PNHP

Low cost eHealthInsurance plans exposed

Low cost eHealthInsurance plans exposed

eHealth Data: Premiums 47% Higher for Individual Health Insurance Plans with Comprehensive Health Benefits

eHealthInsurance
March 18, 2013

Today eHealth, Inc., parent company of  eHealthInsurance.com, America’s first and largest private online health insurance exchange, released a ‘Cost of Comprehensive Health Benefits’ report. This new report shows that average monthly premiums for individual health insurance plans are forty-seven percent (47%) higher than average when they cover a comprehensive list of eight health benefits.

Since 2005, eHealth’s Cost and Benefits report has tracked the percentage of plans surveyed that cover eight health benefits deemed to be comprehensive by eHealth, including: Laboratory and X-Ray; Emergency Services; Prescription Drugs; Chiropractic; Maternity; OB/GYN; Periodic Exams; and Well Baby care.

In 2010, the Affordable Care Act (ACA) created a new list of ten Essential Health Benefits (EHBs) that all major medical health insurance plans must cover at an actuarial value of 60% or more in order to fulfill the federal mandate for health coverage, beginning in January of 2014.  Those EHBs include: ambulatory patient services; emergency services; hospitalization; maternity and newborn care; mental health and substance use disorder services, including behavioral health treatment; prescription drugs; rehabilitative and habilitative services and devices; laboratory services; preventive and wellness services and chronic disease management; and pediatric services, including oral and vision care.

The data presented in this report do not reflect the impact that new Essential Health Benefit (EHB) standards will have on plan prices, nor does the report take into account other factors that may impact the cost of health insurance in 2014. Not only do some of the benefits differ and overlap, but chiropractic care is not deemed to be an EHB by the ACA.

“These data provide valuable insight into the cost of health insurance plans as consumers prepare to enroll in the more comprehensive health plans that will become available with the Affordable Care Act,” said eHealth Senior Vice President of Carrier Relations Robert Hurley. “Our report does not provide an ‘apples to apples’ comparison of plans that cover the essential health benefits established in the Affordable Care Act, but it does provide some interesting insight into the potential impact that new benefits standards could have on the cost of health insurance plans in the individual health insurance market.”

http://news.ehealthinsurance.com/news/ehealth-data:-premiums-47-higher-for-individual-health-insurance-plans-with-comprehensive-health-benefits

And…

Richer health benefits cost 47% more, industry report warns

By Chad Terhune
Los Angeles Times, March 19, 2013

“I think consumers can expect new health plans next year are going to be somewhere between 40% to 60% more expensive,” said Bob Hurley, eHealth’s senior vice president of carrier relations. “I think there is a fair amount of concern that the health plan requirements are too rich.”

http://www.latimes.com/business/money/la-fi-mo-health-insurance-rates-20130319,0,2057027.story

Comment:

By Don McCanne, M.D.

Many critics of the Affordable Care Act (ACA) say that the health plans to be offered in the proposed state insurance exchanges should be replaced with plans that have fewer regulatory requirements and that can be sold across state borders. They often cite the bargain prices of plans offered by eHealthInsurance as an example of how we could make health insurance more affordable for everyone. So what is eHealthInsurance offering?

By their own analysis, eHealthInsurance does not consider their plans to be comprehensive unless they offer the eight benefit categories listed in the article excerpt above. If those benefits are included, the premiums are 47 percent higher for both individual and family plans than the premiums for their cheapest plans. Note that these eight benefits are not the same as the ten benefit categories that are required as essential health benefits under ACA, so it is likely that the premiums under ACA will be even more than 47 percent higher than the cheap eHealthInsurance plans. This doesn’t even take into consideration cost sharing such as the deductibles.

There is already concern that the benchmark silver plans under ACA, with an actuarial value of only 70 percent (patient pays 30 percent of costs, which might be partially offset by income-indexed subsidies), may leave patients vulnerable to excessive out-of-pocket costs. If the stripped down eHealthInsurance plans were allowed as replacements for exchange plans, it is inevitable that most enrollees would face financial hardship should they develop significant medical problems.

So what is the response of eHealthInsurance? eHealth senior vice president Robert Hurley says, “I think there is a fair amount of concern that the health plan requirements are too rich.”

This exposes the highly touted low cost eHealthInsurance plans as the shoddy plans that they are. You might be nominally insured, but don’t you dare get sick.

What "forgiveness formula" would be appropriate for medical debt?

Forgiveness Formulas

By Casey B. Mulligan, Economics Professor, University of Chicago
The New York Times, March 20, 2013

In an ideal world, collecting debts would be as simple as asking debtors to pay their obligations when they are able to. But in reality most businesses have found that they need to obtain other assurances, such as collateral or the option to shut off services to a delinquent payer. Otherwise it is too easy for debtors to claim hardship and walk away without paying.

On the other hand, many families and other debtors do experience genuine hardship. In those cases it can be compassionate and even efficient to at least partly forgive the debts of people who have fallen on hard times. Many economists see loan defaults as (sometimes) an efficiency-enhancing form of risk-sharing.

One approach would be for lenders to develop and disclose a “forgiveness formula” that would clearly define “hard times” and indicate precisely what kind of forgiveness is possible. The advantage of forgiveness formulas is that distressed borrowers can be certain where they stand with the lender and can readily evaluate whether they were treated “fairly.”

Hospitals are also known to partly forgive medical debts incurred by the uninsured, while they make no accommodation for many others. Some states require hospitals to explain in writing how they go about discounting charges for hardship patients, but you might guess that hospitals worry that patients will game those calculations in order to pay less.

One advantage of health reforms that get more people on health insurance is that by getting people to pay for their health care before they get sick, the reforms reduce the number of cases in which clear forgiveness has to be traded off with formula gamesmanship.

Comment:

By Don McCanne, M.D.

A forgiveness formula for hospitals?

Other nations have been successful in providing health care to everyone at a cost much below that of our dysfunctional system here in the United States. Their programs often have first dollar coverage; therefore medical debt is almost unheard of – certainly a minuscule fraction of what we have here.

Instead of establishing strategies for forgiveness in the future, wouldn’t it be more logical to establish a health care financing system in which debt forgiveness would never need to be a consideration?

http://economix.blogs.nytimes.com/2013/03/20/forgiveness-formulas/

The cost of failing to use government price negotiation for drugs

State Savings with an Efficient Medicare Prescription Drug Benefit

By Dean Baker and Nicole Woo
Center for Economic and Policy Research (CEPR), March 2013

Americans pay far higher prices for prescription drugs than do people in other wealthy countries. The reason that other countries spend so much less on drugs is that their governments negotiate prices with the pharmaceutical industry. The United States government could adopt the same approach with the Medicare drug program and use its market leverage to negotiate the same, or even lower, prices as are paid by other wealthy nations. This issue brief finds the potential savings to states would be enormous, cumulatively between $31 billion and $73 billion over 10 years, and also each state individually could expect significant savings.  California leads the way, with potential savings between $3.3 and $7.8 billion. The next six top-saving states are Florida, New York, Texas, Pennsylvania, Ohio and Illinois, all with projected savings of at least $1 billion per year.

http://www.cepr.net/index.php/publications/reports/state-savings-with-an-efficient-medicare-prescription-drug-benefit

Comment:

By Don McCanne, M.D.

