PNHP

Brown's dream: deep and accessible care for body and soul

Brown's dream: deep and accessible care for body and soul

By Susan Dugan
Washington Park (Colo.) Profile, Feb. 10, 2011

Health care activist Roya Brown views health care as a basic human right. Drawn first to Health Care for All Colorado, Brown recently founded Young HCAC, whose mission is to “get young people involved in educating, mobilizing and agitating … to get mad about what is going on.”

“As you become a student of Rumi and learn more about Sufi teaching you learn not to be attached to identities such as where you’re from, what’s your religion, who’s your family. You do not label yourself anymore, in order to become a limitless person.”

Still, she credits her open-minded Iranian family for instilling a thirst for adventure and knowledge. “I was raised in a very outspoken, free-willed family. My father was a lawyer with a knack for humanity and our home was always open to people coming and going. My father was my best friend. The only difference between my dad and me was our spirituality. Inside I knew there had to be something intelligent out there that created the moon and sun and stars. My father was a humanist and realist who believed only in what you could touch and see.”

At age 17, Brown left Tehran for England and majored in math and computer science at Oxford Polytechnic where she met and married her American husband and developed an appreciation for the British health care system. The couple moved to Florida in 1976 where she earned a degree in engineering from the University of Central Florida. “We were going to go back to Iran to see how he liked it and maybe live in both places,” she says.  But the 1979 Iranian revolution squashed those plans. Brown found herself unexpectedly “locked out” and unable to return home for many years.

She worked as an engineer and relocated to Denver in 1983. “Tehran is a high mountain place and Florida was never my cup of tea,” she says. “This was the closest to what I call home.” Again she found work as an engineer but her dissatisfaction with the corporate world continued to escalate. By this time a single mother, she found herself questioning elements of the American dream.

“I wanted to start my own business but couldn’t because of our need for health care. I felt enslaved. I began to see that people here get married because of health care; they have chronic illnesses and can’t get out of their nasty jobs because they can’t get health care. Every time I questioned that, people would come back and say, ‘Well, we don’t want to be socialist.’ And I thought – what’s the difference between working for a corporation for benefits and working for the government who works for the corporation who gives you the benefits? When they talk about a capitalist system they don’t talk about people being entrepreneurs, they talk about a small amount of people in the corporation making a lot of money and the rest of them working for benefits.”

The situation rankled. While continuing to work as an engineer, she began math tutoring at her son’s school and fell in love with teaching. In 1997, she went back to school to earn a math teaching license. Later, she took a part-time position at PS1 Charter School and was offered paid tuition to earn a master’s in special education, a degree she is currently completing.

Meanwhile, in 2003, hoping to show her then 17-year-old son something of the larger world, Brown packed up their bags and hit the road. “I had a couple thousand dollars in my pocket and we went to France for a month and then to England. Everywhere we went, I knew people and we were welcomed.” Her son returned to the States to stay with her mother while Brown took a short-term position in Dubai managing a friend’s engineering company. When Iran was struck by a massive earthquake, Brown traveled there, intending to volunteer for a few weeks before returning to the U.S. but deciding to stay another year to help with rebuilding, working as a construction manager.

Toward the end of her stay, her involvement as a bystander in an accident rekindled an interest in Rumi sparked years earlier. “I had wanted to go see the Rumi celebration in Turkey in December but didn’t really have the money. Then I saw a car accident and jumped out of my car to go help a person lying on the pavement.” As she waited for help, someone stole her purse holding her American and Iranian passports, requiring her to travel to Turkey to receive a new U.S. passport. Inspired by what she learned there about Rumi’s spiritual journey, she returned to the States committed to learn and share more.

At home, she found a dear friend, dying of cancer, who could not afford to purchase her employer-sponsored health care insurance. “When she was diagnosed the insurance company told her she needed to wait because of a pre-existing condition – and public health care told her she needed to wait because she was not poor enough to use the system. By the time I arrived they had already written her off to hospice, because she didn’t have any overnight care. She was crying and asked if I would stay with her. I said, ‘Of course.’”

The friends spent the remainder of her days together, talking, laughing and reviewing their lives. “The only part that bothered me was, why I wasn’t here to fight for her. And then I thought – why should anyone have to fight for health care? At the Democratic National Convention I saw this woman with a sign for Health Care for All Colorado (HCAC) and said, ‘I’ve been looking for you.’”

Brown joined the organization in 2008, participated in planning rallies and served on the board as media chair, all the while filled with a vague longing to do something more. When her college student son asked her to suggest a controversial topic for an English paper he was writing, she recommended health care. “We discussed it while he was doing his first, second and tenth drafts. He did a lot of research looking at different reform options. He ended up getting an A, and said, ‘Now I know what you do, and I am really for what you do.’ And I thought: I didn’t have to twist his arm; he just got it all by himself.”

The experience inspired her to launch Young HCAC. “Our mission is basically to get young people involved in educating, mobilizing and agitating around the whole issue of universal health care in Colorado. We are going to have summit conferences and already have a website to attract young adults. We are hoping to develop a movement through sharing people’s personal stories about failing to access and receive needed health care. I call it a movement because it is not going to happen until people are educated, and get mad about what is going on.”

Currently extending Rumi’s wisdom through “Rumi walk and talks” held in Washington Park and local cafés, Brown’s belief in the power of story to teach and persuade transcends her health care activism. “Rumi was Persian and Persians live on proverbs. One saying we have is, ‘The one who searches will find.’ Rumi changed this around to ‘The one who finds will search.’ What he meant, really, is when you find God, you will search. The searching doesn’t even begin until then. So I guess that since I have found, I have become thirsty for wanting to know more and more, and to share it. This world is not about taking, it is a place to give, to leave your legacy, so you will continue to learn and people will learn from you.”

(Editor’s note: to find out more about Young HCAC, visit YoungHCAC.com.)

http://washingtonparkprofile.com/index.php?option=com_content&task=view&id=1371&Itemid=108

Ezra Klein – Gov. Peter Shumlin: The man who'd bring single-payer health care to Vermont

By Ezra Klein
The Washington Post, 02/10/2011

Peter Shumlin, the newly elected governor of Vermont, has a plan for health-care reform: Rather than repeal it, he wants to supercharge it. His state will set up an exchange, and then, as soon as possible, apply for a waiver that allows it to turn the program into a single-payer system. You can read a summary of the plan here (Word file). I spoke with Shumlin this morning, and a lightly edited transcript of our conversation follows.

Ezra Klein: The report (PDF) prepared by Dr. William Hsiao offered three options for Vermont: single payer, a strong public option and a form of private-public single payer. My understanding is that you’re backing the third option. What separates it from a traditional single-payer system?

Peter Shumlin: Single payer means something different to everyone. The way I define it is that health care is a right and not a privilege. It follows the individual and not the employer. And it’s publicly financed. The only difference between single-payer one and single-payer three in Hsiao’s report is that in single-payer three, the actual adjudication of payment is contracted to an existing insurance entity. So the state doesn’t have to set up a new bureaucracy to run it. His modeling suggests that’d be more economical. It’s a minute difference.

EK: And why go to a single-payer system at all?

PS: In Vermont, this is all about cost containment. There are 625,000 people in Vermont. We were spending $2.5 billion on health care a decade ago. Now we’re above $5 billion. And we project we’ll be spending a billion dollars more in 2014. This is where everyone has failed in health-care reform. And this will go after three of our main drivers of costs.

