PNHP

Rex Morgan's prescription: socialized medicine in U.S.

Rex Morgan's prescription: socialized medicine in U.S.

JAMES ADAMS
NATIONAL ARTS CORRESPONDENT

Supporters of socialized health care in Canada and the United States have a seemingly unlikely friend in Rex Morgan M.D., the handsome, deeply decent physician who has been a staple of newspaper comics since 1948.

So far there’s no record of the Romanow health care commission or the U.S. Secretary of Health having consulted the fictional doctor.

However, as any of the 30 million readers of the syndicated strip carried by 300 newspapers in 15 countries can tell you, Rex has come out foursquare in favour of what his creator calls “a single-payer, state-supported health care system.”

Interestingly, the man behind Rex Morgan’s position isn’t some “communist or liberal socialist” — although he has received plenty of mail calling him that, and worse. He’s Woody Wilson, a 55-year-old registered Republican from Tempe, Ariz., who voted for George W. Bush in the 2000 elections.

“I believe the country that is supposedly the richest and most powerful in the world shouldn’t be forcing its citizens to choose between paying their mortgage or saving their lives. Yet that is what is happening with millions of Americans right now,” Mr. Wilson said in an interview this week.

“What’s needed is health care for everyone instead of dividends for stockholders in pharmaceutical companies.”

Mr. Wilson has been writing Rex Morgan M.D., a sort of soap opera in comic form, since 1991, having worked as an apprentice under its originator, psychiatrist Nicholas Dallis (now deceased), since 1982.

Under Mr. Wilson, Rex Morgan hasn’t hesitated to tackle domestic violence, epilepsy, drug abuse, AIDS, organ transplants, asthma and sexual harassment.

“We’ve never made people laugh; we’re about informing and entertaining,” he likes to say, and, in fact, medical professionals and support groups have included some of his strips in their educational packages.

But in recent months Mr. Wilson has pulled his rock-jawed hero firmly into the far more dicey arena of health policy, even sending him to Washington, D.C., to testify before legislators.

The strip’s current storyline is dealing with the fallout from the death of Rex Morgan’s friend, Dick Coleman, who lost his job after being diagnosed with colon cancer. Losing the job resulted in the loss of his family’s health coverage and the threatened foreclosure on the mortgage on the Colemans’ home.

In the wake of Dick’s death — “the very week [in June this year] that Dubya got his colonoscopy,” Mr. Wilson noted — his wife Marsha became borderline suicidal and his daughter Dana started to use drugs and get involved with criminal elements.

“All because they couldn’t afford health insurance,” a sombre Rex Morgan mused in one recent strip.

It’s estimated that nearly 40 million Americans share the plight of Dick Coleman. Meanwhile, “We’re adding a million or more people to the rolls of the uninsured each year,” Mr. Wilson said.

Mr. Wilson likes to call himself “just a comic-strip guy,” but he’s a guy whose wife happens to have a PhD in health-care policy from Massachusett’s Brandeis University and who “sits and talks with me about my stories.”

Moreover, it’s a measure of Mr. Wilson’s perceived clout that he has been invited to speak in November at the annual convention of the 9,000-member U.S. Physicians for a National Health Program.

Despite the flak Mr. Wilson has received from some readers, no newspaper has pulled Rex Morgan M.D. from its comics section.

“Our problem goes to something else,” Mr. Wilson said.

“Strips like ours — they’re called continuity strips — are perceived to be old-fashioned these days. So we have to work harder to keep them fresh.”

Rex Morgan, he added,”will always have to be about hot issues, will always have to try to be a bit ahead of the curve, if only because we’re syndicated in so many countries.”

Mr. Wilson said Rex’s campaign for a national, state-financed health-care regime “is going to be a recurring theme for years to come.”

Right now the fight for a comprehensive medical program “isn’t a national priority,” he acknowledged, “nor is there the political will for it.”

But this could change in two or three years, if the ranks of the uninsured swell to, say, 50 million.

“That’s a political party, in effect, right there,” he said. “If someone can mobilize those people . . . that’s a major force.”

Unsurprisingly, those Americans critical of Mr. Wilson’s position like to ask him, “Do we want to have a Canadian health-care system? Do we want rationing? Do we want to wait in line for hip-replacement surgery?”

Mr. Wilson chuckled. “My wife and I were talking about this and she said, ‘Well, in Canada, [health care] is about waiting; in America, it’s about money.’ I want the waiting.”

Rex Morgan’s prescription: socialized medicine in U.S.

