PNHP

Healthcare-NOW Statement on HR 3962

Healthcare-NOW Statement on HR 3962

Dear Healthcare-NOW! Supporter:

On Saturday, November 7, 2009, the House passed H.R. 3962, the Affordable Health Care for America Act, to much celebration by the Democratic party. Healthcare-NOW!’s view, however, is that the House bill is a gift to the insurance industry at the further expense of the people of this nation.

The bill’s advocates claim it will cover an additional 36 million people, subsidize the cost of insurance for families up to 400% above the poverty level, increase Medicaid coverage to 150% above the poverty level, close the Medicare donut hole by 2019, place a surcharge on individuals making more than $500,000 and couples making more than $1,000,000, will end rescissions and pre-existing conditions.

What the Democrats fail to mention is the bill leaves millions of people uninsured, allows medical bankruptcies to persist, criminalizes and fines the uninsured, increases the number of underinsured, does nothing to contain the sky rocketing costs, blocks women from their reproductive rights, transfers massive public funds to private insurance companies strengthening their control over care, protects pharmaceutical companies’ superprofits at patient expense, fails to reclaim the 31% of waste in our system, expands Medicaid without regard to the state budget crises, discriminates based on immigration status and age, and sets up several levels of care covering less for those without the ability to pay. Those who have coverage will increasingly find care unaffordable and will go without. The whole system will inevitably fail from being fiscally unsustainable.

So is the House bill better than nothing?

“I don’t think so,” writes Marcia Angell, M.D., former editor of the New England Journal of Medicine. “It simply throws more money into a dysfunctional and unsustainable system, with only a few improvements at the edges, and it augments the central role of the investor-owned insurance industry. The danger is that as costs continue to rise and coverage becomes less comprehensive, people will conclude that we’ve tried health reform and it didn’t work. But the real problem will be that we didn’t really try it. I would rather see us do nothing now, and have a better chance of trying again later and then doing it right.”

Given that the bill does nothing to contain or reduce rising costs or end the private health insurance industry’s dominance, we hoped that the Progressive Caucus would stand strong. But they did not. All but two of H.R. 676’s cosponsors voted for H.R. 3962 — Rep. Eric Massa [D-NY] and Rep. Kucinich [D-OH].

Rep. Massa stated, “At the highest level, this bill will enshrine in law the monopolistic powers of the private health insurance industry, period. There’s really no other way to look at it.”

Despite telling single-payer advocates that Congressman Weiner’s single-payer amendment could not go to vote because it would open the floodgates for regressive amendments on abortion and immigrant access, the Democratic leadership allowed votes on both. Prior to the vote on H.R. 3962, the Stupak Amendment passed that will prevent women receiving tax subsidies from using their own money to purchase private insurance that covers abortion and in many cases will prevent low-income women from accessing abortion entirely.

“The House of Representatives has dealt the worst blow to women’s fundamental right to self-determination in order to buy a few votes for reform of the profit-driven health insurance industry,” writes Terry O’Neill, President of National Organization for Women. “We must protect the rights we fought for in Roe v. Wade. We cannot and will not support a health care bill that strips millions of women of their existing access to abortion.”

Healthcare-NOW! fought to win a fair and open debate on healthcare reform including the merits of a single-payer system. This has not yet happened, but the advocacy for this system has greatly impacted the debate in meaningful ways.

We need to continue to build the grassroots movement for single-payer, not-for-profit, national healthcare. We look forward to much brain-storming at our upcoming national strategy conference in St. Louis this weekend, and the opportunity to move forward with renewed energy, creative ideas, and resolve.

Meanwhile, we have the opportunity NOW to continue to support the Sanders’ Single-Payer Amendment to be introduced in the U.S. Senate, Congressman Kucinich’s efforts to get the state single-payer amendment back in when the House and Senate bills are reconciled, and the efforts of the Mobilization for Health Care for All.

Thanks for all that you do,

Healthcare-NOW! National Staff

America’s Affordable Health Choices Act Implementation Timeline

Summary of the provisions of the House bill and when they go into effect (pre-amendments)

Coverage expansions don’t start until 2013

Prepared by the Committees on Ways & Means, Energy & Commerce, and Education & Labor
October 29, 2009

http://www.politico.com/pdf/PPM41_hcr_timeline.pdf

2010

INSURANCE MARKET REFORMS ENDS HEALTH INSURANCE RESCISSIONS: Prohibits abusive practices whereby health insurance companies rescind existing health insurance policies when a person gets sick as a way of avoiding covering the costs of enrollees’ health care needs.

