PNHP

Drug sales reps now pushing hospitals

Drug sales reps now pushing hospitals

Hospitals Adopt Drug Industry Sales Strategy

By Phil Galewitz
Kaiser Health News, December 13, 2011

The University of Chicago Medical Center is one of a growing number of hospitals nationwide hiring former drug and device sales representatives to visit doctors’ offices to persuade them to use their services over competing facilities.

In visits that can last five to 20 minutes, the reps may try to win doctors’ loyalty by helping them get better times on operating room schedules or easier patient referrals to hospital-based specialists. The sales reps can also carry messages back to the hospital, like a doctor’s request for a new medical device to be available in surgery.

While hospitals have always tried to woo doctors to refer patients to them, the institutions are growing more direct in their efforts. The hospitals mine data to see which doctors have the most profitable, well-insured patients, and then they assign those doctors to a sales rep.

HCA Inc., the nation’s largest for-profit hospital chain, has at least 150 employees who make physician visits – or about one per hospital, said spokesman Ed Fishbough.

Convinced the sales-call strategy is fueling higher admissions, Tenet Healthcare Corp., the nation’s third largest for-profit hospital chain, has doubled its sales force in the past two years. The company now has 152 “physician liaisons” at its 49 hospitals, most of which are in California, Texas and Florida.

About two-thirds of Tenet’s liaisons are former drug and device sales reps, and they can make tens of thousands of dollars in bonuses if doctors increase their referrals to the hospitals. “These people are really good and really assertive and very sophisticated,” said Stephen Newman, Tenet’s chief operating officer.

http://www.kaiserhealthnews.org/stories/2011/december/14/hospitals-adopt-drug-industry-sales-strategy.aspx?referrer=search

The for-profit hospital chains – HCA and Tenet – both infamous for prior ethical lapses, have instituted tarnished sales programs that are now being adopted by others, including the not-for-profit University of Chicago Medical Center. They are using “assertive” former pharmaceutical and medical device sales reps to siphon off the most profitable and best insured patients, by convincing physicians to change their hospital referral patterns.

This is not about making the best use of a region’s health care resources. This is about hospitals cherry picking the most lucrative physicians and their patients, while making other competing hospitals, which are often safety-net institutions, the victims of adverse selection. We are already witnessing the closure of some of these institutions because of the inability to meet their costs.

This strategy is working. Sales calls are fueling higher admissions. What does this say about the physicians who are complicit in this activity? Can we really expect them to support altruistic policies in support of more equitable health care in the community at large, when they are being offered lucrative opportunities to practice in a more physician-friendly environment?

Under a well designed single payer system, capital improvements would be based on regional planning and budgeted separately, providing the facilities and equipment appropriate for the needs of the community. Hospitals would be placed on global budgets, providing enough financial resources to fulfill their mission of health care. Passive investors would be removed by eliminating for-profit ownership of hospitals. This would change the hospitals’ primary mission of making the greatest profit that the market will bear, to one of simply serving the health care needs of the community.

A comment from a recent Quote of the Day on the social consequences of segregation of the affluent (Nov. 25) seems to be very appropriate here. I wrote, “As the more affluent members of our society continue to concentrate themselves in their upscale neighborhoods, they take our resources with them, including some of the best of our health care services. Not only do they leave behind fewer resources for low- and moderate-income families, they also leave behind the political will to do something about it.”

PolitiFact's 2011 Lie of the Year

Dems' 'Mediscare' a dubious winner

By Angie Drobnic Holan and Bill Adair
Politico, December 20, 2011

Republicans muscled a budget through the House of Representatives in April that they said would take an important step toward reducing the federal deficit. Introduced by Rep. Paul Ryan of Wisconsin, the plan kept Medicare intact for people 55 or older, but dramatically changed the program for everyone else by privatizing it and providing government subsidies. Democrats pounced.

• Just four days after the party-line vote, the Democratic Congressional Campaign Committee released a Web ad, saying seniors will have to pay $12,500 more for health care “because Republicans voted to end Medicare.”

• Rep. Steve Israel of New York, chairman of the DCCC, appeared on cable news shows and declared that Republicans voted to “terminate Medicare.”

• A Web video from the Agenda Project, a liberal group, said the Ryan plan would leave the country “without Medicare” and showed a Ryan look-alike pushing an old woman in a wheelchair off a cliff.

• And just last month, House Minority Leader Nancy Pelosi sent a fundraising appeal that read, “House Republicans’ vote to end Medicare is a shameful act of betrayal.”

PolitiFact debunked the Medicare charge in nine separate fact-checks rated False or Pants on Fire, most often in attacks leveled against Republican House members.

Now, PolitiFact has chosen the Democrats’ claim as the 2011 Lie of the Year.

At times, Democrats and liberal groups were careful to characterize the Republican plan more accurately. Another claim in the ad from the Agenda Project said the plan would “privatize” Medicare, which received a Mostly True rating from PolitiFact. President Barack Obama also was more precise with his words, saying the Medicare proposal “would voucherize the program, and you potentially have senior citizens paying $6,000 more.”

With a few small tweaks to their attack lines, Democrats could have been factually correct, said Norman Ornstein, a resident scholar at the American Enterprise Institute, a conservative think tank. “I actually think there is no need to cut out the qualifiers and exaggerate,” he said.

http://www.politico.com/news/stories/1211/70705.html

And…

Long-Term Analysis of a Budget Proposal by Chairman Ryan

Congressional Budget Office
April 5, 2011

Among other changes, the proposal would convert the current Medicare program to a system under which beneficiaries received premium support payments – payments that would be used to help pay the premiums for a private health insurance policy and would grow over time with overall consumer prices. The change would apply to people turning 65 beginning in 2022; beneficiaries who turn 65 before then would remain in the traditional Medicare program, with the option of converting to the new system.

Under the proposal, most elderly people would pay more for their health care than they would pay under the current Medicare system. For a typical 65-year-old with average health spending enrolled in a plan with benefits similar to those currently provided by Medicare, CBO estimated the beneficiary’s spending on premiums and out-of-pocket expenditures as a share of a benchmark: what total health care spending would be if a private insurer covered the beneficiary. By 2030, the beneficiary’s spending would be 68 percent of that benchmark under the proposal.

http://www.cbo.gov/ftpdocs/121xx/doc12128/04-05-ryan_letter.pdf

Comment: 

By Don McCanne, MD

PolitiFact has chosen the Democrats’ claim that “Republicans voted to end Medicare” as 2011 Lie of the Year. The facts that led the Democrats to attack the Ryan Medicare plan that the House Republicans passed are not in dispute. PolitiFact’s lie accusation stemmed simply from the imprecision of the Democrats’ political rhetoric, and not from a dispute about the actual facts that Democrats were attempting to publicize through simple sound bites.

