PNHP

Amartya Sen on government austerity

Amartya Sen on government austerity

The Crisis of European Democracy

By Amartya Sen
The New York Times, May 22,2012
The worthy but narrow intentions of the European Union’s policy makers have been inadequate for a sound European economy and have produced instead a world of misery, chaos and confusion.
There are two reasons for this.
First, intentions can be respectable without being clearheaded, and the foundations of the current austerity policy, combined with the rigidities of Europe’s monetary union (in the absence of fiscal union), have hardly been a model of cogency and sagacity. Second, an intention that is fine on its own can conflict with a more urgent priority — in this case, the preservation of a democratic Europe that is concerned about societal well-being. These are values for which Europe has fought, over many decades.
The cause of reform, no matter how urgent, is not well served by the unilateral imposition of sudden and savage cuts in public services. Such indiscriminate cutting slashes demand — a counterproductive strategy, given huge unemployment and idle productive enterprises that have been decimated by the lack of market demand.
There is, in fact, plenty of historical evidence that the most effective way to cut deficits is to combine deficit reduction with rapid economic growth, which generates more revenue.
There are surely lessons here from John Maynard Keynes, who understood that the state and the market are interdependent. But Keynes had little to say about social justice, including the political commitments with which Europe emerged after World War II. These led to the birth of the modern welfare state and national health services — not to support a market economy but to protect human well-being.
Though these social issues did not engage Keynes deeply, there is an old tradition in economics of combining efficient markets with the provision of public services that the market may not be able to deliver. As Adam Smith (often seen simplistically as the first guru of free-market economics) wrote in “The Wealth of Nations,” there are “two distinct objects” of an economy: “first, to provide a plentiful revenue or subsistence for the people, or, more properly, to enable them to provide such a revenue or subsistence for themselves; and secondly, to supply the state or commonwealth with a revenue sufficient for the public services.”
Participatory public discussion — the “government by discussion” expounded by democratic theorists like John Stuart Mill and Walter Bagehot — could have identified appropriate reforms over a reasonable span of time, without threatening the foundations of Europe’s system of social justice.
Europe cannot revive itself without addressing two areas of political legitimacy. First, Europe cannot hand itself over to the unilateral views — or good intentions — of experts without public reasoning and informed consent of its citizens.
Second, both democracy and the chance of creating good policy are undermined when ineffective and blatantly unjust policies are dictated by leaders. The obvious failure of the austerity mandates imposed so far has undermined not only public participation — a value in itself — but also the possibility of arriving at a sensible, and sensibly timed, solution.
This is a surely a far cry from the “united democratic Europe” that the pioneers of European unity sought.
(Amartya Sen is a Nobel laureate and a professor of economics and philosophy at Harvard.)
http://www.nytimes.com/2012/05/23/opinion/the-crisis-of-european-democracy.html

Although Amartya Sen warns of the threat of unilateral austerity programs to the united democratic Europe, his words can also apply to the current political efforts in the United States to reduce the role of government through austerity measures. The current attack on Medicare exemplifies the fact that the austerity agenda does not spare our government health programs.
Perhaps the most important warning we should extract is implied by Professor Sen’s concern about the undermining of public participation. We should take heed of the fact that a united democratic nation requires not only public involvement but also public awareness of the proposed policies and their ramifications. As he writes, political legitimacy of nations requires “public reasoning and informed consent of its citizens.”
The public has to understand that the rhetoric of unilaterally “reducing taxes” equates with imposing government austerity. They then have to understand what government austerity truly means. It does not mean, “cut my taxes, but leave my Medicare alone.”

When your coverage gets cut, would you buy into Medicare?

By Jack Bernard
Charleston (W.Va.) Gazette, May 12, 2012

CHARLESTON, W.Va. — If the highly politicized Supreme Court overturns the individual mandate — and possibly all of Obamacare (the Affordable Care Act), where do we go from here?

Do we throw up our hands and say the sky is falling, as the Democrats are currently doing? Or do we stick our heads in the sand and go to a Dickensian free enterprise system like some on the right advocate, the uninsured sick be damned?

My party, the GOP, clearly does not want to talk about the elephant in the room — health insurance coverage trends. According to a recent Gallup poll, the number of uninsured nationwide has gone from 15 percent in 2008 to 17 percent in 2011. So, the private model insurance system is not only failing, it is failing at an increasing rate when it comes to covering the uninsured.

In West Virginia, the situation is more stable, with no rise in the last few years. However, the uninsured are still 18 percent of the population, above the national average.