NEW LIMITS ON PRE-EXISTING CONDITION EXCLUSIONS: Prior to the bill’s complete prohibition on pre-existing condition exclusions beginning in 2013, reduces the window that plans can look back for pre-existing conditions from 6 months to 30 days and shortens the period that plans may exclude coverage of certain benefits. It also prohibits insurers from limiting or denying coverage based on acts stemming from domestic violence.

BAN ON LIFETIME LIMITS: Prohibits insurance companies from placing lifetime caps on coverage.

IMMEDIATE SUNSHINE AGAINST INSURER PRICE GOUGING (RATE REVIEW): Discourages excessive price increases by insurance companies through review and disclosure of insurance rate increases.

ENACTS ADMINISTRATIVE SIMPLIFICATION: Begins adopting and implementing administrative simplification requirements to reduce paperwork, standardize transactions, and greatly diminish the administrative burdens and associated costs in today’s health care system.

ENSURING VALUE (MEDICAL LOSS RATIO): Specifies that health plans spend a minimum of 85 percent of premium dollars on medical care, while making sure that such a change doesn’t further destabilize the current individual health insurance market.

INCREASE DEPENDENT AGE FOR POLICIES THROUGH AGE 26: Allows those through age 26 not otherwise covered to remain on their parents’ policies at their parents’ discretion.

COBRA EXTENSION: Allows individuals to keep their COBRA coverage until the Exchange is up and running. [NOTE: This is separate from the Recovery Act provisions that provide premium assistance for selected groups.]

ENSURING RECONSTRUCTIVE SURGERY FOR CHILDREN: Requires plans to pay for reconstructive surgery for children with deformities.

LIMITATION ON POST-RETIREMENT REDUCTIONS OF RETIREE HEALTH BENEFITS: Prohibits employers from reducing retirees’ health benefits after those retirees have retired, unless the reduction is also made to benefits for active participants.

GRANTS TO STATES FOR IMMEDIATE HEALTH REFORM INITITATIVES: Builds on an existing grant program to enhance incentives for states to move forward with a variety of health reform initiatives prior to 2013.

IMPROVED BENEFITS CREATES REINSURANCE FOR EARLY RETIREES: Creates a new temporary reinsurance program to help offset the cost of coverage for companies that provide early retiree health benefits for those ages 55-64.

IMMEDIATE HELP FOR THE UNINSURED (INTERIM HIGH-RISK POOL): Creates a $5 billion fund, modeled after the President’s plan, to finance an immediate, temporary insurance program for those who are uninsurable because of pre-existing conditions.

NEW LONG-TERM CARE PROGRAM (CLASS ACT): Creates a new, voluntary, public long-term care insurance program to help purchase services and supports for people who have functional limitations. Benefits are a daily or weekly cash benefit to help people with functional limitations purchase the services and supports needed to maintain personal and financial independence. CLASS would supplement, not supplant, traditional payers of long-term care (e.g. Medicaid and/or private long term care insurance).

ESTABLISHES THE HEALTH BENEFITS ADVISORY COMMITTEE: Establishes within 60 days of enactment the Health Benefits Advisory Committee-led by the Surgeon General and made up of health care experts, health care providers and patients-provides recommendations on the essential benefits package to the Secretary of HHS for approval.

PUBLIC HEALTH IMPROVEMENTS INCREASES FUNDING FOR COMMUNITY HEALTH CENTERS: Provides increased funding for community health centers that will allow them to double the number of patients served over the next five years.

IMPLEMENTS NEW PREVENTIVE HEALTH SERVICES PROGRAM IN COMMUNITIES: Provides immediate funding for preventive services at the community and local level to address public health problems such as obesity, tobacco use, and diabetes.

EXPANDS PRIMARY CARE, NURSING AND PUBLIC HEALTH WORKFORCE: Increases access to primary care by sustaining the current efforts to increase the size of the National Health Service Corps. Primary care and nurse training programs are also immediately expanded to increase the size of the primary care and nursing workforce. Ensures that public health challenges are adequately addressed.

EMPLOYER WELLNESS PROGRAMS: Establishes a grant program for employers to promote healthy behaviors among their employees.

