PNHP

Using single payer to establish political credibility

Using single payer to establish political credibility

Democrats spar over health care claim

WCAX.com
July 21, 2010
The gloves are off in the fight for the Democratic nomination for governor (Vermont). Former State Senator Matt Dunne is calling out Senator Peter Shumlin for what he says is a troubling misstatement.
Peter Shumlin first said it two weeks ago in an online questionnaire, then again this week in a mailing to voters: “I am the only candidate who sponsored a single-payer health care bill.” Dunne says that is simply not true.
“The facts are that I also sponsored a single-payer health care bill,” Dunne told reporters outside the Statehouse Wednesday.
He did. During the 1993-1994 legislative session when Dunne was serving as a State Representative he co-sponsored a bill that would have created a single-payer system. He wants a public retraction of Shumlin’s claim and is requesting that Shumlin send out another mailer with the correction.
“It is critically important that Peter Shumlin take action and take action quickly to correct the record, to be clear in public that he was factually wrong,” says Dunne.
http://www.wcax.com/Global/story.asp?S=12850303

When two candidates for governor are engaged in a political skirmish as to which one is the bona fide single payer supporter, then we know that single payer is back on the table (at least in Vermont).

It's back – H.R. 5808 – the public option

H.R. 5808 - To amend the Patient Protection and Affordable Care Act to establish a public health insurance option.

Introduced July 21, 2010 by Rep. Lynn C. Woolsey, with 128 cosponsors
The Library of Congress

SEC. 1325. PUBLIC HEALTH INSURANCE OPTION.
  (a) (1)  ESTABLISHMENT- For years beginning with 2014, the Secretary of Health and Human Services (in this subtitle referred to as the `Secretary’) shall provide for the offering through Exchanges established under this title of a health benefits plan (in this Act referred to as the `public health insurance option’) that ensures choice, competition, and stability of affordable, high-quality coverage throughout the United States in accordance with this section. In designing the option, the Secretary’s primary responsibility is to create a low-cost plan without compromising quality or access to care.

http://thomas.loc.gov/

And…

Letter from Douglas W. Elmendorf, Director

To: Honorable Fortney Pete Stark, Chairman, Subcommittee on Health, Committee on Ways and Means
Congressional Budget Office
July 22, 2010

Under the proposal (H.R. 5808), a public health insurance plan would be established and administered by the Secretary of Health and Human Services (HHS), and it would have to charge premiums that fully cover its costs for benefit payments and administrative expenses.

The Congressional Budget Office (CBO) estimates that the public plan’s premiums would be 5 percent to 7 percent lower, on average, than the premiums of private plans offered in the exchanges.

In deciding whether to enroll in the public plan, potential subscribers would consider those premium differences along with various other factors, including the number of providers who chose to participate in that plan. CBO expects that some providers would decline to participate in the public plan because its payment rates would be lower, on average, than private plans’ payment rates. Even so, many providers would be likely to participate, in part because they would expect a plan administered by HHS to attract a substantial number of enrollees.

Taking into account all of the relevant factors, CBO estimates that roughly one-third of the people obtaining coverage through the insurance exchanges would enroll in the public plan. CBO estimates that about 25 million people would purchase coverage individually through the exchanges in the 2017–2019 period under the proposal; in addition, about 13 million people would be expected to obtain employment-based coverage through the exchanges — so total enrollment in exchange plans would be about 38 million. Total enrollment in the public plan would thus be roughly 13 million.

Compared with projections of enrollment under current law for the 2017–2019 period, CBO estimates that about three-quarters of a million more people would obtain individually purchased coverage and about three-quarters of a million fewer would have employment-based coverage. The proposal would have minimal effects on the number of people with other sources of coverage and on the number of people who would be uninsured.

CBO and the staff of the Joint Committee on Taxation (JCT) estimate that the proposal would reduce federal budget deficits through 2019 by about $53 billion. That estimate includes a $37 billion reduction in exchange subsidies and a $27 billion increase in tax revenues that would result from changes in employment-based coverage, partly offset by an $11 billion increase in costs for providing tax credits to small employers.

http://www.cbo.gov/ftpdocs/116xx/doc11689/Stark_Letter-HR_5808-07-22.pdf

Comment: 

By Don McCanne, MD

So here is the stand-alone bill for the public insurance option that created so much controversy during the reform process. As we look closer at this option, we can see that the great tragedy of the public option debate was that this almost worthless proposal diverted our attention away from the debate that we should have been having – a debate over whether or not we should enact a single, universal public insurance program.

Let’s look first at the very narrow impact of the features of the public option, and then we’ll look at the very broad and crucial implications of returning to this debate instead of the one that we should be having.

First of all, what impact would this have on the numbers of insured? The additional three-quarters of a million individuals net who would obtain individually purchased coverage would be offset by approximately the same number who would no longer have employer-sponsored coverage. Enacting the public option will produce no net gain in the numbers of individuals insured.

CBO estimates that premiums for the public option will be 5 to 7 percent lower than the premiums for the private plans offered in the exchanges. This savings is from a combination of lower administrative costs for the public option, and the ability of the government to extract greater price and fee concessions from the providers of health care. Paying a slightly lower premium may not be wise if the providers start bailing out of the system.

Also, the supporters of this measure shouldn’t pretend that the very modest reduction in administrative costs of these public plans somehow addresses the profound administrative waste throughout our system. The single payer model would be effective in reducing this waste by hundreds of billions of dollars, whereas H.R. 5808  merely takes a paring knife to plans that would cover only about 4 percent of us, while neglecting the profound administrative waste of the other insurers and the administrative burden that they place on the health care delivery system. The public option is merely another plan in the insurance exchange markets, and, as such, fails to provide the fundamental structural financing reform that we need.

Further, the 5 to 7 percent difference could easily be lost in the fog of comparing the government subsidies for the exchange plans with the employers’ contributions to the premiums of employer-sponsored plans. A policy that has a very modest benefit for 13 million people is unimpressive when we are trying to fix a system so that it takes care of all 310 million of us.

CBO estimates that the measure would reduce the federal budget deficits through 2019 by about $53 billion, partly by decreasing subsidies in the exchanges and increasing income and payroll taxes for those losing employer-sponsored coverage. This reduction in government spending results in increased costs to individuals – a trend that already is having a negative impact on affordable access to health care. Nevertheless, 53 billion dollars is hardly a blip when you consider that we’ll be spending about 30,000 billion dollars on health care through 2019. Besides, though CBO is required to estimate the impact on the federal budget, what we really care about is our total national health expenditures (NHE) and not the portion that passes through a government budget.