For those who are still insured, the situation is problematic. In West Virginia, premiums for those enrolled in full family coverage have been going up substantially, from $12,554 in 2009 to $14,542 in 2010, a 16 percent increase in just one year, according to the Agency for Healthcare Research and Quality.  Yes, $10,150 of this cost is picked up by the employer, but that just results in lower wages over the long run. Or, even worse, relocation of West Virginia factories overseas. How long can this go on?

As a small employer (I am a County Commissioner in a rural county near Atlanta), I know that we have a tough choice each year. We can:

* Increase employee deductibles and co-payments because of higher insurance charges to us.

* Cut programs like road maintenance, EMS, the sheriff and the courts.

* Raise property taxes yet again.

I mentor small businesses that face the same situation, only worse because they cannot raise revenues through taxation. Larger companies are absorbing more of the premiums, but they are moving their operations out of the United States in part because of steadily rising health care costs.

The answer to our problem is Medicare For All. A single payer system will restrict the rise in costs and cover every citizen. Single payer is what the majority of developed nations have enacted and their per capita costs are much less than here. A respected group, Physicians for a National Health Program, has examined this scenario in great detail. There is more at their site pnhp.org.

At a minimum, we should seriously reconsider the Reid plan to expand Medicare incrementally. In 2009, Sen. Harry Reid proposed a voluntary buy-in for folks 55-64 who did not have private insurance. Unsurprisingly, there were immediate outcries from the insurance, physician and hospital lobbies. Some of their objections were reasonable, but most were just self-serving.

The affect of adverse selection — having only the sickest people buy into the system — was the most valid objection by insurance companies. Another was the unknown impact that the expansion would have on the financial side for both the government and providers.

The way to address these two issues is through expanding Medicare year by year. In other words, just take what Reid said and move to an incremental implementation. In 2013, folks 64 could buy in. In 2014, people 63 could buy in, and so forth. It would be slow, but eventually everyone over 55 would be covered. Then, it could be expanded to other groups. And, if the impact on providers is minimal… as I believe it would be… the phase-in could be revved up.

If we had a bi-partisan Congress dedicated to helping the country, rather than just the insurance company and medical lobbyists funding their campaigns, passing this legislation would be simple. As difficult as it is, elected officials of good faith on both sides of the aisles should come together and propose Medicare expansion as a bi-partisan compromise for the good of the nation.

If not, we can just wait another 10 or 15 years until many more West Virginians and Americans have lost their unaffordable private insurance, the number of uninsured is 33 percent or more here and elsewhere, our industries are uncompetitive internationally, and we are forced to go to a single payer model.

As Churchill said, “Americans can always be counted on to do the right thing, after they have exhausted all other possibilities.”

Bernard is a retired senior health care executive and a county commissioner in Jasper County, Ga. He has worked with several W.Va. hospitals, including CAMC, and oversaw planning for Humana Hospital-Greenbrier Valley and the region. 

http://wvgazette.com/Opinion/OpEdCommentaries/201205110164

GAO on the Small Employer Health Insurance Tax Credit

Small Employer Health Tax Credit: Factors Contributing to Low Use and Complexity

GAO (Government Accountability Office)
May 14, 2012

Fewer small employers claimed the Small Employer Health Insurance Tax Credit in tax year 2010 than were estimated to be eligible. While 170,300 small employers claimed it, estimates of the eligible pool by government agencies and small business advocacy groups ranged from 1.4 million to 4 million. The cost of credits claimed was $468 million. Most claims were limited to partial rather than full percentage credits (35 percent for small businesses) because of the average wage or full-time equivalent (FTE) requirements. 28,100 employers claimed the full credit percentage. In addition, 30 percent of claims had the base premium limited by the state premium average.

One factor limiting the credit’s use is that most very small employers, 83 percent by one estimate, do not offer health insurance. According to employer representatives, tax preparers, and insurance brokers that GAO met with, the credit was not large enough to incentivize employers to begin offering insurance. Complex rules on FTEs and average wages also limited use. In addition, tax preparer groups GAO met with generally said the time needed to calculate the credit deterred claims. Options to address these factors, such as expanded eligibility requirements, have trade-offs, including less precise targeting of employers and higher costs to the Federal government.

http://www.gao.gov/assets/600/590832.pdf

Comment: 

By Don McCanne, MD

One of the benefits of the Affordable Care Act is the tax credits offered to small businesses to help them obtain health insurance coverage for their employees. This evaluation by the GAO shows that, in 2010, 83 percent of small businesses eligible for the full credit did not even offer health insurance.

According to the report, “small employers do not likely view the credit as a big enough incentive to begin offering health insurance and to make a credit claim, according to employer representatives, tax preparers, and insurance brokers we met with.”

