PNHP

Sen. Sheila Kuehl on the LAO report

Sen. Sheila Kuehl on the LAO report

LAO Confirms Single Payer Reduces Health Care Spending, Contains Annual Growth

by State Senator Sheila Kuehl
California Senator Sheila Kuehl
June 16, 2008

The new LAO report did not actually analyze SB 840

Although the LAO’s report clearly showed the kinds of savings a single payer plan would provide for the State, workers, employers and private individuals, it was not an assessment of SB 840. SB 840, now awaiting a hearing in the Assembly Appropriations Committee, does not contain details concerning taxes, premiums, expenses or other financial matters, but rather constructs a Blue Ribbon Panel, made up of statewide officers, to research and propose the actual funding mechanism and put it out for a vote of the people, along with the entire health insurance plan.

What the LAO found

The LAO study confirmed that a single payer health care system saves money and lowers the rate at which health care costs grow each year.

Generally, the LAO report agreed with the findings of the Lewin Group study of 2006 with regard to the impact of single payer on the growth in health care spending and found that Lewin’s projections for the legislation’s impact on health care spending were reasonable. Like Lewin, the LAO analysis identified substantial savings on administrative costs, bulk purchasing of drugs and durable medical equipment, and confirmed that it would lower the rate at which costs grow every year.

Need for Single Payer greater than ever

The main lesson of the Analyst’s report is that the people and employers of California are continuing to pay escalating healthcare costs while wages and payrolls are flatlining. Those costs are a drain on our already shaky economic outlook. SB 840 will bring stabilization to the healthcare crisis and, since the Blue Ribbon Panel will have flexibility to adjust the details of premium proposals, single payer is still our best answer.

http://dist23.casen.govoffice.com/index.asp?Type=B_PR&SEC={88ED6A03-02D2-492F-8C37-9434DFB58E29}&DE={42BC1F9D-AA2B-4C10-879B-CAC5C5647E0B}

Comment:

By Don McCanne, MD

When you hear criticisms of single payer based on this report, keep in mind the facts. The Legislative Analyst did not find any significant problems with the single payer model. It would provide all essential services for everyone while slowing increases in health care costs. What it did show is that delaying reform is increasing costs by tens of billions of dollars, and the failure to address our flat wage scales is creating the need to use even more progressive methods of financing health care.

Current proposals to use an expansion of private plans will fall short on universality and comprehensiveness, and will be even more expensive because of the failure to adopt the cost efficiencies of the single payer model.

The LAO study shows that the failure is not in the single payer model – it works – but the failure in containing costs is due to not yet having enacted the single payer model.

You think health care reform would cost a lot now. Just wait until it’s expensive.

Doctors to Join National Protests Against Private Health Insurers

For immediate release:
June 18, 2008

Contacts:
John Geyman, M.D., (360) 378-6264
Don McCanne, M.D., (949) 493-3714
Garrett Adams, M.D., (502) 895-8847

Doctors and medical students will join with nurses, patients, union members and health care reform activists at a rally tomorrow in San Francisco and 16 other cities, charging that the private health insurance industry is responsible for 47 million Americans being uninsured, half of all personal bankruptcies and at least 18,000 deaths each year.

The biggest rally is set to take place outside San Francisco’s Moscone Center, where delegates to the convention of America’s Health Insurance Plans (AHIP), the national trade association of the health insurance industry, will be listening to pro-industry figures like former Senators John Breaux and Bill Frist. About 35,000 insurance company executives are attending the meeting.

The physicians and others are calling for “guaranteed single-payer health care now,” a nonprofit, Medicare-like national health insurance program that is supported by 59 percent of doctors and about two-thirds of the general public. A bill in Congress, H.R. 676, embodies the single-payer approach and has 90 co-sponsors, more than any other health reform proposal.

“Private health insurance is obsolete,” said Dr. John Geyman, M.D., professor emeritus of family medicine at the University of Washington in Seattle and past president of Physicians for a National Health Program.

Geyman is the author of six books, including the forthcoming “Do Not Resuscitate: Why the Health Insurance Industry is Dying, and How We Must Replace It.”

Private health insurance has outlived its usefulness, he said, for the following reasons:

* it is much less efficient than public financing
* it fragments the risk pool by cherry-picking healthy patients
* it is the source of the epidemic of underinsurance
* administrative and overhead costs are excessive and insupportable
* profiteering is trumping patients’ needs
* insurance premiums are too costly for middle-class families
* the industry has excessive political clout and resists regulation

“While there is widespread consensus that the nation’s health care system is broken and in urgent need for reform, too little attention has been paid to the role of the private insurance industry in perpetuating our problems,” Geyman said.

“Over the past 40 years, private insurance has evolved from a not-for-profit activity into a $300-billion-a-year, for-profit, investor-owned industry. The six biggest insurers made over $10 billion in profits in 2006. They did so by enrolling healthy people, denying claims, and screening out the sick, who are increasingly being shunted into our beleaguered public safety net programs.”