MEDICARE AND MEDICAID IMPROVEMENTS BEGINS TO FILL IN THE MEDICARE PART D DRUG DONUT HOLE: Provides for a 50% discount on brand-name drugs in the Part D donut hole, and immediately shrinks the size of the donut hole by $500 in 2010. The donut hole continues to be narrowed over the coming years until it is fully eliminated by 2019.

IMPROVES PREVENTIVE HEALTH COVERAGE IN MEDICARE & MEDICAID: Eliminates cost sharing for preventive services to encourage wider use of preventive care for Medicare beneficiaries. Requires State Medicaid programs to cover preventive services recommended to the Secretary of HHS based on evidence, such as tobacco cessation counseling for pregnant women.

ALLOWS STATES TO COVER LOW-INCOME INDIVIDUALS WITH HIV: Gives States the option of extending Medicaid coverage to HIV-positive individuals and provides enhanced federal matching payments for the costs of care.

INCREASES REIMBURSEMENT FOR PRIMARY CARE IN MEDICAID: Brings reimbursement for primary care services in Medicaid up to Medicare levels with 100% federal funding (phased in over several years).

PROVIDES FOR 12-MONTH CONTINUOUS ELIGIBILITY IN CHIP: Provides continuity of care for children by requiring that states provide 12-month continuous eligibility for children in the CHIP program

CREATES MEDICARE ACCOUNTABLE CARE ORGANIZATIONS AND MEDICAL HOME PILOT PROGRAMS: Requires the Secretary to set specific benchmarks for expansion of these programs and to test them in a variety of settings and geographic regions. If the initial pilots prove successful, the Secretary is directed to continue expanding them on a large-scale basis.

2011

ELIMINATES BARRIERS TO ENROLLMENT IN MEDICARE LOW-INCOME SUBSIDY FOR PART D DRUG PROGRAM: Eases burdens on enrollment so more low-income beneficiaries can get the financial help they need to make health care affordable.

NEW PROTECTIONS IN MEDICARE ADVANTAGE: Limits cost-sharing for services in Medicare Advantage plans to no more than cost-sharing in traditional Medicare, and provides for bonus payments to high-quality plans.

ESSENTIAL BENEFITS: In preparation for reform, the Health Benefits Advisory Committee reports their recommended essential benefits package to the Secretary of HHS for adoption. Additional federal funds to states with high unemployment. Assists States in maintaining access to Medicaid services during the recession by extending the current Recovery Act increase in federal Medicaid payments to states with high unemployment rates.

2012

IMPROVES LOW-INCOME PROTECTIONS IN MEDICARE: Increases the assets test limits in the Part D drug program and Medicare Savings Programs to ensure that more low-income beneficiaries get the financial help they need to make their health care affordable.

EXTENDS MONTHS OF COVERAGE OF IMMUNOSUPPRESSIVE DRUGS FOR KIDNEY TRANSPLANT PATIENTS: Lifts the current 36-month limitation on Medicare coverage of immunosuppressive drugs for kidney transplant patients who would otherwise lose this coverage on or after January 1, 2012.

2013

HEALTH INSURANCE REFORMS: Implements comprehensive health insurance reforms that prohibit insurance companies from engaging in discriminatory practices that enable them to refuse to sell or renew policies due to an individual’s health status. In addition, insurance companies can no longer exclude coverage for treatments based on pre-existing health conditions. The legislation also limits their ability to charge higher rates due to health status, gender, or other factors, and permits premiums to vary only by age (no more than 2:1), geography and family size.

HEALTH INSURANCE EXCHANGE: Opens the Health Insurance Exchange to individuals without other coverage and to small employers with 25 or fewer employees. This new venue will enable people to comparison shop for standardized health packages. It facilitates enrollment and administers affordability credits so that people of all incomes can obtain affordable coverage.

PUBLIC HEALTH INSURANCE OPTION: Creates a new public health insurance plan option that is available only within the Health Insurance Exchange. It competes on a level playing field against private health plans and will inject competition into the many parts of our country without a competitive health insurance market. Because it doesn’t operate at the behest of investors, it will be able to offer stiff competition to private insurers-forcing them to compete on cost and quality for the first time.

