PNHP

Extra benefits of Medicare Advantage plans

Extra benefits of Medicare Advantage plans

Medicare Advantage in 2007

CMS (Centers for Medicare and Medicaid Services)

In 2007, the Medicare Advantage program is providing an affordable, high value choice for all Medicare beneficiaries.

The value and availability of plans is a direct result of Congressional policies establishing minimum rates for MA plans in some regions where the MA option was not yet available. These policies were established to ensure wide availability of MA plans and to do so, in part, by providing extra benefits to enrollees.

Plans, even those without networks of providers, can work directly with providers and beneficiaries, as many disease management companies do to ensure they receive appropriate follow-up and preventive services.

It is difficult to build these programs into the FFS program. Providers are not expected to coordinate care across settings or over time with patients after they leave their specific setting of care. It would require the program to pay either a care management organization separate from the delivery system to manage the patient or to pay physicians or others for these services.

http://www.cms.hhs.gov/HillNotifications/downloads/MedicareAdvantagein2007.pdf

And…

Low-Income and Minority Beneficiaries in Medicare Advantage Plans, 2004

AHIP (America’s Health Insurance Plans)
February 2007

The two main reasons that beneficiaries cited for choosing Medicare Advantage plans in 2004 were: (1) Lower costs (cited by 34 percent), and (2) Better benefits and coverage (cited by 21 percent) than fee-for-service Medicare.

http://www.ahip.org/content/fileviewer.aspx?docid=19240&linkid=165238

And…

The Facts: Medicare Advantage

Galen Institute
March 22, 2007

This fact sheet was jointly prepared by health policy experts from the American Enterprise Institute, the Center for Medicine in the Public Interest, the Galen Institute, The Heritage Foundation, the Institute for Policy Innovation, the Institute for Research on the Economics of Taxation, the National Center for Policy Analysis, the Pacific Research Institute, and Project Hope.

Wouldn’t it be better to simply add to traditional Medicare the extra benefits that Medicare Advantage plans offer?

Traditional Medicare pays for acute care after patients are ill and for some preventive services. Medicare Advantage plans offer added services for prevention and early detection of disease, and they are better able to provide coordinated medical care. This is the 21st century approach to medical care that the commercial market is finding offers better care at lower long-term costs.

One of the most critical issues in the future is how the Medicare program will address the growing numbers of beneficiaries with chronic conditions. In the traditional Medicare program, this responsibility either has to be taken on by one of the beneficiaries’ many providers, or by a separate entity that would need to coordinate with the variety of providers and with the beneficiary. Medicare cannot duplicate this role of MA plans by simply adding more services such as preventive care, more comprehensive drug coverage, and dental and vision care to the Medicare payment schedule. A strong MA program provides the best opportunity for creating a program to meet the growing need for coordinated care.

http://www.galen.org/medicare.asp?DocID=997

Comment:

By Don McCanne, MD

To advance the conservatives’ agenda of privatizing Medicare, private health plans had to be enticed to submit bids by being offered an average of an additional twelve percent over the costs of providing care within the traditional FFS (fee-for-service) Medicare program. In turn, the private plans could use a modest portion of this higher payment to offer greater benefits to entice patients to join the plans. It worked. Nineteen percent of Medicare beneficiaries are now enrolled in these private Medicare Advantage plans, and they are enjoying greater benefits as a result.

This higher payment has been characterized as an overpayment to the plans, and it is, when considering that most of it is used by the insurers for their own intrinsic purposes and not for patient care. But that portion which expands benefits is appropriate, except that it is very unfair. The other four-fifths of Medicare beneficiaries should be receiving the same enriched benefit package.

The administration, the insurance lobby, and the conservative think tanks are all pleading to stop the efforts to reduce these higher payments, correctly demonstrating that individuals enrolled in these Medicare Advantage programs will lose benefits. The solution is obvious. Payments required to maintain these benefits should be preserved, but the extra payments wasted by the insurers should be eliminated. And for fairness, the same extra benefits should be granted to everyone remaining in the traditional FFS Medicare program. The funds wasted by the Medicare Advantage plans would go a long way toward payment for the enrichment of benefits for everyone.

Understanding that this position might be taken by some of us who are more concerned about patients than insurers, the proponents of private plans have also countered with the claim that only they can provide coordinated care through care management services. CMS states that coordinated care services could be provided through the traditional FFS Medicare program only by requiring the program “to pay either a care management organization separate from the delivery system to manage the patient or to pay physicians or others for these services.”

To be sure we understand what they are saying, maybe we should expand on that last statement. If we want our traditional Medicare program to provide coordinated services then either we are going to have to hire managed care organizations and their administrators to manage the medical care of the patients, or we are going to have to pay primary care physicians appropriate compensation to manage medical care.

Everyone agrees that we need to reinforce our primary care infrastructure. Maybe this is the way to do it. Start paying primary care physicians and practitioners designated fees for the job that they were trained to do – coordinating the care of their patients. They could do it for a lot less than the wasteful, private Medicare Advantage plans. And they would do it while injecting a full dose of humanity – a product that private insurers can’t deliver.

