The Utility of Trouble

Leveling the Playing Field: Giving Municipal Officials the Tools to Moderate Health Insurance Costs

By Bob Carey
The Boston Foundation
February 2010

The Boston Foundation, Greater Boston’s community foundation, is one of the oldest and largest community foundations in the nation… The Foundation is made up of some 900 separate charitable funds established by donors either for the general benefit of the community or for special purposes. The Boston Foundation also serves as a major civic leader, provider of information, convener, and sponsor of special initiatives designed to address the community’s and region’s most pressing challenges.

Executive Summary (excerpts)

The drop in state tax revenues and the subsequent reduction in local aid to cities and towns have forced municipal governments across the Commonwealth to reduce services, impose layoffs, and increase taxes and fees to balance their fiscal 2009 and 2010 budgets. The outlook for fiscal 2011 is hardly encouraging. Compounding this problem is the continued escalation in operating and overhead costs, including the enormous cost of providing health insurance benefits to municipal employees and retirees.

One option for communities to lower their health insurance costs is to join the state’s Group Insurance Commission (GIC), which manages health benefits for state employees, retirees, and their spouses and dependents. The GIC is the largest provider of employer-sponsored health benefits in the Commonwealth, covering over 320,000 individuals.

Over the past ten years, the GIC has moderated the growth in its health insurance premiums by increasing members’ point-of-service cost sharing and offering health plans that utilize tiered provider networks. During this same period, the municipal health plans reviewed in this report remained largely unchanged, with only minor increases in point-of-service cost sharing and no use of tiered provider network plans.

The difference in plan designs – that is, higher point-of-service cost sharing in GIC plans compared to municipal health plans – is the main reason why municipal health insurance premiums are higher than the state’s. This analysis highlights the differences in premiums to demonstrate the would-be savings available to municipalities from altering plan designs.

It is important to qualify that these estimated savings presuppose that cities and towns would not be required to make any associated tradeoffs by way of concessions to unions to secure labor approval for joining the GIC.

The irrefutable point, however, is that there could be significant savings for cities and towns – in a time of severe fiscal challenges – if they were allowed to join the GIC apart from collective bargaining. Furthermore, if municipal managers were provided the same authority that state managers possess to modify plan designs outside the collective bargaining process, it is likely municipalities could attain premium savings comparable to those realized by the GIC.

A prime example of the effect of the differences in management rights occurred earlier this year. A portion of the savings estimates noted above is due to mid-year benefits changes that the GIC made to address a budget deficit in FY 2010 resulting from higher than anticipated health care costs. The benefit changes, approved by the Commission in November 2009 and effective February 2010, increased the amount of cost sharing borne by enrollees and lowered health insurance premiums by an average of 5.5%. These mid-year changes further increased the differences in premiums and point-of-service cost sharing between the health benefits provided municipal employees and those provided state employees.

While the growth in municipal health insurance premiums can be reduced by increasing point-of-service cost sharing, enrollees will incur more out-of-pocket expenses as they utilize the health care system. As this report reveals, the higher cost sharing of the GIC plans compared to municipal health benefits would shift more of the costs to enrollees, although a portion of these expenses would be offset by a reduction in health insurance premiums.

Approval of changes to the GIC’s health benefits requires a majority vote of the Commission. And, while union and retiree representatives serve on the 15-member Commission, they make up a minority of the membership. Therefore, support from union and retiree representatives is not needed to approve the package of health insurance benefits provided to state employees and retirees.

Recommendations

1. Level the playing field between state and local health benefits management by removing the requirement that municipal officials must collectively bargain plan design changes

2. Bring the health benefits provided to municipal employees into line with the health benefits offered state employees and retirees

3. Require all municipal retirees who are eligible for Medicare to enroll in Medicare Part B as a precondition for receiving health benefits from the municipality

4. Adopt a premium contribution strategy that incents members to select more cost-effective health plans

5. As point-of-service cost sharing increases, limit members’ financial exposure by putting in place an out-of-pocket maximum or funding a Health Reimbursement Account (HRA)

The Utility of Trouble (79 pages):
http://www.tbf.org/uploadedFiles/tbforg/Utility_Navigation/Multimedia_Library/Reports/UtilityOfTrouble_2010.pdf

Comment:

By Don McCanne, MD

This report from The Boston Foundation contains two very important fundamental proposals designed to reduce health care costs for municipal governments in Massachusetts. One of them directly relates to health policy, but the other, which is perhaps even more important, relates to the freedom of workers to negotiate for a level of total compensation that meets their most basic needs.

First, the health policy lesson. This report adds another invidious voice to those who would control costs for those paying for health benefit programs, not by reducing health care costs, but by shifting those costs to the very individuals who need health care.