AFFORDABILITY CREDITS: Makes Health Insurance Affordability Credits available through the Exchange to ensure people can obtain affordable coverage. Credits are available for people with incomes above Medicaid eligibility and below 400% of poverty who are not eligible for or offered other acceptable coverage. They apply to both premiums and cost sharing to ensure that no families face bankruptcy due to medical expenses.

INDIVIDUAL RESPONSIBILITY: Requires individuals to obtain acceptable health insurance coverage or pay a penalty of 2.5% of their income that is capped at the cost of the average cost of qualified coverage.

EMPLOYER RESPONSIBILITY: Employers are required to offer coverage to their workers and their workers’ families with minimum contributions and meet standards for that coverage or pay a penalty of 8% of their payroll to help offset the cost of their workers obtaining coverage through the Exchange. Employers have a grace period and are not required to meet the benefit standards until 2018.

PROTECTS SMALL BUSINESS: Small businesses with annual payrolls below $500,000 are exempt from requirements to offer or contribute to coverage, including the 8% payroll contribution for failure to provide health benefits to their workers. The 8% requirement is phased in for small businesses with an annual payroll between $500,000 and $750,000.

SMALL BUSINESS TAX CREDITS: Provides certain lower-wage small businesses that choose to provide health coverage with a new tax credit worth up to 50% of the amount paid by a small employer for employee health coverage. The credits are available on a rolling basis for the first two years that an employer offers qualified coverage.

EXPANDS MEDICAID ELIGIBILITY: Expands Medicaid to 150% of poverty to ensure that people obtain affordable health care in the most efficient and appropriate manner. The expansion is fully federally funded in 2013 and 2014; thereafter states pay 9% and the federal government pays 91%.

PROTECTS THE HEALTH OF NEWBORN BABIES: Provides temporary Medicaid coverage for up to 60 days for babies who are born without proof of other health coverage.

2014

INITIATES AN AFFORDABILITY TEST FOR EMPLOYER-SPONSORED COVERAGE: Opens the Health Insurance Exchange to individuals who have an offer of employer-sponsored coverage, but for whom that coverage would be unaffordable because the premium would absorb more than 12% of their family income. People who meet this test will be able to enter the Exchange and are eligible for affordability credits based on their incomes.

HEALTH INSURANCE EXCHANGE EXPANDS: Opens the Health Insurance Exchange to small businesses with 50 or fewer employees.

ENSURING VALUE IN MEDICARE ADVANTAGE (MEDICAL LOSS RATIO): Requires Medicare Advantage plans to spend a minimum of 85 percent of premium dollars on medical care.

2015

EXPANDS HEALTH INSURANCE EXCHANGE: Opens the Health Insurance Exchange to small businesses with 100 or fewer employees and provides the Health Choices Commissioner the authority, from 2015 forward, to continue expanding the Exchange to larger employers as the system is ready to handle increased capacity.

2018

EMPLOYERS OUTSIDE THE EXCHANGE ARE REQUIRED TO MEET ESSENTIAL BENEFITS PACKAGE: The grace period ends for employer-sponsored plans to meet the health insurance standards. All employer-sponsored coverage and health insurance offered within the Exchange is required to meet benefit and contribution standards.

Misguided fixation on premiums

Health savings? No one knows

By Carrie Budoff Brown
Politico
November 11, 2009
Barack Obama ran for president on a promise of saving the typical family $2,500 a year in lower health care premiums.
But that was then.
No one in the White House is making such a pledge now.
It’s one of the most basic, kitchen-table questions of the entire reform debate: Would the sweeping $900 billion overhaul actually lower spiraling insurance premiums for everyone?
Jonathan Gruber, the favorite economist of the White House, said the bill “really doesn’t bend the cost curve.”
Reminded that Obama demanded a bill that lowers health care spending, Gruber said: “That is what he would like to do. But heā€™s not doing it.”
If premiums are the benchmark by which reform is judged, “we are setting ourselves up to fail,” Gruber said.
http://www.politico.com/news/stories/1109/29421.html

