Medicare Plus

Canadian Medical Association
CMA Policy Statement
July 2007

To sustain Canada’s health care system for the next generation, changes need to be made to bring about a new vision for Medicare. The CMA identifies this future vision as “Medicare Plus.”

The Chaoulli decision has established that patients cannot be denied a private sector insurance and treatment option. The Quebec government has since made provisions in its legislation to comply with the decision, however it has so narrowly circumscribed the terms and conditions under which private insurance contracts might be offered and delivered that it is highly unlikely private coverage will be offered.

The ability of physicians to choose whether or not to participate in the public health insurance plan has been a key feature of Medicare since its inception. Physicians are willing to accept reasonable limits on their ability to opt in or out of the public health plan to ensure that adequate access to medical services is maintained. To achieve this, an effective regulatory framework is required to govern the intersection of public and private health care and there must be concerted effort on the part of stakeholders to investigate the implications of and opportunities to minimize conflicts of interest. When considering options for the delivery of publicly insured services by the private sector, it is critical that the integrity of the public system is maintained and that Medicare remain the cornerstone of Canadian health care.

The CMA recommends that:

When access to timely care cannot be provided in the publicly funded system, Canadians should be able to use private health insurance to reimburse the cost of care obtained in the private sector.

http://www.cma.ca//multimedia/CMA/Content_Images/Inside_cma/Advocacy/MedicarePlus/still_about_access.pdf

And…

The case against private insurance

By Naomi Lakritz
Calgary Herald
August 2, 2007

It’s been said that during the 12 or so years they spend in medical school, doctors learn to think of themselves as gods.

Well, the gods must be crazy. Or greedy. Or both. How else to explain the Canadian Medical Association’s ridiculous support for physicians’ right to work simultaneously in both a public and private system, including the introduction of private health insurance — and the gall to label this as standing up for their patients?

It is patently obvious they are standing up for their bank accounts, not their patients. That they are so eager to place patients at the mercy of insurance companies, whose subterfuges for skipping out on claims are well-documented in the U.S., shows their patients’ best interests are the last priority.

A recent New York Times article profiled Gordon Hendrickson, 66, of Albuquerque, whose best bet to beat pancreatic cancer was risky surgery performed by a Houston specialist. His insurance company refused to pay for the surgery. Hendrickson had it done anyway. Today, he is cured, but owes $80,000 in medical bills.

Is this what the CMA wants to inflict on Canadians?

“Of the people who go bankrupt in the U.S., 50 per cent of the time it is because of medical bills. Of that 50 per cent, 75 per cent had health insurance,” says Dr. Ida Hellander, executive director of the Chicago-based Physicians For a National Health Program.

Insurance companies are putting the screws to American patients in insidious ways.

In a telephone interview, Hellander says it’s hard to find a policy with a deductible less than $1,000. Some policies have deductibles up to $5,000.

“A thousand dollars is a lot of money. So people have chest pains and they won’t go to the ER because they’ll have to pay that $1,000 deductible,” she says.

Another nasty trend is co-insurance — when you go to the hospital, you pay 20 per cent of the bill before your insurance kicks in.

Insurers have also dropped mental health coverage, so people with mental illnesses are going untreated. Only the most indigent can get their mental health care funded by the government. Also, if you have a pre-existing condition, insurance companies will do their best to link it to everything else you visit the doctor for, in order to avoid paying the bill.

And the CMA wants to subject Canadians to these kinds of nightmares?

Equally absurd is the CMA’s claim that these reforms would allow doctors to spend more time with patients. Sure, they would — with the private patients whose visits are more lucrative for the doctor.

The public patients might be fitted in if there are a few minutes left over in the doctor’s day from filling out the insurance forms for his private patients.

According to an article in the Ventura County Star, 80 per cent of doctors in California are frustrated with the huge amount of time they spend filling out insurance forms.

Don McCanne, a retired family physician and senior health policy fellow with the PNHP, says doctors will be “cream-skimming the more profitable patients,” to the detriment of the public ones.

