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Another view: SB 840 will cure state's struggles with health care

Another view: SB 840 will cure state's struggles with health care

By Sheila Kuehl — Special to The Bee
Published 12:01 am PDT Sunday, August 20, 2006

I couldn’t agree more with the editorial that health care reform must start on the common ground that our current system is failing everyone involved.

However, the increasing costs of health insurance premiums are bankrupting our state, our businesses and working families. One in five Californians has no health insurance today, and increasing numbers of businesses are planning to drop their health insurance by next year.

Nibbling around the edges with incremental change is not enough. We need courageous and thoughtful reform that provides what all Californians want — affordable access to good-quality health care. This is what SB 840 achieves.

The current health care system and attempts at “reform” fail because they simply bicker about who is going to pay instead of addressing the underlying reasons for out-of-control health care costs. The Sacramento Bee highlights the approach taken in Massachusetts, which, if applied in California, would legally require everyone to purchase private health insurance policies and pay endlessly increasing premiums into the current system that is completely broken. Proponents of the model in Massachusetts even say the reform is not workable in California.

We are spending $186 billion a year on health care right now. With caps on administrative overhead, these monies are more than enough to provide every California resident with excellent health care. We don’t need to spend more on health care; we need to stop wasting our health care dollars on insurance company administration.

Insurance companies do not improve the quality of health care we receive, and they do not provide choices. Instead, insurance companies limit the choices we have. They oppose legislation extending coverage to lifesaving health screenings for infants, hearing aids for children and effective Alzheimer’s medications. Instead of providing simple, straightforward health care coverage, they waste billions of dollars on complicated insurance schemes designed to screen out patients who need health care and to reduce payments to doctors.

Universal health care is the best answer, and it is possible now. SB 840 works by pooling our health care resources so that everyone — state and federal government, income earners and employers — all pay in, and Californians all get quality coverage. SB 840 reduces costs and guarantees your right to choose your own doctor. It saves businesses money and is affordable for families.

Polls show that a majority of Californians support universal health care — there is no more common ground than that.

About the writer: Sen. Sheila Kuehl, D-Santa Monica, is responding to The Bee’s Aug. 13 editorial “Health reform must start on common ground.” She can be reached at senator.kuehl@sen.ca.gov

Groups Form Coalition Focused on "Healthcare Crisis"

Carole Mikita Reporting
August 22nd, 2006 @ 3:34pm

Six community groups formed a coalition to bring awareness to what they call the healthcare crisis. The coalition called this event ‘CHALK IT UP’; the chalk outlines of bodies are still on the sidewalk, each one representing a Utahn.

Dozens of people stopped at Washington Square, 400 S. State St., during their lunch hours to be ‘chalked.’

Tess Bonham, Age 10: “Because people don’t have health insurance.”

Their outlines represent individuals without health insurance who will die.

Fred Gurney, age 11: “I think people should have health care because it’s not really good to die.”

Groups gathered in downtown Salt Lake today say that’s exactly what will happen in the next twelve months. By the end of the afternoon, this coalition of groups hopes to have 132 chalk outlined bodies.

Linda Parsons, Utah Jobs with Justice: “It’s probably a lot more than that. Statistics will show that, and we hope it will bring some attention to our politicians about health care and our crisis.”

Politicians and candidates did show up… using the event to promote their platforms.

Pete Ashdown, (D) U.S. Senate candidate: “This is becoming an economic issue in America. It’s not just small businesses that are suffering, big businsses like Delta and GM. We need some imagination by our federal government to deal with this problem.”

Bob Brister, Utah Green Party candidate for 2nd District: “Every other industrialized country in the world doesn’t let their citizens go without healthcare.”

Scott McCoy, (D) State Senator: “We have almost 300-thousand in the state of Utah, 70-odd-thousand of those are children. And so it should be a priority for the legislature.”

Each group believes the United States needs a national health insurance system that covers everyone.

Barbara Toomer, The Disabled Rights Action Committee: “We joined the coalition, mainly because we have healthcare problems also. And healthcare is extremely important to a person with a disability.”

The coalition members all support a bill H.R. 676, the United States National Health Insurance Act, a publicly financed, privately delivered health care program that uses already existing Medicare.