Winds of change carrying cries for health care toward the Hill

Lance Dickie
Seattle Times | Editorial Columnist
Friday, March 23, 2007

Here is an unadorned fact of political life: An anxious middle class makes things happen, which explains the persistent drum beat of national interest in universal health-insurance coverage. People are uneasy.

The exact shape of the change to come is not clear, but more and more Americans are eager to listen to the options. One of the most straight-forward, and familiar, is national single-payer health insurance.

Everyone keeps their own doctors. Or more to the point, everybody can have one. Health care via physicians, nurses, hospitals, clinics, tests and technicians does not change. The caregivers are not employed by Uncle Sam.

Instead of having private insurance, everyone pays something into a common fund, and government writes the checks. Maybe it is the federal government that pays the bills, or states could be given the cash to devise a payment system that works best closest to home.

The revolution is in financing and reimbursement, not health-care delivery.

All the more curious is this uneasy mood occurring in what are understood to be recession-free, stable economic times of low unemployment.

Not long ago, the observation that unpaid medical bills are the No. 1 cause of personal bankruptcy might have been mildly interesting, like the unemployment rate if you have a steady job. Instead there is an unsettling recognition of vulnerability.

The middle class watches as medical benefits are cut as they grow more expensive or are lost altogether. Parents worry about grown children going without insurance because of the cost or employers who do not provide it.

Two short generations out from broad employer-based coverage, grandchildren come into the world without the neo-natal talisman of economic stability, a health-insurance card.

Two things are happening. In huge numbers, voters — a key word — are telling pollsters they think the federal government should guarantee health insurance. They are willing to pay higher taxes and forego tax cuts for the coverage, according to a recent New York Times/CBS News Poll.

Politicians hear the rumblings, and they are reacting in state capitals and on Capitol Hill with ideas and plans, many of which have been around a while. The stunning reversal of fortune for Congressional Republicans helped with the sensitivity training.

Last Friday on an unseasonably balmy evening, 300 people were in Kane Hall on the University of Washington campus to offer a rock-star welcome to three leaders working to provide universal health care. Given the topic and the weather, it was like packing Key Arena.

Rep. Jim McDermott, D-Seattle, and Dr. Quentin Young, co-founder of the Chicago-based Physicians for a National Health Program, have seen the political climate and national conversation turn in their direction. At the heart of both their optimistic talks was the need for public education.

Young, a wise-cracking octogenarian praised as a policy bulldog, works to keep the essence of single-payer simple. Repeat after him: Everybody in. Nobody out.

McDermott is equally tenacious. He first introduced his single-payer legislation in 1992. Bloodied but unbowed by the health-care debacle of the Clinton years, McDermott sees versions of his federal bill sprout in legislatures around the country. In a telephone call this week, McDermott said he sees the activity in the states as part of a welcome ferment that will help drive action at the national level.

The other significant change in the dynamic for universal health care is the interest being shown by major employers and labor unions. Over time, he expects state efforts and business support to point toward a single universal national plan.

Rep. Sherry Appleton, D-Poulsbo, was given an award by the Northwest chapter of Young’s group, for her work on The Washington Health Security Trust, which is dead for this session. A good idea, it will be back. Washington has 643,000 people without health insurance, 15 percent of the 43 million Americans without any coverage. Millions more have inadequate insurance.

State by state or via Washington, D.C., anxious Americans are demanding change. In this atmosphere, no credible presidential candidate can afford to be without a coherent health-insurance plan.

Lance Dickie’s column appears regularly on editorial pages of The Times. His e-mail address is ldickie@seattletimes.com

Copyright (c) 2007 The Seattle Times Company

Union fights health horrors

By Gregory Lopes
Washington Times
March 23, 2007

America’s largest organized labor union is setting the stage for a campaign to reform the country’s health care system.

The AFL-CIO’s Working America, an affiliate of the union, this week set up the Web site: “Health Care Hustle.”

The site is a public forum for medical horror stories from the country’s health care system. “We’re getting hustled by powerful interests who don’t want to pay their fair share for real reform,” said Working America Director Karen Nussbaum.

The Web site already has 550 health care horror tales posted. The stories assess blame for health care hardships, whether it’s special-interest organizations such as the pharmaceutical lobby and insurance companies or the Bush administration.

At the end of the year, Working America will tally the “evildoers” in each story and create a media campaign targeted at that entity.

“We’re going to take the power of the people combined with the institutional power of the AFL-CIO and teach the evildoers a lesson. We think they will feel the pressure,” said Ms. Nussbaum.

The AFL-CIO is not part of a recent health care collaboration between the Service Employees International Union and corporate giants such as Wal-Mart. Ms. Nussbaum said that plan takes the wrong path to universal health care by shifting too many medical expenses to workers. Instead, she said a universal health care system must be built on the government-run Medicare program.

