PNHP

Does universal comprehensive insurance encourage unnecessary use?

Does universal comprehensive insurance encourage unnecessary use?

Does universal comprehensive insurance encourage unnecessary use? Evidence from Manitoba says “no”

Many argue that “free” medical care leads to unnecessary use of health resources. Evidence suggests that user fees do discourage physician use, at least by those of low socioeconomic status. In this study, we compare health care utilization and health among socioeconomic groups to determine whether people of low socioeconomic status see physicians more than would be expected given their health status

Read the full article at http://www.cmaj.ca/cgi/content/full/170/2/209?maxtoshow=&eaf

The Future of Medicare

Institute for Public Accuracy 915 National Press Building, Washington, D.C. 20045 (202) 347-0020
http://www.accuracy.org ipa@accuracy.org, Wednesday, March 24, 2004

Interviews Available:
* The Future of Medicare * Exxon Valdez Anniversary

ALAN SAGER, asager@bu.edu, http://www.healthreformprogram.org
DEBORAH SOCOLAR, dsocolar@bu.edu Sager and Socolar are directors of the Health Reform Program at Boston University’s School of Public Health. They released a report in October 2003 entitled “New Medicare Rx Benefit Means Big Profits for Drug Makers.”

Sager said today: “In 2003, actuaries predicted that the Medicare Trust Fund would be depleted in 2026 — 23 years ahead. Yesterday, the actuaries redicted depletion in 2019 — seven years sooner. The evidence from past years is clear that managed care privatization has cost Medicare money. So no one should be surprised that the Medicare actuaries have cited the new Medicare bill’s provisions as a cause of accelerated Medicare insolvency. A reckless belief that privatization and managed care will save money is no substitute for genuine cost controls. Since Medicare privatization and managed care won’t save money, more people need to ask why this Congress and administration keep boosting it. Other wealthy nations cover all of their citizens, live longer and — on average — spend only one-half as much per person as we do. They are far from perfect, but we can learn from them. For example, sadly, about 50 percent of the U.S. health dollar is wasted on unnecessary clinical services, administration, excess prices for drugs and other items, and outright theft.”

Drs. IDA HELLANDER, QUENTIN YOUNG, (312) 782-6006, pnhp@aol.com, https://pnhp.org Hellander is executive director of Physicians for a National Health Program; Young is national coordinator for the group. They are both available for interviews about the future of Medicare.

DEAN BAKER, baker@cepr.net, http://www.cepr.net/publications/medicare_choice_plus.htm
Co-director of the Center for Economic and Policy Research, Baker said today: “The 2004 Medicare trustees report, released yesterday, provides further proof that President Bush’s drug plan was a massive giveaway to the
pharmaceutical and insurance industries…. It is important that the public be made aware that the financial problems facing Medicare are due to corruption and not demographics…. If our government is too corrupt to fix the U.S. health care system, then it should at least allow seniors to buy into the superior systems in other countries.” Baker is author of the report “Medicare Choice Plus: The Answer to the Long-Term Deficit Problem,” which outlines this proposal at the above web page.

DUNE LANKARD, cell: eyak@redzone.org, http://www.redzone.org Fifteen years ago today, the Exxon Valdez spilled millions of gallons of crude oil into Prince William Sound. Lankard (currently in D.C.) is an Eyak of the Eagle Clan and fished for salmon in the Copper River flats and Prince William Sound until the spill. Named a Time magazine “Hero for the Planet” in 1998, Lankard is the founder and executive director of the Eyak Preservation Council. He said today: “Exxon Mobil has yet to make good on their promise for an additional $100 million for the Sound if it had not recovered by now. Meanwhile, the just-released Fortune 500 list found Exxon Mobil to be the second biggest company on this list — and the one with the biggest profits.”

PAMELA MILLER, pkmiller@akaction.net, http://www.akaction.net Also currently in D.C., Miller is a biologist and director of Alaska Community Action on Toxics, an organization that focuses on environmental health and justice issues.

For more information, contact at the Institute for Public Accuracy Sam Husseini, (202) 347-0020 or (202) 421-6858

PNHP's written testimony on Medicare

United States House of Representatives Committee on Ways and Means

Hearing on Board of Trustees 2004 Reports
March 24, 2004

Written statement of Don R. McCanne, M.D., Past-President, Physicians for a National Health Program

The 2004 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds describes the projected imbalances between the anticipated revenues and the expected growth in expenditures of the Medicare program. The Trustees call for prompt, effective, and decisive action to address this challenge.

As expected, a highly charged political debate rages over the causes of these anticipated net deficits in Medicare funding. Although we will hear much about factors such as the generous payments to Medicare Advantage plans, and the decline in tax revenues supporting the program, one factor predominates above all others: health care costs continue to escalate well beyond the level of inflation.

Health care cost increases are related to expanding and ever more expensive technological advances, along with unrestrained expansion in the capacity of our health care delivery system. We are spending more because we find more ways to spend health care dollars, and because we continue to expand the capacity that allows us to do it.

