PNHP

Insurance payment confusion leads to bad credit reports

Insurance payment confusion leads to bad credit reports

Why medical debts shouldn't count

For many, the road to ruined credit is pockmarked with medical collections, often for tiny amounts or billed in error. The truth is that medical debt rarely indicates whether a borrower is high risk.

By Liz Pulliam Weston
MSN Money
November 19, 2007

The Your Money message board is littered with complaints from folks whose otherwise pristine credit was sabotaged by a medical collection. Sometimes their records were besmirched over absurdly small amounts that nonetheless had big impacts on credit scores.

Medical collections are surprisingly common, at least according to a 2003 Federal Reserve study of consumer-credit reports. Nearly one in three consumers (31%) with a credit report had at least one collection account reported, and more than half of those were medical collections.

The amounts owed weren’t substantial: 36.5% of the medical collections were for $100 or less, and 86% were for $500 or less.

Yet any collection account is considered a major negative to lenders and to the credit-scoring formulas they use. Though the impact of a collection on your scores fades over time, it will shave off points for as long as the negative mark remains on your report — typically seven years.

Your chances of having your credit ruined by a medical bill are soaring for a variety of reasons:

* More people are uninsured or underinsured.

* Medical-debt collection has become big business.

* Medical billing is a mess.

Even when a consumer is covered by insurance, confusion abounds. Doctors and hospitals often insist the consumer is ultimately responsible for the bills, saying medical providers bill insurers only as a courtesy. Yet frequently the providers have agreements with insurers and government agencies to accept discounted reimbursement as payment in full; the providers aren’t supposed to pursue patients for payment.

Meanwhile, insurers are constantly changing what’s covered and by how much, and providers move in and out of covered networks. Providers also claim some insurers deliberately drag their heels on reimbursements, adding to the chaos and uncertainty.

“Insurance companies are often contributing to the false reporting of medical debt,” said (Travis Plunkett, a spokesman for the Consumer Federation of America), as tussles over payment increasingly get turned over to collection agencies.

http://articles.moneycentral.msn.com/Banking/YourCreditRating/WhyMedicalDebtsShouldntCount.aspx?page=all

Comment:

By Don McCanne, MD

So you have excellent coverage. About six months ago you received medical care for what proved to be a minor problem. The care included a couple of office visits, a few laboratory tests, medical imaging, two prescriptions, and you’re fine now.

Since then you’ve received numerous statements from your insurer documenting the physician visits, laboratory tests, medical imaging facility services, radiologist’s fee for interpretation of studies, and documentation from the pharmacy benefit manager. Each statement included many numbers, but the only number that really caught your attention was the dollar amount after the statement, “You are not responsible for paying this amount.” That appeared on several of the forms, though the amount noted was confusing since it didn’t seem to fit with any of the other numbers on the page. In the meantime, you have received statements from each of the medical professionals and health care institutions involved stating that your insurance has been billed and that this is the amount due (the total, non-adjusted charge), but since no payment yet appears you decide to wait until payment is actually made by the insurer and the disallowed amount is adjusted off. Otherwise you really don’t know what you should pay.

Within the past week, you have received notices from two different collection agencies representing two of the billing entities. Since your coverage is excellent, it is clear that there is some error here. What do you do?

The first step is to take out your insurance contract to see what is covered. Check for deductibles, copayments (dollar amount), coinsurance (percentage of the charges), tiering of benefits (different coverage for different levels of products or services), capping of benefits (maximum to be paid under specific categories), amounts to be paid by a fund such as a health savings account, and any other innovative features specific to your coverage. Then check to see if each professional and institution is contracted with your insurer. Since the list you have is a few years old, be sure to obtain a current list of providers. Then determine precisely how much is to be paid by the insurer, how much is to be adjusted off, and how much you are responsible for paying. The set of numbers will likely vary depending on whether or not the professional or the institution is currently contracted. Now retrieve from your records every notice of change in benefits that you received from the insurer at each annual renewal. Go back and change the numbers based on these notices, being certain that you apply the changes in chronological order.

