ABC News’ Medical Editor Dr. Tim Johnson says the U.S. health-care system is in Critical Condition.(ABCNEWS)

Peter Jennings Interviews ABCNEWS’Medical Editor on the Health-Care Crisis

Oct. 21 — Did you know that the United States spends more on health care, per capita, than any other country in the world?

Even so, 43 million Americans have no health-care coverage — including one in 10 children. Americans spend $1.6 trillion on health care and much of the system is clearly troubled.

Insurance premiums are going up for the third year in a row. Americans already pay twice as much for prescription drugs as anyone else. The ramifications of all this are huge in the world’s richest nation.

Every other country with a single-payer system, and all of the rich ones do, manage to cover everyone, have universal care, get very good results and do it at a far lower overhead than in the United States have.

This week, every news program on ABCNEWS is taking a closer look at the American health-care system. Peter Jennings interviewed ABCNEWS’ medical editor, Dr. Timothy Johnson for Critical Condition.

Peter Jennings: Tim, you helped us decide on the name of the series, Critical Condition. What is it essentially that is so critical?

Dr. Timothy Johnson: Costs are rising, we’re getting less for our money, we spend twice as much per person on health care in this country than any other industrialized country but we have 43 million uninsured. So we spend a lot of money but we don’t take care of a large section of our population. I think we’re at a critical juncture as to how we should proceed.

Jennings: So you think it’s a critical juncture as well as a critical condition.

Johnson: Yes, I think that’s a fair statement. Certainly for some people it’s a critical condition. The uninsured in our country, we know that they have a 15 to 18 percent mortality rate increase compared to those that are insured. We know that 18,000 of the uninsured die each year in this country for lack of insurance. For them, it’s critical condition. But for the rest of us it’s a critical juncture: What’s going to happen to our health insurance?
PAGEBREAK

Jennings: Why are so many people in the ABCNEWS poll apparently happy with their health care? [The poll found 64 percent of people with health insurance said they are satisfied with their health care, but 59 percent are worried about being able to afford it in the future.]

Johnson: That’s always been an interesting question. They feel good about their own doctor, their own hospital. But when they start to think about it as a system, and what may happen to their health insurance and their employment, they get worried.

Jennings: Do you see a change in this for a year ago or two years ago?

Johnson: Absolutely. They numbers of concerned are going up. Three years ago, 44 percent were concerned about the overall care in this country, now 54 percent … that’s a 10 percent increase in just three years.

Jennings: The conventional wisdom is Americans like to think that we have the best health-care system in the world.

Johnson: And we do, certainly for people that are very rich or who have very good health insurance and who have very good connections into the health-care system. But for too large a number, 43 million, and many who are underinsured, it is not the very best system in the world.

Jennings: So what was notable in that regard in this poll this time?

Johnson: What was notable is that 62 percent of our population said that they would favor a system of universal health insurance financed by the government, paid for by the tax payers, as opposed to the system we now have, the employer based system where many people are uninsured. I was stunned by that figure.

Jennings: I think conventional wisdom has it that in America, land of the free, that the marketplace is where the price is best established.
PAGEBREAK 

Johnson: That’s true for commodities like a car, where you can go in and make choices and you can even walk out of the showroom if you want. You can’t do that when you’re sick. You can’t do that with health care. So, for health care, you’re talking about a service and here I think the private sector has some real shortcomings. They have to spend a lot of overhead on sales and marketing and choosing the patients they’re going to serve. They shuffle a lot of paperwork. Their administrative paperwork is 15 percent versus the accepted figure of 3 percent for Medicare which is a single payer system where the government handles the money. The delivery system is free. You can pick whatever doctor or hospital you want.

Jennings: Why couldn’t you regard health care as a commodity the way you regard cars?

Johnson: Because in order for it to be a commodity you have to have a consumer who’s informed and can make choices. The consumer can go in and say I want this color, they have the information to make choices; they can walk away from the offered product. Think about getting a colonoscopy, a very common procedure today. Where can you find the Web site that tells you who is the best at it, where it might be the cheapest, who has the most training? The consumer doesn’t have the information to make the choices necessary for a commodity in the free marketplace.

Jennings: Some will say that Americans need to take more personal responsibility for their health care and be better informed.

Johnson: I would not disagree with that. And I think that if we could get better information that will certainly be part of our responsibilities as consumers but right now, that information is very hard to come by. The marketplace doesn’t really exist in terms of consumer information for health care.
PAGEBREAK
Jennings: Now, I think that the conventional wisdom is still the single-payer system, as you and others have described it, is socialized medicine and that isn’t for the U.S.

