Resource – Page 1154

Maine succeeds in adopting nonviable reform

Portland Press Herald
June 14, 2003
Innovative health bill embraced
By Josie Huang

State lawmakers embraced one of the nation’s most ambitious attempts at health-care reform Friday, passing a bill that promises affordable coverage to all Mainers within five years while controlling health-care spending statewide. National policy analysts have described the bill’s focus on access, cost and quality as groundbreaking at a time when other cash-hungry states are taking slower, more cautious steps.

Others attach “first-in-the-nation” to the bill’s centerpiece, the state-sponsored Dirigo Health insurance program that would use the state’s buying clout to offer low-deductible but comprehensive health plans through private insurance carriers.

Democratic Sen. Sharon Treat, the bill’s chief sponsor in the Senate, said the program aims for the same goal of universal health care as a single-payer health-care system, a controversial measure being studied by a legislative panel. But, she said, Dirigo Health is not “disruptive to the current system we have.”

http://www.pressherald.com/news/statehouse/030614health.shtml?show_results#poll

Comment: Before we begin the celebration we should look at some of the details of Maine’s “universal” health care program. The following points were culled from numerous reports and, therefore, may not provide a precise or entirely accurate description. But they do provide a general perspective of this “first in the nation” program of “affordable coverage for all.”

* The system relies on private health plans which ensures that administrative waste will continue to be a prime feature of Maine’s health care system. Worse, using multiple private plans will perpetuate the inequities that are characteristic of a market that thrives on cost shifting, adverse selection, overt and covert manipulation of benefits and other measures that allow insurers to create inequities largely to benefit their own industry.

* Employers will be expected to contribute about 60% of the costs of the coverage. Maine has a large number of small businesses which already have had difficulties funding adequate health care programs for their employees. Many employers simply will not be able to afford the coverage.

* Lower income individuals who do not qualify for public programs nor meet the definition of poverty will still not be able to afford their portion of the premium, and, consequently, will not be able to participate.

* Medicaid expansion is another feature of the program. Expanding this chronically underfunded program will result in more cost shifting and greater impaired access because of a lack of participation by “unwilling” providers.

* A portion of the funding is through the state give-back provision of the latest tax-cut bill recently passed by Congress. This hardly constitutes a reliable long-term source of funding.

* Another portion of the funding is through an assessment on insurers which the governor states would not be passed on as higher premiums. But consumers always pay business overhead in one form or another.

* Participants would be charged “subsidized fees that would vary according to their ability to pay and the amount of coverage purchased.” Obviously this suggests that those with modest incomes cannot expect to have access to the same level of care as the more affluent would. Does this mean total hip replacements for the affluent and walkers for the poor?

* Part of the funding would be through the savings achieved through decreased utilization of emergency facilities. But the savings will be in marginal costs only which will prove to be a relatively paltry sum. And much of the savings will vanish if no attempt is made to establish evening and weekend clinics when the breadwinner is able to provide transportation for his/her family.

* Prices (not costs) will be controlled for one year only by a voluntary effort to cap price increases to 3.0% for physicians and 3.5% for hospitals. A transitional voluntary cap cannot have any significant long term impact on health care costs.

* If the Dirigo Health program fails, the Legislature is authorized to adopt a “high-risk pool model.” The performance of high-risk pool models in other states has been less than sterling. Very high costs, poor coverage, and long waiting lists have plagued these programs.

Maine is to be admired for its intense efforts to provide health care access for everyone. But the process began with the false premise that all vested interests must be included. Private health plans are the source of many of the problems in health care (administrative excesses, adverse selection, erecting financial barriers to care, limiting choice, inability to contain costs, creating inequities in coverage, etc., etc.). Public administration of the health care system was never a serious consideration, in deference to the health plans. Thus policies were developed to benefit the plans while sacrificing the goal of an affordable, comprehensive and truly universal system.

The California Health Care Options Project has demonstrated that reform models that build on the current system of private health plans and public programs are the most expensive models of reform, and they fail to achieve universality and equity. Dirigo Health is no exception. Maine’s program is particularly weak because it relies very heavily on voluntary compliance with many aspects of the program. Unfortunately, we will continue to hear about Maine’s struggles with its health care system because a program built on an infrastructure of wet noodles cannot possibly perform.

