The Business Journal September 6, 2002 Universally controversial By Shelley Herochik

Supporters call it Measure 23, the Oregon Comprehensive Health Care Finance Act of 2002. It’s also known as the single-payer health plan.

The measure, which proposes a ground-breaking funding mechanism to support comprehensive coverage for all Oregon residents, is the only universal health care initiative on a state ballot this November.

Insurance companies such as Regence (Blue Cross/Blue Shield) say that more than money-indeed their very existence-is at stake. Under Measure 23, the need for third-party insurers would be eliminated, since the pool, and not the insurer, pays practitioners’ bills.

“That’s irresponsible public policy for Oregon,” said Leonard Hagen, manager of legislative affairs for Regence.

One member of the progressive community, the Oregon AFL-CIO, has chosen not to endorse the measure.

“Although the federation supports a universal health care program,” said research and education director Lynn-Marie Crider, “a financing mechanism that puts more of the responsibility on employers would be more appropriate.”

But the American Federation of Teachers, a member of the AFL-CIO, has taken a different position.

“The cost to our members under the proposed structure may be less than the total package in their collective bargaining agreements,” said Richard Schwarz, AFT’s executive director. “We believe it is a solution.”

http://portland.bizjournals.com/portland/stories/2002/09/09/focus1.html

Comment: The opposition of the insurance industry to a single payer health plan is understandable since their very existence is at stake. But why should labor be opposed?

Health benefits have been a very important negotiating tool for labor’s leadership. It is in the interests of union leaders to continue to be able to negotiate with employers the entire employee benefit package. Losing the right to negotiate health benefits risks weakening the role of unions. On the other hand, if a single payer system were adopted and equitably funded, the health care costs of union members would actually diminish. So, actually, it is in the interests of union members to end the employment-linkage of health care coverage and adopt a single payer system.

Apparently, in Oregon, the parent AFL-CIO organization is more interested in meeting the needs of its leadership, whereas the subsidiary, the American Federation of Teachers, is more interested in meeting the needs of its members.

The Business Journal September 6, 2002 Universally controversial By Shelley Herochik

Supporters call it Measure 23, the Oregon Comprehensive Health Care Finance Act of 2002. It’s also known as the single-payer health plan.

The measure, which proposes a ground-breaking funding mechanism to support comprehensive coverage for all Oregon residents, is the only universal health care initiative on a state ballot this November.

Insurance companies such as Regence (Blue Cross/Blue Shield) say that more than money-indeed their very existence-is at stake. Under Measure 23, the need for third-party insurers would be eliminated, since the pool, and not the insurer, pays practitioners’ bills.

“That’s irresponsible public policy for Oregon,” said Leonard Hagen, manager of legislative affairs for Regence.

One member of the progressive community, the Oregon AFL-CIO, has chosen not to endorse the measure.

“Although the federation supports a universal health care program,” said research and education director Lynn-Marie Crider, “a financing mechanism that puts more of the responsibility on employers would be more appropriate.”

But the American Federation of Teachers, a member of the AFL-CIO, has taken a different position.

“The cost to our members under the proposed structure may be less than the total package in their collective bargaining agreements,” said Richard Schwarz, AFT’s executive director. “We believe it is a solution.”

http://portland.bizjournals.com/portland/stories/2002/09/09/focus1.html

Comment: The opposition of the insurance industry to a single payer health plan is understandable since their very existence is at stake. But why should labor be opposed?

Health benefits have been a very important negotiating tool for labor’s leadership. It is in the interests of union leaders to continue to be able to negotiate with employers the entire employee benefit package. Losing the right to negotiate health benefits risks weakening the role of unions. On the other hand, if a single payer system were adopted and equitably funded, the health care costs of union members would actually diminish. So, actually, it is in the interests of union members to end the employment-linkage of health care coverage and adopt a single payer system.

Apparently, in Oregon, the parent AFL-CIO organization is more interested in meeting the needs of its leadership, whereas the subsidiary, the American Federation of Teachers, is more interested in meeting the needs of its members.

