PNHP

Canadian health care misstated

Canadian health care misstated

Dr. Francis Pasley
Letters, Burlington Free Press, May 2, 2011

I am a medical doctor, semi-retired living in Vermont and having a limited practice. Prior to moving to Vermont two and a half years ago I practiced full time, dividing my practice between the Detroit area in Michigan and Windsor, Ontario, an hour drive from Detroit. Thus I have a substantial personal knowledge of medical practice in the USA and Canada.

I have been distressed to hear opinions by Vermont medical professionals and local conservatives about the poor care available in Canada, especially long waiting times for care, and the negative feelings of physicians who have moved here from Canada about the experiences they have had practicing medicine in Canada, suggesting no one would stay there by choice.

I moved to Vermont for family reasons and not to leave practice in Ontario, Canada. Indeed if I were younger I would far rather return to practice in Canada. Caring for patients without having to worry about their ability to afford medical care far outweighed any negatives. I knew doctors who chose to practice in Canada rather than the United States for the same reason. Some who trained in the U.S. and elected to locate in Canada.

In my opinion the waiting list issue is manufactured by people who wish to discredit a system that cares well for everyone with some minor inconveniences rather than one that denies care to millions while admittedly providing exceptional care to those well able to afford it. For those with urgent needs and serious medical problems, in my experience the care in Canada is equally exceptional and prompt.

The issues relating to medical care in every country are enormous and to raise concerns about waiting or the personal preferences of a few physicians trivializes it. We must rather decide what sort of society we wish to live in, what level of support we owe to all in our society, to whom we choose to deny adequate nutrition or healing efforts so that the privileged will be denied nothing or whether we choose to provide basic adequate sustenance to all. Hopefully we will choose the latter and then face the difficult task of defining what represents basic adequate sustenance.

Dr. Francis Pasley of Williston is a member of Physicians for a National Health Program.

http://www.burlingtonfreepress.com/article/20110501/OPINION02/105010333/My-Turn-Canadian-health-care-misstated

The Push to Enact Medicare Reform

Letters
The New York Times, May 1, 2011

There is a “real choice on Medicare” (editorial, April 24) just not within the narrow confines defined by the deficit zealots inside the Beltway or in editorial offices.

The G.O.P.-Ryan plan is little more than a thinly veiled scheme to destroy one of the most fundamental reforms in American history through privatization and further cost-shifting to many of the most vulnerable in our society.

But the White House plan also fails, through a reliance on a health care law that expands the role of private insurers while taking inadequate steps to rein in price-gouging by the private insurers that ultimately puts cost pressures on Medicare as well.

The “real choice” would be securing the future of Medicare once and for all by extending it to cover everyone. Through its proven formula of global budgeting and federal bulk-purchasing power, it is the best way to effectively control costs while ensuring that we change our broken health care system from one based on ability to pay to one based on patient need.

ROSE ANN DeMORO
Executive Director
National Nurses United
Oakland, Calif., April 25, 2011

Further comment by Uwe Reinhardt on queues in Canada

The last Quote of the Day discussed Princeton Economics Professor Uwe Reinhardt’s New York Times blog entry on rationing in Canada and the United States. I (Don McCanne) wrote a response to his article, and he responded to my comments. That response follows.

The New York Times
Economix

Uwe E. Reinhardt
Daily Economist
April 29th, 2011

Len Charlap’s Comment No. 27 requests that I respond to Comment No. 9 by Don McCanne, even though Dr. McCanne did not explicitly called for a response.

I agree with Dr. McCanne that the role of queues can easily be misunderstood.

Given a naturally or artificially limited supply of a thing, queues arise when money prices are not allowed to rise to levels that shrink the demand for the thing to match the available supply. Other prices – e.g., the price of time (e.g., waiting in a doctor’s office) or discomfort prices (the disutility of having to put up with a physical impairment while waiting) then do the equilibrating.

In the case of naturally limited supplies – e.g., supplies of transplantable organs – neither of these prices equilibrates demand and supply and some administrative mechanism of rationing occurs. My former Princeton student, later leader of the U.S. Senate and then my co-teacher of a course on health policy at Princeton, told us how that works. It is less than perfect.

In the case of artificially limited supplies, one way to reduce the time-and–discomfort prices is simply to expand the supply of the artificially limited supply.

It is true that in the past I have criticized Canadian policy makers for not doing so. They responded that they are actually quite concerned over the issue and, in fact, have sought to understand the nature of their queues better through one (or perhaps even two) Royal Commissions on queues in health care.

Since that time, they have worked on what they call “evidence-based queuing,” that is, a form of queuing that uses queuing theory and seeks to minimize the physical harm of queuing, giving serious cases faster access than is available to less serious cases.

My Canadian colleagues tell me what Canadians do not want to do is to have their supply side driven by entrepreneurial forces that can easily flood the market with excess capacity and drive up costs. They cite the huge American literature on the excess use of imaging in the US as example.

Similarly, my Canadian colleagues tell me that what Canadians do not want to do is spend 17% (soon going on 20%) of the GDP on health care, especially when there is no evidence that it begets better overall health statistics (and often worse statistics), greater patient satisfaction, and moreover leaves millions of citizens without health insurance and spotty access to care, not even to speak of financial distress.