Under the Republican-approved proposal, the traditional Medicare program would be phased out totally and replaced with private insurance plans. Much of the financing responsibility would gradually shift to the Medicare beneficiaries. According to the Congressional Budget Office, by 2030 two-thirds of the costs would be paid by the beneficiary, and only one-third paid by the government. In almost no way does this resemble the Medicare program that we know.

Nevertheless this almost entirely new program would still carry the Medicare label. Thus PolitiFact can argue that, technically, Republicans did not vote to end Medicare. But substantively, the infrastructure of the traditional Medicare program would be ended with not much more than the label surviving.

Norman Ornstein makes the important point that the Democrats would have been factually correct had they made a few small tweaks to their attack lines (e.g., “end Medicare as we know it,” which was used effectively). That is a lesson that we all should learn.

Unfortunately, PolitiFact did knock its credibility down a notch on this one. Poorly crafted sounds bites are worthy of a demerit, but the shocking truth behind the crucial message that the Democrats were trying to convey certainly did not warrant the “Pants on Fire” 2011 Lie of the Year award. That award should have been bestowed instead upon the Republicans who claimed that they voted to save Medicare.

PolitiFact’s 2011 Lie of the Year

Dems’ ‘Mediscare’ a dubious winner

By Angie Drobnic Holan and Bill Adair
Politico, December 20, 2011

Republicans muscled a budget through the House of Representatives in April that they said would take an important step toward reducing the federal deficit. Introduced by Rep. Paul Ryan of Wisconsin, the plan kept Medicare intact for people 55 or older, but dramatically changed the program for everyone else by privatizing it and providing government subsidies. Democrats pounced.

• Just four days after the party-line vote, the Democratic Congressional Campaign Committee released a Web ad, saying seniors will have to pay $12,500 more for health care “because Republicans voted to end Medicare.”

• Rep. Steve Israel of New York, chairman of the DCCC, appeared on cable news shows and declared that Republicans voted to “terminate Medicare.”

• A Web video from the Agenda Project, a liberal group, said the Ryan plan would leave the country “without Medicare” and showed a Ryan look-alike pushing an old woman in a wheelchair off a cliff.

• And just last month, House Minority Leader Nancy Pelosi sent a fundraising appeal that read, “House Republicans’ vote to end Medicare is a shameful act of betrayal.”

PolitiFact debunked the Medicare charge in nine separate fact-checks rated False or Pants on Fire, most often in attacks leveled against Republican House members.

Now, PolitiFact has chosen the Democrats’ claim as the 2011 Lie of the Year.

At times, Democrats and liberal groups were careful to characterize the Republican plan more accurately. Another claim in the ad from the Agenda Project said the plan would “privatize” Medicare, which received a Mostly True rating from PolitiFact. President Barack Obama also was more precise with his words, saying the Medicare proposal “would voucherize the program, and you potentially have senior citizens paying $6,000 more.”

With a few small tweaks to their attack lines, Democrats could have been factually correct, said Norman Ornstein, a resident scholar at the American Enterprise Institute, a conservative think tank. “I actually think there is no need to cut out the qualifiers and exaggerate,” he said.

http://www.politico.com/news/stories/1211/70705.html

And…

Long-Term Analysis of a Budget Proposal by Chairman Ryan

Congressional Budget Office
April 5, 2011

Among other changes, the proposal would convert the current Medicare program to a system under which beneficiaries received premium support payments – payments that would be used to help pay the premiums for a private health insurance policy and would grow over time with overall consumer prices. The change would apply to people turning 65 beginning in 2022; beneficiaries who turn 65 before then would remain in the traditional Medicare program, with the option of converting to the new system.

Under the proposal, most elderly people would pay more for their health care than they would pay under the current Medicare system. For a typical 65-year-old with average health spending enrolled in a plan with benefits similar to those currently provided by Medicare, CBO estimated the beneficiary’s spending on premiums and out-of-pocket expenditures as a share of a benchmark: what total health care spending would be if a private insurer covered the beneficiary. By 2030, the beneficiary’s spending would be 68 percent of that benchmark under the proposal.

http://www.cbo.gov/ftpdocs/121xx/doc12128/04-05-ryan_letter.pdf

PolitiFact has chosen the Democrats’ claim that “Republicans voted to end Medicare” as 2011 Lie of the Year. The facts that led the Democrats to attack the Ryan Medicare plan that the House Republicans passed are not in dispute. PolitiFact’s lie accusation stemmed simply from the imprecision of the Democrats’ political rhetoric, and not from a dispute about the actual facts that Democrats were attempting to publicize through simple sound bites.

Under the Republican-approved proposal, the traditional Medicare program would be phased out totally and replaced with private insurance plans. Much of the financing responsibility would gradually shift to the Medicare beneficiaries. According to the Congressional Budget Office, by 2030 two-thirds of the costs would be paid by the beneficiary, and only one-third paid by the government. In almost no way does this resemble the Medicare program that we know.

Nevertheless this almost entirely new program would still carry the Medicare label. Thus PolitiFact can argue that, technically, Republicans did not vote to end Medicare. But substantively, the infrastructure of the traditional Medicare program would be ended with not much more than the label surviving.

Norman Ornstein makes the important point that the Democrats would have been factually correct had they made a few small tweaks to their attack lines (e.g., “end Medicare as we know it,” which was used effectively). That is a lesson that we all should learn.

Unfortunately, PolitiFact did knock its credibility down a notch on this one. Poorly crafted sounds bites are worthy of a demerit, but the shocking truth behind the crucial message that the Democrats were trying to convey certainly did not warrant the “Pants on Fire” 2011 Lie of the Year award. That award should have been bestowed instead upon the Republicans who claimed that they voted to save Medicare.

Theresa BrownGold: Painter of the under-insured

This article on unaffordable under-insurance was covered in a previous Quote of the Day (Dec. 8), but a new response posted on the In These Times website follows:

Health Reform Devolves Into ‘Unaffordable Under-Insurance’

By Roger Bybee
In These Times, December 7, 2011

Response by “Art As Social Inquiry”
19 Dec 2011

Thank you for this piece.  I draw similar conclusions from my informal research.  I am looking at how we access healthcare in the US by painting portraits and telling the stories of those who are using the system.  More recently, the portraits are of people who actually HAVE insurance but because they are under-insured, they are suffering great financial and physical hardships.  The great secret in the US is that millions of us are under-insured and don’t know it unless we suffer a medical catastrophe.  This secret will be exposed if the essential benefits package of the ACA is too skimpy. People will get sick, think they are insured and find that even with insurance medical bills will eat up their savings. And they will be very angry. I don’t know…this next difficult phase may be the crucial first step toward a single-payer system? The ACA will help many millions, but is it enough? The question will always be “Can a for-profit system for delivering medical care really see to the needs of a country’s greatest asset – it’s people?”

http://inthesetimes.com/working/entry/12348/health_reform_runs_into_unaffordable_under-insurance

“Art As Social Inquiry” is actually portrait painter Theresa BrownGold.