Though the complexity of the rules and the modest amount of the credits are cited as causes for the low participation rates, the fundamental flaw is that this program was designed to comply with our fragmented, dysfunctional system of financing health care – a model that will always fall short of reform goals.

Instead of trying to patch our fragmented program of private plans and pubic programs, we need to replace it with a single payer national health program – an improved Medicare for all.

Call it ‘ObamaCares’

By Gustavo S. Montana, M.D.
The Herald-Sun (Durham, N.C.), Letters, May 2, 2012

The Accountable Care Act (ACA) has drawn more attention now that the Supreme Court is about to decide its fate.

The critics of ACA often refer to it as ObamaCare. Objections to the act are directed to the entire legislation or to specific issues that the legislation addresses. The critics of ACA do not offer solutions to any of the problems that this legislation addresses.

Mr. Romney, among the critics, advocates the abolition of ACA but he neglects to acknowledge that the Massachusetts Health Plan, which he enacted as governor, shares similarities with ACA, thus Mr. Romney should also advocate the abolition of the Massachusetts plan.

While we wait for the Supreme Court decision, we should honestly evaluate alternatives to ACA like a national or state-by-state single-payer system(s) with the option to obtain medical services of questionable or unproven benefit through private insurance. The reduction in administrative cost of a single-payer system lowers the cost of health care and frees financial and human resources that can be invested in education, research and other sectors of the economy.

When President Obama pursued health care reform, he intended to make the system fair and accessible to most of the people in this country. His effort fell short not by his lack of conviction and understanding of the issues but by a political system aligned with other interests. I think that we should refer to ACA as ObamaCares because I believe that Mr. Obama does care.

Dr. Gustavo S. Montana lives in Chapel Hill, N.C.

http://www.heraldsun.com/view/full_story/18423855/article-Letters–May-2?instance=search_results

The ills of money-driven medicine

By Philip Caper, M.D.
Bangor Daily News (Maine), May 17, 2012

A couple of weeks ago, nine medical specialty societies released a list of 45 medical tests and procedures they believed are significantly overused. On the heels of this announcement was a conference on “Avoiding Avoidable Care” attended by about 150 experts, mostly physicians. I attended.

We spent two days discussing the reasons for and ethics of unnecessary medical care in the U.S. Instead of blaming others (such as patients or malpractice lawyers), the doctors at this conference mostly agreed that “If you’re looking for an explanation for medical care overuse — too many tests, procedures and prescriptions — follow the money.”

The amount of overuse was estimated to be around 30 percent of all medical care. We spend $2.7 trillion annually on medical care in the U.S. Thirty percent of a big number is still a big number, about $800 billion in this case. In our industrialized health care system, moving “product” is important, whether or not it is really necessary.

The World Health Organization reported earlier this month that the U.S. ranks poorly in our rate of premature births. Our rate of prematurity has risen around 30 percent since 1981. We are now on a par with Turkey, Kenya, Thailand and Honduras at about 12 percent. Canada, Australia and Europe all fare significantly better with rates around 7 percent.

The high U.S. rate is attributed to a variety of factors. Lack of prenatal care tied to poor health insurance coverage is prominent among them. Many of these premature births could be prevented, and have been in many other countries, through better primary care and inexpensive public health measures. Many in Congress are now trying to eliminate such programs — to save money.

The BDN recently reported that 750 people showed up last month in Machias for free dental care offered by volunteers. The lack of dental care in rural Washington County was attributed largely to economic barriers made worse by poor economic times, such as lack of dental insurance, and to diets filled with cheap “soda, sweets and junk food.”

But don’t worry, your health care dollars are at work in other ways. Documents released earlier this month by the Minnesota attorney general detailed the increasingly desperate tactics employed by hospitals as unpaid debts mount. They are attempting to collect money owed by patients seeking emergency care, sometimes by threatening denial of services. Accretive Health, the company employed by the hospitals to collect the bills, reported a $29.2 million profit last year. Accretive Health saw its stock decline 19 percent after the papers were released.

The real tragedy in these stories is that the dysfunction in each is mostly avoidable. They are all the result of applying the principles of business and the techniques of industrialization to health care, where they don’t belong.

During the past several decades, clinical decision-making, from lab tests to pharmaceutical prescribing to procedures (including some highly invasive ones), have become subject to “market forces.” Most Maine doctors are now employed by large corporations that hold them to “productivity (profit) targets,” achieved mainly by ordering tests and procedures, in order to meet “business objectives.”

The result has been an explosion of health care services and costs for those who can pay. We as a nation now spend twice as much as other countries that provide health care for all their people, and with better results, at about half the cost.

