to study the results and express themselves in public forums around the state. Unfortunately, the working group timeline delays any meaningful legislation based on its work until the 2010 legislative session.

It is now time for those seeking political office to confront the elephant in the room — the private health insurance industry — and the obstacles it poses to delivering quality health care at an affordable cost to everyone who needs it.

Although both Sens. Hillary Clinton and Barack Obama have said they could support single-payer NHI, neither seems prepared to advocate for it. This new survey of the nation’s doctors, coupled with the findings in an AP/Yahoo public opinion poll last December that 65 percent of Americans favor a similar approach, demonstrate substantial public support for national health insurance. Clearly the physicians and the public are pointing the way forward for meaningful political action.

David McLanahan, M.D., and Donald Mitchell, M.D., are members of Physicians for a National Health Program, Western Washington Chapter. Contributing to this column was Hugh Foy, M.D., also a chapter member.

AHIP on “Health Savings Account Plans”

January 2008 Census Shows 6.1 Million People Covered by HSA/High-Deductible Health Plans

America’s Health Insurance Plans (AHIP)
Center for Policy and Research
April 2008

The number of people with HSA/HDHP coverage rose to 6.1 million in January 2008, up from 4.5 million in January 2007, and 3.2 million in January 2006.

In two market segments — individual and large-group — over 90 percent of enrollees in HSA/HDHP plans were in Preferred Provider Organization (PPO) products.

Premiums for large-group coverage in HSA/HDHP plans were similar to those reported for small-group HSA/HDHP coverage. In both cases, these premiums are considerably lower than premiums reported in surveys of all employer-based coverage, including other types of plans. For example, the average premium was $12,106 in 2007 for all employer-sponsored family policies; nearly $4,000 higher than the reported average family premium for the best-selling small-group HSA/HDHP plan in January 2008, and almost $3,900 higher than the average premium for large-group HSA/HDHP plans.

Partial Information on Health Savings Accounts (based on information from 460,000–800,000 HSA acounts):

During the year 2007, 83 percent of the reported accounts in place had average annual balances of $2,500 or less; 7 percent had account balances over $5,000. (In general, health insurance plans offering HSA/HDHP coverage may not have information about HSA accounts held by their policyholders, especially if the HSA account is established with a bank that is not affiliated with the health insurance plan.)

Full report:
http://www.ahipresearch.org/pdfs/2008_HSA_Census.pdf

Press release:
http://www.ahip.org/content/pressrelease.aspx?docid=23159

Comment:

By Don McCanne, MD

Today’s press release from AHIP has the headline, “More Than Six Million Enrolled in Health Savings Account Plans.” In the release, AHIP President and CEO Karen Ignagni states, “Employers and individuals across the country and across the age spectrum are choosing HSA plans, which are now an important part of the portfolio of coverage options offered by health plans.”

So anyone who can read plain English now knows that the are more than six million health savings accounts. But wait a minute. This study shows only that there are more than six million high-deductible health plans (HDHPs) which meet the qualifications to establish a health savings account. They have only partial information on less than 800,000 actual health savings accounts and cannot tell us whether the other five million accounts were even established, much less funded.

This release is not about HSAs. It is about the industry’s high-deductible health plans. They are using the hype over HSAs to expand the market for their HDHPs by deceptively labeling them “HSA plans.”

Although the HSA label may be an effective marketing tool for these HDHPs, since only seven percent of the HSAs actually established and reported have balances over $5000, it is not really the HSA that ultimately motivates the individual or employer to purchase these plans. It is the low premium that is attractive to the purchaser.

HDHPs are less expensive because they require greater out-of-pocket spending by the patient, whether or not those funds come from the patient’s own health savings account. We are already experiencing a major epidemic of underinsurance, exposing patients to financial hardship. This deceptive marketing of HDHPs by the insurance industry will only compound this tragedy.

And our presidential candidates want to leave this industry in charge. The real tragedy would be if we merely sit back and let them do it.

The Folly of McCain-Care

His great new plan isn’t new or great. And it still wouldn’t help Elizabeth Edwards get decent insurance.

By Jonathan Cohn
The New Republic
Published: Tuesday, April 29, 2008

A few months ago, when John McCain decided to address the public’s anxiety about unaffordable medical care, he gave the sort of speech we’ve grown accustomed to hearing from Republicans over the years.

