PNHP

Deputy sickout is more than a labor issue

Deputy sickout is more than a labor issue

Visalia Times-Delta
December 5, 2002
Editorial

Frustration reigned Tuesday among several Tulare County offices.

It was illustrated by the sight of Sheriff Bill Wittman explaining the absence of 37 percent of his line staff who had called in sick to protest their stalled contract negotiations.

It was evident in the picketing by county employees who fear rising health-insurance costs will eat most of their paychecks next year.

And the frustration was reiterated again by Wittman, who noted that his deputies are the lowest-paid in the area and pay the highest percentage of their paychecks for health insurance.

But the issue that links them all and overrides the others is health care. It is ironic the deputies used a sickout to convey their frustration, because health care is at the heart of the matter.

When will we as a state and community realize that the lack of affordable health-care insurance and care options is building to a catastrophe that crosses all interests? This week’s events should tell us that, if nothing else.

We’ve seen the signs in the past couple of years as fewer health-insurance companies are willing to write insurance here. Doctors can’t afford to practice here because the reimbursement rate for public insurance is so low. Hospitals are forced to close. Clinics and emergency rooms are overflowing. Specialists can’t be lured to practice here. There is a shortage of nurses ….

And now it is evident from the crisis among public employees that even professional and middle-management workers can’t afford health-care coverage.

Also Tuesday night, a small group of people conducted its monthly meeting: “Health Care for All” promotes the adoption of a universal access, single-payer health-care insurance plan. It’s a radical concept that would eliminate private insurance plans in favor of one system that covers everybody and would be paid for partially with taxes now devoted to health care and partially through the premiums paid through existing plans.

That, too, is complicated. It will take a massive education effort to convince most people that it would be to their benefit.

But look what is happening with the alternative.

The deputy sheriffs are sending a message to our community: Unless we fix the health-care system, we as community will not be able to afford to protect ourselves. We will not be able to afford the public services we take for granted. We can’t continue to see expenses for health care rise without the dam bursting. Tuesday we saw the cracks appearing in that dam in the form of massive employee discontent.

http://www.visaliatimesdelta.com/news/stories/20021205/opinion/512457.html

Some Tentative First Steps Toward Universal Health Care

December 7, 2002
New York Times
By MILT FREUDENHEIM

orried that the growing number of uninsured patients will undermine the nation’s health care system, insurance executives across the country are pressing for new steps toward universal health care.

Many health plans are developing or offering insurance with lower premiums and slimmer coverage to attract customers who cannot afford more comprehensive policies. Executives at Blue Cross Blue Shield of Montana are pressing state legislators to raise the cigarette tax to subsidize basic coverage. Another insurer, Blue Shield of California, proposed a plan this week for health insurance for all state residents. And Dr. William W. McGuire, chief executive of the UnitedHealth Group, the largest private insurer, has written to every member of Congress calling for “essential health care for all Americans.”

Health insurers, which have long ranked high among the country’s most disliked businesses, frame many of their proposals in public policy terms. But they also have strong business reasons to become involved in the debate over helping the uninsured. They want to add young, healthy members to their insurance pools to spread the cost of caring for the sick. They are also eager to add members whose premiums would be paid with tax money or government subsidies.

Several insurance executives also said pressures generated by the uninsured were raising a threat to the system that could lead to government intervention if insurers did not develop a plan first.

“If we don’t do something in a darn hurry about the uninsured, the whole health care system in this country is going to collapse and the government will step in,” said Chuck Butler, a vice president of Blue Cross Blue Shield of Montana. “People will say, enough is enough.”

Dr. Jay Crosson, executive director of physician groups at Kaiser Permanente, the largest nonprofit insurer, said, “As insurance becomes less affordable, more and more people will be upset and frightened, and the industry will find itself drawn into the political process.”

Most health insurers are thriving, keeping ahead of rising hospital charges and doctor fees by raising premiums as much as 30 to 40 percent a year for small companies and 17 percent and higher even for large employers. But the increases, combined with disappearing jobs, are leading many people to drop health insurance and, not incidentally, adding to the unpopularity of insurance and managed care companies.

