PNHP

Higher-income uninsured do not receive recommended services

Higher-income uninsured do not receive recommended services

Use of Health Care Services by Lower-Income and Higher-Income Uninsured Adults

By Joseph S. Ross, MD, Elizabeth H. Bradley, PhD, and Susan H. Busch, PhD
JAMA
May 3, 2006

Our study provides recent, nationally representative estimates of the use of recommended services for cancer prevention, cardiovascular risk reduction, and diabetes management for insured and uninsured adults with varying annual household incomes. We found that high numbers of uninsured and lower-income adults are not receiving recommended care-challenging the views of a majority of people in the United States who believe that the uninsured are able to get the care they need from physicians and hospitals.

In addition, our findings indicate that even among higher-income adults, lacking insurance was associated with significantly decreased use of recommended health care services; we found that increased income did not attenuate the association between being uninsured and using fewer recommended health care services for cancer prevention, cardiovascular risk reduction, and diabetes management. The gap in the use of recommended care between uninsured and insured adults did not narrow significantly as income increased for any recommended service we examined. In fact, we found that the gap in the use of recommended care between uninsured and insured adults significantly widened as income increased for use of cervical and breast cancer screening, serum cholesterol screening, and eye examination and influenza and pneumococcal vaccination for diabetes management. In these cases, income not only failed to attenuate the association between being uninsured and using fewer recommended health care services, but the effect of lacking insurance was more pronounced for the higher-income uninsured than the lower-income uninsured. Moreover, when using the comparison between successive income levels rather than the trend across income, we found that for nearly every comparison, increased income did not significantly attenuate the association between being uninsured and using fewer recommended health care services. Thus, our findings are not limited to inferences regarding the highest-income uninsured, but are relevant for uninsured adults of all incomes.

Currently, many of the proposed health care reforms from both the public and private sector involve increased out-of-pocket cost-sharing or deductibles, such as the recent authorization of health savings accounts through the 2003 Medicare Modernization Act. The results of our study suggest that such reforms may increase the number of adults not receiving recommended health care; adults using out-of-pocket funds to purchase health care services, whether they are enrolled in health savings accounts, employer-sponsored high-deductible insurance plans, or plans with substantial cost sharing, may not purchase recommended chronic and preventive care at levels comparable with adults enrolled in traditional health insurance plans.

It is important to note that it is possible that in situations in which the net benefit to the individual is low, the net benefit to society may still be high.

http://jama.ama-assn.org/cgi/content/full/295/17/2027
Abstract:
http://jama.ama-assn.org/cgi/content/abstract/295/17/2027

Comment:

By Don McCanne, M.D.

There is no dispute. Regardless of income level, either the lack of insurance or excessive cost-sharing results in decreased utilization of clearly beneficial health services, with resultant impaired health outcomes.

Some contend that personal choice must prevail over all other considerations. If a person does not want to contribute funds to a risk pool (i.e., health insurance) then the individual should have the freedom to make that choice.

Others, including many conservatives, do not believe that health care costs should be shifted from “free riders” who do not contribute to risk pools, to the rest of us who will bear the cost of those who lose the bet they placed when they declined to participate. Most agree that some form of government intervention is required to be certain that would-be free riders contribute equitably to the costs.

Government precedence over individual choice is certainly not a new concept. We already have in place many requirements that are designed to protect the public from the costs of individuals who make bad choices. Seat belt and helmet laws protect society from financial losses due to injury of others. Auto insurance mandates also prevent free rider status by enforcing risk pooling.

This new study shows that individuals who can afford health insurance are avoiding care that can prevent health care spending that might well be shifted to the rest of us through higher taxes and insurance premiums. When speaking of rights, we should have the right to require that the free riders reduce our exposure to their potential monetary losses from their adverse health events.

Some of us are passionate supporters of national health insurance simply because we believe that everyone should have the right to affordable health care. For those who don’t really share this belief, just the simple concept of fairness dictates that we should eliminate free riders by including everyone in an equitably funded risk pool. And common business sense dictates that the most efficient and effective method would be through a single payer system. We should all be able to agree on this.

Cover the uninsured

New Jersey, EDITORIAL
Sunday, April 30, 2006

Tomorrow begins the fourth Cover the Uninsured Week, a nonpartisan, national effort to urge U.S. leaders to make health coverage for Americans their top priority and to facilitate the enrollment of uninsured people who are eligible for subsidized health-care programs. With some 1,000 public events scheduled nationwide, Cover the Uninsured Week will be the largest such campaign in history. Among those who will make the case for national solutions in forums in Washington, D.C., and around the nation will be business leaders who will describe how rising health expenses limit their ability to provide health insurance for their employees and drive up the cost of competing on a global basis.

