PNHP

Health plan crunch for CalPERS

Health plan crunch for CalPERS

The Sacramento Bee
February 21, 2002
By Lisa Rapaport

The California Public Employees’ Retirement System is exploring a radical overhaul of its health benefits program, admitting it can no longer use the market power of its 1.2 million members to hold down skyrocketing health care costs.

As HMO pullouts have forced members to enroll in CalPERS’ two self-insured PPO plans, PERS Care and PERS Choice, those plans have seen their reserves dip to dangerously low levels. Members in those plans, meanwhile, have seen their rates increase much faster than their counterparts in the HMO plans.

Allen Feezor, CalPERS health benefits administrator:

“HMOs are aggressively managing their risk at the expense of PERS enrollees. If the situation is not addressed, it will jeopardize our statutory requirement to provide affordable health care coverage to all, regardless of age or location,”

Barbara Adachi, a regional managing director for Deloitte & Touche:

“CalPERS needs to act now to avoid further deterioration in its plans. There’s an understanding that it will take time, but we already know that the market will not be able to solve the problems CalPERS faces.”

http://www.sacbee.com/content/business/story/1653915p-1729331c.html

Comment: CalPERS is the nation’s second largest provider of health benefit plans, surpassed only by the Federal Employees Health Benefits Program. And now there is general agreement that the market will not be able to solve the problems CalPERS faces. Why? The reasons are complex, but one important fact is that private health plans in the marketplace are mandated, based on “good” business practices, to avoid risk, shifting it elsewhere. Concentrating high-cost beneficiaries into CalPERS’ self-insured plans demonstrates that size alone will not contain costs when the market is able to siphon off low-cost beneficiaries.

Haven’t we had enough of these attempts to use the magic of the marketplace to control costs and provide comprehensive coverage for everyone. It is not as if we need to continue more real-life studies on the dynamics of the health care marketplace. The experiment has been completed with seemingly endless extensions that serve no other purpose than to prolong the life and profits of these failed marketplace health plans. It is time to end policies that prolong the viability of these parasitic middleman plans, and to enact policies that prolong the viability of patients!

A single, publicly administered, universal program of health insurance is precisely what we need. Let’s go for it!

1 in 8 Health Care Workers Lack Health Insurance

Contacts:
Brady Case (617) 308-7035
Quentin Young, MD (312) 782-6006
Don McCanne, MD (949) 493-3714

1 in 8 Health Care Workers Lack Health Insurance

Harvard Study Finds Coverage Falling Fast for Health Personnel and Their Children, Particularly in Private Health Sector

A study published in today’s American Journal of Public Health finds that one out of every 8 health care workers lacks medical insurance, far more than a decade ago. The children of health personnel also suffered declining health coverage over the decade and now account for one in ten uninsured children in the US.

The study, by Harvard researchers Drs. David Himmelstein, Steffie Woolhandler, and Harvard medical student Brady Case, analyzed data from a national survey of approximately 150,000 US residents conducted annually by the Census Bureau.

1.36 million health care personnel were uninsured in 1998, up 83.4% from 1988. The proportion uninsured rose from 8.4% to 12.2%. Declining coverage rates in the growing private-sector health care workforce—and falling health employment in the public-sector, which provided health benefits to more of its workers—accounted for the increases. The authors argue that the growth of for-profit medicine during the 90s, and price pressures from managed care, led many health institutions to cut workers’ benefits. In effect, investors and executives gained at the expense of health personnel and their children. In 1998, 1.12 million uninsured children lived in households with a health care worker, accounting for 10.1% of all uninsured children in the U.S.

The study analyzed all employees in physicians’ offices, hospitals, nursing homes and other health services settings. Physicians, nurses, managers, aides, food service, cleaning, building service, and laundry workers, and clerical and administrative support workers were among the groups examined.

Insurance coverage fell for virtually every health occupation in every type of institution, though some groups fared worse than others. The number of uninsured health workers in the private sector doubled over the decade while in the public sector the figure declined. In 1998, 20.0% of personnel in nursing homes were uninsured—more than in other health settings. Among occupational groups aides experienced the highest rate of uninsurance—23.8%. Even among physicians, more than 1 in 20 (5.4%) were uninsured. Black and Hispanic personnel were at least twice as likely as white health personnel to lack insurance. Geographic variations were considerable; Texas had the worst record.

The falling coverage over the past decade is particularly worrisome because it occurred during a record economic boom. An even steeper increase in uninsurance is likely in the current recession.

“Over the past decade we’ve learned that for-profit hospitals and dialysis clinics have high death rates; that for-profit HMOs and nursing homes score lower on quality; and that health care fraud is epidemic. Now we learn that market medicine means not only poor care and high prices for patients, but mistreatment of health workers.” said Brady Case, a medical student at Harvard and lead author of the study. “It’s perverse. The health care system, squeezed by Wall Street, is consigning its own workers and their families to the ranks of the uninsured.”

Dr. Don McCanne, President of Physicians for a National Health Program, commented: “In denying care to caregivers, our health system defies the Golden Rule. And it’s not only wrong, but dangerous. When a nurse with a cough or a kitchen worker with hepatitis can’t afford care, patients are at risk. It’s time for the U.S. to adopt a single payer national health insurance program.”