“These for-profit companies have burdened our system with enormously wasteful administrative costs and skyrocketing CEO salaries, while leaving tens of millions uninsured and underinsured,” Geyman continued. “The risk pool has been badly fragmented among more than 1,300 private insurers, defeating the goal of insurance, which is to provide coverage by sharing risk across a broad population. Premium prices continue to climb at a double-digit rate alongside other health costs.”

“Thus, the average family premium for employer-based coverage was $11,500 in 2006, an increase of 87 percent from 2000,” he said. “At the rate we are going, health insurance premiums will consume almost one-third of average household income by 2010 and all of household income by 2025.”

“This clearly is not sustainable,” Geyman said. “What is urgently needed is a transition to single-payer national health insurance, coupled with our private delivery system. By moving to such a system, patients would regain their choice of physician and hospital. The administrative savings alone would be $350 billion a year, enough to cover all of the uninsured and underinsured. That is the only realistic path to guaranteeing truly universal and equitable care to everyone at an affordable cost.”

Physicians for a National Health Program (www.pnhp.org), a membership organization of over 15,000 physicians, supports a single-payer national health insurance program. PNHP is headquartered in Chicago and has chapters across the United States. To contact a physician-spokesperson in your area, contact info@pnhp.org or call (312) 782-6006. For additional resource materials these and related topics, visit www.pnhp.org/research.

The June 19 protests are scheduled to take place in San Francisco; Albany, N.Y.; Atlanta; Baltimore; Boston; Chicago; Harrisburg, Pa.; Indianapolis; Jacksonville, Fla.; Louisville, Ky.; Minnetonka, Minn.; Pittsburgh; Philadelphia; New York City; Newark, N.J.; Oklahoma City; San Antonio and St. Louis.

For more information on the San Francisco protest, see www.singlepayernow.net or call 415-695-7891.

"I Think I See a Few Dollars on That X-Ray: We'll have to Operate"

by David Himmelstein, MD
Posted by CommonHealth, Friday, June 13th, 2008
WBUR Blog

As a primary care doctor, I live with one foot in the horse and buggy era and one in the silicon age. I spend most of my time talking to patients and wielding a stethoscope, and I also use the latest high tech gadgets. But the gadgetry is getting out of hand; its overuse threatens patients and is blowing the lid off health care costs. Here’s one example. Last week, when a patient came in complaining of a cough that had lingered longer than usual, I sent him down for a chest x-ray. The x-ray was absolutely normal to my eye, a reading confirmed by the radiologist. But he added one key phrase after the word “normal.” “Consider obtaining a CT scan.”

Now the radiation from a single chest CT is equivalent to about 500 chest x-rays, which carries a real risk of causing cancer down the road. And there’s virtually no evidence that a CT would help a patient like mine. But it would certainly benefit the radiologist. He and his colleagues are paid as piece workers — they get an additional fee for each scan they interpret. Radiologists have gotten rich (they average over $400,000 annually) by buying CT scanners, MRI machines and other high tech gadgets, and prodding other doctors to order these expensive tests. And each test breeds more tests. A tiny abnormality on one CT (and most of us have something that looks a little funny if you look hard enough), means a radiologist’s report recommending “follow-up CT in 6 months to assess progression.”

It’s not just the radiologists who work this scam. Perhaps half of the stents that cardiologists put in do patients no good at all; oncologists inflict lucrative chemotherapy on many patients who gain nothing but suffering from these potions; and orthopedists often needlessly scope knees and operate on backs. And hospitals are willing partners to these rip-offs. The useless and harmful procedures keep ORs humming and beds full of high-paying patients. It’s gadgets and procedures that bring in the big bucks.

HMOs and insurers have tried to crack down on unnecessary care. But doctors and hospitals can easily outsmart them. We manufacture the data they use to monitor us. I can always make a plausible case for an expensive test, and just try interrupting a cardiologist in the middle of a diagnostic catheterization to debate whether a stent is really needed. So insurers are turning to high deductible insurance policies in an effort to get patients to do the dirty work of limiting care. Unfortunately, the high deductibles mostly keep people away from inexpensive primary and preventive care, and do little to discourage high cost, useless procedures. Even one day in the hospital pushes most patients over their deductible, leaving them no further reason to economize.

As Milton Roemer (a distinguished health policy professor) once observed: “an empty hospital bed will soon be filled.” He probably would have added “an idle CT scanner will soon be in use,” but CTs hadn’t been invented yet. Once you build it, they will come — encouraged by their doctors — and costs will rise.

So what are the implications of all this for health reform? Not good. Almost everywhere you look, hospitals are building, and the new buildings won’t house psychiatrists or family doctors who devote their days to the routine, inexpensive care that has the biggest impact on health and wellness. They’re for big ticket items like surgery and imaging suites. Those buildings will soon be filled, driving health costs further skyward. And legislation encouraging prevention, or electronic medical records, or even banning drug company gifts won’t make a whit of difference (even though I favor all of these things).

