Resource – Page 1084

Medicare's 40th Anniversary & Resources from Kaiser

Dear Colleague:

This summer marks the 40th year since the enactment of Medicare, the landmark health care program for the nation’s most vulnerable—the elderly, frail, and disabled. For the past decade, the Fund’s Program on Medicare’s Future has focused on the experience of beneficiaries, evaluating how new policies or emerging trends affect their coverage and access to care. In conjunction with the program’s anniversary, we are pleased to offer a new Medicare Resources page, a collection of selected Fund research on some of the program’s current challenges, including implementation of the new drug benefit, a restructured managed care program, and growing pressure to improve the quality of care while controlling costs.

Check this page again next week for a link to a webcast of a July 26th event at the Henry J. Kaiser Family Foundation conference center in Washington, D.C., noting the 40th anniversary of enactment of the laws establishing both Medicare and Medicaid, the jointly funded federal-state program that helps states provide medical assistance to low-income individuals and families. This historic event will include remarks from a half-dozen former Health Care Financing Administration (HCFA)/Centers for Medicare and Medicaid Services (CMS) administrators, former Health, Education, and Welfare Secretary Joseph A. Califano, Jr., and other health policy experts, including Kaiser President Drew Altman and Fund President Karen Davis. Also on the 26th, Health Affairs, in collaboration with the event’s co-sponsors, will publish several perspective articles by former HCFA/CMS administrators.

Toyota, Moving Northward

By Paul Krugman
The New York Times
July 25, 2005

Modern American politics is dominated by the doctrine that government is the problem, not the solution. In practice, this doctrine translates into policies that make low taxes on the rich the highest priority, even if lack of revenue undermines basic public services. You don’t have to be a liberal to realize that this is wrong-headed. Corporate leaders understand quite well that good public services are also good for business. But the political environment is so polarized these days that top executives are often afraid to speak up against conservative dogma.

Instead, they vote with their feet. Which brings us to the story of Toyota’s choice.

There has been fierce competition among states hoping to attract a new Toyota assembly plant. Several Southern states reportedly offered financial incentives worth hundreds of millions of dollars.

But last month Toyota decided to put the new plant, which will produce RAV4 mini-S.U.V.’s, in Ontario. Explaining why it passed up financial incentives to choose a U.S. location, the company cited the quality of Ontario’s work force.

What made Toyota so sensitive to labor quality issues? Maybe we should discount remarks from the president of the Toronto-based Automotive Parts Manufacturers’ Association, who claimed that the educational level in the Southern United States was so low that trainers for Japanese plants in Alabama had to use “pictorials” to teach some illiterate workers how to use high-tech equipment.

But there are other reports, some coming from state officials, that confirm his basic point: Japanese auto companies opening plants in the Southern U.S. have been unfavorably surprised by the work force’s poor level of training.

There’s some bitter irony here for Alabama’s governor. Just two years ago voters overwhelmingly rejected his plea for an increase in the state’s rock-bottom taxes on the affluent, so that he could afford to improve the state’s low-quality education system. Opponents of the tax hike convinced voters that it would cost the state jobs.

But education is only one reason Toyota chose Ontario. Canada’s other big selling point is its national health insurance system, which saves auto manufacturers large sums in benefit payments compared with their costs in the United States.

You might be tempted to say that Canadian taxpayers are, in effect, subsidizing Toyota’s move by paying for health coverage. But that’s not right, even aside from the fact that Canada’s health care system has far lower costs per person than the American system, with its huge administrative expenses. In fact, U.S. taxpayers, not Canadians, will be hurt by the northward movement of auto jobs.

To see why, bear in mind that in the long run decisions like Toyota’s probably won’t affect the overall number of jobs in either the United States or Canada. But the result of international competition will be to give Canada more jobs in industries like autos, which pay health benefits to their U.S. workers, and fewer jobs in industries that don’t provide those benefits. In the U.S. the effect will be just the reverse: fewer jobs with benefits, more jobs without.

So what’s the impact on taxpayers? In Canada, there’s no impact at all: since all Canadians get government-provided health insurance in any case, the additional auto jobs won’t increase government spending.

But U.S. taxpayers will suffer, because the general public ends up picking up much of the cost of health care for workers who don’t get insurance through their jobs. Some uninsured workers and their families end up on Medicaid. Others end up depending on emergency rooms, which are heavily subsidized by taxpayers.

Funny, isn’t it? Pundits tell us that the welfare state is doomed by globalization, that programs like national health insurance have become unsustainable. But Canada’s universal health insurance system is handling international competition just fine. It’s our own system, which penalizes companies that treat their workers well, that’s in trouble.

I’m sure that some readers will respond to everything I’ve just said by asking why, if the Canadians are so smart, they aren’t richer. But I’ll have to leave the issue of America’s comparative economic performance for another day.

For now, let me just point out that treating people decently is sometimes a competitive advantage. In America, basic health insurance is a privilege; in Canada, it’s a right. And in the auto industry, at least, the good jobs are heading north.

