PNHP

Educational quality impaired by cost of health insurance

Educational quality impaired by cost of health insurance

Association of School Business Officials International
March 14, 2004
Rising Health Costs Hit School Maintenance, Tech and Teacher Budgets

School business officials say the cost of employee health insurance has risen so sharply that it has adversely hit their budgets-so much so that they’ve trimmed spending on building maintenance, teaching positions, technology upgrades and professional development for teachers.

The information comes from administrators across the country who belong to the Association of School Business Officials International (ASBO) in Reston, VA and who replied to a recent on-line survey. A vast majority (95%) agrees that the cost of health insurance in their district is a bigger problem now than ever before. Over 90% place the blame on the basic cost of health insurance.

ASBO President William R. Fellmy, Ph.D.:
“The significant increase in the cost of health insurance over the last few years has been felt nationally. We know about its impact on our own pocketbooks. But the public often doesn’t realize this hits our schools hard economically and affects educational quality.”

http://asbointl.org/WhatsNew/index.asp?bid=5626

Comment: Educational quality is yet another victim of our failure to enact the changes that we know would improve access, coverage and affordability. If we know what to do, why aren’t we doing it?

Health care marketplace creates wasteful, excess capacity

BMJ
March 13, 2004
Use of hospitals, physician visits, and hospice care during last six months of life among cohorts loyal to highly respected hospitals in the United States
By John E Wennberg, et al

Academic medical centres in the United States with reputations for excellence differed dramatically in the care they provided to patients during the last six months of life.

…physicians have been shown to adapt their decisions about admission and discharge to the availability of intensive care unit beds, admitting more patients with lower severity of illness and extending their length of stay when more beds are available. In the light of this evidence, the likely explanation for the variations in acute hospital care and physician visits is variation in bed and workforce capacity relative to the size of population loyal to the 77 hospitals.

http://bmj.bmjjournals.com/cgi/content/full/328/7440/607

And…

The New York Times
March 13, 2004
An M.R.I. Machine for Every Doctor? Someone Has to Pay
By Reed Abelson

…doctors, their traditional sources of income squeezed, discover a new one: diagnostic imaging.

Instead of sending patients to a radiologist or one of four local hospitals, doctors in Syracuse have been particularly aggressive about installing imaging equipment – particularly M.R.I. machines – in their own offices.

There are signs that more machines may translate into too much imaging. Excellus points to data that suggest use of M.R.I.’s in Syracuse is two-thirds higher than in Rochester, for example, and higher than the national average.

And…

Health Affairs
March/April 2004
Growth Of Single-Specialty Medical Groups
By Lawrence P. Casalino, Hoangmai Pham and Gloria Bazzoli

Using site-visit data from the Community Tracking Study, we show that specialists are increasingly forming large single-specialty medical groups, particularly in orthopedics and cardiology, where new technologies have increased the number of diagnostic imaging and surgical services that can be
provided in outpatient settings.

CTS site visits have provided little evidence that single-specialty groups, to date, are developing many of the organized quality-improving and cost-reducing processes to be expected in a focused factory. The current system pays specialists for increasing, not decreasing, the quantity and complexity of services provided and does not pay them for improving quality. Previous research has shown that physicians who own ancillary facilities tend to increase the amount of ancillary services they provide. Health plan executives at many CTS sites believe that increased specialist use of ancillary services is increasing health care costs.

http://content.healthaffairs.org/cgi/content/full/23/2/82

Comment: There is now ample evidence in the health policy literature to show that excess capacity in the health care system results in over-utilization, defined as an increase in utilization without a reasonably commensurate improvement in health care outcomes.

It is important to establish an optimum level of capacity ensuring that services will be there when needed but not enabling excessive utilization. A single payer system separates budgets for operation of the health care system from budgets for capital improvements, precisely for these reasons.

When we depend on market forces to establish capacity, the decision makers
head for the money. Thus, as Wennberg has shown in another study, Boca Raton
has a capacity that allows about a 30% excess in the level of services, but
without a demonstrable improvement in outcomes.

A single payer system not only establishes fairness in funding and in allocation of resources, but it also allocates resources more effectively. Will someone explain why we continue to support our current expensive but wasteful, less effective, and inequitable system when we know how to make it better?

Health Care Costs Not a Difficult Problem for Most Americans

Silicon Valley Biz Ink
(PRNewswire)
March 10, 2004
Health Care Costs Not a Difficult Problem for Most Americans

Majorities of the U.S. public say they know what their health care premiums, doctor visits, prescription drugs and deductibles cost while far fewer say they do not, according to the results of a recent new Harris Interactive poll conducted for The Wall Street Journal Online’s Health Industry Edition.