Nearly 46 million Americans lack health coverage. New Jersey feels the consequences more harshly than most; our state ranks ninth among the states in the percentage of its residents who are uninsured, according to a report issued last Wednesday by the Robert Wood Johnson Foundation, one of the chief sponsors of Cover the Uninsured Week. The state’s 1.3 million uninsured — 15.3 percent of its population — are four times more likely than its insured residents to have no personal physician or health-care provider, which makes them less likely to receive preventive services, such as mammograms, pap smears, prostate screening tests and colonoscopies. That, in turn, leads to sickness that costs many times to treat — usually at public expense — than the cost of prevention would have been. A similar report last week by the Commonwealth Fund showed a rising number of uninsured among moderate-income and middle-income families: Two in five working-age Americans with annual incomes between $20,000 and $40,000 were uninsured for at least part of 2005, the report said, and 70 percent of the uninsured were in families with at least one working adult.

— — —

Many states are intervening on behalf of their citizens. Earlier this month, for example, Massachusetts forged a bipartisan coalition to adopt the nation’s first universal health-insurance law, requiring all residents to obtain coverage and providing ways to make that coverage affordable for everyone. It’s encouraging that two of New Jersey’s legislative leaders on health care, Sen. Joseph Vitale, D-Woodbridge, and Assemblyman Neil Cohen, D-Union, have promised to meet with employers, consumer groups, insurance firms, hospitals, doctors, drug firms and other key players over the next six months to determine whether the Massachusetts approach could be adapted for this state, possibly as an expansion of New Jersey’s existing FamilyCare program, which provides health coverage to 139,000 working-poor parents and 112,000 children.

Bravo for the states that are trying. But the problem is a national one and must be solved nationally. Our preference, as we have said many times, is for a single-payer system like Canada’s that eliminates the administrative costs that make up such an enormous part of the overall cost of health care. However, any serious attempt by Congress and the White House to cover America’s uninsured would be vastly preferable to the indifference they display today.

© 2006 The Times of Trenton

Unions Back Single-Payer Health Plan

SINGLE-PAYER GOVT. HEALTH CARE BILL GAINS UNION BACKERS AS ‘COVER THE UNINSURED’ WEEK RUNS


By Press Associates, Inc. Staff Writer Mark Gruenberg

WASHINGTON (PAI) – A bill establishing a government-run Canadian style single-payer health care system for the U.S., built on Medicare, is gaining union backers, coincidentally as “Cover the Uninsured” week ran from May 1-7. The measure, H.R. 676 by Rep. John Conyers (D-Mich.), would eliminate the private for-profit health insurance industry by establishing a government-run system.

The “United States National Health Insurance Act” would be funded through the federal budget, says a fact sheet from the Robert Wood Johnson Foundation, which covers health issues and which sponsors the week spotlighting the uninsured.

Momentum for Conyers’ bill – plus the week-long observance and a planned Senate debate the same time on health care issues – comes just after the Massachusetts legislature voted to require every state resident to buy insurance.

GOP Gov. Mitt Romney, who plans to seek his party’s presidential nomination, signed the bill, but used his line-item veto to ax its provisions that required corporations to pay their fair share of health care bills. That prompted AFL-CIO President John J. Sweeney to say “it is simply ridiculous” for Romney to “try to solve Massachusetts’ health care problems by dumping them on the backs of working people.”

“An individual mandate to buy insurance can only work if it is paired with a guarantee of affordable, comprehensive coverage, and the legislation falls dangerously short of that goal,” Sweeney added. He said the result is that a single worker earning $28,000 a year would have to pay $350 a month – or 15 percent of pre-tax income – for health care. Health care now takes slightly more than one-sixth of U.S. gross domestic product – the measurement of the value of all goods and services in the country.

Other health care advocates in the Bay State point to a proposed universal health care state constitutional amendment, to be discussed at a May 10 conference.

The latest backers of Conyers’ bill were the Ohio legislative board of the Brotherhood of Locomotive Engineers and Trainmen/IBT, Letter Carriers Branch 3126 of Royal Oak, Mich., and Graphic Communications Conference/IBT Web Pressmen’s Local 4N of San Francisco. The Ohio BLET said it will take the cause to its conference convention in June and – if it wins – to the Teamsters convention immediately afterwards.

Their endorsements, in late April, came just after that of the Pennsylvania AFL-CIO, on April 6, after lobbying by USW Local 3567 member Janet Hill, who is also secretary of the Pittsburgh-area Coalition of Labor Union Women. Both the Pittsburgh and Philadelphia CLUW chapters had earlier endorsed Conyers’ legislation.

The Pennsylvania AFL-CIO, which claims 900,000 members, is the second state fed to back H.R. 676, after Kentucky’s. Conyers also has 68 U.S. House co-sponsors.

And Amalgamated Transit Union Local 825, which represents bus drivers, mechanics and other workers at New Jersey Transit, also voted to ask its parent international to back Conyers’ bill.