E-mail: krugman@nytimes.com

Study: AHP Legislation "A License to Steal"

JULY 21, 2005 — Legislation that would make it easier for small businesses to band together to purchase insurance and bypass state mandates is “a license to steal,” says a study released Thursday.

“The consequences are predictable: bankruptcy, delayed or forgone medical care, and loss of coverage for America’s businesses and workers,” said report author Mila Kofman, an assistant research professor at Georgetown University’s Health Policy Institute.

The report is referring to a bill (HR 525)—expected to pass the House next week—that would allow association health plans (AHPs) to bypass state regulation in areas such as mandating insurance coverage for specific treatments and procedures. Exempting AHPs from state laws, advocates say, would make it easier for small businesses to join forces and cut better deals with insurers when purchasing health care coverage for employees.

But Kofman said that the lack of state regulation of AHPs creates an easy opportunity for scam artists to come in, get their money and go out of business. “In law enforcement circles, these are called ‘cash cows,'” she said at a press conference.

The legislation would prohibit state regulators from shutting down fraudulent AHPs and would stop states from making it illegal to sell phony insurance to federal AHPs, Kofman said.

The bill would require the Department of Labor to monitor AHPs, a responsibility the agency cannot handle, Kofman said. And the bill would rely too heavily on self-reporting and self-regulation by the plans. “Crooks won’t be notifying the feds of lying, cheating, and stealing,” she said.

Between 2000 and 2002, fraudulent AHP-like plans affected more than 200,000 policyholders and left businesses and workers responsible for $252 million in medical bills, Kofman said. While the states shut down 41 illegal operations selling coverage through phony and real associations, the U.S. Labor Department shut down just three, Kofman found.

Rep. Sam Johnson, R-Texas, the leading sponsor of the House AHP bill, said such plans “protect people and increase the insured. The last time I checked, the Department of Labor has done a tremendous job monitoring the health plans of big business. I’d like to see small business have that same advantage—and their employees insured,” he said in a statement.

Groups such as the U.S. Chamber of Commerce, the National Federation of Independent Business, and the National Association of Manufacturers are pressuring Congress to pass the AHP legislation. They say such plans would help reduce the number of uninsured Americans by giving smaller employers the same market clout that larger businesses now enjoy when they purchase health coverage for their workers.

While the legislation has passed the House several times and is expected to do so again, it faces more opposition in the Senate, where Sen. Olympia J. Snowe, R-Maine, has introduced a similar bill (S 406).

Kate Sullivan Hare, executive director of health care policy for the U.S. Chamber of Commerce, said the AHP measure includes a number of licensing and solvency requirements to help prevent fraudulent companies from offering coverage. Hare also said the Department of Labor would add staff to help monitor the AHPs if the legislation became law.

“There’s nothing any of us can do about the scam operators—it’s buyer beware,” Hare said. “They’re out there now.”

Jill and Brent Burgess, who attended the press conference with Kofman, were the victims of one of those fraudulent operators. The couple, which operated their own business, lost their health care coverage for themselves and their three children when the company they bought insurance from was shut down for operating illegally, Jill Burgess said. Saddled with $30,000 in unpaid medical bills, her family had to file bankruptcy. “There was no other way out of this nightmare,” she said.

Kansas Commissioner of Insurance Sandy Praeger said there will be more victims like the Burgess family if Congress approves the AHP bill. “Simply put, allowing federal AHPs to operate outside the authority of state regulators will expose consumers to more fraud and insurance scams,” she said.

CQ HealthBeat is a daily e-mail newsletter distributed by Congressional Quarterly, Inc.

Medicare’s 40th Anniversary & Resources from Kaiser

Dear Colleague:

Study: AHP Legislation “A License to Steal”

The legislation would prohibit state regulators from shutting down fraudulent AHPs and would stop states from making it illegal to sell phony insurance to federal AHPs, Kofman said.

“There’s nothing any of us can do about the scam operators—it’s buyer beware,” Hare said. “They’re out there now.”

CQ HealthBeat is a daily e-mail newsletter distributed by Congressional Quarterly, Inc.

U.S. Will Offer Doctors Free Electronic Records System

By Gina Kolata
July 21, 2005

There is no one in medicine who does not consider it both crucial and long overdue to have electronic records in doctor’s offices and hospitals.

With electronic files, patient records are not stuck on pieces of paper in endless files, but are on a screen at the touch of a key. The computers alert doctors to do medical tests and avert errors by warning when they write a prescription for the wrong drug or the wrong dose. Patients can often see their own files and even make their own appointments, online, from their homes.

But most doctors have balked. The systems cost tens of thousands of dollars, and doctors worry that the companies selling them and providing support will go out of business. Many use computers to file health insurance claims, but only 20 percent to 25 percent of the nation’s 650,000 licensed doctors outside the military and the Department of Veterans Affairs are using electronic patient records.

