APA President Urges Support For Single-Payer Insurance System
American Psychiatric Association
Psychiatric News
June 16, 2006

The events that (APA President Steven) Sharfstein weathered this past year underscored the importance of the advocacy mission in which he had challenged his fellow APA members to join him. He left them with this simple but weighty message:

“We must tirelessly advocate for [single-payer universal health reform]. As the health care crisis extends and mushrooms, with more and more Americans without adequate coverage, the opportunity for such change will come at national, state, and local levels. And we must be there as advocates for our patients.”

http://pn.psychiatryonline.org/cgi/content/short/41/12/1-a

State health law could be template
By Bob Kievra
Worcester Telegram & Gazette
June 16, 2006

The state’s 65-day-old health care law could have national significance – legislation that might alter presidential politics in 2008 and shift the vexing topic out of the “hopeless” category for the first time in a generation, a Harvard University professor said last night.

Robert J. Blendon, professor of health policy and political analysis at the Harvard University of Public Health and the John F. Kennedy School of Government, said the new Massachusetts law – if it can be made to work – offers hope that the problems of the uninsured can be tackled in a thoughtful, bipartisan manner.

The 145-page law, intended to provide health care coverage to the state’s 550,000 uninsured adults, imposes an individual mandate for everyone in Massachusetts to obtain health insurance by July 1, 2007.

http://www.telegram.com/apps/pbcs.dll/article?AID=/20060616/NEWS/606160517/1002/BUSINESS

And…

AMA: Penalize some uninsured Americans
By Bruce Japsen
Chicago Tribune
June 13, 2006

The AMA’s policy-making House of Delegates vote in favor of what it called “individual responsibility” comes as state and federal lawmakers are weighing similar ideas in the form of legislation in Congress and state houses across the country.

In the past, the Republican-leaning AMA has shied away from government mandates as a way to provide health insurance coverage for more Americans.
In this instance, the group acknowledged Tuesday at a press briefing that its support of tax penalties to incentivize people to buy coverage would be a “significant shift” in the organization’s thinking on matters of covering the uninsured.

http://www.chicagotribune.com/business/chi-060613ama,1,3515691.story?coll=chi-news-hed

And…

Can Massachusetts Lead the Way in Health Care Reform?
By Stuart H. Altman, Ph.D., and Michael Doonan, Ph.D.
The New England Journal of Medicine
May 18, 2006

Massachusetts will require everyone who can afford health insurance to buy it – an individual mandate.

We don’t know exactly what the new insurance plans will look like, how much they will cost, and whether government subsidies will prove adequate. The cost of the reform will be contingent on the actual price of available plans and subsidy levels, which will not be known until regulations are drafted and insurers and health plans offer new products for this market.

http://content.nejm.org/cgi/content/full/354/20/2093

And…

Editorial
Los Angeles Times
June 14, 2006

…the real solution to the nation’s healthcare problems will have to come from a Washington ZIP Code. If it’s smart, Congress will study some of the states’ innovative ideas to determine whether they could work on a national level.

Requiring all citizens to have health insurance, for instance, is an interesting idea that could gain bipartisan traction.

http://www.latimes.com/news/opinion/editorials/la-ed-vermont14jun14,0,4682219.story?coll=la-news-comment-editorials

And…

Cheers and jeers for Mass. insurance mandate By Leah Carlson Shepherd
Employee Benefit News
June 1, 2006

In a groundbreaking move with far-reaching implications, Massachusetts adopted a law in April to require state residents to obtain medical insurance by July 1, 2007. Previously, no state had required people to carry medical insurance.

U.S. Sen. Edward Kennedy (D-Mass.): “Massachusetts once again leads the nation with an innovative plan that will achieve our longstanding goal of expanding health care for all.”

http://www.benefitnews.com/detail.cfm?id=9026

Comment:

By Don McCanne, M.D.

There has been a dramatic surge in media reports that there is a developing consensus that the individual mandate, requiring each individual to purchase his or her own insurance, is the common ground which will bridge the partisan divide on health care reform. It is rumored that even the leading candidate for the 2008 Democratic Party presidential nomination is currently working with consultants to develop an individual mandate model.