Overall, few found paying for health care difficult… Humphrey Taylor, chairman of The Harris Poll at Harris Interactive:

“The good news is that most people do not find it difficult to pay their insurance premiums or out-of-pocket costs. The bad news is that those who find it very difficult — up to 20 million adults — include many sick, low-income people who really need the care.”

http://www.prnewswire.com/cgi-bin/stories.pl?ACCT=SVBIZINK4.story&STORY=/www/story/03-09-2004/0002125200&EDATE=TUE+Mar+09+2004,+02:52+PM

Comment: Although most Americans are concerned about the future affordability of health care, they are not yet having difficulties meeting the costs. The large majority, at any given point in time, are relatively healthy and have only modest or negligible health care costs.

Although many will develop significant medical problems and move into the minority sector with higher care costs, younger, healthier individuals will replace them, ensuring that the healthy will always remain a significant majority. As long as the financial exposure remains quite tolerable, this large, healthy majority may never become a potent force in the health care reform movement.

Will we ever have enough solidarity to support reform that would ensure affordable access to health care for the minority who do have significant
health care needs?

Maybe we are moving in another direction and instead developing solidarity on the contemporary modification of Russell Long’s famous quotation: “Don’t tax you, don’t tax me, don’t even tax that rich fellow behind the tree.”

Weak health care market forces lead to thoughts of government solutions

Weak health care market forces lead to thoughts of government solutions

Health Affairs
March/April 2004
Are Market Forces Strong Enough To Deliver Efficient Health Care Systems?
Confidence Is Waning
By Len M. Nichols, Paul B. Ginsburg, Robert A. Berenson, Jon
Christianson
and Robert E. Hurley

The quest for greater efficiency in the delivery of health care services is eternal in a country that spends far more on health care than any other, consistently has growth in spending that outstrips that of income, is unable to provide insurance coverage to at least 15 percent of its population, and ranks poorly among industrialized countries in systemwide measures such as life expectancy and infant mortality. Add to this our quality problems, and it is hard to be complacent about the value U.S. citizens receive for their health care dollars. Inefficiency also puts a very high public-sector price tag on universal coverage, which helps polarize the politics of this issue.

Typically, all analyses of health system reform address the same key question: What and how much can markets do alone, and how much help might they need from government to produce more efficient outcomes or a more equitable distribution of health care resources? As we enter another season of broad debate about the structure of health care financing, the Community Tracking Study (CTS) site visits of the Center for Studying Health System Change (HSC) can make a unique contribution to analyses of the power and limits of market forces.

The CTS is a longitudinal study that tracks changes in local health care systems nationwide. Researchers conduct site visits to twelve randomly selected and nationally representative communities every two years to interview leaders of the local health care system about changes in the organization, delivery, and financing of health care and the impact of those changes on people.

We were struck by how many of our respondents-especially those traditionally
not predisposed to seek larger roles for government-echoed sentiments similar to the following. An insurance broker said, “The delivery system is a mess. The sectors don’t talk. No one wants to change. The government must do something.” A surprised benefit consultant reported: “There now is a lack of resistance to government involvement.” And capturing a sentiment expressed in many different ways, one local policymaker said, “If the private sector can’t figure all this out, it’s scary to think that we might actually end up running to government-I mean, HCFA!-to do it.”

The theme of “everyone feels constrained from changing his own behavior” cut
across many respondents’ views. Some kind of intervention stronger than what
has been tried before is thought to be necessary to force change. At the same time, there was general recognition that “fault” lies all around and that all sectors-including public programs-need to change their behavior for high-quality, effective health care to become more affordable in the long run. Perhaps it is this recognition of shared blame and shared self-interest in the status quo-plus a growing awareness in each community that health care creates jobs and contributes to local economic health-that has led a diverse array of leaders to begin to look to government as a focal point for a solution, at least as a convener or referee among stakeholders with diverse interests.

What is palpable across the twelve communities we studied is the recognition that private market forces are limited in their ability to achieve social objectives in health care services, and a growing sense that a broader conversation about what to do next should begin soon. This conversation may find more willing participants than would have been possible four to six years ago.

http://content.healthaffairs.org/cgi/content/abstract/23/2/8

Alain Enthoven responds (excerpts):

It is late, probably too late, to avert the inexorable progression to “Medicare for All.” U.S. employers would need to have an epiphany soon. But when it comes to health care, most of their horizons are so limited and their vision so constrained that such a change seems unlikely. What is becoming most likely is that the winning candidate in 2008 will make “Medicare for All” a foundation of his or her platform. And employers, incapable of controlling costs and desperate to get medical expenses off their financial statements, will lead the candidate’s campaign finance committee. Labor and small business will join them. The large and growing numbers of uninsured, by then reaching well into the middle class, will consider the issue to be of top priority.