From her website:

Health Care in the United States

Art As Social Inquiry

This is a series of what will be 100-plus paintings depicting a cross-section of Americans. The titles of the paintings designate the kind of health insurance coverage or lack of coverage the sitters have. The goal is to paint a picture of the American health care system in the faces of our country’s citizens from the very best health coverage to the most horrific of circumstances resulting from a person’s lack of coverage. Who are we when it comes to health care? Let’s not be afraid to look at real people and be touched by their experiences – from the best to the worst – as we navigate this very big issue. There is no agenda but to ask, “What’s your experience? What are your thoughts on the subject?”

http://artassocialinquiry.org/projects/healthcare/

Comment: 

By Don McCanne, MD

We have long heard tragic stories of the uninsured, but now the under-insured are joining them with their sad tales. Theresa BrownGold’s series of portraits on Health Care in the United States tells us stories of a cross section of Americans, while relating them to their insurance status.

You might take a moment to look at two extremes in her series. First click on the third portrait in the eighth row – painted in a style that indicates that the person is no longer with us. Those of us who have been in the trenches certainly recognize the description as being all too typical of when the U.S. health care system fails us miserably.

The other portrait to click on is the politician in the seventh row on the left, with blue eyes and wearing a blue sweater pulled over an open-collar white shirt. Again, many of us will recognize his description as being one of those power players who seem to be oblivious to the plight of those not well served by our health care system.

Everyone has a story, whether good or bad. We can thank Theresa BrownGold for giving us so many pictures, each worth a thousand words and more, motivating us to continue to do our best to see that all stories become good ones.

Theresa BrownGold: Painter of the under-insured

This article on unaffordable under-insurance was covered in a previous Quote of the Day (Dec. 8), but a new response posted on the In These Times website follows:

Health Reform Devolves Into ‘Unaffordable Under-Insurance’

By Roger Bybee
In These Times, December 7, 2011

Response by “Art As Social Inquiry”
19 Dec 2011

Thank you for this piece.  I draw similar conclusions from my informal research.  I am looking at how we access healthcare in the US by painting portraits and telling the stories of those who are using the system.  More recently, the portraits are of people who actually HAVE insurance but because they are under-insured, they are suffering great financial and physical hardships.  The great secret in the US is that millions of us are under-insured and don’t know it unless we suffer a medical catastrophe.  This secret will be exposed if the essential benefits package of the ACA is too skimpy. People will get sick, think they are insured and find that even with insurance medical bills will eat up their savings. And they will be very angry. I don’t know…this next difficult phase may be the crucial first step toward a single-payer system? The ACA will help many millions, but is it enough? The question will always be “Can a for-profit system for delivering medical care really see to the needs of a country’s greatest asset – it’s people?”

http://inthesetimes.com/working/entry/12348/health_reform_runs_into_unaffordable_under-insurance

“Art As Social Inquiry” is actually portrait painter Theresa BrownGold.

From her website:

Health Care in the United States

Art As Social Inquiry

This is a series of what will be 100-plus paintings depicting a cross-section of Americans. The titles of the paintings designate the kind of health insurance coverage or lack of coverage the sitters have. The goal is to paint a picture of the American health care system in the faces of our country’s citizens from the very best health coverage to the most horrific of circumstances resulting from a person’s lack of coverage. Who are we when it comes to health care? Let’s not be afraid to look at real people and be touched by their experiences – from the best to the worst – as we navigate this very big issue. There is no agenda but to ask, “What’s your experience? What are your thoughts on the subject?”

http://artassocialinquiry.org/projects/healthcare/

We have long heard tragic stories of the uninsured, but now the under-insured are joining them with their sad tales. Theresa BrownGold’s series of portraits on Health Care in the United States tells us stories of a cross section of Americans, while relating them to their insurance status.

You might take a moment to look at two extremes in her series. First click on the third portrait in the eighth row – painted in a style that indicates that the person is no longer with us. Those of us who have been in the trenches certainly recognize the description as being all too typical of when the U.S. health care system fails us miserably.

The other portrait to click on is the politician in the seventh row on the left, with blue eyes and wearing a blue sweater pulled over an open-collar white shirt. Again, many of us will recognize his description as being one of those power players who seem to be oblivious to the plight of those not well served by our health care system.

Everyone has a story, whether good or bad. We can thank Theresa BrownGold for giving us so many pictures, each worth a thousand words and more, motivating us to continue to do our best to see that all stories become good ones.

Is expensive health care a social determinant of health?

Health and social services expenditures: associations with health outcomes

By Elizabeth H Bradley, Benjamin R Elkins, Jeph Herrin, Brian Elbel
BMJ Quality & Safety, March 29, 2011

Abstract

Objective
To examine variations in health service expenditures and social services expenditures across Organisation for Economic Co-operation and Development (OECD) countries and assess their association with five population-level health outcomes.

Design
A pooled, cross-sectional analysis using data from the 2009 release of the OECD Health Data 2009 Statistics and Indicators and OECD Social Expenditure Database.

Setting
OECD countries (n=30) from 1995 to 2005.

Main outcomes
Life expectancy at birth, infant mortality, low birth weight, maternal mortality and potential years of life lost.

Results
Health services expenditures adjusted for gross domestic product (GDP) per capita were significantly associated with better health outcomes in only two of five health indicators; social services expenditures adjusted for GDP were significantly associated with better health outcomes in three of five indicators. The ratio of social expenditures to health expenditures was significantly associated with better outcomes in infant mortality, life expectancy and increased potential life years lost, after adjusting for the level of health expenditures and GDP.

Conclusion
Attention to broader domains of social policy may be helpful in accomplishing improvements in health envisioned by advocates of healthcare reform.

http://qualitysafety.bmj.com/content/20/10/826.abstract

And…

To Fix Health, Help the Poor

By Elizabeth H. Bradley and Lauren Taylor
The New York Times, December 8, 2011

IT’S common knowledge that the United States spends more than any other country on health care but still ranks in the bottom half of industrialized countries in outcomes like life expectancy and infant mortality. Why are these other countries beating us if we spend so much more? The truth is that we may not be spending more – it all depends on what you count.

In our comparative study of 30 industrialized countries, published earlier this year in the journal BMJ Quality and Safety, we broadened the scope of traditional health care industry analyses to include spending on social services, like rent subsidies, employment-training programs, unemployment benefits, old-age pensions, family support and other services that can extend and improve life.

We studied 10 years’ worth of data and found that if you counted the combined investment in health care and social services, the United States no longer spent the most money – far from it. In 2005, for example, the United States devoted only 29 percent of gross domestic product to health and social services combined, while countries like Sweden, France, the Netherlands, Belgium and Denmark dedicated 33 percent to 38 percent of their G.D.P. to the combination. We came in 10th.

