PNHP

Steven Brill on using single payer to "clean up the system"

Steven Brill on using single payer to "clean up the system"

Experts debate all-payer setups vs. Medicare for all

By Brett Norman
Politico, March 14, 2013

Health care prices are too damn high.

That’s the punch line to the provocative Time magazine piece “Bitter Pill” by Steven Brill, who laid out his diagnosis of the problem Wednesday at a Center for American Progress panel.

He cited sky-high hospital executive salaries and operating margins, monopolistic and opaque pricing by providers and a fearsome lobbying force — many times larger than those of the oil and gas or defense industries — that has beaten policymakers into submission.

“The lap-doggery to the health care industry is bipartisan,” he said. The article has sent hospitals and other stakeholders to the wall in defense of the system, and it’s fueling debates in policy circles.

But while many policy experts agree with much of Brill’s diagnosis of factors that are driving up costs, there’s far less consensus on what to do about it.

Brill said the voluminous feedback he’s received since publishing the article breaks down along two lines. Conservatives believe consumers need to have more “skin in the game” — to pay more of health costs so they become more conscientious shoppers and put pressure on providers to more efficiently compete for their business. And liberals see the solution in Medicare-for-all, a single-payer system, amplifying the negotiating might the federal health care program already leverages to keep costs down.

Brill rejected the single-payer possibility as impractical in his article but now says that he is increasingly siding with that camp. “It’s sort of the cleanest way to clean up the system,” he said.

Brill believes that the federal health care law in general does little to control costs and will most likely drive up the cost of insurance because of new requirements for more robust coverage.

He gave little credence to the Beltway policy wonk goal of transforming the health care system away from paying for quantity of services provided to paying for health outcomes and the quality of care. He said similar efforts to move the legal profession away from billing by the hour and toward meeting performance benchmarks have either failed or proved more expensive.

http://www.politico.com/story/2013/03/experts-debate-all-payer-setups-vs-medicare-for-all-88835.html

Comment:

By Don McCanne, M.D.

Steven Brill provided such a convincing argument for using Medicare as a universal program to control health care spending that he now seems to be convincing himself that we should look beyond the current approach of dismissing single payer as impractical. As he says, single payer is “sort of the cleanest way to clean up the system.”

Experts debate all-payer setups vs. Medicare for all

By Brett Norman
Politico, March 14, 2013

Health care prices are too damn high.

That’s the punch line to the provocative Time magazine piece “Bitter Pill” by Steven Brill, who laid out his diagnosis of the problem Wednesday at a Center for American Progress panel.

He cited sky-high hospital executive salaries and operating margins, monopolistic and opaque pricing by providers and a fearsome lobbying force — many times larger than those of the oil and gas or defense industries — that has beaten policymakers into submission.

“The lap-doggery to the health care industry is bipartisan,” he said. The article has sent hospitals and other stakeholders to the wall in defense of the system, and it’s fueling debates in policy circles.

But while many policy experts agree with much of Brill’s diagnosis of factors that are driving up costs, there’s far less consensus on what to do about it.

Brill said the voluminous feedback he’s received since publishing the article breaks down along two lines. Conservatives believe consumers need to have more “skin in the game” — to pay more of health costs so they become more conscientious shoppers and put pressure on providers to more efficiently compete for their business. And liberals see the solution in Medicare-for-all, a single-payer system, amplifying the negotiating might the federal health care program already leverages to keep costs down.

Brill rejected the single-payer possibility as impractical in his article but now says that he is increasingly siding with that camp. “It’s sort of the cleanest way to clean up the system,” he said.

But two panel members, Ezekiel Emanuel, a senior fellow at CAP who advised the Obama administration on its health care law, and Giovanni Colella, CEO of Castlight Health, offered more market-oriented, all-payer alternatives.

Colella, whose company is dedicated to making health care costs and quality of different providers transparent and comparable, argued that better information will go a long way toward transforming the health care sector into a free market.

Emanuel argued that the public is unlikely to ever have good enough information to become selective health care consumers or, at least, is unlikely to act on that information. He pointed instead to payment reforms such as pilot projects included in the Affordable Care Act that pressure providers themselves to profit from becoming more efficient. And he said that he expects the growth of health care costs, which historically have far outpaced inflation, to level off with the growth in the rest of the economy by the end of the decade.

Brill believes that the federal health care law in general does little to control costs and will most likely drive up the cost of insurance because of new requirements for more robust coverage.

He gave little credence to the Beltway policy wonk goal of transforming the health care system away from paying for quantity of services provided to paying for health outcomes and the quality of care. He said similar efforts to move the legal profession away from billing by the hour and toward meeting performance benchmarks have either failed or proved more expensive.

