PNHP

Sen. Kennedy’s universal coverage program

Sen. Kennedy’s universal coverage program

From the office of Senator Edward Kennedy
For Immediate Release
January 22, 2004
Senator Edward M. Kennedy Introduces the Health Security and
Affordability Act

A new effort is… needed to end the crisis of the uninsured and provide comprehensive health insurance for all Americans. We can make health insurance affordable for individuals, businesses, and government.

I intend to introduce new legislation to do that-the Health Security and affordability Act. It will rely on the employer-based system to do that, because the most realistic way to reach this goal is through a combination of job-based coverage for workers and dependents where possible, and insurance through public and private programs where needed.

The cornerstone of universal health care should be a requirement that employers share in the responsibility to provide quality health insurance for employees and their dependents. Eighty percent of the uninsured are workers or family members of workers. Employer-based health insurance provides coverage for 170 million Americans today. We should improve it, not scrap it.

For decades, we have required employers to contribute to Social Security and
to Medicare. We require them to pay a minimum wage, and contribute to unemployment insurance. Now it is time to say that they also have an obligation to contribute to the cost of health insurance for their employees.

A solid majority of businesses already provide health insurance to their workers, and the rest should fulfill that obligation, too. The Health Security and Affordability Act will require all large businesses to provide coverage as good as the coverage now provided to every member of Congress and other federal employees. Small businesses will be asked to contribute to coverage based on their ability to pay.

In asking businesses to fulfill this obligation, government has an obligation too-to assist them in making health care affordable. Use of information technology, paying for results, improving quality, and a new emphasis on prevention will reduce health care costs for society as a whole. The bill I propose will include an additional guarantee. No employers will have to spend more than 12% of their payroll for health care for their employees. If health costs rise faster than a fair average of other costs, the government will cover the difference. We will protect America’s ability to compete in the world, and we will keep wages and profits from being consumed by health care costs.

For individuals without access to employment-based coverage, we will establish new options based on the Federal Employees Health Benefit Program-the program that provides good health insurance for members of Congress and Federal workers. The same options now available to members of Congress should be available to those not qualifying for coverage from other sources. Businesses can participate as well, so that they can make these choices available to their employees if they feel they offer better value.

Premiums for the plan will be based on ability to pay, including cost-sharing for low income families. It will also help low-income workers covered by their employer’s plan.

http://kennedy.senate.gov/

Comment: This is an historical moment. We are truly at a major fork in the road to comprehensive health care reform. The nation now agrees that reform is essential. We agree that health care must be affordable and accessible for everyone. Virtually all fully-informed observers of the health care scene recognize that the problems require a national solution. They agree that coverage must be universal. And most agree that now is the time to seriously address this problem.

The most important unresolved issue is whether universal coverage alone is an acceptable goal, or we need to include other goals such as equity and efficiency. It is a crucial decision. Reform has become an imperative. The model selected will not be a temporary measure to make do until we can enact something better. Although continuing refinements would be inevitable, the fundamental structure will be with of for decades, if not longer.

Sen. Kennedy’s proposal is a dramatic improvement over our existing system.
But, whether employer-sponsored plans or individual plans similar to the
federal employee options (FEHBP-type coverage), Sen. Kennedy’s proposal
will leave in place the current private health plans.

Private plan choices no longer include the option of comprehensive indemnity
coverage, but they are limited to variations of HMO or PPO managed care
plans plus self-insured programs. All plans today manipulate premiums, benefits (including restricted provider lists) and cost sharing to match the particular targeted patient populations. To ensure an equitable system of coverage for all, the federal government would have to mandate a comprehensive, accessible benefit package, set reasonable, modest limits on cost sharing, and ensure that premiums remain affordable. The Medicare + Choice options demonstrate that private plans cannot comply with such mandates without being granted extra taxpayer funds (as the Bush administration just did with the 10.6% increase for Medicare Advantage plans). Why should we lock into the system forever administratively-wasteful, superfluous, private plan bureaucracies? All studies confirm that a single, publicly-owned insurer would provide the administrative services much more efficiently. And we wouldn’t have private plans manipulating premiums, benefits and cost sharing to their own benefit.

Now that we have come to that fork in the road, let’s not merely follow Yogi
Berra’s advice and “take it,” but let’s intensify our efforts to be certain that policymakers and the public choose a path only as a fully-reasoned decision. One path offers universal coverage, and the other path adds equity, comprehensiveness, efficiency, affordability, a better framework for an integrated information technology system for error reduction and improved
resource allocation, and innumerable other important goals that we can achieve.