JAMES ADAMS
NATIONAL ARTS CORRESPONDENT

Supporters of socialized health care in Canada and the United States have a seemingly unlikely friend in Rex Morgan M.D., the handsome, deeply decent physician who has been a staple of newspaper comics since 1948.

So far there’s no record of the Romanow health care commission or the U.S. Secretary of Health having consulted the fictional doctor.

However, as any of the 30 million readers of the syndicated strip carried by 300 newspapers in 15 countries can tell you, Rex has come out foursquare in favour of what his creator calls “a single-payer, state-supported health care system.”

Interestingly, the man behind Rex Morgan’s position isn’t some “communist or liberal socialist” — although he has received plenty of mail calling him that, and worse. He’s Woody Wilson, a 55-year-old registered Republican from Tempe, Ariz., who voted for George W. Bush in the 2000 elections.

“I believe the country that is supposedly the richest and most powerful in the world shouldn’t be forcing its citizens to choose between paying their mortgage or saving their lives. Yet that is what is happening with millions of Americans right now,” Mr. Wilson said in an interview this week.

“What’s needed is health care for everyone instead of dividends for stockholders in pharmaceutical companies.”

Mr. Wilson has been writing Rex Morgan M.D., a sort of soap opera in comic form, since 1991, having worked as an apprentice under its originator, psychiatrist Nicholas Dallis (now deceased), since 1982.

Under Mr. Wilson, Rex Morgan hasn’t hesitated to tackle domestic violence, epilepsy, drug abuse, AIDS, organ transplants, asthma and sexual harassment.

“We’ve never made people laugh; we’re about informing and entertaining,” he likes to say, and, in fact, medical professionals and support groups have included some of his strips in their educational packages.

But in recent months Mr. Wilson has pulled his rock-jawed hero firmly into the far more dicey arena of health policy, even sending him to Washington, D.C., to testify before legislators.

The strip’s current storyline is dealing with the fallout from the death of Rex Morgan’s friend, Dick Coleman, who lost his job after being diagnosed with colon cancer. Losing the job resulted in the loss of his family’s health coverage and the threatened foreclosure on the mortgage on the Colemans’ home.

In the wake of Dick’s death — “the very week [in June this year] that Dubya got his colonoscopy,” Mr. Wilson noted — his wife Marsha became borderline suicidal and his daughter Dana started to use drugs and get involved with criminal elements.

“All because they couldn’t afford health insurance,” a sombre Rex Morgan mused in one recent strip.

It’s estimated that nearly 40 million Americans share the plight of Dick Coleman. Meanwhile, “We’re adding a million or more people to the rolls of the uninsured each year,” Mr. Wilson said.

Mr. Wilson likes to call himself “just a comic-strip guy,” but he’s a guy whose wife happens to have a PhD in health-care policy from Massachusett’s Brandeis University and who “sits and talks with me about my stories.”

Moreover, it’s a measure of Mr. Wilson’s perceived clout that he has been invited to speak in November at the annual convention of the 9,000-member U.S. Physicians for a National Health Program.

Despite the flak Mr. Wilson has received from some readers, no newspaper has pulled Rex Morgan M.D. from its comics section.

“Our problem goes to something else,” Mr. Wilson said.

“Strips like ours — they’re called continuity strips — are perceived to be old-fashioned these days. So we have to work harder to keep them fresh.”

Rex Morgan, he added,”will always have to be about hot issues, will always have to try to be a bit ahead of the curve, if only because we’re syndicated in so many countries.”

Mr. Wilson said Rex’s campaign for a national, state-financed health-care regime “is going to be a recurring theme for years to come.”

Right now the fight for a comprehensive medical program “isn’t a national priority,” he acknowledged, “nor is there the political will for it.”

But this could change in two or three years, if the ranks of the uninsured swell to, say, 50 million.

“That’s a political party, in effect, right there,” he said. “If someone can mobilize those people . . . that’s a major force.”

Unsurprisingly, those Americans critical of Mr. Wilson’s position like to ask him, “Do we want to have a Canadian health-care system? Do we want rationing? Do we want to wait in line for hip-replacement surgery?”

Mr. Wilson chuckled. “My wife and I were talking about this and she said, ‘Well, in Canada, [health care] is about waiting; in America, it’s about money.’ I want the waiting.”

Attitudes toward the United States' Health Care System

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

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

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

The Big Picture

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

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

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

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

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

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

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

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

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

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

Special message to our friends who share our vision:

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

Attitudes toward the United States’ Health Care System

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

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

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

The Big Picture

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

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

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

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

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

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

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

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

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

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

Special message to our friends who share our vision:

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

Dividing up health care by income class

By Uwe E. Reinhardt

FEDERAL BUDGETS can be viewed as memorand ums in which the president and the majority of the Congress tell God about the moral tradeoffs they have made on behalf of the nation. From that perspective, last year’s memo was illuminating for health policy.