The individual mandate does not displace consumer-directed health care as the leading right-wing proposal for reform. On the contrary, it would greatly expand the market for consumer-directed products such as HSAs and high-deductible health plans. It merely reframes the rhetoric, making the individual mandate appear to be the politically feasible compromise. But do the politicians really understand what they are supporting?

The fundamental flaw with the individual mandate model is that insurance plans will have a new responsibility. They will have to cover not only the relatively healthy: healthy employees, their healthy families, and those who pass underwriting standards in the individual market. Since the individual mandate means that everyone must be covered, the plans will have to cover those with higher health care costs as well. Pooling everyone together is expensive. This year we are already spending $7110 per person for health care. Can a middle-income family of four really afford to pay nearly $30,000 for their share of the health care spending pool? Of course not.

A universal individual mandate can work only if the insurance product is affordable. By mandating that everyone be included, there are only two ways of keeping premiums affordable.

The current consumer-directed trend is to strip benefits out of the plans, and to increase out-of-pocket spending through high-deductibles, co-payments and coinsurance. That way, the health insurance premium is affordable, but access to care is not affordable for those who have needs. This totally defeats the purpose of insurance: providing financial protection against the losses of adverse medical events.

The other way to keep premiums affordable would be to shift the bulk of health care costs to the government. Very large tax credits would help, but that would add even more to the current, relatively-opaque taxpayer burden that is already funding 60 percent of our health care. Another government role would be to provide re-insurance, protecting the insurance companies from major losses (i.e., that 20 percent of individuals who use 80 percent of our health care). But then what good are insurers if they are not going to insure us against loss?

Even if we did adopt a government-funded individual mandate, we would perpetuate the tremendous losses that we are already experiencing due to profound administrative excesses, and due to a highly wasteful and even harmful maldistribution of our health care resources. Now that’s what’s not affordable!

So the NBT (Next Big Thing) is the individual mandate? Single payer advocates – get on your horses!

HMO Rate Increases Continue to Decline for Fourth Consecutive Year, According to Hewitt Associates U.S. Employers Remain Focused on Managing Costs
Hewitt Associates LLC
Press Release
June 13, 2006

Preliminary information from Hewitt Associates, a global human resources services company, shows that 2007 HMO rates will increase approximately 11.7 percent — representing the fourth consecutive year of declining rate increases.

“Although there has been a steady decline in the level of HMO rate increases over the past several years, double-digit increases are still very difficult for employers to absorb,” said Paul Harris, senior health care strategist, Hewitt Associates. “The good news is that there do not appear to be market pressures that might cause rates to begin increasing again.”

Although increases are moderating, companies are still facing double-digit increases and, as a result, continue to make plan design changes and share more of the cost with employees.

http://was4.hewitt.com/hewitt/resource/newsroom/pressrel/2006/06-13-06.htm

Comment:

By Don McCanne, M.D.

This is good news? Rates are stabilizing at low double digit increases? Employers are managing costs by sharing more of the costs with employees?

These rate increases are well in excess of inflation, and costs are being shifted to employees at a time when their wages are failing to keep up with the rest of the economy. Patients are bearing much of the brunt of our failed health care funding policies.

It’s not that we don’t understand how to control health care costs. We do. The single payer model does precisely that (with the not insignificant additional advantage that it also provides truly comprehensive coverage for absolutely everyone).

The problem is that we continue to depend on private sector plans to manage costs, which now means that they manage to shift more of the costs to patients. Their model doesn’t work and it needs to be dumped. It’s time for single payer.

2006 Annual Meeting of the House of Delegates Reference Committee highlights
AMA

The AMA voted to support a requirement that individuals and families earning greater than 500 percent of the federal poverty level obtain, at a minimum, coverage for catastrophic health care and evidence-based preventive health care, using the tax structure to achieve compliance. Upon implementation of a system of refundable tax credits or other subsidies to obtain health care coverage, this requirement would apply to individuals and families earning less than 500 percent of the federal poverty level.

http://www.ama-assn.org/ama1/pub/upload/mm/471/refcom_highlights.pdf

Comment:

By Don McCanne, M.D.

For 2006, an income of 500 percent of the federal poverty level is about $50,000 for an individual and about $100,000 for a family of four. Only about one-tenth of the uninsured have incomes at that level or higher. This is obviously only a tiny step towards universal coverage.