“We believe this is a very important program and we urge our international executive board to consider endorsing HR 676,” Local 825 President Muhsin Rasuul wrote ATU President Warren S. George about the localfs executive board and membership endorsements of the legislation.

But Conyers’ bill may not see the light of day in the GOP-run Congress, which instead is considering legislation – in the Senate – that would supposedly help small businesses band together to get health insurance.

In reality, the AFL-CIO said, that measure, pushed by the so-called National Federation of Independent Business – a key section of the ruling Republicans’ Right-Wing coalition – could raise the premiums on people who are insured and increase the number of the uninsured, now 46 million.

Itfs those uninsured people who are the focus of the week-long “Cover The Uninsured” drive, with the backing of the AFL-CIO, SEIU, several health care groups and even the U.S. Chamber of Commerce. But while the groups all agree there is a health care coverage problem, they are silent on how to solve it.

Conyers’ bill would mandate comprehensive coverage of “all medically necessary services”: primary care and prevention, inpatient and outpatient care, long term care, emergency care, mental health services, prescription drugs, durable medical equip-ment, full dental services (except cosmetic dentistry), substance abuse treatment, chiropractic services and basic vision care and vision correction, the summary says.

“No cost-sharing would be imposed and benefits would only be available from public or non-profit providers,” it adds. “Non-profit HMOs that deliver care in their own facilities and employ clinicians on a salaried basis could participate.”

And there would be no insurance premiums.

Hospitals and nursing homes would get monthly lump-sum payments while doctors and nurses would get fee-for-service payments under a negotiated fee schedule based initially on current prevailing fees or reimbursement, the foundation says.

Data from Americafs Agenda: Health Care For All, a group headed by former UFCW President Doug Dority, shows health insurance premiums rose 60 percent since the year 2000, but “the proportion of premiums that insurers paid out for medical costs declined” in the same time.

The money went into insurers’ profits and claims processing – paperwork. Other data shows private insurers spend approximately one-fifth of their revenue on overhead, including processing. Medicare – the basis for Conyers’ bill – spends three percent.

Barbara Ehrenreich: President Bush, Meet Lorraine

By Barbara Ehrenreich
Published on The Progressive (http://progressive.org)
April 2006 Issue

Here’s the news that rocked my little world this month: We got a message that a family friend, let’s call her Lorraine, who was in an ICU, barely able to breathe on her own. In the last few weeks, there’d been some mumblings about “not feeling a hundred percent,” but no hint of anything seriously wrong. The diagnosis came back in a couple of days: fourth-stage breast cancer, which has spread to a number of other organs, including her lungs. If you know anything at all about breast cancer “staging,” you know there is no fifth stage.

Lorraine has no health insurance. We didn’t know that. In fact, we’d been content to believe that her consulting business was going as well as she said it was. In her late forties now, she’s a former accountant who never could find another decent job–also a news junkie, an avid reader, and an energetic volunteer in a number of worthy causes. But it turns out she’s been struggling with the cell phone bill and the rent. A few weeks ago, unbeknownst to us, she’d moved out of her apartment and into a free room offered by one of the nonprofits she volunteers for. The cost of a mammogram–well over $100–must have been out of reach.

President Bush, in his State of the Union address, said we should each have a “catastrophic” health insurance policy for the big ticket items like breast cancer, plus a tax-deductible savings account for the little things, like mammograms. If we have to take “personal responsibility” for our doctor visits and routine care we’ll be thrifty about it–or so the thinking goes–and the nation’s medical expenditures will stop spiking like an Ebola fever.

It’s an old idea, going back at least to the Clintons, that the problem with the American health system is that we, the consumers, just consume too much. Make us mindful of the costs by raising co-payments and other out-of-pocket costs, and we’ll stop indulging in blood workups, MRIs, prostate exams, and all those other fun things.

President Bush, meet Lorraine. Her problem wasn’t that she feasted on unnecessary care, but that like so many of the forty-five million uninsured Americans, she was’t getting any care at all. Maybe, when she first noticed the lump, she should have staged a sit-in at the nearest clinic until it sprang for a free mammogram. But her idea of “personal responsibility” was not to be a bother to anyone.

And how much does the “personal responsibility” theory even apply to the insured population? I have insurance–at enormous cost, because I’m not part of a group plan and I’m an ex-breast cancer patient myself–but that doesn’t mean I choose what care I get. It’s not my idea to have an annual mammogram and pap smear. The doctor had to threaten tears before I’d submit to a bone scan, and they’ll have to drag me in for a colonoscopy. No one aside from the rare victim of Munchausen’s syndrome goes looking for recreational medical care.