When President Bush and the new Congress began their terms in January 2001, they faced a projected 10-year federal surplus of $3.1 trillion (excluding a projected Social Security surplus of $2.5 trillion). Even before Sept. 11, by August 2001, that surplus had melted to merely $847 billion, primarily as a result of the huge tax cut enacted in the preceding months. By January 2002, the budget had deteriorated further to a projected 10-year deficit of $742 billion.

Evidently, then, last year’s memo to God read in part: ”Thank you, Lord, for gracing us with a 10-year projected surplus of $3.1 trillion. If it’s a choice of spending that surplus on (A) providing health insurance to the 40 million or so hard-working Americans now without it or (B) providing tax relief to the nation’s overtaxed well-to-do, we’ll take the tax cut. Respectfully yours, George W. Bush and the majority of the US Congress.”

As an ex-Christian with only a vague memory of the New Testament, I have no idea how well that memo may sit with the good Lord. As an economist trained in the Theory of Revealed Preference, however, I can infer clearly the preferences of the nation’s politically dominant elite. If that elite could not find it in its heart and mind to extend health insurance to uninsured Americans when the nation was awash in budget surpluses, it is unlikely to do so as the government once again faces red ink as far as the eye can see.

After chatting about the problem but leaving it unresolved for more than half a century, the political elite last year gave the clearest signal yet that upwards from 30 million to 40 million uninsured will remain a permanent feature of our health system, deep into the current century.

As in the past, the uninsured will continue to forgo the timely, early medical interventions that well-insured Americans take for granted. In case of serious illness, however, most of them probably will be able to scrounge up critical needed care from kindly doctors and hospitals, albeit in the undignified posture of health-care beggars. In the process, they will severely stress the finances and the morale of these kindly providers of care.

Many other uninsured will be hounded by medical bills and slide into personal bankruptcy. In research by Harvard law professor Elizabeth Warren, medical bills were found to be the second most frequently cited reason for family bankruptcy in the United States, behind loss of employment.

The next tier up in our health system will be HMOs catering to Medicaid beneficiaries. In principle, they should be able to offer patients better coordinated care than the traditional Medicaid program could, but only as long as the federal and state governments pay premiums high enough to cover the cost of well-managed modern health care. It remains to be seen how well the legislators will own up to that contract in the tight budgetary climate ahead.

For Americans receiving insurance as part of the labor contract there will be a wide array of private insurance products, ranging all the way from tightly managed HMOs for low-wage workers to more open-ended Preferred Provider arrangements for middle-income families to the completely open-ended, no-holds-barred health care that moneyed elite has always taken for granted.

Many of the private insurance products, however, are currently being changed to shift larger fractions of health care costs into the patients’ own budgets, providing quite explicitly for rationing health care by price and ability to pay.

Sitting on the sideline will be the Medicare program for the elderly, whose spotty benefit package always has explicitly called for the rationing of important components of health care (e.g., prescription drugs) by price and ability to pay. The program may be absorbed one day into the income-tiered private health insurance products, although that prospect remains uncertain.

This income-tiered health system will remain an inexhaustible source of confusion and rancor, primarily as a result of a built in dissonance over the distributive ethic for health care. The American public still expects physicians and hospitals to deliver health care on a strictly egalitarian basis. Woe to the physicians or hospitals thought to dabble in boutique medicine for the well-to-do or to deny the uninsured health care.

On the other hand, the nation’s policy-making elite clearly signals through the payment system it put in place that the health-care experience of Americans can be let to vary by income class. For example, when federal and state legislators are willing to offer pediatricians, say, $75 per visit with their own children, but pay pediatricians seeing children of poor inner-city family fees that may not even cover practice costs – or simply leave such children uninsured – do they sincerely expect the delivery of health care to all Americans on an egalitarian basis?

One sympathizes with health professionals who must practice within this sea of dissonance. It makes ours the messiest and, in some ways, the most dishonest health system anywhere in the world.

As last year’s federal budget memo to the good Lord makes clear, however, the providers of health care must learn to live with this dissonance as one more chronic condition they confront. It is as good as it will get in our latitudes.

Uwe E. Reinhardt is the James Madison professor of political economy at Princeton University.