It is not hard to sympathize with them on that view.

http://community.nytimes.com/comments/economix.blogs.nytimes.com/2011/04/29/does-the-ryan-plan-curb-health-spending/?permid=9#comment9

Health-Care Reform Act Assailed

McClatchy-Tribune Information Services
April 29, 2011

April 29–Congress caved into corporate interests last year to enact a health care policy that will leave millions of Americans without insurance, do nothing to rein in rising costs and put everyone at the mercy of an unfair, for-profit system, a national advocate for a single-payer health system said in Albuquerque.

“We need a system,” Margaret Flowers, a Maryland-based congressional fellow with Physicians for a National Health Program, told the New Mexico Public Health Association convention in Albuquerque this week. “We don’t have a system. We don’t allocate resources in a rational way. We ration care in the cruelest way, on the ability of the patient to pay.”

Flowers, a pediatrician who left practice in 2007 to work on health reform issues, said health policy “is part of a greater social justice movement” that should fight for better education, jobs, decent housing and a cleaner environment for everyone.

Corporate interests, abetted by corporate-controlled media, kept a single-payer solution from being discussed during the debate the led to the passage of the Affordable Care Act in 2010, Flowers said, adding that the evidence shows such a system provides better patient care at a lower cost than an insurance-based, for-profit payment system.

Medicare and Medicaid are victims of out-of-control costs that ACA will only make worse, she said. The law will raise costs with new insurance exchanges, more regulations on insurance companies and an increased role for the Internal Revenue Service, which will have to enforce mandatory coverage rules scheduled to take effect in 2014, Flowers said.

If corporations paid taxes on operations they move off shore, revenues will be more than enough to fund those programs, Flowers said. “Austerity measures are not necessary,” she said.

http://insurancenewsnet.com/article.aspx?id=258535

Insurers Getting Rich By Not Paying for Care

By Wendell Potter
PR Watch, April 25, 2011

If I had stayed in the insurance industry, my net worth would have spiked between 4 p.m. Wednesday and 4 p.m. Thursday last week — and I wouldn’t even have had to show up for work.

I’m betting that just about every executive of a for-profit health insurance company, whose total compensation ultimately depends on the value of their stock options, woke up on Good Friday considerably wealthier than they were 24 hours earlier. Why? Because of the spectacular profits that one of those companies reported Thursday morning.

Among those suddenly wealthier executives, by the way, are the corporate medical directors who decide whether or not patients will get coverage for treatments their doctors believe might save their lives.

UnitedHealth Group, the biggest health insurer in terms of revenue and market value, earned so much more during the first three months of this year than Wall Street expected that investors rushed to buy shares of every one of the seven health insurers that comprise the managed care sector. In my view, it would be more accurate to call it the managed care cartel.

UnitedHealth is always the first of the big seven to announce earnings every quarter, so investors consider it a bellwether. If UnitedHealth exceeds Wall Street’s expectations, as it has been doing consistently, investors assume that the other six will do likewise. Sure enough, all seven — Aetna, CIGNA, Coventry, Health Net, Humana, UnitedHealth and WellPoint — saw their stock prices close Thursday afternoon at or near 52-week highs.

UnitedHealth’s shares shot up more than 8 percent during the day. Increases of that magnitude are so rare that I could almost hear the champagne corks popping in the Minnetonka, Minnesota office of UnitedHealth’s CEO, Stephen J. Hemsley.

Wall Street analysts had worried that health insurers would have such a hard time complying with the provisions of the year-old health care reform law that their profit margins would decline. Those concerns were put to rest when UnitedHealth reported that its operating margins were “stable” at 8.7 percent in the quarter. The company’s stellar performance should also put to rest — forever — the myth that “ObamaCare” is “bleeding insurers dry,” as industry apologist Sally Pipes contended in a Feb. 24 commentary in Forbes.

Noting that UnitedHealth’s 13 percent increase in profits prompted the company to raise its full-year earnings forecast, the Minneapolis Star Tribune opined, “Life under new health care reform laws may not be so rough after all.”

Indeed. Consider these numbers: UnitedHealth’s profit during the first three months of this year increased to $1.35 billion from $1.19 billion a year ago. When you do the math to determine the company’s earnings per share, the result is nothing short of jaw-dropping. On that basis, UnitedHealth’s profit jumped from $1.03 to $1.22 per share. Wall Street analysts had been expecting the company to earn just 89 cents a share. When you beat Wall Street’s expectations by 33 cents a share, you have accomplished something that most CEOs can only dream about.

UnitedHealth’s CEO at Top of Forbes 2011 Executive Pay List

Speaking of CEOs, Stephen Hemsley in particular made out like a bandit Thursday. Already at the very pinnacle of Forbes 2011 “Executive Pay List” (you read that right, his total compensation of $101.96 million last year made him the highest paid corporate executive in the United States of America), Hemsley saw his net worth skyrocket last week.

Of that $101.96 million Hemsley “earned” last year, $98.55 million came from stock gains, mostly from exercising options. And that doesn’t even count the value of stock options he hasn’t yet cashed in. According to published reports about the company’s Securities and Exchange Commission (SEC) filings, the total value of the options Hemsley had not exercised by the end of last year totaled almost $745 million. Considering the fact that the price of UnitedHealth’s stock has increased by more than $20 per share in just the last nine months, you can be pretty certain that Hemsley is now sitting on a stash of options worth well over $1 billion. That doesn’t count the shares of UnitedHealth stock Hemsley owns outright, the value of which was estimated to be $111.4 million at the end of 2010 and which, of course, is much higher now.