Medicare for all will end up with an impasse like Canada’s, only much more
costly. The Medicare model will not deliver efficient health care systems. A
properly structured market model, based on existing demonstrated successes,
could.

http://content.healthaffairs.org/cgi/content/abstract/23/2/25

Comment: A final quote from the Nichols, et al article: Given how emphatically the nation rejected substantially more government involvement in health care decision making via the Clinton Health Security Act, it is a testament to the extent of malaise among private health care market participants today that a willingness to reconsider major government involvement surfaced frequently in our interviews during our 2002-03 site visits. At the same time, many respondents quickly added caveats such as, “But we can’t say that out loud.” Thus, the next system overhaul discussion period is likely to be long, for much political and educational work will have to precede any consensus decision to intervene in particular ways.

There's a single solution to problems in health system

LAURA BILLINGS: There’s a single solution to problems in health system

A column last week about the health care costs that have been the sticking point in negotiations with striking Metro Transit bus drivers seems to have struck a chord with readers. Several dozen wrote in with their own concerns about the crisis in health care, which I thought I’d answer here, while we wait for our rides …

These bus drivers don’t know how good they have it. They should just be grateful they get health insurance at all — a lot of us don’t.

True. There are an estimated 41 million uninsured Americans, despite the fact we spend twice as much on health care as the average spent in other developed countries that provide universal coverage. Here in Minnesota, we have 394,580 uninsured — about 8 percent of the population.

Why is it a company’s responsibility to pay for any of the coverage? When my grandfather came to America from Germany in 1898 he never expected anyone to pay for his health care — and if you couldn’t afford something you didn’t get it.

Well, a lot of businesses believe that providing health coverage to employees should no longer be part of the social contract. A business group in California is trying to turn back a new law requiring large companies to pay for 80 percent of their workers’ health care benefits. The group already has collected more than 620,000 signatures to get on the ballot in November. Businesses in plenty of other places are eager to see how this turns out, since rising health care costs are cutting into profits.

As for your grandfather, his logic might have held up better a hundred years ago, when a trip to the doctor wouldn’t have bankrupted you. Have you checked out your own HMO statements lately? I went to the emergency room for stitches recently and got a bill for almost a thousand bucks. Why does it cost so much? In part, because those of us who do have insurance end up subsidizing those who don’t.

The biggest problem is that people use medical insurance way too much, and bug their doctors for the tiniest things instead of toughing it out.

I swear I needed those stitches. The blood was everywhere! It’s true that unnecessary medical costs are a contributing factor, but there are 41 million bigger problems.

It’s these doctors that are the problem. They want to keep us from having national health insurance because they’d lose money, and wouldn’t be able to pay the greens fees at their fancy golf courses.

Take your shots, but the truth is that physicians may be more fed up with the way our health care system works than almost anyone. According to a Harvard Medical School study published last month in the Archives of Internal Medicine, nearly two-thirds of the 904 Massachusetts doctors they surveyed were in favor of single-payer national health insurance. Some 57 percent said they’d be willing to work under a salary system, and 67 percent said they’d even take a reduction in fees for a reduction in paperwork. Physicians feel your pain.

There’s no way this country could afford to give health insurance to everyone who doesn’t have it. The expense would be mind-boggling.

Not really. According to a report from the Kaiser Commission on Medicaid and the Uninsured, providing coverage for all 41 million uninsured Americans would increase health spending’s share of the gross domestic product by less than one percentage point — $34 billion to $69 billion a year, depending on which approach you choose. As for mind-boggling, the uninsured already use about $99 billion in medical care each year.

You do a great job defining the problem — now come up with the solution to health costs.

Better minds than mine have already proposed one. In fact, more than 8,000 physicians (including two former surgeons general and the former editor of the New England Journal of Medicine) back a plan proposed last summer by Physicians for a National Health Plan. They suggest building and expanding on the foundation of the current Medicare program, providing access to people of all ages and covering prescription drugs and long-term care. They say such a single-payer system would save more than $200 billion a year in administrative, marketing and other private industry expenses — more than enough to pay for people who don’t have insurance.

Why haven’t you heard about this? Because the only politicians willing to say the words “national health insurance” in public are Ralph Nader and Dennis Kucinich. Even though health care has reached a crisis stage, expect November’s election to be decided on more important issues like who gets to marry whom and prayer in the classroom.

Every time I read your column I think my head is going to explode.

That sounds bad. You should see a doctor about that.
———————————————————————————
Laura Billings can be reached at lbillings@pioneerpress.com or 651-228-5584.

There’s a single solution to problems in health system

LAURA BILLINGS: There’s a single solution to problems in health system

A column last week about the health care costs that have been the sticking point in negotiations with striking Metro Transit bus drivers seems to have struck a chord with readers. Several dozen wrote in with their own concerns about the crisis in health care, which I thought I’d answer here, while we wait for our rides …

These bus drivers don’t know how good they have it. They should just be grateful they get health insurance at all — a lot of us don’t.

