PNHP

Health insurance companies are con artists

Health insurance companies are con artists

By James Binder, M.D.
The Charleston (W.Va.) Gazette, Dec. 20, 2014

Private insurance companies have conned us once again. It wasn’t long ago that many folks were pleased with a new insurance regulation that required private insurers to cover pre-existing medical conditions. People said it was the moral thing to do. It was also self-protective, since almost all of us will develop a chronic medical condition at some point in our lives.

It is no surprise to many of us that private insurers have found a way to avoid paying for sick people with pre-existing conditions. The private insurers are very clever! They have created a way to sidestep the intent of the pre-existing regulation. How did they con us this time?

First, it is important to realize that Obamacare not only allowed private insurers to remain as middleman in the delivery of health care, it actually increased their income and power. From their position of power, they have begun to collect huge copayments for certain specialty drugs. Don McCanne, MD, a top healthcare analyst, explains:

“Specialty drugs are a problem for private insurers for two reasons. They are very expensive and they are taken by individuals with serious disorders, such as cancer, rheumatoid arthritis, and multiple sclerosis. By assigning high coinsurance payments for specialty drugs, patients who were on them would go elsewhere for their insurance coverage when they found out the coinsurance was unaffordable.”

This deceptive strategy allows them to get rid of the sicker, more expensive patients and hold onto healthier patients. In other words, we have a heath care system shunning the sickest and most needy patients.

It is well past the time to rid the health care system of these middlemen, who deny necessary care to the sickest patients and increase the cost of health care at the same time. This a double hit. We would save over $300 billion annually in administrative costs if we eliminated this unnecessary bureaucracy.

It would not be wise or moral to simply repeal Obamacare, as some politicians are proposing. Many people do benefit from Obamacare.

A logical and compassionate response would be to replace with it a better system — single-payer national health insurance. Everyone would be covered for all necessary care with the amount of money already in the system. National health insurance is much more efficient than marketplace care. Patients learning to live with chronic medical conditions would not have the additional emotional burden of dealing with a health system trying to deny them care. What a good idea!

James Binder, M.D., is co-leader of the West Virginia Chapter of Physicians for a National Health Program.

http://www.wvgazette.com/article/20141220/ARTICLE/141229960

Reform health care to serve patients, not corporate medicine

By Philip Caper, M.D.
Bangor (Maine) Daily News, Dec. 18, 2014

When I was a kid, I liked to play a game called “connect the dots” where I connected a series of numbered and apparently unrelated dots to reveal a picture of a person, animal or object. I still enjoy connecting dots, but now I do it with apparently unrelated observations and try and understand the picture they reveal. Here are several dots I have observed lately.

The Commonwealth Fund recently released a study of the adequacy of health care for people over age 65 in wealthy countries. Even after 50 years of Medicare, seniors in the U.S. had nearly twice the rate of cost-related problems accessing care than those of any other wealthy country. Our seniors also have more chronic illness, take more medications and struggle more to pay for health care than those in the 10 other countries studied.

The difference is that in all of the other countries, everybody, not just seniors, have health care coverage. The study’s authors speculate that by the time we reach 65, we have a lot of catching up to do because of the inadequate care we received when we were younger, when preventive care could have made a real difference.

The Consumer Protection Financial Bureau recently published a report stating that about 75 million consumers in the U.S. have had bill collection problems reported on their credit reports. They found that “roughly half of all collection problems that appear on credit reports are reported by debt collectors seeking to collect on medical bills claimed to be owed to hospitals and other medical providers.” NBC News concludes that medical debt is hurting the creditworthiness of 43 million Americans, and the systems in place to collect and report this debt can be challenging.

An article appeared last week in the New York Times, headlined “ The Punishing Cost of Cancer Care.” The author, oncologist Mikkael Sekeres, puts the problem faced by cancer patients starkly.

“As the price of chemotherapy now routinely reaches $100,000 for a full treatment course, my patients are forced more and more into making the equivalent of Sophie’s Choice when it comes to treating their cancer: Spend down their savings for an improvement in survival that might amount to a few weeks, secretly hoping that they will be one of the lucky few at the ‘tail’ of the survival curve — the handful of people who live years more; or decline the therapy and in so doing ensure that their families will be provided for after they have died.”

Yet another New York Times column pointed out there appears to be a direct relationship between social status and health: the higher your social status, the better your health. Low social status engenders a chronic “fight or flight” response, a state of chronic insecurity, helplessness, fear, anger and stress. These emotions cause the secretion of adrenal hormones that, if excessive, cause high blood pressure, diabetes, heart and kidney disease, and strokes. We seem to be reaching a tipping point, where our American health care system soon may be producing more illness than it cures.

As I have written before, social factors, not medical care, are the most important determinants of illness in Americans. Early detection and timely medical care are the most important determinants of how effectively diseases can be treated and how far they progress.

So what thread connects these seemingly unrelated dots, and what picture emerges? I see a health care system that is evolving to serve primarily the financial needs of the large corporations that comprise our medical-industrial complex, not the real needs of patients and other ordinary people.

As the share of medical costs borne directly by patients continues to rise, the market for supplemental insurance policies and other gimmicks marketed to deal with those out-of-pocket costs will grow as entrepreneurs in the financial services industry scramble to exploit loopholes in the law. More and more debt will be financed with high interest rate credit cards and other consumer credit.

The winners, once again, will be the insurance companies, credit card companies and banks. The losers will be the patients and the rest of the U.S. economy.

I think we can do better than this. We need to overhaul the way we finance and pay for health care and return its focus to serving patients, not the needs of corporate America. The experiences of other wealthy nations show we can do this by expanding and improving Medicare to everyone. That is strong evidence upon which to base our own public policy.

By excising the profit motive from the heart of health care, we can reshape the emerging picture to one that works for all of us.

