PNHP

A Word about SCHIP

A Word about SCHIP

by Andrew D. Coates
Monthly Review
November 2007

The recent proposal, vetoed by President Bush, to expand the State Children’s Health Insurance Program (SCHIP) represents an important effort to defend working families with uninsured children from the grim cruelty of paying out of pocket for the care of sick children, which can too easily lead to financial ruin for the entire families and create impediments, at least, to medical care for the children.

American health care is in crisis, and yet we are still putting coins and dollars into humble jars and coffee cans at diner counters, supermarket bake sales, and church fundraisers to try to raise money for the treatments of uninsured children afflicted with malignancies. (Charity exists in America, but only for children who never did anything to anyone and who, even from the most conservative, fundamentalist, neo-liberal, or Malthusian viewpoint, could never be said to deserve their illnesses.) Haven’t we all wondered at one time or another: what if we find ourselves among those parents who can’t find the money or time off work when their child needs to see a doctor or a dentist? And what if the doctor said that more tests are needed, or a specialist, or a hospital? What kind of society do we live in that produces, so readily, such personal desperation when a child becomes sick?

The SCHIP program not only promises to address this appalling situation by reducing the number of uninsured children but should cost society relatively little since children in America are by and large healthy and require, compared to older people, fewer expensive treatments, hospitalizations, and interventions. So (like the 84% in the New York Times poll earlier this year) we can all agree that SCHIP should be expanded to include ALL of the roughly 9 million children in America who have no health insurance.

But what can we, who are serious about health care reform, expect from SCHIP? Some characterize SCHIP as a step toward universal health insurance. Would that it were so.

Launched in 1998, SCHIP gives a block grant to states to fund programs to either augment Medicaid benefits to children, or establish a separate subsidized health insurance for children, or do some combination of these two. The program did help to reduce the number of uninsured children until 2004. However, the number of children losing private employer-based coverage has progressively outstripped enrollment in SCHIP. Since 2004, the number of uninsured children has risen dramatically, by more than 1 million children, through 2006. Yet the SCHIP expansion proposal, introduced by Congressman Rangel (HR 976), did not aim to cover all children. It hoped to provide funds to cover 3.2 to 4.2 million children by 2012 — fewer than half of children who lack health insurance now.

Thus, this SCHIP expansion, even if enacted, would still fall short of meeting all the unmet needs as private health insurance fails ever more children than before. So one step forward, one step back.

Worse, SCHIP is a capped grant given out state by state, so not only does its delivery vary widely from state to state, but funding for the children now covered by SCHIP has lagged behind the skyrocketing costs of health care, creating a crisis in many states. More realistically, then, one step forward, two steps back.

Therefore, it’s misleading to call the SCHIP expansion proposal a step toward universal health insurance. The proposal should be vigorously supported, but, at the same time, we should explain that SCHIP, a laudable social reform that has protected many families from ruin, does nothing — absolutely nothing — about the cause of the burgeoning number of uninsured children: the fact that our system is dominated by private employer-based health insurance.

Reforms that rely on private health insurance, including those that set up publicly-financed insurance alongside the existing system (as SCHIP does), will simply not work. They will be brought down by the harsh realities of health care bought and sold as a corporate commodity, which does not provide health security and is becoming less and less affordable each day: soaring costs at every level, widening disparities in access and outcomes, lack of choice of provider or clinic or hospital, and deteriorating quality of care. Proposals for health reform that avoid this fundamental issue may mitigate the inhumanities of our health care system, but they will not get us out of the crisis.

So what should we do?

Even as we support the expansion of SCHIP, we must make clear what created the urgent need for a program like that to begin with: the failure of private health insurance. In other words, in struggle for SCHIP, activists must lay the groundwork for reform that offers a true step forward — a proposal for a publicly-financed single-payer national health program, like House Bill HR 676.

The past record of private health insurance corporations has disqualified them from continuing as the central force managing American health care. If mainstream politicians lack the courage to say so, they are out of step with the American people, who now recognize that private insurance has got to go — in a democracy, the public should decide health policies.

Democratic candidates question reform proposals

Obama Criticizes Rivals on Health Care

The Washington Post
November 21, 2007

“When Senator Clinton or Senator Edwards say they’re going mandate health care, but they haven’t talked about either how to enforce it, or how to make it affordable to people, then it’s not really a mandate. Anymore than if we mandate that people get car insurance. But (if) they can’t afford it, they just don’t get it,” (Sen. Barack) Obama said.

“Senator Clinton’s health care plan covers every single American. Senator Obama’s does not. Any health care plan that leaves 15 million Americans uninsured cannot be considered universal,” said (Clinton spokeswoman Kathleen Strand).

http://www.washingtonpost.com/wp-dyn/content/article/2007/11/21/AR2007112101034.html

And…

Bill Richardson Talks Up Health Plan

Associated Press
November 21, 2007

Speaking at Rivier College, which offers nursing degrees, (Gov. Bill Richardson of New Mexico) said he isn’t completely opposed to the kind of government-run, single-payer system used in Canada and many European countries, but prefers to give consumers a choice.

“I’m starting to warm up to it a little bit because I get very frustrated with insurance companies. … They tick me off, and I wish I could say, ‘You’re out of this business,'” he said. “The problem with that is, fundamentally, I believe every American deserves choice.”

Richardson said he’d rather control the insurance companies and force them to do the right thing. He also said he worries that a single-payer system would create an overwhelmingly complex bureaucracy.