As has already happened with most pension plans, health benefit programs are shifting from defined benefit programs to defined contributions. Although they are passed off as providing choice of “more cost-effective health plans,” that is merely a euphemism for requiring workers to pay the full balance of premiums over that of the basic spartan plans.

The increases in “point-of-service cost sharing” again is merely shifting more costs to worker-patients through higher deductibles, co-payments, and ever increasing coinsurance. Anthem Blue Cross has some plans with coinsurance as high as 70 percent, meaning that the insurance pays only 30 percent of only the allowed charges.

We don’t need to repeat here the impact of making individuals pay more of the premiums and greater cost sharing. We’ve heard enough about the financial hardships and physical suffering that these health financing policies cause.

But what we should repeat here is that the proposal before Congress has the same impact. Individuals will have to pay the full premium differences for plans above the basic plans with a low actuarial value, and plans will continue to compete on premiums by using innovations to shift more costs to patients, especially through increased cost sharing.

On the second point, we’ll depart from our usual narrower topic of health policy, and touch on one of the most important issues of these times – the successful attack on social solidarity that has shifted the nation’s wealth up the economic ladder, now leaving middle-income Americans struggling to make ends meet.

With the shift from a manufacturing economy to a service economy, the attack on unions and collective bargaining has been unrelenting. Even government employees’ unions and teachers’ unions have had considerable difficulties maintaining clout.

Look at the recommendations of The Boston Foundation. Take away the health benefit programs that the workers paid for through forgone wage increases. When substituting the cheaper plans, the municipalities should not “make any associated tradeoffs by way of concessions to unions.” Most of the premium reductions will benefit the municipalities with very little going to the workers. Make sure that union and retiree representatives remain a minority of the state’s Group Insurance Commission (GIC) so that their demands can be ignored. This is class warfare, and the rich guys are winning.

The PNHP leadership and others in the policy community have warned that the Massachusetts reform efforts would fall short, and particularly would fail to address the cost issues. This Boston Foundation report is simply one more example of why reform should not have been based on a business model of a market of private plans. It should have been based on the better and less costly public social service model that has a mission to assist everyone in obtaining the health care that they need.

Now President Obama and Congress are making the same mistake by following the same primrose path to the everlasting bonfire. People are going to get burnt.

The Utility of Trouble

Leveling the Playing Field: Giving Municipal Officials the Tools to Moderate Health Insurance Costs

By Bob Carey
The Boston Foundation
February 2010
The Boston Foundation, Greater Boston’s community foundation, is one of the oldest and largest community foundations in the nation… The Foundation is made up of some 900 separate charitable funds established by donors either for the general benefit of the community or for special purposes. The Boston Foundation also serves as a major civic leader, provider of information, convener, and sponsor of special initiatives designed to address the community’s and region’s most pressing challenges.
Executive Summary (excerpts)
The drop in state tax revenues and the subsequent reduction in local aid to cities and towns have forced municipal governments across the Commonwealth to reduce services, impose layoffs, and increase taxes and fees to balance their fiscal 2009 and 2010 budgets. The outlook for fiscal 2011 is hardly encouraging. Compounding this problem is the continued escalation in operating and overhead costs, including the enormous cost of providing health insurance benefits to municipal employees and retirees.
One option for communities to lower their health insurance costs is to join the state’s Group Insurance Commission (GIC), which manages health benefits for state employees, retirees, and their spouses and dependents. The GIC is the largest provider of employer-sponsored health benefits in the Commonwealth, covering over 320,000 individuals.
Over the past ten years, the GIC has moderated the growth in its health insurance premiums by increasing members’ point-of-service cost sharing and offering health plans that utilize tiered provider networks. During this same period, the municipal health plans reviewed in this report remained largely unchanged, with only minor increases in point-of-service cost sharing and no use of tiered provider network plans.
The difference in plan designs – that is, higher point-of-service cost sharing in GIC plans compared to municipal health plans – is the main reason why municipal health insurance premiums are higher than the state’s. This analysis highlights the differences in premiums to demonstrate the would-be savings available to municipalities from altering plan designs.
It is important to qualify that these estimated savings presuppose that cities and towns would not be required to make any associated tradeoffs by way of concessions to unions to secure labor approval for joining the GIC.
The irrefutable point, however, is that there could be significant savings for cities and towns – in a time of severe fiscal challenges – if they were allowed to join the GIC apart from collective bargaining. Furthermore, if municipal managers were provided the same authority that state managers possess to modify plan designs outside the collective bargaining process, it is likely municipalities could attain premium savings comparable to those realized by the GIC.
A prime example of the effect of the differences in management rights occurred earlier this year. A portion of the savings estimates noted above is due to mid-year benefits changes that the GIC made to address a budget deficit in FY 2010 resulting from higher than anticipated health care costs. The benefit changes, approved by the Commission in November 2009 and effective February 2010, increased the amount of cost sharing borne by enrollees and lowered health insurance premiums by an average of 5.5%. These mid-year changes further increased the differences in premiums and point-of-service cost sharing between the health benefits provided municipal employees and those provided state employees.
While the growth in municipal health insurance premiums can be reduced by increasing point-of-service cost sharing, enrollees will incur more out-of-pocket expenses as they utilize the health care system. As this report reveals, the higher cost sharing of the GIC plans compared to municipal health benefits would shift more of the costs to enrollees, although a portion of these expenses would be offset by a reduction in health insurance premiums.
Approval of changes to the GIC’s health benefits requires a majority vote of the Commission. And, while union and retiree representatives serve on the 15-member Commission, they make up a minority of the membership. Therefore, support from union and retiree representatives is not needed to approve the package of health insurance benefits provided to state employees and retirees.
Recommendations
1. Level the playing field between state and local health benefits management by removing the requirement that municipal officials must collectively bargain plan design changes
2. Bring the health benefits provided to municipal employees into line with the health benefits offered state employees and retirees
3. Require all municipal retirees who are eligible for Medicare to enroll in Medicare Part B as a precondition for receiving health benefits from the municipality
4. Adopt a premium contribution strategy that incents members to select more cost-effective health plans
5. As point-of-service cost sharing increases, limit members’ financial exposure by putting in place an out-of-pocket maximum or funding a Health Reimbursement Account (HRA)
The Utility of Trouble (79 pages):
http://www.tbf.org/uploadedFiles/tbforg/Utility_Navigation/Multimedia_Library/Reports/UtilityOfTrouble_2010.pdf

