PNHP

Bill to design new health care model approved

Bill to design new health care model approved

By DANIEL BARLOW
Times Argus (Vt.), April 8, 2010

MONTPELIER – Senators voted 28-2 Wednesday to hire consultants to design a new health care model for Vermont, one of which would include a single-payer system.

Approval of the bill is a victory for Sen. Doug Racine, D-Chittenden, the chair of the Senate Health and Welfare Committee, who made it his goal this year to set Vermont on a path to a new health care system.

Racine, a gubernatorial candidate, said the state’s health care spending is on an unsustainable path and is now expected to hit almost $6 billion by the year 2012. His proposal would fully design several new options for the state.

“This is an essential next step for the state of Vermont,” Racine told his colleagues on the Senate floor Wednesday afternoon. “We need to get our costs under control and provide what we have promised … that all Vermonters have access to high-quality and affordable health care.”

Racine said his goal with the bill was to move the discussion over the future of health care beyond the abstract and instead begin looking at the specific details of various proposals. His bill allocates about $300,000 to a newly-revamped Health Care Reform Commission to hire consultants and fully design up to three new health care models.

The bill states that at least one of those models must be a single-payer system, one where all Vermonters are included in a single pool run by the state government. That has some advocates – such as Burlington’s Vermont Workers’ Center – cheering Racine on.

“We know that this bill has changed a little since when it was first introduced, but we’re still strongly supporting it,” said James Haslam, the director of the Center. “It puts Vermont on the right path.”

Racine conceded that he preferred his original bill, which envisioned setting up a new independent committee to study health care and help design the new systems. Under changes made to the bill by the Senate Appropriations Committee, that format was scrapped and the plans handed to the Reform Commission, a body of legislators and citizens who debate health care policy.

“The commission can still do the work,” Racine said.

Racine’s bill changed in other ways too. The Senate Appropriations Committee also successfully added an amendment to the bill – in a 21-9 vote on the floor – language that would give the Vermont government more authority over regulating hospital budgets.

That provision, sponsored by Sen. Susan Bartlett, D-Lamoille, the Appropriations Committee chairwoman and another gubernatorial candidate, places a 4 percent statewide cap on hospital budget increases over the next two years. There are provisions in the bill for certain financial exemptions from that cap.

Several senators worried that their hospitals would be shortchanged. Sen. Kevin Mullin, R-Rutland, said his county’s main hospital would be hurt more than others because 72 percent of the patients they see are on Medicaid or Medicare. The 4 percent cap would effectively be a 1 percent cap, he said.

“I want to be on record supporting my local hospital,” Mullin said.

Bartlett responded that the state government and school districts have been making tough budget decisions. She said “this isn’t even the beginning of the hard stuff” when it comes to bring budgets in line.

“They should be scared,” Bartlett said. “We’re almost out of money. But there are protections in here. There are plenty of outs for a hospital that is in an extreme financial situation.”

Only two senators – Sen. Randy Brock, R-Franklin, and Sen. Margaret “Peg” Flory, R-Rutland, voted against Racine’s health care bill. Brock said he was worried that a single-payer system in Vermont would be a “magnet for those from elsewhere.” Flory said the commission’s mission would cost too much in a tight budget year.

“We’re talking about a quarter million to a half million here,” she said. “This is just another proposal that we probably wouldn’t be able to do anything with for six more years.”

Daniel.Barlow@timesargus.com

http://www.timesargus.com/article/20100408/NEWS01/4080374/1002/NEWS01

Mutual fund managers are relieved

Health Care Overhaul May Help a Fund Sector

By Geraldine Fabrikant
The New York Times
April 9, 2010
Now that President Obama has finally gotten his sweeping health overhaul passed, mutual fund managers can breathe a sign of relief. Finally, there is some certainty about the changes, and most of them appear to be beneficial for health care stocks.
“There does not seem to be any onerous cost control,” said Les Funtleyder, a heath care analyst at Miller Tabak, an insititutional brokerage firm and asset manager.
In the wake of the new bill, the only negative he sees is a potential problem for insurance companies, like WellPoint, the UnitedHealthGroup and Aetna, because at some point they will have to cover all potential clients. “Then the question is, will they price these things so that they can avoid losing money?” he asked.
http://www.nytimes.com/2010/04/11/business/mutfund/11health.html?hpw

For those of us who continue to express concerns about the failure of the reform legislation to adequately control the excess growth in health care spending, this news is no surprise. Mutual fund managers are relieved that there are no onerous cost controls, allowing them to continue to include health care stocks as an important part of their portfolios. The only concern they’ve expressed is that health insurers now are going to have pay for health care for high-cost patients that they’ve been successful in excluding from their plans.
Expanding our expensive dysfunctional health care financing system works well for Wall Street, but it doesn’t work for the rest of us. It is absolutely inevitable that we will have to adopt a program of social insurance, preferably an improved Medicare for all.  The sooner, the better.

