British Medical Association (BMA)

The BMA is against the increasing commercialisation of patient care. We want to see the NHS restored as a public service working co-operatively for patients, not a market of commercial businesses competing with each other. That’s why we’re campaigning for an NHS which:

1. Provides high quality, comprehensive healthcare for all, free at the point of use

2. Is publicly funded through central taxes, publicly provided and publicly accountable

3. Significantly reduces commercial involvement

4. Uses public money for quality healthcare, not profits for shareholders

5. Cares for patients through co-operation, not competition

6. Is led by medical professionals working in partnership with patients and the public

7. Seeks value for money but puts the care of patients before financial targets

8. Is fully committed to training future generations of medical professionals

http://www.lookafterournhs.org.uk/for-doctors/our-principles/

Comment: 

By Don McCanne, MD

Who could understand better the British National Health Service than the physicians of the British Medical Association? Their experience has led them to take a strong stand against for-profit commercialization of health care. Are physicians in the United States fundamentally that much different from those in Great Britain? Don’t think so.

Our Principles

British Medical Association (BMA)
The BMA is against the increasing commercialisation of patient care. We want to see the NHS restored as a public service working co-operatively for patients, not a market of commercial businesses competing with each other. That’s why we’re campaigning for an NHS which:
1. Provides high quality, comprehensive healthcare for all, free at the point of use
2. Is publicly funded through central taxes, publicly provided and publicly accountable
3. Significantly reduces commercial involvement
4. Uses public money for quality healthcare, not profits for shareholders
5. Cares for patients through co-operation, not competition
6. Is led by medical professionals working in partnership with patients and the public
7. Seeks value for money but puts the care of patients before financial targets
8. Is fully committed to training future generations of medical professionals
http://www.lookafterournhs.org.uk/for-doctors/our-principles/

Who could understand better the British National Health Service than the physicians of the British Medical Association? Their experience has led them to take a strong stand against for-profit commercialization of health care. Are physicians in the United States fundamentally that much different from those in Great Britain? Don’t think so.

By Gillian Steward
thestar.com
May 11, 2010

A Calgary for-profit hospital, once a beacon of hope for medical entrepreneurs across the country, declared bankruptcy last week. And who will have to pick up the pieces? None other than the public health-care system and ultimately Alberta taxpayers.

For years, critics predicted that this experiment in privatized health care would prove unreliable and expensive. But no one imagined a scenario in which publicly funded Alberta Health Services would go to court in a bid to keep the lights on over the operating tables in an investor-owned hospital. No one imagined that AHS would be paying receivership fees in order to keep the doors open. But this is, in fact, what has happened because Calgary’s public health-care system is so reliant on private partners.

The private hospital, Health Resource Centre, was once the focal point of premier Ralph Klein’s health-care strategies. It was for the benefit of HRC and its bevy of investors and orthopedic surgeons that in 2000 the Alberta government passed the Health Care Protection Act, which allowed private surgical clinics to keep patients overnight, thus allowing HRC to perform hip and knee replacements that had previously been permitted only in public hospitals.

The Klein government had already closed three public hospitals in Calgary as it pared its budget in order to eliminate the deficit. So there was indeed a shortage of operating theatres, a shortage HRC was quite prepared to fill. It had taken over space in one of the hospitals that had been closed and sold off. And it had been lobbying government ministers and local health authority administrators in an effort to secure contracts to provide surgeries for publicly insured patients who could not be accommodated in the public hospitals.

In 2004, HRC finally hit pay dirt. The regional health authority awarded it a two-year contract worth $20 million for the provision of 2,500 hip and knee surgeries. The health authority acknowledged that it was paying 10 per cent more than what it would cost if the surgeries were done in a public hospital but, given the shortage of operating theatres, it didn’t have much choice.

The contracts continued and HRC became so successful that it decided to expand and rent expensive space in a new development. That’s when HRC ran into trouble. Before it had even moved in, the developer claimed HRC had defaulted on payments. HRC claimed that Alberta Health Services had cut back on promised contracts, and declared bankruptcy.