Ballooning health care costs are crowding out public health and prevention measures, education, infrastructure and public safety. They have contributed in a major way to job-lock, stagnation of wages and declining health insurance protection (think MaineCare) for all but the most well-off.

While the federal health reform law was a remarkable political accomplishment and makes some important but limited progress, it will fall far short of getting the job done.

Real reform has to occur in three phases. First, replace our employment-based, for-profit health insurance system with a single nonprofit, publicly financed system — everyone in, nobody out. Second, remove economic incentives from clinical decision-making. Third, establish firm and effective budgetary limits on all aspects of health care that apply fairly to everybody. Finally, return the culture of health care to one of maintaining health and healing illness, and away from money-driven medicine.

Given the gridlock in Congress, I don’t expect to see such changes coming from Washington. But we in Maine can do it ourselves. All it takes is the will.

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/2012/05/17/health/the-ills-of-money-driven-medicine/

GAO on the Small Employer Health Insurance Tax Credit

Small Employer Health Tax Credit: Factors Contributing to Low Use and Complexity

GAO (Government Accountability Office)
May 14, 2012
Fewer small employers claimed the Small Employer Health Insurance Tax Credit in tax year 2010 than were estimated to be eligible. While 170,300 small employers claimed it, estimates of the eligible pool by government agencies and small business advocacy groups ranged from 1.4 million to 4 million. The cost of credits claimed was $468 million. Most claims were limited to partial rather than full percentage credits (35 percent for small businesses) because of the average wage or full-time equivalent (FTE) requirements. 28,100 employers claimed the full credit percentage. In addition, 30 percent of claims had the base premium limited by the state premium average.
One factor limiting the credit’s use is that most very small employers, 83 percent by one estimate, do not offer health insurance. According to employer representatives, tax preparers, and insurance brokers that GAO met with, the credit was not large enough to incentivize employers to begin offering insurance. Complex rules on FTEs and average wages also limited use. In addition, tax preparer groups GAO met with generally said the time needed to calculate the credit deterred claims. Options to address these factors, such as expanded eligibility requirements, have trade-offs, including less precise targeting of employers and higher costs to the Federal government.
http://www.gao.gov/assets/600/590832.pdf

One of the benefits of the Affordable Care Act is the tax credits offered to small businesses to help them obtain health insurance coverage for their employees. This evaluation by the GAO shows that, in 2010, 83 percent of small businesses eligible for the full credit did not even offer health insurance.
According to the report, “small employers do not likely view the credit as a big enough incentive to begin offering health insurance and to make a credit claim, according to employer representatives, tax preparers, and insurance brokers we met with.”
Though the complexity of the rules and the modest amount of the credits are cited as causes for the low participation rates, the fundamental flaw is that this program was designed to comply with our fragmented, dysfunctional system of financing health care – a model that will always fall short of reform goals.
Instead of trying to patch our fragmented program of private plans and pubic programs, we need to replace it with a single payer national health program – an improved Medicare for all.

Private insurers blame health care prices

Health Care Cost and Utilization Report: 2010

Health Care Cost Institute
May 2012

The Health Care Cost Institute (HCCI) was created in September 2011 to provide comprehensive data on health care costs and promote independent, nonpartisan research and analysis on the causes of the rise in U.S. health spending.

HCCI’s research activities are based on de-identified data voluntarily provided by Aetna, Humana, Kaiser Permanente, and UnitedHealthcare, four of the nation’s largest insurers.

The 2010 HCCI Health Care Cost and Utilization Report is the first report of its kind to track changes in expenditures and utilization of health care services by those younger than 65 covered by employer sponsored, private health insurance (ESI).

$4,255 –
Average annual per capita health care spending for beneficiaries younger than 65 and covered by employer-sponsored group insurance in 2010.

1.6% & 3.3% –
The consumer price index (CPI-U), a measure of price inflation, and the growth rate of average per capita spending on group ESI beneficiaries younger than 65 (2009-2010). Per capita spending outpaced overall price inflation in 2010.

2.6% & 7.1% –
Growth rate of estimated per capita health care spending by insurers and beneficiaries, respectively, between 2009 and 2010.

