PNHP

Study finds most pulled into debt by illness have jobs, health insurance(Associated Press)

Study finds most pulled into debt by illness have jobs, health insurance(Associated Press)

By Mark Jewell, AP

BOSTON (Feb. 2) – Costly illnesses trigger about half of all personal bankruptcies, and most of those who go bankrupt because of medical problems have health insurance, according to findings from a Harvard University study to be released Wednesday.

Researchers from Harvard’s law and medical schools said the findings underscore the inadequacy of many private insurance plans that offer worst-case catastrophic coverage, but little financial security for less severe illnesses.

”Unless you’re Bill Gates, you’re just one serious illness away from bankruptcy,” said Dr. David Himmelstein, the study’s lead author and an associate professor of medicine. ”Most of the medically bankrupt were average Americans who happened to get sick.”

The study, to be published online Wednesday by the journal Health Affairs, distributed questionnaires to 1,771 bankruptcy filers in 2001 in California, Illinois, Pennsylvania, Tennessee and Texas. That year, there were 1.46 million personal bankruptcies in the United States.

More than 900 of those questioned underwent more detailed interviews about their financial and medical circumstances for what the authors say is the first in-depth study of medical causes of personal bankruptcies, which have risen rapidly in recent years.

Illness and medical bills were cited as the cause, at least in part, for 46.2 percent of the personal bankruptcies in the study. Himmelstein said the figure rose to 54.5 percent when three other factors were counted as medical-related triggers for bankruptcies: births, deaths and pathological gambling addiction.

The study estimates medical-caused bankruptcies affect about 2 million Americans each year, counting debtors and their dependents, including 700,000 children.

Most of those seeking court protection from creditors had health insurance, with more than three-quarters reporting they had coverage at the start of the illness that triggered bankruptcy. The study said 38 percent had lost coverage at least temporarily by the time they filed for bankruptcy, with illness frequently leading to the loss of both a job and insurance.

By the Numbers
2 million
Estimated number of people affected annually by medical bankruptcies
76 percent
Portion of medical bankruptcy filers in the Harvard study who had health insurance
$11,854
Average out-of-pocket costs for the illness that led to bankruptcy
Source: Reuters

Out-of-pocket medical expenses covering co-payments, deductibles and uncovered health services averaged $13,460 for bankruptcy filers who had private insurance at the onset of illness, compared with $10,893 for those without coverage. Those who initially had private coverage but lost it during their illness faced the highest cost, an average of $18,005.

”We need to rethink health reform,” said Dr. Steffie Woolhandler, a study co-author and associate professor of medicine at Cambridge-based Harvard. ”Covering the uninsured isn’t enough. We also must upgrade and guarantee continuous coverage for those who have insurance.”

Susan Pisano, a spokeswoman for America’s Health Insurance Plans, representing nearly 1,300 health insurance providers, said the study did not adequately explore the role that disability income protection plans and personal savings can play in helping someone with a medical problem avoid bankruptcy.

”It’s very important to ask questions about what the financial stressors are for American families, but we don’t think this study digs deeply enough,” Pisano said.

The findings indicate medical-related bankruptcies hit middle-class families hard – 56 percent of the filers owned a home, and the same number had attended college.

”Families with coverage faced unaffordable co-payments, deductibles and bills for uncovered items like physical therapy, psychiatric care and prescription drugs,” Himmelstein said.

The study, funded by the Robert Wood Johnson Foundation, did not examine how many bankruptcy filers were from dual-income families where both partners had insurance, Himmelstein said.

Jeff Morris, resident scholar at the American Bankruptcy Institute, founded by Congress in 1982 to analyze bankruptcy trends, said the Harvard findings roughly mirror those of a 1996 ABI study in which 57 percent of bankruptcy filers cited medical problems as a primary bankruptcy cause. Respondents in that study were more likely to cite three other factors as primary causes, including easy access to credit, job loss and financial mismanagement.

Morris said he was aware of no data indicating that the Harvard study, which was based on 2001 bankruptcy filings, does not accurately reflect current trends in medical-related bankruptcies.

”Medical coverage is becoming more for catastrophic loss than for intermediate expenses,” Morris said.

Copyright 2005 The Associated  Press

Study ties bankruptcy to medical bills(NY Times)

By Reed Abelson

Sometimes, all it takes is one bad fall for a working person with health insurance to be pushed into bankruptcy.

Hundreds of thousands of Americans file for personal bankruptcy each year because of medical bills – even though they have health insurance, according to a new study by Harvard University legal and medical researchers.

“It doesn’t take a medical catastrophe to create a financial catastrophe,” said Elizabeth Warren, a Harvard law professor who studies bankruptcy and is one of the authors of the study.

The study, which is scheduled to appear today on the Web site of Health Affairs, an academic journal, provides a glimpse into a little-researched area connecting bankruptcy and medical costs. About 30 percent of people said they filed for bankruptcy because of an illness or injury, even though most of them had health insurance when they first got sick.

