HarrisInteractive
Health Care News
Editor: Humphrey Taylor, Chairman of The Harris Poll
June 22, 2004
Reputations of Pharmaceutical and Health Insurance Companies Continue Their Downward Slide

In this year’s survey, 44% of all adults think the pharmaceutical companies are doing a good job for their consumers (and 48% think they are doing a bad job). In 1997, fully 79% thought the industry was doing a good job.

Health insurance companies were never as popular, during the last seven years, as pharmaceutical companies, but in 1997 a 55% majority believed they were doing a good job for their consumers. …only 36% now give them good marks – 19 points lower than seven years ago.

Some members of the public see a difference between managed care and health insurance companies, even though virtually all insurance companies now sell managed care, and it really is just one industry. Only 30% of the public give managed care companies good marks… For the past two years, managed care has been tied for last place with the tobacco companies.

http://www.harrisinteractive.com/news/newsletters/healthnews/HI_HealthCareNews2004Vol4_Iss11.pdf

Comment: In this survey of the public view of 15 industries, they were asked, “Do you think health insurance companies (or one of 14 other industries) generally do a good or bad job of serving their consumers?”

With pharmaceutical firms, other surveys have indicated that the public believes that drug prices in the U.S. are too high. We now need government intervention in drug pricing, through bulk purchasing and/or regulation, balancing value for purchasers with fair profits for the manufacturers.

The public clearly recognizes that the insurance plans are not serving us well. This is further reinforced by a plethora of studies confirming that private insurers provide essentially no value when judged by cost and quality. Administrative costs are outrageous. And, rather than pooling risk, they serve as wasteful middlemen for healthier individuals as they dump the more costly patients into taxpayer funded programs or, worse, out into the street. Destroying the fundamental functions of insurance certainly results in impaired quality of their insurance products. High costs with poor quality, by definition, destroys value. In contrast, administrative efficiency and a universal risk pool, features of a single payer system, would provide the value that we now need in health care coverage.

Since the public recognizes that private insurers are serving us poorly, why do they keep electing politicians that support policies that nurture this industry at a great cost to the rest of us?

The fact that we need change, isn’t that like a… well… Duh!

California’s single payer bill passes Assembly Health Committee
Wed, 23 Jun 2004
(These two releases were distributed by e-mail and are not currently available by a link, therefore they are presented here in their unedited versions. Please excuse the length of this important message.)

California State Senator Sheila Kuehl
FOR IMMEDIATE RELEASE
June 22, 2004

CONTACT: Sara Rogers 916 445 1353 or Robin Podolsky 310 441 9084

KUEHL’S STATEWIDE HEALTH COVERAGE BILL TAKES HISTORIC STEP FORWARD IN ASSEMBLY HEALTH COMMITTEE

Senate Bill 921, authored by State Senator Sheila Kuehl (D-23) which would
provide comprehensive health benefits to every Californian at no new cost to
California’s general fund, has been passed by the State Assembly Health Committee by a vote of 12 to 5.

SB 921 would create a single, streamlined reimbursement system for medical
care in California that has been projected to save the state about $14 billion dollars in administrative healthcare costs alone. These and other substantial savings make it possible to insure every resident of California with a comprehensive health plan that would include medical, dental, vision, mental health and prescription drug coverage among benefits.

Because SB 921 would cover every Californian, it would offer each patient the freedom to choose among all healthcare providers. Healthcare provision would remain subject to competition and in private hands. The legislation would also require the State of California to use its purchasing power to negotiate directly with pharmaceutical companies to buy prescription drugs in bulk, thus drastically lowering their cost.

“I’m very grateful to my colleagues in the Assembly Health Committee for voting to extend healthcare coverage to every Californian,” said Senator Kuehl. “SB 921 will make it possible for every Californian to keep their health care coverage even if they change jobs; start a business; start a family; continue our education; or travel out of state. Our important relationships with the doctors we trust will not be interrupted. People with undetected chronic illnesses will get the care they need to avert the heartache and economic burden of medical catastrophes. This bill will save our state money and improve the quality of life for all of us.”