Okay. Now that you’ve done this, you find that you do owe the amounts for which you are responsible after payments were made to the providers and the disallowed amounts were deducted. But the amounts demanded by the collection agencies are greater than the amounts that are your responsibility.

Since obviously there is an error, you now contact the administrative staff of one of the providers that are dinging you. The staff member insists that their ledger for your account is correct and that the insurer has obviously made an error. They don’t have time to help you further and insist that you contact your insurer since that’s your responsibility anyway.

After hours of punching through automated phone systems with endless times on hold, dropped calls, referrals to other departments, you finally end up where you began, and a real person in India tells you that all of their numbers are correct. She explains that the provider apparently did not adjust off the full disallowed amount, assuming, of course, that you did pay the deductibles and coinsurance that you owed. Oh.

So you call back the provider and explain that you will send payment for the deductible and coinsurance that you owe, but you want them to adjust off the balance that was disallowed. Sorry. The account has already been turned over to the collection agency and you will have to deal with them.

The collection agency responds by stating that they have nothing to do with insurance contracts. All they have is the amount that the provider turned over to them for collection, and that is the amount that you must pay. If you want an adjustment made, you’ll have to contact the provider.

Take a break from this one, and start the process over with the other collection agency. (Repeat the last six paragraphs here.)

Enough. Just pay the whole d*** thing and consider later whether to go through the grief of trying to obtain refunds from the providers. But at least this will keep your credit report clear. Sorry. These delinquencies have already been reported by both collection agencies. You can receive a free credit report if it’s been over a year since your last request, but you’ll have to pay a fee to find out how many points were deducted from your credit score.

What is really sad is that, with what you believe to be a really great health insurance plan, and with an honest effort to comply with the rules of your plan, and in spite of considerable personal inconvenience, you can become one of the more than 15 percent of individuals who end up with an impaired credit rating merely because of the administrative complexity inflicted on us by the private insurance industry.

With a single payer national health program, you go to your health care professional, receive your tests, and then follow the treatment program that you decide on after further consultation with your healthcare professional. The bills go to the single payer; you receive a statement of services and payments only to keep the process transparent.

Why are our politicians telling us that this isn’t politically feasible? Do we really want to continue to include screwed up credit reports on our list of the perverse features of an exclusively American health care system?

Do we really want to protect the thriving big business of medical-debt collection? After all, aren’t they merely an extension of the medical insurance administrative profession that we prize so highly?

Looking for a Bright Side

Republican and Democrat promote hospital coverage for all as Catamount fails Vermonters

By Peter Freyne
Seven Days: Vermont’s Independent Voice
11/21/07

Health Care Solved? — This month, the Vermont television airwaves are full of the well-done, funny ads with the farmer saying how he’s “healthy as a horse” — just before the horse behind him keels over!

The TV ads, centerpiece of a $1.6 million marketing campaign (http://www.greenmountaincare.org), were unveiled recently at Rutland Regional Medical Center by a bipartisan contingent that included Republican Gov. Jim Douglas, Democratic House Speaker Gaye Symington and Democratic Rep. Harry Chen, M.D.

The pitch is to get uninsured Vermonters over 18 who’ve been uninsured for at least 12 months to contact Green Mountain Care and sign up for the highly touted Catamount health insurance plan. That’s the one which was agreed upon by both the Democratic leadership under the Golden Dome, who surrendered on single-payer, and the best friend the insurance industry has in Vermont: Gov. Jim Douglas.

But Cambridge, Vermont, physician and health-care-reform firebrand Dr. Deb Richter doesn’t fool easily. Yours truly asked the good doctor recently for her take on what the state’s leading politicians are touting as progress.