What’s more, America is one of only three industrialized countries to spend the majority of its health and social services budget on health care itself. For every dollar we spend on health care, we spend an additional 90 cents on social services. In our peer countries, for every dollar spent on health care, an additional $2 is spent on social services. So not only are we spending less, we’re allocating our resources disproportionately on health care.

Unfortunately, instead of learning from countries like Sweden and France, we prefer the frantic scramble to recover money from one part of the health care system only to reallocate it toward retreads of previously failed reforms. We pretend that the fresh schemes are innovative, but they are usually long on promises, short on details and often marked with an annoying acronym: H.M.O., F.S.A., A.C.O. and so forth.

It’s time to think more broadly about where to find leverage for achieving a healthier society. One way would be to invest more heavily in social services. This may be difficult for many Americans to swallow as it suggests a potentially expanded role for government.

(Elizabeth H. Bradley is professor of public health at Yale and faculty director of its Global Health Leadership Institute, where Lauren Taylor is a program manager.)

http://www.nytimes.com/2011/12/09/opinion/to-fix-health-care-help-the-poor.html

And…

Letters, The New York Times, December 18, 2011

To the Editor:

Re “To Fix Health, Help the Poor” (Op-Ed, Dec. 9):

Although Elizabeth H. Bradley and Lauren Taylor never use the words “social determinants of health,” they are illustrating the profound truth that it is the circumstances in which people live and work that determine the health status of any population, in any nation.

Along with that come some counterintuitive truths. First, that health care, while crucial to individual survival, makes at best a modest contribution to population health.

Second, that most social and economic policies are in effect health policies because of their impact on those social determinants. Even a perfect American health care system (let alone what we have now) cannot by itself fix our abysmal maldistribution of health.

When my colleagues and I worked at the nation’s first community health center in the Mississippi Delta in the 1960s, our doctors saved many lives and eased much suffering.

We repaired collapsing plantation shacks. We built sanitary privies. In the face of devastating poverty, unemployment and malnutrition, we organized a cooperative farm where residents grew tons of vegetables, and we found pathways to jobs and education.

Those interventions did far more to save lives, ease suffering and improve our target population’s health than our medical care did.

H. JACK GEIGER
Brooklyn, Dec. 9, 2011

(The writer is professor emeritus of community medicine at the City University of New York Medical School.)

http://www.nytimes.com/2011/12/19/opinion/the-road-from-poverty-to-health.html?ref=opinion

Comment: 

By Don McCanne, MD

Opponents of health care reform frequently object to the use of statistics such as our lower life expectancy and greater infant mortality, arguing that these represent socioeconomic factors and therefore are not due to deficiencies in our health care system.

There are two problems with their position. One is that this allows them to gloss over the severe deficiencies in our overly expensive but inadequate health care system. The other is that they offer no remedies that might improve the social determinants of health, implying that misery and poverty are a simply matter of personal choice.

As this report shows, “The ratio of social expenditures to health expenditures was significantly associated with better outcomes in infant mortality, life expectancy and increased potential life years lost, after adjusting for the level of health expenditures and GDP.”

The United States has distorted this ratio by spending so much on health care (much misdirected) while spending so little on social services.

We need to spend more money, but not on h
ealth care. We are already paying the health care delivery system enough, but we need to have a far more efficient financing system that improves the allocation of those payments.

Where we need to spend more money is on public social services, in the broadest sense of the term. The comment by Jack Geiger shows that it is not so much a matter of money as it is a matter of personal and societal dedication, supported by strong public policy.

We can make America a far better place for the least of us and for the rest of us as well. To accomplish that, we’re going to have to do better in promulgating the virtues of egalitarianism. We certainly could use more help from the One Percenters.

Is expensive health care a social determinant of health?

Health and social services expenditures: associations with health outcomes

By Elizabeth H Bradley, Benjamin R Elkins, Jeph Herrin, Brian Elbel
BMJ Quality & Safety, March 29, 2011

Abstract

Objective
To examine variations in health service expenditures and social services expenditures across Organisation for Economic Co-operation and Development (OECD) countries and assess their association with five population-level health outcomes.

Design
A pooled, cross-sectional analysis using data from the 2009 release of the OECD Health Data 2009 Statistics and Indicators and OECD Social Expenditure Database.

Setting
OECD countries (n=30) from 1995 to 2005.

Main outcomes
Life expectancy at birth, infant mortality, low birth weight, maternal mortality and potential years of life lost.

Results
Health services expenditures adjusted for gross domestic product (GDP) per capita were significantly associated with better health outcomes in only two of five health indicators; social services expenditures adjusted for GDP were significantly associated with better health outcomes in three of five indicators. The ratio of social expenditures to health expenditures was significantly associated with better outcomes in infant mortality, life expectancy and increased potential life years lost, after adjusting for the level of health expenditures and GDP.

Conclusion
Attention to broader domains of social policy may be helpful in accomplishing improvements in health envisioned by advocates of healthcare reform.

http://qualitysafety.bmj.com/content/20/10/826.abstract

And…

To Fix Health, Help the Poor

By Elizabeth H. Bradley and Lauren Taylor
The New York Times, December 8, 2011

IT’S common knowledge that the United States spends more than any other country on health care but still ranks in the bottom half of industrialized countries in outcomes like life expectancy and infant mortality. Why are these other countries beating us if we spend so much more? The truth is that we may not be spending more – it all depends on what you count.

In our comparative study of 30 industrialized countries, published earlier this year in the journal BMJ Quality and Safety, we broadened the scope of traditional health care industry analyses to include spending on social services, like rent subsidies, employment-training programs, unemployment benefits, old-age pensions, family support and other services that can extend and improve life.

We studied 10 years’ worth of data and found that if you counted the combined investment in health care and social services, the United States no longer spent the most money – far from it. In 2005, for example, the United States devoted only 29 percent of gross domestic product to health and social services combined, while countries like Sweden, France, the Netherlands, Belgium and Denmark dedicated 33 percent to 38 percent of their G.D.P. to the combination. We came in 10th.

What’s more, America is one of only three industrialized countries to spend the majority of its health and social services budget on health care itself. For every dollar we spend on health care, we spend an additional 90 cents on social services. In our peer countries, for every dollar spent on health care, an additional $2 is spent on social services. So not only are we spending less, we’re allocating our resources disproportionately on health care.

Unfortunately, instead of learning from countries like Sweden and France, we prefer the frantic scramble to recover money from one part of the health care system only to reallocate it toward retreads of previously failed reforms. We pretend that the fresh schemes are innovative, but they are usually long on promises, short on details and often marked with an annoying acronym: H.M.O., F.S.A., A.C.O. and so forth.

It’s time to think more broadly about where to find leverage for achieving a healthier society. One way would be to invest more heavily in social services. This may be difficult for many Americans to swallow as it suggests a potentially expanded role for government.