Economist Paul Krugman, also writing in the New York Times, shatters one of the cherished myths of Canada’s proponents of private health, when he discusses hip replacements. This surgery is always seized upon by the private-health cheerleaders as something for which there is no waiting in the U.S. system:

“There’s a funny thing about that example, which is used constantly as an argument for the superiority of private health insurance over a government-run system: the large majority of hip replacements in the United States are paid for by, um, Medicare.

“That’s right: the hip-replacement gap is actually a comparison of two government health insurance systems. American Medicare has shorter waits than Canadian Medicare because it has more lavish funding.”

Krugman also points out that the insurers themselves cause waiting lists to grow, citing the example of Mark Kleiman, a UCLA professor, who nearly died waiting for a biopsy because his insurance company stalled approving it.

“There’s no question that some Americans who seemingly have good insurance nonetheless die because insurers are trying to hold down their ‘medical losses’ — the industry term for actually having to pay for care,” Krugman writes.

Reached at his home in San Juan Capistrano, Calif., McCanne calls the CMA’s interest in private care “self-serving” at a time when Canada really needs to repair the public system’s flaws.

“Frankly, they’re greedy,” he says. “Private insurance is the worst thing they could do.”

Amen to that, Dr. McCanne.

http://www.canada.com/calgaryherald/news/theeditorialpage/story.html?id=ab96889d-3cbc-4d5d-87ce-ad46de9db0a3

And the latest…

CBC News

Health Minister Tony Clement has rebuffed the Canadian Medical Association in its call for greater privatization of medicare.

Clement said the federal government will not allow so-called dual practice, which allows doctors to work in both the public and private health systems. In an interview, he referred to such an arrangement as a two-tier system.

Clement said the doctors’ organization is entitled to its opinion but the government believes the CMA proposal would breach the Canada Health Act.

The minister was responding to a letter from the Registered Nurses Association of Ontario, which called on Prime Minister Stephen Harper to uphold the single-tier system.

http://www.cbc.ca/cp/health/070801/x080121A.html

Reason to rejoice…

It is important to understand that the greed brush does not paint all physicians. Just as dedicated physicians in the United States formed Physicians for a National Health Program (PNHP) in response to the flawed reform proposals of the American Medical Association, dedicated physicians in Canada have formed Canadian Doctors for Medicare (CDM).

Their Mission:

“The mission of CDM is to provide a voice for Canadian doctors who believe in and support Canada’s publicly funded system for physician and hospital care, and who reject private insurance and direct payment for these medically necessary services.”

http://www.canadiandoctorsformedicare.ca/mainpage.html

Comment:

By Don McCanne, MD

Amen.

Rudy Giuliani Campaign Announces Health Care Advisors

RUDY
www.JoinRudy2008.com
July 30, 2007

The Rudy Giuliani Presidential Committee today announced key advisors who have been providing input on Rudy Giuliani’s commitment to providing affordable free-market-based solutions to health care aimed at giving Americans more control over and access to their health care.

The Mayor’s group of advisors includes well-known advocates of consumer-driven health care and recognized leaders in their respective areas of expertise.

“Rudy Giuliani strongly believes in limited government and giving American families more control over their health care decisions,” said Steve Goldsmith, the campaign’s Chief Domestic Policy Advisor. “He understands that failed mandates and wasteful, unaccountable bureaucracies lead to the exclusion of millions of Americans from quality care and health insurance.”

The Advisors:

Dan Kessler, Ph.D. – a senior fellow at the Hoover Institution and a professor at the Graduate School of Business at Stanford University, and co-author of Healthy, Wealthy, and Wise (advocates a free market solution to reform).

Scott Atlas, M.D. – a senior fellow by courtesy at the Hoover Institution whose research includes free market solutions to health care.

David Gratzer, M.D. – a senior fellow at the Manhattan Institute whose most recent book, with Foreword by Milton Friedman, is The Cure: How Capitalism Can Save American Health Care.