Approaching the Medicare deficit as an isolated problem will not address the fundamental cause of health cost increases. Rather, the integrity of the Medicare program would be threatened because solutions would be narrowly directed to substantially increasing revenues and/or dramatically reducing benefits. Either a reduction in benefits or an increase in cost sharing by the beneficiary would threaten to impair access to care because of lack of affordability for the individual beneficiary. The alternative of asking taxpayers to fund the increase in Medicare costs would be problematic when considering that they would also be facing the same escalating health care costs.
PAGEBREAK
We already know that regions with higher health care capacity have increased intensity of services but without a commensurate improvement in medical outcomes. Hospitals with greater bed capacity in their intensive care units provide costly and relatively inhumane end-of-life care when less expensive and more compassionate care would be provided in a hospice environment. Physician owned specialty hospitals and medical group owned imaging systems significantly increase capacity and the level of services although there is negligible data available to demonstrate improved outcomes.

Other nations have demonstrated that planning and capital budgeting of capacity can prevent excessive utilization while ensuring adequate capacity to prevent unnecessary queues. The 15.5% of our Gross Domestic Product that we are currently spending on health care is more than enough to ensure appropriate capacity plus fund the operating expenses of our system, with the proviso that we do not waste resources on some of the current excesses of our system. Although health care planning declined after prior efforts, the current level of spending has reached a threshold that now makes it imperative.

The administrative costs of private health plans are significantly greater than those of public programs such as Medicare. But an even greater problem is the profound administrative burden placed on our health care delivery system by our fragmented system of a great multitude of private plans, large public programs, and, for some, no programs at all. In 2003 numbers, an estimated $286 billion in these administrative costs could be recovered and utilized for the deficiencies in health care coverage today. Eliminating administrative waste must be a part of our solution to rising costs.
PAGEBREAK
Although our national policies protect and promote technological development, there is a pressing need to demand value for our private and public investment. Pharmaceutical firms that develop copycat drugs merely for the purpose of restarting the patent clock should no longer be disproportionately rewarded for such non-innovative efforts. Only new products with demonstrated value should be rewarded with higher prices. Also new products developed with public funding should return that investment to the taxpayer through lower prices. We should require that new technological innovations provide both significant medical benefit and value before funding them. And there is ample evidence to demonstrate that prices are much higher in the United States than in other nations. We clearly need a method of negotiating rates and prices to be sure that we are receiving a fair value for our health care investment while allowing a fair but not excessive profit for the manufacturer or provider.

To bring the level of health care cost increases down to near the rate of inflation, we need to control capacity and pay fair prices. Medicare alone cannot have a significant influence on capacity. Although Medicare does have some regulatory control over prices, acting alone inevitably results in inequitable results through cost shifting and unfairness in pricing, while failing to control global costs. And Medicare cannot further reduce administrative waste when it is adding to the administrative burden by being an additional player in our fragmented system.

Replacing our inefficient and wasteful system of funding care with a single public payer would control costs through global budgeting, planning and budgeting of capital improvements, and negotiation of rates and prices. And with the administrative savings made possible by eliminating the waste of the private bureaucracies, we could afford to fund care for everyone while controlling costs on into the infinite horizon. Instead of limiting Medicare reform considerations to revenue increases and benefit reductions, let us adopt systemic reforms that will enable the enactment of comprehensive, affordable coverage for everyone.

Don McCanne, M.D.
Home address:
33781 Avenida Calita
San Juan Capistrano, CA 92675-4905
Telephone 949-493-3714
Fax 949-493-7985
don@mccanne.org

Physicians for a National Health Program
29 E. Madison St., #602
Chicago, IL 60602
Telephone 312-782-6006
Fax 312-782-6007
pnhp@aol.com
www.pnhp.org

PNHP’s written testimony on Medicare

United States House of Representatives Committee on Ways and Means

Hearing on Board of Trustees 2004 Reports
March 24, 2004

Written statement of Don R. McCanne, M.D., Past-President, Physicians for a National Health Program

The 2004 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds describes the projected imbalances between the anticipated revenues and the expected growth in expenditures of the Medicare program. The Trustees call for prompt, effective, and decisive action to address this challenge.

As expected, a highly charged political debate rages over the causes of these anticipated net deficits in Medicare funding. Although we will hear much about factors such as the generous payments to Medicare Advantage plans, and the decline in tax revenues supporting the program, one factor predominates above all others: health care costs continue to escalate well beyond the level of inflation.

Health care cost increases are related to expanding and ever more expensive technological advances, along with unrestrained expansion in the capacity of our health care delivery system. We are spending more because we find more ways to spend health care dollars, and because we continue to expand the capacity that allows us to do it.

Approaching the Medicare deficit as an isolated problem will not address the fundamental cause of health cost increases. Rather, the integrity of the Medicare program would be threatened because solutions would be narrowly directed to substantially increasing revenues and/or dramatically reducing benefits. Either a reduction in benefits or an increase in cost sharing by the beneficiary would threaten to impair access to care because of lack of affordability for the individual beneficiary. The alternative of asking taxpayers to fund the increase in Medicare costs would be problematic when considering that they would also be facing the same escalating health care costs.
PAGEBREAK
We already know that regions with higher health care capacity have increased intensity of services but without a commensurate improvement in medical outcomes. Hospitals with greater bed capacity in their intensive care units provide costly and relatively inhumane end-of-life care when less expensive and more compassionate care would be provided in a hospice environment. Physician owned specialty hospitals and medical group owned imaging systems significantly increase capacity and the level of services although there is negligible data available to demonstrate improved outcomes.

