Daily Herald
3/2/2004
Optimism in key sector
By Mike Comerford

Large scale layoffs in the last three years have been headline grabbers but keeping the local economy afloat has been the steady strength of area small
and mid-sized businesses.

An optimism index compiled by the National Federation of Independent Business indicates optimism in the small business sector in the first quarter of this year was higher than any quarter of the go-go 1990s and near an all-time record.

An eyebrow raising 17 percent of small businesses said they plan to hire employees in the next three months. Banks are vying to capture growing smaller companies, 25 percent of whom said this quarter they intend to expand their businesses. That’s near a pace not seen since the mid- 1980s.

Small businesses, according to the National Federation of Independent Business, also say they are re-building their inventories. Historically, taxes have been the biggest worry on the minds of managers at small businesses. But this year, health insurance costs were the single-biggest problem, they told the business association.

“The only fly in the ointment is health insurance,” said Bill Dunkelberg, chief economist, National Federation of Independent Business. “Consequently, about 40 percent of small businesses don’t offer health-care insurance.”

http://www.dailyherald.com/search/main_story.asp?intid=38048121

Comment: Small businesses are thriving, thank goodness. But the escalating cost of health insurance has driven small businesses to look for solutions such as association health plans and consumer-directed products. Although these approaches would provide relief for the business owner, they shift costs to the employee-patient, making essential care unaffordable for many. And close to half of the employers have already abandoned any attempt to provide health care coverage.

It really is time to end our inadequate and wasteful system of employer-sponsored private plans, but not until we have in place a better alternative.

Small businesses should join with us in advocating for a more affordable and
more equitable system of universal social insurance. It’s good for business.
It’s good for employees. And it’s good for all of us.

Center for Information Technology Leadership
February 23, 2004
New Findings Show that Investment in Standardized Healthcare Information Exchange Would Deliver $87 billion in Annual Healthcare Savings

“Our research shows conclusively that there are strong financial reasons for the nation to invest in standardized healthcare information exchange,” said Blackford Middleton, MD, Chairman of CITL. “Standardized information exchange would save the nation $86.8 billion each year. Clearly, we must accelerate efforts to focus national policy discussions on implementing standardized healthcare information exchange and interoperability.”

Dr. Middleton announced the results of CITL’s research into the value of Healthcare Information Exchange and Interoperability (HIEI) at the HIMSS
Annual Conference, February 23, in Orlando, Fla. The study considered four
levels of interoperability, but the conclusions focused on the financial value of moving to nonstandardized, machine-organizable data and standardized, machine-interpretable data. CITL found that the value of standardized HIEI far exceeds the value of non-standardized HIEI. The research concludes that it is not cost effective to invest in non-standardized HIEI.

HIEI generates savings by enabling automated sharing of data among the computers of participants involved in clinical treatment. Currently, 90% of data is shared manually via telephone, fax, and mail, and one study found that pertinent patient data were unavailable in 81% of patient visits to an outpatient clinic.

CITL calculated that savings would come from fewer tests and improved efficiency. CITL projected less redundancy and decreased labor costs from reduced administrative tasks. The results should be viewed as conservative estimates of the value of HIEI, since CITL considered only transactions that involve providers. In addition, it assumed that all providers would purchase new systems. Overall, CITL believes that actual financial benefits would be even higher than its projections.

http://www.citl.org/news/HIEI_Findings.pdf

Comment: One of the advantages of a single, universal system of funding health care is that it would be simpler and less costly to include an integrated information technology system. Although the benefits are not disputed there has been some concern about the costs of such a system. This report allays those fears.

The precise amount of savings would vary under different specific models, but the savings would be real if the health care information exchange and interoperability (HIEI) is standardized. In contrast, our current non-standardized approach is clearly not cost effective.

A single, universal program of social insurance is the ideal framework within which to establish a standardized HIEI. Let’s go to the drawing boards now.