Johnson: Socialized medicine means that the government both finances health care and owns and operates the doctors and the hospitals.

Jennings: Like Britain?

Johnson: Like Britain. In Canada, it’s a split system. The government indeed does collect the money and disperse it. They run the financial part of health care. But the delivery system is free. People can choose whatever doctor or hospital they want to go to. So, we have a system like that in this country. It’s called Medicare. That’s exactly what happens with Medicare. So, to call the Canadian system socialized is to call Medicare socialized. I think it’s a pejorative word and inaccurate.

Jennings: When I walk past people who know that we’re doing this series this week and I mention the single-payer system, they just say, “Never in America.”

Johnson: I’ve talked to elderly people who say they love Medicare but they don’t want the government involved. They forget that the government has a role to play in setting standards, maybe in handling the money with lower administrative costs. It would be a tragedy for the government to try to run the health-care system in terms of delivery.

Jennings: On top of which, many Americans hold it to be conventional wisdom that private is better than public. Period.

Johnson: In fact the government does a few things well. And I’ll hold up one example in the health-care system: The NIH, the National Institutes of Health, is the shining gem of medical research in this entire world. It’s owned and run by the government. They can do some things well, especially when it comes to health care. Not everything, but some things.

PAGEBREAK 

Johnson: And the Republicans in general are very much opposed to that. But at the same time, they realize that Medicare is an example of something that works in part. It needs to be reformed, we need to have a drug benefit, we need to improve the services. They’re behind the times. We need to probably spend more money, believe it or not. At least on some of the administration. But, the same Republicans who don’t want a single-payer system would be loathe to say to our senior citizens, “We’re going to take away from you the one single-payer system we do have” — it’s called Medicare.

Jennings: We’re coming into an election year. It’s clearly a hot political subject. Do you think there is the political will in the country to compromise and provide a system with which all people of all political ideologies would agree?

Johnson: I would like to think so. I’m probably pessimistic about it, but with the latest poll results from our own poll, I’m more optimistic because all of a sudden we have a majority of people who are thinking in that direction. And that is what it’s going to take —a political majority to put pressure on congress. I think the heart of the American people want to do something right, in terms of the uninsured, and I think that the politicians will be dragged along.

Jennings: Conventional wisdom holds that, I think, that with the uninsured, they still have access to American medical care, they have it in the emergency room.
PAGEBREAK

Johnson: I would call that a real misunderstanding. It is true. We do not let people die in the streets if they get sick enough, they will get to the emergency room, but all too often by that time, they’re so much sicker that their outcomes are less assured. It’s going to cost a lot more money to take care of them. We have access through the emergency room, but if we could have it earlier through insurance coverage we could provide it at less cost, with better outcomes and with more dignity.

Jennings: If the uninsured are crowding the emergency rooms for basic care, is that adding to the cost of health care for the rest of us?

Johnson: It is. Somebody has to pay those bills, obviously. And it falls on local and state and to some degree, federal governments. But we pay a much higher price, I think, in the moral issue involved and the medical outcomes involved.

Health Versus Wealth
July 9, 2004

Will actual policy issues play any role in this election? Not if the White House can help it. But if some policy substance does manage to be heard over the clanging of conveniently timed terror alerts, voters will realize that they face some stark choices. Here’s one of them: tax cuts for the very well-off versus health insurance.

John Kerry has proposed an ambitious health care plan that would extend coverage to tens of millions of uninsured Americans, while reducing premiums for the insured. To pay for that plan, Mr. Kerry wants to rescind recent tax cuts for the roughly 3 percent of the population with incomes above $200,000.

George Bush regards those tax cuts as sacrosanct. I’ll talk about his health care policies, such as they are, in another column.

Considering its scope, Mr. Kerry’s health plan has received remarkably little attention. So let me talk about two of its key elements.

First, the Kerry plan raises the maximum incomes under which both children and parents are eligible to receive benefits from Medicaid and the State Children’s Health Insurance Program. This would extend coverage to many working-class families, who often fall into a painful gap: they earn too much money to qualify for government help, but not enough to pay for health insurance. As a result, the Kerry plan would probably end a national scandal, the large number of uninsured American children.

Second, the Kerry plan would provide ”reinsurance” for private health plans, picking up 75 percent of the medical bills exceeding $50,000 a year. Although catastrophic medical expenses strike only a tiny fraction of Americans each year, they account for a sizeable fraction of health care costs.

By relieving insurance companies and H.M.O.’s of this risk, the government would drive down premiums by 10 percent or more.