The administrative challenges of establishing our own public insurance program would not be much greater than those we faced when we established the Medicare and Medicaid programs. In contrast, we would face greater administrative issues for a complex program of large employer-mandated plans, separate small employer programs, multiple FEHBP-type individual plans, and an administrative nightmare of trying to match various employer and individual funding sources with the fragmented system of intermediary plans. It’s not the task of establishing a system of public funding, but it’s the special interests that continue to block reform.

As Sen. Kennedy says, “… let’s get it done-if not this year, then next year with a new Congress and a new Administration elected with a mandate to get it done.” He’s right. But let’s be sure that everyone understands what we are doing. We will have to live with it for a very long time.

President Bush's State of the Union response on health care

The White House
January 20, 2004
State of the Union Address
President George W. Bush

On the critical issue of health care, our goal is to ensure that Americans can choose and afford private health care coverage that best fits their individual needs. To make insurance more affordable, Congress must act to address rapidly rising health care costs. Small businesses should be able to band together and negotiate for lower insurance rates, so they can cover more workers with health insurance. I urge you to pass association health plans. (Applause.) I ask you to give lower-income Americans a refundable tax credit that would allow millions to buy their own basic health insurance. (Applause.)

By computerizing health records, we can avoid dangerous medical mistakes, reduce costs, and improve care. To protect the doctor-patient relationship, and keep good doctors doing good work, we must eliminate wasteful and frivolous medical lawsuits. (Applause.) And tonight I propose that individuals who buy catastrophic health care coverage, as part of our new health savings accounts, be allowed to deduct 100 percent of the premiums from their taxes. (Applause.)

A government-run health care system is the wrong prescription.(Applause.) By keeping costs under control, expanding access, and helping more Americans afford coverage, we will preserve the system of private medicine that makes America’s health care the best in the world. (Applause.)

http://www.whitehouse.gov/news/releases/2004/01/20040120-7.html

Comment: Other than his comments on the recently enacted Medicare bill, the above is the entire section of his speech that covered his health care proposals.

President Bush’s proposals:
* “…ensure that Americans can choose and afford private health care coverage that best fits their individual needs…”

(Affordable coverage means plans stripped of benefits with excessive cost sharing)

* “…Congress must act to address rapidly rising health care costs.”

(Rhetoric without a substantive proposal)

* “Small businesses should be able to band together… (in) association health plans.”

(Association health plans enable the marketing of inadequate plans that escape adequate state insurance regulatory oversight)

* “… give lower-income Americans a refundable tax credit that would allow millions to buy their own basic health insurance.”

(Privatizing Medicaid while increasing the cost sharing of lower-income individuals!)

* “… computerizing health records…”

(An essential inevitability, made less possible by the perpetuation of our current fragmented method of funding health care)

* “… eliminate wasteful and frivolous medical lawsuits.”

(Malpractice reform is important, but “frivolous” lawsuits are hardly even a negligible portion of the health care cost problem)

* “… individuals who buy catastrophic health care coverage, as part of our new health savings accounts, be allowed to deduct 100 percent of the premiums from their taxes.”

(Regressive tax policy that disproportionately benefits higher-income individuals)

A government-run health care system is the wrong prescription. (Applause.)

By keeping costs under control, expanding access, and helping more Americans afford coverage, we will preserve the system of private medicine that makes America’s health care the best in the world. (Applause.)”

(Innumerable studies have confirmed that we rank first only in the cost of our health care system but that our system fails miserably in health care outcomes, especially considering our resources. America’s health care is clearly not the best in the world. Health policy experts across the political spectrum agree that we need a federal solution to our problems in funding health care. Our president, in condemning government involvement, is not demonstrating the political leadership that we desperately need.

Nor are the politicians who applauded these comments. Shouldn’t we be considering a regime change

President Bush’s State of the Union response on health care

The White House
January 20, 2004
State of the Union Address
President George W. Bush

On the critical issue of health care, our goal is to ensure that Americans can choose and afford private health care coverage that best fits their individual needs. To make insurance more affordable, Congress must act to address rapidly rising health care costs. Small businesses should be able to band together and negotiate for lower insurance rates, so they can cover more workers with health insurance. I urge you to pass association health plans. (Applause.) I ask you to give lower-income Americans a refundable tax credit that would allow millions to buy their own basic health insurance. (Applause.)

