PNHP

Fraudulent and abusive calculations of fraud and abuse

Fraudulent and abusive calculations of fraud and abuse

Center on Budget and Policy Priorities
September 2, 2003
Reducing “Waste, Fraud, and Abuse”: One Percent Of What? Double-Counting and Other Budget Committee Mistakes Will Require Some Committees to Cut Entitlement Programs More than One Percent
By Richard Kogan

Today (September 2, 2003), House and Senate Committees are scheduled to
submit recommendations on how to reduce “waste, fraud, and abuse” in federal
“mandatory,” or entitlement, programs. In May, the House and Senate Budget
Committees directed 12 Senate committees and 15 House committees to find
ways to reduce entitlement programs; the Budget Committees issued dollar
targets for each of these committees, supposedly equal to one percent of the
total entitlement spending in each committee’s jurisdiction. The Budget
Committees’ calculations were flawed, however, in major and minor ways.
As a result, most committees are required to find savings that represent
substantially more than one percent of the entitlement spending under their
jurisdiction, and a few are required to find savings of less than one percent.

The Budget Committees’ largest error was to double-count the cost of certain
“trust fund” programs. Double-counting makes these programs look costlier
than they really are, and so makes the savings targets for committees with
jurisdiction over these programs higher than one percent. The Budget Committees double-counted the cost of all programs that have trust funds
into which the U.S. Treasury transfers money, with the trust fund then using
the transferred funds to make payments to (or on behalf of) program beneficiaries. Programs with such a funding structure include the military
retirement program, the civil service retirement program, and Part B of
Medicare (the Supplemental Medical Insurance program, which pays for
visits to physicians, rather than hospital bills).

This is double-counting, and is scrupulously avoided by CBO and OMB.In total, double-counting of this nature by the Budget Committees produces ten-year savings targets that are $24 billion too high.

The Budget Committees also erred with regard to programs where the federal
government acts as an agent in “passing through” to other entities certain
funds that it collects for specified purposes… When a budget account is not really a government “spending program” but essentially is a pass-through for other transactions, there is no possibility of reducing the costs by one percent.

http://www.cbpp.org/9-2-03bud.htm

Comment: A major problem with programs of social insurance is that conservatives, when in control, continue to reduce funding (though usually simply by failing to provide adequate inflationary increases). They then plead that the programs are ineffective and should be replaced with private
alternatives.

Using dishonest calculations cloaked as reductions in “waste, fraud,and abuse” is in itself fraudulent and abusive. We need to demand that our legislators protect our public programs such as Part B of Medicare.
Failing that, we should replace them with legislators who will.

Date: Thu, 4 Sep 2003 10:26:29 -0700
Subject: qotd: Relaxing EMTALA rules will result in lethal outcomes

Department of Health and Human Services
Centers for Medicare & Medicaid Services
42 CFR Parts 413, 482, and 489
[CMS-1063-F] RIN 0938-AM34

Medicare Program; Clarifying Policies Related to the Responsibilities of Medicare-Participating Hospitals in Treating Individuals with Emergency Medical Conditions

ACTION: Final rule.
SUMMARY: This final rule clarifies policies relating to the responsibilities of Medicare-participating hospitals in treating individuals with emergency medical conditions who present to a hospital under the provisions of the
Emergency Medical Treatment and Labor Act (EMTALA).

Excerpt:
(2) Exception: Application to inpatients.

(i) If a hospital has screened an individual under paragraph (a) of this section and found the individual to have an emergency medical condition, and admits that individual as an inpatient in good faith in order to stabilize the emergency medical condition, the hospital has satisfied its special responsibilities under this section with respect to that individual.

http://cms.hhs.gov/providers/emtala/cms-1063-f.pdf

And…

Institute of Medicine
Care Without Coverage: Too Little, Too Late

Hospital-based Care

The poorer health status of uninsured adults at the time of hospitalization is compounded by experiences as inpatients. They receive fewer needed services, worse quality care, and have a greater risk of dying in the hospital or shortly after discharge.

Traumatic injuries: Surprisingly, provider response to traumatic injury can be influenced by insurance status. Uninsured trauma victims are less likely to be admitted to a hospital, receive fewer services when admitted, and are more likely to die than are insured trauma victims.

http://www.iom.edu/includes/DBFile.asp?id=4160

Comment: The way in which a problem is framed greatly influences the approaches to solving the problem.

The administration has elected to define the continued application of EMTALA
standards to an emergency patient, once that patient is admitted, as a burdensome and unnecessary regulatory requirement. Their solution is to waive EMTALA rules for emergency inpatients once admitted. Relaxing this requirement can only compound the negative outcomes described in the Institute of Medicine report.

Others would define the problem as impaired outcomes and even death resulting from lack of insurance coverage for many emergency patients. Most of us would agree that the solution for the problem framed in this manner should be to ensure that everyone has adequate health insurance coverage.

Should our administration begin supporting policies that improve health care
outcomes, or should it continue to place a higher priority on policies that reduce government oversight of serious deficiencies that adversely affect the health of our citizens?

(Although this message addresses the waiving of EMTALA rules for emergency
patients who are admitted, an even more consequential change is in the relaxation of the rules for specialist on-call backup of emergency services.

More preventable deaths are inevitable. Although adequate specialist coverage will always remain a problem, the immediate solution is not to merely diminish the obligation of specialists to provide coverage, but rather to ensure that they will be compensated when their services are required. Again, ensuring that everyone has adequate health care insurance is the first step toward solving these problems. Removing the issue of compensation allows for a less heated dialogue on the other important on-call disputes.)