# # #

Physicians for a National Health Program (PNHP) is an organization of over 9,000 physicians that support universal access to health care. PNHP was founded in 1987 and has chapters across the U.S. For local contact information or copies of “No Care for the Caregivers: Declining Health Insurance Coverage for Health Care Personnel and Their Children, 1988-1998” (Am J Public Health. March 2002) call the PNHP headquarters in Chicago at (312) 782-6006.

Contacts:
– Brady Case is a medical student at Harvard.
– Dr. Quentin Young is an internist and former President of the American Public Health Association. He also serves as the National Coordinator of Physicians for a National Health Program
– Dr. Don McCanne is the National President of PNHP and a retired family physician.
– Drs. David Himmelstein and Steffie Woolhandler are currently on vacation. They may be reached at their clinical offices at (617) 665-1032 starting February 28.

Second Opinion: Is Health Insurance a Civil Right?

The Washington Post
February 19, 2002
By Abigail Trafford

“With pomp and circumstance and the glare of TV lights, representatives from 12 leading health, business and labor organizations signed a proclamation to ‘come together from diverse perspectives to seek solutions to one of America’s greatest problems.'”

“But the marching spirit of the summit conference started to sputter as soon as the health care moguls were asked about solutions. Out came the old buzzwords of stall, stall and stall: ‘Incremental,’ said one chieftain. There would be no one solution but a number of possible steps to chip away at the problem. ‘Public, private, incremental, long haul,’ agreed another. ‘Progress will be slow,’ said the consumer representative. ‘We have to keep the best we have and allocate resources,’ added another leader. ‘Incremental,’ echoed another.”

“To find solutions, each leader at the summit has to be willing to lose a little for the country to gain a lot. ‘Incremental’ is not a word that helps Potter, Hegdal or Henderson (examples of the plague of ‘uninsurance’). They’re not interested in ‘slow progress.’ They need coverage now. The uninsured have been waiting for decades for some relief.”

“So let’s give the chieftains 90 days to come up with a unified plan. After that, to return to the civil rights mode, it may be time for a march on Washington.”

http://www.washingtonpost.com/wp-dyn/articles/A18970-2002Feb15.html

For-Profit Health Care: Expensive, Inefficient and Inequitable

Dr. Arnold S. Relman, Professor Emeritus of Medicine and Social Medicine at Harvard Medical School and Emeritus Editor-in-Chief of the New England Journal of Medicine, Presentation to the Standing Senate Committee on Social Affairs, Science and Technology

Mr. Chairman, Honorable Members of the Standing Senate Committee on Social Affairs, Science and Technology :

My name is Dr. Arnold S. Relman. I am Professor Emeritus of Medicine and of Social Medicine at the Harvard Medical School and former Editor-in-Chief of the New England Journal of Medicine. I have been asked by the Canadian Health Coalition to appear before you today to testify about the U. S. experience with private, for-profit health care.

I have been studying and writing about this subject for over two decades. In 1985 and 1986 I served on a committee established by the Institute of Medicine of the U. S. National Academy of Sciences to report on “For-Profit Enterprise in Health Care.” During my editorship and afterwards, the New England Journal of Medicine published many articles in this field and, since I retired from that post, my own writings have continued to focus on this topic. I am now at work on a book that surveys the present unhappy condition of the U. S. health care system, with particular attention to the role of private enterprise.

My conclusion from all of this study is that most of the current problems of the U. S. system – and they are numerous – result from the growing encroachment of private for-profit ownership and competitive markets on a sector of our economy that properly belongs in the public domain. No health care system in the industrialized world is as heavily commercialized as ours, and none is as expensive, inefficient, and inequitable — or as unpopular. Indeed, just about the only parts of U. S. society happy with our current market-driven health care system are the owners and investors in the for-profit industries now living off the system.

The U. S. may be a world leader in medical science and technology, and its major medical centers may provide some of the best and most sophisticated care available anywhere, but taken as a whole, our health care system is failing and will need major reform very soon. We have tried private for-profit markets, first in hospitals, in ambulatory care facilities and services, and in nursing homes, and then more recently, in the ownership of insurance plans – and the experiment has failed. Private health care businesses have certainly not achieved the benefits touted by their advocates. In fact, there is now much evidence that private businesses delivering health care for profit have greatly increased the total cost of health care and damaged – not helped – their public and private nonprofit competitors.

The U. S. experience enables students of health care policy to compare the performance of nonprofit and for-profit facilities as well as the performance of insurance systems, and the results are clear for all who want to examine the evidence. For-profit hospitals were much more expensive than their nonprofit counterparts when Medicare and private insurers simply reimbursed charges. That difference disappeared when the payers began to negotiate fixed prices, but there has never been any evidence that for-profit hospitals could provide similar services at lower prices than their nonprofit competitors. However, a recent study of Medicare per capita expenditures for all health services, including hospital care, found that they were much higher in regions served exclusively by for-profit hospitals than in regions where there were fewer or no for-profit hospitals.