This is a truly good idea. Our society tries to protect its members from the consequences of random misfortune; that’s why we aid the victims of hurricanes, earthquakes and terrorist attacks. Catastrophic health expenses, which can easily drive a family into bankruptcy, fall into the same category. Yet private insurers try hard, and often successfully, to avoid covering such expenses. (That’s not a moral condemnation; they are, after all, in business.)

All this does is pass the buck: in the end, the Americans who can’t afford to pay huge medical bills usually get treatment anyway, through a mixture of private and public charity. But this happens only after treatments are delayed, families are driven into bankruptcy and insurers spend billions trying not to provide care.

By directly assuming much of the risk of catastrophic illness, the government can avoid all of this waste, and it can eliminate a lot of suffering while actually reducing the amount that the nation spends on health care.

Still, the Kerry plan will require increased federal spending. Kenneth Thorpe of Emory University, an independent health care expert who has analyzed both the Kerry and Bush plans, puts the net cost of the plan to the federal government at $653 billion over the next decade. Is that a lot of money?

Not compared with the Bush tax cuts: the Center on Budget and Policy Priorities estimates that if these cuts are made permanent, as the administration wants, they will cost $2.8 trillion over the next decade.

The Kerry campaign contends that it can pay for its health care plan by rolling back only the cuts for taxpayers with incomes above $200,000. The nonpartisan Tax Policy Center, which has become the best source for tax analysis now that the Treasury Department’s Office of Tax Policy has become a propaganda agency, more or less agrees: it estimates the revenue gain from the Kerry tax plan at $631 billion over the next decade.

What are the objections to the Kerry plan? One is that it falls far short of the comprehensive overhaul our health care system really needs. Another is that by devoting the proceeds of a tax-cut rollback to health care, Mr. Kerry fails to offer a plan to reduce the budget deficit. But on both counts Mr. Bush is equally, if not more, vulnerable. And Mr. Kerry’s plan would help far more people than it would hurt.

If we ever get a clear national debate about health care and taxes, I don’t see how President Bush will win it.

URL: http://www.nytimes.com

Uninsured’s ills worsen come bills
By jspencer@denverpost.com
Jim Spencer
Denver Post Columnist
Friday, July 09, 2004 –

To read Scott Ferguson’s hospital bill is to know the insanity of modern medical economics and the nightmare of 44 million Americans without health insurance.

Here is an albuterol inhaler available at drugstore.com for $13.99. Centura Health’s St. Anthony Central Hospital in Denver charged Ferguson $323.05.

Here is a 30-cent dose of the diuretic Lasix. Centura wanted Ferguson to pay $72.30.

Ferguson, a 51-year-old musician with a heart condition, also got 28-cent tablets of Motrin for $12.70 apiece, $1.73 doses of Ativan for $75.60 a pop and Valium for $79.15 a dose instead of the drugstore.com price of $2.24.

Six hundred milligrams of an antibiotic called Cleocin is readily available at $9.54. Centura’s charge to the uninsured? How does $136.30 grab you?

The bills from a six-day hospitalization for a heart attack last December threatened to grab Ferguson by the bank account and choke the financial life out of him.

That’s why he refused to pay his $67,000 hospital bill. Ferguson discovered that the government health-insurance programs Medicare and Medicaid would only reimburse Centura roughly $6,700 for the services he received.

“I offered them that, plus 30 percent profit,” Ferguson said. “I had the cash to pay them what the insurance companies would have.”

Centura wouldn’t settle, Ferguson said. So Ferguson joined a national lawsuit that challenges discriminatory pricing that victimizes folks already down on their luck.

“I see people destroyed by this,” Ferguson said. “I see no reason for that.”

Centura officials said they couldn’t talk about Ferguson’s case because of the lawsuit. But the people in charge of the Colorado Hospital Association claim this is how it has to be for the uninsured.

“By federal regulation, in order to participate in Medicare, Medicaid and private (health insurance) plans, everybody must be charged the same price,” said Peter Freytag, CHA’s vice president.

But while everyone gets charged the same price, nobody actually pays that price except, perhaps, the uninsured. Government and private insurance companies cut far better deals with hospitals across the country.

In an example that doesn’t involve Centura or Ferguson, records for someone with a private health-insurance plan showed a $16,108 charge for testing blood flow in the patient’s heart. The insurance company paid only $10,470 – $5,638 less than the bill.

To stay in business with so many discounts, Freytag said, hospitals must set prices high. The result is that a portion of all hospital costs are reflected in the charges. That’s why guys like Ferguson get bills of $323 for $14 inhalers.

The inflated charges can get written off as charity or bad debt, Freytag said.

Since joining the lawsuit, Ferguson says he’s heard from plenty of people who paid wacky amounts because of threats from hospital bill collectors.

