PNHP

Gaming the individual mandate

Gaming the individual mandate

Short-term customers boosting health costs

By Kay Lazar
The Boston Globe
April 4, 2010
Thousands of consumers are gaming Massachusetts’ 2006 health insurance law by buying insurance when they need to cover pricey medical care, such as fertility treatments and knee surgery, and then swiftly dropping coverage, a practice that insurance executives say is driving up costs for other people and small businesses.
In 2009 alone, 936 people signed up for coverage with Blue Cross and Blue Shield of Massachusetts for three months or less and ran up claims of more than $1,000 per month while in the plan. Their medical spending while insured was more than four times the average for consumers who buy coverage on their own and retain it in a normal fashion, according to data the state’s largest private insurer provided the Globe.
The typical monthly premium for these short-term members was $400, but their average claims exceeded $2,200 per month.
The problem is, it is less expensive for consumers — especially young and healthy people — to pay the monthly penalty of as much as $93 imposed under the state law for not having insurance, than to buy the coverage year-round. This is also the case under the federal health care overhaul legislation signed by the president, insurers say.
http://www.boston.com/news/health/articles/2010/04/04/short_term_customers_boosting_health_costs/?page=full

Health policy science told us ahead of time that a mandate for individuals to buy private health insurance would not work if the penalties for not doing so were quite modest. Yet Massachusetts enacted such a plan, and now very similar policies have been enacted into federal law.
The Massachusetts experience has demonstrated that health care consumers will act in their own financial interest. Individuals who perceive themselves to be in good health will elect to pay the much lower penalty for being uninsured. If they then develop expensive medical problems, they will sign up for a health plan, but then will drop their coverage after their medical needs are met. It means little to them that this drives up premiums for those who remain in the insurance pools.
There are legitimate reasons that state and federal legislators have been reluctant to assign greater penalties for not being insured. The most important is that insurance premiums are simply not affordable for moderate income individuals who do not receive adequate public or employer assistance. Even the modest penalties create a financial hardship for some. Pushing the penalties higher would compound the financial stresses that too many middle income families are already experiencing.
There are policy interventions available, but those under consideration are based on leaving the private insurance industry in charge. One suggestion is to close enrollment except for a short period of open enrollment once or twice a year. This would leave already financially strapped individuals without a safety valve should problems arise during closed enrollment periods. Another suggestion would be to reinstitute (Massachusetts) or expand (federal) the waiting period before preexisting disorders are covered, even if of very recent onset, again preventing coverage for more urgent, serious problems.
Though some might suggest that these individuals would be getting what they deserve for not being insured, the real fault is with policies inherent in the design of a financing system based on private insurance plans. Individuals are forced to choose between private insurance coverage that they may not be able to afford, or exposing themselves to the potential of greater financial insecurity by remaining uninsured. If solving problems in a system creates new problems, then we should question the system itself.
We can do this far better. We can separate the financing from the delivery of health care. With a single payer, improved Medicare for all, everyone would be automatically covered, for life. The financing of the system would not be through premiums tagged to private plans, but rather would be through progressive tax policies in which each person would pay an equitable share, and no one would face a financial hardship.
Gaming the individual mandate is not a very fun game. Let’s shut it down, and change to a system that works for everyone.

Fighting Illini: Because Illinois Wants More Than Insurance for All

Undaunted: Movement for Improved Medicare for All Grows in Illinois and Across the Nation

By Donna Smith
Guaranteed Healthcare Blog
March 29, 2010

Just blocks from President Obama’s Hyde Park home south of the Loop in Chicago, more than 70 activists gathered on Saturday, March 27, 2010, to plan strategy for advancing an improved and expanded Medicare for all system as the law of the land.  Activists across the nation are undaunted by the passage of the current health reform bill as they know that mandating the purchase of private insurance is not the same as providing access to healthcare.

Joining the activists from throughout Illinois was Illinois State Representative Mary Flowers, chief sponsor of Illinois’ single-payer health reform bill HB311, seen in the photo on the left.

By sharing their successes in advancing the Medicare for all, single-payer position, the activists spent eight hours together, broke into issue panels and came away with the formation of four task forces to explore the most effective and strategic ways to move the movement in Illinois both in terms of state legislative energy and as part of a larger national movement.

