PNHP

Health care cost soar, coverage erodes: Troubling prognosis for state at annual health car forum

Health care cost soar, coverage erodes: Troubling prognosis for state at annual health car forum

By Michelle Hillman
Wednesday, October 23, 2002

WALTHAM – Increases in health-care spending are in the double digits, insurance premiums are rising faster than the rate of inflation and there’s no solution on the horizon.

That sentiment was echoed by several health-care policy experts who spoke at the Massachusetts Medical Society here yesterday as part of the “State of the State’s Health Care” annual forum.

Drew E. Altman, president and CEO of the Kaiser Family Foundation in California, told 125 physicians and policymakers that health-care costs will continue to rise sharply while coverage erodes.

Total premiums this year rose 12.7 percent nationally. The average individual premium increased from $2,650 last year to $3,060 this year, and an average family premium increased by $901 this year to $7,954.

There are currently 41 million Americans without insurance coverage, a problem expected to get worse as many states, including Massachusetts, reduce Medicaid programs for the poor and disabled.

In Massachusetts, 50,000 residents stand to lose coverage under its version of the federal Medicaid program – MassHealth Basic – effective April 1, 2003.

Nancy Turnbull, director of educational programs at the Harvard School of Public Health, said pressure will continue to be put on MassHealth as the financial picture to erodes.

She said cutting eligibility will cause the ranks of the uninsured to rise, which will have a “tremendous” effect on hospitals and health-care providers left to care for the poor and disabled.

The cost of insurance is rising at a faster percentage rate than earnings for the first time in a decade, Altman said. He said rising insurance costs are creating problems for employers, but even bigger problems for employees who are being asked to pay more for fewer benefits.

In a national survey of firms with 200 or more workers this year, Altman said 78 percent said they would increase the amount employees pay for health insurance.

Health-care spending per capita was up 10 percent in 2001, which is the first double-digit increase since 1990, said Paul B. Ginsburg, president of the Center for Studying Health System Change in Washington, D.C.

Ginsburg said the elderly aren’t to blame for rising health-care costs. Increased hospital spending on wages and new technology is the culprit. He said in 2000, the average hourly wage for health-care workers increased by 3 percent, followed by a 6 percent hike last year.

Hospitals are spending more on wages because they are better paid by health plans. In the 1990s, many hospitals merged or consolidated giving them more leverage to negotiate higher prices for services with health plans.

Ginsburg said long-term drivers of health-care costs are physicians and patients’ penchant for the best technology medicine has to offer.

While technology can help reduce costs with faster and better ways to treat people, it also creates more volume because more people want the latest in treatments.

The “big ticket” problems in health-care spending are figuring out how to cover the uninsured and creating a prescription drug benefit for seniors. He said it was a “national shame” that seniors don’t have drug coverage, and people without insurance coverage are left to fend for themselves.

Altman said to cover 41 million uninsured people costs from $85 billion to $125 billion a year, and to provide a comprehensive drug plan for seniors would cost $350 billion to $800 billion over 10 years.

The problems will be addressed only when there is enough concern in the public, said health policy experts at yesterday’s event. When enough people become uninsured, or the cost of insurance increases beyond what people can afford, is when change will occur, Ginsburg said.

Letters in Support of Single Payer

In response to Marcia Angell’s Op-Ed piece on single payer, the New York Times received a number of supportive letters to the editor:

Prescriptions for an Ailing Patient

October 19, 2002

To the Editor:

Re “The Forgotten Domestic Crisis,” by Marcia Angell
(Op-Ed, Oct. 13):

The solution to the American health care crisis is a single-payer system. It is painfully clear that our health care system is a business run for profit and not for thebenefit of the patient. Few Americans now believe the myththat the market distributes health care in the most efficient or effective way.

If the Democrats want to regain their credibility and moral high ground, they should stop accepting money from any interest that might prevent them from speaking the truth about this. They could then fight forcefully for a single-payer system. High risk, high reward: Americans might wholeheartedly give them the White House in 2004.

JANET HEROUX
Princeton, N.J., Oct. 15, 2002

To the Editor:

Re “The Forgotten Domestic Crisis,” by Marcia Angell (Op-Ed, Oct. 13): As a psychotherapist with many patients in their 20’s, I can attest to the fact that not only do most of them not have any health insurance, but they also do not expect it as a condition of living in this country.

Dr. Angell is correct about the remedy, but I fear that we cannot rely on those who profit from the current system to redistribute the “profits.” Yet that is exactly what would have to happen if all of our citizens were given adequate
health insurance.

Don’t those who pay taxes and vote in this country deserve at least the minimum of essential services?

JUDITH GREENE
New York, Oct. 13, 2002

To the Editor:

Marcia Angell (Op-Ed, Oct. 13) is correct when she says the health care system “would be front and center in this fall’s political debate” were it not for national defense issues and a looming war with Iraq crowding political agendas. Why can’t we kill two birds with one stone? Why not have a quid pro quo health care system?

Instead of a national single-payment system as Dr. Angell proposes, provide free coverage for all health care needs in exchange for mandatory military or civil service. Not only would this save money, but it would also promote unity, nationalism and provide better health care coverage than many Americans already have.