First, Vermont spends 8 cents on every dollar on administrative costs, just chasing the money around. That’s a huge waste of money. Second, we’ll use technology to conquer waste. You’ll get a Vermont medical card, and everyone’s medical records will be on that card, so you’ll go into a doctor’s office and they’ll know what the last doctor did to you. That helps avoid duplication of services. And the last piece, the most challenging, is remaking the payment system so providers are paid for making you healthy, not for doing the most procedures.

EK: Single-payer systems often lose on the ballot and in the legislature. No state has successfully managed to pass one into law, much less implement it. And the objection that usually stands in the way of these projects is that I’m happy with my health-care insurance, and I don’t trust the government to create something new and put me into it. How do you answer that?

PS: I suspect I’m the only politician in America who won an election in this last cycle with TV ads saying I was going to try to pass the first single-payer system in America. This election was a confirmation of my judgment that Vermonters are tired of enriching pharmaceutical companies and insurers and medical equipment makers at the expense of their family members. The reality in Vermont is that there are not very many Vermonters who are happy with the current system. We’re losing our rural providers. Our small hospitals are struggling. And Vermonters are lowering their coverage and paying more and more for it.

EK: How will the funding work? Right now, a lot of money comes from employers. What happens to their share?

PS: Where health care has failed is in designing a cost containment mechanism that works. That’s the really hard part of our job. So I’m asking us to spend the next 12 months designing the tools for cost containment. Once we do, we’ll figure out how to structure the way we pay for it.

EK: One of the things you asked of Dr. Hsiao was to preserve provider incomes. How can you do that while cutting costs? At some point, doesn’t lower spending also mean fewer doctors or hospitals or lower incomes?

PS: The reason Vermont has the opportunity to be the lab for a different kind of change is that we don’t have a lot of high-paid physicians in Vermont. We have a lot of low-paid physicians. We have rural providers who’re making less than they did when they graduated from medical school. Our cost driver is not that we have a lot of physicians running around in Mercedes-Benzes. It’s waste in the system.

EK: How will this interact with other systems? Let’s say I have Kaiser Permanente. I come to Vermont and break my leg. What happens?

PS: Nothing different than what happens right now. You’d go to one of our providers’ offices, and they’d bill Kaiser for that one. No different than if you break a leg in France or Switzerland. Radical as this seems to Americans, the rest of the world has figured this out and gotten it right. We keep getting it wrong, and we’re paying for it.

http://voices.washingtonpost.com/ezra-klein/2011/02/gov_peter_shumlin_the_man_whod.html

Ready for Single-Payer

By Josh Hoxie
The Defender, Guest Columnist
February 8, 2011

With the passage of the Patient Protection and Affordable Care Act last spring, those of us graduating in May won’t have to include losing health insurance on our long list of life-altering changes.

Thanks to the federal legislation, young people may now stay on their parents’ health insurance coverage up to age 26. This is one of the many benefits in the bill conservatives call “Obamacare.”

Less than a year later, the newly elected Republican majority in the House of Representatives has sworn to overturn the landmark legislation as part of a host of conservative initiatives.

Meanwhile, here in Vermont, legislators are primed to do just the opposite: expand health care coverage to all Vermonters in a single-payer system.

Single-payer health care is the talk of the town in the wake of the presentation to legislators by William Hsiao, the Harvard economist tasked with devising a plan for reforming Vermont’s health care system. Single-payer would bring all Vermonters into one system, eliminating the mountains of administrative cost that clog up our current patchwork of private and public insurance companies.

Momentum is building in favor of single-payer reform. Hsiao, known for developing Taiwan’s impressive universal healthcare system, advocates for single-payer in his report claiming that increased costs of covering more people could be offset by reducing inefficiency and administrative costs.

Newly elected Gov. Peter Shumlin endorsed single-payer reform during the campaign and has continued to show his support for major legislative reform. This is key as single-payer legislation cleared the House and Senate in 2005 only to be vetoed by then-Gov. Jim Douglas.

If reform were to pass, Vermont would require a waiver from the federal government to fold Medicare and Medicaid into the single-payer system. U.S. Senator Bernie Sanders has already introduced a bill in the Senate to do this with the support of Sen. Patrick Leahy and Rep. Peter Welch.

The Hsiao report applauds Vermont’s low rate of uninsured and high quality of care, claiming “Vermont’s health system is one of the best in the United States,” but also outlines the need for significant action as he claims the system is “unmanageable and at risk of crisis.”

In the wake of Hsiao’s presentation, over three dozen medical professionals descended on the statehouse in Montpelier Jan. 27 to tell legislators to pass single-payer health reform.

Each one had a story about a patient who was negatively affected by the current system.
Of course, the devil is in the details, which are being hashed out in closed-door sessions by lawmakers in Montpelier.

Single-payer advocates are gearing up for a showdown with lobbyists from drug companies and insurance companies who seek to maintain the inefficiencies they profit from. .

If a bill is proposed this legislative session, we may see landmark legislation for universal health coverage pass by May of this year. By the time seniors graduate, those sticking around Vermont may no longer have to worry about ever going uninsured.

http://journalism.smcvt.edu/defender/2.8.11/OP-ED/Ready%20for%20Single%20Payer.html

Is ending job lock a job killer or a creator of employment opportunities?

CBO: Health law to shrink workforce by 800,000

By J. Lester Feder and Kate Nocera
Politico
February 10, 2011

CBO Director Douglas Elmendorf told the House Budget Committee on Thursday that the health care law will reduce employment by 0.5 percent by 2021 because some people will no longer have to work just to afford health insurance.

“That means that if the reduction in the labor used was workers working the average number of hours in the economy and earning the average wage, that there would be a reduction of 800,000 workers,” Elmendorf said in an exchange with Rep. John Campbell (R-CA).

The report, published in August, said, “The Congressional Budget Office estimates that the legislation, on net, will reduce the amount of labor used in the economy by a small amount — roughly half a percent — primarily by reducing the amount of labor that workers choose to supply … That net effect reflects changes in incentives in the labor market that operate in both directions: Some provisions of the legislation will discourage people from working more hours or entering the workforce, and other provisions will encourage them to work more.”

Republicans gleefully seized on the admission, eagerly promoting it as evidence of what they call the law’s job-killing effect.

“More bad news for American families,” was how Budget Committee Chairman Paul Ryan’s office described the report in a release.

“Since day one Republicans have opposed Obamacare for a simple reason: it would destroy jobs. Minority Leader Pelosi, Leader Reid and others said we were wrong. Guess not,” said John Murray, deputy chief of staff for Majority Leader Eric Cantor.

http://www.politico.com/news/stories/0211/49273.html

And…

The Budget and Economic Outlook: An Update

Congressional Budget Office
August 2010

Effects of Recent Health Care Legislation on Labor Markets

The Patient Protection and Affordable Care Act (Public Law 111-148) and the Health Care Education Reconciliation Act of 2010 (P.L. 111-152) will affect some individuals’ decisions about whether and how much to work and employers’ decisions about hiring workers. The Congressional Budget Office (CBO) estimates that the legislation, on net, will reduce the amount of labor used in the economy by a small amount — roughly half a percent — primarily by reducing the amount of labor that workers choose to supply. That net effect reflects changes in incentives in the labor market that operate in both directions: Some provisions of the legislation will discourage people from working more hours or entering the workforce, and other provisions will encourage them to work more. Moreover, many people will be unaffected by those provisions and will face the same incentives regarding work as they do under current law.

The net reduction in the supply of labor is largely attributable to the substantial expansion of Medicaid and the provision of subsidies that will reduce the cost of insurance obtained through the newly created exchanges, beginning in 2014. In particular:

* The legislation extends Medicaid eligibility to most nonelderly residents whose income is below 138 percent of the federal poverty level (FPL) — including childless adults who are currently ineligible for Medicaid in most states. (The FPL in 2010 is $10,830 for a single person and $22,050 for a family of four.)