This report from The Boston Foundation contains two very important fundamental proposals designed to reduce health care costs for municipal governments in Massachusetts. One of them directly relates to health policy, but the other, which is perhaps even more important, relates to the freedom of workers to negotiate for a level of total compensation that meets their most basic needs.
First, the health policy lesson. This report adds another invidious voice to those who would control costs for those paying for health benefit programs, not by reducing health care costs, but by shifting those costs to the very individuals who need health care.
As has already happened with most pension plans, health benefit programs are shifting from defined benefit programs to defined contributions. Although they are passed off as providing choice of “more cost-effective health plans,” that is merely a euphemism for requiring workers to pay the full balance of premiums over that of the basic spartan plans.
The increases in “point-of-service cost sharing” again is merely shifting more costs to worker-patients through higher deductibles, co-payments, and ever increasing coinsurance. Anthem Blue Cross has some plans with coinsurance as high as 70 percent, meaning that the insurance pays only 30 percent of only the allowed charges.
We don’t need to repeat here the impact of making individuals pay more of the premiums and greater cost sharing. We’ve heard enough about the financial hardships and physical suffering that these health financing policies cause.
But what we should repeat here is that the proposal before Congress has the same impact. Individuals will have to pay the full premium differences for plans above the basic plans with a low actuarial value, and plans will continue to compete on premiums by using innovations to shift more costs to patients, especially through increased cost sharing.
On the second point, we’ll depart from our usual narrower topic of health policy, and touch on one of the most important issues of these times – the successful attack on social solidarity that has shifted the nation’s wealth up the economic ladder, now leaving middle-income Americans struggling to make ends meet.
With the shift from a manufacturing economy to a service economy, the attack on unions and collective bargaining has been unrelenting. Even government employees’ unions and teachers’ unions have had considerable difficulties maintaining clout.
Look at the recommendations of The Boston Foundation. Take away the health benefit programs that the workers paid for through forgone wage increases. When substituting the cheaper plans, the municipalities should not “make any associated tradeoffs by way of concessions to unions.” Most of the premium reductions will benefit the municipalities with very little going to the workers. Make sure that union and retiree representatives remain a minority of the state’s Group Insurance Commission (GIC) so that their demands can be ignored. This is class warfare, and the rich guys are winning.
The PNHP leadership and others in the policy community have warned that the Massachusetts reform efforts would fall short, and particularly would fail to address the cost issues. This Boston Foundation report is simply one more example of why reform should not have been based on a business model of a market of private plans. It should have been based on the better and less costly public social service model that has a mission to assist everyone in obtaining the health care that they need.
Now President Obama and Congress are making the same mistake by following the same primrose path to the everlasting bonfire. People are going to get burnt.

The Utility of Trouble

Leveling the Playing Field: Giving Municipal Officials the Tools to Moderate Health Insurance Costs

By Bob Carey
The Boston Foundation
February 2010

The Boston Foundation, Greater Boston’s community foundation, is one of the oldest and largest community foundations in the nation… The Foundation is made up of some 900 separate charitable funds established by donors either for the general benefit of the community or for special purposes. The Boston Foundation also serves as a major civic leader, provider of information, convener, and sponsor of special initiatives designed to address the community’s and region’s most pressing challenges.