So the narrow impact is that the public option fails to meet the goals of reform since it does nothing to increase the net numbers of individuals with insurance, and it doesn’t even provide a blip in our NHE.

The broader impact of H.R. 5808 is much more consequential. Considerable political capital will be consumed in efforts to enact it. The managers of the bill would understand that any consideration of a single payer national health program would have to be left off of the table since that model actually would accomplish the goals of reform. To go through another process that alienates so many colleagues in the health care justice camp risks creating an impasse to real reform that could last many years or perh
aps even a decade or two.

The financing infrastructure of the Patient Protection and Affordable Health Care Act cannot work to achieve equitable health care financing for everyone. We can’t afford to waste political capital on a legislative amendment that merely appeases those who lost the public option debate, but does nothing to build the solid financial infrastructure that we need.

Let’s spend all of our political capital on real reform: a single payer national health program – an improved Medicare for everyone.

It’s back – H.R. 5808 – the public option

H.R. 5808 – To amend the Patient Protection and Affordable Care Act to establish a public health insurance option.

Introduced July 21, 2010 by Rep. Lynn C. Woolsey, with 128 cosponsors
The Library of Congress

SEC. 1325. PUBLIC HEALTH INSURANCE OPTION.
  (a) (1)  ESTABLISHMENT- For years beginning with 2014, the Secretary of Health and Human Services (in this subtitle referred to as the `Secretary’) shall provide for the offering through Exchanges established under this title of a health benefits plan (in this Act referred to as the `public health insurance option’) that ensures choice, competition, and stability of affordable, high-quality coverage throughout the United States in accordance with this section. In designing the option, the Secretary’s primary responsibility is to create a low-cost plan without compromising quality or access to care.

http://thomas.loc.gov/

And…

Letter from Douglas W. Elmendorf, Director

To: Honorable Fortney Pete Stark, Chairman, Subcommittee on Health, Committee on Ways and Means
Congressional Budget Office
July 22, 2010

Under the proposal (H.R. 5808), a public health insurance plan would be established and administered by the Secretary of Health and Human Services (HHS), and it would have to charge premiums that fully cover its costs for benefit payments and administrative expenses.

The Congressional Budget Office (CBO) estimates that the public plan’s premiums would be 5 percent to 7 percent lower, on average, than the premiums of private plans offered in the exchanges.

In deciding whether to enroll in the public plan, potential subscribers would consider those premium differences along with various other factors, including the number of providers who chose to participate in that plan. CBO expects that some providers would decline to participate in the public plan because its payment rates would be lower, on average, than private plans’ payment rates. Even so, many providers would be likely to participate, in part because they would expect a plan administered by HHS to attract a substantial number of enrollees.

Taking into account all of the relevant factors, CBO estimates that roughly one-third of the people obtaining coverage through the insurance exchanges would enroll in the public plan. CBO estimates that about 25 million people would purchase coverage individually through the exchanges in the 2017–2019 period under the proposal; in addition, about 13 million people would be expected to obtain employment-based coverage through the exchanges — so total enrollment in exchange plans would be about 38 million. Total enrollment in the public plan would thus be roughly 13 million.

Compared with projections of enrollment under current law for the 2017–2019 period, CBO estimates that about three-quarters of a million more people would obtain individually purchased coverage and about three-quarters of a million fewer would have employment-based coverage. The proposal would have minimal effects on the number of people with other sources of coverage and on the number of people who would be uninsured.

CBO and the staff of the Joint Committee on Taxation (JCT) estimate that the proposal would reduce federal budget deficits through 2019 by about $53 billion. That estimate includes a $37 billion reduction in exchange subsidies and a $27 billion increase in tax revenues that would result from changes in employment-based coverage, partly offset by an $11 billion increase in costs for providing tax credits to small employers.

http://www.cbo.gov/ftpdocs/116xx/doc11689/Stark_Letter-HR_5808-07-22.pdf

Comment: 

By Don McCanne, MD

So here is the stand-alone bill for the public insurance option that created so much controversy during the reform process. As we look closer at this option, we can see that the great tragedy of the public option debate was that this almost worthless proposal diverted our attention away from the debate that we should have been having – a debate over whether or not we should enact a single, universal public insurance program.

Let’s look first at the very narrow impact of the features of the public option, and then we’ll look at the very broad and crucial implications of returning to this debate instead of the one that we should be having.

First of all, what impact would this have on the numbers of insured? The additional three-quarters of a million individuals net who would obtain individually purchased coverage would be offset by approximately the same number who would no longer have employer-sponsored coverage. Enacting the public option will produce no net gain in the numbers of individuals insured.

CBO estimates that premiums for the public option will be 5 to 7 percent lower than the premiums for the private plans offered in the exchanges. This savings is from a combination of lower administrative costs for the public option, and the ability of the government to extract greater price and fee concessions from the providers of health care. Paying a slightly lower premium may not be wise if the providers start bailing out of the system.

Also, the supporters of this measure shouldn’t pretend that the very modest reduction in administrative costs of these public plans somehow addresses the profound administrative waste throughout our system. The single payer model would be effective in reducing this waste by hundreds of billions of dollars, whereas H.R. 5808  merely takes a paring knife to plans that would cover only about 4 percent of us, while neglecting the profound administrative waste of the other insurers and the administrative burden that they place on the health care delivery system. The public option is merely another plan in the insurance exchange markets, and, as such, fails to provide the fundamental structural financing reform that we need.

Further, the 5 to 7 percent difference could easily be lost in the fog of comparing the government subsidies for the exchange plans with the employers’ contributions to the premiums of employer-sponsored plans. A policy that has a very modest benefit for 13 million people is unimpressive when we are trying to fix a system so that it takes care of all 310 million of us.

CBO estimates that the measure would reduce the federal budget deficits through 2019 by about $53 billion, partly by decreasing subsidies in the exchanges and increasing income and payroll taxes for those losing employer-sponsored coverage. This reduction in government spending results in increased costs to individuals – a trend that already is having a negative impact on affordable access to health care. Nevertheless, 53 billion dollars is hardly a blip when you consider that we’ll be spending about 30,000 billion dollars on health care through 2019. Besides, though CBO is required to estimate the impact on the federal budget, what we really care about is our total national health expenditures (NHE) and not the portion that passes through a government budget.

