PNHP

PNHP NY Metro Chapter Responds to Citizens Health Care Working Group Recommendations

PNHP NY Metro Chapter Responds to Citizens Health Care Working Group Recommendations

THE CITIZENS HEALTH CARE WORKING GROUP LISTENED TO THE AMERICAN PUBLIC WITH ONE EAR

By Len Rodberg, Ph.D.
Physicians for a National Health Program, NY Metro Chapter

The Citizens Health Care Working Group was created by the Medicare Modernization Act of 2003 to provide opportunities for the American public to “engage in an informed national debate to make choices about the services they want covered, what health coverage they want and how they are willing to pay for coverage.”After a long and involved process, which included the holding of community meetings in some 40 communities across the country as well as receipt of thousands of online and written individual responses, the CHCWG has issued a set of Interim Recommendations (at www.citizenshealthcare.org) and invited comments on them on a form provided at that site.The deadline for comments is August 31,2006. A month later, the Group will issue final recommendations for consideration by the President and Congress.

The legislation creating the Working Group directed it to submit “an interim set of recommendations on health care coverage and ways to improve and strengthen the health care system based on the information and preferences expressed at the community meetings”(Emphasis ours). (Sec. 1014(h)(4)(D)) The principal recommendation of the Working Group is “It should be public policy that all Americans have affordable health care.” This followed from the central message that it heard in these meetings, which it described as follows: “Across every venue we explored, we heard a common message: Americans should have a health care system where everyone participates, regardless of their financial resources or health status, with benefits that are sufficiently comprehensive to provide access to appropriate, high-quality care without endangering individual or family financial security” (Emphasis in original).

Accordingly, the Group went on to make the historic pronouncements that (1) “It should be public policy, established in law, that all Americans have affordable health care coverage” and (2) “Assuring health care is a shared social responsibility.” (Emphasis ours) However, in their subsequent elaboration, the Working Group seems to ignore, in very important respects, the clearly expressed views of those attending the community meetings. Some key examples:

1. The recommendations assert that “no specific health care financing mechanism is optimal.” This conflicts with the views of large majorities of respondents who supported a publicly-funded national program. Twenty-five of 29 community meetings supported “Create a National Health Program” as the most heavily favored answer to the question “If you believe it is important to ensure access to affordable, high quality health care coverage and services for all Americans, is most important to you/which of these proposals would you suggest for doing this?”(Appendix B, p.7). On-line, 72.2% of respondents — far more than chose any other option — agreed with the option “Create a national health plan, financed by taxpayers, in which all Americans would get their health insurance.”(Appendix C, p. 6) And the CHCWG reported, in “Dialogue with the American People,” that “when asked to evaluate different proposals for ensuring access to affordable high quality health coverage and services for all Americans, individuals at all but four meetings ranked …[this option] highest.” (p. 41)

2. The CHCWG recommends that a “core” benefit package be defined for all Americans. This seems to have been an assumption of the Working Group rather than a response to the views expressed in community meetings or by individual respondents, who were never asked whether they supported the idea of limited coverage to basic or “core” services. In fact, the Working Group reports in “Dialogue with the American People” that “many participants…were also concerned about arbitrary limits on coverage and were not comfortable with bare-bones benefit packages.”(p.2) Moreover, “individuals voiced support for a fairly comprehensive basic benefit design” (p. 10) And these comprehensive services should be affordable; the Working Group reported that “a commonly expressed view was that a simpler system [such as the national program favored by the large majority of respondents] would result in lower administrative costs.” (p.3)

The concept of limiting benefits to “core” services grew out of Congress’s charge to the Working Group to determine “what trade-offs are the American public willing to make in either benefits or financing to ensure access to affordable, high quality health care coverage and services”. However, the clear answer from the public, as expressed in the community meetings and individual responses, was that simplification of the system and cost savings through information technology, quality improvement, and regulation of prices would make such trade-offs unnecessary (“Dialogue” p. 30; online poll items 8e and 12c). As the CHCWG reported in “Dialogue with the American People.” “Although worded in a variety of ways, the single most common response to the question about trade-offs can be summarized as ‘No trade-offs’.”(p. 34)

3. Beyond its proposed limitation to core services, the CHCWG’s discussion of Recommendation 1 suggests that even for core services they are thinking of means-tested co-payments. Community meetings and individual respondents rejected this approach. The Working Group says, “Financial assistance will be available to those who need it.” Three paragraphs later they comment that certain financial protections “such as those against catastrophic [and impoverishing] health care expenditures” may need to wait until some efficiency gains are realized. And, in discussing Recommendation 5, they call for providing consumer information on cost sharing in federally funded health programs.

The primary purpose of health care reform is to ensure that financial barriers do not keep anyone from receiving necessary care. But because the CHCWG has largely failed to focus on any cost control strategy other than limiting covered services to a “core” set, their recommendations are potentially harmful to people’s health. Shared social responsibility at the level of system financing means that people contribute according to their ability. But the CHCWG’s recommendations abuse this principle when they extend it to mean cost sharing at the point that someone needs health care. The threat of facing out-of-pocket costs would deter many from getting needed care. Justifying cost sharing at the point of service delivery is a socially irresponsible way to apply the principle of shared social responsibility.

Comments on the Interim Recommendations

Recommendation 1: It should be public policy that all Americans have affordable health care.

We applaud this recommendation. It is encouraging to see an entity created by the U.S. Government supporting the concept of universal health care, the principle that everyone in this country should have access to the health care they need without facing financial barriers that would discourage them from seeking care. We believe it is long past time for the United States to move toward this goal, which every other advanced country has already achieved.

We do not, however, accept the idea, which the CHCWG supports, that Americans should have access to only a “core” set of services, with the wealthy able to buy their way into more services. Other, less wealthy countries have shown that comprehensive services can be made available to everyone without creating such a two-class system. An American system should also provide access to a comprehensive set of services, without bias or exclusion.

Further, the concept of making “financial assistance available to those who need it” suggests that this will be a means-tested system. We believe that everyone should have access to health care without having to face such demeaning examinations of their finances.

We believe there should be a universal, government-financed system of national health insurance that will make health care available to everyone. This country has the financial means to do this; in fact, many studies show that we can do this without spending any more than now.

Recommendation 2: Define a “core” benefit package for all Americans.