Other nations have demonstrated that planning and capital budgeting of capacity can prevent excessive utilization while ensuring adequate capacity to prevent unnecessary queues. The 15.5% of our Gross Domestic Product that we are currently spending on health care is more than enough to ensure appropriate capacity plus fund the operating expenses of our system, with the proviso that we do not waste resources on some of the current excesses of our system. Although health care planning declined after prior efforts, the current level of spending has reached a threshold that now makes it imperative.

The administrative costs of private health plans are significantly greater than those of public programs such as Medicare. But an even greater problem is the profound administrative burden placed on our health care delivery system by our fragmented system of a great multitude of private plans, large public programs, and, for some, no programs at all. In 2003 numbers, an estimated $286 billion in these administrative costs could be recovered and utilized for the deficiencies in health care coverage today. Eliminating administrative waste must be a part of our solution to rising costs.
PAGEBREAK
Although our national policies protect and promote technological development, there is a pressing need to demand value for our private and public investment. Pharmaceutical firms that develop copycat drugs merely for the purpose of restarting the patent clock should no longer be disproportionately rewarded for such non-innovative efforts. Only new products with demonstrated value should be rewarded with higher prices. Also new products developed with public funding should return that investment to the taxpayer through lower prices. We should require that new technological innovations provide both significant medical benefit and value before funding them. And there is ample evidence to demonstrate that prices are much higher in the United States than in other nations. We clearly need a method of negotiating rates and prices to be sure that we are receiving a fair value for our health care investment while allowing a fair but not excessive profit for the manufacturer or provider.

To bring the level of health care cost increases down to near the rate of inflation, we need to control capacity and pay fair prices. Medicare alone cannot have a significant influence on capacity. Although Medicare does have some regulatory control over prices, acting alone inevitably results in inequitable results through cost shifting and unfairness in pricing, while failing to control global costs. And Medicare cannot further reduce administrative waste when it is adding to the administrative burden by being an additional player in our fragmented system.

Replacing our inefficient and wasteful system of funding care with a single public payer would control costs through global budgeting, planning and budgeting of capital improvements, and negotiation of rates and prices. And with the administrative savings made possible by eliminating the waste of the private bureaucracies, we could afford to fund care for everyone while controlling costs on into the infinite horizon. Instead of limiting Medicare reform considerations to revenue increases and benefit reductions, let us adopt systemic reforms that will enable the enactment of comprehensive, affordable coverage for everyone.

Don McCanne, M.D.
Home address:
33781 Avenida Calita
San Juan Capistrano, CA 92675-4905
Telephone 949-493-3714
Fax 949-493-7985
don@mccanne.org

Physicians for a National Health Program
29 E. Madison St., #602
Chicago, IL 60602
Telephone 312-782-6006
Fax 312-782-6007
pnhp@aol.com
www.pnhp.org

California Medical Association and single payer

California Medical Association
House of Delegates
March 13-15, 2004

The delegates adopted a health care financing reform policy (Report B-1-04)…

Report B-1-04
CMA Health Care Financing Reform Policy

Recommendation 7:

That in order for CMA to consider supporting a single payer health reform proposal, the following criteria must be in place:

1. Physicians must be permitted to balance bill their usual and customary rates.

2. A scientific, apolitical body must make benefit/coverage decisions.

3. Pluralistic delivery system options must be retained (e.g., pre-paid
group practices, FFS).

4. A mechanism for addressing fraud.

5. Patients allowed to “buy up” – to purchase additional coverage outside the ‘single’ plan.

6. A mechanism to address capital investment and infrastructure building.

7. Medically appropriate co-payments on a sliding scale must be incorporated
to discourage excessive utilization.

http://www.calphys.org/html/bb522.asp

Comment: Single payer advocates certainly would have problems with some of
the qualifying criteria listed, including balance billing, financial penalties for accessing beneficial services, and the suggestion that buying to the front of the queue might be permitted through “buy up” coverage. But we must recognize that it is truly remarkable that the California Medical Association has officially advanced its position on single payer to one of considering support.

We should work within organized medicine to be certain that single payer continues to be included in the evaluation of all options for reform. As the
general concepts for reform are better understood, we can continue to work
to improve the policy details.

Al Franken and single payer

Al Franken and single payer

The New York Times
March 21, 2004
Al Franken, Seriously
By Russell Shorto

(Al Franken) supports universal health care and is warming to the idea of a
single-payer system.

Comment: And that’s no lie!

Singapore's MSAs plus catastrophic not adequate

The Straits Times
March 19, 2004
New health insurance for all
By Salma Khalik

A compulsory national medical insurance scheme will be put in place to plug a gap in Singapore’s efforts to make health care affordable. Acting Health Minister Khaw Boon Wan will be taking the next few months to hammer out a workable medical insurance plan – a call made time and again by MPs.

Yesterday, Mr Khaw agreed with Government Parliamentary Committee for health chairman Lily Neo that the concept of ‘risk-pooling’ was needed. While there are private medical insurance plans, insurers tend to ‘cherry-pick’, servicing mainly the low-risk group: the young and healthy.