Many lost their jobs – and their insurance – because they got sick, while others faced thousands of dollars in co-payments and deductibles and for services not covered by their insurance.

One person cited in the bankruptcy study, for example, broke a leg, missed a couple of months of work and then had $13,000 in unpaid medical bills, though his employer-based health plan had already paid for much of his care, Ms. Warren said.

Another respondent to the survey was able to pay for hospital stays for lung surgery and a heart attack but could not return to his old job. When he found a new job, he was denied coverage because of his pre-existing conditions, which continued to require costly medical care and contributed to his bankruptcy.

Policy analysts say these findings underscore the limitations of the nation’s current system of providing health insurance largely through employers. Some argue that even for those with insurance, benefits can be ephemeral.

“You can lose it because it’s tied to employment,” said Joseph Antos, a health policy researcher with the American Enterprise Institute, who said people were also at risk if their employers went out of business.

To understand the effect of illness or injury on bankruptcy, the researchers surveyed 1,771 people who filed for bankruptcy in 2001 and interviewed 931 of them. They discovered a complex web of factors leading to bankruptcy, particularly as illness caused people to lose their jobs or cut back the hours they worked just as they were facing high medical bills.

Many of those families, Ms. Warren said, then “endured a one-two punch.”

The researchers examined those who specifically reported that their bankruptcies were precipitated by financial burdens caused by medical illness. They also included in a broader category of medical-related bankruptcy people who had more than $1,000 in unpaid medical bills at the time of the bankruptcy filing or had mortgaged their home to pay those bills.

The researchers acknowledged that often there was no single reason why someone went bankrupt. “There’s definitely overlapping reasons,” said Steffie Woolhandler, an associate professor of medicine at Harvard and one of the authors of the report.

They also pointed to gaps in coverage that left people vulnerable to financial crisis – particularly when workers switched jobs or were temporarily unable to afford contributions to a health plan. The high cost of continuing coverage under Cobra, the federal rule that allows former employees to stay on health plans for a time if they pay the entire cost, “is a cruel joke to these people,” Ms. Warren said.

Even when people remain insured, the study also notes that many health plans have limits on certain kinds of coverage, like physical therapy or prescription drugs.

“If you’re sick enough long enough, you’re in deep trouble in our society,” said David Himmelstein, an associate professor of medicine at Harvard Medical School, another of the study’s authors.

While some policies do offer catastrophic coverage, which pays for care after costs reach a certain threshold, Dr. Himmelstein said that coverage “often kicks in after people are bankrupted” because they must incur high medical bills to qualify.

And employees, who often have little choice of plans and frequently do not understand the differences among plans, are increasingly offered policies with less and less coverage, some policy analysts say.

“There’s a race to the bottom in terms of what health insurance means today,” said Ron Pollack, the executive director of Families USA, a consumer advocacy group in Washington.

This area is ripe for additional research, said Uwe E. Reinhardt, a professor at Princeton University, who said that there had not been enough hard evidence about working Americans who became ill and then went broke. “We put together vignettes, but they are not powerful enough,” he said.

The findings also raise questions about the effect of asking employees to bear a greater share of health cost through higher co-payments and the like. Many employers are shifting the increasing cost of care onto their employees, arguing that that trend gives workers an incentive to make judicious use of health care. But the researchers say higher co-payments and deductibles may well exacerbate the problem of medical bankruptcies.

Cornelia Dean contributed reporting for this article.

Bankrupted by illness(Newsday)

Bankrupted by illness
Researchers find that medical problems contributed to about half of all 2001 filings in the United States
February 2, 2005

Medical problems and their financial fallout – such as job loss and inability to pay soaring health care bills – contributed to about half of all bankruptcies in the United States in 2001, Harvard researchers found.

Even people with medical insurance were not safe from financial ruin resulting from illness, the researchers wrote in an article posted this week on the Web site of the journal Health Affairs. In fact, most people bankrupted by illness did have health insurance, the researchers found.
 
Out-of-pocket medical costs averaged $13,460 for people who had private health insurance when they became ill, versus $10,893 for the uninsured, the researchers found. The highest costs, which averaged $18,005, were incurred by people who had private insurance when they first became ill, but later lost it. Cancer patients’ out-of-pocket costs averaged $35,878.

“I think the message is, in this country, no one’s safe, even if you’re solidly middle class and have insurance coverage,” said Dr. David Himmelstein, lead author of the study and a professor at Harvard Medical School. Some people had insurance, but gaps in coverage resulted in large bills, Himmelstein said. Others who were sick for long periods lost the jobs that provided health care coverage.

Himmelstein is a founder of Physicians for a National Health Program, which advocates national health insurance. Several local attorneys confirmed yesterday that in New York, medical problems often figure in a decision to declare bankruptcy. Researchers estimate that in New York State in 2004 there were 38,645 medical bankruptcies.