Using Web-based weapons is a new tactic for trade unions that, not long ago, were able to wield influence through numbers rather than technology. But federal statistics released this month show national union membership for 2006 at 12 percent of wage and salary workers, down from 12.5 percent in 2005 and 20.1 percent in 1983.

The illusion of private insurance coverage

The Illusion of Coverage: How Health Insurance Fails People When They Get Sick

By Carol Pryor, Andrew Cohen and Jeffrey Prottas
The Access Project
March 2007

The purpose of this study is to investigate the gaps in coverage and the systemic problems that cause insured people to accrue medical debt, as well as the consequences of the debt for individuals and families.

Findings

Our interviews suggest that medical debt among the insured results from a variety of causes and the interaction of a number of factors, including the adequacy of people’s insurance plans, the nature of their medical needs, the cost of their treatments, and their financial resources. In all cases, however, interviewees found that their insurance failed to fulfill its primary function – to protect them from financial losses and guarantee access to needed care when they became ill.

Insurance Characteristics that Cause Medical Debt

* Premiums, deductibles and other cost sharing.
* Caps on coverage.
* Uncovered services.

Insurance Processes that Cause Medical Debt

* Confusing policy provisions.
* Out-of-network fees.
* Procedural problems.
* Insurance disputes and errors.
* Complex provider billing and collections systems that compounded problems
resulting from complex insurance processes.

Lack of Meaningful Choice of Plans

* No real choice of plans.
* Increasing costs and worsening coverage.
* Higher premiums and levels of cost sharing.
* Pre-existing condition exclusions.
* Deceptive marketing practices.

Consequences of Medical Debt

* Access to care.
* Financial consequences.
* Employment consequences.
* Access to credit.
* Psychological consequences.

Conclusion

With health care costs and the number of people without insurance rising out of control, health care analysts and state and federal policy-makers are again focusing on ways to repair our health care system. Some of the proposals that have been offered are based on theoretical notions of what ails our system and what will fix it – people don’t pay enough of their medical costs to become informed consumers, state mandates require insurers to provide too much coverage, people should be allowed to purchase only the health insurance they need. However, serious proposals should be based not only on theory, but on real experiences of real people.

Numerous surveys have clearly documented that, in fact, many uninsured and insured people face unaffordable medical bills and crushing medical debt that undermines both their health and their long-term financial security. This report has attempted to put a face on those numbers. It has tried to show the often devastating effects of medical debt on individuals and families who thought they were secure because they were insured, but found out that their insurance did not protect them when they needed care. As we look for ways to decrease the number of uninsured, we should not replace one problem with another. People need coverage, not the illusion of coverage. We must guarantee that they have access to quality, affordable insurance that provides real protection when they are most in need.

http://www.accessproject.org/adobe/the_illusion_of_coverage.pdf

Comment:

By Don McCanne, MD

This report is important. It shows through the personal experiences of real people the severe deficiencies of our private insurance plans. Those who have significant health care needs are sounding the alarm for many of the rest of us who are complacent in believing that our private plans will provide us with adequate financial protection should we ever need to rely on them. Sadly, this report confirms that today’s health insurance plans frequently provide only the illusion of coverage.

There is one problem with this report, and that is with its recommendations. After identifying the major deficiencies of private health coverage, the authors make numerous specific recommendations to correct these deficiencies. They call for comprehensiveness, limited out-of-pocket expenses, guaranteed issue, guaranteed renewability, community rating, insurer efficiency, ombudsmen for dispute resolution, and regulatory oversight of unfair insurance practices. But just imagine what that would do to private insurance premiums under our current multipayer system. Talk about unaffordable!

So what do the authors suggest? They recommend public hearings on insurers’ requests for premium increases, as if talking about skyrocketing costs would control them. When that doesn’t work, to protect people with unaffordable medical expenses they would “require hospitals and other providers to offer appropriate discounts and financial assistance.” Really? The private insurance model is irreparably flawed. It’s time to give up on it.

A single payer system of national health insurance would eliminate all of the problems listed in the findings of this report – except one. We would lose our choice of health plans. Instead of choosing between thousands of plans with unaffordable premiums and inadequate protection, we would be limited to only one plan that really does work.

Physicians Critique Presidential Candidates' Health Plans

Media Advisory
March 20, 2007

CONTACTS:
Don McCanne, MD — (949) 493-3714
David Himmelstein, MD — (617) 665-1032
Nicholas Skala — (312) 782-6006

Leaders of the 14,000-member Physicians for a National Health Program (PNHP) will be available for commentary and analysis of candidates’ health proposals related to the “New Leadership on Health Care” presidential forum hosted by the Service Employees’ International Union and the Center for American Progress. The event will be Saturday, March 24th, 2007, 12:15 pm ET at the University of Nevada, Las Vegas.