(c) 2002 Boston Globe

Texas Public Policy Survey Statewide Survey on Health Care Survey

University of Houston
Center for Public Policy
conducted June 20-29, 2002

Q8. I’m going to read you some different ways to guarantee health care for more Americans and Texans. As I read each one, please tell me whether you would favor or oppose it.

52% favor – A national health plan, financed by taxpayers, in which all Americans would get their insurance from a single government plan.

72% favor – Requiring businesses to offer private health insurance for their employees.

69% favor – Offering uninsured Americans income tax deductions, tax credits, or other financial assistance to help them purchase private health insurance on their own.

72% favor – Expanding state government programs for low-income people, such as the Medicaid and the Children’s Health Insurance Program, to provide coverage for people without health insurance.

75% favor – Expanding the neighborhood health clinics.

http://www.uh.edu/cpp/healthcare.pdf

Comment: The University of Houston poll used precisely the same phrasing for a national health plan as does Professor Robert Blendon of Harvard in his polls. Including the terms “financed by taxpayers” and “a single government plan” invariably results in a low percentage of positive responses. The 52% favorable response in this poll is especially remarkable in that Texas is not exactly noted for its liberal-progressive activism.

Texans apparently really do want to see that everyone is guaranteed access to health care. There is even stronger support for various “incremental” proposals, as the numbers above indicate. All of them involve some form of tax subsidy (including the regressive taxation of the employer mandate). It is most likely that there is some degree of awareness that these proposals represent egalitarian ideals made possible by public funding (although maybe not expressed in these terms).

It would be interesting to see the response if the public understood more of the policy behind the proposals. They are willing to support these tax funded expansions, but they are probably not aware that the increased costs are greater than would be the costs of a national health insurance program. Also, they are probably not aware that they could have more health care benefits with fewer out-of-pocket expenses with national health insurance.

Do you suppose that there might be a different response to the national health insurance option if the respondents were asked if they supported a program that increased their benefits, gave them free choice of providers, provided coverage for everyone, and controlled our health care costs? Naw… they don’t want the government involved. After all, what’s really important here?

Underinsured in America: Is Health Coverage Adequate?

Kaiser Commission on Medicaid and the Uninsured
July 2002

Though health insurance is one of the most important factors in assuring access to health care, gaps in coverage can create access problems even among the insured. Thirty-eight percent of insured individuals report that they or their families experienced at least one problem accessing medical services in the past year. Nearly one-fifth (18%) report that they postponed seeking medical care, 15% had a problem paying medical bills, 10% did not get a prescription drug they felt they needed, 8% were contacted by a collection agency about a medical bill, and 6% didn’t get care they felt they needed.

Many of these problems arise because some individuals’ health plans do not cover all the services they need. In other cases, individuals cannot afford the cost sharing associated with covered benefits.

While the uninsured are most at risk, researchers estimate that about a fifth of insured individuals are underinsured and face limits on coverage or substantial financial costs if faced with an illness. Given the recent increase in health care costs, it is likely that this problem will escalate in coming years.

http://www.kaisernetwork.org/health_cast/uploaded_files/4060.pdf

Comment: Current trends in health insurance include defined contributions, greater price sensitivity through cost sharing, splitting risk pools into individual accounts, introduction of Spartan “basic” benefit plans, greater tiering of insurance options, and other measures that are moving away from the traditional role of assuring financial security through risk pooling.

Why this shift? These policies are designed to protect employers against increased costs. Yet employers pay only about 19% of the nation’s health care bill. These policies are designed to reduce risk for the insurance companies, assuring the financial security of this industry, at the cost of the financial security of patients. They are designed to support the views of those that are ideologically opposed to a government role in issues of social justice.

Do we really want to expand policies that protect an insurance industry noted for egregiously wasting our health care resources? Do we really want to continue to rely on employer “good will” to struggle to provide 19% of the funding of our health care system, when we have the capability of relieving them of this burden? Do we really want to cater to ideological elements that believe that funding through a tax system is more evil than funding through the private sector, even when it has been demonstrated that public funding provides greater value for health care dollars?

We already have more than enough resources to provide comprehensive health care benefits for everyone. Isn’t it time to establish policies that would enable us to utilize our resources much more effectively? We can continue with our existing private and public health care delivery system, but we desperately need a single risk pool that is publicly funded and publicly administered.

HHS Report Shows More American Children with Health Coverage

HHS News U.S Department of Health and Human Services
July 15, 2002

HHS Secretary Tommy G. Thompson today released an HHS report that shows American children are significantly more likely to have health insurance today than in 1997, when the bi-partisan State Children’s Health Insurance Program (SCHIP) was enacted into law.

