PNHP

WMC Wrong on Health Care and Attorneys

WMC Wrong on Health Care and Attorneys

By Jack E. Lohman
8/30/2005

Somehow it doesn’t surprise me that Wisconsin Manufacturers Commerce opposes the recent state Supreme Court decision that declared the limits on malpractice awards unconstitutional and that lead paint trials can move forward. WMC was extremely quick to take the side of its business, health care and insurance members, but to the detriment of the public. WMC is wrong on a number of accounts.

Indeed the malpractice and health care systems need fixing, but removing physician and hospital accountability and victim protection is not the way to do it. Two wrongs don’t make a right, though it does get certain WMC members off the hook at the expense of their business members and the public.

Let’s dispense with a major myth: it is true that health care costs are rising at five times the rate of inflation, but the malpractice industry is not the monster driving the system. Having been a health care provider for 25 years before retiring in 2004, I’m as testy toward trial lawyers as the next guy. But this one is not their doing, and WMC should look inward to its own health care members for the solution.

Malpractice awards have remained essentially flat for five years at less than 0.5% of our state’s total health care costs. But insurance premiums have soared by 120% because of a runaway insurance industry that is allowed to make up its losses incurred elsewhere. Besides, only 9 awards in the last 10 years exceeded the cap we would have had in place. Most awards are settled out of court because doctors won’t testify against doctors.

Rising health care costs are the result of only one thing, a medical community that has switched from being humanitarian centers to for-profit corporations. The industry is running amok. They are inefficiently operated and they love it, because inefficiency is where they make their profits.

Both Medicare and private insurers are incurring 20% to 30% of their costs from unnecessary and inappropriate medical testing, and another 30% in exorbitant administrative waste (compared to Canada’s 8% and Medicare’s 3.5%). Wisconsinites are supporting 400 for-profit insurance companies compared to the ONE non-profit in each Canadian province.

It is true that jobs are leaving Wisconsin, but it’s because of runaway health costs and not because of attorneys. That will not change under the Supreme Court ruling. If WMC really wants to get behind its manufacturing members (and the public at the same time), it will sideline its health care and insurance members and support a universal health care system like that in Canada, one which would also cover the 15% of our uninsured population.

To cover health care costs in Canada, their employers pay only a small per-employee tax of $800 and the taxpayers pick up the rest. They use one medical administrator, like Medicare uses WPS in our state. All physicians and hospitals remain independent and patients keep their physician choice.

We don’t have to have the wait times that they do; we don’t with Medicare and we can properly fund any universal system we develop. Over 90% of Canadian patients prefer their system to ours, and only a handful per year come to the states to speed up elective surgeries. Another handful of physicians move south because they can become millionaires here and not there.

So what would happen with the jobs WMC claims will leave the state? With a repaired health care system the nation’s second-highest health care costs would drop to the lowest, our malpractice costs would remain at the lowest in the nation, more manufacturers would move to and stay in Wisconsin, workers would immigrate and state tax revenues would increase, unemployment would decrease, WMC membership would increase, and patients would increase for the medical community.

So, WMC, what’s not to like about this fix?

Lohman is a retired business owner, is volunteer director of www.WiCleanElections.org and can be reached at jlohman@execpc.com

Mass voters may get a new angle on health care

Health Reform Program report makes the case for single-payer program
By Rebecca Lipchitz
BU Today
August 31, 2005

A once unpopular plan for health care reform in Massachusetts is gaining support from legislators and with an upcoming vote on an amendment to the state constitution, it may have a new chance to enter the spotlight.

The plan calls for a single-payer health care system, and Alan Sager, an SPH professor, and Deborah Socolar, an SPH health sciences project manager, hope Massachusetts voters will support it. Sager and Socolar codirect the BU-based Health Reform Program. Their recent report, titled $1 Billion Per Week is Enough, asserts that the money wasted on health care overhead and other unnecessary costs in Massachusetts would cover the health care costs of every resident.

As many as 10 percent of the Commonwealth’s more than six million residents are uninsured, yet individuals and businesses spend $52.7 billion a year on health care, according to the report, which served as testimony on behalf of Senate Bill 755. The proposal to establish the Massachusetts Health Care Trust is now in the lap of the Joint Committee on Health Care Financing.

The proposal would cover all the state’s residents and contain costs by allowing doctors to manage the budget, but not benefit from it. One budget would compensate doctors, another would go toward health care expenses. Doctors would manage only the latter. A large portion of excess cost in the current health care system is paperwork, Sager says, “and the mistrust is the largest source of paperwork. The clerks and the doctors and hospitals fighting insurance companies are not adding an ounce to human health or security. Only when doctors have to make tradeoffs will they have the ability and willingness to weed out clinical waste.”

In the past, such effective solutions lacked political support. “What won’t work can pass,” he says, “but what will work won’t pass.” But efforts to reform the Massachusetts health care system could take an unexpected turn this fall.

An amendment that would require the Commonwealth to provide health insurance to all residents passed overwhelmingly at last year’s constitutional convention. If the amendment passes again at this year’s convention, scheduled for September 14, it would be put before the voters. (Proposed amendments must be approved twice by the legislature before being placed on a ballot.) If voters endorse it, the Commonwealth must find a plan to achieve it. New debates on how to best cover all residents would be sparked, giving new relevance to ideas once cast aside.

The proposal to establish a Health Care Trust is not the first attempt to create a single-payer health care system in Massachusetts, but the idea has not always been marketed very well, Sager says. “The phrase ‘single-payer’ is four syllables,” he says, “and includes two of the most unpopular words in America.” But such a solution is increasingly relevant, according to bill cosponsor Senator Steven Tolman (D-Boston).

“Once you hear the facts about what’s going on in our health care system, you don’t have to be a rocket scientist to realize that we have a major problem,” Tolman says “A third of our dollars are not going to direct care.”

In addition to covering all residents, regardless of whether they can afford it, a single-payer system has other benefits, such as taking the pressure off businesses and municipal governments to provide health benefits and unemployment insurance.

Tolman, who has supported a single-payer solution in the past, says the public is likely to accept such a measure only incrementally. “People are afraid of change,” he says. “We know that, but the work [Sager and Socolar] have done has clearly given us the evidence that the money is in the system.”