“I hate bureaucracy,” he said.

“If you hate bureaucracy, how can you like HMOs and insurance companies?” Richard Ingram called out from the audience.

“That’s called a left hook,” Richardson joked.

http://ap.google.com/article/ALeqM5gNrYvAi-WwpRBCdw1Ry9fxZ2as4QD8T1O61G0

Comment:

By Don McCanne, MD

There seems to be a consensus that the Democratic presidential candidates are leading on the issue of health care reform. But what are they leading with?

Except for Dennis Kucinich who advocates for a single payer national health program, all of the candidates support choice in the private health insurance market (albeit some would also include a competing public insurance program that would fail due to adverse selection). The well-recognized fundamental flaw of using private plans is that the insurance industry can no longer provide reasonably comprehensive plans that are affordable for average-income individuals (without resorting to near-fraudulent underinsurance programs).

Sen. Clinton ignores this and pretends that you can simply require individuals to buy bona fide plans that they cannot afford. Sen. Obama does acknowledge this problem but pretends that tweaking our system will make plans so affordable that everyone will want to buy them. Neither approach can possibly provide affordable, comprehensive care for everyone. By rejecting the single payer approach of creating an equitably-funded universal risk pool, they have both abandoned any hope of achieving affordable health care for everyone even before the real process for reform has begun.

Gov. Richardson also uses the conservative/neo-liberal framing of “choice” (phony choice of private marketplace health plans that take away your real choices in health care) because of concerns about political feasibility of the progressive framing of “choice” (real choice of health care professionals and facilities under a universal, publicly-financed system). But he does seem to understand the line between politics and policy as he let slip his actual views about single payer, and about the private insurance industry about which he wishes he could say, “You’re out of this business.”

And his comments about hating bureaucracy? Maybe it’s time to give all of the candidates a left hook – not a knock-out blow, but just enough to shock them into reality.

Candidates propose opportunities for private insurers

Health-Care Plans Aid Industry

By Laura Meckler
The Wall Street Journal
November 19, 2007

Democratic presidential candidates like to beat up on insurance companies, but there is a lot for the industry to like in their health-care plans — starting with plenty of new business.

“Here’s the potential for a whole new pool of lives for them to cover, with payment behind it,” said Benjamin Isgur, assistant director of PricewaterhouseCoopers’ Health Research Institute, which examined the presidential health plans’ impact on industry. The study, a comprehensive look at health-care plans offered by candidates in both parties, also concludes that doctors, hospitals and other health-care providers would likely benefit since more patients with insurance suggest more would seek care and be able to pay their bills.

The industry’s chief lobbyist, Karen Ignagni, president of America’s Health Insurance Plans, says she is encouraged by the debate so far and says her group is focused on trying to get universal insurance enacted rather than stopping it.

http://online.wsj.com/public/article/SB119543898597597588-hAX1Z6ys2bagmXahn8UDxuEhGQ0_20071219.html?mod=tff_main_tff_top

And…

Beyond the Sound Bite

Review of Presidential Candidates’ Proposals for Health Reform

PricewaterhouseCoopers’ Health Research Institute
November 2007

The seven leading Republican and Democratic presidential candidates are proposing two different approaches that would reform the U.S. healthcare system at two different speeds. The Democrats promise broader and more immediate changes, with new mandates, programs, and funding. Rather than creating new government programs, the Republicans’ proposals rely on indirect approaches such as changes in tax incentives that could move insurance away from an employer-based model.

None of the leading candidates are proposing a single-payer system; therefore, the industry’s future hinges on a public/private system.

Ensuring that 100% of U.S. residents have access to insurance coverage is probably not realistic, but a mix of solutions is more likely to achieve higher levels of coverage because the uninsured defy a common stereotype.

The market for individual insurance, which has seen minimal recent growth despite the introduction of tax-advantaged health savings accounts (HSAs), could receive a boost through the Republicans’ tax credits or the Democrats’ proposals to require individuals to buy health insurance.

The chief concern for health plans is to protect the markets in which they sell their products. While increased coverage would benefit health plans, they could see major changes in how they sell their products. Within the candidates’ proposals are three key risks for insurers: new regulation on companies, especially community rating and profit limits; possible loss of entire markets to government insurers; and possible movement of market share as products shift from employer to individual market.

Full report (65 pages):
http://pwchealth.com/cgi-local/hregister.cgi?link=reg/soundbite.pdf

Comment:

By Don McCanne, MD

All proposals of the leading Republican and Democratic candidates for president would use various tax policies to increase funds available for the purchase of private health plans, especially in the individual market. Does this really provide greater opportunities for private insurers to expand their markets and increase their revenues?

The stumbling block is the apportionment of risk. Will the plans be required to open their risk pools to higher-cost individuals with greater health care needs? Or will they be allowed to continue to select out the healthier sectors and pass the real costs on to the government (taxpayers)?

If they must include all risks, their products would be affordable only if regulations would permit the sale of underinsurance products, making actual health care access unaffordable for many. On the other hand, if they were allowed to decline to cover higher-risk individuals, then they would continue to be an expensive, superfluous industry that shirks their most important function of pooling risk.

Of course, there is the risk that private insurers could lose “entire markets to government insurers,” but isn’t that what they really want? Keep the healthy, but shift the high-risk individuals to government programs? If that were the case, then shouldn’t we adopt principles of social insurance similar to those of other nations with universal systems that use private insurers?