Those of you in Maine who are continuing to craft the single payer model, please do not leave your tables. Maine desperately needs your program, as will soon be evident.

Legislative Alert Private drug-only policies: Actuarial perspectives

(The legislative alert appears at the end of this message.)

The Henry J. Kaiser Family Foundation June 2003 Medicare Prescription Drugs Through Private Drug-Only Policies: A Discussion with Actuaries By Health Policy Alternatives, Inc.

… the Kaiser Family Foundation contracted with Health Policy Alternatives, Inc. to convene a panel of health actuaries familiar with the Medicare program and the prescription drug debate.

The objective was to explore the implications of providing prescription drug benefits to Medicare beneficiaries through private, drug-only plans from the perspective of the insurance industry and other potential plan sponsors such as PBMs (pharmacy benefit managers).

… there was consensus among the actuaries interviewed for this project that certain features of a Medicare stand-alone prescription drug proposal would be important to attracting the participation of insurers or PBMs.

1. Freedom to set premiums without arbitrary government limits.

2. Government subsidies of beneficiary premiums that do not erode over time.

3. A one-time beneficiary enrollment opportunity, with aggressive government marketing and beneficiary information efforts to achieve maximum beneficiary participation.

4. Shared risk with the government, at least in the initial years, preferably through risk corridors.

5. Ability to price premiums locally and not nationally.

6. Flexibility to exit the market (no guaranteed renewal as exists for Medigap insurers).

7. Some benefit flexibility, especially with respect to cost-sharing.

8. Flexibility to use cost containment measures, including formularies.

9. Preemption of most state laws and regulations to reduce costs of compliance and make it easier to market on a multi-state or national basis.

10. Government collection and distribution of premiums to reduce the administrative burden of plans, and maximize retention of enrollees.

Whether a Medicare drug-only product would be sustainable as a line of business would depend on plan experience and future government policy, especially maintenance of adequate government subsidies and limited enrollment opportunities.

http://www.kff.org/content/2003/6086/6086.pdf

Comment: In order for this program to work, our government must bear most of the risk, must provide administrative functions and marketing, and must grant flexibility and relief from regulations. The plans must also have the right to shift costs to the Medicare beneficiaries and limit or even deny benefits.

If the plans are insisting that we, as taxpayers, accept the risks and bear the administrative functions normally provided by insurers, and that we, as beneficiaries, grant the plans flexibility to significantly reduce our plan benefits in order to embellish their profits, then what function are they serving other than interjecting themselves as superfluous middlemen? Why on earth do the Republicans and the “bipartisan Democrats” continue to insist that we must use private insurers to administer our own Medicare program? This question should be asked not only of the proposed prescription drug benefit, but also of the private Medicare “carrier” HMOs and the proposed Medicare PPO programs.

Another quote from the report is instructive:

“Even the more enthusiastic of our participants had reservations, however, about participating in a government sponsored program. Based on their experiences with M+C and Medigap, they regarded the government as an unreliable business partner and worried that they could not count on ‘the rules of the game’ remaining constant.”

Which is the “unreliable business partner” here? The health plans promised higher quality at a lower cost. They delivered higher costs while failing to deliver on quality. And now they claim that the government is an “unreliable partner” because of the reluctance to increase funding of the wasteful administrative excesses of the plans.

The plan actuaries are correct. Without taxpayer funding of plan excesses, and without the “flexibility” to adjust profits by denying patients their benefits, the plans cannot justify their existence. So what justification can the politicians provide?

*** Legislative Alert ***

Last night the Senate Finance Committee approved legislation that “would offer Medicare beneficiaries a stand-alone prescription drug benefit delivered through private insurance companies. And they also would offer a new Medicare option that would use preferred provider organizations (PPOs) to deliver comprehensive health coverage.”

http://www.washtimes.com/national/20030613-124454-9969r.htm

Opponents of privatization have indicated that they will accept this compromise in order to deliver on the promise of prescription drug coverage. But this is “barn door” privatization legislation that will not be readily amenable to future legislative correction. Privatization of Medicare is too great of a price to pay for an inadequate and highly defective prescription benefit. We need health policies that protect patients, not insurers.