Summary of the Executive Summary

We find continued growth in per capita and estimated aggregate health care spending in this population, although that growth is less than 4 percent. This is consistent with the Centers for Medicare & Medicaid Services’ findings regarding national health expenditures. Patients’ out-of-pocket share of prices paid went up, although the cost-sharing rate on a per capita basis (including beneficiaries who did not use services) did not change much. Prices increased across all categories of service, with outpatient services experiencing the fastest growth. Unlike other recent reports on health care spending, we find that the increased spending is mostly due to unit price increases rather than changes in the quantity or intensity of services.

http://www.healthcostinstitute.org/files/HCCI_HCCUR2010.pdf

And…

S&P Healthcare Economic Indices

March 2012 Update

7.84% – S&P Healthcare Economic Commercial Index
2.41% – S&P Healthcare Economic Medicare Index

http://www.standardandpoors.com/indices/sp-healthcare-economic-indices/en/us/?indexId=sp-healthcare-economic-indices

Comment:

By Don McCanne, MD

Until now, much of our information on health care costs has been obtained from government sources – especially Medicare and Census data. The Health Care Cost Institute is an effort on the part of the private insurance industry to share their data in an effort to improve research and analysis on the causes of the rise in U.S. health care spending.

Cooperating in this effort are Aetna, Humana, Kaiser Permanente, and UnitedHealthcare. Conspicuously absent are Cigna, and especially WellPoint.

Many reasons are given for our very high health care costs, but this study adds to the evidence that price increases are the most important factor (except, of course, for the administrative waste that is usually ignored in studies like this). The excess increase in prices is a particularly relevant observation since this study was limited to individuals under 65 with employer-sponsored, private health insurance.

This report establishes beyond any doubt that the nation’s largest private insurers have been ineffective in controlling health care prices (not to mention generating more administrative waste). In spite of the contracts that the private insurers have with health care providers, health care price increases continue to greatly exceed the rate of inflation. Also, the most recent S&P Healthcare Indices confirm, once again, that our government Medicare program has been far more effective in controlling per capita health care costs than have the private commercial insurers.

All other nations control health care prices. Medicare controls health care prices. Only our private insurers have been incompetent in slowing price escalation. This is yet more evidence that private insurer intermediaries functioning relatively autonomously in the health care marketplace are ineffective in bringing us better pricing of health care products and services. This is a job for government, not the marketplace.

We are often accused of being unfairly critical of the private insurers since it is not their fault that health care prices are so high. Do we really care whether or not it is their fault? Prices are high, and they haven’t helped. They are a profoundly expensive administrative industry. We should continue to waste our vast sums on their ineffective model of price containment?

Look at the growth rates of per capita health spending that they report in this study of their own industry. The spending by the insurers increased at a rate of 2.6%, a feat that they were able to accomplish partly by increasing beneficiaries costs by 7.1%! Is that the kind of assistance that we need from this industry?

It’s time to throw them out of the Temple (a biblical proxy for all religious and secular moralists).

The smug 800-pound gorilla

By Toni Vafi
St. Louis Post-Dispatch, May 20, 2012

Regarding “Single-payer is the key” (May 16): From the inequities and insufficiencies in care to medical bankruptcies, Dr. Ed Weisbart reminds us of the millions of Americans suffering and dying for lack of health care. Those of us using this system are reminded of our own precarious position each time we seek medical care. It seems strange that our lawmakers and politicians fail to see the difficulties described in this Dr. Weisbart’s commentary and experienced by all of us.

The smug 800-pound gorilla — the health insurance industry — sitting in the center of the room gobbles up about 30 cents of each health care dollar. While it provides nothing in actual health care, it spends a lot time searching patient histories for policy loopholes that enable it to deny care. This is known as “obligation to stockholders,” my friend. Politicians smoothly refer to our health system as “the best in the world” but blandly ignore the gleeful gorilla victoriously surveying the scenes of destruction.

Isn’t it time for policymakers to grasp the cruelty of the present health care reimbursement system and transform it so that needed health care can come before obligation to stockholders? Isn’t it time for politicians to realize that the electorate no longer believes their commentary on our health care system? Isn’t it time for us to pay more attention to the Dr. Weisbarts of the world? I believe it is.

Toni Vafi resides in Webster Groves, Mo.

http://www.stltoday.com/news/opinion/mailbag/letters-to-the-editor-may/article_175005f0-1d18-5a5c-aba8-36034ebd5c60.html#ixzz1vW8D6Ftt

Patients go bankrupt as medical costs soar

By Colorado Public News and Erika Gonzalez
KUNC Colorado Public News (NPR), May 21, 2012

In 2008, Kimberly Fague was diagnosed with organ failure. Plagued by nausea, she lost a third of her body weight. She suffered from confusion and constant fatigue. Her liver and surrounding organs swelled to the point that she developed a hernia.

Her illness also took a financial toll. Too sick to work, Fague was forced to retire from her position at the Federal Bureau of Prisons after 18 years with the agency. And despite having government health insurance, she was forced to file for bankruptcy in 2010, after racking up $15,000 in medical debt.

“The bulk of it was for hospital stays, but there were also out-of-pocket expenses for procedures, outpatient surgeries, medications. It was very difficult,” said the Denver resident.