CBO: The Price Sensitivity of Demand for Nongroup Health Insurance

The Price Sensitivity of Demand for Nongroup Health Insurance
Congressional Budget Office
August 2005

This paper examines the sensitivity of decisions to purchase insurance in the individual, or “nongroup,” insurance market to the price of that insurance-a central aspect of tax credits and other price-based incentives to stimulate the purchase of private health insurance. The paper focuses on those without access to group insurance through an employer-in other words, those for whom nongroup insurance may be the only coverage option. Surveys by the Census Bureau and others help identify such people and allow an examination of their economic and demographic characteristics. However, those surveys do not contain information on the potential premium (or price) of insurance for those who do not purchase it.

This paper uses two alternative methods to estimate that premium for single workers partly on the basis of information about their health status. It then uses exogenous differences in insurance premiums attributable to (1) the tax deductibility of premiums for self-employed individuals and (2) the effect of state-level premium compression and community rating regulations to estimate the responsiveness of otherwise similar people to different levels of price. Using a reduced-form ordinary least squares (OLS) regression model, this analysis estimates a price elasticity of demand for health insurance of -0.57. For example, a 10 percent reduction in insurance premiums is estimated to result in a 5.7 percent increase in health insurance coverage in the nongroup market in our sample of single workers, 16 percent of whom had nongroup coverage at the time of the survey in 2002. Analyses of poor and less-healthy subgroups find largely insignificant results, though the less-healthy appear to be less responsive to premium changes than the more-healthy.

http://www.cbo.gov/ftpdocs/66xx/doc6620/08-24-HealthInsurance.pdf

Comment: Sorry to distribute a message that’s nearly lost in technical jargon, but this one is important.

Most current administration efforts to adopt policies that would reduce the numbers of uninsured are targeted toward the individual insurance market. In order to make premiums affordable, tax credits have been proposed. This study confirms, once again, that reducing premium costs for individuals, through the tax system, will have very little impact in reducing the numbers of uninsured.

The importance of this study is that in our debates we can now say, “The Congressional Budget Office says that tax credits won’t work! Now let’s talk instead about reform that really will work!”

Even the insured can buckle under health care costs

Some make ends meet by forgoing treatment
By Julie Appleby
USA TODAY
August 31, 2005

Medical progress has helped Americans live longer, but the exploding cost of those breakthroughs has polarized the nation: More than one in four Americans are faltering under the burden of health costs, while almost half — those lucky enough to be healthy or wealthy — are untouched.

The rest are a mix of those who say they worry about whether they will be able to pay routine medical bills in the future and those who have already started cutting corners — skipping treatments or not taking prescriptions — because of the costs.

Other findings from a nationwide survey of adults by USA TODAY, the Kaiser Family Foundation and Harvard School of Public Health show that medical inflation is creating financial problems even for those who most assume should be able to handle the costs — those with health insurance.

Sixty-two percent of those struggling to pay medical bills have health insurance, underscoring how increasing premiums, deductibles and gaps in coverage are affecting families.

The survey, a wide-ranging look at the impact of medical costs on the nation’s families, found that 28% of adults were unable to pay for some form of medical care in the past year. That’s nearly double the 15% who reported such a problem in 1976.

Medical costs are a growing burden for middle-income families with children, as well as for the working class, people with chronic illnesses, the disabled and the uninsured. Many who cannot pay skimp on health care, go without prescription drugs or simply ignore their bills, the survey showed.

“The cost of health care is going up much faster than people’s wages,” says Drew Altman of the Kaiser Family Foundation, a non-partisan research group not affiliated with the Kaiser medical group. “Families are paying about (on average) $1,000 more now just for health care premiums than they were five years ago.”

Surprisingly, costs are less of a problem for the elderly, most of whom are covered by Medicare, even though it has seen a 71% increase in monthly premiums since 2000. The survey found that the elderly were far less likely than those under 65 to have skipped treatments or drugs or to have reported that they did not have enough money for medical care.

Overall, the hardest hit by medical costs are the uninsured.

Next are adults under age 65 with insurance who have household incomes of less than $75,000, an analysis of the survey data found. Those in that vast swath of Middle America were far more likely than those richer or older to report not having enough money to pay for medical costs in the past year (33%), to have paid $1,000 or more in out-of-pocket costs for care (31%) or to have skipped medical treatment or a prescription because of the cost (34%).

Wealthier households and those who report few health problems — two groups that represent nearly half of Americans — had little or no difficulty with medical costs.

“Whenever you say there’s a health care crisis, most Americans say, ‘Gee, it must be my neighbor, not me,’ ” says Uwe Reinhardt, an economics professor at Princeton. “That’s because most Americans are not very sick. But when they really do need several different drugs, it can very quickly be very expensive.”

Conducted this spring, the telephone survey of 1,531 adults comes after four years of back-to-back double-digit increases in health insurance premiums.

Premiums for policies offered by employers have risen more than 57% since 2000, with the average family policy costing $9,950 last year, according to a separate employer survey by the Kaiser Family Foundation. Workers pay an average of $2,661 toward that cost. Other findings of the USA TODAY/Kaiser/Harvard poll include:

•More than one in five Americans currently have an overdue medical bill.

•Nearly two out of 10 say health care costs are their biggest monthly expense after rent or mortgage payments.

•Almost three out of 10 estimate they paid $1,000 or more out-of-pocket for health care in the past year on top of premiums.

For some, medical expenses are not a disaster. Paying the bills may mean only putting off buying new cars or redecorating the house. The survey found that 39% of people are very satisfied with what they pay for their health insurance.

Carola Schmidt, of Sheridan, Wyo., has health insurance through her husband’s job. She says it has about a $1,000 annual deductible and covers 90% of the cost of in-network care.

“We do have insurance, and it covers the majority of costs,” says Schmidt. “I hear a lot of complaining, but then people complain about the price of gas and the price of this or that. You have to put it in perspective. If you don’t have insurance, that’s a huge problem. I can’t complain.”

But for others, medical costs cut deeply into the family budget. They make do by going without recommended treatment, or they pile up credit card debt. Fifteen percent of those polled say they’ve been contacted by a collection agency over medical bills, and 12% report using up all or most of their savings because of medical bills.

