PNHP

Keep Your Hands Off Medicare, President Bush

Keep Your Hands Off Medicare, President Bush

The Hartford Courant
April 13, 2001
by Ramon Castellblanch

“The way to get a Medicare prescription drug benefit that does not risk Medicare hospital benefits is paying for them from the general fund budget surplus, not from the Medicare hospital fund.”

“Medicare’s problem isn’t economic or financial – there’s plenty of money in its surplus. The problem is political.”

The full article is available at www.ctnow.com, under “Editorials.”

Comment: The problem with a “unified” budget, combining Medicare and Social Security taxes with general revenues, is the shift in the source of revenues used to run our government. The excess funds paid into Medicare and Social Security are shifted into the funds for general expenses. But look at who is paying. Unlike income taxes, which are progressive, low income individuals bear the full burden of their portion of these payroll taxes. In fact, the Social Security portion is regressive since high income individuals pay a lower percentage of their total income than do moderate and low income individuals. As Congress tackles tax and budget issues, we must insist that they do not use this patently unfair mechanism of shifting funding of general expenses from our fair, progressive income tax system over to our programs of social insurance that are funded by each participant. To do so would be yet another injustice of the poor funding government services for the rich. Perhaps we should counter with the recommendation that payroll taxes be eliminated and that Medicare and Social Security be funded by general revenues (income taxes), inherently more fair because of the progressive nature. It would certainly bring to attention the real issue involved, and it would strengthen our bargaining position on behalf of preserving Medicare funds.

Don

Message from Don McCanne:

Hoag Memorial Hospital Presbyterian is a first rate hospital that, in fact, does contribute significantly to the unmet medical needs of the community. I still stand by my position that even the best of us must do much more to advance the cause of universal health care, but I sincerely regret using Hoag Hospital as a negative example merely because of a minor blemish in their ethics (using defibrillator gifts to golf courses as a marketing strategy). I feel strongly that the “good guys” have to work together on the cause of health care justice, and, in this instance, I violated my own standards by taking on one of the best.

In fairness, I am presenting the statement of Gwyn Parry, M.D., the Director of Community Medicine at Hoag Memorial Hospital Presbyterian (relayed through Felix Schwarz, Executive Director of the Health Care Council of Orange County).

****************

Subject: Hoag Hospital Date: 13 Apr 2001 From: Gwyn Parry, M.D. To: Felix Schwarz

Thank you Felix. We always appreciate the critical commentary, and you know that we agree with the need for significant improvement in the provision of health care access. As the only modern industrialized nation without a universal system of health care access and provision, we’re going to fall way behind in this competitive world throughout this century unless we bring about some major changes; and we’re going to have to speak more aggressively in asking ourselves some very searching questions about our moral and ethical commitment to our society. While I don’t engage in rhetorical argument, I would suggest that to be knowledgeable about not-for-profit hospitals, and to be able to make learned commentary, one should review the community benefit legislation: SB697. As you well know, this act of the California legislature provides the motivational standard for programs and initiatives in community benefit provided by not-for-profit hospitals, of which Hoag Memorial Hospital Presbyterian is but one. I’m sure that you can provide your readers with a copy, and a copy of your excellent analysis of hospital programs that you wrote two or three years ago. Additionally, I’d further suggest that your readers access the Community Benefit reports annually filed with the Office of Statewide Health Planning and Development and now accessible via the OSHPD website: http://oshpd.cahwnet.gov/hpp/hcbp/index.htm

Hospitals are listed in alphabetical order; by county; and by bed size. Identify the hospital in which you are interested and e-mail your request to: hppmail@oshpd.state.ca.us

Requests can also be submitted by phone or fax. We are required to annually report our programs provided for the at-risk, underserved, and while we don’t advertise them, reports include the dollar expenditures. I think your readers and correspondents might be interested in just how much effort is being put into community outreach for residents that lack resource access and service that we take for granted. On another related topic, I’ve had an opportunity to talk to several funding sources about the forum on insurance issues that you wish to conduct and you and I need to sit down at your convenience and re visit the proposal. Thanks GP

Hoag Hospital Donates Portable Defibrillators to 10 Golf Courses

Los Angeles Times Orange County Edition
April 10, 2001

Robert J. Heath, director of golf at Pelican Hill Golf Club near Newport Beach: “This will definitely help us react in emergency situations.”