What is important is that the AMA is now officially on record as supporting an individual mandate to purchase health coverage in the private insurance market. They would eventually expand that to cover all of the uninsured through a system of refundable tax credits. The good news is that the AMA is explicitly supporting universal health care coverage.

The bad news is that individual mandates for private plans is the most expensive method of achieving universal coverage, and it leaves patients vulnerable to medical debt because of the deterioration in the quality of plans available in the private market.

Let’s not simply settle for universal coverage. Let’s also make it efficient, affordable and comprehensive through a single payer program of national health insurance.

The Huffington Post
The Blog
(Accessed June 13, 2006)

In today’s NY Times (June 10), Hillary Clinton states, “I think you should cover all children who don’t have other access to coverage. We shouldn’t have any uninsured children. But we have to take that step by step.”

For decades, we have been reforming health care “step by step.” These steps have resulted only in more uninsured and in an explosion in medical debt due to deteriorating coverage. These financial barriers to care have resulted in impaired health outcomes.

John Conyers’ HR 676 would replace our inefficient, inequitable, fragmented system with an affordable national health insurance program providing comprehensive benefits for everyone. For those concerned about skyrocketing costs, this is the only effective proposal (which expands coverage) that actually brings costs under control. It should appeal to progressives who want access and coverage for everyone, and to the business community which wants relief from unrelenting cost escalation while ensuring adequate coverage for employees.

This should no longer be a partisan issue. If the Republicans would begin to discuss the business rationale of single payer, then Sen. Clinton should be willing to concede that comprehensive reform really is feasible. But we do need to sit down with our Republican friends to be sure that they understand the single payer business model.

By: dmccanne on June 10, 2006 at 01:05pm

http://www.huffingtonpost.com/deborah-burger/a-walking-tour-of-america_b_22478.html

Wounds Salved, Clinton Returns to Health Care (NY Times, June 10):
http://www.nytimes.com/2006/06/10/washington/10hillary.html?pagewanted=all

Comment:

By Don McCanne, M.D.

Seriously. Let’s make every effort to be certain that the Republicans and the business community clearly understand the single payer business model. The efficiencies and cost containment mechanisms should appeal to anyone who is struggling with budgets.

Medicare Advantage benchmarks and payments compared with average Medicare FFS spending
MedPAC
Medicare Briefs

The purpose of this report is to present data on the level of Medicare Advantage (MA) payments for Parts A and B services relative to the spending on similar beneficiaries in Medicare’s traditional fee-for-service (FFS) program. This responds to requests from Congressional committees to update our past analyses.

CMS no longer determines MA plan payments based solely on administratively set payment rates. Plans now submit formal bids, and then CMS compares the bids with benchmarks to determine payment. Medicare’s payment declines if bids are lower than the benchmarks.

Plan service areas have expanded to more rural and other areas with benchmarks that are high relative to Medicare FFS spending. The benchmarks were relatively high because these areas were given increases in payment rates under earlier law.

Finally, the risk adjustment system has changed payment rates. In 2004, the Centers for Medicare & Medicaid Services (CMS) adjusted plan payments with a blend of 70 percent demographic factors and 30 percent health risk factors.

For 2006, 25 percent of each payment is based on the demographic factors and 75 percent is based on the health risk factors. By 2007, payments will be based 100 percent on risk-adjusted rates.

With the introduction of risk adjustment, the payment system now explicitly takes into account the relative disease burden of the MA population. Risk adjustment (applied to 75 percent of payments in 2006) generally would lower payments to plans if they enrolled beneficiaries who were healthier. But CMS has taken steps to prevent overall payments to plans from going down. A hold-harmless adjustment increases the benchmark rates in 2006 by the amount that CMS expects payments would fall because of risk adjustment.

We find that the combined benchmarks are set at an average of 115 percent of FFS Medicare in 2006. After taking into account the amount that plans return to the trust fund through the bidding process, the 115 percent figure falls to 111 percent. In sum, this 111 percent includes all three factors we have discussed: the relationship of the MA benchmarks to FFS rates, the effect of bidding and returning funds to the trust funds, and the hold-harmless provisions.

http://www.house.gov/stark/news/109th/pressreleases/20060606_MedPAC.pdf

Comment:

By Don McCanne, M.D.

Hold-harmless!?