“If I have to read another [former Office of Management and Budget Director Peter] Orszag article on fee-for-service, I will hang myself,” Brill said.

http://www.politico.com/story/2013/03/experts-debate-all-payer-setups-vs-medicare-for-all-88835.html#ixzz2NWPKFElV

Don't look for workplace wellness programs to produce significant cost savings

A Hospital System’s Wellness Program Linked To Health Plan Enrollment Cut Hospitalizations But Not Overall Costs

By Gautam Gowrisankaran, Karen Norberg, Steven Kymes, Michael E. Chernew, Dustin Stwalley, Leah Kemper and William Peck
Health Affairs, March 2013

This study examined the effectiveness of a program put in place by BJC HealthCare, a hospital system based in St. Louis, Missouri, that tied employees’ eligibility to participate in the system’s most generous health plan with participation in a wellness program. We found reductions in inpatient costs but similar increases in non-inpatient costs. Therefore, we conclude that although the program did cut some hospitalizations, it did not save money for the employer in the short term. This finding underscores that wellness program incentives under the Affordable Care Act are unlikely to greatly reduce health care spending over the short run.

http://content.healthaffairs.org/content/32/3/477.abstract#aff-7

And…

Wellness Incentives In The Workplace: Cost Savings Through Cost Shifting To Unhealthy Workers

By Jill R. Horwitz, Brenna D. Kelly and John E. DiNardo
Health Affairs, March 2013

The Affordable Care Act encourages workplace wellness programs, chiefly by promoting programs that reward employees for changing health-related behavior or improving measurable health outcomes. Although there may be other valid reasons, beyond lowering costs, to institute workplace wellness programs, we found little evidence that such programs can easily save costs through health improvement without being discriminatory. Our evidence suggests that savings to employers may come from cost shifting, with the most vulnerable employees — those from lower socioeconomic strata with the most health risks — probably bearing greater costs that in effect subsidize their healthier colleagues.

Despite the proliferation of wellness programs, drawing reliable conclusions about their financial returns on investment is difficult. Safeway credits its program with holding per capita health care costs flat from 2005 to 2009. However, employers’ reports are largely anecdotal. Some of them may attribute savings to wellness programs that could have resulted from unrelated causes, such as concurrent benefit restructuring or selection via restrictions on participation in the programs to certain job categories. A review of employer wellness studies concludes that they commonly suffer from insufficient controls, selection, and inadequate data.

http://content.healthaffairs.org/content/32/3/468.abstract

Comment:

By Don McCanne, M.D.

Workplace wellness programs were included in the Affordable Care Act partly as a means of promoting better health, but also as a means of reducing future health care spending though prevention of disease. The problem is that there is little empirical evidence that there is a potential for large cost savings from these programs. The two articles cited tend to confirm that wellness programs should not be relied upon to control future spending.

In no way does this mean that workplace wellness programs should be abandoned. Promoting health is a beneficial endeavor and should be encouraged. Rather, there are two other take-home lessons from these articles.

If financial incentives are included in wellness programs, they should be very carefully designed. The article by Jill Horwitz and her colleagues shows that savings to employers may result in the shifting of costs to employees who are more vulnerable due to their lower socioeconomic status which is associated with greater health risks. Using wellness funds for the already healthy while penalizing the more vulnerable is not wise policy.

The other lesson is that we should not pretend that wellness programs, along with the other tweaks in the Affordable Care Act, are going to bring us enough cost savings such that we can abandon efforts to enact the fundamental reforms that we need to ensure that absolutely everyone receives essential health care services under a program that we can afford.

Enacting a single payer national health program – an improved Medicare for all – is perhaps the most important step that we can take to promote wellness for all of us. Of course, there are many other public health measures that we should support, including addressing our serious socioeconomic inequities and injustices. But enacting single payer would be a great first step.

PNHP members react to Time's ‘Bitter Pill’

PNHP note: In addition to longer commentaries by Dr. James Kahn and Dr. Don McCanne on Steven Brill’s special report in Time magazine titled “Bitter Pill: Why Medical Bills are Killing Us,” many members and supporters of Physicians for a National Health Program sent in letters to the editor of the magazine. We reprint here a selection of those letters, none of which have been among the 21 letters published to date.Bitter Pill

Accurate data, flawed conclusions

In “Bitter Pill,” a well-researched and in many ways thoughtful essay, Steven Brill gets all the data right, but then draws conclusions that are surprisingly off the mark.

After providing nearly 20 pages of damning evidence — against both the excesses and inefficiencies of the private health insurance industry, and the runaway profiteering of hospitals, pharmaceutical and device manufacturers — he arrives, or appears to arrive, at the obvious point: that is, “the best way both to lower the deficit and to help save money for people” is “the single payer approach favored by liberals and used by most developed nations.” Here he is right on the mark. But then abruptly, having just provided an argument that clearly supports it, he dismisses this conclusion. He provides two reasons for backing away from single payer: first, “no doctor could hope for anything approaching the income he or she deserves (and that will encourage future doctors to want to practice).” Second, “this kind of systemic overhaul … seems unrealistic” given the extraordinary political power and influence of the health care industry.

The first assertion is factually incorrect. In fact, most doctors would earn the same under a single-payer system as they do now. The main difference in the professional life of myself and of tens of thousands of physicians like me would be freedom from the unimaginably exhausting and time-consuming demands of private insurance company rules and regulations. For those doctors whose high incomes ($1 million or more annually) result from billing for individual procedures like cardiac catheterization and joint replacements, incomes would likely suffer somewhat, but would certainly remain in the mid- to high-six figures. It’s hard to believe that as a nation, we would reject such urgently needed reforms simply to protect these multimillion-dollar salaries.