PNHP is the nation’s largest organization advocating a single-payer national health insurance system. For more than 20 years, PNHP has been at the forefront of the U.S. health policy debate. PNHP leaders have published original research in the New England Journal of Medicine, the Journal of the American Medical Association, and Health Affairs. Members have also done countless media appearances and interviews, including the New York Times, USA Today and the Wall Street Journal. Major research by PNHP includes:

* Americans already pay the world’s highest health care taxes. We spend enough for national health insurance — we just don’t get it.
(Woolhandler, et al. “Paying for National Health Insurance — And Not Getting It,” Health Affairs 21(4); July / Aug. 2002)

* Nearly one-third (31 percent) of health spending goes to administration and paperwork which result from our reliance on private insurance companies.
(Woolhandler, et al “Costs of Health Administration in the U.S. and Canada,” NEJM 349(8) Sept. 21, 2003)

* Half of all U.S. bankruptcies are due in part to illness and medical bills.
(Himmelstein et al, “Illness and Injury as Contributors to Bankruptcy,” Health Affairs Web Exclusive, February 2, 2005)

Local physician experts are available for most state and metropolitan media.

WHAT: Physician health policy experts available for interview about presidential candidates’ health proposals

WHEN: Following SEIU/CAP “New Leadership on Health Care” forum, Saturday, March 24th, 2007, 12:15 pm ET

WHERE: Experts are available for comment on all areas of national policy, and local PNHP representatives are available in most states and major metropolitan areas.

To Schedule an Interview: Contact Nicholas Skala at 312-782-6006. An analysis of John Edwards’ health proposal by PNHP Senior Health Policy Fellow Dr. Don McCanne is available at:

Critique of Edwards’ Health Plan:
https://pnhp.org/news/2007/february/harry_and_louise_on_.php

And a policy analysis archive by Dr. McCanne is available at:
https://pnhp.org/news/quote_of_the_day.php

Physicians for a National Health Program is an organization of 14,000 physicians that support single-payer national health insurance. PNHP is headquartered in Chicago and has chapters and spokespeople across the U.S. To contact a physician-spokesperson in your area, contact nick@pnhp.org or call 312-782-6006. www.pnhp.org.

Physicians Critique Presidential Candidates’ Health Plans

Media Advisory
March 20, 2007

CONTACTS:
Don McCanne, MD — (949) 493-3714
David Himmelstein, MD — (617) 665-1032
Nicholas Skala — (312) 782-6006

Leaders of the 14,000-member Physicians for a National Health Program (PNHP) will be available for commentary and analysis of candidates’ health proposals related to the “New Leadership on Health Care” presidential forum hosted by the Service Employees’ International Union and the Center for American Progress. The event will be Saturday, March 24th, 2007, 12:15 pm ET at the University of Nevada, Las Vegas.

PNHP is the nation’s largest organization advocating a single-payer national health insurance system. For more than 20 years, PNHP has been at the forefront of the U.S. health policy debate. PNHP leaders have published original research in the New England Journal of Medicine, the Journal of the American Medical Association, and Health Affairs. Members have also done countless media appearances and interviews, including the New York Times, USA Today and the Wall Street Journal. Major research by PNHP includes:

* Americans already pay the world’s highest health care taxes. We spend enough for national health insurance — we just don’t get it.
(Woolhandler, et al. “Paying for National Health Insurance — And Not Getting It,” Health Affairs 21(4); July / Aug. 2002)

* Nearly one-third (31 percent) of health spending goes to administration and paperwork which result from our reliance on private insurance companies.
(Woolhandler, et al “Costs of Health Administration in the U.S. and Canada,” NEJM 349(8) Sept. 21, 2003)

* Half of all U.S. bankruptcies are due in part to illness and medical bills.
(Himmelstein et al, “Illness and Injury as Contributors to Bankruptcy,” Health Affairs Web Exclusive, February 2, 2005)

Local physician experts are available for most state and metropolitan media.

WHAT: Physician health policy experts available for interview about presidential candidates’ health proposals

WHEN: Following SEIU/CAP “New Leadership on Health Care” forum, Saturday, March 24th, 2007, 12:15 pm ET

WHERE: Experts are available for comment on all areas of national policy, and local PNHP representatives are available in most states and major metropolitan areas.

To Schedule an Interview: Contact Nicholas Skala at 312-782-6006. An analysis of John Edwards’ health proposal by PNHP Senior Health Policy Fellow Dr. Don McCanne is available at:

Critique of Edwards’ Health Plan:
https://www.pnhp.org/news/2007/february/harry_and_louise_on_.php

And a policy analysis archive by Dr. McCanne is available at:
https://www.pnhp.org/news/quote_of_the_day.php

Physicians for a National Health Program is an organization of 14,000 physicians that support single-payer national health insurance. PNHP is headquartered in Chicago and has chapters and spokespeople across the U.S. To contact a physician-spokesperson in your area, contact nick@pnhp.org or call 312-782-6006. www.pnhp.org.