Let’s encourage people to drop their employer insurance and shop for coverage on their own, he said, since that will create a vibrant market in which people can find better bargains. And since some people will still have trouble paying for insurance, let’s give them a tax credit that would help offset the cost.

A big problem with this scheme, as critics like me pointed out, was that it wouldn’t do much for people who were already sick. Insurance companies generally won’t offer coverage directly to people with “pre-existing conditions,” since they represent such bad financial risks. (It turns out people with medical problems need medical care!) So buying insurance on their own really isn’t an option.

In just the last few weeks, this issue has started to become a political liability for McCain, thanks mostly to Elizabeth Edwards, who–in addition to being a well-known cancer patient–is also a well-known policy wonk. Edwards has given a series of speeches in which she has pointed out that neither she nor McCain himself, who is a three-time melanoma survivor, could buy individual insurance under his plan, since insurers would disqualify both of them for pre-existing conditions.

McCain bristled at this suggestion, vowing recently to ABC’s George Stephanopoulos that “we’re not leaving anybody behind.” His advisers echoed that sentiment, saying Edwards didn’t fully understand the proposal–and that, in short order, they’d have more to say on the subject.

Apparently that’s what McCain was doing earlier today. In a speech at a Florida cancer hospital, McCain acknowledged that people with pre-existing conditions can’t always buy insurance on their own. But, he says, that doesn’t mean these people will be left to twist in the wind.

Instead, McCain is offering people like Edwards what he calls a “Guaranteed Access Plan.” But unlike all those awful big-government entitlements the Democrats are promising–you know, the ones that (supposedly) make you wait in long lines and cut off access to high-technology treatments–McCain says his plan will let the states handle the problem by working hand-in-hand with private insurers to offer insurance for people with pre-existing conditions.

It will be the best of both worlds, McCain promises: Affordable, available insurance, but through private carriers and without the heavy hand of Washington.

It all sounds very lovely–unless you know something about health care policy, in which case it sounds absolutely preposterous.

More than 30 states already have programs almost exactly like the one McCain just sketched out. They are called “high risk pools,” and the idea is pretty straightforward: Private insurers agree to sell policies directly to individuals, even those with pre-existing medical conditions, as long as the state helps to subsidize the cost.

But the whole reason conservatives like McCain prefer this approach to liberal schemes for universal coverage is that it involves minimal government regulation. As a result, private insurers have enormous leeway in dictating the terms of coverage. And one place they use that leeway is by setting high prices. A few years ago, a Commonwealth Fund study found that, on average, state high-risk pools offered coverage that was two-thirds more expensive than regularly priced coverage. In some states, the high-risk coverage was actually twice as high as regular coverage.

At those prices, you might think the coverage was spectacular. Not so. While private insurers in high-risk pools are willing to accept people with pre-existing conditions, they’re not generally willing to cover expenses related to those pre-existing conditions–at least not right away. Nearly all the plans surveyed had waiting periods of between six months and a year, during which the insurers would not cover care for prior medical problems.

The plans also came with high cost-sharing; that is, beneficiaries were required to pay a sizeable portion of the bill–say, 20 percent–straight out of their pockets every time they received medical service. And, in many cases, the policies had lifetime benefit limits of a million dollars–which is not that hard to hit if you have the kind of serious medical condition that would land you in a high-risk pool in the first place.

To put this in more practical terms, I contacted Karen Pollitz, a research professor at the Georgetown University Health Policy Institute who has done some of the most detailed studies anywhere on high-risk pools and the individual market. Specifically, I asked her to consider what McCain’s plan would–hypothetically–do for the person who has given him the most political grief lately: Elizabeth Edwards.

It turns out that North Carolina, where Edwards lives, doesn’t actually have a high-risk pool in operation right now. (It hopes to launch one next year.) But neighboring South Carolina does. Pollitz was able to track down published figures with the rates the South Carolina pool would charge a 50-year-old man. (Edwards, a 57-year-old woman, would actually pay more.) And according to those figures, Edwards’ most cost-effective option would be to choose a plan that had monthly premiums of $867 for six months, followed by $693 every month thereafter.

That plan comes with a $1,500 deductible; in other words, every year Edwards would have to pay $1,500 in medical bills before the insurance kicked in. After that, she’d have to deal with the cost-sharing until she had spent another $3,500 out of her pocket.