As you can imagine, Hemsley and other UnitedHealth executives were peppered with questions during the company’s conference call with Wall Street analysts last Thursday. They wanted to know how UnitedHealth had pulled off such a stunning accomplishment.

As it turned out, they pulled it off by paying far fewer medical claims than anyone had expected. That in and of itself is not new. Last year was one of the industry’s most profitable years because, the big insurers insisted, their policyholders had not needed to go the doctor or check into the hospital as much as they had in the past. Consequently the insurers did not have to pay as many claims. The reason they gave was that the flu season last year was much less severe than predicted.

Insurers Mum on What’s Really Making Their Profits Skyrocket

Well, it turns out that dog won’t hunt anymore. UnitedHealth executives admitted during the call with analysts Thursday morning that “the incidence of influenza was substantially higher this quarter than last year.” So, even though more people had to be treated for the flu during the first three months of this year than UnitedHealth had expected, the company still managed to spend less on medical claims during the quarter than investors had expected.

Not being able to attribute the unexpected decrease in medical spending to a mild flu season this time, Hemsley and his colleagues said it was because of the unexpected decrease in stormy weather.

I’m not making this up. They blamed the company’s good fortune on “the effect of severe consistent winter weather conditions across significant portions of the country.”

Veteran analyst Christine Arnold of Cowen and Company apparently wasn’t buying it, so she pressed for more “clarity” during the call.

“Excluding places where you saw winter storms,” she asked, “was utilization (of health services) up?”

Earlier in the call, the executives seemed to be suggesting that the number of inpatient hospital “bed days” was down considerably because of bad weather.

“So, excluding storms,” she probed, “were bed days up?”

UnitedHealth’s chief financial officer, Dan Schumacher, finally had to ‘fess up.

“Bed days excluding storms were flat to slightly down depending on the geography,” he replied.

In other words, it wasn’t the stormy weather after all. Unfortunately, Arnold did not press further (“OK. That’s helpful. Thanks,” she said) and no one asked the logical follow-up question: “Well, then, what was it?”

Insurers Pinch Policy Holders for Higher Premiums and Out-of-Pocket Costs

Contrary to what insurance company bigwigs try to make us believe, it is not snow, sleet and freezing rain or mild flu seasons that enables these companies to blow Wall Street’s estimates out of the water. What they will not admit is that their companies are making record profits by pushing more and more of us into benefit plans that require us to pay a whole lot more out of our own pockets before they will pay anything for our medical care.

And I’m betting that if the insurers had to disclose their rates of claim denials and the number of procedures their medical directors are refusing to pay for, we would see that those numbers are increasing, and maybe substantially. Medical directors know they play a key role in meeting Wall Street’s expectations, and they’re rewarded with raises, bonuses and, yes, stock options, if management is pleased with their job performance. The less money these co
mpanies pay out for care, the more is left over to reward shareholders and a bunch of corporate executives.

This is why, folks, that “utilization” is down. Growing numbers of people who have insurance, who are paying hard-earned money every month for coverage that is increasingly inadequate as well as expensive, simply can’t scrape up enough cash to go to the doctor or hospital or, in many cases, even pick up their prescriptions.

That is a trend that the insurers are determined to continue. And while we are being forced to go without necessary care and empty our pockets to pay our premiums, insurance company billionaire Stephen Hemsley and his cohorts are stuffing their pockets — with our money.

http://www.prwatch.org/news/2011/04/10665/insurers-getting-rich-not-paying-care

Health Execs Getting Richer As Some Americans Beg for Help to Pay for Care

By Wendell Potter
The Huffington Post, April 28, 2011

On Monday, I wrote about the good fortune of UnitedHealth Group, one of the big seven for-profit health insurance companies, and its CEO, Stephen J. Hemsley. Last week, UnitedHealth pleased Wall Street so much with its report of earnings during the first three months of this year that investors clamored to buy the company’s stock.
 
By the time the New York Stock Exchange closed last Thursday, shares of UnitedHealth’s stock had shot up more than 8 percent and reached their highest value in more than three years. The company’s shareholders, including Hemsley, now the highest paid CEO in America, were suddenly much wealthier.
 
Owners of health insurance company stock continued to get richer this week. On Tuesday, Humana Inc. announced that its first quarter earnings would be so much better than Wall Street expected that it was raising its full-year profit outlook and instituting a dividend. The company’s stock price jumped 5.5 percent after disclosing that fabulous news.
 
The good news, at least for shareholders, just keeps on coming. This morning, Aetna announced that it, too, had exceeded Wall Street’s expectations during the first quarter — by an astonishing 54 cents a share. Yesterday, WellPoint Inc., which operates more than a dozen Blue Cross plans across the country, announced that its earnings topped expectations by 48 cents per share.
 
When I was handling financial communications at CIGNA, I knew investors would be pleased if the company exceeded their expectations by even a penny a share. During my nearly two decades in the industry, I never saw insurers blow past what they had been expected to earn by such wide margins. Health insurers’ shareholders must be pinching themselves today to make sure they’re not dreaming.
 