As we have stated above, we do not accept the concept of this recommendation. Experience with Medicare in this country, and with the health systems of many other countries, has shown that comprehensive benefits can be provided without excessive spending and without creating a two-class system, one for those who can afford only “core” services and another for those who can afford to buy more. We need to avoid such a two-tiered system; this country should move as quickly as possible to a single system for all.

Recommendation 3: Guarantee financial protection against very high health care costs.

A comprehensive, publicly-financed system could provide access to a full range of services without need for any special “catastrophic” coverage such as this recommendation suggests. Further, since such a system will facilitate access to low-cost primary care, this will reduce the need for the high-cost services that this recommendation addresses.

Recommendation 4: Support integrated community health networks.

We support this recommendation. Such networks are an efficient, community-friendly way of providing services.

Recommendation 5: Promote efforts to improve quality of care and efficiency.

We strongly support this recommendation. We believe that creating a universal, publicly-financed system will provide the best means of achieving this, since this will enable the quality of care to be measured and the current wasteful administrative costs of private insurance to be eliminated.

Recommendation 6: Fundamentally restructure the way palliative care, hospice care and other end-of-life services are financed and provided.

We strongly support this recommendation as well. We are a humane society, and we should show treat our people humanely throughout their lives, including at the end of life.

Single-Payer Comeback?

Marilyn Werber Serafini
(mserafini@nationaljournal.com)
National Journal
June 17, 2006

Rep. John Conyers, D-Mich., is plotting the comeback of a liberal idea that’s been locked in a closet for more than a decade. Even some opponents acknowledge that the concept of single-payer health care is again drawing attention, and others contend that it may be the first sign of push-back against the conservative, free-market, consumer-driven health care movement that has dominated discussions in Washington for 15 years.

Last week, Conyers launched the Congressional National Health Insurance Caucus in the House; Reps. Dennis Kucinich, D-Ohio, Barbara Lee, D-Calif., and Jim McDermott, D-Wash., will co-chair. The caucus will conduct briefings, unofficial hearings, and seminars on single-payer health care, which is usually defined as a system in which the government reimburses some part, or all, of everyone’s medical costs. Already, Conyers has 70 Democratic co-sponsors on a bill to extend Medicare-style health care coverage to all Americans.

Since the early 1990s, a few lone Democrats in Congress — namely Conyers, fellow Michigan Democrat John Dingell, and Sen. Edward Kennedy, D-Mass. — have introduced bills to keep the idea of government health care for all from disappearing. But interest was weak.

Indeed, sweeping health care reform of any sort hasn’t had an audience since President Clinton’s effort to enact health coverage for every American failed in 1994. When Republicans won control of Congress that year, even most Democrats began limiting themselves to pushing for small health care fixes.

So what makes Conyers think he can revive the idea now? Especially when Republicans, who control Congress and the White House, are pushing market-driven programs that place greater responsibility on individuals?

For starters, there’s the appeal of the new Massachusetts law that promises universal health care coverage for residents of the Bay State. And Conyers cites a groundswell of grassroots support for national health care, mostly because carmakers and other large corporations say they just can no longer afford skyrocketing health care costs for their employees. “Collective bargaining is taking it on the chin” when it comes to health care benefits, Conyers said in an interview.

Grace-Marie Turner, president of the Galen Institute, a free-market-oriented research organization that focuses on health and tax policy, has also noticed an “ever more organized and louder call from people who want a larger role for government.” Although Turner supports the free-market approach, she acknowledges that the single-payer message was undeniable at recent hearings conducted by the Citizen’s Health Care Working Group, which Congress established in 2003.

“In meeting after meeting, there was strong support for a national health plan, financed by taxpayers,” Turner said. “Granted, many of those who showed up were encouraged to attend by groups that have a vested interest in government-funded programs. There was a strong feeling that, if the profit motive in the health sector just could be eliminated, all of these goals could be achieved without any other trade-offs.” The hearings gave “Conyers the impetus to say, ‘Let’s go for [single-payer] again,’ ” Turner said.

Polls by the Kaiser Family Foundation consistently show that one-third of Americans embrace a single-payer system, and that 15 percent name it as their top choice, said Drew Altman, Kaiser’s president. “There’s a growing frustration with the problems of health care, and so it doesn’t surprise me that that base of support is revving up again,” he said. “It’s not that we’re being swept up in a new wave of single-payerism. It’s a sign of push-back to the consumer-driven approaches.”

Single-payer could get a boost if Democrats win control of the House or Senate in November. In the House, Conyers would likely chair the Judiciary Committee, Dingell could chair the Energy and Commerce Committee, and Rep. Charles Rangel, D-N.Y., would probably get the gavel at the Ways and Means Committee.

If Democrats win the Senate, Kennedy would probably retake the top spot at the Health, Education, Labor, and Pensions Committee. Already on the Senate side, Sens. George Voinovich, R-Ohio, and Jeff Bingaman, D-N.M., have introduced the Health Partnership Act of 2006 to allow states to apply for federal grants to experiment with single-payer systems, health savings accounts, and other new approaches.

“There’s a general and slow revving up for what will be another national health reform debate after the 2008 election,” Altman said. “The direction that it will take will depend heavily on who wins the election.” In the end, Altman said, he doubts that the direction will be purely single-payer or purely market-driven. “But the energy has been with the Right, and now we’re seeing some push-back from the Left .”

© National Journal Group, Inc.

San Francisco Labor Council Unanimously Passes Resolution in Support of SB840

Resolution in Support of SB840, the California Health Insurance Reliability Act (Kuehl’s Health Care Plan to Cover All California’s) & HR 676, the United States National Health Insurance Act

On Monday, July 10, the San Francisco Labor Council unanimously passed the following resolution in support of California Senate Bill 840, the California Health Insurance Reliability Act and House Resolution 676, the United States National Health Insurance Act.