What will happen to me if I get sick or injured and can't pay my bills?

Katrina vanden Heuvel
BLOG | Posted 08/22/2006 @ 11:13am

On the domestic front, that’s a key question on voters’ minds as the November elections approach. A poll of working women, released on August 8 by the AFL-CIO, indicated that concern about access to quality medical coverage was rated the top issue by 97 percent of respondents, outpolling the income gap between women and men for the first time. MoveOn members, asked to vote on issues that they believe should define a “new positive agenda” ranked healthcare for all persons at the top of the list.

In California, one of the country’s largest states and a decisive election-year battleground, the growing momentum behind healthcare reform is pushing two sharply different approaches into public view.

The first, a proposal for universal healthcare coverage, is presented in Senate Bill 840, authored by Southern California’s State Senator Sheila Kuehl (D-23). SB 840 would provide universal, comprehensive healthcare insurance to Californians while protecting consumers’
ability to choose their own doctors. Under the SB 840 model, consumers and businesses would pay an income or payroll-based premium for a “solid, comprehensive plan” that includes medical, dental, vision, prescription drug, hospitalization and emergency coverage. Medical care provision would remain as the mix of private and not-for-profit business that it is now. SB 840 would also mandate that California use its purchasing power to negotiate bulk rates for prescription drugs and medical equipment. (The administrative costs for medical care in California would drop below 5 percent of total costs, compared to the whopping 25 to 30 percent currently being spent.)

On the other side, on June 16, Sandra Shewry, Governor Schwarzenegger’s Director of the Department of Health Services hosted a meeting of journalists to discuss the possibility of “Massachusetts-style health reform” in California. As it turned out, uninvited healthcare experts and advocates showed up, as well, to deliver an early warning: Massachusetts’ so-called universal healthcare plan is already bad news for the people of Massachusetts and would be a disaster for California.

The heart of the Massachusetts plan is this: every resident of Massachusetts must have health insurance by July 1, 2007 or pay a fine–but costs of health insurance and medical care itself are not controlled, nor are there adequate standards for what health insurance is supposed to cover. Big insurance wins; consumers lose.

The Massachusetts plan offers subsidies for the very poor–as it should, and allows those who can afford it to buy insurance pre-tax–but this plan squeezes middle class people who don’t qualify for subsidies and can’t afford to buy insurance pre-tax. The plan subsidizes people who earn up to 300 percent of the poverty level. But a typical group policy in Massachusetts costs about $4,500 annually for an individual and more than $11,000 for family coverage. Many families and business would be forced to choose between complying with the law and other vital necessities. Young and healthy people might be able to buy low premium plans, but even these are now typically considered affordable only to people whose income is greater than 499 percent of the poverty level. Furthermore, such high-deductible, low-coverage plans often don’t offer even adequate coverage.

The sort of plans available to middle-class consumers– those with deductibles that run into the thousands of dollars–mean that most consumers would wind up footing the bill for most of their own yearly healthcare in addition to the premiums that such a law would force them to pay. If such consumers found themselves truly needing extensive coverage–if they get hit by a car or contract a serious illness–they may find out that their cut-rate plan will leave them in terrible financial trouble. (About half of all bankruptcies sustained in the United States today are the result of medical expenses incurred by people who had health insurance they thought they could trust). Middle class consumers will not be able to choose the doctors they most trust but will be forced to decide among the doctors whose services are covered by the plan they can afford.

The sad joke is that plans like this are being marketed as “consumer driven.” Healthcare consumers (that is to say, everybody) please take note: any so-called ‘consumer-driven’ health plan is really an anti-consumer hit and run. California State Senator Sheila Kuehl is offering a real alternative. Her bold legislative initiative would bring truly affordable healthcare to all.

SB 840 has already been passed by the California State Senate and the Assembly Appropriations Committee. It will likely be up for a floor vote by the Assembly later this week or next Monday. Ask your California friends to support this bill–and to contact their Assembly representatives to vote “yes’ on SB 840. And urge your own state legislators to put forth similarly bold proposals.

Salinas throws support behind universal health care

By GEORGE B. SÁNCHEZ
Herald Salinas Bureau

The Salinas City Council this week endorsed a state Senate bill to provide universal health care for California residents.