September 11, 2002

We mourn the senseless and tragic loss of nearly 3000 young adult lives on
September 11, 2001.

We mourn the senseless and tragic loss of over six times as many young adult
lives since September 11, 2001, lives lost merely because these individuals
lacked health insurance.

We mourn for the potential consequences of an arrogance of national leaders
who would rationalize the preemptive destruction of lives, as if that were a
good and noble effort.

Let’s pledge to do all we can as a nation to prevent any further senseless
premature loss of lives, here or anywhere, regardless of the cause.

New York Times

September 3, 2002
Make It Illegal to Be Uninsured

To the Editor:

“Next Big Health Debate: How to Help Uninsured” (Business Day, Aug. 27)
summarizes the growing financial burden that the uninsured impose on those
who are insured.

Before our society ever succeeds in solving this problem, we must face three
imperatives. First, we must impose an individual health insurance mandate,
thereby making it actually illegal to be uninsured, as the purchase of
health insurance must not be a voluntary decision.

Second, for the 15 percent of the population who would be affected by this
mandate (and for only this segment), we must allow the insurers to offer
stripped-down policies with modest benefits and low costs.

Third, we must subsidize the fulfillment of this mandate through tax
deductions and tax credits, depending on the income level of the person or
family involved.

Kenneth S. Abramowitz
New York
The writer is a health care analyst.
http://www.nytimes.com/2002/09/03/opinion/L03HEAL.html

And a response:

September 10, 2002
Punishing the Poor

To the Editor:

A Sept. 3 letter writer proposes that it be illegal to be uninsured, and
urges that stripped-down policies be imposed on the poor, financed by tax
credits and tax deductions.

This would impose a severe financial burden on the poor. Moreover, tax
credits or deductions would be of minimal help to poor people, who pay
little or nothing in taxes. The letter writer’s proposal would make people
subject to sanctions (jail?) for the state of being poor and sick.

A better solution is to finance basic health care for all, no questions
asked, the way most civilized countries do.

Judith A. Fischman
New Smyrna Beach, Fla.
http://www.nytimes.com/2002/09/10/opinion/L10HEAL.html

Comment:  Henry Simmons, president of the National Coalition on Health Care,
has said that there are three basic models for health care reform: employer
“play or pay,” a single payer system, or individual mandates (Kondracke,
Roll Call, April 22, 2002). Other approaches would fail to assure universal
coverage, would fail to assure that health care would remain affordable, and
would fail to correct the major inequities in our system.

Mr. Abromowitz, who has previously expressed the “blame the patient for cost
increases” viewpoint, proposes the cruel solution of stripping away all but
the most basic of benefits for the “15%” of low income individuals. He fails
to acknowledge that his approach also applies to the majority since current
trends are to strip away benefits by making them unaffordable. Average
income individuals with significant acute or chronic disorders will be
unable to afford the care they need. And then he wants to make it “illegal”
to fail to participate in this highly deficient program.

Ms. Fischman’s comments demonstrate the absurdity of this approach of
charging the victim with a criminal act. It is possible that a refundable
tax credit could be generous enough to purchase an adequate insurance plan,
but then the combined private and public spending would be much more than
the single payer option, because of perpetuation of tremendous
administrative inefficiencies. And costs would remain difficult to contain.

The employer mandate, “pay or play,” would require subsidies for those
employers unable to afford to purchase plans for their employees or to pay
the tax that would be assessed in lieu of insurance. Also, programs would be
required for the unemployed and others that might be left out of an employer
mandate. In addition, the flawed policies inherent in a market of multiple
health plans would continue to perpetuate inequities and fail to adequately
control costs.

The simplicity of the design of a single payer system would assure
comprehensive benefits for everyone. Costs could be contained by
establishing a global budget. At our current level of health care spending,
$1.5 trillion, more than one-seventh of our gross domestic product, we
already have more than enough funds to pay for comprehensive care for
everyone.