Mon, 1 Mar 2004
Conservatives using HSAs to prevent a “socialized system”

MotherJones.com
March/April 2004
Medicare’s Hidden Bonanza
By Michael Scherer

For conservative leaders, the best part of the Medicare bill President Bush signed in December had absolutely nothing to do with Medicare. Rather, the provision that House Speaker Dennis Hastert calls “the most important piece in the bill” and former Speaker Newt Gingrich considers “the single most important change in health care policy in 60 years” is a little-noticed tax rebate set to cost the Treasury $6.4 billion over the next decade. The measure allows Americans to open tax-free “health savings accounts,” which can be used to pay medical bills-in effect removing their owners from the shared risk that has been the core of the health-insurance system since World War II.

For conservatives, a key selling point of health savings accounts is the potential effect on the future of health care: In making their case to lawmakers, (Golden Rule Insurance Co.’s Chairman Emeritus J. Patrick) Rooney’s allies cited polls showing that two-thirds of Americans support government-run, universal health care. By giving a large segment of the population the option to withdraw from the health-insurance system, they argued, health savings accounts could serve as a poison pill preventing another “Hillarycare” debate. “It’s going to be real hard to socialize the system if everybody has their own account,” explains John Goodman, head of the conservative National Center for Policy Analysis.

http://www.motherjones.com/news/outfront/2004/03/02_401.html

Comment: There is no question that the agenda of the conservatives is to shift the responsibility for funding health care away from collective pools, whether public or private, and onto the individual patient. They correctly perceive that health savings accounts will create a formidable political body of individuals who will have been able to reduce their health insurance premiums, funds which would otherwise be lost forever, and deposit the savings into their own personal accounts.

Because of the regressive tax policies of HSAs, higher income individuals will even receive taxpayer assistance in paying for their health costs. And if they remain healthy, they can eventually use their own accounts as a retirement plan. For the large sector of our society composed of relatively young, healthy individuals who have decent incomes, HSAs are a very good deal, providing adverse medical events do not occur.

But is this really a formidable force that will inevitably oppose universal coverage? HSAs that are not depleted become almost identical to individual
retirement accounts (IRAs) at age 65. What would be the response of this group if we adopted a universal health insurance program and told these individuals that their HSAs would no longer be exposed to the risk of medical bills but would be converted into permanent IRAs? The mere establishment of HSAs does not preclude political support for universalinsurance.

In the interim, funds that will be diverted into these accounts will have been removed from the collective risk pools. Funds to provide care for those with health care needs will be even less available. The crisis in health care funding will increase in intensity. More suffering will occur as health care becomes less and less affordable for individuals with needs.

We really do need to fix the funding of our health care system now.

Mon, 1 Mar 2004
Conservatives using HSAs to prevent a “socialized system”

MotherJones.com
March/April 2004
Medicare’s Hidden Bonanza
By Michael Scherer

For conservative leaders, the best part of the Medicare bill President Bush signed in December had absolutely nothing to do with Medicare. Rather, the provision that House Speaker Dennis Hastert calls “the most important piece in the bill” and former Speaker Newt Gingrich considers “the single most important change in health care policy in 60 years” is a little-noticed tax rebate set to cost the Treasury $6.4 billion over the next decade. The measure allows Americans to open tax-free “health savings accounts,” which can be used to pay medical bills-in effect removing their owners from the shared risk that has been the core of the health-insurance system since World War II.

For conservatives, a key selling point of health savings accounts is the potential effect on the future of health care: In making their case to lawmakers, (Golden Rule Insurance Co.’s Chairman Emeritus J. Patrick) Rooney’s allies cited polls showing that two-thirds of Americans support government-run, universal health care. By giving a large segment of the population the option to withdraw from the health-insurance system, they argued, health savings accounts could serve as a poison pill preventing another “Hillarycare” debate. “It’s going to be real hard to socialize the system if everybody has their own account,” explains John Goodman, head of the conservative National Center for Policy Analysis.

http://www.motherjones.com/news/outfront/2004/03/02_401.html

Comment: There is no question that the agenda of the conservatives is to shift the responsibility for funding health care away from collective pools, whether public or private, and onto the individual patient. They correctly perceive that health savings accounts will create a formidable political body of individuals who will have been able to reduce their health insurance premiums, funds which would otherwise be lost forever, and deposit the savings into their own personal accounts.

Because of the regressive tax policies of HSAs, higher income individuals will even receive taxpayer assistance in paying for their health costs. And if they remain healthy, they can eventually use their own accounts as a retirement plan. For the large sector of our society composed of relatively young, healthy individuals who have decent incomes, HSAs are a very good deal, providing adverse medical events do not occur.