If you do the math, you’ll see that means Edwards would end up paying more than $14,000 a year in insurance and out-of-pocket medical expenses. (At least for now. The rates go up in July.)

But wait–there’s the small matter of her cancer treatment during those first six months, which South Carolina’s pool, like the rest, wouldn’t cover at all. (And, no, those expenses wouldn’t count towards the deductible or out-of-pocket limits, either.) Given the high cost of cancer care–some drugs cost $10,000 a month–Pollitz says that her expenses could easily reach $100,000, although it’d be less if Edwards is no longer getting intensive, cutting-edge treatment.

Edwards, who is wealthy, can afford to pay those bills. But most cancer patients can’t, and as Pollitz notes, “If you have cancer, if you have a tumor growing in you, you can’t just let it grow for six to twelve months while you wait for the pre-existing waiting period to run out.”

The result is that a lot of people with medical problems will end up deciding to forgo insurance altogether, figuring that the insurance will make it harder–not easier–to pay their bills. And those people will almost certainly do what most people without insurance do: Pay out of pocket until they’re broke or cut back on their own medical care to save money, even though it could mean worse medical problems (and even higher bills) down the road.

In fairness, one of the reasons these insurance arrangements charge so much money for coverage is that they are serving a population of people with exceptionally high medical bills–i.e., the people who are “high risk.” And states have not traditionally devoted enough money to subsidize them.

McCain has promised he wouldn’t let that happen–that he’s determined to make sure the insurance is affordable for everybody. But, as many experts have noted, his budget promises are wildly unrealistic: He’s vowed to reduce the deficit, and yet, by all accounts, he’s promised far more in tax cuts than he might possibly generate in accompanying spending reductions. If McCain’s promises to be fiscally responsible are so transparently false, why take promises about his health care initiative on faith–particularly if he’s promising to do something states have tried and repeatedly failed to do on their own already?

Come to think of it, why should we even believe McCain takes this issue seriously? His Democratic counterparts, Hillary Clinton and Barack Obama, issued detailed policy proposals more than six months ago–with pages of analysis and explanation, right down to the budget dollars. Those details were a sign of commitment and, on a more practical level, their constant hyping of them represent an investment of political capital.

By contrast, even today’s announcement from the McCain campaign–which was supposed to help fill in the many blanks left before–came with only minimal detail and supporting evidence. The actual proposals are still vague, consisting mostly of bland vows to “work with governors” and make sure premiums for people with pre-existing conditions are “reasonable.” And while health care is the campaign’s focus this week, it’s never occupied the place in his agenda that it does in the Democrats’.

In a sense, this isn’t surprising. Earlier this year, when I first wrote about the basics of McCain’s health care vision, I asked his economics adviser, Douglas Holtz-Eakin, whether the McCain plan had the same ambition as the Democratic candidates’ plans. Holtz-Eakin, who has a reputation as a straight shooter, gave me a forthright answer: No. “We are not under the illusion that it will get universal coverage,” he said. And that was pretty much the line the campaign seemed to be taking: They might not be covering everybody, but they were helping some people–and doing so in a manner they found preferable to liberal alternatives, which necessarily required the government to become more involved in the deliver of health insurance. It wasn’t my view of the world–I think those liberal alternatives have been shown to work very well–but it was an honest and intellectually consistent one.

But with McCain’s vow that “we’re not leaving anybody behind” and the promotion of this “Guaranteed Access Plan,” it seems they’re not so ready to concede ambition after all. Maybe it’s the sting of Edwards’ attacks, which have gotten a lot of media attention. Maybe it’s the poll numbers suggesting that the public thinks health care is major voting issue. Or maybe it’s the fact that McCain, who has always struck me as more decent than most politicians, has genuinely reflected upon the plight of the medically uninsurable.

Whatever the reason, now McCain is talking like he wants to help everybody. Of course, he isn’t ready to give up his market-oriented principles on health insurance; he doesn’t realize that, by its very nature, private insurance operating in a regulatory vacuum is incapable of taking care of the people who need medical attention the most. And that’s why, at the end of the day, his plan for expanding coverage is every bit as inadequate as the critics have said all along.

Jonathan Cohn is a senior editor at The New Republic. He is also a senior fellow at Demos and the author of Sick: The Untold Story of America’s Health Care Crisis–and the People Who Pay the Price.