Crystal Cox, 49, whose 58-year-old husband, Gary, died in October after five months in the hospital, has health insurance. But like many insurance plans, it covers only 80% of hospital bills. So Cox, who earned $12,000 last year at her job cleaning an elementary school, says she owes the hospital $20,000 for the treatment her husband received for strokes and complications of diabetes. The North Bangor, N.Y., resident shops at lowest-cost grocery stores and keeps her thermostat set low in the winter, looking to save wherever she can.

Because of her debt, she avoids going to the doctor herself, putting her among the 29% of those surveyed who reported that they, or someone in their household, had skipped medical treatment, cut pills in half or failed to fill a prescription in the past year because of cost. “I just don’t want to add more bills to what I’m already carrying,” Cox says.

As co-payments, premiums and deductibles rise, those facing financial difficulties are increasingly moderate-income families, such as Jeffrey Herchenroder’s, who have health insurance.

The 45-year-old high school teacher lives just outside Albany, N.Y., with his wife, Cindy, and two of his three children on an annual income of about $65,000. His oldest child just graduated from college. His job provides insurance, for which Herchenroder pays about $3,000 annually toward the premium; his employer pays the rest. He has rheumatoid arthritis, and his 11-year-old son has asthma and diabetes. They recently paid $1,000 for their share of the cost of an insulin pump. Everyone in the family takes at least one prescription drug. Each month, he estimates, the family spends $280 on drugs alone.

“We dip into credit cards, and it starts to become a big cloud,” he says. “We have good insurance but still some amount of (financial) trouble. Medical costs affect our lifestyle. We don’t vacation. We don’t eat out. I buy cars with blown engines and put new engines in them so we have something to drive. I’ve never owned a car newer than 6 years old.”

The most popular type of insurance plan today carries annual deductibles that last year averaged $287 for an individual plan and required patients to pay 20% of hospital or lab bills. As co-payments and deductibles grow, doctors and hospitals report that more patients are skipping out on their share. In response, some doctors, clinics and hospitals are demanding patients pay their co-payments upfront.

Michelle Barkenquast, 37, is a six-year breast-cancer survivor who lives in Homestead, Fla. She has health insurance through her job as a floral buyer for supermarkets. She pays 20% of costs for medical tests or 30% if the clinic or doctor is not in her insurers’ network. She recently turned down one of three tests — a CAT scan — her doctor wanted her to have.

“The place where I was going to have the test called a few days ahead of time and said I would be expected to pay at time of service. It was going to be nearly $3,000. I ended up having two of the tests run, so when I went in, it was about $750,” Barkenquast says.

Such co-payments can strain family budgets.

Kimberly Anderson, 31, of San Antonio, has insurance through her husband’s job. In the past year, she’s had two surgeries, and both her children had surgery for ear tubes. The family income is about $72,000, but their mortgage eats up $1,500 of that a month and payments on two new cars an additional $1,200. She says she and her husband, Jeff, owe about $1,500 to more than a dozen doctors and labs for the costs the insurance plan did not cover. Paying off those bills has fallen behind other priorities.

“You get bills from the anesthesiologist, the surgeon, the consulting surgeon, not to mention the bills for labs, X-rays and MRIs,” she says. “They’re all in collections right now. We’re a middle-income family. Our money goes to the bills and getting food on the table and getting stuff we need to have. Medical bills come last.”

She says the bills did not interfere with getting a mortgage on a new house because the Federal Housing Administration (FHA) didn’t count medical debt in its calculations.

Anthony Stout, 31, is a journeyman mechanic for heating and air conditioning systems, in Blackwell, Okla. His company provides health insurance for him, but not for his wife and six children. His children qualify for a state Medicaid health program, but his $15-an-hour job pays too much for his wife, Stacy, to qualify. She recently had a baby, a cost that was covered by the state program, and is just starting back to work, but she has no insurance.

Stout this past year had a lump removed from his shoulder and lost a week’s pay while out recovering. Luckily, it wasn’t cancer. He owes $2,000 for his share of the surgery; his insurance paid $8,000. “For me, $2,000 is a great percentage (of my income). My rent here may be cheaper than other parts of the country, but the medical costs are the same,” says Stout, who says he hasn’t yet paid the bill.

As a single working mom, Marvella Davis, 37, pays $100 a month for over-the-counter medications for her twin 12-year-old girls, Jasmine and Jamela, who have rheumatoid arthritis. Davis, whose $8-an-hour receptionist job in Dunwoody, Ga., doesn’t come with insurance, has no coverage. The girls are covered by Medicaid, but it doesn’t pay for ibuprofen, a common painkiller used to treat the painful joint condition. Because of the medical expenses, she sometimes has to borrow money from her mother to buy food.

“Their joints get so stiff that they can’t move,” she says. “I can’t not give it to them. But the grocery bill is hard to keep up with.”

In general, the survey found the elderly less affected by medical costs than working-age adults. People over age 65, even those with chronic conditions, are among those who report the fewest problems paying for medical care, illustrating the success of Medicare as it hits its 40th birthday. Eighteen percent of those 65 or over reported skipping a medical treatment or drug because of the cost, compared with 32% of those under 65, the survey showed.

Although the $250 she pays for Medicare and a supplemental policy is her biggest monthly payment, Glenda Cato, 68, says the money comes right out of her pension check and she isn’t suffering. That may be because she managed money well all her life, Cato says. Her house is paid off, and she has no credit card or car payment debt.

“That’s a lot of money because my income isn’t that much, but I know people who are paying twice that,” says Cato, of Sonora, Calif.

She considers herself lucky because she knows plenty of people who have no insurance. Her son, for example, has coverage, but his employer does not provide a family policy. So his wife and kids are uninsured.

“They just pay as things come along,” Cato says. “My grandson fell off his bike and had a big cut on his arm. That was $1,500. I think it’s a big problem in America that isn’t being addressed. People are doing without. They just don’t go for health care because they can’t afford it.”

The number of uninsured has grown in recent years, fueled mainly by workers losing insurance as they lost jobs in a slow economy. Census Bureau figures released Tuesday show 45.8 million uninsured in 2004, up from 45 million in 2003. But the number with insurance grew as well, so the percentage of people without insurance remained the same, at 15.7% of the population.