“The governor is right, Catamount is a very good insurance product,” answered Dr. Richter. “And it will be wonderful for the few thousand people the state can afford to subsidize. But it won’t do a thing for the tens of thousands of Vermonters who are struggling to pay for health insurance policies that have huge co-pays and deductibles and barely cover their needs,” she added. “The Catamount solution is akin to putting a high-quality Band-Aid on a wound that is getting larger by the day. It won’t solve the problem. But it will get the governor re-elected. And that is the point, isn’t it?”

Richter doesn’t mince words. And she’s part of a growing body of medical doctors across the country who also want America to join the rest of the civilized world with regard to health care. They have an increasingly active national organization called Physicians for a National Health Program (https://pnhp.org). These docs share the “radical” notion with docs in France, Britain, Spain and Canada that “health care is a human right.”

Vermont’s health-care reform “Joan of Arc” was promoting Michael Moore’s illuminating film Sicko around the state this summer and fall. The other evening she brought the flick to a student audience at the University of Vermony. Good crowd turned out — almost 400.

When it was over Richter asked, “How many of you have health insurance?”

Almost all the hands in the theater went up.

“And keep your hands up if you have health insurance for life,” she added.

All but two or three hands dropped.

“See, that’s the problem,” said Dr. Deb. “Everyone in every other industrialized nation is guaranteed health care for life.”

But the “real” shame, noted this Vermont doctor, wife and mother of a college-age kid — and who does make house calls — “is that we’re already spending enough money in total to cover every single American with comprehensive coverage, eye care, dental care, prescriptions, doctor, hospital, everything!”

The audience of tuition-laden college folk was paying very close attention.

“You have to know a couple numbers,” said Richter. “Of the total amount we’re spending in Vermont, one-third of it is for administrative costs. It has nothing to do with health care. Not with people taking your blood pressure or doing any kind of surgery. You don’t need all these people in administration.

“Put it all in one pot and there’s more than enough money,” said the good doctor. “So this whole idea that we can’t afford to cover every single person in America is bullshit, and we should call it that!”

The audience burst into applause. Who doesn’t like a doctor who talks straight? In fact, Richter’s straight talk has prompted a few to suggest the candidate-strapped Vermont Left consider her as gubernatorial material in 2008.

Richter says she’s not interested. At least not at the moment.

So if there’s more than enough money to cover everyone, why isn’t everyone covered?

“You have to wipe out the insurance industry from health care. It’s a little bit of a problem,” she said with a tinge of sarcasm.

Yes, indeed.

Only in America, eh?

When it comes to your health, the middle man comes first!

The horse may topple over in the million-dollar Catamount TV ad campaign, but Dr. Deb isn’t giving up. Richter is organizing her troops behind H.304, a bill that would at least provide some hospital coverage to all Vermonters. A foot in the door, though not in the operating room.

The bill is sponsored by Barre Town Republican Rep. Topper McFaun and former Democratic Speaker of the House Michael Obuchowski of Bellows Falls.

Interesting duo, eh?

P.S. If you haven’t seen Sicko because you think you know what it’s about, do yourself a favor this holiday season. Rent it. Buy it. Sit down and watch it. Mr. Moore’s best by far.

Only in America.

Advocacy Group for Single-Payer

Mark Gruenberg, Editor
Press Associates
Union News Service

NEW YORK (PAI)–As the debate over the future of national health care heats up–at least among the Democratic presidential hopefuls–an advocacy group for single-payer government-run health care has published a leading medical scholar’s point-by-point criticism of the health care plans offered by the top three Democrats.

Not surprisingly, Len Rodberg, research director the New York affiliate of Physicians for a National Health Plan, concludes that the plans offered by Sens. Hillary Clinton (D-N.Y.) and Barack Obama (D-Ill.) and former Sen. John Edwards (D-N.C.) would be inferior to Canadian-style government-run national health care.

Single-payer government-run health care is drawing increasing grass-roots support among local unions and particularly central labor councils, even though the two union federations–the AFL-CIO and Change to Win–have taken no stand on exactly how to achieve universal health care coverage in the U.S.