PAUL LIEBESKIND
Dumont, N.J., Oct. 13, 2002

To the Editor:

Marcia Angell (Op-Ed, Oct. 13) recommends a single-payer system similar to those in Britain and Canada. This prefers a nationalized managed care collective over the dominant H.M.O.-managed care collectives.

Managed care fails for the same reason that nationalized industrial collectives failed in Western Europe. Ill-informed centralized authoritative decisions result in
poor-quality products, unhappy customers, inflation and erosion of infrastructure – problems that in varying degrees afflict the British, Canadian and the American
corporate-style managed health care collectives. There is a better way.

ROBERT W. GEIST, M.D.
St. Paul, Oct. 14, 2002

To the Editor:

Re “The Forgotten Domestic Crisis,” by Marcia Angell (Op-Ed, Oct. 13): In addition to placing health care increasingly out of the economic reach of individuals and businesses, our commodity approach guarantees that the pool of insurable individuals will continue to shrink, thereby undermining the very essence of affordable insurance.

Insurance works because a lot of people pay premiums and not everyone uses services. The more healthy people insured, the stronger the system. A single-payer, broadly financed health insurance system is hardly socialism; it is the only way health care can become universally accessible and even remotely cost-effective.

SUSAN POOR
San Francisco, Oct. 15,
2002

http://www.nytimes.com/2002/10/19/opinion/L19HEAL.html?ex=1036034356&ei=1&en=dc3b077de7e982ea

Experts decry health system

Speakers at SR forum call for universal care plan to replace present insurance

October 20, 2002

By JEREMY HAY
THE PRESS DEMOCRAT

Experts at a forum Saturday in Santa Rosa pronounced America’s health care system terminally ill and worse.

“It is a crazy and cruel system we are now struggling with,” said Jack Glaser, senior vice president of theology and ethics for St. Joseph’s Health Care System, the parent of Santa Rosa Memorial Hospital and Petaluma Valley Hospital.

Glaser was among two dozen speakers — physicians, nurses, public health administrators and educators — during a daylong forum at Santa Rosa Junior College. Though they differed on the formula, they overwhelmingly supported a universal health care system.

Past proposals — including a California ballot measure in 1994 and a Clinton administration plan a year earlier — have failed. But supporters of universal health care are closely watching Oregon, where voters next month will consider a proposal for the state to insure all of its residents.

“It’s a new political climate,” said Dr. Quentin Young of Chicago, national coordinator for the 10,000-member Physicians for a National Health Program, which advocates a single-payer government-financed system.

He said the present system’s woes — including 41.2 million Americans without health insurance, skyrocketing premiums for those who are insured, and soaring medical costs — are “fertile soil” for change.

“The people are ready,” said Mike Smith, a Sonoma Valley Health Care District board member and a lead organizer of the forum, “Health Care Crisis 2002: A Search for Solutions.”

The conference was co-sponsored by the junior college and nurses belonging to Service Employees International Union Local 707. Its urgent tone was underscored by the collapse of Health Plan of the Redwoods, which declared bankruptcy in June and closes its doors this month, leaving about 64,000 people to find other coverage.

Speakers cited a variety of strains on the system, including low reimbursement rates from insurers and the government, and a shortage of skilled workers that leaves many in the health care field feeling overworked and demoralized.

In Sonoma County, they said, lower pay scales and higher housing costs have contributed to doctors leaving and nurses choosing to work elsewhere.

Those who remain must contend with a population where 11 percent of children and 14 percent of adults under 65 are without health insurance, further taxing the system, said county Public Health Officer Mary Maddux-Gonzalez.

Without systemic changes, many expect the problems to get worse.

“The stress on the health care system within the next decade will demolish it; it’s an inexorable, inevitable demographic fact,” said Santa Rosa physician Robert Dozor, referring to when the first of the 76 million-strong baby-boom generation qualifies for Medicare benefits in 2011.

About 200 people, many of them medical professionals, attended the forum, and among the audience and panelists there was a broad sentiment that health maintenance organizations and private insurance plans should be replaced with a system along the lines of Medicare, which covers all citizens over age 65.

“We need some sort of national care system,” said Maria Angel of Sonoma, a government studies student at Sacramento State University who plans a career in public health policy.

Smith, from the Sonoma Valley Health Care District, said the time is ripe for change.

“The reason we don’t have universal health care is because we don’t have a broad-based movement to put fire under the politicians,” he said.

Others warned that without a firm sorting of priorities, any movement will suffer.

“You cannot have everything,” said Glaser. “If we cannot constrain ourselves to face that about health care … we will not see this in 50 years.”

You can reach Staff Writer Jeremy Hay at 521-5212 or jhay@pressdemocrat.com.

Universal Health Care Issue Regaining Saliency

October 17, 2002
By JOHN A. MacDONALD, Courant Staff Writer

WASHINGTON — Maine Rep. Scott W. Cowger was clear and concise when a newspaper asked his top priority if he is elected to a fourth term in the state legislature: “Providing affordable health care to all Mainers, not just low-income people. We must take aggressive action, including providing a single-payer universal health care system.”

Cowger is not alone. With insurance premiums rising and the number of uninsured Americans increasing, candidates across the nation are reviving the issue of the uninsured. The action is most concentrated in Oregon, where voters will decide Nov. 5 whether to become the first state in the nation to cover every resident through a government-financed health care system.