The private Medicare plans have always benefited by their ability to selectively market their products to healthier Medicare beneficiaries, even though they have received payments at a higher level that assumes that they enroll their fair share of those in poor health. Congress and the administration have promised us, and have now required by law, that the payments to the plans would be adjusted to reflect the risk based on the level of health of the enrollees.

The required risk adjustments are now in place. But what has CMS done? By giving back to the plans the required adjustments, CMS is ensuring that the plans will not be harmed by their success in excluding, by selective marketing, the higher-cost Medicare patients with greater health care needs.

“Hold-harmless” is yet another abuse of rhetoric that characterizes this administration. Granting a gift of taxpayer funds to the private Medicare Advantage plans certainly harms the taxpayer.

Worse, they promised to us and enacted measures that would establish fairness by adjusting for risk. They lied to us!

Interim Recommendations of the Citizens’ Health Care Working Group June 1, 2006

The Citizens’ Health Care Working Group was created by the Medicare Prescription Drug, Improvement and Modernization Act of 2003, Sec. 1014 to provide for the American public to “engage in an informed national public debate to make choices about the services they want covered, what health care coverage they want, and how they are willing to pay for coverage.”

Following this nationwide citizen engagement, the Working Group is required to prepare and make available to the public this 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.” Following a 90-day public comment period on these recommendations, the Working Group will submit to Congress and the President a final set of recommendations.

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.

Interim report:
http://www.citizenshealthcare.gov/recommendations/interim_recommendations.pdf

Comment:

By Don McCanne, M.D.

Those who have followed and participated in this process should agree that the “common message” above represents the prevailing views of the participants. We want a universal, comprehensive, high-quality system that does not endanger financial security for anyone.

Unfortunately, some of the actual details of the report do not seem to reflect this view but rather reflect the opinions of the current administration. Following, in quotations, are a few excerpts from the report, each followed by my comment.

* “No specific health care financing mechanism is optimal.”

There was a clear preference for an equitable, progressively-funded system of insurance for everyone. The administration’s tax credit proposal was rejected by most of those who were offered that option in the sessions. This statement seems to reflect the opinion of the individuals preparing the report rather than the view of the majority of citizens participating.

* “We understand that the transition from the current system to a system that includes all Americans will take time and that multiple financing sources will need to coexist during the move to universal coverage.”

Incrementalism was not a concept discussed in the sessions. This statement, calling for an incremental process, also seems to represent the view of those preparing the report.

* “Define a ‘core’ benefit package for all Americans”

“Core” is a term selected by those preparing this report which suggests that only basic services should be covered by a universal program, and that, by inference, second-tier benefits should be provided only for those who can afford them. The “common message” in this report states that benefits should be “sufficiently comprehensive to provide access to appropriate, high-quality care.” However “core” is defined, it implies that access to other appropriate care will be impaired due to financial barriers. This does not seem to be the intent of the citizen-participants.

* “Guarantee financial protection against very high health care costs”

The report does call for financial protection for low-income individuals, but out-of-pocket health care expenses now threaten average-income Americans. Protection against “very high health care costs” is a call for high-deductible, catastrophic coverage, a policy supported by the administration. In contrast, the majority consensus of the citizen-participants is that the system should not endanger “individual or family financial security,” though many participants seemed to be uninformed about the adverse consequences of high-deductible health plans.

* “Expanding and modifying the Federally Qualified Health Center concept to accommodate other community-based health centers and practices serving vulnerable populations”

Rather than ensuring that every individual has comprehensive health care coverage, the administration supports the expansion of community health centers to serve low-income individuals, especially those who are uninsured.
Although community health centers serve a very important role, they should not be viewed as a substitute for adequate health care coverage.

* “Consumer-usable information about health care services that includes information on prices, cost-sharing, quality and efficiency, and benefits”

This statement supports the consumer-directed health care movement, the current market diversion from the need to focus on a comprehensive system of health care coverage.

It is likely that members of Congress will select those portions of this report that support their own individual agendas while ignoring the overriding message supporting an equitable, comprehensive, high-quality system for everyone. The Working Group has requested comments on this interim report before it is formally submitted to the President and Congress. You should provide those comments to help ensure that this process is not hijacked by the opponents of comprehensive reform.

Use the following link to submit your comments on the interim recommendations: http://www.citizenshealthcare.gov/speak_out/ircomment1.php