Less satisfaction with publicly-traded insurers

J.D. Power and Associates Reports:

BlueCross BlueShield and Privately Held Health Plan Enrollees Voice Greater Customer Satisfaction Compared with Members of Publicly Traded Companies

J. D. Power and Associates
March 15, 2007

Members of BlueCross BlueShield and privately held health plans tend to rate their overall service experience notably higher than enrollees of plans owned by publicly traded companies, according to the J.D. Power and Associates 2007 National Health Insurance Plan Satisfaction Study released today.

The inaugural study identifies coverage and benefits, choice of doctors, hospitals and pharmacies, and information and communication as the most significant factors in driving member satisfaction. Additional factors examined in the study include approval processes, insurance statements, customer service and claims processing.

The study examines the member satisfaction performance of 49 large health plan companies in the four U.S. Census regions, with enrollments representing 80 percent of U.S. commercial health plan members. Criteria for inclusion were plans with approximately 750,000 members across all commercial products, excluding Medicare and Medicaid.

http://www.jdpower.com/press-releases/pressrelease.aspx?id=2007041

Comment:

By Don McCanne, MD

Investor-owned, publicly-traded health insurance companies provide a lower level of “customer satisfaction” (this is a J. D. Power study) than do non-profit BlueCross BlueShield and other privately held companies.

Non-profit insurers are dedicated primarily to serving the interests of their beneficiaries. Publicly-traded insurers are mandated to place the interests of their passive investors first. This study demonstrates that this really does make a difference.

This study compared various private plans, differentiated by whether or not they were publicly traded. Now imagine an improved version of Medicare that would serve as a national health insurance program. Go back and look at the criteria used to determine customer satisfaction and imagine how a Medicare for All program would rate. It would be off the top of the charts.

UnitedHealth sets standards for market success

Health insurance giant buys Sierra

By Ian Mylchreest
Las Vegas Business Press
March 19, 2007

Local health insurance giant Sierra Health Services agreed last week to be bought by Minnesota-based UnitedHealth Group. The deal is an all-cash transaction that will pay Sierra shareholders $43.50 per share. That values the local insurer at $2.6 billion.

The David and Goliath relationship in this deal is evidenced by UnitedHealth’s financing. It said that the transaction would be financed “with cash on hand, cash flows from operations and normal capital market activities.”

UnitedHealth spokesman Tyler Mason said the deal would not involve significant job losses in Las Vegas because the company would maintain its local operations. “We need people on the ground to grow the business and that is what we intend to do,” he said.

UnitedHealth faced turmoil in 2006 when its then-CEO William McGuire became the poster boy for backdating stock options, after a front page story in the Wall Street Journal revealed the practice. The board eventually forced McGuire out but his $1.6 billion in stock options were left untouched.

http://www.lvbusinesspress.com/articles/2007/03/19/news/iq_13194749.txt

And…

AMA asks Justice Department to block takeover of Sierra Health Services

AMA
March 19, 2007

The American Medical Association (AMA) today asked the Department of Justice to block the proposed acquisition of Sierra Health Services by UnitedHealth Group, and outlined its strong opposition to the merger in a letter to U.S. Attorney General Alberto Gonzales. The AMA has deep reservations about United’s goal of dominating the Nevada health insurance market, and in particular the Las Vegas market, by purchasing the state’s largest insurer.

If the proposed merger is allowed, the AMA estimates that United would control 78 percent of the HMO market in Nevada, and 95 percent of the HMO market in the Las Vegas-Paradise metropolitan area.

The proposed acquisition of Sierra highlights the alarming trend of consolidation within the health insurance industry. Between 1995 and 2005, there were more than 400 mergers involving health insurers and managed care organizations. The AMA has long cautioned that this trend is responsible for a growing market imbalance where patients and physicians are left vulnerable to the demands of a few giant health insurers.

http://www.ama-assn.org/ama/pub/category/17426.html

And…

UnitedHealthcare under fire over pay

By Chris Rauber
San Francisco Business Times
March 16, 2007

Doctors locally and statewide are engaged in a new round of warfare with UnitedHealthcare, and the California Medical Association has asked state regulators to step in.

The CMA, which represents 35,000 doctors statewide, wants the state Department of Managed Health Care and the Department of Insurance to see if reports of widespread delays, underpayments and other errors on doctors’ contracts by the giant Minnesota-based health plan are the result, as the doctors’ group says it suspects, “of a significant lack of administrative capacity.”

This is year two of tumultuous disputes between UnitedHealthcare, which acquired Cypress-based PacifiCare in late 2005, and many of the region’s doctors and medical practices. Last October, for example, United boasted that it had added 41 hospitals and nearly 11,000 physicians to its California provider network in the first half of 2006, including premier groups like San Francisco-based Brown & Toland Medical Group. But Sun Microsystems dropped the health plan, replacing it with Blue Cross of California, reportedly in part due to the continuing dispute with doctors. Benefits consultants said other major companies could take similar steps if the situation dragged on into this year.

http://www.bizjournals.com/sanfrancisco/stories/2007/03/19/story1.html?b=11742768001432550

Comment:

By Don McCanne, MD

And our national policies are designed to keep big government out of our health care and allow market forces to play out? If you step back and look at how Medicare functions and then look at how UnitedHealth and the other private insurers function, how could anyone seriously contend, when it comes to health insurance, that big market forces provide greater value than big government?