Sally C. Pipes – president and chief executive officer of the Pacific Research Institute, a San Francisco-based think tank. Previously she was assistant director of the Fraser Institute.

Donald W. Moran – served as the Executive Associate Director for Budget and Legislation at the U.S. Office of Management & Budget under President Ronald Reagan.

http://www.joinrudy2008.com/news/pr/548

And…

Giuliani attacks Democratic health plans as ‘socialist’

By Paul Steinhauser
CNN.com/politics
July 31, 2007

Republican presidential candidate Rudy Giuliani said Tuesday he wants to give American citizens more control over their health care.

“We’ve got to do it the American way,” Giuliani said during a town hall forum in Rochester, New Hampshire. “The American way is not single-payer, government-controlled anything.”

“That’s why when you hear Democrats in particular talk about single-mandated health care, universal health care, what they’re talking about is socialized medicine.”

Giuliani’s health care plan, unveiled at the forum, includes giving taxpayers tax credits to purchase private health insurance. The highlight of Giuliani’s plan: a $15,000 tax deduction for each family to buy private health insurance.

He says his program for private insurance would replace coverage from employers.

While outlining his plan, Giuliani offered few details.

http://www.cnn.com/2007/POLITICS/07/31/giuliani.democrats/

Comment:

By Don McCanne, MD

Rudy Giuliani’s choice of health care advisors is all you need to know to understand his positions on reform. His decision to trump rational health policy with extremist libertarian ideology does tend to make you question his political skills. He obviously isn’t poll driven.

By Denise Grady
The New York Times
July 29, 2007

A glorious blend of forces came together to save Gordon Hendrickson’s life: smart doctoring, luck, kindness, and his own wisdom and abundant grit.

Only his insurance company tried to stand in the way.

His doctors thought he was among the lucky few with pancreatic cancer found early enough to be cured by surgery. But they warned him not to have the surgery in his home city, Albuquerque. They said the operation he needed, a Whipple procedure, was so risky and complicated that it should be done only by a surgeon who performed it often and at a hospital with many similar cases. But neither was available locally.

…his internist, Dr. Kristine Bordenave… canceled her other appointments to spend hours on the phone finding a major cancer center that would quickly admit him. It turned out to be the M. D. Anderson Cancer Center in Houston.

But his insurer, the Presbyterian Health Plan, refused to pay for treatment in Houston. The company insisted that the operation be done in Albuquerque and sent him a list of five local surgeons.

He went to M. D. Anderson anyway.

Mr. Hendrickson had the surgery. It went well. But he was left with more than $80,000 in medical bills, which Presbyterian Health Plan refused to pay.

Mr. Hendrickson waged a long battle with Presbyterian.

After Presbyterian rejected two appeals, he took his case to a state review board, where he represented himself because he could not afford a lawyer.

Ultimately, Mr. Hendrickson won the case, and Presbyterian Health Plan paid the entire bill.

http://www.nytimes.com/2007/07/29/health/29OBSTACLES.html?adxnnl=1&adxnnlx=1185712600-tpCl49Yqw7WlMUs6wqw8Gg

About Presbyterian Healthcare Services:
http://www.phs.org/admin/about_us.shtml

Comment:

By Don McCanne, MD

The appropriate medical decision could not be more straightforward. A Whipple procedure should always be done in a center with an experienced team. To attempt this operation at a local level with an inexperienced team is almost tantamount to a death sentence.

Had Mr. Hendrickson been covered by the traditional Medicare program, the referral would have been made promptly to M. D. Anderson Cancer Center without the need to consider any other referral options, the operation would have been completed, and Medicare would have paid the bills. End of story.

But no. His coverage was through Presbyterian Health Plan, an intrusive third party payer that held contracts with the patient on the consumer side, and with a specific list of physicians and hospitals on the provider side. The contracts allowed Presbyterian Health Plan to use a basic business decision to overrule a crucial medical decision. This clearly caused Mr. Hendrickson considerable distress, and could have cost him his life.