* People who purchase insurance through the new exchanges will generally be eligible for tax credits to help them pay their health insurance premiums if their income is between 138 percent and 400 percent of the FPL and they are not offered coverage through an employer. (They may also be eligible for reductions in their cost-sharing requirements.) Those subsidies decline in value as income rises and can, under some circumstances, drop sharply to zero when income exceeds 400 percent of the FPL.
 
The expansion of Medicaid and the availability of subsidies through the exchanges will effectively increase beneficiaries’ financial resources. Those additional resources will encourage some people to work fewer hours or to withdraw from the labor market. In addition, the phaseout of the subsidies as income rises will effectively increase marginal tax rates, which will also discourage work. But because most workers who are offered insurance through their jobs will be ineligible for the exchanges’ subsidies and because most people will have income that is too high to be eligible for Medicaid, those effects on financial resources and marginal tax rates will apply only to a small segment of the population.

Other provisions in the legislation are also likely to diminish people’s incentives to work. Changes to the insurance market, including provisions that prohibit insurers from denying coverage to people because of preexisting conditions and that restrict how much prices can vary with an individual’s age or health status, will increase the appeal of health insurance plans offered outside the workplace for older workers. As a result, some older workers will choose to retire earlier than they otherwise would.

Some other provisions of the legislation may also affect decisions regarding work, but their net effect on the total labor supply will probably be small.

http://cbo.gov/ftpdocs/117xx/doc11705/08-18-Update.pdf

Comment: 

By Don McCanne, MD

The Republicans in Congress have been using this report from the Congressional Budget Office (CBO) to claim that the Patient Protection and Affordable Care Act (ACA) is a “job killer,” even naming the bill that they passed to repeal health reform the “Repealing the Job-Killing Health Care Law Act.” But on reading the report from the CBO on which this claim is made, it is clear that this is not taking jobs away from the workforce; rather it is removing the shackles of job lock from these workers.

Until ACA many individuals who wanted to and were otherwise able to retire early, or wanted to pursue other less structured jobs or avocations, were unable to because they would lose their employer-sponsored health insurance and would be unable to replace it either because it was too expensive or was not available because of preexisting medical disorders. Thus this job lock was one more major defect that the reform bill was designed to correct, and it partially will once fully implemented.

The CBO explicitly states that “the legislation, on net, will reduce the amount of labor used in the economy by a small amount — roughly half a percent — primarily by reducing the amount of labor that workers choose to supply.” Note that word “choose.” These workers will not be terminated. In contrast, they will celebrate freedom, much as the Egyptians are doing today. These 800,000 jobs are not being killed, they are being abandoned voluntarily.

Which leads to a very important point that was left out of the CBO report, and certainly left out of the Republican rhetoric. These are 800,000 jobs that have been opened up to the labor market. Once these 800,000 individuals have stepped aside because they no longer need their jobs, 800,000 new jobs will have been created, not killed. And aren’t the Republicans, the Democrats and the nation at large claiming that job creation is one of our most urgent priorities?

This does not end the problems inherent in a largely employer-sponsored system. Employers are shifting more of the costs to their employees for purely business considerations, trying to control overhead expenses. Under-insurance is becoming the standard. The private plans that will be available through the exchanges will be overpriced and inadequately subs
idized. Waste will be perpetuated because of administrative excesses and the lack of an efficient system of financing health care.

We should relieve employers of their employee health benefits burden, while ending job lock forever. Employees would never again have to worry about health insurance and the costs of it if we had an improved Medicare that covered everyone.

Is ending job lock a job killer or a creator of employment opportunities?

CBO: Health law to shrink workforce by 800,000

By J. Lester Feder and Kate Nocera
Politico
February 10, 2011

CBO Director Douglas Elmendorf told the House Budget Committee on Thursday that the health care law will reduce employment by 0.5 percent by 2021 because some people will no longer have to work just to afford health insurance.

“That means that if the reduction in the labor used was workers working the average number of hours in the economy and earning the average wage, that there would be a reduction of 800,000 workers,” Elmendorf said in an exchange with Rep. John Campbell (R-CA).

The report, published in August, said, “The Congressional Budget Office estimates that the legislation, on net, will reduce the amount of labor used in the economy by a small amount — roughly half a percent — primarily by reducing the amount of labor that workers choose to supply … That net effect reflects changes in incentives in the labor market that operate in both directions: Some provisions of the legislation will discourage people from working more hours or entering the workforce, and other provisions will encourage them to work more.”

Republicans gleefully seized on the admission, eagerly promoting it as evidence of what they call the law’s job-killing effect.

“More bad news for American families,” was how Budget Committee Chairman Paul Ryan’s office described the report in a release.

“Since day one Republicans have opposed Obamacare for a simple reason: it would destroy jobs. Minority Leader Pelosi, Leader Reid and others said we were wrong. Guess not,” said John Murray, deputy chief of staff for Majority Leader Eric Cantor.

http://www.politico.com/news/stories/0211/49273.html

And…

The Budget and Economic Outlook: An Update

Congressional Budget Office
August 2010

Effects of Recent Health Care Legislation on Labor Markets

The Patient Protection and Affordable Care Act (Public Law 111-148) and the Health Care Education Reconciliation Act of 2010 (P.L. 111-152) will affect some individuals’ decisions about whether and how much to work and employers’ decisions about hiring workers. The Congressional Budget Office (CBO) estimates that the legislation, on net, will reduce the amount of labor used in the economy by a small amount — roughly half a percent — primarily by reducing the amount of labor that workers choose to supply. That net effect reflects changes in incentives in the labor market that operate in both directions: Some provisions of the legislation will discourage people from working more hours or entering the workforce, and other provisions will encourage them to work more. Moreover, many people will be unaffected by those provisions and will face the same incentives regarding work as they do under current law.

The net reduction in the supply of labor is largely attributable to the substantial expansion of Medicaid and the provision of subsidies that will reduce the cost of insurance obtained through the newly created exchanges, beginning in 2014. In particular:

* The legislation extends Medicaid eligibility to most nonelderly residents whose income is below 138 percent of the federal poverty level (FPL) — including childless adults who are currently ineligible for Medicaid in most states. (The FPL in 2010 is $10,830 for a single person and $22,050 for a family of four.)

* People who purchase insurance through the new exchanges will generally be eligible for tax credits to help them pay their health insurance premiums if their income is between 138 percent and 400 percent of the FPL and they are not offered coverage through an employer. (They may also be eligible for reductions in their cost-sharing requirements.) Those subsidies decline in value as income rises and can, under some circumstances, drop sharply to zero when income exceeds 400 percent of the FPL.

The expansion of Medicaid and the availability of subsidies through the exchanges will effectively increase beneficiaries’ financial resources. Those additional resources will encourage some people to work fewer hours or to withdraw from the labor market. In addition, the phaseout of the subsidies as income rises will effectively increase marginal tax rates, which will also discourage work. But because most workers who are offered insurance through their jobs will be ineligible for the exchanges’ subsidies and because most people will have income that is too high to be eligible for Medicaid, those effects on financial resources and marginal tax rates will apply only to a small segment of the population.

Other provisions in the legislation are also likely to diminish people’s incentives to work. Changes to the insurance market, including provisions that prohibit insurers from denying coverage to people because of preexisting conditions and that restrict how much prices can vary with an individual’s age or health status, will increase the appeal of health insurance plans offered outside the workplace for older workers. As a result, some older workers will choose to retire earlier than they otherwise would.