Sen. McCain's Guaranteed Access Plan

Remarks By John McCain On Health Care On Day Two Of The "Call To Action Tour"

www.JohnMcCain.com
Lee Moffitt Cancer Center & Research Institute, Tampa, FL
April 29, 2008

As President, I will meet with the governors to solicit their ideas about a best practice model that states can follow — a Guaranteed Access Plan or GAP that would reflect the best experience of the states. I will work with Congress, the governors, and industry to make sure that it is funded adequately and has the right incentives to reduce costs such as disease management, individual case management, and health and wellness programs. These programs reach out to people who are at risk for different diseases and chronic conditions and provide them with nurse care managers to make sure they receive the proper care and avoid unnecessary treatments and emergency room visits. The details of a Guaranteed Access Plan will be worked out with the collaboration and consent of the states. But, conceptually, federal assistance could be provided to a nonprofit GAP that operated under the direction of a board that included all stakeholders groups — legislators, insurers, business and medical community representatives, and, most importantly, patients. The board would contract with insurers to cover patients who have been denied insurance and could join with other state plans to enlarge pools and lower overhead costs. There would be reasonable limits on premiums, and assistance would be available for Americans below a certain income level.

This cooperation among states in the purchase of insurance would also be a crucial step in ridding the market of both needless and costly regulations, and the dominance in the market of only a few insurance companies. Right now, there is a different health insurance market for every state. Each one has its own rules and restrictions, and often guarantees inadequate competition among insurance companies. Often these circumstances prevent the best companies, with the best plans and lowest prices, from making their product available to any American who wants it. We need to break down these barriers to competition, innovation and excellence, with the goal of establishing a national market to make the best practices and lowest prices available to every person in every state.

http://www.johnmccain.com/Informing/News/Speeches/2c3cfa3a-748e-4121-84db-28995cf367da.htm

Comment:

By Don McCanne, MD

This speech was promoted as a major policy address that would flesh out Sen. McCain’s proposal for health care reform, according to his campaign spokesman Jeff Sadosky. Until now, the only real substance of his proposal was to offer a tax credit, $2500 for individuals and $5000 for families, to purchase health plans in a competitive, deregulated private insurance market. Most of the rest of his proposal is simply rhetorical fluff.

What would appear to be new is his proposal for a Guaranteed Access Plan (GAP). He would establish nonprofit GAPs with stakeholder boards that would provide oversight “in ridding the market of both needless and costly regulations.” Unfortunately, those needless and costly regulations have not been adequate to prevent the explosion in the growth of underinsurance products that currently are exposing insured individuals to unaffordable out-of-pocket expenses for health care. By further reducing regulatory oversight, his proposal would make health care access even less affordable for the majority of Americans.

All of the candidates have been guilty of promoting rhetorical fluff as if it provided the substantial, effective policy reform that we desperately need. This includes measures such as electronic medical records, integrated information technology, disease management, wellness programs, tort reform, innovative payment systems, nebulous administrative efficiencies, and so forth. Some of these policies, if properly structured, might have a beneficial impact on our health care system, but none of them seriously address the two crippling problems in health care today: failing to provide everyone with access to comprehensive health care services, and failing to make that health care affordable for each individual with needs.

The proposals of Sen. Clinton and Sen. Obama fall far short of making health care affordable for everyone, and, as a result, would leave many without access to the care that they need simply because of the financial barriers to care. With continued excessive escalation of health care costs, their proposals would likely result in further deterioration of affordability and access.

In contrast, Sen. McCain would free up the market to allow private insurers to create plans with premiums that we can afford. The only tradeoff is that we’ll have to pay out-of-pocket for most of the health care that we might need.

Side-by-Side Comparison of the Candidates' Positions on Health Care

Kaiser Family Foundation

This side-by-side comparison of the candidates’ positions on health care was prepared by the Kaiser Family Foundation with the assistance of Health Policy Alternatives, Inc. and is based on information appearing on the candidates’ websites as supplemented by information from candidate speeches, the campaign debates and news reports. The sources of information are identified for each candidate’s summary (with links to the Internet). The comparison highlights information on the candidates’ positions related to access to health care coverage, cost containment, improving the quality of care and financing. Information will be updated regularly as the campaign unfolds.