Comment: Now that Hoag Hospital has extended its outreach to meet the needs of the millionaires that frequent Orange County’s golf courses, perhaps the hospital board members can turn their attention to addressing the unmet medical needs of the uninsured servants of these millionaires.

Felix Schwarz, Executive Director of Health Care Council of Orange County, responding to my comments about Hoag Hospital’s gift of defibrillators to ten golf courses:

“In defense of Hoag — they provide outstanding support to the Share Our Selves (SOS) free medical and dental clinic, and to the Costa Mesa Senior Center. The Hoag Foundation and the hospital have contributed generously to the Health Care Council’s support — I can think of a great many targets in Orange County who have done little or nothing for the working poor while raking in obscene profits from the health care non-system, but Hoag is not one of them. Giving defibrillators to golf courses would not be high up on my list of urgent health care needs in this county, but, on balance, I wish we had more Hoags!”

Comment: Felix is correct. Hoag Memorial Hospital Presbyterian is one of the finest hospitals in Orange County. They have provided more charitable services than our for-profit hospitals, but they have hardly made a dent in the need that exists. Orange County is one of the most affluent counties in the nation, and yet 90,000 of our children have no insurance. Hoag Hospital, representing the best of our health care system, should play a leadership role in advocating for health care justice for all. Hoag Hospital and the millionaire patients served by it have the status and wealth to move the agenda for health care reform. Yet they remain inert. I’m sorry Felix. Although they represent the finest that we have, they’re still not good enough, and I’m going to continue to whack them and the rest of our leaders that are failing to support reform that will bring everyone under the health care umbrella.

Don McCanne

Health Trumps Taxes

ABCNEWS.com
4/9/01

Poll: 52% – Don’t cut taxes, spend more on health care for the uninsured 30% – Cut taxes, keep health spending the same 10% – Cut taxes, cut health spending

The percentages that support spending more on health care for the uninsured rather than cutting taxes, by annual family income level: 67% – income less than $25,000 52% – income $25,000-$50,000 49% – income $50,000-$100,000 37% – income more than $100,000

http://abcnews.go.com/sections/US/DailyNews/budget_poll010409.html

Comment: Does affluence foster inhumanity? Or are the inhumane more effective at achieving affluence? Either way, it’s sad.

Don

Who Gets What Slice of the President's First Federal Budget Pie

The New York Times
April 10, 2001

Health By Robin Toner

“The department’s (Health and Human Services) discretionary spending (outside the entitlement programs like Medicare and Medicaid) would grow by 5 percent under the Bush proposal, an increase of $2.7 billion over the 2001 fiscal year’s. The National Institutes of Health was the major winner in this ‘redirection of resources,’ as the budget called the shifting of money among programs.”

Ron Pollack, Executive Director of Families USA:

“The president’s budget proposal literally shortchanges Americans’ health care by providing too little support and reaching too few people.”

Tommy G. Thompson, Secretary of Health and Human Services:

“What’s more important than finding a cure for cancer? What’s more important than finding a cure for Alzheimer’s?”

Comment: What’s more important? Applying the knowledge and resources that we do have to improve the health of the American people that are funding the National Institutes of Health (NIH).

Much of the blame for runaway health care costs in America rests with the special privileged position that we have given our health care technology and pharmaceutical industries. Through the NIH, the taxpayers fund much of the research that is used by these industries to develop new products. These products are granted patent protections, and yet have not been subjected to the same degree of cost controls that the providers of health care are now facing. Many of the products, such as copycat drugs and scanners with more colorful images, have not demonstrated their value but have significantly added to costs.

In shifting health care dollars from care for the less fortunate in our society to the NIH, the administration is tacitly supporting their friends in the technological and pharmaceutical industries with free, taxpayer funded research. The taxpayers have a vested interest in this research and should directly benefit in the form of a return on our investment through lower costs and rational spending. Each other nation controls drug costs; we should as well. Although we need to fund new research, we should not fund the market applications until real value is demonstrated by pilot studies. We also need to recognize that increasing expenditures in technology reduces expenditures in other sectors. Since we are near the limit of what we will tolerate in health care expenditures, we need to place these industries under an implicit global budget. This would be automatic if we were to establish a publicly administered, universal risk pool. Only then could we be assured that everyone benefits from the public funding of health care research.

http://www.nytimes.com/2001/04/10/politics/10WRAP.html

Response to Uwe Reinhardt by Philip Pollner, M.D. & Nancy Wooten, Ph.D. April 10, 2001

Dear Dr. Reinhardt:

We were saddened to read your email letter <2_27_01.htm> “To my Gentle Critics,” (February 27, 2001). You argue that “We can never have a health care system that balances the dignity and freedom sought by doctors and patients with society’s desire to have the system operated with some larger constraints. We can never have it, not under our system of governance. There is nothing that you or your patients can do about it. Your voices do not count, and you are powerless and must get used to it.”