Under such programs, common pools of sickness funds are established, or inter-pool transfers are arranged based on actual claims experience. That way the private plans would pay their fair share of total health care costs. But then their premiums wouldn’t be affordable.

It’s time to give up on the fantasy that the insurance industry can provide us with affordable comprehensive plans when we expect them to participate in the pooling of risk.

We don’t need policies that would expand markets for the private plans. We simply need to establish a common, universal risk pool and fund it equitably. With our own public system, we wouldn’t even need the private plans.

Health care north of the border

By Marshall Helmberger and Tom Klein
November 20, 2007
Timberjay, Ely, Minnesota

While Americans often don’t agree on much when it comes to politics, on one particular issue we really do seem to share a common view. Recent polls show vast majorities, up to 90 percent, of Americans agree that the nation’s health care system is in need of serious reform.

High costs and the growing numbers of uninsured and underinsured Americans are at the top of the list of complaints. While Americans clearly don’t agree on the best approach to resolving such problems, many have pointed across the border to Canada as a model to fix what’s wrong with American health care.

The merits of the Canadian style of health care have been the subject of intense debate in the U.S. for months, sparked in part by Michael Moore’s recent documentary film, “Sicko”, which highlighted Canada’s system among others. Free market advocates have shot back, pointing to studies that show growing dissatisfaction among Canadians over long wait times for some types of medical care.

So what’s the real story?

We didn’t need to go far to find out. Last month, Timberjay investigative reporters Tom Klein and Marshall Helmberger hopped across the border to Fort Frances to talk to health care professionals, business leaders, politicians and average Canadians, to find out what lessons America can learn from health care north of the border.

A few surprises

While Americans often talk of Canada’s national health system, the first surprise you’ll learn from talking to Canadians is that, in fact, Canada does not have a national health care system. The federal law, known as the Canada Health Act, sets guidelines for health care in Canada, but leaves each province to determine how to meet those objectives.

In Ontario, residents don’t look to the federal government for their health care — they look to the provincial government in Toronto, which manages the Ontario Health Insurance Program, or OHIP.

That’s probably not surprising given that universal health care in Canada was a creation of the provinces in the first place. In 1946, under the leadership of Tommy Douglas, the province of Saskatchewan first implemented provincial-wide health coverage, a model that spread to other provinces before becoming the basis for national policy beginning in the 1960s.

While the details of Canadians’ health care varies from province to province, the basic outline for OHIP is surprisingly similar to a system that is already well established here in the U.S. — Medicare.

Like Medicare, OHIP pays for hospitalization, doctors’ visits and most medical procedures but, for working-age adults, things like prescription drugs (unless they’re administered in a hospital), some eyecare, or dental or chiropractic services, are not covered. Most of these additional services are covered for Ontario seniors, and typically for children as well. As with many seniors in the U.S., most adults in Ontario between age 18 and 65 purchase supplemental insurance to cover any health-related expenses not covered by OHIP.

Such policies are significantly less expensive, however, than the broader health insurance purchased by most working age Americans, and most, as in the U.S., are paid for by employers. Jim Cummings, the publisher of the Fort Frances Times, says such policies cost him about $70 a month per employee for family coverage. That amounts to about $840 a year, or far less than the $13,000-$16,000 annual premium typical for full family coverage in the U.S.

The Canadian system, which is actually called Medicare in Canada, is similar to the U.S. style of Medicare in other ways as well. Like Medicare, the Canadian system involves public financing, but typically private delivery of care. Most hospitals and clinics are publicly-owned and funded by the province, but are run by independent boards that set priorities for health care spending. In addition, most doctors work independently on a private-fee-for-service basis, just as in the U.S.

The view of Canadians

We quickly discovered one trend among residents of Ontario. If an American asks them what they think of their own health care system, the response of Mike Williams is fairly typical: “I love it.” Williams is a former emergency medical technician, who lives near Emo. He was dining with friends last month at a restaurant in downtown Fort Frances, when we asked them to share their views.

Such a response may reflect more a sense of national pride than a full and complete picture of Canadians’ real attitudes. While every Canadian we spoke to expressed support for their system, and view it as superior to the U.S. model, when asked more specific questions, several did point to the waiting list, known as “the queue” in Canada, as an issue, but most didn’t see it as a serious problem.

Perhaps that’s because for Canadians with more immediate medical needs, waiting is the exception, not the rule. “In acute emergencies,” you jump to the front of the line,” said Cummings, who related the recent case of his wife, who had experienced chest pains. “She got immediate care in Fort Frances,” he said. “And when her local doctor decided she needed surgery, they had an operating room booked the next day in Winnipeg. They flew her there and sent a nurse along as well. And, except for the ride to the airport, it was all paid for by the province.”

Pam Cain had a similar experience last year, when an ovarian cyst proved to be cancerous. Cain, who manages a provincial history museum in Fort Frances, had been experiencing pain and made an appointment to see her doctor.

When that doctor couldn’t determine the problem, she saw a specialist two weeks later, who determined she had a cyst, which was most likely non-cancerous, but still required surgery. The surgery was scheduled for about six weeks later. But before getting there, she experienced more severe pain and took herself to the local emergency room. At that time, she was referred across the border to use the CT scanner at International Falls, which isn’t unusual for Canadian patients in the Fort Frances area, because Fort Frances doesn’t yet have a CT scanner of their own (the community has recently raised money for one and its installation has been approved by the province).