Dr. Simmons’ words of wisdom on comprehensive reform are well worth
reviewing again:
https://pnhp.org/Press/2002/Quote_of_the_day/7.13.02.htm

The Sacramento Bee
September 8, 2002
Low profile for health care in campaign
By Aurelio Rojas

As Gov. Gray Davis and businessman Bill Simon move into the fall stretch in
their race for governor, rising health care costs have joined education as
the most important issues on voters’ minds, according to Field Poll Director
Mark DiCamillo.

Experts have warned for years the system is headed for collapse without
wholesale changes. But neither the Democratic incumbent nor his Republican
challenger is offering a cure.

The issue is complex — involving employers, state and federal agencies,
insurers, health maintenance organizations, hospitals, physicians and other
competing interests.

But pundits say the political calculus is simple. Middle- and upper-income
workers and the elderly make up the lion’s share of the electorate. And
those groups have access to health care, either through their employers or
the government after they retire.

Polls show voters are sympathetic to the plight of the uninsured, most of
whom work. But woe to the politician who proposes raising taxes to expand
coverage.

http://www.sacbee.com/content/politics/story/4320898p-5340111c.html

Comment:  Both houses of the California State Legislature are controlled by
progressives, Gov. Davis is a Democrat, and California’s health care
situation is deteriorating. Never was the moment for reform more opportune.
Yet, instead of comprehensive reform, Gov. Davis just blue penciled the
incremental step of expanding the Children’s Health Insurance Program to
include parents of covered children, even though two-thirds of the cost of
the expansion would have been paid by the federal government.

It seems that there is little hope for comprehensive reform until the
majority, who are relatively healthy and complacent with their current
coverage, decide that it is time. Will that ever happen?

The Democracy Owners’ Manual
A Practical Guide to Changing the World
By Jim Shultz

Another false notion in initiative politics is that initiative campaigns are
grand opportunities to shift public opinion to your side, even in the face
of special interests opposing you. In fact, initiative campaigns are a poor
time to educate the public, especially while you are being outspent ten to
one or more. Initiative campaigns are often big-money battles of quick sound
bites and images aimed at manipulating voters, not educating them. Most
experienced initiative campaigners will tell you that if an initiative
doesn’t start out with support (as measured by serious polling) in the range
of at least 65 to 70 percent, it has very little chance of maintaining 51
percent by election day. In almost every case, the “yes” vote for a measure
only falls as the election approaches.

Some advocates learn this lesson the hard way. In 1994, California health
care advocates qualified an initiative to establish a state-run health care
system, despite many polls showing the public’s strong skepticism about such
a move. Instead of the grand public education effort that proponents hoped
would sway voters to their side, they were crushed three to one following a
multimillion-dollar ad blitz by health insurers that set the cause backward,
not forward.

For information on “The Democracy Owners’ Manual”:
http://www.democracyctr.org/resources/manual/index.htm

Comment:  Most of us are uncomfortable when we read Jim Shultz’s words. But
reality often creates discomfort. We’d much prefer to live with our
fantasies of utopia.

But, as long as Jim Shultz has shocked us into reality, let’s look at what
he has to say. He says that it is absolutely essential for us to understand
the processes by which policy is translated into action. Without that
knowledge and understanding, many of our efforts are for naught.

Jim Shultz is a veteran of the California political scene. He understands
how the process works. We don’t like to hear about our past mistakes, but we
definitely must understand them. We must understand the processes that are
likely to bring us success and those that will assure our defeat. “The
Democracy Owners’ Manual” is must reading for those of us that want to
change the world.

The Kaiser Family Foundation and Health Research and Educational Trust
Employer Health Benefits
2002 Summary of Findings

Between spring of 2001 and spring of 2002, monthly premiums for
employer-sponsored health insurance rose 12.7%, the second consecutive year
of double-digit premium increases, and the largest increase since 1990.
Average annual premium costs rose to $3,060 for single coverage (up from
$2,650 in 2001) and $7,954 for family coverage (up from $7,053 in 2001).
Premiums increased substantially faster than overall inflation (1.6%) and
wage gains for non-supervisory workers (3.4%).