What can help? Real health planning, which limits the supply of expensive gadgets and ORs. Paying doctors on salaries rather than as piece workers. And a ban on for-profit medicine. Unfortunately, all of these require far more radical reform than Chapter 58. They’re only feasible under a real national health insurance program.

David Himmelstein is an Associate Professor of Medicine at Harvard Medical School and Co-Founder of Physicians for a National Health Program

“I Think I See a Few Dollars on That X-Ray: We’ll have to Operate”

by David Himmelstein, MD
Posted by CommonHealth, Friday, June 13th, 2008
WBUR Blog

As a primary care doctor, I live with one foot in the horse and buggy era and one in the silicon age. I spend most of my time talking to patients and wielding a stethoscope, and I also use the latest high tech gadgets. But the gadgetry is getting out of hand; its overuse threatens patients and is blowing the lid off health care costs. Here’s one example. Last week, when a patient came in complaining of a cough that had lingered longer than usual, I sent him down for a chest x-ray. The x-ray was absolutely normal to my eye, a reading confirmed by the radiologist. But he added one key phrase after the word “normal.” “Consider obtaining a CT scan.”

Now the radiation from a single chest CT is equivalent to about 500 chest x-rays, which carries a real risk of causing cancer down the road. And there’s virtually no evidence that a CT would help a patient like mine. But it would certainly benefit the radiologist. He and his colleagues are paid as piece workers — they get an additional fee for each scan they interpret. Radiologists have gotten rich (they average over $400,000 annually) by buying CT scanners, MRI machines and other high tech gadgets, and prodding other doctors to order these expensive tests. And each test breeds more tests. A tiny abnormality on one CT (and most of us have something that looks a little funny if you look hard enough), means a radiologist’s report recommending “follow-up CT in 6 months to assess progression.”

It’s not just the radiologists who work this scam. Perhaps half of the stents that cardiologists put in do patients no good at all; oncologists inflict lucrative chemotherapy on many patients who gain nothing but suffering from these potions; and orthopedists often needlessly scope knees and operate on backs. And hospitals are willing partners to these rip-offs. The useless and harmful procedures keep ORs humming and beds full of high-paying patients. It’s gadgets and procedures that bring in the big bucks.

HMOs and insurers have tried to crack down on unnecessary care. But doctors and hospitals can easily outsmart them. We manufacture the data they use to monitor us. I can always make a plausible case for an expensive test, and just try interrupting a cardiologist in the middle of a diagnostic catheterization to debate whether a stent is really needed. So insurers are turning to high deductible insurance policies in an effort to get patients to do the dirty work of limiting care. Unfortunately, the high deductibles mostly keep people away from inexpensive primary and preventive care, and do little to discourage high cost, useless procedures. Even one day in the hospital pushes most patients over their deductible, leaving them no further reason to economize.

As Milton Roemer (a distinguished health policy professor) once observed: “an empty hospital bed will soon be filled.” He probably would have added “an idle CT scanner will soon be in use,” but CTs hadn’t been invented yet. Once you build it, they will come — encouraged by their doctors — and costs will rise.

So what are the implications of all this for health reform? Not good. Almost everywhere you look, hospitals are building, and the new buildings won’t house psychiatrists or family doctors who devote their days to the routine, inexpensive care that has the biggest impact on health and wellness. They’re for big ticket items like surgery and imaging suites. Those buildings will soon be filled, driving health costs further skyward. And legislation encouraging prevention, or electronic medical records, or even banning drug company gifts won’t make a whit of difference (even though I favor all of these things).

What can help? Real health planning, which limits the supply of expensive gadgets and ORs. Paying doctors on salaries rather than as piece workers. And a ban on for-profit medicine. Unfortunately, all of these require far more radical reform than Chapter 58. They’re only feasible under a real national health insurance program.

David Himmelstein is an Associate Professor of Medicine at Harvard Medical School and Co-Founder of Physicians for a National Health Program

LAO report on SB 840 (California)

A fiscal analysis of SB 840 (Kuehl), which would establish in California a single-payer health care system and its companion financing mechanism.

By Elizabeth G.Hill, Legislative Analyst
California Legislative Analyst’s Office (LAO)
May 22,2008

Fiscal Projection Overview. We estimated the revenues and costs of the SPP for 5.5 years, assuming an implementation date of January 1, 2011. Our estimate indicates that that the SPP would result in a net shortfall of $42 billion in 2011-12 (the first full year of operations) and $46 billion in 2015-16.

Significant Factors Contributing to Shortfall

A substantial portion of our analysis relies on modeling and estimates described in the Lewin report, which concluded that SB 921 (2004) would generate sufficient resources to pay the costs for universal coverage. Nonetheless, our estimates indicate the SPP would incur annual shortfalls over our projection period. The estimates for our first full year of implementation in 2011-12 differ from those estimated by Lewin for the first full year of implementation (2006) primarily for the three reasons discussed in more detail below.