Dr. Reinhardt, perhaps your dismal opinion regarding the prospect for reform reflects your disappointment and despair with what seems a futile process at this point in time, but coming from a revered ally and a respected scholar this conveys a sense of hopelessness and surrender to many of us who have been committed for years to the attainment of health care for all Americans. Worse, at a time when we are facing both conflict and challenge in trying to improve the health care system, your commentary lends neither new ideas, strategies, encouragement nor moral support – any of which would be at least helpful as we try to keep the faith.

Most important, when viewed from the perspective of history your statement on the prospects for ultimate victory loses credence. Time and again we have witnessed what was considered to be unimaginable goals or unexpected institutional and legislative metamorphoses become reality. Who, for example, would have thought in 1982 as the Cold War raged that a decade later the Soviet Union would cease to exist, that the Berlin Wall would be toppled and the two Germanys would reunite? What black person in the 1970s living in Johannesburg would have dared to dream that apartheid would be abolished and representative government established in South Africa by the 1990s? Few men or women alive in nineteenth century America could imagine that there would ever be a Constitutional amendment guaranteeing women the right to vote, or foresee that there would be federal and multistate statutes enforcing the abolition of child labor. Nearly any observer in 1910 would have thought it impossible “not under our system of governance” that black Mississippians would be free from fear of lynching, be free to vote, and have gained in general their civil rights. In each of these examples, institutional, cultural, legal and diverse other barriers existed, powerful or wealthy interests were in place to halt change, yet profound change did come for many reasons including the hard, patient and persistent energies of activists who fortunately did not subscribe to your fatalism.

History speaks for itself; these are facts and not fantasies – although fantasies they seemed to be at some point in time. Dr. King once said, “Every time I look into the pages of history, change was never initiated by protocol, it was initiated by dreamers.” We understand that the journey ahead is difficult, but we persevere, as we know such “dreams” over time can be shaped into reality. The indecency of the American health care system, the suffering of those without health or health care, is the constant reminder to us that the struggle is a critical one, worthy of keeping the faith even when prospects seem dim. As a prominent spokesperson, we need your understanding, commitment and support as we continue to fight for justice and equality in health care.

In another echo from history, Frederick Douglass perhaps expressed it best when he wrote in 1853, “If there is no struggle, there is no progress. Power concedes nothing without a demand. It never did and it never will.”

Your gentle critics,

Philip Pollner, M.D. Nancy Wooten, Ph.D. National Leadership Coalition for Health Care Newark, Delaware

Prof. Uwe Reinhardt responds to Drs. Pollner and Wooten April 10, 2001

Dear Dr. Pollner and Wooten:

Many thanks for your response to my dismal letter. It is hard to disagree with your historical sweep. It happened, and major things are likely to happen in the future. Empires rose and fell. For all I know, we will be a Chinese colony in 2100. (China and India actually have enough people to occupy the U.S.)

You know, of course, the old joke about Congressman Claude Pepper’s ascent to heaven. He asked God whether there would ever be universal health insurance in America. Whereupon God answered: “Probably, yes. But not in my lifetime.” In that sense, of course, you are right. It may come. How soon is another question. Boot up theatlantic.com, and read David Brooks’ article on “Our Future Leaders,” an essay based on a month’s sojourn at Princeton. Perhaps you see hope for the underclass in that essay. I see the opposite.

I come at the topic the way I do these days not to discourage progress, but instead to annoy the opponents of universal coverage. In case you have not seen it, I attach a paper delivered to the US Chamber of Commerce a while ago. These days I say the crudest things about the poor to my students and to my audiences, mainly to shock people. I am holding up a mirror to these people to tell them: this is the kind of people you are.

Tomorrow I shall lecture on the income distribution in my freshman class. I’ll make the point that our extraordinarily wide income distribution can be maintained only by tightly controlling the lower end of the income distribution. We do this by jailing more people per capita than any other industrialized nation (possibly excluding Russia) and by spending, in California, more on jails than on education. That is the kind of people we are. I say this in a natural tone, without raising my voice, as if that were reasonable, just perhaps, possibly to arouse at least one student under 400.

