October, 1996

A study by Harvard researchers and leaders of Physicians for a National Health Program published in this month’s American Journal of Public Health punctures the myth that costly emergency room visits by uninsured patients are driving health costs. President Clinton and other policy leaders have spotlighted ER overuse as a major concern, and managed care plans often deny coverage for ER visits as a cost-saving measure. The study found that uninsured patients use no more emergency care than insured people, and often pay out-of-pocket for their ER visits.

The study, based on data from the 1987 National Medical Expenditure Survey, found:

ER care for the uninsured totaled only $1.1 billion, or 0.23% of all health care costs; the entire ER bill for all Americans amounted to 1.9% of all health spending.

The uninsured averaged $37 per capita per year in ER care, vs. $38 for those with insurance.

The uninsured paid 47% of their ER costs themselves; only 10% was free care that hospitals cost-shifted to other patients.

While the uninsured got no more ER care than insured Americans, they got much less of other kinds of care. Hence, restricting ER access would take away a critical health care resource for the uninsured.

Children and black men also received much of their care from ERs.

Study author Patrick H. Tyrance, Jr., a senior student at Harvard Medical School and Kennedy School of Government commented: “Too often, minorities, the poor and the uninsured are blamed for high health care costs. Restricting ER visits will save little money, but will cut the care of people who need it most. We need to minimize ER care by making other care available, not by penalizing patients.”

Dr. Steffie Woolhandler, Associate Professor of Medicine at Harvard and study co-author said: “HMOs often refuse to pay ER bills, which shifts costs to the patients and increases HMO profits. Policymakers want us to believe that we must curtail further care to bring down costs. But compared to Canadians we pay 40% more for care and get less: fewer ER visits, fewer doctor visits, shorter hospital stays, even fewer high tech procedures like lung transplants.”

Dr. Woolhandler is a co-founder and spokesperson for Physicians for a National Health Program, a 7,000 member organization that supports universal access to health care under a single payer national health insurance program. PNHP has 59 state and local chapters.

August, 1996

On Sunday, August 25 at 7:00 P.M. the Rev. Jesse Jackson, Sr. will join a group of doctors, nurses, labor leaders and citizens at Pasteur Park, near the Cook County Hospital, to challenge the Democratic Convention Delegates to reinsert universal health coverage in the party platform. The language was recently removed by the platform committee in Pittsburgh.

“The Democrats had a long and proud history of trying to deliver health care to all Americans, but in a moment of great cowardice they reversed their course and are only ensuring health care for the few,” said Dr. Quentin Young, National Coordinator of Physicians for a National Health Program.

The Democratic commitment to universal coverage began in the Truman Administration, over forty years ago. “After President Clinton’s attempt to pass a broad, if misguided, overhaul of the health care system, his signing of the welfare and minimalist health reform packages are a national shame and a blight on the party,” said Dr. Susan Steigerwalt, President of PNHP. “As the President rends social safety nets, his party seems prepared to abandon even the hope of universal health coverage,” she added.

Following Sunday’s rally, Physicians for a National Health Program and many community leaders and activists, will hold a four-day, round-the-clock vigil across the street from the Democratic convention. The initial city plan had a three-block cordon around the convention. As a result of the successful suit in Federal Court, filed by the ACLU on behalf of Dr. Young, the city will have to allow the vigil. The activists will have access to the Democratic delegates and urge them to reaffirm their commitment to universal coverage.

“The Democrats seem willing to condemn large numbers of people to a life without insurance. America’s health care crisis will not be served by patchwork help at the margins, as exemplified by the Kennedy-Kassebaum bill that the President signed into law on Wednesday. The party leadership has long ignored the obvious solution to America’s health crisis — to cover all Americans equally and equitably through universal health insurance program,” said Dr. Young. “Further, all polls show that this is precisely what the American people prefer.”

April, 1996

“The proposed merger of insurance giants Aetna Life and U.S. Healthcare will create an entity that controls access to health care for one in every 12 Americans. This merger provides further evidence of a race towards oligopoly in our health care system, by firms organized to value shareholder profits over patient care.

“Aetna knows that U.S. Healthcare has the proven formula for recouping their purchase price of $8.9 billion, nearly $3,200 per patient. U.S. Healthcare rewards doctors for giving skimpy care and penalizes them for referring patients to specialists, emergency rooms or hospitals. They’ve generated higher profits in 1995 than nearly any other for-profit HMO. What Aetna is getting for this immense sum is not hospitals, clinics, or other tangible facilities, but the exclusive right to control and profit from the relationship between patients and the health system.

“The track record of these giant for-profit firms bodes ill for patient care. In 1994, U.S. Healthcare took 25% out of every premium dollar for its outrageous CEO salaries, profits, and bureaucracy. U.S. Healthcare CEO Leonard Abramson made $20 million in cash and stock options in a single year. Meanwhile, until a public scandal recently forced U.S. Healthcare to change their policy, they forbade any criticism of their plans by physicians (the so-called “gag clauses”). But even without gag clauses, U.S. Healthcare retains the right to fire any physician without cause.

“As revealed in an editorial in the New England Journal of Medicine by PNHP co founders, Drs. David Himmelstein and Steffie Woolhandler (Extreme Risk: The New Corporate Proposition for Physicians, December 12, 1995), U.S.Healthcare places almost all of the financial risk for patient care on its physicians. Pitting patient interests against the doctors, U.S. Healthcare pays a primary care physician with 1500 patients a net income as low as $0 or as high as $150,000 depending on how willing he or she is to meet their rock bottom standards on use of hospitals, emergency rooms, and specialty visits. Meanwhile, “gag clauses” keep hapless patients in the dark.