The CDC report also found that overall health insurance coverage has improved. The percentage of Americans without health insurance fell to 14.1 percent in 2001 from 15.4 percent in 1997.

http://www.cdc.gov/nchs/releases/02news/release200207.htm

Table on the number and percent without health insurance: http://www.cdc.gov/nchs/about/major/nhis/released200207/table01_1.htm

Comment: The success of the SCHIP program in expanding health insurance coverage for children is gratifying. But what did not appear in the news release, but only in the table accessible through a link, is the fact that for ages 18-64 years, 30.8 million were uninsured in 1997, and 30.9 million were uninsured in 2001. Most experts agree that this number has become even larger since the onset of the recession.

More disconcerting news is that the recession has negatively impacted the funding of Medicaid and SCHIP, since most states must produce a balanced budget. That means program cuts since politicians are refusing to increase taxes. On July 15, CMS administrator Tom Scully told the National Governors Association, “We can’t always give you more money. But we are trying to help you… make the money you have go as far as you can.”

We have enough funds in health care to provide comprehensive services for everyone. Isn’t it time for a policy change?

(Scully quote: Arrillaga, Associated Press, July 15)

The Changing Political and Economic Environment of Health Care in Canada

Commission on the Future of Health Care in Canada
Discussion Paper No. 1 July 2002
By Gerard W. Boychuck, University of Waterloo

Executive Summary

In the post-deficit political context, the political sustainability of public health care seems precarious. While the tension between health care as a large public expenditure program and a broader political context oriented towards balanced budgets, debt retirement and tax reduction seems relatively obvious, the political fragility of public health care in Canada is neither the automatic nor necessary result of this broader context. Rather, the linkage between health care and fiscal issues has been politically and institutionally constructed. As a result, the sustainability of public health care in Canada at the current time is, fundamentally, a political – rather than simply a fiscal – issue. The existence of a fiscal crisis of health care in Canada is not evident in current expenditure patterns; however, public beliefs that there is a funding crisis in health care are, nonetheless, real. The crucial question is how and why this linkage between health care spending and fiscal issues such as deficits, debt and taxes, so clearly captured in current understandings of sustainability, has become so firmly embedded in Canadian policy debates over the past half decade. While the contemporary political orientation towards balanced budgets, deficit/debt reduction and lower taxes does not necessarily undermine the sustainability of the current health care system, more robust political support is required to sustain the current system of public health care in this context and the potential for current institutional arrangements to undermine support of the health care system is magnified.

The fiscal crisis of health care is not merely an ideological construct; rather, it has firm and enduring institutional underpinnings. It is rooted in the paradoxical situation by which the public health care system’s institutional framework – especially the nature and dynamics of federal-provincial fiscal relations – are structured such that they fundamentally undermine rather than bolster public support for the system. The current political fragility of the system is the result of political dynamics generated out of nearly a decade of federal-provincial wrangling over funding in a context of fiscal restraint. The incentives created by federal-provincial fiscal arrangements and the resulting patterns of interaction have led to widespread perceptions both among the elite and the broader Canadian public that the public health care system in Canada is of rapidly declining quality, is wracked by a funding crisis, is unable to control costs, and is, ultimately, fiscally unsustainable.

Current expenditure patterns provide slim grounds for arguments that the system is fiscally unsustainable. Provincial health expenditures relative to GDP are the same now as they were a decade ago and recent patterns of expenditure increases are, in part, a response to pent-up demand created by expenditure restraint in the mid-1990s. Arguments that the system is fiscally unsustainable are only plausible if based on assumptions of cost acceleration above and beyond cost increases driven by aging, population growth and moderate cost increases in services now offered or, alternatively, on the claim that current levels of tax effort are unsustainable. The former issue can be plausibly debated; however, arguing that the potential for future cost increases poses a threat to sustainability is fundamentally different than arguing that existing expenditure patterns demonstrate that the current system is unsustainable. The sustainability of current provincial tax efforts in the face of increasing global and continental economic integration is also an open question in the longer term; however, to this point, there is no evidence of downward harmonization in provincial fiscal efforts.

