PNHP

Projected Savings from Electronic Medical Records Called Illusory

Projected Savings from Electronic Medical Records Called Illusory

Harvard critics reject Rand Corporation claims that underlie Gingrich and Clinton policies

PRESS RELEASE
EMBARGOED UNTIL 1:00 AM EDT
September 14, 2005

Contacts:
Steffie Woolhandler, M.D. & David U. Himmelstein, M.D.
(617) 665-1032
(617) 497-1268
(cell) (617) 312-0970

Nicholas Skala
(312) 782-6006

Hope And Hype: Predicting The Impact Of Electronic Medical Records

Electronic medical records (EMR) are unlikely to save much money according to a commentary by Harvard Medical School health policy experts Drs. David Himmelstein and Steffie Woolhandler that appears in the September/October issue of the journal Health Affairs. The commentary debunks a Rand Corporation report appearing in the same issue that forecasts massive savings from EMR.

The Rand report (which was financed by medical computing firms) is the latest of many recent claims that medical computing will save hundreds of billions of dollars in medical costs. Politicians across the political spectrum from Hillary Clinton to Newt Gingrich see in computing a painless solution to our nation’s health care crisis (additionally, Sen. Ted Kennedy has introduced federal legislation calling for the widespread adoption of EMR).

The Himmelstein/Woolhandler commentary points out that computer vendors have been claiming that such savings were imminent for the past 30 years. Yet during that time thousands of hospital computer systems have been installed that “haven’t saved a nickel.” The commentary criticizes the Rand researchers for basing their forecast on little or no reliable data. Moreover the Rand forecast assumes that “interoperability” among disparate medical computing systems, which has yet to be achieved in practice, can be readily accomplished nationwide.

Dr. Himmelstein, an Associate Professor of Medicine at Harvard and former Chief of Clinical Computing at Cambridge Hospital, commented: “We’ve made steady but slow progress in medical computing over the past three decades. But computers don’t offer the panacea that politicians hope for and computer firms are peddling. To mount a national program to do in every hospital that which has yet to be done in any hospital may benefit the computer vendors who paid for the Rand research, but it risks failure on a colossal scale.”

“Computers won’t solve the health care crisis. Since hospitals started computerizing, bureaucracy has multiplied and costs have risen faster than ever. Only national health insurance can streamline health care bureaucracy and save enough money to make universal coverage feasible. We need politicians to provide real leadership, not wait and hope for a technologic miracle.” according to Dr. Steffie Woolhandler, an Associate Professor of Medicine at Harvard and prominent health policy researcher

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Physicians for a National Health Program is an organization of 13,000 physicians advocating for non-profit national health insurance. PNHP has chapters and spokespersons across the country. For contacts, call (312) 782-6006

Health Crisis in Louisville’s West End

There is a solution, experts tell forum
By Anne Braden
The Louisville Defender
(Special to The Defender)
Thursday, September 8, 2005

Millions of people across the U.S. are in poor health, and many are dying of diseases and conditions that could have been cured. Thousands of these people live in Louisville — the largest number in the West End. This is a tragedy and it does not have to be that way.

That is the message brought to a recent community forum sponsored by the Kentucky Alliance Against Racist & Political Repression at its headquarters on Broadway by Dr. Adewale Troutman, director of the Louisville Metro Health Department and two other panelists.

“This is a matter of social justice and human rights,” Troutman said. “We are told that in this country we are guaranteed ‘life, liberty and the pursuit of happiness.’ But we can’t have any of these unless we have health care.”

There are a number of reasons why so many Americans die when they don’t have to, and the principal one is that people do not get preventive care, the panelists told the forum. “They do not go to a doctor or clinic for regular check-ups, so by the time they are diagnosed, it is too late,” said another panelist, Dr. Garrett Adams, a distinguished local physician.

And they don’t go for check-ups because they don’t have health insurance, the panelists told the forum. (A recent Census Bureau report based on Year 2000 figures, stated that 45.8 million people in the U.S, have no insurance at all, and 530,000 of them live in Kentucky, about, 85,000 of them in Louisville. And that many more are under-insured, some say as many as 80 million.)

There is an answer to this crisis, Dr. Troutman said. It’s Single-Payer National Health Insurance.

Most people — including the people who need it most – don’t know what that term means. The name is not very descriptive.

Panelists at the forum put it simply. “It’s a system like Medicare,” said Dr. Adams “But it’s not just for people over 65, it’s for everybody, and it covers all medical conditions.”  

If it’s so simple, then why don’t we have it?

Dr. Adams put that simply too. “The block is the insurance industry,” he said. “The insurance companies are parasites feeding off the medical system. They are the middle-man, and Single Payer would cut them out.” And they spend some of their huge profits, Adams said, to use their connections to mass communication systems to tell people Single Payer would be a calamity and would be bad for them.

But today there is hope that this powerful force can be overcome, said the third panelist, Kay Tillow, a coordinator of a broad local coalition, Kentuckians for Single Payer Healthcare. Rep. John Conyers (D-Mich.) has introduced a bill in Congress to implement Single Payer, HR 676. It is called the Expanded and Improved Medicare for All Bill. And a mass movement in support of it is spreading like wildfire all across the country.

Dr. Troutman, who is recognized nationally as an authority on health care conditions in African American communities, also stressed the wide gap that exists between health conditions in the white and Black communities. If you are Black, statistically you are 2-1/2 times more likely than whites to die in infancy, and your life span will be 10 years shorter than that of whites. African Americans are 12 percent of the U.S. population but 27 percent of the uninsured.

The Facts & the Figures

All the panelists peppered their presentations with statistics and factual information. Dr. Adams showed slides with charts demonstrating the rising numbers of uninsured people and the growing number of administrators of health care services.

Dr. Troutman noted that much of his academic training and experience has been in research and statistics. “Anything I tell you is backed up by statistics and facts,” he said. “We do not have a health care system in the U.S. We have a fragmented program to manage sickness.”

For example, the panelists presented these facts:

• This is the only industrialized country in the world that does not have a guaranteed health plan for all of its people.

• The U.S. spends an average of about $5,000 per patient on health care. Other countries, which have national health programs, spend between $2,000 and $3,000. But, according to the World Health Organization, the U.S. is 37th in the world in efficiency of health care delivery.

• 18,000 people in the U.S. die each year for lack of health insurance. That’s six times the number that were killed in the 9/11 attack on the World Trade Center.

• Between 80 and 85 percent of the people without insurance in the U.S. are employed. They just can’t afford rapidly rising insurance premiums, which have increased by double digits each year since 2001.

• Drug company profits average four times those of other Fortune 500 companies.

How It Would Work

About 35 people attended the forum. They were very diverse, racially and age-wise, and came from many sections of the community. They were full of questions to the panelists.