The whole health-care pricing scheme reminds medical economist J.D. Kleinke of “a psychedelic version of what car dealers do with sticker prices. Everything’s on sale.”

Unless you happen to be uninsured. Then, said Kleinke, you prop up hospitals that remain “incredibly profitable.”

“The Daughters of Charity are known on Wall Street as the Daughters of Currency,” he said.

The answers aren’t easy. A single-payer health-care system would do it, Kleinke said, but Americans don’t seem ready. Meanwhile, regulatory changes that force hospitals to charge the uninsured the Medicaid reimbursement rate will have to do.

One thing is certain: Americans need a change of heart.

“There is,” contended Kleinke, “almost a disdain for the poor.”

Nothing says it better than trying to collect $136.30 for a $9.54 dose of antibiotics.

Jim Spencer’s column appears Mondays, Wednesdays and Fridays. He can be reached at 303-820-177

ABC News’ Medical Editor Dr. Tim Johnson says the U.S. health-care system is in Critical Condition.(ABCNEWS)

Peter Jennings Interviews ABCNEWS’Medical Editor on the Health-Care Crisis

Oct. 21 — Did you know that the United States spends more on health care, per capita, than any other country in the world?

Even so, 43 million Americans have no health-care coverage — including one in 10 children. Americans spend $1.6 trillion on health care and much of the system is clearly troubled.

Insurance premiums are going up for the third year in a row. Americans already pay twice as much for prescription drugs as anyone else. The ramifications of all this are huge in the world’s richest nation.

Every other country with a single-payer system, and all of the rich ones do, manage to cover everyone, have universal care, get very good results and do it at a far lower overhead than in the United States have.

This week, every news program on ABCNEWS is taking a closer look at the American health-care system. Peter Jennings interviewed ABCNEWS’ medical editor, Dr. Timothy Johnson for Critical Condition.

Peter Jennings: Tim, you helped us decide on the name of the series, Critical Condition. What is it essentially that is so critical?

Dr. Timothy Johnson: Costs are rising, we’re getting less for our money, we spend twice as much per person on health care in this country than any other industrialized country but we have 43 million uninsured. So we spend a lot of money but we don’t take care of a large section of our population. I think we’re at a critical juncture as to how we should proceed.

Jennings: So you think it’s a critical juncture as well as a critical condition.

Johnson: Yes, I think that’s a fair statement. Certainly for some people it’s a critical condition. The uninsured in our country, we know that they have a 15 to 18 percent mortality rate increase compared to those that are insured. We know that 18,000 of the uninsured die each year in this country for lack of insurance. For them, it’s critical condition. But for the rest of us it’s a critical juncture: What’s going to happen to our health insurance?
PAGEBREAK

Jennings: Why are so many people in the ABCNEWS poll apparently happy with their health care? [The poll found 64 percent of people with health insurance said they are satisfied with their health care, but 59 percent are worried about being able to afford it in the future.]

Johnson: That’s always been an interesting question. They feel good about their own doctor, their own hospital. But when they start to think about it as a system, and what may happen to their health insurance and their employment, they get worried.

Jennings: Do you see a change in this for a year ago or two years ago?

Johnson: Absolutely. They numbers of concerned are going up. Three years ago, 44 percent were concerned about the overall care in this country, now 54 percent … that’s a 10 percent increase in just three years.

Jennings: The conventional wisdom is Americans like to think that we have the best health-care system in the world.

Johnson: And we do, certainly for people that are very rich or who have very good health insurance and who have very good connections into the health-care system. But for too large a number, 43 million, and many who are underinsured, it is not the very best system in the world.

Jennings: So what was notable in that regard in this poll this time?

Johnson: What was notable is that 62 percent of our population said that they would favor a system of universal health insurance financed by the government, paid for by the tax payers, as opposed to the system we now have, the employer based system where many people are uninsured. I was stunned by that figure.

Jennings: I think conventional wisdom has it that in America, land of the free, that the marketplace is where the price is best established.
PAGEBREAK 

Johnson: That’s true for commodities like a car, where you can go in and make choices and you can even walk out of the showroom if you want. You can’t do that when you’re sick. You can’t do that with health care. So, for health care, you’re talking about a service and here I think the private sector has some real shortcomings. They have to spend a lot of overhead on sales and marketing and choosing the patients they’re going to serve. They shuffle a lot of paperwork. Their administrative paperwork is 15 percent versus the accepted figure of 3 percent for Medicare which is a single payer system where the government handles the money. The delivery system is free. You can pick whatever doctor or hospital you want.

Jennings: Why couldn’t you regard health care as a commodity the way you regard cars?