Instead, both federations vow to put universal health care, type unspecified, atop the domestic agenda for the 2008 election, forcing candidates from both parties to take the issue on. The unionists would then decide, after the election, what method to back to achieve that goal. The AFL-CIO has not ruled out single-payer health care. Change to Win has taken no official position on any health care alternative.

Several leading unions, notably the Steel Workers, the California Association of Nurses, the International Longshore and Warehouse Union, the Auto Workers and at least one building trades union, support government-run single-payer health care.

By contrast, Andy Stern, president of the Service Employees–the union with the most health care workers–does not rule out single-payer but says it may well be politically unachievable.

Many of those unions endorse the single-payer bill (HR 676) offered by veteran Rep. John Conyers (D-Mich.). His district includes many Auto Worker retirees and present UAW members who see their health care benefits dwindle or in possible danger, while the not-so-Big-any-more-Three dumped health care on the union.

HR 676 would virtually extend Medicare and its government-run system to the entire nation, trashing the health insurance companies, their co-pays, denial of coverage and care, high premiums and the 18,000 yearly deaths they cause–according to government estimates–due to denial of payment for treatment of their policyholders. Insurers’ overhead now takes at least 20% of health care dollars, while Medicare’s overhead is 3%.

One of the other Democratic hopefuls, Rep. Dennis Kucinich (D-Ohio), is a lead co-sponsor of Conyers’ plan, but Rodberg’s analysis does not mention that.

In his critique, Rodberg makes several key points:

* In their details, none of the three leading Democratic hopefuls offer “universal” coverage. Rodberg points out Obama’s plan is universal only for children. The senator claims his plan cuts costs so much it would become universal for adults, too.

But Rodberg disputes that. He says none of the three plans cuts costs, because all three leave the insurers in place to run the system–with no cost controls.

* “Large employers must provide insurance for their employees or–in the case of Edwards and Obama–pay into a fund to subsidize insurance for their employees,’ Rodberg notes. But he says the plans are silent on minimum coverage requirements the insurers must meet, relying on “competition’ to produce improved health care coverage. That could produce minimal, Wal-Mart-like coverage at high cost.

Clinton, Rodberg noted, even used the health insurers’ phrase “American Health Choices Plan” as a label for her plan. That “suggests that what consumers want is a choice of plan,” not universal coverage, Rodberg added.

* Workers and their families would be forced to buy insurance individually, again without cost controls. Rodberg says the three hopefuls’ plans would offer “income-related subsidies through the tax system” to help those who cannot afford insurance.

* Insurers would be barred from rejecting people for pre-existing conditions and Clinton’s plan would also ban “large premium differences based on age, gender, or occupation.” But again there would be no cost controls, leaving insurers free to declare that they would insure certain people–the elderly and those who ‘cost’ more–at enormous prices, Rodberg states.

“Since multiple payers would remain–even if one of them might be a public payer (similar to Medicare)–few of the savings and simplifications that are possible with a single payer plan can be achieved,” he contends.

“Consumers must purchase insurance, but no limits are proposed on what insurers can charge them. No regulations are proposed to assure the adequacy of benefits or that would affect either the restrictions insurers now impose on the choice of doctor and hospital or the way they handle, and deny, claims.

“And there is no simplification of the complex and wasteful private insurance sys-tem with its co pays, deductibles, exclusions, and claim denials,” Rodberg ends.

###

Press Associates, Inc. (PAI) — 11/26/2007

Former Brooklin, Maine Couple Applaud Canadian System

by Tom Walsh
The Ellsworth American
Thursday, November 22, 2007

BEAR RIVER, Nova Scotia — Along the stretch of Nova Scotia highway that leads to Paul and Gretchen Volenik’s new home is a road sign that reads “Paradise, Next Right.”

The Voleniks are convinced that’s exactly where they have settled.

“We love it here,” Paul says. “This area is like Maine was 35 years ago. We’re just delighted every day that we are here.”