Those who have followed health policy closely are already aware that we could have had much lower drug spending in the Medicare Part D drug program had we authorized government price negotiation with the pharmaceutical industry, just as other governments have done so successfully. This new report from CEPR puts a price on the waste that we tolerate merely because we don’t place demands on our legislators to fix the system.

Think about this a little bit more. If we demanded government price negotiation not only for those of us enrolled in the Part D Medicare program, but for all of us who need prescription medication, just think of how much more reasonable our pharmaceutical spending would be. We could do this simply by adopting a single payer, improved Medicare for all program.

But the drug savings would be only the beginning. By now, most of you are aware of the many other single payer policies that would produce enough total savings to ensure high-quality care for all of us, while making our health care delivery system affordable for the entire nation. Why are we not beating down the doors of Congress?

Brill’s big breakthrough

A Time manifesto on healthcare costs smashes fences that have constricted this conversation for far too long

By Trudy Lieberman
Columbia Journalism Review, The Second Opinion blog, March 5, 2013

Steven Brill’s taboo-busting X-ray of the US medical system, “Bitter Pill,” has a chance to reframe the way we think and talk—and report—about healthcare costs.

In a penetrating, systemic, and long (36 pages) look at medical care, US style, for Time magazine, with tale after tale of the financial miseries befalling the system’s victims, with number after number bolstering his analysis, Brill zooms in on the nation’s unrealistic and destructive healthcare costs—why they exist and persist.

Brill, a journalist and an entrepreneur, offers the media a rare chance to move beyond the fence that usually corrals this discussion. High healthcare costs are spawned by a powerful ethic in American medicine that is too often nurtured by the press, an ethic that dictates that the medicine men—doctors, hospitals, and drug companies—sit at the right hand of God and deserve all they can get. Brill’s article crashes right through that fence, in fact, and provides the stuff for further productive reporting.

“When we debate health care policy,” he writes, “we seem to jump right to the issue of who should pay the bills, blowing past what should be the first question: Why exactly are the bills so high?” Precisely. Brill gives us some answers, too, not based on quotes from the self-serving players we hear from so often in this dreary debate, but based on serious investigation.

The waste at nonprofit hospitals: Waste in the US system is the recurring theme throughout Brill’s piece. The sacred cows he slaughters are the country’s nonprofit hospitals, which he holds largely responsible for much of the overspending. When McKinsey, the consulting firm, examined hospital financial reports with the help of a Bank of America survey, it found, as Brill put it:

The 2,900 nonprofit hospitals across the country, which are exempt from income taxes, actually end up averaging higher operating profit margins than the 1,000 for-profit hospitals after the for-profits’ income-tax obligations are deducted. In health care being nonprofit produces more profit.

Brill dissects some of these nonprofit places of healing—from the world-famous MD Anderson Cancer Center in Houston to less well known facilities, such as Stamford Hospital in Stamford CT—by showing, with real live bills from patients, the absurdity of some of their charges. For example: a $77 charge for one box of sterile gauze pads. Or consider this: $18 for a single diabetic test strip. Amazon sells a box of 50 for $27.85, about 55 cents a strip. In hundreds of small and midsize cities across the country—the American health care market has transformed tax-exempt ‘nonprofit’ hospitals into the towns’ most profitable business and largest employers, Brill reports. (Indeed, that latter point often makes it tough for local reporters to tackle these institutions.)

But Brill goes beyond the obviously absurd charges and examines where they come from—the chargemaster, an uber-list of prices each hospital keeps for every possible treatment and service. It governs what patients are actually charged and what payers actually pay. The chargemaster is phony and utterly flexible; it bends according to the negotiating leverage of hospitals and insurance companies when they joust for the final prices.

Brill describes the elaborate games that hospitals and payers play in determining who gets what discounts from the chargemaster, which result in an inequitable patchwork payment system. The leverage of the biggest of the big hospitals and insurers determines which patients are charged more or less depending on their carrier’s negotiating skill. As Brill demonstrates, that leaves plenty of room for hugely inflated prices, which in turn make it possible to pay over-the-top salaries to hospital executives.

Few patients know about the chargemaster and its amazing flexibility. Even hospital execs profess ignorance. When Brill asked for a chat with the CEO of Stamford Hospital to find out more about a patient’s bill, a spokesman replied that he doubted the CEO “has even seen the list in years. So I’m not sure why you care.” Most top hospital execs refused to talk when Brill inquired about their charges. Instead he got blah-blah comments from communications operatives.

But supposedly nonprofit hospitals are accountable to the public. They get generous tax exemptions in return for giving community benefits that can range from health fairs to free care for the poor. Some reporters have tried to investigate these community benefits, and they often run in to the same stone wall as Brill did. It makes you wonder to whom these institutions are accountable.

Handcuffing Medicare: Perhaps the biggest public service Brill has done is give credit where credit is due—to Medicare, an efficient social insurance program that is the only thing that keeps the hospitals and doctors in check and deserves far better press than it has gotten. Brill’s comprehensive reporting on Medicare could be a game changer, switching the conversation from cutting Medicare and cost-shifting (to beneficiaries), to helping Medicare do its job even better.

By carefully parsing so many hospital bills from non-Medicare patients and comparing them to how much less Medicare would have paid, Brill shows what happens when the government gets involved in the price of care. The price goes down. One hospital charged a patient $333 for a particular X-Ray. Medicare pays $23.83.

The government’s involvement is what healthcare sellers fear, and that opposition has prevented a more rational discussion of alternatives to a bloated system.

Doctors and hospitals may grumble about Medicare’s lower reimbursement, but as Brill notes, most still treat Medicare patients. “Hospitals don’t lose money when they treat Medicare patients,” says Jonathan Blum, Medicare’s deputy administrator, whom Brill interviewed for his piece. (Take a look at all the billboard and TV advertising—often focused on the elderly—that hospitals spend a fortune on, partly to attract Medicare patients.)

Another major theme of Brill’s piece is that Medicare could do way more to control medical costs if only Congress would let them is a point he made on ABC’s This Week in late February, where he talked about the legal prohibition on negotiating prices with pharmaceutical companies. In many other countries drug prices are regulated; America could save some $94 billion a year if we paid what other countries pay for the same products, he reported. (It’s worth noting too that drugs in England are free to people age 60 and older. In the US, thousands of seniors pay hundreds of dollars each month, even with Medicare’s drug benefit, because the prices are so high, and because insurers, which provide the drug coverage, make them pay huge amounts of coinsurance and copays—cost-shifting arrangements that Congress allows.)

Yet drug makers have won over public opinion by arguing that their high profit margins in the US are justified because they subsid
ize R & D needed for trailblazing drugs. Brill writes:

Apart from the question of whether a country with a health-care spending crisis should subsidize the rest of the developed world—not to mention the question of who signed Americans up for that mission—there’s the fact that the companies’ math doesn’t add up.

Using the case of Flebogamma, a sterile solution to boost the immune system, and its maker, Grifols, he lays bare some of that fuzzy math.

Congress has placed other kinds of handcuffs on Medicare, too. Brill’s discussion of how the program is prohibited from considering whether drugs and medical devices are both cost effective and clinically effective in making payment decisions is illuminating, and one the press almost completely missed during the debate on Obamacare and afterward. The law did set up a Patient-Centered Outcomes Research Institute to do comparative effectiveness research.