We must now make every effort to defeat this legislation on the Senate floor, and then go to work to elect legislators who will protect, improve and expand our single payer Medicare program. Affordable, comprehensive health care for everyone is a goal that we must not surrender.

Don McCanne, MD President, Physicians for a National Health Program www.pnhp.org

AHPs would harm many small employers

Mercer Risk, Finance & Insurance
Prepared for: National Small Business United
June 2003
Impact of Association Health Plan Legislation on Premiums and Coverage for
Small Employers
By Beth Fritchen FSA, MAAA & Karen Bender FCA, ASA, MAAA

National Small Business United (NSBU) engaged Mercer Risk, Finance &
Insurance (Mercer) to analyze the “Small Business Health Fairness Act of
2003” (H.R. 660 and S. 545). This legislation would encourage the formation
of federally certified Association Health Plans (AHPs) by exempting these
plans from various state laws that govern health insurance sold to small
employers today.

Proponents of H.R. 660 and S. 545 argue that federally certified AHPs would
expand access to affordable health insurance for small employers and reduce
the number of uninsured. Opponents believe the legislation would have the
exact opposite effect – that is, it would cause premiums to rise and the
number of uninsured to increase.

In brief, we found that once federal AHP legislation was fully implemented:

* Health insurance costs would increase significantly for small businesses
in the state-regulated insurance market.

* AHP legislation would increase, not decrease, the number of uninsured.

* Federal AHPs would gain a pricing advantage through risk-selection, not
greater administrative efficiency.

* Federal AHPs would insure the healthiest small employers.

* Small employers would face higher premiums overall.

These results indicate that AHP legislation is not a solution to rising
health care costs for small employers. While some firms obtaining coverage
through AHPs may see lower premiums, firms with higher-cost employees would
see their premiums increase. Overall, small employers would pay higher
premiums and the uninsured population would increase if this legislation
were enacted.

http://www.nsbu.org/files/mercer_ahp_report.pdf

Marjorie B. Colson: Medicare is fine model for single-payer health system

By Marjorie B. Colson
June 11, 2003

I am an 80-year-old American enrolled in a 40-million-member single-payer health plan called Medicare. I have been enrolled in Medicare for 15 years, and while I am not 100 percent satisfied with the program, I wouldn’t trade it for any private health insurance plan anywhere in the world. I have good company, and lots of it. Roughly 40 million people agree with me.

Here’s why:

I know, when I go to the doctor or to the hospital, my bills will be paid. Twice over the past two years, I have been in the hospital as the result of a fall. Once I broke my hip and needed a stay in the hospital, hip surgery and follow-up rehabilitation; and once I fractured an ankle and sprained my feet and one knee, requiring, again, hospitalization and follow-up rehabilitation at a nursing home. For those services, plus many additional weeks of outpatient therapy, I paid nothing.

I feel fairly secure about my health insurance plan, as it is shared by about 40 million people, most of whom are prepared, at the drop of a hat, to take action to foil government officials proposing changes in our plan that might affect us adversely.

I am very familiar with the power of Medicare recipients, being the president of a large senior organization in central Wisconsin, and being responsible on occasion to organize a response to a government action that we feel threatens our health and our quality of life. Something called “Third Rail Politics” has been developed around both the Medicare and Social Security programs as a result of our activism on behalf of ourselves and others like us.

Because my health plan is public, a government plan, I have three elected officials who might be said to sit on the board of my health plan. My representatives are accountable to me and my fellow seniors, and respond to our complaints and problems.

If I were in a private health plan, the board would be made up of individuals appointed by shareholders. Such board members are never accountable to patients of their health insurance or health maintenance companies. Patients, in fact, don’t know who board members are and have no right to try to speak to them about the quality of their care.

I suggest that fellow citizens enrolled in smaller splinter groups called private insurance plans might want to look at the ability of senior and disabled people to defend our programs and ourselves, and consider trying to get into our single-payer plan or a similar government health plan. I can guarantee, after 15 years in Medicare, that it will take a huge worry from your mind.

I have absolute freedom to choose my doctor or other health care provider. I have a government-issued card that guarantees me entrance to the clinic or hospital of my choice. And my membership in the huge Medicare club assures me help and support when I need it.