Physician Philip Caper of Brooklin is a founding board member of Maine AllCare, a nonpartisan, nonprofit group committed to making health care in Maine universal, accessible and affordable for all. He can be reached at pcpcaper21@gmail.com or through his website at philcaper.net.

http://bangordailynews.com/2014/12/18/health/blogs-and-columns/reform-health-care-to-serve-patients-not-corporate-medicine/print/

Listen to Deb Richter

Protesters demand action on single payer, condemn Shumlin’s reversal

By Morgan True
VTDigger.org, December 18, 2014

Protesters from across the state descended on Montpelier Thursday to voice their anger with Gov. Peter Shumlin’s decision to drop his pursuit of single payer health care. More than 60 people stood in front of the Statehouse chanting slogans and singing protest songs.

Deb Richter, a longtime single payer advocate who regularly attends the Green Mountain Care Board’s meetings, tried to convince protesters that Shumlin is not their enemy.

“He’s the only governor in the country who raised this issue and put it in the forefront,” she said.

She urged them to have patience, and said she’s still optimistic Vermont will be the first state to have public universal health care, but that goal may need to achieved in increments, as the governor indicated when he made his announcement Wednesday.

“This is like turning the Titanic,” she said, “Frankly, beating up on the governor I do not believe is really going to be helpful.”

Richter called on the protesters to take their message to the Legislature, which she said is now the most fertile ground for making progress on health reform.

http://vtdigger.org/2014/12/18/protesters-demand-action-single-payer-condemn-shumlins-betrayal/

****

Comment:

By Don McCanne, MD

Deb Richter is right. The criticisms of Vermont Gov. Peter Shumlin are not only misdirected, many of them are based on the notion that he had all of the tools at hand to establish a single payer system in Vermont, but that he then decided not to move forward in response to political pressure. We should look carefully at the facts and then decide what approach we should now take to advance the single payer cause.

Many of the protests state or imply that Vermont was on the cusp of implementing a single payer system, but the effort failed because Gov. Shumlin was not innovative enough in his financing proposal for the single payer system, and then elected to abandon it because of the tax burden on individuals and businesses.

What is wrong with this concept?  Well, many things, but the most important is that the model that the governor was trying to implement WAS NOT A SINGLE PAYER MODEL. Excuse the shouting, but everyone must understand that this was not a failure of the single payer model.

Very early it was clear that Vermont could not establish a single payer system without federal support. Even the Obama administration did not have the tools to grant the comprehensive “waivers” that would be required since the process for such waivers must be authorized by Congress. The available Sec 1115 Medicaid waivers, Sec 1332 ACA waivers, and the highly limited Medicare demonstration waivers are not nearly enough to assemble a single payer program. Also ERISA restrictions prevent the state from moving self-funded employer-sponsored health plans into a state system.

It became so obvious that the label, “single payer,” was removed from the legislation, H.202, and the bill was completely rewritten. The bill passed WAS NOT A SINGLE PAYER BILL. After negotiations with the Obama administration, it was clear that there was no way to transfer the control of Medicare to the state government. It was decided that Medicare had to be left out since there was no other option. Another dilemma was that Vermont could not force employers such as IBM into the program, yet the financing system for Green Mountain Care (the surviving entity that was not even close to being a single payer for Vermont) would require payroll taxes and income taxes. How could you require IBM and their employees to pay taxes into a state health care program when they are already paying into IBM’s health benefit program? There are a multitude of other problems that we won’t repeat here, but Vermont was never even close to establishing a single payer system.

When opponents of single payer use the failure in Vermont as proof that single payer cannot work, we must respond that VERMONT NEVER ENACTED A SINGLE PAYER BILL. The bill that was enacted was not much more than a variation on the Affordable Care Act. Although it did have the unique feature of attempting to consolidate private insurers into Green Mountain Care, it failed to provide processes to implement the great multitude of other beneficial features that would be required to make it a single payer system. Vermont’s effort WAS NOT A FAILURE OF THE SINGLE PAYER MODEL.

Gov. Shumlin was not to blame. The federal restrictions were simply overwhelming, making implementation of single payer impossible without major federal legislative action. Nevertheless, Gov. Shumlin continued with his efforts to move forward with implementing as many features of single payer as were possible in this political environment. Any objective analysis reveals that there were too few options at his disposal. Merely expanding our dysfunctional system results in increased health care spending. Innumerable studies have shown that expanding on our system increases spending while falling short of reform goals. Gov. Shumlin just proved that once again. This was not a failure of the single payer model; it was a failure of a model composed of flawed health policies found in our current financing system, as perpetuated by the Affordable Care Act. A true single payer system achieves all goals while slowing spending to sustainable levels.

So what do we do now? Once everyone finishes with their venting, it is imperative that we all pick up our pace in moving forward with single payer. There are many tasks at hand. The three most important you’ve heard repeatedly: education, education, education. The nation needs to have a better understanding of single payer (and I dare say that applies to some in our own camp as well). We need both federal and state legislation. States cannot do it without enabling federal legislation, but then states will need their own legislation to implement the single payer bill enacted by Congress. Until we have the requisite federal legislation, states should begin working on cleaning up our health care financing systems so that the eventual transition to single payer will flow more smoothly.

Many have said that we cannot do anything for the next two years because of the red tide in Congress. On the contrary, two years is almost too short of a time to intensify our education efforts, and begin building the political momentum for reform, ideally before the 2016 elections. We need to get working immediately.

The news from Vermont should not be a reason to walk. On the contrary, it provides us with a reality check on what we need to do.

By the way, did I say that this was not a failure of single payer, since it was never a single payer model in the first place?

(Note: There are many views being expressed now, and some of them are in conflict. The views here are mine and not the official views of PNHP. During this time, all opinions should be expressed, but awfulizing and obstruction of progress should be avoided at all costs. We need to sound off, regroup, and then move forward both individually and in unison in our quest for health care justice for all.)