Whereas, California’s health care system is in decline as evidenced by steeply rising health insurance premiums, increasing numbers of uninsured who will soon represent 1 in every 4 Americans, and declining quality of care for both insured and uninsured California’s; and

Whereas, a lack of health insurance is a substantial barrier to receiving health care and has been a proven cause of poor health outcomes and increase mortality; and

Whereas, most insured are members of working families whose employers do not provide health insurance benefits; and

Whereas, people who have insurance are very worried of losing it due to declining employer offered coverage and employment instability; and

Whereas, health insurance premiums are growing by double digit margins each year such that growth in health care spending is the single greatest problem facing California’s economy; and

Whereas, the United States is the last industrial nation in the world yet to establish a health care plan to cover all residents and the United States spends twice as much on health care as every other industrial nation; and

Whereas, Senate Bill 840 (Kuehl) is California’s plan to establish a system of health insurance for every resident of the state, while stabilizing the growth in health care spending, and improving quality at the same time; and

Whereas, current spending is plenty of money to cover all residents with comprehensive health benefits under this model. The problem is not that we do not spend enough money, it is that we waste so much of what we do spend; and

Whereas, this model has been tested in every other industrial nation in the world, and in the United States through Medicare and Veterans Administration; and

Whereas, this model is funded by consolidating all public monies spent on health care and replacing the premiums, co-payments and deductibles paid to insurance companies with premiums paid to this system; and

Whereas, an independent financial analysis found that the cost of providing coverage to the uninsured and underinsured would be more than offset by savings resulting from administrative implication bulk purchasing of prescription. This analysis also determined that his model would provide savings to California businesses, consumers and government; and

Whereas this single-payer medical model has also been introduced by Congressman John Conyers, Jr. (HR676) has been endorsed by 154 union organizations including 28 central labor councils, two state AFL-CIO Federations (Kentucky and Pennsylvania), 3 area labor federations and most recently the United Auto Workers (UAW), International Union, AFL-CIO.

NOW, THEREFORE, BE IT RESOLVED, that the San Francisco Labor Council supports the passage of SB 840 and HR 676 and urges the State Legislature and the Governor to adopt this critical legislation; and

BE IT FURTHER RESOLVED, that the San Francisco Labor Council urges all of its local unions and affiliates to support the passage of SB 840; and

BE IT FURTHER RESOLVED that the San Francisco Labor Council submits this resolution to the 2006 California State Federation of Labor’s Bi-Annual COPE Convention for its support; and

BE IT FINALLY RESOLVED that the San Francisco Labor Council will continue to educate, organize, mobilize and lobby for support of SB840, a single-payer system, as the best solution to California’s health care crisis.

The Best Medical Care In The U.S.

How Veterans Affairs transformed itself -- and what it means for the rest of us

By Catherine Arnst
Business Week
JULY 17, 2006

Raymond B. Roemer, 83, has earned his membership in “the greatest generation.” A flight engineer during World War II, his B-24 was shot down over Potsdam during a bombing run. He managed to parachute out, but the jump landed him in enemy territory. Roemer spent 11 months in a German POW camp until he was liberated by General George S. Patton’s troops in April, 1945.

A month later he came home to Buffalo with a Purple Heart and a few crushed vertebrae from that parachute jump. He married his high school sweetheart, started a successful metal-fabricating business, and signed up for health benefits with Blue Cross/Blue Shield. He can afford to be treated at any of some 20 well-regarded hospitals in the area, but Roemer has made what what may seem a bizarre choice. He goes to the Veterans Affairs Medical Center in Buffalo, a hulking, gray edifice first opened in 1950. He doesn’t go just for his service-related injuries, either. His primary care doctor is at the VA, he fills his prescriptions there, and he uses the hospital for his vision and hearing needs. He even persuaded his 59-year-old son and business partner, Nicholas, a Vietnam War vet, to enroll with the VA.

If you wish to read this article, please click here or purchase a copy of the July 17th edition of Business Week or visit their website at: www.businessweek.com

UAW Convention Endorses Single Payer Health Care & the Conyers Bill

UAW Convention Resolves to Fight for Single Payer Health Care and Calls for Passage of the Conyers Bill

Two thousand delegates to the 34th International Convention of the United Auto Workers (UAW), meeting in June, strongly endorsed a single payer health care system and called for passage of legislation introduced by Congressman John Conyers that would implement such a system.

The resolution states, “The best solution to our nation’s health care crisis is a comprehensive, single-payer plan to provide quality health care to every man, woman and child in the United States.” Under the section titled “The Solution” the resolution continues: “Legislation to establish a single-payer system for the United States has been introduced by Congressman John Conyers, Jr.”

The resolution spells out the Conyers bill: “The United States National Health Insurance Act, also known as ‘Expanded and Improved Medicare for All,’ would cover every person in the US for all necessary medical care, including prescription drugs….” The resolution notes that the Conyers legislation would end deductibles and co-payments.

“The question isn’t whether we can afford to have universal, single-payer health care; the question is, can we afford not to?” states the UAW resolution.

The UAW set forth an indictment of our current health care system. “Many Americans instinctively claim that the U.S. health care system is No. 1. Regrettably, this is not close to the mark. While we excel in the development of technologies, we still have a dysfunctional system when it comes to actually providing care-the only meaningful standard. Despite the Cadillac prices, our health care system delivers a defective product.”

The resolution sadly noted the 100,000 hospital deaths each year from preventable errors, the 46 million uninsured who suffer mortality rates 25% higher than the insured, and the poor ranking of the US behind other industrialized countries in life expectancy, infant mortality, and childhood immunization.

The UAW warned that the problem will worsen as more health insurers switch to for-profit status. The resolution states: “Rather than a social good, health care becomes just another commodity; a $1.7 trillion market with ample opportunity to siphon off exorbitant profits and executive salaries at the expense of health care services. In 2003 the median total compensation for the CEOs of health insurers was just over $14 million….”

The UAW blasted the ideologues who claim that Americans overuse their health plans and should be forced to pay more out of pocket as the way to lower costs. The union dispelled these claims by showing that Americans don’t demand more health care services and already pay more out of pocket than people in most other countries.

The UAW condemned Health Savings Accounts as a cruel hoax that shifts the costs to the sick, the disabled, and the aged. The resolution also exposed the myth that malpractice litigation is the cause of health care inflation by showing that malpractice costs are less than 2 percent of total health care spending.

The final section of the resolution, headed “Mobilizing for Change” declares: “We must not allow our frustrations with the political process to weaken our efforts to solve the health care crisis;” and “We will continue to educate, organize, mobilize and lobby in support of a universal, single-payer health care system.”

The full UAW Convention resolution is available from the UAW or from:

Kay Tillow
All Unions Committee for Single Payer Health Care-HR 676 c/o Nurses Professional Organization
1169 Eastern Parkway #2218
Louisville, KY 40217
(502) 636 1551
nursenpo@aol.com

HR 676 now has 72 congressional co-sponsors in addition to John Conyers.