Dan Isaacson, campaign manager of Health Care for All Oregon, says one statistic makes the case for the ambitious change he is trying to pass. About 423,000 Oregon residents, 13 percent of the population, are not covered by health insurance. “People have a bad taste in their mouths for health insurance companies,” he said.

Still, the proposal appears to face long odds in Oregon and elsewhere. The only public poll in Oregon showed the issue trailing, 40 percent to 47 percent. The poll was conducted earlier this month by The Oregonian newspaper.

The proposal would end the system of private health insurance, which covers about 63 percent of Americans nationwide, and give the state government the responsibility for collecting taxes and paying medical bills. The goal – universal coverage – is the same one former President Clinton sought to achieve a decade ago. Clinton wanted to compel employers to provide health care, rejecting a government-financed system as exists in Canada because it was considered politically impossible.

The same conditions that prompted the Clinton proposal – multiple years of double-digit increases in health insurance costs and rising numbers of uninsured – are beginning to reappear. But that does not mean the public is ready for the kind of sweeping change proposed in Oregon and other places, experts said.

“The vast majority of Americans do not want a one-size-fits-all health insurance system,” said Len Nichols, who worked on the Clinton administration’s unsuccessful effort.

G. Lawrence Atkins, president of Health Policy Analysts, which advises Fortune 100 companies, said the nation’s private health care system is “on the verge of a meltdown.” But he is not ready to predict imminent wholesale change either.

Robert Blendon, a Harvard University expert on public attitudes on health care issues, said he sees little evidence health care is having a widespread effect on this fall’s elections, largely because there has been so much focus on terrorism and a possible war with Iraq. He also doubts the appeal of the single-payer approach.

Oregon’s Bold Plan

Mark Lindgren, who is working to pass the Oregon proposal, calls it an “audacious” plan. Opponents describe the proposal as an ill-conceived and ruinous tax increase.

Under the proposal, every man, woman and child in Oregon would receive health insurance with no co-payments and no deductibles. Any medical procedure approved by a doctor or registered medical professional would be covered under the plan, making it more comprehensive than most private insurance. The question is whether Oregonians would be willing to pay higher taxes to put the plan into effect.

The plan would be financed by a new payroll tax of up to 11.5 percent on businesses and an increase in personal income taxes. The top personal income tax rate would rise from its current 9 percent to as high as 17 percent. But employers and their workers no longer would pay premiums to insurers, estimated to be about $6,300 for family coverage next year.

Opponents said the plan would put Oregon’s economy at risk, result in huge job losses and threaten the quality of health care in the state. One of the more remarkable figures to emerge from the debate is that the universal coverage plan would cost $19 billion in its first year, about $3 billion more than the current state budget.

The Battle Elsewhere

On a recent Saturday, hundreds of people rallied in Montpelier, Vt., for a universal health care system similar to the one proposed in Oregon. “I speak for the people of America when I say this is a lead-in for national health care,” said Dr. Quentin Young, past president of Physicians for a National Health Program.

In addition to Vermont, candidates are pushing universal coverage in Maine, Washington state, California, Illinois, Massachusetts and New Mexico. This year, universal coverage proposals were introduced in at least 10 state legislatures, but all died because of tight budgets. Since 1994, single-payer system proposals have failed in Massachusetts, Florida and California.

A single-payer plan was introduced in the Connecticut legislature in 2001 but died without a hearing.

Despite repeated rejections, the idea refuses to go away. Edward F. Howard, executive vice president of the non-partisan Alliance for Health Reform, said the idea’s popularity is its apparent simplicity, equity and efficiency. “It does have some appeal,” Howard said.

But the appeal is far from universal. In Ohio, where prescription drug coverage is a hot item in the race for governor, the Columbus Dispatch took editorial note of the Oregon measure, commenting, “Oregon, a land where people are unafraid to take on some of the thorniest problems in health care, may become the nation’s crucible once again. … Better Oregon than Ohio.”

Voters eye health-care option

A November measure would create universal coverage.