Some other provisions of the legislation may also affect decisions regarding work, but their net effect on the total labor supply will probably be small.

http://cbo.gov/ftpdocs/117xx/doc11705/08-18-Update.pdf

The Republicans in Congress have been using this report from the Congressional Budget Office (CBO) to claim that the Patient Protection and Affordable Care Act (ACA) is a “job killer,” even naming the bill that they passed to repeal health reform the “Repealing the Job-Killing Health Care Law Act.” But on reading the report from the CBO on which this claim is made, it is clear that this is not taking jobs away from the workforce; rather it is removing the shackles of job lock from these workers.

Until ACA many individuals who wanted to and were otherwise able to retire early, or wanted to pursue other less structured jobs or avocations, were unable to because they would lose their employer-sponsored health insurance and would be unable to replace it either because it was too expensive or was not available because of preexisting medical disorders. Thus this job lock was one more major defect that the reform bill was designed to correct, and it partially will once fully implemented.

The CBO explicitly states that “the legislation, on net, will reduce the amount of labor used in the economy by a small amount — roughly half a percent — primarily by reducing the amount of labor that workers choose to supply.” Note that word “choose.” These workers will not be terminated. In contrast, they will celebrate freedom, much as the Egyptians are doing today. These 800,000 jobs are not being killed, they are being abandoned voluntarily.

Which leads to a very important point that was left out of the CBO report, and certainly left out of the Republican rhetoric. These are 800,000 jobs that have been opened up to the labor market. Once these 800,000 individuals have stepped aside because they no longer need their jobs, 800,000 new jobs will have been created, not killed. And aren’t the Republicans, the Democrats and the nation at large claiming that job creation is one of our most urgent priorities?

This does not end the problems inherent in a largely employer-sponsored system. Employers are shifting more of the costs to their employees for purely business considerations, trying to control overhead expenses. Under-insurance is becoming the standard. The private plans that will be available through the exchanges will be overpriced and inadequately subsidized. Waste will be perpetuated because of administrative excesses and the lack of an efficient system of financing health care.

We should relieve employers of their employee health benefits burden, while ending job lock forever. Employees would never again have to worry about health insurance and the costs of it if we had an improved Medicare that covered everyone.

A liar for the insurance industry

Interview: Wendell Potter

The SocialistWorker
February 10, 2011

Wendell Potter is the former head of public relations for insurance giant Cigna. In 2009, he became a whistleblower, describing with an insider’s knowledge the behavior of the health insurance industry. His book Deadly Spin: An Insurance Company Insider Speaks Out on How Corporate PR Is Killing Health Care and Deceiving Americans documents those revelations.

Potter spoke to Helen Redmond during a Chicago stop on his national book tour in January.

Helen Redmond: Can you talk about how insurance companies make profits?

Wendell Potter: They make profits in ways that other companies don’t. It’s a unique way of doing business.

McDonald’s, when it sells hamburgers or French fries, doesn’t care whether you are old or young, whether you are sick or not, whether you are male or female. They don’t care about that, but insurance companies care a lot about that. And they don’t want to sell you their product if you have been sick in the past, they don’t want to sell you the product if you are older. If they do, they want to charge you a lot more.

McDonald’s doesn’t charge an older person three times as much for a hamburger as they charge a teenager. Insurance companies can do that. So it’s an entirely different kind of business that way, in order to make Wall Street happy. And I say Wall Street because the industry is controlled by big for-profit corporations these days, and they’re all listed on the New York Stock Exchange, so they have to meet Wall Street’s expectations.

To do that, they have to do things that are often not in the best interest of the people in this country. Their practices result directly in people going without insurance, not being able to buy it at any price. We have too many people in this country who don’t have insurance, largely because of the practices of the insurance companies.

These companies want to avoid risk. They want to avoid paying out medical claims. They try to avoid insuring people who need insurance.

HR: What are some of the “tricks of the trade” that you witnessed?

WP: Canceling insurance when people get sick, a practice called recission. The companies will cancel someone’s policy when they’re in the midst of cancer treatment. They’ll have someone look at the application the person filled out, looking for some justification to cancel the policy.

Often, they’ll find something–some omission that’s usually inadvertent, like one woman who testified before Congress. She was in the midst of treatment for breast cancer, and her policy was cancelled because she forgot to disclose that she had been treated for acne.

Purging small businesses from the rolls is another industry practice that is prevalent. It’s the reason why half of small businesses can’t offer health care to their employees. When one employee gets sick and has high medical claims, the insurance company will raise the rates so much that the employer will have to drop coverage for everyone. Refusing to pay for treatment that a doctor has recommended is another example.

HR: Denial of care.

WP: The industry calls it “denial of coverage.” They use that term because the lawyers insisted. We would always say “denial of coverage.” It’s semantics, because when you deny coverage to someone, you essentially deny care.

Most people in this country don’t have the financial resources to pay for a liver transplant, for example, or for cancer care. They don’t have the financial means to do it, and it’s why a lot of people go bankrupt. They think their insurance will cover them, they have to have the treatments but they find they can’t afford it. Others forego treatment and die. Many die.

HR: You were the public relations person for Cigna. What was your job, in terms of the overall picture?

WP: My job description said my responsibility was to protect and enhance the company’s reputation. It’s very broad, and it encompasses a lot of things–handling crisis communications, situations.

In that category, I was the person who handled what we called “high-profile” cases, when someone was denied coverage for care, and it became a media event. I would be the person, along with my staff, who would deal with the reporters. We tried to explain the company’s point of view.

I dealt with financial matters, particularly with litigation. I dealt with reporters from the Wall Street Journal and other financial media when they announced earnings. So I had to know how these companies make money and how they met or didn’t meet Wall Street’s expectations.

I represented the company at the industry level. I worked with my peers at other insurance companies to plan PR strategy to defeat health care reform. Or try to shape reform to benefit industry.

HR: Did you ever think in the course of your work that you were hurting people?

WP: I didn’t. I wouldn’t let myself think that. On the contrary, I thought some of the things I was doing might actually benefit people.

For example, I would explain the p.r. consequences to the CEO of not overturning a denial when the media was involved. I would say, “If you don’t reconsider this, then this will become a significant p.r. problem.” From time to time, the company would say they’d reconsider, and agreed to pay. I would pat myself on the back and say I played some role in this person getting a life-saving procedure.

That’s rationalization. I think all of us rationalize, and I know I certainly did, and a lot of my fellow employees did. You look at what you do individually, and you think that maybe you contribute to someone getting the care they need, and acknowledge that your company does provide insurance benefits to a lot people, and hopefully those people who are insured get the coverage they need when they need it.

You don’t really think about the other practices of the industry. I didn’t think about it until I rose up the corporate ladder and was able to see things that these companies do to satisfy Wall Street’s expectations. It became abundantly clear to me that what I was doing was contributing to the number of people who don’t have insurance. It was only in the latter part of my career that I came to terms with that.

HR: One of the most interesting parts of your book was your reaction to Michael Moore’s movie Sicko. Can you talk about what you had to do to spin that? It must have been a huge task.

WP: It was. When I finally saw the movie I was affected by it. I think he did an exceptionally good job of knowing how to handle people who were wronged by insurance companies in a way that connected with us emotionally.

It really was a movie that explained in an effective way the problems we have with our health care system in this country–and also, the benefits of other systems. Other countries have been able to achieve universal coverage for their citizens.