Now, however, Medicare, which says the lack of electronic records is one of the biggest impediments to improving health care, has decided to step in. In an unprecedented move, it said it planned to announce that it would give doctors – free of charge – software to computerize their medical practices. An office with five doctors could save more than $100,000 by choosing the Medicare software rather than buying software from a private company, officials say.

The program begins next month, and the software is a version of a well-proven electronic health record system, called Vista, that has been used for two decades by hospitals, doctors and clinics with the Department of Veterans Affairs. Medicare will also provide a list of companies that have been trained to install and maintain the system.

Given Medicare’s heft, the software giveaway could transform American medicine, said Dr. John Wasson, a Dartmouth Medical School health care researcher.

But, Dr. Wasson added, it may take a while. “If you look at it from a five-year point of view, it will make a huge difference,” he said.

At first, he predicted, many doctors will bide their time, to see just how good Vista is.

Dr. Alan Garber, a Stanford University economist and internist, said of the Medicare plan: “It’s a good idea. It’s not foolproof.”

But, Dr. Garber added, Medicare’s investment and the program’s many appealing features “are all signals that it might be around for a long time and a doctor in a small office would not be taking an enormous risk.”

Medicare has not estimated what its software giveaway is worth. But Duncan Pringle, chief Vista technologist at Perot Systems, said that each doctor in a practice paid about $20,000 to $25,000 to get started with a commercial system, including costs of software, a license fee charged to each doctor, installation and servicing.

Installing Vista would cost $10,000 to $12,000 for an entire medical practice. That means that a practice of five doctors might pay $100,000 to computerize, but if the doctors used the Medicare system they might pay only $10,000 for the whole office.

The problem is that Vista has a reputation for being extremely difficult to install. Medicare says it modified and simplified it for doctors’ offices, but it remains to be seen whether doctors will want it.

Doctors are well aware that even with free software, no system is really free.

“Vista is a good system and it all sounds great,” said Dr. Thomas Jevon, a family physician in Wakefield, Mass. But, he added, “anyone who uses a computer can get frustrated and waste time trying to make it work.”

And for doctors, whose time is typically valued at $250 an hour, that time adds up.

“If a program takes 10 minutes away from your hour each day, that is costing you tens of thousands of dollars a year,” Dr. Jevon said. “That’s what’s bugging doctors.”

There is little doubt that computerized offices can help. For instance, Dr. Kevin Toppenberg recently saw an emergency patient who had injured his leg at the beach and arrived at his office wincing in pain. The patient’s regular doctor, one of Dr. Toppenberg’s 14 colleagues, practiced in another of the group’s three offices in Greeneville, Tenn., and was taking the day off.

In a typical medical practice, the man’s records would ordinarily be in a paper file in his own doctor’s office and a colleague in another office would have no way of getting them. Dr. Toppenberg, like many other doctors, would rather send such a patient to an emergency room than see him without a medical record.

“To just be working blind is scary for doctors,” Dr. Toppenberg said.

But Dr. Toppenberg’s newly installed computer program let him see the man’s record immediately, on a computer screen. After examining the man and diagnosing a probable torn muscle, Dr. Toppenberg sent him to an orthopedist. Then Dr. Toppenberg added his findings to the man’s record so his colleague would have them instantly when he needed to consult them.

The Vista project began a few years ago when Medicare officials realized that help for small medical practices was in its own backyard. The federal government had already paid hundreds of millions of dollars to develop Vista, and now uses it in the Veterans Administration’s 1,300 inpatient and outpatient facilities, which maintain more than 10 million records and treat more than five million veterans a year. Why not give Vista to doctors?

In fact, though few knew, Vista had been available all along to anyone who submitted a Freedom of Information Act request.

Over the years, the program had accrued a passionate following and even an organization, World Vista, founded in 2002 mostly by V.A. employees to help spread it throughout the world. One reason for their enthusiasm was that no company owns Vista so anyone can modify and enhance it.

It is, said Joseph Dal Molin, director of World Vista, a survival of the fittest. “What’s good survives,” he said.

One feature, for example, was suggested by a V.A. nurse. Why not put a bar code on a prescription bottle to identify the drug and its dose, put a bar code on the patient’s wristband to identify the patient’s prescription, and then scan the drug label and the patient’s wristband before administering a drug? If there was a discrepancy, Vista could catch it before an error was made. Programmers added that feature, and V.A. drug errors plummeted by 80 percent overnight.

Still, it is one thing to use a system that someone else installed and someone else maintains. It is another to get a set of disks in the mail and do it yourself.

Giving out a version of Vista is “a great idea,” said Dr. David Kibbe, director of the center for health information technology at the American Academy of Family Physicians, a group that has been working on the project. “But at the beginning, there was a lot of wishful thinking. They said, ‘We’ll just release it.’ I said, ‘Where’s the fairy dust?’ ”

Those who tried to install Vista on their own would agree.