(Elizabeth H. Bradley is professor of public health at Yale and faculty director of its Global Health Leadership Institute, where Lauren Taylor is a program manager.)

http://www.nytimes.com/2011/12/09/opinion/to-fix-health-care-help-the-poor.html

And…

Letters, The New York Times, December 18, 2011

To the Editor:

Re “To Fix Health, Help the Poor” (Op-Ed, Dec. 9):

Although Elizabeth H. Bradley and Lauren Taylor never use the words “social determinants of health,” they are illustrating the profound truth that it is the circumstances in which people live and work that determine the health status of any population, in any nation.

Along with that come some counterintuitive truths. First, that health care, while crucial to individual survival, makes at best a modest contribution to population health.

Second, that most social and economic policies are in effect health policies because of their impact on those social determinants. Even a perfect American health care system (let alone what we have now) cannot by itself fix our abysmal maldistribution of health.

When my colleagues and I worked at the nation’s first community health center in the Mississippi Delta in the 1960s, our doctors saved many lives and eased much suffering.

We repaired collapsing plantation shacks. We built sanitary privies. In the face of devastating poverty, unemployment and malnutrition, we organized a cooperative farm where residents grew tons of vegetables, and we found pathways to jobs and education.

Those interventions did far more to save lives, ease suffering and improve our target population’s health than our medical care did.

H. JACK GEIGER
Brooklyn, Dec. 9, 2011

(The writer is professor emeritus of community medicine at the City University of New York Medical School.)

http://www.nytimes.com/2011/12/19/opinion/the-road-from-poverty-to-health.html?ref=opinion

Opponents of health care reform frequently object to the use of statistics such as our lower life expectancy and greater infant mortality, arguing that these represent socioeconomic factors and therefore are not due to deficiencies in our health care system.

There are two problems with their position. One is that this allows them to gloss over the severe deficiencies in our overly expensive but inadequate health care system. The other is that they offer no remedies that might improve the social determinants of health, implying that misery and poverty are a simply matter of personal choice.

As this report shows, “The ratio of social expenditures to health expenditures was significantly associated with better outcomes in infant mortality, life expectancy and increased potential life years lost, after adjusting for the level of health expenditures and GDP.”

The United States has distorted this ratio by spending so much on health care (much misdirected) while spending so little on social services.

We need to spend more money, but not on health care. We are already paying the health care delivery system enough, but we need to have a far more efficient financing system that improves the allocation of those payments.

Where we need to spend more money is on public social services, in the broadest sense of the term. The comment by Jack Geiger shows that it is not so much a matter of money as it is a matter of personal and societal dedication, supported by strong public policy.

We can make America a far better place for the least of us and for the rest of us as well. To accomplish that, we’re going to have to do better in promulgating the virtues of egalitarianism. We certainly could use more help from the One Percenters.

HHS punts the essential benefits decision to the private insurers!

Essential Health Benefits: HHS Informational Bulletin

U.S. Department of Health & Human Services
December 16, 2011

On December 16, 2011, the Department of Health and Human Services issued a bulletin outlining proposed policies that will give States more flexibility and freedom to implement the Affordable Care Act.

Intended Approach: Comprehensive and Flexible

HHS intends to propose that essential health benefits are defined using a benchmark approach. Under the Department’s intended approach announced today, states would have the flexibility to select a benchmark plan that reflects the scope of services offered by a “typical employer plan.” This approach would give states the flexibility to select a plan that would best meet the needs of their citizens.

States would choose one of the following benchmark health insurance plans:

* One of the three largest small group plans in the state by enrollment;
* One of the three largest state employee health plans by enrollment;
* One of the three largest federal employee health plan options by enrollment;
* The largest HMO plan offered in the state’s commercial market by enrollment.

If states choose not to select a benchmark, HHS intends to propose that the default benchmark will be the small group plan with the largest enrollment in the state.

The benefits and services included in the benchmark health insurance plan selected by the state would be the essential health benefits package. Plans could modify coverage within a benefit category so long as they do not reduce the value of coverage.

To prevent federal dollars going to state benefit mandates, the health reform law requires states to defray the cost of benefits required by state law in excess of essential health benefits for individuals enrolled in any plan offered through an Exchange.

These benchmarks are generally regulated by the state and would be subject to state mandates applicable to the small group market.  Thus, those mandates would be included in the state essential health benefits package if the state elected one of the three largest small group plans in that state as its benchmark.

This approach would provide maximum flexibility to states, employers and issuers while providing quality, comprehensive, coverage for consumers.

Coverage

Essential health benefits must include coverage of services and items in all 10 statutory categories. Based on our research, we believe that these benchmarks will cover most of the essential health benefits outlined by the Affordable Care Act. These categories include preventive care, emergency services, maternity care, hospital and physician services, and prescription drugs.

Allowing Plans Flexibility to Innovate and Consumers Greater Choice

To meet the EHB coverage standard, HHS intends to require that a health plan offer benefits that are “substantially equal” to the benchmark plan selected by the state and modified as necessary to reflect the 10 coverage categories. Health plans also would have flexibility to adjust benefits, including both the specific services covered and any quantitative limits, provided they continue to offer coverage for all 10 statutory EHB categories and the coverage has the same value.  Permitting flexibility will provide greater choice to consumers, promoting plan innovation through coverage and design options, while ensuring that plans providing EHBs offer a certain level of benefits.

Fact sheet:
http://www.healthcare.gov/news/factsheets/2011/12/essential-health-benefits12162011a.html

Essential Health Benefits Bulletin (15 pages):
http://cciio.cms.gov/resources/files/Files2/12162011/essential_health_benefits_bulletin.pdf

Comment: 

By Don McCanne, MD

It looks like Health and Human Services has decided that the new standard for health insurance to be offered under the Affordable Care Act will be the cheapest of the three largest small group plans offered in any given state. There will be no national standard. Although they would allow states more generous options other than the skimpy small group plans, with today’s concerns over high health care costs, the cheapest option certainly will be selected by the state stewards.

There is a requirement that 10 categories of health benefits must be included, but the specific services covered within each category will be determined by the insurers. The insurers will retain the flexibility to adjust both the specific services and the amount of those services (quantitative limits).  HHS claims that this benefits us by providing greater choice for consumers and by providing insurers with the opportunity to innovate. Why they should deem that to be beneficial is astonishing when considering that insurer innovation means having to choose between various plans that take away, to varying degrees, choices of providers, benefits, and amount of financial security.

The essential health benefits do not define the cost sharing features of the plans such as deductibles, copayments and coinsurance. Guidance on that will be forthcoming, but we already know that the least expensive plan will be the bronze plan with an actuarial value of 60 percent (the plan pays 60 percent of only the covered health care services). Again, because of our high insurance premiums, most people will select the cheapest actuarial-value plan.

Can you think of anything worse than having cash-starved states selecting the cheapest private plans with the most spartan selection of benefits allowable – benefits selected by the private insurance industry –  and offering those plans to struggling middle-income Americans who will be mandated to purchase these plans when many of them will not be able to afford even the bottom bronze plans in spite of the subsidies? And don’t even think about how they’re going to pay the high out-of-pocket expenses when they actually need health care.