The council voted 6-0 to support the California Health Insurance Reliability Act, which calls for the creation of a state health insurance agency that would be overseen by an elected commissioner. Councilwoman Janet Barnes abstained from the vote.

If the bill is enacted, the commissioner would be appointed by the governor and confirmed by the state Senate.

The resolution of support was brought to the council by the Salinas Action League, a local activist group, and introduced by Councilman Sergio Sanchez.

“One in five people in California do not have health insurance,” said Salinas Action League member Dr. Carolee Bull. “In a few years, it will be one in four.”

Bull said federal, state and local money already spent on health care, along with low premium rates by employees and employers, would go into a state fund proposed by Sheila James Kuehl, D-Los Angeles.

The cities of Berkeley, Santa Cruz and Watsonville, as well as Alameda, Marin and Los Angeles counties, have also passed resolutions in support of the bill.

“We need universal health care in this county,” said Councilwoman Gloria de la Rosa.

“Health care is like housing,” said Councilman Maria Giuriato, a social services worker. “It’s the foundation and infrastructure to leverage health and hold a good job.”

Giuriato asked the Salinas Action League to seek support for the bill from the Monterey County Board of Supervisors as well as other cities in Monterey County.

Carole Erickson, director of Student Health Services at Monterey Peninsula College, told the board about a Salinas student who had to be hospitalized for scabies, a skin-burrowing mite. If the student had access to preventive health care, Erickson said, the infection could have been properly diagnosed and treated.

Access to preventive health care is more cost effective than hospitalization, she said.

“If it’s cheaper to treat up front, then what are we doing?” said Erickson.

Jeff Richman, a school nurse who works in Salinas and the Pajaro Valley, said it is common to find students who need vision, dental and mental health care but have no access to a doctor other than the school nurse.

The proposed bill, he said, would help them.

George B. Sánchez can be reached at 753-6771 or gesánchez@montereyherald.com.

MedPAC on the increase in volume of physician services

Statement of Mark E. Miller, Ph.D., Executive Director, Medicare Payment Advisory Commission
U.S. House of Representatives
Subcommittee on Health, Committee on Energy and Commerce July 25, 2006 Medicare payment to physicians

Medicare expenditures for physician services are growing rapidly. In 2005 spending on physician services increased 8.5 percent, while the number of beneficiaries in FFS Medicare increased only 0.3 percent. To get good value for the Medicare program, the payment system should set the relative prices for services accurately. Providing incentives to control unnecessary growth in volume and intensity would be desirable, but it is much more difficult.

Measuring physician resource use

For Medicare beneficiaries living in regions of the country where physicians and hospitals deliver many more health care services there is no clear relationship with better quality of care or outcomes. Moreover, they do not report greater satisfaction with care than beneficiaries living in other regions. This finding, and others by researchers such as Wennberg and Fisher, are provocative. They suggest that the nation could spend less on health care, without sacrificing quality, if physicians whose practice styles are more resource intensive moderated the intensity of their practice.

MedPAC recommends that Medicare measure physicians’ resource use over time, and feed back the results to physicians. Physicians could then start to assess their practice styles, and evaluate whether they tend to use more resources than their peers. Moreover, when physicians are able to use this information with information on their quality of care, it will provide a foundation for them to improve the efficiency of the care they and others provide to beneficiaries. Once greater experience and confidence in this information is gained, Medicare might begin to use the results in payment, for example as a component of a pay-for-performance program.

Creating new incentives in the physician payment system

MedPAC has consistently raised concerns about the SGR as a volume control mechanism and recommended its elimination. We believe that the other changes discussed previously-pay for performance, encouraging use of IT, measuring resource use, setting quality standards for imaging services, and improving payment accuracy-can help Medicare beneficiaries receive high-quality, appropriate services and help improve the value of the program. Although the Commission’s preference is to directly target policy solutions to the source of inappropriate volume increases, we recognize that the Congress may wish to retain some budget mechanism linked to volume. An ideal volume control mechanism would overcome the incentive under fee-for-service to increase volume and instead create incentives for physicians to practice in ways that improve care coordination and quality while prudently husbanding Medicare resources. The Congress has tasked the Commission to evaluate several alternative volume control mechanisms including differing levels of application such as group practice, hospital medical staff, type of service, geographic areas, and outliers. We will report on these alternatives in March 2007.

http://www.medpac.gov/publications/congressional_testimony/072506_Testimony_physician.pdf?CFID=2415800&CFTOKEN=28943302

Comment:

By Don McCanne, MD

One of the most important features of a well-functioning national health insurance program is that it can use budgets to slow the growth in health care costs to a level closer to the growth in GDP. But what a nightmare that creates.