So the narrow impact is that the public option fails to meet the goals of reform since it does nothing to increase the net numbers of individuals with insurance, and it doesn’t even provide a blip in our NHE.

The broader impact of H.R. 5808 is much more consequential. Considerable political capital will be consumed in efforts to enact it. The managers of the bill would understand that any consideration of a single payer national health program would have to be left off of the table since that model actually would accomplish the goals of reform. To go through another process that alienates so many colleagues in the health care justice camp risks creating an impasse to real reform that could last many years or perhaps even a decade or two.

The financing infrastructure of the Patient Protection and Affordable Health Care Act cannot work to achieve equitable health care financing for everyone. We can’t afford to waste political capital on a legislative amendment that merely appeases those who lost the public option debate, but does nothing to build the solid financial infrastructure that we need.

Let’s spend all of our political capital on real reform: a single payer national health program – an improved Medicare for everyone.

California PNHP's President Dr. Jim Kahn’s testimony to the California Assembly Health Committee

James G. Kahn, MD, MPH
Testimony 29 June 2010
California Assembly Health Committee

Thank you for inviting me to speak before your committee. Health care reform is a timely and pressing issue, and I’m pleased to contribute to the discussion.

My name is James G. Kahn. I am a professor of health policy at UCSF, and President of the California chapter of Physicians for a National Health Program.

I want to thank Sen. Mark Leno for his inspirational leadership for universal health care, as well as his co-authors such as on this committee.

My perspective in assessing health care interventions is that of a hard-nosed, data-driven economist. My research at UCSF focuses on how to critically read evidence on intervention effectiveness, and how to shift resources to the most efficient uses. My assessments are intended to be pragmatic and realistic.

My pragmatic and realistic assessment of single payer health care – as encompassed in SB 810 – is that it would sharply reduce inefficiency and waste, while returning to medicine a focus on providing the best quality health care.

I will highlight two major points in my testimony – the huge savings realized by single payer due to increased efficiency, and the interest of physicians in single payer.

First I would like to establish an important fundamental concept: single payer is a financing intervention – how we pay for care – not a change in how health care is delivered. All monies are collected and disbursed by a trust fund. The provider system remains as it is today – mainly private hospitals, medical offices, and so on – with the same incentives to attract and retain patients, and even greater autonomy in medical decision making. Thus, single payer is a public-private partnership, adopting the best traits of both systems.

My particular expertise in health system research is in billing and insurance-related administrative costs. My colleagues and I have demonstrated that as much as 1 dollar in seven that goes into a medical office is used to collect payment – for contracting, billing, copayment collection, and repeated appeals of claim denials. Overall, for health care funded through the private insurance system, fully 38 cents of each dollar goes to administration and profits, leaving only 62 cents for clinical care. 20 cents is avoidable administration – which would mainly disappear with single payer. This translates to billions of dollars that become available to pay for health care – more than $200 billion per year in the United States, and $30 billion in California.

That’s why economists like single payer – it improves the technical efficiency of providing health care.

Why do physicians like single payer? In one national survey, published in the Annals of Internal Medicine, 59% said they support single payer reform.

There are several reasons:

* Doctors have long felt mistreated by insurers: unpayed or under-payed for delivered health care services. Private insurers have a far worse payment track record than Medicare.

* Doctors resent the time they have to spend on billing and insurance-related administration – an average of nearly 60 minutes per day. They’d rather provide health care.

* Doctors would like to see that all patients have quality insurance that assures access to needed services. In this way, care decisions can reflect clinical decisions which take into account what care is needed, rather than financial constraints.

When you put together administrative efficiency and doctors focused on providing care, you get lower costs and higher quality.

The other rich democracies (the countries in the OECD) spend approximately half as much per person as we do on health care. Much of that savings is in lower administrative costs.

And they have much better health care quality and outcomes. This was recently demonstrated again in a Commonwealth Fund multi-country study.

In economics, it is often said that people are willing to pay for quality. In health care, we have the remarkable situation of how paying less – reducing the system’s fat – is the route to improved quality.

The new federal health reform legislation, which expands private insurance, does not provide the benefits of single payer. It does, however, allow states to implement single payer. PNHP-California encourages you to do so.

Thank you.

California PNHP’s President Dr. Jim Kahn’s testimony to the California Assembly Health Committee

James G. Kahn, MD, MPH
Testimony 29 June 2010
California Assembly Health Committee

Thank you for inviting me to speak before your committee. Health care reform is a timely and pressing issue, and I’m pleased to contribute to the discussion.

My name is James G. Kahn. I am a professor of health policy at UCSF, and President of the California chapter of Physicians for a National Health Program.

I want to thank Sen. Mark Leno for his inspirational leadership for universal health care, as well as his co-authors such as on this committee.

My perspective in assessing health care interventions is that of a hard-nosed, data-driven economist. My research at UCSF focuses on how to critically read evidence on intervention effectiveness, and how to shift resources to the most efficient uses. My assessments are intended to be pragmatic and realistic.

My pragmatic and realistic assessment of single payer health care – as encompassed in SB 810 – is that it would sharply reduce inefficiency and waste, while returning to medicine a focus on providing the best quality health care.

I will highlight two major points in my testimony – the huge savings realized by single payer due to increased efficiency, and the interest of physicians in single payer.

First I would like to establish an important fundamental concept: single payer is a financing intervention – how we pay for care – not a change in how health care is delivered. All monies are collected and disbursed by a trust fund. The provider system remains as it is today – mainly private hospitals, medical offices, and so on – with the same incentives to attract and retain patients, and even greater autonomy in medical decision making. Thus, single payer is a public-private partnership, adopting the best traits of both systems.

My particular expertise in health system research is in billing and insurance-related administrative costs. My colleagues and I have demonstrated that as much as 1 dollar in seven that goes into a medical office is used to collect payment – for contracting, billing, copayment collection, and repeated appeals of claim denials. Overall, for health care funded through the private insurance system, fully 38 cents of each dollar goes to administration and profits, leaving only 62 cents for clinical care. 20 cents is avoidable administration – which would mainly disappear with single payer. This translates to billions of dollars that become available to pay for health care – more than $200 billion per year in the United States, and $30 billion in California.

That’s why economists like single payer – it improves the technical efficiency of providing health care.