Dr. Nancy Anthracite, a family physician in Washington, needed endless hours of help from a group of Vista enthusiasts who call themselves the Hardhats and volunteer their time. Getting started with Vista was so daunting, Dr. Anthracite said, that even when the V.A. demonstrated its program at medical meetings, almost no none of those in attendance wanted to use it on their own.

“You go to meetings and they show you things doctors can do with Vista and everyone’s going , ‘Wow, wow, wow,’ ” Dr. Anthracite said. “But no one installs it.”

So for three years, Medicare and its contractors worked to make the program easier to use.

They even gave it a new name, VistaOffice, to signify that was intended for small-office practices, not the huge V.A. system.

Some, including Dr. Toppenberg, decided not to wait for the August release of the new program. Last year, he learned that he could get the unmodified V.A. version of Vista and decided to try it.

“I started looking around,” Dr. Toppenberg said. “The newer systems tended to be about $15,000 per doctor, not counting the ongoing support fees. Then I found out that the Vista system was available. You just have to figure out how to get it to work.”

He did – but it took him six months.

Anyone who wants the new Vista, which is expected to require far fewer steps to install than the V.A.’s version, must wait until August. Some, like Dr. Meyer Cohen, an internist in Boca Raton, Fla., want to see how it works before committing time and money to it.

But a few, like Dr. Ismet B. Kursunoglu, director of the Alaska Clinic in Wasilla, Alaska, cannot wait.

“There are a lot of fantastic vendors,” Dr. Kursunoglu said, “but, realistically, we’re in a time period where reimbursement is going down and costs are rising. This is free.”

“This,” he said, “is a fantastic opportunity.”

Two BU scholars to criticize Romney health plan

By Liz Kowalczyk
Boston Globe
July 20, 2005

Two Boston University professors plan today to release a report critical of Governor Mitt Romney’s health-care plan, arguing that it does not address the state’s soaring medical costs and that it does not provide full insurance coverage to everyone.

Professors Alan Sager and Deborah Socolar, directors of the university’s Health Reform Program, will testify at a legislative hearing focused on alternatives to the governor’s plan, which would require most uninsured Massachusetts residents to buy health insurance.

The hearing is scheduled for 10 a.m., and will be chaired by Representative Patricia Walrath, cochairwoman of the Joint Committee on Health Care Financing and Democrat from Stow. Discussions will focus on two bills that propose a single-payer health care system, also called universal health care, and a third that would redirect money from the cigarette excise tax and the national settlement with tobacco companies into health education and cancer prevention programs.

In a single-payer system, all residents would be covered under one umbrella, run by the government or some other entity. Essentially, Romney wants instead to expand the system of public and private coverage to provide insurance to about 500,000 Massachusetts residents who do not have it.

Romney has said he wants to make coverage less expensive by permitting insurers to offer low-cost policies with scaled-back benefits. People making too little to afford those plans and making too much to qualify for Medicaid would be eligible for state subsidies to help them buy insurance. Medicaid would remain in place for the poorest state residents unable to afford private insurance.

Residents who do not get health insurance would face tax penalties, and the garnishing of their wages, to cover care.

Today, Romney plans to announce more details of another component of his plan, called Safety Net Care, and to file legislation. The proposal would take the more than $1 billion a year that the state, health plans, and hospitals contribute to the so-called ”free care pool,” which pays for medical care for some uninsured residents, and to use it to help buy insurance for the residents.

Another approach being pushed by a coalition, including the nonprofit organization Health Care for All, would force most employers to cover workers.

Sager said that Massachusetts residents and insurers spent $2,176 per person in 2003 on hospital care alone, 41 percent higher than the national average.

”We don’t think [Romney’s] plan seriously attacks any of the causes of high health costs,” Sager said in an interview. ”We don’t think a single-payer is a cure-all. But it cuts a lot of administrative waste quickly by reducing complexity and provides the right foundation for squeezing out clinical waste.”

http://www.boston.com/news/local/articles/2005/07/20/
two_bu_scholars_to_criticize_romney_health_plan/

Understanding the Buzzwords

By Susanne L. King
Berkshire Eagle

LENOX

I WAS talking to colleagues this week about the health care reform bills currently before the state Legislature, and realized once again how complex and confusing this topic can be, even for health care professionals. All involved in health care reform are using buzzwords like “universal” to appeal to residents of our state, 650,000 of whom are uninsured, and 350,000, underinsured. We are a beleaguered population that is literally dying for change.

The Institute of Medicine has described five principles for health care reform: coverage must be universal (covering everyone), continuous (not tied to a job), affordable to individuals and families, and affordable and sustainable for society. In addition, coverage should enhance health and well-being by providing access to high quality care that is effective, efficient, safe, patient-centered and equitable.

Gov. Romney has proposed a plan with a mandate that everyone in Massachusetts must buy health insurance, with partial subsidies for individuals who earn less than $28,710. Romney’s plan would rely on the for-profit insurance industry to provide “bare bones” coverage, which would include deductibles and co-payments. His plan would control costs by tightly regulating expenditures for the poor, but would still leave patients with massive medical bills and possible bankruptcy after an expensive illness. He would enforce his mandate by taking away tax refunds or garnishing wages. This is a tax from a governor who says he’s against new taxes. And as usual, the middle income population would be hardest hit.