First of all, they wanted to know exactly how Single-Payer would work. Dr. Adams explained it, step by step. Every person in the country could apply for and receive a National Health Insurance Card. When they needed treatment or a diagnosis, of just a check-up, they would go to the doctor, clinic or hospital of their choice. That health provider would send the bill direct to a special agency created for this purpose. It would pay the bill direct to the provider. The patient would owe nothing. There would be no deductibles or co-pays.

Coverage would be comprehensive for all medically necessary care, including home health, nursing homes, dental, vision, mental health, hospitals, office visits, physicians, laboratory tests, medicines, and rehabilitation. Thus, like Medicare, the program would be “publicly funded and privately delivered.”

And where would the money to finance the program come from? From a modest payroll tax on employers and employees — less than employers pay now to private insurers if they provide coverage to their employees, and less than employees pay private companies if they can afford insurance at all. In addition, there would be a tax on corporate profits and higher rates for people whose income is over $250,000 a year. A subsidy from the Federal Government would be much less than it now puts into health care because the huge administrative costs of private insurers would be eliminated.

But what about employees of insurance companies who would lose their jobs? The Conyers bill provides a cushion for these people, Dr. Adams said, as any humane government should, when progress inflicts suffering on some individuals. In a program something like the GI Bill after World War 11, displaced workers would be subsidized for several years while they returned to school, entered training programs to learn new skills and professions, or established diverse businesses of their own.

Countering the Arguments of Opponents

And what, members of the audience wanted to know, should they say to counter the arguments of those who say Single Payer would destroy the so-called “health system” and them?

All of this, Dr. Troutman said, is a web of myths, circulated by those who control the channels of mass communication and the economy, and it’s an old pattern. In the 1920s for example, the scare word was “Bolshevik,” and the American Medical Association turned people away from the simple reform of health clinics in poor communities by giving them that label. Later, in the mid-20th Century they called universal health care “socialized medicine,” and today, they still use that term. They also say Single Payer would lower the quality of health care, drive young people away from seeking medical careers and experienced doctors out of the country or out of the profession, would mean waits for months or even years to get service at hospitals, and would bankrupt the country.

None of this, Dr. Troutman and Dr. Adams said, is true. Single-payer is not “socialized medicine,” in which the government would run health care. Rather it is like the Canadian system in which patients choose the provider they want and a public agency pays for it — a system that is “publicly financed but privately delivered.” The tales of long waits in Canada are greatly exaggerated, but where they happen it is because the Canadian program is under-funded. If Canada spent anywhere near as high a percentage of its Gross National Product on health care as the U.S. does, there would be no waits.

They said some high-priced specialists might flee the profession, but Cuba, which has a socialized system and has the best health delivery system in the world, according to researchers, recruits more youth into the profession than it needs and exports doctors to other health-starved countries. The volume of paperwork in Canada is much smaller than the amount required by private insurers in the U.S. And the cost to the government of a Single Payer plan would be much lower than the amount it now pays to states and health providers.

Journeys to Commitment

The recent forum was moderated by Alice Wade, Organizer/Coordinator of the Kentucky Alliance. The introduction of the panelists included brief summaries of their unique life stories, and each one opened their presentation by telling about their own journey to a commitment to Single Payer. Dr. Troutman grew in the South Bronx when that area was predominantly African- American and in an advanced state of decay. He was the son of a single mother who worked at low-paying jobs to support her children, and he lived on the streets. Most of his close friends are now either dead (one in the East River), on drugs living the life of a dealer, or in prison. He says he often wonders why his position is totally different and concludes that it must be the work of a Divine Providence and God must have a purpose for his life. Something in Troutman turned him in the direction of service to others very early. As a student, working his way through City College of New York, he became a part of the Black Liberation Movement of the 60s in New York and organized the first Black Student Union in New York’s university system. He went on to earn a medical degree and a Master’s in both public health and Black Studies in distinguished universities. When he came out of school, he had already decided to use his education and skills to improve the lives of Black and poor people. Since then, he has held high positions in both public agencies and private health care facilities, and in research institutions and has used all of them to pursue his purpose of helping the people he left behind in poverty and isolation. (He worked with Former U.S. Surgeon General Dr. David Satcher on a widely-acclaimed study of the Black/white health gap and co-authored a recent highly-publicized article based on this study entitled “What If We Were Equal?”)

Since becoming Louisville Metro Health Department’s first African American director in January 2004, his primary objective has been to make that agency’s services and information more readily available to poor communities, and he has already accomplished a series of reforms. He has come to believe that real health care requires more than physical care. He said it must also address the mental, psychological and spiritual needs of people. And he believes bringing real health reform will require taking on the host of evils that plague health-starved communities — for example, lack of jobs and educational opportunity and hopelessness.

Dr. Adams was born in Nashville and recently retired from the full-time faculty of the U of L School of Medicine where he was Chief of Pediatric Infectious Diseases and Medical Director of Communicable Diseases at the Metro Health Department. He holds an M.D. and Master’s degrees in Public Health from a series of top-ranked universities. For many years, he was on the staff of Kosair Children’s Hospital and says that despite its valiant efforts to meet the needs of struggling parents and their children he saw the deterioration in health care access and delivery throughout the U.S.

He says he first heard of Single Payer insurance from a medical journal article he read when he was working at the Metro Health Department two years ago. His curiosity was aroused, and he looked at the web site of the Physicians for a National Health Program (www.PNHP.org). He endorsed the Physicians Proposal for a National Health Program, and he soon found he was not alone. He said when he signed on in August 2003, there were 8,000 doctors across the country who had done the same thing. By last January, he said, this number had increased to 13,000. The American Medical Association, which only represents 25 per cent of American physicians, still opposes Single Payer, but many primary care physicians — frustrated by worsening life conditions in low-income communities and the inability of health care agencies to meet their needs — are organizing rapidly everywhere for Single Payer.

Kay Tillow is a native of Western Kentucky and — like Dr. Troutman — came to maturity in the 1960s. She became an organizer and worked first with miners in Eastern Kentucky where the miners’ union was under massive attack, was losing members as union mines shut down and was being forced to close its network of hospitals in the mountains. Later she moved to Pittsburgh and worked many years on the staff of the union that represented hospital workers there and fought not just for their rights but also for better health care for patients. About 15 years ago, she returned to Kentucky, and began organizing hospital workers first in Western Kentucky and then in Louisville. She now serves as staff of the Nurse’s Professional Organization (NPO), the union which represents local hospital workers. It has carried on a long struggle with the Norton hospital system, and has recruited a majority of the workers in one of its hospitals. But it has been unable to get a contract because Norton has steadily refused to negotiate, despite several decisions from the National Labor Relations Board ordering it to do so.