Why do physicians like single payer? In one national survey, published in the Annals of Internal Medicine, 59% said they support single payer reform.

There are several reasons:

* Doctors have long felt mistreated by insurers: unpayed or under-payed for delivered health care services. Private insurers have a far worse payment track record than Medicare.

* Doctors resent the time they have to spend on billing and insurance-related administration – an average of nearly 60 minutes per day. They’d rather provide health care.

* Doctors would like to see that all patients have quality insurance that assures access to needed services. In this way, care decisions can reflect clinical decisions which take into account what care is needed, rather than financial constraints.

When you put together administrative efficiency and doctors focused on providing care, you get lower costs and higher quality.

The other rich democracies (the countries in the OECD) spend approximately half as much per person as we do on health care. Much of that savings is in lower administrative costs.

And they have much better health care quality and outcomes. This was recently demonstrated again in a Commonwealth Fund multi-country study.

In economics, it is often said that people are willing to pay for quality. In health care, we have the remarkable situation of how paying less – reducing the system’s fat – is the route to improved quality.

The new federal health reform legislation, which expands private insurance, does not provide the benefits of single payer. It does, however, allow states to implement single payer. PNHP-California encourages you to do so.

Thank you.

It's back – H.R. 5808 – the public option

H.R. 5808 – To amend the Patient Protection and Affordable Care Act to establish a public health insurance option.

Introduced July 21, 2010 by Rep. Lynn C. Woolsey, with 128 cosponsors
The Library of Congress
SEC. 1325. PUBLIC HEALTH INSURANCE OPTION.
(a) (1)  ESTABLISHMENT- For years beginning with 2014, the Secretary of Health and Human Services (in this subtitle referred to as the `Secretary’) shall provide for the offering through Exchanges established under this title of a health benefits plan (in this Act referred to as the `public health insurance option’) that ensures choice, competition, and stability of affordable, high-quality coverage throughout the United States in accordance with this section. In designing the option, the Secretary’s primary responsibility is to create a low-cost plan without compromising quality or access to care.
http://thomas.loc.gov/

And…

Letter from Douglas W. Elmendorf, Director

To: Honorable Fortney Pete Stark, Chairman, Subcommittee on Health, Committee on Ways and Means
Congressional Budget Office
July 22, 2010
Under the proposal (H.R. 5808), a public health insurance plan would be established and administered by the Secretary of Health and Human Services (HHS), and it would have to charge premiums that fully cover its costs for benefit payments and administrative expenses.
The Congressional Budget Office (CBO) estimates that the public plan’s premiums would be 5 percent to 7 percent lower, on average, than the premiums of private plans offered in the exchanges.
In deciding whether to enroll in the public plan, potential subscribers would consider those premium differences along with various other factors, including the number of providers who chose to participate in that plan. CBO expects that some providers would decline to participate in the public plan because its payment rates would be lower, on average, than private plans’ payment rates. Even so, many providers would be likely to participate, in part because they would expect a plan administered by HHS to attract a substantial number of enrollees.
Taking into account all of the relevant factors, CBO estimates that roughly one-third of the people obtaining coverage through the insurance exchanges would enroll in the public plan. CBO estimates that about 25 million people would purchase coverage individually through the exchanges in the 2017–2019 period under the proposal; in addition, about 13 million people would be expected to obtain employment-based coverage through the exchanges — so total enrollment in exchange plans would be about 38 million. Total enrollment in the public plan would thus be roughly 13 million.
Compared with projections of enrollment under current law for the 2017–2019 period, CBO estimates that about three-quarters of a million more people would obtain individually purchased coverage and about three-quarters of a million fewer would have employment-based coverage. The proposal would have minimal effects on the number of people with other sources of coverage and on the number of people who would be uninsured.
CBO and the staff of the Joint Committee on Taxation (JCT) estimate that the proposal would reduce federal budget deficits through 2019 by about $53 billion. That estimate includes a $37 billion reduction in exchange subsidies and a $27 billion increase in tax revenues that would result from changes in employment-based coverage, partly offset by an $11 billion increase in costs for providing tax credits to small employers.
http://www.cbo.gov/ftpdocs/116xx/doc11689/Stark_Letter-HR_5808-07-22.pdf

So here is the stand-alone bill for the public insurance option that created so much controversy during the reform process. As we look closer at this option, we can see that the great tragedy of the public option debate was that this almost worthless proposal diverted our attention away from the debate that we should have been having – a debate over whether or not we should enact a single, universal public insurance program.
Let’s look first at the very narrow impact of the features of the public option, and then we’ll look at the very broad and crucial implications of returning to this debate instead of the one that we should be having.
First of all, what impact would this have on the numbers of insured? The additional three-quarters of a million individuals net who would obtain individually purchased coverage would be offset by approximately the same number who would no longer have employer-sponsored coverage. Enacting the public option will produce no net gain in the numbers of individuals insured.
CBO estimates that premiums for the public option will be 5 to 7 percent lower than the premiums for the private plans offered in the exchanges. This savings is from a combination of lower administrative costs for the public option, and the ability of the government to extract greater price and fee concessions from the providers of health care. Paying a slightly lower premium may not be wise if the providers start bailing out of the system.
Also, the supporters of this measure shouldn’t pretend that the very modest reduction in administrative costs of these public plans somehow addresses the profound administrative waste throughout our system. The single payer model would be effective in reducing this waste by hundreds of billions of dollars, whereas H.R. 5808  merely takes a paring knife to plans that would cover only about 4 percent of us, while neglecting the profound administrative waste of the other insurers and the administrative burden that they place on the health care delivery system. The public option is merely another plan in the insurance exchange markets, and, as such, fails to provide the fundamental structural financing reform that we need.
Further, the 5 to 7 percent difference could easily be lost in the fog of comparing the government subsidies for the exchange plans with the employers’ contributions to the premiums of employer-sponsored plans. A policy that has a very modest benefit for 13 million people is unimpressive when we are trying to fix a system so that it takes care of all 310 million of us.
CBO estimates that the measure would reduce the federal budget deficits through 2019 by about $53 billion, partly by decreasing subsidies in the exchanges and increasing income and payroll taxes for those losing employer-sponsored coverage. This reduction in government spending results in increased costs to individuals – a trend that already is having a negative impact on affordable access to health care. Nevertheless, 53 billion dollars is hardly a blip when you consider that we’ll be spending about 30,000 billion dollars on health care through 2019. Besides, though CBO is required to estimate the impact on the federal budget, what we really care about is our total national health expenditures (NHE) and not the portion that passes through a government budget.
So the narrow impact is that the public option fails to meet the goals of reform since it does nothing to increase the net numbers of individuals with insurance, and it doesn’t even provide a blip in our NHE.
The broader impact of H.R. 5808 is much more consequential. Considerable political capital will be consumed in efforts to enact it. The managers of the bill would understand that any consideration of a single payer national health program would have to be left off of the table since that model actually would accomplish the goals of reform. To go through another process that alienates so many colleagues in the health care justice camp risks creating an impasse to real reform that could last many years or perhaps even a decade or two.
The financing infrastructure of the Patient Protection and Affordable Health Care Act cannot work to achieve equitable health care financing for everyone. We can’t afford to waste political capital on a legislative amendment that merely appeases those who lost the public option debate, but does nothing to build the solid financial infrastructure that we need.
Let’s spend all of our political capital on real reform: a single payer national health program – an improved Medicare for everyone.