California's employer mandate is a step forward,but not enough

San Francisco Chronicle
September 1, 2003
Health Insurance for All
SB2 an important step in solving the problems of the uninsured By John whitelaw, M.D., the immediate past president of the California Medical Association, and Art Pulaski, the executive treasurer of the California Labor Federation, AFL-CIO.

Nearly 7 million people in California lack health-care insurance. Most uninsured Californians work and pay taxes, but do not receive health-care coverage from their employers. In fact, 8 out of 10 uninsured Californians work or are the dependents of working, uninsured Californians.

A special committee in the California Legislature is reviewing historic legislation called “Health Care for Working Families.”

This legislation — SB2 — would significantly expand access to health care
by building on the national system of employer-based health coverage.
Employers would pay a user fee into a state health insurance purchasing pool. Employers who provide a basic level of coverage would get a credit against the fee. Beginning in 2005, companies with more than 200 employees would be required to provide health insurance for their employees and dependents. In 2006, companies with more than 20 employees would be required to provide coverage for their employees, but not their dependents.

Smaller companies will be exempt from this measure.By providing coverage to millions of uninsured Californians, SB2 would save lives, safeguard medical services and stabilize skyrocketing premiums.This historic legislation (authored by Senate President Pro Tem John Burton,D-San Francisco) is sponsored by the California Medical Association,the California Labor Federation, AFL-CIO and thousands of other community and health advocate groups.

click here to read the article

Comment: California’s SB2 is a prime example of why the dialogue on reform
should not be “either incremental or universal,” but rather should be “incremental and universal.”

Our goal is comprehensive and affordable care for absolutely everyone which
can be achieved only by enacting a universal system of social insurance. But
because many barriers exist to achieving that goal in the immediate future,
we need to support interim measures that improve access and coverage without introducing detrimental policies that might negatively impact our goals.

It is estimated that SB2 will provide coverage to about 1.1 million of the
4.5 million Californians who are uninsured at any given point in time.
(At least 6.2 million Californians are uninsured at some point within a year.)
Expanding coverage to over a million residents is a very worthy goal,and
should be supported by all of us.

But SB2 still leaves several million without coverage. SB2 is the most expensive model of reform, and will increase California’s global healthcare costs significantly. It leaves in place the highly flawed and fragmented system of funding health care with its egregious administrative waste,catering to the private health insurance industry. It perpetuates many of the inequities in both the funding of health care and in the allocation of our health care resources. It clearly is not a measure that we can pass and then walk away from, as if the job were done.

SB921, the single payer bill of Sen. Sheila Kuehl, has not been included in
the conference committee deliberations, but it is still very much an active
bill. As a two year bill, it is scheduled for further consideration in January, 2004. It does have an almost insurmountable hurdle. Any tax increase in California must have a two-thirds vote in both the Senate and Assembly. The single payer model shifts private spending into the public sector. A variation of the model has not been created that would avoid a tax increase (even though offset by a reduction in private spending). The conservatives, though a minority, have been able to block any legislation involving a tax increase.

Although SB921 cannot pass in its present form, SB2 was crafted to avoid any
tax increase. Though SB2 falls far short of our goals, it can pass.Because
it is an improvement, it should be vigorously supported.

That said, we must not allow dissemination of the misperception that SB2
will have solved our health care problems. We must continue the fight for
coverage of the millions left uninsured, for eliminating the inequities in
our system, and for ensuring that comprehensive health care will be affordable for everyone.

We need to pass SB2. But then, instead of relaxing our efforts, we need to
become even more diligent in educating the public on the benefits of a single payer system of social insurance. California advocates need to send a loud and clear message on Sen. Kuehl’s SB921, the single payer bill.

Message: 2
From: “Don McCanne”
To:
Date: Tue, 2 Sep 2003 13:36:33 -0700
Subject: qotd: Understanding consumer-directed health care

California HealthCare Foundation
8/26/03
Understanding Consumer-directed Health Care in California
By Jon Gabel and Thomas Rice

Despite a shared interest among insurers and employers in exploring the potential of consumer-directed health plans, such coverage remains a rarity
in California-a state that typically leads the nation in innovative health
care models.

The report,Understanding Consumer-directed Health Care in California,examines consumer-directed health plans, which link consumers’ health coverage choices to the financial consequences of those choices. If,for example, consumers choose a health plan that results in greater overall expenditures, they will have to pay more in premiums. This report explains how the products work, identifies the industry players behind them, and discusses the factors likely to influence their growth.

The report focuses on three types of consumer-directed plans including:
* Health reimbursement arrangements (HRAs), whereby an employer establishes an individual health reimbursement arrangement for a specified dollar amount for each enrolled employee, generally in conjunction with a high deductible insurance product.

* Customized plans, whereby employers make a fixed contribution toward the
employee’s premium, and the employee then chooses among an array of products
with different prices that reflect a wide-range of benefit designs and provider networks.

* “Design your own” products, so far non-existent in California, let employees choose their own set of providers and benefit features-essentially designing their own provider network and specifying the services covered-with the employee’s premium contribution dependent on the choices made.

http://www.chcf.org/topics/view.cfm?itemid=21485

For the full report:
http://www.chcf.org/documents/insurance/ConsumerDirectedHealthCare.pdf

Comment: Since consumer-directed health care is being touted by some as the
next major trend in innovative reform efforts, activists should become informed on these proposals and their potential impact. The report by Gabel and Rice provides an excellent, straightforward explanation, along with a description of their initial impact in California.