But so what? “Medicare could see the research and say, Ah, this drug works better and costs the same, or is even cheaper,” says John Gunn, the chief operating officer at Sloan-Kettering. “But they are not allowed to do anything about it.” (In England and in other countries, government or quasi-government agencies use both cost and clinical effectiveness in recommending which drugs should be used. Maybe that helps explain why seniors in the UK get free medications. The National Health Service usually doesn’t pay for stuff that doesn’t work, and if there’s a cheaper and just-as-effective alternative, that’s what docs prescribe.)

The influence of drug and device makers: Brill makes clear that these two very profitable business sectors have a stranglehold on Congress. From the prohibition on Medicare to use competitive bidding for what’s called durable medical equipment—like wheelchairs, syringes for diabetics, hospital beds, and canes—to the high price of cancer drugs, Brill demonstrates how they manage to keep Congress on their side, to the detriment of the public purse.

Medicare spends about $15 billion a year on medical equipment, and it has been conducting a pilot program to see if those costs can come down. This pilot, which embraces competitive bidding, has resulted in a 40 percent savings. However, it covers only about three percent of the medical equipment that beneficiaries use. If the program went nationwide, Brill estimates Medicare could save some $6 billion annually.

The lobbying campaign of device makers such as the Minneapolis-based Medtronic, whose practices Brill carefully dissects, shows what healthcare sellers do when they don’t like some rule or regulation or tax. Time’s piece describes how device makers are trying to rid themselves of a 2.39 percent excise tax on medical devices called for by Obamacare. Their arguments are the usual ones—the tax would reduce sales so much that the industry would lose some 400,000 jobs, they say. The press, for the most part, has passed along the gloom and doom scenarios from device makers, who Brill calls “superstar performers in a booming medical economy,” without questioning their numbers.

Brill did question them, and found the Affordable Care Act, which imposed the tax to help fund subsidies for the uninsured, would barely hurt the industry. He cited a 2011 McKinsey report, showing that Medtronic “delivered an amazing compounded annual return of 14.95 percent to shareholders from 1990 to 2010.” If the tax were so disruptive that it would kill sales, why, Brill asks “would the industry pass it along to consumers as a price increase? It hardly has to given its profit margins.”

Flaws in Obamacare: “With Obamacare we’ve changed the rules related to who pays for what, but we haven’t done much to change the prices we pay,” Brill asserts. That’s an important observation, and one that was brushed aside by many policymakers in the haste to pass health reform. As CJR has pointed out, the media, too, may have helped oversell what the law is to accomplish.

Brill analyzes what the law does this way: Obamacare, he says, tinkers at the edges of the system but does not address the core problem. It does improve the claims appeal process, for example, and makes some insurance terms available in plain English. While such changes are positive, he writes, “none of it is a path to bending the healthcare cost curve.” That gets to the heart of the debate over the affordability (which CJR recently addressed in an Exchange Watch piece about the efforts to set up Connecticut’s Obamacare health exchange).

Brill observed the “exchanges could raise costs, not lower them.” Indeed, three of Obamacare’s best provisions—prohibiting exclusions for preexisting conditions, ending annual and lifetime caps on coverage, and restrictions on copays for preventive care, will most likely raise insurance premiums, Brill tells readers.

Unfortunately, Brill doesn’t fully explore the affordability conundrum. Many of the people whose misery he described owned “limited benefits policies,” which don’t cover much if someone has a catastrophic illness. Obamacare eliminates such restrictions.

Yet patients could still find themselves in the same financial boat when series illness strikes. Because insurance in the state insurance exchanges, as Brill argues, may well still be expensive, consumers faced with the mandate to buy coverage are likely to choose the cheapest policies—and those are designed to cover only 60 percent of the costs. Families might still struggle to pay the remaining 40 percent. Medical bills that seem like monsters from outer space will not disappear for many Americans—even with Obamacare.

An official of a firm who helps people untangle their medical bills and negotiate with providers tells Brill that most of the firm’s clients are middle or upper-middle people with insurance. That tracks with studies by CUNY professors Steffie Woolhandler and David Himmelstein and Elizabeth Warren (now a US Senator from Massachusetts), who found it was mostly middle class people with insurance who declared medical bankruptcy. Brill’s predictions about rising premiums and rising medical costs may not change this picture.

Brill’s solutions: A big omission in Brill’s remarkable tour through the American health system is a serious critique of the doctors. Although the piece devotes a brief section to the doctors’ role in creating this mess, he gives their complicity short shrift. To bolster this notion of what he calls “over-doctoring,” Brill seems to generalize from an 89-year-old patient named Alan A., who got 33 visits in one year from 11 doctors who, according to Brill, “had nothing to do with his recovery from the heart attack or his cancer.” While noting there’s been some progress toward weaning the docs from fee-for-service payments to salaries, he doesn’t directly address the question of whether US physicians, particularly specialists, are paid too much, a subject policymakers have been reluctant, for decades, to address.

Nor does Brill discuss Congressional efforts to limit inflation in doctors’ fees through the 1997 Balanced Budget Act, and the doctors’ mostly successful efforts to thwart its mandated cuts in Medicare reimbursements. Failing to discuss the “Doc Fix” campaign
s by physicians’ professional organizations leaves the impression they have no role in the high cost of care. They do.

Brill does talk about hospital consolidation and how hospitals are buying up doctor practices and steering patients to them, thus increasing their leverage with insurance companies—an ominous trend. As news outlets like National Journal, the Tampa Bay Times, and The Charlotte Observer have reported, such consolidations have already boosted prices and set up a battle between giant hospitals and giant insurers. Perhaps someday a Brill Part 2 might explore all this.

His offers some solutions, which Time lays out in an infographic. Each yields billions of dollars in savings.

• Recapturing 75 percent of the profits from hospitals by taxing them, regulating their prices, ensuring real competition and transparency, and rethinking the chargemaster so it reflects real costs, not phony ones. The savings: $84 billion.

• Allowing and funding comparative effectiveness evaluations in prescribing drugs. (We hope he means both clinical and cost effectiveness.) The savings: $28 billion.

• Reducing the number of tests and procedures done only to prevent malpractice lawsuits. (The literature is full of alternatives to this broken system, which both sides perpetuate.) The savings: $74 billion.

Brill’s list goes on, totaling some $360 billion in savings, or about 13 percent of the country’s total healthcare spending.

What’s really eye-opening is the $3.6 billion operating profit amassed by the country’s ten largest nonprofit hospitals—money that now goes for huge executive salaries and for buying up other hospitals and doctor practices, which, as the consolidation frenzy continues apace, will further drive up costs.

Are his remedies adequate? He concedes some are unlikely to happen. And he doesn’t quite follow the logic of his own research all the way.

He convincingly argues that Medicare is the superior angel in the US system, and that it could actually control costs if only Congress would let it. Medicare is “the only player in the system that seems to have to balance countervailing interests the way market players in a real market usually do,” he writes.