Vermont bails on single-payer health care

By Sarah Wheaton
Politico, December 17, 2014

Vermont Gov. Peter Shumlin on Wednesday dropped his plan to enact a single-payer health care system in his state — a plan that had won praise from liberals but never really got much past the framework stage.

“This is not the right time” for enacting single payer, Shumlin said in a statement, citing the big tax increases that would be required to pay for it.

Shumlin faced deep skepticism that lawmakers could agree on a way to pay for his ambitious goal and that the feds would agree to everything he needed to create the first state-based single-payer system in 2017.

And that was all before Shumlin, a Democrat, almost lost reelection last month in one of the country’s most liberal states. And it was before MIT economist Jonathan Gruber, the now notorious Obamacare consultant who also advised Vermont until his $400,000 contract was killed amid the controversy, became political poison.

Shumlin had missed two earlier financing deadlines but finally released his proposal. But he immediately cast it as “detrimental to Vermonters.” The model called for businesses to take on a double-digit payroll tax, while individuals would face up to a 9.5 percent premium assessment. Big businesses, in particular, didn’t want to pay for Shumlin’s plan while maintaining their own employee health plans.

“These are simply not tax rates that I can responsibly support or urge the Legislature to pass,” the governor said. “In my judgment, the potential economic disruption and risks would be too great to small businesses, working families and the state’s economy.”

And that was for a plan that would not be truly single payer. Large companies with self-insured plans regulated by ERISA would have been exempt. And Medicare also would have operated separately, unless the state got a waiver, which was a long shot.

Shumlin added that federal funds available for the transition were $150 million less than expected.

He also has a lot less political capital than before November. Shumlin, chairman of the Democratic Governors Association, still hasn’t even officially won his own reelection bid: The Legislature will settle the outcome of the November race in January because Shumlin failed to win more than 50 percent of the vote. He’s leading his Republican challenger by just a few thousand ballots.

And the substance of the plan isn’t its only politically problematic aspect. Gruber, now infamous for his blunt assessments of the Affordable Care Act and his remarks about “stupid” voters, was until recently a state consultant. Days after the election, video emerged of him dismissing criticism of Vermont’s plan in 2011 by asking, “Was this written by my adolescent children, by any chance?” State officials said they would cut off his contract.

Advocates of a single-payer plan said Shumlin should not be able to cast aside Act 48, the 2011 law that called for the creation of Green Mountain Care, without repealing it. A group planned to hold a rally in front of the statehouse on Thursday to protest his decision.

“The governor’s misguided decision was a completely unnecessary result of a failed policy calculation that he pursued without democratic input,” the group Healthcare Is a Human Right Campaign said in a statement.

Rachana Pradhan contributed to this report.

http://www.politico.com/story/2014/12/vermont-peter-shumlin-single-payer-health-care-113653.html#ixzz3MGuTCTja

PNHP note: To read the response of PNHP’s president, Dr. Andy Coates, to these developments, click here.

Americans prefer public option to single payer

How the High Cost of Medical Care Is Affecting Americans

By Elisabeth Rosenthal
The New York Times, December 18, 2014

The Times designed a questionnaire with CBS News and conducted a national poll this month.

Americans are eager for relief.

There seems to be widespread agreement that medical prices are burdensome for American patients, and new solutions are needed. But will the answer be a market-based approach involving greater price transparency? More regulation, focusing on price? A government-sponsored single-payer health system, like that in Canada? Or allowing younger people to join Medicare, the popular health insurance program for seniors? Many readers surprised me by saying they could not wait to turn 65. As one reader from Texas said: “I bought medicine in Mexico for 23 years before I became eligible for the promised land of Medicare.”

NYTimes/CBS Poll

Would you favor or oppose a government-administered health insurance plan — something like the Medicare coverage that people 65 and older get — that would compete with private health insurance plans? 

59%  Favor
34%  Oppose
 8%  No opinion

Would you favor or oppose a single-payer health care system, in which all Americans would get their health insurance from one government plan that is financed by taxes?

43%  Favor
50%  Oppose
 7%  No opinion

http://www.nytimes.com/interactive/2014/12/18/health/cost-of-health-care-poll.html

****

Comment:

By Don McCanne, MD

During the health care reform debate there was considerable support for a “public option” – providing individuals an option of choosing a Medicare-like program, administered by the government, that would compete with the private health plans. During the legislative process it received much publicity, but it was eventually eliminated from consideration under pressure from the insurance industry that did not want any competition from the government. A vote on a single payer proposal also was promised by the Democratic leadership in the House, but eventually the opportunity for that vote was traded away in politics as usual.

We still hear calls for a public option that many contend would address the high costs of health care, though few seem to understand that it would hardly have any impact on costs since it would be only one more player in our dysfunctional multi-payer financing system. But we also hear calls for a single payer system – an improved Medicare for all – that actually would slow spending while meeting other important goals such as universality and equity.

How are these messages resonating with the public? The competitive public option concept is supported  by 59% of those polled, whereas the single payer concept is supported by only 43%, with 50% opposed.

Although some might dispute this polling based on the phrasing of the questions or whatever, to me these results seem to suggest a much more serious problem. Instead of the national debate that we should be having – single payer versus our fragmented multi-payer system – the debate is being shifted to our private insurance-dominated multi-payer system versus a multi-payer system with a public option – a Medicare-like program that you can purchase in place of private insurance.

What does that shift in the debate do? Well, first of all, it ensures that single payer will continue to be left off of the table as we move forward. Second, it allows the insurers to exercise damage control by ensuring, through their ownership of Congress, that the public option would be prohibited from gaining an “unfair” competitive advantage against the private insurers. During the reform debate the insurance lobby was successful in selling the concept that the public option had to be removed from the control of government and have restrictions placed on it that would make it worse than the private plans. Just opening that door was still too much for the insurers, and so the concept was tabled. But when it comes back up again, the insurers want to have that debate rather than the single payer debate, and they are ready for it.