Although purists in the health policy academic community might suggest that
we wait to observe the full impact of these innovations before we pass judgment on them, a few comments can be made in advance.

“Health reimbursement arrangements” (HRAs) are the insurance industry’s answer to medical savings accounts (MSAs). The accounts are funded by the employer. The accounts require administrative services since they can be used only for medical expenses, and they are not portable from employer to employer. They are combined with high deductible plans, usually PPOs.

Adverse selection is a problem if the employer offers any other options,resulting in excessive costs for plans that concentrate individuals with greater health care needs. Of concern is that the individual is exposed to 100% of the costs between the amount in the account and the deductible of the catastrophic coverage. Negative outcomes inevitably will result from failure to obtain timely care because of financial disincentives once the HRA account is depleted.

“Customized packages” are defined contribution programs in which the individual must pay more to obtain more comprehensive coverage of benefits and/or a greater selection of providers. Many healthy individuals will select lower cost coverage which may well prove to be inadequate if significant health care needs later develop. This defeats the purpose of insurance.

“Design-your-own” products do not exist in California. It is unlikely that they will ever be a significant player because of the difficulty of selecting and pricing almost unlimited variations in coverage.

Consumer-directed programs are designed to reduce health care costs for employers by shifting costs to employees. The health policy literature confirms that this can only result in reduced access to health care because of lack of affordability. Reduced access in turn results in impaired health outcomes. Consumer-directed programs are bad health policy. Why do we keep avoiding the inevitable conclusion that we need a comprehensive,universal program of social insurance?

(Thomas Rice discusses the issue of consumer choice in his chapter,”Should
Consumer Choice Be Encouraged in Health Care,” from the book, “The Social
Economics of Health Care,” edited by John B. Davis. It is well worth reading. http://www.semcoop.com/detail/0415251621)

A column on Health Care Reform

The goal of a National Health Care program is to provide the best care for all at an affordable cost. Unfortunately, to institute such a system, the pressure of the corporate health groups has been for many years and continues to be, formidable.
Eleven years ago, prior to the 1992 elections, opinion polls indicated that 90 percent of Americans believed that the health care system needed “fundamental change’ or “a complete rebuilding”.

This called forth a full court press by the corporations which had a vested interest in their profit-making endeavors. Among them were the American Medical Association , the Blue Cross/Blue Shield and other health insurance companies, as well as the drug and medical equipment companies. With their millions and millions of dollars they were able to prevent any meaningful reforms. In the years since the 1992 election the amounts of money and propaganda have increased exponentially. The only force which can prevail against this kind of pressure is the common sense of the voters, and it can do so only if the people get out and vote against legislators who are in bed with the corporations ,and vote for people who have the interest of the public at heart.

Over the past two decades discussion about health care reform has intensified. In this process a number of statements and claims by those who oppose a single payer system have assumed a prominent place; enough so in fact, that they have acquired the status of myths and we must be prepared to refute them.

Most often heard is the claim that National Health Insurance is socialized medicine. In a real socialized system the government owns and operates it – it hires and pays the doctors and other personnel, it owns and operates the hospitals and clinics.

All other arguments can be answered by referencing the health statistics which show that the health of the American people is not rated as high as that of the other industrialized countries Life expectancy, infant mortality, maternal mortality, hospital admissions, physicians’ visits, surgical procedures etc. are all better in Canada, for example, than are those in the U.S.
Conversion of our present non-system to a national health insurance, despite what pessimists say, is possible if a knowledgeable electorate get out and vote for those who will support one.

©#651, Goodrich , June 1, 2003

California’s employer mandate is a step forward,but not enough

San Francisco Chronicle
September 1, 2003
Health Insurance for All
SB2 an important step in solving the problems of the uninsured By John whitelaw, M.D., the immediate past president of the California Medical Association, and Art Pulaski, the executive treasurer of the California Labor Federation, AFL-CIO.

Nearly 7 million people in California lack health-care insurance. Most uninsured Californians work and pay taxes, but do not receive health-care coverage from their employers. In fact, 8 out of 10 uninsured Californians work or are the dependents of working, uninsured Californians.

A special committee in the California Legislature is reviewing historic legislation called “Health Care for Working Families.”

This legislation — SB2 — would significantly expand access to health care
by building on the national system of employer-based health coverage.
Employers would pay a user fee into a state health insurance purchasing pool. Employers who provide a basic level of coverage would get a credit against the fee. Beginning in 2005, companies with more than 200 employees would be required to provide health insurance for their employees and dependents. In 2006, companies with more than 20 employees would be required to provide coverage for their employees, but not their dependents.

Smaller companies will be exempt from this measure.By providing coverage to millions of uninsured Californians, SB2 would save lives, safeguard medical services and stabilize skyrocketing premiums.This historic legislation (authored by Senate President Pro Tem John Burton,D-San Francisco) is sponsored by the California Medical Association,the California Labor Federation, AFL-CIO and thousands of other community and health advocate groups.

click here to read the article

Comment: California’s SB2 is a prime example of why the dialogue on reform
should not be “either incremental or universal,” but rather should be “incremental and universal.”

Our goal is comprehensive and affordable care for absolutely everyone which
can be achieved only by enacting a universal system of social insurance. But
because many barriers exist to achieving that goal in the immediate future,
we need to support interim measures that improve access and coverage without introducing detrimental policies that might negatively impact our goals.