Dissecting out each individual policy perhaps can make them easier to understand, but when you patch them together, just try to explain the resulting health care financing infrastructure to the average individual who just wants health care when needed. Most individuals may not be able to understand the complexities of health policy, but once they’ve been exposed to the new standard, they certainly will understand what is meant by UNAFFORDABLE UNDER-INSURANCE.

Try this thought experiment. Since the common defect in these Quote of the Day policy messages seems to be the dominance of the private insurers, try constructing a health care financing system without the private insurers being included. Wow! That was easy!

All we need now is to elect leaders who are willing to dismiss the insurers so that we can get on with building a system that works for all of us.

Advocates push for public health care

Want government-run single-payer system

By Andy Metzger, State House News Service
WWLP News, Channel 22 NBC, Dec. 15, 2011

BOSTON – Five years after redrawing the lines in the national health care debate, Beacon Hill is looking at new reforms, closely studying payment system plans to lower costs and examining a government controlled single-payer model.

“We will end up with a government option at some point. We will end up with a single-payer at some point, and wouldn’t it be wonderful if that point was now, and the place was Massachusetts?” said Sen. Dan Wolf (D-Harwich) at a Thursday afternoon legislative hearing.

Everyone who spoke at the nearly three-hour hearing was in favor of An Act Establishing Medicare for All in Massachusetts, but it has its detractors including the Pioneer Institute, which submitted written testimony arguing it would cause regulatory problems at the federal level and could create a “two-tiered medical system.”

Massachusetts made history in the 2006 health care reform signed by Gov. Mitt Romney, but single-payer advocates say that law fell short and blame it for a new host of problems.

“Ironically the growing intrusion of insurance companies was sort of kicked off by the passage of health care reform, which kind of emboldened them,” said Dr. Carroll Eastman, who said she left an administrative position in health care because the job was increasingly concerned with billing, rather than treating patients.

The cause for a single-payer health care system is not new, but it has some burgeoning support among doctors and nurses who are fed up with the demands of private insurance companies.

Dr. Leo Stollbach, a member of the Massachusetts Medical Society, said a recent survey showed that 41 percent of members support a single-payer system, up 7 percentage points since 2010. Another 23 percent support a broadly available public health insurance option, Stollbach said.

“At what point are we going to decide that we’re going to stop living in a Charles Dickens novel,” said Marisa DeFranco, a U.S. Senate Democratic candidate, at the Joint Committee on Health Care Financing Committee hearing. “Please do not play defense to Republicans on this.”

Single-payer health care has been a perennial issue on Beacon Hill. Despite some support over the years in the higher echelons of legislative leaders, the idea has never advanced.

The chief focus among legislative leaders and Gov. Deval Patrick is on the governor’s health reform bill and competing plans aimed at controlling escalating costs by altering the payment system to make it focus on the health of patients rather than how many services are provided.

Sen. Jamie Eldridge (D-Acton), who sponsored the single-payer legislation, asked the committee to pass a bill that “has elements of a single-payer” system.

Single-payer would be like MediCare for everyone, said supporters, creating a baseline of coverage that people could add to with private plans. Another option proposed by reformers is adding a public option, a government-run system that anyone could sign up for.

During the recent national debate on expanded health care, critics lambasted the idea of a public option, until it was eventually scrapped from the bill signed by President Barack Obama.

But supporters of single-payer said it would free up business by removing the requirement for business owners to provide healthcare to employees.

“The biggest single inhibitor, the biggest ball and chain around small business growth … is the cost and the complexity of health care,” said Wolf, who founded Cape Air about 24 years ago, a company that now employs more than 1,000 people.

On a macro level, the United States spends almost twice as much per capita on health care as Canada, which has a single-payer system, but Canada has a longer life expectancy, said Gerald Friedman, a professor of economics at UMass Amherst.

“We spend more to receive worse health care than virtually every other country,” Friedman said. “It’s just getting worse and worse.”

Meanwhile, Vermont has already reportedly passed a single-payer bill last March, though Sen. Richard Moore (D-Uxbridge) quipped that Vermont is also “the only state without a constitutional regulation to balance the budget.”

Moore, the committee co-chairman, gave few other clues about what the committee might be considering in its own legislation.

http://www.wwlp.com/dpp/news/massachusetts/advocates-push-for-public-health-care

Health Care Advocates, Providers Rally in Support of Single-Payer Health Care Bill

Local politicians get behind a single-payer health care option

By Jonathan Pickering
Stoneham.Patch.com, Dec. 21, 2011

Touting dramatic reductions in health care costs, improved access to health care for all residents, and a boost to local businesses, State Sen. Jamie Eldridge and State Rep. Jason Lewis testified in support of “An Act Establishing Medicare for All in Massachusetts,” a bill they have filed in the state legislature, at a legislative hearing at the State House last week.

Eldridge and Lewis were joined by dozens of health care advocates, physicians, employers, and employee union leaders who came out in support of the bill.

The bill, heard by the Joint Committee on Health Care Finance, would create a single payer health care system for Massachusetts: a universal public insurance plan covering all medically necessary care. This plan would function for residents under 65 much the way Medicare does for residents 65 and older, but without premiums or co-payments.

A similar plan is currently used successfully by many countries around the world and is in the process of being implemented in Vermont.

“I believe that health care is a basic human right, and we must do everything we can to ensure that every Massachusetts resident has access to quality, affordable care,” Lewis said. “We can alleviate the burden of escalating healthcare costs on families and small businesses by instituting a robust single-payer plan here in the Commonwealth.”

“If Massachusetts is serious about reducing health care costs for families, businesses and state and local governments, we need to stop tinkering at the edges of a broken system and enact a single-payer healthcare system. It’s the only reform that would truly reduce costs in a substantial way, eliminating medical debt and bankruptcies while guaranteeing access to quality, affordable health care as a right for all residents of the Commonwealth,” added Eldridge.

Economist Gerald Friedman, of UMass-Amherst, noted at the hearing that a single-payer system could reduce health care costs by nearly $13 billion a year (or 19%) in Massachusetts.

Even after expanding coverage to all currently uninsured Massachusetts residents, this would leave savings of over 17.6 percent of current expenditures. These dramatic savings come from eliminating much of the administrative costs incurred by insurers and healthcare providers in our current system. This is money paid by employers and employees in premiums that does not go toward paying for care.

Friedman also noted that, when added to significant administrative savings within companies, a single-payer system would enhance the competitiveness of Massachusetts businesses, potentially adding thousands of additional jobs to the state economy.

[Editor’s note: The information above was issued in a press statement from the Office of State Rep. Jason Lewis.]

http://stoneham.patch.com/articles/health-care-advocates-providers-rally-in-support-of-single-payer-healthcare-bill

HHS punts the essential benefits decision to the private insurers!