Despite this, there is now a widespread perception of an existing fiscal crisis in public health care. The roots of this perception lie, to some significant degree, in the institutional underpinnings of health care -especially federal-provincial fiscal arrangements. In the context of more generalized restraint, these arrangements began to generate dynamics with serious potential to undermine public support for the system of public health care. First, the illusion of the rapid growth in the overall fiscal burden of health expenditures (relative to the economy) is primarily an artifact of federal-provincial financing arrangements. Secondly, the manipulation of the fiscal system so that the burden of government debts and deficits is borne primarily at the provincial level, whose primary program responsibility is health care, has strongly reinforced the linkage in public debates between health care spending and the issue of debt and deficits. Finally, current fiscal arrangements provide provinces with strong incentives to emphasize the failings of their own health care systems and the broader fiscal unsustainability of public health care in an attempt to maximize leverage for their demands on the federal government to enrich transfers.

These dynamics have had important impacts on public perceptions of health care including the striking decline in public perceptions of the quality of health care that exists despite the prevalence of positive personal health care experiences. In addition, there also are widespread public perceptions that the public health system is experiencing a major funding crisis (despite the fact that the fiscal burden of public health care relative to the economy is no heavier than at the outset of the 1990s) and that increased funding must be a central component of improving the health care system. Finally, public confidence in the handling of health care issues by both levels of government is decreasing and the belief that governments are falling further and further behind in terms of addressing the problems facing health care is becoming more prevalent.

Current expenditure patterns do not suggest that the fiscal sustainability of the public health care system in Canada is in jeopardy in the immediate term. This does not mean that future cost acceleration poses no threat to the sustainability of health care or that there is no need for a concern with fiscal restraint in health management. Nor does it mean that the issue of sustainability should be dismissed as a transitory phenomenon that will fade as the politics of fiscal restraint ease. The conditions resulting in broad perceptions of an existing fiscal crisis of health care have very real and enduring institutional underpinnings that can be expected to continue into the foreseeable future regardless of whether there are objective grounds for it, and regardless of whether solutions to containing future cost pressures are implemented. Under current arrangements, a continuing and not easily reversible decline in public perceptions both of the quality and sustainabilility of the existing system public health care in Canada seems likely. It is here that the real potential for crisis lies.

http://www.healthcarecommission.ca/Suite247/Common/GetMedia_WO.asp?MediaID=890&Filename=Boychuk_E.pdf

Kip Sullivan clarifies the message on his response to the Miller-Luft HMO Plan Performance Update:

“Implicitly, HMO quality is as good as it appears only because HMOs use more resources than FFS plans use.”

This statement appears in the excerpt from the literature review by Miller and Luft in the latest Health Affairs that Don sent out last week. Miller and Luft name no author, and cite no paper, but given the context, it appears to be directed at me. For the record, I have never made such a statement. Anyone familiar with the literature would not make the blanket statement that “HMOs use more resources than FFS plans.”

Kip Sullivan

Controlling Health Spending in the Private Sector

Council on Health Care Economics and Policy
Ninth Princeton Conference
The Robert Wood Johnson Foundation
June 6-8, 2002

Henry Simmons, MD, MPH, FACP, President of the National Coalition on Health Care:

So having shared with you our observations and recognizing the magnitude and the interrelatedness of the cost, coverage, and quality problems we face, and the failure of all the existing and presently proposed strategies to deal with it, what reforms do we feel will be necessary?

Well, we have concluded that solution is going to require a comprehensive strategy that effectively integrates federal, state and private sector policies and achieves all of those goals. We must achieve universal coverage. After ten years of effort and looking here and elsewhere, we have found no voluntary mechanism that will achieve that.

We must create a massive effort, public and private, to improve the quality of all care and to eliminate that waste of hundreds of billions of dollars and the unnecessary carnage that is causes.

We must develop a mechanism to control total health system cost, not just for Medicare, not just for the big buyers, but for everybody. And to stop the national shell game of cost shifting which currently is the mode of operation.

And obviously, we have to create a viable, fair, sustainable system to finance care. Having done those, we’ve automatically accomplished the last objective which is to administratively simplify the most complex, non-user friendly system on the face of the earth.

As you can see, the subject of this conference, cost containment, is one, but only one of the essential goals. Why do they all have to be attained as hard as that will be to do? Because as I said earlier, the problems are inextricably intertwined. You can’t solve one without addressing them all. It’s a vicious cycle.

Without system-wide cost containment strategies, you can neither assure, afford or sustain universal coverage. Without universal coverage, you cannot assure quality. And in the absence of quality, you cannot contain your costs or most importantly, make rational payment decisions…

In addition, without universal coverage, you can neither create a truly competitive market based system, make the system less complex, stop risk selection and cost shifting, or most importantly, achieve a level playing field of equitable financing. And remember, those who advance the managed competition hypothesis, honestly told us a decade ago that it could not work without mandatory universal coverage.