There is no good evidence about the relative quality of hospital services in for-profit and nonprofit facilities, because such studies are difficult to do. Quality is easier to ensure in nursing homes and kidney dialysis centers. They are largely paid through fixed, negotiated prices by public insurance, and their products are more or less standardized. Studies that have looked at objective measures of quality of service show that public and private non-profit nursing and dialysis facilities provide significantly better and safer services to patients than their for-profit counterparts. This shows that when you fix the price and the services so that there is no wiggle room, non-profits clearly provide better care.

A little over a decade ago, for-profit investor-owned businesses took over the private insurance field, and now they cover more than half of our people – mainly through employers. More than a quarter of our population is covered by Medicare and Medicaid, which are largely financed by government. Comparisons of these private and public systems are instructive. The Medicare system has administrative costs of less than 3 percent, with all the remainder of expenditures going to physicians, hospitals and other providers. The private insurers, on the other hand, have corporate and administrative costs of 15 to 30 percent, and in addition outsource many other services they use to control costs by restricting the use of expensive resources. As a result, it can be estimated that only 50 to 60 percent of the premium dollar ends up with the providers, who themselves must pay additional administrative costs to deal with the regulations of the multiple insurers they must bill. And, while the private insurers at first held down premium prices by drastically cutting utilization, they have now run out of cost-cutting options and are meeting increasing resistance from providers and the public. Recently, premium prices of private for-profit insurers have again begun to increase at double-digit rates, more rapidly than the costs of Medicare and Medicaid.

A remarkable demonstration of the failure of the commercial, HMO insurance system was seen a few years ago when senior citizens covered by Medicare were encouraged to obtain their care from private, for-profit HMOs that would be paid by the government. It soon became obvious that the costs of care under the private system were much greater and that senior citizens were dissatisfied with the care they received. A wholesale exit of senior citizens from the private system ensued. They voted with their feet for the public system.

In short, the U. S. experience has shown that private markets and commercial competition have made things worse, not better, for our health care system. That could have been predicted, because health care is clearly a public concern and a personal right of all citizens. By its very nature, it is fundamentally different from most other good and services distributed in commercial markets. Markets simply are not designed to deal effectively with the delivery of medical care – which is a social function that needs to be addressed in the public sector.

We in the U. S. are belatedly learning this lesson and soon may be ready to try other options that will depend more on public action. Many of us south of the border have always believed that you Canadians had the right idea in deciding that the financing of health care is primarily a public responsibility. We still think you are right and that we ought to emulate you, rather than vice versa. I am surprised and disappointed in your Committee’s Interim Report, which seems to favor policy options dependent on private market involvement in Canadian health care. Before making your final recommendations, I hope you will look more closely at the U. S. experience – which ought to convince most evidence-driven observers that markets can’t solve public problems like health care – and in fact make them worse.

However, to make a publicly financed system work effectively, I believe both our countries need to begin reforming their medical care delivery systems. That is where we both ought to be looking for ways to optimize our use of resources and improve the quality of our health care.

I believe that splintering the delivery system into many different, highly specialized facilities, as has been proposed in both our countries, is not in general a sound option for improving quality and effectiveness. A much better approach would be to re-organize how physicians work together. Both our countries now depend largely on independent solo medical practitioners to provide ambulatory and hospital services on a fee-for-service basis. We should both begin to encourage physicians and other health care professionals to organize themselves into self-governing, multi-specialty and multi-disciplinary teams to deliver comprehensive care at prepaid, capitated rates. Physicians provide the best care when they work in teams, not as competitors. Furthermore, to discourage over service, they should be paid primarily for their time, and not on a piecework basis. That would reduce both fraud and the resources wasted on the processing of claims.

Finally, I want to say just a word about “consumer choice,” which is now being touted in the U. S., and I gather in Canada, too, by believers in the magic of the market as a mechanism for controlling costs and improving the quality of services. While there is much to be said for making more information available to people about their health care, it is a fundamental misconception to imagine that sick patients can or should behave like ordinary consumers in commercial transactions, selecting the services and prices they want. Health care is totally different from most goods and services, and that’s why we have medical insurance and why sick people need the professional and altruistic services of physicians and other providers.

I suspect most Canadians understand why health care is special and why it needs to be insured by a public system like the one you now have. I would be surprised if they want the fundamental fairness of their Medicare system to be changed by the introduction of market forces.

Thank you for your attention.

Humana Medical Reviewer Admits to Denying Heart Transplant

Contacts:
Linda Peeno MD (502) 895-9761
Joanne Landy (212) 666-4001
Don McCanne MD (949) 493-3714

Showtime contacts:
Michele Morris (310) 234-5222
Joan Ziff (212) 808-1590

Humana Medical Reviewer Admits to Denying Heart Transplant
Second “John Q” Movie – Starring Laura Dern – Coming out in May

Louisville – Former Humana Medical Reviewer Dr. Linda Peeno was so disturbed by what she experienced working for the giant HMO – including denying a young patient’s heart transplant – that she went into medical ethics and is now a vocal advocate for a national health insurance program.

