PNHP

Health costs talk is crucial

Health costs talk is crucial

Sun, Jul. 25, 2004 
Health costs talk is crucial

States need incentives to try policy changes
Mercury News Editorial

Crisis doesn’t begin to describe the extent of America’s health care problem.
The nation’s economic future is being threatened by a system that is drowning America’s employers and its workers in a sea of rising insurance premium costs.

California’s business and labor unions should join forces to find common ground and demand a national conversation about health care reforms. Now.

Health care alternatives exist, ranging from the relatively simple — revamping our employer-based system — to the more radical, such as instituting a single-payer or voucher system.

Congress should be pushed to provide incentives for states to experiment with policy changes to see whether they would be effective at a national level.

The problem isn’t a lack of funding — America spends $1.6 trillion a year on health care. That’s 50 percent more per capita than the second-highest spending country, Switzerland.

Yet the health of the average American is worse than that of citizens in any of the major industrialized nations. Americans’ life expectancy has slipped to 24th in the world after topping the rankings three decades ago. The World Health organization now ranks the United States 37th in the world in overall health system performance, sandwiched between Costa Rica and Slovenia. Those low rankings are in large part due to the fact that 44 million Americans — many of them workers — have no health care insurance. As a result, inability to pay medical expenses is expected to soon become the leading cause of bankruptcy in America.

President Bush’s solution is underwhelming, at best. He proposes to cut the number of uninsured by roughly 10 percent by providing tax credits and personal savings accounts to the uninsured.

Democratic challenger John Kerry’s proposal is more ambitious. He advocates eliminating Bush’s tax cuts for households with an income of $200,000 or more and use those savings to fund coverage for an additional 27 million people. But his plan will have a difficult time passing Congress, if Republicans retain control.

Neither candidate puts enough emphasis on bringing down costs.

One way to accomplish that goal is to adopt a universal health care system. Many Californians are unaware that Sen. Sheila Kuehl’s single-payer bill — SB 921 — has passed the state Assembly and is pending in the state Senate. The thrust of her argument is that the United States wastes nearly 20 percent of its health care dollars — $300 billion annually — on health care administrative costs. In contrast, administrative costs account for only 2.1 percent of Medicare’s budget.

But universal health care contains its own set of unknowns. Oregon voters in 2002 voted down a single-payer initiative over fears that taxes would go through the roof and that rationing of certain medical procedures (a recurring criticism of Canada’s single-payer system) would ultimately become a fact of life. California would need further assurances on both fronts before making that leap of faith.

Kuehl gets high marks for having the courage to move the health care conversation forward.

Those who remain on the sidelines have themselves to blame if health care premiums jump another 14 percent next year and if costs continue to rise four times faster than wages.

Ford: Health costs could drive investment overseas Firm's vice chairman says rising fees hurt competitiveness

Tuesday, July 20, 2004
Ford: Health costs could drive investment overseas Firm’s vice chairman says rising fees hurt competitiveness
By Eric Mayne / The Detroit News

If U.S. health care costs continue to soar, Detroit automakers may be forced to invest overseas rather than the United States to remain competitive, Ford Motor Co. Vice Chairman Allan Gilmour said in a speech Monday.

Ford spent $3.2 billion on health care in 2003 for 560,000 employees, retirees and their dependents. The costs added $1,000 to the price of every Ford car and truck built in the United States — up from $700 three years ago.

The rising health care tab means Ford has less money to invest in new products.

“Our foreign competitors don’t share these problems,” Gilmour said Monday in a speech before the National Governors Association in Seattle. “These health care challenges have created a competitive gap, that if unchecked, will drive investment decisions away from the United States.”

Automakers and other manufacturers increasingly arelooking overseas to take advantage of lower wages and cheaper benefits, raising fears that U.S. auto jobs could be outsourced. But the vast majority of vehicles sold in the United States are still assembled in North America. Toyota Motor Co.p., Honda Motor Co. and other foreign automakers with U.S. operations enjoy lower health care costs because they employ younger workers and support fewer retirees. Nationwide, health care expenditures have grown 7 percent annually for five years — more than double the inflation rate — to $1.67 trillion in 2003.

Gilmour told The Detroit News in an interview Monday that he addressed the group because state governments must be involved in the process to fix the system. But meaningful progress can’t be made until after November’s presidential election, and Ford isn’t taking sides. Until then, Ford plans to adopt better management and consumer education to affect change. “We have to help Americans become better health care consumers,” said Gilmour, who has spent the last six months studying health care costs and their impact on Ford, the auto industry and the country.

He questioned why insurance companies cover the cost of visits to a doctor’s office. But insurance companies won’t pay for phone advice from that same doctor.

It is possible to cover the cost of such service, without compromising a patient’s needs, said Jim Morell, immediate past chairman of the American Association of Healthcare Consultants.

“If you look at somebody who sees a doctor on a regular basis, there probably aren’t many surprises,” Morell said. “But right now, everything is geared to a face-to-face encounter. We don’t have a handle on the record-keeping for (phone service).”

Ford is encouraging increased Internet use to streamline and lower the cost of delivering health care services — such as the transfer of medical records.

“We’re auditing everything we can find to audit,” Gilmour said.
 
Gilmour urged the governors to take decisive action.

“We, as employers, need your leadership — perhaps including the establishment of a broad-based coalition — to find a solution for the long term. Not a quick fix for the present.”

You can reach Eric Mayne at 313-222-2443 or emayne@detnews.com.

Ford: Health costs could drive investment overseas Firm’s vice chairman says rising fees hurt competitiveness

Tuesday, July 20, 2004
Ford: Health costs could drive investment overseas Firm’s vice chairman says rising fees hurt competitiveness
By Eric Mayne / The Detroit News

If U.S. health care costs continue to soar, Detroit automakers may be forced to invest overseas rather than the United States to remain competitive, Ford Motor Co. Vice Chairman Allan Gilmour said in a speech Monday.