Moore knows how to elicit emotional responses, and that happened to me. He was depicting something that few people really understood. I knew from my own personal experience that what he was writing about was true–from my own handling of a lot of these high-profile cases. And they’re not just occasional cases. These things happen all the time. It’s just the fact that most of them aren’t known.

HR: When I saw Sicko,
people in the audience were crying.

WP: It was as if you were sitting across from some of those people and hearing their stories. I’ve heard these stories face-to-face from people as I’ve traveled around, and you want to do something for them. I know that by making Sicko, Moore hoped to change the system so people don’t suffer like that anymore.

HR: So how did you handle the p.r. for Sicko?

WP: I had an obligation to understand the situations that he had in the movie that pertained to Cigna. There were two or three people who were covered by Cigna in the film. I had to figure out a way to explain why we did what we did to those folks in a very general way. I would always say, “I can’t talk about a particular individual or case because of federal privacy laws.”

My role was to say that we provide care for millions of people, and we have an effective way for people to appeal denials. So I more or less talked about process–about how we had a process to keep these things from happening.

HR: Can you discuss the influence of America’s Health Insurance Plans (AHIP) on the new health care legislation passed last year? How much influence did they have on the crafting of the law?

WP: An enormous amount of influence. AHIP made sure one of their CEOs was visiting the White House on a regular basis. Ron Willams of Aetna was there at least half a dozen times during the debate, meeting with the president.

HR: Behind closed doors?

WP: Yes, absolutely behind closed doors–at least, not public meetings. They weren’t all necessarily private meetings with the president, but they were with him and/or staff out of public view. They also have lobbyists who were responsible for crafting the legislation and making sure the industry’s points of view were in the bill.

Karen Ignagni, the head of AHIP, testified before Congress many times. They spent a lot of time on Capitol Hill, both testifying and lobbying.

HR: Is there any concern among AHIP members about the suffering their industry causes?

WP: If there is, it’s never discussed. I’ll speak for myself. I was in a lot of meetings. I never heard any acknowledgement that the industry played a role in the suffering.

There is a great deal of denial. The finger was pointed elsewhere. We’d say, “We’re not the reason why health care costs are so high.”

Also, we’d try to find other reasons why the number of uninsured was so high, other than the practices of the insurance industry. You spend an enormous amount of time looking at other potential reasons for people’s suffering.

HR: Like the pharmaceutical industry and the prices they charge for medication?

WP: Oh yes. Consolidation among providers was another one. As my former CEO would call it, “the real drivers of health care costs.”

HR: And the real drivers of health care costs are?

WP: Driven by other parts of the health care system. And by us.

If you believe the health care executives, all Americans are largely responsible for high health care costs, because we demand the best. We demand drugs we see advertised, we demand the latest technology, so we demand all these things without having any understanding of how much they cost. Or we don’t care how much they cost.

HR: What do you think about PPACA? Will it solve the health care crisis?

WP: It will not solve the health care crisis. It will begin to make a dent in it.

I’ve said the legislation is worth passing. There are a lot of flaws. Much of it was written by the health insurance industry to benefit health insurance companies–like the individual mandate, the requirement that we buy their product.

But it also makes some of their practices illegal. It does have consumer protections in there. It begins to close the “donut hole” for Medicare Part D. Parents can keep their kids on their policies until the age of 26. It will prohibit the industry from using pre-existing conditions [to bar people from insurance].

It does a lot of good things–but it doesn’t bring all of us into coverage and it does not do enough to end these egregious practices. It doesn’t do enough to reduce or control costs. In my view, the enactment of this reform is the “end of the beginning “of health care reform.

HR: They’ll still be able to deny coverage for medical treatment.

WP: Yes, they will. This legislation doesn’t affect that. For most people, it’s a “benefit decision.” The law doesn’t require these companies to cover everything the doctor recommends.

HR: Are you a supporter of single payer as proposed by Physicians for a National Health Program (PNHP)?

WP: I don’t talk about that too much. I try to stick to what I know. And I know a lot about what the insurance industry has done. I don’t pretend to know the ideal solution for the health care crisis. What I have said is it’s outrageous that Congress didn’t give single-payer a fair hearing. It never was debated. And it seems to work quite well for Canadians. They like it a lot.

Why don’t we look at how France has been able to achieve universal coverage? Why did we have a debate just looking at what we’ve got? Why don’t we look at something that’s more far reaching–I hate to use the word “radical”–but something that is different from system that is broken right now?

HR: It would mean the abolition of the insurance industry as we know it. Can you see that happening?

WP: I can see that happening. I can say I’d be in favor of that happening.

HR: What do you hope your book will do?

WP: I hope it will make people think. I hope it will open eyes. I hope people will see that it pulls the curtains back on how corporations behave, what they do to win, and why frankly it’s so hard to get meaningful reform. Why has it taken 100 years to get this far?

http://socialistworker.org/2011/02/10/liar-for-the-insurance-industry

Organizations of Faith for Single-Payer

Eleven faith-based organizations have passed resolutions in support of HR 676/Medicare for All so far.

In the summer of 2008, for example, the Presbyterian Church (USA), adopted a recommendation supporting national health care reform, calling for advocacy and education that pursues “the goal of obtaining legislation that enacts single-payer, universal national health insurance as the program that best responds to the moral imperative of the gospel.”

The United Methodists have called single-payer, the “Pure Alternative” to healthcare reform, and say that the, “United Methodist policy says ‘Yes’ to Jesus’ mandate that we move to a caring non-profit system that uses our money to cover everybody, not for profits, but for a single payer system that provides guaranteed quality healthcare for all.”

If your church or faith group wants to pass a resolution in favor of HR 676/single-payer, let us know. We’ll be happy to provide you with sample resolutions or more information.

Faith Endorsements for Medicare for All

Assembly of the Urban Caucus of the Episcopal Church
General Board on Global Ministries of the United Methodist Church
Presbyterian Health, Education and Welfare Association of the Presbyterian Church (USA)
Church Women United State Governments
Unitarian Universalist Association General Assembly
Presbyterian Church (USA)
Union for Reform Judaism
Ainsworth United Church of Christ of Portland, Oregon
The Network of Spiritual Progressives – Tikkun Magazine
United Church of Christ
Episcopal Church’s General Convention

Bill outlines governor's health care path

By Nancy Remsen
Burlington (Vt.) Free Press, Tue, Feb 8, 2011

MONTPELIER — The woman who Gov. Peter Shumlin hired to guide his health reform effort presented lawmakers Tuesday with the administration’s roadmap — an 80-page bill — leading to a consolidated, publicly financed system that would provide medical coverage to all Vermonters.

“We don’t think we have all the answers, but we think we are putting in front of you a solid proposal for moving forward with major, meaningful health reform,” Anya Rader Wallack, Shumlin’s special assistant on health reform, told members of House Health Care and Senate Health and Welfare committees. “We know you will find ways to change and improve it.”

Democratic legislative leaders embraced the bill as a framework they would use to speedily write their own version. House Speaker Shap Smith, D-Morristown, wants the House Health Committee to vote out a bill by the second week in March.

The proposal created plenty of unease — among lawmakers as well as special interest groups for businesses and hospitals.

Rep. George Till, D-Jericho, a doctor and member of the House Health Care Committee, said the bill asked Vermonters to agree to build a new system without knowing fundamental information such as how the system would be financed or how payments to providers would change.

Others who are anxious to see a single-payer system cheered the bill.

“I feel pretty positive about it,” Dr. Deb Richter of Montpelier said. “Everything in there I feel we can work with.”

The bill would move the state through three stages in four years to reach the target of a single-payer system. Planning would dominate the first stage that would commence in July, with the first structural changes taking place in 2014.