As I point out in my speeches and in the attached paper, the uninsured are, by and large, disposable people whose income is low (which means that we consider their social contribution low). Because we do not have to be nice to these people to have them work like hell for us in taxicabs, restaurants etc., we are not nice to them. We can, economically, take them for granted, and so we do.

I think 30 years of pretending that by good cheer and hoping we shall solve this problem have not yielded any fruit. Perhaps anger will. I am angry and disgusted.

You can keep on struggling. I would not want to discourage you. I’ll keep on annoying the good Judeo-Christians. It’s just another form of that struggle.

I also attach a homework assignment that you may find interesting. I bet you it moved no soul in my class.

Best regards,

UER

<2001ec102ps5ANSX.doc>Homework assignment.doc

uschambe.doc

Who Gets What Slice of the President’s First Federal Budget Pie

The New York Times
April 10, 2001

Health By Robin Toner

“The department’s (Health and Human Services) discretionary spending (outside the entitlement programs like Medicare and Medicaid) would grow by 5 percent under the Bush proposal, an increase of $2.7 billion over the 2001 fiscal year’s. The National Institutes of Health was the major winner in this ‘redirection of resources,’ as the budget called the shifting of money among programs.”

Ron Pollack, Executive Director of Families USA:

“The president’s budget proposal literally shortchanges Americans’ health care by providing too little support and reaching too few people.”

Tommy G. Thompson, Secretary of Health and Human Services:

“What’s more important than finding a cure for cancer? What’s more important than finding a cure for Alzheimer’s?”

Comment: What’s more important? Applying the knowledge and resources that we do have to improve the health of the American people that are funding the National Institutes of Health (NIH).

Much of the blame for runaway health care costs in America rests with the special privileged position that we have given our health care technology and pharmaceutical industries. Through the NIH, the taxpayers fund much of the research that is used by these industries to develop new products. These products are granted patent protections, and yet have not been subjected to the same degree of cost controls that the providers of health care are now facing. Many of the products, such as copycat drugs and scanners with more colorful images, have not demonstrated their value but have significantly added to costs.

In shifting health care dollars from care for the less fortunate in our society to the NIH, the administration is tacitly supporting their friends in the technological and pharmaceutical industries with free, taxpayer funded research. The taxpayers have a vested interest in this research and should directly benefit in the form of a return on our investment through lower costs and rational spending. Each other nation controls drug costs; we should as well. Although we need to fund new research, we should not fund the market applications until real value is demonstrated by pilot studies. We also need to recognize that increasing expenditures in technology reduces expenditures in other sectors. Since we are near the limit of what we will tolerate in health care expenditures, we need to place these industries under an implicit global budget. This would be automatic if we were to establish a publicly administered, universal risk pool. Only then could we be assured that everyone benefits from the public funding of health care research.

http://www.nytimes.com/2001/04/10/politics/10WRAP.html

Response to Uwe Reinhardt by Philip Pollner, M.D. & Nancy Wooten, Ph.D. April 10, 2001

Dear Dr. Reinhardt:

We were saddened to read your email letter <2_27_01.htm> “To my Gentle Critics,” (February 27, 2001). You argue that “We can never have a health care system that balances the dignity and freedom sought by doctors and patients with society’s desire to have the system operated with some larger constraints. We can never have it, not under our system of governance. There is nothing that you or your patients can do about it. Your voices do not count, and you are powerless and must get used to it.”

Dr. Reinhardt, perhaps your dismal opinion regarding the prospect for reform reflects your disappointment and despair with what seems a futile process at this point in time, but coming from a revered ally and a respected scholar this conveys a sense of hopelessness and surrender to many of us who have been committed for years to the attainment of health care for all Americans. Worse, at a time when we are facing both conflict and challenge in trying to improve the health care system, your commentary lends neither new ideas, strategies, encouragement nor moral support – any of which would be at least helpful as we try to keep the faith.