Medical problems contributed to bankruptcies in about 700,000 U.S. households in 2001, the Harvard researchers concluded from legal filings in five states – California, Illinois, Pennsylvania, Tennessee and Texas. They used that data and interviews with bankruptcy filers to determine the extent of the national problem.
Westbury attorney Andrew Thaler, a bankruptcy trustee in the Eastern District of New York, confirmed that “a lot of people are having to file bankruptcy because of medical reasons. Lots of times people with medical debts will have other debts as well.”

Bankruptcy Study(Kaiser Daily Health Policy Report)

Kaiser Daily Health Policy Report
Wednesday, February 02, 2005
Coverage & Access

Medical Conditions, Resulting Financial Issues Contributed to Half of Bankruptcies in 2001, Study Says

About half of bankruptcies filed in 2001 were because of medical bills, according to a study published Wednesday on the Health Affairs Web site, the Chicago Tribune reports (Rubin, Chicago Tribune, 2/2). For the study, researchers from Harvard Medical School and Harvard Law School surveyed 1,771 U.S. residents who filed for bankruptcy in 2001 and interviewed 931 of them (Abelson, New York Times, 2/2). People interviewed had cases involving injury or illness, unpaid medical bills of more than $1,000 in the two years prior to filing for bankruptcy, loss of two weeks of work because of illness or injury or mortgaging of a home to pay medical bills, the Los Angeles Times reports (Dickerson, Los Angeles Times, 2/2). According to the study, 46.2% of people reporting bankruptcy in 2001 cited illness and medical bills as the cause. The rate rose to 54.5% when births, deaths and gambling addictions were considered as factors, the AP/San Jose Mercury News reports (Jewell, AP/San Jose Mercury News, 2/2). The number of bankruptcies filed in the United States tripled between 1980 and 2001, to nearly 1.5 million couples and individuals. The number of medical-related bankruptcies increased twenty-threefold during that period, the study says (Los Angeles Times, 2/2).

More Findings

According to Steffie Woolhandler, one of the study authors and a doctor at Cambridge Hospital, 76% of people who had a medical-related bankruptcy had health insurance when they first became ill (Kowalczyk, Boston Globe, 2/2). According to the study, 38% of those who filed for bankruptcy lost their health coverage at least temporarily by the time they had declared bankruptcy (AP/San Jose Mercury News, 2/2). Most of those who filed for bankruptcy because of medical costs were middle-income homeowners, the study indicates (Los Angeles Times, 2/2). For people filing bankruptcy, out-of-pocket medical costs averaged $13,460 for those who had health insurance, compared with an average of $10,893 for the uninsured, the study says. The highest costs — $18,005 on average — were incurred by people who had private health coverage at the beginning of their illness but later lost it, according to the study. For patients with cancer, average out-of-pocket costs were $35,878, the study finds (Kerr, Long Island Newsday, 2/2). The study also says that employer-sponsored health insurance does not seem to shield families from high medical costs because an illness can lead to job loss and loss of health coverage, the Los Angeles Times reports. In addition, people who cited medical bills as a cause for filing bankruptcy were more likely than others to have experienced a gap in health coverage because of costs or because they switched to a new plan and then lost coverage because of pre-existing medical conditions, the study says. In addition, about 33% of those who filed for bankruptcy because of medical costs said they still have difficulty paying bills, such as mortgages, utilities and rent (Los Angeles Times, 2/2).

Researchers’ Reaction

Elizabeth Warren, a Harvard law professor and one of the study’s authors, said, “It doesn’t take a medical catastrophe to create a financial catastrophe” (New York Times, 2/2). Woolhandler said, “A larger share of American workers are going to have insurance that’s like a paper umbrella. It looks good, and it might even protect you in a sprinkle, but it melts away in a downpour” (Rackl, Chicago Sun-Times, 2/2). David Himmelstein, another author and Harvard Medical School professor, said, “Unless you’re Bill Gates, you’re just one serious illness away from bankruptcy. Most of the medically bankrupt were average Americans who just happened to get sick. Health insurance offered little protection” (Rapaport, Sacramento Bee, 2/2). Warren said, “These are hard-working, ‘play-by-the-rules’ people who have health insurance and have discovered that they were just one bad diagnosis away from financial catastrophe. I think that’s the real heart of the story. This is about people who thought they were all safe” (Los Angeles Times, 2/2). Woolhandler said, “We need to rethink health reform. Covering the uninsured is not enough. We also must upgrade and guarantee continuous coverage for those who have insurance” (AP/San Jose Mercury News, 2/2). The Tribune reports that Himmelstein and Woolhandler, who are married, are co-founders of Physicians for a National Health Program, a group that advocates a national health insurance system (Chicago Tribune, 2/2).

Other Reaction

Some health policy analysts said they believe the findings highlight the “limitations” of the employer-based health insurance system, according to the New York Times. For instance, as employers shift more health care costs to workers, increasing copayments and deductibles could exacerbate the problem of medical-related bankruptcies, the Times reports. Joseph Antos, a health policy researcher with the American Enterprise Institute, said, “You can lose [health insurance] because it’s tied to employment” (New York Times, 2/2). Attorney Andrew Thaler, a bankruptcy trustee in New York, said that “a lot of people are having to file bankruptcy because of medical reasons. Lots of times people with medical debts will have other debts as well” (Long Island Newsday, 2/2). Greg Scandlen, director of the Galen Institute, said, “I don’t doubt there are people who lose their jobs due to a medical problem and hence lose their income and insurance. But this ‘study’ tells us absolutely nothing about those people because it is trying so hard to exaggerate the problem” (Chicago Tribune, 2/2).
The study is available online.