From the very start, the two most important goals for reform allegedly were to cover everyone and to control health care costs. But the precondition that reform be based on an expansion of private health plans within our dysfunctional, fragmented financing system immediately eliminated universal coverage as a goal. It proved to be impossible to balance all of the variables in this dysfunctional system to ensure that everyone would be covered. So they gave up.
Efforts were then directed to creating policies that would slow the growth in health care costs, again with the precondition that the role of private insurers would be protected and expanded. This led to the profusion of magical thinking – pretending that numerous vague innovative concepts included in the bill would somehow slow the growth in health care costs. Since the Congressional Budget Office does not have a data base on magical solutions, they were unable to score any of these innovations as effective instruments to control costs. As Jonathan Gruber said, the bill “really doesn’t bend the cost curve.”
So they decided to forget about universal coverage and to forget about total costs, but they still had a problem unique to our financing system based on private health plans. In a high cost system like ours, how do you make premiums affordable?
More magical thinking. Pretend that there is a “basic” level of insurance that will take care of all of our basic health care needs. Gold, or platinum, or Cadillac tiered health plans should be made available for wealthier individuals who want more comprehensive plans and are willing to pay for them. But do those more comprehensive plan cover services that the rest of us really don’t need?
It is almost impossible to sort out health care products and services based on whether or not they are essential. For a person with a disabling osteoarthritis of the hip, is a hip replacement essential? Or should the surgery be reserved for those with platinum plans? A wheelchair for gold plans? A walker for the silver plans? And for the bronze plans, an instruction sheet on how to carve a cane out of a stick of wood?
Since they really couldn’t establish tiers based on the specific services provided, they based them on the actuarial value – the percentage of costs that the plan would pay for. Basic plans have been defined in the legislation as having an actuarial value of 65 or 70 percent. The patient is responsible for 30 or 35 percent of the costs. You can see how “basic” these lower tier plans are when you consider that the average employer-sponsored plan has an actuarial value of 80 percent and some are as high as 88 percent.
Designating this basic plan as the standard created two more problems. The premiums would still be unaffordable for the majority of us, and the out-of-pocket expenses would bankrupt those who developed major medical problems. The answer? Subsidize the premiums and the out-of-pocket expenses with two more administratively complex programs that attempt to match the subsidies to ever-changing income levels. Now do that within a $900 billion ten year budget that has to meet many other demands.
It doesn’t work. Low income individuals who would be mandated to purchase private plans (those not qualifying for Medicaid) do not have the discretionary income to pay even the very modest out-of-pocket expenses required. For moderate and moderately-high income individuals, the portions of the premium and out-of-pocket spending would create financial hardships, especially for those with health care needs.
Only the wealthy would fare well, and they’re the only ones who could afford the highest tier plans. The concept of tiered health plans allows the wealthiest of us to eliminate financial barriers to care, protecting the wealth of the wealthy, while leaving the majority of us with financial barriers that have been proven repeatedly to impair access to essential health care services. What a sick concept!
The precondition of building reform on an infrastructure of private health plans has resulted in a fixation of trying to make premiums and out-of-pocket expenses affordable when it is an impossibility under this model.
Even Jonathan “let’s-get-everyone-covered-and-then-figure-out-how-to-pay-for-it” Gruber says that if premiums are the benchmark by which reform is judged, “we are setting ourselves up to fail.”
It’s not too late to do it right. We can strip down the current legislation to the important beneficial features, including ending private insurer abuses, and pass it as a temporary emergency measure, codifying “temporary” and “emergency.”
We can include in the legislation language that the process must move forward immediately with reform that will ensure that health care is universal, accessible, comprehensive, portable, and publicly administered. That would set us up for success.

New Evidence of Pharma's Sweetheart Deal

By Jonathan Cohn
Senior Editor
The New Republic
November 10, 2009

Critics have complained that a drug industry got a sweetheart deal when it struck a bargain with the White House and Senate Finance Committee over health care reform.

There’s new reason to think those critics were right.

It comes from an October forecast by IMS Health, a respected global research and consulting firm. The report, which IMS distributed to clients and which a source provided, projects that the drug industry will see average annual growth of 3.5 percent between 2008 and 2013.

Back in March, IMS had projected no growth at all during that same five-year stretch. In fact, it projected the drug business would actually contract slightly–with negative annual growth of 0.01 percent.

What changed? A major factor, according to IMS, was the emerging details of health care reform.

Health reform, as currently envisioned, wouldn’t merely bring coverage to the uninsured. It would also fill in the “donut hole” in Medicare Part D–the gap in coverage that leaves beneficiaries with serious health problems paying for hundred if not thousands of dollars in out-of-pocket prescription costs.