To make this kind of money, insurance companies have to spend far less paying their policyholders’ medical claims than anyone thought possible.
 
They’ve been able to do that so far this year, despite the new health care reform law, by shifting many policyholders into plans that force them to spend more from their own pockets before coverage kicks in. Insurance firms also fatten their bottom lines by denying more claims.
 
What are the real-world consequences? Let me share portions of just three e-mails I received this week to give you a hint. I wish I could say that such e-mails are rare.
 
The first came from a man who actually sells policies for one of the above-mentioned firms on a part-time basis. He decided to write me after visiting a family that was on the verge of bankruptcy because of what they have to pay for insurance coverage and out-of-pocket expenses.
 
He told me that the head of the family was a small business owner who was still working well into his late 60’s because it was the only way he was able to provide insurance for himself, his wife and a daughter suffering from mental illness. He was paying $28,800 in annual premiums and had just been notified that he would have to pay 25 percent more when the current term of his policy expired.
 
Even though he was paying more than $2,000 a month for coverage, it was far from adequate. It did not cover his daughter’s three-times-a-week visits to her mental health doctors, which meant that he had to pay an additional $300 per visit out of his own pocket. On top of that, he had to pay $1,000 every month for her prescriptions.
 
“It truly disgusted me, and I had no idea what I could do to help them,” he wrote.
 
The irony is that the part-time insurance salesman who sent the email was uninsured. He couldn’t afford coverage himself.
 
The second e-mail came from Molly Poole, a woman I had met in March in Lancaster, Pa. She was writing to tell about a new website — www.LetScottLive.com — that she created to help raise money for her husband’s care. While Stephen Hemsley and a handful of other insurance company executives are becoming billionaires, Molly and Scott Poole, who has Lou Gehrig’s disease, are now effectively beggars. They wrote asking me to help spread the word about their plight and to assist in their efforts to raise money.

Here’s what Molly wrote:

In short, we have been terrorized since spring 2009 with a variety of insurance company games. First we were told (by Highmark Blue Cross) that we were about to hit Scott’s million-dollar lifetime cap ‘in the next month or so.’ That was wrong, but that didn’t stop them from calling every few months to give us another ‘you’re hitting your cap soon’ scare and giving a vague date a few months out. They were always wrong in the end, but that did nothing for the panic level at the time.

Molly wrote that Scott had been transferred to COBRA on Nov. 7, 2010, after losing his job. As that coverage was about to expire, the Pooles applied for an extension. A case manager for their insurer said it would be a waste of time to apply for the extension because Scott was rapidly approaching the lifetime coverage limit. After weeks of battle, the Pooles finally got the extension, but only for a short while.
 
“We only have coverage through May 7,” Molly, wrote, “so that’s why we’ve created a website to try to raise funds. We need to come up with approximately $400,000 a year to cover nursing and other medical costs. God forbid a hospital stay. What savings we have left are what’s running the house. We start tapping them, we lose the house.”
 
Molly ended her e-mail with this: “The illness itself has been a walk in the park compared to the insurance hassles. Can you imagine something that makes dealing with Lou Gehrig’s disease a breeze compared with what they are putting you through?”
 
The third e-mail I got was from Stan Brock, the saint who founded Remote Area Medical (RAM) to provide care to people in isolated villages in less developed countries. Stan started his mission by flying doctors to nearly inaccessible places along the Amazon River in South America.
 
Today, most of RAM’s “expeditions” are in the United States, and increasingly they are to locations that are not at all remote. I went to a RAM expedition in Wise County, Va., a few years ago. The experience changed my life and contributed to my decision to quit my job and start speaking out about the abuses of the U.S. health insurance industry.
 
Stan wrote to tell me about RAM’s most recent two expeditions in California.
 
The crowds for the pair of expeditions “were similar to those you saw in Wise County, VA. We could have seen more patients had we been allowed to bring in volunteers from out of state,” he wrote.

I am convinced that if federal laws were changed so that doctors could cross state lines to provide free care, that RAM-type operations would begin to spring up nationwide and make a significant d
ifference for health care for the underserved at no cost to the government or taxpayer. We really need an economics expert to make those sort of projections on a nationwide basis with volunteer clinics going on weekly in every state; not just by RAM but by numerous other charitable organizations and civic groups.

These three emails are just the most recent I’ve received out of many over the past several months.
 
I will continue to share some of them with you — and fill you in on how incredibly rich a few executives and shareholders are becoming while Americans are being reduced to begging for help to pay for health care or waiting for one of Stan Brock’s expeditions.
 
http://www.huffingtonpost.com/wendell-potter/health-execs-getting-rich_b_854831.html

Further comment by Uwe Reinhardt on queues in Canada

The last Quote of the Day discussed Princeton Economics Professor Uwe Reinhardt’s New York Times blog entry on rationing in Canada and the United States. I (Don McCanne) wrote a response to his article, and he responded to my comments. That response follows.

The New York Times
Economix

Uwe E. Reinhardt
Daily Economist
April 29th, 2011

Len Charlap’s Comment No. 27 requests that I respond to Comment No. 9 by Don McCanne, even though Dr. McCanne did not explicitly called for a response.

I agree with Dr. McCanne that the role of queues can easily be misunderstood.