Two years later, Fague is still struggling to pay off medical bills. Disabled and still a few months away from qualifying for Medicare, Fague says many of her debts are in collections.

“The whole situation is not easy,” Fague said. “The phone calls start at 8 a.m. and they never stop.”

Some policy experts say Fague’s story is far from unique. Harvard University researchers and medical doctors David Himmelstein and Steffie Woolhandler found that medical problems contributed to more than 60 percent of all bankruptcies in 2007.

Another analysis, performed by Northwestern University’s Kellogg School of Management, puts the figure much lower, at 17 percent. The U.S. Department of Justice also examined 5,203 bankruptcy cases filed between 2000 and 2002 and found that of those reporting medical debts, those debts accounted for 13 percent of total unsecured debt.

While the contrasting data shows that it’s difficult to determine exactly how many Americans fall into bankruptcy because of mounting medical expenses, it’s clear that consumers are drowning in medical debt.

A 2007 survey by the Commonwealth Fund, a private foundation that supports independent research on healthcare issues, found that 41 percent of working-age Americans – 72 million people – have medical bill problems or are paying off medical debt. That figure is up from 34 percent in 2005. If the number of elderly adults who are dealing with the same issues are included, the total rises to 79 million.

“We do hear from a number of consumers here who have struggled with that issue,” said Serena Woods, director of strategic engagement for the Colorado Consumer Health Initiative.

CCHI does not track statistics on how many bankruptcies in Colorado stem from medical debt. State agencies also don’t have any figures on how large the problem might be on a statewide level.

But the feedback that CCHI received from consumers facing big medical bills led the organization to successfully push for a law this year limiting hospital charges to low-income uninsured patients and requires hospitals to offer a payment plan to eligible patients.

“Uninsured patients don’t have negotiating power like insured people do, so their starting price is often higher,” said Woods.

The Commonwealth Fund reports that problems with medical bills are most prevalent among uninsured adults. Of adults ages 19 to 64 who were uninsured, 60 percent said they had medical problems or accrued medical debt in 2010. That compares to 51 percent in 2005.

While some expect health care reform to improve the situation, Harvard’s Woolhandler says that the coverage mandated under the Affordable Care Act is too skimpy to provide adequate protection in the event of a major illness.

“Many people will go from being completely uninsured to being woefully underinsured and being underinsured still leaves you vulnerable to bankruptcy,” said Woolhandler.

She notes that more than three-quarters of the filers in her study were insured at the start of the bankrupting illness and most were solidly middle class – homeowners with college degrees. Still, out-of-pocket expenses for high co-payments and deductibles put them over the edge.

Fague knows that scenario too well.  She faced co-payments of as much as $300 for some medications, and spent $600 alone on gas driving to medical appointments. While the caps proposed in the bill wouldn’t apply to Fague because she has insurance, she testified in favor of the measure, hoping to gain better transparency in the billing process.

“The information about (payment programs) is not there, whether for the destitute or someone who has insurance,” she said.

Woolhandler contends that a single-payer system with full coverage is the best weapon to prevent more medical-related bankruptcies. A single-payer system is one in which a single entity – usually a government or quasi-governmental agency – funds the delivery of health care.

“Only single-payer, nonprofit national health insurance can give families the comprehensive coverage they need to be protected from medical bankruptcy,” said Woolhandler, co-founder of Physicians for a National Health Program, an organization comprised of 18,000 health care providers who support single-payer national health insurance.

Woolhandler points to Canada, where she says medical bankruptcies are rare because the majority of costs associated with treating medical illnesses are covered. Medicare recipients also struggle less with medical debt than their younger counterparts. Just 19 percent of adults over 65 reported any medical bill problems or debt, according to the Commonwealth Fund.

The Medical Bankruptcy Fairness Act of 2009, which stalled out in Congress a few years ago, presented another solution. The act would have provided special protections to debtors whose filings were caused by medical expenses.

For her part, Fague says she just wishes that the hospitals where she received treatment had been more flexible and willing to work with her, based on the costs involved in treating her illness. Despite the bankruptcy filing and tapping retirement savings to pay off medical bills, she still considers herself lucky.

“I am in a better situation than most out there because my insurance covers quite a bit,” Fague said. “Somebody without this good of a plan could be in debt easily three times the amount I am.”

http://www.kunc.org/post/patients-go-bankrupt-medical-costs-soar

WellPoint critic, 88, leads docs' crusade for Medicare for all

By Dan Carpenter
The Indianapolis Star, May 18, 2012

He was personal physician to the Rev. Martin Luther King Jr. and future President Barack Obama when they were in Chicago.

He fought to end racial segregation in that city’s hospitals in the 1950s and 1960s.