A movie based on Dr. Peeno’s experiences, called “Damaged Care” and including a scene showing her denying a patient’s heart transplant, is coming out on Showtime in May. Laura Dern (“Jurassic Park”) plays Dr. Peeno. Dern also co-produced the film. Dr. Peeno testified before Congress in May of 1996 about her heart transplant case and has been outspoken about the right to health care ever since.

“As a physician working for Humana, I denied a young man a heart transplant that would have saved his life, and thus caused his death,” testified Dr. Peeno. “No person or group has held me accountable for this, because, in fact, what I did was I saved a company a half a million dollars.”

“Humana’s only concern was costs,” says Dr. Peeno. “The young man fit all the criteria, a donor had been found, his doctor was ready to do the operation. Meanwhile, behind the scenes Humana employees scrambled to find a loophole in the patient’s contract. When they did, I was the one who had to tell the surgeon that the operation would not be covered.”

“The doctor asked me if I knew that the patient would likely die of his condition without the surgery, and I said I knew.” says Dr. Peeno. “When I hung up the phone my colleagues at Humana were thrilled, even joyful. I was sickened.”

The movie “Damaged Care” stars, in addition to Laura Dern, James LeGros, Adam Arkin, and Michelle Clunie, and features Regina King and Dianne Ladd. It is being distributed by Paramount Network Television. It was directed by Harry Winer.

Dr. Peeno recalls that shortly after denying the patient their heart transplant, a gigantic piece of sculpture was purchased for Humana’s headquarters – costing about the same amount as the heart transplant she had denied.

“When HMO’s came on the scene, we were told that they would eliminate only the “inappropriate care” and they would reduce costs so everyone could have insurance. Exactly the opposite has happened. They deny and delay needed care with sophisticated techniques, consume enormous resources for overhead costs and profits, and health care costs are rising dramatically.”

“Our health care funding system is sick,” says Dr. Don McCanne, a retired family physician and President of Physicians for a National Health Program. “If people only understood that we are already paying enough to provide comprehensive coverage for everyone – including heart transplants – if we only cut out the insurance middlemen and adopted a national health insurance program.”

The New York Chapter of PNHP leafleted outside a movie theater at the premier of John Q in New York City. “Everyone we spoke to agreed that we need health care reform,” says Joanne Landy, Executive Director of NYC-PNHP. “The public is overwhelmingly in favor of getting rid of the HMO’s and adopting a national health program.”

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Physicians for a National Health Program (PNHP) is an organization of over 10,000 physicians that supports a single payer national health insurance program. PNHP is based in Chicago with chapters across the US. For local contact information, call (312) 782-6006. www.pnhp.org

Dr. Linda Peeno is a family physician, medical ethicist and medical-legal consultant in Kentucky. She was the recipient of the 2001 “Dr. Quentin Young Health Activist Award”.

Hearing on Health Tax Credits to Decrease the Number of Uninsured

United States House of Representatives
Committee on Ways and Means
February 13, 2002

(Dr. Stuart Butler, Vice President of the Heritage Foundation, and others provided extensive testimony on the use of tax credits to assist with the purchase of health insurance in the private market.)

The testimony continues:

Chairman Bill Thomas (R-CA): Mr. Stark? We only have about four minutes.

Rep. Pete Stark (D-CA): … I’m gonna guess that we could provide Medicare for the under 65 population for probably 3,000 bucks a year. It was 4,000 for the 55 to 65 for the buy-in, so I’m extrapolating. Kids are only about 1,000 bucks, so you can fuss with me about the 3,000. But, I’m pretty close. If you add a maximum co-pay of 1,000 bucks, one day in the–one exposure to the hospital and 100 bucks for the doctor, you’re talking about, at most, $4,000 for a plan that–I handed out this list of benefits that I got off the e-group–that’s probably just as good as that, and if you–most of those had a $3,000 premium and a $1,000 co-pay. So, you could have Medicare with completely open enrollment and community rating, and why would anyone, therefore, object if using this tax credit, we allow people to purchase Medicare as an alternative? That’s all we’d need to keep the insurance companies honest. If they want to compete, let ’em compete. And we already have it for the seniors where, obviously, the private insurance didn’t want to compete. And so, I’d be perfectly willing to say, “Okay, let’s do it,” but just let Medicare offer a plan at budget net–cost as we do now with the subsidy for Part B, no higher, and provide it that way? Who’d object to that?

Dr. Stuart Butler (V.P. – Heritage Foundation): Well, I think you’d immediately see, of course, the adverse selection against Medicare, which is one of the big concerns with that. The people who would quickly and immediately take that option would be the people with the highest cost–.

Rep. Stark: Yeah, but adverse concern is the guy who doesn’t get any insurance through the private market.

Dr. Butler: Well, I understand that. But, I’m just trying to point out that the cost of providing that coverage is–.

Rep. Stark: It’s interesting how the (inaudible) is always worried about the poor people and the sick people first, as they’re jamming it to us rich, healthy people? I like that, Stuart. You’re true to form, always worrying about the rich people, never give a hoot for the poor.