Both Senators Robert Travaligni and Richard Moore have also sponsored legislation for health care reform. They also use buzzwords like “health care for all” and “universal.” These words sound good, but are not indicative of what these bills would provide if they were enacted. Sen. Moore’s complex proposal would expand MassHealth and pay for health insurance subsidies for low income workers. Travaligni’s bill would provide tax deductions for health savings accounts and also expand MassHealth enrollment. Both would add more cost to the system, without providing health care for everyone.

In all three plans, choice of provider would be limited by the insurance coverage offered by an employer, or by the patient’s income. This is not equitable or patient-centered. Nor are the plans continuous, since they depend on a person having a job. Finally, they would not be affordable, because they rely on the for-profit insurance industry. Patients would still have to pay insurance premiums, co-payments, and deductibles, that make insurance policies unaffordable.

The only bill that could truly provide universal, continuous, patient-centered health care, that is affordable for both individuals and society, and is sustainable, is the Massachusetts Health Care Trust Legislation, Senate Bill 755. This is the “single payer” bill. All the buzzwords are actually true about this bill.

What single payer means is that the government would collect and dispense the health care funds. In other words, the government is the “single payer” since insurance companies are eliminated. Doctors and hospitals would still be private, and patients could choose where they would go and which providers they would see. Patients would have more choices in such a system. Doctors would have reduced administrative costs. Single payer health care would be “Medicare for everyone,” but without the limits and exclusions of the current Medicare program.

The other bills are unable to provide universal, comprehensive care at an affordable price, because the insurance companies take up to 30 percent of the health care dollar, and doctors and hospitals have additional huge administrative costs dealing with the myriad profit-making insurance companies that are reluctant to relinquish the money they have collected from patients.

Chasing the insurance dollar has become a nightmare for doctors and hospitals. And the cost of health insurance has become a nightmare for patients — one family told me their managed care insurance premium for the upcoming year has risen to $17,400.

Dr. Alan Sager, a professor at Boston University School of Public Health, reports that Massachusetts spends $52 billion per year on health care, 39 percent of which is attributed to administration and overhead costs of insurance companies, doctors, and hospitals. He has calculated that we have enough dollars in the health care system right now to cover everyone, and to provide more comprehensive benefits than are currently available now, including medical, dental, prescription drug and long term care benefits.

We do not need health care “reform” that does not provide universal coverage, is not continuous, is not affordable, is not patient-centered, and does not stem the rising costs of health care. For these reasons, we do not need the bills proposed by Romney, Travaglini or Moore, none of which meet the principles of reform elucidated by the Institute of Medicine, and all of which continue to subsidize insurance companies at the expense of patient health care.

Dr. Donald McCanne, past president of Physicians for a National Health Plan, says, “For a long time it has been clear that the single payer model of reform would provide a real solution to our health care crisis. But many voices have remained silent or muffled because of concerns about political feasibility…. It’s the politics. And more and more of us now realize that we must speak up if we ever expect to change the politics.”

The Joint Committee on Health Care Financing will hold a hearing at the Statehouse in Boston on The Massachusetts Health Care Trust Legislation (S. 755) on July 20. It is sponsored and supported by four of the five legislators from Berkshire County, although Sen. Nuciforo has recently pledged his support for Travaglini’s bill as well. He will need to decide which bill he supports, because the single payer bill and Travaglini’s bill are neither comparable nor compatible.

Please contact your legislators and let them know you support Senate Bill 755, or attend the hearing and give your testimony about your health care experiences. Demand that legislators stop tinkering with the current untenable system and go for single payer health care reform.

Susanne L. King, M.D., is a Lenox physician and frequent Eagle contributor.

http://www.berkshireeagle.com/otheropinions/ci_2862789

UAW: For a healtier America

UAW members help build movement for single payer health care
by Kim Ashby
Local 862

A grassroots movement is underway to educate people about single payer health care in Kentucky.

The goal of the movement is to educate people about the unjust treatment of patients and the profiteering of insurance companies. There are over 45 million people in the United States currently without health care, and 557,000 are in Kentucky.

More than 18,000 Americans die each year for lack of health insurance. Drug companies’ profits average four times those of other Fortune 500 companies. The United States is the only industrialized nation without national health care.

Our country pays 50 percent more of our Gross Domestic Product on health care than nations with national health care programs. Consequently, the richest country, according to the World Organization, ranks a mere 37th in the world in quality health care.

In 2003 a group of concerned individuals formed Kentuckians for Single Payer Healthcare (KSPH). Linda Peeno, a physician; David Bos, of the faith community; Kay Tillow, a nurse; Ann Walsh, activist; Garrett Adams, physician; Edgar Lopez, physician; and many others, including UAW members, are working to inform the public about the benefits of a single payer health care system.