By computerizing health records, we can avoid dangerous medical mistakes, reduce costs, and improve care. To protect the doctor-patient relationship, and keep good doctors doing good work, we must eliminate wasteful and frivolous medical lawsuits. (Applause.) And tonight I propose that individuals who buy catastrophic health care coverage, as part of our new health savings accounts, be allowed to deduct 100 percent of the premiums from their taxes. (Applause.)

A government-run health care system is the wrong prescription.(Applause.) By keeping costs under control, expanding access, and helping more Americans afford coverage, we will preserve the system of private medicine that makes America’s health care the best in the world. (Applause.)

http://www.whitehouse.gov/news/releases/2004/01/20040120-7.html

Comment: Other than his comments on the recently enacted Medicare bill, the above is the entire section of his speech that covered his health care proposals.

President Bush’s proposals:
* “…ensure that Americans can choose and afford private health care coverage that best fits their individual needs…”

(Affordable coverage means plans stripped of benefits with excessive cost sharing)

* “…Congress must act to address rapidly rising health care costs.”

(Rhetoric without a substantive proposal)

* “Small businesses should be able to band together… (in) association health plans.”

(Association health plans enable the marketing of inadequate plans that escape adequate state insurance regulatory oversight)

* “… give lower-income Americans a refundable tax credit that would allow millions to buy their own basic health insurance.”

(Privatizing Medicaid while increasing the cost sharing of lower-income individuals!)

* “… computerizing health records…”

(An essential inevitability, made less possible by the perpetuation of our current fragmented method of funding health care)

* “… eliminate wasteful and frivolous medical lawsuits.”

(Malpractice reform is important, but “frivolous” lawsuits are hardly even a negligible portion of the health care cost problem)

* “… individuals who buy catastrophic health care coverage, as part of our new health savings accounts, be allowed to deduct 100 percent of the premiums from their taxes.”

(Regressive tax policy that disproportionately benefits higher-income individuals)

A government-run health care system is the wrong prescription. (Applause.)

By keeping costs under control, expanding access, and helping more Americans afford coverage, we will preserve the system of private medicine that makes America’s health care the best in the world. (Applause.)”

(Innumerable studies have confirmed that we rank first only in the cost of our health care system but that our system fails miserably in health care outcomes, especially considering our resources. America’s health care is clearly not the best in the world. Health policy experts across the political spectrum agree that we need a federal solution to our problems in funding health care. Our president, in condemning government involvement, is not demonstrating the political leadership that we desperately need.

Nor are the politicians who applauded these comments. Shouldn’t we be considering a regime change

Broader Health Coverage May Depend on Less

The New York Times
January 20, 2004
Broader Health Coverage May Depend on Less
By Milt Freudenheim

With the number of uninsured Americans rising to new heights, some policy makers and influential health care experts are saying that the best way to give health coverage to more people is to give some people less.

Experiments in several states are establishing stripped-down packages of basic benefits intended to be affordable for employers and uninsured workers, including young, middle-class people who have dropped out of the health insurance pool. Some officials say that government health benefits could be extended to more people, too, if the benefit package were narrower.

Some experts warn that cutting back mandated benefits will neither yield enormous savings nor slow the increase in costs associated with medical advances.

“There is very little in health care that you can trim off,” said John Sheils, a health policy expert at the Lewin Group, a consulting firm based in Falls Church, Va., that has advised health care advocacy groups in several states. “If you develop a new procedure that does some good,” he added, “ultimately all the insurers are going to have to recognize it and pay for it.”

Comment: John Sheils is one of the nation’s most noted authorities in the analyses of health care reform proposals. His microsimulation models have demonstrated that little savings can be achieved by reducing the level of services covered, if the resulting product continues to protect individuals from the excessive financial burdens of health care.

Many proposals today call for ensuring “basic” coverage for everyone, as if that were a lower-cost, isolated segment of health care that people “really need.” But when attempts are made to define what should or should not be covered, the process falls apart. Theoretically, beneficial services should be covered and ineffective services should not. But, in fact, much of health care cannot be readily assigned to one of these two categories.

Thus, the concept of “basic” services really should mean that patients must have unimpeded access to physicians and other providers and to the institutions and services that they control. The ultimate decision for appropriate services should be made jointly by the patient and his or her health care professional. This process is not amenable to meat cleaver economics.