AHS then went to court to try and save HRC, for without it there are not enough operating theatres to accommodate all the patients scheduled for surgery.

http://www.thestar.com/news/canada/article/807403–steward-bankrupt-beacon-of-privatized-health-care

And…

Clinic rescue costs $2.8M

By Colette Derworiz
Calgary Herald
May 12, 2010

Alberta Health Services will spend at least $2.8 million to keep a financially troubled private surgical centre operating for the next eight months, sparking outrage the Stelmach government is using taxpayer money to prop up a for-profit enterprise.

Health Resource Centre — a private facility owned by Networc Health Inc. — will stay open to perform publicly funded knee and hip replacement surgeries after the Edmonton-based medical superboard took the unusual step of filing legal action to fend off a possible bankruptcy.

But the intervention comes with a price tag for taxpayers after AHS ended up buying $1.3 million of the company’s outstanding bank loans (at full value) to bolster the superboard’s legal standing in the case as a secured creditor.

In addition, AHS agreed to pay $600,000 in interim receivership costs and the clinic’s monthly rent — which will work out to nearly $960,000 from now until January — to Northwest Healthcare Properties, the landlord

“You have to wonder how many times taxpayers have to pay for the same service,” said Liberal MLA Kevin Taft. “Taxpayers seem to be on several hooks at once for this debt. It’s expensive for the taxpayers, unnerving for the patients and it’s gotta be difficult for the staff. This is just lose, lose, lose.”

Proponents of public health care said it’s an expensive lesson.

“AHS paying $100,000 a month on a building they sold for a song just rubs salt in the wounds of the paying public,” said David Eggen of Friends of Medicare.

Dr. Tom Noseworthy, a health policy expert at the University of Calgary, said the region “needed some breathing room” to continue delivering the surgeries.

“For practical purposes, that private enterprise has become an extension of their business, or shall we say, our business,” he said. “Private health-care delivery is never cheaper, it’s never of better quality and you don’t get better outcomes. I don’t know how many times we have to say that.”

http://www.calgaryherald.com/health/Clinic+rescue+costs/3017404/story.html

And…

Calgary Herald

July and August 2005

Premier Ralph Klein:  “Let me be blunt. We have unacceptable waiting lists in our publicly funded, rationed health-care system, and all the money in the world is not going to eliminate them.”

Don McCanne:  “Ralph Klein states that ‘all the money in the world’ is not going to eliminate waiting lists, unless the source of the funds is private instead of public. What nonsense.”

https://pnhp.org/news/2005/august/albertas_premier_kl.php

Comment: 

By Don McCanne, MD

Right-wing ideologues, such as former premier Ralph Klein of Alberta, have continued to push for more privatization of Canada’s health care system. They claim that the private sector provides greater access and higher quality at a lower cost. As if they didn’t have enough contrary evidence from the United States, they have continued with their experiments in privatization.

The experience with Health Resource Centre – a private, for-profit hospital – reinforces the proponents of the public system who use health policy science to sound the alarms over the ill-advised march toward further privatization.

The current saga began with Premier Klein’s notion that public hospitals had to be shut down because the taxpayers couldn’t afford them, yet private hospitals should position themselves to address the problem of excess queues which were further exacerbated by the failure of the government to appropriately adjust capacity in the system. He seems to imply that private funds manifest some sort of magical quality that public funds lack.

The results of this experiment would suggest the opposite. The for-profit Health Resource Center not only provided the same orthopedic services at a 10 percent greater cost, the center is now going to cost the taxpayers much more money in an effort to bail it out. This could have been prevented if Klein and others of his ilk had provided appropriate stewardship of the public program. Tweaking a public system is far less expensive than establishing a parallel private system.

Dr. Tom Noseworthy, health policy expert at the University of Calgary, states it well when he says, “Private health-care delivery is never cheaper, it’s never of better quality and you don’t get better outcomes. I don’t know how many times we have to say that.”