He ministered to civil rights marchers in the dangerous Deep South as head of an interracial doctors’ group, the Medical Committee for Human Rights, whose efforts paved the way to Medicare.

Quentin Young, M.D., has devoted his retirement, after 61 years of practice, to the fight for national health insurance — Medicare for all. On Wednesday, he stood in brilliant sunshine on Monument Circle facing the fortress of his greatest adversary.

“We’re for single payer. It just makes sense, economically, medically. And we’re optimistic,” the 88-year-old activist said as he waved toward the WellPoint headquarters. “But we’re really small compared to our opponent.”

That depends. The protest staged at WellPoint’s annual shareholders’ meeting by Hoosiers for a Commonsense Health Plan and the Chicago-based Physicians for a National Health Program was aimed at huge money, reaped in profits and spent on lobbying and campaigns against health care reform by the nation’s second-largest private insurer.

Yet the single-payer side can point to polls showing wide support by Americans in general and physicians in particular. Young and his fellow leaders, Drs. Robert Stone of Bloomington and Garrett Adams of Louisville, wore their examining coats to illustrate the point that doctors feel walled off from patients by insurance companies and are having Peter Finch “Network” moments.

Young, who is national coordinator of Physicians for a National Health Program, can remember when the profession was a lot more conservative than that. From his long perspective, popular sentiment will overcome concentrated power just as it did with race and gender equality.

Whether or not the Affordable Care Act passes its Supreme Court test, he and his compatriots said, America’s for-profit system, costliest in the world and less effective than dozens of others, is unsustainable. It leaves 50 million Americans uninsured, and the advocates say 50,000 of those die every year for lack of access.

“The corporate model seeks to maximize return on investment,” Young said. “This made America great, in many industries. You can’t apply it to health care. You make money on health care by getting rid of sick people.”

They won’t get rid of Quentin Young any time soon if his personal prognosis holds up. His parents each lived to be 98, and his quick smile and full head of gray hair bespeak a man who could pester WellPoint and Congress another decade and then some.

“I quit practice four years ago after 61 years and asked myself what was I going to do with the rest of my life,” he said. “I decided to work for national health care. I don’t know how useful I am, but I feel good about it.”

Carpenter is Star op-ed columnist.

Correction: Dr. Young’s partner in his Hyde Park practice, Dr. David Scheiner, was Obama’s personal physician.

http://www.indystar.com/article/20120520/OPINION05/205200301/

WellPoint critic, 88, leads docs’ crusade for Medicare for all

By Dan Carpenter
The Indianapolis Star, May 18, 2012

He was personal physician to the Rev. Martin Luther King Jr. and future President Barack Obama when they were in Chicago.

He fought to end racial segregation in that city’s hospitals in the 1950s and 1960s.

He ministered to civil rights marchers in the dangerous Deep South as head of an interracial doctors’ group, the Medical Committee for Human Rights, whose efforts paved the way to Medicare.

Quentin Young, M.D., has devoted his retirement, after 61 years of practice, to the fight for national health insurance — Medicare for all. On Wednesday, he stood in brilliant sunshine on Monument Circle facing the fortress of his greatest adversary.

“We’re for single payer. It just makes sense, economically, medically. And we’re optimistic,” the 88-year-old activist said as he waved toward the WellPoint headquarters. “But we’re really small compared to our opponent.”

That depends. The protest staged at WellPoint’s annual shareholders’ meeting by Hoosiers for a Commonsense Health Plan and the Chicago-based Physicians for a National Health Program was aimed at huge money, reaped in profits and spent on lobbying and campaigns against health care reform by the nation’s second-largest private insurer.

Yet the single-payer side can point to polls showing wide support by Americans in general and physicians in particular. Young and his fellow leaders, Drs. Robert Stone of Bloomington and Garrett Adams of Louisville, wore their examining coats to illustrate the point that doctors feel walled off from patients by insurance companies and are having Peter Finch “Network” moments.

Young, who is national coordinator of Physicians for a National Health Program, can remember when the profession was a lot more conservative than that. From his long perspective, popular sentiment will overcome concentrated power just as it did with race and gender equality.

Whether or not the Affordable Care Act passes its Supreme Court test, he and his compatriots said, America’s for-profit system, costliest in the world and less effective than dozens of others, is unsustainable. It leaves 50 million Americans uninsured, and the advocates say 50,000 of those die every year for lack of access.

“The corporate model seeks to maximize return on investment,” Young said. “This made America great, in many industries. You can’t apply it to health care. You make money on health care by getting rid of sick people.”