Middle-Class Workers With Health Coverage Represent Most Medical Bankruptcies In America(Health Affairs)

EMBARGOED for release
Wednesday, Feb. 2, 2005, 12:01 a.m. EST

Contact: Jon Gardner
jgardner@projecthope.org
301-347-3930

Middle-Class Workers With Health Coverage Represent Most Medical Bankruptcies In America, Health Affairs Article Says

Authors Say Trend Shows Need For Safety-Net Program For Chronically Ill, Importance Of Separating Health Coverage From Employment

BETHESDA, MD–About 2 million Americans a year are in families that experience a bankruptcy following illness or injury, representing about half of all bankruptcies in the United States. Most of those filings were middle-class workers who had health insurance at the onset of their medical difficulties, according to an article posted today on the Health Affairs Web site.

David U. Himmelstein, associate professor of medicine at Harvard Medical School, and three colleagues reviewed 1,771 personal bankruptcy documents in five federal judicial districts in 2001, and conducted follow-up surveys with 931 of those debtors to determine how illness contributes to bankruptcy in America.

While the number of overall bankruptcies was 3.6 times higher in 2001 than in 1980, the number of health-related bankruptcies increased 23-fold over the same period, which suggests that high medical bills were a major contributor to the growth in the number of individuals seeking federal bankruptcy protection.

“The medical debtors we surveyed were demographically typical Americans who got sick,” Himmelstein says. “They differed from others filing for bankruptcy in one important respect: They were more likely to have experienced a lapse in health coverage. Many had coverage at the onset of their illness but lost it. In other cases, even continuous coverage left families with ruinous medical bills.”

Among the survey’s findings:

* Between 1.9 million and 2.2 million Americans (filers plus dependents) were affected by medical bankruptcies in 2001
* Three-quarters of the debtors had insurance at the onset of the bankrupting illness
* Out-of-pocket costs for those bankruptcy filers since the onset of illness or injury averaged $11,854
* Medical debtors were 42 percent more likely than other debtors to experience a lapse in health insurance coverage
* As they experienced financial trouble, 61 percent of the filers failed to seek medical treatments they needed

“As in Canada and most of western Europe, health insurance should be divorced from employment to avoid coverage disruptions at the time of illness,” Himmelstein says. “Insurance policies should incorporate comprehensive stop-loss provisions, closing coverage loopholes that expose insured families to unaffordable out-of-pocket costs. Additionally, improved programs are needed to replace breadwinners’ incomes when they are disabled or must care for a loved one.”

Himmelstein’s coauthors are Elizabeth Warren, a professor at Harvard Law School in Boston; Deborah Thorne, assistant professor in the department of sociology and anthropology at Ohio University in Athens; and Steffie Woolhandler, associate professor of medicine at Harvard.

You can read the article at content.healthaffairs.org/cgi/content/abstract/hlthaff.w5.63

####

Health Affairs, published by Project HOPE, is a bimonthly multidisciplinary journal devoted to publishing the leading edge in health policy thought and research. Additional peer-reviewed papers are published weekly online as Health Affairs Web Exclusives at www.healthaffairs.org. Health Affairs Web Exclusives are supported in part by a grant from the Commonwealth Fund.

Frist's HSA Proposal a Nightmare for Patients

We dare not follow
Bush, Frist, Thomas have healthcare dreams
others might call nightmares
 
Story originally published January 31, 2005
Written by Todd Sloane, Assistant Managing Editor Op/Ed Modern HealthCare
 
 
Visionaries see problems differently than the rest of us, conjuring up solutions we ordinary folks could never divine. These are essential people, and yet there are times to beware of them, such as when they are thinking of running for president or are feeling the pressure of term limits. At such times be very cautious about following them. You could fall off a cliff.

Healthcare providers and their patients are treading close to such an abyss. President Bush, Senate Majority Leader Bill Frist (R-Tenn.) and House Ways and Means Committee Chairman Bill Thomas (R-Calif.) are dreaming the dreams of men with near absolute power and a short deadline.

Frist, who has promised to retire from the Senate in 2006, may be floating a bit higher than the others, having recently revealed his vision of healthcare in the year 2015 in of all places the New England Journal of Medicine. His alien dream is filled with accounts of injected nanorobots that detect and fix cancers and implanted radio frequency devices that continuously monitor goings on in our abdomens. At the head of this brave new healthcare system is the informed public, presumably the same erudite masses that would send the good Dr. Frist to the White House in 2008.