Bankrupt beacon of privatized health-care

By Gillian Steward
thestar.com
May 11, 2010
A Calgary for-profit hospital, once a beacon of hope for medical entrepreneurs across the country, declared bankruptcy last week. And who will have to pick up the pieces? None other than the public health-care system and ultimately Alberta taxpayers.
For years, critics predicted that this experiment in privatized health care would prove unreliable and expensive. But no one imagined a scenario in which publicly funded Alberta Health Services would go to court in a bid to keep the lights on over the operating tables in an investor-owned hospital. No one imagined that AHS would be paying receivership fees in order to keep the doors open. But this is, in fact, what has happened because Calgary’s public health-care system is so reliant on private partners.
The private hospital, Health Resource Centre, was once the focal point of premier Ralph Klein’s health-care strategies. It was for the benefit of HRC and its bevy of investors and orthopedic surgeons that in 2000 the Alberta government passed the Health Care Protection Act, which allowed private surgical clinics to keep patients overnight, thus allowing HRC to perform hip and knee replacements that had previously been permitted only in public hospitals.
The Klein government had already closed three public hospitals in Calgary as it pared its budget in order to eliminate the deficit. So there was indeed a shortage of operating theatres, a shortage HRC was quite prepared to fill. It had taken over space in one of the hospitals that had been closed and sold off. And it had been lobbying government ministers and local health authority administrators in an effort to secure contracts to provide surgeries for publicly insured patients who could not be accommodated in the public hospitals.
In 2004, HRC finally hit pay dirt. The regional health authority awarded it a two-year contract worth $20 million for the provision of 2,500 hip and knee surgeries. The health authority acknowledged that it was paying 10 per cent more than what it would cost if the surgeries were done in a public hospital but, given the shortage of operating theatres, it didn’t have much choice.
The contracts continued and HRC became so successful that it decided to expand and rent expensive space in a new development. That’s when HRC ran into trouble. Before it had even moved in, the developer claimed HRC had defaulted on payments. HRC claimed that Alberta Health Services had cut back on promised contracts, and declared bankruptcy.
AHS then went to court to try and save HRC, for without it there are not enough operating theatres to accommodate all the patients scheduled for surgery.
http://www.thestar.com/news/canada/article/807403–steward-bankrupt-beacon-of-privatized-health-care

And…

Clinic rescue costs $2.8M

By Colette Derworiz
Calgary Herald
May 12, 2010
Alberta Health Services will spend at least $2.8 million to keep a financially troubled private surgical centre operating for the next eight months, sparking outrage the Stelmach government is using taxpayer money to prop up a for-profit enterprise.
Health Resource Centre — a private facility owned by Networc Health Inc. — will stay open to perform publicly funded knee and hip replacement surgeries after the Edmonton-based medical superboard took the unusual step of filing legal action to fend off a possible bankruptcy.
But the intervention comes with a price tag for taxpayers after AHS ended up buying $1.3 million of the company’s outstanding bank loans (at full value) to bolster the superboard’s legal standing in the case as a secured creditor.
In addition, AHS agreed to pay $600,000 in interim receivership costs and the clinic’s monthly rent — which will work out to nearly $960,000 from now until January — to Northwest Healthcare Properties, the landlord
“You have to wonder how many times taxpayers have to pay for the same service,” said Liberal MLA Kevin Taft. “Taxpayers seem to be on several hooks at once for this debt. It’s expensive for the taxpayers, unnerving for the patients and it’s gotta be difficult for the staff. This is just lose, lose, lose.”
Proponents of public health care said it’s an expensive lesson.
“AHS paying $100,000 a month on a building they sold for a song just rubs salt in the wounds of the paying public,” said David Eggen of Friends of Medicare.
Dr. Tom Noseworthy, a health policy expert at the University of Calgary, said the region “needed some breathing room” to continue delivering the surgeries.
“For practical purposes, that private enterprise has become an extension of their business, or shall we say, our business,” he said. “Private health-care delivery is never cheaper, it’s never of better quality and you don’t get better outcomes. I don’t know how many times we have to say that.”
http://www.calgaryherald.com/health/Clinic+rescue+costs/3017404/story.html

And…

Calgary Herald

July and August 2005
Premier Ralph Klein:  “Let me be blunt. We have unacceptable waiting lists in our publicly funded, rationed health-care system, and all the money in the world is not going to eliminate them.”
Don McCanne:  “Ralph Klein states that ‘all the money in the world’ is not going to eliminate waiting lists, unless the source of the funds is private instead of public. What nonsense.”
https://pnhp.org/news/2005/august/albertas_premier_kl.php