Tillow still works as staff for NPO while she helps organize Kentuckians for Single Payer Healthcare. She says the local group is part of a burgeoning national movement to pass the Conyers bill. Fifty members of Congress have joined Conyers as co-sponsors of the bill. “But there are over 400 members, so we have a long way to go,” Tillow said. “But we are growing fast.” She said that nationally scores of religious institutions, civil-rights organizations and unions have endorsed the bill, and the local coalition is also growing. It will soon begin to work to get the state legislature to enact a Single Payer plan for Kentucky. Tillow was a key organizer of a coalition seeking a Kentucky Single Payer plan over a decade ago, and she recalled that the recently deceased Leonard Gray, who was then a state legislator, introduced a bill to enact a state plan. It did not get out of committee, but meantime the coalition supporting it did extensive research and proved that such a plan would be much less costly to the state than its current levels of subsidy to health institutions.

A Personal Experience

Dr. Troutman ended his presentation to the forum with another personal story. He said he recently had occasion to be hospitalized himself— for a minor condition that needed official diagnosis. He said he got into a local hospital immediately and got thorough and skilled attention from doctors and staff. He said he realized this was because he is a doctor himself and has good insurance. But then he added:

“I stayed one night, they gave me one pill, did a cardiogram, stress test and one other test and three (not so good) meals.” When I left, they gave me a copy of my bill on which the balance due was zero because my insurance was paying it. When I got home and looked at it, the total was over $12,000. I thought to myself, ‘If I didn’t have insurance, what would I do?’ I would have to take bankruptcy and would probably lose my home. I realized that this is what happens to millions of people in the U.S. — studies show that 51 percent of bankruptcies result from medical crises.”

Dr. Adams said the experience had strengthened his determination that this experience not happen to any more people in Louisville.

Dr. Troutman is eager to speak to more community groups about Single Payer and the Black-white health gap. If your church or neighborhood group or union local would like to have him, call the Alliance at 778-8130 and they will tell you how to contact those responsible for his schedule. Tillow and Dr. Adams said their organizations also are eager to provide speakers.

Contact Kentuckians for Single Payer Healthcare at 459-3393, Also everyone is welcome at regular meetings of the Coalition. They meet on the third Thursday of each month, 5:30 to 7 p.m. at Central Presbyterian Church, Fourth & Kentucky.

Excess consumer demand?

Letters to Business
By Richard T. Landres, M.D., Stockton
San Francisco Chronicle
September 11, 2005

SB840, the (single payer) bill proposed by state Sen. Sheila Kuehl, D-Santa Monica, would increase the cost of health care rather than reduce it. This is because a large portion of our health care expenditures are driven by consumer demand for services.

As a practicing physician in California for more than 30 years, it’s been my experience that patients and families usually want the very best health care (i.e, every conceivable test, whether medically necessary or not, and sometimes more than once).

Even when the diagnosis is understood and not serious, medically unnecessary tests are frequently obtained in order to reassure the patient and/or because of physicians’ malpractice liability concerns.

Ethical physicians who attempt to curtail unnecessary testing and treatment often have dissatisfied patients, who need only go to another doctor to get whatever test or treatment they desire.

Whether or not one favors a single-payer system politically, make no mistake that Sen. Kuehl’s proposed legislation — lacking as it does any provision for patient copayments or premiums or any external utilization controls — would dramatically increase health care costs.

http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2005/09/11/BUGIPEL7TQ1.DTL&type=business

And…

Many Adults Do Not Follow Doctors’ Recommendations for Care, Survey Shows
Kaiser Daily Health Policy Report
Sep 13, 2005

More than half of U.S. adults have previously decided not to follow treatment recommendations from their physician because they considered them “unnecessary or too aggressive,” according to a Wall Street Journal Online/Harris Interactive poll, the Wall Street Journal reports.

Poll respondents cited as the main reasons for unnecessary treatment recommendations physicians’ concerns about malpractice lawsuits (53%), physicians’ desire to earn more (45%) and physicians’ desire to meet the demands of patients (45%).

http://www.kaisernetwork.org/daily_reports/rep_index.cfm?DR_ID=32531

Comment: Supporters of the consumer-directed health care (CDHC) contend that health care costs are out of control because patients are demanding too much care. CDHC advocates contend that we will not control costs until we require patients to pay more out-of-pocket for all of this “unnecessary”
care.

Judging from this Harris poll, it appears that, in sharp contrast, patients believe that it is the physicians who are responsible for all of this “unnecessary” care. Would anyone suggest that physicians be required to share in the costs for all of this “unnecessary” testing and treatment that they are ordering for their patients?

Both theories are fundamentally flawed. Most health care spending is for beneficial services (though qualifications to this comment will not be addressed here). The excess spending that would be due to meeting unreasonable demands of patients would constitute only a minute fraction of overall spending. Likewise, most recommendations made by physicians are sincerely intended to benefit patients. Instituting financial penalties on either the patient demand side or the physician supply side would have only a very modest impact on overall health care spending. More importantly, the reduction in spending would reduce the amount of beneficial services provided. The savings would be very small, but the negative impact on health could be significant.

There are better methods of managing costs such as improving the primary care infrastructure, using capital budgets to ensure appropriate levels of capacity, and negotiating fair pricing of services and products.

Lets’ quit blaming the patients who demand too much care and doctors who are getting rich by providing too many services. Compared to the real problems with our health care system, these are almost phantom issues. Instead, let’s get on with fixing our system using sound theory and proven principles. We really can achieve health care justice for all, if we just get serious.

Medicare PPOs' gain is taxpayers' loss

Defective Design: Regional Competition In Medicare An inconsistent approach to regional competition in the Medicare Modernization Act will be very costly for taxpayers.
by Steven D. Pizer, Roger Feldman, and Austin B. Frakt
Health Affairs
August 23, 2005

Abstract:

The Medicare Prescription Drug, Improvement, and Modernization Act (MMA) of 2003 creates several new types of private insurance plans in Medicare. The most familiar of these is the preferred provider organization (PPO). Uneven application of regional bidding requirements will place new PPOs at a competitive disadvantage relative to established health maintenance organizations (HMOs). A little-noticed section of the regulations implementing MMA offsets this disadvantage and gives PPOs a strong incentive to bid in some regions, but costs to the taxpayer will be high: up to $60 billion over ten years.

http://content.healthaffairs.org/cgi/content/abstract/hlthaff.w5.399

Comment: We have been sold the concept that Medicare can improve quality and reduce costs only by introducing private plans that compete in the marketplace, competing with each other and with the traditional Medicare program. Is that really true?

Competing health plans under the Medicare + Choice program were not able to reduce costs. In fact, when it was recognized that costs were actually higher, rate increases were reduced and many plans fled the market, even though they were still receiving more funds than were paid for comparable services under the traditional program.

You would think that this failed experiment would have been enough. But no. Congress then established the Medicare Advantage program, specifically designed to be certain that PPOs would enter the private Medicare market. To ensure that private plans would be successful, Congress provided extra funds for the plans, estimated by some to be as much as 119% of the amount paid for comparable services in the traditional Medicare program.

Now we see that this was still not enough. Since it was clear that PPOs would not be able to compete with HMOs in some regions, rules were established that could result in giving PPOs an additional $60 billion in incentives to cover regions not served by HMOs.