When Cain’s CT scan suggested her cyst was likely cancerous, her wait for surgery was over. “I was flown to Winnipeg for surgery in less than half a day,” she said. Since then she’s gotten regular follow-up care in Winnipeg, with the province picking up the cost of her mileage in addition to the care she receives.

A year later, she’s doing fine and hasn’t had any significant medical-related bills to pay.

The same probably couldn’t be said for Cain if she lived south of the border, notes John Rafferty, a provincial politician with the New Democratic Party, or NDP. Not only would Cain have likely been faced with thousands of dollars in medical costs, even with insurance, Rafferty said she would also face the potential of losing medical coverage all together.

Waiting times and politics

As a critic of the Liberal Party that’s currently in charge of Ontario’s health program, Rafferty isn’t shy about expressing shortcomings of the system. He acknowledges that health care in Ontario, just as in the U.S., remains a major political issue as the government and the public weigh the competing merits of affordability and access. Waiting times remain the primary issue with voters, he said.

American critics of the Canadian system frequently point to waiting times for appointments or some procedures as a failing of nationalized systems in general, but data from countries like Britian and France suggest the problem is a more pronounced one in Canada than elsewhere.

Wait times are most common for sufferers of chronic illnesses, who may have to wait weeks, or in some cases, even a few months, for appointments with some specialists.

Yet wait times in Canada may be fueled more by the remote nature of much of the country than anything else. “Doctor recruitment is a big issue,” said Wayne Woods, chief executive officer of the Riverside Hospital system, which operates four hospitals in northwestern Ontario. “Big cities seem to have enough, but more remote areas are crying for doctors,” said Woods.

Fort Frances is a case in point. Woods said the community has budgeted for 14-15 doctors, but can currently only find 11 willing to work there — and the doctor shortage means patients in the community wait longer than they otherwise might for appointments.

Woods said the remote nature of many smaller Canadian communities has long been a factor behind the doctor shortage. Indeed, doctor shortages in rural Canada in the 1940s were in part responsible for the creation of Canada’s publicly-funded system.

Attracting doctors can be even more difficult today than it was then. In an era when most doctors’ spouses also work, and are typically professionals as well, it means a community must often find employment for two, rather than just one. “Finding work for the spouses of doctors is one of the biggest challenges,” said Cummings, at the Times.

Finding doctors for remote communities isn’t a problem unique to Canada. Hospital administrators in northern Minnesota and other rural parts of the U.S. note similar difficulties as many doctors prefer the lifestyle available in larger cities to that found in small, isolated communities.

The wait for appointments in some cases has prompted Canadians to increasingly make use of emergency rooms, where wait times are little different than in the U.S. Cummings said the province has responded to the political demands of patients by instituting a policy that requires that patients receive attention by a nurse-practitioner within ten minutes of arriving at an emergency room. While the policy may have pleased most Canadians, some health care officials worry it may increase costs in the long run.

One factor that apparently hasn’t hampered recruitment is doctor pay. While some in the U.S. believe otherwise, doctors in Canada don’t work for the government. They work for themselves, typically on a fee-for-service basis under contract with hospitals and clinics.

And most Canadian doctors earn salaries that are comparable to doctors in the U.S. According to Woods, most general practitioners earn $150,000-$175,000 a year. And specialists earn much more than that. “A million dollars isn’t unusual,” said Woods. “The sky’s really the limit.”

Love for Canadian system not universal, but system remains highly popular

The NDP’s Rafferty admits that not everyone in Canada loves their health care system. “There are people in Canada who think the U.S. system is a good one. They’re generally the ones with money,” he said.

Some wealthy Canadians, who are not content to wait for procedures, do head to the U.S. or other countries for care. “I know people who go to the Mayo,” said Rafferty. “The U.S. does a good job of emergency medicine and if you have money, you can get access to the U.S. system.”

While conservatives in Canada did attempt a few years ago to significantly alter the system now in place, Rafferty said the move was soundly rejected by Canadians.

The popularity of the Canadian approach to health care was probably best expressed in 2004, when the CBC asked Canadians to vote in a contest to select the greatest Canadian in history. The winner? Tommy Douglas, the late prairie populist, NDP leader, and father of Canada’s modern health care system.

That popularity doesn’t surprise Rafferty, who says the system works well for the majority of Canadians. “Not only is everyone covered, but we see that our system is actually cheaper than in the U.S.” he said.

And for many Canadians, the issue is who has the power over their health care decisions.

“You have the insurance companies making the decisions. That’s what’s scariest to me about the U.S. system,” said Teresa Hazel, the director of the Riverside Foundation for Health Care in Fort Frances.

While the provincial governments sets overall budgets for health care, the allocation of those funds is determined by separate boards made up of citizens, health care professionals, and other stakeholders in the system. Many Canadians believe this approach makes the system more responsive to the needs of communities and patients than a system motivated by insurance company profits.

Rafferty said Canadians are less reluctant than many Americans to take an all-for-one and one-for-all attitude when it comes to social benefits, like health care. There’s a difference in mindset,” said Rafferty. “We know that if you factor in all the taxes, we probably pay considerably more than Americans. But that’s a tradeoff that Canadians are willing to make.”