Each 1 percent increase in costs adds 300,000 to the 41 million uninsured, according to the Lewin Group, a health care research organization. Many of the uninsured are young and healthy workers in small companies. When they go without health insurance, costs per person soar for the sicker people who remain.

People who need care keep the coverage like “people buying fire insurance when the house is on fire,” said Randy Kammer, a vice president of Blue Cross and Blue Shield of Florida.

Some health insurers in the Southeast are finding that as many as one in 10 small-business customers are not renewing their coverage, according to Brian Klepper, executive director of the Florida-based Center for Practical Health Reform, a group of insurers, hospitals and employers.

But uninsured patients still go to hospitals, which then pass along the cost of unpaid bills in higher charges to health plans.

“The tragedy of our nation’s health care system,” said Dr. McGuire of UnitedHealth, “is that in spite of its many impressive features, it has ultimately failed to make even basic care consistently available to all of our citizens.”

Dr. McGuire is calling for building universal coverage around an agreed national definition of what constitutes basic acceptable coverage, “based on firm evidence” of the effectiveness and cost efficiency of the care. He has written to every member of Congress and dispatched UnitedHealth officials to promote his plan in Washington, D.C., and in Minnesota and other states.

On Tuesday, Bruce G. Bodaken, the chief executive of Blue Shield of California, one of the largest health plans in the state, called for a statewide universal health care system, to be financed by employers, individuals and a new tax, which he said could be a model for the nation. More than six million California residents have no health insurance.

Mr. Bodaken said in an interview and a speech at the Commonwealth Club in San Francisco that under his plan, all except the smallest employers would be required to offer basic coverage. Individuals who could afford it would have to buy their own policies, and a new tax would subsidize those unable to get coverage.

Blue Shield has commissioned an independent study of taxing alternatives, including raising the state income tax, sales tax, a tax on health insurance premiums or hospital and doctors’ fees and the tobacco tax.

“We absolutely have to solve this problem,” said Helen Darling, president of the Washington Business Group on Health, a group of large self-insured companies. “The number of uninsured will inevitably grow because of the rapid rise in health care costs. We know it’s going to get much worse.”

In Florida, 30 insurers, working with Tom Gallagher, the state insurance commissioner, plan to introduce several lower-cost standard and basic policies in the spring to attract small groups that have been dropping coverage. Some policies will include high deductibles and fewer state-mandated provisions like numerous visits to occupational and physical therapists, said Ms. Kammer of Blue Cross and Blue Shield of Florida.

In Montana, insurers have lined up bipartisan support in the legislature to raise cigarette taxes at next month’s session to subsidize health care for the uninsured. The package includes tax credits for employers with two to four workers, coverage for schoolteachers and for more children in low-income families, as well as prescription drugs for low-income elderly people, Mr. Butler said.

Only 2.9 million New Yorkers are uninsured, reflecting the state’s extensive public assistance programs. But Howard Berman, chief executive of Excellus, a Blue Cross holding company in Rochester, said that with a projected budget shortfall exceeding $6 billion, the state will be hard put to help if more residents lose their coverage.

“We need new products for middle-class people who have been priced out,” he said. “And we need more efficiency in the system to reduce costs.”

http://www.nytimes.com/2002/12/07/business/07CARE.html

Physicians lump HMO patients with MediCal and the uninsured

The Center for the Health Professions
University of California, San Francisco
California Physicians 2002: Practice and Perceptions
December 2002
By Kevin Grumbach, MD, et al

Only 58% of patient care physicians in the state are accepting new patients if the patient has HMO insurance coverage. The percentage of specialists with HMO patients fell from 77% to 62% between 1998 and 2001. The rate of physician participation in private HMO plans is approaching the historically low rate of physician participation in Medi-Cal, the state’s insurance plan for low income Californians. A privately insured HMO patient in California now faces almost as much difficulty as a Medi-Cal patient in obtaining a new patient appointment with a new doctor. The problem of lack of availability of physicians in many regions of the state is largely due to physicians not accepting patients with certain types of health insurance (or without health insurance altogether) rather than due to an absolute shortage of physicians practicing in California.

http://futurehealth.ucsf.edu/pdf_files/Phass2.pdf

Comment: In a personal communication, Dr. Grumbach comments:

“Definitely looks like managed care is in the retreat in CA. Only problem is that I think a lot of docs are hoping to return to the mythical ‘good old days’, basically charging patients directly, rather than are looking forward to a universal system under public administration. And the results from the Kaiser docs are interesting, suggesting to me that Kaiser Permanente has actually won over its physician staff with a model of managed care that seems to be more genuinely committed to quality of care and a strong culture of physician led group practice.”