But is this really a formidable force that will inevitably oppose universal coverage? HSAs that are not depleted become almost identical to individual
retirement accounts (IRAs) at age 65. What would be the response of this group if we adopted a universal health insurance program and told these individuals that their HSAs would no longer be exposed to the risk of medical bills but would be converted into permanent IRAs? The mere establishment of HSAs does not preclude political support for universalinsurance.

In the interim, funds that will be diverted into these accounts will have been removed from the collective risk pools. Funds to provide care for those with health care needs will be even less available. The crisis in health care funding will increase in intensity. More suffering will occur as health care becomes less and less affordable for individuals with needs.

We really do need to fix the funding of our health care system now.

TheBakersfieldChannel.com
February 27, 2004
UFCW International President’s Statement

Excerpts from the statement of United Food and Commercial Workers international President Doug Dority on the Southern California Strike/Lockout:

Today, I am pleased to join with the officers of the seven Southern California UFCW local unions in their announcement of a tentative agreement in the longest major strike in the history of the UFCW, the largest and longest strike in the history of the supermarket industry, and the first major strike of the 21st century.

The men and women on the picket lines are genuine heroes. Their sacrifice
for affordable family health care has motivated and activated workers across
the nation. I am honored to be part of their union, and I am humbled as well
as inspired by their dedication, strength and selflessness.

Through their struggle, the striking and locked out workers have performed a
service for the whole country. They have sounded the alarm for all of America — your health care benefits at work are at risk. If the supermarket giants profitable, growing Fortune 50 mega-corporations can launch an attack on health care benefits, then every employer is sure to follow. They have sounded the alarm that the American health care system is ready to collapse.

In one year, over 2 million lost health insurance. That’s over 6,000 workers
a day. The fight here has given us a national call to action. We must have national health care reform. No one company, no one union, no industry or group of workers alone can fix the health care system. We can patch it up. We can protect our members for another contract term, but the system continues to falter, exacting an increasing cost on both workers and employers and leaving more and more families without health care.

Now is the time for action. 2004 is the year to put health care reform on the political agenda and demand that every candidate for office commits to comprehensive, affordable health insurance for every working family.

No worker should ever again be forced to choose between a paycheck and health care benefits. No worker should ever again be forced into the streets for five months to protect health care for their families.

The UFCW will lead the fight for health care reform. And, I believe, with members like our Southern California members, the UFCW will win that fight.

http://www.thebakersfieldchannel.com/news/2881620/detail.html

Comment: The UFCW can’t do it alone. Let’s all join in the effort. Each of us should use our individual talents to motivate action in our communities, religious organizations, service clubs, political parties, professional societies, and any other milieu that can move the cause forward.

Stop what you are doing right now and set aside five minutes (time it) to think of nothing else other than what you can do to support the movement for universal, comprehensive, affordable care for everyone.

Check the time. You have five minutes… Go!

Los Angeles Times
February 27, 2004
Union, Stores Reach a Deal to End Strike
By James F. Peltz, Melinda Fulmer and Ronald D. White

Negotiators reached a deal Thursday night that could end the California supermarket strike and lockout, a bitter fight that highlighted the national
debate over how much companies should pay for workers’ healthcare coverage.

… in a victory for the supermarket companies’ bid to stem rising healthcare costs, their regular per-employee contributions to the healthcare program would be capped at a set dollar limit…

http://www.latimes.com/business/la-fi-upermain27feb27,1,2819295.story?coll=la-home-headlines

Comment: Although there will be considerable diversionary discussion about
the other issues, this strike and lockout was really about only one issue. Management wanted to change to a defined contribution program in order to
cap the companies’ health care costs. Future cost increases will be the responsibility of the employees. With continuing health care cost escalation, the financial burden will be unbearable for these employees who earn less than $30,000 per year.

The past decade has witnessed an unrelenting effort to shift the costs of employer-sponsored coverage to the employees. This settlement is a landmark,
pivotal point in the history of employer-sponsored coverage.