Dr. Butler: Well, I–.

Rep. Stark: –At least you’re consistent.

Dr. Butler: I think my record’s very clear on that, Congressman.

Rep. Stark: Yes, your record is very clear. You don’t give a rat’s behind for the poor and the indigent. All you worry about is rich people getting their tax breaks.

Dr. Butler: Well, Congressman, I’ve actually–.

Rep. Stark: –Your career is outstanding in that regard.

Dr. Butler: If you look at the proposal–actually–.

Rep. Stark: –God bless you. Keep it up.

http://www.kaisernetwork.org/health_cast/uploaded_files/hwa021302.pdf

Comment: Mr. Stark, in his mastery of the eloquence of the lay language, has left no doubt as to the fundamental issue that lies behind the debate on health care reform. Maybe we should proceed with this debate. Let’s decide once and for all whether we, as a nation, give a rat’s behind. If we don’t, let’s not waste more time and effort on health care reform. But, if we do, let’s quit wasting our time trying to incrementally create a system that can be accepted by those that don’t give a rat’s behind. There is no such system. The enemies of reform will always try to silence the hoot that we want to give to the poor. If you doubt this, then ask yourself why a few decades of incremental reform have resulted in more uninsured, higher costs, and greater impairment of access to health care. The collectors of rat’s behinds have silenced almost every hoot of each reform measure.

Single payer reform would provide comprehensive care for everyone and effectively address the cost issue. Let’s leave the enemies of reform in their vaults, counting their rat’s behinds, while we move on with real reform. Let’s fix the damn thing now. Let’s enact a single payer system.

Joshua Freeman, M.D., Professor and Chair, Department of Family Medicine, University of Kansas Medical Center, responds to Kip Sullivan on the Wennberg proposal:

I agree pretty much with Sullivan. Two comments:

1. The biggest problem with Wennberg, Ellwood and others is that the ownership of the care providers by private, corporate, for profit entities precludes not only privacy, but true cost-effectiveness, as it inescapably alters the motivation for everything that such providers do. This, not prospective payment, large groups, etc., is the problem with HMOs-in-their-current-form.

2. Sullivan is correct of course about prospective studies. My concern is that new IRB regulations, with the intention of protecting privacy of patients, will preclude a lot of people-based (as opposed to lab-based) research. Thus, it will not hurt those currently most NIH funded whose work is least likely and with the longest time lag to benefit people (but has the highest status, since it isn’t susceptible to as much variation as studies involving actual people, with their undisciplined habits of variation!) but will be a real threat to clinical and in particular social science research on things that may be of greater immediate benefit (this has nothing to do with Wennberg or really Sullivan, but is a thought I had on reading Sullivan).

Uwe Reinhardt, Ph.D., responds to the Pete Stark – Stuart Butler exchange during the House Ways and Means hearing:

I do understand Pete’s frustration and anger, and I share the sentiment. Pete has been a constant champion of the poor over the years and he must be deeply saddened at the 1990s. But I do not think that he was being fair to Stuart Butler.

To be sure, Stuart has a strong bias in favor of private market solutions–he, like Mark Pauly, has a deep-seated belief that government solutions invariably breed inefficiency and corruption, just as others have a deep-seated belief that private, for -profit enterprise is inherently anti-social. On the other hand, I know that both Mark and Stuart do care deeply about the welfare of low-income people, would very much like to see them all insured, and have worked hard over the years to work out politically feasible proposals to achieve that goal–proposals that have varied with the political temper of the times. They are not callous people. There really is such a thing as a compassionate conservative, and these two fall into that class (as President Bush does not–for he lacks the first of the “c’s”).

In fact, none other than former New Republic editor Michael Kinsley (recently retired from Slate) called Stuart Butler’s original proposal (JAMA, around 1992) the most liberal proposal at the time, measured by the ultimate incidence of the fiscal burden and the degree of protection it offered. It may be recalled that the Urban Institute judged the financing of the Clinton Plan regressive in its incidence.

It is worth re-reading that old Heritage Foundation proposal to appreciate just how far we have sunk in terms of social ethics. Today it would be dead on arrival. Even Al Gore would have decried Stuart’s proposal as “reckless spending.”

Uwe

John Q.

Hundreds of thousands of Americans watched this weekend as a desperate father held a hospital emergency room at gunpoint and demanded a heart transplant for his dying son. Fortunately for everyone, it all happened in a movie, ‘John Q,’ which opened Friday

Los Angeles Times
February 18, 2002
‘John Q.’s’ Public Warning By Benedict Carey

Hillel Laks, M.D., Professor and Chief, Division of Cardiothoracic Surgery, UCLA Medical Center, Los Angeles:

“It’s very important for people to know what their insurance pays for, and to know they can do something about it. John Q. could have gone to the company and said, ‘I don’t like this policy. I want to spend $100 more and get better insurance.’ If he’s willing to go shoot people to save his son, why can’t he pay a little extra a month to make sure he’s covered?”

http://www.latimes.com/features/health/la-000012439feb18.story?coll=la%2Dheadlines%2Dhealth

Comment: Professor Laks is a noted and respected expert on heart transplants. However, before he ventures further into expressing public opinions on health policy, I would emphatically recommend that he become more versed in the basic fundamentals of this discipline. He might begin by reading “Understanding Health Policy” by Thomas Bodenheimer and Kevin Grumbach.