A new, independent Vermont Health Reform Board proposed to begin work later this year would be charged with developing ways to contain health costs by reforming the way doctors and hospitals are paid and setting budgets for health expenditures.

“We need to do that as soon as possible,” Wallack said.

In prepared remarks, Wallack acknowledged the legislation would scare some who are wary of change and disappoint others who want to move faster toward a single payer system.

Wallack asked all sides to “work with us to build a better system.”

She stressed Shumlin’s resolve concerning this initiative — in case anyone thought the administration might give up because of the hurdles ahead.

“Make no mistake, we are committed to reforms that get us as many of the benefits of a single payer as possible under current federal law, and to asking for a waiver from federal law so that we can gain the full benefits of a single payer when that option is available,” she said. “We are committed to this goal and we are giving you a plan for how we will reach it.”

Concerns

Betsy Bishop, president of the Vermont Chamber of Commerce, agreed with Till that the bill left critical decisions for the future. The proposal says the administration would have until January of 2013 to deliver a plan for financing a publicly run system.

“It is difficult to build a system and say we will talk about how to pay for it at a later date,” Bishop said. “I hope to persuade them to have that conversation this year.”

Sen. Kevin Mullin, R-Rutland, noted that many important and potentially controversial decisions wouldn’t be up for discussion this year. They are given to the Vermont Health Care Reform Board, a sixmember panel that the governor would appoint.

“We will see if the Legislature is willing to give up all that authority,” Mullin said.

Bea Grause, president of the Vermont Association of Hospital and Health Care Systems, complained about the Shumlin administration’s proposal to increase a tax on hospitals and reduce reimbursements under a state health insurance program — all to help balance next year’s budget.

“We can’t really separate this bill from the budget,” Grause said. “We are willing to build a better mouse trap,” she continued, “but the state doesn’t have a good track record.”

Support

House Health Care Committee Chairman Mark Larson, D-Burlington, is the sole sponsor of the Shumlin bill in the House. He sees it as the catalyst for a decision about the future of health care in Vermont.

“We need to make a decision about where we are going,” Larson said. “Dr. Hsiao started the conversation,” Larson said, referring to William Hsiao, a Harvard researcher the Legislature hired, who reported two weeks ago that a singlepayer system was the best way to fix the state’s broken health-care system.

“The administration moved that conversation forward when it provided one answer on how to get there.” Larson said.

Cassandra Gekas, health care advocate with the Vermont Public Interest Research Group, called the introduction of the bill “a historic moment for Vermont” because it set out “the most ambitious plan to implement federal health care reform in the nation and will position Vermont as a leader.”

James Haslam, director of the Vermont Workers’ Center that has campaigned to win support for the idea that health care is a human right, said introduction of the bill signaled how much had been accomplished.

His organization, however, is preparing for a fight to win passage of Shumlin’s plan.

“The people who don’t want to move in this direction have a particularly loud voice,” Haslam said. “We are pushing more of the grassroots organizing that got us here. That is going to be really critical.”

Contact Nancy Remsen at 578-5685 or nremsen@bfp.burlingtonfreepress.com

Health reform bill

The Shumlin administration released its health-care reform legislation Tuesday. The bill sets out a three-step process to move the state to a single-payer health system over four years. Here’s the timeline:

Stage one

– After July 1, establish a six-member, independent board to set cost containment targets, create system-wide budgets, review state regulators’ decisions on insurance rates, pursue reforms in the way hospitals and doctors are paid to focus on outcomes rather medical procedures.

– Effective July 1, authorize and begin planning a health benefit exchange, a “mar­ketplace” where Vermonters would be able to compare health insurance coverage. Al­though the exchange might offer multiple in­surance plans, the bill proposes the ex­change would require a common claims process and other administrative simplifica­tion.

– By Jan. 15, 2013, deliver to Legisla­ture details of how the exchange would ac­commodate Medicaid, Medicare, private in­surance, associations, state and local government workers and teachers. Also de­liver to lawmakers two financing plans — one if the state receives federal waivers and can set up a single-payer system in 2014 and one if the state doesn’t receive waivers.

Stage two

– On Jan. 1, 2014, launch Vermont Health Benefit Exchange, with coverage ex­tended to employers with fewer than 100 workers, plus government workers, teachers and Vermonters on Medicaid, Medicare and other state health insurance programs. Pri­vate insurers would be required to sell their products through the exchange. Federal tax credits would be available to reduce the price of coverage for uninsured individuals up to 400 percent of the federal poverty level.

($43,320 for an individual.)
Stage three

– 2014-17: As soon as allowed under federal law or by a waiver, launch Green Mountain Care, a publicly financed health in­surance program offering “essential” benefits to all Vermont residents. Health care would no longer be connected to employment.

What they’re saying

“We are asking everyone involved in this discussion to step back and look at the big picture and work with us to build a better system. We need to cover everyone and control costs. This can’t be done overnight, and it can’t be done recklessly, but it must be done.”
— Anya Rader Wallack, special assistant for health care to Gov. Peter Shumlin

“It is difficult to build a system and say we will talk about how to pay for it at a later date. I hope to persuade them to have that conversation this year.”
— Betsy Bishop, president of the Vermont Chamber of Commerce

“It is truly a historic moment for Vermont. The governor has released a comprehensive health reform bill … that is by far the most ambitious plan to implement federal health care reform in the nation and will position Vermont as a leader.”
— Cassandra Gekas, health care advocate, Vermont Public Interest Research Group

“It creates a starting point. … I don’t think it does much but create a panel that will make all the decisions. Now we will see if the Legislature is willing to give up all that authority. I’m trying to be optimistic that we do more good than harm.”
— Senate Assistant Republican Leader Kevin Mullin of Rutland

“This is a road map. It is up to us to make sure there are no detours we need to take.”
— Senate President Pro Tempore John Campbell, D-Windsor

http://www.burlingtonfreepress.com/article/20110208/NEWS03/110208010/Bill-outlines-governor-s-health-care-path

15 Executives Who Get Paid Millions To Deny You Health Care Coverage

By Business insider, Wall St. Cheat Sheet
March 20, 2010

The business model of American health insurers is basically: try to get healthy customers as clients, and then resist as long as possible when it comes to paying out claims.

That’s actually not an indictment or a criticism.

It’s just the way our system works, and it’s screwed up.

Whatever you feel about Obamacare, you probably think our current system needs reform in some sense.

Below we present the posterboys of the problem. Top healthcare CEOs making millions, leading companies that deny you coverage.

Herbert Fritch, HealthSpring

2008 revenue: $2.2 Billion
Y/Y change: 39.0%

CEO compensation: $800,000

HealthSpring earnings rose by 33% in the Q409 thanks to a 26 percent increase in premiums, according to BizJournal.

Said Fritch: “We are pleased with out operating results in 2009. Moving to 2010, our Medicare Advantage membership has increased despite the fact that we reduced benefits across many of our markets in response to Medicare rate cuts.”

Source: Fortune

Jay Gellert, Health Net

2008 revenue: $15.4 Billion
Y/Y change: 8.9%

CEO compensation: $1.34 Million

Health Net increased the premiums of just one small business in New Jersey 124% in 2010. The company blamed the changes on changing demographics at the small business, according to WSJ.com.

Source: Forbes and Fortune

J. Mario Molina, Molina Health Care

2008 revenue: $3.1 Billion
Y/Y change: 24.9%

CEO compensation: $2.2 Million

Molina boosted profits more than any other Michigan HMO in 2008, according to Crain’s.