Last spring, after first moving to Nova Scotia in 2005, the Voleniks put down permanent roots in the picturesque village of Bear River, an artists’ colony not far from Digby.

Now living near Digby, Paul and Gretchen Volenik are enjoying all that rural Nova Scotia has to offer, including tax-funded medical care.

Through “Bear River Bargains & Books,” Paul, 59, sells old books and other collectibles, while Gretchen, 56, devotes her attention to expanding the garden she’s designing for self-sufficiency.

For Paul the cross-border move came after 35 years of living in Maine, the last nine in Brooklin. Between 1994 and 2002, he served as a Democratic state representative in the Maine Legislature.

Until term limits pulled the plug on his political career, Volenik was a tireless and vocal advocate for a state-funded universal health care system that would provide health insurance and medical care to every citizen of Maine.

That never happened. Ironically, as permanent foreign residents of Canada, the couple now have access to universal health care through Nova Scotia’s tax-funded medicare program, a system that provides cradle-to-grave, unlimited access to medically necessary health care services.

“Paul worked very hard over eight years in the Maine legislature, fighting to get health care for everybody,” Gretchen says. “Now we have it. It wasn’t our intention that it would just be he and I, but we do have it now. And it’s too bad that Maine, and the United States, doesn’t have it.”

Paul Volenik said he’s studied the issue of single-payer universal health care long enough to know its doable in Maine. What’s lacking, he feels, is the political will to scrap the existing multi-payer system, with its well-entrenched special interests eager to protect the profits inherent in the status quo.

“Through what was known as the Health Security Board, we did the most advanced study in the country on single-payer health care systems,” he said. “The report that came out said that we could keep the current system of private delivery of health care but with totally public funding, folding in all of the health care dollars coming into the state, including Medicare.

“By adding a payroll tax, we could cover everyone in the state with not Cadillac coverage, but good, basic coverage — better than most insurance policies — for less money than was currently being spent in Maine on the total cost of health care. And that was keeping the private delivery system. We didn’t propose going as far as Canada, which is not just publicly funded, but involves publicly owned hospitals and, in some places, doctors on salary. We didn’t go that far, but we did prove we could cover everyone for less money.”

As governor, Angus King Jr. threatened to veto any single-payer legislation, Volenik said.

When Governor John Baldacci took office, he embraced the Dirigo approach, which Volenik described as an “incremental” system that doesn’t confront the issues that keep driving up the costs of medical care and health insurance.

“The Baldacci system and any of the other incremental systems that have failed in the past is like a train,” Volenik said. “The engineer is driving the health care train, and he stops at each stop and picks up a few more people, maybe children, or a group of low-income people. But he fails to notice that the train is on fire and that people are leaping off in all directions, because the system is ridiculous.

“An incremental system doesn’t work,” he said. “Until you get rid of the insurance companies, until you get rid of the immense power of the drug companies, until you get rid of the inflated salaries of hospital administrators, you will never have an effective health care system.”

Paul and Gretchen Volenik don’t have a family doctor. The Digby region, like other rural areas within Nova Scotia, is enduring a shortage of doctors. Fortunately, they said, they don’t need a doctor.

“We don’t have a physician; we have a nurse practitioner, and it’s the best medical care I’ve ever had,” Paul says. “Instead of, like in Maine, going into the office for an annual physical and having the doctor see you for 10 or 15 minutes, every time I’ve seen her she’s spent at least an hour, with real interaction as to your total medical situation.”

Gretchen said both she and Paul have also required services provided through a small hospital located 17 miles from home in Annapolis Royal.

“Although we continually hear about wait times, we have not experienced that at all,” she said. “When we went to Halifax to have physicals to become permanent residents, I figured we’ll be there all day long, and that didn’t happen.”

Gretchen realizes the system isn’t “free,” that hefty income, sales and other taxes cover the $2.8 billion annual cost of providing health care services to Nova Scotia’s 935,000 residents. She says she doesn’t mind paying more than $4 a gallon for gasoline because she knows that fuel taxes help pay for Nova Scotia’s health care system.