Another concern about the public option debate is that the concept is being deliberately conflated with the premium support concept as a means of ensuring that there is strong public support for improving health care value through competition – competition of private health plans, that is. The government would provide support for the insurance premiums through virtual vouchers that would provide an option to purchase various plans through the public exchanges. Thus the insurance industry gets precisely what it wants with the debate being limited to how much damage can be done to the free-standing public option, public in name only, to be sure that it does not unfairly compete with the private insurers (inadequate funding of reserves, prohibition of “advertising,” increasing adverse selection through the requirement of being the safety-net insurer, requirement to maximize cost sharing, requirement of using ultra-narrow networks, etc.).

Maybe some of this is a stretch, but we really have to be concerned when the perception of the public at large is that we don’t want a single payer system but we do want a government plan that competes with private insurers. The issues are complex. We have a lot of work to do to educate the nation on the true facts behind reform options. As far as messaging is concerned, right now the single payer opponents can dismiss our model with just one word: competition. Now just try to find one word or phrase that explains why single payer is vastly superior to private plans competing in the marketplace.

Single payer in Vermont and the U.S.: Now IS the time

FOR IMMEDIATE RELEASE, Dec. 17, 2014
Contact: Mark Almberg, PNHP communications director, 312-782-6006, mark@pnhp.org

The following statement was released today by Dr. Andrew D. Coates, president of Physicians for a National Health Program:

Today, Vermont’s governor, after campaigning for single payer for years, announced that he would not work to pass single-payer legislation in Vermont this year.

“Single payer” is shorthand for a reform that will replace the present wasteful and chaotic system of private health insurance, Medicare, Medicaid and out-of-pocket cash payments with a single public finance system that will redirect resources in order to guarantee access to all necessary care for everyone, which would include many essentials not covered by any present plan.

Governor Peter Shumlin, in his press conference, stated that “now is not the right time” for single payer.

I disagree.

The time for a single-payer system is now. Our patients in every state urgently need it.

Indeed, the people of Vermont, including the state’s physicians, nurses and other caregiving professionals, have repeatedly affirmed their support for single-payer reform.

Vermonters throughout the state understand that an equitable health care system must be truly universal and must remove all financial barriers to medically necessary care. They recognize that a public single payer is an essential incremental step toward these goals.

The people of Vermont have said health care should be regarded as a public good, much like fire protection, and not as a commodity you buy on the market. Gov. Shumlin was elected to office in considerable part because of his championing of this view.

Single-payer activists in Vermont have pointed out that by eliminating the unnecessary and wasteful role of private insurance companies – middlemen who put their profits above the interests of our patients — resources will be liberated to improve the health of all.

Dr. William Hsiao, the Harvard health economist who Gov. Shumlin recruited to study the impact of single payer in Vermont, estimated that a single-payer-like reform (not a true single payer, since there would still be multiple plans, including private plans) would achieve an overall savings of over 25 percent on health care spending (10 percent delivery system savings, 8.5 percent overhead savings, 5 percent reduction in fraud and 2 percent saved through lower malpractice costs.)

Gov. Shumlin today stated that the costs of his proposed reform would be too great, saying, “The taxes required to replace health care premiums with a publicly financed plan that would best serve Vermont are, in a word, enormous.” (The governor’s finance proposal would have instituted an 11.5 payroll tax on employers and a progressive income tax of zero to 9.5 percent, depending on income.) The governor did not dwell upon the fact that the taxes he cited would be less, on average, than the exorbitant and burdensome premiums and out-of-pocket costs that presently weigh heavily upon households as well as employers.

Gov. Shumlin also invoked “risk of economic shock” as a reason to turn away from single payer — the idea that the transition to a Vermont without private health insurance, a Vermont without profiteers lining up to make a buck off the suffering of the sick, would prove too threatening to the social order.

Gov. Shumlin has made many speeches about the need to liberate Vermont, and indeed the United States, from the corrupting and corrosive influence of profit-seeking in health care. Yet from its inception, the enabling legislation for reform in Vermont – Act 48 – allowed a continuing role for private insurers alongside public payers. Lawmakers therefore dropped the term “single payer” from its text.

The continued presence of multiple payers in the proposed Vermont reform necessarily canceled out many of the administrative savings that would be attained by a true single-payer system and opened the door to multi-tiered care along the lines of what the Affordable Care Act currently represents.

It’s important to note that the Affordable Care Act has increased the influence of the big insurers and other private interests in our health care system. Strengthening these forces has hurt our patients and the profession of medicine in all states, including Vermont.

Today’s announcement by Gov. Shumlin, a leading light in the Democratic Party, thus shows the difficulty that individual states face in trying to disentangle themselves from these private corporate interests. It shows why physicians and Americans as a whole need to step up the demand for a deep-going, national reform – an improved Medicare for all.

It is time to put the interests of patients first, ahead of political expedience. Now IS the time for single payer in Vermont and in the nation. It is the only reform that will cover everyone, save lives, and save money. Mr. Shumlin, of all our nations’ governors, knows this well.

We pledge to redouble our efforts to press for national legislation – such as H.R. 676, the Expanded and Improved Medicare for All Act – to achieve the goal of universal access to high-quality, affordable care. We invite Gov. Shumlin to rededicate himself to the cause of a public national health program.

As Hillel, the great ancient sage, famously asked, “If I am not for myself, who will be for me? And, if I am only for myself alone, then what am I? And, if not now, when?”

Now is the time to press forward, not retreat. Our patients do not deserve to wait.

Physicians for a National Health Program ( www.pnhp.org ) is an organization more 19,000 physicians, health professionals, medical and health professional students who advocate for universal, single-payer, improved Medicare for all.