The USA TODAY/Kaiser/Harvard survey found 18% of adult respondents uninsured. Of the survey respondents who were uninsured, 6% said they didn’t think they needed coverage. But 70% said cost kept them from getting coverage.

Scott Bell, 28, chief installer for a furniture company, lives in Graham, Texas. His job doesn’t come with health insurance, so he pays his own medical costs. Bell, who has asthma, takes two prescriptions a month. Recently, he went to the emergency room with breathing problems.

“Between the bills from the hospital and the doctor, it came to $1,800, for just a couple of hours,” says Bell. “I just send what I can each month — usually around $30 — and they’ve never said anything.”

Bell says he pays $285 a month for his asthma medication, Advair. Sometimes he travels five hours to Mexico to buy it. “When I can go to Mexico, it only costs $40. Medical costs are probably my third-biggest expense, behind rent and my vehicle. Sometimes I have to go without, but most of the time, I can manage somehow or another. I do a lot of extra side jobs, every weekend.”

Kathleen Follett, 54, of Woodburn, Ore., works full time as a sales associate at Wal-Mart in the crafts and fabric department. She earns less than $20,000 a year. While Wal-Mart offers health insurance, she says it costs too much. Of the choices she had, the insurance plan she wanted would have cost about $38 a paycheck, or $76 a month.

Instead, Follett says, “I don’t go to the doctor for anything.”

Solutions to rising costs are elusive — and often temporary. Managed care held down increases during the mid-1990s, but backlash against the restrictions led the strictest types of plans to fall into disfavor and costs rose again.

Most health cost experts, such as Paul Ginsburg, an economist at the Center for Studying Health System Change, a non-partisan think tank in Washington, D.C., say there is no single answer to controlling rising costs. “I don’t see any silver bullet out there that is going to alter the trajectory of our health system, which is one of spending more and more to care for fewer and fewer people,” Ginsburg said at a press briefing in Washington, D.C., last week. One idea currently in vogue includes paying bonuses to doctors and hospitals that show they are improving quality or outcomes. The goal: making health care more efficient, safer and cheaper.

Another idea is to pass along more costs to consumers on the theory that they will become more judicious users of health care and will shop around for the best prices. One way to do that is through insurance plans with high deductibles.

Such plans come with at least a $1,000 annual deductible for individuals and $2,000 for families, meaning patients must themselves pay for care until reaching those limits. Some of the policies are coupled with new tax-free medical savings accounts. While high-deductible plans may lower monthly premiums, they could come as a shock for some patients: The average annual deductible last year for the most popular type of managed care plan was $287 for an individual, according to the Kaiser employer survey.

Supporters say such plans will counter the mistaken belief fostered during the HMO era, when few plans had deductibles and it generally cost $10 to see a doctor or get a prescription, that health care was cheap.

“It’s the first kind of reform targeted at consumers,” says Robert Helms, a resident scholar in health policy at the American Enterprise Institute, a conservative think tank in Washington, D.C. Managed care, he says, attempted to control costs by cutting payments to doctors and hospitals. “This really attempts to get individual consumers involved in decisions.”

Critics, such as Consumers Union, say this approach would hurt those with chronic conditions, who would have to pay even more for health care. Health savings accounts and high-deductible policies are still too new for any definitive studies showing whether they result in long-term savings or what financial effect they may have on people with chronic illnesses.

But at best, such solutions will only help slow health care inflation, say several economists such as Ginsburg and Reinhardt. New medical treatments, rising prices and growing demand from aging baby boomers are expected to continue to fuel rapid inflation for years.

“The underlying health care costs are not going to go down,” says Glenn Melnick, a researcher at Rand, a Santa Monica, Calif.-based think tank. “They will continue to grow annually in the 8%-to-10% range for as far as we can see. Managed care is over.”

As costs rise, so will the number of those struggling to pay. “If you were to repeat this survey every two years, you will find more and more moving into those categories where it’s difficult to pay those bills,” Melnick says. “Just because you don’t have a problem today, doesn’t mean you can’t be in one of these other groups next year.”

Physician Group Decries 859,000 Rise in Uninsured

FOR IMMEDIATE RELEASE
August 30,2005
Contacts:
David Himmelstein, M.D. (617) 497-1268
Nicholas Skala (312) 782-6006

please click here to download
the uninsured numbers State by State

Physician Group Decries 859,000 Rise in Uninsured

Medicaid Ranks Swell by 1.9 Million as Poverty Rises and Private Coverage Drops

Middle-Class Losing Coverage at Fastest Rate

13,000 Doctors: “National Health Insurance is the Only Solution”

CHICAGO – Responding to newly-released data from the U.S. Census Bureau showing that the number of uninsured Americans increased by 859,000 in 2004, members of Physicians for a National Health Program condemned the sharp increase in the number of uninsured and called for a national health insurance program to provide comprehensive coverage to all Americans.

The number of uninsured rose from 45 million in 2003 to 45.8 million in 2004 (15.7 percent of the population), the fourth straight year of increases. The number of uninsured has increased by 6 million since 2000.

The Physicians’ group noted that only a huge increase in the number of Medicaid enrollees – driven by an unfortunate increase in the number of people in poverty who were therefore Medicaid-eligible – prevented a much larger rise in the number of uninsured Americans; without the expansion of Medicaid and other public programs the ranks of the uninsured would have swelled by 3.1 million.

While the proportion of Americans covered by private health insurance declined (from 68.6 percent in 2003 to 68.1 percent in 2004), the number of Americans enrolled in Medicaid rose by 1.9 million (from 12.4 percent to 12.9 percent).

The new numbers reflect a continuation of the trend during the Bush administration of declining private coverage and rising poverty which has driven up the number of uninsured despite increases in the Medicaid population. Since 2000 Medicaid enrollment has swelled by 9.6 million (increasing from 10.2 percent of the population to 13 percent in 2004). States spent more on Medicaid in 2004 than on primary and secondary education combined.