Not all of his visions are out of “Fantastic Voyage.” He returns to terra firma long enough to call for an end to tax incentives for employers who offer health coverage, which would effectively end that insurance system. The credits would go to those all-powerful individual citizens, who would brave the private insurance market armed with the latest outcomes and clinical research data. Mind you, he has no plans to end the current discrimination in that market against anyone who has actually been sick. Bemoaning the fact that the average family policy now costs $9,000 per year, Frist wants to come to the rescue by promoting health savings accounts as a panacea. It seems that paying a far lower premium but shelling out $5,000 to $10,000 from your pocket for these catastrophic policies is much more “empowering.”

Thomas’ ideas come wrapped in less interstellar prose, but the net effect is much the same. The chairman, who would lose his coveted post under House Republican rules in 2007, has his eye on the infernal payroll tax that funds Medicare and Social Security. The tax discourages hiring, Thomas says, and he hints at lowering it or scrapping it in favor of an income tax, either of which would lead to cuts in benefits or an increase in the retirement age. A less onerous method of trimming Medicare costs, of course, would be to allow HHS to negotiate prices for the new prescription-drug benefit with drug companies, but that is off the table. Apparently, the “ownership society” that conservatives love to talk about does not allow for such government interference, even in a marketplace the government itself established.

President Bush, meanwhile, still has Medicaid firmly in his rifle sights as he staves off the lame-duck label. His brother Jeb has proposed privatizing the program in Florida, handing poor beneficiaries a check they can use to brave the managed-care market, which I am sure will be thrilled to have them. The prez won’t go that far on a national basis, but he will try to cap spending on a program that has been rising in cost but at a significantly lower rate than overall health spending. His favorite buzzword here is “flexibility” for state programs, a word that for providers and patients translates roughly to “screwed.”

All these visions have me swooning, a state that many providers may be experiencing as well. I wonder if my employer-sponsored insurance plan covers this condition. If you have a health savings account, you may want to just lie down.

Bankruptcy Study Highlights Need For National Health Insurance

EMBARGOED UNTIL 12:01 AM EDT
February 2, 2005

Contacts: John Geyman, M.D. (360) 378-6264
Claudia Fegan, M.D. (312) 689-1581
Nicholas Skala (312) 782-6006 nick@pnhp.org

Bankruptcy Study Highlights Need For National Health Insurance

Most Bankrupted by Illness Had Insurance

Physicians’ Group Decries Fake Reforms and “Counterfeit Coverage”

A new Harvard study of medical bankruptcies highlights the growing number of Americans with dangerously skimpy health insurance coverage and the need to address the problems of the insured as well as the uninsured, according to Physicians for a National Health Program (PNHP). The study, published today as a Web Exclusive by the journal Health Affairs found that half of U.S. bankruptcies, affecting 2 million people annually, were attributable to illness or medical bills. (Copies of the article can be accessed at: https://pnhp.org/facts/bankruptcy_study.php)

The physicians’ group pointed out that three-quarters of those bankrupted by illness were insured when they first got sick. While politicians acknowledge the need to cover the uninsured, they have ignored the worsening plight of those with coverage. Rising health care costs, skimpier policies and the cancellation of coverage when illness causes job loss have augmented the financial risk for those with insurance. This heightened risk is reflected in the 2200% increase in medical bankruptcies since 1981 found in the Harvard study.

PNHP highlighted two causes of the high rate of medical bankruptcy among the insured. First, many employers are cutting back coverage through larger co-payments, deductibles and exclusions — often under the euphemism of “consumer-driven health plans.” Second, the current link between coverage and employment means that insurance often evaporates when it is needed the most — when illness is so severe that breadwinners are unable to work. The COBRA law, which allows people to continue their coverage when they lose a job, has failed to address this problem because the premiums for continued coverage are unaffordable (often $10,000 per year or more).

Only national health insurance (NHI) can solve the problem, according to the group. The NHI plan proposed by the group in the Journal of the American Medical Association (see www.physiciansproposal.org for text of proposal) would de-link coverage from employment, cover all medically necessary care without co-payments or deductibles, and cover all Americans. Previous studies have shown that the administrative savings under NHI from eliminating private insurance companies could fund comprehensive care for all Americans without any increase in overall health costs.

Dr. Claudia Fegan, Director of Ambulatory Care at Provident Hospital in Chicago and Immediate Past President of PNHP commented “Only national health insurance can fix the health care mess. Without national health insurance, the best we can do is rob Peter to pay Paul — cut back coverage for the insured in order to cover a few of the uninsured. But with national health insurance we can achieve massive savings on insurance bureaucracy and profits — more than enough to guarantee full coverage for every American.”

It s a cruel irony that in trying to help our patients we often ruin them financially. We heal their bodies, but inflict lasting financial wounds. said Dr. John Geyman, PNHP President and former Chair of the Department of Family Medicine at the University of Washington. The huge number of people affected by medical bankruptcies 2 million each year – means the average doctor has two or three of them in their practice. Yet I suspect that few of us have been aware of this epidemic.

Dr. Quentin Young, PNHP National Coordinator remarked “The paradox is that the costliest health system in the world cannot provide decent, accessible health care to all Americans. In contrast, all other industrial democracies have the answer: national health insurance financed by progressive taxes. In American terms, Medicare for all.”