This high rate of growth appears to have been driven primarily by rapid
inflation in spending for health care services. Premium equivalents for
self-insured plans (the estimated cost of health care claims for an employee
whose employer self-insures) – which are a reflection of growth in
underlying health care costs – grew by 12.3% over the last year, or roughly
the same rate as premiums for insured plans. This suggests that insurers’
decisions about premiums are being influenced more by cost trends than by
catch-up pricing associated with the underwriting cycle.

What seems clear is that employees are likely to pay more for health
benefits and health care in the future. This year, 43% of all firms and 78%
of large firms (200 or more workers) report that they are very or somewhat
likely to increase the amount that employees pay in 2003. Thirty-two percent
of all firms and 42% of large firms report that they are very or somewhat
likely to increase deductibles, while 34% of all firms say they are very or
somewhat likely to raise employee costs for prescription drugs.

With a weakened economy and escalating premium inflation, the brief period
of increasing employer coverage – and concomitant drop in the number of
uninsured Americans – has come to a close.

http://www.kff.org/content/2002/20020905a/3252a.pdf

Comment:  The opponents of reform will not be able to pass this off as a
transient insurance underwriting blip. The increases in medical claims
expenses are real. Employers are no longer tolerating them. The resultant
increases in cost sharing by the employee-beneficiaries are making access to
health care truly unaffordable for an ever enlarging sector of our
population. Current policies will only increase rationing by ability to pay.
Yet most Americans believe that everyone should have access to essential
health care. The status quo is not acceptable.

Comprehensive private solutions do not exist. Employment linkage has
provided only a partial solution, and that is proving to be less and less
satisfactory as the numbers above indicate. Individually purchased health
plans have even greater deficiencies than the employment linked plans.
Individually designated accounts such as MSAs will not work for those with
significant health care needs. Charity will never be adequate simply because
health care costs greatly exceed the tolerated threshold of voluntary
contributions. We have depended on combinations of these private solutions,
and they have proven to be grossly inadequate.

If Americans really do want everyone to have access to a reasonable level of
care, then we must cooperate in deciding on which public solutions we should
adopt. Now, more than ever, there is a need to understand the impact of
various public policies in health care. The science is already there. Now is
the time to use it.

Mathematica Policy Research, Inc.
September 2002
Medicare+Choice Withdrawals: Experiences in Major Metropolitan Areas
by Marsha Gold and John McCoy

Recent experience highlights the importance of local market features in
shaping beneficiaries’ experience with Medicare+Choice. Medicare managed
care developed unevenly across the country and is eroding unevenly as well.

Under current policy, it is likely that Medicare+Choice will continue to
diminish
nationally, with enrollment increasingly concentrated in those markets where
conditions are most hospitable. Since markets vary, often in ways that
federal policy can only marginally influence, a market-based insurance
strategy like Medicare+Choice will almost always mean that plan choices vary
substantially across the nation.

http://www.mathematica-mpr.com/PDFs/opinsights8.pdf

Comment:  Medicare+Choice was an attempt to control Medicare costs by using
private health plans competing in the marketplace. It was a dismal failure.
All studies demonstrated that costs actually increased and that access to
the plans varied greatly depending on local market conditions.

Now the Bush administration is introducing Medicare+Choice PPO plans. They
will pay the plans 99% of the costs of the traditional programs plus
one-half of the cost overruns. The plans most likely will demonstrate
initial success by directing their marketing to the healthy sector of
Medicare patients. Low cost patients will leave them with profits initially.
But, as their beneficiaries age and develop greater health care needs, the
private PPO Medicare plans also will be unable to meet the higher costs,
especially when adding in the greater administrative expenses of the PPO
plans. And the cost overruns will again be borne by the taxpayers. As the
current Mathematica study indicates, we can expect these plans to provide
unstable insurance support because of the continual need to modify their
targeted markets based on local market profitability.