One irony is that Presbyterian Health Plan is part of Presbyterian Healthcare Services which is a private, nonprofit statewide healthcare system with several hospitals, plus primary and specialty care through Presbyterian Medical Group. Single payer model proposals usually include coverage for integrated healthcare delivery systems, as long as their mission is providing health care rather than providing insurance services.

Suppose we adopted a single national health insurance program covering everyone for all reasonable beneficial services. Presbyterian Health Plan would be superfluous and could be eliminated. Payment for services could be made directly by the public insurance program. The patient could be free to continue to use Presbyterian Healthcare Services, but could also be free to use any other healthcare providers such as M. D. Anderson Cancer Center. Neither the patient nor the providers necessarily would be locked in by a contract.

But what if the integrated healthcare delivery system elected to be funded through capitation, as some single payer models would permit? That returns some of the financial risk to the delivery system, and locks the patient back in (otherwise the government would be paying, for the same patient, both a capitation fee for comprehensive services and fee-for-service costs outside of the system). The single payer model does call for funding hospitals through global budgets, so the hospital component of the integrated delivery system could be funded by global budgets as well. The medical group component could then be funded either by fee-for-service, or also by a global budget negotiated to cover legitimate costs plus fair compensation. Paying physicians by salary reduces the incentives to either withhold beneficial care or provide excessive services (although it risks sloth).

At any rate, Mr. Hendrickson’s experience provides us with yet one more example of why we need to remove private insurers from our financing of health care. Health care needs to be based strictly on medical need rather than on business decisions made by private insurers.

A debate between Dr. Nancy Nielsen, president-elect of the American Medical Association and Dr. Don McCanne, Senior Policy Fellow for Physicians for a National Health Program.
KALW, San Francisco
July 29, 2007

Hosted by Marty Nemko

Halfway through the debate:

Marty Nemko: You know, as I’m kind of stepping back and listening to this debate, at this moment in time in the debate, it’s seeming as though the advantages of lower costs that would accrue from reduced administrative costs that would come from single payer, the simplification of life that would come from single payer, and retention of choice in the single payer program that you’re advocating, that is choice of doctors and hospitals, right now makes it look like you’re winning. So I’d like to ask you, Don, some tough questions that I think will at least allow our listeners to hear the best answers to these kind of tough questions…

To hear the hour-long broadcast, click on “HERE” for the 7/29 archive:
http://www.martynemko.com/past-and-upcoming-radio-shows

Comment:

By Don McCanne, MD

Because of my obvious bias, I’ll not comment here on our respective opinions on the health care reform policies debated. The listeners can draw their own conclusions.

But I would like to mention one point of disagreement that could not be clarified during the limited time of the broadcast. I mentioned that the AMA’s version of choice was the choice of private health plans, allowing individuals to purchase plans with lower premiums, but at a cost of reducing the insurance function of the private plans. Those plans work for the healthy, but not for those who later develop significant medical problems. She replied that this does not at all represent the AMA’s proposal. She used the analogy that you would never buy an unsafe car, but rather you would choose a car with all of the safety features. But the 2007 AMA proposal for reform specifically states: “Benefit mandates should be minimized to allow markets to determine benefit packages and permit a wide choice of coverage options.” This point is absolutely crucial because it further demonstrates how poorly private plans would serve us in a universal system of health care coverage.

By Laurie E. Felland, Debra A. Draper, Allison Liebhaber
Center for Studying Health System Change
July 2007

In rapid fashion, Massachusetts has made efforts to both ignite demand for health insurance and establish a marketplace for individuals and small employers to purchase coverage.

Perhaps the most fundamental challenge is the issue of affordability. While most market observers agree that the primary goal of the reform is to improve access to health insurance, they contend that its ultimate success depends on affordability–both in the short term, as well as the long term. If affordable coverage is not available, it is unlikely that small employers on the cusp of offering insurance to their workers will be motivated to do so.