HR 676 has been endorsed by 154 union organizations including 28 central labor councils, two state AFL-CIO’s (KY and PA), and 3 area labor federations. The full list of union endorsers and a sample resolution are available at the contact information above.

Illinois' dubious claim of first to cover all kids

Illinois’ Program to Provide Health Care for All Kids
State of Illinois
All Kids

Governor Rod R. Blagojevich

…more than a quarter of a million children right here in Illinois do not have health insurance. That means they can’t see a doctor or get medicine when they need to. When they do get medical care, it’s often in the emergency room, after a small problem has grown into a big problem. That’s wrong. I believe every child should be able to get medical care when they need it, before it becomes an emergency.

That’s why I created the All Kids program: to make health care a reality for hundreds of thousands of families across the state. Illinois will be the first state in the nation to provide affordable, comprehensive health insurance for every child. Of the 250,000 children in Illinois without health insurance, more than half come from working and middle class families who earn too much to qualify for state programs like KidCare, but not enough to afford private health insurance. Through All Kids, comprehensive health insurance will be available to every uninsured child at rates their parents can afford.

The All Kids program will offer Illinois’ uninsured children comprehensive health care that includes doctor’s visits, hospital stays, prescription drugs, vision care, dental care and medical devices like eyeglasses and asthma inhalers. Parents will pay monthly premiums for the coverage, but rates for middle-income families will be significantly lower than they are on the private market. The program officially begins on July 1, 2006.

http://www.allkidscovered.com/

Comment:

By Don McCanne, M.D.

Gov. Blagojevich and the state of Illinois are to be commended for taking this initiative to become “the first state in the nation to provide affordable, comprehensive health insurance for every child.” Although our one goal is to enact a single payer national health insurance program covering everyone, as individuals most of us support interim incremental measures that do expand access and coverage.

Dedicated advocates of universal health insurance, such as Sen. Ted Kennedy and Sen. Hillary Clinton, insist that adopting a single program of national health insurance is not politically feasible, so we should abandon that effort and direct our attention to incremental steps that will eventually result in universal coverage. One of the most radical steps that currently has some political traction is to provide universal coverage for all children. Supporting health care for innocent little children is a political winner, not to mention that it is not much of a budget buster since most children are quite healthy and have only very modest health care needs. Although most incremental measures have been referred to as baby steps, covering all children would be a major giant step, even if incremental.

So Illinois is the first state to enact universal coverage for children.

Let’s look at some of the specifics.

  • Current employer-sponsored and individually purchased insurance programs remain in place. Very low income families may qualify for a rebate if they follow a complex process. Adding administrative complexities to the current excessive administrative burden is flawed policy.
  • In the future, individuals who wish to switch their children from private coverage to the All Kids program, primarily because of its premium structure, will have to wait one year without any coverage whatsoever before they can be enrolled (except for very low income families). Mandating a period of uninsurance is flawed policy.
  • The program is means tested. Not only are premiums adjusted by income level, but also co-payments are tiered based on income, and even the total out-of-pocket maximum for cumulative co-payments is adjusted. This results in administrative complexities that are compounded by the fact that income levels change, creating instability in the benefit level for which the children qualify. Also, means tested programs are somewhat intrusive and demeaning and NEVER result in 100 percent participation. Means testing for a universal program is flawed policy.
  • Failure to pay premiums results in cancellation of coverage. Reinstatement requires retroactive payment of all premiums plus a three month penalty of having no coverage. The majority of uninsured children are in families on tight budgets. Periodic problems paying bills are inevitable. Terminating coverage for personal financial difficulties is flawed policy.
  • Under All Kids, physicians and pharmacies may refuse to provide services if co-payments are not paid. Including program requirements that obstruct access to care is flawed policy.
  • The cost to the state is to be offset by the dubious savings theoretically attained by shifting state health insurance programs to a managed care system. Failure to establish a permanent, reliable source of funding is flawed policy.
  • The application is eight pages and requires submission of various supporting documents. To improve enrollment rates, a large network of Application Agents has been established. Even with this costly administrative program, it is anticipated that only 50,000 of the 250,000 uninsured children will be enrolled this year. A true universal program should automatically enroll everyone. Even though all children uninsured for over a year are qualified for this program, administrative barriers will keep many out. Anything less than automatic enrollment is flawed policy.
  • Physicians must contract with the state to provide services under this program. It is clear that many physicians are unwilling to do so, partly because of distrust due to a backlog of claims under the state’s Medicaid program (which will be folded into All Kids). Parents may lose the option of taking their children to their current primary care physicians merely because of provider contracting considerations. Establishing restricted primary care provider lists is flawed policy.
  • Primary care physicians will serve as the gatekeeper for specialized services. Although the specifics are not yet clear, presumably primary care providers will have to use restricted, in-network provider lists when referring children for specialty care, if such services are even covered. Such restrictions may not allow the primary care physician to use established, coordinated referral patterns, possibly resulting in fragmented, disruptive, and less accessible care. Not including all providers of health care services is flawed policy.

This is that giant incremental step of covering all children that everyone is talking about. It is a truly beneficial program. But it fails to provide universal coverage. It fails to reduce costly administrative excesses but rather adds more to our fragmented system of funding care. It fails to remove financial barriers to access. It fails to provide free choice of health care providers.

Simply stated, it costs more than a single payer system and it fails to establish single payer policies that would ensure accessible, comprehensive health care for everyone.

The next legislator that tells you that single payer should be rejected because it’s not politically feasible, tell him or her that the election of obstructionists to health care justice is no longer politically feasible.
Then share the word with others and follow through on election day.

Porter and Teisberg's Redefining Health Care

Redefining Health Care
Creating Value-Based Competition on Results By Michael E. Porter and Elizabeth Olmsted Teisberg

(2006 – Harvard Business School Publishing)

The fundamental flaw in the health care sector is not competition, but the wrong kind of competition. Health care competition is not focused on delivering value for patients. Instead, it has become zero sum: the system participants struggle to divide value when they could be increasing it. Although health care offers tremendous value, the unnecessary costs of zero sum competition undermine and erode that value.