Volenik says single-payer plan feasible

By: Stephen Betts
December 06, 2002

The chairman of a state panel looking at designing a state-run, single-payer health care system said a consultant’s report leaves him convinced such a system is doable.
      Paul Volenik, who represented Vinalhaven and North Haven in House District 129 for eight years until Wednesday, said the committee will make a formal presentation to the state Legislature next month.

      He said Thursday he is hopeful a single-payer system can be approved, whether it is this year or another year.

      The report by Mathematica Policy Research of Washi-ngton, D.C., finds that a single-payer system compared to the current system would either cost the same or cost 5 percent more, depending on the benefits provided under a single-payer system.

      Mathematica is projecting $8.3 billion will be spent on health care in Maine in 2004 and that will jump to $10.6 billion by 2008 under the current system.

      But Volenik noted that with the current system, 150,000 Mainers have no health insurance. He said even if a single-payer system costs 5 percent more than the current one, it would be worth it insure everybody.

      The consultants were conservative when calculating the administrative savings a single-payer system would reap, he noted. Eventually, there will be more savings as people with insurance become healthier and costs are lessened.

      The current way of financing health care, through taxes for Medicaid and privately financed insurance through businesses and individuals, would be replaced with a payroll tax, Volenik said.

      The tax could be 12 to 16 percent, he said, with one model calling for the employer to pay 8 percent and the worker 4 percent. This system would ensure that the people most able to pay would pay the most.

      He said businesses that do not contribute anything for their employees’ health insurance would incur greater costs. However, some businesses would pay less, as would employees, many of whom already pay a high price for coverage.

      For instance, a person earning $20,000 annually would have to pay $800 if the employee portion of the payroll tax was 4 percent. That $800 is less than what most people pay for their share of insurance premiums, he noted.

      Volenik was a major proponent of a single-payer system during his years in the Legislature. He convinced the state to form the 19-member Health Security Board, which has been meeting frequently and hired the consultant to work on a model for a single-payer system.

©Courier Gazette 2002

Provider cross-subsidy to uninsured declining

Center for Studying Health System
Change Mounting Pressures: Physicians Serving Medicaid Patients and the Uninsured, 1997-2001
Tracking Report No. 6
December 2002
By Peter J. Cunningham

Clouds on the Horizon

Continued financial pressures on physicians may decrease their willingness to serve Medicaid patients even further, potentially endangering access to care. States are experiencing serious budget pressures, and most are considering reducing or freezing Medicaid physician reimbursement to cut program costs. Rising health care costs as well as reductions in other provider payments may constrain physicians’ ability further to cross-subsidize free care to uninsured patients. And access to physicians is just one concern, as more general cost-containment measures being considered or implemented by states also could affect access to hospitals and prescription drugs among both Medicaid and uninsured patients.

http://www.hschange.com/CONTENT/505/

Comment: Our current system of funding health care is not capable of assuring access to health care for low-income and uninsured individuals. This problem would be eliminated by improving the allocation of the $1.55 trillion that we are already spending on health care. The administrative efficiencies of a single, universal, publicly-administered insurance program would provide enough recovery of wasted resources to fund comprehensive services for everyone.

SF Chron Letter to Editor: Market Share vs. Health Care

Market Share vs. Health Care

by Don Bechler

Blue Shield CEO Bruce G. Bodaken’s solution for achieving universal health care would have Californians paying more money while expanding Blue Shield’s market share. His employer mandate/public insurance model perpetuates administrative waste and a system in which multiple health plans try to insure the healthy and avoid the sick.

Let’s rid ourselves of the 300 insurance company and 69 government bureaucracies in California. Creating one publicly funded and PUBLICLY ACCOUNTABLE agency to finance all healthcare would rid us of the existing maze of bureaucracies. We would pay taxes in lieu of premiums, but they would be less than current insurance company premiums. This would mean a healthier economy with more money in the pockets of businesses and working people.