If eliminating non-basic services is not an effective option, then how can we control costs? Placing the entire health care system under a global budget will determine the capacity of the system. The budget allocation process will determine capacities for segments of the health care system.

That process may well limit the number of total knee replacements in nonagenarians. But isn’t that process better than depriving many of us of beneficial services merely because they fail to meet an arbitrary threshold of just what a basic service is?

The fallacy of "basic" health care

The New York Times
January 20, 2004
Broader Health Coverage May Depend on Less
By Milt Freudenheim

With the number of uninsured Americans rising to new heights, some policy makers and influential health care experts are saying that the best way to give health coverage to more people is to give some people less.

Experiments in several states are establishing stripped-down packages of basic benefits intended to be affordable for employers and uninsured workers, including young, middle-class people who have dropped out of the health insurance pool. Some officials say that government health Benefits could be extended to more people, too, if the benefit package were narrower.

Some experts warn that cutting back mandated benefits will neither yield enormous savings nor slow the increase in costs associated with medical advances.

“There is very little in health care that you can trim off,” said John Sheils, a health policy expert at the Lewin Group, a consulting firm based in Falls Church, Va., that has advised health care advocacy groups in several states. “If you develop a new procedure that does some good,” he added, “ultimately all the insurers are going to have to recognize it and pay for it.”

Comment: John Sheils is one of the nation’s most noted authorities in the analyses of health care reform proposals. His microsimulation models have demonstrated that little savings can be achieved by reducing the level Of services covered, if the resulting product continues to protect individuals from the excessive financial burdens of health care.

Many proposals today call for ensuring “basic” coverage for everyone, as if that were a lower-cost, isolated segment of health care that people “really need.” But when attempts are made to define what should or should not be covered, the process falls apart. Theoretically, beneficial services Should be covered and ineffective services should not. But, in fact, much of health care cannot be readily assigned to one of these two categories.

Thus, the concept of “basic” services really should mean that patients must have unimpeded access to physicians and other providers and to the institutions and services that they control. The ultimate decision for appropriate services should be made jointly by the patient and his or Her health care professional. This process is not amenable to meat cleaver economics.

If eliminating non-basic services is not an effective option, then how can we control costs? Placing the entire health care system under a global budget will determine the capacity of the system. The budget allocation process will determine capacities for segments of the health care system. That process may well limit the number of total knee replacements in nonagenarians. But isn’t that process better than depriving many of us of beneficial services merely because they fail to meet an arbitrary threshold of just what a basic service is?

The fallacy of “basic” health care

The New York Times
January 20, 2004
Broader Health Coverage May Depend on Less
By Milt Freudenheim

With the number of uninsured Americans rising to new heights, some policy makers and influential health care experts are saying that the best way to give health coverage to more people is to give some people less.

Experiments in several states are establishing stripped-down packages of basic benefits intended to be affordable for employers and uninsured workers, including young, middle-class people who have dropped out of the health insurance pool. Some officials say that government health Benefits could be extended to more people, too, if the benefit package were narrower.

Some experts warn that cutting back mandated benefits will neither yield enormous savings nor slow the increase in costs associated with medical advances.

“There is very little in health care that you can trim off,” said John Sheils, a health policy expert at the Lewin Group, a consulting firm based in Falls Church, Va., that has advised health care advocacy groups in several states. “If you develop a new procedure that does some good,” he added, “ultimately all the insurers are going to have to recognize it and pay for it.”

Comment: John Sheils is one of the nation’s most noted authorities in the analyses of health care reform proposals. His microsimulation models have demonstrated that little savings can be achieved by reducing the level Of services covered, if the resulting product continues to protect individuals from the excessive financial burdens of health care.

Many proposals today call for ensuring “basic” coverage for everyone, as if that were a lower-cost, isolated segment of health care that people “really need.” But when attempts are made to define what should or should not be covered, the process falls apart. Theoretically, beneficial services Should be covered and ineffective services should not. But, in fact, much of health care cannot be readily assigned to one of these two categories.

Thus, the concept of “basic” services really should mean that patients must have unimpeded access to physicians and other providers and to the institutions and services that they control. The ultimate decision for appropriate services should be made jointly by the patient and his or Her health care professional. This process is not amenable to meat cleaver economics.

If eliminating non-basic services is not an effective option, then how can we control costs? Placing the entire health care system under a global budget will determine the capacity of the system. The budget allocation process will determine capacities for segments of the health care system. That process may well limit the number of total knee replacements in nonagenarians. But isn’t that process better than depriving many of us of beneficial services merely because they fail to meet an arbitrary threshold of just what a basic service is?