Ford spent $3.2 billion on health care in 2003 for 560,000 employees, retirees and their dependents. The costs added $1,000 to the price of every Ford car and truck built in the United States — up from $700 three years ago.

The rising health care tab means Ford has less money to invest in new products.

“Our foreign competitors don’t share these problems,” Gilmour said Monday in a speech before the National Governors Association in Seattle. “These health care challenges have created a competitive gap, that if unchecked, will drive investment decisions away from the United States.”

Automakers and other manufacturers increasingly arelooking overseas to take advantage of lower wages and cheaper benefits, raising fears that U.S. auto jobs could be outsourced. But the vast majority of vehicles sold in the United States are still assembled in North America. Toyota Motor Co.p., Honda Motor Co. and other foreign automakers with U.S. operations enjoy lower health care costs because they employ younger workers and support fewer retirees. Nationwide, health care expenditures have grown 7 percent annually for five years — more than double the inflation rate — to $1.67 trillion in 2003.

Gilmour told The Detroit News in an interview Monday that he addressed the group because state governments must be involved in the process to fix the system. But meaningful progress can’t be made until after November’s presidential election, and Ford isn’t taking sides. Until then, Ford plans to adopt better management and consumer education to affect change. “We have to help Americans become better health care consumers,” said Gilmour, who has spent the last six months studying health care costs and their impact on Ford, the auto industry and the country.

He questioned why insurance companies cover the cost of visits to a doctor’s office. But insurance companies won’t pay for phone advice from that same doctor.

It is possible to cover the cost of such service, without compromising a patient’s needs, said Jim Morell, immediate past chairman of the American Association of Healthcare Consultants.

“If you look at somebody who sees a doctor on a regular basis, there probably aren’t many surprises,” Morell said. “But right now, everything is geared to a face-to-face encounter. We don’t have a handle on the record-keeping for (phone service).”

Ford is encouraging increased Internet use to streamline and lower the cost of delivering health care services — such as the transfer of medical records.

“We’re auditing everything we can find to audit,” Gilmour said.
 
Gilmour urged the governors to take decisive action.

“We, as employers, need your leadership — perhaps including the establishment of a broad-based coalition — to find a solution for the long term. Not a quick fix for the present.”

You can reach Eric Mayne at 313-222-2443 or emayne@detnews.com.

SCHIP is now failing us

Today’s Topics:

1. SCHIP is now failing us (Don McCanne)
2. B. Capell on the declining enrollment in SCHIP (Don McCanne)
3. D.W. Light on the declining enrollment in SCHIP (Don McCanne)

Sat, 24 Jul 2004
Subject: qotd: SCHIP is now failing us

The Kaiser Commission on Medicaid and the Uninsured
News Release
July 23, 2004
New Survey Reports Children’s Enrollment in SCHIP Coverage Dropped for the First Time in the Six-Year History of the Program Reflecting both the economic downturn and the significant drop in state revenues over the past two years, enrollment of children in the State Children’s Health Insurance Program (SCHIP) declined during the second half of 2003 for the first time since enactment of SCHIP in 1997. Enrollment declines in 11 states and the District of Columbia more than offset moderate increases in 37 other states, according to the new 50-state survey.

http://www.kff.org/medicaid/kcmu072304nr.cfm

Comment: As we have continued to watch the expansion of the rolls of the uninsured, we have taken some solace in the one success of the past decade: the expanding coverage of children through the SCHIP program. Now current public policies have resulted in this significant setback in children’s coverage.

We need a system which would automatically enroll everyone in a program with comprehensive coverage. With our existing fragmented system, we have demonstrated that we have not met the threshold of adequate political support for these patchwork government programs. But the experience of other industrialized nations has demonstrated that a universal program would meet that threshold.

If we want a universal, comprehensive system, we are going to have to elect politicians who will enact it. Until then, we can weep, especially for the children.

—————————————————————————————–
Date: Sat, 24 Jul 2004 09:41:45 -0700
Subject: qotd: B. Capell on the declining enrollment in SCHIP

Beth Capell, Ph.D., lobbyist for California’s Health Access:

I derive a sadder lesson from this experience: an initial spurt of political will is not sufficient to sustain commitment to adequate funding of health care. Sustaining adequate funding, even in tough times, takes sustained and ongoing effort by health advocates.

That will be as true in a system of universal coverage as it is for SCHIP. Having all of us in the same system will strengthen the will, but as the experiences in Canada, Britain, and elsewhere demonstrate, those who value profits over patients are always with us.
——————————————————————————————
Message: 3
Sat, 24 Jul 2004
D.W. Light on the declining enrollment in SCHIP

Donald W. Light, Ph.D., Professor of Comparative Health Care Systems, University of Medicine and Dentistry of New Jersey:

You are right that automatic enrollment is the key. So is a universal system rather than patches in a quilt. We are now seeing the same process that characterized CHIP occur with the new Medicare coverage. Millions of extra dollars and a sub-industry is being created just to overcome the bureaucratic complexities and many stipulations that are part of any one patch, so that those who “should” enroll do.

Health Care Crisis Incites Residents

THE SAG HARBOR EXPRESS
ISSUE DATE: 6/24/04 June 2004

Health Care Crisis Incites Residents
by Beth Young

Sag Harbor has become known of late for its social activist groups, from the Women in Black to East End Direct Action to every stripe of neighborhood and community organization.

Several members of the Sag Harbor community launched the new Coalition for Health Coverage in Suffolk (CHCS) organization this weekend at a press event in front of the emergency department at Southampton Hospital.

The group is part of a nationwide campaign to bring attention to what members believe is a growing health care crisis in America.