The second assertion — that it “seems unrealistic” for Medicare to be improved and expanded to include comprehensive coverage for all Americans — is logically flawed. Brill himself admits that the halfway measures he goes on to propose are similarly “unlikely to happen” given the current political power structure. Beyond this, if our society had followed his logic in 1917 or 1954, today we’d be living in a country where women were forbidden to vote and where schools were separated by race.

The injustice of our current health care system is a civil rights issue as urgent as women’s suffrage and desegregation. Now the oppressed are not only women or minorities, but all of us who find ourselves outside the 1 percent of wealth and influence. An improved and expanded Medicare for All would change this. Virtually all other developed countries know this. When will we wake up to this?

Jim Recht, M.D.
Cambridge, Mass.
The writer, a psychiatrist, is co-chair of Massachusetts PNHP.

Brill missed the elephant in the room

Mr. Brill focuses on eight hospital billing statements yet dismisses the American private insurance industry as “ho-hum.” He missed the biggest elephant in the room. The largest single expense in American medicine is the administrative costs of private insurance that would be recovered with a single payer financing plan – that’s $350 billion annually and rising. That $350 billion represents 40 percent of our premium dollars. Half are insurance industry administrative costs; the other half are physician and hospital costs to collect from insurance companies. Remember this industry denies 30 percent of all first claims, requiring physicians to spend $82,000 each to pay clerks to persist in second and third claims.

That $350 billion is more than the combined income of all American physicians; more than the nation spends on all medications; more than we spend on obesity and tobacco-related diseases – combined; and more than we need to expand care to provide complete coverage of everyone in the country.

Every other industrialized nation provides better care to more people for less money than we do, and none use a private insurance industry like ours. Replacing it with a national single payer financing agency, even with no change in hospital billing, will provide everyone in the U.S. with health care for less than spend now. Mr. Brill found the bitter pill but missed the elephant.

Samuel Metz, M.D.
Portland, Ore.
The writer, an anesthesiologist, is a member of the Oregon chapter of Physicians for a National Health Program.

Cure for ailing health system falls short

Mr. Brill’s excellent article does a wonderful job of showing just how expensive, chaotic, dysfunctional and inequitable our health care “non-system” is. However, his prescription for the cure for this “lethal” system leaves much to be desired.

As a physician for 40 years, a Medicare recipient, a patient and an advisor for Medicare Rights helping seniors navigate the complicated terrain of today’s Medicare, I have come to a see that there is a better way to reform. I believe that a single-payer, publicly funded, privately delivered, Medicare for All is the best solution to our health care problem. Treating health care as a social need and not as a commodity from which to make a profit is the only moral path to health justice. It is also the most fiscally conservative solution. All other industrialized nations have already figured this out.

We need to learn from them.

Elizabeth Rosenthal, M.D.
Larchmont, N.Y.
The writer, a dermatologist, is a board member of the N.Y. Metro Chapter of PNHP.

Medicare for All would drive down costs

As someone who has worked on all side
s of the health care field (regulator, nonprofit, for-profit) for 30 years, I was intrigued by the Brill piece “Why Medical Bills Are Killing Us.” On the analysis of the problem, Brill was mainly on target, but he missed the mark on most of his proposed solutions. For example, hospital competition is not the answer to getting lower prices and never has been. Hospital coordination of services within a region via regulation is a far more cost effective way to minimize duplicative purchases of expensive technology, for instance. Furthermore, group purchasing of supplies, pharmaceuticals and capital equipment by large, strong hospital systems has been shown time and again to drive down vendor prices by up to 20 percent versus pricing given to small independent hospitals with no clout. I know: I supervised hundreds of these studies in every area of the country and with many providers, including Sloan-Kettering. He glosses over the real solution: a single-payer system which forces hospitals to be more efficient. Medicare for All, incorporating quality measures, would eliminate all the “chargemaster” game playing Brill decries. The inefficient providers would be paid the same as the effective ones. With higher costs, they would be driven out. Likewise for the ones with poor quality. Plus, the 20-plus percent administrative/marketing costs currently charged by private insurance companies, versus just 3 percent with Medicare, could be put back into direct care where it belongs.

Jack Bernard
Monticello, Ga.

Mere tweaks won’t solve the problem

Steven Brill, in his well-researched special report, “Bitter Pill,” built a definitive case for further improving Medicare and then providing it for everyone as a single-payer national health program. Citing the power of special interests, he then rejects that concept and leaves us with a recommendation for a few tired ideas that would only tweak our dysfunctional health care system. It is time for us to accept the fact that the only special interest that really matters is the patient.

Don McCanne, M.D.
San Juan Capistrano, Calif.
The writer is senior health policy fellow, Physicians for a National Health Program.

Medicare model points the way

Steven Brill rightly identifies the heart of our health care cost problem as wildly inflated charges as well as wasteful diversion of health care dollars to corporate profits enforced by governmental protections for corporate interests. He also rightly notes that LOWERING the age of eligibility for Medicare (making Medicare available to more people) would improve/reduce our health care costs. But then he waffles and says that he isn’t going to come right out and support “single payer,” when, of course, he has just made a case for the single-payer system we have right now that is working so well: Medicare. I’m not sure why he does this, but let me underscore again his observation that Medicare is functioning well, that it does not pay the wildly inflated charges, and that we should make the Medicare option available much more widely — ideally available to all — if we are to bring health care costs under control without simply requiring all patients to pay for everything out of pocket (as increased co-pays or as payment for coverage denied by corporate insurance plans).