Executive Summary (excerpts)

The drop in state tax revenues and the subsequent reduction in local aid to cities and towns have forced municipal governments across the Commonwealth to reduce services, impose layoffs, and increase taxes and fees to balance their fiscal 2009 and 2010 budgets. The outlook for fiscal 2011 is hardly encouraging. Compounding this problem is the continued escalation in operating and overhead costs, including the enormous cost of providing health insurance benefits to municipal employees and retirees.

One option for communities to lower their health insurance costs is to join the state’s Group Insurance Commission (GIC), which manages health benefits for state employees, retirees, and their spouses and dependents. The GIC is the largest provider of employer-sponsored health benefits in the Commonwealth, covering over 320,000 individuals.

Over the past ten years, the GIC has moderated the growth in its health insurance premiums by increasing members’ point-of-service cost sharing and offering health plans that utilize tiered provider networks. During this same period, the municipal health plans reviewed in this report remained largely unchanged, with only minor increases in point-of-service cost sharing and no use of tiered provider network plans.

The difference in plan designs – that is, higher point-of-service cost sharing in GIC plans compared to municipal health plans – is the main reason why municipal health insurance premiums are higher than the state’s. This analysis highlights the differences in premiums to demonstrate the would-be savings available to municipalities from altering plan designs.

It is important to qualify that these estimated savings presuppose that cities and towns would not be required to make any associated tradeoffs by way of concessions to unions to secure labor approval for joining the GIC.

The irrefutable point, however, is that there could be significant savings for cities and towns – in a time of severe fiscal challenges – if they were allowed to join the GIC apart from collective bargaining. Furthermore, if municipal managers were provided the same authority that state managers possess to modify plan designs outside the collective bargaining process, it is likely municipalities could attain premium savings comparable to those realized by the GIC.

A prime example of the effect of the differences in management rights occurred earlier this year. A portion of the savings estimates noted above is due to mid-year benefits changes that the GIC made to address a budget deficit in FY 2010 resulting from higher than anticipated health care costs. The benefit changes, approved by the Commission in November 2009 and effective February 2010, increased the amount of cost sharing borne by enrollees and lowered health insurance premiums by an average of 5.5%. These mid-year changes further increased the differences in premiums and point-of-service cost sharing between the health benefits provided municipal employees and those provided state employees.

While the growth in municipal health insurance premiums can be reduced by increasing point-of-service cost sharing, enrollees will incur more out-of-pocket expenses as they utilize the health care system. As this report reveals, the higher cost sharing of the GIC plans compared to municipal health benefits would shift more of the costs to enrollees, although a portion of these expenses would be offset by a reduction in health insurance premiums.

Approval of changes to the GIC’s health benefits requires a majority vote of the Commission. And, while union and retiree representatives serve on the 15-member Commission, they make up a minority of the membership. Therefore, support from union and retiree representatives is not needed to approve the package of health insurance benefits provided to state employees and retirees.

Recommendations

1. Level the playing field between state and local health benefits management by removing the requirement that municipal officials must collectively bargain plan design changes

2. Bring the health benefits provided to municipal employees into line with the health benefits offered state employees and retirees

3. Require all municipal retirees who are eligible for Medicare to enroll in Medicare Part B as a precondition for receiving health benefits from the municipality

4. Adopt a premium contribution strategy that incents members to select more cost-effective health plans

5. As point-of-service cost sharing increases, limit members’ financial exposure by putting in place an out-of-pocket maximum or funding a Health Reimbursement Account (HRA)

The Utility of Trouble (79 pages):
http://www.tbf.org/uploadedFiles/tbforg/Utility_Navigation/Multimedia_Library/Reports/UtilityOfTrouble_2010.pdf

This report from The Boston Foundation contains two very important fundamental proposals designed to reduce health care costs for municipal governments in Massachusetts. One of them directly relates to health policy, but the other, which is perhaps even more important, relates to the freedom of workers to negotiate for a level of total compensation that meets their most basic needs.

First, the health policy lesson. This report adds another invidious voice to those who would control costs for those paying for health benefit programs, not by reducing health care costs, but by shifting those costs to the very individuals who need health care.

As has already happened with most pension plans, health benefit programs are shifting from defined benefit programs to defined contributions. Although they are passed off as providing choice of “more cost-effective health plans,” that is merely a euphemism for requiring workers to pay the full balance of premiums over that of the basic spartan plans.

The increases in “point-of-service cost sharing” again is merely shifting more costs to worker-patients through higher deductibles, co-payments, and ever increasing coinsurance. Anthem Blue Cross has some plans with coinsurance as high as 70 percent, meaning that the insurance pays only 30 percent of only the allowed charges.