It is estimated that SB2 will provide coverage to about 1.1 million of the
4.5 million Californians who are uninsured at any given point in time.
(At least 6.2 million Californians are uninsured at some point within a year.)
Expanding coverage to over a million residents is a very worthy goal,and
should be supported by all of us.

But SB2 still leaves several million without coverage. SB2 is the most expensive model of reform, and will increase California’s global healthcare costs significantly. It leaves in place the highly flawed and fragmented system of funding health care with its egregious administrative waste,catering to the private health insurance industry. It perpetuates many of the inequities in both the funding of health care and in the allocation of our health care resources. It clearly is not a measure that we can pass and then walk away from, as if the job were done.

SB921, the single payer bill of Sen. Sheila Kuehl, has not been included in
the conference committee deliberations, but it is still very much an active
bill. As a two year bill, it is scheduled for further consideration in January, 2004. It does have an almost insurmountable hurdle. Any tax increase in California must have a two-thirds vote in both the Senate and Assembly. The single payer model shifts private spending into the public sector. A variation of the model has not been created that would avoid a tax increase (even though offset by a reduction in private spending). The conservatives, though a minority, have been able to block any legislation involving a tax increase.

Although SB921 cannot pass in its present form, SB2 was crafted to avoid any
tax increase. Though SB2 falls far short of our goals, it can pass.Because
it is an improvement, it should be vigorously supported.

That said, we must not allow dissemination of the misperception that SB2
will have solved our health care problems. We must continue the fight for
coverage of the millions left uninsured, for eliminating the inequities in
our system, and for ensuring that comprehensive health care will be affordable for everyone.

We need to pass SB2. But then, instead of relaxing our efforts, we need to
become even more diligent in educating the public on the benefits of a single payer system of social insurance. California advocates need to send a loud and clear message on Sen. Kuehl’s SB921, the single payer bill.

Message: 2
From: “Don McCanne”
To:
Date: Tue, 2 Sep 2003 13:36:33 -0700
Subject: qotd: Understanding consumer-directed health care

California HealthCare Foundation
8/26/03
Understanding Consumer-directed Health Care in California
By Jon Gabel and Thomas Rice

Despite a shared interest among insurers and employers in exploring the potential of consumer-directed health plans, such coverage remains a rarity
in California-a state that typically leads the nation in innovative health
care models.

The report,Understanding Consumer-directed Health Care in California,examines consumer-directed health plans, which link consumers’ health coverage choices to the financial consequences of those choices. If,for example, consumers choose a health plan that results in greater overall expenditures, they will have to pay more in premiums. This report explains how the products work, identifies the industry players behind them, and discusses the factors likely to influence their growth.

The report focuses on three types of consumer-directed plans including:
* Health reimbursement arrangements (HRAs), whereby an employer establishes an individual health reimbursement arrangement for a specified dollar amount for each enrolled employee, generally in conjunction with a high deductible insurance product.

* Customized plans, whereby employers make a fixed contribution toward the
employee’s premium, and the employee then chooses among an array of products
with different prices that reflect a wide-range of benefit designs and provider networks.

* “Design your own” products, so far non-existent in California, let employees choose their own set of providers and benefit features-essentially designing their own provider network and specifying the services covered-with the employee’s premium contribution dependent on the choices made.

http://www.chcf.org/topics/view.cfm?itemid=21485

For the full report:
http://www.chcf.org/documents/insurance/ConsumerDirectedHealthCare.pdf

Comment: Since consumer-directed health care is being touted by some as the
next major trend in innovative reform efforts, activists should become informed on these proposals and their potential impact. The report by Gabel and Rice provides an excellent, straightforward explanation, along with a description of their initial impact in California.

Although purists in the health policy academic community might suggest that
we wait to observe the full impact of these innovations before we pass judgment on them, a few comments can be made in advance.

“Health reimbursement arrangements” (HRAs) are the insurance industry’s answer to medical savings accounts (MSAs). The accounts are funded by the employer. The accounts require administrative services since they can be used only for medical expenses, and they are not portable from employer to employer. They are combined with high deductible plans, usually PPOs.

Adverse selection is a problem if the employer offers any other options,resulting in excessive costs for plans that concentrate individuals with greater health care needs. Of concern is that the individual is exposed to 100% of the costs between the amount in the account and the deductible of the catastrophic coverage. Negative outcomes inevitably will result from failure to obtain timely care because of financial disincentives once the HRA account is depleted.

“Customized packages” are defined contribution programs in which the individual must pay more to obtain more comprehensive coverage of benefits and/or a greater selection of providers. Many healthy individuals will select lower cost coverage which may well prove to be inadequate if significant health care needs later develop. This defeats the purpose of insurance.

“Design-your-own” products do not exist in California. It is unlikely that they will ever be a significant player because of the difficulty of selecting and pricing almost unlimited variations in coverage.

Consumer-directed programs are designed to reduce health care costs for employers by shifting costs to employees. The health policy literature confirms that this can only result in reduced access to health care because of lack of affordability. Reduced access in turn results in impaired health outcomes. Consumer-directed programs are bad health policy. Why do we keep avoiding the inevitable conclusion that we need a comprehensive,universal program of social insurance?