Judy Bertelsen, M.D.
Berkeley, Calif.
The writer practices geriatric medicine and is a member of PNHP California.

Why not turn to ‘most logical’ solution?

Steven Brill’s “Bitter Pill: Why Medical Bills are Killing Us” describes the irrationality of the health care market and underscores its gross unfairness toward our nation’s patients, be they insured, underinsured or uninsured. However, Mr. Brill’s remedies for this mess (“tax hospital profits at 75 percent and have a tax surcharge on all non-doctor hospital salaries that exceed, say, $750,000” and “outlaw the chargemaster”) seem more contorted and less workable than what Sloan-Kettering’s chief operating officer, John Gunn, called the “most logical solution” — a single-payer system, an expanded and improved Medicare for all. The Medicare model is a much simpler, economical way of paying for care, and from the look of the shiny new hospitals in retiree-laden Florida, it’s clearly viable.

Roy Korn, M.D.
Middleburgh, N.Y.
The writer is an internist who specializes in geriatric medicine.

Time for Medicare-For-All

By Bob Balhiser
Independent Record (Helena, Mont.), Letters, March 9, 2013

Health insurance companies are parasites that add no value whatsoever to our health care system!

I have a Medicare supplement plan and my wife has a high deductible ($5,950) individual plan. The same company writes both policies. Rates for my plan are regulated by Medicare while hers are not regulated at all. Here are recent increases for both types of health insurance plans: rates for my Medicare Supplement increased 9.2 percent from 2011 to 2012, and 9 percent from 2012 to 2013. During the same time period, my wife’s private health insurance premium rose 15.5 percent and 20.7 percent respectively. We can hardly wait until she becomes eligible for Medicare so we can quit feeding this parasitic company.

The example above demonstrates why we should rid our country of private health insurers and implement a single-payer system such as Improved Medicare-For-All. Granted, opponents of single payer health care will be the first to call it “socialized medicine,” but nothing could be further from the truth. Instead, Medicare-For-All might more properly be described as “socialized health insurance” wherein private sector doctors, hospitals and pharmacies are paid by a single insurer called Medicare.

What are the potential savings from Medicare-For-All done right? Well, the U.S. pays 18 percent of Gross Domestic Product for health care, while other advanced countries with “socialized health insurance” pay an average of 11 percent GDP. That 7 percent GDP difference in our economy would amount to a savings of $1 trillion annually. So, let’s do something that should appeal to Republicans and Democrats alike. Let’s implement Medicare-For-All and apply all the savings toward national debt reduction. How’s that for a win/win solution?

Bob Balhiser resides in Helena, Mont.

http://helenair.com/news/opinion/readers_alley/time-for-medicare-for-all/article_728cc2ce-8911-11e2-a4af-001a4bcf887a.html

Analysis of Pennsylvania's single payer proposal

The Pennsylvania Health Care Plan: Impact and Implementation

By Gerald Friedman, Ph.D., Professor of Economics, University of Massachusetts – Amherst
March 5, 2013

Executive Summary

Pennsylvania is on an unsustainable economic path.  Health care costs are absorbing a growing share of personal income. Between 1991 and 2009, spending on health care in the Commonwealth increased by $60 billion, rising nearly twice as fast as state income. Little of this increased spending can be attributed to improvements in health care. Instead, the fastest growth has been in administration and billing operations… while a growing number of Pennsylvanians are without adequate health insurance or access to needed care.
 
The Pennsylvania Health Care Plan (PHCP) would put the state on a sustainable path by controlling health care costs while giving all citizens access to quality health care. It would establish a single-payer system to finance health care — paying for all necessary medical care including hospital care, visits to doctors / nurses, occupational and physical therapy, prescription drugs, medical devices, medically necessary nursing home care and home health care. By reducing administrative costs and anti-competitive market practices, the PHCP could save $33 billion in 2014, almost 23% of existing medical spending. These savings would allow the expansion of coverage to all Pennsylvania residents while still saving over $17 billion, or $1,335 per person.
 
The PHCP would be funded by a 10% payroll tax paid by employers and a 3% levy on income paid by recipients. The shift from insurance premiums and out-of-pocket expenses to taxes linked with income would lower health care spending for over 80% of Pennsylvanians.

Businesses and local governments would also benefit, saving on payroll costs as well as the premiums paid to cover the “administrative costs” associated with private health insurance. By lowering payroll costs, the PHCP would make Pennsylvania businesses more competitive, producing an additional 120,000 – 200,000 new jobs.

(Legislation to be introduced March 19 in the Pennsylvania Senate as SB 400)

http://healthcare4allpa.org/wp-content/uploads/2013/03/EISExecutiveSummary.pdf

Full report (38 pages)
http://healthcare4allpa.org/wp-content/uploads/2013/03/EconomicImpactStudy3513.pdf

Comment:

By Don McCanne, M.D.