Brill recommends lowering, not raising, the age for Medicare eligibility—a goal the creators of Medicare had in 1965. Lowering the age would improve the government’s cost challenge, because people in their late 50s and early 60s would be covered by a more efficient and less costly arrangement than will be the case under Obamacare’s insurance exchanges, which will be able to exert little, if any downward pressure on prices.

Brill’s solution seems to set the nation on the path of Medicare for All and toward a national health system—that Brill cannot bring himself to endorse.

Gunn, the chief operating officer at Sloan-Kettering, told Brill. “If you could figure out a way to pay doctors better and separately fund research… adequately, I could see where a single-payer approach would be the most logical solution.”

Brill sees it somewhat differently: “The real issue isn’t whether we have a single payer or multiple payers. It’s whether whoever pays has a fair chance in a fair market.” Yet he still roots for government power to strip away some of the tremendous leverage held by healthcare providers in today’s health market.

Logically, that circles back to how much doctors should get paid, who pays for their education (Medicare finances some of it), how much nonprofit hospitals should profit, and how much drug and device manufacturers really need to earn. Those questions have been on the shelf for decades. Brill’s contribution dusts them off, exposing them once again to scrutiny by the public and the press.

Maybe Brill has finally succeeded in breaking down the fences that have penned in what’s possible to discuss when it comes to healthcare, and offering to Americans some previously out-of-sight, out-of-mind topics for honest, objective consideration. In his morning on the Sunday network news circuit, the roundtable participants on ABC’s This Week raced as hard as they could to fence in the discussion and cut Brill off, but they didn’t completely succeed.

The Second Opinion, CJR’s healthcare desk, is part of our United States Project on the coverage of politics and policy. Follow @USProjectCJR for more posts from this author and the rest of the United States Project team. And follow Trudy Lieberman @Trudy_Lieberman.

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The Big Boys: An affordability puzzle

The Big Boys: hospitals and their pricing muscles

Care crisis: Medicare for all

By the Editorial Board
The Charleston (W.Va.) Gazette, March 17, 2013

CHARLESTON, W.Va. — Health care should be a human right for all people. Medical insurance should be universal, covering everyone. It should be operated by government, the only sector with enough power to curb runaway trillion-dollar costs. Insurance firms and medical corporations shouldn’t get rich from sickness, their executives pocketing millions per year. U.S. employers shouldn’t be forced to spend more than $7,000 per employee per year for health insurance.

Most modern democracies have nationalized “single-payer” health systems guaranteeing care for all at moderate cost — but America shamefully clings to for-profit medicine, and the U.S. system is a disaster.

The entire March 4 Time magazine is devoted to America’s dilemma, in a cover story titled “Why Medical Bills Are Killing Us.” The 25,000-word study says:

“In the United States, people spend almost 20 percent of the gross domestic product on health care, compared with about half that in most developed countries. Yet in every measurable way, the results our health care system produces are no better and often worse than the outcomes in those countries …. We’re likely to spend $2.8 trillion this year on health care ….”

“Why exactly are the bills so high? What are the reasons, good or bad, that cancer means a half-million or million-dollar tab? Why should a trip to the emergency room for chest pains that turn out to be indigestion bring a bill that can exceed the cost of a semester of college? … Why does simple lab work done during a few days in a hospital cost more than a car?”

The long report describes families who are devastated by colossal medical bills. And it describes sky-high profiteering by medical executives. The CEO of Medtronics electronic device firm was paid $25 million in 2012 — and hospital administrators grab up to $5 million yearly.

It described a blue-collar Oklahoma man who suffered back pain, and a Catholic charity hospital billed him $86,951 for a one-day visit to install an electronic nerve interceptor. The hospital’s administrator is paid $1.9 million per year.

Surprisingly, Time concludes that Medicare, America’s chief “socialized medicine” system, is the best cure for skyrocketing costs, because it clamps tight controls on medical bills. And its bureaucracy is super-frugal. Medicare spends just $3.80 each to process more than 1 billion claims per year — while Aetna insurance spends $30 to process each claim. Commercial insurers waste a lot of money trying to foist bills onto someone else.

For generations, Democrats in Washington have sought to bring low-cost universal health care to America. President Obama’s landmark 2010 reform was a major step. Maybe the wisest course would be to expand Medicare until it covers every American.

http://www.wvgazette.com/Opinion/Editorials/201303170050

Oregon bill backs study of single-payer financing

By Bennett Hall
Corvallis (Ore.) Gazette-Times, March 18, 2013

Oregon health care reformers are hoping a measure working its way through the Legislature will help them prove what they’ve been claiming all along: that a single-payer system is the cheapest way to provide quality care for all.

House Bill 3260 would direct the Oregon Health Authority to conduct a feasibility study on at least four options for financing health care delivery in the state, including a publicly financed single-payer system.

The study also would evaluate the costs of continuing to rely on a mix of public health plans and private insurance; an option that would allow consumers to choose between publicly funded and private plans; and one or more other options designed by the researchers conducting the study.

In addition, HB 3260 sets out a list of criteria that any financing system should meet. Among other things, the system should provide:

• universal access to comprehensive care;
• transparency and accountability;
• integration of physical, dental, vision, mental health and long-term care;
• reduction of administrative costs; and
• sufficient, fair and sustainable financing.

Rep. Michael Dembrow, a chief sponsor of the bill, called it part of a long-term plan to create a single-payer health care system in Oregon.

The Portland Democrat noted that the earliest such a system could be implemented would be 2017, when states can seek waivers under the federal Affordable Care Act. In the meantime, he and others are laying the groundwork.

Earlier this session, Dembrow reintroduced the Health Care for All Oregon Act, which would create the framework for a state single-payer system. While he doesn’t expect that measure, House Bill 2922, to pass this session, Dembrow noted that its already attracted 24 sponsors, more than twice the support he got for HB 3510 in the 2011 Legislature.

“The bill is not fully fleshed out in terms of a funding mechanism,” he said. “What we need to do is get to that level of specificity, and that’s what (HB 3260) does.”

Dr. Mike Huntington of Corvallis, a leader of the statewide reform group Health Care for All Oregon, said a thorough financial analysis could set the stage for serious discussion of single payer.

HB 3260 is similar to a measure passed by lawmakers in Vermont several years ago. The feasibility study it authorized was a key step on that state’s path to adopting a modified single-payer health care system.

“We are convinced that publicly managed financing is critical to any health-care plan,” Huntington said. “But to be persuasive for the public and the Legislature, we want to have a study done specifically for Oregon.”

The study, expected to cost between $250,000 and $500,000, would be financed by grants and private donations. Under terms of HB 3260, the Oregon Health Authority would be expected to complete the job and offer its recommendations on health care funding before the 2015 Legislature opens.

Hearings on the measure have been scheduled for early April before the House Health Care Committee, and Dembrow said he’s expecting a strong show of support.

“I’m feeling very, very optimistic,” he said. “There really seems to be a lot of momentum behind this bill.”

http://www.gazettetimes.com/news/local/bill-backs-study-of-single-payer-financing/article_71ee5e10-8dbf-11e2-a5b9-001a4bcf887a.html

Rhode Island's is 41st state AFL-CIO to endorse H.R. 676

By Single Payer News

On Feb. 25 the Executive Board of the Rhode Island AFL-CIO unanimously endorsed H.R. 676, Expanded and Improved Medicare for All, the national single-payer legislation recently reintroduced into Congress by Rep. John Conyers Jr., D-Mich.