The fact is there’s a big difference between the economics of health care and that of, say, costume jewelry. We the consumers control the demand for costume jewelry; we can splurge on it or leave it alone. But we have precious little control over our demand for health care. Sure, we can exercise and refrain from smoking and sky-diving and swimming with sharks. We can eat right, too (whatever that may mean, with the dietary advice fluctuating from month to month). But it’s the medical profession that determines how often we need our blood drawn, our breasts squished, our cervices scraped, or any of the other nasty interventions they have to offer.

If the medical care we consume was under our own control, I’d say, sure, save up for it and use it wisely. But it’s no more in our control than the wind and floods we insure our homes against.

You think it’s too expensive to have universal health insurance? Let’s be hard-headed about Lorraine’s case. If she’d been diagnosed earlier, she might have gotten by with a mastectomy and a bout of chemotherapy instead of burning up Medicaid dollars in an ICU. She might be out volunteering for the needy right now, instead of lying in terror in a hospital bed.

Barbara Ehrenreich is a columnist for The Progressive. Her latest book is “Bait and Switch: The (Futile) Pursuit of the American Dream.” Her website is www.barbaraehrenreich.com.

Massachusetts' health plan is not single-payer

By Matthew W. Petty
Op-Ed, The Forum (Fargo, ND)
May 4, 2006

The single-payer national health insurance system described by Josh Swanson in his April 23 opinion in The Forum is the best solution to America’s health care crisis. Unfortunately, the Massachusetts legislation Swanson describes is not single-payer, nor does it solve the health care crisis.

The Massachusetts proposal mandates that people buy their own coverage – with little or no help from employers – or pay a hefty fine. Swanson compares health insurance to auto insurance, arguing that if every driver is required to buy auto insurance, it is fair to make every person buy his or her own health insurance. But this argument ignores the critical fact that people have a choice to own a car but no choice about being an all-too-human mortal.

Extending the auto insurance argument to social policy fails to address real crises. For example, no one wo uld suggest ending homelessness and hunger by mandating that all homeless people buy a house and all hungry people buy food.

Requiring the uninsured to purchase health insurance will simply result in a proliferation of health insurance policies not worth the paper they are printed on. A 2005 Harvard study shows that three-quarters of people bankrupted by illness had health insurance when they first became ill. That percentage could skyrocket if the country adopted a Massachusetts-style individual-mandate law thanks to cheap and skimpy insurance policies.

Swanson is correct that many studies show single-payer to be the most cost-effective solution to the health care crisis. Unfortunately, the Massachusetts plan only adds to the health care system’s administrative waste. Massachusetts’ health care system already devotes $13.3 billion to billing, marketing, and other administrative costs. If the state devoted the same percentage as Canada’s single-payer system to bu reaucracy, the state’s health care system could save $9.5 billion annually, enough to cover all that state’s uninsured and to improve coverage for everyone else.

The Massachusetts health care proposal purports to provide health insurance to nearly all state residents. In reality the proposal promotes shoddy coverage with more holes than Swiss cheese. Insurance will remain unaffordable even with tax subsidies, forcing state residents to spend as much as 20 percent of their income for health insurance. The proposal will do nothing to stop employers from dropping coverage for workers, control costs, or reduce paperwork.

Nations with single-payer systems (e.g., Canada, Sweden, Norway, Germany, etc.) have better health outcomes while spending less per capita. Adopting a true single-payer system is the real solution to America’s health care crisis.

Petty is a 2001 graduate of Fargo’s Shanley High School and a 2005 graduate of Northwestern University with a bachelor’s degree in social policy and specialization in health policy. He is currently office manager and research associate with Physicians for a National Health Program, a 14,000-physician-member national nonprofit organization based in Chicago. E-mail matt@pnhp.org.

FOX NEWS on the single-payer solution

In U.S Hospitals, Emergency Care in Critical Condition
By Don Snyder
FOX NEWS
May 1, 2006

Data from the American College of Emergency Physicians, which represents 23,000 ER doctors, paints a chilling picture of a system in decline. The capacity of the nation’s emergency systems has decreased by 14 percent since 1993, ACEP says, as more than one thousand hospitals have closed their emergency departments nationwide. Meanwhile, demand continues to increase, with 114 million ER visits reported in 2003, the highest number the CDC has ever recorded.

Single-Payer Solution?

Doctors interviewed for this article unanimously decried the deterioration of emergency care and see a single-payer universal health plan as the answer. They point out that government programs could meet important health needs and operate with less overhead than private plans designed to make profits and satisfy stockholders.

For example, according to (Dr. Peter Viccellio, the head of the emergency department at Stony Brook University Hospital), Medicare operates with a 3 percent overhead compared to private insurers who spend 30 percent on overhead.

Stony Brook University Hospital spends $15 million dollars a year on billing because the private plans are so different and criteria for payment so complex. A single payer system would eliminate the need for each hospital to operate its own billing department.

“I could vaccinate a lot of kids with the $15 million our hospital would save,” said Dr. Viccellio.