We don’t need to repeat here the impact of making individuals pay more of the premiums and greater cost sharing. We’ve heard enough about the financial hardships and physical suffering that these health financing policies cause.

But what we should repeat here is that the proposal before Congress has the same impact. Individuals will have to pay the full premium differences for plans above the basic plans with a low actuarial value, and plans will continue to compete on premiums by using innovations to shift more costs to patients, especially through increased cost sharing.

On the second point, we’ll depart from our usual narrower topic of health policy, and touch on one of the most important issues of these times – the successful attack on social solidarity that has shifted the nation’s wealth up the economic ladder, now leaving middle-income Americans struggling to make ends meet.

With the shift from a manufacturing economy to a service economy, the attack on unions and collective bargaining has been unrelenting. Even government employees’ unions and teachers’ unions have had considerable difficulties maintaining clout.

Look at the recommendations of The Boston Foundation. Take away the health benefit programs that the workers paid for through forgone wage increases. When substituting the cheaper plans, the municipalities should not “make any associated tradeoffs by way of concessions to unions.” Most of the premium reductions will benefit the municipalities with very little going to the workers. Make sure that union and retiree representatives remain a minority of the state’s Group Insurance Commission (GIC) so that their demands can be ignored. This is class warfare, and the rich guys are winning.

The PNHP leadership and others in the policy community have warned that the Massachusetts reform efforts would fall short, and particularly would fail to address the cost issues. This Boston Foundation report is simply one more example of why reform should not have been based on a business model of a market of private plans. It should have been based on the better and less costly public social service model that has a mission to assist everyone in obtaining the health care that they need.

Now President Obama and Congress are making the same mistake by following the same primrose path to the everlasting bonfire. People are going to get burnt.

Kaiser Health News
March 2, 2010

Q: What are the parallels or contrasts between the Clinton administration’s efforts to get a health care overhaul in 1993-94 and now?

Former Senate Majority Leader Tom Daschle:  … You’ve got a lot more recognition that we don’t have a luxury this time to fail. Per capita costs were $3,400 in 94, they’re $8,000 now. The level of uninsured was 37 million, and now I think it’s over 50 million.

Whether it’s quality, access or costs you can look at all the numbers, they’ve dropped precipitously, and we’ve been able to demonstrate, if anything, out of these last 15 years that incremental reform doesn’t work. We’ve tried incremental reform with SCHIP and with the passage of Part D and maybe portability, a couple things here and there. We’ve seen everything go south, and it’s going to continue to do that until we put in place the corrective policy building blocks to address this more comprehensively.

Daschle: Are you satisfied that the Senate bill does enough to control costs?

A. I don’t think that either version of the bill does enough. I look at this whole effort as having three components: insurance reform, payment reform and delivery reform. And all three components have cost containment elements in them. Not nearly as much as I’d like, but I think a lot of the building blocks are going to be in place. But you can’t expect one bill to comprehensively deal with each one of these components to everyone’s satisfaction. I tell audiences all over the country, that if this passes I think we’re on the 30-yard line, that we’ve got 70 yards to go to accommodate really significant change in the system, adequate enough to be able to say we’ve addressed cost, access and quality in a meaningful way.

http://www.kaiserhealthnews.org/Checking-In-With/Daschle-Incremental-Health-Reforms-Wont-Work.aspx

And…

Why Incremental Reforms Will Not Solve the Health Care Crisis

By Don McCanne, MD
Journal of the American Board of Family Practice
16:257-261 (2003)

The record of incrementalism to date is unimpressive. Medicaid, the State Children’s Health Insurance Program, and the Health Insurance Portability and Accountability Act have been important programs that have provided access and coverage for many who need it. These programs alone, however, have been grossly deficient in filling the greater voids in our system. The numbers of uninsured Americans continue to increase. Health care costs continue to escalate well beyond the rate of inflation, while no efforts are being made to reduce the egregious waste of our administrative excesses. We are spending more on health care administration alone than is allocated for our entire national military defense budget. Health care outcomes continue to be much worse in the United States than in other industrialized nations that provide coverage for everyone at a much lower cost than that of our fragmented and inefficient system. Furthermore, inadequate coverage is now threatening the financial security of many of those that actually do have insurance.

Despite the failure of incrementalism, these approaches continue to have support primarily because of the perception that the nation does not want a “taxpayer-funded, government solution.” Ironically, health care is already 60% publicly funded, and nearly all incremental proposals involve public policy, especially tax policy, and actually further increase taxpayer funding of health care.

Conclusion

Incremental models of reform perpetuate our flawed, fragmented system of funding health care. They perpetuate inequities both in the funding of health care and in the allocation of our health care resources. They limit choice of health care providers. None assures continuity of coverage and care. Many incremental proposals barely have an effect on the numbers of uninsured, and none of them ensure truly universal coverage. All incremental approaches substantially increase health care costs, and most current proposals assure neither financial security nor health security.