Among the engaged activists were nurses from various practice settings and locations throughout the state.  Many have seen drastic cuts to programs and services in their communities, and as patient advocates remain firmly committed to restoring not only those programs and services cut but also improving and enhancing patient access and care until a single standard of high quality care is the law of the Land of Lincoln and the Land of Obama.  HB311, The Health Illinois Act, would assure RNs in Illinois that no patient would be turned away because they lacked insurance, lacked adequate cash to self-pay or had been denied treatment by an insurance company.

Nurses will serve on each of the four task forces created:  legislative, media, labor and direct action.  The legislative task force will assess the work necessary on Illinois’ elected officials — both state and federal — to help advise other single-payer reform supporting groups how best to motivate those in office to support and defend HB311 and national improved and expanded Medicare for all and how to select and target campaigns of those wishing to be elected in Illinois to make sure those candidates are single-payer solid.  The media task force plans to do outreach to local and regional media to develop better lines of communication and enhance chances for coverage of single-payer issues and also make good use of the members within the Illinois Single Payer Coalition who create media on the web and beyond.  The labor task force will work with local labor bodies to enhance advancement of the AFL-CIO’s Resolution 34 supporting single-payer reform and will research becoming a part of the national Labor Campaign for Single-Payer.  And the direct action task force will continue seeking effective settings in which to challenge the power of the profit engine — private insurance, big Pharma, corporate healthcare providers, etc — with those actions which will advance the cause of single-payer reform.

Also on hand for the day was Dr. Quentin Young of Physicians for a National Health Program.  Dr. Young is a long time resident of Hyde Park, and PNHP has its national office in Chicago.  Katie Robbins of Healthcare-Now was also in from Philadelphia and New York and facilitated the meeting.  Several members of Progressive Democrats of America’s Chicago chapter helped plan the meeting, as did members of the local and state Green Party along with members of CHI-SPAN, the Chicago Single Payer Action Network, a wonderful group of people from Access Living in Chicago, Health Care for All Illinois (HCAI) members, the Champaign County Health Care Consumers, and a strong contingent of activists from Springfield and from East St. Louis, IL.  Every group worked cooperatively and with purpose to celebrate the path forward for all who believe that healthcare as a basic human right applies to every person — not just those with money or influence or both.

The event was hosted by the Illinois Single Payer Coalition with tremendous support offered by Dr. Anne Sheetz, who always lends her intelligence and humanity to the effort to transform healthcare for all in her state.

My participation was complete joy in seeing a movement that has been insistently advancing for the past several months firmly plan next steps and remain undaunted by whatever the political turmoil and tumult in DC.

My home state — and my beloved Chicago — can do so much to entrench common Midwestern values about right and wrong and human decency into a healthcare discussion that all too often is focused on revenues and denials and everything but good health for all.

Onward, Illinois.  Onward. 

http://www.guaranteedhealthcare.org/blog/donna-smith-sicko-patient/2010/03/29/undaunted-movement-improved-medicare-all-grows-illinois-an

WellPoint/Empire drops four non-profit hospitals

WellPoint Unit Drops Stellaris From Network

By Avery Johnson and Suzanne Sataline
The Wall Street Journal
April 2, 2010

A unit of WellPoint Inc. dropped Stellaris Health Network, a four-hospital chain in Westchester, N.Y., from its network after Stellaris asked for a 15% increase in reimbursement payments from the health insurer.

Stellaris says it merely wanted the insurer to pay rates consistent with what it receives from other health plans in the market. “Our non-profit community hospitals can no longer subsidize the record profits of a health-insurance conglomerate,” said Arthur A. Nizza, Stellaris’s president and chief executive, in a statement. Empire asserts charges of overall profitability aren’t relevant to this particular situation.

The decision will affect thousands of members of Empire BlueCross BlueShield, a WellPoint unit in New York, who use the hospital system. Empire has six million members in New York, and Stellaris has been one of its top 10 hospital systems in the state based on size and member utilization.

The failure to reach an agreement, which resulted in the contract being terminated late Wednesday, is the latest in a string of negotiations between hospitals and insurers that have gone hostile.

http://online.wsj.com/article/SB10001424052702303960604575158042406727102.html

Comment: 

By Don McCanne, MD

It is common to hear hospital administrators complain about low reimbursement rates from Medicare, yet how many terminate their participation in the Medicare program? And of course Medicare never unilaterally terminates a provider except when appropriate in cases of criminal fraud or incompetency that constitutes a hazard to patients.