In a predominantly fee-for-service system, physicians respond to a slowing of rate increases by increasing the frequency and intensity of services provided (volume of services). To maintain a growth rate near that of the GDP, the rate per unit of service must be decreased to offset the increases in the number of units of services provided. This is the flaw in MedPAC’s SGR formula (sustainable growth rate). Medicare’s fee per unit of service must be reduced to slow the growth rate to a “sustainable” level.

What has been the source of the volume increase? Part of it has been that patients are brought back for return visits more frequently, and the levels of services have been increased from basic to moderate complexity. Another very important component has been the increased utilization of high-tech services, especially medical imaging. The explosion of spending in imaging has pulled a significant amount of funds away from physicians, especially family physicians and general internists just at a time that we are trying to reinforce the primary care infrastructure.

Virtually everyone agrees that the current rate of growth is not sustainable indefinitely. Costs will not be controlled without controlling volume. How do you do that? One possibility presented in this testimony is to identify the non-beneficial excesses and then educate physicians who, in response, would likely modify their practice patterns. This can be effective as has been demonstrated by the decline in the use of antibiotics in childhood viral respiratory infections once physicians were convinced that they were of no value. That approach will help, but it alone likely will not be sufficient. New innovations will continue to present new challenges.

MedPAC is currently evaluating several volume control mechanisms and will report their findings to Congress in March, 2007. Volume will be controlled, but how will they do that, and can we live with it? This is a process that requires intensive citizen oversight by the policy community. Heads up!

Affordability concerns are moving up the income ladder

The Commonwealth Fund Commission on a High Performance Health System August 2006 Public Views on Shaping the Future of the U.S. Health System
By Cathy Schoen, Sabrina K. H. How, Ilana Weinbaum, John E. Craig, Jr., and Karen Davis
The Commonwealth Fund

Abstract:

On behalf of The Commonwealth Fund Commission on a High Performance Health System, Harris Interactive surveyed U.S. adults to determine the public’s perspectives on ways to improve patient care and on health policy priorities facing the President and Congress. Overall, the representative sample of 1,023 adults ages 18 and older revealed strong public support for efforts to improve care coordination and access to information. There is a shared belief that expanded use of information technology, care teams, and improved delivery of preventive services could improve the quality of care. Patients reported recent experiences of wasteful, inefficient, or unsafe care. In addition, half of middle-income and lower-income families reported serious problems paying for care and insurance coverage. Three-quarters of all adults said the U.S. health care system needs either fundamental change or complete rebuilding. Expanding insurance and controlling costs, they said, should be top priorities for federal action.

Affordability concerns are moving up the income ladder

Half of middle-income ($35,000-$49,999 annually) and lower-income (less than $35,000 annually) families said they have had serious problems paying for care in the past two years. With the median U.S. household income at $44,000, the findings indicate that more than half of all households are experiencing stress when paying for medical care.

A similarly high proportion of middle- and lower-income adults reported difficulties paying for health insurance.

Affordability is a now a concern at even higher-income levels. One-third of adults with annual incomes between $50,000 and $74,999 reported serious problems in paying for care.

Shared Views, Values and Concerns

Across income groups and regions of the country, there was resounding agreement that ensuring reliable health insurance and controlling rising costs are the most pressing health policy issues for the President and Congress to tackle. The majority consistently ranked coverage and costs as their top two priorities.

http://www.cmwf.org/publications/publications_show.htm?doc_id=394606

Comment:

By Don McCanne, MD

This report is highly credible (Harris Interactive) and is current (survey conducted June, 2006). It confirms many other reports about pubic views on the U.S. health care system.