They won’t get rid of Quentin Young any time soon if his personal prognosis holds up. His parents each lived to be 98, and his quick smile and full head of gray hair bespeak a man who could pester WellPoint and Congress another decade and then some.

“I quit practice four years ago after 61 years and asked myself what was I going to do with the rest of my life,” he said. “I decided to work for national health care. I don’t know how useful I am, but I feel good about it.”

Carpenter is Star op-ed columnist.

Correction: Dr. Young’s partner in his Hyde Park practice, Dr. David Scheiner, was Obama’s personal physician.

http://www.indystar.com/article/20120520/OPINION05/205200301/

Private insurers blame health care prices

Health Care Cost and Utilization Report: 2010

Health Care Cost Institute
May 2012
The Health Care Cost Institute (HCCI) was created in September 2011 to provide comprehensive data on health care costs and promote independent, nonpartisan research and analysis on the causes of the rise in U.S. health spending.
HCCI’s research activities are based on de-identified data voluntarily provided by Aetna, Humana, Kaiser Permanente, and UnitedHealthcare, four of the nation’s largest insurers.
The 2010 HCCI Health Care Cost and Utilization Report is the first report of its kind to track changes in expenditures and utilization of health care services by those younger than 65 covered by employer sponsored, private health insurance (ESI).
$4,255 –
Average annual per capita health care spending for beneficiaries younger than 65 and covered by employer-sponsored group insurance in 2010.
1.6% & 3.3% –
The consumer price index (CPI-U), a measure of price inflation, and the growth rate of average per capita spending on group ESI beneficiaries younger than 65 (2009-2010). Per capita spending outpaced overall price inflation in 2010.
2.6% & 7.1% –
Growth rate of estimated per capita health care spending by insurers and beneficiaries, respectively, between 2009 and 2010.
Summary of the Executive Summary
We find continued growth in per capita and estimated aggregate health care spending in this population, although that growth is less than 4 percent. This is consistent with the Centers for Medicare & Medicaid Services’ findings regarding national health expenditures. Patients’ out-of-pocket share of prices paid went up, although the cost-sharing rate on a per capita basis (including beneficiaries who did not use services) did not change much. Prices increased across all categories of service, with outpatient services experiencing the fastest growth. Unlike other recent reports on health care spending, we find that the increased spending is mostly due to unit price increases rather than changes in the quantity or intensity of services.
http://www.healthcostinstitute.org/files/HCCI_HCCUR2010.pdf

And…

S&P Healthcare Economic Indices

March 2012 Update
7.84% – S&P Healthcare Economic Commercial Index
2.41% – S&P Healthcare Economic Medicare Index
http://www.standardandpoors.com/indices/sp-healthcare-economic-indices/en/us/?indexId=sp-healthcare-economic-indices

Until now, much of our information on health care costs has been obtained from government sources – especially Medicare and Census data. The Health Care Cost Institute is an effort on the part of the private insurance industry to share their data in an effort to improve research and analysis on the causes of the rise in U.S. health care spending.
Cooperating in this effort are Aetna, Humana, Kaiser Permanente, and UnitedHealthcare. Conspicuously absent are Cigna, and especially WellPoint.
Many reasons are given for our very high health care costs, but this study adds to the evidence that price increases are the most important factor (except, of course, for the administrative waste that is usually ignored in studies like this). The excess increase in prices is a particularly relevant observation since this study was limited to individuals under 65 with employer-sponsored, private health insurance.
This report establishes beyond any doubt that the nation’s largest private insurers have been ineffective in controlling health care prices (not to mention generating more administrative waste). In spite of the contracts that the private insurers have with health care providers, health care price increases continue to greatly exceed the rate of inflation. Also, the most recent S&P Healthcare Indices confirm, once again, that our government Medicare program has been far more effective in controlling per capita health care costs than have the private commercial insurers.
All other nations control health care prices. Medicare controls health care prices. Only our private insurers have been incompetent in slowing price escalation. This is yet more evidence that private insurer intermediaries functioning relatively autonomously in the health care marketplace are ineffective in bringing us better pricing of health care products and services. This is a job for government, not the marketplace.
We are often accused of being unfairly critical of the private insurers since it is not their fault that health care prices are so high. Do we really care whether or not it is their fault? Prices are high, and they haven’t helped. They are a profoundly expensive administrative industry. We should continue to waste our vast sums on their ineffective model of price containment?
Look at the growth rates of per capita health spending that they report in this study of their own industry. The spending by the insurers increased at a rate of 2.6%, a feat that they were able to accomplish partly by increasing beneficiaries costs by 7.1%! Is that the kind of assistance that we need from this industry?
It’s time to throw them out of the Temple (a biblical proxy for all religious and secular moralists).