With the success in shifting low income employees into a defined contribution system, there is no doubt that higher income employees, who can currently afford the costs, also will be shifted rapidly into defined contribution programs. We can anticipate an accelerated growth in high-deductible, managed care PPO plans because of the lower premiums offered. Use of health savings accounts (HSAs) will increase, but they are not insurance. HSAs are merely a vehicle to subsidize the health care of wealthier individuals with taxpayer funds. We are witnessing the end of the era of employer-sponsored coverage.

The healthy and wealthy will continue to do fine in this health care environment. But both moderate and low income individuals who have significant health care needs will face financial disaster along with impaired access to care because of lack of affordability.

Actually, there is some good news in this disaster. This transformation of the health care system will be extremely unstable and intolerable. It cannot last long. It will become clear to all that we will need to shift our abundant health care resources into an equitable, affordable system of social insurance.

It remains to be seen how long we will tolerate a rapidly deteriorating system and how much suffering we have to witness before we adopt a system of social insurance.

The grocery workers stuck it out for nearly five months and then lost. Can we show the nation a much better option in the next five months? Taking longer will only increase the privation and suffering.

United States Congress
Joint Economic Committee
February 25, 2004

Impact of “Consumer-Driven” Health Care on Consumers Testimony of Gail Shearer, Director, Health Policy Analysis Washington Office of Consumers Union

Excerpts:

One way to reduce the employer premiums for health insurance, and to make
payments more predictable, is to switch to a “defined contribution” approach
to health insurance… In the employer health insurance market, a key dstinguishing feature of its effort to move toward a defined contribution model is high-deductible coverage. As indicated by the title of the Joint Economic Committee hearing, the term that insurers and employers have coined to name this new trend in the marketplace is “consumer-driven health care.” Consumers Union… is troubled by this trend in the marketplace. In our testimony, we plan to explain why we believe this type of coverage is misnamed, misguided from a policy perspective, and a dangerous distraction from the health insurance crisis that faces 43.6 million uninsured consumers and tens of millions of underinsured consumers.

The focus of the President’s Economic Report chapter on health insurance is
more on the alleged problems of over-insurance rather than the problems associated with the lack of insurance and underinsurance. The chapter could
be a primer for a Health Economics 101 course on the virtues of an unfettered free market for health insurance: the reader learns about different consumption choices that consumers make when they have insurance. It posits that patients might over-consume services if they face too little cost-sharing.

Nowhere in this chapter is there recognition of the reality that faces millions of Americans every year: For the most part, people are not uninsured out of choice, but because they can not afford to pay health insurance premiums. Every day, uninsured and underinsured Americans are dying because of the lack of insurance.

When the marketplace shifts to one characterized by pricing to risk, as suggested by the President’s Economic Report, this leads to escalating premiums for the very people who can least afford them – people who face serious health challenges.

The Administration’s proposals, which boost “consumer-driven” health care,
by design, shift more costs to those who are sick. The result will ultimately be a health care system that distributes costs of health care even less fairly than it does today.

Based on survey data from the Medical Expenditure Panel Survey (MEPS) and
adjusted to 2000 levels (by the Lewin microsimulation model), the average
health care costs of those with employer based coverage was $2,628 in 2000.
However, the average masks a large degree of variation: those in the lowest
fifth of spending incurred on average $30 of health care expenditures, while
those in the top tenth of spending incurred costs of $16,710. This variation
of risk goes to the heart of the need to find a way to spread costs broadly
in order to keep costs affordable to those at the highest risk level. Yet the Economic Report of the President suggests that instead of spreading risks broadly so that health coverage will be affordable to those with existing conditions, “pricing to risk” is a primary goal of the health insurance marketplace. This approach sacrifices any notion of community and sharing of our neighbor’s burden, in favor of marketplace efficiency.

Expansion of medical savings accounts (MSAs) under the new name of Health
Savings Accounts (HSAs) adds a new wrinkle to “consumer-driven health care”
plans by making the contributions to the health reimbursement account tax
deductible. This new tax policy, combined with high deductible health coverage, is likely to appeal disproportionately to the healthy and wealthy.

Because of the variation of risks, and different selections made by people of different health status, high deductible plans can not exist in the long-term in a marketplace that offers low-deductible plans as well. Ultimately, low-deductible plans will be driven out of the market, with “premium spirals” driving out comprehensive coverage.