Most important, when viewed from the perspective of history your statement on the prospects for ultimate victory loses credence. Time and again we have witnessed what was considered to be unimaginable goals or unexpected institutional and legislative metamorphoses become reality. Who, for example, would have thought in 1982 as the Cold War raged that a decade later the Soviet Union would cease to exist, that the Berlin Wall would be toppled and the two Germanys would reunite? What black person in the 1970s living in Johannesburg would have dared to dream that apartheid would be abolished and representative government established in South Africa by the 1990s? Few men or women alive in nineteenth century America could imagine that there would ever be a Constitutional amendment guaranteeing women the right to vote, or foresee that there would be federal and multistate statutes enforcing the abolition of child labor. Nearly any observer in 1910 would have thought it impossible “not under our system of governance” that black Mississippians would be free from fear of lynching, be free to vote, and have gained in general their civil rights. In each of these examples, institutional, cultural, legal and diverse other barriers existed, powerful or wealthy interests were in place to halt change, yet profound change did come for many reasons including the hard, patient and persistent energies of activists who fortunately did not subscribe to your fatalism.

History speaks for itself; these are facts and not fantasies – although fantasies they seemed to be at some point in time. Dr. King once said, “Every time I look into the pages of history, change was never initiated by protocol, it was initiated by dreamers.” We understand that the journey ahead is difficult, but we persevere, as we know such “dreams” over time can be shaped into reality. The indecency of the American health care system, the suffering of those without health or health care, is the constant reminder to us that the struggle is a critical one, worthy of keeping the faith even when prospects seem dim. As a prominent spokesperson, we need your understanding, commitment and support as we continue to fight for justice and equality in health care.

In another echo from history, Frederick Douglass perhaps expressed it best when he wrote in 1853, “If there is no struggle, there is no progress. Power concedes nothing without a demand. It never did and it never will.”

Your gentle critics,

Philip Pollner, M.D. Nancy Wooten, Ph.D. National Leadership Coalition for Health Care Newark, Delaware

Prof. Uwe Reinhardt responds to Drs. Pollner and Wooten April 10, 2001

Dear Dr. Pollner and Wooten:

Many thanks for your response to my dismal letter. It is hard to disagree with your historical sweep. It happened, and major things are likely to happen in the future. Empires rose and fell. For all I know, we will be a Chinese colony in 2100. (China and India actually have enough people to occupy the U.S.)

You know, of course, the old joke about Congressman Claude Pepper’s ascent to heaven. He asked God whether there would ever be universal health insurance in America. Whereupon God answered: “Probably, yes. But not in my lifetime.” In that sense, of course, you are right. It may come. How soon is another question. Boot up theatlantic.com, and read David Brooks’ article on “Our Future Leaders,” an essay based on a month’s sojourn at Princeton. Perhaps you see hope for the underclass in that essay. I see the opposite.

I come at the topic the way I do these days not to discourage progress, but instead to annoy the opponents of universal coverage. In case you have not seen it, I attach a paper delivered to the US Chamber of Commerce a while ago. These days I say the crudest things about the poor to my students and to my audiences, mainly to shock people. I am holding up a mirror to these people to tell them: this is the kind of people you are.

Tomorrow I shall lecture on the income distribution in my freshman class. I’ll make the point that our extraordinarily wide income distribution can be maintained only by tightly controlling the lower end of the income distribution. We do this by jailing more people per capita than any other industrialized nation (possibly excluding Russia) and by spending, in California, more on jails than on education. That is the kind of people we are. I say this in a natural tone, without raising my voice, as if that were reasonable, just perhaps, possibly to arouse at least one student under 400.

As I point out in my speeches and in the attached paper, the uninsured are, by and large, disposable people whose income is low (which means that we consider their social contribution low). Because we do not have to be nice to these people to have them work like hell for us in taxicabs, restaurants etc., we are not nice to them. We can, economically, take them for granted, and so we do.

I think 30 years of pretending that by good cheer and hoping we shall solve this problem have not yielded any fruit. Perhaps anger will. I am angry and disgusted.

You can keep on struggling. I would not want to discourage you. I’ll keep on annoying the good Judeo-Christians. It’s just another form of that struggle.

I also attach a homework assignment that you may find interesting. I bet you it moved no soul in my class.

Best regards,

UER

<2001ec102ps5ANSX.doc>Homework assignment.doc

uschambe.doc

Improve Your Health, Lower Your Taxes

The Washington Post
April 9, 2001
by Joey Holleman

“The Texas physician who introduced aerobics and is a candidate to become the nation’s next surgeon general is endorsing federal tax breaks to encourage more healthful behavior. Call it an aerobics-and-veggies deduction.”

“His plan would give tax deductions of up to $1,000 per person for taking care of himself or herself. Keep your body mass index under 25, and you get a $250 deduction. You would get $250 deductions for keeping your blood pressure under 140 over 90, keeping your cholesterol under 200 and not smoking.”