Like many senior and disabled people on Medicare, I do not currently have a prescription drug benefit. That situation, interestingly, is being remedied (at least partially and temporarily) by the small free market that happens to still exist in the nation. Storefronts and Internet sites selling drugs at Canadian prices are proliferating so rapidly that retail pharmacists are trying to organize to force seniors and disabled people to return to their own more pricey U.S. pharmacy counters. It won’t happen, as more and more Medicare recipients find their own cut-rate pharmacies with Canadian prices. We are creating our own remedy, e-mailing each other as we find new and better drug prices in Canada – a country with a single-payer health care system that serves all of its citizens.

When people talk about how hard it is to repair the broken health care system in the United States, I respond by reminding them that a rational and realistic solution exists:

Single-payer anyone? Join the club.

Marjorie B. Colson lives in Madison and is active with many local groups, including the Dane County SOS Senior Council.

Published: 10:09 AM 6/11/03

http://www.madison.com/captimes/opinion/column/guest/50645.php

LeBow wishes he could ride

Community: Nampa doctor to be honored by cross-country bike tour

By Nathaniel Hoffman

NAMPA – As Canyon County cyclists train for the first ever Bob LeBow Classic Bike Tour, LeBow continues to train his mind and body after a July 2002 bike accident that left him paralyzed.

LeBow was an avid cyclist who used to commute to his job as medical director of Terry Reilly Health Services in Nampa by bicycle and had ridden his bike all over the world. Now he speaks in short sentences through a ventilator from his son’s home in a Philadelphia suburb.

“Too bad I can’t ride in it,” LeBow said, adding that he was honored the ride was named after him.

LeBow and his wife have race bibs number one and two pinned up near his bed, and their son Ted LeBow and granddaughter Becca are coming to Nampa to ride in the tour on Saturday.

Bob LeBow’s wife, Gail LeBow, said she has seen tandem bicycles that can accommodate quadriplegic people and hopes the couple will one day be able to ride again.

“It’s a very steep learning curve,” Gail LeBow said of all the details that come along with taking care of her husband.

But Bob LeBow, 62, said his stamina has increased from almost zero to the point that he does physical therapy exercises and is learning how to write with a special computer and paint with a mouth stick.

He is learning to use a chin switch and eventually a chin mouse so that he can write on his own and practices on a computer screen mounted to his chair.

“I’ve been gradually improving my writing,” Bob LeBow said.

He published a book shortly before the accident exposing many of the weaknesses in the U.S. health care system, and the book will soon come out in hard cover.

The LeBows said they miss Idaho and the clinic and are glad that people are still thinking about them.

“I’d like to be there,” Bob LeBow said.

For more about the Bob LeBow Classic Bike Tour.

Bob LeBow is a past PNHP president.

Single Payer Passes Senate in California

SB921 (Kuehl), the Health Care For All Californians Act, a landmark healthcare reform declaring the intent of the legislature to establish a single payer health care system for all California residents at no new cost to the state, passed the California Senate Floor Wednesday morning on a vote of 23 to 14. The bill now moves to the State Assembly.

“The California Health Care Options Project completed last year demonstrated that comprehensive health care coverage could be provided for everyone at a cost lower than that of our current inefficient and inadequate system,” explains Don McCanne, president of Physicians for a National Health Program (PNHP.)

“In SB 921, Sen. Sheila Kuehl has provided the legislative vehicle to enact a single payer system that would finally bring affordable health care to all.”

The California Physicians Alliance(CAPA), the state chapter of Physicians for a National Health Program are active in speaking and writing articles about the need for health care reform in the state.

If you’re interested in supporting single payer health care in California, please contact the California Physicians Alliance at capa@jps.net or call (510) 832-7134.

Note:This bill is, in effect, a committment by the legislature to continue to study the issue, keeping the possibility for reform open, but not making single payer a certainty by any means. Stay tuned and if you live in California, please join the struggle for reform.

D. Light on Enthoven's model

Donald W. Light, Ph.D. responds on Enthoven’s managed competition model:

Hope springs eternal for Enthoven. He forgets his own previous analyses, where he describes how for-profit HMOs did not set themselves up as group models that would allow such plan – plan competition, but instead all signed up a large proportion of the same physician pools in order to maximize appeal to policy-holders, thereby emasculating his competition model. If only HMOs would behave as the competition model says they are supposed to behave!