In contrast, a single payer program would provide affordable, equitable, comprehensive care for everyone.

Whether through tax policy, public programs, regulatory oversight, mandated coverage, or a combination of these and other interventions, the government will be intimately involved in our health care funding. We can no longer afford to dismiss any valid option because it is a government solution, especially in that all proposals are government solutions. We must decide how we can best use our government resources to be sure that we are receiving the greatest value for our health care investment. Limiting our consideration to various incremental solutions closes the door on the health care reform goals of equity, affordability, and efficiency, and it threatens the goals of universality, provider choice, access, and comprehensiveness. When all are readily achievable, why accept less?

http://www.jabfm.org/cgi/content/full/16/3/257

Comment: 

By Don McCanne, MD

To understand that incremental reforms have not worked, all you have to do is look at the increasing numbers of uninsured, the greater numbers with inadequate insurance, the steep increases in health care prices, the perversities of the private insurers, and the administrative waste and other dysfunctions of our multi-payer and non-payer system. Everyone agrees that incrementalism has failed us, even Tom Daschle and Don McCanne.

Daschle and McCanne also agree that the policies contained in the House and Senate bills also fall far short. As Tom Daschle states, “… that if this passes I think we’re on the 30-yard line, that we’ve got 70 yards to go to accommodate really significant change in the system, adequate enough to be able to say we’ve addressed cost, access and quality in a meaningful way.”

Think of what he has said. The policies contained in these bills are highly flawed incremental steps that won’t even get us one-third of the way there, at the same time that he tells us that incremental reform won’t work.

In my article (link above) I discuss some of the incremental policies and why they have not worked and will not work. Although some of the terminology and policy proposals have evolved since the article was written, it does discuss several of the concepts in the legislation supported by Congress and President Obama. The basics are the same; incremental health reforms won’t work.

For those who say, “yes, but the insurance market reforms are an improvement over what we now have,” we need to acknowledge that not only are these incremental steps, but they take us down the WRONG path. They lock us into a profoundly wasteful and inefficient financing system that, by design, draws off much needed and evermore scarce health care dollars by prioritizing the interests of a parasitic industry over the interests of patients.

Tom Daschle explains that, once this legislation passes, most of the work will still be left to do. The flaw with this strategy is that everyone will walk away pretending that health care has been reformed. It will take another decade or two of financial hardship, suffering and even death before our elected leaders will admit that this didn’t work. That is far too great of a price to pay for us to let them off the hook now.

Addendum:  If the legislation does pass, PNHP is not walking away. Get used to listening to our clamoring.

Daschle: Incremental Health Reforms Won’t Work

Kaiser Health News
March 2, 2010

Q: What are the parallels or contrasts between the Clinton administration’s efforts to get a health care overhaul in 1993-94 and now?

Former Senate Majority Leader Tom Daschle:  … You’ve got a lot more recognition that we don’t have a luxury this time to fail. Per capita costs were $3,400 in 94, they’re $8,000 now. The level of uninsured was 37 million, and now I think it’s over 50 million.

Whether it’s quality, access or costs you can look at all the numbers, they’ve dropped precipitously, and we’ve been able to demonstrate, if anything, out of these last 15 years that incremental reform doesn’t work. We’ve tried incremental reform with SCHIP and with the passage of Part D and maybe portability, a couple things here and there. We’ve seen everything go south, and it’s going to continue to do that until we put in place the corrective policy building blocks to address this more comprehensively.

Daschle: Are you satisfied that the Senate bill does enough to control costs?

A. I don’t think that either version of the bill does enough. I look at this whole effort as having three components: insurance reform, payment reform and delivery reform. And all three components have cost containment elements in them. Not nearly as much as I’d like, but I think a lot of the building blocks are going to be in place. But you can’t expect one bill to comprehensively deal with each one of these components to everyone’s satisfaction. I tell audiences all over the country, that if this passes I think we’re on the 30-yard line, that we’ve got 70 yards to go to accommodate really significant change in the system, adequate enough to be able to say we’ve addressed cost, access and quality in a meaningful way.

http://www.kaiserhealthnews.org/Checking-In-With/Daschle-Incremental-Health-Reforms-Wont-Work.aspx

And…

Why Incremental Reforms Will Not Solve the Health Care Crisis

By Don McCanne, MD
Journal of the American Board of Family Practice
16:257-261 (2003)

The record of incrementalism to date is unimpressive. Medicaid, the State Children’s Health Insurance Program, and the Health Insurance Portability and Accountability Act have been important programs that have provided access and coverage for many who need it. These programs alone, however, have been grossly deficient in filling the greater voids in our system. The numbers of uninsured Americans continue to increase. Health care costs continue to escalate well beyond the rate of inflation, while no efforts are being made to reduce the egregious waste of our administrative excesses. We are spending more on health care administration alone than is allocated for our entire national military defense budget. Health care outcomes continue to be much worse in the United States than in other industrialized nations that provide coverage for everyone at a much lower cost than that of our fragmented and inefficient system. Furthermore, inadequate coverage is now threatening the financial security of many of those that actually do have insurance.