Kenneth H. Cooper, M.D.:

“We need a financial incentive to encourage Americans to take care of themselves.”

Comment: Regressive tax policy favoring the wealthier, healthier subset of our society hardly represents rational health policy. Kenneth Cooper may well be a good choice to encourage improved physical fitness and better nutrition. It is very unfortunate that he begins with a proposal that echoes the flawed tax policy of the current administration, while failing to propose a realistic program that will promote better health habits.

(I would comment further on the logistical difficulties of his proposal, and the inequity of a system that penalizes individuals with genetic and cultural impediments to achieving his goals, but I’m about to leave for my daily two mile jog, followed by a breakfast of fruit, cereal and low-fat yogurt.)

Don

Health Coverage for All Americans, Letter to the Editor

The New York Times
April 8, 2001

To the Editor:

It is shocking that President Bush’s budget would gut the financing for health care access for the uninsured, specifically community access programs, especially after he campaigned in favor of expanding community and migrant health centers (front page, April 4).

Nearly 43 million Americans have no coverage at all. Some 30 million Americans are underinsured; when serious illness strikes, gaps in their coverage leave them with devastating out-of-pocket expenses. Employers are shifting more costs to employees as health costs spiral. With the economy softening, some employers may drop coverage, and many millions of newly unemployed people will be unable to afford to keep their coverage.

Congress should address the critical issue of providing all consumers with affordable, quality health coverage.

GAIL SHEARER
Director, Health Policy Analysis, Consumers Union
Washington, April 5, 2001

Medical Fees Are Often More for Uninsured by Gina Kolata

NYTimes

When patients go to Dr. Stephen Brenner, an internal medicine specialist, for a routine exam, their bills can vary by 45 percent. The uninsured pay the most and patients with insurance plans are charged the least.

It is not his doing, said Dr. Brenner, who practices in New Haven. He explains that it is because health insurance companies insist on hefty discounts. “It’s a take it or leave it situation for doctors,” Dr. Brenner said. But he said he knew that the insured paid much less than their share. For the insured, he said, “it’s almost like getting a BMW or Mercedes at half price.”

Other doctors cite more extreme price disparities. A New York gynecologist says he gets $25 for a routine exam for a woman insured by Group Health Insurance and charges $175 for the same exam for a woman without insurance.

“It’s horribly ironic,” said Paul Menzel, a professor of philosophy at Pacific Lutheran University in Tacoma, Wash. The care of the poor once was supported by the wealthy and the insured, but now the opposite is happening, he said. “It is the people who are most provided for, not the people who are least provided for, who get the benefit of cost-shifting,” Professor Menzel said.

In a medical emergency, uninsured people can get care, even if they walk away from their bills. But if it is not an emergency, doctors and hospitals may insist on payment, often requiring a deposit in advance. As a result, some uninsured people struggle for years to pay medical bills and others put off seeing a doctor until minor problems become major ones.

Some health policy experts like Uwe Reinhardt, an economics professor at Princeton University, see the situation as “brutal and inhumane.” But, Professor Reinhardt said, doctors and hospitals are trapped in it.

Despite the discounts they have negotiated, some large insurance companies have had their own financial troubles lately. For example, Aetna, the nation’s largest health insurer, reported in January that its fourth quarter earnings had declined by 65 percent.

Mark Pauly, a professor of health care systems at the Wharton School of the University of Pennsylvania, said there was no real villain. “I don’t think it’s exactly good versus evil,” he said, “it’s just business.”Ê The problem crept up on them, doctors and hospital administrators say, after they began agreeing to slash their prices for health insurers in return for a steady flow of patients. Then they found themselves scrambling to maintain their cash flow.

They found an answer with patients outside the managed care system, like those with fee-for-service plans in which the patients pay their own bills and are reimbursed by an insurance company. But the uninsured also are outside the system, and have no one to negotiate for them. So they end up charged the higher prices, too.

Most patients paying the full fare have no idea that their bill may be many times that of the people next to them in the doctor’s waiting room. And, in interviews, many doctors said they did not offer patients information on pricing disparities, however much they might agonize over the inequities of the system.

While this may not be a problem for people who can afford fee-for-service plans, which typically are far more expensive than other health insurance, it can be devastating for the uninsured.