(Thomas Rice discusses the issue of consumer choice in his chapter,”Should
Consumer Choice Be Encouraged in Health Care,” from the book, “The Social
Economics of Health Care,” edited by John B. Davis. It is well worth reading. http://www.semcoop.com/detail/0415251621)

Al-Jazeerah reports results of Pew survey

The Pew Research Center
Survey
July 24, 2003

Scrap Tax Cuts for Health Insurance

Fully 72% of Americans agree that the government should provide universal
health care, even if it means repealing most tax cuts passed since Bush took
office. Democrats overwhelmingly favor this proposal (86%-11%) and independents largely agree (78%-19%). Even a narrow majority of Republicans
(51%) favor providing health insurance for all even if it means canceling the tax cuts, while 44% disagree.

A big majority of those who support this proposal,ú 61%,ú think of it as a moral as well as a political issue, while most opponents tend to see this in strictly political terms (58%).

http://people-press.org/reports/display.php3?PageID=725
And…

Al-Jazeerah
8/31/03
Opinion
Majority of Americans Call for Universal Health Care
By Sam Adams

The United States of America is the only 1st-tier country that does not provide a comprehensive national health care system for all of its citizens. It is an appalling scandal that the richest country in the world ignores the needs of nearly 45 million people who lack health care insurance. The majority of Americans call for Universal Health Care, according to a PEW
Research Center Survey…

http://www.aljazeerah.info/Opinion%20editorials/2003%20Opinion%20Editorials/August/31%20o/Majority%20of%20Americans%20Call%20for%20Universal%20Health%20Care%20Sam%20Adams.htm

Comment: Our administration is attempting to bring American values to Iraq.
Shouldn’t we be uncomfortable with this report distributed by Al-Jazeerah?
More importantly, should we continue to neglect our problems here at home?

72% of us believe that our government should provide universal health care,
even if that means repealing most of the tax cuts. Does our example show other nations that democracy works? We have much more work to do to prove that it can.

Support for "hybrid" proposal?

Support for “hybrid” proposal?

Health Affairs
Web Exclusive
August 27, 2003

Americans’ Views Of The Uninsured: An Era For Hybrid Proposals Most agree that something should be done to help the uninsured, but they don’t want to pay higher taxes to do it.
by Robert J. Blendon, John M. Benson, and Catherine M. DesRoches

From the Discussion:
Although there is no public consensus on any single approach to helping the
uninsured get coverage, a hybrid plan-one that leaves workplace insurance in
place and includes elements of several different proposals to cover more of
the uninsured-offers the possibility of gaining public support.

Continuing reliance on workplace insurance will reassure those who already have such insurance that their coverage will not be at risk. The possibility of a compromise hybrid plan arises from the fact the large majorities of both.Democrats and Republicans are amenable to three different approaches to
covering the uninsured: some form of requirement that employers offer health
insurance to their employees, tax credits to buy private health insurance,
and expanding state government programs for low-income people to provide
coverage. With a hybrid plan, nearly everyone would get some element of
their preferred way to deal with the problem of the uninsured.

http://www.healthaffairs.org/WebExclusives/Blendon_Web_Excl_082703.htm

Comment: A hybrid proposal reminiscent of the Clinton plan, promising
something for everyone, brings back unpleasant memories of the disintegration of the legislative process when all special interests descended on Washington.
Words of optimism for reform escape me now.

Universal Health Plan is Endorsed

Published on Wednesday, August 13, 2003 by the Boston Globe

Universal Health Plan is Endorsed
Thousands of doctors back proposal in JAMA

by Liz Kowalczyk and Amber Mobley

 
Thousands of US physicians have endorsed a broad proposal that would abolish for-profit hospitals and insurers and transfer all Americans into an expanded and improved Medicare program for all ages, reigniting the debate over universal health care a decade after President Clinton’s failed plan.

While the four physicians who wrote the plan — three of whom are affiliated with Harvard Medical School — are members of a nonprofit organization that has long pushed for universal health coverage, the new proposal is important for two reasons: It was published today in one of the country’s most prestigious and its most widely circulated medical journal, the Journal of the American Medical Association, and because of the large number of doctors — nearly 8,000, including two former surgeons general — who endorsed it.

“The doctors said they hope to spark a debate over national health insurance that essentially ended with the death of the Clinton health plan.

Of the Democratic presidential candidates, only Rep. Dennis Kucinich is advocating a single-payer system.

Americans spend $1.6 trillion on health care, which the doctors say is more than enough money to cover every American. The doctors contend that there will be at least $200 billion in administrative savings in a single-payer, national insurance plan.”The Associated Press

JAMA officials said it is unusual for the journal, which has a circulation of about 700,000 worldwide, to publish an article endorsed by such a large number of physicians. JAMA’s editor, Dr. Catherine DeAngelis, said that an editorial accompanying the article represents the journal’s viewpoint that it is time for the country to grapple more seriously with major problems in the health-care system.

“Look, if you don’t agree with this plan, it’s not a foolproof plan, there are plenty of problems with it, come up with something better,” she said in an interview. “Let the debate resume. It’s sort of been on the back burner and it’s time we get on the stick with this. We are the only developed country in the world that doesn’t have a specific health plan for our people. It’s a disgrace. We have too many people not insured, and this is wrong.”

In the editorial accompanying the proposal, Rashi Fein of Harvard Medical School said one drawback of such a comprehensive plan is that it may be too radical to pass the US political system, but that the doctors’ proposal “should re-energize the debate.”

The plan, developed by the Physicians for a National Health Program, based in Chicago, differs from Clinton’s 1993 initiative in fundamental ways. Clinton sought to avoid large new taxes, instead seeking to require all companies to offer health insurance with federal subsidies helping small employers, Fein said. The country’s basic system — employers buying health insurance from nonprofit and for-profit insurance companies — would have remained intact.