Right-wing ideologues, such as former premier Ralph Klein of Alberta, have continued to push for more privatization of Canada’s health care system. They claim that the private sector provides greater access and higher quality at a lower cost. As if they didn’t have enough contrary evidence from the United States, they have continued with their experiments in privatization.
The experience with Health Resource Centre – a private, for-profit hospital – reinforces the proponents of the public system who use health policy science to sound the alarms over the ill-advised march toward further privatization.
The current saga began with Premier Klein’s notion that public hospitals had to be shut down because the taxpayers couldn’t afford them, yet private hospitals should position themselves to address the problem of excess queues which were further exacerbated by the failure of the government to appropriately adjust capacity in the system. He seems to imply that private funds manifest some sort of magical quality that public funds lack.
The results of this experiment would suggest the opposite. The for-profit Health Resource Center not only provided the same orthopedic services at a 10 percent greater cost, the center is now going to cost the taxpayers much more money in an effort to bail it out. This could have been prevented if Klein and others of his ilk had provided appropriate stewardship of the public program. Tweaking a public system is far less expensive than establishing a parallel private system.
Dr. Tom Noseworthy, health policy expert at the University of Calgary, states it well when he says, “Private health-care delivery is never cheaper, it’s never of better quality and you don’t get better outcomes. I don’t know how many times we have to say that.”

Milliman, Inc.
May 2010

The annual Milliman Medical Index (MMI) reports total annual medical spending for a typical American family of four covered by an employer-sponsored preferred provider organization (PPO) program. The MMI represents the total cost of payments to healthcare providers, and excludes the non-medical administrative component of health plan premiums.

The total 2010 medical cost for a typical American family of four is $18,074.

This is an increase of 7.8%. This is the third year in a row that the annual rate of increase has been below 8%; however, the dollar increase of $1,303 is still the highest we have seen in the last 10 years and since the inception of this index.

Cost Implications of Healthcare Reform on Family of Four

While employers are making the immediate changes required to their benefit plans and adapting their longer-term benefit strategy to the new regulatory environment, healthcare costs continue to increase at rates exceeding most other costs of doing business. Debate continues on the extent to which the changes from healthcare reform have potential to bend the long-term cost curve; however, for the near term, the underlying drivers of increasing healthcare costs are not expected to immediately change.

Efforts to enforce insurance rate controls may have indirect impact on the growth in healthcare costs but still do not address the underlying cost of care. For now, the onus of control remains with insurers, who will attempt to put pressure of providers to lower costs to a level that approved premium rates can support. There may be more extensive shift in market dynamics in 2014, when the government takes on an even larger proportion of payment responsibility due to expansion in Medicaid, the creation of exchanges, and the availability of subsidies for certain lower-income individuals.

While underlying cost drivers as yet remain relatively unchanged, there are some changes that will have a predictable effect on cost. The most immediate changes, such as increasing dependent coverage up to age 26 and elimination of lifetime and annual benefit maximums, will cause a direct shift in costs from employees to employers. Other options that will be implemented later, such as federally-mandated state health exchange plans, require much deeper analysis before an employer can make an informed decision. Because the practical implementation of this new legislation has not yet been defined, many employers are choosing to delay changes to their benefit plans for future annual benefit cycles, although it is very possible that those changes could be dramatic.

Looking into the future for the “typical family of four” represented by this analysis, the cost implications of reform are unclear. Much depends on the underlying medical cost that is dissected in this report. When it comes to cost control, the status quo is not encouraging. If reform or some other factors can motivate a reduction in the underlying cost of care, it will have important implications for the future cost of care for American families.

http://www.milliman.com/expertise/healthcare/publications/mmi/pdfs/milliman-medical-index-2010.pdf

Comment: 

By Don McCanne, MD

The Milliman Medical Index (MMI) is especially significant this year because it proves that the Patient Protection and Affordable Care Act (PPACA) is already a miserable failure even before the provisions of the act take place. The MMI for 2010 is $18,074. Let’s look at what that means under the PPACA.

It’s important to understand precisely what the MMI is. It is the average amount that is already being spent on actual health care for a typical family of four enrolled in an employer-sponsored Preferred Provider Organization (PPO) plan. It does not include any of the administrative expenses or profits of the private insurers.