Affordability is also a concern of individuals and, despite the individual mandate to have health insurance, there are likely to be some people who will forgo coverage and pay the tax penalty. They may decide this based on individual assessments that they cannot afford coverage, which for lower-income individuals, in particular, may mean that basic needs such as housing and food take precedence over obtaining health insurance. Efforts in other states to reduce the number of uninsured by creating purchasing pools, offering insurance subsidies to employers and employees, tax credits or limited benefits often have struggled for precisely this reason–individuals’ perceptions that they cannot afford coverage or that what they are buying is not worth the cost. In April, the Connector board reported plans to exempt nearly 20 percent of uninsured adults (approximately 60,000 people) ineligible for state subsidies from the individual mandate after determining that even the lowest cost insurance is unaffordable for them. The Connector board currently is revisiting the premium levels that will be considered affordable for people at all income levels, after learning that its proposed schedule would exempt significantly more people from the individual mandate than originally intended.

The challenge of affordability extends to a policy debate about what should be the balance between the financial obligations of individuals and the state. The less affordable coverage is for consumers, the more likely the state will have to commit additional monies to subsidize people to achieve near universal coverage.

There is also the issue of whether the Connector adds additional administrative costs to the system. Evidence from other states’ purchasing pool initiatives suggest that the administrative costs of marketing, enrollment processing and premium collection, for example, can be significant.

What happens, however, if people forgo health insurance coverage, but still receive care?

The reform is being implemented during a time when the state’s economy is strong and unemployment is low. What happens if there is an economic downturn?

The issue for Massachusetts may come down to how close to the goal of universal coverage is realistically attainable. The state has a lower percentage of uninsured people compared to most other states, which increases the feasibility of achieving near universal coverage. But at what point do the costs to the state getting one additional individual insured outweigh the benefits?

http://www.hschange.org/CONTENT/939/

Comment:

By Don McCanne, MD

It is an appropriate time to revisit the new Massachusetts program for universal coverage since it went into effect on July 1, and we now have this assessment from the Center for Studying Health System Change, a highly credible source of unbiased information. It is important that we understand this program since it is being touted as a model for other states to emulate.

The issue of affordability was of primary concern from day one. But rather than addressing the crucial problem of the affordability of health care, the architects of the program decided to tackle the problem of the affordability of private insurance plans.

It rapidly became clear that the private insurers could not provide a comprehensive product with premiums that average-income individuals could afford. Although the program subsidizes premiums for low-income individuals, they did not consider extending subsidies to average-income individuals. That wouldn’t make sense. Why would you subsidize inefficient private plans for the majority of individuals when a single publicly-funded program would be much more efficient and more equitable?

Insisting that the program must be administered through private plans, the architects tinkered with the policies behind the concept. They gave up on enacting standard comprehensive benefits for everyone, and established four levels of coverage: bronze, silver, gold, and young adult. Since the less expensive plans were still unaffordable for many, they tinkered with numbers that would excuse many from the penalty that would be assessed for not buying the insurance that they could not afford. But in trying to come up with reasonable numbers, it turns out that a great many more will have to be excused from the penalty. Thus their universal program is not universal, and it will be even less so as the health care financing crisis deteriorates further.

Of all states, Massachusetts had the most favorable health care environment to enact an individual mandate to purchase private insurance. It is not working in Massachusetts, and the outcome would be worse in any other state that tried the same.

The primary flaw in most reform proposals is that they begin with the assumption that we must include private insurance plans in any system of universal coverage, no matter how much is wasted in administrative excesses. Not only is it the most expensive model of administering health care funds, private plans also diminish our choice of providers, limit benefits, and shift more costs to those with health care needs. Talk about flawed assumptions. All objective criteria would indicate that we should begin with the assumption that private plans must be eliminated in order to recover much of the profound administrative waste of our fragmented system of financing health care.

By transferring the affordability concern from individuals to the administrators of a national health insurance program, we could begin to address seriously the real cost drivers of excessive health care spending. Nothing short of structural reform will work.