It’s back – H.R. 5808 – the public option

H.R. 5808 – To amend the Patient Protection and Affordable Care Act to establish a public health insurance option.

Introduced July 21, 2010 by Rep. Lynn C. Woolsey, with 128 cosponsors
The Library of Congress

SEC. 1325. PUBLIC HEALTH INSURANCE OPTION.
(a) (1)  ESTABLISHMENT- For years beginning with 2014, the Secretary of Health and Human Services (in this subtitle referred to as the `Secretary’) shall provide for the offering through Exchanges established under this title of a health benefits plan (in this Act referred to as the `public health insurance option’) that ensures choice, competition, and stability of affordable, high-quality coverage throughout the United States in accordance with this section. In designing the option, the Secretary’s primary responsibility is to create a low-cost plan without compromising quality or access to care.

http://thomas.loc.gov/

And…

Letter from Douglas W. Elmendorf, Director

To: Honorable Fortney Pete Stark, Chairman, Subcommittee on Health, Committee on Ways and Means
Congressional Budget Office
July 22, 2010

Under the proposal (H.R. 5808), a public health insurance plan would be established and administered by the Secretary of Health and Human Services (HHS), and it would have to charge premiums that fully cover its costs for benefit payments and administrative expenses.

The Congressional Budget Office (CBO) estimates that the public plan’s premiums would be 5 percent to 7 percent lower, on average, than the premiums of private plans offered in the exchanges.

In deciding whether to enroll in the public plan, potential subscribers would consider those premium differences along with various other factors, including the number of providers who chose to participate in that plan. CBO expects that some providers would decline to participate in the public plan because its payment rates would be lower, on average, than private plans’ payment rates. Even so, many providers would be likely to participate, in part because they would expect a plan administered by HHS to attract a substantial number of enrollees.

Taking into account all of the relevant factors, CBO estimates that roughly one-third of the people obtaining coverage through the insurance exchanges would enroll in the public plan. CBO estimates that about 25 million people would purchase coverage individually through the exchanges in the 2017–2019 period under the proposal; in addition, about 13 million people would be expected to obtain employment-based coverage through the exchanges — so total enrollment in exchange plans would be about 38 million. Total enrollment in the public plan would thus be roughly 13 million.

Compared with projections of enrollment under current law for the 2017–2019 period, CBO estimates that about three-quarters of a million more people would obtain individually purchased coverage and about three-quarters of a million fewer would have employment-based coverage. The proposal would have minimal effects on the number of people with other sources of coverage and on the number of people who would be uninsured.

CBO and the staff of the Joint Committee on Taxation (JCT) estimate that the proposal would reduce federal budget deficits through 2019 by about $53 billion. That estimate includes a $37 billion reduction in exchange subsidies and a $27 billion increase in tax revenues that would result from changes in employment-based coverage, partly offset by an $11 billion increase in costs for providing tax credits to small employers.

http://www.cbo.gov/ftpdocs/116xx/doc11689/Stark_Letter-HR_5808-07-22.pdf

So here is the stand-alone bill for the public insurance option that created so much controversy during the reform process. As we look closer at this option, we can see that the great tragedy of the public option debate was that this almost worthless proposal diverted our attention away from the debate that we should have been having – a debate over whether or not we should enact a single, universal public insurance program.

Let’s look first at the very narrow impact of the features of the public option, and then we’ll look at the very broad and crucial implications of returning to this debate instead of the one that we should be having.

First of all, what impact would this have on the numbers of insured? The additional three-quarters of a million individuals net who would obtain individually purchased coverage would be offset by approximately the same number who would no longer have employer-sponsored coverage. Enacting the public option will produce no net gain in the numbers of individuals insured.

CBO estimates that premiums for the public option will be 5 to 7 percent lower than the premiums for the private plans offered in the exchanges. This savings is from a combination of lower administrative costs for the public option, and the ability of the government to extract greater price and fee concessions from the providers of health care. Paying a slightly lower premium may not be wise if the providers start bailing out of the system.

Also, the supporters of this measure shouldn’t pretend that the very modest reduction in administrative costs of these public plans somehow addresses the profound administrative waste throughout our system. The single payer model would be effective in reducing this waste by hundreds of billions of dollars, whereas H.R. 5808  merely takes a paring knife to plans that would cover only about 4 percent of us, while neglecting the profound administrative waste of the other insurers and the administrative burden that they place on the health care delivery system. The public option is merely another plan in the insurance exchange markets, and, as such, fails to provide the fundamental structural financing reform that we need.

Further, the 5 to 7 percent difference could easily be lost in the fog of comparing the government subsidies for the exchange plans with the employers’ contributions to the premiums of employer-sponsored plans. A policy that has a very modest benefit for 13 million people is unimpressive when we are trying to fix a system so that it takes care of all 310 million of us.

CBO estimates that the measure would reduce the federal budget deficits through 2019 by about $53 billion, partly by decreasing subsidies in the exchanges and increasing income and payroll taxes for those losing employer-sponsored coverage. This reduction in government spending results in increased costs to individuals – a trend that already is having a negative impact on affordable access to health care. Nevertheless, 53 billion dollars is hardly a blip when you consider that we’ll be spending about 30,000 billion dollars on health care through 2019. Besides, though CBO is required to estimate the impact on the federal budget, what we really care about is our total national health expenditures (NHE) and not the portion that passes through a government budget.