SUSAN TOM
Statesman Journal
October 11, 2002

A sweeping initiative on the November ballot will test just how frustrated Oregonians are with the health care system.
Measure 23 would create a universal health care finance plan to provide medically necessary services to every Oregonian. If passed, Oregon will be the first state to offer free health care to all its residents. The measure would replace insurance premiums, copayments, deductibles and other out-of-pocket patient expenses with a single payer state system financed by payroll and personal income taxes.
Mark Lindgren, chairman of Health Care for All Oregon, the group backing the measure, said the initiative was deliberately written to be vague to avoid potential court challenges. A 15-member board would be created to set limits on health care services and to administer the program.
Laurie Sobel, attorney for Consumers Union, publisher of Consumer Reports, said the measure would reduce hidden costs and time wasted filing claims by cutting out the middle people, the insurance companies.
“We believe everyone has the right to health care,” Sobel said. “It makes for a healthier community and ultimately leads to lower costs.”
The measure sounds like an improvement over the current system, said Garth Keir of Salem, a former state worker retired on disability.
“It’s not just what you need now but what you may need,” said Keir, 56. “I always subscribe to the idea that we’re all in one big rowboat and we need to row together or sink together.”
But a growing number of opponents, including business, insurance, labor and medical groups like the Oregon Medical Association and Associated Oregon Industries, call the measure poorly written and financially unsustainable. They say it would force repeal of cost-saving worker compensation reforms and reduce money for schools. Estimates are that Measure 23 could cost up to $20 billion annually.
A coalition of health care insurers, including ODS Health Plans, Regence BlueCross BlueShield of Oregon, Kaiser Permanente, PacifiCare and Providence Health Plan, raised $402,692 so far to defeat the measure.
By comparison, Health Care for All Oregon raised $22,023, mostly from small donations.
David Fiskum, a lobbyist for Oregonians Against UnHealthy Taxes, said the measure not only would give the board unlimited power in issuing bonds and rationing health care, but will create another bureaucracy.
The timing also is bad given the state’s high unemployment rate and sagging economy.
An additional payroll tax will make Oregon a less attractive place for business, said Ken Rutledge, spokesman for the Oregon Association of Hospital and Health Systems.
“They’re being very naive to think there’s going to be adequate money to pay for all services,” Rutledge said.
Barbara Cummings, a Salem small business owner, said more people will abuse the system because there is no incentive to take personal responsibility for one’s health. She expects longer waits, more crowding and a lower quality of health care as a result.
“What happens when money runs out? Will I have to wait six weeks for an MRI?” Cummings said.
Rob Wagner, government relations director of the American Federation of Teachers-Oregon, said the measure is not an ideal fix, but it is a good first step toward.
“I see our members at the bargaining table having to choose between salary increases to keep up with the cost of living or picking up a greater portion of health care costs,” Wagner said.
Universal health supporters Oregon State Public Interest Research Group and Oregonians for Health Security are taking more conservative approaches because they say Oregonians aren’t ready to toss out the current system.
“We’re looking for smaller steps along the way and they’re looking for a leap,” said Rob Manning, spokesman for Oregonians for Health Security. “But if it were to pass, we would definitely be in support of it.”
The reason: more than 400,000 Oregonians don’t have health insurance. One in five lack prescription coverage.
Oregonians aren’t alone in their frustration with sharply rising premiums, lower reimbursements and reduced access. Fourteen states, including California and most recently Texas, are pursuing a single-payer system, according to the Universal Health Care Action Network in Cleveland, Ohio. Oregon could become the testing ground for a health care overhaul.
The problem isn’t new; the Clinton administration tried, but failed to expand health care coverage.
And Gov. John Kitzhaber’s promise of a more expansive system than the Oregon Health Plan to be financed in part by a business tax never materialized.
Critics say the current system provides too few services, costs too much, makes money off the young and healthy and dumps the sick and old.
Dr. Don McCanne, president of Physicians for a National Health Program, said the measure allows more efficient use of health care funds and establishes equity in finance and access.
“It provides more comprehensive services at a cost that is no greater than what Oregon is spending,” McCanne said.
But Dr. Colin Cave, OMA president-elect, said while the organization favors universal health care — it supported the Oregon Health Plan — it won’t back the measure because its approach is unreasonable.
Measure 23 has no limits on what type of health care is necessary, no incentive to coordinate access and no residency requirement.
There’s also no guarantee that 15 people have the necessary sophistication to deal with complex health care issues and manage a budget at least double that of Oregon’s general fund. Getting a federal waiver also is very unlikely.
“It’s very lopsided,” Cave said. “This is not the way to do it.”
But Hanteng Dai of Salem, a 38-year-old state employee, said he supports the measure despite its flaws because it’s the first step toward improving health care for society in the long run.
“Accept the concept first, improve the procedure later,” Dai said. “Don’t kill an idea in its infancy.”
Susan Tom can be reached at (503) 399-6744.

The Forgotten Domestic Crisis

By MARCIA ANGELL

CAMBRIDGE, Mass. — If it weren’t for the steady beat of war drums, health care would be front and center in this fall’s political debate. And war or no war, politicians will not be able to avoid it much longer. As John Breaux of Louisiana, long one of the most conservative Senate Democrats, recently told the press, “The system is collapsing around us.”

That is not hyperbole. Private health insurance premiums are rising at an unsustainable average of about 13 percent per year — and as much as 25 percent in some areas of the country. Coverage is shrinking, as more employers decide to cap their contributions to health insurance plans and workers find they cannot pay their rapidly expanding share. And with the rise in unemployment, more people are losing what limited coverage they had. Last month, the Census Bureau reported that nearly 1.5 million Americans lost their insurance in 2001.

The fatal flaw in the system is that we treat health care as a commodity. That has been the case for a long time, but the effects were masked during the economic boom of the 1990’s. Now, with the recession, the irrationality of that approach is exposed.

When health care becomes a commodity, the criterion for receiving it is ability to pay, not medical need. Private insurers and providers compete with one another to avoid getting stuck with high-cost patients, so they can keep more of their revenues. But this game of hot potato takes a lot of oversight and paperwork. In fact, the hallmark of the system is the extent to which health funds are diverted to overhead and profits.

Look at what happens to the health-care dollar as it wends its way from employers to the doctors and hospitals that provide medical services. Private insurers regularly skim off the top 10 percent to 25 percent of premiums for administrative costs, marketing and profits. The remainder is passed along a gantlet of satellite businesses — insurance brokers, disease-management and utilization-review companies, lawyers, consultants, billing agencies, information management firms and so on. Their function is often to limit services in one way or another. They, too, take a cut, including enough for their own administrative costs, marketing and profits. As much as half the health-care dollar never reaches doctors and hospitals — who themselves face high overhead costs in dealing with multiple insurers.