Healthcare Reform Not Found: Abort, Retry, Ignore?

By Eric LaMotte, Contributing Writer
Synapse, The UCSF Student Newspaper
April 8, 2010

Despite the intense efforts of a vocal minority, healthcare reform was enacted this year by congressional Democrats who claimed to place the needs of American citizens over those of corporations. Unfortunately, they chose to enact policies that will continue to allow a costly, complex, fragmented, for-profit insurance system to inflict damage on the rest of our healthcare system. Now, living in a post-reform world, we must decide where to go from here, and I am reminded of the error prompt that every frustrated computer user has had to answer at one point or another: Abort, Retry, Ignore?

Republicans are clamoring to repeal the law after November’s midterm elections. They want us to “Abort” our efforts for reform.

Congressional Democrats, the White House and the press want us to play dumb and pretend that the law is a “sweeping measure of reform” that is going to bring meaningful change to patient’s lives, and that we should wait ten years to see how the reform goes before tackling the subject again. They want us to “Ignore” the deficiencies of the new law, despite the fact that Massachusetts, our model for national reform, is already retracting the expansion of insurance coverage it enacted in 2006 and cutting payments to safety net hospitals in order to sustain a fiscally irresponsible model of reform. Massachusetts has the most expensive healthcare system in the world, and yet we are emulating this system in an effort to address rising costs.

Unfortunately, neither “Aborting” nor “Ignoring” are going to lower the $2.4 trillion dollars that we currently spend on healthcare, or get us significantly more healthcare for that pricetag. Neither option will decrease the 31% of healthcare costs that we spend pushing paper to figure out who’s going to pay for care. Neither option will prevent a middle-class family from going bankrupt when a parent gets very ill, has to temporarily miss work and is still on the line for paying her premiums, deductibles, 30% co-payments and full costs for out-of-network charges and uncovered benefits. This political triumph for Democrats is a policy disaster, shifting problems around rather than fixing them.

Instead, we must click “Retry” and quickly. Before HR3962/4872, the thing our country needed most from Congress was universal healthcare. After reform, it’s still universal healthcare.

Democrats could have improved Medicare and expanded it to cover all Americans, giving them full coverage for a comprehensive array of benefits (including dental, drug and mental health coverage) with no co-payments or deductibles: a 100% actuarial value plan. American residents would be guaranteed coverage from birth to death, without having to sign up year after year or worry about transferring insurance and providers with changes in employment. Patients would have full choice of doctor, without limitation to “networks,” and decisions about medical care would be restored to patients and providers. Private insurance would be allowed for any services not covered in the universal benefits package, such as cosmetic surgery. This is what is called a single payer system, since one organization is paying every part of every bill for every patient. The plan would be paid for by taxes that would replace the current mix of taxes, premiums, copayments, and deductibles, and would cost the same amount we pay now by eliminating $400 billion in bureaucratic waste from the system. In essence, Congress could have enacted a law that obviously and successfully prevents patients from going broke when they get sick.

Instead, Congress enacted a law that prevents patients from going broke in some ways – for example, by being rescinded from their plan – but leaves other ways of going broke wide open. You can bet that insurance companies will quickly adapt. As just one example, they could lower payments to providers, which would also cause providers to drop off the plan, making it harder to find a doctor who is “in-network” and raising the likelihood of out-of-network, uncovered charges.

Many progressives see these adaptations as a reason to trash corporations, and especially executives of private insurance companies. I think this reaction is ineffective and counterproductive, as it can turn off moderates and conservatives. Insurance companies are businesses, and they’re supposed to make the biggest profit they can within the boundaries of the law. We shouldn’t expect them to do anything else. The problem is not that they are evil, but rather that they are amoral, and yet we decide to put them in charge of access to a service with moral value. The fault is with us. If we are going to routinely consider the actions that we should naturally expect insurance companies to take to be abusive, then perhaps we shouldn’t put them in that position in the first place. Democrats, including President Obama, pretended to be outraged when Anthem Blue Cross threatened to raise premiums 39% in California, yet Democrats are unwilling to even allow the idea into the public debate that it might make sense to cut the private insurance industry out of the game altogether. They need to learn the meaning of the Ice T lyric, “don’t hate the player, hate the game.”