Gov. Shumlin regrettably bails

Governor says: ‘Now is not the time for single payer financing plan’

Times Argus, December 17, 2014

Gov. Peter Shumlin is backing away from a commitment to pass a single payer health care financing plan in Vermont in 2015. He just made the announcement at a press conference in Montpelier.

http://www.timesargus.com/article/20141217/THISJUSTIN/141219995

Comment:

By Don McCanne, MD

Gov. Shumlin has provided a very valuable lesson for all of us. He did almost everything possible on a state level to try to establish a single payer system within Vermont. He has established the fact that, beyond all doubt, a bona fide single payer system is impossible to enact and implement on a state level without comprehensive enabling federal legislation.

We can be thankful to Gov. Shumlin for his valiant efforts. He has shown us that it is imperative that we continue with our efforts toward a goal of enactment of federal single payer legislation.

Those of us working on the state level still have very important work to do. We need to continue our education efforts on a local, statewide, and national basis. We will not have single payer until the people understand it and elect a Congress that will bring it to us.

There are other important health care measures that can provide some improvements in our dysfunctional health care system, and we should support those. But we cannot be fooled into thinking that these are incremental steps on the path to single payer. Our health financing infrastructure must be replaced with a single payer system. Mere patches, such as we see with the Affordable Care Act, fall far, far short of what we need, and will only perpetuate health care injustices.

We have plenty of dedicated people who will continue with efforts to provide the beneficial patches to our system, and we should support their work. But, above all, we need to regroup and intensify our efforts to educate the nation on the imperative of a federal solution. That must be our first and foremost priority. Nobody should become discouraged and start thinking of leaving our ranks. We need to get busy and recruit more soldiers for our cause, beginning today. We are fighting for the health of the nation.

N.Y. single-payer health care bill gets wide support

Council member Corey Johnson and Raging Grannies face off against insurance brokers at daylong hearing

By Irina Ivanova
Crain’s New York Business, Dec. 16, 2014

The Affordable Care Act has made an unwieldy system of health insurance even more complicated, and should be replaced with a centralized, tax-funded health care system.

That was the prevailing view at Tuesday’s all-day hearing on the New York Health Act, Assemblyman Richard Gottfried’s bill to create statewide single-payer health insurance that stands almost no chance of passing in the state Senate.

The handful of insurance representatives who testified for a wait-and-see approach followed their speeches with a swift exit, often to the tune of hisses and groans from patients, health care workers and unions in the audience who far outnumbered them.

“No one advancement is big enough to bend the cost curve in itself,” said Lawrence Thaul, president of Millennium Financial, an insurance brokerage. “It took many years to improve Medicare. Let us not be shortsighted and impatient—and you’ve been anything but that, chair,” he hastily added to Mr. Gottfried, who chaired the hearing.

Mr. Gottfried, who heads the Assembly’s committee on health, has carried a version of his single-payer legislation since 1999.

Many doctors and health care workers bemoaned the amount of time spent billing and collecting payment for medical care. 

“I employ 24 separate billing people,” said Dr. Neil Calman, president of the Institute for Family Health, “each of whom develops a relationship with one or two paying companies.” Dr. Donald Moore, who recently stopped accepting commercial health insurance, said he used to spend the equivalent of three to four weeks every year billing for his work.

But without this back-and-forth between providers and insurance companies to drive down providers’ charges, health care would cost even more, argued insurance executives.

“Price controls would not work because there would be no one on whom to shift the excess costs,” said Craig Hasday, the legislative chair of the New York State Association of Health Underwriters. “Over time, the issue of affordability will return, but as a tax issue.”

Proponents of the bill included speakers from the nurses’ union and other organized labor groups, Green Party activists and even eight elderly activists who called themselves the Raging Grannies. The grannies, decked in flowers, sang songs supporting the bill to the tune of “Rudolph the Red-Nosed Reindeer.”

Councilman Corey Johnson spoke about the inconvenience of getting his prescriptions even under the City Council’s generous health plan. Even the mayor’s office weighed in, writing in a letter that “a single-payer system merits serious consideration because of its financial benefits for the city.”

This iteration of the New York Health Act comes at a time when providers and insurers increasingly are turning to population health management and ever-larger systems as a way of controlling costs. One of the state’s largest Medicaid reform attempts to date, the $8 billion DSRIP waiver, asks hospitals, community providers and insurance companies to collaborate to reduce hospital admissions.

For Dr. Hemant Sindhu, a resident at Brookdale Hospital, Medicaid reform is single-payer in miniature.

“There is no doubt,” he said, “that having a unified payment system allowed to rapid transformation and improvement of health care.”

http://www.crainsnewyork.com/article/20141216/HEALTH_CARE/141219875/single-payer-health-care-bill-gets-wide-support

Why do insurers set out-of-pocket maximums lower than required?

Many Obamacare Plans Set Out-Of-Pocket Spending Limits Below The Cap

By Michelle Andrews
Kaiser Health News, December 12, 2014

Seventy-four percent of 2015 silver level plans’ out-of-pocket spending caps are below the $6,600 spending limit allowed for individual plans and $13,200 maximum for family plans, according to Avalere, a consulting firm. The average out-of-pocket maximum for 2015 individual silver plans will be $5,853, says Caroline Pearson, a vice president at Avalere. Silver was the most popular plan type this year, selected by about two-thirds of enrollees.

After a policyholder reaches the out-of-pocket spending limit during the year, the insurer pays all the bills, unless, for example, they involve doctors and hospitals not in the health plan’s network.

The vast majority of other plans also feature lower limits on out-of-pocket spending—which includes deductibles, copayments and co-insurance, but not premiums. Seventy-one percent of bronze plan spending limits were below the allowed maximum (with an average spending limit for single coverage of $6,381), as were 94 percent of gold plans (average limit, $4,458) and 98 percent of platinum plans (average limit, $2,145).

The tradeoff for lower out-of-pocket spending maximums may be a higher deductible, says Pearson. The average deductible for silver plans will increase 7 percent in 2015, to $2,658. Other metal-level average plan deductibles are increasing as well.

Higher deductibles are likely helping keep premiums low, and low premiums are what consumers are looking for, Pearson says.