Another single payer study… another result that makes single payer the imperative. Are we slow learners? Or what?

Pa. study proves single payer will save $17 billion annually and cover everybody in state

By Chuck Pennacchio
OpEd News, March 11, 2013

A single-payer health care plan will save Pennsylvania families, businesses and tax payers $17 billion annually while providing comprehensive health care to all, according to an economic impact study released today.

Commissioned by Health Care for All PA, a statewide non-profit organization, the study was conducted by University of Massachusetts – Amherst professor of economics Gerald Friedman, Ph.D.

It compares the cost of the current for-profit health insurance model in Pennsylvania under which provider choice is limited and health services are rationed by health insurance companies to that of a consumer-driven health care system which gives people freedom to choose their own doctors, hospitals and health care providers.

The legislation to create this single-payer system will be re-introduced in the Pennsylvania Senate (Senate Bill 400) on March 19 by Senator Jim Ferlo. The name of this state-based, consumer-driven health care system will be The Pennsylvania Health Care Plan.

Some of the important advantages of The Pennsylvania Health Care Plan are:

* Comprehensive coverage for every resident of Pennsylvania, including dental, vision, mental health and prescription drug services;

* Eliminates the need for hospitals to absorb the cost of care for the uninsured;

* Reduces bureaucracy for private physicians resulting in reduced administrative costs and improved compensation for private physicians;

* Reduces or eliminates health insurance over-costs for small business, allowing for more job creation, greater reinvestment of profits, and reduced workers’ compensation costs.

* Radically reduces the total cost of health care to levels more consistent with costs in the rest of the industrialized world.

A one-page Executive Summary along with the full text of the Economic Impact Study is available here.

Please spread the word. Contact your friends and legislators. Help us with donations for advertising and speaker transportation costs. Health care for all IS possible in Pennsylvania, but only if we demand it.

Read the entire study here.

Chuck Pennacchio is executive director of Health Care for ALL PA.

http://www.opednews.com/articles/Study-proves-that-single-p-by-Chuck-Pennacchio-130311-711.html

New York: Gottfried, Perkins introduce universal health care bill

By Clara A. Smith
The Legislative Gazette (Albany, N.Y.), March 11, 2013

Assemblyman Richard Gottfried and Sen. Bill Perkins have unveiled a bill that, if adopted, would create a new single-payer health plan called New York Health.

The health plan, designed to provide widespread health care for all New Yorkers, would provide health coverage regardless of employment, wealth, age, income or any other factor. The plan would replace private insurance coverage with universal coverage for all New Yorkers.

“Health care should be a right, not a privilege,” said Gottfried, the Assembly Health Committee chair. “Coverage should be driven by the needs of patients, not insurance companies and stockholders. You and your doctor work to keep you healthy. New York Health will pay the bill.”

Coverage for health care would be publicly funded under the new health plan and would include a benefits package more inclusive than most health plans currently offered. Instead of patients and employers paying deductibles, premiums and co-pays, coverage would be funded through a graduated tax on income, based on ability to pay, according to the sponsors of the legislation.

“There would be two basic sources of revenue; one would be a payroll tax that would be paid primarily by employers that would be on all payroll income and progressively graduated so that higher wage and [salary] earning employees would pay a higher percentage than lower,” Gottfried said at a press event announcing the introduction of the bill. “The second revenue source would be a surcharge on the state income tax on taxable interest dividends, capital gains … that is important because our wealthiest earners in our society, their wealth doesn’t come from a salary, it comes from interest in dividends and capital gains.”

Perkins, in a letter advocating for the bill that was sent to fellow Senate members, describes current federal health care as having made improvements over the years but unfortunately still gives insurance companies too much control of “our health and our wallets.” He said that currently patients and their doctors are forced to figure out what is covered under insurance companies while trying to get reimbursed.

“Health care should be about health, not profit,” Perkins said at the press event. “For some this may be a new issue, but this issue has been around for years and it’s time has come. In fact, it has more than come. I have always advocated that your health is your wealth and I am proud to sponsor this bill.”

The bill, (A.5389/S.2078) notes that all New Yorkers would be covered for “medically necessary services,” such as preventative, specialist and primary care; mental health; dental; reproductive health care; medical supply costs and prescription drugs.

“Right now, five New Yorkers die every day due to lack of health care and many go bankrupt from medical bills. That is unacceptable and inhumane,” said Laurie Wen, executive director of Physicians for a National Health Program. “A universal, publicly financed health care system would save lives [and] money. It’s a win-win situation for patients, physicians and our economy.”

All New Yorkers under the plan would choose a primary care practitioner or other provider of their choice to “provide care coordination.” This move is meant to help patients get the care and follow-up attention they need so they can successfully navigate the new health plan system.

“New Yorkers — as individuals, employers and taxpayers — have experienced a rapid rise in the cost of health care and coverage in recent years,” as stated in a sponsor memo submitted by Perkins. “This increase has resulted in a large number of people without health coverage.

“Businesses have also experienced extraordinary increases in the costs of health care benefits for their employees. An unacceptable number of New Yorkers have no health coverage and many more are severely underinsured.”