The State of California recently concluded a 1.2 million-dollar study called the Health Care Options Project. (www.healthcareoptions.ca.gov) It concluded that by removing the insurance industry from the health care loop, Californians could save 7.6 billion dollars a year while insuring everyone with better services including long term care and full prescription drug coverage. As insurance would not be tied to employment, you could change jobs and still keep your same doctor.
Bodaken dismissed the study saying he disagreed with it and that the Blue Shield Foundation would produce its own study showing how his plan would work.

State Senator Sheila Kuehl will soon introduce legislation for the plan that saves Californians money and produces high quality health care for all.

More money for Blue Shield is not the only choice.

Don Bechler
Chair
Health Care For All
San Francisco Chapter
415-695-7891

Jobless swell clinic's rolls

Posted on Mon, Dec. 02, 2002

MORE SPACE NEEDED IN MTN. VIEW TO SERVE UNINSURED
By Truong Phuoc Khánh
Mercury News

Every layoff in Silicon Valley leaves not only one more unemployed worker but also one more unemployed worker without medical insurance. As the jobless ranks grow, one free health care clinic in Mountain View — traditionally the medical refuge for the working poor — is seeing white-collar workers filing into its waiting room.

They come in for flu shots, cold medicine or a prescription for high-blood pressure. As is true at all nine RotaCare clinics in the Bay Area, the visits are free. The Mountain View clinic, which operates on a shoestring budget of $250,000 aided by a cadre of volunteer doctors, nurses and translators, is looking for another, larger facility to serve the growing uninsured population.

“There’s always been an uninsured immigrant population,” said Dr. Erica Weirich, a family practitioner who donates her time to treat RotaCare patients once or twice a month. “But recently, things have changed. We’re definitely seeing much more of a mix — individuals who have lost their medical coverage because they’ve been laid off.”

The first RotaCare clinic was formed by a local Rotary Club in Santa Clara in 1989 to provide free medical care to those without access to medical services.

The bulk of those who visit the clinic in Mountain View are immigrants and the working poor who labor in service-industry jobs without health benefits.

While Spanish is still dominant, a more diverse mix of languages can be heard at the clinic recently, from Farsi to Chinese to Russian.

“It’s like the U.N. in our waiting room,” said Barbara Avery, manager of outreach medical services for El Camino Hospital, a collaborator and sponsor of RotaCare. “You’re out of work for a year, things get very, very tight, and you’re sick. To go to a doctor for a medical visit may be more than they can afford.”

Nicole Patakova, 39, worked as a quality controller for a technology company until six months ago.

“Good job, good pay,” she said.

Her husband, also laid off from an electronics company this year, was recently diagnosed with high blood pressure. The couple came in the night before Thanksgiving.

Patakova said she felt uncomfortable being there.

“I’ve never used something like this,” Patakova said. “I’ve always worked in my life, and I’ve never needed help like this.”

Weirich recalled two nights earlier when a young man came to the clinic with a similar story.

“He’d been laid off, and he was actually there with a common problem, an infected ingrown toenail,” Weirich said. “And he was really embarrassed to be there. He said he used to have a personal doctor.”

Before 5 p.m. Wednesday, the waiting room was full. Mothers with young children. Senior citizens. Young couples who are pregnant.

Alongside first-timers such as Patakova were regulars who struggle with chronic ailments like diabetes and heart disease. Isabel Torres, 30, has been coming for six years to keep her diabetes manageable. Giovanni Arriola, 23, arrived in the Bay Area two months ago from El Salvador and had an earache.

The all-volunteer staff for the evening: two doctors, two nurses, one nurse practitioner, one nursing student, one medical assistant, one pharmacist and three Spanish translators.

Some services provided at the clinic are immunizations, tuberculosis testing, pregnancy testing, treatment for high blood pressure, diabetes, asthma, free medications and children’s physicals.

A major sponsor for the clinic is the Peninsula Community Foundation, but a one-year grant is running out and the clinic is seeking additional support to help it secure a long-term lease elsewhere.