* Competition is based on results

If, and only if, providers have to demonstrate excellent results in addressing specific medical conditions will errors decline, unnecessary tests not be performed, unnecessary treatments stop, the use of ineffective treatments cease, and the withholding of effective services come to an end. Supply-induced demand for unneeded care will decline when results are measured and compared. Physicians who cannot demonstrate patient value will go out of business.

* Competition is centered on medical conditions over the full cycle of care

Providers should organize themselves around medical conditions, not skills of discrete specialties or services necessary to address a medical condition. Integrated practice units, as we term them, should include all the services necessary to address a medical condition, usually in dedicated facilities.

* Value is driven by provider experience, scale, and learning in medical conditions

Value in health care delivery is created by doing a few things well, not by trying to do everything. Yet health care delivery currently is not organized this way – indeed, the current system encourages just the opposite.

As in every field, health care providers that concentrate their effort and learn from experience in addressing a medical condition usually deliver the most value and innovate the most rapidly.

What is needed in health care delivery is not narrow specialization, but critical mass and experience in a medical condition over the care cycle.

* Competition is regional or national

The relevant geographic scope for competition in health care delivery is regional, national, or even international, not just local.

In obtaining care, patients, referring physicians, and health plans should seek out excellent care that best meets patient needs wherever it is located.

While traveling to a preeminent regional facility may sound expensive and inconvenient, cost savings and better short- and long-term medical outcomes can make travel clearly worthwhile for both patients and health plans. The cost and inconvenience of travel are easily justified by avoiding other, higher costs that arise with inferior outcomes (longer recovery times, less complete recovery, chronic pain, complications, and mistakes).

* Results information is widely available

In measuring results, data on medical outcomes is essential, but price information is just as important. Together, outcome and price data enable judgments to be made about value.

Current piecemeal prices for discrete interventions and services are not the prices that patients really want, or that matter for patient value. Prices should cover service bundles involved in episodes or full cycles of care.
The relevant price is the overall price for care, not the price of a visit, treatment, or service by an individual physician.

* Innovations that increase value are strongly rewarded

It is nonsensical to argue that disease-curing innovations do not lower costs and increase value. That stance confuses value creation in the treatment of a medical condition with costs of treating other conditions in the future. It ignores the productive contributions of more healthy individuals, including the revenues they contribute through premiums to the health insurance system, and the value (including less need for care) of a better quality of life for patients. Also, a substantial portion of health care costs occur early in life, so a patient may have decades of good health before succumbing to a different disease.

* The opportunity of value-based competition

If competition on results drove the pursuit of health care value for patients, the gains would be enormous.

To reap these benefits, however, the nature of competition must change. Each constituent in the system must shift its roles, strategies, and policies.

http://www.isc.hbs.edu/firm-soci-healthcare.htm

Comment:

By Don McCanne, M.D.

This is an important book. Its authors are two of the most noted authorities on competition, strategy and innovation. If anyone could bring sense to the topic of competition in health care, certainly they should be able to.

Many policymakers in the United States have continued to cling to the theory that competition in the health care marketplace will provide better value by improving quality and reducing costs. Porter and Teisberg now join those who acknowledge that market failures in health care have resulted in mediocrity and very high costs, just the opposite of what market theorists would predict. In “Redefining Health Care,” Porter and Teisberg describe quite accurately many of the failures, though they contend that they are due to the fact that we have the wrong kind of competition in health care.

Being avid believers that only competition can improve value, they then describe changes that they believe should be made to the health care delivery system so that it would conform to the theory of market competition. Since competition is the be-all and end-all, they would abandon much of what does work well in the delivery system and substitute it with a contorted system that arguably would function even less well than our current, highly-flawed system.

Imagine a system in which care is delivered based on teams, without geographical limitations, organized around medical conditions, competing with other teams organized around the same conditions. Imagine your community hospital and its specialists providing care for a very limited list of medical conditions selected on the basis of providing better outcomes and lower prices. Your community hospital may very well lack a team that is dedicated to your particular problem, requiring you to travel to the next county, or maybe the next state, for care. Then allegedly to create transparency in pricing, you receive a single bill that totally obscures any understanding as to where your payment goes. You really have to read the book to understand the extent to which this line of reasoning is carried.
The flaws in their reasoning are due to the fact that they place market competition at the first order, and then would modify 15 percent of our economy, the $2 trillion health care industry, to comply with their academic exercise.

Since I was already aware of their theories, I decided to do a mental exercise when I read their book. Wherever they discussed “competition” as the solution to our health system flaws, I substituted “cooperation” and then imagined how that would play out. Think about that. Instead of a Lake Wobegon system where all providers are above average because “physicians who can’t demonstrate value would go out of business,” we would have a system in which everyone joins together to try to maximize health care value for the benefit of patients. This seems to represent a conflict of ideologies.

Competition is ideally suited for markets and the business community (a good thing – for commodities). Cooperation is ideally suited for democratic governments and its citizens (also a good thing – for health care services).
But then ideologies are abstractions. Health care isn’t.

This book would be of value to members of the policy community who may have struggled with the concept of competition in health care when it didn’t really seem to be relevant to their work. Reading it will provide reassurance that they can proceed without concerns that they might be ignoring a potent tool.

This book is also an important resource for avid supporters of market competition in health care. Since the best that these noted authors can come up with is the bizarre concept of competing medical-condition teams without geographical boundaries, then you know that you no longer have to look for the magic of the marketplace in health care. There’s no magic there.

Economic equality is best medicine

Health of societies mostly relies on political and economic policies, not the individual treatment of disease

By STEPHEN BEZRUCHKA
GUEST COLUMNIST – Seattle PI
Sunday, June 25, 2006

http://seattlepi.nwsource.com/opinion/275142_focus25.html

The headlines read that rich Americans aren’t as healthy as poor Brits, despite our spending twice as much money on health care as they do. Our newborns die at the highest rates of any rich country, even with our ever-advancing medical technologies. The feds report our mortality rates have never been lower. The United Kingdom study director suggests it is the nature of an unequal society in the United States that affects everybody, while experts over here are puzzled. What is going on?

Thomas Pynchon wrote in “Gravity’s Rainbow” that “if they can get you asking the wrong question, they don’t have to worry about the answers.” Which medical care drug plan to choose is the wrong question. Instead let’s ask, “What makes a society healthy?”