Wouldn’t it be appropriate to ask how paying more money reduces costs? Shouldn’t we ask for an explanation of how providing extra funds to private plans creates a level playing field for competition with the traditional Medicare program?

Maybe Congress had something else in mind. Maybe they wanted to see private plans thrive, and they knew that they could not without trumping marketplace dynamics by artificially infusing extra funds into the private element of the competing programs.

Why would Congress and the administration go to such an effort and expense to support private plans? We think we know. Once such plans are commonplace, then Congress can begin a process of neglect by design, transforming the traditional Medicare program into a severely underfunded program that will satisfy no one, patients and providers alike. Once private plans predominate, the process of shifting costs to the Medicare beneficiaries through innovative product design can be accelerated. The ultimate goal is to shift the responsibility for funding health care away from the tax system and back to the individual.

Once again we’ve fallen into the trap of letting the opponents of government frame the debate. They would have us believe that only marketplace competition can improve quality and reduce costs, but by their own deliberate interference in the marketplace, they have shown us that they know that the market didn’t work.

Advocates of market competition will tell us that monopolies (single sellers) and monopsonies (single buyers) can destroy market competition by gaining exclusive control of the market. That is true, but does that mean that we would automatically receive lower quality health care at a higher cost?

Suppose that the monopsony were our own public, single payer insurance system. Wouldn’t we be in a position to demand higher quality health care than we are currently receiving? And wouldn’t we be in a position to demand fair pricing of services so that we would receive appropriate value for our health care investment?

Let’s no longer participate in the debate on health care reform as they have framed it: the failed model of market competition between health plans. Let’s move on to our framing of the debate: a single payer monopsony that provides higher quality at fair prices.

Medicare Law Prompts a Rush for Lobbyists

By Robert Pear
New York Times
August 23, 2005

WASHINGTON, Aug. 19 – The new Medicare law has touched off explosive growth in lobbying by the health care industry, whose spending on advocacy here far exceeds that of consumer groups and other industries like defense and banking.

Almost every week the federal government issues new rules or guidelines to carry out the 2003 law, which provides a drug benefit starting in January. To keep track of the new rules and to decipher their meaning is a full-time job for hundreds of lawyers and lobbyists, who regularly seek changes advantageous to their clients.

With hundreds of billions of dollars at stake, health care providers, insurers, drug makers and pharmacies are continually trying to influence rules for the drug benefit and other initiatives authorized by the law.

“You see a real surge in health care lobbying because that’s where the money is,” said Frederick H. Graefe, a lobbyist for hospitals and makers of medical equipment. “Twenty years ago the defense industry was dominant and had the most lobbyists, the big players. Now it’s health care.”

Last year alone, the health care industry spent $325 million – more than any other sector – in its efforts to influence Congress and federal agencies, according to Political Money Line, a nonpartisan group that studies reports filed with Congress by lobbyists and their clients.

Drug companies led the way. They reported spending $86.9 million on lobbying last year, followed by hospitals with $55 million and doctors with $35.4 million.

Lobbying Congress nowadays often means persuading lawmakers to make telephone calls to Bush administration officials on behalf of clients concerned about specific issues, like the Medicare payment for a drug or a medical device.

The pinpoint focus of much lobbying is illustrated by the case of Lexapro, an antidepressant made by Forest Laboratories. The Bush administration has said that Medicare drug plans must cover “substantially all” antidepressants, but not necessarily Lexapro, a drug widely prescribed for depression and anxiety among older adults. Claudia Schlosberg, a lawyer with Blank Rome who represents Forest Laboratories, has been pressing Medicare officials to reverse that decision and has obtained letters from several members of Congress supporting the company’s position in favor of covering Lexapro.

“Every health care interest has a voice on Capitol Hill,” said Elizabeth J. Fowler, a lawyer who recently left the Democratic staff of the Senate Finance Committee to join a consulting firm. “What you lose in the process is consumer and beneficiary voices. We heard a lot more from industry interests than from beneficiaries.”

Chris Jennings, who became a lobbyist after serving as health policy coordinator for President Bill Clinton, said: “The proliferation of health care lobbyists produces specialization. The broader good is often lost as people focus on next year’s Medicare reimbursement rate for a specific group of health care providers, or a regulation to be issued next month.”

The health care industry is subject to pervasive federal regulation, and the government sets prices for many goods and services provided to the elderly under Medicare. But the Bush administration and the Republican majority in Congress are receptive to advice from the industry, including private insurers who will deliver the drug benefit.

“The success of the new Medicare law depends on a robust partnership between government and the private sector,” said Stacey Hughes, a partner in the lobbying firm established by former Senator Don Nickles, Republican of Oklahoma.

Health policy experts and officials said the growth of health care lobbying reflected several trends:

* Congress earmarks more and more money each year for specific hospitals, medical schools and health care projects. Health care providers and local officials have a better chance to obtain such largess if they retain lobbyists to plump for their projects on Capitol Hill.

* Lobbying has become more substantive. To buttress their arguments, lobbyists need data, cost estimates and economic analyses of health policy proposals. They retain expert consultants to prepare such reports.

* Lobbyists have adopted many techniques of political campaigns. They hire pollsters and buy advertising to sway public opinion and pressure Congress.

* Many lobbyists have carved a niche for themselves by focusing on one party, one house of Congress, one Congressional committee or a handful of influential lawmakers.

Carol A. McDaid, a health care lobbyist at Capitol Decisions, a subsidiary of the Van Scoyoc Companies, said, “It’s become so sophisticated that, in preparation for a critical vote, a big health care or pharmaceutical company will hire a different firm to lobby each key member of an important committee, like the Ways and Means Committee.”

The Pharmaceutical Research and Manufacturers of America reported spending $15.5 million on lobbying last year, while two of its members, Pfizer and Bristol-Myers Squibb, spent $5.6 million apiece and Johnson & Johnson spent $4.5 million.

Other heavyweight lobbies included the American Medical Association, which spent $18.5 million last year, and America’s Health Insurance Plans, which spent $5.6 million, about the same amount as the Blue Cross and Blue Shield Association.

By contrast, AARP, the lobby for older Americans, spent $8 million. The American Cancer Society spent $2.6 million, the American Heart Association spent $1 million and Families USA, the liberal group that calls itself a voice for health care consumers, reported spending $40,000.

Alan B. Mertz, president of the American Clinical Laboratory Association, said the advocacy budget for his group had more than tripled, to $2.5 million this year from $750,000 in 2002. “We had to beef up our advocacy to deal with threats to our Medicare reimbursement,” Mr. Mertz said, noting that Medicare payments for laboratory tests had been frozen through 2008.

Lobbyists said it made sense for their clients to pour money into lobbying because so much money was at stake. Health care accounts for more than 15 percent of the nation’s economy, and private insurers often look to Medicare as a guide in deciding what services to cover and how much to pay.