Now, we recognize that to achieve those ambitious reforms is not going to be easy… We have to get the public and our political leaders to understand that there is a great deal of unfinished business in health care. We are convinced that health care will be the transcendent domestic issue in our society in this decade. And in our coalition meeting just two days ago in Washington, we unanimously committed ourselves to do everything we can to make this our highest priority over the next two years.

So, to conclude, given our assessment what are our answers to the three major questions we’ve talked about these two days. Should health care costs be contained? They must be, because unless they’re contained, none other than the wealthy can be assured they will have coverage when they need it or continue to be able to afford that which they now have.

Question two. Can health care costs be contained without harming patients? Absolutely, but not with the strategies we’re currently using, or currently contemplating.

Question three. Must the system be restructured? Yes, from top to bottom.

Question four. What will be necessary to control costs? These major national policy changes and the abandonment of a bankrupt piecemeal strategy we’ve been utilizing for 40 years.

A difficult task, monumental, but one that we are convinced must be completed, because otherwise our great grandchildren will be sitting in this room attending not the 9th but the 109th Princeton Conference and a topic of which will be “Why didn’t we do what was necessary sooner?” So, I guess you can subtly show that we reject the piecemeal approach that this society is trying to implement. And frankly, we would also, I guess, object to those people who say, “Because it’s going to be hard, we shouldn’t try.” That’s a self-fulfilling prophecy.

http://www.kaisernetwork.org/health_cast/uploaded_files/Transcript_CouncilonHealthEconomics_6.8.02.pdf (Cut and paste this tail to the link above for access to the transcript.)

The website of the National Coalition on Health Care: http://www.nchc.org/

Kip Sullivan comments on the assessment of quality in the review of HMO plan performance by Robert Miller and Harold Luft:

Back in March of this year, Uwe Reinhardt and I debated whether managed care damaged the quality of medical care. Uwe cited an unpublished literature review by Robert Miller and Harold Luft that Uwe described as “inconclusive,” that is, it found managed care and FFS care to be roughly equivalent in quality. I wrote Uwe back and asked, “Do you know if Luft and Miller’s new review excluded studies that didn’t control for coverage differences? If it did not, why do you give its conclusions any credibility?” Uwe did not answer me.

Now we know the answer to the first of my two questions. The latest Health Affairs (July-August 2002) contains the Miller-Luft literature review Uwe was no doubt talking about. As was the case in Miller-Luft’s 1994 and 1997 literature reviews, this one (which covers studies published between 1997 and June 2001) includes studies that failed to control for coverage differences, a failing which will often bias results in favor of managed care plans and rarely bias results against fee-for-service doctors (see the PNHP web site for more details on this argument). This was no oversight; at the end of their article, Miller and Luft make a point of arguing with an article I published in the American Journal of Public Health in 1999 criticizing their methodology. Their reasoning is very strange.

I find this latest review to be deceptive for two other reasons. (1) In places, it leads the reader to think that the studies reviewed compared HMOs to FFS plans, when in fact few studies looked at what most people think of when we hear the phrase “FFS plan” — indemnity plans that don’t use utilization review or other managed care tactics. (2) In many places, the review leads the reader to believe the studies compared HMOs to “non-HMOs,” when in fact some of the studies mixed HMOs and PPOs together.

My conclusion: None of Miller and Luft’s three reviews are reliable. My review in the Am J Pub Health uses the soundest methodology, and that review concludes HMO care is inferior to FFS care.

Kip Sullivan _______________________

Following is the abstract of the article by Miller and Luft to which Sullivan refers. Also is the comment from that article referring to the prior critique by Kip Sullivan. Please note that this was written prior to Kip Sullivan’s comments which appear above and, therefore, could not be responsive to this latest critique.

Health Affairs July/August 2002 HMO Plan Performance Update: An Analysis Of The Literature, 1997-2001 By Robert H. Miller , Harold S. Luft

Abstract

This paper synthesizes results from peer-reviewed literature published from 1997 to mid-2001, on various dimensions of health maintenance organization (HMO)plan performance. Results from seventy-nine studies suggest that both types of plans provide roughly comparable quality of care, while HMOs lower use of hospital and other expensive resources somewhat. At the same time, HMO enrollees report worse results on many measures of access to care and lower levels of satisfaction, compared with non-HMO enrollees. Quality-of-care results in particular are heterogeneous, which suggests that quality is not uniform – that it varies widely among providers, plans (HMO and non-HMO), and geographic areas.

Responding to an earlier critique.