Particularly ironic is that fact that this large player in an industry noted for its highly wasteful, profound administrative excesses is being accused of having a “significant lack of administrative capacity.” It has so many administrators that it has to hire more administrators to find the administrators within its administrative pools to administer the administrative functions of their company whose primary product is administrative services.

But this does show what markets do well. Their administrative services have been so profitable that they can buy for $2.6 billion, in an all cash deal, one of the small players, while retaining its large administrative staff so that they can keep “people on the ground to grow the business.”

Is that what this is all about? Allowing administrators to intrude into our health care system to create market successes by diverting health care resources to their own industry? Shouldn’t it be about improving resource allocation for the benefit of patients? Private insurers excel at the former, whereas public insurance excels at the latter.

If we adopted a universal national health insurance program it would be very damaging to the private health insurance market. Is that a price that we are prepared to pay?

The single-payer solution

Commentary

By Linda Hunt Beckman
Philadelphia Inquirer
Tue, Mar. 20, 2007

Linda Hunt Beckman is a professor of English at Arcadia University and a coordinator for Neighborhood Networks

It is no secret that health care in this country needs a fix. About 47 million people don’t have any health insurance, including more than a third of families with incomes of $40,900 or more.

And for those who can get a policy through their jobs, premiums are sky-high, with cutbacks in benefits. Many jobs don’t provide health insurance anymore, and the cost of private insurance is prohibitive. Americans pay more for health care than people in any other country, and there is a reason: Administrative expenses, created largely by the many layers of the health-insurance system, and insurance-company profits take one out of every five health-care dollars.

Many Pennsylvanians welcomed Gov. Rendell’s announcement in February that he had a health-care plan. What many did not know is that there is another plan our state legislature could pass and that it offers a cheaper, better fix. Senate Bill 300, the Family and Business Health Care Security Act, would provide single-payer universal health care to all Pennsylvanians (there will be a counterpart House bill). The national bill, H.R. 676, providing single-payer coverage for all Americans, has been in Congress for several years; it may be easier to pass the state bill first.

Single-payer health care in Pennsylvania would be much like Medicare for all (but better, because it would cover all costs; offer medications at a fair price; provide dental, optical, and mental-health care, and allow a relatively straightforward and just settlement – within the system – for malpractice). Just as senior citizens get almost all of their health care through a publicly funded, privately delivered system, the Family and Business Act would mean you could go to a doctor or hospital of your own choosing, and these physicians and facilities would not be working for the state or run by it (it would no more fit the negative notion Americans have of “socialized medicine” than does Medicare). The term single payer means that the money for the health-care system would come out of a single tax-supported fund, just as the money for Medicare does. And if we compare Medicare with the administrative expenses created by health-insurance industry, the overhead on our Medicare system is less than 4 percent.

Why don’t we know about the option these bills provide? Health care is excellent in countries – including Canada, France, Australia, Denmark and most other developed nations – with single-payer plans. These programs are accessible to everyone, regardless of income; simpler to understand; less troubled by bureaucratic complications and expenses, and, most important, offer affordable care of high quality. We in the United States are unfamiliar with the single-payer option because tremendous amounts of money are spent by the medical-insurance and pharmaceutical industries to keep us in the dark. They would lose big bucks if we chose to go this route.

That health care elsewhere is less expensive is easily established: The United States spent an average of $6,102 a person on it in 2004, according to the Organization for Economic Cooperation and Development, while Canada spent $3,165 a person, France $3,159, Australia $3,120 and Britain just $2,508. Medications offered by those systems are affordable because those governments, unlike ours in running Plan D for those on Medicare, can negotiate with pharmaceutical companies for lower prices.

We could be as healthy and spend as little. S.B. 300 calls for funding by a 3 percent income tax on all citizens and a 10 percent tax on employers. These taxes, unfortunately, cannot be progressive because the Pennsylvania Constitution mandates a flat tax. Still, 3 percent of income is far less than most of us pay now for health insurance (with more spent out of pocket), and the legislation would offer the same services to people who have no income.

The governor’s plan would not cover even nearly everybody, would not pay for medications, would not be as comprehensive in kinds of care provided, and would cost the state far more. Rendell’s plan, like other supposedly universal health-care plans now in operation in Massachusetts and Maine and proposed in California, would be far more expensive because health-insurance companies, which require costly layers of administration and demand large profits, are the middlemen.

The corporate opposition to single payer exaggerates flaws that some systems have, or had, ignoring the fact that our health care is rationed by income. If you are poor, you may well get inferior health care all of your life. We could learn from problems elsewhere and thus develop the best truly universal health-care system of all.

Linda Hunt Beckman (beckman5@verizon.net) is a professor of English at Arcadia University and a coordinator for Neighborhood Networks.