RotaCare benefits not just those who walk through its doors, Avery said, but also the community at large.

“We don’t want emergency rooms flooded with patients coming in with an earache,” Avery said. “You don’t want to eat a salad prepared by a worker who has TB.”

Dr. Richard Brown's Testimony on Drug Prices at NY State Hearing

Testimony of the New York Chapter of Physicians for a National Health Program
Hearing of the New York State Assembly Committee on Health
Prescription Drug Prices in New York State, December 5, 2002

        My name is Richard J. Brown. I am a psychiatrist, recently retired, who has been in practice, both institutionally and independently, for over 35 years. I additionally received an M.S. in administrative medicine from a school of public health. My educational and working experiences have led me to look beyond my immediate clinical and administrative activities into the functioning of the health care system.
        I am on the Board of Directors of the New York Chapter of Physicians for a National Health Program, an organization advocating a publicly funded, publicly administered health care system that provides equal access for all residents to quality, affordable care. Our nation is the only industrialized country that does not provide this for all our residents; more than 40 million people in the United States are medically uninsured, and a similar number are underinsured.
        It is not that there isn’t enough money to provide health care for everyone. Our country spends more on health care (more than 14% of GDP) than any other country (10.5% of GDP is the most that any other country spends.) Yet we are way down on the World Health Organization’s performance list – only 37th — lower than Canada, Japan, and all of Europe. Ours it the only industrialized country without a national health program.
I am here to speak about the pharmaceutical industry and the cost of prescription drugs in this country and in this state. The prescription drug industry is costwise the fastest growing sector within the 14% of GDP utilized for health care. Drug spending is rising 15-20% a year – doubling every five years.
        Part of this increase is demographically driven. We are living longer, growing more numerous, and many of us require medicines for chronic conditions. The increase is also due to advances in the science and practice of medicine, including the development of newer drugs that help to manage high blood pressure, diabetes, elevated cholesterol, infectious diseases including HIV/AIDS, gout, depression and psychoses, among other diseases.
        But another part of this rising cost is attributable to unconscionable profit-taking and profligate promotional practices. The pharmaceutical industry’s average profit after all expenses including research and development, advertising, promotions, lobbying, political campaign funding, contributions to law makers, and anti-consumer lawsuits to maintain uncontrolled prices is 18-19% – that’s over three times the profit margins of the other industrial sectors.
        Looking more closely, we find that drug prices in this country average over twice those of the very same drugs in other countries. How does this happen? In every single country throughout the industrialized world except for the United States, drug prices are government controlled. Let me say that again: In Australia, in Canada, in France, in Germany, in Italy, in Japan the governments control drug prices. Also to be noted is the fact that direct-to-consumer advertising (DTCA) is banned in the European Union and Canada. Europeans visiting the U.S. are startled to see those ubiquitous “Ask Your Doctor” ads we find on TV and radio, in newspapers and magazines, and on billboards. While the industry claims that this advertising is “educational,” in yesterday’s New York Times it was reported that the General Accounting Office  Congress’s investigative arm – has found that “drug companies have repeatedly disseminated misleading advertising, even after being cited for violations, and millions of people see the deceptive ads before the government tries to halt them.” These ads are hard to escape in the United States, and as I have indicated, are not to be found in Europe or Canada.
        Promotions include lectures to physicians in expensive restaurants and often include paying the doctors up to $500 to help drive the point home that the drug being promoted is the Rolex of them all.
        The pharmaceutical industry has thus far been successful in blocking even weak federal legislation that would lower drug prices. These costs are borne by Medicaid, state programs, and private insurers, as well as by individual patients without drug coverage who sometimes have to compromise expenditures on food, clothing, fuel and other necessities of life.
        So far even modest attempts at reining in drug prices have failed at the national level. We in New York cannot afford to wait until this much-needed national reform is adopted. Other states either singly, or in partnership with other states, are beginning to take measures to control spiraling drug prices. It is high time for our great state of New York to take a leadership role in this endeavor; such a step would offer a decided benefit to our own people and to people around the country.
        As you review your legislative alternatives, I ask that you consider very seriously the necessity of controlling pharmaceutical prices in order to defend the public coffers and to make affordable drugs available to all New Yorkers.
        I thank you for this opportunity to testify before this Committee.