Interim Growth Rates.

The Lewin report estimated costs and revenues assuming full implementation in 2006. Between that year and 2011-12, we estimate that health benefits costs would grow at a higher rate than the SPP proposed tax base and redirected health funds. This difference in growth rates accounts for over one-half of the shortfall we project in 2011-12.

Data Sources.

The Lewin report used data from a variety of sources, much of which originated between 1998 and 2003, including some data from national surveys. Our analysis uses more recent data that, where possible, is more specific to California and based on actual reported data rather than surveys. For example, we used wage data provided by EDD instead of survey data, resulting in a lower estimate of payroll taxes than projected in the Lewin report. In total, these various data differences contributed roughly 40 percent to the shortfall we project for 2011-12.

Some Different Assumptions.

While we generally agree with many of the assumptions regarding savings and costs used in the Lewin report, our assumptions differed somewhat in a few areas. Our estimates assume somewhat lower costs from health care utilization as well as somewhat higher costs for administration and drug purchasing. Our estimates also include the costs of establishing an operating reserve, which the Lewin report did not include. Additionally, we estimated that greater amounts of state and local funding could be redirected to the SPP than did the Lewin report. We describe these differences in greater detail below. The net effect of these assumptions contributed to most of the remaining shortfall.

http://www.lao.ca.gov/2008/hlth/sb840/SB840_analysis.pdf

Comment:

By Don McCanne, MD

California’s single payer bill, SB 840, authored by Sen. Sheila Kuehl, has already been approved once by the California State Legislature, only to be vetoed by Gov. Arnold Schwarzenegger. It is back before the legislature, has passed in the Senate and is now in the Assembly Appropriations Committee.

A previous analysis of the bill by The Lewin Group has confirmed that it would provide comprehensive benefits for all residents of California with no increase in total health care spending.

A new analysis by the Legislative Analyst was just released showing that the bill would result in a $42 billion shortfall in its first full year of operation. Opponents of single payer reform will jump on this to loudly proclaim that single payer is a fraud and cannot result in savings that would be used to pay for care needed by the uninsured and underinsured. One columnist has already labeled this as “a financial train wreck” (Daniel Weintraub, The Sacramento Bee, June 15).

What will not be reported by those who wish to demonize single payer is that the Legislative Analyst confirmed that the features of single payer would perform as previously modeled. Truly comprehensive benefits would be provided for absolutely everyone, while the rate of cost escalation would slow. Although she made relatively minor adjustments in the assumptions, she did not report any previously unrecognized significant flaws in the single payer model.

So what is this $42 billion shortfall that did not show up in the previous Lewin analysis?

Over half is due to the fact that California has faced another five years of outrageous health care inflation, and that alone has raised the baseline by over $20 billion.

Almost half (40 percent) is due to use of more recent wage data indicating that payroll tax revenue would be less because wages are comparatively lower than previously modeled.

Different assumptions used by the Legislative Analyst account for most of the remaining shortfall – a very modest amount.

This $42 billion shortfall is not a reason to turn away from single payer, but rather it confirms that single payer reform is even more urgent. Health care inflation is killing us, and it must be harnessed immediately. The financial burdens of wage earners are killing them (sometimes literally), and they must have immediate relief from the financial hardships caused by their health care needs.

The LAO report confirms that single payer provides the financing structure that we need, and enacting it has become an emergency.

Congressional Quarterly article on Taiwan's single payer system

Taiwan: Surprising Lessons From a Small Island

By John Reichard, CQ HealthBeat Editor
CQ HealthBeat News
June 5, 2007

In the middle of May, two Taiwanese officials, Hou Sheng-Mou and Michael S. Chen, came to Washington facing a tough assignment: promote single payer health care in a city where it’s widely regarded as a non-starter in the debate over revamping the U.S. system.

http://www.cqpolitics.com/wmspage.cfm?docID=hbnews-000002889735&parm1=5&cpage=1

Comment:

By Don McCanne, MD

There will be a two week break in the Quote of the Day messages, which will give you plenty of time to read this article on Taiwan’s single payer system.

Congressional Quarterly article on Taiwan’s single payer system

Taiwan: Surprising Lessons From a Small Island

By John Reichard, CQ HealthBeat Editor
CQ HealthBeat News
June 5, 2007

In the middle of May, two Taiwanese officials, Hou Sheng-Mou and Michael S. Chen, came to Washington facing a tough assignment: promote single payer health care in a city where it’s widely regarded as a non-starter in the debate over revamping the U.S. system.

http://www.cqpolitics.com/wmspage.cfm?docID=hbnews-000002889735&parm1=5&cpage=1

Comment:

By Don McCanne, MD

There will be a two week break in the Quote of the Day messages, which will give you plenty of time to read this article on Taiwan’s single payer system.