Amidst the already loud voices in support of “Abort” and “Ignore,” we need to raise a new and thundering voice for “Retry.” The national single payer bill described above is already written: HR 676. It’s thirty pages long, and written in plain English. It’s deficit neutral. It’s fiscally responsible. It guarantees access to healthcare as a right for all Americans. It has 88 co-sponsors, many of whom are “progressive” democrats who violated public promises to constituents by voting for a bill without a public option and are now in need of appealing to their base. Democrats have shown that they can pass something without the help of a single Republican.

Although San Francisco’s congresswomen are unlikely to work towards a new healthcare bill this year, we can make that their fault, not our own. Currently, neither Rep. Jackie Speier nor Speaker Nancy Pelosi are among the 88 cosponsors of the bill. If I know one thing, it’s that we won’t get single payer until we give our representatives no choice but to vote for it, by making our voices heard loud and clear. Don’t just call them today – keep them on your speed dial.

In California, we will have our own shot at enacting a statewide single payer system with SB 810. The bill passed the State Senate in January by a vote of 22-14. But it’s a long way from being enacted, and California’s idiosyncratic political system makes it unlikely that California will be the first state to enact a single payer plan. You can support real reform by joining efforts with PNHP/CaPA, CaHPSA, AMSA, CNA, or California OneCare.

http://synapse.ucsf.edu/articles/2010/April/8/opinion.html

Senate wants 3 plans that ensure health care for all Vermonters

Experts to provide options for universal coverage

By Nancy Remsen
Burlington (Vt.) Free Press
Thursday, April 8, 2010 

MONTPELIER — Dr. Deb Richter is accustomed to the slow pace of progress toward the health reform she favors, but she comes back to the Statehouse again and again to push for change. She was on hand Wednesday when senators took another small step.

The Senate voted 28-2 to give preliminary approval to a bill that directs the Legislature’s Health Care Reform Commission to hire experts to write three sets of plans that would implement a universal health care system in Vermont beginning in July 2012. One of the options must be a government-administered, publicly financed health benefits system.

“It is a good bill. It will get the ball rolling,” said Richter, an advocate of a single-payer system she sometimes describes as “Medicare for all.” Medicare is a federal health insurance program that covers all Americans over age 65. Richter is sure the design for a single-payer system will show it to be “the most fiscally conservative way to cover everybody.”

The Senate’s health reform bill wouldn’t commit the state to change, said Senate Health and Welfare Committee Chairman Doug Racine, D- Chittenden. Rather, it would give next year’s Legislature and new governor detailed information to help them make decisions about the next steps they could take to achieve universal access and better affordability.

Racine said the design process “is a necessary step to make change.”

The bill senators endorsed Wednesday was a political compromise among three Democratic gubernatorial candidates. Racine, Senate Appropriations Chairwoman Susan Bartlett and Senate President Pro Tempore Peter Shumlin are among five Democrats running for governor. Initially, they disagreed about who should coordinate the planning called for in the bill.

“I believe now we are one big happy family,” Racine reported as he asked senators to substitute the compromise bill for his committee’s original version. Rather than create a new board to oversee the planning process, the bill calls for using an existing commission. The panel’s membership would change to include two more nonlegislative members and two fewer lawmakers.

Another change proved more controversial — although not among the gubernatorial candidates. It would cap growth in the collective rate increase for the state’s 14 hospitals at 4 percent for each of the next two years.

http://www.burlingtonfreepress.com/article/20100408/NEWS03/100407029/-1/RSS

UCSF student Eric LaMotte on single payer

Opinion: Healthcare Reform Not Found: Abort, Retry, Ignore?

By Eric LaMotte
Synapse, The UCSF Student Newspaper
April 8, 2010

Despite the intense efforts of a vocal minority, healthcare reform was enacted this year by congressional Democrats who claimed to place the needs of American citizens over those of corporations. Unfortunately, they chose to enact policies that will continue to allow a costly, complex, fragmented, for-profit insurance system to inflict damage on the rest of our healthcare system. Now, living in a post-reform world, we must decide where to go from here, and I am reminded of the error prompt that every frustrated computer user has had to answer at one point or another: Abort, Retry, Ignore?

Amidst the already loud voices in support of “Abort” and “Ignore,” we need to raise a new and thundering voice for “Retry.” The national single payer bill described above (in the full article at the link below) is already written: HR 676.