Institute of Medicine's call for universal coverage

Institute of Medicine
January 14, 2004
Committee on the Consequences of Uninsurance

Insuring America’s Health: Principles and Recommendations

Principles to guide the extension of coverage

1. Health care coverage should be universal.
2. Health care coverage should be continuous.
3. Health care coverage should be affordable to individuals and families.
4. The health insurance strategy should be affordable and sustainable for society.
5. Health insurance should enhance health and well-being by promoting access to high-quality care that is effective, efficient, safe, timely, patient-centered, and equitable.

Using the principles

The Committee concludes that health insurance coverage for everyone in the United States requires major reform initiated as federal policy.

The Committee recommends that these principles be used to assess the merits of current proposals and to design future strategies for extending coverage to everyone.

To illustrate how the principles should be used to evaluate reform proposals, the Committee sketches four prototypes for major reform in a simplified format so that the main incentives are clear. It then assesses ach prototype against each of the principles, highlighting the model’s strengths and weaknesses.

The prototypes

1. Major public program extension and new tax credit
2. Employer mandate, premium subsidy, and individual mandate
3. Individual mandate and tax credit
4. Single payer

Each of the four prototypes satisfies the principles better than does the status quo. Each model does so through different mechanisms and realizes each principle to a different degree. The Committee does not recommend one approach over another.

The Committee recommends that the President and Congress develop a strategy to achieve universal coverage and to establish a firm and explicit schedule to reach this goal by 2010.

It is time for our nation to extend coverage to everyone.

http://books.nap.edu/books/0309091055/html/index.html

Comment: The Committee has provided a great service by demonstrating, in previous reports, the severe deficiencies in our system related to uninsurance, and now by providing an unqualified recommendation for universal coverage.

In the interest of objectivity, the Committee has not recommended a specific model of universal coverage, but the crucial importance of examining the specific impacts of each model is appropriately stressed. Table 5.2 in the report (page 150) does demonstrate that the single payer model is the most effective in ensuring continuous, universal coverage, and that the coverage would remain affordable for individuals and for society.

Single payer advocates will find much in this report to continue to fuel our passion for reform.

Institute of Medicine’s call for universal coverage

Institute of Medicine
January 14, 2004
Committee on the Consequences of Uninsurance

Insuring America’s Health: Principles and Recommendations

Principles to guide the extension of coverage

1. Health care coverage should be universal.
2. Health care coverage should be continuous.
3. Health care coverage should be affordable to individuals and families.
4. The health insurance strategy should be affordable and sustainable for society.
5. Health insurance should enhance health and well-being by promoting access to high-quality care that is effective, efficient, safe, timely, patient-centered, and equitable.

Using the principles

The Committee concludes that health insurance coverage for everyone in the United States requires major reform initiated as federal policy.

The Committee recommends that these principles be used to assess the merits of current proposals and to design future strategies for extending coverage to everyone.

To illustrate how the principles should be used to evaluate reform proposals, the Committee sketches four prototypes for major reform in a simplified format so that the main incentives are clear. It then assesses ach prototype against each of the principles, highlighting the model’s strengths and weaknesses.

The prototypes

1. Major public program extension and new tax credit
2. Employer mandate, premium subsidy, and individual mandate
3. Individual mandate and tax credit
4. Single payer

Each of the four prototypes satisfies the principles better than does the status quo. Each model does so through different mechanisms and realizes each principle to a different degree. The Committee does not recommend one approach over another.

The Committee recommends that the President and Congress develop a strategy to achieve universal coverage and to establish a firm and explicit schedule to reach this goal by 2010.

It is time for our nation to extend coverage to everyone.

http://books.nap.edu/books/0309091055/html/index.html

Comment: The Committee has provided a great service by demonstrating, in previous reports, the severe deficiencies in our system related to uninsurance, and now by providing an unqualified recommendation for universal coverage.

In the interest of objectivity, the Committee has not recommended a specific model of universal coverage, but the crucial importance of examining the specific impacts of each model is appropriately stressed. Table 5.2 in the report (page 150) does demonstrate that the single payer model is the most effective in ensuring continuous, universal coverage, and that the coverage would remain affordable for individuals and for society.

Single payer advocates will find much in this report to continue to fuel our passion for reform.