In addition, because it will take several years to close the donut hole, reform relies on voluntary discounts from the pharmaceutical industry to make drugs more affordable in the intervening years. But those discounts would apply only to name-brand drugs, not generics.

Put it all together, and you have more demand for name-brand drugs. As a result, IMS believes, pharmaceutical companies would be able to raise their prices–enough to boost revenue significantly: “If this bill is implemented,” the report concludes on page 138, “an increase in prices on new drugs can be expected.”

Exactly what this would mean in actual dollar terms isn’t clear. But from some back-of-the-envelope calculations, it appears that IMS thinks revenues for the makers of name-brand drugs could grow by hundreds of billions of dollars over the next ten years. (To be clear, this is a very rough guess, based on extrapolations from the report’s tables–and I have not run it by experts.)

That brings us back to the deal that the Pharmaceutical Researchers and Manufacturers of America, which represents those companies, made with the White House and Senate Finance Committee.

The deal–details of which came to light in reports by the New York Times and Huffington Post–was pretty straightforward. The industry agreed to embrace health care reform and, later on, launched a massive advertising campaign to promote the cause. In exchange, the White House and Senate Finance–which had been asking various industries to pledge concessions that would help pay for the cost of coverage expansions–promised not to seek more than $80 in reduced payments to drug makers.

To an industry as big and profitable as the drug makers, giving up $80 billion over ten years wouldn’t seem like much of a sacrifice–a point critics started making right away. But if IMS is right, the drug industry wouldn’t even be giving up $80 billion, in any meaningful sense of the term. If anything, it’d be making more money. Maybe quite a lot of it.

Of course, the projections from IMS–like any such projections–are full of uncertainty. That’s why there are so many “coulds” and “mights’ in the explanation above.

And even if the drug industry is getting a sweetheart deal, the political reality remains what it was all along. As I noted in my recent article on the drug deal, the drug industry has enormous leverage in Congress: When relatively liberal congressional committees tried limit the exclusivity period for biological drugs, industry lobbyists beat back the effort easily.

Given the tight squeeze in Congress–remember, even the House passed reform with only a tiny, five-vote margin–it’s entirely possible that declaring war on the drug lobby would have undermined the whole reform effort.

Then again, the House version of reform does seek greater concessions from the drug industry than the Senate Finance bill does. And the two chambers’ bills must eventually be reconciled in conference committee.

The drug industry will complain about any efforts to alter their deal. But the IMS projection suggests they’ll be just fine.

Note: Calls and emails to IMS were not returned.

Drug Deal

How Big Pharma extorted the White House

By Jonathan Cohn
Senior Editor
The New Republic
August 25, 2009

‘We’ll have the negotiations televised on C-SPAN,” then-presidential candidate Barack Obama explained, “so that people can see who is making arguments on behalf of their constituents, and who are making arguments on behalf of the drug companies or the insurance companies.”

Those were heady times. It was September 2008, at a town hall in Virginia, where Obama was offering a preview of how he intended to conduct his presidency. He would change the way Washington works, make it transparent, and, in so doing, deliver what the American public needed–starting with affordable health insurance. But, just a few months later, Obama’s team was doing exactly what he said his administration wouldn’t do: negotiating behind closed doors. The subject, sure enough, was health reform. The partner was the drug industry. By June, they had a deal.

Exactly who agreed to what has been the subject of some controversy, even among parties to the negotiation. But the basics are not really in dispute. The drug industry promised to endorse reform, including initiatives that would reduce its bottom line by up to $80 billion over ten years. In return, the administration–and one of its key Senate allies–agreed to stop at $80 billion, at least as far as the drug industry was concerned.

It’s the kind of quid pro quo that generally raises eyebrows, as more than one conservative was quick to note: “The press and congressional Dems would have gone nuts if we had tried anything remotely like this,” said Tevi Troy, who was a health care official in the Bush administration. And, in fact, a few congressional Democrats have gone nuts. “We have all been focused on the debate in Congress, but perhaps the deal has already been cut,” Representative Raul Grijalva, co-chairman of the Congressional Progressive Caucus, told The New York Times, which first broke the story. Beyond Capitol Hill, the reaction from liberals was even harsher. “When an industry gets secret concessions out of the White House in return for a promise to lend the industry’s support to a key piece of legislation, we’re in big trouble,” former Labor Secretary Robert Reich wrote on his blog. “That’s called extortion.”