Already there’s a problem. Since the MMI represents the amounts being paid by PPOs, the discounts for network physicians and hospitals and other products and services are already built in. The MMI represents a lower level of spending made possible by contracting payment rates with the physicians and hospitals that are included in the networks. That means that families for whom the spending is at MMI levels have lost their right of free choice of physicians and hospitals unless they are willing and able to pay significant financial penalties for obtaining care outside of the networks. The plans that will be available in the state insurance exchanges will be network-restricted managed care plans – mostly PPOs with some HMOs. Health care reform that takes away choice is not the reform that we wanted.

One of the most important measures in PPACA attempts to address the problem of high costs and the poor coverage of the plans currently available in the individual and small group markets. Individuals and small employers who are having problems finding adequate affordable plans will be able to buy plans in the insurance exchanges that theoretically have the same benefits and cost efficiencies of the large group market currently available to larger employers. If these exchanges actually work as intended, then the MMI will represent the average cost of health care for a family of four enrolled through the exchanges. This assumes that the insurers will cooperate and not continue to use deceptive innovations that have resulted in lower-value products in the individual insurance markets.

Assuming that the exchanges work as intended, keep in mind that the insurers offering individual and small group plans within the exchanges will be required to maintain a medical loss ratio of 80 percent. That is the amount that must be spent on actual health care – the amount that is represented by the MMI, minus the out-of-pocket expenses. They will keep 20 percent for their own administrative costs and profits (or even more if they are successful in their current efforts to shove some of their administrative costs into the medical loss ratio by reclassifying these administrative costs as “health care).

So let’s look at the numbers. The standard Silver plans offered by the exchanges will have an actuarial value of 70 percent. That means that the plans will pay an average of 70 percent of the costs and the other 30 percent will be paid out-of-pocket by individuals and families, partially offset by subsidies for those who qualify. Using the 2010 MMI, the plans will pay for a family of four an average of $12,652 (70 percent of $18,074). The twenty percent for administrative costs and profits will add another $3,163 ($12,652 is 80 percent of the premium) which means that the premium that the insurer will have to charge will be $15,815 ($12,652 plus $3,163). The out-of-pocket portion for the family will be $5,422 (30 percent of $18,074). The the total average cost for the family for both the premium and out-of-pocket expenses combined will be $21,237 ($15,815 plus $5,422).

These are averages. To determine what each family actually would pay is more difficult because of several variables, including sliding scale subsidies for the premiums, sliding scale subsidies for the out-of-pocket expenses, opt-out eligibility based on the level of household income, and out-of-pocket spending, especially for those whose incomes exceed the eligibility thresholds for the subsidies.

Nevertheless, let’s look at a family of four with an income at 400 percent of the federal poverty level – the threshold at which they qualify for neither the subsidies for premiums nor the subsidies for out-of-pocket costs. That income level is $88,200. That family would pay an average of $21,237, or 24 percent of their income, for health care, leaving them $66,963 for all of their other expenses. But since that
is average, those with greater health care needs would face even larger out-of-pocket costs, which could be staggering. Even if the plan is promoted as having a stop-loss, private insurers are infamous for leaving patients stuck with charges for non-covered services and out-of-network providers. The bottom line is that PPACA has not ensured that the hard-working American family is protected from financial hardship or even personal bankruptcy should significant medical needs arise.

There are those who say that health care reform is done; we now have PPACA. They say that although it will likely require some adjustments along the way, our task now is to make it work. To those individuals I can only say, step back and look at the confounded mess! It will never insure everyone. It will never make health care affordable for each and every individual and family. It will never control administrative waste as it continues to add on more and more administrative complexity.

We need to keep and build on some of the health system reforms in PPACA, such as the reinforcement of our primary care infrastructure. But we desperately need to dump the sick, fragmented financing system that wastes so much in resources and perpetuates the profound inequities and physical and financial suffering experienced in our system. We need to enact an improved Medicare for all, and do it ASAP!