From the perspective of reforming health care financing in the United States, the most important finding in this report is that the concerns about affordability of health insurance and health care have moved up the income ladder. The concerns of average-income families are now as great as lower-income families (more than half!), and now even higher-income families are concerned (one-third!).

The other issues addressed are very important, especially the need for a medical home. But they will be very difficult to address until we fix the financing of health care by providing comprehensive coverage for everyone.

U.S. capacity for mammograms adequate, but…

United States Government Accountability Office (GAO) July 2006 Mammography Current Nationwide Capacity Is Adequate, but Access Problems May Exist in Certain Locations

Closures of certified mammography facilities outpaced openings during a recent 3-year period, and financial considerations were most often cited as the reason for facility closures.

Although key elements that make up mammography capacity have decreased and the use of screening mammography has grown, current nationwide capacity is adequate.

The loss or absence of machines in certain locations may have resulted in access problems, including problems for women who are medically underserved, such as those who have a low income or lack health insurance.

http://www.gao.gov/highlights/d06724high.pdf

Comment:

By Don McCanne, MD

So the United States has the capacity to provide every women with appropriate mammography screening, except for those who have low income or lack health insurance.

How much longer are we going to sit back and just talk about this. Have we no decency?

Aetna's "Vital Savings on Health"

Aetna to offer discount cards, starting in Denver, New Jersey The insurer’s move is part of a trend in which big health plans are looking for new ways to serve small employers.
By Jonathan G. Bethely
American Medical News
Aug. 14, 2006

Vital Savings on Health would allow companies to offer their employees prepaid cards good for 10% to 50% discounts off the cost of routine health expenses, when payment is made at the point of service. The company said the discount represents the range of discounts under Aetna’s PPO plans, and that physicians would not be expected to provide additional discounts. Physicians would call a toll-free number or check a Web site to determine the rates for various services.

Christine Skelly, Aetna’s vice president of health-related financial solutions, said Aetna will target employers who want to offer their employees some medical coverage, but just can’t afford a traditional insurance plan. Money will be deposited into the debit card via contributions from employers and/or employees.

Aetna will require its member physicians to opt out of the program if they don’t want to participate. Without that notice, they’re in.

http://www.ama-assn.org/amednews/2006/08/14/bisc0814.htm

Aetna’s release on Vital Savings on Health:
http://www.aetna.com/news/2006/pr_20060712.htm

Comment:

By Don McCanne, M.D.

So Aetna’s “Vital Savings on Health” program is the next best thing to insurance: a card ensuring that patients will receive the same discount that Aetna receives from its PPO contracted physicians. This program should appeal especially to small businesses since the cost is lower than PPO plans which small businesses are finding to be less and less affordable each year.

The most important difference from a PPO plan is that the contracted rate for services is paid from the patient’s own debit card account rather than from a risk pool maintained by Aetna. Aetna bears absolutely no risk in this program. Patients will have the same choices of physicians as in Aetna’s PPO plans since physician enrollment is automatic, unless the physician initiates an opt-out process.

So what is the product that Aetna is selling here? Aetna is selling the right to dictate which patients will receive a discount and what the amount of the discount will be. What? That is a right that belongs to the physician and not to Aetna. So they are selling a product, a discount, that doesn’t belong to them but that they have stolen from the physicians. What chutzpah!

And we still insist on national policies that leave the private insurers in charge? What chutzpah!

PacAdvantage failure a bad omen for small business coverage

Insurance-pool plug pulled
By Gilbert Chan
The Sacramento Bee
August 12, 2006

Citing the pullout of three major health plans, California’s pioneering small-business health insurance pool is shutting down.

“PacAdvantage exhausted every possible approach to keep the voluntary partnership together. Unfortunately, market forces prevented that from happening,” said Peter Lee, chief executive officer of the Pacific Business Group on Health, which created PacAdvantage eight years ago after taking over the landmark small-business insurance pool established by the state in 1992.

Moving to boost employer-purchased health insurance in California, lawmakers launched the pool 14 years ago to make coverage more affordable businesses with fewer than 50 workers. Once off the ground, the law called for the program to be privatized. In the meantime, lawmakers also guaranteed the availability of coverage for small businesses.