Despite the failure of incrementalism, these approaches continue to have support primarily because of the perception that the nation does not want a “taxpayer-funded, government solution.” Ironically, health care is already 60% publicly funded, and nearly all incremental proposals involve public policy, especially tax policy, and actually further increase taxpayer funding of health care.

Conclusion

Incremental models of reform perpetuate our flawed, fragmented system of funding health care. They perpetuate inequities both in the funding of health care and in the allocation of our health care resources. They limit choice of health care providers. None assures continuity of coverage and care. Many incremental proposals barely have an effect on the numbers of uninsured, and none of them ensure truly universal coverage. All incremental approaches substantially increase health care costs, and most current proposals assure neither financial security nor health security.

In contrast, a single payer program would provide affordable, equitable, comprehensive care for everyone.

Whether through tax policy, public programs, regulatory oversight, mandated coverage, or a combination of these and other interventions, the government will be intimately involved in our health care funding. We can no longer afford to dismiss any valid option because it is a government solution, especially in that all proposals are government solutions. We must decide how we can best use our government resources to be sure that we are receiving the greatest value for our health care investment. Limiting our consideration to various incremental solutions closes the door on the health care reform goals of equity, affordability, and efficiency, and it threatens the goals of universality, provider choice, access, and comprehensiveness. When all are readily achievable, why accept less?

http://www.jabfm.org/cgi/content/full/16/3/257

Comment: 

By Don McCanne, MD

To understand that incremental reforms have not worked, all you have to do is look at the increasing numbers of uninsured, the greater numbers with inadequate insurance, the steep increases in health care prices, the perversities of the private insurers, and the administrative waste and other dysfunctions of our multi-payer and non-payer system. Everyone agrees that incrementalism has failed us, even Tom Daschle and Don McCanne.

Daschle and McCanne also agree that the policies contained in the House and Senate bills also fall far short. As Tom Daschle states, “… that if this passes I think we’re on the 30-yard line, that we’ve got 70 yards to go to accommodate really significant change in the system, adequate enough to be able to say we’ve addressed cost, access and quality in a meaningful way.”

Think of what he has said. The policies contained in these bills are highly flawed incremental steps that won’t even get us one-third of the way there, at the same time that he tells us that incremental reform won’t work.

In my article (link above) I discuss some of the incremental policies and why they have not worked and will not work. Although some of the terminology and policy proposals have evolved since the article was written, it does discuss several of the concepts in the legislation supported by Congress and President Obama. The basics are the same; incremental health reforms won’t work.

For those who say, “yes, but the insurance market reforms are an improvement over what we now have,” we need to acknowledge that not only are these incremental steps, but they take us down the WRONG path. They lock us into a profoundly wasteful and inefficient financing system that, by design, draws off much needed and evermore scarce health care dollars by prioritizing the interests of a parasitic industry over the interests of patients.

Tom Daschle explains that, once this legislation passes, most of the work will still be left to do. The flaw with this strategy is that everyone will walk away pretending that health care has been reformed. It will take another decade or two of financial hardship, suffering and even death before our elected leaders will admit that this didn’t work. That is far too great of a price to pay for us to let them off the hook now.

Addendum:  If the legislation does pass, PNHP is not walking away. Get used to listening to our clamoring.

Daschle: Incremental Health Reforms Won’t Work

Kaiser Health News
March 2, 2010
Q: What are the parallels or contrasts between the Clinton administration’s efforts to get a health care overhaul in 1993-94 and now?
Former Senate Majority Leader Tom Daschle:  … You’ve got a lot more recognition that we don’t have a luxury this time to fail. Per capita costs were $3,400 in 94, they’re $8,000 now. The level of uninsured was 37 million, and now I think it’s over 50 million.
Whether it’s quality, access or costs you can look at all the numbers, they’ve dropped precipitously, and we’ve been able to demonstrate, if anything, out of these last 15 years that incremental reform doesn’t work. We’ve tried incremental reform with SCHIP and with the passage of Part D and maybe portability, a couple things here and there. We’ve seen everything go south, and it’s going to continue to do that until we put in place the corrective policy building blocks to address this more comprehensively.
Daschle: Are you satisfied that the Senate bill does enough to control costs?
A. I don’t think that either version of the bill does enough. I look at this whole effort as having three components: insurance reform, payment reform and delivery reform. And all three components have cost containment elements in them. Not nearly as much as I’d like, but I think a lot of the building blocks are going to be in place. But you can’t expect one bill to comprehensively deal with each one of these components to everyone’s satisfaction. I tell audiences all over the country, that if this passes I think we’re on the 30-yard line, that we’ve got 70 yards to go to accommodate really significant change in the system, adequate enough to be able to say we’ve addressed cost, access and quality in a meaningful way.
http://www.kaiserhealthnews.org/Checking-In-With/Daschle-Incremental-Health-Reforms-Wont-Work.aspx