One more absurdity of our market-based system: the pressure is to increase total health-care expenditures, not reduce them. Presumably, as a nation we want to constrain the growth of health costs. But that’s simply not what health-care businesses do. Like all businesses, they want more, not fewer, customers — but only if they can pay.

All piecemeal attempts to improve the system — while keeping it market-based — have run into the following dilemma: if access to services is expanded, costs rise; if costs are lowered, access is cut. That’s the way it is. The only way to avoid this dilemma is to change the system entirely.

What we need is a national single-payer system that would eliminate unnecessary administrative costs, duplication and profits. In many ways, this would be tantamount to extending Medicare to the entire population. Medicare is, after all, a government-financed single-payer system embedded within our private, market-based system. It’s by far the most efficient part of our health-care system, with overhead costs of less than 3 percent, and it covers virtually everyone over the age of 65. Medicare is not perfect, but it’s the most popular part of the American health-care system.

Many people believe a single-payer system is a good idea, but that we can’t afford it. The truth is that we can no longer afford not to have such a system. We now spend more than $5,000 a year on health care for each American — more than twice the average of other advanced countries. But nearly half that amount is wasted. We now pay for health care in multiple ways — through our paychecks, the prices of goods and services, taxes at all levels of government, and out-of-pocket fees. It makes more sense to pay only once, perhaps through a new tax on income earmarked for health care (in the same way Medicare is financed through payroll taxes).

It is sometimes argued that innovative technologies would be scarce in a national single-payer system, so we would have long waiting lists. This misconception is based on the fact that there are indeed waits for elective procedures in some countries with national health systems like Great Britain and Canada. But that’s because they spend far less on health care than we do. If they were to put the same amount of money as we do into their systems, there would be no waits. For them, the problem is not the system; it’s the money. For us, it’s not the money; it’s the system. We already spend enough for an excellent universal system.

A single-payer system is not socialized medicine. Although a new national program — like Medicare — would be publicly financed, the doctors and hospitals would not work for the government, but would remain private. Some fear onerous government regulations from a national payment system, but surely nothing could be more onerous for patients and providers than the multiple, intrusive regulations imposed on them by the private insurance industry today.

We live in a country that tolerates enormous disparities in income, material possessions and social privilege. That may be inevitable in a free-market economy. But those disparities should not extend to essential services like education, clean water and air and protection from crime, all of which we already acknowledge are public responsibilities. The same should be true for medical care — particularly since we can well afford to provide it for everyone if we end the waste and profiteering of our market-based system.

Marcia Angell, the former editor in chief of the New England Journal of Medicine, is a senior lecturer in social medicine at Harvard Medical School.

Medicaid reductions balance budgets

Kaiser Commission on Medicaid and the Uninsured
Medicaid Spending Growth: Results from a 2002 Survey
September 2002
Prepared by Vernon Smith, Ph.D., Eileen Ellis, Kathy Gifford, Rekha Ramesh,
and Victoria Wachino

In response to their overall fiscal situations and… Medicaid cost
pressures, 45 states took action to reduce their Medicaid spending growth in
Fiscal Year 2002. Forty-one states reported that they have plans underway to
take additional actions for FY 2003, which started July 1 in most states. As
the fiscal year progresses, it is likely that more states will act to reduce
their Medicaid spending. It is also notable that for each type of cost
containment strategy, more states reported planning to undertake action in
FY 2003 compared to FY 2002.

The most common cost containment action that states are undertaking are
policies to control the cost and use of prescription drugs, but states are
also limiting payments to providers, eliminating some benefits, and
restricting eligibility:

· Forty states are planning to implement prescription drug cost controls in
FY 2003, an increase over 32 states in FY 2002.
· A majority of states, 29, are either reducing or freezing some of their
provider payment rates in FY 2003. Twenty-two states reported provider rate
cuts or freezes for FY 2002.
· Fifteen states are reducing Medicaid benefits in FY 2003. Eight of these
states reduced dental benefits; states reduced other benefits, such as home
health, podiatry, and optical services as well. Nine states reduced benefits
in FY 2002.
· Eighteen states are reducing or restricting Medicaid eligibility. Eight
states implemented eligibility restrictions in FY 2002. Four states
(Missouri, New Jersey, Nebraska, and Massachusetts) eliminated eligibility
for thousands of people. States have also restricted eligibility by changing
rules related to transitional medical assistance or changing rules related
to their medically needy programs that will make fewer people eligible for
Medicaid.
· Fifteen states are increasing beneficiary co-payments for services other
than prescription drugs. Four states increased co-payments for
non-prescription drug services in FY 2002.

The same pressures that increased Medicaid costs in FY 2002 will persist in
FY 2003. State officials indicated that Medicaid enrollment is likely to
continue to increase, particularly if the economy does not improve. State
Medicaid enrollment forecasts are for increases that average 6.2 percent.
Medical costs are expected to continue to increase as well, adding to the
cost pressure, with prescription drug costs likely increasing again at
double-digit rates. The factors that affect Medicaid are largely the same as
those that increase costs for private insurance, where premiums increased by
nearly 13 percent in 2002.