Today, approximately 1 out of 5 Californians is uninsured, and, nationally, catastrophic medical illness remains the leading cause of personal bankruptcy. Most uninsured Californians are employed but either cannot afford the medical insurance offered to them at work or are not offered healthcare benefits through their job. Analysts agree that the costs of healthcare are propelled upward by the overuse of emergency room care (the most expensive kind of healthcare delivery) by people who are not insured and do not receive regular medical attention. Doctors and hospitals also report that, as insurance premiums rise in cost, the reimbursements paid by private insurance companies to medical providers are shrinking.

Cost Controls in SB 921 would mean that businesses would not be burdened
with suddenly rising health care premiums; would no longer have the responsibility for negotiating complicated health care benefits packages for
their employees; and would also insure the self-employed.

SB 921 would also relieve doctors and hospitals of the administrative costs
associated with multiple insurance plans. Since all patients will be insured, healthcare providers will not have to worry about uninsured patients being unable to pay for the care they receive. Physicians will have a direct voice in the amount of reimbursement they receive. Those reimbursements will reflect the actual costs, on a regional basis, of providing care, and they will come on time. Doctors, not insurance companies, will be in charge of deciding what is medically appropriate for patients.

SB 921 will be funded with those federal and state dollars already earmarked
for healthcare, along with a means-based, equitable tax. Individuals and
employers will pay into the plan based on what they can afford, not what
insurance companies want to charge. This tax will replace all premiums, deductibles, co-pays and out-of-pocket expenses. For most taxpayers and businesses, this will lead to sizeable savings.

PAGEBREAK

HEALTH ACCESS UPDATE
Tuesday, June 22nd, 2004

UNIVERSAL COVERAGE BILL PASSES ASSEMBLY HEALTH COMMITTEE

In a boost to the goal of quality, affordable health care for all, SB 921 (Kuehl), a groundbreaking bill to establish a universal single-payer health system in California, was passed in Assembly Health Committee Tuesday. Having passed the full Senate last year, this new vote raises the profile of this comprehensive health reform solution. The vote was not a given: When Senator Sheila Kuehl decided to schedule the bill in this committee a few weeks ago, she did not know if she would get the votes.

SUPPORT TESTIMONY: Senator Kuehl opened her testimony by stating how “very proud” she was to author SB 921. After describing the “perfect storm” crisis in health care, she described that the bill “imagines a system that provides
high quality, affordable health care for all.” Her stated emphatically that “this bill is possible,” pointing to Medicare and the Veterans Administration.

Dr. L. Paul Smith, who practiced and taught at McGill University in Canada
and now is a member of AARP California, followed on that point, stating that “America is no stranger to single-payer health plans.” He mentioned key benefits of such a plan, including universality, comprehensiveness, and consolidated administration, leading to cost effectiveness. Dr. Bill Durston, a Sacramento emergency room doctor also with significant credentials, talked of his personal experiences, both with uninsured and underinsured patients. He also highlighted the significant administrative hassles of the current system.

Dozens of organizations came forward to declare their support, as Senator Kuehl joked, half in fun and full in earnest, “I apologize that there are over 500 organizations in support of this bill.” When closing on the bill, she again stated how she had “never seen anything” like the support SB921 has, and simply said that this the bill “is in the interest of California.”

OPPOSITION TESTIMONY: Opposition witnesses used several arguments. The Chamber of Commerce representative stated “we do not support the concept of universal health coverage.” The Chamber stated their belief that the bill would entail “significant costs” beyond what Californians currently spend, but did not produce research to back up that argument. She referred to the recent Oregon ballot initiatives for a single-payer plan, where 79% of the state voted no. She claimed that SB 921 does “nothing to address the underlying cost of health care.”