So the narrow impact is that the public option fails to meet the goals of reform since it does nothing to increase the net numbers of individuals with insurance, and it doesn’t even provide a blip in our NHE.

The broader impact of H.R. 5808 is much more consequential. Considerable political capital will be consumed in efforts to enact it. The managers of the bill would understand that any consideration of a single payer national health program would have to be left off of the table since that model actually would accomplish the goals of reform. To go through another process that alienates so many colleagues in the health care justice camp risks creating an impasse to real reform that could last many years or perhaps even a decade or two.

The financing infrastructure of the Patient Protection and Affordable Health Care Act cannot work to achieve equitable health care financing for everyone. We can’t afford to waste political capital on a legislative amendment that merely appeases those who lost the public option debate, but does nothing to build the solid financial infrastructure that we need.

Let’s spend all of our political capital on real reform: a single payer national health program – an improved Medicare for everyone.

Cigna's CareToday clinics

Cigna Medical Group Announces Grand Opening of CMG CareToday Clinic in South Chandler, Ariz.

Cigna Medical Group
July 19, 2010

Cigna Medical Group has announced the opening of its newest CMG CareToday convenience care medical clinic in South Chandler, Ariz. This brings the total number of clinics to 10 since CMG CareToday’s launch in 2007.

Staffed by board-certified nurse practitioners and physician assistants, the clinics offer walk-in medical care for unscheduled patients with low acuity conditions such as colds, flu, sore throat, lower back pain, ear aches, bladder infections and pink eye. In addition, the clinics offer pregnancy tests and child and adult immunizations, including flu shots. School, sports and camp physicals are also available.
 
“CMG CareToday is a convenient alternative that can accommodate local residents who may be unable to see their primary care physician because of time or other issues,” said Corinne Bell, DO, MBA, medical director of CMG CareToday. “Expanding the number of clinics Valleywide gives residents a place to go for non-emergency care and provides quick relief for common illnesses.”

First time visits to any CMG CareToday location are $29 retail; subsequent visits are $59. Lab services range from $10 to $15 and a select number of generic prescription medications are available for $10 or $15. CIGNA customers, and individuals covered under other accepted health plans, pay only their office visit co-pay or co-insurance. Additionally, Cigna Medical Group patients who visit CMG CareToday will have their medical records transferred seamlessly through an electronic health record directly to their primary care physician for future follow-up.

About Cigna Medical Group

Cigna Medical Group, the multi-specialty group practice division of CIGNA HealthCare of Arizona, Inc., is one of the Valley’s largest group practices with more than 30 offices located throughout Metropolitan Phoenix, including three Urgent Care centers and 10 CMG CareToday convenience care clinics. To learn more about Cigna Medical Group and the services they provide, please visit www.CignaMedicalGroup.com.

About CIGNA Corporation

CIGNA (NYSE: CI), a global health service company, is dedicated to helping people improve their health, well being and sense of security. CIGNA Corporation’s operating subsidiaries provide an integrated suite of medical, dental, behavioral health, pharmacy and vision care benefits, as well as group life, accident and disability insurance, to approximately 46 million people throughout the United States and around the world. To learn more about CIGNA, visit www.cigna.com.

http://www.prnewswire.com/news-releases/cigna-medical-group-announces-grand-opening-of-cmg-caretoday-clinic-in-south-chandler-ariz-98780589.html

Comment:

By Don McCanne, MD

Cigna is no longer simply one of the largest, for-profit, private insurance corporations in the nation, it is now a component of the health care delivery system. From the Cigna Medical Group website: “CIGNA is the only managed care organization in Arizona that operates multi-specialty centers designed to help you conveniently receive care and move on with your busy day.”

With tighter regulation under the Patient Protection and Affordable Care Act, the private insurers are looking for innovative solutions that will ensure a bright future for their executives and shareholders. What better opportunity is there than to expand their intrusion into health care delivery? Imagine the expansion of a chain of nurse practitioner- and physician assistant-staffed convenience care clinics with CIGNA branding in bright neon lights.

What next? Accountable care organizations (ACOs) with full control of physicians and hospitals? Imagine each hospital in your community with a building-top mounted branding neon sign – WELLPOINT, UNITEDHEALTH, AETNA, CIGNA, HEALTH NET, HUMANA, though further consolidation could leave us with maybe just three market choices: WellPoint, UnitedHealth, and Kaiser Permanente. Maybe we could end up with only one: UnitedWellPoint.

Though this seems farcical, instead of simply controlling the puppet strings of health care – the insurance function – these national corporations would like to take over the puppets as well.

You say that’s impossible? I remember telling my colleagues what we could expect when the legislation passed that enabled the managed care revolution. They said that the scenario I described was impossible, and, besides, they would never sign the contracts anyway. It didn’t take long.

How could we end up with one or more UnitedWellPoints? The steamrollers for ACOs are fired up and beginning to roll. Physicians will have almost no say in this transformation. The fight for control will be between the hospitals and the major private insurers. What kind of a contest will that be with thousands of local hospitals competing for control with a few large national insurance companies that already hold the money?

Wouldn’t it be much safer to give entire control of the purse strings to an improved Medicare? At least then any redesign of the health care delivery system would benefit patients rather than shareholders.

Cigna’s CareToday clinics

Cigna Medical Group Announces Grand Opening of CMG CareToday Clinic in South Chandler, Ariz.

Cigna Medical Group
July 19, 2010

Cigna Medical Group has announced the opening of its newest CMG CareToday convenience care medical clinic in South Chandler, Ariz. This brings the total number of clinics to 10 since CMG CareToday’s launch in 2007.

Staffed by board-certified nurse practitioners and physician assistants, the clinics offer walk-in medical care for unscheduled patients with low acuity conditions such as colds, flu, sore throat, lower back pain, ear aches, bladder infections and pink eye. In addition, the clinics offer pregnancy tests and child and adult immunizations, including flu shots. School, sports and camp physicals are also available.
 
“CMG CareToday is a convenient alternative that can accommodate local residents who may be unable to see their primary care physician because of time or other issues,” said Corinne Bell, DO, MBA, medical director of CMG CareToday. “Expanding the number of clinics Valleywide gives residents a place to go for non-emergency care and provides quick relief for common illnesses.”