The whole idea is to help Singaporeans ‘stretch their Medisave dollars’, he said. While there is $30 billion in Medisave money, 17 per cent of CPF members have less than $1,000 in their accounts. Even those with the maximum $30,000 in their Medisave will find it insufficient for their needs.

But while it is for the people to decide if they want to opt for MediShield, this new scheme will be compulsory unless the consensus opinion is otherwise.

‘To minimise administrative costs, a compulsory national scheme is best. It ensures full coverage with the lowest premiums. It ensures maximum equity
and efficiency,’ Mr Khaw explained.

http://straitstimes.asia1.com.sg/topstories/story/0,4386,240837,00.html

Comment: The proponents of medical savings accounts (MSAs or HSAs, the health savings accounts of the Medicare bill) frequently cite the “success” of the MSA program in Singapore as a basis for supporting a similar program in the United States.

Singapore has a Medisave program which is composed of individual MSA-type
accounts, a MediShield program which covers catastrophic, life threatening disorders, and a Medifund program that serves the poor. What has become evident is that coverage for non-catastrophic illnesses is clearly needed. Their current system leaves many without affordable access to essential but non-catastrophic health care services.

It comes as no surprise that they have discovered that universal risk-pooling will be necessary to ensure full coverage at the lowest cost and to provide maximum equity and efficiency. It seems that policymakers in the United States should be able to come to the same conclusion.

Singapore’s MSAs plus catastrophic not adequate

The Straits Times
March 19, 2004
New health insurance for all
By Salma Khalik

A compulsory national medical insurance scheme will be put in place to plug a gap in Singapore’s efforts to make health care affordable. Acting Health Minister Khaw Boon Wan will be taking the next few months to hammer out a workable medical insurance plan – a call made time and again by MPs.

Yesterday, Mr Khaw agreed with Government Parliamentary Committee for health chairman Lily Neo that the concept of ‘risk-pooling’ was needed. While there are private medical insurance plans, insurers tend to ‘cherry-pick’, servicing mainly the low-risk group: the young and healthy.

The whole idea is to help Singaporeans ‘stretch their Medisave dollars’, he said. While there is $30 billion in Medisave money, 17 per cent of CPF members have less than $1,000 in their accounts. Even those with the maximum $30,000 in their Medisave will find it insufficient for their needs.

But while it is for the people to decide if they want to opt for MediShield, this new scheme will be compulsory unless the consensus opinion is otherwise.

‘To minimise administrative costs, a compulsory national scheme is best. It ensures full coverage with the lowest premiums. It ensures maximum equity
and efficiency,’ Mr Khaw explained.

http://straitstimes.asia1.com.sg/topstories/story/0,4386,240837,00.html

Comment: The proponents of medical savings accounts (MSAs or HSAs, the health savings accounts of the Medicare bill) frequently cite the “success” of the MSA program in Singapore as a basis for supporting a similar program in the United States.

Singapore has a Medisave program which is composed of individual MSA-type
accounts, a MediShield program which covers catastrophic, life threatening disorders, and a Medifund program that serves the poor. What has become evident is that coverage for non-catastrophic illnesses is clearly needed. Their current system leaves many without affordable access to essential but non-catastrophic health care services.

It comes as no surprise that they have discovered that universal risk-pooling will be necessary to ensure full coverage at the lowest cost and to provide maximum equity and efficiency. It seems that policymakers in the United States should be able to come to the same conclusion.

America's health insurance industry's plans for our future

America’s Health Insurance Plans (AHIP)
March 9, 2004
America’s Health Insurance Plans Chart a Course for Improving Quality, Access and Affordability

The recently merged American Association of Health Plans (AAHP) and Health Insurance Association of America (HIAA) today unveiled a new name… America
‘s Health Insurance Plans (AHIP).

(Co-Chairman Michael) Abbott, who is President and CEO of American Republic
Insurance Company, stated, “Our mission is clear: We will advocate for a legislative and regulatory environment that enables our members to help create a health care system that meets the needs of all stakeholders – consumers, employers and public purchasers. Our goal is to help make access to high-quality, affordable health care a reality for all Americans.”

Board of Directors Statement
A Commitment to Improve Health Care Quality, Access, and Affordability
March 2004

WE BELIEVE that the times call for the nation to make a renewed commitment to meet the needs and expectations of health care consumers regardless of health, socioeconomic status, location or other circumstances.

OPTIONS FOR GIVING ALL AMERICANS ACCESS
(Comments are by Don McCanne.)

* Provide access to health care coverage for lower-income individuals and
families through tax credits
Comment: Proposed tax credits are not adequate to make health plans
affordable for low-income individuals.

* Encourage younger Americans to seek and maintain health coverage
Comment: The AHIP proposal calls for tax-advantaged health spending accounts
which would effectively remove this relatively healthy sector from the insurance risk pools, driving up costs for those with greater needs who remain in the traditional plans.

* Intensify efforts to cover adults and children who are eligible for but not enrolled in Medicaid and SCHIP
Comment: Since this sector does not have enough resources to pay the costly
health plan administrative expenses, AHIP shifts this responsibility from their plans to administratively efficient public programs funded by taxpayers.