True. There are an estimated 41 million uninsured Americans, despite the fact we spend twice as much on health care as the average spent in other developed countries that provide universal coverage. Here in Minnesota, we have 394,580 uninsured — about 8 percent of the population.

Why is it a company’s responsibility to pay for any of the coverage? When my grandfather came to America from Germany in 1898 he never expected anyone to pay for his health care — and if you couldn’t afford something you didn’t get it.

Well, a lot of businesses believe that providing health coverage to employees should no longer be part of the social contract. A business group in California is trying to turn back a new law requiring large companies to pay for 80 percent of their workers’ health care benefits. The group already has collected more than 620,000 signatures to get on the ballot in November. Businesses in plenty of other places are eager to see how this turns out, since rising health care costs are cutting into profits.

As for your grandfather, his logic might have held up better a hundred years ago, when a trip to the doctor wouldn’t have bankrupted you. Have you checked out your own HMO statements lately? I went to the emergency room for stitches recently and got a bill for almost a thousand bucks. Why does it cost so much? In part, because those of us who do have insurance end up subsidizing those who don’t.

The biggest problem is that people use medical insurance way too much, and bug their doctors for the tiniest things instead of toughing it out.

I swear I needed those stitches. The blood was everywhere! It’s true that unnecessary medical costs are a contributing factor, but there are 41 million bigger problems.

It’s these doctors that are the problem. They want to keep us from having national health insurance because they’d lose money, and wouldn’t be able to pay the greens fees at their fancy golf courses.

Take your shots, but the truth is that physicians may be more fed up with the way our health care system works than almost anyone. According to a Harvard Medical School study published last month in the Archives of Internal Medicine, nearly two-thirds of the 904 Massachusetts doctors they surveyed were in favor of single-payer national health insurance. Some 57 percent said they’d be willing to work under a salary system, and 67 percent said they’d even take a reduction in fees for a reduction in paperwork. Physicians feel your pain.

There’s no way this country could afford to give health insurance to everyone who doesn’t have it. The expense would be mind-boggling.

Not really. According to a report from the Kaiser Commission on Medicaid and the Uninsured, providing coverage for all 41 million uninsured Americans would increase health spending’s share of the gross domestic product by less than one percentage point — $34 billion to $69 billion a year, depending on which approach you choose. As for mind-boggling, the uninsured already use about $99 billion in medical care each year.

You do a great job defining the problem — now come up with the solution to health costs.

Better minds than mine have already proposed one. In fact, more than 8,000 physicians (including two former surgeons general and the former editor of the New England Journal of Medicine) back a plan proposed last summer by Physicians for a National Health Plan. They suggest building and expanding on the foundation of the current Medicare program, providing access to people of all ages and covering prescription drugs and long-term care. They say such a single-payer system would save more than $200 billion a year in administrative, marketing and other private industry expenses — more than enough to pay for people who don’t have insurance.

Why haven’t you heard about this? Because the only politicians willing to say the words “national health insurance” in public are Ralph Nader and Dennis Kucinich. Even though health care has reached a crisis stage, expect November’s election to be decided on more important issues like who gets to marry whom and prayer in the classroom.

Every time I read your column I think my head is going to explode.

That sounds bad. You should see a doctor about that.
———————————————————————————
Laura Billings can be reached at lbillings@pioneerpress.com or 651-228-5584.

Musicians and health care coverage

Reuters
Mar 5, 2004
Health Insurance Crisis Lingers for Biz
By Chris Morris

Friends held a benefit for Tony Thompson at the Hard Rock Cafe in December.
Thompson, one of the best-known drummers of the ’70s and ’80s, had died Nov.
12 after being diagnosed with renal cell cancer. Doctors had removed one of
his kidneys, but by then the cancer had spread to his lungs and liver.

Thompson was uninsured.

“He couldn’t afford it,” says his widow, Patrice Thompson. “When I met him,
he had no money.”

Patrice now faces hospital and medical bills that she calls “astronomical.” In 2002, the nonprofit Washington, D.C.-based Future of Music Coalition (FMC) conducted an online survey and found that 44% of its 2,400 musician respondents did not have any health insurance.

Widow Patrice Thompson:

“I don’t understand how it has gone on this long without somebody doing something about it, or at least pitching a bitch about it.”

http://www.reuters.com/newsArticle.jhtml?type=musicNews&storyID=4509891

Comment: It might be expected that a fragmented, patchwork system of health
insurance coverage that depends on variables such as employment, job stability, financial resources and other similar factors would not serve musicians well. This flawed system has failed to reduce the problems of the uninsured. And the rest of us are paying too much for coverage that is progressively deteriorating.