[PNHP note: Actually, Americans pay the highest taxes for health care in the world, in addition to the highest out-of-pocket costs, but we don’t receive value for our money. Canadians have modestly higher taxes overall than Americans, but in addition to universal health care, those pay for things like free higher education, roads, and many other benefits. See “Paying for National Health Insurance – And Not Getting It” Woolhandler and Himmelstein, Health Affairs, July/August 2002]

Employers are shifting more costs to employees

U.S. employers' health benefit cost continues to rise at twice inflation rate, Mercer survey finds

Mercer
November 19, 2007

Total U.S. health benefit cost rose by 6.1 percent in 2007, the same pace as last year, to an average of $7,983 per employee, according to the National Survey of Employer-Sponsored Health Plans, conducted annually by Mercer and released today.

The bad news is that’s still more than twice the rate of inflation. Health cost growth is outpacing wages and material costs and eroding business profitability.

Among employers with fewer than 200 employees, health coverage prevalence fell from 63 percent to 61 percent in 2007 — and that’s down from 66 percent five years ago. This drop-off is continuing despite the new availability of relatively low-cost consumer-directed health plans (CDHPs).

The Mercer survey also found that employers expect cost to rise 5.7 percent in 2008. That figure takes into account any changes that employers will make in the level of benefits, the type of plan offered, or the plan vendor. If employers made no changes, the cost of their largest medical plan would rise by about 8 percent, they predict.

After the out-of-control cost growth in the early part of this decade, a fourth year of single-digit increases begs the question, why isn’t it worse? Cost shifting is one reason. Among large employers (those with 500 or more employees), average in-network PPO deductibles rose by about 11 percent.

Another factor that may have served to slow cost increases was the growth in enrollment in consumer-directed health plans, the type of medical plan with the lowest cost by far. In 2007, the percentage of employees enrolled in a CDHP (based on either a Heath Savings Account or a Health Reimbursement Account) rose from 3 percent to 5 percent of all covered employees. The lion’s share of the plans added in 2007 were based on HSAs, which don’t require an employer contribution.

So-called “mini-med” plans, which strictly limit the total amount of benefits payable in a year ($10,000 is a common limit) are now offered by 7 percent of all large employers and 19 percent of large wholesale/retail employers as a way to provide some kind of low-cost coverage to part-timers not eligible for the regular plan or to full-time employees not yet eligible for coverage.

http://www.mercer.com/referencecontent.jhtml?idContent=1287790

Comment:

By Don McCanne, MD

The continued escalation of employers’ health benefit costs at twice the rate of inflation is bad news, but what is much worse is that employers have responded by shifting even more of the costs to their employees. These increases compound each year.

Perhaps the most alarming development in this trend is the increased use of mini-med plans. These plans typically cut off coverage once health care spending has reached $10,000. Obviously these plans fail to provide financial security for individuals with major acute or chronic disorders. Since they won’t work for people who really need health care, they should not be dignified with the label of “low-cost coverage.”

Both employers and insurers continue to seek innovations to reduce their spending on health care. Placing coverage decisions in the hands of either the insurers or the employers will continue to result in greater out-of-pocket costs for individuals, especially those with significant health care needs.

In contrast, the administrators of a national health program would continue to seek ways to pay for the health care that individuals need. (You can write your own “Why do we… ” question here, and then attempt to answer it.)

Roadblocks in the private insurance maze

How U.S. Health System Can Fail Even the Insured

By John Carreyrou
The Wall Street Journal
November 16, 2007

Barbara Calder lives in nearly constant pain. Her limbs dislocate at the slightest movement, even when she turns over in bed at night. She wears her hair short because brushing it hurts too much.

Mrs. Calder suffers from Ehlers-Danlos Syndrome, a rare genetic disorder in which the connective tissue that binds the body together gradually falls apart. But, although she began suspecting she had the disease 16 months ago and had health insurance, she spent a year battling numerous roadblocks just to see a specialist who could diagnose her condition. Now Mrs. Calder says she is left wondering whether she’s going to die suddenly because she can’t get the test that would tell her whether she has the fatal form of the disease.

Mrs. Calder’s difficulties mirror those of millions of insured Americans who get lost in the U.S. health-care system’s giant maze. For many, the journey is frustrated by coverage limits, denied claims and impersonal service.

Polls show that health care has become Americans’ No. 1 domestic concern, thrusting it to the center of the presidential campaign. Every major candidate has introduced a health-care reform plan. But for the most part, these plans focus on providing coverage to the 45 million uninsured or reining in medical costs. They do little to address the myriad hurdles insured patients often encounter when they seek care.

Trying to navigate these obstacles can be especially maddening for patients like Mrs. Calder who have little-known genetic diseases. Insurers, for their part, argue that they are merely fulfilling employers’ demand to control medical costs.

http://online.wsj.com/article/SB119515792495794643.html

Comment:

By Don McCanne, MD

Although this article provides considerable detail, no attempt has been made here to extract from it some of the numerous barriers faced by Barbara Calder – barriers deliberately erected in our system of private insurance plans. Suffice it to say that our fragmented system resulted in “a year battling numerous roadblocks,” and her battle isn’t through.

Under ideal circumstances, rare disorders such as Ehlers-Danlos Syndrome create challenges for the health care delivery system. But other nations use their health care financing systems to enable better access to the care that people need, regardless of the complexity of their disorders. Yet our dysfunctional private insurance system is designed to impair access in a misdirected attempt to control medical spending.