Importunely, Dr. Laks’ response represents the prevailing view of the leadership of the medical associations, of many business leaders, and the conservatives and many moderates who now control the political agenda. Their rhetoric is that control of health care should be shifted to the consumer, and this is done by defining the contribution of either the employer or the government and then allowing the beneficiary-patient to have “choice” of the type of coverage by contributing the balance of the premium. That “choice” for those with very limited income and assets, such as John Q and another 100,000,000 or so in the United States, either requires an often unaffordable premium, or requires that the individual select options with unaffordable out-of-pocket expenses. For the benefit of Dr. Laks and others that don’t seem to quite get it, in health policy terms, this is called “defined contribution” and “shifting risk to the beneficiary.”

In fact, everyone who is going to take a stand on issues of health policy should read “Understanding Health Policy.” If individuals are going to support cruel and inhumane health policies, they should understand exactly what they are doing. In this age, they should not be allowed the intellectual laziness and the “Let them eat cake” insensitivity of proclaiming, “Let them have choice,” and then walking away from the problem.

Understanding Health Policy: http://shop.mcgraw-hill.com/cgi-bin/pbg/0071378154.html?id=aaHGHsD3

Kip Sullivan, responding to the Wennberg et al proposal for Medicare reform:

I agree with your statement that Wennberg et al. have presented a compelling argument that Americans are exposed too often to overuse and underuse of medical services. And I agree as well that Wennberg is wrong to promote HMOs as the mechanism best suited to reduce overuse and underuse. However, I want to call attention to a proposal Wennberg makes that you didn’t discuss which I believe is dangerous and doomed to fail.

Wennberg, like all managed-care advocates, believes quality (overuse, underuse, and misuse) can only be improved if the structure of the health-care system is changed, and if patient privacy is destroyed (or, at best, placed at grave risk). Wennberg shares two beliefs with Paul Ellwood and other managed-care advocates: (1) quality cannot be improved unless doctors are herded into large entities — preferably HMOs — that have enough power over doctors to force, cajole, and/or educate them into changing their practice style, and (2) patient medical files are dumped into large information depots, preferably national depots, and these depots are used by researchers to determine “best practice.” Both beliefs, casually and frequently expressed by the managed-care crowd, have never been elaborated, and certainly never proven. I think both beliefs are nonsense. A thorough refutation of this nonsense would take up more time than I have today. I comment on just two issues.

The notion that doctors can improve their understanding of the massive medical-science literature only if they leave solo practices and join large networks of docs or HMOs makes several bogus assumptions, the most important of which is that the bureaucrats who head up the network or HMO do have plenty of time to keep up with the medical literature, and, given their superior knowledge and their managed-care tools (utilization review, financial incentives, etc.), are capable of forcing or inducing the army of doctors under their command to weed out the “bad practices” and nourish the “best practices.” Just saying this seems to me proof enough of the silliness of this proposal, but if there are people on this list who would like to question this statement, please do. This is a complex issue and I’d be happy to expound.

The second premise I want to quarrel with is Wennberg’s assumption that medical research has been shackled, lo these many centuries, by the absence of national or regional information depots containing all information on all patients. (To my knowledge, Paul Ellwood was the first person to make a big splash promoting this nonsense. He did so in a 1988 article for the New England J Med.) The problems with this proposal are numerous and mind-boggling.

The most serious problem with the notion that advances in medical science depend on researchers trolling through millions of patient files is that it pretends, without saying so, that the historic methods of advancing medical science were never any good, or were terribly inefficient. The gold standard in scientific research is, of course, the prospective, controlled trial. Trolling through patient files after patients have received medical care is, by definition, a retrospective methodology. You can do your best to control for variables that could affect outcomes, but as a rule you’ll never control for all relevant variables with a retrospective methodology as well as you will with a prospective methodology. I’m not saying retrospective research is useless. I’m merely calling attention to an obvious fact — medical science, excuse me, “identification of best practices” will advance faster if we rely primarily on prospective methods, and that increasing the number of retrospective studies based on huge information depots (as opposed to the old-fashioned technique of asking a sample of patients for consent and then reviewing their files) will accomplish relatively little. To put it another way, if we never create gigantic information depots, medical science will continue to advance by the same route it always has — by basic research, by randomized (prospectively designed) clinical trials, by retrospective research using relatively small patients samples, by clinical experience, and by serendipity.

Note the advantage to patients in the old-fashioned methods of advancing medical science — our records are used with our consent. Under the Wennberg proposal, all records (not just that portion relevant to the study) on all patients (not just a sample of patients) are routinely dumped into the depot and kept there till the end of time (which is a much longer violation of patient privacy than the period of time required by the typical old-fashioned prospective or retrospective study).

And I haven’t even discussed the cost of the Wennberg-Ellwood boondoggle.