Copies of the paper are available from PNHP at (312) 782-6006 or info@pnhp.org
To read the pdf version of the articles please go to www.pnhp.org/bankruptcy/uninsured.html

“Illness and Injury as Contributors to Bankruptcy,” Himmelstein et al, Health Affairs Web Exclusive, February 2, 2005.

To Reach the Author:
David U. Himmelstein, M.D., Harvard University: (617) 497-1268

###

Physicians for a National Health Program is an organization of 12,000 physicians advocating for non-profit national health insurance. PNHP has chapters and spokespersons across the country. For contacts, call (312) 782-6006

Frist’s HSA Proposal a Nightmare for Patients

We dare not follow
Bush, Frist, Thomas have healthcare dreams
others might call nightmares
 
Story originally published January 31, 2005
Written by Todd Sloane, Assistant Managing Editor Op/Ed Modern HealthCare
 
 
Visionaries see problems differently than the rest of us, conjuring up solutions we ordinary folks could never divine. These are essential people, and yet there are times to beware of them, such as when they are thinking of running for president or are feeling the pressure of term limits. At such times be very cautious about following them. You could fall off a cliff.

Healthcare providers and their patients are treading close to such an abyss. President Bush, Senate Majority Leader Bill Frist (R-Tenn.) and House Ways and Means Committee Chairman Bill Thomas (R-Calif.) are dreaming the dreams of men with near absolute power and a short deadline.

Frist, who has promised to retire from the Senate in 2006, may be floating a bit higher than the others, having recently revealed his vision of healthcare in the year 2015 in of all places the New England Journal of Medicine. His alien dream is filled with accounts of injected nanorobots that detect and fix cancers and implanted radio frequency devices that continuously monitor goings on in our abdomens. At the head of this brave new healthcare system is the informed public, presumably the same erudite masses that would send the good Dr. Frist to the White House in 2008.

Not all of his visions are out of “Fantastic Voyage.” He returns to terra firma long enough to call for an end to tax incentives for employers who offer health coverage, which would effectively end that insurance system. The credits would go to those all-powerful individual citizens, who would brave the private insurance market armed with the latest outcomes and clinical research data. Mind you, he has no plans to end the current discrimination in that market against anyone who has actually been sick. Bemoaning the fact that the average family policy now costs $9,000 per year, Frist wants to come to the rescue by promoting health savings accounts as a panacea. It seems that paying a far lower premium but shelling out $5,000 to $10,000 from your pocket for these catastrophic policies is much more “empowering.”

Thomas’ ideas come wrapped in less interstellar prose, but the net effect is much the same. The chairman, who would lose his coveted post under House Republican rules in 2007, has his eye on the infernal payroll tax that funds Medicare and Social Security. The tax discourages hiring, Thomas says, and he hints at lowering it or scrapping it in favor of an income tax, either of which would lead to cuts in benefits or an increase in the retirement age. A less onerous method of trimming Medicare costs, of course, would be to allow HHS to negotiate prices for the new prescription-drug benefit with drug companies, but that is off the table. Apparently, the “ownership society” that conservatives love to talk about does not allow for such government interference, even in a marketplace the government itself established.

President Bush, meanwhile, still has Medicaid firmly in his rifle sights as he staves off the lame-duck label. His brother Jeb has proposed privatizing the program in Florida, handing poor beneficiaries a check they can use to brave the managed-care market, which I am sure will be thrilled to have them. The prez won’t go that far on a national basis, but he will try to cap spending on a program that has been rising in cost but at a significantly lower rate than overall health spending. His favorite buzzword here is “flexibility” for state programs, a word that for providers and patients translates roughly to “screwed.”

All these visions have me swooning, a state that many providers may be experiencing as well. I wonder if my employer-sponsored insurance plan covers this condition. If you have a health savings account, you may want to just lie down.

Frustrations vented at health care forum

By Sarah Baker
Based on comments made and stories told at the Kentucky Health Insurance Research Project public forum Tuesday in Elizabethtown, physicians and patients alike are disgusted.

The forum was the first of 15 scheduled across Kentucky to gather information about the uninsured and the underinsured.

“This is an attempt to put a face on the problem,” said the project director Michal Smith-Mello of the Kentucky Long-Term Policy Research Center.

About 20 people, several of whom work or volunteer in the medical field, attended the forum at the Pritchard Community Center, and many were eager to point out the insurance industry’s downfalls.

Lela Williams expressed the great need for more accessible health insurance. As a State Health Insurance Program volunteer through the Central Kentucky Senior Corps, Williams helps the uninsured find community and government programs to meet their medical needs. She said the paperwork alone is a barrier to health care for the uninsured.

“As a person who sits and helps people fill out forms, I was astounded,” she said. “People can’t walk through the bureaucracy. The forms are mind-boggling.”

