PNHP

Theodore Marmor on why turning Medicare into vouchers won’t work

Theodore Marmor on why turning Medicare into vouchers won’t work

Turning Medicare into vouchers won’t work

By Theodore R. Marmor
Tampa Bay Online, August 18, 2012

Before Medicare began in 1965, many American senior citizens — and their children — struggled to pay for their doctor bills. Ever since, Medicare’s been an American success story.

Why, then, do so many Beltway pundits and members of Congress — including Mitt Romney’s new running mate, Rep. Paul Ryan, R-Wis. — go after it?

Some of its critics claim that slashing Medicare is the only way to control the deficit. Like most attacks on Medicare, this one is based on ideology, not evidence. Medicare’s critics often claim that rising federal health care spending is America’s biggest fiscal challenge. In fact, the federal deficit is bloated today primarily due to the Bush administration’s irresponsible tax cuts, economic mismanagement, costly wars and increased defense spending.

Of course large numbers of retiring boomers mean Medicare will need more revenue. But Medicare costs won’t need to spiral out of control. The new Affordable Care Act includes steps to limit per-person health care price hikes. It’s already saving Medicare money. Yet Romney and Ryan promise they would work to repeal it.

What’s their alternative? The Ryan Budget Plan calls for extremely deep cuts to Medicare, while promising more and longer-lasting tax cuts for a few very wealthy Americans. Most House Republicans have already voted for that. It would end Medicare as we know it, and instead force seniors to buy private insurance with vouchers that would cover less of their healthcare costs each year.

These vouchers would reduce seniors’ choices, not their costs. Why? Republican voucher plans assume that if government ends Medicare, private insurance companies will start to deliver cheaper, more efficient plans. But what’s their evidence?

When the nonpartisan Congressional Budget Office analyzed vouchers, it found that even a slight dip in future federal spending on health care for older Americans would drive costs up. Vouchers with slowly rising buying power would simply leave seniors and their loved ones to pay more out of pocket for bigger medical bills.

In fact, Uncle Sam’s already lost money on Medicare contracts with competing private health insurance plans. Although they spent more per patient, those private plans didn’t improve coverage or quality of care. Meanwhile, Medicare has shown it bargains more effectively for better prices than most private insurers say that they can afford to do.

How are frail older people — one in three with cognitive impairments — supposed to wade through pages of fine print to understand new, complicated and often confusing “choices”? Is that what seniors really want? Surveys show most people care much more about being free to choose their doctors than to do complex comparison shopping.

Consumer choice, it turns out, is just a fig leaf that Medicare’s critics use to try to hide what would truly be in store for seniors if Medicare were to be gutted over time: fewer benefits, higher costs and the loss of Medicare’s guarantee of access to a wide range of doctors and hospitals. What’s more, its supporters aim to mask their true aim by grandfathering in those over 55, keeping them from having to face a transformed Medicare program.

The Ryan Budget Plan wouldn’t really control Medicare’s costs. It would simply shift them to future senior citizens and make Medicare less efficient.

There’s no good reason to weaken and eventually dump a program that’s met the needs of America’s seniors and disabled citizens so well for decades. Instead of wasting time and money pushing snake oil schemes to replace Medicare, let’s tackle the real problem of rising health care costs with sensible cost controls, paid for by taxing — not cutting taxes for — those who can best afford it. That way, Medicare can survive and succeed for a long time to come.

(Theodore R. Marmor is professor emeritus of public policy and political science at Yale University and has testified before Congress about Medicare reform. He is a member of the Scholars Strategy Network, a new national organization that brings together many of America’s leading scholars to address pressing public challenges at the national, state and local levels.)

http://www2.tbo.com/news/opinion/2012/aug/18/naopino2-turning-medicare-into-vouchers-wont-work-ar-467518/

Comment: 

By Don McCanne, MD

Medicare is under political attack. In this article, Professor Theodore Marmor, one of the nation’s leading experts on Medicare, explains concisely the issues and the potential consequences. It can serve as a valuable resource for explaining to others just what is at stake. For single payer advocates, educating the public on this debate is a must if we are to continue to advocate for an “improved Medicare for all.”