State must lead the way

State must lead the way
David Lazarus
Sunday, January 18, 2004
Ā©2004 San Francisco Chronicle

More than 43 million Americans may now be uninsured, but no one expects a
national health care system similar to Canada’s to be adopted any time soon.
The obstacles, not least the fierce opposition of the $300 billion insurance industry, make such an enormous change politically untenable.

If universal coverage is to come to the United States, most experts agree, it will be introduced gradually, state by state. And California is positioning itself to be among the first out of the gate with a workable plan.

A statewide universal health care bill, introduced by Sen. Sheila Kuehl, D-Santa Monica, was approved by the Senate last summer. It will be taken up by the Assembly this year.

No one, not even Kuehl herself, expects such groundbreaking legislation to become law in the near future. But a few years down the road, as California
businesses increasingly plead for help in coping with runaway health care
costs, the bill’s chances could improve significantly.

“The more employers are burdened with providing health care for society, the
more they’ll be looking at this kind of system,” Kuehl predicted.

“Chances are slim the bill will get passed this year. But maybe four years from now, with a five-year transition period — that’s very possible.”

Businesses, pension funds and other insurance providers have grappled with
annual double-digit increases in insurance premiums for the past four years.

About 70,000 supermarket workers are on strike in Southern California because their employers want to raise health care costs. Nearly 100,000 workers at the telecom giant SBC, to cite just one other example, say they’ll walk off the job if medical costs are increased when their contract expires in April.

Meanwhile, the influential Institute of Medicine in Washington estimates that 18,000 adults die each year because they don’t have insurance.

The institute, which advises the federal government on health matters, issued an unprecedented call last week for universal health care but offered no guidance about how it could be achieved.

In Canada, a so-called single-payer system has been in place nationally since 1971. Taxpayer funds are allocated in lump-sum payments to hospitals, which have wide discretion as to how resources are used. Any citizen can receive treatment from any doctor at any hospital.

“It took one Canadian province, Saskatchewan, to show it could be done in the 1940s,” noted Kevin Grumbach, chairman of UCSF Medical School’s Department of Family and Community Medicine and a long-time backer of universal health care. “Then it caught on province by province.”

Kuehl’s bill, SB921, would create a single-payer system in California. It probably would be funded by a payroll tax that would replace current employer medical contributions and an income tax that would replace employee premiums, co-pays and other out-of-pocket expenses.

Kuehl said she’s also exploring having a statewide single-payer insurance system embrace a portion of workers’ compensation as well — an issue of particular interest to California businesses long accustomed to some of the highest workers’ comp costs in the nation.

“I read about all the strikes and labor problems, and I grind my teeth,” said Dan Hodges, chairman of Health Care for All-California, an advocacy group. “All this could be solved by SB921.”

One key issue for the legislation is how a California single-payer system would accommodate the various federal programs, including Medicare and Medicaid, which are a part of the health care landscape. Federal funding comprised about half of nearly $163 billion spent on health care in the state last year.

“There are a number of steps along the way that would have to be solved,” Kuehl acknowledged, adding that it remains unknown whether federal authorities would allow California to serve as a conduit for Medicare funds.

In any case, a Canadian-style single-payer system is not the only approach on the table to bring health coverage to the estimated 7 million Californians now lacking insurance.

Bruce Bodaken, chairman and chief executive of Blue Shield of California, advocates rejiggering the current insurance system so that everyone in the
state is covered. Among other things, he proposes requiring anyone who can
afford health insurance to buy it, and subsidizing those who can’t.

“The most practical way to achieve universal coverage is to build on the existing system but make sure everyone’s paying their fair share,” Bodaken said.

He added that his plan would have a better shot at passage than the single-payer system advocated by Kuehl, which would all but decimate private health insurers. “The political future of single-payer is no slam dunk,” Bodaken said.

The problem with the Blue Shield approach is that, while it guarantees insurers more customers, it doesn’t address inefficiencies now pushing health care costs higher.

A pair of Harvard Medical School researchers determined last week that $45
billion of the $163 billion spent on health care in California last year was eaten up by administrative expenses.

With a single-payer system in place, the researchers found, California health care spending would be reduced by almost $34 billion — enough to cover every uninsured person in the state and improve treatment for others.

In 2002, the California Health and Human Services Agency asked the Lewin Group, a prominent health care consulting firm, to evaluate nine different
proposals for expanding coverage in the state. The proposals included reforms similar to Bodaken’s plan along with establishment of a single-payer system.