In California, we will have our own shot at enacting a statewide single payer system with SB 810. The bill passed the State Senate in January by a vote of 22-14. But it’s a long way from being enacted, and California’s idiosyncratic political system makes it unlikely that California will be the first state to enact a single payer plan. You can support real reform by joining efforts with PNHP/CaPA, CaHPSA, AMSA, CNA, or California OneCare.

http://synapse.ucsf.edu/articles/2010/April/8/opinion.html

For a picture of Eric LaMotte with Senator Arlen Specter, with the caption, “Senator Specter talks with first-year medical student Eric LaMotte, who supports single payer health insurance”:

http://today.ucsf.edu/stories/senator-specter-urges-ucsf-community-to-exert-political-power/

Comment: 

By Don McCanne, MD

For a breather, today’s message is an affirmation that there is hope for the future in health care, as represented by this article by Eric LaMotte, an astute medical student at the University of California at San Francisco (my alma mater).

Thanks, Eric.

(During our travels this month, qotd messages will be sporadic to nil.)

UCSF student Eric LaMotte on single payer

Opinion: Healthcare Reform Not Found: Abort, Retry, Ignore?

By Eric LaMotte
Synapse, The UCSF Student Newspaper
April 8, 2010
Despite the intense efforts of a vocal minority, healthcare reform was enacted this year by congressional Democrats who claimed to place the needs of American citizens over those of corporations. Unfortunately, they chose to enact policies that will continue to allow a costly, complex, fragmented, for-profit insurance system to inflict damage on the rest of our healthcare system. Now, living in a post-reform world, we must decide where to go from here, and I am reminded of the error prompt that every frustrated computer user has had to answer at one point or another: Abort, Retry, Ignore?
Amidst the already loud voices in support of “Abort” and “Ignore,” we need to raise a new and thundering voice for “Retry.” The national single payer bill described above (in the full article at the link below) is already written: HR 676.
In California, we will have our own shot at enacting a statewide single payer system with SB 810. The bill passed the State Senate in January by a vote of 22-14. But it’s a long way from being enacted, and California’s idiosyncratic political system makes it unlikely that California will be the first state to enact a single payer plan. You can support real reform by joining efforts with PNHP/CaPA, CaHPSA, AMSA, CNA, or California OneCare.
http://synapse.ucsf.edu/articles/2010/April/8/opinion.html
For a picture of Eric LaMotte with Senator Arlen Specter, with the caption, “Senator Specter talks with first-year medical student Eric LaMotte, who supports single payer health insurance”:
http://today.ucsf.edu/stories/senator-specter-urges-ucsf-community-to-exert-political-power/

For a breather, today’s message is an affirmation that there is hope for the future in health care, as represented by this article by Eric LaMotte, an astute medical student at the University of California at San Francisco (my alma mater).
Thanks, Eric.
(During our travels this month, qotd messages will be sporadic to nil.)

Pennsylvania's Blues avoid battle

Highmark sues to block state review of Blues competition

By Emily Berry
American Medical News
April 5, 2010

Highmark Inc. has asked a state court to block the Pennsylvania Dept. of Insurance from investigating or releasing any findings about the state of competition between the state’s four BlueCross BlueShield-affiliated plans.

In a lawsuit filed March 16, the Pittsburgh-based company accused Pennsylvania Insurance Commissioner Joel Ario of planning to try to break up the Blues plans’ current licensing arrangement, set by the BlueCross BlueShield Assn.

The state’s four Blues plans split their business into distinct territories. The only overlap is in central Pennsylvania, where Highmark, which has a Blue Shield trademark, and Capital BlueCross compete.

Pennsylvania Gov. Ed Rendell criticized Highmark’s decision to block the state’s review. “I am disappointed — but not surprised — that Highmark has chosen to fight our efforts to ensure the protection of consumers and guarantee a free and fair marketplace,” he said in a statement. “Health insurance is a big business. Historically, it has operated — and especially here in Pennsylvania — with limited regulation and weak oversight.”

http://www.ama-assn.org/amednews/2010/04/05/bisb0405.htm

Comment:

By Don McCanne, MD

Pennsylvania’s four BlueCross BlueShield plans have staked out different territories, effectively eliminating market competition between the Blues. One of the reasons that the reform model was based on private health plans was that market competition was supposed to bring us higher quality insurance products at lower costs. Instead, Pennsylvania is getting higher costs at whatever quality.

What is in the recently-enacted health reform legislation that will prevent such anti-competitive practices? The state health exchanges? This is an industry that is suing to block the release of any information about anti-competitive behavior. Just because they’ve been granted a new marketing tool in the form of the exchanges doesn’t mean that they are going to change their ways. The major markets are already concentrated amongst a few insurers, and they will continue to remain so.

Since we have lost the benefit of competition, why should we spend so much more merely to keep the private insurers in control? Let’s recover the resources that they waste and use the funds for a truly universal program that actually does cover all of us. That will require new, preemptive legislation, but it’s just what we need – an improved Medicare for everyone.