Despite these cost pressures, state legislatures appropriated increased
funding for Medicaid for FY 2003 that averaged less than 5 percent. This
suggests that in many states the original legislative appropriation will be
insufficient to meet actual program expenditures. Medicaid officials
indicated that further program cuts will likely be considered and additional
funds will likely be needed in FY 2003. However, with state reserve and
rainy day funds substantially depleted, it will be more difficult to find
the funds needed to finance Medicaid this fiscal year and next.

http://www.kff.org/content/2002/4064/4064.pdf

Comment: Medicaid, being a program for low-income individuals, will always
be treated as a “welfare” program. In difficult financial times its need
will be greater, but funding sources will diminish. Politicians inevitably
will favor other programs as they reduce medical services for these less
fortunate individuals without a political voice.

We are spending $5757 per capita in health care this year. That would create
a $1.55 trillion pool of health care funds, more than enough to provide
comprehensive health care services for everyone. If we placed everyone in a
single risk pool, there would be no reason to submit a major sector of our
society to the indignities and inadequacies of a separate “medical welfare”
program.

New slideshow by Darcy Haber

PNHPers may be interested in this new Powerpoint slideshow by Darcy Harber. Download it here.

Additional text:

We had a great HC speaker training yesterday — thanks so much to all of you who participated.  As I have promised many of you, attached please find the power point presentation I used.  Of course, you are all welcome to use it and modify it to fit your needs.  And I welcome any additional suggestions/changes/additions you have so I can continue to improve my version!
  
And now for some good news for a change . . .
From today’s WSJ  (article not on website)
 
75% of respondents favor a Canadian-style health-care system in which the government pays for health care through taxes and negotiates fees directly with doctors.  73% of respondents who support that idea would still support it if their taxes increased as a result, the survey showed.
 
Nearly a third of respondents chose “controlling health care and prescription drug costs” when asked to choose the most important of six issues that need attention of state government.

Family practice as an agent for reform

The Journal of the American Board of Family Practice
September-October 2002
Family Practice in a Failing Health Care System: New Opportunities To
Advocate for System Reform
By John P. Geyman, MD

Family practice embraced reform of medical education and the health care
system in its early development, and it has the potential to become an
active and credible change agent for reform, particularly if it becomes part
of a coalition with the other primary care specialties. Family physicians
are typically close to their patients and communities and, if activated and
focused, could become major players toward system reform. Instead of
spending its energies trying to redress the problems linked to the current
disintegrating health care system, family practice could more effectively
serve the public interest and its own future self-interest if its efforts
are targeted to basic structural reform of the system.

http://www.familypractice.com/journal/abfpjournal_frame.htm and click
“2002,” then “Sep/Oct,” and then the article under “Special Communication.”

Comment: This excellent article is based on the 12th G. Gayle Stephens
Lecture delivered by Dr. Geyman. It discusses the problems of our
deteriorating health care system, the alternatives for reform, and suggests
some constructive future directions for family practice to take through a
leadership role in advocating for system reform.

Drug co-payments benefit plans, not patients

JAMA
October 9, 2002
Employer Drug Benefit Plans and Spending on Prescription Drugs
By Geoffrey F. Joyce, PhD; José J. Escarce, MD, PhD; Matthew D. Solomon, MA;
Dana P. Goldman, PhD

We found that many of the tools used to influence pharmaceutical use were
effective in reducing drug expenditures for working-age enrollees with
employer-provided drug coverage. Adding an additional level of co-payment,
increasing existing co-payments or coinsurance rates, and requiring MGS
(paying co-payments plus differences in cost between the brand and generic
drugs) all reduced health insurance plan payments significantly.

Patient out-of-pocket spending did not change substantially within a
specific benefit design, because the reduction in overall drug use due to
higher patient cost-sharing largely offset the effects of higher co-payments
per prescription.

Several studies have found that spending caps and formulary restrictions
reduced use of both essential and nonessential medications among low-income
and elderly populations.

Conclusions: Adding an additional level of co-payment, increasing existing
co-payments or coinsurance rates, and requiring mandatory generic
substitution all reduced plan payments and overall drug spending among
working-age enrollees with employer-provided drug coverage. The reduction in
drug spending largely benefited health insurance plans because the
percentage of drug expenses beneficiaries paid out-of-pocket rose
significantly.

http://jama.ama-assn.org/issues/v288n14/abs/joc21507.html

Comment: We continue on the path of developing and expanding policies that
benefit health insurance plans, to the detriment of patient coverage. When
will we finally accept the concept that health policy should be designed to
benefit patients?

Universal care hinges on cost

http://www.oregonlive.com/elections/oregonian/index.ssf?/xml/story.ssf/html_standard.xsl?/base/news/103399171483813.xml

Cast against a national backdrop of eroding health coverage, Oregon moves into the spotlight next month with a ballot measure that would create a single statewide health plan for virtually all residents.

Consumer activists, senior citizen groups and church organizations have spent years trying to advance similar “single payer” health changes in state legislatures from Oregon to Vermont. But their grass-roots organizing efforts have been defeated repeatedly, with the opposition primarily led by the powerfully funded insurance and hospital industries.

This time, they’re using a different approach, and because Oregon’s Measure 23 is the first single-payer proposal to go directly before voters since 1994, it’s drawing national attention to the campaign.