The Lewin Group concluded that only a single-payer system would guarantee
universal coverage and control future costs, while also reducing health care
spending by as much as $7.6 billion per year through economies of scale.

Other states, including Massachusetts and Maine, are exploring single- payer
systems, but California is furthest along in terms of legislative activity and financial analysis. An in-depth analysis of Kuehl’s SB921 was begun by health care specialists last week as part of preparations for an Assembly vote.

The question at this point is not whether such a system would work in the state (or nationwide, for that matter). The question now is whether the political will can be found to push ahead with fundamental change that would benefit millions of California residents and thousands of businesses.

UCSF’s Grumbach says the time will come when taxpayer-backed universal coverage is seen as the only true solution to the state’s health care woes. It won’t be tomorrow, though, or the day after.

“It could take 10 years,” Grumbach said. “But the current system is so bloody awful and so many people are suffering, something eventually has to happen.”

The country can no longer ignore the uninsured.

Des Moines Register Editorial: Get everyone covered by 2010

The country can no longer ignore the uninsured.
By Register Editorial Board
01/17/2004
—————————————————————————————–
In the past three years, the number of uninsured Americans has grown by 3 million people – roughly the population of Iowa – leaving 43 million Americans with no health insurance. On Wednesday, the Institute of Medicine recommended the United States find a way to get these people health insurance by 2010.

The panel, part of the National Academy of Sciences, recognizes that having a large uninsured population damages the entire country.

About 18,000 people die each year as a result of being uninsured. Nearly half the uninsured report not seeking medical care when they’re sick. Uninsured car-accident victims receive less care in the hospital and have a higher mortality rate than insured patients. Uncompensated care costs health-care providers more than $35 billion a year. Uninsured children are less likely to receive medical care, and untreated chronic conditions can affect hearing, learning ability and school performance.

One uninsured person in a family jeopardizes the financial stability of the whole family.

The list goes on and on.

A country that doesn’t take care of the health of its people will eventually feel the effects trickling down in other areas. Lost productivity. Lost wages. A strain on schools and human services. Increases in the health-insurance premiums for those fortunate enough to have insurance.

It’s a problem that has to be fixed. The institute doesn’t recommend exactly how to provide health insurance to all, but suggests the most likely way would be a universal system financed through the government.

That’s not as radical as it sounds. After all, Medicare is a universal, government-financed insurance program for people over 65, and it’s wildly popular. It spends only a small percentage of its funding on administration, unlike the wastefully expensive private industry. Yet it’s only available for one segment of America. Why not get serious about devising a way to offer similar coverage to all Americans?

What premiums pay for

Friday, January 16, 2004 (SF Chronicle)
What premiums pay for
David Lazarus

The United States squanders more money every year on health care bureaucracy than it would cost to provide medical coverage for the 43 million Americans now lacking insurance.

That’s the finding of two respected Harvard Medical School researchers, David Himmelstein and Steffie Woolhandler, in a study appearing this week in the International Journal of Health Services.

They determined that of $1.6 trillion in total health care spending last year, at least $399 billion was eaten up by administrative costs such as clerical work in hospitals and processing a vast array of insurance forms.

But if a national health care plan like Canada’s were implemented in this country, the researchers found, administrative overhead would be slashed by about $286 billion.

This amount, in turn, would be sufficient to not only provide health coverage for every uninsured American nationwide but also allow millions of underinsured people to improve their quality of care.

Himmelstein, who is also a physician, said in an interview that 10 percent of revenue at his Cambridge practice now goes to an outside billing firm that handles much of his insurance work.

“That amount could be used instead to care for more patients,” he observed. “It could be used to hire additional people and fund a huge expansion of care.”

Similarly, Himmelstein estimated that at least 15 percent of his time every day is spent dealing with paperwork.

“That’s 15 percent of my time that I’d much rather spend on patients or learning more about medicine,” he said.

Private health insurers, who would be decimated by taxpayer-funded universal coverage, oppose creation of a Canadian-style system in the United States. Instead, they prefer adjusting the existing system to expand the number of people covered.

But Himmelstein and Woolhandler argue that the existing system is grossly inefficient and needs to be completely overhauled. The findings of their research may be speculative, but they say it points the way toward legitimate cost reductions.

In California, they found, nearly $163 billion was spent last year on health care. Of that total, $45 billion, or about 28 percent, went to administrative costs.

With Canadian-style universal coverage, the researchers concluded, Californians would save almost $34 billion annually on administrative overhead. This would provide more than $5,000 for each of the state’s nearly 7 million uninsured.