Medicine and Empire: Book Review

By Steffie Woolhandler and David Himmelstein
Monthly Review, September 2012

Howard Waitzkin, “Medicine and Public Health at the End of Empire” (Boulder, Colo.: Paradigm Publishers, 2011), 256 pages, $25, paperback.

For the past three decades Howard Waitzkin has been (along with Vicente Navarro) the leading social medicine theorist in the United States. “Medicine and Public Health at the End of Empire” provides a superb sampling of Waitzkin’s wide-ranging work, and a readily accessible introduction to the searching insights offered by a Marxist view of medicine.

Trained as both a sociologist and physician, Waitzkin’s career has melded clinical involvement as a primary care doctor in oppressed communities with writing and activism, in both the United States and Latin America. He currently works with GIs resisting military deployment.

Much of the book is devoted to meticulous delineation of the myriad ways that globalized capitalism creates the social conditions that make us sick and puts a straightjacket on the health system’s ability to respond.

In an initial chapter, Waitzkin reviews the historical role of seemingly benevolent foundations (e.g., Rockefeller) and international health organizations in smoothing the way for the imperial project. He then traces the emergence of the tradition of revolutionary social medicine from Frederick Engels through Rudolph Virchow (a 19th-century German physician, much-revered in the mainstream of medicine as father of modern pathology) and Salvador Allende (who was a physician before becoming Chile’s first socialist president).

Engels, in his “Condition of the Working Class,” chronicled occupational conditions such as lead poisoning, black lung, and repetitive stress injury, and he also observed that the noxious conditions in English factories sickened the surrounding communities — prefiguring much of the modern work in environmental and occupational medicine. Virchow’s classic investigation of the social origins of cholera and tuberculosis epidemics was reflected in his ardent support for the uprisings of 1848. And Allende, long before emerging as a world-renowned political leader, made major contributions both as a theoretician of the social origins of ill-health and as a practical innovator when he served as Minister of Health in Chile. Waitzkin reminds us that the recent discovery of the “social determinants of health” is merely a rediscovery, generally in defanged form, of these earlier vibrant understandings.

Waitzkin brilliantly exposes the forces that pushed the development of (highly profitable) coronary care technology and assured that this unproven technology overwhelmed alternative approaches to the modern epidemic of heart disease. Indeed, Bernard Lown, who features prominently in Waitzkin’s tale as a founder of the intensive care approach to heart attacks, often decries the damage wrought by the focus on medical commodities and high-tech interventions in cardiology, and the concomitant neglect of the human beings who house the hearts.

Much of the book focuses on Latin American health politics and social medicine. Waitzkin offers hopeful glimpses of progress in Cuban health care and in social medicine in Brazil, as well as a bleaker portrait of the reversals in Chilean health care, first under the U.S.-backed dictatorship, and more recently due to the continuing domination of neoliberal policies.

He explores the unifying features of the efforts to make profit, rather than health, the ends of medicine. His carefully documented analysis of multinational firms, the World Bank, international trade and health organizations, and major philanthropic foundations demonstrates that the commodification of medicine represents a collective project of empire.

Waitzkin’s critique of neoliberal health policies is fleshed out by meticulously documented case studies of international managed care firms’ efforts to penetrate Latin America and the health care privatization that has paved the way for profit-making. In some nations, public-sector social-insurance systems have succumbed to the onslaught, and have been transformed to for-profit insurance and delivery schemes (a situation mirrored in the United States by the 2003 Medicare “reform” that pumped $50 billion annually in public dollars into managed-care firms). But in other countries, popular movements have mounted successful resistance to the efforts to wrest health care from public or quasi-public control. Waitzkin details the hard-fought struggle to preserve and strengthen public-sector health care in El Salvador; the victories of Bolivia’s indigenous communities against corporate efforts to privatize water systems; and the health successes wrought by Mexico City’s left-leaning local government. Nor does he neglect the United States, reiterating the importance of the ongoing struggle to achieve a single-payer health care reform.

Ultimately, “Medicine and Public Health at the End of Empire” is a hopeful book, persuasively reminding us that capitalist society, and particularly capitalist medicine, generates cogent discontents, oppositional social forces, and hence the seeds and motive force of its own transcendence.