Yet what happens when a private insurer is the payer? The decision to terminate a contract is strictly a business decision made based on market conditions, having much less to do with the value, quality or necessity of the services being provided, but much more to do with the oligopolistic leverage that the insurer has in the market. The private insurer, based purely on a business decision, is quite willing to disrupt the continuity of health care services for its own customers. And WellPoint/Empire says that their profitability isn’t relevant when it makes these decisions!?

And what will the new reform legislation do to correct these blatant injustices? It will pour more taxpayer funds into the coffers of these intrusive middleman, providing them with even greater leverage in their negotiations with the health care delivery system.

Do we want a health care financing system that is designed to benefit the money managers, or do we want a financing system designed to be sure that health care is there when patients need it? If we favor the latter, then we need to dump the private insurers and adopt an improved Medicare program that takes care of everyone.

WellPoint/Empire drops four non-profit hospitals

WellPoint Unit Drops Stellaris From Network

By Avery Johnson and Suzanne Sataline
The Wall Street Journal
April 2, 2010
A unit of WellPoint Inc. dropped Stellaris Health Network, a four-hospital chain in Westchester, N.Y., from its network after Stellaris asked for a 15% increase in reimbursement payments from the health insurer.
Stellaris says it merely wanted the insurer to pay rates consistent with what it receives from other health plans in the market. “Our non-profit community hospitals can no longer subsidize the record profits of a health-insurance conglomerate,” said Arthur A. Nizza, Stellaris’s president and chief executive, in a statement. Empire asserts charges of overall profitability aren’t relevant to this particular situation.
The decision will affect thousands of members of Empire BlueCross BlueShield, a WellPoint unit in New York, who use the hospital system. Empire has six million members in New York, and Stellaris has been one of its top 10 hospital systems in the state based on size and member utilization.
The failure to reach an agreement, which resulted in the contract being terminated late Wednesday, is the latest in a string of negotiations between hospitals and insurers that have gone hostile.
http://online.wsj.com/article/SB10001424052702303960604575158042406727102.html

It is common to hear hospital administrators complain about low reimbursement rates from Medicare, yet how many terminate their participation in the Medicare program? And of course Medicare never unilaterally terminates a provider except when appropriate in cases of criminal fraud or incompetency that constitutes a hazard to patients.
Yet what happens when a private insurer is the payer? The decision to terminate a contract is strictly a business decision made based on market conditions, having much less to do with the value, quality or necessity of the services being provided, but much more to do with the oligopolistic leverage that the insurer has in the market. The private insurer, based purely on a business decision, is quite willing to disrupt the continuity of health care services for its own customers. And WellPoint/Empire says that their profitability isn’t relevant when it makes these decisions!?
And what will the new reform legislation do to correct these blatant injustices? It will pour more taxpayer funds into the coffers of these intrusive middleman, providing them with even greater leverage in their negotiations with the health care delivery system.
Do we want a health care financing system that is designed to benefit the money managers, or do we want a financing system designed to be sure that health care is there when patients need it? If we favor the latter, then we need to dump the private insurers and adopt an improved Medicare program that takes care of everyone.

Taiwan to move towards more equitable financing

Talk of the day -- Health insurance overhaul nearly ready

By Sofia Wu
Focus Taiwan News Channel
March 30, 2010

The health insurance premium rate will be raised from the current 4.55 percent to 5.17 percent April 1, but Department of Health (DOH) Minister Yaung Chih-liang said Monday the public could end up paying less in premiums when a second-generation health care system is adopted in two years.

Earlier Monday, Yaung briefed Premier Wu Den-yih on draft amendments to the National Health Insurance Act that will pave the way for the introduction of a new generation of health care insurance.

After listening to Yaung’s briefing, Wu said the executive branch will lobby lawmakers to pass the draft package during its current session to allow for an early implementation of the second-generation system.

Under the new system, premiums will be paid by the insured, employers and the central government. At present, the government’s contribution is financed by both central and local governments.

The new system will calculate premiums based on total household income (including wages, stock dividends, rental income and other unearned income) instead of the current model that considers only the insureds’ salaries or earned income.