Jobless swell clinic’s rolls

Posted on Mon, Dec. 02, 2002

MORE SPACE NEEDED IN MTN. VIEW TO SERVE UNINSURED
By Truong Phuoc Khánh
Mercury News

Every layoff in Silicon Valley leaves not only one more unemployed worker but also one more unemployed worker without medical insurance. As the jobless ranks grow, one free health care clinic in Mountain View — traditionally the medical refuge for the working poor — is seeing white-collar workers filing into its waiting room.

They come in for flu shots, cold medicine or a prescription for high-blood pressure. As is true at all nine RotaCare clinics in the Bay Area, the visits are free. The Mountain View clinic, which operates on a shoestring budget of $250,000 aided by a cadre of volunteer doctors, nurses and translators, is looking for another, larger facility to serve the growing uninsured population.

“There’s always been an uninsured immigrant population,” said Dr. Erica Weirich, a family practitioner who donates her time to treat RotaCare patients once or twice a month. “But recently, things have changed. We’re definitely seeing much more of a mix — individuals who have lost their medical coverage because they’ve been laid off.”

The first RotaCare clinic was formed by a local Rotary Club in Santa Clara in 1989 to provide free medical care to those without access to medical services.

The bulk of those who visit the clinic in Mountain View are immigrants and the working poor who labor in service-industry jobs without health benefits.

While Spanish is still dominant, a more diverse mix of languages can be heard at the clinic recently, from Farsi to Chinese to Russian.

“It’s like the U.N. in our waiting room,” said Barbara Avery, manager of outreach medical services for El Camino Hospital, a collaborator and sponsor of RotaCare. “You’re out of work for a year, things get very, very tight, and you’re sick. To go to a doctor for a medical visit may be more than they can afford.”

Nicole Patakova, 39, worked as a quality controller for a technology company until six months ago.

“Good job, good pay,” she said.

Her husband, also laid off from an electronics company this year, was recently diagnosed with high blood pressure. The couple came in the night before Thanksgiving.

Patakova said she felt uncomfortable being there.

“I’ve never used something like this,” Patakova said. “I’ve always worked in my life, and I’ve never needed help like this.”

Weirich recalled two nights earlier when a young man came to the clinic with a similar story.

“He’d been laid off, and he was actually there with a common problem, an infected ingrown toenail,” Weirich said. “And he was really embarrassed to be there. He said he used to have a personal doctor.”

Before 5 p.m. Wednesday, the waiting room was full. Mothers with young children. Senior citizens. Young couples who are pregnant.

Alongside first-timers such as Patakova were regulars who struggle with chronic ailments like diabetes and heart disease. Isabel Torres, 30, has been coming for six years to keep her diabetes manageable. Giovanni Arriola, 23, arrived in the Bay Area two months ago from El Salvador and had an earache.

The all-volunteer staff for the evening: two doctors, two nurses, one nurse practitioner, one nursing student, one medical assistant, one pharmacist and three Spanish translators.

Some services provided at the clinic are immunizations, tuberculosis testing, pregnancy testing, treatment for high blood pressure, diabetes, asthma, free medications and children’s physicals.

A major sponsor for the clinic is the Peninsula Community Foundation, but a one-year grant is running out and the clinic is seeking additional support to help it secure a long-term lease elsewhere.

RotaCare benefits not just those who walk through its doors, Avery said, but also the community at large.

“We don’t want emergency rooms flooded with patients coming in with an earache,” Avery said. “You don’t want to eat a salad prepared by a worker who has TB.”