An MDeity can’t answer that, nor can most people working in public health departments. One reason for their ignorance: It is very difficult to get people to understand something when their salary depends on their not understanding it. Medical doctors are paid to treat diseases, so everyone has a disease if we do enough tests. Public health workers ply a trade, make sure enough kids get their shots, tell people to say no or wear a condom and check the water for arsenic. They consider efforts to understand basic conditions that produce health in society to be outside their job description.

Who can tell us the answer to what makes a population healthy? Few in this country know, because we don’t ask that question. Anyone who does is marginalized for acting stupid. I was told “Medical care, of course, that’s why we are teaching you to be a good doctor.” Our federal government, in its Institute of Medicine 2003 report “The Future of the Public’s Health in the 21st Century,” states on page 59: “more egalitarian societies (i.e. those with a less steep differential between the richest and the poorest) have better average health.” This remarkable finding has emerged from research carried out over the last 25 years, and the science is as good as that linking smoking and poor health.

Why aren’t the media broadcasting this news? For the last quarter century it has become unpatriotic to believe in economic justice. Instead we give ever more to the rich through tax cuts and subsidies and demand that the poor accept having less, in the hopes of some trickling down. Egalitarianism is not a treatment taught in U.S. medical and public health schools, nor in any school except kindergarten.

What is it about a bigger differential between the richest and poorest that leads to worse average health? Intuitively, we can see that not everyone shares the same stress in a bigger-gap society and those lower down suffer more of the slings and arrows of misfortune rained down from above. There is less caring and sharing in society when the gap is in our face.

Other research findings demonstrate that individual behaviors are not as important for our health as political policies that impact the gap between the rich and the poor. These behaviors are those we have learned since about toddlerdom: diet, exercise and not smoking. They are good ideas but when compared with economic justice, these individual practices are relatively unimportant. For example, the healthiest country in the world, Japan, has the highest proportion of men smoking among all rich countries. Obviously smoking is not good for your health but compared with the less steep differential, it is not as important a factor. As a doctor who used to badger people about this habit, it was very difficult for me to reconcile this finding. Studies demonstrate the individual behaviors are not that important for our health. Health care, even universal health care, has been shown to have little or no overall impact on a nation’s health.

The spending on health care in the United States makes up nearly one half of all monies paid for health care worldwide. Despite that, we who live in the USA, the richest country in world history (with half of the globe’s billionaires), die younger than we should. To understand this conundrum, the first step we must take is to recognize that health and health care are two very different concepts — despite sounding so similar. Health of societies is mostly determined by political and economic policies while health care can only prevent and treat individual diseases.

The United States used to be one of the healthiest countries in the world when egalitarian principles were near the horizon. President Kennedy told us not to ask what our country can do for us but to ask what we can do for our country. His request came after a decade of policies in which the poor made relatively more economic gains than the rich, something Robin Hood might have admired. For example, in the United States the general population shared its income growth with returning World War II veterans and subsidized their re-entry into society. Back then we were one of the healthiest countries in the world — but not for long. The rich and powerful interpreted the president’s remarks to mean, “What can ordinary people do for us?” During the last 30 years the rich have gotten much richer, and we have strayed far from egalitarian ideals

The increasingly steep differential between the richest and poorest is the reason why we are as healthy as Cuba, the country we have been strangling for almost 47 years. While our health as a nation has been improving, other countries are seeing better and faster results. People in more than 25 countries, including nearly all the rich nations and a few poor ones as well, live longer and healthier lives than we do.

There is currently no federal agency, or any other body, whose goal it is to make us healthier compared with other nations. Our Centers for Disease Control and Prevention have put forth Healthy People 2000 and 2010 initiatives, with disease and behavior oriented national goals, but we did not achieve these goals in 2000, and have no chance of coming close to fulfilling them in the next four years. They do not address our standing compared with other nations. This is like giving the Olympic Gold Medal not to the winner, but to the contestant who said they tried the hardest!

The illiterate of the 21st century will not be those who can’t read or write but those who cannot learn, unlearn and relearn. Much of what I learned in medical school is not acceptable practice today. Some of what we think we know today will be folly tomorrow. What the Institute of Medicine reports will, I think, stand the test of time. If we want healthy grandchildren, we must seriously consider what the feds have said.

Economic justice is the medicine we need. In today’s situation, this requires overturning all the recent federal legislation that gives ever more to the rich. The work of the Hood Robins (who take from the poor and give to the rich) is bad for our health, as our own Institute of Medicine acknowledges. Perhaps we should demand a Health Impact Assessment like other countries, to track the toll in human lives sacrificed by political policies that favor the rich over the poor.

This state’s Washington Health Foundation is unique in the nation for trying to make Washington state the healthiest in the country. According to a composite indicator used to rank the health of states, we have fallen to 15th place while Minnesota is first and Louisiana is last. To effect real change and improve health through this country, I suggest we strive to make Louisiana first in the nation. That state has among the highest infant death rates, the shortest length of life, the highest homicide rates, the highest teen birth rates and the biggest gap between rich and poor. Katrina’s aftermath was no accident. By concentrating on improving health in this country’s worst off state, everyone will do better.

The last 40 years have seen an unbridled giveaway to the minority of the wealthy and powerful, as politicians distorted Kennedy’s words and did what they could for the rich of America. It is now time for the majority, who make up the bottom 80 percent of this nation, to ask what our country can do for us. Everyone’s health, both rich and poor, will benefit from this old-fashioned idea: economic justice.

Stephen Bezruchka, M.D., MPH, is with the Department of Health Services, School of Public Health and Community Medicine, at the University of Washington.

© 1998-2006 Seattle Post-Intelligencer

OECD Health Data 2006 for the United States

Organization for Economic Cooperation and Development (OECD) OECD Health Data 2006
How Does the United States Compare

Total health spending accounted for 15.3% of GDP in the United States in 2004, the highest share in the OECD and more than six percentage points higher than the average of 8.9% in OECD countries.

The United States also ranks far ahead of other OECD countries in terms of total health spending per capita, with spending of 6,100 USD (adjusted for purchasing power parity), more than twice the OECD average of 2,550 USD in 2004.

Between 1999 and 2004, health spending per capita in the United States increased in real terms by 5.9% per year on average, a growth rate exceeding the OECD average of 5.2% per year.

The public sector is the main source of health funding in all OECD countries, except for the United States and Mexico. In the United States, only 45% of health spending is funded by government revenues, well below the average of 73% in OECD countries. The public share of total health spending remains the lowest among OECD countries. On the other hand, private insurance accounts for 37% of total health spending in the United States, by far the largest share among OECD countries.