Yaung said the new system will be more equitable, as wealthy households whose income does not mainly rely on earned income will have to pay higher premiums.

http://focustaiwan.tw/ShowNews/WebNews_Detail.aspx?Type=aALL&ID=201003300010

Comment: 

By Don McCanne, MD

Taiwan’s single payer system has been phenomenally successful, though they, like all other nations, have had to confront increases in health care costs. Under the current financing system it has become necessary to increase the percent of income paid as insurance premiums, to the displeasure of the citizens of Taiwan. That has prompted recommendations to improve the financing system.

The most important change is to shift from a premium based on a percentage of earned income to a percentage of all household income, including wages, stock dividends, rental income and other unearned income. The obvious impact of this is to make the contribution more equitable by increasing the progressive nature of the health care tax. This acknowledges the necessity of instituting a transfer not only from the healthy to the sick, but also from the wealthy to those with more modest incomes. Costs are too high to do otherwise.

Another change is to eliminate the contribution of local governments, which frequently struggle with their budgets, and to shift the full responsibility for the government contribution to the central government.

When you think about, we’ve already adopted these principles for our Medicare program. The program was established as a federally funded program, unlike Medicaid which depends on state funding as well. Also, the reconciliation bill just signed by President Obama includes a Medicare tax on the unearned income of wealthier individuals.

But there is one glaring difference between the approaches of Taiwan and the United States. Taiwan uses an exceptionally efficient single payer system that covers everyone, whereas we lose almost all of the advantages of the single payer model by limiting our Medicare program to less than 15 percent of our population.

It’s great that we’ve accepted the principle of equitable financing of health care, but wouldn’t you think that our government stewards would be smart enough to know that we also need a stable, efficient financing infrastructure, if for no other reason than to ensure that everyone benefits from equitable financing? The Taiwanese stewards have already figured that one out.

Taiwan to move towards more equitable financing

Talk of the day — Health insurance overhaul nearly ready

By Sofia Wu
Focus Taiwan News Channel
March 30, 2010
The health insurance premium rate will be raised from the current 4.55 percent to 5.17 percent April 1, but Department of Health (DOH) Minister Yaung Chih-liang said Monday the public could end up paying less in premiums when a second-generation health care system is adopted in two years.
Earlier Monday, Yaung briefed Premier Wu Den-yih on draft amendments to the National Health Insurance Act that will pave the way for the introduction of a new generation of health care insurance.
After listening to Yaung’s briefing, Wu said the executive branch will lobby lawmakers to pass the draft package during its current session to allow for an early implementation of the second-generation system.
Under the new system, premiums will be paid by the insured, employers and the central government. At present, the government’s contribution is financed by both central and local governments.
The new system will calculate premiums based on total household income (including wages, stock dividends, rental income and other unearned income) instead of the current model that considers only the insureds’ salaries or earned income.
Yaung said the new system will be more equitable, as wealthy households whose income does not mainly rely on earned income will have to pay higher premiums.
http://focustaiwan.tw/ShowNews/WebNews_Detail.aspx?Type=aALL&ID=201003300010

Taiwan’s single payer system has been phenomenally successful, though they, like all other nations, have had to confront increases in health care costs. Under the current financing system it has become necessary to increase the percent of income paid as insurance premiums, to the displeasure of the citizens of Taiwan. That has prompted recommendations to improve the financing system.
The most important change is to shift from a premium based on a percentage of earned income to a percentage of all household income, including wages, stock dividends, rental income and other unearned income. The obvious impact of this is to make the contribution more equitable by increasing the progressive nature of the health care tax. This acknowledges the necessity of instituting a transfer not only from the healthy to the sick, but also from the wealthy to those with more modest incomes. Costs are too high to do otherwise.
Another change is to eliminate the contribution of local governments, which frequently struggle with their budgets, and to shift the full responsibility for the government contribution to the central government.
When you think about, we’ve already adopted these principles for our Medicare program. The program was established as a federally funded program, unlike Medicaid which depends on state funding as well. Also, the reconciliation bill just signed by President Obama includes a Medicare tax on the unearned income of wealthier individuals.
But there is one glaring difference between the approaches of Taiwan and the United States. Taiwan uses an exceptionally efficient single payer system that covers everyone, whereas we lose almost all of the advantages of the single payer model by limiting our Medicare program to less than 15 percent of our population.
It’s great that we’ve accepted the principle of equitable financing of health care, but wouldn’t you think that our government stewards would be smart enough to know that we also need a stable, efficient financing infrastructure, if for no other reason than to ensure that everyone benefits from equitable financing? The Taiwanese stewards have already figured that one out.