Side-by-side comparison of the candidates’ positions

Website: www.health08.org/sidebyside.cfm

Sen. McCain’s Guaranteed Access Plan

Remarks By John McCain On Health Care On Day Two Of The “Call To Action Tour”

www.JohnMcCain.com
Lee Moffitt Cancer Center & Research Institute, Tampa, FL
April 29, 2008

As President, I will meet with the governors to solicit their ideas about a best practice model that states can follow — a Guaranteed Access Plan or GAP that would reflect the best experience of the states. I will work with Congress, the governors, and industry to make sure that it is funded adequately and has the right incentives to reduce costs such as disease management, individual case management, and health and wellness programs. These programs reach out to people who are at risk for different diseases and chronic conditions and provide them with nurse care managers to make sure they receive the proper care and avoid unnecessary treatments and emergency room visits. The details of a Guaranteed Access Plan will be worked out with the collaboration and consent of the states. But, conceptually, federal assistance could be provided to a nonprofit GAP that operated under the direction of a board that included all stakeholders groups — legislators, insurers, business and medical community representatives, and, most importantly, patients. The board would contract with insurers to cover patients who have been denied insurance and could join with other state plans to enlarge pools and lower overhead costs. There would be reasonable limits on premiums, and assistance would be available for Americans below a certain income level.

This cooperation among states in the purchase of insurance would also be a crucial step in ridding the market of both needless and costly regulations, and the dominance in the market of only a few insurance companies. Right now, there is a different health insurance market for every state. Each one has its own rules and restrictions, and often guarantees inadequate competition among insurance companies. Often these circumstances prevent the best companies, with the best plans and lowest prices, from making their product available to any American who wants it. We need to break down these barriers to competition, innovation and excellence, with the goal of establishing a national market to make the best practices and lowest prices available to every person in every state.

http://www.johnmccain.com/Informing/News/Speeches/2c3cfa3a-748e-4121-84db-28995cf367da.htm

Comment:

By Don McCanne, MD

This speech was promoted as a major policy address that would flesh out Sen. McCain’s proposal for health care reform, according to his campaign spokesman Jeff Sadosky. Until now, the only real substance of his proposal was to offer a tax credit, $2500 for individuals and $5000 for families, to purchase health plans in a competitive, deregulated private insurance market. Most of the rest of his proposal is simply rhetorical fluff.

What would appear to be new is his proposal for a Guaranteed Access Plan (GAP). He would establish nonprofit GAPs with stakeholder boards that would provide oversight “in ridding the market of both needless and costly regulations.” Unfortunately, those needless and costly regulations have not been adequate to prevent the explosion in the growth of underinsurance products that currently are exposing insured individuals to unaffordable out-of-pocket expenses for health care. By further reducing regulatory oversight, his proposal would make health care access even less affordable for the majority of Americans.

All of the candidates have been guilty of promoting rhetorical fluff as if it provided the substantial, effective policy reform that we desperately need. This includes measures such as electronic medical records, integrated information technology, disease management, wellness programs, tort reform, innovative payment systems, nebulous administrative efficiencies, and so forth. Some of these policies, if properly structured, might have a beneficial impact on our health care system, but none of them seriously address the two crippling problems in health care today: failing to provide everyone with access to comprehensive health care services, and failing to make that health care affordable for each individual with needs.

The proposals of Sen. Clinton and Sen. Obama fall far short of making health care affordable for everyone, and, as a result, would leave many without access to the care that they need simply because of the financial barriers to care. With continued excessive escalation of health care costs, their proposals would likely result in further deterioration of affordability and access.

In contrast, Sen. McCain would free up the market to allow private insurers to create plans with premiums that we can afford. The only tradeoff is that we’ll have to pay out-of-pocket for most of the health care that we might need.

Side-by-Side Comparison of the Candidates’ Positions on Health Care

Kaiser Family Foundation

This side-by-side comparison of the candidates’ positions on health care was prepared by the Kaiser Family Foundation with the assistance of Health Policy Alternatives, Inc. and is based on information appearing on the candidates’ websites as supplemented by information from candidate speeches, the campaign debates and news reports. The sources of information are identified for each candidate’s summary (with links to the Internet). The comparison highlights information on the candidates’ positions related to access to health care coverage, cost containment, improving the quality of care and financing. Information will be updated regularly as the campaign unfolds.

Side-by-side comparison of the candidates’ positions

Website: www.health08.org/sidebyside.cfm

Is LipiScan a gizmo?