The physicians’ plan is more radical and more encompassing, including coverage for the 41 million uninsured Americans as well as incorporating ways to control costs by setting a national budget, providing a set amount of money to hospitals for day-to-day operations and major expansions, paying for nursing home and home care for the elderly, and developing a national list of drugs the program would pay for.

The government would pay for health care through an expanded version of traditional Medicare, the federal health insurance program for the elderly. Most hospitals and clinics would remain privately owned and operated, and the national health insurance program would pay them a monthly budget for operating costs. Investor-owned facilities would be converted to nonprofit status. Private insurance companies would be virtually eliminated. The plan is endorsed by former surgeons general Dr. David Satcher, who served under Clinton, and Dr. Julius Richmond, appointed by Jimmy Carter.

One of the doctors’ arguments is that for-profit companies and multiple insurers are diverting money from clinical care for the demands of business. The physicians estimate that the country would save $200 billion annually by eliminating profits of investor-owned hospitals and insurance companies and by reducing administrative costs for hospitals and doctors who must bill dozens of different insurance companies. Private health insurers now consume 12 percent of premiums for overhead, while Medicare and the Canadian national health insurance system have overhead costs below 3.2 percent, the doctors reported.

Taxes, the doctors said, would increase. But except for the very wealthy, higher taxes would be offset by the elimination of insurance premiums and out-of-pocket copayments and deductibles, they argued.

Lead coauthor Dr. Marcia Angell, a senior lecturer at Harvard Medical School and former editor of the New England Journal of Medicine, said during a news conference in Washington, D.C., that the doctors want to curtail the entrepreneurial aspects of medicine, where insurers and providers avoid unprofitable patients and try to shift costs back to patients. But she said they also sought ways to control costs amid skyrocketing insurance premiums.

Dr. Steffie Woolhandler and Dr. David Himmelstein, both physicians at Cambridge Hospital and associate professors at Harvard Medical School, were coauthors.

Critics and even advocates of universal health insurance said the doctors’ proposal has major shortcomings. Susan Pisano of the American Association of Health Plans said private industry, not the government, has led the way in adopting disease management programs and prescription drug coverage. “Political pressures on Congress make change and innovation very difficult,” she said.

Giving hospitals a set monthly budget is similar to a form of managed care called “capitation,” in which insurers paid doctors and hospitals a set amount of money to treat patients. If they kept under the budget, providers made a profit; if they exceeded the budget, they lost money.

But capitation is now being called a failure by many providers, because it creates a financial incentive to limit care, and many insurers are moving away from it.

Further, many health-care economists questioned whether the proposal is realistic in the United States, given that even Clinton’s more modest plan failed.

© Copyright 2003 Globe Newspaper Company

Support for “hybrid” proposal?

Support for “hybrid” proposal?

Health Affairs
Web Exclusive
August 27, 2003

Americans’ Views Of The Uninsured: An Era For Hybrid Proposals Most agree that something should be done to help the uninsured, but they don’t want to pay higher taxes to do it.
by Robert J. Blendon, John M. Benson, and Catherine M. DesRoches

From the Discussion:
Although there is no public consensus on any single approach to helping the
uninsured get coverage, a hybrid plan-one that leaves workplace insurance in
place and includes elements of several different proposals to cover more of
the uninsured-offers the possibility of gaining public support.

Continuing reliance on workplace insurance will reassure those who already have such insurance that their coverage will not be at risk. The possibility of a compromise hybrid plan arises from the fact the large majorities of both.Democrats and Republicans are amenable to three different approaches to
covering the uninsured: some form of requirement that employers offer health
insurance to their employees, tax credits to buy private health insurance,
and expanding state government programs for low-income people to provide
coverage. With a hybrid plan, nearly everyone would get some element of
their preferred way to deal with the problem of the uninsured.

http://www.healthaffairs.org/WebExclusives/Blendon_Web_Excl_082703.htm

Comment: A hybrid proposal reminiscent of the Clinton plan, promising
something for everyone, brings back unpleasant memories of the disintegration of the legislative process when all special interests descended on Washington.
Words of optimism for reform escape me now.

Political feasibility of comprehensive reform

Health Affairs
Web Exclusive
August 27, 2003
The Politics Of Health Reform: Why Do Bad Things Happen To Good Plans? In the United States, the more desirable health care reform is on substantive grounds, the less politically feasible it is.
by Jonathan Oberlander

Abstract:

This paper examines political feasibility and its implications for health reform. I discuss the political obstacles to health reform in the United States, disentangling perennial barriers from contemporary constraints. I then explore major reform options and their political prospects. I argue that while incremental reform now appears to be the most feasible option, the political climate may change in a way that permits a bolder vision.

Moreover, incremental reform may not be sustainable in the long run,for the
same reason that makes it politically popular now: It does not change the
status quo in the health system.

http://www.healthaffairs.org/WebExclusives/Oberlander_Web_Excl_082703.htm

PDF format:
http://www.healthaffairs.org/WebExclusives/2206Oberlander.pdf

Comment: As I read this article to select the “Quote of the Day,” I was
overwhelmed with the number of possibilities. And I was concerned that the
individual provocative comments would distract readers from the extremely
important overall perspectives presented by Professor Oberlander.Therefore
I am distributing only the abstract.

This article should be read in its entirety by everyone who is dedicated to
reforming our health care system. Down load it and print it out (in the
PDF format for easier reading). It should become a part of your health policy
library.