Pennsylvania’s Blues avoid battle

Highmark sues to block state review of Blues competition

By Emily Berry
American Medical News
April 5, 2010

Highmark Inc. has asked a state court to block the Pennsylvania Dept. of Insurance from investigating or releasing any findings about the state of competition between the state’s four BlueCross BlueShield-affiliated plans.

In a lawsuit filed March 16, the Pittsburgh-based company accused Pennsylvania Insurance Commissioner Joel Ario of planning to try to break up the Blues plans’ current licensing arrangement, set by the BlueCross BlueShield Assn.

The state’s four Blues plans split their business into distinct territories. The only overlap is in central Pennsylvania, where Highmark, which has a Blue Shield trademark, and Capital BlueCross compete.

Pennsylvania Gov. Ed Rendell criticized Highmark’s decision to block the state’s review. “I am disappointed — but not surprised — that Highmark has chosen to fight our efforts to ensure the protection of consumers and guarantee a free and fair marketplace,” he said in a statement. “Health insurance is a big business. Historically, it has operated — and especially here in Pennsylvania — with limited regulation and weak oversight.”

http://www.ama-assn.org/amednews/2010/04/05/bisb0405.htm

Comment:

By Don McCanne, MD

Pennsylvania’s four BlueCross BlueShield plans have staked out different territories, effectively eliminating market competition between the Blues. One of the reasons that the reform model was based on private health plans was that market competition was supposed to bring us higher quality insurance products at lower costs. Instead, Pennsylvania is getting higher costs at whatever quality.

What is in the recently-enacted health reform legislation that will prevent such anti-competitive practices? The state health exchanges? This is an industry that is suing to block the release of any information about anti-competitive behavior. Just because they’ve been granted a new marketing tool in the form of the exchanges doesn’t mean that they are going to change their ways. The major markets are already concentrated amongst a few insurers, and they will continue to remain so.

Since we have lost the benefit of competition, why should we spend so much more merely to keep the private insurers in control? Let’s recover the resources that they waste and use the funds for a truly universal program that actually does cover all of us. That will require new, preemptive legislation, but it’s just what we need – an improved Medicare for everyone.

The New Zealand Way: Another Approach to Health Care

After 28 years as a primary care physician in the U.S., Dr. Ken Fabert traveled to New Zealand to see what patients and doctors think of their single-payer system

By Dr. Ken Fabert
Yes! Magazine, April 8, 2010

As I discussed earlier, a well-organized and well-trained primary care base is vital to the rational utilization of health care resources, and a key part of the New Zealand system. Surprisingly, though, at the initial point of access, which is often a physician-owned practice, the patient is expected to pay some or even most of the cost of the encounter. Many patients, however, are able to obtain a community health services card; with it, co-pays are on a sliding scale based on income. Further subsidies are available for patients with chronic illness who have more than 12 visits per year. Despite these subsidies, I was rather surprised to learn that computerized patient account systems prompt for information about bad debts and previous payment status; this seems to be generally accepted as a necessary evil if the system is to maintain financial viability and overall fairness.

This is, however, the only part of the system that requires out-of-pocket payment. And despite the potential barrier to access posed by these co-pays, my experience in the sites I’ve visited so far is that it doesn’t seem to be a significant barrier to access. I do want to continue to observe the potential effects of this system. But that’s where the potential financial barriers end.

After being seen by a primary care doctor, all laboratory investigations, radiology tests, emergency hospital evaluations, hospitalizations, and surgery are paid for. No deductibles, no co-pays, no maximums.

Recently, primary care subsidies have been changed to include free care for children under six and full prenatal and obstetrical care. These costs are administered through primary health organizations, or PHOs, one of the primary conduits through which the annual national health budget directly pays general practitioners and other primary providers.

The Accident Compensation Corporation (ACC) is one of several pillars on which the New Zealand health care system is based. It is a no-fault national insurance program funded directly by the government to cover medical expenses stemming from any accident that occurs in New Zealand. The rules of the ACC preclude further litigation because both medical expenses and subsequent compensation are provided for. Thus, the absurdities and excesses of a litigation-driven system of compensation—such as that found in United States, where many doctors feel they must practice “defensive medicine,” ordering unnecessary tests and procedures to make sure their bases are covered in the event of a malpractice lawsuit—are simply rendered irrelevant. Health policy academics—frequently law school professors and economists rather than medical clinicians—often downplay the impact of litigation on the U.S. health care system’s high costs, but the corrosive effect of this lawyer-driven adversarial system is pervasive. Just ask any clinician. In a future blog I will address this issue more comprehensively, but for now let’s continue to look at what makes the New Zealand health care system tick.