“Fundamentally, those who would likely win from shifting to MSA/catastrophic
arrangements are the healthy who will ‘take back’ some of their ‘excess’ contributions that effectively help to subsidize others.”

“The great savings will be for the employees who have little or no health care expenditures. The greatest losses will be for employees with substantial health care expenditures.”

A recent study of “consumer-directed health benefits” concluded that the young and healthy are potential winners, and that older people are less likely to choose high deductible plans.

In sum, high deductible coverage, combined with the new tax shelter, drive up premiums for those wanting low deductible coverage, are likely to lead to elimination of low-deductible coverage, strain the federal treasury, and will lead to shifting of costs to those who are sick while benefiting the healthy and those in high tax brackets.

As the President’s Economic Report clearly points out, high-deductible (and “consumer-driven”) health care plans are designed to increase out-of-pocket
costs for those who have health care expenditures.

Focusing on transforming our health care marketplace into a high-deductible marketplace is a dangerous distraction from the urgent national goal of extending affordable, quality health coverage to all.

For the full testimony:
http://www.consumersunion.org/pub/0225JECTestimonyNoSummary.pdf

Comment: High-deductible coverage, health savings accounts, defined contributions, and plans with Spartan benefits and greater cost sharing are all methods of “empowering the consumer” in the health care marketplace. In health care, an “empowered consumer” means that he or she feels the pain of health care costs. Current trends are intensifying this pain by “pricing to risk.” Those with greater health care risks are being required to pay higher prices if they “choose” to have access to health care. Those who cannot afford the higher prices will “choose” to have impaired health care outcomes (though no other real option is being offered).

Gail Shearer’s testimony should be downloaded and distributed widely. The
nation needs to understand why we should reject current policies that provide the healthy and wealthy with the option of not participating in the risk pools that help to fund care for the sick and poor.

United States Congress
Joint Economic Committee
February 25, 2004

Impact of “Consumer-Driven” Health Care on Consumers Testimony of Gail Shearer, Director, Health Policy Analysis Washington Office of Consumers Union

Excerpts:

One way to reduce the employer premiums for health insurance, and to make
payments more predictable, is to switch to a “defined contribution” approach
to health insurance… In the employer health insurance market, a key dstinguishing feature of its effort to move toward a defined contribution model is high-deductible coverage. As indicated by the title of the Joint Economic Committee hearing, the term that insurers and employers have coined to name this new trend in the marketplace is “consumer-driven health care.” Consumers Union… is troubled by this trend in the marketplace. In our testimony, we plan to explain why we believe this type of coverage is misnamed, misguided from a policy perspective, and a dangerous distraction from the health insurance crisis that faces 43.6 million uninsured consumers and tens of millions of underinsured consumers.

The focus of the President’s Economic Report chapter on health insurance is
more on the alleged problems of over-insurance rather than the problems associated with the lack of insurance and underinsurance. The chapter could
be a primer for a Health Economics 101 course on the virtues of an unfettered free market for health insurance: the reader learns about different consumption choices that consumers make when they have insurance. It posits that patients might over-consume services if they face too little cost-sharing.

Nowhere in this chapter is there recognition of the reality that faces millions of Americans every year: For the most part, people are not uninsured out of choice, but because they can not afford to pay health insurance premiums. Every day, uninsured and underinsured Americans are dying because of the lack of insurance.

When the marketplace shifts to one characterized by pricing to risk, as suggested by the President’s Economic Report, this leads to escalating premiums for the very people who can least afford them – people who face serious health challenges.

The Administration’s proposals, which boost “consumer-driven” health care,
by design, shift more costs to those who are sick. The result will ultimately be a health care system that distributes costs of health care even less fairly than it does today.

Based on survey data from the Medical Expenditure Panel Survey (MEPS) and
adjusted to 2000 levels (by the Lewin microsimulation model), the average
health care costs of those with employer based coverage was $2,628 in 2000.
However, the average masks a large degree of variation: those in the lowest
fifth of spending incurred on average $30 of health care expenditures, while
those in the top tenth of spending incurred costs of $16,710. This variation
of risk goes to the heart of the need to find a way to spread costs broadly
in order to keep costs affordable to those at the highest risk level. Yet the Economic Report of the President suggests that instead of spreading risks broadly so that health coverage will be affordable to those with existing conditions, “pricing to risk” is a primary goal of the health insurance marketplace. This approach sacrifices any notion of community and sharing of our neighbor’s burden, in favor of marketplace efficiency.