However, the medical community is itself divided on this issue of universal health care.

In August 2003, the prestigious Journal of the American Medical Association proposed a national health insurance program that had been endorsed by more than 8,000 doctors, including two former surgeons general.

The American Medical Association, the largest medical organization in the United States, immediately distanced itself from the article. It said that while JAMA was associated with the AMA, the publication is editorially independent. The AMA has historically opposed a national health insurance system.

AMA president Donald Palmisano, responding in 2003 to the JAMA proposal, acknowledged that “a solution is desperately needed.” However, he said that a national health care system would “ration care, increase bureaucracy and demoralize doctors and patients.”

Doctors who support a national health care plan acknowledge that a prerequisite for adoption of universal health care in the United States is a fundamental change in attitude by Americans.

“The commitment to health care is a commitment by an entire society,” said (Dr. Angela Gardner, head of the task force that studied the nation’s emergency health care facilities). “I think at the moment Americans struggle with how much they are committed to health care for everyone.”

http://www.foxnews.com/story/0,2933,193883,00.html

Comment:

By Don McCanne, M.D.

By including a comment by former AMA president Donald Palmisano dredged from their 2003 files, FOX NEWS has provided a “fair and balanced” report. But even FOX NEWS couldn’t deny that all physicians interviewed for this report were unanimous is seeing “a single-payer universal health plan as the answer.”

Krugman – Death by Insurance

Death By Insurance
By Paul Krugman
The New York Times
May 1, 2006

For lower-income working Americans, lack of health insurance is quickly becoming the new normal. That’s the implication of survey results just released by the Commonwealth Fund, a nonpartisan organization that studies health care. The survey found that 41 percent of nonelderly American adults with incomes between $20,000 and $40,000 a year were without health insurance for all or part of 2005. That’s up from 28 percent as recently as 2001.

Many of the uninsured reported spending their entire savings on health care and/or that they were having difficulty paying for basic necessities. And most uninsured adults reported cutting corners on medical care to save money – failing to fill prescriptions, skipping medications, going without preventive care.

Here’s the other side of the same coin: health insurers’ business is lagging, reports The Wall Street Journal, as “rising premiums and medical costs push more of their traditional-employer customers to shun or curtail company health benefits.” And some investors are feeling the pain. Aetna’s stock price fell sharply last week, on news that its “medical cost ratio” – a term I’ll explain in a minute – rose from 77.9 to 79.4.

Taken together, these stories tell the tale of a health care system that’s driving a growing number of Americans into financial ruin, and in many cases kills them through lack of basic care. (The Institute of Medicine, part of the National Academy of Sciences, estimates that lack of health insurance leads to 18,000 unnecessary American deaths – the equivalent of six 9/11’s – each year.) Yet this system actually costs more to run than we would spend if we guaranteed health insurance to everyone.

How do we know this? The medical cost ratio is the percentage of insurance premiums paid out to doctors, hospitals and other health care providers.

Investors are upset about Aetna’s rising ratio, because it leaves less room for profit. But even after the rise in the cost ratio, Aetna spends less than 80 cents of each dollar in health insurance premiums on actually providing medical care. The other 20 cents go into profits, marketing and administrative expenses.

Other private insurers have similar ratios. And here’s the thing: most of those 20 cents spent on things other than medical care are unnecessary.
Older Americans are covered by Medicare, which doesn’t spend large sums on marketing and doesn’t devote a lot of resources to screening out people likely to have high medical bills. As a result, Medicare manages to spend about 98 percent of its funds on actual medical care.

What would happen if Medicare was expanded to cover everyone? You might think that the nation would spend more on health care, since this would mean covering 46 million Americans who are currently uninsured. But the uninsured already receive some medical care at public expense – for example, treatment in emergency rooms that would have been both cheaper and more effective if provided in doctors’ offices.

And Medicare manages to spend much more of its funds on medicine, as opposed to other things, than private insurers. If you do the math, it becomes clear that covering everyone under Medicare would actually be significantly cheaper than our current system.

And this calculation doesn’t even take into account the costs our fragmented system imposes on doctors and hospitals. Benjamin Brewer, a doctor who writes an online column for The Wall Street Journal, recently commented on the excess expenses he incurs trying to deal with 301 different private insurance plans. According to Dr. Brewer, he currently employs two full-time staff members for billing, and his two secretaries spend half their time collecting insurance information. “I suspect,” he wrote, “I could go from four people in the paper chase to one with a single-payer system.”

Many pundits see red at the words “single-payer system.” They think it means low-quality socialized medicine; they start telling horror stories – almost all of them false – about the problems of other countries’ health care. Yet there’s nothing foreign or exotic about the concept: Medicare is a single-payer system. It’s not perfect, it could certainly be improved, but it works.