Their concerns are broad-reaching, from prescription drug plans for seniors to women’s health issues to the underinsurance of immigrants and small businesses, but they share a focus on the unique issues facing the South Fork.

Kathleen Madigan of Sag Harbor is planning a new TV documentary called “On the Edge: Living Without Health Insurance,” which will be hosted by another Sag Harborite, investigative journalist Jim Henry. Terry Winchell will provide the music for the program.

“We’ve discovered thousands of people are suffering silently,” said Madigan. “People are working so hard to stay alive out here.”

Madigan, who helped form the Women’s Health Partnership to provide free mammograms and pap smears on the South Fork, has seen her share of those most impacted by the health care crisis here.

The show will follow the plight of both the average hard-working citizen and recent immigrants to an area where the needs of wealthy citizens are placed at the forefront. The program will include an interview with the CEO of Southampton Hospital, which recently came under fire for its now-rescinded Southampton PLUS program. That program would have entitled those who paid an additional fee to superior care at the hospital.

Dr. Elaine Fox has practiced medicine in Southampton for 17 years, and she came to the rally on Saturday because of the crisis many patients are having in getting the care they need.

“It’s totally unjust,” she said of the American health care system. “Health care is a right, not a privilege. This country treats healthcare as a commodity – its just not right.”

Though the hospital’s PLUS program may be an easy target for those upset about health care, Dr. Fox believes the issue is more complex.

“The hospital is having this problem because a not-for-profit hospital is forced to compete with for-profits to stay alive,” she said.

James Henry, whose recently completed book “The Blood Bankers” exposes shady international banking practices, has just as much of a concern for health care practices.

“It’s of interest to small business owners, immigrants,” he said. “Our focus is on organizing and educating people. There are 44 million uninsured people in the United States, 2.5 million more in the past year. In the U.S. as a whole, more than 80 million people have been uninsured for six months.”

Specific policies that the group would like to explore include that the government bargain more efficiently with pharmacies, and bringing attention to the new bill HR676, which would reorganize health care through a single payer system. That plan would save $280 billion in administrative costs over the current system.

Members of the group call themselves “Health Care Voters,” and they are pledging to make health care a priority every time they go to the polls. They plan to pressure elected officials to make health care a priority, by voting only for candidates who have detailed, feasible plans to provide quality, affordable health care.

The group estimates that over 250,000 Americans have signed on for the pledge.

Beyond the rhetoric of consumer-driven health care

HSR (Health Services Research)
A Special Supplement to HSR
August 2004

Guest Editors’ Introduction
Consumer-Driven Health Care: Beyond Rhetoric with Research and Experience
By Anne K. Gauthier and Carolyn M. Clancy

The evidence and commentaries in this special issue, while needing to be interpreted with caution, are rich with lessons to help purchasers, policymakers, plans, consumers and researchers as consumer-driven health care continues to evolve. At the moment, the reality of consumer-driven health care appears to be neither the panacea promoters would wish nor the poison opponents fear, and there are still concerns for how the poorer and sicker will fare.

Commentary
Current MSA Theory: Well-Meaning but Futile
By George C. Halvorson

The MSA theory makes sense only until you add the actual cost data to the equation. Then the MSA approach runs into a real problem if you assume that the goal is to actually reduce health care costs. The typical MSA benefit package is irrelevant to expensive patients; irrelevant to cheap patients; and a potentially painful disincentive for chronic care patients.Despite its undoubted good intentions, that is not really a good care-based approach.

Commentary
Defined Contribution Health Plans: Attracting the Healthy and Well-Off
By Gail Shearer

The findings from these two studies (two studies in this special edition on consumer-driven health care plans or CDHCs) are troubling for another reason: because of the nature of adverse selection, over time, DCHPs (defined contribution health plan, a more apt label according to Shearer) may drive lower-deductible health insurance options out of the marketplace.

Bolstered in the health care market with the enactment of the health savings account provision in the Medicare bill, in a few short years, it is very possible that unpopular high-deductible health insurance coverage will be the only choice that many employees may face for their coverage in the employer-based market. Those with high health care expenses will face higher out-of-pocket costs than they would in the absence of DCHPs. It is troubling that this type of change in the health care marketplace will take place in the absence of a public debate. Advocates of medical savings accounts, for example, maintain that there should be a choice of plans. The reality is that over time, as adverse selection pushes the next “relatively healthy” group toward high-deductible plans, an insurance marketplace death spiral will result and ultimately will remove the very choice (a low-deductible plan) that employees want.

Concluding Commentary
Consumer-Directed Health Care: Will It Improve Health System Performance? By
Karen Davis

These studies are too preliminary and the consumer- directed health plan products too new to reach firm conclusions about their long-term value. However, concerns are raised by the initial experience. It seems clear that they are relatively more attractive to higher-income individuals. When health status is measured by prior utilization rather than demographic characteristics such as age or presence of chronic conditions CDHP plans appear to experience favorable risk selection. The downside of the growth of CDHP is likely to be increasing market segmentation, with lower-income and sicker individuals served by managed care plans and higher- income, healthier individuals enrolled in CDHP products. Without risk adjustment, sicker and lower-income individuals will pay higher premiums, and HMOs may eventually face a “death spiral” as unfavorable risk selection worsens.

http://www.blackwell-synergy.com/servlet/useragent?func=synergy&synergyAction=showTOC&journalCode=hesr&volume=39&issue=4p2&year=2004&part=null

And…

Kaisernetwork.org
Alliance for Health Reform
7/9/2004
Briefing: Consumer-Directed Health Care: The Next Big Thing?