Steffie Woolhandler, M.D., M.P.H., and David Himmelstein, M.D., are professors of public health at City University of New York, visiting professors of medicine at Harvard, and co-founders of Physicians for a National Health Program.

www.monthlyreview.org

Theodore Marmor on why turning Medicare into vouchers won't work

Turning Medicare into vouchers won’t work

By Theodore R. Marmor
Tampa Bay Online, August 18, 2012
Before Medicare began in 1965, many American senior citizens — and their children — struggled to pay for their doctor bills. Ever since, Medicare’s been an American success story.
Why, then, do so many Beltway pundits and members of Congress — including Mitt Romney’s new running mate, Rep. Paul Ryan, R-Wis. — go after it?
Some of its critics claim that slashing Medicare is the only way to control the deficit. Like most attacks on Medicare, this one is based on ideology, not evidence. Medicare’s critics often claim that rising federal health care spending is America’s biggest fiscal challenge. In fact, the federal deficit is bloated today primarily due to the Bush administration’s irresponsible tax cuts, economic mismanagement, costly wars and increased defense spending.
Of course large numbers of retiring boomers mean Medicare will need more revenue. But Medicare costs won’t need to spiral out of control. The new Affordable Care Act includes steps to limit per-person health care price hikes. It’s already saving Medicare money. Yet Romney and Ryan promise they would work to repeal it.
What’s their alternative? The Ryan Budget Plan calls for extremely deep cuts to Medicare, while promising more and longer-lasting tax cuts for a few very wealthy Americans. Most House Republicans have already voted for that. It would end Medicare as we know it, and instead force seniors to buy private insurance with vouchers that would cover less of their healthcare costs each year.
These vouchers would reduce seniors’ choices, not their costs. Why? Republican voucher plans assume that if government ends Medicare, private insurance companies will start to deliver cheaper, more efficient plans. But what’s their evidence?
When the nonpartisan Congressional Budget Office analyzed vouchers, it found that even a slight dip in future federal spending on health care for older Americans would drive costs up. Vouchers with slowly rising buying power would simply leave seniors and their loved ones to pay more out of pocket for bigger medical bills.
In fact, Uncle Sam’s already lost money on Medicare contracts with competing private health insurance plans. Although they spent more per patient, those private plans didn’t improve coverage or quality of care. Meanwhile, Medicare has shown it bargains more effectively for better prices than most private insurers say that they can afford to do.
How are frail older people — one in three with cognitive impairments — supposed to wade through pages of fine print to understand new, complicated and often confusing “choices”? Is that what seniors really want? Surveys show most people care much more about being free to choose their doctors than to do complex comparison shopping.
Consumer choice, it turns out, is just a fig leaf that Medicare’s critics use to try to hide what would truly be in store for seniors if Medicare were to be gutted over time: fewer benefits, higher costs and the loss of Medicare’s guarantee of access to a wide range of doctors and hospitals. What’s more, its supporters aim to mask their true aim by grandfathering in those over 55, keeping them from having to face a transformed Medicare program.
The Ryan Budget Plan wouldn’t really control Medicare’s costs. It would simply shift them to future senior citizens and make Medicare less efficient.
There’s no good reason to weaken and eventually dump a program that’s met the needs of America’s seniors and disabled citizens so well for decades. Instead of wasting time and money pushing snake oil schemes to replace Medicare, let’s tackle the real problem of rising health care costs with sensible cost controls, paid for by taxing — not cutting taxes for — those who can best afford it. That way, Medicare can survive and succeed for a long time to come.
(Theodore R. Marmor is professor emeritus of public policy and political science at Yale University and has testified before Congress about Medicare reform. He is a member of the Scholars Strategy Network, a new national organization that brings together many of America’s leading scholars to address pressing public challenges at the national, state and local levels.)
http://www2.tbo.com/news/opinion/2012/aug/18/naopino2-turning-medicare-into-vouchers-wont-work-ar-467518/

Medicare is under political attack. In this article, Professor Theodore Marmor, one of the nation’s leading experts on Medicare, explains concisely the issues and the potential consequences. It can serve as a valuable resource for explaining to others just what is at stake. For single payer advocates, educating the public on this debate is a must if we are to continue to advocate for an “improved Medicare for all.”