Cerberus Capital provides another Massachusetts lesson for U.S.

Seeking lower-cost care

By Steven Syre and Robert Gavin
The Boston Globe
March 30, 2010

The New York private equity firm that last week struck a deal to buy Caritas Christi Health Care could build the chain of six Catholic community hospitals into a competitive lower-cost provider of medical services in Massachusetts, touting it as a profitable national business model in the age of health care reform, analysts say.

Caritas, which also includes a physicians network, could become a new cost-conscious option for more patients under such a system.

Cerberus Capital Management plans to invest $830 million to acquire Caritas Christi and turn the charity into a for-profit venture. The investment, which includes money to reduce debt and invest in renovations and upgrades, would appear to be a steep price for the Caritas business as it exists today.

But the hospitals could emerge as an attractive lower-cost alternative to Boston’s big teaching hospitals as health care reform moves forward soon in Massachusetts and later across the country. And, as reforms aimed at controlling costs take effect, an increasing number of health insurance policies may well offer patients a choice: Go to a famous teaching hospital and pay more or go elsewhere and spend less.

If the ambitious plan works, it could eventually mean a sizable payoff for Cerberus and its investors, said Howard Anderson, senior lecturer at MIT’s Sloan School of Management. With a successful health care business, Cerberus could cash out by taking the company public and selling stock to investors, or by selling the chain to another for-profit health care firm.

http://www.boston.com/business/healthcare/articles/2010/03/30/caritas_christi_could_carve_out_a_lower_cost_niche_under_new_owner/

Comment: 

By Don McCanne, MD

Massachusetts has been held up as a model on which our new federal health financing program is based. The purchase of Caritas Christi Health Care by Cerberus Capital Management may give us a hint as to what efforts under such a reform model might be made to slow the growth in health care costs.

Cerberus Capital Management plans to convert Caritas Christi into “an attractive lower-cost alternative” to Boston’s expensive teaching hospitals.

Their concept of lowering costs is right out of the book on the promised rewards of free markets. They are going to take a chain of low-cost charity hospitals and convert it into a for-profit venture. Then they are going to reap a “sizable payoff” by cashing out, either by taking the company public and selling stock to investors, or by selling the chain to another for-profit health care firm.

The model of reform that has just been enacted expands the lucrative health care marketplace for opportunists such as these venture capitalists. These entities will be crawling out of the woodwork to try to glom on to a share of the massive infusion of tax dollars to be redistributed by the private insurance companies. Should we really have expected anything else?

It’s not too late to regroup and do it right.

Cerberus Capital provides another Massachusetts lesson for U.S.

Seeking lower-cost care

By Steven Syre and Robert Gavin
The Boston Globe
March 30, 2010
The New York private equity firm that last week struck a deal to buy Caritas Christi Health Care could build the chain of six Catholic community hospitals into a competitive lower-cost provider of medical services in Massachusetts, touting it as a profitable national business model in the age of health care reform, analysts say.
Caritas, which also includes a physicians network, could become a new cost-conscious option for more patients under such a system.
Cerberus Capital Management plans to invest $830 million to acquire Caritas Christi and turn the charity into a for-profit venture. The investment, which includes money to reduce debt and invest in renovations and upgrades, would appear to be a steep price for the Caritas business as it exists today.
But the hospitals could emerge as an attractive lower-cost alternative to Boston’s big teaching hospitals as health care reform moves forward soon in Massachusetts and later across the country. And, as reforms aimed at controlling costs take effect, an increasing number of health insurance policies may well offer patients a choice: Go to a famous teaching hospital and pay more or go elsewhere and spend less.
If the ambitious plan works, it could eventually mean a sizable payoff for Cerberus and its investors, said Howard Anderson, senior lecturer at MIT’s Sloan School of Management. With a successful health care business, Cerberus could cash out by taking the company public and selling stock to investors, or by selling the chain to another for-profit health care firm.
http://www.boston.com/business/healthcare/articles/2010/03/30/caritas_christi_could_carve_out_a_lower_cost_niche_under_new_owner/

Massachusetts has been held up as a model on which our new federal health financing program is based. The purchase of Caritas Christi Health Care by Cerberus Capital Management may give us a hint as to what efforts under such a reform model might be made to slow the growth in health care costs.
Cerberus Capital Management plans to convert Caritas Christi into “an attractive lower-cost alternative” to Boston’s expensive teaching hospitals.
Their concept of lowering costs is right out of the book on the promised rewards of free markets. They are going to take a chain of low-cost charity hospitals and convert it into a for-profit venture. Then they are going to reap a “sizable payoff” by cashing out, either by taking the company public and selling stock to investors, or by selling the chain to another for-profit health care firm.
The model of reform that has just been enacted expands the lucrative health care marketplace for opportunists such as these venture capitalists. These entities will be crawling out of the woodwork to try to glom on to a share of the massive infusion of tax dollars to be redistributed by the private insurance companies. Should we really have expected anything else?
It’s not too late to regroup and do it right.