In 2009, The New York State Department of Health and Department of Insurance, based on a study by the Urban Institute, released a report that declared single-payer plans the “most cost-effective way to provide health care to all New Yorkers.”

“Single-payer health care is just, simple, clear and efficient,” Dr. Paul Sorum of Albany Medical Center said at the press event. “We ask the state legislature and the governor to save the physicians and patients of New York state to allow the physicians to take care of patients not insurance companies, to be a beacon for the rest of the country, to lead us into universal single-payer health care.”

If passed, this bill would be the second of its kind enacted in the United States. Vermont, in 2011, enacted legislation called “Green Mountain Care” that is set to create the first functional single-payer health care system within the next several years.

Gottfried clarified at the event that if the bill is passed it will take a few years for New York to get the proper systems ready to implement the plan ready.

The bill is currently co-sponsored by 83 other legislators.

http://www.legislativegazette.com/Articles-Top-Stories-c-2013-03-11-82933.113122-Gottfried-Perkins-introduce-universal-health-care-bill.html

Would busting up our consolidated health care market lower prices?

No Competition: The Price Of A Highly Concentrated Health Care Market

By Diane Archer
Health Affairs Blog, March 6, 2013

As health care costs swell, the private insurance system that covers most working Americans is in crisis. Americans are paying higher and higher premiums for increasingly threadbare coverage, and employers are getting out of the business of providing health care altogether. Rising costs cannot be attributed purely to improving technology or increasing operating costs for providers, because Medicare has controlled per capita spending more effectively than commercial insurers that provide employer-sponsored coverage.

Rather, commercial insurers cannot contain costs because the pricing mechanism for medical services is broken. When it comes to health care, competition simply isn’t working.

Prices in the private sector are out of control. On average, private insurers pay 25 percent more than Medicare for physician services and 30 percent more for hospital care. What’s more, both public and private sector payment rates for doctors in America are far and away the highest in the world, and research suggests that these high rates are among the principal reasons health care is so much more expensive in this country than elsewhere.

These international gaps are much wider in the private sector. For instance, private payments for an office visit in the United States cost 70 percent more than those abroad, while public payments are 27 percent higher.

Rather than being influenced by competition, health care prices are largely set by insurers and providers with monopoly power to maximize profits. Big hospital chains and provider groups dominate most local markets and extract extremely high rates from dominant insurers, which are motivated by fear of losing market share if they fail to attract these providers to their networks.

Commercial health plans have little bargaining power when they negotiate prices with monopolistic providers. In fact, even insurance industry lobbyists admit that private health plans cannot hold down the cost of health care. Insurers choose instead to adapt to this non-competitive environment.

So what is to be done?

The Patient Protection and Affordable Care Act (“ACA”) will for the first time guarantee the overwhelming majority of Americans access to good coverage, a huge step forward.  But it expands coverage mostly by relying on the dysfunctional private insurance market. There is no evidence that the newly created exchanges will exert any downward pressure on prices, given the experience of private plans to date.

Congress needs to recognize that players in the private health care marketplace will continue to set excessive rates until they are stopped. These exorbitant rates are not only hurting working people, they are also driving up Medicare costs and imposing a massive burden on taxpayers and the federal government. Doctors and hospitals are conditioned to expect higher and higher rates and demand higher payments from public programs.

Congress has three options to rein in runaway prices: It can use Medicare-style techniques to set rates or rate ceilings in the commercial marketplace, including in the new health insurance exchanges, just as every other developed nation does. It can give people under 65 the choice of a public health insurance plan that works like Medicare, competes against the private health plans, and brings down costs. Or it can do both.

Over the long-term, the federal government might be able to address the broken pricing mechanism by enforcing antitrust laws more aggressively than before to break up monopolies in health care markets. But it is worth remembering that even heavily regulated insurance markets – such as Medicare Advantage or the exchange system in Massachusetts – have not been particularly successful at controlling costs. The simple fact is that the array of existing incentives for commercial insurers does not tend to drive down prices. Given the direction of commercial insurance, relying on the current version of “competition” is destined to jeopardize access to health care for millions of working Americans while driving public spending upward.

http://healthaffairs.org/blog/2013/03/06/no-competition-the-price-of-a-highly-concentrated-health-care-market/

Comment:

By Don McCanne, M.D.

The increase in anti-competitive consolidation of hospitals and physician groups is thought to be contributing to our high health care spending, especially since private insurers have been very feeble price negotiators in this concentrated market. Does that mean that we need the government trust busters to step in to introduce more competition in health care?

As Noble laureate Kenneth Arrow demonstrated a half century ago, there are many reasons that merely busting up consolidated health systems could never lead to a functioning competitive market in health care. Besides, the cost escalation has always been with us, long before the more intense consolidation efforts began. As far as the wish to achieve lower prices through competition, we can forget about competing hospitals, competing physician groups, competing accountable care organizations, and, especially, competing private insurance plans.

As far as what we should do, Diane Archer suggests either extending Medicare’s administered pricing function to private insurers as well, or providing a Medicare-like plan that competes with the private insurers, or both.

During the debate over the “public option,” we explained how merely adding another insurance option, even though government-run, to our highly dysfunctional, fragmented system of financing health care would have very little impact on achieving our goals of universality, equity, efficiency, and affordability.