“It’s a fair way to do it,” she said. “Everybody pays those taxes. We all pay into it. It’s not like the wealthy get the good health care, and the working stiff gets some kind of health care, but with big deductibles. And then there are the people who can’t get health care. There are all these tiers in the United States. Here, it’s the same for everybody, and we all pay.”

Giuliani and Health Care

The New York Times
Letter to the Editor
Published: November 24, 2007

To the Editor:

Re Ć¢ā‚¬Å“Giuliani, Foe of Ć¢ā‚¬ĖœSocializedĆ¢ā‚¬ā„¢ Medicine, Expanded Public Care as MayorĆ¢ā‚¬Ā (news article, Nov. 17):

As The New York Times reported on May 3, 1996, Mayor Rudolph W. Giuliani appointed former Mayor John V. Lindsay to two largely ceremonial city posts to provide Mr. Lindsay with city-financed health insurance and make him eligible for a pension. Although Mr. Lindsay belonged to the upper class all his working life, the cost of his health care had driven him into dire straits in retirement.

Mr. Giuliani saw nothing wrong with enlisting socialized health insurance to rescue an old friend, an approach that Mr. Giuliani, as presidential candidate, now deplores as Ć¢ā‚¬Å“socializedĆ¢ā‚¬Ā medicine.

The term applies to systems in which the government not only finances health insurance, but also owns and operates all health care facilities. The system at the Department of Veterans Affairs reserved for military veterans, for example, is purely socialized medicine.

If Mr. Giuliani despises socialized medicine, as he now contends, perhaps he would abolish the V.A. health system if he were elected president. American veterans should challenge him to come clean on the issue.

Uwe E. Reinhardt
Princeton, N.J., Nov. 17, 2007

The writer is a professor of political economy at Princeton University.

Promote Universal Single-Payer Health Care

The California Democratic Party
Resolution Number ANA07.15

WHEREAS, California is facing a major public health crisis due to the skyrocketing costs and diminishing benefits of the current health care system resulting in 7 million uninsured and countless underinsured Californians; and

WHEREAS, the 25 percent or greater cost that the private health insurance system spends on the administration of health plans makes apparent the inefficiency of this system in contrast to the less than 3 percent it would cost to administer a “single-payer” “Medicare-type” insurance system; and

WHEREAS, the California Democratic Party is already on record as endorsing the move toward a “single-payer system” as stated in the 2006 CDP Platform, as well as being on record as endorsing a universal health care proposal that covers all state residents through a non-profit, single payer, comprehensive health plan;

THEREFORE BE IT RESOLVED, that the CDP recognizes that the health and well-being of Californians is not a commodity to be subjected to the demands of the free market, and the profiteering of stockholders and CEOs; and

BE IT FURTHER RESOLVED, that the CDP strongly supports the drafting and passage of legislation that creates and enacts a single-payer health care program which provides comprehensive, secure, high quality, efficient and sustainable access to health care for all Californians.

Submitted and Written by: Johanna Olson, MD, So. California Chair,
California Democratic Party Progressive Caucus, DSCC Member, 42nd AD
Co-sponsored by: Susie Shannon, Executive Board Member, 42nd AD

Signatories: Ahjamu Makalani, DSCC Member, 61st AD;
Helen Hartman, DSCC Member, 42nd AD;
Brad Parker, DSCC Member, 42nd AD; John Heaner, Region 13 Director;
Dante Atkins, DSCC Member, 42nd AD; Marilyn Grunwald, DSCC Member, 40th AD;
Dan Licht, DSCC Member, 42nd AD;
Michael Jay Miltenberg, DSCC Member, 42nd AD

#

Adopted by the Executive Board
Of the California Democratic Party
At Its Executive Board Meeting
Sheraton Hotel, Anaheim
November 18, 2007

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.