Extortion is a harsh word, but not an inaccurate one. By almost any reckoning, the drug industry demanded–and got–a sweetheart deal in exchange for its support. But were Obama and his allies wrong to go along with it? Not necessarily–at least, not if they really wanted to pass health reform. Good government and good policy make for great speeches. But, in the real world, they’re not always so compatible.

The lineage of the deal with PhRMA, the drug-industry trade group, traces back to before Obama was even elected president. In the fall of 2008, representatives of the entire health care industry–pharmaceutical manufacturers, insurers, doctors, hospitals, device-makers–began holding regular meetings with key staff on Capitol Hill. The two senators leading the discussions, Ted Kennedy and later Max Baucus, made no secret of their mission. Instead of trying to fight these industries head on, they hoped to come up with a consensus version that at least some of the industries could live with, if not support outright. Once Obama took office, the conversation turned more concrete. Obama and his allies wanted to wring savings out of the health care system, in order to finance coverage expansions, and, over the long run, make medical care less expensive. Which industries, they asked, were prepared to help–to sacrifice some short-term earnings in order to make reform possible?

The drug industry was first in line, according to several sources familiar with the discussions. But its list of demands was long. It strongly opposed letting the federal government negotiate directly with drug companies over price, the way governments in other countries do; it didn’t want to give the government rebates on drugs it purchased for Medicare recipients; and it didn’t want to let Americans buy cheaper drugs overseas. All three positions ran counter to Democratic Party orthodoxy. (Later, the industry made clear its opposition to a public insurance option, as well.) Pressed to give up something, the drug-industry officials indicated that they would be willing to put up with several other changes designed to reduce its revenues–like giving the government a larger rebate on drugs purchased for Medicaid recipients–but only to the extent they reduced revenues by $50 billion over ten years. Anything more, they said, was unacceptable.
Neither the staff of Baucus’s Senate Finance Committee, which had been leading the discussion with PhRMA, nor officials from the administration, who had since joined the talks, were thrilled with this offer, according to people with close knowledge of the negotiations. For one thing, the administration and Baucus believed the drug industry would ultimately make money from reform, since more people with insurance coverage was bound to mean more people buying drugs. (PhRMA countered these arguments with a dubious analysis arguing that reform would not mean much new business, partly because most of the newly insured would be relatively healthy and thus need few drugs.) Obama and his allies also thought $50 billion over ten years just wasn’t a lot of money, particularly for an industry that has consistently ranked among the most profitable in the country. They had a bigger number in mind–something closer to $100 billion.

A breakthrough finally came when Obama and his allies indicated they wanted to fill in the “donut hole”–the gap in coverage for seniors who opt for Medicare drug coverage. At that point, the drug industry volunteered to sell its name-brand drugs at a discount to consumers, worth about $30 billion over ten years. It wasn’t much of a sacrifice for the industry; the discounts would come almost entirely out of new drug sales, not existing ones. But it helped seal the deal.

It took a while for the terms of the arrangement to get out. The initial White House announcement, issued this June, was bland and vague: It merely indicated that PhRMA was giving up $80 billion in revenue to make reform possible. But, in August, PhRMA president Billy Tauzin–apparently nervous that House liberals were pressing for reforms that would reduce drug-industry profits more deeply–gave more details to The New York Times. The deal, he made clear, was to limit drug-industry exposure: Reform would not reduce pharmaceutical profits by more than $80 billion. White House Deputy Chief of Staff Jim Messina subsequently confirmed that that was the administration’s understanding, as well. Additional details subsequently appeared in The Huffington Post and The Atlantic, although different sources offered slightly different versions of what Baucus and the White House promised.

While some conservatives were unhappy that PhRMA conceded anything–in an open letter, House Minority Leader John Boehner recently accused Tauzin of “appeasing” the administration and its allies–it was on the left where dismay was most vocal. But, inside the administration and on Capitol Hill, even those critical of the deal’s terms say it may have been necessary, given PhRMA’s clout. As proof, they point to what happened when two congressional committees– Senator Kennedy’s Health, Education, Labor, and Pensions (HELP) and Representative Henry Waxman’s Energy and Commerce–took up their own versions of reform in July. In the HELP deliberations, several Democrats joined with Republicans to reject a proposal that would have let people buy drugs from Canada and Mexico. During the Energy and Commerce Committee mark-up, a similarly bipartisan coalition voted to give the makers of biological drugs the right to sell their wares exclusively for twelve years–more than the administration and Waxman thought necessary. In both cases, PhRMA got exactly what it wanted. Says one senior congressional staffer working on health legislation, “No matter how much high-handed talk there is [in Congress] of reining in PhRMA, in the end, they always get their way.”