Essential Health Benefits: HHS Informational Bulletin

U.S. Department of Health & Human Services
December 16, 2011

On December 16, 2011, the Department of Health and Human Services issued a bulletin outlining proposed policies that will give States more flexibility and freedom to implement the Affordable Care Act.

Intended Approach: Comprehensive and Flexible

HHS intends to propose that essential health benefits are defined using a benchmark approach. Under the Department’s intended approach announced today, states would have the flexibility to select a benchmark plan that reflects the scope of services offered by a “typical employer plan.” This approach would give states the flexibility to select a plan that would best meet the needs of their citizens.

States would choose one of the following benchmark health insurance plans:

* One of the three largest small group plans in the state by enrollment;
* One of the three largest state employee health plans by enrollment;
* One of the three largest federal employee health plan options by enrollment;
* The largest HMO plan offered in the state’s commercial market by enrollment.

If states choose not to select a benchmark, HHS intends to propose that the default benchmark will be the small group plan with the largest enrollment in the state.

The benefits and services included in the benchmark health insurance plan selected by the state would be the essential health benefits package. Plans could modify coverage within a benefit category so long as they do not reduce the value of coverage.

To prevent federal dollars going to state benefit mandates, the health reform law requires states to defray the cost of benefits required by state law in excess of essential health benefits for individuals enrolled in any plan offered through an Exchange.

These benchmarks are generally regulated by the state and would be subject to state mandates applicable to the small group market.  Thus, those mandates would be included in the state essential health benefits package if the state elected one of the three largest small group plans in that state as its benchmark.

This approach would provide maximum flexibility to states, employers and issuers while providing quality, comprehensive, coverage for consumers.

Coverage

Essential health benefits must include coverage of services and items in all 10 statutory categories. Based on our research, we believe that these benchmarks will cover most of the essential health benefits outlined by the Affordable Care Act. These categories include preventive care, emergency services, maternity care, hospital and physician services, and prescription drugs.

Allowing Plans Flexibility to Innovate and Consumers Greater Choice

To meet the EHB coverage standard, HHS intends to require that a health plan offer benefits that are “substantially equal” to the benchmark plan selected by the state and modified as necessary to reflect the 10 coverage categories. Health plans also would have flexibility to adjust benefits, including both the specific services covered and any quantitative limits, provided they continue to offer coverage for all 10 statutory EHB categories and the coverage has the same value.  Permitting flexibility will provide greater choice to consumers, promoting plan innovation through coverage and design options, while ensuring that plans providing EHBs offer a certain level of benefits.

Fact sheet:
http://www.healthcare.gov/news/factsheets/2011/12/essential-health-benefits12162011a.html

Essential Health Benefits Bulletin (15 pages):
http://cciio.cms.gov/resources/files/Files2/12162011/essential_health_benefits_bulletin.pdf

It looks like Health and Human Services has decided that the new standard for health insurance to be offered under the Affordable Care Act will be the cheapest of the three largest small group plans offered in any given state. There will be no national standard. Although they would allow states more generous options other than the skimpy small group plans, with today’s concerns over high health care costs, the cheapest option certainly will be selected by the state stewards.

There is a requirement that 10 categories of health benefits must be included, but the specific services covered within each category will be determined by the insurers. The insurers will retain the flexibility to adjust both the specific services and the amount of those services (quantitative limits).  HHS claims that this benefits us by providing greater choice for consumers and by providing insurers with the opportunity to innovate. Why they should deem that to be beneficial is astonishing when considering that insurer innovation means having to choose between various plans that take away, to varying degrees, choices of providers, benefits, and amount of financial security.

The essential health benefits do not define the cost sharing features of the plans such as deductibles, copayments and coinsurance. Guidance on that will be forthcoming, but we already know that the least expensive plan will be the bronze plan with an actuarial value of 60 percent (the plan pays 60 percent of only the covered health care services). Again, because of our high insurance premiums, most people will select the cheapest actuarial-value plan.

Can you think of anything worse than having cash-starved states selecting the cheapest private plans with the most spartan selection of benefits allowable – benefits selected by the private insurance industry –  and offering those plans to struggling middle-income Americans who will be mandated to purchase these plans when many of them will not be able to afford even the bottom bronze plans in spite of the subsidies? And don’t even think about how they’re going to pay the high out-of-pocket expenses when they actually need health care.

Dissecting out each individual policy perhaps can make them easier to understand, but when you patch them together, just try to explain the resulting health care financing infrastructure to the average individual who just wants health care when needed. Most individuals may not be able to understand the complexities of health policy, but once they’ve been exposed to the new standard, they certainly will understand what is meant by UNAFFORDABLE UNDER-INSURANCE.

Try this thought experiment. Since the common defect in these Quote of the Day policy messages seems to be the dominance of the private insurers, try constructing a health care financing system without the private insurers being included. Wow! That was easy!

All we need now is to elect leaders who are willing to dismiss the insurers so that we can get on with building a system that works for all of us.

Do we need health insurance?

By Philip Caper, M.D.
Bangor Daily News, Dec. 15, 2011

Do Americans need health insurance? The short answer is no — at least not in the form it currently exists in America.

It is true that in many wealthy countries private insurance companies are used in the financing of universal health care systems. But they are nothing like American companies. They are regulated public utilities and are told by their governments who to insure, what to cover and how much and when to pay. Most are prohibited from making a profit and are required to pay any willing provider. Not exactly the American model.

The purpose of health care financing systems should be — and is in all other wealthy countries — to facilitate the delivery of health care services, to protect individuals and families against huge medical care expenses and to avoid breaking the national bank while they do so. But in America, our private insurance system actually interferes with the delivery of health care and is rapidly becoming too expensive.

Last month I argued for adopting a universal health care system on moral, ethical and economic grounds. It is not only more humane but cheaper to cover everybody. We have moved in fits and starts toward that goal since the enactment of Medicare in 1965.

The recent federal health reform law took a few steps forward. But we are now taking a couple steps back, especially in Maine. Last week Gov. Paul LePage proposed disqualifying 65,000 beneficiaries of MaineCare. Earlier this year, the Legislature enacted PL90 that rolls back regulations intended to spread the financial risks of illness and improve access to health care for those most in need of it.

A little history may be informative. Private employment-based health insurance in America was not a planned system, but grew out of World War II wage and price controls. It was one of the few ways employers could attract and retain employees in a tight labor market. The spread of these benefits received a boost when the federal government exempted them from federal taxes.

Private health insurance was dominated by nonprofit Blue Cross and Blue Shield plans until about 1990. That changed when Blue Cross plans across the country began to convert to for-profit status, arguing that it would improve their efficiency. Maine Blue Cross made that transition in 2000 when it changed from a company whose mission was facilitating health care to one whose mission was maximizing shareholder wealth.