Where We Are Now on Health Reform

Dr. Quentin Young
The Huffington Post
March 30, 2010

With the passage of the Democrats’ health bill, Congress and President Obama have created a new (and not so new) legislative framework for health care finance in the United States. Now that we’ve officially entered the post-legislative period, it’s worth noting how we got to where we are.

The for-profit insurers and their health industry allies sunk their claws into the legislative process early and hung on to the very end. The new bill largely reflects their handiwork. Stock prices for virtually all the leading private insurers remain high and have been trending upward. Investors are also bullish on the promising prospects for the drug companies and for-profit hospitals in the wake of the bill’s passage.

The attacks on the Democrats’ bill from the right-wing Republicans and their proto-fascist allies, including many so-called tea-baggers, were fierce, sometimes absurd and frequently despicable. The racist and homophobic assaults on supporters of the bill set a disturbing, new low for contemporary U.S. politics.

Politically, it can be argued that Obama and his administration squeaked through a highly significant victory, made so by the shameful strategies of the Republicans and their allies. It’s a fact that a defeat for Obama engineered by these reactionary forces would have poisoned the climate of political discourse seriously. Nevertheless, the bill is full of pitfalls that harbinger ill for the American public as patients.

Blue Dog and anti-abortion Democrats held out for their agenda until the very last minute, wresting still more restrictions from their party’s leadership (at the expense of millions of women and ordinary working people) and making the final vote very close. The bill’s curtailment of reproductive choice prompted an appropriately stinging response from the National Organization for Women.

For those of us who wanted to see more fundamental and progressive reform – specifically, those of us who called for sharply reducing the role of the profit-driven insurance companies and Big Pharma in our health system – it’s fair to say that virtually no gains were made.

The systemic cause of our universally judged “broken” health care system – the role of the private insurance industry – was not substantively addressed. In fact, the role of that industry was actually strengthened with the passage of this bill.

So what did we end up with?

There are a number of qualified virtues in the bill. Among these are certain restrictions on the ability of insurers to deny coverage to persons with pre-existing conditions, the allowance of children up to the age of 26 to be covered under their family’s insurance plan, the expansion of Medicaid by approximately 16 million additional people (although it must be noted that the Medicaid remains badly underfunded and therefore provides substandard care), and new appropriations for community health centers and the training of primary care doctors.

It’s worth noting that all of these modestly positive measures could have been enacted separately. Instead, they were linked with measures like a burdensome individual mandate on middle-income uninsured people to buy health insurance (a defective product, as many who use their insurance quickly find out), the handing over of about $450 billion in taxpayer money to the insurers in the form of subsidies, an excise tax on workers’ health plans exceeding a certain threshold, and new restrictions on women’s reproductive rights, to name just a few. At least 23 million people will still be uninsured by 2019.

Given the big role the insurers played in writing the new law, it’s safe to assume they’ve created sufficient loopholes to protect their interests over both the short and long term. One example: only a few days after the bill was passed, insurers denied that they were obligated to issue coverage to children with pre-existing conditions, a key pro-reform talking point of the president. Under pressure, they’ve apparently retreated from this stance. But it’s only a symptom of a larger problem.

The main cause of our dysfunctional health system, the for-profit private insurance industry, remains in the driver’s seat, as the statement of Physicians for a National Health Program stresses.

The bill will do little if anything to check the runaway health system costs and their ability to visit bankruptcy and other forms of penury on the American people.

Simply put, the one rational remedy for all of this, single-payer national health insurance, is more urgent than ever. It’s critical to our nation’s health and well-being. It has been noted, accurately, that our persistent health care mess is threatening our economic status domestically and in global competition.