Insurance industry insider on Medicare vouchers

Medicare Voucher Costs

Letter, The New York Times, August 28, 2012

To the Editor:

Re “Truth and Lies About Medicare” (editorial, Aug. 19):

As a former chief executive and actuary of an insurance company that once sold both individual and group health insurance, I am particularly mystified by the effort to push Medicare participants into the individual health insurance market.

I thought that we wanted to reduce — or at least control — the cost of health insurance, but individual health insurance is by far the most expensive alternative.

Depending on the size of the vouchers, the government itself may save money, but the entire system will pay more. Someone has to pay for the costs of individual underwriting, marketing and so on, and those expenses will fall on the elderly themselves.

You are also correct in assuming that there is likely to be anti-selection, with the healthier people going to the insurance companies, leaving the sickest and most expensive people in the Medicare plan.

It is certainly true that health insurance needs reform and that President Obama is far from having all the answers, but the Romney-Ryan plan will increase the country’s health care bill with little or any of the increase going to more or better health care.

Stephen Brown
Brewster, Mass.

http://www.nytimes.com/2012/08/29/opinion/medicare-voucher-costs.html

Comment: 

By Don McCanne, MD

Today’s message is important because it comes from an insider in the health insurance industry. Not only does he indicate that it is a terrible idea for Medicare beneficiaries to use vouchers to purchase private, individual plans, but, of even greater significance, is “that health insurance needs reform and that President Obama is far from having all the answers.”

For private insurance reform, nobody has all the answers. The nature of the beast is that when you try to fix one defect, others open up. Instead of moving Medicare beneficiaries into private insurance plans, we need to move private insurance victims into Medicare.

Insurance industry insider on Medicare vouchers

Medicare Voucher Costs

Letter, The New York Times, August 28, 2012
To the Editor:
Re “Truth and Lies About Medicare” (editorial, Aug. 19):
As a former chief executive and actuary of an insurance company that once sold both individual and group health insurance, I am particularly mystified by the effort to push Medicare participants into the individual health insurance market.
I thought that we wanted to reduce — or at least control — the cost of health insurance, but individual health insurance is by far the most expensive alternative.
Depending on the size of the vouchers, the government itself may save money, but the entire system will pay more. Someone has to pay for the costs of individual underwriting, marketing and so on, and those expenses will fall on the elderly themselves.
You are also correct in assuming that there is likely to be anti-selection, with the healthier people going to the insurance companies, leaving the sickest and most expensive people in the Medicare plan.
It is certainly true that health insurance needs reform and that President Obama is far from having all the answers, but the Romney-Ryan plan will increase the country’s health care bill with little or any of the increase going to more or better health care.
Stephen Brown
Brewster, Mass.
http://www.nytimes.com/2012/08/29/opinion/medicare-voucher-costs.html

Today’s message is important because it comes from an insider in the health insurance industry. Not only does he indicate that it is a terrible idea for Medicare beneficiaries to use vouchers to purchase private, individual plans, but, of even greater significance, is “that health insurance needs reform and that President Obama is far from having all the answers.”
For private insurance reform, nobody has all the answers. The nature of the beast is that when you try to fix one defect, others open up. Instead of moving Medicare beneficiaries into private insurance plans, we need to move private insurance victims into Medicare.

Shareholders urge WellPoint to oust CEO Angela Braly

Shareholders urge WellPoint to oust CEO Angela Braly

By Chad Terhune
Los Angeles Times, August 28, 2012

Investors in health insurance giant WellPoint Inc., which runs Anthem Blue Cross in California, are pressing for a change in top management as criticism intensifies about the company’s lagging stock, managerial missteps and disappointing earnings.

Shareholder complaints about WellPoint’s chairwoman and chief executive, Angela Braly, have grown louder since last month, when the Indianapolis company posted another anemic quarter and cut its full-year profit outlook as its enrollment fell again.

The investor unrest follows years of consumer fury that beset WellPoint as it repeatedly raised premiums on many families and small businesses by 10% or more.