A representative of health plans challenged the belief that “in order to get to universal coverage, you must junk the concept of private competition.” He argued that we all rely on vital services, such as “food, clothing, and housing,” which are “delivered best by a private, competitive approach.” Finally, he cited that this was a “danger” in thinking there were “easy options” to the health care crisis, and that instead, there are “very difficult tradeoffs.”

Other business associations railed against “government-run health care,” and
instead argued for health savings accounts and association health plans. Representations of manufacturers pointed out that the bill removes employers
from the “control and cost of utilization of health care,” and the employer would be stuck with “whatever bill that the state sent them.” Health underwriters noted that the United States spends more than most countries with single-payer systems, and “what services will be rationed to reduce our costs?”

LEGISLATOR COMMENTS: Assemblyman Frommer raised concerns that there were “no limits on revenues collected,” “no controls on costs,” and “a Cadillac benefits package.” He also questioned the timing, with the upcoming referendum to repeal SB 2, the Health Insurance Act passed last year. Senator Kuehl responded that she was a co-author of SB 2 and strongly supported its passage and will work to defend it this fall, and that there is no contradiction to support both.

Assemblywoman Goldberg referred to her experiences in Los Angeles with a
health system that is unraveling: “If we don’t do something, nobody will
have health care.” Assemblyman Dymally supported the bill and urged the
people to challenge the monied interests.

Assemblyman Richman stated that he supports “universal coverage” but does
not support a single-payer system, and does not believe the terms are interchangeable. He raised concerns about “no limits what the income tax
would be, the payroll tax,” etc. He cited provider rate reimbursement concerns, citing the low reimbursement in Medi-Cal, another “government run” health insurer. Senator Kuehl responded that she was not surprised that a program directed at the poor is “nickel and dimed,” and the bill seeks to insulate the health plan from the political concerns of the Governor and legislature.

Assemblywoman Wolk stated she would support the bill to “move it forward,”
but had concerns about it being “not cooked,” especially with the lack of
clarity on the revenues to fund the system, and the potential legal challenges. Having lived in other countries, she also has expressed concerns about “the choices and limitations that others live with that would not be put up with here” in America. Finally, Assemblywoman Rebecca Cohn, Chair of the Assembly Health Committee, gave her support, “since everybody has a body,” and each body eventually breaks down.

NEXT STEPS: The bill will not move forward this year. Senator Kuehl will
continue to work to develop the revenue package to fund the health system,
based in part on economic studies are in the works. This will be a challenge: while the tax system to fund this universal health plan would replace the billions Californians currently spend in premiums, deductibles, and other costs, it still would be considered a tax increase and thus need a two-thirds vote. Yet Senator Kuehl has committed to reintroduce this bill next year, and the organizing and advocacy from this session has created a strong base of support to move forward.

For the text of SB 921 and related legislative documents:
http://www.leginfo.ca.gov/cgi-bin/postquery?bill_number=sb_921&sess=CUR&house=B&search_type=email

Comment: This historic action establishes, with no doubt whatsoever, the
credibility of the single payer model of reform. When legislators seriously examine all of the options, the superiority of the single payer model is evident.

Unfortunately, peculiarities of the California legislative process will prevent the passage of SB 921 in this session. California requires a two-thirds vote in both the Assembly and the Senate to pass any measure that involves a tax increase. California’s legislative districting process has established safe districts which allows the parties to nominate ideological extremists. The Republicans vote as a solid block on all tax measures, and they constitute more than one-third of each chamber.

But the significance of this landmark event cannot be overstated. Legislators can learn the complexities of our health care financing structure, and they can identify solutions that would rectify many of the inherent flaws in the system.

This victory should provide an incentive for you to pull out all stops in your efforts to educate your colleagues and the public on the model of reform that will finally bring health care justice to America: a single payer system for everyone.

Please share this message with others who care.