“The new census numbers should wake up our politicians.” said Dr. David Himmelstein, Associate Professor of Medicine at Harvard Medical School. “More and more are uninsured, and the Bush Administration’s main strategy for increasing coverage is to drive more Americans into poverty so they can qualify for Medicaid. But Medicaid is second class coverage, often little better than being uninsured. Americans desperately need national health insurance.”

Middle-class Americans with incomes of between $50,000 and $75,000 were the fastest-growing group of uninsured, increasing by 616,000 individuals in 2004.

“The high cost of insurance premiums are forcing millions of middle-class Americans to forego coverage, and millions more find that their skimpy policies leave them vulnerable to high out-of-pocket costs and even bankruptcy if they are seriously ill,” Himmelstein said. “Most of the two million Americans affected by medical bankruptcies each year were middle-class. A middle income is no longer a guarantee of coverage or protection.”

PNHP National Coordinator Dr. Quentin Young said that a system of national health insurance was the only way to solve the problems in the nation’s health system.

“These cold figures can never measure the human suffering that results from being uninsured. It makes any illness a potential economic and social catastrophe,” Young said. “The Administration’s proposed reforms fail to address the systemic problems of the health system. Health savings accounts and tax credits will only intensify the failure. By contrast, the experience of other industrialized nations teaches us that high-quality, comprehensive care can be provided to all our citizens without increasing health spending. A single-payer national health insurance system has emerged as only solution to the nation’s health system debacle.”

###

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

U.S. Census Bureau: 45.8 million uninsured

Income Stable, Poverty Rate Increases, Percentage of Americans without Health Insurance Unchanged
U.S. Census Bureau
August 30, 2005

The percentage of the nation’s population without health insurance coverage remained stable, at 15.7 percent in 2004. The number of people with health insurance increased by 2.0 million to 245.3 million between 2003 and 2004, and the number without such coverage rose by 800,000 to 45.8 million.

Press release:
http://www.census.gov/Press-Release/www/releases/archives/income_wealth/005647.html

Health Insurance Coverage: 2004
http://www.census.gov/hhes/www/hlthins/hlthin04.html

Comment: Although the percentage of uninsured is stable at 15.7%, an additional 800,000 individuals have no insurance, for a total of 45.8 million in 2004. The 800,000 individuals added to the list can assure you that there should be no complacency in these numbers.

One very important point not covered is that the security provided by health care coverage is deteriorating, potentially exposing many of the 245 million with coverage to significant debt. An egregious example is that of David and Darlene Henderson. They purchased a $1 million catastrophic plan, through a business association, for a premium of $400 per month. She developed breast cancer, and he had emergency surgery for an aortic aneurysm. Their insurance paid $33,428 and left them with out-of-pocket expenses of $181,855. Although theirs is an extreme example, it does indicate the vulnerability of the insured as innovative trends in coverage play out. (The Sacramento Bee, August 29, 2005:
http://www.sacbee.com/content/business/story/13489439p-14330129c.html)

Our current policies and projected trends will lead us further into disaster. This can be prevented by changing the way we allocate the $1.9 trillion that we are already spending on health care. But that will require a change in national policies. The process can begin only once there is an honest acknowledgement that we need public oversight of a universal system.

Until then, you might want to cover your potential losses by investing in the booming business of collection agencies.

Medical insurance left them hanging

Penn Valley couple shocked by big bills
By Andrew McIntosh
Sacramento Bee Staff Writer
Monday, August 29, 2005

When Darlene Henderson became ill with breast cancer in 2001, the illness devastated her body and soul.

And that was only the start of her misfortunes.

Soon afterward, the Penn Valley woman’s husband, David, was felled by an abdominal aortic aneurism the size of a baseball and rushed to surgery.

As the self-employed couple struggled to recover from three major surgeries each, their only comfort was that they had bought $1 million worth of catastrophic medical insurance through a business association.

Or, so they thought – until a blizzard of medical bills topping $210,000 buried them.

The Hendersons soon learned their insurance would cover less than 20 percent of the bills, plunging them into a financial crisis.

Backed by a Santa Monica-based consumer group, the Hendersons and dozens of others like them statewide are calling on Insurance Commissioner John Garamendi to educate consumers about the perils of such insurance and crack down on companies selling it.

“Like people who have swerved over a cliff on a dangerous road, we feel obligated to petition for a hazard sign to protect others,” David Henderson said.

Garamendi, concerned about the proliferation of what he called “skeletal” health coverage, will examine the sale of limited insurance policies through industry associations at a Sept. 20 public hearing in San Francisco.

Currently, state rules require basic hospital insurance benefits to be “of real economic value to the insured.”

Yet the regulations, last updated in 1972, include a minimum hospital benefit of just $30 a day.

The Hendersons bought their insurance through the National Association of Self-Employed because of promises made by their sales agent, who pitched a policy from the Mega Life and Health Insurance Co. of North Richland Hills, Texas.

For $400 a month, the couple said the Mega sales agent told them, they could buy a group policy that would cover 80 percent to 100 percent of their hospital costs up to $1 million.

In the end, Mega covered $33,428 of the Hendersons’ bills, they said, leaving them quivering when they learned they still owed $181,855.

The agent, the Hendersons said, didn’t emphasize or explain some critical information:

* There was no cap on their out-of-pocket expenses, unlike traditional health insurance available through large employers.

* Their benefits had daily maximums so far below the average cost of medical procedures and hospital stays that the financial security it purported to offer was illusory.

The Hendersons acknowledge that they didn’t read the fine print in the policy. Even if they had, they might not have understood it, said a representative of the California Foundation of Taxpayer and Consumer Rights. The Santa Monica-based consumer group said the complex policies are riddled with exclusions and caps.

“No other policy sells patients health care coverage that promises so much yet delivers so little,” spokeswoman Carmen Balber said.

She said Mega and other association health insurers pay maximum benefits that are so far below the average cost of medical procedures that customers have little or no protection from financial ruin.

David Henderson urged authorities to act fast to protect consumers: “The public has to be protected from these unscrupulous practices.”

Sick and unable to work while trying to care for themselves and Darlene Henderson’s 88-year-old mother, the Hendersons were forced to sell a car and other possessions on eBay to help pay some of their bills, David Henderson recalled.