We can easily fix our system of funding health care so that everyone would
have permanent, comprehensive coverage. But if we limit our efforts to patching our existing fragmented system, the problems of the musicians and the rest of the uninsured will never be resolved.

Sen. Clinton's subtle attack on incrementalism

Center for American Progress
March 3, 2004
Keep America Working: Restoring Jobs to Ensure American Prosperity
An Address by Sen. Hillary Rodham Clinton

American companies that continue to try to keep up with health care and pension costs find it increasingly difficult to do so. We are seeing now double-digit increases in health care, and we’re seeing the collapse of many of our pension systems that are basically being held aloft by a lot of accounting and prayers.

So how do we deal with this? Well, we can deal with it in a patchwork, incremental fashion, but eventually we’re going to have to decide. We’re
going to have to decide, are we going to provide a more level playing field
for our manufacturers by figuring out a way to deal with those legacy costs
which were, remember, built up because they thought they were doing the right thing for American workers and their families? Are we going to figure out a more sensible way to deal with health care and pension costs? Or are we going to continue to try to shift those burdens so that more and more is put on the employee and the employer and we have no end in sight of the increase in cost.

It’s also clear that this set of issues is politically volatile, as I can attest from my efforts ten years ago. And perhaps, though, the time is slowly coming. We weren’t ready ten years ago, we didn’t really understand the full cost of what we were up against, but it’s becoming more and more difficult to ignore the implications of these policies for the economy, and there have to be some attempts to reach a consensus that begins to solve these problems…

http://www.americanprogress.org/site/pp.asp?c=biJRJ8OVF&b=35989
Comment: “… patchwork, incremental fashion…”? “… eventually we’re going to have to decide.” “… the time is slowly coming.” The time has come. The question is no longer whether we need changes but what those changes will be.

Although Sen. Clinton will not be able to lead the charge since she spent most of her political capital on her prior attempt at reform, at least she is venturing out with guarded rhetoric revealing that she does understand that incremental patches simply will not do it.

Sen. Clinton’s subtle attack on incrementalism

Center for American Progress
March 3, 2004
Keep America Working: Restoring Jobs to Ensure American Prosperity
An Address by Sen. Hillary Rodham Clinton

American companies that continue to try to keep up with health care and pension costs find it increasingly difficult to do so. We are seeing now double-digit increases in health care, and we’re seeing the collapse of many of our pension systems that are basically being held aloft by a lot of accounting and prayers.

So how do we deal with this? Well, we can deal with it in a patchwork, incremental fashion, but eventually we’re going to have to decide. We’re
going to have to decide, are we going to provide a more level playing field
for our manufacturers by figuring out a way to deal with those legacy costs
which were, remember, built up because they thought they were doing the right thing for American workers and their families? Are we going to figure out a more sensible way to deal with health care and pension costs? Or are we going to continue to try to shift those burdens so that more and more is put on the employee and the employer and we have no end in sight of the increase in cost.

It’s also clear that this set of issues is politically volatile, as I can attest from my efforts ten years ago. And perhaps, though, the time is slowly coming. We weren’t ready ten years ago, we didn’t really understand the full cost of what we were up against, but it’s becoming more and more difficult to ignore the implications of these policies for the economy, and there have to be some attempts to reach a consensus that begins to solve these problems…

http://www.americanprogress.org/site/pp.asp?c=biJRJ8OVF&b=35989
Comment: “… patchwork, incremental fashion…”? “… eventually we’re going to have to decide.” “… the time is slowly coming.” The time has come. The question is no longer whether we need changes but what those changes will be.

Although Sen. Clinton will not be able to lead the charge since she spent most of her political capital on her prior attempt at reform, at least she is venturing out with guarded rhetoric revealing that she does understand that incremental patches simply will not do it.

A Heftier Dose To Swallow Rising Cost

A Heftier Dose To Swallow Rising Cost of Health Care in U.S. Gives Other Developed Countries an Edge in Keeping Jobs
By Kirstin Downey Washington Post Staff Writer 3/06/04

For each mid-size car DaimlerChrysler AG builds at one of its U.S. plants, the company pays about $1,300 to cover employee health care costs — more than twice the cost of the sheet metal in the vehicle. When it builds an identical car across the border in Canada, the health care cost is negligible.

In the battle for manufacturing jobs, the United States has always been at a disadvantage compared with underdeveloped countries where wages are low. But the rapidly rising cost of health care in the United States means that even developed countries sometimes have an edge when it comes to keeping jobs, according to interviews with dozens of corporate executives, legislators and health care consultants.