Expansion of medical savings accounts (MSAs) under the new name of Health
Savings Accounts (HSAs) adds a new wrinkle to “consumer-driven health care”
plans by making the contributions to the health reimbursement account tax
deductible. This new tax policy, combined with high deductible health coverage, is likely to appeal disproportionately to the healthy and wealthy.

Because of the variation of risks, and different selections made by people of different health status, high deductible plans can not exist in the long-term in a marketplace that offers low-deductible plans as well. Ultimately, low-deductible plans will be driven out of the market, with “premium spirals” driving out comprehensive coverage.

“Fundamentally, those who would likely win from shifting to MSA/catastrophic
arrangements are the healthy who will ‘take back’ some of their ‘excess’ contributions that effectively help to subsidize others.”

“The great savings will be for the employees who have little or no health care expenditures. The greatest losses will be for employees with substantial health care expenditures.”

A recent study of “consumer-directed health benefits” concluded that the young and healthy are potential winners, and that older people are less likely to choose high deductible plans.

In sum, high deductible coverage, combined with the new tax shelter, drive up premiums for those wanting low deductible coverage, are likely to lead to elimination of low-deductible coverage, strain the federal treasury, and will lead to shifting of costs to those who are sick while benefiting the healthy and those in high tax brackets.

As the President’s Economic Report clearly points out, high-deductible (and “consumer-driven”) health care plans are designed to increase out-of-pocket
costs for those who have health care expenditures.

Focusing on transforming our health care marketplace into a high-deductible marketplace is a dangerous distraction from the urgent national goal of extending affordable, quality health coverage to all.

For the full testimony:
http://www.consumersunion.org/pub/0225JECTestimonyNoSummary.pdf

Comment: High-deductible coverage, health savings accounts, defined contributions, and plans with Spartan benefits and greater cost sharing are all methods of “empowering the consumer” in the health care marketplace. In health care, an “empowered consumer” means that he or she feels the pain of health care costs. Current trends are intensifying this pain by “pricing to risk.” Those with greater health care risks are being required to pay higher prices if they “choose” to have access to health care. Those who cannot afford the higher prices will “choose” to have impaired health care outcomes (though no other real option is being offered).

Gail Shearer’s testimony should be downloaded and distributed widely. The
nation needs to understand why we should reject current policies that provide the healthy and wealthy with the option of not participating in the risk pools that help to fund care for the sick and poor.

The Boston Globe
2/24/2004
Vocal critic of abuse by clergy found dead
By Brian MacQuarrie

Patrick McSorley, a victim of defrocked priest John J. Geoghan who became one of the most visible critics of clergy sexual abuse, was discovered dead early yesterday in a North End apartment, his lawyer said yesterday.

A close friend said McSorley, 29, occasionally went to the apartment to take drugs owing to a chronic substance-abuse problem that had plagued him for several years.

“To think he had come this far and just to have it end so abruptly — it’s a tragic ending,” said the friend, Alexa MacPherson, 29,…

“I spent a lot of last summer and fall trying to help him get into a drug- rehabilitation program. He definitely was in need of some serious help,” MacPherson said. “There were days when we would spend 10, 12, 14 hours at . . . hospitals, trying to get him in. He wanted their help so badly, and we basically got turned away because he had no health insurance.”

http://www.boston.com/news/local/massachusetts/articles/2004/02/24/vocal_critic_of_abuse_by_clergy_found_dead/

Comment: “… turned away because he had no health insurance.”
Patrick McSorley may or may not be one of the 18,000 young adults who will
die this year merely because of the lack of health insurance. It is quite possible that his disease of chemical dependency may have been lethal even if he were insured. But now we’ll never know.

Some may want to blame the victim. Others may blame clergy abuse. The issues
are complex, as they are in every instance of preventable premature death. But we can very easily eliminate the factor of being insured and move on with efforts to correct the other individual and societal problems that culminate in these tragedies. Just that first step alone would save 18,000 young adult lives.