PacAdvantage’s downfall began to take shape in the spring after Blue Shield said it was losing money in the program and announced plans to withdraw after this year.

Subsequent talks with Blue Shield, Kaiser and Health Net failed to work out a solution. With Blue Shield leaving, Kaiser and Health Net opted to follow suit.

http://www.sacbee.com/content/business/story/14294947p-15141048c.html

And…

Health Pool to Close for Lack of Insurers
By Daniel Yi
Los Angeles Times
August 12, 2006

Combining small business’ buying power has done little to increase affordability, (Marian Mulkey, an analyst with California Healthcare Foundation) said, because a voluntary program’s “fundamental flaw is that people will participate only when it is in their best self-interest.”

No amount of pooling can stop rising healthcare costs, experts said.

The only way a pool of buyers would have enough power to significantly influence costs, most sources agreed, is if it included virtually everyone in a form of universal care brought about by mandate or government subsidy.

http://www.latimes.com/business/la-fi-health12aug12,1,7477954.story

Comment:

By Don McCanne, MD

The proponents of association health plans (AHPs) claim that they will make health insurance affordable for small businesses by using the power of group purchasing in the private insurance market. The Pacific Business Group on Health, through PacAdvantage, has demonstrated that group purchasing by itself has no impact on controlling health insurance costs.

AHPs will achieve premium reductions only by stripping plans of benefits and shifting more out-of-pocket expenses to patients. Destroying the financial security provided by insurance is no solution to our nation’s health care financing crisis.

There are two important lessons from PacAdvantage’s downfall. Establishing separate pools for selected sectors creates inequities since pools that cover higher-risk individuals will inevitably fail (death spiral). More importantly, a fragmented system of multiple pools (e.g., private insurers and public programs) has almost no control over the systemic problems that result in continuing health care cost escalation. In contrast, the administrators of a single universal risk pool could use their monopsony to finally bring health care costs under control.

It's time for healthcare for everyone

By Frederick S. Mayer, R.Ph., MPH
Aug 7, 2006

The United States will spend more than $2 trillion on health care this year, which is more than enough to pay for comprehensive health care for everyone. That includes $200 billion (10%) on prescription drugs. Yet we will continue to see adverse health outcomes, including death, because millions are finding that health care is simply unaffordable. It is a national disgrace that people will die merely because they could not afford to purchase their prescriptions and other essential care, even though we are spending enough to provide for them.

The problem is not the affordability of drugs; the problem is the highly flawed and fragmented system with which we fund all health care, including drugs. We depend not only on public programs such as Medicare and Medicaid, but also on private plans, both employer-sponsored and individually purchased. Charity, intended or not, and public clinics and hospitals represent other major sources of funding.

Rather than the affordability of health care, much attention has been directed to the affordability of insurance plans. For tens of millions of Americans, insurance is simply unaffordable, and they go without coverage. For those who do have insurance, more costs are being shifted to the individual to control the prices of premiums. Some of this is in the form of reduced benefits, such as more restrictive formularies, but a greater portion of the shift is in the form of increased cost-sharing. Typical of these user fees that are applied at the time of accessing services are the high co-pays, out-of-pocket expenses, and step formularies required with upper-tier drugs.

The problem with these trends is that health care has become unaffordable for precisely those individuals with the greatest healthcare needs. Medical bills are a major cause of half of all bankruptcies in this country, and two-thirds of those individuals had insurance. Health plan innovation has slowed the rate of premium escalation, but it has done so at the expense of greatly diminishing the financial security that insurance should be providing.

Since we are spending enough to provide comprehensive care for everyone, and yet so many fail to receive the care they need, it is obvious that much of our health spending is not providing value. Where is the waste? One major source of waste is that our fragmented system of funding care is administratively complex for the payers, and it places an even greater administrative burden on the healthcare delivery system. Hundreds of formularies administered by innumerable PBMs are obviously much more burdensome than a single, comprehensive, national formulary for evidence-based Medicare (EBM), which would automatically include everyone and would use a single automated billing system.

Healthcare systems with a strong primary care infrastructure have been demonstrated to provide higher quality care at a lower cost. Yet primary care is in dramatic decline in the United States. A unified system of funding care would establish incentives to encourage expansion of the primary care infrastructure.