We have learned bitterly that the unlimited lobbying resources of the health industry giants can prevail in both chambers of Congress. Where, for instance, was the serious challenge from the 90 representatives on record in favor of H.R. 676, the single-payer proposal?

While the raucous and dangerous right-wing assault was unmitigated throughout the campaign, virtually no serious demand came from the progressive wing of the Congress.

Our work is cut out for us. We have the same important challenge faced by the civil rights advocates of the 1950s and ’60s, which ended victoriously. The same steady expansion of popular awareness and demand to the level of a movement is the requirement to end the current corporate control of our health system.

http://www.huffingtonpost.com/dr-quentin-young/where-we-are-now-on-healt_b_518930.html

Obama’s reform: no cure for what ails us

Observations: U.S. Health Reform

By David U. Himmelstein and Steffie Woolhandler
British Medical Journal, March 30, 2010

As the applause fades for President Obama’s health reform, David Himmelstein and Steffie Woolhandler fear that the new law will simply pump funds into a dysfunctional, market driven system

It was a stirring scene: President Obama signing the new health reform law before a cheering crowd, and a beaming vice president whispering in his ear, “This is a big fucking deal.” As doctors who have labored for universal health care we’d like to join the celebration, but we can’t. Morphine has been dispensed for the treatment of cancer – the reform may offer a bit of temporary relief, but it is certainly no cure.

The new law will pump additional funds into the currently dysfunctional, market driven system, pushing up health costs that are already twice those in most other wealthy nations. The Medicaid public insurance program for poor people will expand to cover an additional 16 million poor Americans, while a similar number of uninsured people with higher incomes will be forced to buy private policies. For the “near poor” the government will pay part of these private premiums, channeling $447 billion in taxpayer funds to private insurers over the next decade.

Unfortunately, private insurers win in the marketplace not through efficiency or quality but by maximizing revenues from premiums while minimizing outlays. They pursue this goal by avoiding the sick and forcing doctors and patients to navigate a byzantine payment bureaucracy that currently consumes 31 percent of total health spending. The health reform bill’s requirement that uninsured people buy insurers’ defective products will fortify these firms financially and politically.

Meanwhile insurers will exploit loopholes to dodge the law’s restrictions on their misbehaviors. For instance, the limit on administrative overheads will predictably elicit accounting gimmickry, for example by relabeling some insurance personnel as “clinical care managers.” While insurers are prohibited from “cherry picking” – selectively enrolling healthy, profitable patients – they’ve circumvented similar prohibitions in the Medicare health maintenance organizations (HMOs). The ban on revoking policies after an individual falls ill similarly replicates existing but ineffective state bans.

Sadly, even if the reform works as planned, 23 million people will remain uninsured in 2019. Meanwhile the public and other safety net hospitals that uninsured people rely on will have to endure a $36 billion cut in federal government funding.

Moreover, many Americans will be left with coverage so skimpy that a serious illness could lead to financial ruin. At present, illness and medical bills contribute to 62 percent of all bankruptcies, with three-quarters of the medically bankrupt being insured. The reform does little to upgrade this inadequate coverage; it mandates that private policies need cover only 70 percent of expected medical costs. The president has often promised that “if you like your current coverage you can keep it.” Yet Americans who now get job based insurance will be required to keep it – whether they like it or not. And many who receive full coverage from an employer will face a steep tax on their health benefits from 2018.

Soaring costs and rising financial strains seem inevitable, despite claims that the reform will “bend the cost curve.” Computer vendors have trumpeted imminent cost savings for half a century (see, for instance, a video made by IBM in the 1960s, available at http://bit.ly/cckdtB). Prevention, though laudable, does not generally reduce costs. Windfalls from prosecuting fraud and abuse have been promised before. The new Medicare advisory board merely tweaks an existing panel. Without an enforcement mechanism, stepping up comparative effectiveness research cannot overcome drug and equipment makers’ promotion of profligate care. Existing insurance exchanges where patients can compare and shop among private plans haven’t slowed growth in costs for public workers nationally or in California. And the mandated experiments with capitated payment systems are warmed-over versions of President Nixon’s pro-HMO policies and subsequent failed initiatives to fix America’s health cost crisis through managed care.

Experience with reforms in Massachusetts in 2006 – the template for the national bill – is instructive. Our state’s costs, already the highest of any state, grew by 15 percent in the first two years after reform, twice the national rate. Moreover, capitated physician groups had costs at least as high as those who were paid on a fee for service basis. Meanwhile, after initial improvements in the state, access to care has begun to deteriorate, and the state has begun to cut back coverage.