Another recipient of government funding is the District Health Board, or DHB, which pays for hospital and laboratory services. (This is a simple mandate on paper, but as with hospital systems everywhere, efficient, fair allocation of these funds is an enormous and politically charged task. In fact, New Zealand’s health minister recently announced significant budget cuts to the DHBs, stating that more funds are to be devoted to clinical care.)

A third entity that makes up the foundation of the health system is PHARMAC, the Pharmacy Management Corporation. PHARMAC is the national pharmaceutical supplier. It negotiates directly with pharmaceutical manufacturers for supply and pricing of essential medicines. All covered drugs are $3.00 NZ ($2.10 USD) per prescription.This includes at least one, if not more, representative drug from virtually every therapeutic class of medications utilized in modern medical practice. In my three weeks of prescribing in New Zealand, I have yet to feel constrained by PHARMAC’s options. Labeled on-patent drugs are still available, but at substantially more cost to the patient—just as in the U.S., where patients do not benefit from the advantage of collective bargaining.

Finally, there is a private sector. Occasionally, patients feel that wait times are excessive for elective surgery such as joint replacements. They can then opt to be treated through the private sector, in which wait times frequently are shorter for such elective procedures. The general perception is that timing, not quality, is the difference between private and public sectors. The specter of a two-tiered health system, with better care available for the rich than the poor, doesn’t seem to have arisen. There is, not surprisingly, a growing health insurance industry for those who prefer to seek their care in the private sector. In general, the insurance industry is better regulated here than in the U.S., but I have heard stories of limitations, asterisks, exclusions, and fine print similar to those employed by the U.S. health insurance industry. But in New Zealand, of course, insurance for private care is entirely optional.

So to summarize, a medical patient in New Zealand can expect the following:

* Co-payment or full payment is needed to access a general practitioner, though subsidies are available.
* All required lab tests, investigations, emergency treatments, hospitalizations, and surgeries are free.
* Prenatal care, childbirth, and care for children under six are free.
* If the patient is injured in an accident, care is free (and subsequent compensation is provided for).
* If medications are required, covered prescriptions cost $3.00 ($2.10 US).

Is everyone in New Zealand happy with this scheme? Obviously not. But by and large, people seem to be satisfied with the provisions available to them. There is occasional grumbling, but when I ask New Zealanders if they would rather have a system like that in the United States, the response is a unanimous and unequivocal “No!”

The New Zealand health system is not socialism. It is an example of an intelligent, educated population and government understanding that one of the cornerstones of a human rights-based society (as well as a healthy, productive, and creative society) is the social provision of health care.

I see words like “landmark” and “historic” used to describe the recent health care legislation signed by President Obama. But compared to the New Zealand system, these legislative reforms are functionally inadequate and morally lacking.

I hope to gain deeper insight into this system as I continue to work here for the next two months. As I do, I’ll share them with you. This includes problems and shortcomings, but also the kind of problem-solving that is taking place to keep the citizens of this country healthy and productive.

Dr. Ken Fabert wrote this article for YES! Magazine, a national, nonprofit media organization that fuses powerful ideas with practical actions. Ken has been a practicing primary care physician in the United States for 28 years, from rural New England and South Carolina to urban Chicago and metro Seattle. A member of Physicians for a National Health Program, he is spending three months as a roving clinician in New Zealand to find out more about how their single-payer health care system works. For more of Ken Fabert’s blogs from New Zealand, click here.

http://www.yesmagazine.org/blogs/ken-fabert/the-new-zealand-way-another-approach-to-health-care?icl=email_wkly20100409&ica=tnFabert