The health care crisis

By Alex Gerber
Washington Times
Commentary
March 18, 2007

Modern medicine has probably done more to mitigate the misery and suffering that plague mankind than all the political ideologies, economic theories and religious persuasions combined.

The triumphs of modern medicine, however, are marred by the failure of health-care socioeconomics to keep pace with the brilliant advances of medical science and technology. The soaring costs of health care and the millions of medically uninsured Americans are stark testimonies of this truism.

Health-care costs are rising the fastest in history. Since 2000, private, employer-based insurance premiums have risen 4 times faster than wages. Total health-care spending has reached $1.9 trillion annually, 16 percent of the national gross domestic product (GDP), almost twice the ratio of the other industrialized nations and projected to climb to $4 trillion, 20 percent of the GDP, by 2015.

We can no longer ignore the dire consequences of the increasing health-care costs. Federal Reserve Board Chairman Ben Bernanke has warned us a fiscal crisis looms due to these unsustainable costs and “the U.S. economy could be seriously weakened, with future generations bearing the costs.” This admonition was first raised by George Washington’s 1796 Farewell Address when he impugned “ungenerously throwing upon posterity the burden which we ourselves ought to bear.”

Also hovering like dark clouds over our health-care system are 47 million medically uninsured Americans — having risen 5 million since President Bush assumed office. That the uninsured have poorer medical outcomes has been well documented. Indeed, there are wards in our nation’s capital where health statistics are akin to those of Third World countries. The National Institute of Medicine has reported that 18,000 Americans die yearly for lack of health insurance, and our economy loses $60 billion to $ 130 billion per year due to poor health and early death.

The problem of runaway health costs and huge numbers of medically uninsured is related to the unanticipated nature of accidents and disease. The answer to preventing a medical calamity from becoming a financial catastrophe is budgeting in advance through insurance as we do for a possible house fire or auto accident.

But there are modifying factors with health insurance, revolving around society’s decision that health care, unlike owning a home or an auto, is a fundamental right. Thus, health problems beyond an individual’s control — diabetes, congenital birth defects, being hit by a drunk driver — should be insured by the community’s pooling of resources (not unlike the collective responsibility civilized societies assume for allaying the costs of natural disasters like hurricanes or floods). Since Otto von Bismarck introduced this concept in Germany more than a century ago, all modern industrial nations, except the world’s richest, have come to this conclusion.

The reason for this American anachronism is buried in history. During World War II, the War Labor Board froze wages and workers were in short supply. To lure them, employers picked up the tab for complete health insurance. National health-care costs in those days totaled only $40 billion yearly — less than 5 percent of the Federal GDP. Due to the influence of its well-paid lobbyists in Washington, the private insurance industry has maintained its dominance of health insurance to this day.

Many health-care insurers are more interested in the bottom line than in the public’s health. The obvious way to increase profits is to decrease benefits by excluding poor health risks from insurance programs. This adverse selection of “cherry picking” plus the 10 percent to 30 percent overhead of marketing, advertising, stockholder dividends and huge executive salaries — none of which cures a single patient — is largely responsible for health-care costs that have “broken” our health-care system.

The answer to our outmoded, multipayer, profit-oriented health-care industry is its replacement by a nonprofit, single-payer government agency. In short, universal health insurance (UHI) through Medicare for our entire population. President Clinton attempted to reform our health-care system along these lines but could not compete with the insurance industry’s $19 million, Harry and Louise TV blitz that conned the public and Congress into believing UHI was “socialized medicine,”

In fact, our country already has UHI — workman’s compensation, which is the law in all 50 states. Society mandates health insurance for breadwinners who are injured on the job but not if they suffer the same injury while driving home from work. Why should a 5 o’clock whistle determine whether medical expenses are covered?.

In this regard, UHI will not be as costly as popularly assumed — perhaps one-tenth the eventual $2 trillion cost of the Iraq war. The uninsured are not all dying on the streets. The majority are obviously receiving care, admittedly delayed, somewhere — emergency rooms, public hospitals or uncompensated care at private hospitals and clinics — with a “cost shift” to the insured. We thus already largely pay for the care of the uninsured.

The model for a UHI program could well be the Canadian UHI health care system, with modifications, which boasts a quality of care equal to ours at far lower cost. Indeed more personnel are needed to administer Blue Cross in Massachusetts than to administer the entire health care system in Canada.

It was not always so. In 1971, the ratio of total health care costs to GDP was 7.1 percent in Canada and 7.6 percent in the United States. With the adoption of its single-payer health care system 25 years ago, Canada’s ratio rose to 9.6 percent in 2006 while ours has almost doubled to 16 percent.

Briefly, Canada’s health-care system provides one standard of care for the entire population, rich and poor alike, under a tax-funded plan. There are no additional expenses (deductibles or co-payments) at the time of treatment.

The superiority of Canada’s health-care system was perhaps best expressed by a recent Harris Interactive poll among the leading industrial societies that evaluated patient satisfaction with their health-care system. Canada ranked first and the United States last. An ABC News poll found that, by a 2-to-1 margin, Americans prefer a switch to Canada’s health-care system.