Moreover, the federal role is growing. Medicare and Medicaid will account for 37 percent of all spending on prescription drugs next year, up from 20 percent this year, said Stephen Heffler, an economist at the federal Centers for Medicare and Medicaid Services.

The Bush administration and the Congressional Budget Office say Medicare will spend more than $1 trillion on prescription drugs in the next 10 years, with outlays topping $100 billion a year after 2009.

Two linguistic changes show how health care lobbyists have emerged as a potent force. Lobbyists and trade associations, once seen as special interests, are now called “stakeholders,” with a legitimate claim to be heard in the policy-making process.

“Expanding coverage” used to mean providing health insurance to people who had none. But lobbyists now use the term in a different sense. When they speak of “coverage expansions,” they mean that Medicare should cover, or pay for, new technology like PET scans, implantable defibrillators and drug-coated stents to treat clogged arteries.

Political campaign contributions are frequently coordinated with lobbying campaigns. Lobbyists often hold fund-raisers at the request of members of Congress, as allowed by campaign finance laws. They are expected to contribute money from their own pockets and to raise money from clients.

“You increase your influence and access by doing fund-raisers,” said James C. Pyles, a lawyer and lobbyist for psychoanalysts and home care agencies. “If you’re not on the donor list, you don’t have much access.”

Ms. McDaid, who lobbies for hospitals and ambulance companies, said: “In the old days, the requests for political giving went mainly to your clients’ political action committees. Now health care lobbyists have to tithe personally. The bigger your client base, the more pressure there is to give. It’s not unusual for a lobbyist at a big firm to give $25,000 to $50,000 in personal contributions to Congressional candidates in a two-year election cycle.”

The growing prominence of health care issues on the national agenda has created an unquenchable demand for lobbyists. New issues include bioterrorism, stem cells, health information technology, the privacy of medical records, television advertising of prescription drugs and the importing of drugs from Canada.

Republicans are in demand at lobbying firms and trade associations, but so are knowledgeable Democrats.

John E. McManus, who formed his own lobbying firm after working for Republican members of the House Ways and Means Committee, received a total of $620,000 last year from the American Medical Association, the Advanced Medical Technology Association, the Pharmaceutical Research and Manufacturers of America and several drug companies, including Merck and Genentech. Mr. McManus can help them navigate the new Medicare law because, as a Congressional aide, he helped write it.

On the other side of the political spectrum, David H. Nexon, a health policy adviser to Senator Edward M. Kennedy for more than two decades, stepped down in February to become senior executive vice president of the Advanced Medical Technology Association, the lobby for makers of medical devices like Medtronic and Guidant.

Charles M. Brain, director of legislative affairs for President Clinton, reported that he got $240,000 last year for representing the Pharmaceutical Research and Manufacturers of America. Stephen J. Ricchetti, deputy chief of staff in the Clinton White House, lobbies for Eli Lilly & Company, Novartis and Pfizer.

Richard J. Pollack, executive vice president of the American Hospital Association, said health lobbying had become more partisan.

“We hire Republicans to lobby Republican members of Congress and Democrats to work Democratic offices,” Mr. Pollack said.

The Generic Pharmaceutical Association has retained Mr. Jennings and Mark W. Isakowitz to lobby for legislation to increase the use of generic drugs. As a White House aide, Mr. Jennings helped devise the Clinton plan for universal health insurance. As a lobbyist at the National Federation of Independent Business, Mr. Isakowitz, a Republican, helped defeat the Clinton plan.

As the costs of Medicare and Medicaid soar, federal prosecutors and members of Congress are investigating fraud and abuse with new zeal. Many health care companies find they need more lawyers and lobbyists to cope.

In a recent advertisement recruiting lawyers for its Washington office, Sidley Austin Brown & Wood, one of the nation’s largest law firms, said its health care practice had “experienced tremendous growth.”

Pharmaceutical Industry Spent $800 million on Lobbying over 7 years, Report States

Kaiser Daily Health Policy Report
08 Jul 2005

The pharmaceutical industry spent $800 million on federal lobbying and campaign contributions over the last seven years, according to a report released Wednesday by the… Center for Public Integrity, Bloomberg/Philadelphia Inquirer reports. CPI reviewed more than 5,500 lobbying disclosure reports filed with the Senate Office of Public Records (Hallam, Bloomberg/Philadelphia Inquirer, 7/7). CPI found that the industry spent $116 million on lobbying and political campaigns in 2003, when Congress approved the prescription drug benefit under Medicare that bars HHS from negotiating drug prices with the industry. The industry spent $128 million in 2004 to lobby for such measures as tax breaks as part of a corporate tax relief bill (Freking, AP/Long Island Newsday, 7/7). CPI said the industry also has lobbied to weaken FDA enforcement, strengthen patent protections and extensions and receive tax credits (CQ HealthBeat, 7/6). In addition, the report stated that the pharmaceutical industry employs 1,291 registered lobbyists — more lobbyists in Washington, D.C., than any other industry — more than half of whom were former U.S. officials (Bloomberg/Philadelphia Inquirer, 7/7). CPI found that more than 3,000 people over the past seven years have lobbied for the industry, including 75 former lawmakers. Those lawmakers include former Sens. Bob Dole (R-Kan.) and Lloyd Bentsen (D-Texas), former Reps. Bob Livingston (R-La.) and Tom Foley (D-Wash.) and current Pharmaceutical Research and Manufacturers of America President Billy Tauzin (R-La.) (AP/Long Island Newsday, 7/7). According to Bloomberg/Inquirer, Tauzin was a “key architect” of the 2003 Medicare law. The report is part of CPI’s yearlong investigation of pharmaceutical industry lobbying and campaign financing. CPI last week published a report that found drug makers have spent more time attempting to influence the U.S. Trade Representative’s Office than FDA. CPI also examined the number of warning letters FDA sent to drugmakers from 1997 to 2004 and found that the number decreased by 84% from 140 to 23 (Bloomberg/Philadelphia Inquirer, 7/7).

Reaction
Roberta Baskin, executive director for CPI, said, “It is astonishing to learn that no other interest has spent more money to sway public opinion in this time period.” Baskin added, “We are not accusing drug companies of wrongdoing; however, we do believe that such financial success deserves close scrutiny” (CQ HealthBeat, 7/6). Ken Johnson, senior vice president for PhRMA, said the report was “clearly biased and one-sided” and did not recognize that “medicines researched and developed by America’s biopharmaceutical research companies save lives and improve the quality of life for tens of millions of patients from around the world” (AP/Long Island Newsday, 7/7). Johnson added that the tax credits the industry receives do not constitute a major subsidy. Johnson said, “Today’s regulations and laws encourage companies to take risks as they pursue cutting-edge research and spend nearly $50 billion a year to develop new and better medications.” Dan Eramian — vice president for communications for the Biotechnology Industry Organization, which is headed by former Rep. Jim Greenwood (R-Pa.) — said that “having a staff with legislative experience to understand the black box of D.C. is a good thing” (CQ HealthBeat, 7/6). The report is available online.