“If you’re a partner in a law firm you can afford to pay more than your legal secretary can,” said Dr. Darcy Hansen, an internist in private practice in Washington. “But,” she said, “it’s the uninsured who really falter.”

Dr. Hansen said the pattern began about 10 or 15 years ago when she started negotiating with managed care companies. “I thought it was the wave of the future,” she said. “I have a lot of poor patients, a lot of single moms who don’t have a huge income. I thought that if they could pay $5 for an office visit they were more likely to come in than if they have to pay a $400 or $500 bill,” she said, referring to the co-payment, the amount a patient might have to pay when a managed care company covers virtually the entire bill.

“Then the fees slowly ratcheted down,” Dr. Hansen said.

In the meantime, she said, with fewer and fewer patients who pay the full rates, she has no choice but to keep prices for those patients high. Her take-home income, she said, is half that of two or three years ago.

Individual doctors are not the only ones in difficult straits. Hospital administrators say the same sequence of events happened to them, with often devastating effects.

The administrators said their problems began about a decade ago when insurance companies offered to make their hospitals “preferred providers,” meaning that patients insured by the companies would go to those hospitals en masse, if the hospitals slashed their prices.

It sounded workable Ñ volume in exchange for a discount. But soon the insurers discovered that their patients wanted a choice of providers. So instead of sending all their patients to one hospital, insurers offered choices. The hospitals were left with the low prices and without the steady stream of patients.

The next step was for hospitals to compete by offering even lower prices to insurers, not so much to get business but to avoid losing it.

Hospitals that tried to hold the line lost business. Then their revenues dried up. “Now the spiral gets deeper,” said James D. Shelton, the chairman and chief executive of Triad Hospitals Inc., a chain of for-profit hospitals and surgery centers.

Mr. Shelton said that he knew the uninsured had been victims of this situation. But, he said, what are hospitals supposed to do?

“There’s a limit to what these people can pay,” Mr. Shelton said. “But what is the greater good Ñ if the hospital goes bankrupt and it’s the only provider in the community or if you try to collect every bill you can within reason and the person goes bankrupt?”

At New York-Presbyterian Hospital in New York, Dr. Herbert Pardes, the president and chief executive, said that so few patients were paying undiscounted rates and the discounted rates were so low that it was becoming increasingly difficult to provide free care for poor people who could not pay.

“I like the fact that we help people who are poor,” Dr. Pardes said. But, he said, the financial pressures on his hospital are so great that “the last thing we want is to get a reputation as the place to go for somebody who’s poor.”

He recently got a call from a friend at another hospital who had a poor, uninsured patient who needed an expensive treatment. Dr. Pardes’s friend said his hospital could not afford to do it. Could New York- Presbyterian take it on? Dr. Pardes’ staff members advised him to say no, that they already were accepting too many charity cases.

“I’m left as the final decision maker,” Dr. Pardes said. “I told them to do it. Then I put the phone down and I started to cry.”

“It is a real ethical and personal dilemma for me,” Dr. Pardes said.

Kenneth E. Thorpe, the chairman of the department of health policy and management at Emory University’s School of Public Health, said he thought he knew about health care prices and the differences between what could be negotiated and what individuals might be charged.

Then his sister-in-law, who is 22 and without health insurance, was hit by a car as she walked along a road in California. She suffered a head injury so severe that she was in a coma. Her medical bills soared to more than $500,000. Yet the man who hit her had no job and no assets and less than $20,000 in insurance, so suing him would not help.

She was covered under an uninsured motorist clause in her father’s car insurance policy. Soon her lawyers started negotiating prices for her medical care. The insurance company’s cap was $300,000 and the lawyers, working on a contingency basis, would get a third of whatever the insurance company paid.

“Lo and behold, they got the rate down so that it fit below the cap,” Professor Thorpe said. The medical charges were reduced to $200,000. That meant that the lawyers got their maximum amount, $100,000, and the insurance company paid its full amount, $300,000.

Professor Thorpe said he was startled by how arbitrary medical pricing seemed to be. “It was a real eye- opener,” he said.

Irene Wielawski, who studied local efforts to provide care for the uninsured under a grant from the Robert Wood Johnson Foundation described pricing disparities in a recent issue of the journal Health Affairs.

When Ms. Wielawski’s son needed a hernia operation, she wrote, her insurance company, Aetna, paid $3,509.50 for a surgeon, the surgical suite, a pediatrician, laboratory tests and an X-ray. But an uninsured Sacramento carpenter she was following as part of her research also needed a hernia operation. Hospital officials told him that the surgeon’s bill alone would be $3,000 to $5,000 and that he needed to make a down payment of $1,500. Unable to pay, he put off the operation for a year until a charity project paid for it.