Dr. Richard Brown’s Testimony on Drug Prices at NY State Hearing

Testimony of the New York Chapter of Physicians for a National Health Program
Hearing of the New York State Assembly Committee on Health
Prescription Drug Prices in New York State, December 5, 2002

        My name is Richard J. Brown. I am a psychiatrist, recently retired, who has been in practice, both institutionally and independently, for over 35 years. I additionally received an M.S. in administrative medicine from a school of public health. My educational and working experiences have led me to look beyond my immediate clinical and administrative activities into the functioning of the health care system.
        I am on the Board of Directors of the New York Chapter of Physicians for a National Health Program, an organization advocating a publicly funded, publicly administered health care system that provides equal access for all residents to quality, affordable care. Our nation is the only industrialized country that does not provide this for all our residents; more than 40 million people in the United States are medically uninsured, and a similar number are underinsured.
        It is not that there isn’t enough money to provide health care for everyone. Our country spends more on health care (more than 14% of GDP) than any other country (10.5% of GDP is the most that any other country spends.) Yet we are way down on the World Health Organization’s performance list – only 37th — lower than Canada, Japan, and all of Europe. Ours it the only industrialized country without a national health program.
I am here to speak about the pharmaceutical industry and the cost of prescription drugs in this country and in this state. The prescription drug industry is costwise the fastest growing sector within the 14% of GDP utilized for health care. Drug spending is rising 15-20% a year – doubling every five years.
        Part of this increase is demographically driven. We are living longer, growing more numerous, and many of us require medicines for chronic conditions. The increase is also due to advances in the science and practice of medicine, including the development of newer drugs that help to manage high blood pressure, diabetes, elevated cholesterol, infectious diseases including HIV/AIDS, gout, depression and psychoses, among other diseases.
        But another part of this rising cost is attributable to unconscionable profit-taking and profligate promotional practices. The pharmaceutical industry’s average profit after all expenses including research and development, advertising, promotions, lobbying, political campaign funding, contributions to law makers, and anti-consumer lawsuits to maintain uncontrolled prices is 18-19% – that’s over three times the profit margins of the other industrial sectors.
        Looking more closely, we find that drug prices in this country average over twice those of the very same drugs in other countries. How does this happen? In every single country throughout the industrialized world except for the United States, drug prices are government controlled. Let me say that again: In Australia, in Canada, in France, in Germany, in Italy, in Japan the governments control drug prices. Also to be noted is the fact that direct-to-consumer advertising (DTCA) is banned in the European Union and Canada. Europeans visiting the U.S. are startled to see those ubiquitous “Ask Your Doctor” ads we find on TV and radio, in newspapers and magazines, and on billboards. While the industry claims that this advertising is “educational,” in yesterday’s New York Times it was reported that the General Accounting Office  Congress’s investigative arm – has found that “drug companies have repeatedly disseminated misleading advertising, even after being cited for violations, and millions of people see the deceptive ads before the government tries to halt them.” These ads are hard to escape in the United States, and as I have indicated, are not to be found in Europe or Canada.
        Promotions include lectures to physicians in expensive restaurants and often include paying the doctors up to $500 to help drive the point home that the drug being promoted is the Rolex of them all.
        The pharmaceutical industry has thus far been successful in blocking even weak federal legislation that would lower drug prices. These costs are borne by Medicaid, state programs, and private insurers, as well as by individual patients without drug coverage who sometimes have to compromise expenditures on food, clothing, fuel and other necessities of life.
        So far even modest attempts at reining in drug prices have failed at the national level. We in New York cannot afford to wait until this much-needed national reform is adopted. Other states either singly, or in partnership with other states, are beginning to take measures to control spiraling drug prices. It is high time for our great state of New York to take a leadership role in this endeavor; such a step would offer a decided benefit to our own people and to people around the country.
        As you review your legislative alternatives, I ask that you consider very seriously the necessity of controlling pharmaceutical prices in order to defend the public coffers and to make affordable drugs available to all New Yorkers.
        I thank you for this opportunity to testify before this Committee.

National health insurance may be our only solution

Orange County Register
December 1, 2002
Commentary: National health insurance may be our only solution
by Michael T. Kennedy, MD, FACS

Don Hull’s letter, “Universal coverage is anything but” [Nov 22], attacks the National Academy of Sciences for suggesting that the Bush administration should “test possible solutions, including universal insurance coverage.” Hull equates universal health insurance, a single-payer system similar to the British National Health System, to the Soviet Union and Cuba, both communist dictatorships.

This is rhetorical hysteria.

The situation in California is at crisis level. Los Angeles County is planning to close major hospitals including Harbor General and Rancho Los Amigos, the latter the premier rehabilitation facility in the world.