They have formed a coalition of individuals joining with other organizations across the country working to pass universal, single payer health insurance as embodied in the plan of the Physicians for National Health Program and in HR 676, the Medicare for All legislation, sponsored by Rep. John Conyers, D-Mich.

HR 676 calls for a National Health Insurance Act, an expansion and improved version of Medicare for All. “Why is this issue important and what has it got to do with me?” is a question many people ask who have little knowledge about the subject. Often they have never given the issue a second thought because they have health care and believe they will be all right.

This is what the proposed bill would provide. The new legislation, if passed, would save billions of dollars now spent on unnecessary duplication and obscene administrative costs. It would eliminate profiteering health care.

HR 676 would allow individuals the ability to choose their own physicians. It would pay for prescriptions. It would include coverage for home health, nursing home, dental, vision, mental health, hospitals, office visits, physicians and rehabilitation. It would cover everyone and remain in place even if one lost a job or retired.

The Conyers bill would restore trust to a mean and broken health care system. It would provide that all employers pay a modest tax similar to Medicare. It would eliminate co-pays and deductibles. It would give to all Americans health coverage equal to that of each official in Congress.

By joining in coalition with other organizations and building a national movement strong enough to win the support of the elected representatives, the Kentucky Single Payer Healthcare group hopes to spread the message about single payer health care.

Another desire of the movement is to inform and educate the public about the issue. The Kentucky group is working toward a positive solution that puts an end to the anger and frustration provoked by an unjust health care system. KSPH is building toward hope and health for everyone by making what is morally right also politically possible within the state of Kentucky. If we can win a single payer health care system in Kentucky, KSPH then wants to help the single payer resolution spread to other states across the country.

Everyone can help spread the message by writing, calling or faxing your member of Congress and asking him/her to support HR 676, as introduced by Rep. John Conyers.

You can also visit the website www.cnhpnow.org and sign the petition for HR 676. Join Kentuckians for Single Payer Healthcare or start a movement in your own community or state to support single payer health care.

You can also ask a speaker from KSPH to come and talk to your group about the issue, circulate petitions, and get a resolution for HR 676 passed in your local union. There are endless possibilities of ways to get involved. Just look at the possibilities and seize the one that is most comfortable for you.

Want to join the movement to help build a better health care system that will take better care of every American? Click on www.kyhealthcare.org.

http://uaw.org/solidarity/rnews/05/q3/r3/r3_02.cfm

Jury Awards $7.4 Million in Wrongful Death Lawsuit Against Humana HMO

TO NATIONAL, LEGAL AFFAIRS AND HEALTH EDITORS:

San Antonio Jury Finds Humana HMO Liable for Negligently Managing Managed Care – HMOs Now Liable for Mismanaging Managed Care

SAN ANTONIO, July 21, 2005 — In a verdict that will have widespread long-term implications for HMOs (Health Maintenance Organizations) across the nation and the estimated 130 million HMO enrollees they serve, a local jury on July 1 awarded $7.4 million in actual damages in a wrongful death lawsuit against Humana Health Plan of Texas Inc., a physician, and his physicians group under contract to provide health care services. Jurors were to consider punitive damages in the second phase of the trial, but attorneys for Humana and the plaintiffs reached an out-of-court agreement that capped those damages at $1.6 million, bringing the total amount of damages to $9 million. Humana will be liable for 35 percent of the $7.4 million in actual damages and the entire $1.6 million in punitive damages after all appeals are exhausted.

In the lawsuit, John Smelik and his two adult children accused Humana and others of negligence in the June 1, 2001, death of Joan Smelik, John’s wife of 47 years. Brant Mittler, a practicing cardiologist and a lawyer represented the Smeliks along with lead plaintiffs’ attorney Jon Powell, and Renee F. McElhaney, appellate counsel for the case from Cox Smith Matthews Incorporated, the largest law firm in San Antonio. Testifying as an expert witness for the plaintiff in this case was Dr. Linda Peeno, the internationally recognized patients’ rights activist and former Humana Medical Reviewer. Humana was represented by Wilson, Elser, Moskowitz, Edelman & Dicker, based in New York City.

The jury decision came after nearly three days of deliberation, culminating a three-week trial presided over by 224th District Judge Rene Diaz, a conservative Republican recently appointed to the bench by Governor Rick Perry. Judge Diaz most recently comes from an insurance defense background prior to being appointed to the bench. Judge Diaz recognized the importance of the case from the beginning which was demonstrated by his choice to bring in a larger than usual jury venire panel, appointing two alternate jurors, and by allowing the jurors to be paid the legal maximum of $50.00 per day.