A New York hedge fund, Royal Capital Management, sent a letter to WellPoint’s board last week saying that Braly has “failed miserably” as CEO and that “it is incumbent upon the board of directors to fulfill its fiduciary responsibility to shareholders by changing leadership.”

Other influential WellPoint shareholders, such as Leon Cooperman’s Omega Advisors hedge fund in New York, have expressed similar concerns about the company’s lackluster performance, particularly compared with its chief competitors’, and they have urged the board to replace Braly.

Thus far, WellPoint’s board has voiced strong support for Braly. “The board has been fully involved in the strategy WellPoint is pursuing and is supportive of the strategy and our management team,” Jacquelyn Ward, the company’s lead outside director, said in a statement last month after analysts began questioning management’s performance.

“Braly has presided over the most arbitrary and capricious health insurance rate hikes of our time,” said Jamie Court, president of Consumer Watchdog, an advocacy group in Santa Monica. “Now she is learning the rules of Wall Street: Cross policyholders all you want, but don’t step on the wallets of shareholders.”

http://www.latimes.com/business/la-fi-wellpoint-under-fire-20120828,0,4090962.story

Comment: 

By Don McCanne, MD

Our politicians have left the private insurance industry in charge of our health care, but what is this industry really all about? As Jamie Court says, “Cross policyholders all you want, but don’t step on the wallets of shareholders.”

Addendum to today’s Quote of the Day on Angela Braly:

Angela Braly resigned today as president and CEO of WellPoint.

It would be a mistake to celebrate this action as some sort of elimination of an evil-doer. She will be replaced. From the perspective of patients, nothing changed.

The action that we need is from the President and Congress. They need to eliminate the private insurers and replace them with an improved Medicare for all. Hold the celebration until we can accomplish that goal.

Health Care Flaws

The New York Times, Letters, Aug. 27, 2012

To the Editor:

Re “A Reluctant Crash Course in Health Insurance 101” (The Agenda, Aug. 21): Suleika Jaouad’s dispassionate account of the added burdens imposed by our fragmented system of health insurance on those unfortunate individuals who become sick is powerful in its lack of sentimentality. With an unconscionable 45,000 excess deaths a year due to lack of health insurance, we remain the only country in the world where getting seriously ill or hurt, as if that weren’t bad enough, significantly increases one’s risk for financial ruin — even with health insurance. More than half of personal bankruptcies in the United States result from medical bills, and of those, 75 percent of the cases are people who had medical insurance when they got sick or injured.

Until the for-profit health insurance industry is replaced by a single-payer national health insurance program, Americans will continue to suffer and die for the sake of excessive corporate salaries and shareholder profits.

Elaine Fox, M.D.
Southampton, N.Y.

To the Editor:

Only in the United States would a young patient be burdened with tens of thousands of dollars of medical bills and a mother who should “be able to spend less time with my bills and more time with me” — while insurance companies bet billions on the increased profits they’re going to reap once the so-called Affordable Care Act brings them millions of new customers. While every other advanced country has achieved universal access to health care and removed from patients the burden of worrying about medical bills, we increasingly saddle patients with co-pays, deductibles and skimpy provider networks.

Medicare, which has largely removed these burdens from the elderly, while controlling costs better than the private sector, points the way. Until we expand and improve Medicare to cover everyone, patients will suffer while corporate stockholders smile all the way to the bank.

Leonard Rodberg
Flushing, N.Y.
The writer is research director for the New York chapter of Physicians for a National Health Program.

Ultra-conservatives offer no solutions on health care

By Pamella Gronemeyer, M.D.
Edwardsville (Ill.) Intelligencer, Letters, Aug. 1, 2012

Recently, I attended the Americans for Prosperity (AFP) event in Edwardsville entitled “Healthcare Freedom.” I am a Medicare for All advocate and a physician. I went to see how and what the AFP (the not-truly-a-grassroots organization but more the tentacle of the Koch Brothers) was selling.