The couple still owe close to $200,000, with interest. They have sued Mega, its parent and the association in Nevada County’s Superior Court.

The company and the National Association for the Self-Employed deny wrongdoing or any liability. A trial is set for January.

The Hendersons also say that the association, an organization they thought was representing their interests as small-business people, has close ties to Mega.

“The NASE was not an independent entity. It was a marketing ruse,” David Henderson said.

Mega is one of several specialty life and health insurers operated by UICI, a holding company that trades on the New York Stock Exchange.

Mega recruits members for the National Association for the Self-Employed, based near Mega in Grapevine, and sells insurance policies on the association’s behalf.

Mega also sells marketing services to the association, and a company controlled by the children of UICI Chairman Ronald Jensen sells administrative and billing services to NASE, a company spokesman confirmed.

Despite these ties, a spokesman for UICI and its Mega affiliate said that the companies and the association are distinct and separate legal entities, adding that ties between them have been properly disclosed to authorities and policyholders.

In an Aug. 8 securities filing, UICI revealed that its Mega affiliate has been named a defendant in “numerous cases” in California and other jurisdictions by plaintiffs challenging the way it is selling health insurance in the self-employed market.

The insurer’s stock, which rose to a 52-week high of $36.40 in the fall of 2004, sank to $21.31 in April before recovering to the $30-$31 range this month.

Plaintiffs are also challenging the relationship between UICI insurance units such as Mega and the associations that are actively promoting its insurance products to members, the company said, adding it has settled several cases without admitting liability.

The company, which last year reported net income of $161.6 million on revenue of $2.1 billion, said in its most recent quarterly report with the Securities and Exchange Commission that resolving the outstanding cases will not have a material effect on its finances.

In January, Mega and the other defendants paid $1.7 million to settle a lawsuit by court reporter Dana Christensen of Marina Del Rey.

Christensen alleged that the defendants deceived her family into purchasing what she calls a “sham insurance policy.” She sued after her husband died from bone cancer, leaving her with uncovered medical bills totaling $450,000, her attorney Tony Stuart said.

A company spokesman insisted its coverage, limitations and caps were all disclosed and discussed with the Christensen family before they bought their policy.

The spokesman added that the Christensens paid $7,760 in premiums to Mega and received about $167,000 in benefits.

“The impression given is that there was no value to the policy and that it was worthless,” the company spokesman said. “That’s an incorrect impression.”

The lawyer for the Christensens said this amount included payouts totaling only $97,000, but the insurer had boosted the benefit by including medical network care discounts for another $70,000.

Regulators here and in other states are taking action as consumer complaints and lawsuits mount.

In late March, the National Association of Insurance Commissioners named the states of Washington and Alaska to lead “a multistate examination” into the conduct of three UICI affiliates, including Mega, Mid-West National and the Chesapeake Life Insurance Co.

The examination started in May 2005 and officials are hoping to finish it by year’s end, said Bill Ripple, a spokesman for Washington Insurance Commissioner Mark Kreidler.

“The number of complaints we had become a trend, not only here, but elsewhere,” Ripple said.

“We’re looking at practices and procedures, such as marketing, to check that they’re doing what they say they’re doing.”

In March, Washington’s Insurance Department served a cease and desist order on Mega, after finding the insurer was selling “substandard and legally noncompliant” group health insurance that included forms “inconsistent with state law.”

In 2004, Mega and another UICI affiliate were fined $100,000 by California’s Insurance Department after auditors found the companies deliberately delayed paying claims.

—————————————–

ASSOCIATIONS AND YOUR HEALTH
The California Department of Insurance wants to make consumers considering health insurance from an association aware of several facts:

* The department does not regulate the associations that offer the coverage.

* Since the association purchases the policy on behalf of its members, it is the association that dictates or negotiates the coverage.

* The quality of the coverage depends on what the association is willing to pay in most cases.

* Consumers should request a specimen copy of the policy and the plan booklet before submitting an application for coverage. To the best of the department’s knowledge, the industry does not routinely offer this.

Source: California Department of Insurance

Physicians returning to Canada

For the First Time, More Canadian Physicians Are Returning to the Country Than Leaving
Canadian Institute for Health Information
August 24, 2005

New statistics compiled by the Canadian Institute for Health Information (CIHI) show that for the first time since 1969 (the period for which data are available) more physicians have returned to Canada than moved abroad. In 2004, 317 physicians returned to Canada, and 262 moved abroad. In the period between 2000 and 2004, the number of physicians who left Canada declined by 38%.

“The new data reflect a continuation in the trend we have seen since the mid-1990s of a decreasing number of doctors leaving Canada for opportunities in other countries,” says Steve Slade, consultant on physician databases at CIHI. “The other notable trend is that Canada’s total number of doctors has kept pace with population growth since the late 1990s.”

While the total number of physicians per 100,000 population has remained quite stable, the situation is not the same for both family physicians and specialists. Between 2000 and 2004, the number of family physicians increased from 94 per 100,000 to 98 per 100,000. However the overall number of specialists per 100,000 population declined from 93 to 91 in the same five-year period.

http://secure.cihi.ca/cihiweb/dispPage.jsp?cw_page=media_24aug2005_e

Full report (139 pages):
http://secure.cihi.ca/cihiweb/dispPage.jsp?cw_page=PG_385_E&cw_topic=385&cw_rel=AR_14_E

Comment: Opponents of single payer reform will shrug this off as a one-year fluke, but it isn’t. It is a well-documented trend over the past decade that simply passed a threshold this year, resulting in a positive influx of physicians migrating back to Canada.

It would be difficult to attribute this shift to factors such as physician income levels in Canada, or, more simply, the enjoyment of Canadian winters.

More likely, physicians prefer to practice in an environment in which they can advocate for their patients without barriers erected by third party payers or by an inability of the patients to meet out-of-pocket costs – barriers that are characteristic of the U.S. system.

Another major flaw in the health care system in the United States is our weak and rapidly-deteriorating primary care base. Barbara Starfield and others have demonstrated that a strong primary care infrastructure improves quality at a lower cost. Another important trend demonstrated in this study is the renewed emphasis on primary care in Canada.

We can learn much from these Canadian physicians who have checked out “the greatest health care system in the world,” and have decided to go back home.