Well off and underinsured

NB: Save this one and share it with others. It is one of the most important policy messages during this window of reform.

How Many Are Underinsured?

Trends Among U.S. Adults, 2003 And 2007

Growing numbers of adults with insurance find that they are not adequately protected from the rising cost of health care.

by Cathy Schoen, Sara R. Collins, Jennifer L. Kriss, and Michelle M. Doty
Health Affairs
June 10, 2008

Abstract

With health insurance moving toward greater patient cost sharing, this study finds a sharp increase in the number of underinsured people. Based on indicators of cost exposure relative to income, as of 2007 an estimated twenty-five million insured people ages 19-64 were underinsured — a 60 percent increase since 2003. The rate of increase was steepest among those with incomes above 200 percent of poverty, where underinsurance rates nearly tripled. In total, 42 percent of U.S. adults were underinsured or uninsured. The underinsured report high levels of access problems and financial stress. The findings underscore the need for policy attention to benefit design, to assure care and affordability.

Study results

Including those uninsured during the year, the share of nonelderly adults with adequate health insurance declined from 65 percent to 58 percent between 2003 and 2007. An estimated 14 percent of all nonelderly adults were underinsured in 2007, and more than one in four adults (49.5 million) were uninsured all or part of the year. Adding uninsured and underinsured adults together, an estimated seventy-five million adults — 42 percent of the under-sixty-five adult population — had either no or inadequate insurance in 2007, up from 35 percent in 2003.

Although adults with very low incomes (below poverty, or $20,000 annual income) were at the highest risk of being uninsured or underinsured in both time periods, insurance erosion has spread up the income distribution well into the middle-income range. The percentage underinsured reached double digits for those with annual incomes of $40,000-$59,999. The proportion insured, not underinsured dropped ten percentage points for adults earning $40,000-$59,999 and $60,000-$99,999.

By 2007 barely half of those with incomes of 200-299 percent of poverty were insured all year with adequate coverage. Nearly one-third had a time uninsured, and 16 percent were underinsured.

Controlling for income, health status, and other characteristics, underinsured and uninsured adults were significantly more likely to go without care because of costs than were those with more protective insurance and no time uninsured.

About half of uninsured and nearly half of underinsured adults reported difficulty paying bills, being contacted by collection agencies for unpaid bills, or changing their way of life to pay their medical bills.

Adults classified as underinsured were more likely to report benefit limits, including limits on the total dollar amount a plan would pay for medical care and on the number of yearly visits to doctors, and were less likely to report dental or prescription drug benefits. Underinsured adults were also far more likely to report high deductibles.

Reflecting their lower incomes, underinsured adults allocate much higher shares of their incomes to premiums. An estimated two in five underinsured adults spent 5 percent or more, and one-fifth spent 10 percent or more, of family income on premiums — more than three times the premium-to-income pattern in the comparison group.

Discussion

This study indicates that the trend toward greater cost sharing in benefit design in recent years is putting millions of insured adults under age sixty-five at risk of spending large shares of their incomes on health care. The number of adults who are underinsured increased by 60 percent from 2003 to 2007, based on cost relative to income indicators. Risks of being underinsured have moved up the income ladder: adults with incomes above 200 percent of poverty accounted for 75 percent of the increase in the number underinsured — rates underinsured nearly tripled in this group. Including those without coverage during the year, an estimated seventy-five million adults under age sixty-five (42 percent) were either underinsured or uninsured during 2007.

Health care costs are highly concentrated among the sickest patients each year, with 10 percent of patients accounting for 64 percent of all spending. The healthiest half of the population accounts for only 3 percent of total spending. To the extent that higher cost sharing, particularly deductibles, is intended to create more prudent care decisions, the skewed distribution suggests that such a strategy will have little overall impact on spending.

The clear impact will be to increase the share of families at risk for medical debt and loss of savings for retirement, college, or other long-term needs.

http://content.healthaffairs.org/cgi/content/abstract/hlthaff.27.4.w298v1

Comment:

By Don McCanne, MD

The current trend to address the issue of affordability through innovative private insurance product design is driving the dramatic increase in the incidence of underinsurance. Because of the skew in rates of illness, these efforts have had little impact in reducing overall health care spending, but they have impaired health care access, and they have had a major negative impact on family finances.

Our current insurance products are working well for the wealthy who can afford out-of-pocket costs, and for the rapidly declining numbers of middle-income individuals who still receive generous plans through their employment. They are not working well for adults with incomes over 200 percent of poverty, as the rate of underinsurance has tripled in this group. Even for those with incomes over 400 percent of poverty, 15 percent are underinsured. This is no longer a problem limited to the poor.

Politicians who state that “you can keep the insurance you have if that’s your choice” are not advancing the policy changes that we need, but rather are pandering to more fortunate individuals who are more likely to vote. We need policy changes that would take care of the health care financing needs of middle- and lower-income individuals. The fact that the wealthy would also benefit, though 85 percent don’t need the help, is hardly a reason to oppose these needed changes.