It is particularly ironic that Bakersfield, California is one of the ten
worst markets for Medicare+Choice contracts since Bakersfield is the home of
William Thomas, Chairman of the House Ways and Means Committee and one of
the strongest supporters of  the plans to privatize Medicare. It is fair to
ask Congressman Thomas whether he is representing the interests of the
residents of his district or representing the interests of the health plans.

All of us should be asking our candidates for elective office precisely what
policies they support. Do they support policies that enhance the markets for
private health plan profitability, or do they support policies that enhance
mechanisms that improve allocation of our health care resources for the
benefit of patients? Knowing that answer, we’ll all be better informed
voters.

Friends of PNHP:  Please don’t miss the special message at the end of
today’s quote.

Harris Interactive
Volume 2, Issue 17
August 21, 2002
Attitudes toward the United States’ Health Care System: Long-Term Trends
Views of the public, employers, physicians, health plan managers are closer
now than at any time in the past

In the more than twenty years since Harris Interactive (or Louis Harris &
Associates, as it was then) first asked the American people what they
thought of the nation’s health care system, there have been many changes,
both up and down. And when we have asked the same questions of other groups
(physicians, employers, hospital managers and health plan managers), we have
usually found quite big differences among the views of those different
groups. This year these differences have narrowed; the level of support for
radical change is somewhat similar in all these groups.

The Big Picture

While legislators in Washington are still deeply scarred by the 1994 debate
and the defeat of the Clinton health care reform proposal, it is clear that
only very small minorities of any of the five groups’ surveyed hold a good
opinion of the health care system as it is now. Those who believe that “on
the whole the health care system works pretty well and only minor changes
are necessary” include only 19% of physicians and smaller percentages of all
other groups surveyed.

If our survey data were to serve as our only guide, there are several other
reasons why one might expect a big push for health care reform. Employers
are more hostile toward the system now than they were in any of our previous
surveys. So are health plan managers. While physicians’ attitudes are a
little bit less negative than they were two years ago, they are more
negative than they were at any time between 1984 and 1997.

The public also has a considerable appetite for health care reform, even if
the radical change score is lower than it was in some previous years,
particularly in the early 1990s. But only 17% of the public thinks that “the
system works pretty well and only minor changes are necessary.” Almost twice
as many (31%) think that “we need to completely rebuild the system,” with
almost everyone else (49%) thinking that “fundamental changes are needed.”

Overall, therefore, a stronger consensus for radical reform is building.

http://www.harrisinteractive.com/news/newsletters/healthnews/HI_HealthCareNe
ws2002Vol2_Iss17.pdf

Comment:  Over four-fifths of physicians, employers, hospital managers,
health plan managers, and the public now all agree that either “fundamental
changes are needed” in our health care system or “that we need to completely
rebuild it.” Less than one-fifth believe that “only minor changes are
necessary.” The most dramatic change is that “doctors became much more
negative in 1999 and have remained more negative ever since.”

Physicians can now do something about it. We have launched a campaign to
invite every physician and medical student in the United States to endorse a
proposal for national health insurance, a proposal that would eliminate
wasteful administrative excesses and assure that health care dollars are
directed more equitably to the health care delivery system. The proposal and
the endorsement form can be accessed at:
http://www.physiciansproposal.org/

The form also provides the option of joining Physicians for a National
Health Program and becoming an active part of the growing physician movement
demanding that we change our policies and priorities from those that are
directed to creating a friendly and profitable environment for health plans
to those that channel our health care resources directly to patient care…
all patients.

A printer friendly version of the full proposal is available at:
https://www.pnhp.org/pproposal.doc

Again, for the endorsement form:
http://www.physiciansproposal.org/

Special message to our friends who share our vision:

Please distribute this message to any physician or medical student whom you
believe is ready to take action to reform the flawed system of funding
health care in the United States. Refer them to these websites, or print out
the proposal and endorsement form and distribute copies, as appropriate. The
crescendo of the physicians’ voices must be heard.