Dr. Syed Quadri, of the Community Health Clinic of Hardin and LaRue Counties, said the uninsured put off seeking medical attention and grow sicker. At the free clinic, he’s treated patients who haven’t seen a doctor in six years. Their ailments reach critical levels and become more expensive to treat.

Quadri and other physicians associated with Physicians for a National Health Program touted national health insurance at the forum, noting that taxpayers are already paying for Medicare, Medicaid and indigent care.

“I think this is the only way this problem can be dealt with,” Quadri said.

Charles Zoeller, who is self-insured, countered that he would participate in a program only if he approved of the health plan’s standards.

Some attendees blamed the industry for health insurance problems. Zoeller suggested the health insurance industry pay for alternative medical treatments rather than only paying for pharmaceuticals that are “poisonous to our systems.”

Edgar Lopez, a retired reconstructive surgeon, complained that “corrupted, fragmented managed-care systems” spend too much money on administration. He said insurance company CEOs earn excessive salaries.

Many in the group said they believe no one is serious about cutting the number of uninsured. Quadri pointed out that no state or national agency has set a goal or time frame for improvement.

The research project is funded by a $713,000 grant from the U.S. Health Resources and Services Administration, Smith-Mello said. Most other states have already received the grant, she said.

In addition to public forums, the research group plans to survey the public and small employers, who are less likely to provide insurance, and hold focus groups with the uninsured and underinsured. The research project’s findings are expected to be used to identify ways to reduce the number of uninsured Kentuckians. The findings and solutions are expected to be presented to state lawmakers.

“The good thing about this grant is it demands you propose solutions,” Smith-Mello said.

Sarah Baker can be reached at 769-1200, Ext. 428, at sjbaker@thenewsenterprise.com.

Reform health care for all

by Karen Winstead 

Winstead, of Rocky Mount, is a certified nurse midwife working as a nurse at a local hospital.

I agree with Dr. Eric Swisher, whose commentary was published Dec. 30 regarding malpractice insurance premiums. As more obstetricians get out of the business, the few left have to pay out even more money for premiums to cover the cost of malpractice claims.

I attended many of the sessions of the Governor’s Working Group on Rural Obstetrical Care and was disappointed with the amount of discussion and ideas regarding malpractice insurance. For some, the crisis is here, and we see little help from government.

However, I disagree with Swisher about the American health-care system being the best in the world. Malpractice insurance is just part of the picture. Swisher apparently has been covered by decent health insurance or has been healthy most of his life.

There are more Americans than ever without the means to pay for health care and going without health care. Free clinics and indigent services, while valuable, are often like treating a bleeding artery with a Band-Aid. We have more obesity, diabetes, heart disease, depression, preterm babies, etc., than ever.

We have a system that treats every pregnant woman as if she is sick, and does not utilize the resources we have wisely. We have a system where healthy, well-off people and some poor get medical treatment, but the working middle and lower classes often do not.

According to Dr. John Bower, a member of Physicians for a National Health Programwho presented at Carilion Health Care Systems Annual Ethics Conference last fall, one-half of all bankruptcies in the previous year were due to a medical reason or large medical debts. Most of us are just one major illness or injury away from bankruptcy.

Look at Canada’s national health-care system. Who gets more kidney transplants, Canadians or Americans? Well, to my surprise, it’s the Canadians. They found it more cost-effective to pay for transplants than to keep people tied to a dialysis machine. Private companies in America make big bucks on dialysis, so Americans stay on dialysis.

And guess what? Canadians can choose their own doctor, midwife, chiropractor, etc. No insurance company tells you whom you have to see. Payments are made in two weeks to the health-care provider. No waiting for months for insurance companies to pay. Liability insurance rates are much lower because the government health system pays for future medical needs.

Who has better maternal and neonatal outcomes? Places like Germany, Sweden, Britain and other developed countries that utilize midwives to care for pregnant women. In the United States, however, attempts were made to systematically eliminate midwives. And, despite decades of research showing their benefits, the Virginia Medical Society continues to work against midwives, who could alleviate some of the shortages of maternity care in Virginia.

The United States spends double the money of other countries on health care and gets half the benefit. To say we have the best health-care system in the world is to be out of touch with reality and the majority of Americans.

There must be fundamental changes in the health-care delivery system that benefit everyone, not just physicians, hospitals, lawyers, insurance companies and drug companies. We all want a better health-care system and less litigation. Let’s use this malpractice crisis to get the ball rolling toward a better system that works for us all.

Canada cheapest for business

Low outlay for labour, benefits cited for ranking
Report analyzes cost of operating in 11 countries

Neco Cockburn
Business Reporter

Despite a rising dollar, Canada remains the cheapest industrialized country in which to do business, according to KPMG.

Lower labour and benefits costs are the main reasons Canada is the most cost-competitive of 11 countries, the consulting firm said in its 2004 “Competitive Alternatives” study, released yesterday.

“Canada means business when it comes to promoting our country as the global business partner of choice,” International Trade Minister Jim Peterson said at a news conference.

Australia finished second, while Japan and Germany are the most costly countries.