So here we are. Our current health care system is unraveling. Older Americans are already covered by a national health insurance system; extending that system to cover everyone would save money, reduce financial anxiety and save thousands of American lives every year. Why don’t we just do it?

http://select.nytimes.com/2006/05/01/opinion/01krugman.html?hp

Comment:

By Don McCanne, M.D.

Why don’t we?

Political momentum building for single payer reform

California Healthline
April 28, 2006
Candidates Endorse Single-Payer Health System

All six candidates for the Democratic nomination for the 6th District Assembly seat support a single-payer health care system, the Santa Rosa Press Democrat reports. The 6th District represents Marin and southern Sonoma counties.

http://www.californiahealthline.org/index.cfm?Action=dspItem&itemID=120829

And…

California Healthline
April 25, 2006
Candidates Support Single-Payer System

San Francisco County Supervisor Fiona Ma and Golden Gate Bridge Director Janet Reilly — candidates for the Democratic nomination for the 12th District Assembly seat — both support a single-payer health care system to expand coverage to the uninsured in California, the San Francisco Chronicle reports.

http://www.californiahealthline.org/index.cfm?action=dspItem&itemID=120775&changedID=120694

Comment:

By Don McCanne, M.D.

Those who state that single payer reform is not politically feasible need to listen to the candidates. When the candidates are competing for the claim of being the one that really, really, really does support single payer, the feasibility argument fades into oblivion.

Janet Reilly’s website statement, “A Prescription for a Healthier California,” demonstrates how intense the support for single payer has become.

A Prescription for a Healthier California (Janet Reilly):
http://www.janetreilly.com/healthcare.html

Part I of her booklet expands on this:
http://www.janetreilly.com/pdf/hcare_booklet.pdf

Even the opponents understand the feasibility of single payer. Outspoken consumer-directed advocate Greg Scandlen had this to say about the flawed Massachusetts plan:

“Having it fail wouldn’t bother me,” Scandlen said, “except many people would conclude, ‘Well, we tried individual responsibility and it failed, so the only thing left is single payer.'”

http://www.heartland.org/Article.cfm?artId=18932

Enthoven and Herzlinger on consumer-driven health care

Is consumer-driven health care a good idea?
Family Practice News
April 1, 2006

Point
Regina Herzlinger, D.B.A., is chair of the business school at Harvard University, Boston.

Unlike the automotive industry, there is no Henry Ford in the health insurance industry to make things cheaper, and there are few choices of health insurance policies. Consumer-driven health care will liberate the Henry Fords of health insurance and allow them to offer more options.

Consumer-driven health care will also liberate health care providers.

Remember that 20% of the health care users account for 80% of health care costs. So you will see health care “focused factories” that concentrate on the sick. Initially, they will focus by procedure or patient group, but more importantly, they will focus on diseases and disabilities. For instance, diabetes patients with numerous comorbidities really need a team to help manage their disease. In a consumer-driven health care system, the Henry Fords of health care will be motivated to organize teams that help these patients or address such underserved populations as African Americans who have sickle cell disease. Consumers will respond to insurance policies that offer these focused factories.

The consumer-driven health care industry will also need a J.D. Power – someone to monitor health care quality the way J.D. Power monitors automobile quality. This kind of business will emerge, as it does in every consumer-driven market.

Counterpoint
Alain Enthoven, Ph.D., is professor emeritus at the Stanford (Calif.) University business school.

The main appeal of consumer-driven health plans is to employers who are eager to find ways to move costs back to employees. The costs are shifted to people with chronic conditions, who usually will reach and exceed their deductibles.

Consumer-driven health plans, especially those with health savings accounts, are great for the healthy and wealthy, who will take it up in a hurry and who can benefit from the tax shelter these plans provide. So while these plans could catch on rapidly, the result will give Americans one more reason to doubt the fairness of our private health care financing and delivery system.

High-deductible consumer-driven health plans are based on the idea that the key to economy is to keep people away from the doctor. That might be true in acute care and in disaggregated fee for service, where there is a lot of unnecessary surgery, but it will not be true in our society, where so many people have or will soon have chronic diseases.

High-deductible consumer-driven health plans move in the wrong direction, distancing people from health care rather than reaching out to support them, to improve their lifestyles, and to manage their chronic conditions so they can avoid hospitals and more costly complications.

I think consumer-driven health plans will lead to the underfunding of primary care and prevention, and will reinforce the present trend of young American doctors who forsake primary care for the “sub-sub-subspecialties”
of radiology, in which they can make a whole lot of money. It will draw more resources into the open-ended fee-for-service sector, whose appetite is insatiable.

http://www.familypracticenews.com/article/PIIS0300707306729115/fulltext

Comment:

By Don McCanne, M.D.

These noted authorities from prestigious schools of business have continued to promote their versions of how we can make competition in the marketplace work to improve the way we fund health care. Professor Enthoven advocates for his model of managed competition (though not in this point-counterpoint), and Professor Herzlinger advocates for her model of consumer-driven health care.