Drug Lobby Second to None

How the pharmaceutical industry gets its way in Washington
Special Report

By M. Asif Ismail

WASHINGTON, July 7, 2005 — The pharmaceutical and health products industry has spent more than $800 million in federal lobbying and campaign donations at the federal and state levels in the past seven years, a Center for Public Integrity investigation has found. Its lobbying operation, on which it reports spending more than $675 million, is the biggest in the nation. No other industry has spent more money to sway public policy in that period. Its combined political outlays on lobbying and campaign contributions is topped only by the insurance industry.

The drug industry’s huge investments in Washington—though meager compared to the profits they make—have paid off handsomely, resulting in a series of favorable laws on Capitol Hill and tens of billions of dollars in additional profits. [See What the Industry Got.] They have also fended off measures aimed at containing prices, like allowing importation of medicines from countries that cap prescription drug prices, which would have dented their profit margins. Pfizer, the world’s largest drug company, made a profit of $11.3 billion last year, out of sales of $51 billion.

The industry’s multi-faceted influence campaign has also led to a more industry-friendly regulatory policy at the Food and Drug Administration, the agency that approves its products for sale and most directly oversees drug makers. [See FDA: A Shell of its Former Self]

Most of the industry’s political spending paid for federal lobbying. Medicine makers hired about 3,000 lobbyists, more than a third of them former federal officials, to advance their interests before the House, the Senate, the FDA, the Department of Health and Human Services, and other executive branch offices.

In 2003 alone, the industry spent nearly $116 million lobbying the government. That was the year that Congress passed, and President George W. Bush signed, the Medicare Modernization Act of 2003, which created a taxpayer-funded prescription drug benefit for senior citizens.

That figure was not anomalous. In 2004, drug makers upped their reported expenditures on lobbyists to $123 million, a record amount for the industry. Of the 1,291 lobbyists who were listed that year as prepresenting pharmaceutical corporations and their trade groups, some 52 percent were former federal officials.

By adding the benefit to Medicare, the government program that provides health insurance to some 41 million people, the industry found a reliable purchaser for its products. Thanks to a provision in the law for which the industry lobbied, government programs like Medicare are barred from negotiating with companies for lower prices.

Critics charge that the prescription drug benefit will transfer wealth from taxpayers, who provide the funding for Medicare, to pharmaceutical firms. According to a study done in October 2003 by Boston University professors Alan Sager and Deborah Socolar, 61 percent of Medicare money spent on prescription drugs will become profit for drug companies. Drug-makers will receive $139 billion in increased profits over eight years, the study predicts. The Medicare prescription drug benefit starts in 2006.

America the lucrative
The U.S. government contributes more money to the development of new drugs—in the form of tax breaks and subsidies—than any other government. Of the 20 largest pharmaceutical corporations, nine are based in the United States. Yet drugs are more expensive in the United States than in any other part of the world, and global drug companies make the bulk of their profits in the United States.

Many blame the industry’s clout in Congress and with the executive branch for the high price of drugs. While many governments worldwide have regulated drug prices, the industry has been able to block a host of measures aimed at controlling prices in the United States. In the past few years, the industry has mounted an effective, organized campaign against legalizing importation of drugs from Canada.

As the Center reported in January, the industry trade group, Pharmaceutical Research and Manufacturers of America, hired a former U.S. ambassador to Canada, Gordon Giffin, and his top aide to lobby the Canadian government on the issue. The industry’s pressure may be paying off. Last week, Canadian Health Minister Ujjal Dosanjh announced that his government would ban the bulk export of prescription drugs and crack down on Internet pharmacies that sell drugs to Americans.

A spokesman for PhRMA, Jeff Trewitt, told the Center in January that price controls thwart innovation and importation of drugs pose serious health risks.

The top 20 drug corporations and the industry’s two trade groups, PhRMA and the Biotechnology Industry Organization, which represents biomedicine companies, disclosed lobbying on more than 1,600 bills between 1998 and 2004. They may have lobbied on far more bills; the Center could only count bills specifically mentioned by the companies and trade groups in their filings. In many cases, lobbyists list issues, like “animal health issues,” rather than specific bills. In counting the number of bills, the Center excluded those lobbied on by BIO that relate solely to biotechnology issues, such as genetically engineered foods.

Apart from Congress, the industry lobbied an array of agencies including the Department of Health and Human Services, the Food and Drug Administration and the State Department on dozens of issues. For instance, PhRMA lobbied 33 federal agencies on 39 issues separately identified under the Lobbying Disclosure Act of 1995.

As the Center reported last week, the agencies include the Office of the U.S. Trade Representative, which shapes the country’s trade agreements with other nations. Since 1998, it has filed 59 lobbying reports concerning the USTR, more than any other lobby or interest.

In recent years, the industry has shown significant power in influencing U.S. trade policy. For example, current drafts of the Dominican Republic-Central American Free Trade Agreement reflect PhRMA’s desire to remove price controls on drugs and provide intellectual property protection in proposed member countries. Recently, the USTR, at the behest of the pharmaceutical industry, pressured Guatemala into repealing a recently passed law permitting wider marketing of generic drugs.

The top 20 corporations and the trade groups reported spending nearly $478 million on lobbying, or nearly 70 percent of all the money the industry reported. These corporations had roughly 64 percent of the global market share, according to IMS Health, a private consulting company that studies the industry.

Congress is most frequently listed as a target of the industry’s lobbying attentions; contacts with the House or Senate are listed on about 5,500 lobby disclosure reports. The Department of Health and Human Services, the Centers for Medicare and Medicaid Services, the Food and Drug Administration and the Executive Office of the President are other agencies heavily lobbied by the industry.

Like other well connected interests in Washington, pharmaceutical firms look to former insiders to carry their message to Congress and executive branch officials. In May 2003, as the battle over the Medicare legislation was climaxing, the Pharmaceutical Research and Manufactures of America, the industry trade group, hired the newly formed lobby shop of Larson Dodd, LLC to join its already formidable army of representatives swarming the hallways of Congress. The hiring of Dave Larson and Quin Dodd by PhRMA—and later by Wyeth and other drug manufactures—was in keeping with the industry’s standard operating procedure: employing former officials to lobby on bills sponsored by their ex-bosses.

Larson was a health policy advisor to Senate Majority Leader Bill Frist, the chief sponsor of a Medicare bill that, six months later, would become law, with potentially tens of billions of dollars of windfall for the drug companies. Dodd is a former legislative director to Sen. Kay Bailey Hutchison, the fourth ranking Republican in the upper chamber.

A third of all lobbyists employed by the industry are former federal government employees, including more than 15 former Senators and more than 60 former members of the U.S. House of Representatives. The two trade groups, PhRMA and BIO, are headed by two influential former members of Congress. PhRMA chief Billy Tauzin and BIO president Jim Greenwood were on committees that regulated drug companies and they each sponsored several bills related to the industry.