Scanner to Find Fatty Deposits in Vessels Is Approved

By Barnaby Feder
The New York Times
April 26, 2008

Federal regulators have approved the sale of a new laser scanning system intended to locate fatty deposits in blood vessel walls that are thought to cause heart attacks.

Lipid pools may be anywhere in an artery wall, not just where a blockage has formed from the buildup of plaque. Researchers are unsure whether stenting the pools might reduce heart attack risk, but many believe that inadvertently covering only part of a pool probably increases the risk of rupture.

But some researchers say the whole concept of trying to find and treat lipid pools with devices is a waste of time and money. The pools, they say, are a symptom of arterial disease that affects all of the heart’s arteries and indeed the whole circulatory system. They favor efforts to use drugs and lifestyle changes to reduce concentrations of the potentially dangerous lipids throughout the body.

InfraRdDx said its catheter, which emits near-infrared laser light inside the artery and forms an image from how much is absorbed, could produce a fuller picture of the contents and dimensions of lipids in the vessel walls. The company’s product, the LipiScan Coronary Imaging System, consists of a $150,000 computer console that analyzes and displays the data gathered by the LipiScan laser catheter, which costs $2,400 and can be used only once.

http://www.nytimes.com/2008/04/26/business/26plaque.html?scp=1&sq=LipiScan&st=nyt

And…

Gizmo Idolatry

By Bruce Leff, M.D. and Thomas E. Finucane, M.D.
JAMA
April 16, 2008

That utilization varies widely by region for several devices and procedures, with no better clinical outcomes in high-use regions, provides strong indirect evidence that gizmo idolatry exists and affects clinical practice.

Common Sense Appeal

Many gizmos make so much sense, in the absence of evidence or even the presence of evidence to the contrary, that their value or utility is persuasive prima facie. For example, if coronary artery occlusion causes myocardial infarction, opening the occlusions postinfarction makes sense. If coronary artery bypass graft surgery has significant morbidity and mortality, perhaps stents are the solution. If bare metal stents develop thrombosis, drug-eluting stents can reasonably be expected to be better. The above reasoning proceeds despite evidence that angiographically defined coronary stenosis is a poor predictor of subsequent occlusion and infarction in patients with stable angina. The face value and common sense appeal of such interventions contribute to their widespread diffusion, more rapidly than evidence alone could justify.

What to Do?

In the medical marketplace, some combination of avarice, hucksterism, credulity, genuine need, and gizmo idolatry impart considerable momentum to the early and unconsidered use of many unproven technologies. A multitiered strategy will be required to combat this phenomenon. Recognition of gizmo idolatry is a critical first step in educating consumers, both clinicians and patients, to be circumspect rather than enthusiastic and to seek evidence about the effectiveness of any medical technology. Tort reform may help reduce defensive medicine–induced gizmo idolatry. Wennberg et al have proposed reforms to the Medicare system to reduce, among other things, the use of supply sensitive services, sometimes a manifestation of gizmo idolatry. Their proposal includes (1) promoting health care organizational structures that foster effective care delivery, (2) detailed strategies to improve the quality of patient-physician decisions regarding treatments in which patient preference should play a role, (3) the promotion of more conservative practice styles, and (4) the establishment of Comprehensive Centers for Medical Excellence to implement these changes.

Conclusion

Gizmo idolatry describes the willingness to accept, in fact to prefer, unproven, technologically oriented medical measures. Several forces contribute to and encourage this tendency. Great burdens may result. Clinicians, patients, payers, and policy makers should be mindful of the urge to use gizmos. Purveyors should proceed responsibly, limiting promotional efforts until data about meaningful benefit to patients are developed. Payers should be stringent in their decisions to cover expensive and unproven treatments. Clinicians and patients should resist the clamor for the new and fancy. Finally, all stakeholders should encourage and reward diligent bedside care for all who need it.

http://jama.ama-assn.org/cgi/content/full/299/15/1830

<3>Comment:

By Don McCanne, MD

Think of how often a medical technology firm has suggested simple, inexpensive clinical management of a condition that would obviate the need to use their very expensive technology. Never? Yet those supporting market financing of our health care system insist that it encourages technological advances which provide higher quality care at lower costs. What we are receiving instead is much more expensive care, often of dubious value.

Technological firms develop products with the primary goal of making a lot of money – a whole lot of money. Their intention is that the results of their research would provide them with products that provide significant benefit to patients. That may not always turn out to be true, but if they can just get their products on the market then they can hope that the “common sense of gizmo idolatry” will drive the success of their innovations.