We should heed the voice of the people.

Alex Gerber, M.D.,a clinical professor of surgery, emeritus, at the University of Southern California, is a former health-care consultant to the White House and the U.S. Department of Health and Human Services.

Massachusetts' "humane exemption" from universal coverage

Promises, promises in healthcare reform

The Boston Globe
March 17, 2007

People of all stripes are closely following the state health reform plan as it is rolled out. Many are beginning to feel that in fact it will be rolling over quite a few in need of affordable quality healthcare (“State OK’s 7 low-cost health plans for uninsured,” Business, March 9).

The utter irony of the quote from Jon Kingsdale, a former Tufts HMO executive and the executive director of the Commonwealth Connector board, is as tragic as it is absurd: “We want to get everybody in the Commonwealth using health insurance, but we also want to be humane and recognize the exceptions.”

This statement amounts to applauding the law’s “individual mandate exemption” that will allow moderate-income state residents who lack health insurance to request a “humane” exception in order to not face tax penalties while receiving state permission to remain uninsured.

ANN ELDRIDGE MALONE
Jamaica Plain
The writer, a registered nurse, is executive director of the Alliance to Defend Health Care.

JAMES ROOSEVELT, chairman of the private insurers’ trade organization, dismisses worries about the affordability of the state’s mandated health plans (“Misinformation and fear muddy healthcare debate,” Letters, March 13). He trumpets the fact that plans without deductibles will be available. What he doesn’t say is that these plans will have huge copayments. In the “basic” no-deductible plan, patients will have to pay 35 percent of the total cost of hospital care, X-rays, lab tests, and outpatient surgery. Even a simple appendectomy would cost thousands out-of-pocket. Few of the uninsured could afford this, especially after forking over premiums of between $3,028 (for a 26-year-old) to $6,056 (for a 56-year-old).

The Connector (the agency running the new health reform) and the insurance companies boast about the low-cost, quality coverage they’re forcing the uninsured to buy. But they admit, in insurance speak, that the new plans have 60 percent of the actuarial value” of a comprehensive plan. Stripped of jargon, this means the uninsured will get 60 percent of the coverage people like Mr. Roosevelt have for their families. And he could afford high copayments and big deductibles. Our patients can’t.

Drs. STEFFIE WOOLHANDLER and DAVID U. HIMMELSTEIN
Cambridge

http://www.boston.com/news/globe/editorial_opinion/letters/articles/2007/03/17/promises_promises_in_healthcare_reform/

Comment:

By Don McCanne, MD

Does universal mean everyone? Or does it mean everyone, except for those who cannot afford health care access because we insist on a convoluted model of reform that is designed to preserve the interests of those very entities most responsible for the intolerable injustices of our high-cost health care system merely because the politics of protecting those interests are more easily negotiated than the politics of obtaining affordable health care for everyone?

Doesn’t the simplicity contrasted with the complexity of those two questions tell you something?

Accepting new patients based on payment source

CDC
MMWR
March 16, 2007

QuickStats: Percentage of Office-Based Primary-Care Physicians Who Did Not Accept New Patients, by Expected Payment Source — National Ambulatory Medical Care Survey, United States, 2003–2004

Although 94.2% of primary-care physicians reported in 2003–2004 that they were accepting new patients, acceptance varied by the patient’s expected payment source.

Percent who did not accept new patients, by expected payment source:

43.0% – Charity or no charge
42.3% – Workers’ compensation
31.6% – Capitated private insurance
29.3% – Medicaid
20.3% – Medicare
11.4% – Noncapitated private insurance
7.0% – Self-pay

http://www.cdc.gov/mmwr/preview/mmwrhtml/mm5610a8.htm?s_cid=mm5610a8_e

Full CDC report, “Characteristics of Office-Based Physicians and Their Practices: United States, 2003-04:”
http://www.cdc.gov/nchs/data/series/sr_13/sr13_164.pdf

Comment:

By Don McCanne, MD

Most office-based primary-care physicians are accepting new patients, but they understandably are concerned about the prospect of receiving adequate payment for their services.

How many of these physicians do you believe enjoy making practice policy decisions based on various potential payment sources? Doesn’t it seem logical that physicians would prefer to make decisions based strictly on the patients’ health care needs, without having to consider how the care is to be funded?

Under a single-payer national health insurance program, a question about accepting new patients based on expected payment source would never have to be asked.

More importantly, how often have you seen surveys in which patients report that they are unable to find a physician who is taking new patients? Well, most of them are, but often only after the patients pass the screening questions for health care payment. At a time when access to primary care has become a major problem, shouldn’t we take the first step of removing this major barrier to care?

We also need to improve incentives for students to select careers in primary care. It would be far simpler to realign incentives through the supply side mechanisms of the single payer model. In fact, demand side approaches impair access by inserting financial barriers to care when our goal should be to improve access. Single payer would remove those barriers.