Excerpts from the transcript of the Q & A portion:

Ed Howard: Time for one more question

Bridget: I’ll be very brief. I’m Bridget [inaudible] with the Energy and Commerce Committee. I spend a lot of my time working on the Medicaid program, and I have to tell you that every time I see that one of the states has made an application to put in their waiver to include HSAs I fall on the floor laughing, simply because I can’t imagine, since Medicaid was originally designed for people who have very low incomes to pay their deductibles and [inaudible] to have access to health care because they don’t have it. I would really just like to know how you would define a compassionate, competitive deductible for somebody who makes say $6,000 a year.

Michael Parkinson (chief medical officer, Lumenos, a provider of consumer-driven health care): …What we’re saying is, that if you look at the public resources, state and federal going into to pay for the Medicaid recipient and then even if you were broadly thinking about what went into everything around them that was meant to be health inducing behaviors, monetize that in a revenue neutral demonstration project to say, that is discretionary money that person can have. I’m not saying dealing with an HSA with $600 and make them come out of their own pocket. What I’m saying, think of the vehicle that has an insurance product and discretionary account that gives them disability control and support, somewhat like cash and counseling, and let’s basically do it…

Bridget: …the question I have is if you got somebody at that income level, they got a lot of things going on in their lives and you try to tell them that they can go out and shop for where they’re going to find a doctor who they’re going to pay, are they even going to know enough to ask the doctor what the right treatment or whatever, I think you’re just setting yourself up for a situation…

Michael Parkinson: That’s why we want to do a demo on the health care side. In reality here’s what we do. We assign you a personal health coach who helps you understand your case-

Bridget: That’s like a clinical trial for treating children. You’re going to take away health care services from people because you want to find out if it works or not.

Ed Howard: Gary, you have a comment?

Gary Claxton (vice president, Kaiser Family Foundation): What’s the risk that people, what happens when they do a bad job as consumers and they have absolutely no money, what happens? I think that’s Bridget’s question.

Michael Parkinson: That’s what happens today. We all pay for health care anyway in the end.

Gary Claxton: Some people have [inaudible].

Michael Parkinson: I guess I’m not expressing myself clearly folks. The community, the state of Tennessee, the state of Georgia, the state of Florida are paying 100% of all expenses in one way or another jointly with the feds.

Gary Claxton: You put them at risk [inaudible].

Michael Parkinson: I didn’t say anything about monetizing or giving them the average of the risk. I don’t want to do on the back of an envelope how this would work tactically. The reason that I came to the Hill today among others, is that you have the opportunity to think more broadly about designs in the employer sector, innovate and also I can tell you that there is some merits to this model as it relates . . . one of the things to me about this model, it’s very cost empowering and it’s very ennobling on the individual level. I personally, call me an idealist, but that’s another outcome of cash and counseling, people felt better about some of the things they can do, the choices that they had. I think that you might want to consider how this might work, that’s all. I’ll leave it at that…

http://www.kaisernetwork.org/health_cast/hcast_index.cfm?display=detail&hc=1224

Comment: The comments here will be limited to consumer-driven health care (CDHC) as a means to reduce health care costs by increasing patient sensitivity to the costs of care. Improving an informed patient-consumer choice through greater transparency in the quality of care delivered by physicians, hospitals and other providers is also frequently labeled as consumer-driven health care. Though an important but essentially unrelated topic, it will not be addressed here.

Many respected, objective health policy analysts have cautioned that it is too early to draw clear conclusions on the impact of these proposals which shift the burden of paying for health care to those who have greater needs. Implicit in their comments is the fact that we will need another decade or so of experience to discover just what will happen, just as we had followed the impact of a decade and more of managed care. But it is crucial to realize that these proposals were not created in an informational void.

An extensive body of health policy literature provides us with enough information to use informal simulations to project quite precisely the impact. We already know that erecting financial barriers to care, which is fundamental to CDHC, impairs access and results in impaired health care outcomes. Period!

Using Bridget’s words, “taking away health care services from people because you want to find out if it works or not,” is nothing short of health policy malpractice! This experiment will kill people. Let’s abandon it immediately!

Op-ed by Drs. David Himmelstein and Steffie Woolhandler on the Kerry Health Plan

Cure a Sick Healthcare System

Universal coverage under National Health Insurance would not increase health costs

By Steffie Woolhandler and David Himmelstein
In These Times
July 23, 2004

Like Capistrano�s swallows, the Democrats always return to health reform. Unfortunately, this year they�re showing little more brain power than the birds.

Don�t get us wrong, we�re no fans of President George Bush�s health agenda: Ship tens of billions of federal dollars to a panoply- of healthcare firms privatize Medicare and dangle skimpy tax credits in front of the 44 million uninsured. But Kerry seems intent on refilling a failed prescription for reform: by proposing to give hundreds of billions to private insurers in exchange for measly coverage for some of the uninsured.

Our healthcare system is so sick that even people with good insurance are feeling the fever. Premiums for employers and their workers are rising 12 percent, even 18 percent per year. Employers have downsized coverage by super-sizing copayments and deductibles. Insurance often proves illusory when it�s most needed�payment denials, visit limits, loopholes and policy cancellations leave millions stuck with huge medical bills despite what they thought was good coverage. Most people�s choice of doctors and hospitals is restricted. Seniors can�t afford drugs, Medicaid recipients face draconian cuts and everyone�s rushed out of the hospital.

Investor-owned healthcare has flourished, despite definitive evidence that it raises both costs and death rates. And bandit CEOs regularly raid our health system, making off with seven- and even eight-figure incomes as their reward for cooking the books, defrauding Medicare and abusing patients to inflate profits.

Bush�s signal healthcare achievement, passage of the $534 billion Medicare drug bill, already is unravelling. Double-digit yearly price increases�even for older drugs�already have eaten up the paltry savings (about 15 percent) available from the recently introduced Medicare drug discount cards. Even the massive flow of federal funds that will commence in 2006, when the full drug benefit kicks in, will only get seniors back where they started last year in terms of drug spending.