Many doctors call for universal coverage in healthcare

Many doctors call for universal coverage in healthcare
Alexandra Marks (2003-08-13)

Think about it as Medicare for all, not just for the elderly.And not just the limited, cash-strapped program that makes headlines now, but an enhanced Medicare that covers prescription drugs and catastrophic care, as well as pays doctors a fair wage for their services. All of this for no more money than the country spends now on healthcare.

Sound too good to be true? Maybe. But for years, independent analyses from the Congressional Budget Office and private consulting firms have found a single-payer, national health-insurance system, however controversial politically, could do just that.

And Wednesday, noting that “the ‘health care mess’ is too real for anyone to ignore,” the prestigious Journal of the American Medical Association (JAMA) gave the medical world a jolt by publishing a proposal for a national health-insurance system that has been endorsed by more than 8,000 doctors. They include two former surgeons general.

Healthcare experts consider the move by the generally conservative journal to be one of the clearest signals yet that the US healthcare system is in need of an overhaul. While no one expects this particular US Congress to endorse a single-payer system, the JAMA decision does put the idea back on the map as a serious alternative.

“The thing is heating up, it really is,” Dr. Henry Simmons, president of the National Coalition on Health Care in Washington. “[Healthcare is] going to be the transcendent domestic issue in the next election.”

The editors at JAMA made it clear they aren’t necessarily endorsing the idea. But they consider the healthcare crisis so dire that all ideas have to be seriously explored.

The American Medical Association, the largest doctor organization in the country, immediately distanced itself from the article. It noted that while JAMA was associated with the AMA, it is editorially independent. Indeed, the AMA has had a long-standing policy opposing a single-payer system.

AMA President Donald Palmisano said that while a solution is “desperately needed” to cover the nation’s more than 40 million uninsured, a single-payer system is not the way to go.

“A single payer system would result in rationing of care, increased bureaucracy and stifling of innovation,” says Dr. Palmisano. “It would demoralize doctors and patients.”

Advocates of a single-payer national health system dispute that. They say patients would have more choice than they do now of doctors and hospitals, which would continue to be run privately under the system they’re proposing. And they contend the services received would be more comprehensive for a fraction of the cost.

Currently, about 26 cents on every US health care dollar is spent on paperwork and administration. Replacing private health insurance companies with a single, government insurer like Medicare, which spends about 3 percent on administration, would save the country $200 billion dollars annually.

“The single payer system is the only one that’s economically feasibly,” says Dr. Richard Brown, a member of Physicians for a National Health Program, which wrote the proposal featured in JAMA. “And of course it’s open, it doesn’t exclude people because they’re a bad health risk.”

Currently, the United States is the only major industrialized country that doesn’t provide some kind of universal coverage, even though it spends more than 14 percent of its GNP on healthcare. According to the World Health Organization, that’s more than any other in the developed world and yet it remains the only one with tens of millions of uninsured. The quality fo care in the United States also fares only modestly when compared with other countries. Out of 181 rated by the WHO in 2000, the US came in 35, just two slots above Cuba.

Single-payer advocates acknowledge it remains a very controversial idea in the United States. But they point out that in the last 10 years support has grown, even in places traditionally opposed. In a fact sheet, the Physicians for a National Health Program note that “More than half of academic physicians, including most medical school deans, now endorse single payer [national health insurance,] as do 40% of small business owners. Polls have long shown that a majority of Americans favor some form of [national health insurance].”

Most health policy experts, including Brown, believe it still could be many years before the country is ready politically to institute a single- payer system. Currently, health insurance is provided by a mix of private, employment based insurers and a government safety net for the poor, as well as full coverage for the elderly. Health insurance is a multi-billion dollar business, with a powerful lobby on Capital Hill.

“I don’t think right now we could move politically too far from that model,” says Kathleen Stoll, director of health policy at Families USA, nonprofit health care consumers advocacy group in Washington. “The problem is that there’s a tremendous hole between those that have coverage from their employers and those that are covered by the government.”

© Copyright 2003, Christian Science Monitor

Reality check on MSAs

They’re just another tax shelter, not health-care reform.
By Des Moines Register Editorial Board
08/25/2003

They’re back. Every few years, medical spending accounts (MSAs) are rolled out as an answer to problems in the health-care system. A provision to expand who can use these accounts has made its way into the Medicare reform being debated in Congress.

The concept is simple: Individuals can put money into savings accounts each year, tax free, and use that money to pay health-care bills out of pocket. If money is left over, the individual gets to keep it.

It’s appealing on the surface. Advocates argue the accounts are an incentive to “save money” by using less health care because people will think twice about “spending their own money.” Participants might pass on unnecessary tests. It’s an opportunity to inject a free-market principle into health care by allowing individuals to select their own doctors and negotiate rates for services.

Now back to the real world:

* Currently insurance companies and the government leverage down doctors” fees. It’s unlikely a single consumer, with no leveraging power, will be able to accomplish that. This is demonstrated over and over when the uninsured pay more than an insurance company does for the same service. People with these accounts could end up paying more.

* Medical spending accounts are another way to tax shelter money for the affluent. Low-income people will not have the extra dollars to stow away in a savings account. Yet higher-income people will be able to let this money build for years, investing it in stocks and bonds to grow tax free.

* Medical spending accounts will appeal to healthy people because they don’t use many medical services and therefore would get to pocket the unspent balance in their accounts. However, the core concept of insurance is pooling the sick and healthy together to balance out the risk. Widespread use of spending accounts could leave a higher proportion of sick people in insurance pools and result in higher premiums for that group.