Kaiser Health News: http://kaiserhealthnews.org/news/many-obamacare-plans-set-out-of-pocket-spending-limits-below-the-cap/

Avalere: http://avalere.com/expertise/managed-care/insights/avalere-analysis-consumers-should-look-at-maximum-out-of-pocket-limits-dedu

****

Comment:

By Don McCanne, MD

This Avalere report reminds us that, at a given actuarial value of a health plan (average percent of the health care costs covered by the plan), there is a reciprocal relationship between the maximum out-of-pocket spending for which the insured is responsible and the deductible that must be met before the plan begins paying for health care.

Ignoring other variables, such as waiving the deductibles for certain preventive services, let’s look at the 2015 average deductibles and average maximum out-of-pocket spending (MOOP) for the four metal tiers representing different levels of actuarial values (AV) in the insurance exchanges. The numbers are for individual plans that must be capped at a MOOP of $6,600 or less.

  • The bronze plans (AV 60%) have an average deductible of $5,249 with an average MOOP of $6,381.
  • The silver plans (AV 70%) have an average deductible of $2,658 with an average MOOP of $5,853.
  • The gold plans (AV 80%) have an average deductible of $1,080 with an average MOOP of $4,458.
  • The platinum plans (AV 90%) have an average deductible of $189 with an average MOOP of $2,145.

It is obvious that, in these examples, as AVs increase, both the deductibles decrease and the MOOPs decrease. The higher the AV value, the more complete is the coverage. But then why are both adjusted? Why didn’t the actuaries set the MOOP for each plan at the statutory maximum ($6,600) and simply adjust the deductibles? That way the higher the premium paid, the lower the deductible would be.

If you look at the platinum plan (90% AV) the average deductible is only $189. With the essential health benefits and the networks remaining the same, in order to push the AV up to 90%, the actuaries had to reduce the maximum out-of-pocket to an average $2,145. For the gold plans, in order to have a product with a standard $1000 deductible ($1,080 with 2015 adjustment), the actuaries also had to lower the MOOP to meet the 80% AV.

The bronze plans, with the lowest AV (60%), had to push their MOOP up to close to the statutory maximum – $6,381, just below $6,600 – but then that required an average deductible of a whopping $5,249 – quite a blow for the low-income individuals and the young invincibles who would be attracted to the low premiums of these plans.

The silver plans, which about two-thirds of exchange purchasers select, have a more balanced deductible and MOOP. So why didn’t they push the MOOP up to the maximum ($6,600) so that they could offer a more reasonable deductible? For one reason, having greater cost sensitivity through higher deductibles advances the consumer-directed approaches of those ideologues who place more importance on the theory of moral hazard than they do on patients getting the care that they need.

Another reason is that, since about 80% of the population uses only about 20% of health care, most insurance plan enrollees would never meet their deductible. With the silver plan deductible of $2,658, insurers would be paying for almost no care for about four-fifths of their enrollees (except preventive services – a very small part of our health care services). The extra that would have to be paid by the insurers for having a modestly lower MOOP would apply to only about one-fifth of their enrollees, most of whom would far exceed their deductibles anyway.

Left out of this are considerations of the consequences of obtaining care out-of-network, even if inadvertent, and of being required to pay retail prices for services that are later determined to not be covered benefits.

Seems like a pretty good deal for the insurers. Isn’t it our turn to get a good deal? We would have to get rid of the insurers first.

Single-payer system would improve health care

By Jessica Bauer Walker
The Buffalo News, Dec. 16, 2014

Recently, hearings were held in Buffalo on the New York Health act, legislation that would provide universal, equitable health insurance for all New Yorkers. Physicians, medical students, nurses, community health workers, leaders from labor and community-based organizations and patients came out to testify.

Their perspectives from the front lines of health care and public health reflected a health care system that is badly broken, treating health as a commodity that is bought and sold, creating large profits for insurance companies while getting health outcomes that are the worst of any industrialized country.

The Affordable Care Act has made some good efforts at improving our health care system by modifying barriers based on income, age and pre-existing conditions while providing financial assistance and tax credits. But it does not tackle the underlying problems of the current health insurance system and the patchwork of companies and private interests that control it.

Organizations such as the Institute of Medicine and Commonwealth Fund say that the U.S. health care system maintains an extremely poor return on investment, despite having the best medical technology in the world and spending double the resources on health care as anyone else. Health care costs are projected to increase by 6 percent annually, 30 million people will remain uninsured by 2023 and many more will have coverage that is not adequate for their needs.

New York could save billions per year with a universal single-payer health care system. One agency would act as the administrator. It would provide preventive and primary care, emergency and hospital care, vision, dental and prescription coverage, mental health and substance abuse treatment and rehabilitation. Despite common assertions that single-payer systems ration care and are inferior to our system, evidence shows that other countries have vastly superior population health outcomes, while spending much less than we do.

New York has the potential to be a leader in the nation by implementing a universal health care system that makes economic sense and is in the spirit of health care as a human right.

Jessica Bauer Walker is executive director of the Community Health Worker Network of Buffalo.

http://www.buffalonews.com/opinion/another-voice/another-voice-single-payer-system-would-improve-health-care-20141216

Perspective: We lay down; now it’s time to stand up

By Hannah Keppler
AMSA On Call blog, December 16, 2014

Last Wednesday, thousands of students at more than 70 medical schools across the country staged “white-coat die-ins” to make a statement about racial injustice, including as it manifests itself in our health care system.

As one of these students, I lay on the ground for 7 minutes, the same amount of time that Eric Garner’s body lay on a Staten Island sidewalk after he was choked to death by police. While I laid there, I thought about the systemic injustices in our society and how I and other students could effect change.

When we first donned our white coats, my classmates and I took an oath to “do no harm.” To me, taking that oath was making a pledge to always respect and honor the value of human life.