The United States has lost nearly 3 million manufacturing jobs since July 2001, with 43 consecutive months of manufacturing-employment decline, from about 17.3 million jobs to about 14.3 million in February 2004. During the same period, the manufacturing workforce in Canada has generally remained stable, at about 2 million jobs, even though the unemployment rate is higher there, at 7.4 percent, than in the United States, where it is 5.6 percent.

And, although both nations lost auto manufacturing jobs in 2000 and 2003, the decline was only 4 percent in Canada, compared with 14 percent in the United States.

Jim Stanford, an economist with the Canadian Auto Workers union, said employers who could operate in either country save $4 per hour per worker by choosing Canada. “That’s a reasonably significant differential. . . . It’s one of the reasons Canada’s auto industry has done a lot better,” he said.

In a joint letter circulated in Canada in November 2002, officials from Ford Motor Co., General Motors Corp. and DaimlerChrysler said “the public health system significantly reduces total labour costs . . . compared to the cost of equivalent private health insurance services purchased by U.S.-based automakers.”

High health care costs have “created a competitive gap that’s driving investment decisions away from the U.S.,” Ford Vice Chairman Allan Gilmour said in a speech at a recent auto industry conference. “If we cannot get our arms around this issue as a nation, our manufacturing base and many of our other businesses are in danger,” he said, according to a transcript of the speech.

Gilmour, who is leading a Ford study of health care, said it may be necessary to prod government officials to consider policy changes to reduce health care costs, although he declined to specify what changes should be made. “I do know that significant reform is necessary,” he said. “Right now the country is on an unsustainable track and it won’t get any better until we begin — business, labor and government in partnership — to make a pact for reform.”

But while the Big Three automakers told Canadians that their nationalized health insurance system helped preserve jobs, and lobbied the Canadian government last year to maintain the program, their corporate executives are not willing to go that far when it comes to health care in the United States.

Business trade groups here advocate small steps, such as helping workers care for themselves better, urging them to stop smoking and lose weight, and shifting costs to employees. The U.S. Chamber of Commerce, for example, backs such proposals as tort reform, electronic prescription writing and providing better information on the quality of care by doctors and hospitals.

The Bush administration has proposed some targeted efforts to help individuals pay for their care, through tax credits and health care spending accounts that officials say would lower taxes and help people pay for health care.

Most of Bush’s Democratic opponents for president would like to see more aggressive governmental action, ranging from Sen. John F. Kerry’s (D-Mass.) plan to expand care for poor children and create a federal insurance pool to help employers pay for catastrophic care to Rep. Dennis J. Kucinich’s (D-Ohio) proposal for a universal, single-payer system that would cut costs by eliminating insurance company paperwork.

Manufacturers outside the auto industry are also concerned about health care costs and employment.

“We can’t just continue to shift jobs out of the United States, not just manufacturing jobs, but all kinds of jobs, and health care is playing a role,” said William A. Rainville, chief executive of Kadant Inc., a Massachusetts-based manufacturer of papermaking equipment. “It’s like we’re in a stream with no control over it.”

Rainville said his company will spend about $6,500 on health care for each of its 525 U.S.-based employees this year, while health care costs for its 45 Canada-based workers are minimal. “Our U.S. workers are the most productive, but it doesn’t make up for the health care,” he said.

Rainville said he has considered moving production to Canada. “As an American it concerns me, but as a businessman, I don’t have much of a choice. You need to do what’s right for the business.”

The cost difference is striking. Employers in Canada pay only about $50 a month, or $600 a year, mostly for optional items such as eyeglasses and orthopedic shoes, said Elaine Bernard, executive director of the labor and worklife program at Harvard Law School. “Health care is significantly cheaper for corporations in Canada,” she said. U.S. employers pay more than 10 times as much — an average $552 a month per employee for health insurance, according to the Kaiser Family Foundation.

In the United States, General Motors spent $4.5 billion on health care last year for its 1.2 million American workers and retirees, at a cost of about $1,200 per car, said Tom Wickham, a GM spokesman. Ford spent $2.8 billion last year on health care, a Ford spokeswoman said. DaimlerChrysler spent $1.4 billion on health care for its 97,000 U.S. workers and 107,000 retirees last year, for an average cost of $1,300 per mid-range car priced at $18,600, said Thomas J. Hadrych, the company’s vice president of compensation, benefits and corporate services. “The reality is it is a significant cost element we struggle with on a year-over-year basis,” Hadrych said.

Meanwhile, the number of people insured by their employers is shrinking, which means that employers who continue to pay for employee health care must pay more. Employer health care costs rose 12 percent in the past year, on top of a 16 percent increase the previous year, according to Towers, Perrin, Forster & Crosby Inc., a human resources consulting firm.

“This is the seventh straight year of double-digit price inflation,” said Helen Darling, a former Xerox Corp. executive who heads the National Business Group on Health, an association of 182 companies. “Prices started climbing in the bubble economy, but companies then were making a lot of money, everybody was living like they made a lot of money,” and the escalation was relatively unnoticed at first, she said.