Georgia’s single payer study

The Atlanta Journal-Constitution
6/22/04
‘Single-payer’ Georgia health plan pushed
By Andy Miller

A proposal for a Medicare-like system that would give health insurance coverage to all Georgia residents would cut total health spending for the state by about $716 million annually, according to study released Monday by a consumer group.

The proposed, government-run “single-payer” plan would be financed by a combination of payroll taxes, increases in tobacco and alcohol taxes, a 1 percent sales tax and a tax on individuals, said Georgians for a Common Sense Health Plan, a group that promotes health coverage for all residents.

But all current payments by employers and individuals, including health insurance premiums and co-pays, would be eliminated under the consumer group’s SecureCare program. Most families earning $75,000 or less would pay less under the proposal, said Rita Valenti, a registered nurse and former state legislator who’s a founder of the Common Sense group.

The study, conducted by the Virginia-based Lewin Group, a health care consulting firm, was financed by a grant from the nonprofit Healthcare Georgia Foundation, a private organization whose mission, in part, is to expand access to affordable, quality health care.

“On paper, there’s a lot of merit to it,” said Ken Thorpe, an Emory University health policy expert and former health official in the Clinton administration. “The politics is always the thing that bottles it up. You’re moving money from the private sector to the public sector.”

http://www.ajc.com/news/content/business/0604/22insurance.html

Comment: How many more studies do we need before we act? Where is our effort to change the politics?

Congressional Budget Office
June 2004
The Effects of Tort Reform: Evidence from the States

This Congressional Budget Office (CBO) paper reviews the major recent studies that evaluate state-level tort reforms and assesses the relevance of that research for evaluating similar proposals at the federal level.

The most consistent finding in the studies that CBO reviewed was that caps on damage awards reduced the number of lawsuits filed, the value of awards, and insurance costs.

http://www.cbo.gov/showdoc.cfm?index=5549&sequence=0&from=7

Comment: Because of major controversies and the intensely emotional nature of the malpractice issue, at PNHP we attempt to avoid diverting much of our effort to this issue, even though it does consume 1% of health care spending. Although we certainly acknowledge that it is a very significant issue, we do concentrate our efforts on supporting changes that will redirect our resources toward ensuring affordable, comprehensive care for everyone. But as much as we try to stay on our message, inevitably during the Q & A segment of our sessions and forums, the malpractice issue is brought up.

Though I don’t want to dwell on this issue, I would like to make an important point. Much of the heated debate is over disputed issues. But we do have some solid data, and an objective assessment of that data can be provided by credible organizations such as the Congressional Budget
Office.

It is imperative that we begin the debate by agreeing to accept the credible, objective information that we do have.

As only one example, caps on damages clearly do decrease malpractice insurance costs, and they do it without placing caps on specific damages such as actual expenses and loss of income. They cap only punitive damages and general damages, the pain and suffering award for which no amount of dollar value can be objectively determined.

General damages are important because they provide the buffer for allowing the attorney to profit without dipping excessively into the specific damages which rightfully belong to the injured patient. As much as we want to support our colleagues in the legal profession who represent patients with genuine entitlement to legal redress, we must plea with them to accept caps that are high enough to fairly compensate injured patients, but at a level that would prevent excessive enrichment of the plaintiffs’ attorneys. Using health care dollars to create mega-wealth for attorneys is just as immoral as using them to create mega-wealth for insurance executives.

And for egregious acts that warrant punishment, the criminal courts would provide a more appropriate venue for retribution. Punitive awards are a misuse of health care dollars. If the attorneys want to participate in a lottery, they should buy a ticket.

Malpractice reform is a very important issue and must be addressed. But we at PNHP are too busy trying to save the lives that are literally lost by our very sick system of funding health care. The AMA has made malpractice reform their number one priority this year. They are certainly an appropriate organization to lobby for this much needed reform. Some of us, including me, wish them success in this endeavor.