First time visits to any CMG CareToday location are $29 retail; subsequent visits are $59. Lab services range from $10 to $15 and a select number of generic prescription medications are available for $10 or $15. CIGNA customers, and individuals covered under other accepted health plans, pay only their office visit co-pay or co-insurance. Additionally, Cigna Medical Group patients who visit CMG CareToday will have their medical records transferred seamlessly through an electronic health record directly to their primary care physician for future follow-up.

About Cigna Medical Group

Cigna Medical Group, the multi-specialty group practice division of CIGNA HealthCare of Arizona, Inc., is one of the Valley’s largest group practices with more than 30 offices located throughout Metropolitan Phoenix, including three Urgent Care centers and 10 CMG CareToday convenience care clinics. To learn more about Cigna Medical Group and the services they provide, please visit www.CignaMedicalGroup.com.

About CIGNA Corporation

CIGNA (NYSE: CI), a global health service company, is dedicated to helping people improve their health, well being and sense of security. CIGNA Corporation’s operating subsidiaries provide an integrated suite of medical, dental, behavioral health, pharmacy and vision care benefits, as well as group life, accident and disability insurance, to approximately 46 million people throughout the United States and around the world. To learn more about CIGNA, visit www.cigna.com.

http://www.prnewswire.com/news-releases/cigna-medical-group-announces-grand-opening-of-cmg-caretoday-clinic-in-south-chandler-ariz-98780589.html

Comment:

By Don McCanne, MD

Cigna is no longer simply one of the largest, for-profit, private insurance corporations in the nation, it is now a component of the health care delivery system. From the Cigna Medical Group website: “CIGNA is the only managed care organization in Arizona that operates multi-specialty centers designed to help you conveniently receive care and move on with your busy day.”

With tighter regulation under the Patient Protection and Affordable Care Act, the private insurers are looking for innovative solutions that will ensure a bright future for their executives and shareholders. What better opportunity is there than to expand their intrusion into health care delivery? Imagine the expansion of a chain of nurse practitioner- and physician assistant-staffed convenience care clinics with CIGNA branding in bright neon lights.

What next? Accountable care organizations (ACOs) with full control of physicians and hospitals? Imagine each hospital in your community with a building-top mounted branding neon sign – WELLPOINT, UNITEDHEALTH, AETNA, CIGNA, HEALTH NET, HUMANA, though further consolidation could leave us with maybe just three market choices: WellPoint, UnitedHealth, and Kaiser Permanente. Maybe we could end up with only one: UnitedWellPoint.

Though this seems farcical, instead of simply controlling the puppet strings of health care – the insurance function – these national corporations would like to take over the puppets as well.

You say that’s impossible? I remember telling my colleagues what we could expect when the legislation passed that enabled the managed care revolution. They said that the scenario I described was impossible, and, besides, they would never sign the contracts anyway. It didn’t take long.

How could we end up with one or more UnitedWellPoints? The steamrollers for ACOs are fired up and beginning to roll. Physicians will have almost no say in this transformation. The fight for control will be between the hospitals and the major private insurers. What kind of a contest will that be with thousands of local hospitals competing for control with a few large national insurance companies that already hold the money?

Wouldn’t it be much safer to give entire control of the purse strings to an improved Medicare? At least then any redesign of the health care delivery system would benefit patients rather than shareholders.

U.K. should reject U.S.-style health care

Letter to the Editor
The Guardian
Wednesday, 14 July, 2010

I read with anguish your report of Andrew Lansley’s plans to transform the NHS into a more US-style programme. We in the US have “choice” and “competition” up to our eyebrows in a privatised system run – even after the recent healthcare “reform” – in the interest of the for-profit health insurance industry. Our system, leaving 50 million Americans out entirely and bankrupting 1.2 million every year because of medical bills, costs twice what yours does.

Make no mistake: these moves are a dramatic step in the direction of further privatising the NHS, to the detriment of patients, GPs and all who care about healthcare as a public good rather than a profit-making enterprise. I urge you to resist all attempts to take the NHS down this dangerous path.

Martha Livingston
Co-author, 10 Excellent Reasons for National Health Care

Vermont AG should reopen investigation into AARP's connections with health insurers, lawyer says

Leas: Vermont Attorney General Bill Sorrell fumbles–twice

By James Marc
Vtdigger.com
July 12, 2010

Vermont Attorney General Bill Sorrell twice fumbled in addressing whether Jim Leddy can legally serve on the Vermont Commission on Health Care Reform while simultaneously serving as President of the Vermont AARP.

The Vermont law that set up the Commission provides that the appointee shall not hold “any official relation to,” “in any manner, be connected with the operation of,” or “make or perform any business contract with” any health care insurer [1].

In its first fumble, the AG’s office issued an opinion letter on June 14, 2010 that failed to address each of these provisions of the law. The letter erroneously concluded that since the AARP is not itself an insurer the appointment of its Vermont President did not violate the law. However, the letter quotes from the AARP website that “AARP contracts with insurers.” The contracts allow insurers to use the AARP name in sales operations in exchange for paying AARP royalty fees. The AARP reports those royalty fees exceed $330 million per year [2]. The AG letter omitted mention of the business contract provision of the law.

The contracts place the AARP in the role of paid public face of health care insurers in their sales operation. This means the AARP has ongoing relation, connection, and contracts with health care insurers. Since organizations are not alive, it is the people who run the organization who are responsible for the relating, connection, and making and performing the organization’s contracts. An AARP news release [3] announcing the appointment of Jim Leddy as AARP President in 2008 included his responsibility “to help AARP achieve its mission in Vermont.” The AARP mission statement provided on the organization’s web site includes provision of “a wide range of special products,” [4] and those special products include “health care insurance products” [5].

The AG opinion letter did not address these facts.

In response to a letter from Professor Frank Nicosia and a letter from myself [6] the AG’s office issued a second opinion letter prepared and signed by Deputy Attorney General Janet C. Murnane [7]. The issuance of the second opinion letter, dated June 25, 2010, implicitly recognized the inadequacy of the first opinion letter.

Distressingly, in its second fumble, the second letter glossed over the role of the Vermont AARP President in AARP’s relations, connections and contracts with health care insurers [7]. Even more shockingly, Ms. Murnane herself has a substantial connection with the subject of her investigation, Jim Leddy.

Here are the facts about this connection:

∙ Deputy Attorney General Janet C. Murnane is a former member of the law firm, McNeil, Leddy & Sheahan, P.C.[8]

∙ John T Leddy, a named partner of that law firm, is the brother of Jim Leddy.