Pennsylvania's Blues avoid battle

Highmark sues to block state review of Blues competition

By Emily Berry
American Medical News
April 5, 2010
Highmark Inc. has asked a state court to block the Pennsylvania Dept. of Insurance from investigating or releasing any findings about the state of competition between the state’s four BlueCross BlueShield-affiliated plans.
In a lawsuit filed March 16, the Pittsburgh-based company accused Pennsylvania Insurance Commissioner Joel Ario of planning to try to break up the Blues plans’ current licensing arrangement, set by the BlueCross BlueShield Assn.
The state’s four Blues plans split their business into distinct territories. The only overlap is in central Pennsylvania, where Highmark, which has a Blue Shield trademark, and Capital BlueCross compete.
Pennsylvania Gov. Ed Rendell criticized Highmark’s decision to block the state’s review. “I am disappointed — but not surprised — that Highmark has chosen to fight our efforts to ensure the protection of consumers and guarantee a free and fair marketplace,” he said in a statement. “Health insurance is a big business. Historically, it has operated — and especially here in Pennsylvania — with limited regulation and weak oversight.”
http://www.ama-assn.org/amednews/2010/04/05/bisb0405.htm
Pennsylvania’s four BlueCross BlueShield plans have staked out different territories, effectively eliminating market competition between the Blues. One of the reasons that the reform model was based on private health plans was that market competition was supposed to bring us higher quality insurance products at lower costs. Instead, Pennsylvania is getting higher costs at whatever quality.
What is in the recently-enacted health reform legislation that will prevent such anti-competitive practices? The state health exchanges? This is an industry that is suing to block the release of any information about anti-competitive behavior. Just because they’ve been granted a new marketing tool in the form of the exchanges doesn’t mean that they are going to change their ways. The major markets are already concentrated amongst a few insurers, and they will continue to remain so.
Since we have lost the benefit of competition, why should we spend so much more merely to keep the private insurers in control? Let’s recover the resources that they waste and use the funds for a truly universal program that actually does cover all of us. That will require new, preemptive legislation, but it’s just what we need – an improved Medicare for everyone.

Pennsylvania’s Blues avoid battle

Highmark sues to block state review of Blues competition

By Emily Berry
American Medical News
April 5, 2010

Highmark Inc. has asked a state court to block the Pennsylvania Dept. of Insurance from investigating or releasing any findings about the state of competition between the state’s four BlueCross BlueShield-affiliated plans.

In a lawsuit filed March 16, the Pittsburgh-based company accused Pennsylvania Insurance Commissioner Joel Ario of planning to try to break up the Blues plans’ current licensing arrangement, set by the BlueCross BlueShield Assn.

The state’s four Blues plans split their business into distinct territories. The only overlap is in central Pennsylvania, where Highmark, which has a Blue Shield trademark, and Capital BlueCross compete.

Pennsylvania Gov. Ed Rendell criticized Highmark’s decision to block the state’s review. “I am disappointed — but not surprised — that Highmark has chosen to fight our efforts to ensure the protection of consumers and guarantee a free and fair marketplace,” he said in a statement. “Health insurance is a big business. Historically, it has operated — and especially here in Pennsylvania — with limited regulation and weak oversight.”

http://www.ama-assn.org/amednews/2010/04/05/bisb0405.htm

Pennsylvania’s four BlueCross BlueShield plans have staked out different territories, effectively eliminating market competition between the Blues. One of the reasons that the reform model was based on private health plans was that market competition was supposed to bring us higher quality insurance products at lower costs. Instead, Pennsylvania is getting higher costs at whatever quality.

What is in the recently-enacted health reform legislation that will prevent such anti-competitive practices? The state health exchanges? This is an industry that is suing to block the release of any information about anti-competitive behavior. Just because they’ve been granted a new marketing tool in the form of the exchanges doesn’t mean that they are going to change their ways. The major markets are already concentrated amongst a few insurers, and they will continue to remain so.

Since we have lost the benefit of competition, why should we spend so much more merely to keep the private insurers in control? Let’s recover the resources that they waste and use the funds for a truly universal program that actually does cover all of us. That will require new, preemptive legislation, but it’s just what we need – an improved Medicare for everyone.

Shareholder group wants WellPoint to become not-for-profit

By J.K. Wall
Indianapolis Business Journal, April 6, 2010

Saying WellPoint Inc. has failed to live up to its commitment to provide “the best healthcare value” for customers, three shareholders of the Indianapolis-based health insurance giant want it to convert to a not-for-profit organization.

They have proposed that the company study the feasibility of such a conversion. The proposal will be voted on at WellPoint’s annual meeting of shareholders in Indianapolis on May 18.

The proposal was disclosed Friday in WellPoint’s proxy statement. The three shareholders—Rob and Karen Stone of Bloomington and Julia Vaughn of Indianapolis—will stage a press conference about the proposal Wednesday morning in front of WellPoint’s Monument Circle headquarters.

“WellPoint has had a heap of (well-deserved) bad publicity lately about their corporate culture of greed,” Rob Stone, an emergency physician at Bloomington Hospital, wrote in an e-mail. He referred to recent controversy over WellPoint’s premium hikes in California, Indiana and other states, and to Friday’s report that its executives enjoyed boosts in compensation last year ranging from 50 percent to 75 percent.

WellPoint’s board of directors urged shareholders to vote the proposal down.

“The proponent of this proposal has not presented any factual information to support the view that converting to nonprofit status would benefit us or our shareholders, employees, customers and members,” the board members wrote in a statement in WellPoint’s proxy filing. They said a feasibility study of the issue “would be costly and would distract management and the Board from overseeing our operations.”