Middle America needs to wake up. Private health plans will continue to morph into underinsurance products. (There goes the retirement funds and the savings for the kids’ college expenses. Perhaps even worse is the loss of self esteem as the credit cards are maxed out and the mortgage payments are in arrears.)

What about a single payer national health program that covers all necessary medical expenses? By now, that should look pretty good to even Harry and Louise.

Why the Massachusetts reform is not a model for the nation

On The Road To Universal Coverage:
Impacts Of Reform In Massachusetts At One Year

By Sharon K. Long, principal research associate at the Urban Institute
Health Affairs
June 3, 2008

In roughly the first year under reform, uninsurance among working-age adults was reduced by almost half among those surveyed, dropping from 13 percent in fall 2006 to 7 percent in fall 2007.

Although coverage at a point in time is important, continuity of coverage over time helps ensure that health care is available to people when it is needed. In step with the drop in uninsurance at the time of the survey, the share of adults who were ever uninsured during the prior year also fell during the first year of health reform. For all adults, the share ever uninsured during the year dropped by four percentage points (to 14.5 percent), while the share of ever-uninsured low-income adults fell ten percentage points (to 24 percent). For higher-income adults (family income over 300 percent of poverty), there was not a significant change in the share reporting that they were ever uninsured during the year (from 7.2 percent to 7.3 percent).

Altogether, 80 percent of those who were uninsured in 2007 reported that it would be difficult to come up with the funds that would be needed to purchase insurance. With 41 percent reporting problems paying other bills, purchasing health insurance is likely to be a hardship for at least some of the remaining uninsured population.

Among low-income adults, there was also a decline in the share reporting very high out-of-pocket spending (more than $3,000 per year), which fell to about 8 percent under reform. Note that $3,000 in out-of-pocket spending represents a sizable share of income for low-income families: nearly 20 percent of family income for a family of three at 100 percent of poverty and 6 percent for a similar family at 300 percent of poverty. (Also for low-income adults, 37 percent had out-of-pocket spending of over $500, and for 24 percent it was over $1000.)

http://content.healthaffairs.org/cgi/content/abstract/hlthaff.27.4.w270v1

Comment:

By Don McCanne, MD

Numerous media reports have covered the success of the Massachusetts health reform program, citing this Urban Institute report released this week. Reducing the numbers of uninsured by almost one-half is certainly a significant accomplishment. As to whether the Massachusetts plan has been a success or a failure, we should look at the accomplishments as contrasted with the goals.

Everyone remembers the accolades on Gov. Romney’s signing of the first universal insurance program in the United States (a label they share with many other failures). This was a program that was supposed to provide everyone in the state with access to comprehensive insurance programs with subsidies for lower-income individuals, and affordable premiums for everyone else so that they could comply with the individual mandate to purchase insurance. Based on this report, this seems to have worked for close to half of the uninsured, but not the other half. What went right and what went wrong?

Those who followed the process will remember that there was great urgency in this legislation. Massachusetts was going to lose federal funds designated for health programs for low-income populations. In the complex negotiations that followed (simplified here), it was decided that, by including everyone, health care financing for the state could become a shared responsibility, accomplishing both goals of covering everyone, and, most urgently, covering the health programs for the poor. Massachusetts received its federal Medicaid and SCHIP financing, and shifted funds from the free-care pool into these programs. For those with higher incomes, employer-sponsored coverage would still be available, or they could purchase affordable plans under the mandate. For those forced to buy their own coverage, actually there really wasn’t much shared responsibility since the mandated employer contribution was negligible, which brought into question whether the plans were really affordable.

At any rate, this program did provide some sort of coverage for a great many low-income individuals (under 300 percent poverty), and thus was a partial success in covering this more vulnerable group. For various reasons, 13 percent of low-income individuals still have no coverage. Also, for those that do, many are faced with unaffordable out-of-pocket expenses, whereas more traditional Medicaid and SCHIP programs lessen that exposure. More may be covered, but for many this coverage is not insurance but is underinsurance. Thus the Massachusetts program was successful in covering more low-income individuals, but with tradeoffs: still leaving many out, and leaving many others exposed to excessive out-of-pocket costs.

What about the other goal of covering everyone? Although the welfare programs fell short, could this legislation result in otherwise universal coverage? After all, a highly lauded component of the program was a mandate for all higher-income individuals to purchase insurance which allegedly they certainly could afford. Not only would everyone have coverage, but it would end the problems of free riders and adverse selection. This report shows that the uninsured tend to be concentrated amongst the young and healthy adults. Leaving these free riders out of the risk pools results in adverse selection, thus the Massachusetts program has not successfully addressed these perversities.

Furthermore, just how successful has this program been in mandating higher-income individuals to purchase insurance? At the beginning, 7.2 percent (of those over 300 percent poverty level) were uninsured for some portion of the year, and at the end of the study it was 7.3 percent. Success rate? Zip. (Technically, there was a 1.8 percent regression-adjusted decline in uninsurance rates in high-income individuals that could be due to increases in other coverage, though those increases did not reach statistical significance.)