I think single-payer advocates should state clearly that one of the advantages of a single-payer system is that patient privacy will not be destroyed. To make that promise, we have to reject the HMO advocates’ claim that quality of care can only be maintained or improved if patient files are routinely inspected by researchers. We should instead promote much more old-fashioned research, and more education of doctors and patients about the results of that research.

Medicare cut seen raising labour costs

The Globe and Mail (Toronto)
February 12, 2002
By Virginia Galt

“Labour costs could shoot up, jeopardizing one of Canada’s key competitive advantages, if universal health care is eroded and unions go after employers for private coverage, industrial relations specialists say.”

The Conference Board of Canada, in a recent briefing paper on corporate health care costs in Canada and the United States:

“Any policy debate on the future of the health care system of Canada should recognize not only medicare’s symbolic value to individual Canadians, but also its economic contribution to the competitiveness of Canadian businesses vis-Ă -vis the United States.”

http://www.globeandmail.com, and under Search” and “This site” enter “Medicare cut” and click “Go”

Beth Capell, Ph.D., responding to the Urban Institute report on the safety net:

The only “safety-net system” proposals that would give the uninsured the same access to care as the insured require that the safety net is as well funded as insurance coverage and as readily accessible. None of these so-called safety net proposals mentioned by Holahan and Spillman, much less the Bush proposal, approach that level of funding and accessibility, to the best of my knowledge. In California, we would need to spend an additional $8-$10 billion a year to fund care for the uninsured comparable to the cost of coverage. Short of that, the safety net will always be inadequate. Even with that, given the well-established correlation of poverty and ill health, funding for the uninsured may not be sufficient–but it would be much closer.

Health Care Access for Uninsured Adults: A Strong Safety Net Is Not the Same as Insurance

Urban Institute
By John Holahan and Brenda Spillman

“The weakness of the safety net does not appear to worsen the uninsureds’ access to care. Conversely, a relatively strong safety net does not appear to improve their position relative to the insured. No matter how the uninsured are supported-whether by third-party payers, the presence of community health centers, a high level of disproportionate share payments, or local government subsidies-we find no evidence that these efforts have the ability to eliminate, or even narrow, barriers to access to the extent that insurance can.”

http://newfederalism.urban.org/html/series_b/b42/b42.html

Comment: The Bush administration is touting proposals for expansion of health insurance coverage, such as very modest tax credits, that will have little impact on decreasing the numbers of uninsured. Instead, their emphasis has been shifted to supporting the health care safety-net through programs such as increased funding for community clinics. (Even the seriousness of this commitment can be questioned in light of the 33% reduction in funding resulting from the elimination of the Medicaid upper payment limit for safety-net institutions.)

This study challenges the assumption that strengthening the safety-net system will provide a substitute for the lack of insurance coverage. The relative strength of the safety-net does not alter access to care. In sharp contrast, insurance coverage, or the lack thereof, dramatically impacts access to health care.

Although this study demonstrated that weaknesses in safety-net systems can be compensated for by the remainder of the health care community, it is important to note that there may be an as yet unidentified threshold at which safety-net systems can collapse resulting in further impairment of access for the uninsured. So it is important to maintain the integrity of the safety-net system until we finally resolve the deficiencies in our methods of funding health care.

But the bottom line is that we must make every effort to provide comprehensive health care insurance for everyone. We now know that the only way that we can do this equitably, and still afford to pay for it, is through a single payer system. Let’s start the planning process today!

Geography And The Debate Over Medicare Reform

Health Affairs
Web Exclusive
February 13, 2002

“A reform proposal that addresses some underlying causes of Medicare funding woes: geographic variation and lack of incentive for efficient medical practices.”

by John E. Wennberg, Elliott S. Fisher, and Jonathan S. Skinner

ABSTRACT:

Medicare spending varies more than twofold among regions, and the variations persist even after differences in health are corrected for. Higher levels of Medicare spending are due largely to increased use of “supply-sensitive” services – physician visits, specialist consultations, and hospitalizations, particularly for those with chronic illnesses or in their last six months of life. Also, higher spending does not result in more effective care, elevated rates of elective surgery, or better health outcomes. To improve the quality and efficiency of care, we propose a new approach to Medicare reform based on the principles of shared decision making and the promotion of centers of medical excellence. We suggest that our proposal be tested in a major demonstration project.

http://www.healthaffairs.org/WebExclusives/Wennberg_Web_Excl_021302.htm

Comment: John Wennberg and his colleagues have previously provided more than ample data to confirm that for even those who have access to care and can afford it, Americans are receiving poor value for their health care dollar. Many services are of no benefit and may be detrimental, and other beneficial services are not being delivered. Mediocrity in care is not limited to low-income, uninsured and under-insured individuals, but it is a characteristic of our entire health care system, with some exceptions.

In this report, Professor Wennberg and colleagues demonstrate that doubling spending in Medicare does not result in more effective care nor better health outcomes. They do demonstrate that this increase in spending merely results in increased use of hospitals, intensive care units, and, especially, medical specialist services, but with no improvement in the index of effective care. Clearly, efforts must be made to reform not just Medicare, but our entire health care system.