George Nee, president of the Rhode Island AFL-CIO, stated, “Year after year America continues to spend more and get less in return for our broken health care system, something must be done. The Rhode Island AFL-CIO strongly supports single-payer national health care as a way to insure all Americans, cut wasteful spending out of our health care system, and contain costs in a system where prices are spinning out of control. All Americans should have access to high quality affordable health care, that does not jeopardize the financial or physical well-being of themselves, their families, or the companies they work for.”

The vote followed a presentation on single payer health care by J. Mark Ryan, M.D., F.A.C.P., president of the state chapter of Physicians for a National Health Program (PNHP). Dr. Ryan is an internist in Providence where he provides primary care at the University Medicine Foundation. “I was very impressed at how knowledgeable the Executive Board members were about H.R. 676 and the benefits of single-payer national health care,” Dr. Ryan told the All Unions Committee.

The Rhode Island AFL-CIO is the umbrella organization for more than 250 local unions which represent over 80,000 working men and women across the state. The story on the Rhode Island AFL-CIO website is here.

*****
H.R. 676 would institute a single payer health care system by expanding a greatly improved Medicare to everyone residing in the U. S.

H.R. 676 would cover every person for all necessary medical care including prescription drugs, hospital, surgical, outpatient services, primary and preventive care, emergency services, dental (including oral surgery, periodontics, endodontics), mental health, home health, physical therapy, rehabilitation (including for substance abuse), vision care and correction, hearing services including hearing aids, chiropractic, durable medical equipment, palliative care, podiatric care, and long-term care.

H.R. 676 ends deductibles and co-payments. H.R. 676 would save hundreds of billions annually by eliminating the high overhead and profits of the private health insurance industry and HMOs.

In the current 113th Congress, H.R. 676 has 41 co-sponsors in addition to Conyers.

H.R. 676 has been endorsed by 598 union organizations including 144 Central Labor Councils/Area Labor Federations and 41 state AFL-CIO’s (KY, PA, CT, OH, DE, ND, WA, SC, WY, VT, FL, WI, WV, SD, NC, MO, MN, ME, AR, MD-DC, TX, IA, AZ, TN, OR, GA, OK, KS, CO, IN, AL, CA, AK, MI, MT, NE, NJ, NY, NV, MA, & RI).

For further information, a list of union endorsers, or a sample endorsement resolution, contact Kay Tillow, All Unions Committee for Single Payer Health Care–HR 676, c/o Nurses Professional Organization (NPO), 1169 Eastern Parkway, Suite 2218, Louisville, KY 40217. Phone: (502) 636 1551 E-mail: nursenpo@aol.com, unionsforsinglepayer.org

Single-payer health care: What it is, what it isn't

Step back and look at it with clear eyes. You’ll see that it’s practical.

By Bonnie Blodgett
Star Tribune (Minneapolis), March 16, 2013

Dr. David Dvorak is an emergency room physician. He supports a single-payer system for Minnesota and wants to make one thing clear: “single payer” doesn’t mean socialized medicine.

In Germany, for instance, hospitals and doctors compete for customers, and the market dictates the cost of what they provide. The government pays the bill because health care isn’t viewed as discretionary but as a basic right. Every taxpayer pays in, according to ability and regardless of illness or age. This creates a vast pool, to borrow a term from the insurance industry, and the larger the pool, the smaller the risk that each participant poses to everyone else. Now that’s an insurance plan!

What bothers Dvorak is that in this country health care is such a hodgepodge. About half of us get coverage through our employers. There are nonprofit insurers and for-profit insurers. The latter group spends about twice as much in overhead as their nonprofit peers. If you’re uninsured because you’re self-employed, unemployed or have a preexisting condition and are 19 or older, well, that’s too bad — but not at all surprising. Fifty million Americans are in the same predicament. Health crises are now the No. 1 cause of bankruptcy in the United States.

Veterans Affairs and Medicare take care of the sickest among us yet somehow manage to deliver health care at the lowest cost. Could that be, at least partly, because they’ve eliminated the middleman? The nonpartisan U.S. General Accounting Office concluded that a system like Germany’s would save the United States nearly $400 billion per year, enough to cover all of the uninsured.

Critics believe that single payer would put an end to innovation. It’s a false argument to begin with, but look at the record: Shiny new stents, scanners and specialists don’t automatically deliver improved health. Moreover, gains produced by medical breakthroughs are erased by such mundane realities as this: When people lose their health coverage, they put off going to the doctor until the cost to heal them is through the roof. Who pays? Taxpayers. Fact is, business pays less than 20 percent of our nation’s health bill, while 60 percent is funded by taxes and the rest is out-of-pocket.

We are spending twice as much as other wealthy democracies — yet our health outcomes, including life expectancy and infant mortality, keep heading the wrong way compared with theirs. Meanwhile, insurance companies and their top executives are raking it in. It takes a certain kind of smarts to deliver shareholders the handsome rewards they’ve come to expect from this industry, rewards that also accrue to the benefit of those brainy executives, whose salaries are dwarfed by what they receive in stock options.

In 2009, when the rest of the nation was mired in recession, the New York Times asked the UnitedHealth compensation committee why CEO Stephen J. Hemsley had been awarded $100 million in stock options that year. The committee praised their man for “enhancing the Company’s reputation, ethical culture and tone at the top.” The Times noted that Hemsley’s predecessor, William W. McGuire, “had stepped down in a scandal over his stock options.”

UnitedHealth employs ordinary people, of course. Jobs are important. But do these jobs grow the economy in a meaningful way? Do they create new treatments or diagnose tumors or comfort an ill patient?

Many studies have proven that single-payer systems are vastly more efficient and fair than our own combo platter. The Affordable Care Act reforms a system that needs to be replaced. In 2017, states will be allowed to opt out. Maybe, on this issue, the agendas of left and the right will align. Conservatives who like taking power from the feds and liberals who see health care as a human right might just see eye-to-eye enact the first single-payer system right here in Minnesota.

That’s how it started in Canada. Dvorak likes to point out that when asked in a nationwide poll to pick from a star-studded roster their greatest national hero, Canadians chose Tommy Douglas, who set up a single-payer health care system in Saskatchewan that was so successful the rest of the country wanted in.

Something else Dvorak wants to clarify: He’s not some renegade outlier. Polling shows not only that two-thirds of Americans support single-payer, but that 59 percent of American physicians do, too.

Why didn’t you know that? Spin. Insurance companies spent $1.5 million a day lobbying to ensure that the ACA would pose no significant threat to its presence in health care. That’s what I mean by smart.

Bonnie Blodgett is a St. Paul writer.

http://www.startribune.com/opinion/commentaries/198548261.html

A disaster in the making – defined contribution for employer plans

To Save, Workers Take On Health-Cost Risk

By Anna Wilde Mathews
The Wall Street Journal, March 17, 2013

Last fall, two big employers embarked on a radical new approach to employee health benefits, offering workers a sum of money and allowing them to choose their health plans on an online marketplace. Now, the first results are in: Many workers were willing to choose lower-priced plans that required them to pay more out of their pockets for health care.