Board members added that as a not-for-profit organization, the company would have poorer access to capital and, by not being able to pay executives with stock, would have a harder time attracting top-level managers.

WellPoint’s predecessor company, Anthem Inc., was a mutual insurance company until its initial public offering in 2001. It was, however, always a for-profit entity. Many of the companies acquired by Anthem or other WellPoint predecessors did convert from not-for-profit to for-profit status before being acquired.

The Stones and Vaughn would like to see the United States adopt a single-payer health insurance system, where the U.S. government would act as insurer for all Americans. Their proposal claims that WellPoint spends as much as 19 percent of its premium dollars on administration and profit, compared with about 3 percent spent on overhead by the federal Medicare insurance program for seniors.

“Although this is good for WellPoint’s profitability and share price, it supports the argument that for-profit health insurance is a major reason for the discrepancy in overhead expenses between the U.S. and other countries,” the shareholder proposal reads. “Nations with universal systems spend about half what we spend on a per-capita basis and have better health outcomes.”

During last year’s annual shareholder meeting, Rob Stone called informally for WellPoint’s board to re-mutualize the company.

[PNHP note: the statement below is the full text of Dr. Stone’s statement of April 7]

Press Conference Statement April 7, 2010

People ask me, why should WellPoint shareholders vote for the proposal that the company explore returning to its traditional Blue Cross, charitable, not-for-profit mission?

The reasons keep coming out in the newspapers, and let me mention a few from the last 12 weeks.

The Indianapolis Star on January 16 exposed that WellPoint has been covertly funding U.S. Chamber of Commerce attack ads against health care reform.  WellPoint spent tens of millions on other non-covert lobbying.  Keep in mind that the bill recently passed was largely written by former WellPoint Vice President Liz Fowler in her role as Max Baucus’ chief healthcare legislative aide.

McClatchy Newspapers on February 24:  ”While Anthem Blue Cross proposed a 39 percent rate increase on thousands of its California customers, its parent company gave 39 of its executives more than $1 million each and spent more than $27 million on 103 lavish executive retreats, congressional investigators said.”

The Los Angeles Times on March 10 updated its readers on the ongoing rescission scandal involving WellPoint in California. “Only a small fraction of eligible Californians have benefited from agreements that Anthem Blue Cross made to settle accusations that they systematically and illegally dropped sick policyholders to avoid paying for their care.”  These were people whose insurance coverage was cancelled after they were diagnosed with cancer and other serious conditions.

The Los Angeles Times again, on March 18 reported that in 2007 WellPoint had pledged through its charitable foundation to spend $30 million over three years to help those lacking health coverage, but its tax records and website show it gave only $6.2 million.

Consumer Watchdog reported March 31 that WellPoint sent a message to investors describing how it would simply re-label administrative costs as “medical care” in response to the new health reform law. The message follows revelations that WellPoint, also intentionally padded already huge premium increases in California, just in case regulators demanded reductions.

Also on March 31, Revive Public Relations released the results of its fourth annual national payer survey of hospital executives. Survey results showed a marked decline in WellPoint/Anthem’s reputation, now 2nd worst of all health insurance companies in their study.

And now this week the news of CEO Angela Braly’s 51% salary increase, up to $13.1 million.  The arrogance is overwhelming.  Why wouldn’t shareholders be concerned with the direction this company is heading?

Yesterday afternoon in Bloomington I listened to Allan Hubbard speak on health care reform at Indiana University.  Mr Hubbard, an Indianapolis businessman, served in the GW Bush administration and is a recent member of WellPoint’s Board of Directors.  

He made no bones about being a Republican and shared a Republican view on where health care reform should go from here.  At the end of his talk he concluded with this prediction: “My guess is that in 15 years we will have a single payer health plan, Medicare for All.”  He wasn’t saying that gleefully.

He explained that all the health insurance companies do is serve as middlemen between patients and providers, (doctors and hospitals).  He fears that as health care reform moves forward, Congress and the people will turn on them as a way to cut spending.  

They (we) should.  The health insurance industry adds huge administrative costs to our system, not to mention the profits they siphon off.  WellPoint is a parasitic middleman that adds no value, but actually increases the cost of healthcare for all of us.  

I see the day when socially responsible investors will divest themselves from health insurers’ stocks.

My recommendation is that WellPoint investors look at drastically changing the
direction of our company, and not wait for the stock price to plummet once the public figures out that insurance companies should go.

Rob Stone MD
Director, Hoosiers for a Commonsense Health Plan (http://www.hchp.info/)
State Coordinator and national Board member, Physicians for a National Health Program
Assistant Clinical Professor of Emergency Medicine, Indiana University School of Medicine