Looking at current inequalities in the health care system, it’s clear to me that not all lives are valued equally. Racial disparities persist, often insidiously. One study found that there is an excess of 83,570 African American deaths per year due to health disparities. [1]

How can we explain this persistent inequality? Racial disparities are endemic in our society, not because of some kind of accident but because of deliberate decisions made over many years.

The “war on drugs” wasn’t an accident, nor was the “ghettoization” of the inner cities while many in white America received bank loans and government subsidies to move to the suburbs. Nor is it a coincidence that our inner-city public school systems are crumbling, that Black and Latino neighborhoods have limited access to fresh, healthy food, or that that more than 60 percent of the people currently in prison are people of color. [2]

These patterns constitute institutional racism. So how do we challenge it?

Well, since we’re medical students we should probably start with the system to which we will dedicate most of our lives. There are many aspects of our health care system that need fixing, but I think the most glaring issue is that, despite an inordinate amount of money being funneled into health care (almost 20 percent of GDP), many people are either left out completely or left with very insufficient coverage.

Unfortunately, a disproportionate number of those with inadequate access to health care are Black and Latino, thus creating striking racial inequalities.

Even after implementation of the Affordable Care Act, 32 million people in this country will remain uninsured [3], and those who are insured under low-cost insurance plans may avoid seeking care because of high deductibles and co-pays. In addition, people on Medicaid may not receive the same quality of care as people with private insurance because so many doctors refuse to accept patients with Medicaid.

I believe that health care is a human right. The fact that so many people in our country are denied access to health care is a profound injustice.

I recently listened to a longtime ER nurse and health care advocate recount a few stories of the many injustices she’s seen over the years. She spoke of women who had showed up in the ER with advanced cervical cancer because they hadn’t been able to afford basic preventative pap-smears. She cited patients who cut their pills in half to make them last longer and then ended up in the ER with preventable heart attacks. Her stories made me realize just how many lives could be saved if people had access to comprehensive health services.

After careful study, I’ve come to the conclusion that achieving universal health care by means of a single-payer system would be a big step towards achieving health care equality. In a single-payer system, no one would ever be denied medically necessary care because of inability to pay, which happens constantly in our current system.

When it comes down to it, the biggest barrier to achieving universal health care right now is lack of political will. People have to organize and demand it, and we as health care providers have a special role to play in this fight.

The time is now for medical students to get political. I think traditionally we’ve shied away from this, but momentum is building and we need to see it through.

I’m not suggesting that all medical students should storm the White House and demand action from President Obama. Let’s start by looking locally, for example at our own medical schools. How about setting up a meeting with your dean to talk about integrating education about health disparities into the medical school curriculum? How about during the next hypertension lecture, we spend 10 minutes having a discussion about inequalities in access to healthy food?

And if we want to see societal change, let’s look beyond our schools to our local, state and national representatives. It’s easier than you think to call them up and make an appointment; you’re a constituent and they want to hear from you. Be persistent. Approach them with a deliberate request. It could be something small related to your community, or something bigger like the New York Health bill, or a national single-payer bill such as Rep. John Conyers’ “Expanded and Improved Medicare for All” Act, H.R. 676.

Many medical students participated in the die-in not only to raise awareness about health disparities and make a statement, but also to demand action from our schools and communities. In order for action to be taken we must be specific and deliberate about what we want. That is going to take a lot of hard work, but I have faith that if enough students organize we can change things.

Medical students have a pivotal role to play when it comes to creating a more equitable health care system, whether it be by supporting single payer, working to eliminate bias, or combating other forms of injustice.

Our voices will not be silenced. Our white coats convey a message about who we are and our value system. We need to stand up and defend those values, whether it be in the exam room or out on the streets. On Wednesday we lay down and people listened. Now it’s time for us to stand up and take action.

Hannah Keppler is a medical student at the Albert Einstein College of Medicine.

References

1. David Satcher, George E. Fryer, Jr., Jessica McCann, Adewale Troutman, Steven H. Woolf and George Rust. What If We Were Equal? A Comparison Of the Black-White Mortality Gap In 1960 And 2000 Health Affairs, 24, no.2 (2005):459-464
http://content.healthaffairs.org/content/24/2/459.full.pdf+html

2. American Friends Service Committee. Facts about the mass incarceration of people of color in the U.S. (2013)
https://afsc.org/story/facts-about-mass-incarceration-people-color-us

3. Millman, Jason. Who is still uninsured under Obamacare – and why. The Washington Post, (2014)
http://www.washingtonpost.com/blogs/wonkblog/wp/2014/11/12/who-is-still-uninsured-under-obamacare-and-why/

http://www.amsa.org/amsa/homepage/takeaction/amsaoncall/14-12-16/Perspective_We_lay_down_now_it_s_time_to_stand_up.aspx

Two Memes that Undercut Medicare-for-All: Managed Care and Competition

Two Theologies Have Blocked Medicare-For-All

By Theodore Marmor and Kip Sullivan
Health Affairs Blog, December 11, 2014

In the 50 years since Medicare was enacted, Congress has never seriously considered extending Medicare to all Americans, nor even lowering Medicare’s eligibility age below 65. This pattern persisted even during those periods when national health insurance was at the top of the national agenda. This is not what the original advocates of Medicare anticipated when Medicare was enacted in 1965. They saw Medicare as the cornerstone of a national system of health insurance that would eventually cover all Americans.

Two Myths that Undercut Medicare-for-All: Managed Care and Competition

In the paper we presented at the Yale conference (Yale Law School, November 6 & 7) , we reviewed short- and long-term factors affecting the debate about Medicare over its lifetime, and then turned to a discussion of two long-term factors: the rise of what came to be called the managed care movement, and the resurgence of a longstanding campaign promoting the idea that competition can right the wrongs of American medicine.

The managed care movement helped marginalize support for Medicare’s expansion primarily through its influence on the proponents of national health insurance. It did so by persuading many potential proponents of Medicare expansion to pursue a different reform strategy.  Insurance companies practicing managed care, the rhetoric claimed, were more efficient than Medicare.  Managed care kept Medicare-for-all off the congressional agenda primarily by inducing potential proponents of Medicare expansion to support managed care rather the expansion of the traditional Medicare program.