The new online marketplace, operated by consulting firm Aon Hewitt, a unit of Aon PLC, was used by more than 100,000 employees of Sears Holdings Corp. and Darden Restaurants Inc. (Olive Garden and Red Lobster), as well as Aon itself, to pick plans for 2013. The employers gave workers a set contribution to use toward health benefits, and they could opt to pay more each month to get richer plans, or choose cheaper ones that might have bigger out-of-pocket fees, such as higher deductibles.

Such employer-centric marketplaces, known as private exchanges, are separate from the public exchanges created by the federal health overhaul law, which will be set up by state and federal governments. However, the public exchanges, serving individual consumers and small businesses, will operate on a similar principle of allowing people to shop for health coverage in an online marketplace.

Companies offering the exchanges say that a lot of employers are considering the approach. “The interest level is like nothing I’ve ever seen,” said Eric Grossman, a senior partner at Mercer.

Change in workers’ choices:

Consumer-Directed Health Plan (Higher deductible)
2012: 12%
2013: 39%

Health Maintenance Organization (HMO)
2012: 18%
2013: 14%

Preferred Provider Organization (PPO)
2012: 70%
2013: 47%

http://online.wsj.com/article/SB10001424127887323639604578366420251188326.html

Comment:

By Don McCanne, M.D.

Be prepared. Very shortly you will be hearing from the supporters of consumer-directed health plans (CDHPs) of the phenomenal success of these plans wherein you put consumers in charge of the money to be used for their health plan purchases. In the first year of this program, there has been a massive shift from more traditional preferred provider organizations (PPOs) to these CDHPs. But you have to understand why this is really terrible news.

Under the traditional employer-sponsored defined benefit health plans, the employers purchase plans for their employees, with the employees paying a percentage of the premium. If the employer offers options, the employee will often select the plan that requires a lower contribution – typically a PPO, but with enough benefits to provide some health security.

Under this newer model of employer-sponsored defined contribution health plans, the employers give a fixed amount of money to each employee to be used to select plans from these private insurance exchanges. Since the employees become responsible for 100 percent of the premium costs above the employer defined contribution, the employees have a much greater incentive to choose plans with the premiums that are closest to the amount of the employer defined contribution – typically a cheaper CDHP.

The experience in the first year alone, with this Aon-operated exchange, 23 percent of employees dropped PPOs, and 4 percent dropped HMOs, resulting in increased enrollment in CDHPs from 12 percent in 2012 to an astonishing 39 percent in 2013!

While the CDHP advocates spread the word that giving consumers control of their health insurance dollars will lower health care spending by allowing employees to “buy only the insurance that they need,” they will remain silent on what really happened. They shifted risk from the employers and their insurers onto the backs of the employees.

How does this work? First, it is important to understand that the workforce and their young families are the healthiest sector of our society. When selecting a plan, it is understandable that many workers would prefer to take home more money in exchange for the risk of paying more out of pocket in the unlikelihood of a major medical event occurring in the next year. People who live check-to-check welcome trading a higher net income for accepting more risk should a low-odds event happen to them.

Keep in mind that a minority of workers or their family members actually will face major medical events. Should that occur, these individuals, who have quite modest incomes, will be responsible for huge medical bills – bills because of the very high deductibles, high coinsurance, and all costs of out-of-network care in these plans that tend to have more limited networks.

This is a setup for personal bankruptcy. Should these CDHP-enrolled employees lose their bets and end up with major injuries or major medical disorders, a very large percentage of them will face this prospect . This is exactly the opposite of what their health care coverage should be providing. The system should ensure that financial barriers to care are removed so that patients can access the care that they need without having to face severe financial hardship.

So when the CDHP advocates tout the success of empowered health care insurance shoppers, they will be able to claim that it works really well for most workers and their families (only not for those who end up needing health care). We need to keep exposing this con job.

Dr. Steffie Woolhandler: Time to end medical debt, medical bankruptcy

The following is an unofficial, slightly edited set of excerpts from a March 4 telephone interview with Dr. Steffie Woolhandler, professor at the City University of New York School of Public Health at Hunter College, visiting professor of medicine at Harvard Medical School, and co-founder of Physicians for a National Health Program, conducted by Dr. Margaret Flowers and Kevin Zeese on their radio show “Clearing the FOG” on We Act Radio, 1480 AM, in Washington, D.C. It took place in the run-up to Strike Debt/Rolling Jubilee’s week of actions, March 16-23, which will spotlight the problems of medical debt and medical bankruptcy. The full radio show, which includes a spokesperson for Strike Debt, can be listened to here.

Dr. Margaret Flowers: Welcome, Dr. Woolhandler.

Dr. Steffie Woolhandler: Good morning. Thank you for having me.

How to people get into medical debt?

Some people get into medical debt because they have no insurance and they get sick. But the majority of people with serious medical debt have insurance, but their insurance is partial – full of gaps like copayments, deductibles and uncovered services.

So what happens is that people get sick, they try to use their insurance, and find that they’re still left holding literally thousands of dollars in unpaid medical bills.

You’ve done several research studies on health care and bankruptcy. What have those studies found?

We interviewed more than 2,000 people in federal bankruptcy court to figure out why they went into bankruptcy. In about 60 percent of all personal bankruptcies, medical bills and medical illness played a major role. Either people were uninsured and got sick, or they were insured, but found that their insurance really failed them when they had a serious illness.

More than three-quarters of people in medical bankruptcy had health insurance when they first got sick. Now, some of those people got so sick they lost their job, or they had to quit their job to take care of a sick family member. When they lost their job they lost their insurance. But even more commonly, people had insurance, usually private insurance, that they kept throughout their medical illness, but were bankrupted anyway because of gaps in coverage like copayments, deductibles and uncovered services.

What’s the trend regarding copayments, deductibles and uncovered services? Is the situation going to improve when Obamacare takes hold?

No. In fact, the federal health law will make the problem of gaps in coverage much more serious because the required insurance policies under the legislation are extremely skimpy. The so-called bronze policies, which are the cheapest policies that will meet the mandate under Obamacare, will only cover about 60 percent of your medical costs. People who buy those plans will still be responsible for 40 percent of total medical care costs. Typically, for someone with a bronze plan who got sick and tried to use their insurance, they would have at least $6,000 per person in out-of-pocket medical costs every single year they’re sick.

This is really the first time that the government has put its stamp of approval on such extremely skimpy policies. In the past, some states were trying to get consumer protections or were trying to regulate the insurance market to make the policies more generous, but Obamacare really reversed that trend with the federal government stepping in and saying we’re going to have these bronze policies that only pay 60 percent of your costs. The federal government is saying, “That’s fine with us, we think that’s OK.”

So the new federal health law has in some ways made the problem of underinsurance worse. It does improve the problem of being completely uninsured, we all know that. Approximately half of all currently uninsured people will receive coverage under Obamacare, and the other half – around 30 million people – will remain uninsured. But when we get to the problem of underinsurance, people with only partial coverage, Obamacare actually makes the situation worse.

The subsidies only kick in with the silver plan or higher. Is that true?

For whatever reason, the subsidies are only available if you purchase at the silver level, and the subsidies phase out at about 250 percent of the federal poverty level, so the subsidies disappear at a relatively low income level.

Can you speak about the impact of financial barriers to care on our health?