* Create “high-risk” purchasing pools to cover uninsured individuals with
especially high health costs.
Comment: One of the great advantages of insurance is that high-risk individuals would have their costs diluted in a large risk pool. AHIP proposes to eliminate these individuals from their plans and have their high-cost care funded by federal and state taxpayers. Excluding those who have greater health care needs from health insurance plans should make us question the need for any involvement by the private health insurance plans.

* Provide bridge loans to help middle-income workers maintain their coverage when they become unemployed
Comment: Although this proposal increases the risk of personal bankruptcy for the unemployed, it would help to preserve this market for the health plans. The unemployed have enough financial problems without piling on more debt.

* Provide access through public programs for Americans living below
poverty
Comment: This perpetuates the under-funded, welfare-model Medicaid-type approach and places the responsibility for funding on the taxpayers rather
than the health plans.

* Provide access for public financing of private health coverage for
Americans living near poverty
Comment: AHIP still wants to keep the health plan market for employed, lower-income individuals, but they want government tax funds to subsidize this market.

* Use tax incentives to promote broader coverage among higher-income workers without insurance
Comment: Taxpayer subsidization of health care costs increases as income increases with these tax incentives. Health care welfare disproportionately
benefiting the wealthy is not rational policy.

http://www.aahp.org/Template.cfm?Section=Home&template=/ContentManagement/ContentDisplay.cfm&ContentID=11209
(The Board of Directors Statement may be accessed by clicking on the link at the bottom of the AHIP release.)

Final comment: It seems that the “renewed commitment” and “new direction”
of AHIP would ensure the health of America’s health insurance plans long into the future. But what about patients? The Board of Directors Statement includes a chart that shows that their proposals will provide access to all of the 43 million uninsured. Unfortunately, AHIP’s “new commitment” totally lacks credibility as innumerable studies have confirmed that these proposals cannot possibly meet that goal.

AHIP’s proposals are designed to generously fund their industry’s own administrative services, but when it comes to paying for health care, they turn to the government and the taxpayers.

If this is the best that America’s Health Insurance Plans can come up with, then we clearly need a national, government solution.

If Ashcroft Were Uninsured…

If Ashcroft Were Uninsured…
By Dan Frosch, AlterNet
March 14, 2004

From the moment Attorney General John Ashcroft was diagnosed with gallstone pancreatitis on March 4, he has without a doubt received the best and most efficient medical care in the world.

While Justice Department officials haven’t released many details, the Attorney General, because of his status, was most likely whisked through the emergency room at George Washington University Hospital, into intensive care and then surgery, and has all the while been doted on by a team of concerned and caring medical experts.

Ashcroft has little reason to worry about the charges he’s incurring. Like virtually all civilian federal employees, Ashcroft is presumably covered by any one of the impressive health plans offered by the United States Office of Personnel management. The most popular plan, Blue Cross/ Blue Shield ‘Standard,’ could conceivably pay for close to 90 percent of Ashcroft’s hospital care.

But what if John Ashcroft was never confirmed as Attorney General and didn’t have that impressive federal health plan? According to the Chicago-based group, Physicians for a National Health Program (PNHP), 41 million Americans don’t have any health insurance and the majority of them, the group says, aren’t necessarily unemployed.

So, what would have happened if John Ashcroft was not Attorney General, didn’t have health insurance and got sick?

What would happen, hypothetically, is this:
One day, on his way into Washington D.C. to see “The Passion of the Christ,” John Ashcroft gets a searing a pain in his stomach. He calls a doctor friend of his for help but the doc is out to lunch. The doctor’s receptionist tells him he should make an appointment and asks what type of health insurance he has.

After an infuriatingly incomprehensible conversation about health coverage, Ashcroft realizes that, because he’s no longer a Senator from Missouri, he doesn’t have insurance. At 61, he’s four years too young to qualify for Medicare. And, because of the steady income he gets from speaking engagements, he’s not among the desperately poor that receive Medicaid, despite deciding to donate most of that money to a Christian charity leaving him a much more modest man.

The receptionist tells him that without insurance, a doctor’s appointment will now run him about $75, and because he’s now not nearly as wealthy as he once was, Ashcroft tells her he’ll just take some Tylenol.

A week goes by, and Ashcroft’s pain grows steadily worse. He doesn’t go to a doctor though, because he knows it will cost him money he doesn’t have. So instead, Ashcroft pops more Tylenol.

It’s worth nothing that according to PNHP, some 18,000 Americans die every year because they don’t have health insurance and wait too long to see a doctor. A few more days go by, and he decides drives into Washington D.C. to see “Passion of the Christ” a second time. But before he can get to the theater, he’s hit with an unbelievable pain in his stomach.

Bravely maintaining his composure, Ashcroft manages to find his way to D.C. General Hospital, the mammoth public hospital he remembers passing every day on his way to Congress. As he pulls into the parking lot, however, he notices that D.C. General looks abandoned. Now that he thinks about it, Ashcroft vaguely remembers reading some newspaper articles about how D.C. General – the only public hospital in the Washington D.C., which mainly served poor and minority residents – was closed by the city in 2001 because in large part, it was over burdened with uninsured patients who couldn’t pay.