Despite the relatively high level of health expenditure in the United States, there are fewer physicians per capita than in most other OECD countries.

The number of acute care hospital beds in the United States in 2004 was 2.8 per 1000 population, also lower than the OECD average of 4.1 beds per 1000 population.

http://www.oecd.org/dataoecd/29/52/36960035.pdf

Comment:

By Don McCanne, M.D.

These numbers confirm once again that the United States has the highest spending on health care per capita, and as a percentage of its GDP. The rate of growth in spending also continues to exceed that of OECD averages.

We should take a closer look at the reported health spending that is funded by the government (45 percent), and that funded by private insurance (37 percent). Steffie Woolhandler and David Himmelstein, in a 2002 Health Affairs article, have demonstrated that those numbers should be adjusted to improve our understanding of the spending.

The OECD calculations do not include two important sources of government funding of health care: (1) the funding of private insurance for government employees, an undisputed government expense, and (2) the tax subsidy received by employers providing insurance for their employees, since employer-sponsored coverage is deductible to the employer but is not taxable income to the employee. When these are included, the United States government funds 60 percent of health care.

Since the number of individuals covered by employer-sponsored plans is much larger than individual plans, employers have had a major influence on health policy. Although a great many individuals are covered through their employment (about 60 percent of those under age 65), these are working individuals and their families who are comparatively healthy and thus have lower health care costs. If we exclude government employees and look at those covered by private employers, then only 19 percent of health care costs are paid by employer-sponsored plans (or only 11 percent if you were to assume that the tax subsidy accrues to the employer rather than the employee).

What is the lesson? Since we already pay so much through the tax system, policies need to be directed to providing greater health care value for our public dollars. Perpetuating a highly dysfunctional system of funding health care merely to cater to the private insurance industry should be abandoned as irrational and irresponsible public policy.

Steffie Woolhandler and David Himmelstein, Paying for national health insurance–and not getting it:
http://www.healthaffairs.org (Use Quick Search for abstract)

Health Savings Accounts: Why They Won't Cure What Ails U.S. Health Care

by S.R.Collins, Commonwealth Fund

Executive Summary

Invited Testimony before the Committee on Ways and Means U.S. House of Representatives Hearing on “Health Savings Accounts,” June 28, 2006

Thank you, Mr. Chairman, for this invitation to testify on health savings accounts (HSAs). The Committee is to be commended for focusing attention on the manifold problems currently confronting the U.S. health care system: steady growth in the number of uninsured Americans, rising health care costs and premiums, wide variation in the quality and cost of care, and inefficiencies in the delivery and administration of care.

Some maintain that HSAs, coupled with high-deductible health plans (HDHPs), are an important part of the solution for the cost, quality, and insurance problems that plague the U.S. health care system. Asking families to pay more out-of-pocket, the reasoning goes, will create more prudent consumers of health care, driving down growth in health care costs and improving the quality of care as providers compete for patients. And the tax incentives of HSAs will lure previously uninsured people into the individual market, reducing the numbers of families without health insurance.

But while it is comforting to believe that such a simple idea could help solve our health care problems, nearly all evidence gathered to date about HSAs and HDHPs points to the contrary. Indeed, there is evidence that encouraging people to join such health plans might act as salt on a wound, exacerbating some of the very maladies that undermine our health care system’s ability to perform at its highest level.

Higher Patient Cost-Sharing Is the Wrong Prescription

  • Americans already pay far more out-of-pocket for their health care than citizens in any other industrialized country.
  • Real per capita out-of-pocket spending has been steadily rising since the late 1990s. Combined with sluggish growth in real incomes, families are spending increasingly more of their incomes on medical costs.
  • There is considerable evidence that high out-of-pocket costs lead patients to decide against getting the health care they need.
  • Rising out-of-pocket costs reduce people’s ability to save for the future.

Early Experience with HSA-Eligible HDHPs Reveals Low Enrollment, Low Satisfaction, High Out-of-Pocket Costs, and Cost-Related Access Problems

  • Few people are currently enrolled in HSA-eligible HDHPs; those who are enrolled are much less satisfied with many aspects of their health care than adults in more comprehensive plans.
  • People in these plans allocate substantial amounts of income to their health care, especially those who have poorer health or lower incomes.
  • People in HDHPs are far more likely to delay, avoid, or skip health care because of cost. Problems are particularly pronounced among those with poorer health or lower incomes.
  • People in these plans are more cost-conscious consumers of health care: they are more likely to ask for lower-priced drugs and more likely to discuss with their doctors different treatment options and the cost of care.
  • Few Americans in any health plan have the information they need to make decisions. Just 12 to 16 percent of insured adults have information from their health plan on the quality or cost of care provided by their doctors and hospitals.

Patients’ Use of Information Alone Is Not Likely to Dramatically Reduce Health Care Costs or Improve Quality

  • It is unrealistic to expect that even with adequate information and patient financial incentives, the transformation of health care system will be driven by patients’ choice of provider. Patients are in the weakest position to demand greater quality and efficiency.
  • Most health care costs are incurred by very sick patients, often under emergency conditions. Shopping for the best physician or hospital is impractical in such circumstances.
  • Payers, federal and state governments, accrediting organizations, and professional societies are much better positioned to insist on high performance.

HSAs Will Not Solve Our Uninsured Problem

  • Economists Sherry Glied and Dahlia Remler estimate that under current law, fewer than 1 million currently uninsured people are expected to gain coverage as a result of HSAs. This is primarily because 71 percent of uninsured Americans are in a 10-percent-or-lower income tax bracket and would thus benefit little from the tax savings associated with HSAs.

New Proposals to Expand HSAs May Fragment Group Insurance Markets, Increasing the Number of Uninsured

  • Additional tax incentives proposed by the Administration’s 2007 fiscal year budget aim to equalize the tax treatment of HSAs in the individual market to those in the employer market, with premium tax deductibility and tax credits. Economist Jonathan Gruber estimates that the Adminstration’s proposals would actually increase the number of uninsured Americans by 600,000. While 3.8 million previously uninsured people would become newly insured through HSA-eligible HDHPs in the individual market, many employers, especially small employers, would drop coverage. Some 8.9 million people would lose their employer-based health insurance.