The business model of for-profit insurance companies is pretty simple. The creation of wealth for shareholders, including many of their executives, depends upon profitability. To maximize profitability they must charge premiums as high as the market will bear, offer skimpy policies that limit coverage, impose high deductibles and minimize what they must pay out for the services they do cover.

Maximizing premiums, imposing high deductibles and limiting the scope of coverage are pretty straightforward. Minimizing payouts for services they do cover is a little more complicated. Four techniques are used. First companies try to avoid insuring people likely to require health care, such as those with a history of illness or who are elderly or in dangerous occupations.

Second, they dispute the need for health care that is recommended or has already been provided to their customers by micromanaging the decisions of doctors and patients and denying as many claims as they can. This is a very expensive and contentious process that often damages the quality of care.

Third, they bargain down the prices health care providers charge as much as possible, shifting costs to other payers. This has created the curious and uniquely American situation where uninsured people pay the highest prices for health care products and services.

Fourth, many companies try to find a reason to retroactively dump sick customers who have filed claims by asserting that they have failed to accurately state their health care history, therefore defrauding the insurance company.

These people end up on public insurance or on the roles of the uninsured. This practice, called “rescission,” is particularly unfair but nevertheless appears to have become widespread. It has been banned by the new federal health care reform act.

What is the problem with this picture? It is not that for-profit insurance companies are failing in their mission. In fact, they are doing a very good job of exactly what their mission demands, maximizing the wealth of shareholders. The problem is that their mission fundamentally conflicts with the mission of a decent health care system.

What can we do to fix this problem? The obvious first step — but not the last — is to replace for-profit insurance companies. They are like a camel entered into the Kentucky Derby. No matter how much it is trained, how hard it tries, how hard it is whipped or who the jockey is, it never wins. It just wasn’t designed for the job.

Although insurance companies could play a role in a redesigned system by becoming public utilities, that is not the most efficient way to finance a system that includes everybody. For example, private insurance companies are currently fighting the new federal health care law’s requirement that they keep their overhead below 20 percent. Medicare, financed through publicly mandated premiums and taxes, spends less than 5 percent on overhead and interferes with health care decisions much less than private carriers.

Maybe it’s time to replace that camel with a racehorse. While we’re at it, why not go for a thoroughbred? An improved Medicare-like system for all Mainers could provide better coverage while spending less. What’s not to like about 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/2011/12/15/health/do-we-need-health-insurance/

Why is Wyden supporting Ryan's Medicare voucher proposal?

A Bipartisan Way Forward on Medicare

By Ron Wyden and Paul Ryan
The Wall Street Journal, December 15, 2011

Our plan would strengthen traditional Medicare by permanently maintaining it as a guaranteed and viable option for all of our nation’s retirees. At the same time, our plan would expand choice for seniors by allowing the private sector to compete with Medicare in an effort to offer seniors better-quality and more affordable health-care choices.

Under our plan, Americans currently over the age of 55 would see no changes to the Medicare system. For future retirees, starting in 2022, our plan would introduce a “premium support” system that would empower Medicare beneficiaries to choose either a traditional Medicare plan or a Medicare-approved private plan. Unlike Medicare Advantage, these private plans would compete head-to-head with traditional, fee-for-service Medicare on a federally regulated Medicare exchange.

Low-income seniors who qualify for both Medicare and Medicaid would continue to have Medicaid pay for their out-of-pocket expenses. Other lower-income seniors would receive fully funded savings accounts to help offset any increased out-of-pocket costs, while wealthier seniors would receive less help.

In the event that these efforts did not stem the rising tide of Medicare spending, there would be a cap on the program’s rate of growth. But unlike other proposals, spending that exceeds the cap would neither be addressed through bureaucratic cuts nor passed on to seniors by default as higher premiums.

Instead, Congress would be required to do its job: Determine why the costs exceeded the cap and – when the evidence merits – reduce payments to providers, drug companies, or others who may be responsible for escalating costs.

Our plan would also expand health-care options for working Americans by giving smaller businesses the opportunity to empower their employees to make their own health-care choices. Under this “free choice option,” employees take the amount that their employer was contributing toward their employer-provided health coverage and use it to purchase their own health insurance instead. The cost to the employer – and the tax-free benefit to the worker – would remain the same.

Yes, these are ambitious reforms, and while we are hopeful for the future, we are under no illusions that they will pass tomorrow. Nevertheless, we offer this plan as proof that Democrats and Republicans don’t have to spend next year making Medicare reform more difficult. Instead, our parties can work together on bipartisan reforms to save and strengthen Medicare.

(Mr. Wyden, a Democrat, is a U.S. senator from Oregon. Mr. Ryan, a Republican, is a U.S. representative from Wisconsin.)

http://online.wsj.com/article/SB10001424052970203893404577098681919780636.html

Press release:
http://wyden.senate.gov/newsroom/press/release/?id=02334291-9c60-4020-9a8d-e2b9d0f37422

White paper (13 pages):
http://budget.house.gov/UploadedFiles/WydenRyan.pdf

Comment: 

By Don McCanne, MD

Although Sen. Ron Wyden (D-Oregon) and Rep. Paul Ryan (R-Wisconsin) have released their white paper on a proposal for reforming Medicare, there is no intent on their part to follow it up with legislation during this session of Congress. Their stated intent is to initiate a bipartisan discussion on Medicare reform, but it appears instead that other political considerations prompted this proposal.

Paul Ryan was stung by the response to his original proposal to end the traditional Medicare program and replace it with a premium support (voucher) program of private health plans. The Congressional Budget Office reported that his plan would cause a major shift of costs from the government to Medicare beneficiaries, and his own constituents beat up on him back home. Also, the Republicans in the House of Representatives are now on record as having voted for the Ryan premium support plan, and the Democrats have made it clear that they will make this a major issue in the coming elections.

This white paper gives the Republicans an out. They can now claim that this is better than the original Ryan proposal because it protects Medicare by leaving it as an option while providing more choices of competing private plans. Obviously this takes away the sting of the Democrats’ attack.

Why would Ron Wyden cooperate with Paul Ryan in this effort to defuse the Democrats’ strategy of using the premium support vote against the Republicans? It is because he is more supportive of his own previous proposal for health care reform than he is for the Democrats to prevail in the next election. His Healthy Americans Act that he pushed throughout the reform process called for an individual mandate to purchase private plans, shifting the tax benefit from employers to individuals (a concept included in this white paper). He has said that Democrats want universal coverage, Republicans want choice, and his plan, and now the Ryan-Wyden proposal, would enable both.

The problem for single payer supporters is that this is a digression that shoves the concept of an improved Medicare for all further into the background. The substance of the debate will be over converting the Medicare Advantage plan into a voucherized program competing on price. Single payer supporters will not be welcome participants in that debate, nor should we.

We shouldn’t waste our resources on countering premium support. That’s the wrong debate. We need to continue with a very strong message on countering private, corporate control of health care, while promoting a publicly-financed and publicly-administered Medicare for everyone. That’s the message that America needs to hear.