And so, Ashcroft sets off in his car around predominantly poor and black southeast D.C., looking for another hospital. Unfortunately, there couldn’t be a worse time for Ashcroft to be sick and uninsured. Not only is there not another hospital in the neighborhood that D.C. General was serving, but also those hospitals picking up General’s slack – Providence, Howard University, Washington Hospital Center and Greater Southeast – have been overwhelmed with patients.

Much like in other big cities across the country, Washington’s emergency rooms have seen a substantial spike in visits, there are virtually no beds available and intensive care units are filled to 95 percent capacity. What’s more, says Joan Lewis, Senior Vice President of the District of Columbia Hospital Association, now that General is gone, these other hospitals are treating more of the city’s approximately 85,000 uninsured residents and spending more of their already depleted cash supply in the process. Since General closed two years ago, the $131 million Washington hospitals were spending annually to subsidize care for uninsured patients jumped an average of about $24 million per year – an enormous financial strain on a system already stretched too thin. Greater Southeast filed for bankruptcy in 2003 and four more of the city’s other seven hospitals are operating in the red. “Everybody feels like we’re on the edge,” says Lewis. “If there was a big epidemic, a medical crisis, we’d be in real trouble.”

Ashcroft, though, doesn’t know any of this. He just knows he needs help and needs it fast. He finally gets to another hospital – take your pick of the four already mentioned – and stumbles into the emergency room. Packed with people and patients, Ashcroft is told by this receptionist to fill out a not so small folder of forms which all seem to ask him for the same information. He complies, even revealing he has no insurance.

Meanwhile, he’s virtually doubled over in pain. But because Ashcroft appears to only have a bad stomach ache, and he’s surrounded by people in serious trauma, he might wait up to eight hours before being seen – according to the D.C. Health Care Coalition, a group of community leaders, clergy and medical professionals pushing for another public hospital.

Finally, Ashcroft is called into an examination room where a nurse takes a quick look and hands him a packet of Tylenol before sending him on his way. The nurse is too overwhelmed with patients who’ve been shot, stabbed and the like to call an equally overwhelmed doctor to conduct a full examination on Ashcroft.
Ashcroft makes it into his car and out of the parking lot before the unimaginable pain finally causes him to go into shock and collapse.

Alerted to a man passed out in his car in the middle of the street, an ambulance rushes Ashcroft back into the emergency room. This time, because his condition is more urgent, he’s seen immediately by doctors who diagnose him with gallstone pancreatitis – a serious illness that occurs when gallstones block the duct of the pancreas – and advise that he be placed immediately in intensive care. Unfortunately, for Ashcroft, ever since D.C. General and its 22-bed Intensive Care Unit (ICU) shut its doors, there’s been little room anywhere for patients requiring intensive care. As a result, says Joan Lewis, doctors sometimes have to keep critically ill patients in the emergency room and check on them when they can. And so, Ashcroft, barely conscious, is kept in the emergency room until, a few hours later, he’s brought up to the ICU.

There, for four days, Ashcroft, is put on an intravenous, given aggressive pain relief and treated with antibiotics by doctors and nurses who visit him around the clock.

On the fifth day in the ICU, doctors decide that Ashcroft should have his gall bladder removed to prevent any reoccurrence. The surgery goes well, and Ashcroft is taken back to the ICU. The next day, he’s removed to a room for less critical patients so that he can fully recover.

Sometime during the next five days, as he’s recovering, financial staff contracted by the hospital politely question a woozy Ashcroft about how he plans on paying for his time there.

Joan Lewis says such staff would try to convert Ashcroft to the D.C. Health Alliance insurance plan instituted in 2001 to combat the growing rate of uninsured. But the plan only works for people who are at 200 percent of the federal poverty level, leaving the majority of the city’s uninsured still without coverage, including Ashcroft.

“Well,” the money guys tell Ashcroft. “Here’s how much you owe us.” While it’s almost impossible to figure out the exact figure on Ashcroft’s bill, one can estimate. Five days in an ICU unit alone at Providence Hospital in Washington, for example, would run up to $30,000. And then there’s the laparoscopic gall bladder surgery and the five days in recovery – which could cost an additional $28,000 (according to Fairview University Medical Center in Minneapolis). But there are still all the expert doctors who’ve visited him daily and have their own separate charges. That price tag might run Ashcroft as much as $5000 for the ten days he’s in the hospital, says Dr. Quentin Young, PNHP’s National Coordinator and former Director of Medicine at Cook County Hospital. Using such rough estimates, Ashcroft is told he’ll have to fork over at least $63,000. Shocked at such an outrageous figure, Ashcroft insists there’s no way in hell he can pay that amount of money and begins to explain his situation.

A financial counselor enters the room and tells Ashcroft that the hospital has done a little research on his “situation,” and because he does have assets and a steady source of income, however small, he’s not eligible for the hospital’s charity fund, reserved for those who truly have no resources. The counselor says the hospital can put Ashcroft on an assistance program, where he’d be charged an incremental fee depending on his financial status. Or, if he’s lucky, the hospital might eat a percentage of the bill – again, based on his status.