Many studies have confirmed that allocation of our healthcare resources is flawed. Some geographical regions are underserved, but others have excess capacity in high-tech services. It has been shown that this excess capacity results in a significant increase in the delivery of high-tech services without any commensurate improvement in health outcomes—and frequently with lower quality and patient-satisfaction ratings. A single funding system would provide data that would identify these wasteful deviations, enabling the application of appropriate adjustments in resource allocation.

We spend more for health care here than in other countries. A single monopsonistic purchaser for the healthcare system could negotiate fair prices. For pharmaceuticals, negotiations would cover costs, fair profits, innovation, and research expenses but would exclude waste such as excessive marketing expenses. Physicians would be able to negotiate appropriate rates, and hospitals would negotiate global budgets. Americans want a first-class healthcare system, so they’d support the funding of legitimate costs and fair profits, just as they support the funding of schools, highways, and police and fire protection.

Several decades of reform efforts have demonstrated that building on our flawed system of funding health care has only increased costs while leaving too many without access to affordable care. We have enough money to pay for health care for everyone. We need only the political will to dismiss the incompetent insurance middlemen running the system and replace them with a single national health insurance program. With our own public system, we would finally be in a position to demand high-quality healthcare products and services for everyone.

THE AUTHOR is past president of the California Public Health Association and president of Pharmacists Planning Service Inc. (PPSI), San Rafael, Calif., ppsi@aol.com

Blue Cross comingles professional fees and business referralfees

Judge Denies Preliminary Injunction In CHA Lawsuit
Medical News Today
August 4, 2006

Los Angeles County Superior Court Judge Carl J. West has rejected a request from the California Hospital Association (CHA) to prohibit Blue Cross of California (Blue Cross) from paying differing fees to physicians who perform colonoscopies in hospitals and ambulatory surgical centers (ASCs).

The CHA filed suit against Blue Cross in June, claiming its practice of paying an additional fee to network physicians who perform colonoscopies at ASCs and less for those performed in hospitals amounted to an unfair business practice that could prove harmful to patients.

In denying a request for a preliminary injunction against Blue Cross, Judge West declared that the CHA has “provided no evidence demonstrating that the policy will interfere with a physician’s medical opinion as to what is best for his or her patient.”

According to Blue Cross, the price range for these procedures is dramatic.
Hospitals typically charge two to three times more for a colonoscopy compared to ambulatory surgery centers.

“Judge West’s ruling goes a long way toward recognizing that the CHA lawsuit is really a matter of potential lost revenue for hospitals, not about patient safety,” said Josh Valdez, senior vice president of health care management for Blue Cross of California. “We strive to ensure our more than
7 million enrollees statewide receive quality health care. This policy is intended to eliminate cost barriers for our members and create an environment where patients can receive this important procedure in as convenient a manner as possible. Encouraging procedures such as colonoscopies to be performed in an ASC is consistent with that mission.”

http://www.medicalnewstoday.com/medicalnews.php?newsid=48758

Comment:

By Don McCanne, MD

Advocates of universal public insurance often dismiss, or maybe even condemn, one of the attributes of private, for-profit insurers: they make excellent business decisions. Paying physicians a modest fee for agreeing to use a lower cost facility saves Blue Cross millions of dollars, part of which will be used to slow the rate of premium increases for Blue Cross members, and part to improve the return for their investors. In the amoral world of the business community, this is exactly what they should be doing.

What about the physician? Is accepting an explicit payment that is dependent on which competing facility you will use, and not related to the professional services rendered, an amoral act? If the physician also has a proprietary interest in that facility, is accepting profits for this self-serving referral also an amoral act?

Commingling business income with professional income is troubling. Many of us would insist that the physician fee be the same for the same service, and not dependent on the facility used. Some of us would insist that the competing facility be non-profit thereby avoiding the self-referral conflict of interest. Others would take the opposite view that, in this age of third party control of compensation, any additional business arrangement that can increase physician income should be acceptable.

Under a single payer system, during price and fee negotiation, it is difficult to know the extent to which an amoral business ethic would be interjected. But one thing is certain, the process would be based on what is in the best interests of the patients and what is fair for the health care providers, and not what is in the interests of the private insurers.