The plaintiff challenged managed care not on the basis of denial of care but because Humana failed to exercise ordinary care in performing its obligations in managing care. In this respect, plaintiffs presented evidence that Humana failed to follow its own Member Handbook, Physicians’
Administration Manual, and internal guidelines, policies and procedures.
The jury found that Humana did not apply case management to Joan Smelik as a process of identifying patients with “chronic or potentially catastrophic”
diseases. Case management was also supposed to deal with patients with complex diseases. Mrs. Joan Smelik was a complex patient who according to Humana never hit the “triggers” to qualify for case management. Humana’s own computer records for Mrs. Smelik showed that Humana knew of her diseases even down to the size of each of her small kidneys, which were indicative of “chronic” kidney disease. Ms. Smelik had a documented episode of acute renal failure attributed in part to the effects on her kidneys of a combination of three drugs, specifically a NSAID agent (non-steroidal anti-inflammatory drug), a diuretic, and an ACE inhibitor in September 2000.
Then, Humana approved Vioxx, an NSAID type drug, in January 2001, and later approved the purchases of the exact same three-drug toxic cocktail of prescription drugs that had put Joan Smelik into renal failure five months earlier. Mrs. Smelik died from complications of renal failure requiring emergency dialysis in May 2001.

Ten of the 12 jurors did agree that Humana was among three of the named defendants who bore responsibility for Joan Smelik’s death. The plaintiffs alleged that Joan Smelik did not receive the health care promised by Humana’s own written policies and standards. Specifically, the plaintiffs demonstrated through testimony that Mrs. Smelik was suffering from emphysema, kidney disease, and a circulatory condition that affected the kidneys and should have been closely monitored in the months before her death.

“This jury has saved lives,” added Jon Powell. The jury forced Humana to go back and actually implement its policies and procedures that supposed to be aimed at making sure members with chronic health problems receive the health care and treatment that they need in order to survive.”

Along with Humana, the lawsuit named as defendants two doctors, Dr.
Michael W. Mann and Dr. Fred C. Campbell Jr., and the Alamo City Medical Group, P.A., which was Mann’s employer and the corporate health care provider under contract to Humana. Campbell cared for Mrs. Smelik under another health insurance provider.

Prior to the trial, which began June 13, all the defendants had agreed to out-of-court settlements with the Smelik family, except for Humana. The earlier settlements totaled $602,000. Nonetheless, jurors were required by law to attribute blame for the negligence among all the defendants.
Specifically, the jury found that Humana was 35 percent responsible, Mann was 50 percent responsible and Alamo City Medical Group was 15 percent responsible. Campbell was not assessed any blame by the jury.

“This case sends a clear message that when an HMO promises to manage care, then they have to do it. And when HMOs fail to do that, the court system will hold them responsible,” said Renee F. McElhaney.

A 2004 U.S. Supreme Court decision in Aetna vs. Davila made it more difficult for disgruntled patients to sue HMOs, such as Humana, in cases where plaintiffs who receive their health plans from employers are claiming a denial of medical care. The high court ruled those cases fall under the Federal Employee Retirement Income Security Act (ERISA), which applies to most of the millions who receive HMO care through their employers and limits the amount of damages that can be recovered in a negligence lawsuit to actual losses. Smelik v. Humana was pleaded as a mismanaged Managed Care case. The Smelik verdict potentially gives new hope to HMO enrollees who are under ERISA and believe that Aetna v. Davila pre-empts their ability to sue their HMO when HMOs demonstrate negligence, fraud, substandard care or denial of benefits.

“Joan’s case will empower people across the country to take back their right to quality affordable health care,” said John Smelik. “People should spend less time having to do battle with their HMOs and more time preventing illness. The system is sick and needs to be fixed so that enrollees who pay their premiums are able to rely on their health care providers. According to the experts who testified in this case, my wife should be alive today had Humana exercised ordinary care in performing its obligations in managing care. Instead, Humana paid for prescribed medications that caused kidney damage and failure; then they let her die claiming that she did not qualify for Case Management and kidney dialysis treatments.”

The Smeliks alleged that the care delivered by Humana and its physicians to Joan Smelik was substandard. Testimony showed that Mrs. Smelik had been under case management when Humana had outsourced that service to another health care provider. But when that contract ended and Humana began handling case management on its own, Mrs. Smelik’s case was not given the necessary extra oversight. Previously, employer based HMOs’ denial of health care benefits had been largely shielded from regulation by state legislatures with the Supreme Court decision in Aetna v. Davila. Now, the Smelik verdict empowers individuals to fight against HMOs when the HMOs are focused more on saving dollars than on saving lives.

“This jury verdict shows that people enrolled in HMOs, even those insurance plans bought through their workplaces, can still turn to state courts, and ask a jury of their neighbors, to hold HMOs accountable for mismanaged managed care,” commented Brant Mittler. “Joan Smelik should have been a managed care success story. Instead she was a managed care failure.”