Given a naturally or artificially limited supply of a thing, queues arise when money prices are not allowed to rise to levels that shrink the demand for the thing to match the available supply. Other prices – e.g., the price of time (e.g., waiting in a doctor’s office) or discomfort prices (the disutility of having to put up with a physical impairment while waiting) then do the equilibrating.

In the case of naturally limited supplies – e.g., supplies of transplantable organs – neither of these prices equilibrates demand and supply and some administrative mechanism of rationing occurs. My former Princeton student, later leader of the U.S. Senate and then my co-teacher of a course on health policy at Princeton, told us how that works. It is less than perfect.

In the case of artificially limited supplies, one way to reduce the time-and–discomfort prices is simply to expand the supply of the artificially limited supply.

It is true that in the past I have criticized Canadian policy makers for not doing so. They responded that they are actually quite concerned over the issue and, in fact, have sought to understand the nature of their queues better through one (or perhaps even two) Royal Commissions on queues in health care.

Since that time, they have worked on what they call “evidence-based queuing,” that is, a form of queuing that uses queuing theory and seeks to minimize the physical harm of queuing, giving serious cases faster access than is available to less serious cases.

My Canadian colleagues tell me what Canadians do not want to do is to have their supply side driven by entrepreneurial forces that can easily flood the market with excess capacity and drive up costs. They cite the huge American literature on the excess use of imaging in the US as example.

Similarly, my Canadian colleagues tell me that what Canadians do not want to do is spend 17% (soon going on 20%) of the GDP on health care, especially when there is no evidence that it begets better overall health statistics (and often worse statistics), greater patient satisfaction, and moreover leaves millions of citizens without health insurance and spotty access to care, not even to speak of financial distress.

It is not hard to sympathize with them on that view.

http://community.nytimes.com/comments/economix.blogs.nytimes.com/2011/04/29/does-the-ryan-plan-curb-health-spending/?permid=9#comment9

Uwe Reinhardt on rationing in Canada and the U.S.

Does the Ryan Plan Curb Health Spending?

By Uwe E. Reinhardt
The New York Times
April 29, 2011

My post last week, on the budget plan offered by Representative Paul D. Ryan, Republican of Wisconsin and chairman of the House Budget Committee, ended with the observation that the plan did not propose measures to control overall health spending in the United States, “nor does that appear to have been Mr. Ryan’s objective.”

The general idea is that, using whatever financial resources are available to them, patients or their loved ones will, of necessity, engage in a benefit-cost analysis and decide whether the anticipated benefits of end-of-life care exceed its expected cost to the household in terms of what that household has to forgo to buy the extra care. This is how markets work.

Economic theory suggests that, other things being equal, rich and less rich households will come to different conclusions on this question. If less money is available over all to spend on elderly Americans, it is the lower middle class that is likely to do most of the self-rationing.

Note that the Ryan plan proposes a means test to determine the federal contribution to Medicare — the very poor elderly will receive larger federal subsidies, although the size of these subsidies remain unspecified. But the middle and lower-middle class is likely to be on its own.

For reasons that escape me, many Americans do not regard rationing scarce resources through the marketplace, by price and ability to pay, as rationing at all, reserving that term for government withholding of marginally beneficial procedures, based on formal cost-effectiveness analysis.

I do beg to differ.

I have also applied the economist’s reasoning to an analysis of styles of rationing in Canada and in the United States and would be happy to hear what readers make of that. (See link below.)

http://economix.blogs.nytimes.com/2011/04/29/does-the-ryan-plan-curb-health-spending/

Uwe Reinhardt: “Keeping Health Care Afloat – The United States Versus Canada”:
http://www.princeton.edu/~reinhard/pdfs/MILKEN%20REVIEW%20CANADA%20vs%20US.pdf

Readers’ Comments

9. Don McCanne
San Juan Capistrano, CA
April 29th, 2011

Professor Reinhardt’s discussion of rationing in the United States and Canada, available at the “an analysis” link in his article above (the “Keeping Health Care Afloat” link), is an absolute must read for those who really care about how we finance health care.

In a personal communication, Dr. Reinhardt has suggested that we have not been adequately forthcoming about the problems of rationing in Canada, especially the development of queues for non-urgent services. (“We” refers to the fact that I’m senior health policy fellow for Physicians for a National Health Program, an organization supporting single payer reform not unlike Canada’s.)

It is true that we tend to discuss the virtues of single payer while not emphasizing its deficiencies, but the virtues far outweigh the deficiencies and our message would be corrupted by including a disproportionate emphasis on the problems.

That said, we certainly do concede that rationing is an issue, but also we do, in fact, address it. First, we support separate budgeting of capital improvements with an emphasis on getting capacity right to avoid both under-utilization (queues) and over-utilization (the excesses described by John Wennberg and the Dartmouth group). Admittedly, that is always a work in progress, but merely making the effort does result in improvements in capacity.

We also support the science of queue management (how the long lines at airports were reduced after they became intolerable following 9/11). Monitoring capacity and making relatively minor adjustments as needed, along with queue management, has been very effective in avoiding excess queues in many nations.

Canada has been addressing this problem with some success. In fact, if you actually read the reports from the Fraser Institute that demonstrate excessive queues, you will see that in most instances the time intervals are very close to what the specialists believe are reasonable (joint replacement being an exception).