The rise of the pro-competition movement constituted another significant impediment to Medicare expansion. It did so by strengthening the belief that market competition among private health insurance firms could be invigorated, largely by eliminating tax subsidies for insurance and shifting more costs onto patients, and that vigorous competition would make the health care sector much more efficient than Medicare could ever be. But because this movement appealed primarily to conservatives who did not support universal coverage in the first place, its impact on the debate about Medicare’s expansion, although powerful, was less direct.

To sum up, the pro-competition movement contributed to keeping the expansion of Medicare off the national agenda by keeping national health insurance off the national agenda throughout most of Medicare’s 50 years. And the managed care movement contributed by persuading liberals to endorse managed care proposals, not the expansion of Medicare, during those infrequent periods when universal coverage was at the top of the national agenda.

Why have the Managed Care and Competition Movements been Politically Successful?

The answer, in our view, is two-fold. First, both movements acquired immense economic power compared with supporters of Medicare expansion. Second, both movements clothed their diagnoses of and solutions to the health care crisis in rhetoric that induces listeners to overlook unproven assumptions that underlie those diagnoses and solutions. This permitted both movements to present their solutions in idealized, oversimplified forms, and to compare their idealized forms to real-world Medicare. Over the years both movements have developed cultures which resist acknowledging the discrepancy between their assumptions and the evidence.

In the first few months of 1970, Paul Ellwood and representatives of the Nixon administration agreed to promote an unproven diagnosis of the health care crisis and an unproven solution. The unproven diagnosis was overuse of the health care system induced by the fee-for-service method of paying doctors. The unproven solution was a new form of insurance company they called the “health maintenance organization” (HMO).

Ellwood and Nixon administration officials made the deliberate decision to refrain from describing how HMOs were supposed to achieve the powers attributed to them. As assistant HEW secretary Lewis Butler put it, “Let’s specify what we want it to do…. Let’s describe the thing by what we want it to do, not how it’s formed.”

This convention – describing an entity that will supposedly alleviate the health care crisis according to what “we want it to do” – was quickly adopted by Democrats. The convention encouraged, and to some degree forced, HMO advocates to explain their support for the concept in highly abstract terms. It also encouraged the use of opinion and wishful thinking as substitutes for evidence and scientific discourse.

The tendency to adopt abstract concepts defined only by the aspirations of their proponents, to give these abstract concepts labels designed to influence rather than illuminate, and to ignore or downplay evidence contradicting claims made for these concepts has persisted within the managed care movement ever since. These habits of thought can be seen in the movement’s support for other managed care proposals, including “pay-for-performance” and “accountable care organizations.”

The pro-competition movement has exhibited similar traits – a tendency not to examine fundamental assumptions and to gloss over evidence contradicting them. Like the managed care movement, the pro-competition movement rests its diagnosis on the unproven assumption that financial incentives are the single greatest cause of health care inflation. Unlike the managed care movement, which sees physician incentives as paramount, the pro-competition movement claims patient financial incentives are the fundamental cause of high medical costs. Like the managed care movement, the pro-competition movement bases its solution on unproven assumptions, the most important of which is that patients can shop for medical care just as they do for food and other commodities.

The willingness of the two movements to compare real-world Medicare with their idealized proposals has contributed significantly to their ability to keep the expansion of Medicare off the table. It has also contributed significantly to their inability to address the problems that bedevil the American health care system – a chronically unacceptable rate of uninsured, barriers to care even for the insured, and rising costs.

http://healthaffairs.org/blog/2014/12/11/two-theologies-have-blocked-medicare-for-all/

Comment:

By Don McCanne, MD

The dream of expanding Medicare to cover all of us has failed to materialize in a large part because of the nation’s obsession with marketplace concepts of health care financing. On the supply side, health care providers are responding to financial incentives that maximize their revenue. On the demand side, patient-consumers are responding to financial incentives that minimize their out-of-pocket spending. In both instances, health care access is compromised – in managed care by erecting structural barriers to care (“managing” the care), and in competition by erecting financial barriers to care (buying competitively-priced plans with lower premiums that have higher deductibles and other cost sharing).

Where did this obsession come from? Gilens and Page have shown that the very wealthy and large business interests have control over major legislation. These interests benefit from marketplace approaches to health care through investments in for-profit insurance companies and in health care delivery organizations, including for-profit hospitals. In contrast, their tax burden in publicly-financed health programs is greater when taxes are progressive. Also many other important government programs are financed through progressive taxes, so the moneyed interests benefit by privatizing government functions to the maximum extent possible.

These interests, along with ideologues, have made a meme of the concept that private markets are always more efficient than massive government bureaucracies, when the evidence is almost always to the contrary. Unfortunately, much of the media have accepted this meme as a given. Since everyone “knows,” based on a lifetime of exposure to these memes, that the private sector can always do it better, they are quite willing to support private solutions to problems such as the financing of health care.

Whenever proposals such as expanding Medicare come up, the insurance industry pulls the puppet strings in Congress, and the public is reminded how well UnitedHealth and the other for-profit insurers are doing in creating private products that have lower out-of-pocket costs than Medicare (not mentioning that they are doing that with one-third of the overpayments they receive while keeping the other two thirds for profits and to pay for the excessive administrative services that they are selling us – a bad deal for taxpayers).

So those who support the intrusive managed care organizations and who support shifting more costs directly to patients under the false banner of marketplace competition (see Kenneth Arrow) have been effective in suppressing any serious consideration of improving Medicare and expanding it to cover everyone. As long as the public continues to buy their meme, there is little likelihood of change.

We need to continue to inform the public on the legitimate findings of health policy science (national health programs that include everyone while providing higher quality at a lower cost), but that is a daunting task considering how difficult it is to communicate complex policies to a population blunted by unfounded memes.