PNHP

Singapore’s MSAs plus catastrophic not adequate

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.

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.