Although government-administered pricing has been effective for Medicare, using it for private insurers also would fall short of these goals since the dysfunctional system would still remain in place. Even combining price controls and a public plan option together would still be inadequate, for the same reasons.

So what should we do? Instead of continuing to apply patches to our current system, we should replace it with an improved Medicare that makes health care affordable for all of us. There would be no need for public option plans, nor for government rate setting of private insurance, if we got rid of the overpriced and inefficient market of private health plans.

Could this be the year for single-payer health care?

By Casey Seiler
Times Union (Albany, N.Y.), Capitol Confidential blog, March 7, 2013

Probably not — but that didn’t stop Assemblyman Richard Gottfried from rolling out the latest version of his perennial bill establishing a statewide single-payer health care system, a structure often shorthanded by advocates nationwide as “Medicare for all.”

Backed by nurses, physicians, anti-poverty activist Mark Dunlea and a clutch of his fellow Democratic lawmakers, Gottfried discussed the bill at a Thursday news conference.

The Manhattan Democrat’s legislation, A.5389, has 73 co-sponsors in his chamber — though Speaker Sheldon Silver is not among them — and about a dozen in the Senate, where the measure is now carried by Bill Perkins. (Until this year, Tom Duane served as its Senate sponsor.)

Even though the nation is only beginning to implement the federal Affordable Health Care Act, Gottfried said the Empire State shouldn’t have to wait years before seeing where it falls short. “Federal health care reform has done a lot of good, but it still leaves us in the hands of insurance companies,” Gottfried said. “New York can do better.”

The New York Health Act would replace all private insurance coverage with comprehensive, universal coverage for every New Yorker, he explained.

“It would save the billions of dollars that we now spend on insurance company administrative costs. … You and your doctor would work to keep you healthy. New York Health would pay the bill with funding from broad-based revenue based on ability to pay,” Gottfried said.

The two sources of revenue: a progressive payroll tax paid for primarily by employers with contributions by workers, and a surcharge on investment income. It would also require the demise of the health insurance industry in New York — a transformation business groups view as only slightly better than the apocalypse.

The bill’s only appearance on the floor of the Assembly was in 1992, when it passed before being promptly ignored by the Republican-controlled state Senate.

“In the intervening years, as Gilda Radner said, ‘It’s always something,’” Gottfried said. “People who would have been focused on single-payer for a couple of years were focused on the Clinton health plan. Then people here in New York were focused on managed-care reforms and for many years fighting against drastic cuts in Medicaid that were on the table. And then for the last several years people were focused on getting health care reform enacted in Washington. Now that federal health care reform is done and people can now assess what good it has done and what it has left undone, I think we are really ready to refocus on single-payer.”

He called it a “superb year” to reconsider the plan. Perkins said that this appeared to be a good year for progressive legislation — an apparent reference to Gov. Andrew Cuomo’s new emphasis — but struck a realistic tone.

“Listen, let’s be for real: There are a lot of monied interests that are involved in this,” Perkins said. “The privatized model is about profit; it’s about paying for policies that do not necessarily speak to the best interests of the community, to the best interests of people. And therefore, to some extent it measures how valuable this is — because there’s so much effort over the years to prevent (the bill) from even getting to daylight.”

Advocates have been cheered by the passage of a single-payer bill in Vermont, although the Green Mountain State won’t be able to implement its system until at least 2017, at which point it will have to seek extensive federal approvals before moving forward. Gov. Peter Shumlin has commented that his state’s move is especially valuable because Vermont’s relatively small population makes it a better lab for a single-payer system. New York, in contrast, is one of the most populous states in the nation.

Casey Seiler is Capitol bureau chief for the Times Union.

For the text above and a link to a video of the press conference:
http://blog.timesunion.com/capitol/archives/180979/could-this-be-the-year-for-single-payer-health-care/

'Bitter pill' should prompt lawmakers to back Medicare for all

By Timothy Shaw, M.D.
The Capital Times (Madison, Wis.), Letters, March 11, 2013

Steven Brill’s recent Time magazine article “Bitter Pill: Why Medical Bills Are Killing Us,” rightly portrays our American health care system as a mess. Health care has become an unaffordable business monopoly that benefits the medical community and corporations the most, and patients the least.

But before the right-wing media starts spinning the fantasy that this mess is “Obamacare,” I want to emphasize that this is NOT Obamacare. Speaking at an AFL-CIO event in 2003, then Sen. Obama advocated for a single-payer plan. But in 2010, President Obama had to settle for the Patient Protection and Affordable Care Act. While it has some excellent provisions in it, it still leaves in place a dysfunctional, employer-based, for-profit health care system which is the cause of the problems elucidated in Brill’s article.

PPACA, as written, was influenced by over 3,000 special-interest lobbyists — doctors, health insurers, big PHARMA, hospital systems, etc. Influenced by special-interest money, Congress dropped the public option, and when eight caring doctors and nurses rose to speak at a congressional hearing in favor of an affordable single-payer system, they were arrested.

Some of our elected leaders speak in disfavor of labor unions, but encourage and are funded by the excessively greedy and profitable union of doctors, insurers, hospitals and big PHARMA.