∙ Ms. Murnane did not disclose her former association with the law firm in which Jim Leddy’s brother John is a named partner.

∙ Nor did Ms. Murnane address whether a brother relationship could be, or appear to be, even closer and much more long term than many client relationships.

The people of Vermont have a right to have opinions of our Attorney General’s office deserving the highest level of respect and admiration. The investigation of the Jim Leddy conflict of interest issue did not meet that standard.

To its credit the Attorney General’s office appears to have issued its second letter in recognition of the flaws in the first letter. In that same spirit the AG’s office should start over again and replace the second letter with a thorough, independent, and impartial review of facts and law about whether Jim Leddy can legally serve on the Vermont Commission on Health Care Reform while retaining his position as AARP Vermont President. So far the AG’s office has refused to do so.

In the meantime, neither of the letters issued by the AG’s office should be considered to be the final word on the issue of whether Jim Leddy can legally serve on the Commission while simultaneously serving as President of the Vermont AARP.

James Marc Leas is an attorney who works in South Burlington.

[1] http://www.leg.state.vt.us/database/status/summary.cfm?Bill=S.0088&Session=2010
[2] http://reichert.house.gov/UploadedFiles/Final_response_10-1.pdf
[3] http://www.vermontbiz.com/node/9869
[4] http://www-static-w4-md.aarp.org/aarp/articles/aarpmission_1.html
[5] http://www.aarphealthcare.com/Products/Default.aspx
[6] http://vermontforsinglepayer.org/blog/2010/06/does-leddys-appointment-conform-to-the-law/
[7] scroll down at http://vtdigger.org/2010/06/29/leas-attorney-generals-office-must-reconsider-leddy-decision/ to see the letter from Janet C. Murnane
[8] http://pview.findlaw.com/view/1007649_1?channel=LP

http://vtdigger.org/2010/07/12/leas-vermont-attorney-general-bill-sorrell-fumbles-twice/

Vermont AG should reopen investigation into AARP’s connections with health insurers, lawyer says

Leas: Vermont Attorney General Bill Sorrell fumbles–twice

By James Marc
Vtdigger.com
July 12, 2010

Vermont Attorney General Bill Sorrell twice fumbled in addressing whether Jim Leddy can legally serve on the Vermont Commission on Health Care Reform while simultaneously serving as President of the Vermont AARP.

The Vermont law that set up the Commission provides that the appointee shall not hold “any official relation to,” “in any manner, be connected with the operation of,” or “make or perform any business contract with” any health care insurer [1].

In its first fumble, the AG’s office issued an opinion letter on June 14, 2010 that failed to address each of these provisions of the law. The letter erroneously concluded that since the AARP is not itself an insurer the appointment of its Vermont President did not violate the law. However, the letter quotes from the AARP website that “AARP contracts with insurers.” The contracts allow insurers to use the AARP name in sales operations in exchange for paying AARP royalty fees. The AARP reports those royalty fees exceed $330 million per year [2]. The AG letter omitted mention of the business contract provision of the law.

The contracts place the AARP in the role of paid public face of health care insurers in their sales operation. This means the AARP has ongoing relation, connection, and contracts with health care insurers. Since organizations are not alive, it is the people who run the organization who are responsible for the relating, connection, and making and performing the organization’s contracts. An AARP news release [3] announcing the appointment of Jim Leddy as AARP President in 2008 included his responsibility “to help AARP achieve its mission in Vermont.” The AARP mission statement provided on the organization’s web site includes provision of “a wide range of special products,” [4] and those special products include “health care insurance products” [5].

The AG opinion letter did not address these facts.

In response to a letter from Professor Frank Nicosia and a letter from myself [6] the AG’s office issued a second opinion letter prepared and signed by Deputy Attorney General Janet C. Murnane [7]. The issuance of the second opinion letter, dated June 25, 2010, implicitly recognized the inadequacy of the first opinion letter.

Distressingly, in its second fumble, the second letter glossed over the role of the Vermont AARP President in AARP’s relations, connections and contracts with health care insurers [7]. Even more shockingly, Ms. Murnane herself has a substantial connection with the subject of her investigation, Jim Leddy.

Here are the facts about this connection:

∙ Deputy Attorney General Janet C. Murnane is a former member of the law firm, McNeil, Leddy & Sheahan, P.C.[8]

∙ John T Leddy, a named partner of that law firm, is the brother of Jim Leddy.

∙ Ms. Murnane did not disclose her former association with the law firm in which Jim Leddy’s brother John is a named partner.

∙ Nor did Ms. Murnane address whether a brother relationship could be, or appear to be, even closer and much more long term than many client relationships.

The people of Vermont have a right to have opinions of our Attorney General’s office deserving the highest level of respect and admiration. The investigation of the Jim Leddy conflict of interest issue did not meet that standard.

To its credit the Attorney General’s office appears to have issued its second letter in recognition of the flaws in the first letter. In that same spirit the AG’s office should start over again and replace the second letter with a thorough, independent, and impartial review of facts and law about whether Jim Leddy can legally serve on the Vermont Commission on Health Care Reform while retaining his position as AARP Vermont President. So far the AG’s office has refused to do so.

In the meantime, neither of the letters issued by the AG’s office should be considered to be the final word on the issue of whether Jim Leddy can legally serve on the Commission while simultaneously serving as President of the Vermont AARP.

James Marc Leas is an attorney who works in South Burlington.

[1] http://www.leg.state.vt.us/database/status/summary.cfm?Bill=S.0088&Session=2010
[2] http://reichert.house.gov/UploadedFiles/Final_response_10-1.pdf
[3] http://www.vermontbiz.com/node/9869
[4] http://www-static-w4-md.aarp.org/aarp/articles/aarpmission_1.html
[5] http://www.aarphealthcare.com/Products/Default.aspx
[6] http://vermontforsinglepayer.org/blog/2010/06/does-leddys-appointment-conform-to-the-law/
[7] scroll down at http://vtdigger.org/2010/06/29/leas-attorney-generals-office-must-reconsider-leddy-decision/ to see the letter from Janet C. Murnane
[8] http://pview.findlaw.com/view/1007649_1?channel=LP

http://vtdigger.org/2010/07/12/leas-vermont-attorney-general-bill-sorrell-fumbles-twice/