The Center reviewed the 1,600 plus bills the top 20 drug corporations and PhRMA and BIO lobbied. Sponsors of more than 50 percent of those bills had one or more former staff members representing the industry. A few of the sponsors have gone on to become lobbyists themselves.

Political giving
In addition to hiring former members and their staffs, the industry has also helped keep lawmakers in office by making political contributions. Since the 1998 election cycle, employees of the pharmaceutical and health product industry, their family members and industry political action committees have given $133 million in campaign contributions to candidates running for federal and state offices, according to the Center for Responsive Politics. Since 2000, the top drug corporations and their employees and PhRMA gave more than $10 million to 527 organizations, tax-exempt political committees which operate in the grey area between federal and state campaign finance laws.

Nearly $87 million of the contributions went to federal politicians in campaign donations, with almost 69 percent going to Republican candidates. Top recipients of the industry’s campaign money include President George W. Bush (upwards of $1.5 million) and members who sit on committees that have jurisdiction over pharmaceutical issues.

In the states, the industry gave more than $46 million to candidates since ’98, according to the Institute on Money in State Politics, which tracks campaign finance at the state level.

The Center could not determine the amount drug interests spent on lobbying in states because of the lack of comparable state disclosure requirements for expenditures. But their lobbying, campaign donations and grassroots efforts have taken on an added dimension because many states are threatening the industry’s high profit margins in a way the federal government and Congress have been unwilling to do.

With states running into fiscal crises, several governors and legislatures have been exploring ways to contain drug prices. Among the several options that have been considered around the country include allowing seniors and others to legally buy drugs from Canada and other countries.

Though some states have been less amenable to drug industry pressure, the drug industry hasn’t given up the fight. For Washington’s biggest spending lobby, it’s a small investment to make for its continuing prosperity.

Victoria Kreha, Alexander Cohen, Kevin Boettcher and Emily McNeill contributed to this report.

Medicare PPOs’ gain is taxpayers’ loss

Defective Design: Regional Competition In Medicare An inconsistent approach to regional competition in the Medicare Modernization Act will be very costly for taxpayers.
by Steven D. Pizer, Roger Feldman, and Austin B. Frakt
Health Affairs
August 23, 2005

Abstract:

The Medicare Prescription Drug, Improvement, and Modernization Act (MMA) of 2003 creates several new types of private insurance plans in Medicare. The most familiar of these is the preferred provider organization (PPO). Uneven application of regional bidding requirements will place new PPOs at a competitive disadvantage relative to established health maintenance organizations (HMOs). A little-noticed section of the regulations implementing MMA offsets this disadvantage and gives PPOs a strong incentive to bid in some regions, but costs to the taxpayer will be high: up to $60 billion over ten years.

http://content.healthaffairs.org/cgi/content/abstract/hlthaff.w5.399

Comment: We have been sold the concept that Medicare can improve quality and reduce costs only by introducing private plans that compete in the marketplace, competing with each other and with the traditional Medicare program. Is that really true?

Competing health plans under the Medicare + Choice program were not able to reduce costs. In fact, when it was recognized that costs were actually higher, rate increases were reduced and many plans fled the market, even though they were still receiving more funds than were paid for comparable services under the traditional program.

You would think that this failed experiment would have been enough. But no. Congress then established the Medicare Advantage program, specifically designed to be certain that PPOs would enter the private Medicare market. To ensure that private plans would be successful, Congress provided extra funds for the plans, estimated by some to be as much as 119% of the amount paid for comparable services in the traditional Medicare program.

Now we see that this was still not enough. Since it was clear that PPOs would not be able to compete with HMOs in some regions, rules were established that could result in giving PPOs an additional $60 billion in incentives to cover regions not served by HMOs.

Wouldn’t it be appropriate to ask how paying more money reduces costs? Shouldn’t we ask for an explanation of how providing extra funds to private plans creates a level playing field for competition with the traditional Medicare program?

Maybe Congress had something else in mind. Maybe they wanted to see private plans thrive, and they knew that they could not without trumping marketplace dynamics by artificially infusing extra funds into the private element of the competing programs.

Why would Congress and the administration go to such an effort and expense to support private plans? We think we know. Once such plans are commonplace, then Congress can begin a process of neglect by design, transforming the traditional Medicare program into a severely underfunded program that will satisfy no one, patients and providers alike. Once private plans predominate, the process of shifting costs to the Medicare beneficiaries through innovative product design can be accelerated. The ultimate goal is to shift the responsibility for funding health care away from the tax system and back to the individual.

Once again we’ve fallen into the trap of letting the opponents of government frame the debate. They would have us believe that only marketplace competition can improve quality and reduce costs, but by their own deliberate interference in the marketplace, they have shown us that they know that the market didn’t work.

Advocates of market competition will tell us that monopolies (single sellers) and monopsonies (single buyers) can destroy market competition by gaining exclusive control of the market. That is true, but does that mean that we would automatically receive lower quality health care at a higher cost?

Suppose that the monopsony were our own public, single payer insurance system. Wouldn’t we be in a position to demand higher quality health care than we are currently receiving? And wouldn’t we be in a position to demand fair pricing of services so that we would receive appropriate value for our health care investment?

Let’s no longer participate in the debate on health care reform as they have framed it: the failed model of market competition between health plans. Let’s move on to our framing of the debate: a single payer monopsony that provides higher quality at fair prices.

President Bush on 9/11

The White House
September 10, 2005
President’s Radio Address

On Sunday, our nation will observe the fourth anniversary of the September the 11th terrorist attacks. Every American has memories of that day that will never leave them. We remember the images of fire and terror at the Pentagon, in Pennsylvania, and in the heart of New York City.

We remember the ruthlessness of those who murdered the innocent and took joy in their suffering. We remember the courage of the police and firefighters and rescue personnel who rushed into burning buildings to save lives, knowing they might never emerge. And we remember the victims — moms and dads, sons and daughters, brothers and sisters, husbands and wives — and the loved ones they left behind.

As night fell on America on September the 11th, 2001, we felt grief and great sorrow. Yet we also saw that, while the terrorists could kill the innocent, they could not defeat the spirit of our nation. The despair and tragedy of that day were overcome by displays of selflessness, courage and compassion.

Today, America is confronting another disaster that has caused destruction and loss of life. This time the devastation resulted not from the malice of evil men, but from the fury of water and wind.

Our greatest resource in such times is the compassionate character of the American people, because even the most destructive storm cannot weaken the heart and soul of our nation.

http://www.whitehouse.gov/news/releases/2005/09/20050910.html

Comment: Today we all mourn the terrible tragic loss of 3000 lives on 9/11/01. Mere words cannot express our thoughts…

In the two months following 9/11/01, another 3000 American lives were lost… merely due to the delay in access to health care because of lack of health insurance. A few of us also mourn that tragic loss… and the loss of another 3000 lives the following two months… and another 3000 the two months after that… and… and…

Since 9/11/01, twenty-four times we have duplicated the tragic loss of 3000 lives.