2010 Milliman Medical Index

Milliman, Inc.
May 2010
The annual Milliman Medical Index (MMI) reports total annual medical spending for a typical American family of four covered by an employer-sponsored preferred provider organization (PPO) program. The MMI represents the total cost of payments to healthcare providers, and excludes the non-medical administrative component of health plan premiums.
The total 2010 medical cost for a typical American family of four is $18,074.
This is an increase of 7.8%. This is the third year in a row that the annual rate of increase has been below 8%; however, the dollar increase of $1,303 is still the highest we have seen in the last 10 years and since the inception of this index.
Cost Implications of Healthcare Reform on Family of Four
While employers are making the immediate changes required to their benefit plans and adapting their longer-term benefit strategy to the new regulatory environment, healthcare costs continue to increase at rates exceeding most other costs of doing business. Debate continues on the extent to which the changes from healthcare reform have potential to bend the long-term cost curve; however, for the near term, the underlying drivers of increasing healthcare costs are not expected to immediately change.
Efforts to enforce insurance rate controls may have indirect impact on the growth in healthcare costs but still do not address the underlying cost of care. For now, the onus of control remains with insurers, who will attempt to put pressure of providers to lower costs to a level that approved premium rates can support. There may be more extensive shift in market dynamics in 2014, when the government takes on an even larger proportion of payment responsibility due to expansion in Medicaid, the creation of exchanges, and the availability of subsidies for certain lower-income individuals.
While underlying cost drivers as yet remain relatively unchanged, there are some changes that will have a predictable effect on cost. The most immediate changes, such as increasing dependent coverage up to age 26 and elimination of lifetime and annual benefit maximums, will cause a direct shift in costs from employees to employers. Other options that will be implemented later, such as federally-mandated state health exchange plans, require much deeper analysis before an employer can make an informed decision. Because the practical implementation of this new legislation has not yet been defined, many employers are choosing to delay changes to their benefit plans for future annual benefit cycles, although it is very possible that those changes could be dramatic.
Looking into the future for the “typical family of four” represented by this analysis, the cost implications of reform are unclear. Much depends on the underlying medical cost that is dissected in this report. When it comes to cost control, the status quo is not encouraging. If reform or some other factors can motivate a reduction in the underlying cost of care, it will have important implications for the future cost of care for American families.
http://www.milliman.com/expertise/healthcare/publications/mmi/pdfs/milliman-medical-index-2010.pdf