And…

Why Incremental Reforms Will Not Solve the Health Care Crisis

By Don McCanne, MD
Journal of the American Board of Family Practice
16:257-261 (2003)
The record of incrementalism to date is unimpressive. Medicaid, the State Children’s Health Insurance Program, and the Health Insurance Portability and Accountability Act have been important programs that have provided access and coverage for many who need it. These programs alone, however, have been grossly deficient in filling the greater voids in our system. The numbers of uninsured Americans continue to increase. Health care costs continue to escalate well beyond the rate of inflation, while no efforts are being made to reduce the egregious waste of our administrative excesses. We are spending more on health care administration alone than is allocated for our entire national military defense budget. Health care outcomes continue to be much worse in the United States than in other industrialized nations that provide coverage for everyone at a much lower cost than that of our fragmented and inefficient system. Furthermore, inadequate coverage is now threatening the financial security of many of those that actually do have insurance.
Despite the failure of incrementalism, these approaches continue to have support primarily because of the perception that the nation does not want a “taxpayer-funded, government solution.” Ironically, health care is already 60% publicly funded, and nearly all incremental proposals involve public policy, especially tax policy, and actually further increase taxpayer funding of health care.
Conclusion
Incremental models of reform perpetuate our flawed, fragmented system of funding health care. They perpetuate inequities both in the funding of health care and in the allocation of our health care resources. They limit choice of health care providers. None assures continuity of coverage and care. Many incremental proposals barely have an effect on the numbers of uninsured, and none of them ensure truly universal coverage. All incremental approaches substantially increase health care costs, and most current proposals assure neither financial security nor health security.
In contrast, a single payer program would provide affordable, equitable, comprehensive care for everyone.
Whether through tax policy, public programs, regulatory oversight, mandated coverage, or a combination of these and other interventions, the government will be intimately involved in our health care funding. We can no longer afford to dismiss any valid option because it is a government solution, especially in that all proposals are government solutions. We must decide how we can best use our government resources to be sure that we are receiving the greatest value for our health care investment. Limiting our consideration to various incremental solutions closes the door on the health care reform goals of equity, affordability, and efficiency, and it threatens the goals of universality, provider choice, access, and comprehensiveness. When all are readily achievable, why accept less?
http://www.jabfm.org/cgi/content/full/16/3/257

To understand that incremental reforms have not worked, all you have to do is look at the increasing numbers of uninsured, the greater numbers with inadequate insurance, the steep increases in health care prices, the perversities of the private insurers, and the administrative waste and other dysfunctions of our multi-payer and non-payer system. Everyone agrees that incrementalism has failed us, even Tom Daschle and Don McCanne.
Daschle and McCanne also agree that the policies contained in the House and Senate bills also fall far short. As Tom Daschle states, “… that if this passes I think we’re on the 30-yard line, that we’ve got 70 yards to go to accommodate really significant change in the system, adequate enough to be able to say we’ve addressed cost, access and quality in a meaningful way.”
Think of what he has said. The policies contained in these bills are highly flawed incremental steps that won’t even get us one-third of the way there, at the same time that he tells us that incremental reform won’t work.
In my article (link above) I discuss some of the incremental policies and why they have not worked and will not work. Although some of the terminology and policy proposals have evolved since the article was written, it does discuss several of the concepts in the legislation supported by Congress and President Obama. The basics are the same; incremental health reforms won’t work.
For those who say, “yes, but the insurance market reforms are an improvement over what we now have,” we need to acknowledge that not only are these incremental steps, but they take us down the WRONG path. They lock us into a profoundly wasteful and inefficient financing system that, by design, draws off much needed and evermore scarce health care dollars by prioritizing the interests of a parasitic industry over the interests of patients.
Tom Daschle explains that, once this legislation passes, most of the work will still be left to do. The flaw with this strategy is that everyone will walk away pretending that health care has been reformed. It will take another decade or two of financial hardship, suffering and even death before our elected leaders will admit that this didn’t work. That is far too great of a price to pay for us to let them off the hook now.
Addendum:  If the legislation does pass, PNHP is not walking away. Get used to listening to our clamoring.