So what actually is the overriding problem of a system like Canada’s? It lies in the ideology of the public stewards of the health care financing system. When egalitarians who believe in government are in charge, efforts are made to attend to problems such as queues and fix them. When those who oppose government programs and prefer private markets are in charge, problems such as queues are allowed to compound for the purpose of driving support for privatization of the health care system (Alberta’s former premier, Ralph Klein, being a prime example).

So, Dr. Reinhardt, I hereby publicly confess that there are potential problems with rationing in a single payer system, but not nearly as severe as the U.S. style of rationing which causes massive suffering and death simply because we ration based on ability to pay. In fact, since all systems ration, selecting rationing that improves value in our health care purchasing might be better labeled as “beneficial rationing.”

Unfortunately, a new report released by the Commonwealth Fund this week shows that, although health insurance will be more affordable because of subsidies under the Affordable Care Act, about one-fourth of middle-income Americans who actually require significant health care will still not be able to pay for it, in spite of subsidies. Rationing by ability to pay was not eliminated by the Affordable Care Act.

Dr. Reindardt, you have also suggested that single payer works better in Canada than it would in the United States simply because Canadians are more egalitarian than we are. But look at the outrage expressed over Paul Ryan’s proposal to privatize our egalitarian Medicare program. Americans can be quite egalitarian when we have something good that works well for all of us.

http://community.nytimes.com/comments/economix.blogs.nytimes.com/2011/04/29/does-the-ryan-plan-curb-health-spending/?permid=9#comment9

Further comment: 

Uwe Reinhardt’s eight page article, “Keeping Health Care Afloat – The United States Versus Canada,” should be downloaded and saved to use as an important resource when responding to expressed concerns about rationing. It is available at the link above.

The most common reason given as to why the United States should reject a Canadian-style single payer system is that it would result in intolerable rationing. Reinhardt’s highly credible article explains in factual terms how rationing works in these two countries. Using Reinhardt’s facts, it is very difficult for me to see how anyone could have an opinion other than it is the United States and not Canada that has intolerable rationing.

Vermont Debates Universal Health Care

The Diane Rehm Show, NPR, April 27, 2011

On April 27, Dr. Robert Zarr, national board member and co-chair of the D.C. chapter of Physicians for a National Health Program, appeared on NPR’s “The Diane Rehm Show” with Vermont Gov. Peter Shumlin, NPR’s Julie Rovner, and the Cato Institute’s Michael Cannon. You can listen to the 51-minute program by clicking on this link and clicking again on “Listen.”

A complete transcript of the show is available here.

Uwe Reinhardt on rationing in Canada and the U.S.

Does the Ryan Plan Curb Health Spending?

By Uwe E. Reinhardt
The New York Times
April 29, 2011

My post last week, on the budget plan offered by Representative Paul D. Ryan, Republican of Wisconsin and chairman of the House Budget Committee, ended with the observation that the plan did not propose measures to control overall health spending in the United States, “nor does that appear to have been Mr. Ryan’s objective.”

The general idea is that, using whatever financial resources are available to them, patients or their loved ones will, of necessity, engage in a benefit-cost analysis and decide whether the anticipated benefits of end-of-life care exceed its expected cost to the household in terms of what that household has to forgo to buy the extra care. This is how markets work.

Economic theory suggests that, other things being equal, rich and less rich households will come to different conclusions on this question. If less money is available over all to spend on elderly Americans, it is the lower middle class that is likely to do most of the self-rationing.

Note that the Ryan plan proposes a means test to determine the federal contribution to Medicare — the very poor elderly will receive larger federal subsidies, although the size of these subsidies remain unspecified. But the middle and lower-middle class is likely to be on its own.

For reasons that escape me, many Americans do not regard rationing scarce resources through the marketplace, by price and ability to pay, as rationing at all, reserving that term for government withholding of marginally beneficial procedures, based on formal cost-effectiveness analysis.

I do beg to differ.

I have also applied the economist’s reasoning to an analysis of styles of rationing in Canada and in the United States and would be happy to hear what readers make of that. (See link below.)

http://economix.blogs.nytimes.com/2011/04/29/does-the-ryan-plan-curb-health-spending/

Uwe Reinhardt: “Keeping Health Care Afloat – The United States Versus Canada”:
http://www.princeton.edu/~reinhard/pdfs/MILKEN%20REVIEW%20CANADA%20vs%20US.pdf

9. Don McCanne
San Juan Capistrano, CA
April 29th, 2011

Professor Reinhardt’s discussion of rationing in the United States and Canada, available at the “an analysis” link in his article above (the “Keeping Health Care Afloat” link), is an absolute must read for those who really care about how we finance health care.

In a personal communication, Dr. Reinhardt has suggested that we have not been adequately forthcoming about the problems of rationing in Canada, especially the development of queues for non-urgent services. (“We” refers to the fact that I’m senior health policy fellow for Physicians for a National Health Program, an organization supporting single payer reform not unlike Canada’s.)

It is true that we tend to discuss the virtues of single payer while not emphasizing its deficiencies, but the virtues far outweigh the deficiencies and our message would be corrupted by including a disproportionate emphasis on the problems.