The counselor doesn’t mention it, but he knows that if Ashcroft doesn’t make his payments he can send collection agents after him, and eventually take him to court if need be. After all, the hospital is already strapped for cash and has spent a lot of money treating Ashcroft. Besides, just letting uninsured patients walk out the door could force the hospital to close. Everyone knows what happened to D.C. General.

The D.C. Hospital Association doesn’t keep track of how often its hospitals go after patients who cannot pay, but as David Sparks, Chief Financial Officer of Providence Hospital, puts it, “Collections happen every day and every week. It’s part of the standard process.”

In the end, says Dr. Quentin Young, there’s a good chance Ashcroft will have to pay much of the money he owes in some capacity, or face a lien on everything he owns. The fact is, according to Roger Whelan, a resident scholar at the American Bankruptcy Institute and a former bankruptcy judge, medical bills attributed to a lack of insurance or insufficient coverage are a leading reason why a record 1.7 million bankruptcies occurred in this country last year.

As for the real Ashcroft, he’ll never know the terrifying dilemma of his alter ego – a dilemma experienced by millions of Americans throughout the country every day – because he’s a high ranking official in the Bush Administration and probably has that impressive federal health plan, or one similar to it. (A Justice Dept. spokesman said that Ashcroft is insured but did not know whether he was on the federal plan.) Of course, it’s the same administration, of which Ashcroft is such an integral part, that has been so opposed to expanding health insurance to all people, regardless of age, employment status or economic well being.

Ironically it’s Ashcroft’s own health insurance that is saving him – not only now, while he’s in the hospital, but once he gets the bill.

Dan Frosch is a freelance journalist based in New York City. He’s been on staff at the San Gabriel Valley Weekly section of the Los Angeles Times, The Source magazine, the Pacific Palisadian Post and most recently the Santa Fe Reporter. Dan also contributes to VIBE and POZ magazines.

America’s health insurance industry’s plans for our future

America’s Health Insurance Plans (AHIP)
March 9, 2004
America’s Health Insurance Plans Chart a Course for Improving Quality, Access and Affordability

The recently merged American Association of Health Plans (AAHP) and Health Insurance Association of America (HIAA) today unveiled a new name… America
‘s Health Insurance Plans (AHIP).

(Co-Chairman Michael) Abbott, who is President and CEO of American Republic
Insurance Company, stated, “Our mission is clear: We will advocate for a legislative and regulatory environment that enables our members to help create a health care system that meets the needs of all stakeholders – consumers, employers and public purchasers. Our goal is to help make access to high-quality, affordable health care a reality for all Americans.”

Board of Directors Statement
A Commitment to Improve Health Care Quality, Access, and Affordability
March 2004

WE BELIEVE that the times call for the nation to make a renewed commitment to meet the needs and expectations of health care consumers regardless of health, socioeconomic status, location or other circumstances.

OPTIONS FOR GIVING ALL AMERICANS ACCESS
(Comments are by Don McCanne.)

* Provide access to health care coverage for lower-income individuals and
families through tax credits
Comment: Proposed tax credits are not adequate to make health plans
affordable for low-income individuals.

* Encourage younger Americans to seek and maintain health coverage
Comment: The AHIP proposal calls for tax-advantaged health spending accounts
which would effectively remove this relatively healthy sector from the insurance risk pools, driving up costs for those with greater needs who remain in the traditional plans.

* Intensify efforts to cover adults and children who are eligible for but not enrolled in Medicaid and SCHIP
Comment: Since this sector does not have enough resources to pay the costly
health plan administrative expenses, AHIP shifts this responsibility from their plans to administratively efficient public programs funded by taxpayers.

* Create “high-risk” purchasing pools to cover uninsured individuals with
especially high health costs.
Comment: One of the great advantages of insurance is that high-risk individuals would have their costs diluted in a large risk pool. AHIP proposes to eliminate these individuals from their plans and have their high-cost care funded by federal and state taxpayers. Excluding those who have greater health care needs from health insurance plans should make us question the need for any involvement by the private health insurance plans.

* Provide bridge loans to help middle-income workers maintain their coverage when they become unemployed
Comment: Although this proposal increases the risk of personal bankruptcy for the unemployed, it would help to preserve this market for the health plans. The unemployed have enough financial problems without piling on more debt.

* Provide access through public programs for Americans living below
poverty
Comment: This perpetuates the under-funded, welfare-model Medicaid-type approach and places the responsibility for funding on the taxpayers rather
than the health plans.

* Provide access for public financing of private health coverage for
Americans living near poverty
Comment: AHIP still wants to keep the health plan market for employed, lower-income individuals, but they want government tax funds to subsidize this market.

* Use tax incentives to promote broader coverage among higher-income workers without insurance
Comment: Taxpayer subsidization of health care costs increases as income increases with these tax incentives. Health care welfare disproportionately
benefiting the wealthy is not rational policy.

http://www.aahp.org/Template.cfm?Section=Home&template=/ContentManagement/ContentDisplay.cfm&ContentID=11209
(The Board of Directors Statement may be accessed by clicking on the link at the bottom of the AHIP release.)

Final comment: It seems that the “renewed commitment” and “new direction”
of AHIP would ensure the health of America’s health insurance plans long into the future. But what about patients? The Board of Directors Statement includes a chart that shows that their proposals will provide access to all of the 43 million uninsured. Unfortunately, AHIP’s “new commitment” totally lacks credibility as innumerable studies have confirmed that these proposals cannot possibly meet that goal.