The gist of the presentation was that Illinois should reject the federal money for expanding Medicaid and not set up health care exchanges putting our state in the same nihilistic class as Florida and Texas. Medicaid shouldn’t be expanded because it is broken. We should reject the Affordable Care Act (ACA) even though the presenter acknowledged that there is no other plan in the works to fix health care nor help cover the working poor who can’t afford health care now.

The story about the 12-year-old who died of dental disease because the family could not find a Medicaid provider was tragic. When asked what should have happened, there was no answer. The child’s death was inevitable (the speaker avoided answering the question). I agree that Medicaid’s payment rate is low and the checks are slow: however, ending Medicaid or shrinking it is not the answer.

Until we get single-payer health care, the ACA is the law of the land. If the AFP likes states’ rights then hopefully Vermont will get a waiver for state single payer and California will move forward. Most of the people in the room looked like they were Medicare age. None of them complained about their single-payer care.

Pamella Gronemeyer, M.D., is co-president for Southern Illinois of Physicians for a National Health Program-Illinois and a member of the board of the Illinois Single Payer Coalition. She resides in Glen Carbon, Ill.

Shareholders urge WellPoint to oust CEO Angela Braly

Shareholders urge WellPoint to oust CEO Angela Braly

By Chad Terhune
Los Angeles Times, August 28, 2012
Investors in health insurance giant WellPoint Inc., which runs Anthem Blue Cross in California, are pressing for a change in top management as criticism intensifies about the company’s lagging stock, managerial missteps and disappointing earnings.
Shareholder complaints about WellPoint’s chairwoman and chief executive, Angela Braly, have grown louder since last month, when the Indianapolis company posted another anemic quarter and cut its full-year profit outlook as its enrollment fell again.
The investor unrest follows years of consumer fury that beset WellPoint as it repeatedly raised premiums on many families and small businesses by 10% or more.
A New York hedge fund, Royal Capital Management, sent a letter to WellPoint’s board last week saying that Braly has “failed miserably” as CEO and that “it is incumbent upon the board of directors to fulfill its fiduciary responsibility to shareholders by changing leadership.”
Other influential WellPoint shareholders, such as Leon Cooperman’s Omega Advisors hedge fund in New York, have expressed similar concerns about the company’s lackluster performance, particularly compared with its chief competitors’, and they have urged the board to replace Braly.
Thus far, WellPoint’s board has voiced strong support for Braly. “The board has been fully involved in the strategy WellPoint is pursuing and is supportive of the strategy and our management team,” Jacquelyn Ward, the company’s lead outside director, said in a statement last month after analysts began questioning management’s performance.
“Braly has presided over the most arbitrary and capricious health insurance rate hikes of our time,” said Jamie Court, president of Consumer Watchdog, an advocacy group in Santa Monica. “Now she is learning the rules of Wall Street: Cross policyholders all you want, but don’t step on the wallets of shareholders.”
http://www.latimes.com/business/la-fi-wellpoint-under-fire-20120828,0,4090962.story

Our politicians have left the private insurance industry in charge of our health care, but what is this industry really all about? As Jamie Court says, “Cross policyholders all you want, but don’t step on the wallets of shareholders.”
Addendum to today’s Quote of the Day on Angela Braly:
Angela Braly resigned today as president and CEO of WellPoint.
It would be a mistake to celebrate this action as some sort of elimination of an evil-doer. She will be replaced. From the perspective of patients, nothing changed.
The action that we need is from the President and Congress. They need to eliminate the private insurers and replace them with an improved Medicare for all. Hold the celebration until we can accomplish that goal.

Senator Kennedy’s Compromise

By Philip Caper, M.D.
The New York Review of Books, July 12, 2012

In Marcia Angell’s critique of Ronald Dworkin’s article about the Affordable Care Act’s mandate to buy health insurance, she advocates for replacing the ACA with a single-payer system [“Should Obama’s Health Care Be Opposed?” NYR, June 7]. In his rebuttal to her letter, Dworkin states that “even Senator Edward Kennedy, who was among the most powerful advocates of a single-payer system, long ago abandoned all hope of achieving it.” That is not quite correct.