That said, we certainly do concede that rationing is an issue, but also we do, in fact, address it. First, we support separate budgeting of capital improvements with an emphasis on getting capacity right to avoid both under-utilization (queues) and over-utilization (the excesses described by John Wennberg and the Dartmouth group). Admittedly, that is always a work in progress, but merely making the effort does result in improvements in capacity.

We also support the science of queue management (how the long lines at airports were reduced after they became intolerable following 9/11). Monitoring capacity and making relatively minor adjustments as needed, along with queue management, has been very effective in avoiding excess queues in many nations.

Canada has been addressing this problem with some success. In fact, if you actually read the reports from the Fraser Institute that demonstrate excessive queues, you will see that in most instances the time intervals are very close to what the specialists believe are reasonable (joint replacement being an exception).

So what actually is the overriding problem of a system like Canada’s? It lies in the ideology of the public stewards of the health care financing system. When egalitarians who believe in government are in charge, efforts are made to attend to problems such as queues and fix them. When those who oppose government programs and prefer private markets are in charge, problems such as queues are allowed to compound for the purpose of driving support for privatization of the health care system (Alberta’s former premier, Ralph Klein, being a prime example).

So, Dr. Reinhardt, I hereby publicly confess that there are potential problems with rationing in a single payer system, but not nearly as severe as the U.S. style of rationing which causes massive suffering and death simply because we ration based on ability to pay. In fact, since all systems ration, selecting rationing that improves value in our health care purchasing might be better labeled as “beneficial rationing.”

Unfortunately, a new report released by the Commonwealth Fund this week shows that, although health insurance will be more affordable because of subsidies under the Affordable Care Act, about one-fourth of middle-income Americans who actually require significant health care will still not be able to pay for it, in spite of subsidies. Rationing by ability to pay was not eliminated by the Affordable Care Act.

Dr. Reindardt, you have also suggested that single payer works better in Canada than it would in the United States simply because Canadians are more egalitarian than we are. But look at the outrage expressed over Paul Ryan’s proposal to privatize our egalitarian Medicare program. Americans can be quite egalitarian when we have something good that works well for all of us.

Comment originally published on the New York Times website

Further comment: Uwe Reinhardt’s eight page article, “Keeping Health Care Afloat – The United States Versus Canada,” should be downloaded and saved to use as an important resource when responding to expressed concerns about rationing. It is available at the link above.

The most common reason given as to why the United States should reject a Canadian-style single payer system is that it would result in intolerable rationing. Reinhardt’s highly credible article explains in factual terms how rationing works in these two countries. Using Reinhardt’s facts, it is very difficult for me to see how anyone could have an opinion other than it is the United States and not Canada that has intolerable rationing.

The quest for significance

By Sherif Emil, M.D.
Bulletin of the American College of Surgeons, April 2011

Click here for an attractive, five-page PDF version of Dr. Sherif Emil’s stirring address delivered at the University of California, Irvine, School of Medicine commencement ceremonies on June 5, 2010. He says in part: “Health care should not be a liberal or conservative issue, for disease, disability, and death do not recognize political affiliations. As a socially conservative Christian, my personal belief that health care is a fundamental human right, best guaranteed through single-payer universal health coverage, stems from my faith, and not despite it. My faith calls for personal morality, but also for societal morality — how do we treat the sick among us, the weak among us, the least among us?”

Vermont's Bill: Is it Single-Payer Health Care?

A question and answer session with Dr. Ida Hellander helps demystify Vermont’s new health care bill.

Yes! Magazine
Apr 27, 2011

Q: Vermont’s Senate just passed a major health bill that many are calling a single-payer plan. Is this the case?

A: No. The best we can hope is that it’s a step in that direction.

While single-payer health reform is supported by a majority of Vermont residents, including the governor, Peter Shumlin, who ran on a single-payer platform, the present legislation in Vermont falls far short of the improved-Medicare-for-all system the state needs to assure high-quality, comprehensive, and affordable care for everyone.

Single-payer activists in Vermont and throughout the nation have been hoping that Vermont would be the first state to create a nonprofit, single-payer system of financing health care, with all the health benefits and savings such a system would bring. However, largely because of pressure brought to bear by powerful vested interests, combined with a dense thicket of federal laws and regulations obstructing state-level single-payer plans, the legislature is now mulling over a much lesser reform.

Vermont may still be first state to get there, it is just going to be a longer and harder struggle because of the federal obstacles in their way. 

Q: Why is Vermont trying to pass something now, when the Obama administration’s plan hasn’t even been implemented yet?

A: Like many other states, Vermont is facing a huge budget deficit, and rising health care costs are a major concern. If they don’t get costs under control, they know they will not be able to expand coverage to everyone. Paradoxically, the best way to control costs is to cover everyone—kicking out the private insurance middlemen and creating a single-payer health care system. The federal plan, also known as the Patient Protection and Affordable Care Act (PPACA), doesn’t do that. It still leaves 23 million Americans uninsured in 2019 and the private insurers at the center of our health system.

Q: How would you describe the bill in Vermont right now?

A: At best, the Vermont bill declares an intention, or aspiration, to establish a publicly funded “universal and unified health system” three to five years hence. It speaks of health care as a “public good,” which is positive, and calls for cost containment by reducing administrative expenses and by health system planning and budgeting. But it places its main emphasis on the state’s compliance with PPACA. 