“That happens everywhere,” said Dr. Guy Clifton, the chief of neurosurgery at the University of Texas- Houston Medical School. “If it’s not an emergency and you can’t pay for it, you don’t get care.”

If Not Now, When, for Universal Health Care?

Los Angeles Times
April 2, 2001
by Robert B. Reich, former Secretary of Labor

“Bill Clinton proposed his plan for universal health care when the nation was deeper in debt than it is now and faced annual deficits of almost $300 billion a year as far as the eye could see. Now we have a budget surplus even Alan Greenspan thinks is too big, and working families need affordable health care more than ever. You don’t have to
be rocket scientist — or even a politician — to figure out what has to be done.”

http://www.latimes.com/news/comment/20010402/t000028079.html

Medical Fees Are Often Higher for Patients Without Insurance

The New York Times
April 2, 2001
by Gina Kolata

“Most patients paying the full fare have no idea that their bill may be many times that of the people next to them in the doctor’s waiting room. And, in interviews, many doctors said they did not offer patients information on pricing disparities, however much they might agonize over the inequities of the system. While this may not be a problem for people who can afford fee-for-service plans, which typically are far
more expensive than other health insurance, it can be devastating for the uninsured.”

Mark V. Pauly, PhD, Professor of Health Care Systems at the Wharton School of the University of Pennsylvania:

“I don’t think it’s exactly good versus evil, it’s just business.”

Comment: Thank you, Dr. Pauly, for reminding us that “business” is inherently amoral, and cannot possibly serve as a force to move our health care system toward promoting the “good.” By extrapolation, you have reminded us that a public service model demands optimum utilization of public funds, an ideal model for our health care system. Dr. Pauly, I’m sure that you will endorse our proposal to throw out the egregiously wasteful, ineffective and “amoral” middleman health plans, and replace
them with an efficient, publicly administered, universal health insurance program that has a mandated mission of providing the greatest good in health care for all of us.

Former JAMA Editor Laments the State of Medical Care

Los Angeles Times
March 26, 2001
by Linda Marsh

An interview with George D. Lundberg, M.D., former editor of the Journal of the American Medical Association:

Question: To switch gears a bit, you’ve been highly critical of managed care….

Answer: Managed care is basically over. People hate it, and it’s no longer controlling costs. Health-care inflation is now back in the double digits. So if it’s not saving money, then why should we have it? But like an unembalmed corpse decomposing, dismantling managed care is going to be very messy and very smelly, and take awhile.

Question: What do you see taking its place?

Answer: In the future, I think we’ll see some form of government health insurance, along the Medicare model. Not necessarily socialized medicine but one large insurance pool or one single payer where people and employers can buy in. I think we should have some kind of mandated health insurance, where every American has to buy a policy with a high deductible, and the individual has to pay above a certain point. People won’t spend their money unless it’s justified. It’s the only way we can control costs.

Comment: “…one large insurance pool or one single payer…” …reality sinks in.

Although Dr. Lundberg needs to brush up on the health policy implications of mandates, buy-ins, employment linkage, high deductibles, caps, and alternatives for cost containment, nevertheless, it is very reassuring to see that a highly respected and very ethical traditionalist recognizes the inevitable.

Rationing or waiting?

Kip Sullivan, noted author on health policy:

We should undertake a campaign to stamp out the use of “rationing” to mean “waiting” where no harm is caused by waiting. “Rationing” in common parlance means “denial of a necessary service,” as in, “Cuba is
rationing electricity by shutting off power to whole neighborhoods for hours at a time.” Waiting nine months for a bone marrow transplant (US) or ten (Canada) is not rationing in the absence of evidence that this delay is harmful (George Silberman et al., “Availability and appropriateness of allogeneic bone marrow transplantations for chronic myeloid leukemia in ten countries,” New England Journal of Medicine 1994:331:1063-1067).

Those who use rationing to mean waiting for care put harmless waiting in the same category with denial. There oughta be a law against it.

Comment: Ida Hellander, commenting on the same study, notes that “the data show that some countries that have been characterized in the public debate as much more restrictive in the provision of sophisticated health care treatments actually had levels of transplantation that were equivalent to, if not greater than, those of the United States.”