Many still contend that the Massachusetts program should serve as a model for the nation. But it certainly doesn’t seem to be a model that we would want to emulate. The welfare component falls short because too many are left without coverage, and many others are exposed to unaffordable cost sharing. The individual mandate is a miserable failure, and that may be the most important lesson for the nation. Reform based on our fragmented system of public programs and private plans is the most expensive model of reform, and it will always fall short of our goals.

Massachusetts considered a single payer system but rejected it for purely political reasons. Where would they be now if they had adopted it? Financial barriers to care would have been removed for everyone. The legislators could have then turned their attention to another very urgent problem they face: reinforcing the primary care infrastructure. Having insurance is of limited value if the primary care professionals are not there when you need them.

UnitedHealthcare – source of identity theft

Officials: Identity theft of UCI students started with insurer's leak

By Marla Jo Fisher
The Orange County Register
June 5, 2008

A computer security breach at a health insurance company was responsible for an identity theft at UC Irvine that affected 1,132 students, and led to fake tax returns filed for at least 155 of them, officials said Thursday.

A criminal investigation is under way in the case, which came from a leak at Minnesota-based UnitedHealthcare, the insurance provider for UCI graduate students.

The thefts came to light in February, after UCI students began filing reports with campus police that someone was filing fraudulent tax returns and collecting the refunds using their names and Social Security numbers.

Students generally discovered the problem after unsuccessfully trying to file their real tax returns, only to find that someone had already filed a fake one and claimed a refund on their accounts.

UCI computer experts pored over their systems trying to find a leak, without success. Federal and local police were called in, and were ultimately able to determine that all the victims had been enrolled in the United Healthcare insurance plan.

“We take our obligation to protect our members’ information seriously, and continue to work with law enforcement officials in this ongoing investigation,” (UnitedHealthcare) spokesman Daryl Richard said.

http://www.ocregister.com/articles/students-uci-tax-2061061-insurance-campus

Comment:

By Don McCanne, MD

The private insurance industry has certainly been doing a shabby job of fulfilling its primary obligation to pool risk. The insurers have been quite successful in avoiding paying for health care by selectively marketing their products to the healthy (like these graduate students), and by using underinsurance to shift more of the costs of care to individuals who actually need it. They use amoral business practices that sometimes challenge the regulators, and occasionally even move into the criminal sphere to achieve their business goals.

UnitedHealthcare should not take any consolation in the fact that we are not going accuse the company of orchestrating the crime of filing fraudulent tax returns for its own policyholders. Even if it was an inside job, this criminal act certainly did not represent official company policy.

UnitedHealthcare does not escape blame in this. The primary product that they sell us is administrative services, and a whole lot of them – things like data processing with security systems that protect the confidential information of their clients. In spite of the excessive resources directed to their administrative systems, they can’t even do that right.

Last week both the Secretary of the Air Force and the Chief of Staff were fired because of security breaches by individuals under their command. In contrast, the last head of UnitedHealthcare was rewarded with a golden parachute of $1.1 billion (some of which he had to give back because of his illegal options backdating).

Bad things happen within the government, and we are outraged and expect corrective action. Bad things happen within the private insurance industry, and yet we intend to reward them by supporting reform that mandates that everyone buy their wasteful administrative services.

Instead, let’s establish our own single payer national health program and hire stewards that will take good care of it for us. If they don’t, we can fire them and hire ones that will.

Nurses know that single-payer universal care is best solution

By MALINDA MARKOWITZ, RN, and BETH PERKINS, RN
The Tennessean
Tennessee Voices
June 8, 2008

Nurses hear the pleas of patients and their families every day to fix what ails the U.S. health-care system. But in the din of the upcoming November election, it can be very difficult to hear the pleas made by the American people for genuine solutions for the pain endured by so many patients and families.

Registered nurses, however, are still listening, and working to press all the candidates to take heed.

“When my 12-year-old grandson says, ‘take my allowance and buy Pawpaw’s medicine,'” Pat Petty of Nashville says she has to ask, “What is wrong with this picture?” Pawpaw is the name Pat’s young grandson attached to his grandpa, Danny Mosley, many years ago.

Now Pat’s family, like so many millions of others in America, have questions that require the attention of the nation’s leaders, as the children begin to see and hear and the extent of the crisis in health care is for their grandparents and parents. No child should have to advocate for what is a human right for all. No American should choose between medication and food or a doctor’s visit and rent.

Middle-class families, working Americans are once again shouldering a heavy load in the crisis. Pat gets frustrated as she thinks about her family’s dilemma, “If you are rich, why worry about affordable health-care coverage? Why worry about medication? You don’t have to — because you have the money.” Those who are poor may at least qualify for government-sponsored programs.