Is the “compassionate character of the American people” solely dependent on television images from CNN or Fox News? Does “the heart and soul of our nation” really require electronic cable feed for sustenance?

Should a city council set health policy?

Hospitals defeated in bid to block rival
By Darrell R. Santschi
The Press-Enterprise
September 7, 2005

More than a month into one of the most bitterly divisive public debates in Loma Linda’s 35-year history, three City Council members voted Tuesday night to issue a permit to build a specialty hospital here.

In so doing, Mayor Floyd Petersen and Councilmen Charles Umeda and Robert Christman rejected a consortium of area community hospitals’ argument that it was up to the city to prevent the specialty hospital from “cherry picking” patients for lucrative surgical procedures, which the hospitals say will jeopardize their emergency and indigent care.

The 28-bed California Heart and Surgical Hospital is to be built at the northeast corner of Barton Road and New Jersey Street, not far from two of the proposal’s biggest detractors: Redlands Community Hospital and Loma Linda University Medical Center.

In the end, the three council members said they didn’t see it as their responsibility to settle issues that they say the state and federal governments should be addressing.

At the Aug. 23 hearing, Dr. William Plested, president-elect of the American Medical Association, contended that specialty hospitals force nonprofit general hospitals to innovate.

http://www.pe.com/localnews/inland/stories/
PE_News_Local_C_hospital07.13717ca7.html

Comment: Just imagine that the $1.9 trillion that we are already spending on health care was in a single, taxpayer-funded pool. That’s not a far reach of imagination since 60% of that spending is already through the tax system.
As taxpayers, what would we want the stewards of our health care system to do in this situation?

Would we want our cardiac surgery services for our community to be delivered in a full-service, tertiary-level, not-for-profit Center of Excellence, or would we want to have our cardiac surgery done in a limited facility, devoid of other hospital support services, and managed with the primary intent of maximizing profit for passive investors?

What about joint replacement? If something went wrong, perhaps resulting in renal shutdown, does it seem reasonable that you would have to be transferred, while critically ill, to a real, full-service hospital, one with a renal team that could better manage your complication?

We would never allow our public funds to be placed in the hands of special interests more concerned about profit than the public good. We would demand regional planning to enable optimal use of our finite resources. What is ironic is that we are not already making this demand, but that has more to do with our current, inefficient, fragmented system of funding care. There are far better systems that would greatly improve our resource allocation; single payer certainly comes to mind.

AMA president-elect William Plested, himself a cardiovascular surgeon, seems to suggest that the technological innovations developed in our academic medical centers could continue to take place only if dollars are drained from our system to support highly profitable, private, special interests, competing in the marketplace, entities that are relieved of any obligation to provide emergency, indigent or other money-losing services. What nonsense.

Once again, the AMA demonstrates that we should not look to it for leadership in solving the problems of our health care crisis. The PNHP voice is needed now, more than ever.

Garamendi's "Priced Out"

Priced Out
Health Care in California
2005
John Garamendi, Insurance Commissioner

Table of Contents

Chapter 1
The State of California Health Care:

* The National Context
* Crisis in Health Insurance: Skyrocketing Health Insurance Premiums
* Crisis in Health Insurance: Paying More for Reduced Coverage
* Health Costs and the Economy
* Crisis in Health Insurance: Growing Uninsured Overall, Greater Reliance on Public Safety Net
* What Happens to the Uninsured?
* Health Status is Declining in California
* California Faces Unique Challenges in Public Health Care Funding Including Lack of Federal Support
* Health Care Quality and Cost Containment

http://www.insurance.ca.gov/PRS/PRS2005/priced-out-health-care-in-california.pdf

Comment: This certainly is not an exciting or provocative quote. So why was it selected?

The first chapter of “Priced Out” describes the health care problems in California, but in a national context. With over 12% of the nation’s population, California exemplifies the national problems and our failures to address them.

This first chapter serves as an excellent, stand-alone report of the some of the more important deficiencies of our entire health care system. We cannot hope for reasonable solutions unless we understand the problems. This report provides a foundation for that understanding. You should consider downloading the first chapter (if not the entire report) for use in your activism for reform.

The report is peppered with specific recommendations that some might describe as incremental tweaking of the system. They should not be lightly dismissed since many of the recommendations would be of value in a universal system of funding health care.

Although some might be distracted by these specifics, Garamendi does list his overriding health care principles. His first principle: “Universal health care coverage is the only real answer.”

The first chapter makes it very clear that the complexities of our dysfunctional system cannot be adequately addressed by simple measures that merely tweak the system, as important as they are. Thorough restructuring of the way that we fund health care will be required to achieve equitable, affordable, comprehensive health care for everyone.

The Lagging Poor

Washington Post
Editorial Page
Tuesday, September 6, 2005

THe poverty level edged up last year, to 12.7 percent — the fourth straight annual increase. Overall median income remained flat at $44,389, down 3.8 percent from its peak in 1999. This is a robust economic recovery?

The Census Bureau’s annual report on income, poverty and health insurance in the United States is not alarming — but neither is it cheering, or even reassuring. Rather, the numbers underscore the lagging and uneven nature of the economic recovery since the 2001 recession. According to the new data, 4 million more people were living in poverty in 2004 than in 2001, and 4.6 million more people lacked health insurance.

Administration officials counsel patience, pointing to the downturn of the 1990s, when it took several years for the poverty rate to start to fall. “The last, lonely trailing indicator of the business cycle,” Commerce Department official Elizabeth Anderson said of the poverty rate.

This has about it more than a whiff of wishful thinking. For one thing, the increase in poverty between 2003 and 2004 is in fact out of the ordinary; such a rise hasn’t happened between the second and third years of an economic recovery since the federal government began collecting poverty data in 1960. For another, the poverty rate may be a lagging indicator, but in this case it’s not lonely: See, for example, the median income of working-age households, which declined 1.2 percent.

Another ominous signal involves health insurance coverage. Although the percentage of people with coverage remained unchanged from 2003 to 2004, that masked a shift from employer-provided insurance to government coverage. The percentage of people with employer-based health insurance fell for the fourth year in a row. Most of this slack has been taken up by Medicaid, the shared federal-state health program for the poor and disabled. But with state budgets under increasing strain from Medicaid costs and with Congress poised to make cuts in the program, it’s not at all certain that states will be willing or able to maintain coverage for working Americans hovering at the edge of poverty.

In the wake of this data and the devastation caused by Hurricane Katrina, Senate Majority Leader Bill Frist (R-Tenn.) was wise to postpone this week’s planned vote to repeal the estate tax. Lawmakers need to remember in the weeks to come that this is an economic recovery that continues to leave too many Americans behind.