Other nations place limits on gizmo medicine while encouraging clearly beneficial high-tech services. Opponents of reform frequently criticize these limits as “government rationing” of health care. But is it really rationing to decline to pay for expensive interventions with highly dubious, unproven benefit? Whether paying a premium to an insurance company or paying a tax to a public insurance program, most of us would not want our funds wasted on these often detrimental excesses.

Remember that Antonio Egas Moniz received the Nobel Prize in 1949 for developing the leucotome – a retractable wire loop gizmo that cut the frontal lobes off of the brain. In our enlightened age, we should demand more than gizmos from the technology firms. If we had a national health program, we would have control of what the firms seek – the money to pay for their gizmos. Then maybe they would get it right.

Doctors agree: We need single-payer health care

It's the only system that offers affordable quality care

By LEONARD A. ZWELLING and ANA MALINOW
Houston Chronicle
April 26, 2008

We have all heard it before. The health care system in the United States is broken. We have all heard it, but when is someone going to do something about it?

Physicians for a National Health Program (PNHP) is a group of 15,000 physicians who believe that there is a solution and it is currently working for Americans — if they are over 65. It is, of course, Medicare, part of the 60 percent of our current health care system that is paid for and administered by the government.

We believe a single-payer system (Medicare for everyone) would be less costly, more efficient and provide all Americans with the health care they need without an increase in overall dollars spent (an amount that is increasing at a rate of 7 percent per year). This would include the 47 million who are currently uninsured and the estimated 50.3 million who are “underinsured” (spending 10 percent or more of their pretax income on health care).

Until now, doctors who believed in a system of guaranteed single-payer health care were in the minority. However, in a new study from Indiana University published in The Annals of Internal Medicine, 59 percent of the physicians support national health insurance.

This is a 10 percentage point increase from the same survey done 5 years ago. In fact, there are increases in support among doctors in every medical specialty. We expect that physician support for single-payer national health insurance will continue to grow. Recently the American College of Physicians endorsed a single-payer system.

Our group, the Physicians for a National Health Program, applauds the new findings. We are thrilled that the majority of our colleagues believe, as we do, that the solution to the health care crisis is a single-payer system.

Most of us now recognize that the huge administrative burden placed on physicians and their office staffs to comply with the mandates of the insurance industry, and the tremendous profits garnered by these companies at everyone’s expense (rising premiums), have nothing to do with quality health care or access to it.

In Texas alone it has been estimated that we waste $98 billion on administrative health care costs. Administrative costs constitute 31 percent of health care expenditures — and don’t make anyone feel better except the insurance company stockholders.

So, of course, the presidential candidates are proposing these same cost-effective plans, right? Wrong. None of the three remaining candidates has a health plan that matches what the majority of physician providers think would be best for their patients or their practices.

The McCain free-market plan has failed; health care is not a commodity subject to the laws of supply and demand. The Clinton and Obama mandate plans would make everyone buy insurance and criminalize those who do not. Such plans have failed repeatedly in the past and a mandate plan is failing in Massachusetts now.

Incremental plans will not work. Free market plans will not work. Mandates will not work. Only a single-payer system, free of the private insurance industry, will provide care to everyone and reduce overhead and administrative costs.

Only single-payer national health insurance, “improved and expanded Medicare for all,” can provide Americans with a level of care equal to that currently available in most industrialized nations.

The doctors have spoken. What about you? This election year, demand a system that provides Americans the health care they deserve: single-payer, national health insurance.

Zwelling and Malinow are both members of PNHP. Malinow, an assistant professor of pediatrics at Baylor College of Medicine, is the current PNHP president.

The French Health Care System

by Jean-Francois Briere

The French health care system was rated the best in the world by the World Health Organization in 2001. The American health care system ranked 37th. In 2004, France spent 10.5% of its gross domestic product on health while the U.S. spent 15.4%. Again, in 2004, the last year for which figures are available, the per capita total expenditure on health in U.S. dollars was $3,464 in France but $6,096 in the U.S. Analyzing the French system might provide some ideas for a solution to the current health care crisis in America. We need to start with an understanding of how the French system works.