“It’s the only state where people are going to get to vote in November on universal health care,” said Dr. Ida Hellander, executive director of Physicians for a National Health Care Program in Chicago. The group represents about 9,000 doctors.

“If the Oregon measure passes, it’s just the beginning,” Hellander said. “It shows that it can be done, that it can work.”

Supporters of Measure 23 say it would solve the problems of rising health costs, uncertain access to caregivers and haphazard limits on coverage. The plan would pay for practically all health services, and extend coverage to the 444,000 children and adults in Oregon who now go without health insurance, according to the latest Census estimates.

Opponents say the plan’s billions of dollars in added taxes on personal income and employer payrolls would undermine Oregon’s already faltering economy. The agency created by the measure would command a $20 billion annual budget and have the power to impose up to $10.8 billion in new taxes in the first year of implementation, which would be 2005.

Business groups and other opponents say health spending would surge under the measure. The reason, they say, is the plan adds coverage for many services that most people now pay for on their own, such as alternative medicine practitioners and prescription drugs for Medicare enrollees.

At the same time, critics say, the measure imposes no specific limits or consumer cost-sharing provisions to discourage excessive use.

“The reality is, it’s inevitable these costs are going to rise rapidly, because you are talking about virtually unlimited options where people could access care free at the point of service,” said Pat McCormick, spokesman for No Unhealthy Taxes for Oregon.

Health insurers and other opponents have given more than $400,000 to the campaign — outspending Measure 23 supporters by more than 18 to 1, according to financial disclosures filed this month. Kaiser Permanente, Regence BlueCross BlueShield of Oregon, Pacificare, PacificSource and ODS Health Plans have each contributed more than twice the total raised by supporters, $22,023.

No more HMOs? Despite heavy spending by opponents, the measure might appeal to many voters who resent managed-care companies and — with the recession — fear losing their health coverage, according to some campaign watchers.

“There is great popular unhappiness with HMOs and health care in general,” said Bill Lunch, political science professor at Oregon State University.

“If somehow, the proponents can make the connection between the problems and Measure 23 as the solution, it is not inconceivable that it could prevail,” Lunch said.

Advocates say eliminating insurance company overhead costs and profits would allow the state to provide universal coverage for less money than employers, individuals and government programs currently spend.

Mark Lindgren, chairman of Health Care for All — Oregon, the coalition behind Measure 23, said it would “vastly reduce” the existing health care bureaucracy. Administrative costs would be capped at 5 percent, compared with the 12 percent overhead typical among health insurance companies in Oregon.

“There is such huge savings possible by cutting out the middleman and bargaining aggressively with pharmaceutical makers,” Lindgren said. “Individual costs should go down, and it’s likely to be a really good deal for Oregon business as well.”

The single statewide health plan would largely replace the jumble of private and public programs that now pay for health care, including individual insurance policies, most employer-sponsored health plans, workers’ compensation medical claims, the state and federally funded Oregon Health Plan for the poor and the federal Medicare program for retirees. Oregon would have to gain approval from the federal government to tap Medicare and the federal money now going to the Oregon Health Plan.

A board with 10 elected members and five appointed by the governor would run the plan. The board’s powers would include setting the fees paid to medical caregivers — which the hospital industry and many doctors strongly oppose. The Oregon Medical Association, the state’s largest physician organization, and the Oregon Association of Hospitals and Health Systems oppose the measure.

“You’ve got a problem already with health care providers who are opting not to accept low government reimbursement,” McCormick said. “You would be providing an incentive for providers to move to other states.”

To draw union support, drafters of the measure left room for health plans run by labor-management health care trusts. Employers and union workers opting to continue such plans would be exempt from the payroll and income taxes.

Despite that provision, the Oregon AFL-CIO recently announced its opposition, citing the increased tax burden on working people.

“We believe a universal health care system is the right way to go, but the burden of responsibility for paying for this one, we believe, is inappropriate,” said the AFL-CIO’s Lynn-Marie Crider. “We believe the responsibility should be borne primarily by the employers.”

Views differ on tax burden The AFL-CIO position highlights measure supporters’ toughest sell: persuading voters to pass a multibillion-dollar tax increase while the state struggles to emerge from recession. Opponents are seizing on the tax burden to sway voters.

“You are going to drive employers out of state or close their doors by imposing an 11 percent payroll tax,” said Mark Nelson, the lobbyist heading the opposition.

According to supporters’ calculations, the plan would cost the state about $19.9 billion in its first year. Existing government programs would cover about two-thirds of the costs. The remaining third, about $6.3 billion, would come from additional taxes. Estimates by the Oregon Department of Administrative Services suggest the additional tax burden could come closer to $10 billion the first year.

Supporters say most Oregonians would pay less in taxes than they currently spend on premiums, co-payments and out-of-pocket costs for doctors, dentists, home health supplies, prescription drugs excluded by private health insurance and Medicare, and long-term care — which all would be covered by the single-payer plan.

Households earning less than 150 percent of the poverty level, currently about $27,000 for a family of four, would be exempt from the income tax increase. The tax rate would increase with income, up to a maximum of an additional 8 percent, which would nearly double the current top tax rate of 9 percent.