There’s a tremendous body of research saying that when people have no insurance, they don’t get preventive care, they don’t get primary care, and when they have a serious illness and go to the hospital they have much worse outcomes – they’re more likely to die.

There’s a growing body of evidence showing that people who have insurance, but have these skimpy policies, so-called underinsurance policies, also face really bad health consequences. When people have skimpy policies they delay getting primary care, they delay going to the hospital, and they also have worse outcomes than people who have full coverage.

We need a system where everybody has coverage for all medically necessary care, because that’s really the only way to assure people get the care they need, and it’s the only way to protect the budget of American families from the very high costs when a serious illness hits.

Do other countries have this problem of underinsurance?

Many countries have systems that cover virtually 100 percent of all medical care. In Canada, traditionally, people have 100 percent coverage of hospital costs, 100 percent coverage of doctors. Certainly in Great Britain there’s a tradition of 100 percent coverage for many people.

Some of the European countries do have copayments; however, in those countries they have much more equal income distribution so they don’t have the huge group of very poor people that we have here, or even low-income people like we have here, who just don’t have the cash in their pocket to pay a copayment.

We have a bad situation in the United States with a lot of income inequality, lots of people who are just barely getting by on their paychecks, and then health care costs, which even if you have insurance, can run into thousands and thousands of dollars out-of-pocket expenses every year.

How will Obamacare affect the middle class?

The underinsurance is actually a very big hit on working families. People are living paycheck to paycheck but are getting by, they’re making it work, and then something like appendicitis or a bad car accident will sink the family and push them into bankruptcy. So one of the things that would really improve the financial security of working families would be if insurance really covered everything.

You’ve also lived and worked in Massachusetts. How is their health law working out?

The Massachusetts health law was the model for the national plan. In Massachusetts, the new law cut the number of uninsured by approximately half, which is what is expected to happen nationally, but you still have about half of the uninsured around, lacking insurance.

The problem is that after enactment of the law, a lot of the services that were available free for the uninsured have been cut. Safety-net funding was reduced by the law. And again that’s going to happen with Obamacare. There’s about $36 billion in cuts to safety-net hospital payments under the federal
health law. There will still be uninsured people – 30 million of them after Obamacare is fully implemented – but the safety-net institutions that care for them will be starved of funds. So, while some people may be better off under Obamacare, certainly, some folks who are uninsured will be significantly worse off under the new legislation.

So basically what’s happening is that cuts are being made to public programs so as to subsidize private insurance?

Yes, that’s what’s going on. And it’s important to remember that the safety-net institutions are not just there for uninsured people – that’s very important, of course – but safety-net institutions also take care of patients with insurance who can’t get care in the private sector. Some who have mental illness problems, or substance abuse problems, may not be welcome in the private sector, regardless of their insurance. Those folks may have to seek care in the safety net, and those institutions have seen their funds taken away and given to private insurance under the Massachusetts law and also the Obamacare legislation.

Has the Massachusetts reform controlled costs?

Health care costs have absolutely not been controlled in Massachusetts despite the fact that then-Gov. Romney claimed that the 2006 reform would control them. Massachusetts’ health care costs are the highest in the nation and continue to rise very rapidly. In fact, it’s pretty certain that they’re the highest health care costs anywhere in the world.

How about medical bankruptcies in Massachusetts? You’ve also done research on that, correct?

Medical bankruptcy in Massachusetts still accounts for about half of all bankruptcies. That was true before the 2006 legislation went into effect and that was true after 2009, after the legislation had been around for a couple of years.

It’s pretty clear that what was done in Massachusetts didn’t impact the problem of medical bankruptcy in any significant way. And if you look at what the insurance is like in Massachusetts, it’s pretty similar to what will occur under Obamacare, that is, very high copayments and deductibles.

If you go on the Massachusetts exchange website, it’s actually called The Connector, you’ll see the cost of a policy of someone in their fifties. For someone in their fifties, the premium would be about $5,000 per year, but then that policy would come with a $2,000 deductible – so figure $7,000 out-of-pocket before the insurance pays a single penny. And then, thereafter, for the next $15,000 in spending, you, the patient, are responsible for 20 percent of the costs, year after year.

Keep in mind that the plans in Massachusetts are a little better than what we can expect under Obamacare.

You’ve been working on these problems for many years. What do you think is the solution?

A single-payer solution, sometimes called an expanded and improved Medicare for all. Everyone would be covered in a program like Medicare, only the single payer would eliminate all of the copayments and deductibles that exist in Medicare.

It’s sometimes called a single-payer system. It’s the type of system that they have in Canada and in several western European countries. You pay for the system out of taxes. Patients have complete free choice of doctor and hospital. There’s no copayments, no deductibles for covered services.

Nations with single-payer systems actually have lower health care costs than in the United States, largely because the administrative costs in a single-payer system are so much lower. If you just have one agency, something like Medicare or Social Security, paying all the doctor bills, giving budgets to hospitals, and so on, you save several hundred billion dollars a year on health care paperwork and administration and that makes the entire health care system substantially more affordable, not just for individuals, but for the government and society.

How can listeners to this program get involved?

I mostly want to echo what’s been said by some of the Strike Debt/Rolling Jubilee people. People are in debt and it’s not your fault if you’re in debt and it’s particularly not your fault if you’re in debt because of a medical problem. This is unfair. No other developed nation forces people to go into debt because they get sick. We need to be thinking of moving toward a fair, efficient, single-payer system so that no one ever has to go into debt because they have the misfortune of being sick.

Americans need Medicare for All

By Hedda Haning, M.D.
Daily Mail (Charleston, W.Va.), March 12, 2013

What’s the matter with our health care?

For the vast majority of docs, their primary concern is to take good care of their patients. But the fact is they also have to pay their expenses and earn a living.

The way things stand now, providers carry much uncompensated care on their books. Their administrative overhead — for pre-approving procedures, re-submitting denied requests, appealing, billing and collecting payments — is huge.

Let me explain about usual and customary fees.

That is the fee the doctor “usually” charges for a given procedure. Insurance companies say they want to pay the doctor’s “usual and customary fees,” but doctors have learned from experience that private insurance companies will pay about half of what the doctor bills.

Doctors solve the problem by billing double what they know will really cover their costs so as to overcome the insurance company scam. This is an old game.

The big problem is that patients suffer, because uninsured patients are responsible for the entire “usual and customary” fee, proving it is usual and customary. They aren’t allowed to scam the billing numbers as the insurance companies do.

Uninsured patients always pay more if they can afford to pay anything.

Also, in the United States, private insurance overhead is at least 30 percent, a cost passed onto the payer. To clarify: the 30 percent does not pay for care.

In the private setting, overhead pays for administration (including repeatedly denying care), advertising and profit.

Medicare has a 3 percent overhead. It’s not Medicare that will bankrupt us; it is private insurance.

Around the world, advanced countries, all having some variation of a Medicare-like system, pay half of what we do and get better care. 

Some suggest that employment will suffer in the United States if numbers of administrative personnel and costs drop because we switch to Medicare for All.

Actually we need more nurses taking care of patients in offices, hospitals, nursing homes, and helping students in school. We just have to prioritize and pay for their employment.

We need more primary care physicians. We need more mental health professionals, including school counselors. Employment will not be seriously at risk.