As this WSJ article states, health care has been thrust to the center of the presidential campaign. But the leading proposed solutions, dependent on private health plans, “do little to address the myriad hurdles insured patients often encounter when they seek care.” The proposal to offer in addition a token public insurance option will be of little help since the public program surely will disintegrate under the death spiral of adverse selection.

The segregated risk pools of private and public programs have become a highly inequitable, inefficient and obsolete method of financing health care. We need a single, universal, efficiently-administered risk pool if we expect our financing system to assist us rather then hinder us in obtaining the health care that we need.

Renew it or lose it

Making the Most of Benefits

By Terri Cullen
The Wall Street Journal
November 15, 2007

It’s that time of year again: open-enrollment season.

The biggest decision for most workers is choosing a health-insurance plan. Ironically, this year the biggest mistake workers may make with health-plan choices is to not make a choice, says Sara Taylor, annual enrollment leader at human-resources company Hewitt Associates. In the past, if workers made no changes to their current health-care plan, they’d remain in the same plan the following year. But this year more companies are asking workers to re-enroll if they want to remain in their current plans.

“If they don’t enroll they may be assigned no coverage at all and employees will be stuck with that decision for a year,” unless they have a change in status, such as a marriage or new child, Ms. Taylor warns. “People need to understand what can happen if they do nothing.”

Why the switch? Health-plan options are changing, with many employers shifting to high-deductible health-insurance plans that include health savings accounts. With workers having to pay more of their own health-care costs, employers and plan providers are pushing them to better understand their plan options.

Indeed, a Hewitt survey estimates employees will contribute an average of $1,859 toward insurance premiums in 2008, compared with $1,690 this year. Out-of-pocket expenses are also expected to climb, thanks to higher co-pays and deductibles. According to Hewitt, employees can expect to pay an average $3,597 out of pocket in 2008, or about 10% more than last year.

http://online.wsj.com/article/SB119505443236192843.html.html

Comment:

By Don McCanne, MD

One crucial feature of a health care program that covers everyone is that enrollment must be automatic and permanent. Obviously we fall far short of that now, but disenrolling an employee because of passive inaction is certainly a further step backwards.

But is it really passive inaction? When an employee has to pay an average of $5456 for premiums plus out-of-pocket expenses, many simply cannot afford that. With a median household income of $48,000 it is understandable why so many forgo their coverage simply because the money is not there. It was spent on food, housing and transportation.

Well, we do keep going backwards. All numbers are worse. That’s too bad when all we really need is one single step forward to a comprehensive health care program that is automatic, permanent, affordable and includes everyone. Why do we continue to resist the obvious?

Best health coverage is single-payer

BY ERIC COOK
Kalamazoo Gazette
Wednesday, November 14, 2007

KALAMAZOO — Insurance-company profits and increases in administrative staff have helped push up the cost of health care so steeply over the years that many Americans can’t afford coverage, a proponent of health-care change said Tuesday in Kalamazoo.

Dr. James C. Mitchiner said single-payer health insurance can greatly reduce health care costs by removing the profits and broadening the risk pool. Mitchiner is an emergency-room physician at St. Joseph Mercy Hospital in Ann Arbor and president-elect of the Washtenaw County Medical Society.

“By broadening the risk pool, you have more healthy people paying for the sick, and less support staff is required,” said Mitchiner, speaking Tuesday evening during a forum titled “Single Payer Health Insurance: What It Is, What It Isn’t and Why We Need It.” Sponsored by the WMU Center for the Study of Ethics in Society, the free event was held in the Fetzer Center’s Putney Auditorium.

Mitchiner advocated a single-payer health-care system funded by the federal government but not owned or controlled by it.

“This isn’t socialized medicine,” said Mitchiner, who serves on the
Michigan State Medical Society Committee on Health Care Quality, Efficiency and Economics. “It is just simply health care that is financed publicly with private delivery.”

Instead of relying on insurance companies with dozens of claims departments, the health-care system would use a single company that would have much lower administrative costs, Mitchiner said.

He described a health-care plan similar to the governmentally funded health-care system in Canada and said it could easily be implemented by the American government.

“We already have a plan similar to this in place which covers a large amount of Americans successfully — Medicare,” he said.

The key to successfully implementing the program would be to do so gradually, he said.

“We would start the program by covering children and then slowly raise the age in which we cover them from 16 to 18 to 21 while simultaneously lowering the eligibility age of Medicare,” Mitchiner said.

Private health insurance would still be available, he said.

“The program would make sure everyone was covered in an essential-benefits package, but people would still use insurance companies for supplemental insurance,” Mitchiner said. People would have the option of buying additional insurance, as they do now in Medicare, he said.

The AMA and single payer policies

Reference Committee highlights

AMA House of Delegates
2007 Interim Meeting

Reference Committee J

The AMA adopted several principles to guide in the evaluation of state health system reform proposals. Health insurance coverage for state residents should be universal, continuous and portable. Coverage should be mandatory only if health insurance subsidies are available for those living below a defined poverty level. The health care system should emphasize patient choice of plans and health benefits, including mental health, which should be value-based. Existing federal guidelines regarding types of health insurance coverage (e.g. Title 26 of the U.S. Tax Code and Federal Employees Health Benefits Program regulations) should be used as references when considering if a given plan would provide meaningful coverage. The delivery system should ensure choice of health insurance and physician for patients, choice of participation and payment method for physicians and preserve the patient/physician relationship. The delivery system should focus on providing care that is safe, timely, efficient, effective, patient-centered and equitable. The administration and governance system should be simple, transparent, accountable, efficient and effective in order to reduce administrative costs and maximize funding for patient care. Health insurance coverage should be equitable, affordable and sustainable. The financing strategy should strive for simplicity, transparency and efficiency. It should emphasize personal responsibility as well as societal obligations.