Source: Fortune

Allen Wise, Coventry Health Care

2008 revenue: $11.9 Billion
Y/Y change: 20.6%

CEO compensation: $2.6 Million

3.2% of Coventry’s revenues end up as pure profit for the company, according to Fortune.

Source: Forbes

Richard Barasch, Universal American

2008 revenue: $4.6 Billion
Y/Y change: 53.5%

CEO compensation: $3.5 Million

After taking a pay cut from 2006 to 2007, Barasch more than doubled his total compensation for 2008, jumping up from $1,564,293 in 2007, according to FierceHealthCare.

Source: Fortune and Forbes

Angela Braly, WellPoint

2008 revenue: $61.2 Billion
Y/Y change: 0.2%

CEO compensation: $4.07 Million

WellPoint has given on $6.2 million towards helping uninsured individuals find insurance and receive care, only one-fifth of what was promised according to the LA Times.

Source: Forbes and Fortune

Michael McCallister, Humana

2008 revenue: $28.9 Billion
Y/Y change: 14.5%

CEO compensation: $4.76 Million

CEO McCallister considers the use of the company’s aircraft part of his compensation, including the use of the jet for family, according to FierceHealthCare.

Source: Fortune and FierceHealthcare

Stephen Hemsley, UnitedHealth Group

2008 revenue: $81.2 Billion
Y/Y change: 7.6%

CEO compensation: $5.03 Million

United Health has raised premiums on the town of Weston, Connecticut 23.5%. The town only budgeted for a 5% increase, according to The Weston Forum.

Source: Forbes and Fortune

James Carlson, Amerigroup

2008 revenue: $4.5 Billion
Y/Y change: 14.5%

CEO compensation: $5.29 Million

Amerigroup was sued in 2008 for excluding pregnant women and unhealthy patients from Medicaid, according to Reuters. The insurer paid $225 million in a settlement.

Source: Fortune and FierceHealthCare

CFO Joseph Zubretsky, Aetna

2008 revenue: $31.0 Billion
Y/Y change: 12.1%

CFO compensation: $5.57 Million

Aetna has boosted premiums on small businesses in New York 20% this year, according to the New York Post.

Source: Fortune

CFO George Mikan III, UnitedHealth Group

2008 revenue: $81.2 Billion
Y/Y change: 7.6%

CEO compensation: $6.531 Million

UnitedHealth Group has premium increases of 13-16% in Rhode Island in 2009 alone, according to HealthReform.gov.

Source: Fortune

Heath Schiesser, WellCare Health Plans

2008 revenue: $6.5 Billion
Y/Y change: 21.0%

CEO compensation: $8.1 Million

WellCare was subject to a government probe after going public in 2007 on the way it paid executives by providing equity up front, a low salary, and further equity in yearly compensa
tion. This hindered its ability to hold on to top talent, according to Tampa Bay Business Journal.

Source: Fortune and Tampa Bay Business Journal

Michael Neidorff, Centene

2008 revenue: $3.5 Billion
Y/Y change: 20.1%

CEO compensation: $8.77 Million

Following news that Centene had decreased benefits for the elderly and disabled, shares jumped 9%, according to Forbes (2008).

Source: Fortune and FierceHealthCare

H Edward Hanway, Cigna

2008 revenue: $19.1 Billion
Y/Y change: 8.4%

CEO compensation: $10.27 Million

Cigna is trying to convince its customers to fight for lower prices from the hospitals they visit, according to WSJ.com.

Source: Forbes and Fortune

Ronald A Williams, Aetna

2008 revenue: $31.0 Billion
Y/Y change: 12.1%

CEO compensation: $38.12 Million

In order to increase profits year on year from 2009 to 2010, Aetna plans to raise premiums to the point where up to 650,000 people would have to drop their coverage in 2010, according to the Huffington Post.

Source: Forbes and Fortune

http://wallstcheatsheet.com/breaking-news/15-executives-who-get-paid-millions-to-deny-you-health-care-coverage.html

Tiered and limited networks deprive patients of choice

Plans steer patients to lower-cost hospitals

By Liz Kowalczyk
The Boston Globe
February 10, 2011

Hundreds of small businesses have signed up in the past month for a new Blue Cross Blue Shield health insurance plan that charges employees hefty fees for seeking care at more expensive hospitals, in an effort to steer them to lower cost care.

The popularity of the plan — Blue Cross Blue Shield of Massachusetts says it is the fastest launch ever of a new product — is the latest sign that the once radical idea has been embraced as a way to control soaring health care costs, even as pricier hospitals warn of a possible backlash and cuts in services.

Other Massachusetts insurers also report brisk business in plans that offer lower premiums in exchange for limits on use of high-cost care. The plans either charge consumers extra for receiving care from popular but expensive hospitals or doctors, or bar them altogether from seeking treatment at those institutions and practices.

The Blue Cross Hospital Choice plan, which went on sale last month, charges members, for example, an extra $1,000 for an inpatient stay or outpatient surgery, and $450 more for an MRI, at 15 higher-cost hospitals, including Massachusetts General and Brigham and Women’s hospitals, Children’s Hospital Boston, and UMass Memorial Medical Center in Worcester.

In Massachusetts, insurers traditionally have offered wide-open networks, meaning members can check into a pricey teaching hospital to deliver a baby rather than go to a less expensive community hospital, and can schedule MRIs in a hospital outpatient department, even when freestanding clinics provide similar service for less money. But amid intense scrutiny into why health care costs in Massachusetts are climbing 7.5 percent a year, “tiered” and “limited” networks have emerged as an immediate way to control costs.

But executives at Partners HealthCare, the parent organization of Massachusetts General and Brigham and Women’s, said that while these new policies are making providers more sensitive to price, they have pitfalls.

Dr. Thomas Lee, head of Partners’ physician group, said some people will become seriously ill and realize they can’t go to, or can’t afford, their first-choice hospital.

http://www.boston.com/business/healthcare/articles/2011/02/10/plans_steer_patients_to_lower_cost_hospitals/?page=full

Comment: 

By Don McCanne, MD

Although private insurers in California have led the way in innovative product changes in an attempt to keep insurance premiums competitive (at the great cost of impairing the protection afforded by their products), Massachusetts is now serving as the laboratory for what we might expect under the Affordable Care Act (ACA), since Massachusetts got a jump start on the ACA model.

What determines which insurance policy people will select for themselves or for their families? The premiums or the benefits? If they are relatively healthy, which most people are, they may look at both, but the decision will most likely come down to choosing a plan with a premium that they can barely afford over a plan with a premium that is totally beyond their means. They are less likely to study the fine print on the benefits that states, for instance, the less expensive plan uses “tiered” or “limited” networks.

As this Boston Globe article indicates, the financial penalties for using a higher tiered facility can be very severe. And limited networks? The plan pays nothing outside of the network. Plan-approved provider networks have been used by the insurers as a tool to leverage the negotiations for provider rates. The expansion in the use of tiered or limited networks now uses the patient as a tool – contrary to their own interests – in an attempt to reduce spending so that premiums remain affordable, if only barely so.

Tiered and limited plans are growing rapidly in Massachusetts. Some of the most prestigious academic medical centers in the nation are being targeted and could face serious budget constraints. In using these tools of the marketplace, financial decisions are not being made based on what services should be provided and paid for; instead they are being made on the basis of what will best support the market of private insurance plans. As a result, serious damage could be inflicted on the infrastructure of our health care delivery system.

Imagine Medicare engaging in this behavior. You really can’t. Although always a work in process, Medicare includes the entire health care delivery system as its network, and reimburses at rates that have some semblance of maintaining the financial viability of the delivery system, while reining in waste. It can do better, and would do so if it were purchasing essentially all care provided in the United States, through an improved Medicare for all. The multiple tools of a single payer system would dramatically improve the efficiency of our health care purchasing.