Why will $534 billion in new federal spending (over 10 years) buy so little? First, the new drug coverage will be purchased through private insurance plans with overhead costs that average four times Medicare�s. Second, the bill prohibits Medicare from negotiating with drug companies to lower their prices (and effectively bans imports of Canadian drugs on the preposterous pretext that they�re unsafe). Both the Canadian government and our own Defense Department have used their purchasing clout to garner volume discounts. Prohibiting such bargaining assures drug firms of hundreds of billions in excess profits.

Finally, the bill hands Medicare HMOs�which have been ripping off Medicare for years�an extra $46 billion. Since 1985, Medicare has paid HMOs for seniors who choose to enroll. The payment formula has allowed HMOs to collect far more than it would have cost the taxpayers to care for these seniors in the traditional Medicare program. The Congressional Budget Office and the General Accounting Office have estimated these extra costs at about $2 billion per year. Yet HMOs�burdened by administrative overhead far higher than Medicare�s�complained they couldn�t make a profit from Medicare patients.

Bush�s solution? Send them more money. So in 2004, Medicare will pay HMOs an extra $552 above the cost of traditional Medicare for each senior they enroll, according to an estimate by the Commonwealth Fund.

Incredibly, the Republicans (and many Democrats) describe this corporate welfare program as a �pro-competition� health policy. Drug firms are granted patents that shield them from generic competitors, foreign drug imports are banned, government is precluded from negotiating over prices and HMOs are given huge subsidies to compete unfairly against Medicare�all in the name of competition.

Sadly, many Bush initiatives merely continued Clinton�s policies. Kerry promises more of the same. He proposes to spend about $65 billion annually to expand coverage through two mechanisms: One, offer government subsidies for private insurance; two, expand Medicaid. As a nod to middle-class Americans, he�d try to hold down private premiums by having the feds pick up the tab for any patient whose care costs more than $50,000�a misguided effort that shifts some costs to the taxpayers but leaves control in the hands of private firms. Kerry�s massive new spending would leave at least 17 million uninsured (by his own estimate) and tens of millions more with inadequate coverage, and stimulate the malignant growth of healthcare costs.

In contrast, a single payer national health insurance (NHI) program could simultaneously cover all of the uninsured, upgrade coverage for most other Americans and save money. Under NHI, everyone would be covered for care at any hospital, doctor�s office or clinic without copayments or deductibles. Patients would enjoy a free choice of provider, and doctors and nurses would be freed from the massive bureaucracy that encumbers care and wastes money. For-profit ownership of hospitals and other clinical facilities would be proscribed, and private health insurers and most HMOs would be eliminated�saving billions now squandered on profits and executives� incomes, while upgrading quality.

Surprisingly, universal coverage under NHI would not increase health costs. At $6,200 per capita, Americans already spend nearly twice as much for care as do Canadians, Australians, Germans, Swedes and the Swiss�all of whom enjoy universal coverage and lower death rates than ours. Much of the cost difference is due to our mammoth health bureaucracy, which wastes upward of $300 billion annually. NHI could slash bureaucracy by replacing the current welter of private plans with a single public payer and simplifying payments. Even the Congressional Budget Office and the General Accounting Office concede that NHI could save enough on bureaucracy to cover all Americans for what we�re now spending.

On the contrary, Kerry�s plan would actually boost bureaucracy. He�d funnel hundreds of billions of additional public dollars through wasteful private plans. And he�d do nothing to cut the tens of billions that doctors and hospitals waste on insurance paperwork. Kerry claims administrative savings for his plan�through computerized billing and claims processing. But such claims are not credible; more than two-thirds of all healthcare bills already are filed electronically. It�s not sending the bill that�s expensive. It�s the insurance advertising and sales, utilization review, eligibility determination, obtaining pre-approvals for referrals, cost-tracking, and co-payment collections. All would continue under Kerry.

For the 85 percent of Americans who currently have insurance, Kerry offers virtually nothing. No plausible plan to upgrade their coverage, slow premium increases, bring down drug costs, improve quality, or ex-pand the number of nurses. He�d just ask tax-payers facing skyrocketing premiums to chip in for the coverage of the uninsured.

Much of what Kerry is pro-pos-ing already was tried, and failed miserably. Medicaid expansion has been pushed by Democrats for decades. Since 1987, 11.4 million people have been added to the Medicaid rolls, and Medicaid spending has risen from $50 billion to $228 billion, eating a hole in state budgets. Yet the number of uninsured has grown by 10.2 million people during this period, and Medicaid has remained second-class coverage, segregating the poor. On many measures, Medicaid patients fare no better than the uninsured. Medicaid should be replaced by mainstream coverage, not expanded.

Subsidies for private coverage also have a dismal track record. A 2002 federal program offers to pay 65 percent of premium costs for workers who�ve lost jobs due to foreign imports. As of December 31, 2003, 8,874 of the 500,000 eligible workers were taking advantage of the subsidy. With private coverage costing about $10,000 per family, few low-income workers can afford insurance, even with a big boost from government.

NHI isn�t just good policy, its good politics. According to a recent Washington Post/ABC News poll, 62 percent of Americans favor �a universal health insurance program, in which everyone is covered under a program like Medicare that�s run by the government and financed by taxpayers.�

Of course, NHI would be a death blow to the health insurance industry and it would threaten the super-profits of powerful drug and hospital firms. Presumably, that is why only Ralph Nader and Dennis Kucinich have been willing to buck the special interests, and say what Americans long to hear about health care: NHI can succeed. Healthcare is a right, not a commodity.