Reference Committee K

The AMA adopted a recommendation in Council on Medical Service Report 2 to reaffirm policy supporting the principle that risk-related subsidies, such as those for high-risk pools, reinsurance and risk adjustment, should be financed through general tax revenues rather than strict community rating or premium surcharges. The AMA also adopted a recommendation to support the principle that health insurance coverage of high-risk patients be funded through direct risk-based subsidies such as high-risk pools, reinsurance and risk adjustment, rather than through indirect methods that rely heavily on market regulation. The AMA also will support state-based demonstration projects to subsidize coverage of high-risk patients through mechanisms such as high-risk pools, reinsurance, risk adjustment and other risk-based subsidies.

http://www.ama-assn.org/ama1/pub/upload/mm/469/refcommhighlightsi07.pdf

Comment:

By Don McCanne, MD

The AMA proposal for reform depends heavily on providing choice of private health plans and using tax credits for lower-income individuals. Such an approach is more expensive than enacting a universal national health program, and falls short on important goals such as universality and comprehensiveness.

Although the AMA has rejected the single payer model of reform, they have approved the support of important policy goals that would be very difficult to attain through their proposal for reform but would almost be a given if single payer were to be enacted.

The AMA calls for coverage to be universal, continuous and portable. Those goals would be automatic with a single payer system, but they would be almost impossible to achieve with a fragmented market of private plans that change their benefits frequently and enter and leave various markets at their own discretion. The only person who can say that he or she has the same continuous, portable plan for the past forty years is a 105 year old Medicare beneficiary.

The AMA states that coverage should be mandatory, but only if health insurance subsidies are available for those living below a defined poverty level. The problem with this concept is that adequate insurance plans are now no longer affordable, not only for those in poverty, but also for average-income individuals. The subsidies required would have to be close to the amount of premiums now paid by employers for their employee health benefit programs. The subsidies would be so great that they would likely be enough to fund the balance (over our current tax spending for health care) that would be required for a single payer system. There would be no reason to waste funds on the highly inefficient, fragmented system of private plans. But one important health policy principle implicit in this recommendation is that the AMA recognizes that health care financing must involve progressive tax policies.

Their emphasis on patient choice of plans and benefits is not rational for two reasons. No individual can possibly predict his or her own future acute or chronic medical needs; everyone needs comprehensive coverage. Also, an effective insurance program requires pooling of all risks in order to effect a transfer from the many who are healthy to the fewer with health care needs; the healthy need to contribute equitably to a pool that provides full benefits for all participants.

The AMA states that federal guidelines such as the Federal Employees Health Benefits Program (FEHBP) should be used as references when considering if a given plan would provide meaningful coverage. Although the FEHBP plans fall short of benefits that would be covered under a single payer model, most of the FEHBP plans are far better than the newer innovative, underinsurance products. The AMA does acknowledge that meaningful coverage requires at least a minimal standard as set by the federal government. Skeletal insurance won’t do.

The AMA states that the system should ensure choice of health insurance and physician. But the majority of private plans today limit the choice of physicians, which is the choice that patients actually want. If the plans were to grant unlimited choice of physicians then they would lose the only real function that they serve: controlling fees through exclusive contracting. Without this function, private plans would be truly superfluous.

The AMA calls for providing care equitably. Although a single payer system would be only the first step toward achieving equitable access, at least it does remove the inequitable financial barriers that are characteristic of the private plans.

The AMA calls for reducing administrative costs and maximizing funding for patient care. No contest here. That is precisely what a single payer system accomplishes, whereas the private plans and the burden they place on providers are the sources of these inefficiencies.

The AMA states that health insurance coverage should be equitable, affordable and sustainable. Again, those are characteristics of the single payer model that the private insurance industry cannot provide.

The AMA states that the financing strategy should strive for simplicity, transparency and efficiency. Once again, the single payer model beats the private insurance industry hands down on these measures precisely because that is inherent in the single payer design.

The AMA supports the emphasis on personal responsibility as well as societal obligations. Everyone agrees that individuals should assume a personal responsibility to take good care of their own health. But we also have a societal obligation to see that the health care needs of everyone are met. That is the purpose of a single payer system, whereas private health plans deliberately establish financial and administrative barriers to care.

The most difficult issue in reform is how to pay for the 80 percent of health care that is used by the 20 percent of the population with greater health care needs. The AMA supports the principle that risk-related subsidies, such as those for high-risk pools, reinsurance and risk adjustment, should be financed through general tax revenues. They recommend against indirect methods that rely heavily on market regulation. Wow. Leave the private plans alone, but shift the real costs of health care to the taxpayers. Obviously, with a massive, tax-payer funded risk pool, we would have a de facto single payer system and would no longer need the private insurers.

It is amazing how close the AMA is to supporting the single payer model. It’s too bad that they don’t yet realize it.

Myth buster

Indira Dammu
Indiana Daily Student
11/14/2007

Repeat a lie often enough and people will believe it, or so the saying goes. No group is more guilty of this charge than conservatives.

Whether declaring global warming a “hoax” or bemoaning the social security “crisis,” conservatives have the art of lying down to a science. This is especially evident in matters related to health care reform, which conservatives reserve a special disdain for. A mere mention of Michael Moore has them frothing at the mouth.