I was the first physician Senator Kennedy hired as an adviser on health care. I served on his staff between 1971 and 1976 and continued to advise him on matters of health policy until his death in 2009. Although Senator Kennedy was acutely (and painfully) aware of the political obstacles that stood in the way of passing legislation expanding Medicare to eventually cover the entire American population, he nonetheless continued to believe it would be the best policy. On April 25, 2007, and over the objections of some on his staff at the time, he (together with Congressman John Dingell) introduced a bill that would do just that.

To the end, Senator Kennedy believed in going for the best.

Philip Caper, MD
Brooklin, Maine

Reply by Jeff Madrick, whom Ronald Dworkin cited as a source:

As Dr. Caper writes, Senator Kennedy always believed that a single-payer system was the best way to achieve adequate health care for all Americans. Not only did he sign onto the Dingell bill, he also reiterated his support of Medicare for all in his book, “America Back on Track,” which I helped write.

But in the political world, he had essentially backed off support for pure single-payer systems by the late 1970s. He realized the approach had too many powerful enemies. As Paul Starr points out in his book “Remedy and Reaction,” Kennedy proposed a plan for universal coverage in 1979 but that plan enabled Americans to buy insurance from Blue Cross, HMOs, or other private insurers. He wrote about his decision to compromise with the private health care industry in his last memoir.

Senator Kennedy was always a political pragmatist. Even in the early 1970s, he was willing to compromise on a full-fledged single-payer plan by requiring some payments by enrollees in opposition to the unions. And let us keep in mind that he supported President Obama’s less than perfect plan as well.

This does not mean Kennedy was not an idealist. His deep-felt idealism was his most admirable trait on issues across the political landscape. But he knew more about how to get legislation passed than almost any of his peers and certainly than anyone around today. It meant compromise, and it is why he accomplished so much. Many of us less-involved observers would not be good at that. But he was.

http://www.nybooks.com/articles/archives/2012/jul/12/senator-kennedys-compromise/

PNHP note: When Sen. Kennedy and Rep. Dingell introduced their “Medicare for All Act” in April 2007, Dr. Don McCanne, PNHP’s senior health policy fellow, assessed the legislation at his “Quote of the Day” blog, noting that it fell far short of the single-payer model by leaving the private health insurance industry in place and by perpetuating the administrative complexity of our current dysfunctional, multipayer system. At the same time, he saluted Kennedy and Dingell as longtime leaders in the effort to obtain comprehensive health care coverage for everyone. You can read McCanne’s assessment here.

Massachusetts leads on health care while Maine regresses

By Philip Caper, M.D.
Bangor Daily News, Aug. 23, 2012
 
Massachusetts, the first state that attempted to offer health care to all its residents and provided the template for national health reform, recently took the inevitable and much more difficult next step.
 
It passed a law intended to restrain future growth in total statewide health care costs. Once government has adopted a policy of achieving universal health care, it must then take steps to maintain affordability.
 
For the past 50 years, our national health care policy has been one of relentlessly expanding our system’s capacity. In the mid-1950s, the Internal Revenue Service made employer-provided health benefits tax exempt. In 1965, building on the legacies of Presidents Roosevelt, Truman and Kennedy, President Johnson prodded the Congress into enacting Medicare and Medicaid, thereby infusing billions of public dollars into our health care system for direct care of the poor and elderly.
 
During the following decades, under both Democratic and Republican administrations, Congress further expanded our health care system, creating community health and mental health centers, the national health service corps and expanding health benefits for federal workers, the military and their dependents, as well as veterans and Native Americans.
 
Congress also provided support to increase the numbers of doctors, nurses and other health care professionals and to construct hospitals and other health care facilities. Federal support for basic biomedical research was massively expanded through the National Institutes of Health.
 
That support subsequently spurred unprecedented innovation through the conversion of publicly funded scientific knowledge into commercially viable products and the capability to use them. With the help of sophisticated marketing techniques, these products and services are now being relentlessly promoted in an effort to increase demand.
 
So our public policy regarding health care has been to spend trillions of dollars to expand our capacity to provide services, personnel, facilities and innovation. These efforts have been hugely successful. Per-capita health care spending (in constant dollars) has increased by about six times since 1966, when Medicare was implemented, and we’re now at about twice the spending level of other wealthy countries.
 