And just FYI, most medical providers in national health programs overseas have approximately the same income as docs do here. That is true even though we spend twice as much on health care in this country than any other developed country does.

Money wouldn’t seem to be a major issue for doctors, and most of them, particularly in primary care, want out of the “free” market.

Again, what most doctors want is to take good care of their patients; therefore, most doctors want single-payer health care or Medicare for All, as do most Americans when polled.

That means a system in which tests and treatments are not profit-driven, but rather depend on studies that show the best way to care for patients, and then provide the needed care for everyone.

I emphasize: While I am talking about public payment, the care is private. You would choose your own provider, doc or hospital.

Many folks don’t realize that the cost of drugs are tightly regulated elsewhere.  Pharmaceuticals in all other advanced countries are as good as ours, but cost a fraction of those on our market.

Somehow the pharmaceutical companies manage to make a really healthy profit even overseas. They don’t have to bankrupt Americans to make money.

By the way, our Veterans Administration system, in recent years considered the model health care provider in our country according to outcomes and patient satisfaction, bargains drug costs way down.

Can the rest of us learn something here?

Did you know that employer-sponsored health care began during World War II to make up for the wartime wage freeze? That approach was useful then, but doesn’t work for us now.

More than 46 million people are uninsured or under-insured in our country even though most of them are currently employed.

Nearly 50 percent of personal bankruptcies are related to medical expenses even though more than 50 percent of the bankrupt had medical insurance at the time the illness began.

Unfortunately, we have even heard – including in West Virginia – of corporations declaring bankruptcy primarily so they can dump employee benefits, including health care.

Contrary to all rumors, according to rankings on every health care outcome from infant mortality to life expectancy to availability of high-tech equipment, our medical care is mediocre at best. We spend much more per capita than any other developed country and our costs are rising faster.

Let me repeat: Our health care is not the best in any way!

So our current health care system is not the best for patients or doctors, and it is not good for the economy either. Health costs weigh on employers.

Few small businesses can afford to pay for health insurance for their employees these days. Even large corporations feel the sting.

A few years back, it cost at least $1,500 per car for GM to cover health care for employees.  It has to be higher now. Is it any wonder that more cars are currently made in Canada than in Michigan or the entire United States? 

And from the workers’ point of view, if they do have health insurance, they feel unable to risk it by changing jobs. They can’t take that chance either to climb the skills or wage ladder.

Our national medical bill is well over a trillion dollars and climbing.

Health care the way we do it now, private and profit driven, is what threatens our future financial stability.

And that is in spite of the fact that millions of Americans don’t have any health insurance at all.

We can simultaneously make our health care system and our economy better by changing from private health administration to Medicare for All. We have to stop being gullible, and we have to stand for care before profit.

Learn more, and help us work for change. Please join us at 7 p.m. April 25 at the University of Charleston for an open public forum on Single Payer Health Care (and a comparison with the Affordable Care Act).

Haning, a retired physician, lives in Charleston.

http://www.dailymail.com/Opinion/Commentary/201303110146

Selling Expensive Health Care Lemons

By Philip Caper, M.D.
Bangor Daily News, March 14, 2013

In 1970, a University of California economist named George Akerlof wrote a paper titled “Selling Lemons.” In it he explained that a market characterized by a large asymmetry of information between seller and buyer would also soon become characterized by a decrease in the quality of goods and dominated by crooked sellers and gullible buyers. In 2001 he won the Nobel Prize for his work.

Sad to say, I can think of no market that better fits these criteria than health care. In a March 4 Time Magazine cover story titled “The Bitter Pill: Why Medical Bills Are Killing Us,” reporter Steven Brill dissects a number of hospital bills and traces the detailed charges back to their origins. He concludes, “everyone along the supply chain – from hospital administrators (who enjoy multimillion-dollar salaries) to the salesmen, executives and shareholders of drug and equipment makers – was reaping a bonanza. The only exceptions, I found, were those actually treating the patients – the nurses and doctors.”

When you need medical care there is absolutely no way you can accurately determine ahead of time what that care will cost you. Don’t hope to get anything approaching a rational explanation for what you are charged after the fact either. The best you can hope for is that whatever insurance you have will cover most of the costs. If not, you are at the mercy of the hospital and, if you can’t pay, its collection agency.

So you can’t know much about the prices of health care. How about the appropriateness or quality of that care? Again, unless you are a doctor you have very few ways to independently judge the safety or benefits of tests, procedures or prescriptions.

And sometimes not even then. Even among well-trained and conscientious doctors, a great deal of uncertainty exists about the risks and benefits of tests and procedures they order and perform.

As the number of doctors who have become employees of profit or non-profit corporations has increased (now about 80 percent of Maine doctors and rising), they have come under pressure to increase the number of “units of service” they provide – visits, tests, procedures and prescriptions – in order to maximize the revenues and profits of the institutions that employ them.

Lately, the need for many commonly performed procedures has come under question by both government and private health care organizations. The U.S. Preventive Services Task Force has recently warned against the routine performance of some. They include mammograms for young women, hormone replacement therapy for older women, prostate cancer tests for older men and drug treatment to prevent osteoporosis. Many are now thought to do more harm than good. There are many more such examples.

Similarly, the American Board of Internal Medicine, one of the medical profession’s most important credentialing bodies, has recently launched a program called “Choosing Wisely.” Its purpose is to identify tests and procedures that are overused and to persuade doctors and patients to use fewer of them. More than 35 medical specialty societies have joined this campaign, each selecting five or more tests or procedures that they believe are significantly overused. Among these are imaging procedures such a CT scans and MRI, the use of which has exploded in frequency and cost in recent years. It is almost impossible for patients to accurately assess the need for and quality of care.

I still believe that most health care workers want to do the right thing by our patients. But our corporatized and business-oriented health care system is making it increasingly difficult.

Businesses try to optimize prices and sales in order to maximize revenues. When “consumers” (patients) have little or no information about what they’re buying, Akerlof’s prediction that maximization of profits rather than value will dominate decision-making comes true. In other words, the asymmetry of information between patients (who possess little) and health care providers and administrators (who possess a lot) makes anything like a rational market in health care services impossible.

That hasn’t stopped free market ideologues from peddling their flawed and self-serving ideas to anyone who will listen, including some uninformed and perhaps naive lawmakers. One result is legislation like Maine’s new health insurance reform law, passed two years ago.

In his Time article, Brill documents that Medicare is much more efficient and does a much better job of controlling costs than private insurance.  It seems to me that he makes a compelling case for expanding Medicare to everybody. But, in the end, he backs off of actually recommending it because, as he explained in an interview, he fears the power of a health care industry that generates huge profits and spends four times as much on lobbying as does the defense industry.

I’m not so sure he’s right about that. I believe people power can overcome corporate power, especially in states such as Maine.

The next time you hear somebody saying “let the market work in health care,” the most reasonable response would be to pat them on the head, and have a good laugh.

But our profit-driven health care system is bankrupting individuals, putting enormous stress on businesses and state and federal governments and destroying the therapeutic doctor-patient bond of trust. So I guess it’s no laughing matter.

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.

http://bangordailynews.com/2013/03/14/opinion/selling-expensive-health-care-lemons/