What Needs to Be Done
We as a nation should focus on more promising strategies for expanding coverage, improving affordability, and lowering costs. These strategies include:

  • Expanding group insurance coverage, with costs shared among individuals, employers, and government. This could be done by expanding employer-based coverage, eliminating Medicare’s two-year waiting period for coverage of the disabled, letting older adults “buy in” to Medicare, and building on Medicaid and the State Children’s Health Insurance Program (SCHIP) to cover low-income parents, young adults, and single adults.
  • Ensuring affordable coverage for families by placing limits on family premium and out-of-pocket costs as a percentage of income (e.g., 5% of income for low-income families).
  • Greater transparency with regard to provider quality and the total costs of care.
  • Pay-for-performance incentives to reward health care providers that deliver high quality and high efficiency.
  • Development of “value networks” of high performing providers under Medicare, Medicaid, and private insurance.
  • High cost care management and disease management.
  • Improved access to primary care and preventive services.
  • Investment in health information technology.

Citation: S. R. Collins, Health Savings Accounts: Why They Won’t Cure What Ails U.S. Health Care, Invited Testimony Committee on Ways and Means U.S. House of Representatives Hearing on “Health Savings Accounts,” June 28, 2006

Fragmented system of coverage vulnerable to budget

Budget Writers Nix Children’s Coverage Expansion
Health Access Alert
June 26, 2006

Legislative leadership and Governor Arnold Schwarzenegger, announced earlier today that they had come to a deal on a state budget. Eager to pass a budget on time this year, they gave up on the fight to expand children’s coverage, one of the sticking points with Republican legislators. Since a budget requires a two-thirds vote, Republican legislators were able to hold up the budget on this issue.

Republicans from both houses had been fuming over $23 million, which had been added by Gov. Arnold Schwarzenegger in his May Revise, to cover about 24,000 children who were awaiting coverage through their local county “Healthy Kids” initiatives. This money is no longer in the budget.

Last week, Republicans had succeeded in getting Democrats to abandon a plan that would have expanded Healthy Families (SCHIP) to all children living in families with incomes below 300 percent FPL ($60,000 for a family of four) beginning in 2008. Also opposed by Governor Schwarzenegger, that plan was slated to cost $1.8 million this year and expand over the next few years.

Both efforts included covering all children, including undocumented children, which make up around 12% of the uninsured children in the state.

http://www.health-access.org/

Kids’ health hooks voters
By Soraya Sarhaddi Nelson
The Orange County Register
June 25, 2006

The two leading gubernatorial candidates say ensuring that basic health care is available to all of the state’s children will be a top priority for them if they’re in the Governor’s Office next year. The issue is important enough to Gov. Arnold Schwarzenegger that he parted company with fellow Republicans in his proposed budget this year, earmarking $23 million to provide coverage for youngsters in 18 counties who don’t qualify for programs like Medi-Cal or Healthy Families (SCHIP) because they aren’t poor enough or are here illegally.

“As you have heard me say many times, we should not politicize the children and drag them into this,” Schwarzenegger told reporters in mid-June. “Children need to get all the attention, if they are here legally or illegally.”

http://www.ocregister.com/ocregister/news/state/stateelections/article_1192707.php

Comment:

By Don McCanne, M.D.

There is almost universal support for providing all children with health care coverage. Although employer-sponsored coverage has continued to decline, efforts to cover children have offset much of this decline, slowing the rate at which the numbers of uninsured are increasing.

Instead of a universal program of health care coverage, we depend on a fragmented system of providing coverage. Special efforts have been made to cover low-income children though Medicaid, SCHIP (Healthy Families in California), and county programs such as California’s Healthy Kids. Theoretically, all low-income children should be covered through these programs. But what is the reality?

Because of greater state revenues than anticipated, in his May Revise of the budget Gov. Schwarzenegger was able to include funding for the county Healthy Kids program. These funds were not to expand eligibility, but rather they were to fund care for children that were already qualified for this program but were excluded merely for lack of budgeted funds. But in the legislative budget battles, these funds were once again cut, leaving 24,000 children on the waiting list (eligible but unfunded).

SCHIP (State Children’s Health Insurance Program) has been the most successful program of the past decade in expanding coverage for children. Many support its expansion to include all uninsured children. Yet partisanship has prevented a modest expansion of the program in California that would have been accomplished by setting the threshold for eligibility at 300 percent of the federal poverty level.

As long as we have a fragmented system of providing health care coverage, the political debates will center not simply over how much we can “afford” to budget for health care, but also about which citizens we will exclude from any coverage whatsoever.

(I used “citizens” deliberately to separate immigration issues from health insurance issues. Fragmented systems of funding health care result in profound inequities in coverage and access. The fact that 12 percent of uninsured children in California are also undocumented does not change that fundamental premise. We can agree on covering the other 88 percent of uninsured children, and then many of us can continue the battle to see that every person living in the United States receives affordable health care regardless of what documents they possess.)

Consumer Directed Health Care and Health Savings Accounts

“Consumer-directed health care” (CDHC) is a euphemism for shifting health care costs onto patients with skimpy insurance policies that offer virtually no coverage. Popular with conservatives, CDHC plans are based on the idea that Americans currently have too much insurance coverage, and would be more prudent purchasers if forced to pay more of their own health care costs. CDHC plans have very high deductibles (e.g. $10,000 for a family), and some come with an attached health savings account (HSA), a private bank account that can be used to pay health expenses (although half of all employees have nothing in their HSA).

But this concept is fundamentally flawed. Americans are not “overinsured,” illness and medical bills currently contribute to half of all U.S. bankruptcies (pdf). These plans simply shift costs from insurers and businesses onto families. Moreover, they offer no hope of controlling health costs, as the sickest 20 percent of the population responsible for 80 percent of health spending (people with tens or hundreds of thousands of dollars in health costs annually) has no incentive to change their spending. In reality, these plans add another complex layer of administration which will exacerbate wasteful health spending.

This fact sheet provides background on consumer directed health care and outlines the arguments against it.

Click here to read the fact sheet (pdf)

Read the testimony of Senior Health Policy Fellow Dr. Don McCanne on HSAs. Submitted to the Committee on Ways and Means, United States House of Representatives.

For additonal information, read an exchange between Dr. Don McCanne and Dr. James Knight on Health Savings Accounts.