The political process in repairing a single payer system versus a fragmented system

The political process in repairing a single payer system versus a fragmented system

Toronto Star
Jul. 22, 2004
Televising health summit `very risky, very bold’ move
Martin to meet provincial leaders Sept. 13 to 15
By Les Whittington

(Prime Minister Paul) Martin, who fought the recent election campaign largely on a promise to protect medicare from being eroded by private, for-profit services, revealed the date of his health-care showdown with the premiers after meeting for the first time with his newly appointed cabinet.

The written announcement of the first ministers’ meeting left no doubt about
Martin’s aims. “The major agenda item will be how to strengthen for the long
term Canada’s publicly funded, single-payer health-care system,” it said.

In a horse-trading session to be broadcast across the country from Ottawa,
Martin will seek support from restive premiers for the Liberals’ main electoral promise – a 10-year blueprint to refurbish the hard-pressed health-care program.

Much of the talk will focus on Martin’s offer of $4 billion in extra federal cash to the provinces in exchange for their help implementing a National Waiting Times Reduction Strategy.

This is envisioned by the Liberals as an “all-out drive” over the next five years to achieve significant reductions in waiting times for medical procedures in five areas: cancer, heart, diagnostic imaging (MRIs), joint replacements and sight restoration.

The federal Liberals also want provincial help with major reforms to reduce runaway medicare costs while improving access to health providers, expanding
home care and developing a national pharmacare program.

http://www.thestar.com/NASApp/cs/ContentServer?pagename=thestar/Layout/Article_Type1&c=Article&cid=1090447813703&call_pageid=968332188774&col=968350116467

Comment: Opponents of health care reform in the United States frequently claim that we don’t want to have a “mess” like they have in Canada. Canada does have a problem with queues (though often exaggerated), and they are now addressing, in an open political process, how they can best rectify this problem. Although single payer systems require continual political maintenance, they certainly do work in ensuring that everyone continues to have affordable access to health care.

Contrast that with health care in the United States, a non-system for which “mess” is a grossly inadequate descriptive term. Our fragmented system is suited to incremental measures which have failed to achieve universal coverage and access and have perpetuated mediocrity in our health care outcomes in spite of the massive infusion of funds. Until we adopt a comprehensive, universal system, we will not be able to resolve our current problems and then maintain higher standards by fine tuning our system through an open public process as is currently taking place in Canada.

Imagine the system that we would have if we exchanged our fragmented mess
for Canada’s single payer, and then infused the resources that we have already designated for health care. With the tweaking of incrementalism, our health care parameters have only worsened. But wouldn’t it be nice if we had a high quality, comprehensive system that really would require simply modest tweaking to enable it to continue to function well? That’s a mess that we could live with.

Single Payer Healthcare Study Approved

Commonwealth Of Massachusetts
MASSACHUSETTS SENATE
7/22/04

Contact: Kate Regnier, 617-722-1280
617-251-9567 (cell)

Senator Steven Tolman Announces Approval Of Bill to mandate Single Payer health care study

(BOSTON) – Senator Tolman today announced that the House and Senate have
approved a bill that mandates an analysis by the state of the effects of a single
payer health care system. A single payer system would replace the current
fragmented mixture of public and private health care plans with a single uniform
plan.

The bill requires that a study be made of, among other things, both the cost and the potential savings associated with the implementation of a single payer health care system. The bill further requires that a study be made of the impact on Massachusetts residents, the Commonwealth’s budget, health care professionals and institutions, the Medicare and Medicaid systems, and state and federal laws and regulations. An interim study must be filed with the general court by December 1, 2004, with the final report due by April 1, 2005, along with relevant draft legislation if necessary.

Massachusetts currently faces a crisis in its health care system, with studies indicating that approximately 1.5 million individuals under the age of 65 were uninsured at some point during 2002/2003. One of the primary arguments advanced by opponents of a universal health care system is the potential cost to
the state. However, a comprehensive study of the costs as well as the myriad
benefits (both financial and otherwise) has not previously been performed by the
Commonwealth.

“With literally millions of people un-or underinsured, despite the exorbitant amount of money that we spend on health care, it seems clear that our current health care system is broken,” said Senator Tolman. “We took powerful strides toward remedying that situation with the passage of the health care constitutional amendment last week. This study is vitally important and should highlight the waste and inefficiency that is endemic in our current health care system. We must continue to be vigilant, however, in exploring solutions that would offer affordable, quality health coverage to everyone.”

The bill will now go to Governor Romney for his signature.

Article by PNHP member in New Haven

New Haven Register
July 22, 2004

With health care crisis, the trees are obscuring the forest
Steve N. Wolfson, M.D.  

Our health care system is in massive disarray, but we are focusing on the trees and missing the forest. This is most obvious in the “insurance state.”

This came home to me as I sat with a patient and she told me that she shortly will not be able to afford her medication. Her husband has been laid off from his job, and their insurance will lapse in three months. They will then join the uninsured, Americans whose prognosis for illness and death shames us all.

The trees: Faced with rising costs, declining reimbursement, and patients who are uninsured and unable to pay for services, formerly charitable hospitals are foreclosing on homes and garnisheeing wages. Faced with increasing barriers to reimbursement while malpractice insurance rates soar, physicians are leaving their practices and their patients.

Patients are foregoing needed medications and losing the opportunity to avoid illness. When illness comes, they are accumulating a crippling burden of debt. More and more of the burden of payment is being shifted to patients. The result is that expenditures that appear discretionary are being dropped.

Too often, this means preventive medicine is out. For those who cannot drop services, meaning those who are already ill, the burden is excruciating.

Meanwhile, businesses complain that the cost of health care for employees and retirees handicaps them in international commerce.