From Hippocrates to Hypocrisy

By Steven Lewis
Winnipeg Free Press
August 21, 2005

The official voice of Canadian doctors has had it with single-tier medicare. Why? Because patients are suffering and dying waiting for care, according to the ineffable Dr. Victor Dirnfeld of British Columbia, with rhetoric unsupported by evidence.

Governments just don’t give Canada’s altruistic doctors the resources to do right by their patients. The solution: Give Canadians a choice to buy their way out of the public lineup.

Last Tuesday, CMA delegates timidly endorsed a private, parallel system by resorting to the convoluted vehicle of the double-negative (voting against a resolution that was against private medicine).

By Wednesday, they were braver. Sixty-four per cent voted in favour of this resolution: “The Canadian Medical Association supports the principle that when timely access to care cannot be provided in the public health-care system the patient should be able to utilize private health insurance to reimburse the cost of care obtained in the private sector.”

Good for the CMA. On Tuesday, the debate was muted, the proceedings oddly preoccupied with wording. No passion, no ringing discussions of principle. Not with a bang, but a whimper. The next day, more spirited to-and-fro. In the end, forced to take a stand, the 200 delegates took one.

It’s folly to blame an interest-group for pursuing its interests. The CMA does not exist to advance the public interest — it is the doctors’ lobby, pure and simple. And, like all sophisticated interest groups, it insists that it is solely preoccupied with the well-being of the public.

Ergo: When a bunch of us doctors set up private clinics for the well-to-do, all Canadians will get better and more timely care. That’s why we’re doing it — nothing to do with money. We deeply admire the public system; we just can’t pass a resolution that declares it to be the best option. We share its values, only it isn’t getting the job done.

Government’s fault — always is.

The CMA has traded the Hippocratic for the Hypocritic with a capital H. But it could show the public just a little respect. We’re quite prepared for your pursuit of self-interest.

You don’t have to pretend you’re doing it for us — you’ve been ambivalent about medicare since the beginning. It’s not about us having a choice, since, by the CMA’s own reckoning, most Canadians won’t be able to buy private insurance. It’s about you having a choice. We’re just fodder for the argument, and collateral damage when you get what you want.

So come clean. Celebrate the lucrative private options for doctors who want to make more money and restrict their practices to those in their own class. Tell us candidly that you favour a minimalist set of core services for the masses, reserving the high-quality diagnostics and fast access to care for successful people like you. That way, you’ll make more money. And, with a stripped-down public system, you’ll pay less tax, too.

And don’t be afraid to chide the thousands of physicians who are naïve enough to commit to the public system. Tell them that their labours are in vain, their system is second-rate, their Toyotas an embarrassment in the hospital parking lot.

Let’s assume that many doctors will want out, and the public system will be under more strain with its capacity temporarily reduced. What can governments and the public do to strengthen the public system and shore it up against further erosion?

There’s a lot that can be done. First, let’s get all the talent in the public system working at full capacity. Get other professionals involved more centrally in primary care. A team of nurses, rehabilitation therapists, psychologists and pharmacists is capable of providing excellent front-line care. If my physician clinic went private and I had the option of seeing a nurse practitioner in a comprehensive clinic, I’d go in a minute. I might go anyway.

Second, if the CMA and its followers want a private and parallel system, make sure it is truly private and parallel. Don’t subsidize it by training its personnel at huge public expense — charge them full tuition ($60,000 a year for physicians). Make them build their own hospitals so the complications from their surgical centres don’t end up taking our space in the public system.

Students at the swish private schools — you know, the ones that the CMA likes to refer to as benign analogies to private medicine — don’t get to use public-school facilities whenever it’s convenient. Let them and their investors put billions of dollars on the table and see if they can make a go of it. You want to be entrepreneurs? Go for it — assemble the capital, take the risk.

Third, regulate profiteering and over-servicing. Provinces can pass laws that opted-out physicians can charge no more per service than the rate in the public system. Some do so already. Require private clinics to undergo regular quality and utilization audits. The U.S. is full of horror stories of investor-driven excess. Examples: A northern California hospital was cracking open chests to perform unnecessary by-pass surgery in response to pressure from the head office to increase profit margins. A southern California outfit was flying in healthy patients from the East Coast to undergo a few days of diagnostic investigations to generate higher revenues.

Impossible here, you say? Think Enron. Think Vioxx. Hell, think Krispy Kreme. Profit is a harsh taskmaster.

Fourth, and importantly, make doctors choose — in or out. No hybrid public and private practices. Take away the safety net: You don’t get to maintain a part-time public practice, where the state pays your fees, while building up your private and parallel business.

You’re entitled to move out — and we’re entitled to change the locks.

But it’s not just governments that have to respond vigorously to the privatization challenge. It’s all of us. Citizens have to make medicare a political issue at both the provincial and federal level. Make parties declare where they stand. If governments get a democratic warrant to preside over the development of a private and parallel system, let it blossom. Canadians deserve a chance to vote on it, one way or the other.

Not everything has to be overtly political. Legions of doctors are philosophically committed to the values of public health care and do their best to make it work. We should support them, honour them, and let the world know who they are. Launch a sticker campaign that certifies medical offices and clinics as medicare-friendly. Voting with one’s feet is always a healthy signal to those who earn their living by serving us. Ask the embarrassing question when making an appointment: “Are you a medicare-friendly clinic? If not, why not?”

And every once in awhile, hit the streets. As the CMA drafts its report on how the public and private systems ought to interact, serenade it with the chants of tens of thousands of citizens in front of their Ottawa head office in support of single-tier health care. Demonstrations in front of provincial medical association offices would be similarly invigorating.

We owe a debt to the CMA for letting us know where it stands. Let’s reciprocate the favour by letting it know, loudly, where we stand. If, in the end, the public sides with the CMA, applaud them one more time.

All that is clear right now is that if medicare is to improve and thrive, it will be in spite of — not because of — the efforts of organized medicine.

Steven Lewis is president of Access Consulting Ltd. in Saskatoon and adjunct professor of health policy at the University of Calgary.