It’s the fifth consecutive time Canada has ranked Number 1, although the gap between it and the United States, which finished seventh, has decreased.

The study found startup and operation costs for small and medium-sized businesses in Canada are 9 per cent lower than in the United States. In 2002, the last time the study was conducted, costs were 14.5 per cent lower in Canada.

Although the change results mainly from a weaker American dollar, the study’s co-author said Canada’s advantage would remain even if the loonie were worth more than 90 cents (U.S.).

“The Canadian cost advantage is very robust in terms of not being all that sensitive to the changes in the U.S. dollar,” said Stuart MacKay, president of MMK Consulting in Vancouver.

The Canadian dollar was pegged at 75 cents (U.S.) for the purpose of study calculations. It closed at 75.48 cents yesterday, down 0.83 of a cent, and has risen about 15 per cent in a year.

Analysts say the findings don’t mean fingers should be crossed for an extremely high dollar.

“I think we’ve already seen that there are a number of industries that have faced a very real competitive threat, even from the move (dollar’s rise) over the past year,” said Doug Porter, senior economist at BMO Nesbitt Burns.

“I think if we actually did have the currency move up into the 90s, there would be sectors in the manufacturing industry that would be in serious jeopardy,” he said. “I doubt that all of Canadian industry would be anything close to comfortable with a currency of above 90 cents.”

Labour costs and benefits, which accounted for 56 to 85 per cent of all location-sensitive costs in the study, are major reasons for Canada’s competitiveness.

The study, which reported all figures in U.S. dollars, found the average labour cost in Canada was $50,919 (U.S.), compared with $63,379 in the United States

But if the Canadian dollar rose sharply, Porter said, it would “tend to erase that labour cost advantage.”

KPMG’s eight-month study looked at 17 industries in the Group of Seven countries” Canada, the United States, Britain, Italy, Japan, Germany and France. Australia, Iceland, the Netherlands and Luxembourg were also included. Canada was the lowest-cost country in nine of those industries, which included aerospace, biomedical research and development and pharmaceuticals.

Consultants looked at the cost of starting and maintaining a business for 10 years, taking 27 factors into account, including land and offices, salaries and benefits, utilities, financing, taxes and transportation. The countries were then compared with the United States, which acted as an index.

For example, a startup software company with revenue of $14.2 million might have annual costs of $12.7 million in the United States. The same company could expect to spend $11 million in Canada and $14.6 million in Japan.

The study found Canada has the lowest electricity cost, at 6.3 cents per kilowatt hour, compared with 15.7 cents in the Netherlands.

Canada ranked fifth lowest in natural gas costs, and third in telecom costs.

The study also analyzed the cost-competitiveness of 30 large international cities. Toronto finished third behind Montreal and Melbourne.

The study didn’t look at other factors that affect company decisions, such as business environment, cost of living or quality of life. It also omits security, legal issues and government incentives.

KPMG released similar reports in 1996, 1997, 1999 and 2002. More than 60 sponsors, including international governments, corporations and consulting firms backed this year’s study.

Downloaded from www.competitivealternatives.com

Myths and Memes about Single Payer: A Rebuttal

International Journal of Health Services
Volume 35, Number 1 / 2005
Myths and Memes about Single-Payer Health Insurance in the United States:
A Rebuttal to Conservative Claims
By John P. Geyman

Abstract:
Recent years have seen the rapid growth of private think tanks within the neoconservative movement that conduct “policy research” biased to their own agenda. This article provides an evidence-based rebuttal to a 2002 report by one such think tank, the Dallas-based National Center for Policy Analysis (NCPA), which was intended to discredit 20 alleged myths about single-payer national health insurance as a policy option for the United States. Eleven “myths” are rebutted under eight categories: access,cost containment, quality, efficiency, single-payer as solution, control of drug prices, ability to compete abroad (the “business case”), and public support for a single-payer system. Six memes (self-replicating ideas that are promulgated without regard to their merits) are identified in the NCPA report. Myths and memes should have no place in the national debate now underway over the future of a failing health care system, and need to be recognized as such and countered by experience and unbiased evidence.

http://baywood.metapress.com/app/home/contribution.asp?wasp=3e83c37qug2rrva0up67&referrer=parent&backto=issue,3,10;journal,1,137;linkingpublicationresults,1:300313,1

Comment: John Goodman of the National Center for Policy Analysis has recently released his book, “Lives at Risk.” It is an attack on singlepayer reform that is a rehash of their prior report on twenty alleged myths of single payer insurance (mentioned in the abstract above). Goodman’s book was given a glowing review in the current issue of JAMA, but that review was by Jane Orient, Executive Director of the extreme right-wing Association of American Physicians & Surgeons and a long-standing opponent of single payer reform.

PNHP’s president, John Geyman, has written a detailed rebuttal of Goodman’s claims which has been published in the current issue of the International Journal of Health Services. The abstract is reproduced above, but, unfortunately the full article is accessible only to subscribers or by payment of a fee. At any rate, it is important to know that PNHP has not allowed Goodman’s outrageous thesis to go unchallenged.