After the economy began to slump, however, executives began to worry. They shifted some of the growing cost to employees by raising insurance premiums and co-payments. Other companies have stopped offering health insurance or have raised premiums so high that some workers can’t afford them.

Most other industrialized countries — Canada, Japan and those in Europe — have government-funded health care systems with universal coverage. Canadians, for example, pay higher income taxes and a 15 percent sales tax to support the nationalized health care system.

“Suffice it to say Canada and Germany have a socialized form of health care” that delivers quality care at a lower cost for a larger number of people, without placing all the expense on employers, said Hadrych, of DaimlerChrysler. “The burden of it falls on the government, not just on employers,” he said. In the United States, “we carry the full brunt of it.”

Hadrych said political pressure on the health care system a decade ago, when the Clinton administration proposed changes, helped keep prices down for several years, but when the political pressure eased, companies began increasing their prices again. He said he believed the country was moving toward what he called a “more comprehensive” solution to the problem in 2001, but that the Sept. 11, 2001, terrorist attacks diverted everyone’s attention.

“Prior to 9/11, we saw a lot of interest on the Hill with respect to the health care issues,” he said. “After 9/11, it all shifted,” and, he said, momentum for a bigger solution was “not there.”

“A lot of people think a single-payer system is better,” he said.

© 2004 The Washington Post Company

*****
Center for American Progress 3/03/04
Keep America Working: Restoring Jobs to Ensure American Prosperity
An Address by Sen. Hillary Rodham Clinton

American companies that continue to try to keep up with health care and pension costs find it increasingly difficult to do so. We are seeing now double-digit increases in health care, and we’re seeing the collapse of many of our pension systems that are basically being held aloft by a lot of accounting and prayers.

So how do we deal with this? Well, we can deal with it in a patchwork, incremental fashion, but eventually we’re going to have to decide. We’re going to have to decide, are we going to provide a more level playing field for our manufacturers by figuring out a way to deal with those legacy costs which were, remember, built up because they thought they were doing the right thing for American workers and their families? Are we going to figure out a more sensible way to deal with health care and pension costs? Or are we going to continue to try to shift those burdens so that more and more is put on the employee and the employer and we have no end in sight of the increase in cost.

It’s also clear that this set of issues is politically volatile, as I can attest from my efforts ten years ago. And perhaps, though, the time is slowly coming. We weren’t ready ten years ago, we didn’t really understand the full cost of what we were up against, but it’s becoming more and more difficult to ignore the implications of these policies for the economy, and there have to be some attempts to reach a consensus that begins to solve these problems…

http://www.americanprogress.org/site/pp.asp?c=biJRJ8OVF&b=35989

Don McCanne’s Comment: “… patchwork, incremental fashion…”? “… eventually we’re going to have to decide.” “… the time is slowly coming.”

The time has come. The question is no longer whether we need changes but what those changes will be.

Although Sen. Clinton will not be able to lead the charge since she spent most of her political capital on her prior attempt at reform, at least she is venturing out with guarded rhetoric revealing that she does understand that incremental patches simply will not do it.

Taxpayers fund health care for the rich

Health Affairs
February 25, 2004
The Cost Of Tax-Exempt Health Benefits In 2004
By John Sheils and Randall Haught

It is important to understand that the tax expenditure for health benefits accrues to workers rather than employers.

We have defined “tax expenditure” as the additional taxes that would be paid
if these benefits were included in taxable income. This depends on the marginal tax rate of the workers receiving these benefits (which varies with personal income and filer type) rather than that of the employer providing them.

We estimate that the average health benefit tax expenditure will be about
$1,482 per family in 2004. However, it is heavily skewed toward high-income
groups. The average will be $2,780 for families with incomes of $100,000 or
more per year, but only $102 for families with incomes of less than $10,000
per year. This reflects the fact that families with relatively higher incomes are more likely to have employer coverage and are in higher tax brackets.

Proposals have emerged that would replace the current health benefit tax
expenditure with a refundable tax credit. Workers would be required to count
the value of employer-sponsored health benefits as income when computing
their taxes, which would increase their incentives to enroll in less costly
health plans. A refundable tax credit of perhaps $1,500 for individuals and
$3,500 for families would be provided to all Americans and would be phased
out as income rises. This would refocus the health benefit tax expenditure
on lower-income people to help the uninsured obtain coverage. The tax credit
also would be available for all health insurance including nongroup coverage
(excluding Medigap), which does not now qualify for tax preferences.