More doctors returning to Canada than leaving, first time in 30 years

By Sheryl Ubelacker
Canadian Press
August 26, 2005

TORONTO (CP) – When Dr. Kellie Leitch returned to Canada from the United States a few years ago, she joined a growing number of Canadian physicians choosing to come back home to practise. And now, the country’s medical brain-drain has been reversed for the first time in 30 years.

For decades, Canada experienced more drain than gain when it came to doctors departing for so-called greener pastures in the United States or countries overseas. But last year, that trend was reversed for the first time, with more doctors returning home than waving bon voyage to the country’s shores, a new report shows.

The report by the Canadian Institute for Health Information (CIHI), released Wednesday, shows that 317 physicians returned to Canada last year compared to 262 who left.

The net surplus is the first since the institute began collecting this data in 1969, and is “a continuation in the trend we have seen since the mid-1990s of a decreasing number of doctors leaving Canada for opportunities in other countries,” said Steve Slade, co-author of the report.

“That’s not happened once on record with our database, and it’s a first, a historical year for Canada,” he said from Ottawa.

The number of doctors who left Canada stood at 420 in 2000; and in 1994, a whopping 771 physicians crossed the border south or left the country’s shores.

Meanwhile, a 24 per cent rise in the number of doctors returning home in 2004, compared with five years earlier, gave Canada’s physician workforce the net gain.

Leitch, who attended the University of Toronto’s medical school, went to California in 2001 to complete her training in pediatric orthopedic surgery.

There were lots of opportunities in the United States, but Leitch said she jumped at an offer from the University of Western Ontario and returned to Canada in late 2002. Since then, she has been named chair chief of pediatric surgery at the Children’s Hospital of Western Ontario.

“The primary reason I returned to Canada . . . is that the Canadian taxpayers paid for my education,” Leitch, 34, said from London. Ont. “There is a huge investment in educating, in particular specialist physicians . . . and it only made sense to me that the people who had made that huge investment should benefit from that specialty they’ve invested in.”

Leitch said there are only about 60 orthopedic surgeons for children in Canada, and even one leaving would have a huge impact on patient care.

But she doesn’t think returning home makes her unique.

“I think there are a lot of Canadian physicians who were trained in Canada who’ve gone to the United States and are looking for a reason to come home. I think it’s because we have a better quality of life in Canada, I think they see there are opportunities here that weren’t available to them in the United States or elsewhere abroad, and that we are a well-supported community.”

The report by the Canadian Institute for Health Information (CIHI), released Wednesday, shows that 317 physicians returned to Canada last year compared to 262 who left.

The net surplus is the first since the institute began collecting this data in 1969, and is “a continuation in the trend we have seen since the mid-1990s of a decreasing number of doctors leaving Canada for opportunities in other countries,” said Steve Slade, co-author of the report.

“That’s not happened once on record with our database, and it’s a first, a historical year for Canada,” he said from Ottawa.

The number of doctors who left Canada stood at 420 in 2000; and in 1994, a whopping 771 physicians crossed the border south or left the country’s shores.

Meanwhile, a 24 per cent rise in the number of doctors returning home in 2004, compared with five years earlier, gave Canada’s physician workforce the net gain.

Dr. Ruth Collins-Nakai, president of the Canadian Medical Association, said the return of some physicians may be related to Canada luring back doctors to head or staff high-profile research institutes at universities across the country.

“I guess we’re somewhat relieved to see there’s a net increase in physicians coming into Canada, although it doesn’t really help us in overall numbers,” lamented Collins-Nakai. “We are more or less treading water in terms of our overall physician supply.”

The CIHI report shows that the number of doctors across the country rose by five per cent between 2000 and 2004 – to 60,612 from 57,803.

But growth in the country’s population kept pace during that period, leaving the number of doctors per 100,000 residents relatively stable – a status quo that has not made it easier for Canadians to find a family physician or get access to a specialist.

Collins-Nakai said hundreds more medical school entry positions are needed – and professors to replace those retiring to teach them – if Canada is to even approach self-sufficiency in achieving a physician workforce large enough to serve all Canadians in a timely fashion.

“In order to accomplish that, the medical schools, which are currently bursting at their seams, are going to need increased resources,” the cardiologist said from Edmonton.

Complicating efforts to ramp up the number of doctors to meet an aging population’s growing demand for both family practitioners and specialists is the concurrent greying of health-care services.

Baldly put, Canada’s doctors are getting older. In 2000-2004, the average age of physicians increased by one year, to 49 from 48. During the same period, the proportion of physicians under age 40 dropped by 13 per cent.

“That’s like our window into the future, where we see a decrease in the number of really quite recent graduates in Canada,” said Slade.

The report also shows that the doctor supply is made up increasingly by women: in 2004, females accounted for almost one-third of physicians, a 10 per cent increase since 2000. Among doctors 40 and under, women made up nearly half in 2004.

But with more female doctors working shorter hours, access to care is not improving for patients, but declining, experts says.

Making matters worse for patients is the expected retirement of more than six per cent of physicians in the next two years, said Collins-Nakai. “And we expect up to one-third of all physicians to be decreasing hours of work.

“Many physicians over the past half or (full) decade have been doing excessive hours of work to provide access to patients,” she said. “And we know we’ve got increased burnout levels among physicians.”

– Here are some highlights from the CIHI report on doctors:

-In 2000, 420 Canadian physicians moved abroad compared to 262 in 2004, a 38 per cent decrease.

-In 2000, 256 physicians returned to Canada compared to 317 in 2004, a 24 per cent increase.

-For the first time since 1969, when statistics were first compiled, more physicians returned to Canada than left the country.

-Between 2000 and 2004, the number of doctors in Canada grew by five per cent, a rate that kept pace with population growth.

-Among the provinces, Alberta and P.E.I. had the largest percentage increase in the number of physicians in the five-year period – up by 19 per cent and 18 per cent, respectively.
-In 2000, there were 188 physicians per 100,000 population; in 2004, there were 189 per 100,000.

-The proportion of family physicians to population rose slightly, while the proportion of specialists dropped between 2000 and 2004.

-During 2000-2004, the number of international medical graduates in family medicine in Canada rose 12 per cent, while specialist graduates numbers fell 9.4 per cent.

-The average age of physicians increased by one year from 2000-2004, to 49.