* Individuals skipping a checkup or opting not to go to the dentist a few times won’t make even a small dent in the health-care spending of this country. The vast majority of spending on health care is done for the few sick and elderly individuals. MSAs won’t change that.

A special-interest radio ad currently playing in Iowa states: “President Bush supports making MSAs available to all Americans, but Senators Ted Kennedy and Hillary Clinton are against it. They want the government to run our health-care system. But Senator Charles Grassley can make the difference. . . . Tell him to keep fighting for the uninsured by making MSAs available to all Americans.”

What do “national health care” and “Hillary Clinton” have to do with spending accounts? And a tax-free account doesn’t “fight for the uninsured” who likely don’t have the money to invest in one of these plans anyway.

The ads are disingenuous. After all the hype is stripped away, it’s clear medical spending accounts don’t render people “insured.” They simply disguise another tax shelter for the affluent while peddling it as something for the average person.

Montpelier Doctor Calls For Universal Health Care

Montpelier Doctor Calls For Universal Health Care
By JAN NEWPHER, City Editor
Friday August 22, 2003

LYNDONVILLE VT- The ever-rising cost of health care is fast becoming a common topic of conversation as the baby boomer generation ages. Participating in the conversation are people advocating what they believe are solutions.

One suggestion is adopting a single-payer universal health-care system administered by the government, a system used by many other countries including Canada.

An advocate of this solution is Dr. Deborah Richter, a Montpelier family practitioner who at one time served as president of Physicians For A National Health Plan and is now a representative of Vermont Health Care For All, a Montpelier-based tax-deductible, nonpartisan organization providing information and news about health care.

Richter, co-author of “Heath Care From A Different Perspective,” a March 2003 position paper, spoke to the Lyndonville Rotary Club Wednesday at the First Congregational Church in Lyndonville. She came armed with facts and figures supporting her position for a universal health-care system.

She told the Rotarians she got her start in learning about health care in the inner city of Buffalo, N.Y., where many people had no health coverage at all. It is “a real atrocity,” not having health care, she said.

One thing we are doing wrong is looking at coverage rather than at services provided, she said. Vermont is a good state to look at coverage because it reflects pretty closely the national experience.

Citing information from a summary of the Lewin Group’s 2001 analysis of health care in Vermont, a study commissioned by the state, Richter said more than 70 percent of our health-care dollars is spent on health-care infrastructure which in Vermont consists of 14 hospitals, 44 nursing homes, 1,300 physicians, 10,000 nurses, 17,000 health-care workers and more. The structure is there whether we use it or not and its cost is fixed – 84 percent for hospitals for example, and 70 percent overall.

Eighty percent of Vermont’s population at any one single time uses only 15 percent of the available health care, while a major share of the heath care is used by only 10 percent of the population, many over the age of 65.

Since health services have such high fixed costs, she said, it makes sense to tailor the size of the infrastructure to what is actually needed. These actual needs should be determined and paid for collectively – by the whole population of Vermont.

For example, 7 percent of Vermonters have diabetes and 25 percent have high blood pressure. Services right now expand to meet the need and when people cannot pay, costs are shifted onto people who can pay – the hospitals raise their rates to cover their losses. But rates cannot be raised forever, she pointed out. We should pay for health care like we pay for roads – with everyone shouldering the cost because everyone benefits.

Trying to get the marketplace to lower costs, by bringing in more insurance companies to compete with each other just won’t work, she said. Health care is not a commodity. Insurance companies understandably want to insure only the healthy, but how do we pay for the people who are sick? Health care for a premature baby can cost as much as $500,000. Under universal health care everyone pays for that baby and no one is turned away.

Some universal health-care systems are better than others and the people under those systems collectively determine what they will and will not pay for, Richter said. For example, in England, people over the age of 65 needing dialysis are not covered. That may not be what we would want in Vermont.

Vermont can shape its own system. Some procedures would not be accepted. For example, bone marrow transplants in the treatment of breast cancer did not prove effective. We may not want to cover circumcision and cochlear implants for hearing, Richter said. People may object to these decisions and they will be debated, and decided upon collectively.

Rationing of services would eventually have to be done to contain costs, Richter’s paper states. The Lewin Group Report indicates chiropractic services would be covered when referred by a physician. Preventive dental care and eye exams would be covered but not orthodontia, eyeglasses and private hospital rooms.

But health care in effect is rationed now – by affordability and decisions made by the insurance companies about what they will and will not cover.

Administrative costs currently account for 24 percent of the health care dollar. Much of this money can be redirected toward patient care if the wasteful duplication by a multiplicity of insurance companies is eliminated. The Lewin Report indicates a single risk pool of 600,000 people for Vermont would save more than $100 million in the first year.

Medicaid and Medicare payments from the federal government can be redirected into one fund and the costs would be further subsidized by a 5.8 percent payroll tax paid by employers and a 2.9 percent payroll tax on employees. There also would be a co-payment by users of $10 for most services.

Costs would be controlled by a global budget determined by a committee of skilled professionals, Richter said. She was not in favor of a co-payment by users, but if it meant the adoption of a universal health-care system she would accept it.

The two other co-authors of Richter’s paper are nurse practitioner Marilyn Rothwell and Terry Doran.

Dr. Richter and Vermont Health Care For All can be contacted through its Web site at www.vthca.org, or at 802-224-9037.