Faced with razor thin or negative bottom lines, the health care system as a whole copes with a rising tide of medical errors with an obsolete, incomplete information system and communications network. And those errors that are detected are snapped up by our legal colleagues, pursuing them within a tort system that with comparable inefficiency neither deters malpractice nor reliably compensates victims of negligence.

These are the trees. Newspapers are filled with examples of the injury done by the fragmented, incomplete approach we have taken toward health care, leaving only the insurers and the drug manufacturers as healthy, wealthy components of the industry.

We need to look at the forest. We have enormous resources in this great country, but they are being misdirected, confused, and diffused. Sophisticated information systems, thousands of nurses, countless thousands of administrative workers monitor insurance claims processing, sending bills with relentless efficiency, denying claims with speed and dispatch, while doctors’ offices, emergency rooms, laboratories and pharmacies barely communicate.

We have an accelerating nursing shortage, forcing hospitals to recruit talented nurses from all over the world to care for the sick, while here their colleagues are recruited away from the bedside to work for lawyers and insurance companies.

This is the forest. Our health care system is broken, the pieces lay all around, and directing our attention just to the pieces is doomed to failure.

This is the forest. We need a single health care system, a single payer for all services, a single focus for setting policies and priorities. It can incorporate all of the components.

We can use the enormous bureaucracy that has grown here. But it must be unified, prioritized, redirected toward delivering care, not paying for it. Clearly, this is an effort that would best be pursued by Congress and the national administration. But if not, then let it start in Connecticut.

Just by unifying the countless forms and applications, drug formularies and benefit plans, we can reduce the burden of administration that lies over health care, thereby freeing energies to address real problems, such as coverage for those now uninsured, and a systematic approach to medical errors. We need to do this now, for delay will only mean more pain.
—————————————————————————————–
Dr. Steven Wolfson is a New Haven cardiologist. Readers may write to him in care of the Register, 40 Sargent Drive, New Haven 06511.

NCHC's call for comprehensive reform

NCHC’s call for comprehensive reform

National Coalition on Health Care
July 20, 2004

Building a Better Health Care System

Principle 1 – Health Care Coverage for All

Principle 2 – Cost Management

Principle 3 – Improvement of Health Care Quality and Safety

Principle 4 – Equitable Financing

Principle 5 – Simplified Administration

Conclusion

The members of the National Coalition on Health Care are determined to work
for comprehensive reform of the American health care system. We offer these
specifications for reform as an agenda – an urgent agenda – for action. We close with two observations.

First, we would emphasize again our conviction that reform must be systemic
and system-wide. The problems of our health care system – and the principles
that guided our development of specifications for reform – are so closely
interrelated that they must all be addressed at the same time. One-dimensional reform will not work.

Consider: Unless we improve the quality of care, we will not be able to manage costs or afford universal coverage. Unless we manage costs effectively, we will not be able to achieve equitable financing or cover all Americans. And unless we assure coverage for everybody, we will be unable to make the system less complex, establish a level playing field without cost-shifting, or create a truly competitive health care marketplace.

Second, the status quo – clearly, undeniably – is not working. It leaves tens of millions of Americans with no health insurance at all. It allows costs to skyrocket year after year, putting coverage out of reach for millions of Americans and compromising the vitality of our economy and its capacity to create and sustain jobs. And it jeopardizes the safety of patients because of widespread sub- standard care.

The status quo is not acceptable. It is time – it is past time – to change it. The readers of this report can have a tremendous impact on the prospects for reform and the shape of reform. We hope that you will work with us in this important effort.

Full report:
http://www.nchc.org/materials/studies/reform.pdf

Press release:
http://www.nchc.org/news/press_releases/2004_07_20.pdf

Webcast of the briefing:

http://www.kaisernetwork.org/health_cast/hcast_index.cfm?display=detail&hc=1239.

Comment: On reading the full report it is difficult to come to any other conclusion than that a single payer, publicly funded and publicly administered insurance program offers the best option, and possibly the only realistic option, for achieving all of the Coalition’s goals. However, in order not to lose support of several coalition members, the other familiar options were included for consideration in this proposal.

Although this report is quite weak on specifying the one precise model of reform that should be adopted, it is very strong in supporting no less than truly comprehensive reform now. The message is that it is time to abandon the failed policies of incremental tweaking. That is a real step forward. We should move on it.

A private health care information technology system

A private health care information technology system

Health and Human Services
July 21, 2004
The Decade of Health Information Technology: Delivering Consumer-centric and Information-rich Health Care
By David J. Brailer, MD, PhD, National Coordinator for Health Information Technology

Conclusion

Health information technology provides a mechanism for refocusing care delivery around consumers without substantial regulation and industry upheaval. Information technology can result in better care (care that is higher in quality, safer, and more consumer responsive) and at the same time, more efficient (care that is appropriate, available, and less wasteful). There are very few other alternatives that can achieve both of these goals in a balanced and timely manner.

A national strategy for HIT is needed to achieve this change. This strategy should inform clinical care by introducing EHRs on a widespread basis everywhere clinicians provide treatment. It should interconnect clinicians to allow them to share data in a seamless and secure manner that protects patient privacy. It should customize health information and care so that consumers can have more control, more treatment options, and more choice of providers, including clinicians who may be at a distance. It also should improve population health by monitoring health care delivery in a simple and timely fashion so that quality, public health risks, and clinical research can be enhanced.

The changes that will accompany the application of information technology to health care will be difficult and will challenge fundamental assumptions that have been long held. However, this change is inevitable, needed, and beneficial. Actions can and should be taken to ensure that this change happens sooner rather than later, is more widespread rather than less, and also improves health care quality while addressing health care costs. The actions that are taken over the next decade will ensure that the best health care can be delivered to Americans, and that lasting and positive change in the health care industry will result.