Our elected leaders should live up to their oath of office and “promote the general welfare” by expanding our Medicare system to ALL citizens equally by voting for H.R. 676 “Expanded and Improved Medicare for All Act.”

Dr. Timothy Shaw resides in Fitchburg, Wis.

http://host.madison.com/ct/news/opinion/mailbag/timothy-shaw-lawmakers-should-vote-for-h-r-medicare-for/article_5c2aa076-98bd-5b62-8dfe-2d423a74e22c.html

Would busting up our consolidated health care market lower prices?

No Competition: The Price Of A Highly Concentrated Health Care Market

By Diane Archer
Health Affairs Blog, March 6, 2013
As health care costs swell, the private insurance system that covers most working Americans is in crisis. Americans are paying higher and higher premiums for increasingly threadbare coverage, and employers are getting out of the business of providing health care altogether. Rising costs cannot be attributed purely to improving technology or increasing operating costs for providers, because Medicare has controlled per capita spending more effectively than commercial insurers that provide employer-sponsored coverage.
Rather, commercial insurers cannot contain costs because the pricing mechanism for medical services is broken. When it comes to health care, competition simply isn’t working.
Prices in the private sector are out of control. On average, private insurers pay 25 percent more than Medicare for physician services and 30 percent more for hospital care. What’s more, both public and private sector payment rates for doctors in America are far and away the highest in the world, and research suggests that these high rates are among the principal reasons health care is so much more expensive in this country than elsewhere.
These international gaps are much wider in the private sector. For instance, private payments for an office visit in the United States cost 70 percent more than those abroad, while public payments are 27 percent higher.
Rather than being influenced by competition, health care prices are largely set by insurers and providers with monopoly power to maximize profits. Big hospital chains and provider groups dominate most local markets and extract extremely high rates from dominant insurers, which are motivated by fear of losing market share if they fail to attract these providers to their networks.
Commercial health plans have little bargaining power when they negotiate prices with monopolistic providers. In fact, even insurance industry lobbyists admit that private health plans cannot hold down the cost of health care. Insurers choose instead to adapt to this non-competitive environment.
So what is to be done?
The Patient Protection and Affordable Care Act (“ACA”) will for the first time guarantee the overwhelming majority of Americans access to good coverage, a huge step forward.  But it expands coverage mostly by relying on the dysfunctional private insurance market. There is no evidence that the newly created exchanges will exert any downward pressure on prices, given the experience of private plans to date.
Congress needs to recognize that players in the private health care marketplace will continue to set excessive rates until they are stopped. These exorbitant rates are not only hurting working people, they are also driving up Medicare costs and imposing a massive burden on taxpayers and the federal government. Doctors and hospitals are conditioned to expect higher and higher rates and demand higher payments from public programs.
Congress has three options to rein in runaway prices: It can use Medicare-style techniques to set rates or rate ceilings in the commercial marketplace, including in the new health insurance exchanges, just as every other developed nation does. It can give people under 65 the choice of a public health insurance plan that works like Medicare, competes against the private health plans, and brings down costs. Or it can do both.
Over the long-term, the federal government might be able to address the broken pricing mechanism by enforcing antitrust laws more aggressively than before to break up monopolies in health care markets. But it is worth remembering that even heavily regulated insurance markets – such as Medicare Advantage or the exchange system in Massachusetts – have not been particularly successful at controlling costs. The simple fact is that the array of existing incentives for commercial insurers does not tend to drive down prices. Given the direction of commercial insurance, relying on the current version of “competition” is destined to jeopardize access to health care for millions of working Americans while driving public spending upward.
http://healthaffairs.org/blog/2013/03/06/no-competition-the-price-of-a-h…

The increase in anti-competitive consolidation of hospitals and physician groups is thought to be contributing to our high health care spending, especially since private insurers have been very feeble price negotiators in this concentrated market. Does that mean that we need the government trust busters to step in to introduce more competition in health care?
As Noble laureate Kenneth Arrow demonstrated a half century ago, there are many reasons that merely busting up consolidated health systems could never lead to a functioning competitive market in health care. Besides, the cost escalation has always been with us, long before the more intense consolidation efforts began. As far as the wish to achieve lower prices through competition, we can forget about competing hospitals, competing physician groups, competing accountable care organizations, and, especially, competing private insurance plans.
As far as what we should do, Diane Archer suggests either extending Medicare’s administered pricing function to private insurers as well, or providing a Medicare-like plan that competes with the private insurers, or both.
During the debate over the “public option,” we explained how merely adding another insurance option, even though government-run, to our highly dysfunctional, fragmented system of financing health care would have very little impact on achieving our goals of universality, equity, efficiency, and affordability.
Although government-administered pricing has been effective for Medicare, using it for private insurers also would fall short of these goals since the dysfunctional system would still remain in place. Even combining price controls and a public plan option together would still be inadequate, for the same reasons.
So what should we do? Instead of continuing to apply patches to our current system, we should replace it with an improved Medicare that makes health care affordable for all of us. There would be no need for public option plans, nor for government rate setting of private insurance, if we got rid of the overpriced and inefficient market of private health plans.