Professor Wennberg’s group proposes a fresh approach to Medicare reform including promotion of effective care and patient safety, reducing unwarranted variation in preference-sensitive care, reducing overuse of supply-sensitive care, refining monitoring systems, and rewarding more efficient resource use. They mention how this can be studied and implemented quite readily within the Medicare program. In fact, after reading their proposal and giving it some thought, it is clear that a single payer system would form the ideal infrastructure for implementation of these measures that would improve quality and efficiency.

They briefly mention the inequities that might result from implementation of a budget cap, but even those inequities would be more readily addressed through a single payer model than they would through a fragmented system of multiple payers. They also suggest that the Breaux-Thomas model might have a place in competitive strategies, although cooperative strategies should also be considered. However, integrated health systems are the entities that would be competing based on best-practice models, and the business-model health plans characteristic of the B-T proposal would add administrative waste and change the focus from best practices to dollar-flow management. Thus there is no reason to blindly follow the path of incrementalism merely because the authors state that it is more likely in the near future.

This article must be read by everyone who wishes to help improve our health care system. Professor Wennberg, et al, have indicated the direction for reform. It is our task to demonstrate that the single payer model provides the ideal infrastructure for implementing their proposals.

John Q

Jonathon Ross, MD, MPH, past president of Physicians for a National Health Program:

Have you seen the ads or the trailer for the movie John Q? Denzel Washington plays a man whose son needs a transplant and ends up going postal when he is told that it is not a covered benefit. I was at the movies when the trailer played.

The trailer finishes with DW holding a hostage and a negotiator saying to him, “How is this going to end, John?”

I couldn’t help saying out loud at the end of these words at the end of the trailer, “National Health Insurance!”

And the audience of about 100 broke into cheers.

Comment: “John Q” opens at theaters today. It has already provoked considerable discussion. Today’s reviews by movie critics are a mix. Some criticize it for using stereotyped characters with predictable behavior. Some criticize dramatizing the use of a violent response (using a gun to take hostages) for a very serious social issue (our failed system of paying for health care). But others clearly acknowledge that the message is very real, that the crisis in insurance coverage today literally threatens lives (though normally much more subtly than in this portrayal).

Discussion of this film has moved from the entertainment section to the news section of the media. And it is the message of the insurance crisis that is being discussed. The anticipated impact is great enough that the American Association of Health Plans is conducting an advertising campaign to deflect the blame to others.

While we need to be sensitive to the fact that violence is used to represent the intensity of the desperation of this fictional father, nevertheless, the nation will be discussing this film and the insurance crisis it portrays. We need to be there to show them that we do have a solution: comprehensive care for everyone with no increase in costs, through single payer health care reform.

For those that have the QuickTime 5 program, the John Q trailer can be viewed at: http://www.apple.com/trailers/newline/john_q.html

Although some may object to specifying single payer reform as the answer, remember that the preliminary results of the California Health Care Options Project demonstrate that only single payer or health service models will provide truly comprehensive care for absolutely everyone, and that they actually reduce health care costs, whereas the incremental models studied fail the tests of universality and comprehensiveness and actually increase health care costs. It is time to refute and chastise those that say that we should stifle the talk of single payer because of political expediency. Single payer is the moral imperative in health care reform. We need to agree on that and then move on with reform.

Personal Costs for Medicare H.M.O.'s Rise

The New York Times
February 14, 2002
By Milt Freudenheim

“Elderly and disabled members of Medicare H.M.O.’s used nearly 50 percent more of their own money on average for medical care in 2001 than they did three years ago, health care researchers said yesterday.”

“Out-of-pocket costs rose 62 percent to $3,578 in 2001 for people in poor health as their share of spending rose for prescription drugs, premiums and other services not fully covered by Medicare.”

Marilyn Moon, a Medicare policy expert at the Urban Institute:

“Many people joined H.M.O.’s to try to reduce out-of-pocket expenses. The bargain was, ‘we will give up some of our control over medical services in order to have some of our costs reduced.'”

John Rother, legislative and policy director of AARP:

“No one is looking at H.M.O.’s any longer as a way of saving money for Medicare. The reality is, fixing these problems is going to cost some money.”

http://www.nytimes.com/2002/02/14/health/14CARE.html

Comment: The Medicare+Choice options were able to offer pharmaceutical coverage and lower out-of-pocket expenses primarily because of their success at enrolling relatively healthy patients. For several reasons, they no longer have the margins that will allow this largess.

The administration and some members of Congress now want to increase funding for these private sector plans which would allow them to continue to offer richer benefit packages. But these plans are not available to everyone, and they vary in their generosity. Why should those that remain in the traditional Medicare program be denied benefits that the private plans provide? They shouldn’t. They should have the same pharmaceutical coverage and reduced out-of-pocket expenses. We know that the plans would not be able to provide identical services at the same price, and they would likely go away.

If the administration really believes that the enrollees of private plans are entitled to these extra benefits, then they must believe that those in the more efficient traditional program should be entitled as well. We do still believe that our taxes should be used equitably. Don’t we?