“However, if you are one of millions of Americans who work and live from paycheck to paycheck, and you are in the middle class — if you have an illness, and if you are out of work due to that illness — will you be on the streets?”

Pat faithfully goes to work every day and just as faithfully votes in every election.

But she is not seeing that faithful attention to responsible living rewarded or honored. Instead, she struggles to make ends meet and gently rebuffs the offerings of her grandson to chip in for Pawpaw’s medications.

There is another way, and Pat knows it. Nurses know it. The American people know it. That way is a truly universal plan. It is single-payer, guaranteed health care for every single American, a form of an expanded and improved Medicare for all. A bill in Congress, H.R. 676, would create just such a plan. It already has the support of 90 members of Congress, more than any other health-care reform bill.

Support for the bill has grown steadily over the past few congressional sessions as co-sponsors hear from their constituents that the current system is claiming more lives than the war in Iraq.

For RNs and for mothers and grandmothers like Pat, that just will not be tolerated. Pat closed, “Who gives the right to insurance companies to play God? What gives the right to insurance companies the right to play doctor? When did insurance companies go to medical school and study and learn the Hippocratic Oath? What gives the insurance companies the right to deny an individual the right to affordable, adequate health care? Are the insurance companies playing God? You are born. You are a healthy baby. You grow up. You think that you are going to live a long healthy live. Then, one day, you get sick.”

As the nation moves toward November’s election, voters like Pat — and their nurses — will undoubtedly be voting according to their values and what they know are their human rights. Health care holds its position on that list of rights and on the list of issues that will draw the attention of millions of voters throughout the land.

Malinda Markowitz, RN, is co-president of the National Nurses Organizing Committee/California Nurses Association. Beth Perkins is a registered nurse in Nashville and National Nurses Organizing Committee/California Nurses Association member.

Obama's health care lite

By Froma Harrop
Syndicated Columnist
The Seattle Times
June 6, 2008

A remarkable thing just happened in the people’s party. Democrats have chosen a candidate, in the year 2008, who does not have a plan for universal health coverage. Barack Obama caresses the words “universal coverage” almost hourly, but his proposal offers nothing of the kind — unlike the plans of Hillary Rodham Clinton, John Edwards and other Democratic hopefuls.

Most striking, the man who showed such timidity on health care became the hero of ardent progressives. So forgiving was their love of Mr. Big that they virtually abandoned what should have been the Democrats’ most potent promise: medical coverage for all.

This is political opportunity lost. In a new CNN/Opinion Research Corp. poll, 49 percent of registered voters list the economy as their No. 1 issue, with the Iraq war second at 19 percent. Health care comes in a close third at 14 percent.

Make no mistake: A universal health-care system is an economic as well as social imperative — the idea that in a rich country, no one should go without medical care. The lack of one hurts Americans’ ability to compete with foreigners whose governments have controlled national health-care costs and achieved better average medical outcomes through their national systems of universal coverage.

So how are voters to compare the health-care proposals of Obama and presumptive Republican candidate John McCain?

McCain proposes tax credits for families to buy their own coverage. This is not the freshest of ideas, though he does call for federal aid to help states cover sick people rejected by private insurers. McCain opposes a mandate requiring everyone to get health insurance.

And so does Obama. He would insist that all children have health coverage, but not adults. As he said during the recent campaign, “Sen. Clinton believes the only way to achieve universal health care is to force everybody to purchase it.”

Thing is, a system based on private coverage that doesn’t force everyone to participate is, by definition, not universal. What happens is that the young and healthy don’t bother buying in. (They figure that they can always glom onto a taxpayer-supported program, should they face a medical crisis.)

The inevitable result is that the government programs fill with expensive patients, while the hearty souls — who in any coherent system subsidize their sick neighbors — get to sit on the sidelines. This is a disaster in the making.

The logic of Obama’s argument isn’t great, either. His line about Hillary forcing people to buy insurance was followed by this: “And my belief is, the reason that people don’t have it is not because they don’t want it but because they can’t afford it.” Well, if his plan makes health insurance affordable, why can’t everyone afford it?

For the record, McCain also vows to make coverage affordable for all. And although his more free-market approach to health care can’t possibly deliver on this (without spending a lot more than he says he will), the McCain vision stands on a sturdier reality.

The best idea is to enroll all Americans in Medicare. This would be much simpler and administratively cheaper than either the McCain or Obama (or Clinton) plan. As it now does for the elderly, Medicare would pick up most of the hospital and physician bills for everybody. An expanded Medicare would free businesses from the burden of providing medical care to employees and their kin.

Obama’s health-care plan looks like a back-of-the-napkin scribbling by someone who didn’t care all that much but needed something. How curious that out of the smoke and drama of the Democratic race, there emerged a “candidate of change” whose health-care proposal is not universal, much less bold.

Providence Journal columnist Froma Harrop’s column appears regularly on editorial pages of The Times. Her e-mail address is fharrop@projo.com