However, these proposals raise several concerns. For example, eliminating the relative tax advantages of employer coverage could cause some employers
to stop offering coverage, assuming that their workers will purchase their
own nongroup coverage with the help of the tax credit. Without a mandate for
all to offer coverage, this could result in a partially offsetting increase
in the number of uninsured people, as the convenience and economy of employer-group coverage disappears. Also, nongroup insurance,which is difficult to obtain in many areas, is much more costly to administer than group coverage, so overall costs would increase. These problems must be addressed before these types of tax credit models can be a viable alternative.

http://content.healthaffairs.org/cgi/content/abstract/hlthaff.w4.106

The full report:
http://content.healthaffairs.org/cgi/reprint/hlthaff.w4.106v1.pdf

Comment: Taxpayers currently are paying for health care for higher income
individuals, which is a benefit that lower income individuals do not receive. Current tax preferences for employer-sponsored plans are highly inequitable because of their regressive nature.

Several policy analysts have suggested discontinuing this inequitable tax
treatment of employer-sponsored plans, and replacing it with refundable tax
credits. Employers would welcome this opportunity to shift the responsibility for obtaining coverage to the employee who would then have to turn to the individual market. But the inequities of the individual market are much more profound than is the current tax injustice. And it is highly unlikely that standard policies could ever be established that would ensure equitable coverage and affordability within the private plan marketplace.

Why do we keep considering all of these other deficient schemes when an
equitably-funded universal system of social insurance would work just
fine?

Health-care critic battles on Doctor featured in film says system can be improved

Health-care critic battles on Doctor featured in film says system can be improved

BY ARZA BARNETT, THE COURIER-JOURNAL

Dr. Linda Peeno, center, talked with Dr. Betty Straub, left, as Sister Mary Rhoads Buckler listened before the showing of the film “Damaged Care.” Peeno and Buckler were portrayed in the film.

In the two years since the release of a movie depicting her battles with the managed health-care industry, Dr. Linda Peeno has heard a lot from the companies involved, she said last night.

What surprised the Louisville physician, though, was hearing from many industry employees who say they know that denying care for financial reasons is wrong.

“I hear this over and over and over again,” Peeno said after a showing of the 2002 movie, “Damaged Care,” at an event at Central High School, 1130 W. Chestnut St.

“I’ve been able to be the voice for a lot of people who haven’t been able to speak up,” Peeno told an audience of about 60 people who identified themselves as doctors, nurses, teachers, labor and religious leaders, and “citizens.”

The event was organized by Kentuckians for Single Payer Healthcare, a group that advocates national health insurance, including a bill before Congress.

The Showtime cable-television movie, which was critical of corporate managed care, starred Laura Dern as Peeno. It tells the story of Peeno’s difficult personal and professional life, including a failed marriage and her battle with Humana Inc.

Peeno, a native of Hodgenville, Ky., has a medical degree from the University of Louisville specializing in internal medicine and infectious diseases. She worked in the 1980s as a medical reviewer for Humana Inc. and as medical director at Blue Cross/Blue Shield Health Plans.

The film shows how she became disillusioned with managed-care systems and eventually left to serve as an expert witness in cases involving insurance companies accused of denying care.

Peeno said that one of the lessons of the movie — and a theme she still advocates — is the need to change the corporate system of health care in the United States.

“We hear constantly that we have to allocate resources,” Peeno said, describing those who want to let the free market solve the nation’s growing health-care crisis. “But there is more than enough money in our health-care system to have quality care.”

She cited what she said were high salaries and profits in the industry. At the time of the movie’s debut, Humana officials said that it was inaccurate and that the company is dedicated to the health and welfare of patients.

Asked what impact she has had on the managed-care system, Peeno paused, then answered, “I like to think that at least part of what I have done was begin to articulate what an ethical health-care system is.”

Peeno has traveled widely around the country in recent years on court cases and for other health-care related events, she said.

“One of the effects I’ve seen is of the complete dispiriting — almost a gutting of the spirit — of health-care professionals, from doctors all the way down,” she said.

Peeno said she didn’t necessarily blame the workers in the managed-care system.

“We’re not talking about evil people, bad people,” she said. “At the basis of it, it’s the way we’re organizing the system.”

Asked about whether managed-care corporations had changed since the years depicted in the movie, Peeno said she had once thought they would “magically straighten up” after a few years of public exposure of their flaws, through lawsuits and other public actions.

But that hasn’t happened, she said.

Instead, industry representatives have argued that practices like those in the movie were “the old way,” she said.

That achieves the same effect of putting profits before people, “but doing so more subtly” by using “layers of organization” and “various ways of eluding responsibility and accountability,” Peeno said.

Event organizers called for support of the Medicare for All Act, proposed by Rep. John Conyers Jr., D-Mich. The bill would provide for a single-payer national health-care system with universal coverage.

Peeno said she supported the bill but added, “No single piece of legislation is going to solve the larger problem of this system and how we all live together in this society.”