After our last literature review, Kip Sullivan argued that our past findings were biased in favor of HMOs because we did not adjust for the fact that HMOs tend to provide more comprehensive coverage than non-HMO plans do. Adjust for those differences, the argument goes, and HMO findings would be much less favorable. This argument is flawed because it ignores the fact that plans are selected on the basis of a “bundle” of characteristics or attributes, not just one. In general, HMOs tend to have more-comprehensive coverage (that is, fewer price constraints on demand), combined with more nonprice constraints – narrower networks and other nonprice attempts (gatekeepers and prior authorizations) to limit specialist visits and expensive services. Non-HMO plans tend to have less comprehensive coverage (that is, more price constraints on demand) but fewer nonprice constraints. Sullivan’s proposal holds constant only one part of the “bundle” coverage, ignoring the other. FFS plans with comprehensive coverage and few nonprice constraints on demand have high utilization, high premiums, and few insured persons. Although the Canadian-style single-payer FFS system has few price restrictions, it too must constrain demand-through overall budgets, long-range resource planning, and queuing.

Also flawed is an additional argument that the apparent comparability of quality is because Medicare, as a result of inadequate risk-adjustment methods, over-pays HMOs, which can therefore offer better coverage (such as outpatient prescription drugs), leading to better outcomes than would have been the case without the overpayment. Implicitly, HMO quality is as good as it appears only because HMOs use more resources than FFS plans use.

There is evidence that Medicare overpaid Medicare HMOs by approximately 6-7 percent, according to two estimates. However, the implication with respect to quality is flawed, since it ignores the fact that many FFS Medicare beneficiaries, employers, or Medicaid pay extra for supplemental insurance coverage and that beneficiaries also incur copayments, deductibles, and other out-of-pocket expenses. These payments add substantially more resources for FFS than for HMO enrollees. As a result, while FFS Medicare beneficiaries may use fewer Medicare-financed dollars (risk-adjusted) than their HMO counterparts use, they almost certainly use more real resources in toto.

In fact, if quality is comparable for HMO and non-HMO plans, then many HMO enrollees who have a choice among plans seem willing to accept lower satisfaction for lower out-of-pocket payments. Based on the findings from the articles reviewed here and in the past, the trade-off overall does not appear to be one of lower quality of care for lower out-of-pocket payments. We note, however, that not all enrollees have a choice of plans, and this may be a source of some of the backlash against managed care.

Securing the Benefits of Medical Innovation for Seniors: The Role of Prescription Drugs and Drug Coverage

U.S. Department of Health and Human Services
Office of the Assistant Secretary for Planning and Evaluation
July, 2002

“This report demonstrates the potentially serious consequences to medical innovation and overall health posed by attempts to contain drug expenditures by implementing government controls that are inevitably arbitrary and out of touch with the diversity of patient needs and circumstances. If applied broadly in the United States, government-controlled restrictions on the coverage of new drugs could put the future of medical innovation at risk and may retard advances in treatment and in the development and introduction of new products. Moreover, government controls may reduce or delay access to specific drugs for seniors. Even when a drug is available, government controls often increase the likelihood that older, lower cost products will be prescribed rather than newer, more innovative products, which may have fewer side effects or other features that improve patient compliance and hence, the effectiveness of medical treatment.

“In contrast to many other countries, the U.S. market is relatively free of government-controlled programs to contain medical costs. Although participation in many federal and state buying programs may require certain types of controls-such as rebates and coverage limits-these programs represent only a small fraction of the market.

“To ensure continued progress in the fight to treat and prevent diseases, especially the chronic illnesses of older age for which we may be on the verge of unprecedented breakthroughs, the American health care system should not resort to government controlled drug coverage decisions. Other steps can and should be taken to reduce the costs of drugs, such as investing in biomedical research on less costly and more effective treatments, protecting the intellectual property rights of American companies worldwide, improving the efficiency of the regulatory process for new treatments, and increasing the availability and effectiveness of competitive approaches to limit the cost of new treatments. These steps will help keep drugs available and affordable without reducing access to valuable new treatments and discouraging innovation just at the time when the potential for innovation is greatest.”

http://aspe.hhs.gov/health/reports/medicalinnovation/

Comment: This report, cloaked as “study” on drug innovation and coverage, is merely a blatantly dishonest political statement of the Bush administration’s policy position on pharmaceutical firms. Just at a time when access to affordable prescription drugs has become a critical problem for many of those with the greatest needs, the Bush administration blows these people away and beds down with the industry that is ripping off the American public. Have they no shame?

(Please accept my apologies for injecting politics into a policy issue. Maybe someone else reading this has a more effective approach to establishing the principle that everyone should have access to essential medications.)