The Milliman Medical Index (MMI) is especially significant this year because it proves that the Patient Protection and Affordable Care Act (PPACA) is already a miserable failure even before the provisions of the act take place. The MMI for 2010 is $18,074. Let’s look at what that means under the PPACA.
It’s important to understand precisely what the MMI is. It is the average amount that is already being spent on actual health care for a typical family of four enrolled in an employer-sponsored Preferred Provider Organization (PPO) plan. It does not include any of the administrative expenses or profits of the private insurers.
Already there’s a problem. Since the MMI represents the amounts being paid by PPOs, the discounts for network physicians and hospitals and other products and services are already built in. The MMI represents a lower level of spending made possible by contracting payment rates with the physicians and hospitals that are included in the networks. That means that families for whom the spending is at MMI levels have lost their right of free choice of physicians and hospitals unless they are willing and able to pay significant financial penalties for obtaining care outside of the networks. The plans that will be available in the state insurance exchanges will be network-restricted managed care plans – mostly PPOs with some HMOs. Health care reform that takes away choice is not the reform that we wanted.
One of the most important measures in PPACA attempts to address the problem of high costs and the poor coverage of the plans currently available in the individual and small group markets. Individuals and small employers who are having problems finding adequate affordable plans will be able to buy plans in the insurance exchanges that theoretically have the same benefits and cost efficiencies of the large group market currently available to larger employers. If these exchanges actually work as intended, then the MMI will represent the average cost of health care for a family of four enrolled through the exchanges. This assumes that the insurers will cooperate and not continue to use deceptive innovations that have resulted in lower-value products in the individual insurance markets.
Assuming that the exchanges work as intended, keep in mind that the insurers offering individual and small group plans within the exchanges will be required to maintain a medical loss ratio of 80 percent. That is the amount that must be spent on actual health care – the amount that is represented by the MMI, minus the out-of-pocket expenses. They will keep 20 percent for their own administrative costs and profits (or even more if they are successful in their current efforts to shove some of their administrative costs into the medical loss ratio by reclassifying these administrative costs as “health care).
So let’s look at the numbers. The standard Silver plans offered by the exchanges will have an actuarial value of 70 percent. That means that the plans will pay an average of 70 percent of the costs and the other 30 percent will be paid out-of-pocket by individuals and families, partially offset by subsidies for those who qualify. Using the 2010 MMI, the plans will pay for a family of four an average of $12,652 (70 percent of $18,074). The twenty percent for administrative costs and profits will add another $3,163 ($12,652 is 80 percent of the premium) which means that the premium that the insurer will have to charge will be $15,815 ($12,652 plus $3,163). The out-of-pocket portion for the family will be $5,422 (30 percent of $18,074). The the total average cost for the family for both the premium and out-of-pocket expenses combined will be $21,237 ($15,815 plus $5,422).
These are averages. To determine what each family actually would pay is more difficult because of several variables, including sliding scale subsidies for the premiums, sliding scale subsidies for the out-of-pocket expenses, opt-out eligibility based on the level of household income, and out-of-pocket spending, especially for those whose incomes exceed the eligibility thresholds for the subsidies.
Nevertheless, let’s look at a family of four with an income at 400 percent of the federal poverty level – the threshold at which they qualify for neither the subsidies for premiums nor the subsidies for out-of-pocket costs. That income level is $88,200. That family would pay an average of $21,237, or 24 percent of their income, for health care, leaving them $66,963 for all of their other expenses. But since that is average, those with greater health care needs would face even larger out-of-pocket costs, which could be staggering. Even if the plan is promoted as having a stop-loss, private insurers are infamous for leaving patients stuck with charges for non-covered services and out-of-network providers. The bottom line is that PPACA has not ensured that the hard-working American family is protected from financial hardship or even personal bankruptcy should significant medical needs arise.
There are those who say that health care reform is done; we now have PPACA. They say that although it will likely require some adjustments along the way, our task now is to make it work. To those individuals I can only say, step back and look at the confounded mess! It will never insure everyone. It will never make health care affordable for each and every individual and family. It will never control administrative waste as it continues to add on more and more administrative complexity.
We need to keep and build on some of the health system reforms in PPACA, such as the reinforcement of our primary care infrastructure. But we desperately need to dump the sick, fragmented financing system that wastes so much in resources and perpetuates the profound inequities and physical and financial suffering experienced in our system. We need to enact an improved Medicare for all, and do it ASAP!

Kaiser Foundation
May 10, 1010

Jackie Judd, vice president and senior advisor for communications, Kaiser Family Foundation:

“You wrote the… opening, overview chapter (of “Landmark” – a new book by the reporting staff of the Washington Post on the new health care law), and in there you said that while the law is complex, it’s also moderate and incremental, and it’s that very moderation that makes it complicated. What do you mean?”

Alec MacGillis, reporter for the Washington Post: 

“Well, it’s something I tried to say often during this whole debate. When people complained about the length of the bill – a two thousand page monstrosity, so complicated – and I wrote a piece back in the Fall that tried to address that argument and pointed out that, you know, if you really wanted a simple bill, then you could just blow this whole thing up.

“And, you know, single payer is very simple. You just, you know – government-run health insurance – get rid of all the health insurance companies, and there are a lot fewer rules to write. That’s simpler, but, obviously, we were not going to do that.

“We were going to take a much more moderate, market-based approach to this. And that means preserving the foundations of our existing system. And that means ending up with something with a law that’s much more complex, because you’re sort of tweaking here and there. You’re not just – it’s not tabula rasa – you’re not starting over.

“But in its main elements it really is a quite moderate and incremental approach. We are preserving the private health insurance system. It’s modeled – no matter what Mitt Romney tells you now – this is modeled on the plan that he passed in 2006 as a Republican governor of Massachusetts; it’s modeled on the Republican alternative to the Clinton plan in the early nineties; it’s modeled on Richard Nixon’s plan in the seventies; it’s modeled on the idea put forward by the Heritage Foundation early last decade, although they’re trying to distance themselves right now from that; but it really is an attempt to build on what we have now, and because you’re doing it that way, you end up with this messy thing. But it’s really not that… but the main elements are not that complicated.