Johnson: Because in order for it to be a commodity you have to have a consumer who’s informed and can make choices. The consumer can go in and say I want this color, they have the information to make choices; they can walk away from the offered product. Think about getting a colonoscopy, a very common procedure today. Where can you find the Web site that tells you who is the best at it, where it might be the cheapest, who has the most training? The consumer doesn’t have the information to make the choices necessary for a commodity in the free marketplace.

Jennings: Some will say that Americans need to take more personal responsibility for their health care and be better informed.

Johnson: I would not disagree with that. And I think that if we could get better information that will certainly be part of our responsibilities as consumers but right now, that information is very hard to come by. The marketplace doesn’t really exist in terms of consumer information for health care.
PAGEBREAK
Jennings: Now, I think that the conventional wisdom is still the single-payer system, as you and others have described it, is socialized medicine and that isn’t for the U.S.

Johnson: Socialized medicine means that the government both finances health care and owns and operates the doctors and the hospitals.

Jennings: Like Britain?

Johnson: Like Britain. In Canada, it’s a split system. The government indeed does collect the money and disperse it. They run the financial part of health care. But the delivery system is free. People can choose whatever doctor or hospital they want to go to. So, we have a system like that in this country. It’s called Medicare. That’s exactly what happens with Medicare. So, to call the Canadian system socialized is to call Medicare socialized. I think it’s a pejorative word and inaccurate.

Jennings: When I walk past people who know that we’re doing this series this week and I mention the single-payer system, they just say, “Never in America.”

Johnson: I’ve talked to elderly people who say they love Medicare but they don’t want the government involved. They forget that the government has a role to play in setting standards, maybe in handling the money with lower administrative costs. It would be a tragedy for the government to try to run the health-care system in terms of delivery.

Jennings: On top of which, many Americans hold it to be conventional wisdom that private is better than public. Period.

Johnson: In fact the government does a few things well. And I’ll hold up one example in the health-care system: The NIH, the National Institutes of Health, is the shining gem of medical research in this entire world. It’s owned and run by the government. They can do some things well, especially when it comes to health care. Not everything, but some things.

PAGEBREAK 

Johnson: And the Republicans in general are very much opposed to that. But at the same time, they realize that Medicare is an example of something that works in part. It needs to be reformed, we need to have a drug benefit, we need to improve the services. They’re behind the times. We need to probably spend more money, believe it or not. At least on some of the administration. But, the same Republicans who don’t want a single-payer system would be loathe to say to our senior citizens, “We’re going to take away from you the one single-payer system we do have” — it’s called Medicare.

Jennings: We’re coming into an election year. It’s clearly a hot political subject. Do you think there is the political will in the country to compromise and provide a system with which all people of all political ideologies would agree?

Johnson: I would like to think so. I’m probably pessimistic about it, but with the latest poll results from our own poll, I’m more optimistic because all of a sudden we have a majority of people who are thinking in that direction. And that is what it’s going to take —a political majority to put pressure on congress. I think the heart of the American people want to do something right, in terms of the uninsured, and I think that the politicians will be dragged along.

Jennings: Conventional wisdom holds that, I think, that with the uninsured, they still have access to American medical care, they have it in the emergency room.
PAGEBREAK

Johnson: I would call that a real misunderstanding. It is true. We do not let people die in the streets if they get sick enough, they will get to the emergency room, but all too often by that time, they’re so much sicker that their outcomes are less assured. It’s going to cost a lot more money to take care of them. We have access through the emergency room, but if we could have it earlier through insurance coverage we could provide it at less cost, with better outcomes and with more dignity.

Jennings: If the uninsured are crowding the emergency rooms for basic care, is that adding to the cost of health care for the rest of us?

Johnson: It is. Somebody has to pay those bills, obviously. And it falls on local and state and to some degree, federal governments. But we pay a much higher price, I think, in the moral issue involved and the medical outcomes involved.

“The Truth About the Drug Companies” By Marcia Angell

New York Review of Books – Volume 51, July 15, 2004

1. Every day Americans are subjected to a barrage of advertising by the pharmaceutical industry. Mixed in with the pitches for a particular drug–usually featuring beautiful people enjoying themselves in the great outdoors–is a more general message. Boiled down to its essentials, it is this:

“Yes, prescription drugs are expensive, but that shows how valuable they are.
Besides, our research and development costs are enormous, and we need to cover them somehow. As ‘research-based’ companies, we turn out a steady stream of innovative medicines that lengthen life, enhance its quality, and avert more expensive medical care. You are the beneficiaries of this ongoing achievement of the American free enterprise system, so be grateful, quit whining, and pay up.” More prosaically, what the industry is saying is that you get what you pay for.

Please click here to read the review