“As it stands,” Himmelstein said, “you could insure all uninsured people for about $1,500 per person. The administrative savings would thus leave plenty of money to upgrade coverage for others.”

The Canadian single-payer system is frequently cited as a model for how the United States might go about offering health coverage to all citizens. The Canadian system, begun nationally in 1971, guarantees all citizens access to essential medical services regardless of employment, income or health.

The system is administered regionally but overseen the federal level. It’s not perfect. A 2001 study found that patients requiring elective surgery wait an average of 16 weeks before reaching the operating table.

Investment is slow in new technologies and equipment. On the other hand, Canadian hospitals and physicians spend substantially less time on administrative chores because the single-payer system is relatively streamlined. Hospitals receive lump-sum payments each year from local authorities but have wide discretion as to how their resources are used. Paperwork is minimal.

Would Canada’s system work in the United States? Probably not without some tweaking. Experts say a U.S. universal health care system probably would require strong regulatory oversight to ensure cost controls and quality (and such oversight likely would cut into at least some of the projected savings).

Government authorities might also need more say over distribution of medical resources. Just as few communities would want or need two fire stations within a block of each other, regulators would help decide where hospitals are built to avoid wasteful duplication of expensive technologies.

“Health care shares many of the same characteristics of fire departments and police departments,” Himmelstein said. “Hospitals should be treated the same way.”

Karen Ignagni, president of AAHP-HIAA, the leading trade group for health insurers, challenged the methodology of Himmelstein and Woolhandler’s study, and said administrative costs in the report “are wildly inflated.”

Many of the expenses included in the study, she said, “actually involve activities that improve the quality of health care. It’s not just paper pushing.”

U.S. health insurers support extending coverage to all Americans, Ignagni stressed, but are “against a one-size-fits-all approach.” For its part, the drug industry’s leading trade group, Pharmaceutical Research and Manufacturers of America, also opposes creation of a single-payer health care system.

Jeff Trewhitt, a spokesman for the association, said private insurance plans offer consumers more choice and “allow pharmaceutical and biotechnology research companies to avoid innovation-stifling, government-mandated price controls.”

Harvard researcher Woolhandler responded in an interview that the insurance and drug industries have resisted change for years. “They’re extremely happy with how things are now,” she said. “For them, it’s a life-or- death struggle.”

Yet in the face of such politically powerful opposition, most experts agree it’s unlikely nationwide universal coverage will be adopted in the United States anytime soon. Then again, Canada began its system more than half a century ago on a province-by-province basis.

The political divide on reform narrows further

Minnesota Public Radio
News
January 13, 2004
Durenberger forum likely to advocate health care for all

Minnesotans have a strong appetite for major changes in the health care system that would both lower costs and lead to universal access to care. That’s the conclusion of a state forum being led by former U.S. Sen.David Durenberger.

“Minnesotans are afraid they are going to lose their health insurance,” Durenberger said. “They are afraid they can’t switch jobs because they’re going to lose their access to health care.”

The forum’s poll, which had a margin of sampling error of plus or minus 3.5 percentage points, showed that while most Minnesotans believe the government should guarantee health coverage, they want the system itself to be run by the private sector and not the government.

Four of five Minnesotans say they would be willing to pay higher taxes to provide health care coverage to more people. More than 90 percent of poll respondents said they want the ability to choose their own doctors.

There seems to be strong support for universal insurance backed up by a willingness to pay for it,” said panelist Dr. Glen Nelson, a former surgeon and former vice chairman of Medtronic. “You could argue that, politically, the people do support universal insurance.”

http://news.mpr.org/features/2004/01/12_ap_healthforum/

Comment: It is truly remarkable how far we have come when a former Republican Senator is advocating for universal health care coverage and access, which contains costs, and is always guaranteed regardless of unrelated factors such as employment status.

We agree on almost all major issues, including the fact that the government should guarantee health coverage. The only major clarification left is defining what we mean by a system “run by the private sector and not the government.”

We are even remarkably close to agreement here. Single payer advocates support a health care delivery system run by the private sector. It is only the funding mechanism that we believe should be public. Our own publicly-owned system of universal insurance would ensure that our agreed upon goals would be achieved.

Instead of looking exclusively for more permutations and combinations of private health plans, let’s now take a serious look at funding our private health care delivery system with our own universal program of public insurance. It would achieve all of our goals.