SOURCE> The Powell Law Firm, San Antonio, Texas

07/21/2005

CONTACT:

Jon Powell, J.D., Lead Plaintiffs’ Attorney, +1-210-225-9300, Cell:
+1-210-336-0330, jonpowell@sbcglobal.net

Brant S. Mittler, M.D., J.D., Plaintiffs’ Attorney, +1-210-408-1189,
Cell: +1-210-827-4246, bsmitt@satx.rr.com

Renee F. McElhaney, Plaintiffs’ Attorney, Cox Smith Matthews Incorporated,
+1-210-554-5597, rmcelhaney@coxsmith.com

John Peter Smelik, Husband of Joan Smelik, +1-830-885-2462, bluejay9534@yahoo.com

The inequity of the deductibility of employer-sponsored plans

Job-sponsored health plans may be targeted for taxation
By Kevin G. Hall (Knight Ridder Newspapers)
CentreDaily.com
Jul. 13, 2005

For 60 years, American workers have received job-sponsored health-care benefits that are excluded from income and payroll taxes, but now they’re in danger of taxation.

An odd coalition of groups from both the right and left wants to tax those benefits, and a special presidential commission is weighing whether to recommend ending their tax exemption when issuing its report Sept. 30 on how to overhaul the tax system.

Left-leaning advocates call for ending the tax exclusion for job-sponsored health benefits in the name of fairness. They think the benefits are an invisible tax break for wealthier Americans that’s unavailable to poorer ones, who generally don’t get job-based health insurance.

“The tax break is regressive because people at the lower-income brackets get less benefit. It does just the opposite of what it should,” said David Kendall, a senior health-policy analyst at the Progressive Policy Institute in Washington.

Some right-leaning advocates think the tax exclusion for job-sponsored health benefits should end because it distorts the free market. The Heritage Foundation, a conservative policy-research center, says the exclusion leaves consumers in the dark about the real costs of health care, leading them to make uninformed decisions that ripple through the health-care economy, driving up costs.

Advocates on left and right agree on this: Ending the tax exclusion should be accompanied by a new national tax-credit system for health care.

“The mechanics of doing it don’t have to be revolutionary,” said Mark Pauly, an expert on health-care costs at the University of Pennsylvania’s Wharton School. “The main problem now is that the exclusion makes expensive insurance look cheap.”

http://www.centredaily.com/mld/centredaily/news/politics/12124748.htm

Comment: The deductibility of employer-sponsored health coverage represents regressive tax policy. It is blatantly unfair that taxpayers are reducing the cost of health insurance for higher-income individuals while making lower-income individuals pay much more (or accept stripped-down policies that fail to provide adequate financial protection).

But what would happen if the tax deductibility were eliminated in the absence of comprehensive reform? Employers are already looking for a way out of the health insurance quagmire. Even though insurance is part of the employee benefit package, losing deductibility would increase the employers net cost, assuming that employees would demand increased compensation to offset the loss of this tax benefit. Turning the rheostat up on the business community’s call for a “national solution” would be deafening.

So we can’t end the deductibility of employer-sponsored coverage until we are ready to enact comprehensive reform, but should that reform be tax credits? Tax credits would be a gift to the insurance industry. As premiums become less and less affordable for employers and for individuals, tax credits could be used to support the insurers’ market. If the tax credits are adequate to be certain that premiums are affordable and benefits are adequate, then the cost to the tax system would be far greater than the current tax loss through deductibility of premiums.

It is very unlikely that this is what conservatives have in mind. President Bush’s $1000/$3000 proposal would be grossly inadequate for moderate- and low-income individuals and would make health care unaffordable for the majority of Americans. Conservatives have suggested means-tested tax credits, but if these were large enough to be effective, then again the cost to the tax system would be inordinately high. Furthermore, it would increase the administrative complexity of our very wasteful system without providing any improvement in the functioning of our fragmented system of funding care.

What the conservatives do have in mind is a tax credit system that is affordable to the taxpayers. Small tax credits will buy small plans. Small plans will empower health care consumers to be prudent shoppers. They will be empowered to spend the money that they don’t have on whatever care nothing will buy. We must admit, that would certainly be effective in reducing health care spending.

We can get rid of the inequitable, regressive tax policies of employer-sponsored coverage, but not by compounding our problems through a system of tax credits. If we really want an equitable system that would ensure affordable access to comprehensive services for everyone, then we need to enact a program would work: a single payer system of national health insurance.

Brown and Kominski on single payer

The Uninsured in California: Single-Payer Health Care
Project California
July 13, 2005

Serious ailments afflict California’s health care system. The “single-payer” model is seen by many as one possible cure. Advocates say such a system would provide universal coverage at less cost. But while single-payer has been much debated in California, it never has been enacted. Why? What are the obstacles it has failed to overcome?

E. Richard Brown, Ph.D., director of the UCLA Center for Health Policy Research, and Gerald Kominski, Ph.D., associate director of the UCLA Center for Health Policy Research, met with Project California to discuss the political and ideological obstacles confronting establishment of a single-payer system in California.

http://www.projectcalifornia.org/site/pp.asp?c=nmL9KgNYLyH&b=880703

Comment: This article was selected for today’s message because it provides a clear, highly credible, objective explanation of the single payer model of reform, and some of the obstacles to reform. You may find this article useful in your efforts to educate others about single payer.

Footer