Overall, President Obama’s is a conservative bill, drafted in close consultation with the drug and insurance industries. Its modest salutary provisions – such as an extra $1 billion a year for community health centers and the expansion of Medicaid – mirror measures that have been passed even under Republican regimes. Its central tenet, that the government should force citizens to buy coverage from a for-profit firm, was first proposed by Richard Nixon when faced with the seeming inevitability of national health insurance in 1972. Similarly, Mitt Romney, a favorite of conservatives, embraced the Nixon approach as Massachusetts governor in 2006, a stance he has now abandoned. Democrats, having retreated from their traditional push for national health insurance, freed Republicans to move still further to the right.

Throughout the reform debate we, and the 17 000 others who’ve joined Physicians for a National Health Program, advocated for a far more thoroughgoing reform: a non-profit, single payer national health insurance program. We will continue to do so. Our health care system has not been cured or even stabilized. For now, we will continue to practice under a financing system that obstructs good patient care and squanders vast resources on profit and bureaucracy.

Passage of the health reform law was a major political event. But for most doctors and patients it’s no “big fucking deal.”

David U. Himmelstein, M.D., is associate professor of medicine at Harvard Medical School and Steffie Woolhandler, M.D., M.P.H., is professor of medicine at Harvard Medical School. They are also co-founders of Physicians for a National Health Program.

Cite this as: BMJ 2010;340:c1778

Houston retirees face 50 percent premium increase

Parker increases insurance premiums of city retirees

By Bradley Olson
Houston Chronicle
March 29, 2010

Working to close a looming $100 million budget shortfall projected for next year, Mayor Annise Parker has sharply increased the monthly insurance premiums that thousands of retired city of Houston employees must pay, prompting outrage from retirees.

Beginning May 1, more than 4,000 retirees under 65 will face a nearly 50 percent increase in their insurance premiums, a budget fix the mayor imposed without consulting City Council.

Parker said the city decided to restructure the benefit payments because retirees under 65 have far higher use of insurance claims than active employees or retirees over 65, whose insurance is subsidized by Medicare.

“People are being priced out of benefits. I’m hoping City Council will take another look at this thing,” said (Bill Elkin, executive director of the Houston Police Retired Officers Association)

http://www.chron.com/disp/story.mpl/front/6935520.html

Comment: 

By Don McCanne, MD

So paraphrasing Mayor Annise Parker of Houston, the greater health care needs of the retirees made it important to restructure their premiums to make them even more unaffordable.

Now think about how the new health reform legislation would address this problem. It looks like these retirees under 65 would have to keep the insurance they have, without the choice of other options, and pay 50 percent higher premiums.

What if everyone were covered by an improved Medicare program? There would not be an issue here.

The point is that we have not reformed our health care financing system; we’ve only tweaked it. We have to keep working to be sure that people understand what didn’t happen this time around.

Houston retirees face 50 percent premium increase

Parker increases insurance premiums of city retirees

By Bradley Olson
Houston Chronicle
March 29, 2010
Working to close a looming $100 million budget shortfall projected for next year, Mayor Annise Parker has sharply increased the monthly insurance premiums that thousands of retired city of Houston employees must pay, prompting outrage from retirees.
Beginning May 1, more than 4,000 retirees under 65 will face a nearly 50 percent increase in their insurance premiums, a budget fix the mayor imposed without consulting City Council.
Parker said the city decided to restructure the benefit payments because retirees under 65 have far higher use of insurance claims than active employees or retirees over 65, whose insurance is subsidized by Medicare.
“People are being priced out of benefits. I’m hoping City Council will take another look at this thing,” said (Bill Elkin, executive director of the Houston Police Retired Officers Association)
http://www.chron.com/disp/story.mpl/front/6935520.html

So paraphrasing Mayor Annise Parker of Houston, the greater health care needs of the retirees made it important to restructure their premiums to make them even more unaffordable.
Now think about how the new health reform legislation would address this problem. It looks like these retirees under 65 would have to keep the insurance they have, without the choice of other options, and pay 50 percent higher premiums.
What if everyone were covered by an improved Medicare program? There would not be an issue here.
The point is that we have not reformed our health care financing system; we’ve only tweaked it. We have to keep working to be sure that people understand what didn’t happen this time around.