France does not have socialized medicine. Socialized medicine is a system where all physicians and medical personnel are employed by the government and medical care is free. In such a system, health insurance does not exist because it is not necessary. Communist countries have socialized medicine and in the United States such a system exists on a limited scale for the military and for veterans.

The main difference between the French and the American health care systems is not in the way medical care is delivered. Both systems are actually fairly similar in this regard. Most physicians in France are independent providers who have a private practice like here. You can find both public and for-profit private clinics/hospitals in France like here. Pharmacies in France are private businesses like here. The main difference lies in the way the financing of the system is structured. France has a non-profit national health insurance system (administered by the Social Security administration) with mandatory coverage for anyone who resides for more than 3 months in the country. Health care insurance is not directly managed by the government but by an autonomous authority made up of representatives of employers, unions and the government. It is in many ways analogous to how Medicare is funded and managed in the United States. The system is financed mainly by mandatory contributions by employers and employees, or on taxable income for non-salaried persons. Contributions are a percentage of income, not a flat amount. This makes universal coverage feasible because nobody is in a position where they cannot afford health insurance. Currently, employers pay 12.8 % of salary to cover their employees. Employees pay a Social Security tax of 7.5% of salary, but this tax (called CSG) covers not only health care insurance but also includes other benefits like disability insurance. Households earning less than $9,600 per year do not pay any contribution. College students pay a flat amount (about $200 per year.) If you go to France, you cannot obtain a residence permit without first showing that you have registered for national health insurance.

The Social Security administration negotiates all medical fees with national unions and organizations of medical providers. The vast majority of physicians agree to follow the Social Security fee scale: they are called “medecins conventionnes” (physicians under contract). If these physicians under contract charge in excess of the established fee schedule, they must return the excess income to Social Security. A small number of physicians do not accept the Social Security fee scale and set their own fees. They see a small clientele of (wealthy) patients. Health care fees for similar services offered by similar categories of physicians in the same area of France are the same. Competition does exist among physicians and among hospitals, but it is about the quality of medical care, not its price. Unlike people stuck in a mandated provider network in the U.S., French patients can see any physician in the country. In this way, France is like a gigantic preferred provider network under contract with a single insurer. Physicians’ incomes in France are comfortable, but not as high as they are in certain specialties, or in certain geographical areas, in the US. Medical schools in France are public institutions and are almost tuition-free. As a result, physicians do not have to pay back huge student loans.

The French health care system does not usually cover 100% of medical fees, but rather a specific percentage depending on the kind of service, or the kind of medication. Commonly prescribed, cheap medications may be reimbursed at 50% of cost. Expensive life-saving ones, for cancer for instance, would be reimbursed at 100%. In 2008, the cost of a visit to a physician is 23 euros (about $34.50 given current exchange rates). It is covered at 70% ($24.15). Patients have to pay 30% ($10.35) from their own pocket. Most people have private insurance coverage for these non-covered balances, usually through unions or non-profit insurance companies where the insurance premiums are highly regulated. Since 2006, patients have been required to see a primary care physician before going to see a specialist, and there is a mandatory co-pay of 1 euro ($1.50) per visit which by law cannot be covered by Social Security or by private insurance. However, the total co-pay amount per year is capped at 50 euros per person ($75). It works much the same way if one is hospitalized: health care charges are covered at 100%, but patients must pay a 16 euro ($24) “hospitality” charge per day, which is usually covered by private insurance. In theory, you are supposed to pay physicians’ charges or medication costs out of pocket and seek reimbursement later. In practice, however, everyone has personal Social Security cards (called “cartes vitales”) containing an electronic chip with personal information which can link directly to the central Social Security computers and automatically credit the reimbursement to the physician’s or the pharmacy’s account. Many French physicians’ offices have only one secretary and sometimes none, because the administrative requirements are so minimal and can be so easily and efficiently handled. Prescription drug prices are controlled by the Social Security administration. The same medication often costs 30% to 50% less in France than in the U.S. French law bans all health care advertising to the general public. Drug companies may promote new products only to physicians, not patients.

Surveys show that the French are generally satisfied with their health care system. It combines universal access to care with a high degree of freedom for patients. While it is not perfect, it provides a model worth emulating.

Jean-Francois Briere is a member of the Steering Committee of the Capital District Alliance for Universal Healthcare and Assistant Professor of French Studies at the University at Albany/SUNY. CDAUH thanks him for taking the time to write this article especially for this newsletter.