Private health plans unable to contain costs

Health Affairs
Web Exclusive
11 June 2003
Tracking Health Care Costs: Trends Stabilize But Remain High In 2002
by Bradley C. Strunk and Paul B. Ginsburg

Health care spending per privately insured person increased 9.6 percent in 2002, a slight reduction from the 10 percent increase in 2001. This is the first time in five years that the spending trend did not accelerate. Nonetheless, health care spending grew nearly four times faster than the U.S. economy grew in 2002 (2.7 percent per capita in nominal terms).

Consumers appear to be facing a second round of sizable increases to cost-sharing requirements in 2003. Recent reports of insurers to Wall Street suggest that employers “bought down” their insurance premiums by an average of roughly 3 percent in 2003. This means that insurance premiums would have increased 3 percent more than they did had employers made no changes to their benefit structures. This increase in cost sharing comes on the heels of a 2-3 percent buy-down in 2002.

http://www.healthaffairs.org/WebExclusives/Strunk_Web_Excl_061103.htm

Comment: Health care spending growth under private health insurance is four times the growth of the U.S. economy. That hardly represents stabilization of health care costs. The fact that private health plans remain incapable of containing health care costs is certainly no reason to celebrate. And the current trend to make health care less affordable by shifting more costs to patients is a sick, perverse solution.

Face it: We're rationing health

By Robert Kuttner, 6/11/2003

HEART DISEASE runs in part of my family. A beloved uncle died at 50 of a heart attack. One grandmother died in her 60s of congestive heart failure; the other of high blood pressure. Others, happily, have lived into their 90s, and I hope I take after them.

In those years, doctors could do little. There was aspirin for pain, nitroglycerine for temporary relief of ”angina,” and digitalis to stimulate the heart. That was it.

But today my fate is not just a matter of diet, exercise, and genetics. There are statin drugs if my arteries tend to clog, several classes of blood pressure medication, and much more. There are elegant diagnostic tests, like the echocardiogram I recently had, where I could both see my heart and its valves on a monitor and listen to the healthy sloshing of my splendid pump. (I’m fine, Mom, this was a routine screening.) And if things ever get bad, there are delicate angio-procedures, valve jobs, triple and quadruple bypasses, even heart transplants. And they all cost a small fortune, from the $10 pills to the $20,000 surgeries. One thing about aspirin, nitrogylcerine, and digitalis: They were dirt cheap. Science keeps inventing ways to keep us alive and well, and all of us expect nothing but the best.

All of which brings me to the debate about health insurance. There are really two issues here, and they tend to get blurred. The first is how we contain costs. The second is how we cover everybody. Seemingly, the two goals are at odds with each other.

How on earth do you restrain health costs as the population keeps aging and as science keeps marching on, much less if everyone is insured? One easy solution: freeze the state of science at about 1950, and we could insure everyone in the United States for cheap. But who wants that?

The fact is that HMOs and the employers who buy most of the insurance can disguise the ugly word all they want, but much of what they do is a form of rationing. They limit available tests, drugs, and procedures. They punish doctors in the pocketbook for spending more than a few minutes with patients. They make the paper chase so complex that many consumers just give up and don’t fill the prescription, or they go without the procedure (and the richer among us just pay out of pocket). All of these measures can be politely called managed care or ”alignment of incentives,” but all are forms of rationing. And unlike true rationing, in which care is based on dire need, wealthier people can always buy their way out.

We are hearing a lot from the Bush administration that competition is the solution to escalating health costs. You can shop around for a car or a hotel; why not for a health plan?

The reason is that medicine and health insurance are not ordinary commodities. For starters, most private health plans deny consumers meaningful choices. The whole point is to limit the choice of doctors and hospitals to those who give the plan discounts and follow the managed care company’s treatment rules.

Insurance companies also spend a fortune on marketing (to target consumers less likely to get sick), on claims processing, and on profit. One of the worst sources of inefficiency in the whole system is the cost of the fragmentation that comes from having duplicative and parallel private bureaucracies.