“What we basically have – the best way to think of it is kind of a three legged stool. We are expanding coverage by requiring that everyone get coverage. We’re also telling the insurance companies that they have to provide everyone coverage who comes and asks for it. So they have to take you; you have to get it. That way you get the healthy people into the pool so that they can afford to take the sick people as well. And then to help people afford to get the coverage that they’re required to get, you provide subsidies. But that’s it, and you need all three legs of that stool. That’s why you need have a mandate.”

http://www.c-span.org/Watch/Media/2010/05/10/HP/A/32795/Washington+Post+Discussion+on+Americas+New+Health+Care+Law.aspx

Comment:

By Don McCanne, MD

So by pursuing a moderate, market-based, Republican-based approach, the health care law was made much more complicated. But the greater tragedy is that it wasn’t only made more complicated, it failed in our goals of covering everyone with a financing system that we could afford. The complicated reform proposal that is now law is the most expensive model of reform ever devised, not to mention being one of the least effective.

As Alec MacGillis states, “… single payer is very simple. You just, you know – government-run health insurance – get rid of all the health insurance companies, and there are a lot fewer rules to write.”

We still can “blow this whole thing up,” and enact single payer. Not only would there be fewer rules, everyone would have the health care that they need, and we would be able to pay for it. That will never happen under the new law.

Washington Post Discussion on America’s New Health Care Law

Kaiser Foundation
May 10, 1010

Jackie Judd, vice president and senior advisor for communications, Kaiser Family Foundation:

“You wrote the… opening, overview chapter (of “Landmark” – a new book by the reporting staff of the Washington Post on the new health care law), and in there you said that while the law is complex, it’s also moderate and incremental, and it’s that very moderation that makes it complicated. What do you mean?”

Alec MacGillis, reporter for the Washington Post: 

“Well, it’s something I tried to say often during this whole debate. When people complained about the length of the bill – a two thousand page monstrosity, so complicated – and I wrote a piece back in the Fall that tried to address that argument and pointed out that, you know, if you really wanted a simple bill, then you could just blow this whole thing up.

“And, you know, single payer is very simple. You just, you know – government-run health insurance – get rid of all the health insurance companies, and there are a lot fewer rules to write. That’s simpler, but, obviously, we were not going to do that.

“We were going to take a much more moderate, market-based approach to this. And that means preserving the foundations of our existing system. And that means ending up with something with a law that’s much more complex, because you’re sort of tweaking here and there. You’re not just – it’s not tabula rasa – you’re not starting over.

“But in its main elements it really is a quite moderate and incremental approach. We are preserving the private health insurance system. It’s modeled – no matter what Mitt Romney tells you now – this is modeled on the plan that he passed in 2006 as a Republican governor of Massachusetts; it’s modeled on the Republican alternative to the Clinton plan in the early nineties; it’s modeled on Richard Nixon’s plan in the seventies; it’s modeled on the idea put forward by the Heritage Foundation early last decade, although they’re trying to distance themselves right now from that; but it really is an attempt to build on what we have now, and because you’re doing it that way, you end up with this messy thing. But it’s really not that… but the main elements are not that complicated.

“What we basically have – the best way to think of it is kind of a three legged stool. We are expanding coverage by requiring that everyone get coverage. We’re also telling the insurance companies that they have to provide everyone coverage who comes and asks for it. So they have to take you; you have to get it. That way you get the healthy people into the pool so that they can afford to take the sick people as well. And then to help people afford to get the coverage that they’re required to get, you provide subsidies. But that’s it, and you need all three legs of that stool. That’s why you need have a mandate.”

http://www.c-span.org/Watch/Media/2010/05/10/HP/A/32795/Washington+Post+Discussion+on+Americas+New+Health+Care+Law.aspx

Comment:

By Don McCanne, MD

So by pursuing a moderate, market-based, Republican-based approach, the health care law was made much more complicated. But the greater tragedy is that it wasn’t only made more complicated, it failed in our goals of covering everyone with a financing system that we could afford. The complicated reform proposal that is now law is the most expensive model of reform ever devised, not to mention being one of the least effective.

As Alec MacGillis states, “… single payer is very simple. You just, you know – government-run health insurance – get rid of all the health insurance companies, and there are a lot fewer rules to write.”

We still can “blow this whole thing up,” and enact single payer. Not only would there be fewer rules, everyone would have the health care that they need, and we would be able to pay for it. That will never happen under the new law.