And from the report:

Public-Private Leadership

Low adoption and use of HIT are attributable to many factors, including a
challenging marketplace and a previous lack of cohesive federal policies supporting it. Leaders across the public and private sector recognize that the adoption and effective use of HIT require a joint effort between federal, state, and local government and the private sector.

The private sector role

While the federal government plays an important role in HIT adoption, the effective use of, and value creation from, this technology lies predominantly with the private sector. The federal government will provide a vision and a strategic direction for a national interoperable health care system, but will rely on a competitive technology industry, privately operated support services, and shared investments in HIT adoption. The private sector must develop the market institutions to deliver the products and services that can transform the paper-based health care system into an electronic, consumer-centered, and quality-based system. The private sector can best ensure that HIT products are successfully implemented in ways that meet the varying needs of American health care across settings, cultures, and geographies. The private sector can also continue constant innovation in HIT and ensure that products are delivered on an affordable basis.

Federal and state governments have delegated most components of quality assurance to voluntary private organizations, including but not limited, to the JCAHO, NCQA, the National Quality Forum, residency review committees, and others. This will be true of quality and performance accountability in the future world of HIT. New market institutions need to be developed that can support clinician adoption of HIT, provide interoperability, and enhance the value realized by these investments. Close collaboration between public and private sectors can develop new methods for improving care without creating unnecessary regulation and minimizing reporting burdens on private industry.

The federal role

The federal government has substantial cause for addressing HIT adoption. Although the public is only now becoming aware of errors and mistreatments
in care delivery, the incidence and severity of errors has been known by researchers for some time. The health status of Americans is lower than it
would be if care were seamless, timely, and evidence driven. Health care
inefficiency and quality problems create economic burdens on other industries. When working Americans spend large shares of their time moving between physicians, dealing with the morbidity of improperly treated chronic illness, handling care burdens for their elderly parents, and recovering from errors and unnecessary therapies, the productivity of the American labor force, and America’s position as a global output leader, is harmed.

The federal government has numerous means of stimulating change in the health care industry, even if most of that change occurs in the private sector. While the federal government should not seek to reform health care without industry collaboration through the use of information technology, neither should it let the status quo exist simply because change will be difficult, complicated, and challenging to the industry. The DoD and VA are major federal health care delivery organizations and, increasingly, contractors for care in communities across the United States. The lessons these organizations have learned about HIT are an invaluable national asset and should be diffused through relationships with private delivery networks. Also, the Federal Employees Health Benefits Program (FEHB) contracts for care in most urban markets across the United States, and can drive positive economic change in general care delivery. Beyond finance and
contracting, the current operation of the health care industry results from a vast
patchwork of federal regulations that create many unintended inhibitory consequences for quality and efficiency.

The full report (178 pages):
http://www.hhs.gov/onchit/framework/hitframework.pdf

Press release:
http://www.hhs.gov/news/press/2004pres/20040721a.html

Comment: The private, competitive market has produced for us computers that are powerful yet inexpensive. Software that is used widely is quite inexpensive, and that in the public domain is essentially free after the initial development costs. With inexpensive computers and software developed in the public domain, the cost of an integrated health care IT (information technology) system should be quite modest. And the return in error reduction and administrative efficiency would far more than offset any real costs.

The Veterans Administration is far ahead of the rest of the nation in developing and utilizing an integrated IT system. And this has been developed in the public (government!) sector. Many other nations with universal health care systems have also introduced integrated IT systems primarily through the public sector.

What has the magic of the competitive marketplace produced in the way of an
integrated IT system to this date? High costs, very poor penetration, and system failures! Competitive market theory dictates that we should be leading the world with a high quality health care IT system at a low cost. What went wrong?

First of all, a fragmented system of multiple private plans, public programs and uninsurance does not provide an infrastructure that is very conducive to an integrated IT system. A single payer system, or, at minimum, a highly regulated system of universal coverage through multiple plans, would provide a framework that would ensure adaptability of an integrated IT system. Of course, a single, publicly administered system would be much preferred for an integrated IT system.

But the greatest difficulty with private IT solutions lies in the very nature of these marketplace models. Their goals are, above all, to maximize profits and to maximize the market price of their shares. To achieve those goals, corporate behavior varies from that of a public entity that has a simpler goal of establishing an effective and efficient high quality system that serves the heath care system and its patients well. The public system does not have to be concerned about being a successful business enterprise, but the private model does.

What might the private sector do that doesn’t serve our interests well? They will produce products that command the highest prices that the market will bear. They will design the products to provide a continuing revenue stream. Once gaining a significant share of the market, they will design incompatibility with other systems in an attempt to garner the entire market. They will design obsolescence into their systems to ensure future markets for their new innovative products. They will partner with and perhaps acquire other related entities that can expand profit potentials through greater control of components of the health care system which their products can influence. Although these are good business practices, they are terrible policies for our health care system.

But without market incentives, wouldn’t innovation be suppressed? We have market innovations now, and they have not resulted in the IT developments
that we desperately need. Public innovations have been effective in developing systems in other nations and in the VA that are already working. If private entrepreneurs can develop innovations that could benefit a public system, there is no reason that they couldn’t be sold to the government to place in the public domain. But they should be priced to reflect costs plus a fair one-time profit. We really don’t need more superfluous profit centers in our health care system.

The health information technology report released today should alarm us all.
Although we all agree on the importance of an integrated IT system, the Bush
administration is limiting the role of the government to being an enabler that encourages the private sector to develop a successful business model. Rather than higher quality at a lower cost, we’ll end up with mediocrity at a much higher cost, wasting even more of our health care dollars.

We desperately need strong leadership from our government in developing a
health care IT system that will serve us all well. But based on the current leadership that has failed to address even the fundamental issue of adequate
health care coverage for all, it is unlikely that we’ll see any enlightened leadership on this in the near future. But that said, “Watch this swing!”