Every reputable study, including the most recent one from the bipartisan Congressional Budget Office, shows that the most cost-effective way of spending limited health dollars is through a single universal system, like Medicare. The elderly may be bewildered by the system, but they are no fools. They know that the one oasis of completely secure coverage and fully free choice is conventional Medicare. That is why the Bush administration, despite wanting to herd seniors into HMOs, caved in and agreed to allow (still too skimpy) drug benefits for people who stay with Medicare.

Here’s where the two questions – cost containment and coverage – come together. The best way of cutting avoidable costs (but not cutting care) and also insuring every American is to put everyone in the same universal system. There would still be difficult choices, but nothing like the insecurity, cost-shifting, waste, and profiteering of the present system.

What stands in the way? Only the insurance industry, the drug companies, the Fortune 500, half the American Medical Association, and the Republican Party. That’s all.

Robert Kuttner is co-editor of The American Prospect. His column appears regularly in the Globe.

D. Light on Enthoven’s model

Donald W. Light, Ph.D. responds on Enthoven’s managed competition model:

Face it: We’re rationing health

By Robert Kuttner, 6/11/2003

In those years, doctors could do little. There was aspirin for pain, nitroglycerine for temporary relief of ”angina,” and digitalis to stimulate the heart. That was it.

We are hearing a lot from the Bush administration that competition is the solution to escalating health costs. You can shop around for a car or a hotel; why not for a health plan?

What stands in the way? Only the insurance industry, the drug companies, the Fortune 500, half the American Medical Association, and the Republican Party. That’s all.

Robert Kuttner is co-editor of The American Prospect. His column appears regularly in the Globe.

HealthCARE Act of 2003

American College of Physicians
ObserverWeekly
6-10-03
Access update
New House bill based on ACP proposals to expand access to care

Legislators introduced a bill into the House today to expand health insurance coverage to millions of uninsured Americans. The proposal already has the support of organizations representing more than 300,000 physicians.

The bill is identical to legislation introduced into the Senate last month. Both proposals are modeled after ACP’s seven-year plan to expand access to care to all Americans by 2010.

Reps. Steven LaTourette (R-Ohio) and Marcy Kaptur (D-Ohio) introduced the Health Coverage, Affordability, Responsibility and Equity (HealthCARE) Act of 2003.

The bill would give states new options to expand coverage through existing public programs. It would also give individuals a tax credit to buy coverage from private plans.

The House legislation would expand access to care through the following measures:

* Give states new options to expand safety net programs for the poor.

* Create refundable tax credits to give eligible individuals the same subsidies to buy health insurance that the federal government gives its employees.

* Allow tax credits to be used to buy individual coverage or coverage through a state purchasing pool modeled after the Federal Employees Health Benefit program.

* Give small businesses access to the same types of affordable health plans available through state purchasing arrangements.

* Create an expert commission to recommend additional measures.

Supporters of the legislation include ACP (American College of Physicians), Families USA, the American Academy of Family Physicians, the American Academy of Pediatrics, the American College of Cardiology and the American College of Geriatrics.

http://www.acponline.org/weekly/2003/6/10/index.html?hp#accessbill

The identical bill introduced in the Senate by Sen. Jeff Bingaman (NM), S.1030, HealthCARE Act of 2003, is available at Thomas: http://thomas.loc.gov/, and type in the bill number, S.1030

Comment: It is unlikely that this “bipartisan” bill will engender significant Republican support, especially without the Tom DeLay/Bill Thomas stamp of approval. But if the public demand for comprehensive reform increases much more, this bill could gain traction. And it does have the support of Families USA and several significant physician organizations.

Although this bill might expand coverage, it would do so partly by expanding private plans through an FEHBP model which would leave in place very costly administrative inefficiencies, and would expose low-income individuals covered by this legislation to cost-sharing that could threaten affordability of care. Analyses of similar proposals demonstrate that this is a very costly method of expanding care. And for moderately low-income, uninsured individuals, this bill provides only a committee that will think about their problem.

If such a bill were to pass, it would greatly reduce or even eliminate the pressure to enact reform that would ensure affordable, comprehensive health care for everyone. If we really do want an equitable health care system that meets our goals, we’re simply going to have to replace the private health plans with a single program of social insurance.

Let’s not be distracted by yet another costly but inadequate attempt to achieve a “politically feasible,” compromise proposal.

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