Orange County hospitals are burdened with thousands of illegal, uninsured immigrants seeking care, but we can’t turn them away from emergency rooms. They are getting treatment, and doctors and hospitals are paying for it out of the decreasing margins left over from managed care. The system for indigent care is overwhelmed. HMOs are “cherry-picking” healthy subscribers and providers (doctors and hospitals) are being squeezed to the point of insolvency. This can’t go on much longer.

Free markets depend on information. The transaction has to be “transparent” so both the buyer and seller know the same facts. This is very difficult to accomplish in health care. Healthy subscribers like HMOs’ lower premiums but when they get sick, it is too late to change. We have an aging population and Medicare is cutting back on reimbursement. No “fat” is left in the system. There is, however, an enormous amount of administrative spending in the current system. There are also many perverse incentives to “game the system” as shown in the Tenet Hospital scandal in northern California.

It may well be that a universal health plan, covering everyone regardless of ability to pay, could be funded out of the total current expenditure on the present system, which has so many distortions. Our own system is unstable and it will not be long before that is apparent even to Hull who probably believes himself to be safe.

Michael T. Kennedy Mission Viejo

Dr. Kennedy is past president the Orange County Medical Association and a past co-director of the Mission Hospital Trauma Center.

http://www2.ocregister.com/ocrweb/ocr/article.do?id=13884&year=2002&month=12&day=3

Comment: Noteworthy about this commentary is that Mike Kennedy, a personal friend, is predominantly a political conservative, and the Orange County Register is a libertarian newspaper. But an objective assessment of the factual status of our health care system, and an objective assessment of the application of health policy science will go a long way toward achieving mutual agreement on the desired model of health care reform. As Mike says, the situation in California is at a crisis level. It is time for all of us to work together on a solution.

Insurer wants universal care

USA TODAY, December 4, 2002

By Julie Appleby
    
       In a break with many other insurers, the head of Blue Shield of California is calling for universal health care, starting with Californians.

       “Some of my peers in the industry may be disappointed with this approach,” CEO Bruce Bodaken told the Commonwealth Club in San Francisco Tuesday. “We are willing to take these risks for a simple reason: The current system and its underlying economics are unsustainable.”

       Bodaken heads one of the state’s leading health insurers, a not-for-profit entity with 2.6 million enrollees. His talk comes as health care costs are rising at their fastest clip in a decade, as more Americans fear losing coverage and as managed care is no longer seen as the answer to the problems.

       Political interest in reforming health care has also revived: Former vice president Al Gore is calling for a single-payer system, several presidential hopefuls are touting their plans for universal coverage and the Bush administration is pushing tax credits and an expansion of community health clinics to help the uninsured.

       Still, many lawmakers consider it politically dangerous to embrace a major overhaul. Voters in Oregon last month rejected a plan to give all state residents health care, paid for with tax increases.

       Bodaken’s plan is not an overhaul. Instead, he suggests building on the current system, by requiring employers to offer coverage or pay into a fund. In turn, individuals would also be required to buy coverage and those who can’t afford it would get government subsidies.

       State and federal health programs would be expanded to cover more low-income residents. Some kind of new tax would help pay for it all.
      
       “Every one of us will have to participate and in some cases make a sacrifice for the good of the whole,” says Bodaken, who sees such efforts starting in the states and eventually going national.

       Critics say a plan like Bodaken’s won’t solve the system’s many problems because it does not remove insurance companies from the equation.

       “He’s got the right diagnosis but the wrong treatment,” says Quentin Young, national coordinator for Physicians for a National Health Program, a group that supports a single-payer-type plan similar to Medicare. “We need to end the profit-motivated distortions in our system.”

       Under a single-payer plan, insurance companies, essentially, would be out of business. Bodaken’s plan, by contrast, could help insurers by requiring everyone to carry insurance. Observers say it is hard to evaluate the plan because many details are unclear. Still, many welcome the debate and say it is significant that a managed care insurer is calling for reform.

       Karen Ignagni of the American Association of Health Plans says the industry wants universal coverage. “Universal coverage doesn’t mean government takeover of the system,” she says. “Our community wants to play a major role in working with Congress and the states.”

http://www.usatoday.com/money/industries/health/2002-12-03-universal_x.htm