Supporters are appealing to voters’ worries about the security of their health care coverage when many employers are cutting benefits or raising the share of costs borne by workers.

“Premiums are going up ridiculously. People are losing jobs and health coverage. Things are getting worse every day,” Lindgren said. “It’s not just wild-eyed liberals saying this.”

Joe Rojas-Burke: 503-412-7073, joerojas@news.oregonian.com

Copyright 2002 Oregon Live. All Rights Reserved.

New Mexico Rallies for Universal Health Care

Prominent physicians, medical students and seniors unite in support of single-payer health care reform

CHICAGO, IL, October 3, 2002 � October 1-8 is Universal Health Care Awareness Week in Albuquerque, New Mexico, bringing national attention to 25% of New Mexico residents who do not have health insurance. Health Students for Social Action (HSSA) and the Gray Panthers, a senior activist group in Albuquerque, have teamed up to organize a week of events to educate people about single-payer health care reform. An independent study by the Lewin group shows that developing a universal health care system is not only affordable, it’s cost effective. Lewin calculated that New Mexico would save millions of dollars by adopting a universal single-payer system.

Event highlights include a highly anticipated October 4 debate between Dr. McCanne, M.D., president of Physicians for a National Health Program (PNHP), and Dr. David Scrase, president of Presbyterian HMO, on the topic of financing health care.

Dr. McCanne is a retired family physician in San Clemente, California. For three decades, he allotted one-half of his practice hours to indigent patients. Dr. McCanne was a tireless supporter of Proposition 186, the California single-payer initiative, defeated by $10 million in insurance industry funded opposition. He has written extensively in the lay press on single-payer and patient-oriented health care, often using the concept of �Universal Medicare” as a model for single payer that the public can understand and support. He has elected to dedicate the remainder of his productive years to full-time activism on behalf of the single-payer cause. PNHP is membership organization of doctors that supports universal health care.

David R. Scrase, MD, is a Board Certified Internist and Geriatrician who has been involved in market-driven managed care for almost two decades. Dr. Scrase practices in Albuquerque, New Mexico.

�As a fourth-year medical student,� says Michael Walta, of HSSA, �I see patients everyday, facing hardship, bankruptcy, or just plain being turned away at the door. We are taking this issue away from the politicians, who are failing us, and bringing the message of universal coverage to those who are being abused by the health care crisis: the working poor, the elderly, and the middle-class.�

Linda Peeno, M.D., nationally known for exposing problems in corporate managed care, will be the keynote speaker at a panel discussion October 5. Peeno is a family practioner, a medical ethicist, and advisor on legal cases against giant for-profit HMOs. Peeno was recently the subject of the Showtime feature film �Damaged Care,� starring Laura Dern (Jurassic Park.)

The week concludes on Sunday with a “Run to Cover Everyone,” sponsored by HSSA, followed by a rally at the National Hispanic Cultural Center.

“New Mexicans deserve comprehensive affordable health insurance,” said Jaime Aagaard, of HSSA. �Medical students are demanding change from our elected leaders”.

More than one-third of Hispanics are uninsured; in some cities the figure is as high as one-half. New Mexico now joins Vermont, Maine, Massachusetts, California, and Oregon in the ever-growing movement supporting single-payer health care reform. For more information about the Run to Cover Everyone go to: www.runtocovereveryone.net

# # #

Physicians for a National Health Program has been advocating for health care reform for 15 years with more than 10,000 members across the United States.
PNHP is headquartered in Chicago.

www.pnhp.org

Universal Health Care Week October 1- 8, 2002
Albuquerque, New Mexico

TUESDAY,OCTOBER 1 & THURSDAY, OCTOBER 3

FUN RUN
Noon: register to sign up for “Run to Cover Everyone” and buy raffle tickets. Outside BMSB, sponsored by Health Students for Social Action (HSSA), noon-1pm.
Contact: 505-907-6655
Email: funrun@twignation.com
http://runtocovereveryone.net

FRIDAY, OCTOBER 4

Grand Rounds
8am: Ob/Gyn Grand Rounds, Dr. Don McCanne, president of Physicians for a National Health Program (PNHP). HSSB 105.

Q&A with Dr. Don McCanne
Noon: Informal Question/Answer Session with Dr. Don McCanne, expert on the single-payer healthcare system.
BMSB basement room 53.

Health Care Financing Debate
5pm: Healthcare Financing Debate, Dr. David Scrace, president of Presbyterian Health Program vs. Dr. Don McCanne.
Nursing and Pharmacy Bldg, auditorium.

Reception
6:30pm: Reception for Dr. Don McCanne, sponsored by local PNHP chapter.
SATURDAY, OCTOBER 5

Universal Health Care Panel
7pm Universal Healthcare Panel, Santa Fe. Sponsored by Green party. Keynote speaker Dr. Linda Peeno, famous whistleblower on corporate managed care, and Dr. Don McCanne.
Call 505-992-3335 for info.
SUNDAY, OCTOBER 6

Reception
10am Reception for Nick Unger of Universal Healthcare Action Network (UHCAN). Contact: 505-899-0392

Run to Cover Everyone
1-5pm Run to Cover Everyone, followed by Rally with free food, live music (Tobias Rene), raffle, plus more. National Hispanic Cultural Center, 4th and Bridge SE. Contact: 907-6655 for info.