So I was naturally excited to hear that the SiCKO-Cure National Road Show would be stopping in Bloomington today. The Road Show aims to lobby members of congress to support House Resolution 676, a bill that calls for the creation of a single-payer health care plan. On this occasion, I decided to bust some common myths offered in defense of our broken system.

Myth: The United States has the best health care system in the world.

Wrong. In spite of spending more per capita on health care than other countries, the U.S. ranks only 37th in the overall quality of health care. We also boast the second-worst newborn mortality rate in the developed world.

Myth: People without health insurance are lazy good-for-nothings.

Again, wrong. In 2004, about half of uninsured Americans worked full time. Even more surprising, 28 percent of middle and upper-middle class individuals are uninsured.

Myth: We can’t trust the government with such an important issue like health care.

It is my contention that apart from hating kids, another reason why Republicans strongly opposed the SCHIP bill is that it demonstrates to the public how efficient the government can be. Historically, programs like Medicaid, Social Security and public broadcasting have been extremely successful and calls for reform have been met with derision. Remember the public furor when President Bush tried to privatize social security in 2005? As long as government agencies are adequately staffed and funded (unlike the DMV), we can trust a government-run health care system to run smoothly.

Myth: There is no such thing as a free lunch.

Actually, this is right. Contrary to Republican claims, however, no Democratic presidential candidate has advocated a “free” universal health care system. Sen. John Edward’s health care plan, the most promising within the field, calls for a small tax increase and repeal of Bush’s tax cuts for the wealthy. Sixty percent of Americans support such a tax increase if it means universal access to health care.

It is evident by now that the numbers are on my side. Yet, Republicans are able to distort facts and resort to cheap shots. Case in point — Rep. Steve King, R-Iowa, in a display of sheer stupidity, coined a nifty acronym for the SCHIP plan — “Socialized Clinton-style Hillarycare for Illegals and their Parents.” While it is easy to get discouraged by such a classic case of Republican wingnuttery, now isn’t the time to give up. Call your congressmen and ask him or her to support H.R. 676. Educate those around you about a universal health care plan. Republicans have monopolized the discussion for too long.

Is reform to benefit underwriters, or patients?

A very recent Quote of the Day message included the comments of Janet Trautwein who represents the National Association of Health Underwriters. She stated that we need to consider “free-market reform, and just say no to single payer.” It was followed by my criticism of underwriters whose role is to deny coverage of individuals with health care needs in order to protect insurers from the costs of that care.

Jeffrey Aaron provided us with his response to that message:

This is not a personal attack on Ms. Trautwein. However, let me speak plainly: she personally benefits from having private insurers in charge of American health care, and her letter plays on fears of “government-run” healthcare that she must know are false.

As a Type 1 diabetic I have had first-hand experience with health care in America, Canada and most recently, Japan.

In America when I became diabetic I lost my job (it was a medical disqualification) which meant that I also lost my employer -provided health care. With what was now a pre-existing condition and no income I was unable to afford health insurance. I paid cash for my medical care and I paid full price, not the reduced rate that insurance companies negotiate with doctors and hospitals. Major diabetic complications (which I have so far been spared) could mean bankruptcy.

By contrast, in Canada I went to any doctor I chose, received excellent care paid for through the single-payer system there, and never had to worry about filing claims or denial of a claim by an insurer. I met no Canadians who were interested in converting to an American-style system. Ms. Trautwein would have us believe that Canada has “substandard care, long waiting lists, loss of physicians, forced outsourcing and healthcare rationing.” Surely there would be hordes of Canadians clamoring to do away with the “inferior” single-payer system.

In Japan I get prompt, competent care without worry about bankruptcy. The citizens seem satisfied with the system.

Ms. Trautwein tells us that black is white and night is day while she benefits from a system that causes pain and misery to those around her. Why should she have any credibility?

Thanks for telling the truth, Don.

Best regards,

Jeff Aaron

Comment:

By Don McCanne, MD

And thanks, Jeff, for showing us that health policy is not just nebulous theory discussed by biased academics; it’s about real people and their actual health care.

Other countries do it; so can we

Modern Healthcare
November 12, 2007

Despite having good doctors and good hospitals, U.S. healthcare outcomes do not compare very favorably with those of other industrialized nations.

A national single-payer plan–paid for with our tax dollars–would be as “socialized” as Homeland Security, the Centers for Disease Control and Prevention, or the Transportation Department. The proper role of “our” government is to take care of needs that “we the people” cannot do as individuals. We have tried to manage healthcare through a market-based system, and we have failed. The market strategy has made billions for insurers but over 47 million Americans remain uninsured, and 18,000 people ages 18-64 die each year in the U.S. because of a lack of access to care. That’s six times as many people as died in the Sept. 11, 2001, terrorist attacks.

I have family members in Canada–various ages and income levels. They have been receiving timely, innovative and excellent care–all prepaid by their own tax dollars. One hears that Canadians have to wait for nonurgent surgeries, but they do eventually get that surgery. Is that rationing? In the U.S., we see the ultimate form of rationing–denial of care.

Canada and other free-market democracies have done the math and they have opted for a single payer system. As the recent Nobel winners in economics have shown–sometimes government must do what markets cannot. Saving lives and saving tax dollars may fall into that category.

Harriette Seiler
Louisville, Ky.