But despite our high spending, we have the highest percentage of population without adequate access to health care, the poorest health outcomes and the least popular health care system of any advanced country.
 
The return on our public investment in health care has been disappointing. It is as though we have written a blank check to develop the world’s most powerful and technically sophisticated car, but now find it accelerating out of control, guzzling fuel at an unsustainable rate and lacking any controls.
 
We have been counseled by the experts to do everything we can to improve efficiency and reduce the demand for services by forcing people to become healthier; better managing treatment; reducing waste, fraud and abuse; increasing competition; making health care more “consumer directed” by requiring patients to pay more up front; and improving efficiency through more and better technology.
 
None of these ideas is new. All have been tried and, by themselves, failed.
 
If we look at evidence for what works from around the world, the results are clear. All other countries have been more successful than the U.S. at restraining costs and improving results. They have done so by constraining overall system capacity and managing the flow of health care facilities, personnel, technology and money into their systems. They have achieved better results at far less cost.
 
That is why the new Massachusetts law is so intriguing and so critically important. Despite the huge contribution of health care to that state’s economy, the Massachusetts Legislature has shown the political will to cap capacity and slow the growth of their total health care spending even as they are trying to increase access. Failure to do so threatens their goal of health care for all.
 
Of course, dramatically simplifying our byzantine and archaic system by replacing it with “Improved Medicare for All” on a state or national level would make this task much easier and would create a way to implement a health care budget that treats everyone fairly. If everybody has a stake in the same system, popular support to better manage and more effectively control its costs would be much stronger. That’s the way it works in most other countries.
 
Instead of fighting over who gets what, we would all support improvements in a system that benefits us all.
 
Winston Churchill once observed that “Americans will always do the right thing, once they’ve exhausted all alternatives.” Despite its flawed approach, Massachusetts now leads the way in its attempts to simultaneously improve access and control costs.
 
In contrast is Maine, which, with the insurance companies firmly in control of our legislature, is going backwards. Working together, people in Maine could change that.
 
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/2012/08/23/health/massachusetts-leads-on-health-care-while-maine-regresses/

Hospitals use physician practice acquisitions to pad fees

Same Doctor Visit, Double the Cost

By Anna Wilde Mathews
The Wall Street Journal, August 26, 2012

… hospitals are increasingly acquiring private physician practices.

Hospitals say the acquisitions will make health care more efficient. But the phenomenon, in some cases, also is having another effect: higher prices.

As physicians are subsumed into hospital systems, they can get paid for services at the systems’ rates, which are typically more generous than what insurers pay independent doctors. What’s more, some services that physicians previously performed at independent facilities, such as imaging scans, may start to be billed as hospital outpatient procedures, sometimes more than doubling the cost.

The result is that the same service, even sometimes provided in the same location, can cost more once a practice signs on with a hospital.

With private insurers, hospital systems with strong market heft can often negotiate higher rates for physician services than independent doctors get. The differential varies widely, anywhere from 5% or less to between 30% and 40%, industry officials say.

When Hartford Hospital, in Connecticut, bought Constitution Eye Surgery Center from its physician owners last year, it told regulators the center’s operating profit was about $3.9 million in fiscal 2009, before the sale. According to James M. Blazar, a senior vice president of the Hartford HealthCaresystem, the operating income at the center is expected to grow to nearly $8 million in fiscal 2012, the first full year of hospital ownership, though surgery volumes are likely to be fairly flat. Higher reimbursement is justified because the system made significant upgrades, he said. “We have not done this for a financial reason, we’ve done this for a quality reason,” he said of the deal.

http://online.wsj.com/article/SB10000872396390443713704577601113671007448.html

Comment: 

By Don McCanne, MD

Much has been written about consolidation of health care providers and how that gives them leverage during contract negotiations with private insurers. This article provides further confirmation of that reality.

Medicare has been drawn into this in that they often pay more for services performed in a hospital facility, but we can be reassured that appropriate adjustments will be made once the full impact of this manipulation is defined. That cannot be said for private insurers that depend on market negotiations. Those with clout prevail.

This would be fixed by simply establishing our own public monopsony – a single payer national health program – which would ensure value for all of us in our health care purchasing.