A Better Approach to Health Care

As the current health law comes under attack and our national deficit continues to grow, single-payer plans are gaining more and more interest.

By Margaret Flowers, MD
YES! Magazine, Feb 08, 2011

Last month, fulfilling a campaign promise, Republicans in the House of Representatives voted to repeal “Obamacare.” The vote was primarily a symbolic gesture. House leadership knows repeal will not survive a vote in the Senate or a Presidential veto. But the Republican leadership is likely to attempt steps that would lead to a de facto repeal of the health law.

One of the main strategies for weakening the law will be to prevent funding to key elements and programs—particularly of those having to do with enforcing regulations on the insurance industry.

We can also expect Republican members of Congress to promote “triggers,” which change the law if certain goals are not met. These changes will drive employers to stop offering health insurance to employees and instead offer fixed contributions that employees can use to purchase health insurance on the open market. As premiums rise, more people will be forced to purchase skimpier policies, leaving them unprotected in times of need.

Republicans also advocate for the opening of the health insurance market across state lines in the belief that this will create competition that reduces the cost of health insurance. In truth, in order to make a profit, health insurers compete to insure the healthiest patients and to avoid paying for care. The result will be a race to the bottom.

Health insurance regulations—which control, for example, what services insurers must cover, or how many physicians they must allow patients to choose between—were put into place to protect patients. Regulations vary by state, meaning that, just as corporations move their headquarters to states with lower taxes, health insurers will base themselves in states with fewer regulations. Premiums may become cheaper, but at the cost of higher out-of-pocket costs and lower quality benefits that leave patients unable to receive needed care or forced into bankruptcy by an unexpected illness or accident.

Such changes shift more and more of the cost of care onto individual patients—particularly those who have the greatest needs. This is exactly the wrong approach if our goal is the creation of a system that improves the health of our population and controls our soaring health care expenditures.

The United States is the only industrialized nation that does not have a coherent health system and that allows investor-owned corporations to finance and provide health services. As a result, we have the highest health care costs in the world but relatively poor outcomes—not to mention a growing number of people who can’t afford the care they need.

We have the cruelest form of health care rationing in this nation: rationing based on the ability to pay. Except for those in the very highest income brackets, we are all at risk of personal bankruptcy due to a health crisis. In fact, the U.S. is unique in that most personal bankruptcies are due to medical illness or medical costs—and more than three-fourths of those who experienced medical bankruptcy were insured.

The good news is that it doesn’t have to be this way. As the weakening of the federal health care law begins, a nationwide effort for more substantial reform—a national single-payer system, also known as improved Medicare for All—is taking place. Health professionals and advocates around the nation are actively engaged in educating, organizing, and agitating to promote Medicare for All. There are tremendous opportunities at the state and national level to pass a single payer system.

As the current health law falls apart and our national deficit continues to grow, single-payer plans are gaining more and more interest. More than 20 state legislatures have either passed single payer health bills or are in the process of creating such bills. California has passed a single payer bill twice, only to have it vetoed. Advocates are working to pass the law once again this year. Vermont is in the process of putting together legislation setting up a system similar to single-payer; legislators expect to pass their bill this year. At the federal level, single-payer bills will be introduced in both the House and Senate.

Our current health spending is enough to pay for high quality comprehensive care for everyone if we switch to a single risk pool that is transparent and publicly accountable.

Dr. Margaret Flowers wrote this article for YES! Magazine, a national, nonprofit media organization that fuses powerful ideas with practical actions. Dr. Flowers is a congressional fellow with Physicians for a National Health Program and a pediatrician based in Baltimore.

Tiered and limited networks deprive patients of choice

Plans steer patients to lower-cost hospitals

By Liz Kowalczyk
The Boston Globe
February 10, 2011

Hundreds of small businesses have signed up in the past month for a new Blue Cross Blue Shield health insurance plan that charges employees hefty fees for seeking care at more expensive hospitals, in an effort to steer them to lower cost care.

The popularity of the plan — Blue Cross Blue Shield of Massachusetts says it is the fastest launch ever of a new product — is the latest sign that the once radical idea has been embraced as a way to control soaring health care costs, even as pricier hospitals warn of a possible backlash and cuts in services.

Other Massachusetts insurers also report brisk business in plans that offer lower premiums in exchange for limits on use of high-cost care. The plans either charge consumers extra for receiving care from popular but expensive hospitals or doctors, or bar them altogether from seeking treatment at those institutions and practices.

The Blue Cross Hospital Choice plan, which went on sale last month, charges members, for example, an extra $1,000 for an inpatient stay or outpatient surgery, and $450 more for an MRI, at 15 higher-cost hospitals, including Massachusetts General and Brigham and Women’s hospitals, Children’s Hospital Boston, and UMass Memorial Medical Center in Worcester.

In Massachusetts, insurers traditionally have offered wide-open networks, meaning members can check into a pricey teaching hospital to deliver a baby rather than go to a less expensive community hospital, and can schedule MRIs in a hospital outpatient department, even when freestanding clinics provide similar service for less money. But amid intense scrutiny into why health care costs in Massachusetts are climbing 7.5 percent a year, “tiered” and “limited” networks have emerged as an immediate way to control costs.

But executives at Partners HealthCare, the parent organization of Massachusetts General and Brigham and Women’s, said that while these new policies are making providers more sensitive to price, they have pitfalls.

Dr. Thomas Lee, head of Partners’ physician group, said some people will become seriously ill and realize they can’t go to, or can’t afford, their first-choice hospital.

http://www.boston.com/business/healthcare/articles/2011/02/10/plans_steer_patients_to_lower_cost_hospitals/?page=full

Although private insurers in California have led the way in innovative product changes in an attempt to keep insurance premiums competitive (at the great cost of impairing the protection afforded by their products), Massachusetts is now serving as the laboratory for what we might expect under the Affordable Care Act (ACA), since Massachusetts got a jump start on the ACA model.

What determines which insurance policy people will select for themselves or for their families? The premiums or the benefits? If they are relatively healthy, which most people are, they may look at both, but the decision will most likely come down to choosing a plan with a premium that they can barely afford over a plan with a premium that is totally beyond their means. They are less likely to study the fine print on the benefits that states, for instance, the less expensive plan uses “tiered” or “limited” networks.

As this Boston Globe article indicates, the financial penalties for using a higher tiered facility can be very severe. And limited networks? The plan pays nothing outside of the network. Plan-approved provider networks have been used by the insurers as a tool to leverage the negotiations for provider rates. The expansion in the use of tiered or limited networks now uses the patient as a tool – contrary to their own interests – in an attempt to reduce spending so that premiums remain affordable, if only barely so.

Tiered and limited plans are growing rapidly in Massachusetts. Some of the most prestigious academic medical centers in the nation are being targeted and could face serious budget constraints. In using these tools of the marketplace, financial decisions are not being made based on what services should be provided and paid for; instead they are being made on the basis of what will best support the market of private insurance plans. As a result, serious damage could be inflicted on the infrastructure of our health care delivery system.

Imagine Medicare engaging in this behavior. You really can’t. Although always a work in process, Medicare includes the entire health care delivery system as its network, and reimburses at rates that have some semblance of maintaining the financial viability of the delivery system, while reining in waste. It can do better, and would do so if it were purchasing essentially all care provided in the United States, through an improved Medicare for all. The multiple tools of a single payer system would dramatically improve the efficiency of our health care purchasing.