The present bill, unlike its initial draft, doesn’t even use the words “single payer.” Of course, those words alone wouldn’t make the legislation a real single-payer system. There has to be progressive taxation to fund the program; the benefits have to be comprehensive; Medicare and Medicaid would need to be folded into the program; private insurers would have to be proscribed from offering competing basic coverage; co-pays and deductibles would have to be banned; and so forth. These measures are not in the bill.

Finally, even if all those provisions were in the legislation, the Legislature still wouldn’t be able to adopt single payer before 2017 because the federal health law won’t allow it. Senator Bernie Sanders and Governor Shumlin are lobbying President Obama to move up that date to 2014, but even three years’ delay is too long. Many states have passed “universal health care plans” only to repeal or roll them back a year or two later because costs were hard to control without a true single-payer system.

Whether the necessary provisions to create a true single-payer system in Vermont are ever enacted depends a lot on a new 5-person board set up to oversee health reform in the state—not to mention how strong the single payer movement is going forward.

Q: Are single-payer activists in Vermont discouraged?

A: Absolutely not. Single-payer activists have been working in Vermont for years to educate people about the need to treat health care as a public good—like fire protection or education—not a private commodity. They’ve clearly made headway in the battle for public opinion; the legislative process has been extremely energizing. 

This is a marathon, not a sprint. Vermonters know that, and have inspired the whole nation by the force of their demand for change. More than 200 doctors from 39 states have told us they’d seriously consider relocating to Vermont if it were to implement a single-payer system. And over 200 health-professional students from throughout the Northeast—and some from as far away as the West Coast—recently rallied at the Vermont Statehouse to say they want single payer now.

Q: Do you think that health care will ever be a human right in this country?

A: The road to a national single-payer program may wind through states like Vermont or we may pass national single-payer legislation (e.g. H.R. 676) first. The only thing for certain is that this is an important movement for anyone who cares about health care or fighting corporate control of our democracy.

I do believe that we will achieve the right to health care, just as we won the battle over abolition and women’s suffrage. But in Vermont and nationally, we need a true single-payer program to make health care universal, sustainable and affordable.

Ida Hellander, M.D. wrote this article for YES! Magazine, a national, nonprofit media organization that fuses powerful ideas with practical actions. Dr. Hellander is health policy director for Physicians for a National Health Program.

Walker’s right about Medicaid, but his reasons are wrong

Letters
Capital Times (Madison, Wis.), April 27, 2011

The only correct statement in Gov. Scott Walker’s op-ed column in The New York Times is that Medicaid is obsolete — but not for the reasons he states.

To illustrate, the following scenarios occurred in Wisconsin hospitals (not Madison). One morning while preparing to perform ear surgery on a boy, I was confronted by his anesthesiologist. As he pointed out the child’s health insurance coverage (Medicaid), he stated that “if all you are going to do is to bring this *** in here, you don’t need to come here.” Similarly, I was called to another hospital urgently to remove a coin from a child’s esophagus as none of the doctors in my specialty took “welfare” patients.

We have a dysfunctional, segregated, unjust, costly medical and dental system, which places our citizens in a perverse health insurance caste system. By providing for “more flexibility,” Walker’s system and Rep. Paul Ryan’s Medicare voucher system would ensure that the budget deficits would be reduced not by lowering costs for everyone equally, but by further eliminating the poor, the disadvantaged children, the elderly, and the too-costly from its rolls. Does your governor or doctor determine your right to equal access to health care?

Not mentioned in Walker’s column: While “I Dream of Jeannie” hit the airwaves in 1965, Canada instituted its “Medicare for ALL” system. Canada’s health care system justly covers ALL citizens equally, at half our costs, with a 5-10 percent overhead, not 31 percent waste ($600 billion a year) profiting the insurance corporations.

Dr. Timothy Shaw
Fitchburg, Wis.

http://host.madison.com/news/opinion/mailbag/article_1b881fc4-6257-5cc7-850d-c3fb194f08f9.html

Maureen Engelberger: Attitude toward Medicaid should concern us all

Letters
Capital Times (Madison, Wis.), May 2, 2011

Dear Editor: I was compelled to respond to the letter written by Dr. Timothy Shaw in The Capital Times concerning Gov. Scott Walker’s proposed cuts in Medicaid. When caring doctors such as Shaw witness other medical professionals who are not willing to service a Medicaid patient, this should make all of us concerned about our current health care system.

My granddaughter was born with Rett syndrome — she didn’t have a choice. She has a very supportive family; we do everything we can to give her what she needs. She is a U.S. citizen who deserves Medicaid for her health care. I was very concerned about the “negative” remark made by the anesthesiologist, who was obviously perturbed when dealing with a Medicaid situation. If we have health care providers with that attitude, I would be concerned not only as a surgeon but as a patient. Where was that anesthesiologist when he was taking the Hippocratic Oath?

This situation makes me very concerned about where health care has gone and where it is going. I agree that the great USA should have “Medicare for ALL” in place of our current ever-rising health care insurance costs. It is obvious that Canada has gotten it right since 1965.

Maureen Engelberger
Madison

Read more: http://host.madison.com/ct/news/opinion/mailbag/article_e9a71b92-320a-5f73-a441-899556f8a539.html#ixzz1S5mp4I8I