History is in the process of discarding most of the elements of managed competition, while Professor Enthoven explains why the consumer-driven approach will never work either.

Neither managed competition nor the consumer-driven model are free market models anyway. Both rely on third party payers to control prices, and both restrict choice to providers selected by the third party payers.

A single payer system would also control prices, but it would do so through mechanisms that would improve resource allocation for the benefit of all of us rather through the current mechanisms that are designed to benefit the third party payers at the cost of efficiency and equity.

Regarding choice of physicians, hospitals and other providers, whereas managed competition and consumer-driven products restrict choices by contracting, a single payer system allows free choice of all providers. It is ironic that these market models are more oppressive to the health care consumer than would be a government-administered single payer system.

Uninsurance is no longer just for low-income families

Gaps in Health Insurance: An All-American Problem
By Sara R. Collins, Ph.D., Karen Davis, Ph.D., Michelle M. Doty, Ph.D., Jennifer L. Kriss, and Alyssa L. Holmgren
The Commonwealth Fund
April 2006

Gaps in health insurance coverage – a problem that has long afflicted lower-income U.S. families – is increasingly becoming an all-American problem.

Percent of working-age adults in 2005 who were uninsured at some time in the past year, including those currently uninsured, by income level:

53% of low income (<$20,000) 41% of moderate income ($20,000-$39,999) 18% of middle income ($40,000-$59,999) 7% of high income ($60,000 or more) Rates of medical bill problems and debt were high among people in both lower-income and higher-income households who experienced a time uninsured. Indeed, rates were highest among those with higher incomes. Nearly three of five (59%) adults with incomes of $40,000 or more reported difficulties with medical bills or accrued debt. Forty-six percent of adults with higher incomes were paying off unpaid medical bills over time. More than one-third (34%) of adults ages 19 to 64 (both insured and uninsured) either had medical bill problems in the past year or were paying off accrued medical debt. Executive summary: http://www.cmwf.org/publications/publications_show.htm?doc_id=367876

Full report:
http://www.cmwf.org/usr_doc/Collins_gapshltins_920.pdf

Comment:

By Don McCanne, M.D.

The problem of potentially being uninsured now has become a major concern for the average American. Even being insured is not protecting Americans from medical debt. Can we cover everyone and prevent medical debt at the same time?

The authors of this report call for building on “group forms of coverage already in place, including employer plans, Medicare, Medicaid, the State Children’s Health Insurance Program, and state and federal employee benefits plans.” Such expansions would increase costs at a time when individuals and employers already are finding it difficult to meet the current level of spending. Consumer-directed models would be even worse since, in shifting costs to patients, the problem of medical debt would be further compounded.

The government is the only payer that could manage equitably the costs of comprehensive care for everyone. If the government is to foot the bill, it needs to fulfill its fiduciary responsibility by demanding efficiency and value. That can be achieved through a single payer system, but not through an industry that spends so much in devising and executing ways to not pay for essential health care.

Single payer is the solution that Americans are seeking. Most just don’t realize it yet. It’s our job to explain it to them.

Gaps in Health Insurance: An All-American Problem

By Sara R. Collins, Ph.D., Karen Davis, Ph.D., Michelle M. Doty, Ph.D., Jennifer L. Kriss, and Alyssa L. Holmgren
Commonwealth Fund, April 26, 2006

Overview

Watch a multimedia presentation about the findings, with audio and slides, by lead author Sara R. Collins, Ph.D., senior program officer and director of the Fund’s Program on the Future of Health Insurance.

Gaps in health insurance coverage\a problem that has long afflicted lower-income U.S. families\is increasingly becoming an all-American problem. Findings from the Commonwealth Fund Biennial Health Insurance Survey show that, while lack of insurance continues to be highest among families with incomes under $20,000, uninsured rates for moderate- and middle-income earners and their families are rising, putting their health and financial security at risk. The survey finds that most of these individuals reside in working families: Of the estimated 48 million American adults who spent any time uninsured in the past year, 67 percent were in families where at least one person was working full time. In addition, survey respondents were asked about problems with medical bills and accrued medical debt; difficulties in accessing needed health care; problems managing chronic conditions; utilization of routine preventive care, like mammograms and colonoscopies; and coordination and efficiency of care.

Executive Summary

National health care spending is climbing by more than 7 percent per year, outpacing economic growth by a substantial margin. As health care costs have climbed, so has the number of people without health insurance in the United States, even during a period of overall economic growth. In 2004, according to U.S. Census data, nearly 46 million people of all ages were uninsured, an increase of 6 million over 2000. This combination of eroding health insurance coverage and rapidly rising health care costs raises concerns about the ability of U.S. families to obtain timely medical care, protect their finances from catastrophic health care costs, and save for retirement.