“Aetna also has shown its willingness to lower costs by lowering quality of care. Aetna once fired their own “primary care physician of the month” when he exceeded Aetna’s cost per patient guidelines a few months later.

“We call the Aetna-U.S. Healthcare way of paying physicians `fee-for-non-service,’ but paying physicians to withold care is not simply the opposite of Aetna’s old fee-for-service system; it’s the mirror image of illegal kickback schemes that reward doctors for referring patients to health services in which they have a financial interest. Unbeknownst to their patients, Aetna and U.S. Healthcare doctors get a kickback from the HMO for denying care.

“Under the guise of letting the marketplace work and increasing competition in the health industry, we are galloping towards an oligopoly in which a handful of companies will control everyone’s access to health care. If this merger-mania continues, Americans will soon have their health care options limited to a choice between McDonalds and Burger King. With the Republican Congress planning to open up the Medicare program to corporate raiding by for-profit HMOs, giant HMOs such as Aetna will reap a windfall.

“U.S. Healthcare’s founder and Chairman, Leonard Abramson and his family will make nearly $1 billion in profit from the merger, money that could and should be going into direct patient care, including care for the uninsured.

“Corporate consolidation is undermining our nation’s health status. We propose an alternative that restores patient care as our highest priority: a not-for-profit system of single payer national health insurance.”

January, 1996

Journal Article Shows U.S. Health Bureaucracy Skyrocketed by Close to 700% Over Past 25 Years
Proportion of Medical Workers Giving Care Has Fallen Dramatically

Over the past 25 years, the percentage of U.S. medical care workers doing mostly paperwork skyrocketed from 18.1 percent to 27.1 percent of total health employment, while the proportion of nursing and physician personnel fell from 51.4 percent to 43.7 percent, according to an article in the February issue of the American Journal of Public Health released today. The study demonstrates that between 1968 and 1993, the number of health care administrators grew by 692 percent. In contrast, over this same period, the number of doctors grew by only 77 percent and registered nurses by 164 percent. Physicians’ offices added 550,000 fulltime administrative personnel, almost one per doctor, to deal with the burgeoning requirements of managed care and other complexities of our market-based system.

The study, entitled “Who Administers? Who Cares? Medical Administrative and Clinical Employment in the U.S. and Canada,” was authored by Harvard doctors Steffie Woolhandler and David Himmelstein, founders of Physicians for a National Health Program, with J.P. Lewontin. The research was supported by a grant from the Robert Wood Johnson Foundation.

Dr. Woolhandler, an associate professor of medicine at Harvard, says “managed care squeezes doctors, nurses and patients but eats up most of the savings with bureaucracy. In 1993, administration accounted for 57 percent of health sector job growth and all of the growth in hospital employment.” “As the proverb says, there’s no use going to bed early to save candles, if the result is twins,” added Dr. Woolhandler.

“Instead of the health system being primarily a patient care service, as it was several decades ago, it has rapidly become much more of a business–by far the biggest business and the number one employer in the United States,” said Dr. Sidney Wolfe, director of the Public Citizen Health Research Group. “Each year, a larger and larger percentage of the more than 10 million employees in this one trillion dollar industry are business people, not health care providers,” added Dr. Wolfe.

“Our nurses have less time to spend at the bedside, while health care companies make enormous profits and reward their CEOs with outrageous compensation,” said Kit Costello, R.N., president of the California Nurses Association.

The study also found that the U.S. allocates far more of its health budget to paper-pushing and administration than does Canada. While total health care employment per capita is 7 percent higher in the U.S. than in Canada, all of the extra U.S. employment is due to administration. Canada actually employs more nurses per capita despite spending one third less on health care per capita. Hospitals employ more clinical staff in Canada, while nursing home staffing is strikingly better. If U.S. hospitals and outpatient facilities adopted Canada’s 1986 staffing patterns, we would save more than $100 billion this year alone and employ 1,407,000 fewer health managers and clerks.

“The U.S. could vastly reduce medical costs and actually increase medical care by switching to a Canadian single payer system,” said Dr.Quentin Young, National Coordinator of PNHP. “The resources saved by trimming paperwork would be sufficient to cover the 40 million uninsured Americans and improve care for many Americans with insurance as well,” added Dr. Young.

October, 1995

Chicago — “The American Medical Association shamelessly put physician and corporate interests over the health of their senior patients today in endorsing the GOP’s Medicare proposal,” said Dr. Quentin Young, an internist in Chicago and national spokesperson for the 7,000 member Physicians for a National Health Program. “The AMA has bitterly opposed Medicare since its creation, and now is endorsing a plan that would lead to its demise. Many of the worst features of the GOP plan are, in fact, straight out of the AMA’s own Medicare proposal. If this bill passes, they will have blood on their hands.”

“Preserving Medicare and improving patient care for the frail elderly is not on the AMA agenda. They are willing to pit physicians directly against their patients in a battle for the dollar. They are collaborating with the Republicans to cap malpractice awards, repeal protections against physician fraud and abuse, and give the newly emerging for-profit physicians’ groups equal access to the $100 billion plus windfall the GOP plan creates for private insurers/HMOs. Private insurers take 15 to 30 percent of premiums for overhead, CEO salaries, and profits, compared with just 1.9 percent in traditional Medicare. The AMA is also seeking the right to price-gouge seniors for more than Medicare pays.”

“We believe that most Americans, and most physicians, support health care reform based on principles of social justice and medical need, not the current reforms driven by Wall Street and the AMA’s greed. With fewer than 50% of physicians in its ranks, and having sunk to a new low, the AMA has forfeited the right to speak for American physicians.”