AHIP’s proposals are designed to generously fund their industry’s own administrative services, but when it comes to paying for health care, they turn to the government and the taxpayers.

If this is the best that America’s Health Insurance Plans can come up with, then we clearly need a national, government solution.

Impact of policies favoring tax credits and catastrophic coverage

The Henry J. Kaiser Family Foundation
March 2004
Coverage and Cost Impacts of the President’s Health Insurance Tax
Credit and
Tax Deduction Proposals

This issue brief looks at the coverage impacts and costs of the two largest components of the President’s proposal: a new tax credit for people purchasing non-group health insurance and a new tax deduction for premiums for high-deductible, non-group health insurance policies.

The estimates presented below were prepared by Jonathan Gruber, Ph.D., Professor of Economics at the Massachusetts Institute of Technology, using a
microsimulation model developed in conjunction with the Kaiser Family foundation.

Overall, this analysis finds that the President’s tax credit and tax deduction proposals for non-group health insurance, when fully implemented, would increase the number of people with health insurance by almost 1.3 million, at a cost of more than $4,700 per newly insured person. As discussed in more detail below, while the net change in the number of people with insurance is relatively small, these policies would result in a substantial movement of individuals away from employer-based coverage and into the non-group market, or in some cases, into being uninsured. Also of significance, the tax credit and tax deduction policies together result in a lower number of newly insured people, and a higher cost for each person newly insured, than the tax credit policy would achieve standing alone.

Two findings in particular raise important questions for policymakers considering these proposals. The first is the impact of both the tax credit and tax deduction proposals on people with employer-based coverage. By offering tax subsidies for non-group health insurance, the policies would reduce the preference under current tax law for employer-based coverage over non-group insurance, with the likely result that fewer employers would offer health benefits to their employees. In some cases, these employees would not find other insurance, either because they would not want to pay the premiums for non-group insurance or because health problems could make it difficult for them to find affordable coverage in some states. This is not to say that any new problems encountered by people who would lose insurance under these proposed policies are necessarily greater or more important than the financial access problems faced by the people who would benefit from the tax credit and deduction policies, but policymakers need to be aware of the potential for disruption in the group insurance market. In particular, people with health problems who lose employer-based coverage would likely face higher premiums and more coverage restrictions in the non-group health insurance market than they currently face when receiving health benefits through work. These same problems-relatively high premiums and coverage restrictions-already exist for people with health problems purchasing non-group health insurance in most states today. Policymakers may want to consider whether current market responses for people with health problems, such as state high risk pools, are sufficient to assure the availability and affordability of coverage for this population.

A second question raised by these findings relates to who benefits from the proposed policies. …the newly insured under the tax credit policy (and the results for the combined policies are almost identical) tend to be younger and healthier than the uninsured overall, and tend to be younger than the under 65 population as a whole. This raises the question of whether these policies could be modified to provide more assistance to older or less healthy uninsured people, or whether an additional policy response, such as a public coverage expansion, would be needed to increase insurance access for these more costly groups of uninsured people.

http://www.kff.org/insurance/loader.cfm?url=/commonspot/security/getfile.cfm&PageID=32681

Comment: This report updates Professor Gruber’s prior microsimulations demonstrating that providing tax credits for individual (non-group) health plans has very little impact in reducing the numbers of uninsured, but has a more significant impact in shifting coverage from employer-sponsored group plans to individual plans. This shift moves individuals into plans than usually have fewer benefits and much less value. In fact, the amount of the tax credit is offset by the funds wasted by purchasing private plans with their inherent lower value. And individuals with significant health problems are particularly vulnerable in the non-group market. Until we have in place a health insurance system that does provide adequate protection for everyone we cannot afford to adopt policies, such as this tax credit proposal, that threatens the future of group health care coverage.

Now that health savings accounts (HSAs) are a reality, President Bush is proposing that we move on to the next step and make catastrophic (high deductible) plans tax deductible. What difference does it make if we allow individuals with higher incomes to benefit from this proposal? Well, first of all, it is unfair. The tax advantage means that taxpayers would be paying more of the health care expenses of higher income individuals and less for those with moderate or low incomes. A health care welfare program for the rich is not really sound health policy nor sound tax policy.

Of much greater importance is the fact that Professor Gruber’s new microsimulation demonstrates that combining tax credits with tax deductibility of catastrophic plans would greatly accelerate the trend to move out of employer-sponsored group plans, and it would have even less impact on reducing the total numbers of uninsured than would the relatively ineffective tax credit alone. In fact, 2.6 million individuals who currently have employer-sponsored coverage would end up with no insurance at all.

To the casual observer, it would seem that tax credits and deductibility of catastrophic coverage would be a move forward. But since these policies have
only a negligible impact on the total numbers of the uninsured, and since they shift individuals from the security of employer-sponsored group plans into the highly flawed marketplace of individual plans, the net impact is decidedly negative.

We do need to move away from employer-sponsored group plans. But that shift
must be into an equitable system of social insurance. Tax policies that benefit the rich and healthy and benefit the private health plan industry should be emphatically rejected.