The Commonwealth Fund Biennial Health Insurance Survey, a nationally representative survey of 4,350 adults age 19 and older, presents new information on the health insurance coverage of Americans and the health and financial consequences families face when they experience breaks in insurance. The survey, conducted between August 2005 and January 2006, finds that while the lowest-income families have always been most at risk of not having insurance coverage, more moderate- and middle-income earners and their families are also in jeopardy. In addition, one of five of all adults under age 65 is currently paying off debt from medical bills incurred in the past. Those who lack insurance are particularly affected by this burden. The survey also finds that uninsured people with chronic health conditions like diabetes and asthma are much more likely to skip medications for their conditions and go to an emergency room or hospital than are those who are insured.

Key findings of the survey include:

Rising Numbers of Uninsured Individuals Are in Moderate- and Middle-Income American Families

  • Two of five (41%) working-age Americans with incomes between $20,000 and $40,000 a year were uninsured for at least part of the past year\a dramatic and rapid increase from 2001 when just over one-quarter (28%) of those with moderate incomes were uninsured (Figure ES-1).
  • Adults with incomes under $20,000 were still the most likely to be uninsured: more than half (53%) had spent time uninsured in the past year.
    • biennial 1
  • Most people who are uninsured are in working families. Of the estimated 48 million American adults who had any time uninsured in the past year, 67 percent were in families where at least one person was working full time.

    • Many Americans Report Medical Bill Problems and Medical Debt

  • One-fifth (21%) of working-age adults, both insured and uninsured, currently have medical debt they are paying off over time and more than two of five (44%) of these individuals are carrying $2,000 or more in debt.
  • More than one-third (34%) of adults ages 19 to 64 either had medical bill problems in the past year or were paying off accrued medical debt. Problems include not being able to pay bills, being contacted by a collection agency about unpaid medical bills, or having to change way of life to pay bills.
  • Three of five (62%) of all adults with medical bills or debt problems said they or their family member were insured at the time the debt was incurred.
  • More than half (51%) of uninsured adults reported medical debt or bill problems. Of those, nearly half (49%) used up all their savings to pay their bills. Two of five were unable to pay for basic necessities like food, heat, or rent because of medical bills.
  • Rates of medical bill problems and debt were high among people in both lower-income and higher-income households who experienced a time uninsured. Indeed, rates were highest among those with higher incomes. Nearly three of five (59%) adults with incomes of $40,000 or more reported difficulties with medical bills or accrued debt. Forty-six percent of adults with higher incomes were paying off unpaid medical bills over time, with over half (54%) of these individuals carrying $2,000 or more in medical debt.

    • People with Gaps in Coverage Have Difficulty Managing Chronic Conditions

  • An alarmingly high proportion\59 percent\of uninsured adults who had a chronic illness, such as diabetes or asthma, did not fill a prescription or skipped their medications because they could not afford them.
  • More than one-third (35%) of uninsured adults who had a chronic condition went to an emergency room or stayed overnight in the hospital in the past year because of their condition\about two times the rate of people with chronic health problems who were insured all year (Figure ES-2).
    • biennial 1

    Individuals with Gaps in Coverage Are Much Less Likely to Get Preventive Care

  • Only 18 percent of uninsured adults ages 50 to 64 had a colon cancer screen in the past five years, compared with 56 percent of adults insured all year.
  • Less than half (48%) of uninsured women ages 50 to 64 had a mammogram in the past two years, compared with 75 percent of women who were insured all year.
  • Few adults without medical insurance receive dental care: only 35 percent of those uninsured at the time of the survey had a dental exam in the past year, half the rate of those who were insured for the full year.

    • People with Gaps in Coverage Experience Inefficient Care

  • Nearly one-quarter (23%) of adults who reported spending any time uninsured in the past year said test results or medical records were not available at the time of a scheduled appointment, compared with 15 percent of continuously insured adults.
  • Nearly one of five (19%) adults with any time uninsured said he or she had been given a duplicate test, twice the rate of duplication reported by continuously insured adults.

    • It is clear from the findings of this survey and from prior research that the health care\and ultimately the health and productivity\of the U.S. population is being damaged as the nation’s insurance problem continues to grow. Real solutions that build on group forms of coverage already in place, including employer plans, Medicare, Medicaid, the State Children’s Health Insurance Program, and state and federal employee benefits plans, will help to fill insurance gaps with meaningful, affordable coverage that helps link families and providers. Preventive care routines, like cancer screenings, blood pressure and cholesterol tests, dental exams, as well as care for chronic conditions, should be the shared reality of all Americans.

    Citation:
    S. R. Collins, K. Davis, M. M. Doty, J. L. Kriss, and A. L. Holmgren, Gaps in Health Insurance: An All-American Problem, The Commonwealth Fund, April 2006

    Copyright 2006 © • The Commonwealth Fund |