To be sure, the administration and its allies did get something more than tens of billion toward the cost of health care reform. They also got the drug industry’s advertising support, which is no small thing at a time when the right has been running roughshod over reform. PhRMA’s proreform advertising may be generic and, in the final analysis, not particularly helpful. But, the plan’s defenders argue, it’s still better than ads amplifying lies about “death panels.” Besides, it’s not as if the administration and its allies can’t seek more concessions from PhRMA later on–a possibility the White House itself seemed to encourage, after the August Times report, by pointing out that the deal was only about health care reform legislation and not future acts of Congress.

Making some initial compromises in the hopes of revisiting them later is not a far-fetched idea. The people who engineered the original Medicare Act promised that the program would pay doctors their “usual and customary fees.” They also handed responsibility for administering payments over to the Blue Cross plans, which had close ties to the hospitals. This helped pacify both physicians and hospitals (although the American Medical Association fought Medicare to the end). Years later, as Medicare’s price tag soared, the federal government reduced physician and hospital payments, effectively bringing to the program the sort of cost control that ideally would have been there in the first place. It wasn’t the cleanest, most open way to pass and then modify legislation. But that’s what it took to get the program up and running. Four decades later, passing comprehensive health reform may require the same kind of unpleasant compromises. As one disappointed congressional staffer puts it, the drug-industry bargain “is offensive–and brash, and tacky, and very PhRMA.” But, the staffer added, “the legislative process is messy.”

Simple, Fair, and Affordable

Pro: Single-Payer Health Care

John A. Day, Jr., M.D.
American Journal of Respiratory and Critical Care Medicine
Volume 180 pp. 920-922, (2009)

With the election of Barack Obama as our 44th President and the installation of a new United States Congress has come renewed attention to health care reform. Appropriately, there is a sense of urgency regarding the 47 million Americans without health insurance and the millions more underinsured, and to make matters worse, it is inevitable that both numbers will increase due to rising unemployment. In response to this crisis, most health care reform proposals attempt to guarantee at least some health coverage for all Americans. Yet nearly all proposals achieve this aim in large part through the current private insurance system. It is well worth asking: exactly what value does the insurance industry bring to health care in this country? And if it contributes little of consequence, is there another way?

Using the private insurance industry to achieve universal coverage would require that all financially able U.S. residents or their employers purchase health insurance. Americans unable to afford health insurance, the poorest and potentially the sickest among us, would be covered by the government–most likely by incorporating them into a public insurance system, although a government subsidy (in all or in part) could be used instead to purchase private insurance coverage. If, as seems likely, a current or future public insurance program is used for this purpose, then this construct amounts to a massive preemptive bailout of health insurers. These private entities would profit by adding relatively healthy young people to their rolls, while potentially bankrupting the public systems that are charged with paying for the care of these unprofitable patients.

Health insurance as a commodity is particularly unsuited to the so-called “wisdom of the market.” Private insurers are dutybound to maximize profits for their shareholders, and profits are best achieved by minimizing risk through cherry-picking the healthiest enrollees and denying payment for services whenever possible (1). These goals are clearly not in the best interest of individuals seeking reliable health insurance coverage, enrollees who require ongoing or complicated care, or the taxpayers subsidizing care for those denied coverage.

Furthermore, health care reimbursement funneled through a private insurance industry does not necessarily lead to improved health. Thirty-one percent of United States health spending goes toward bureaucracy (2). Such remarkable inefficiency is directly attributable to the overhead and profit of the health insurance industry (3) and wasted clerical time, as providers must deal with a multitude of different insurers and health plans.

In contrast, Canada only spends about 17% on total system administration (2). Nor does having private insurance necessarily mean access to affordable, quality health care. Large premium hikes have made it increasingly difficult for businesses to offer, and individuals to buy, comprehensive insurance. Instead, a profusion of high-deductible, high co-pay plans, along with plans offering extremely limited coverage, have put even insured patients at risk. This issue was nicely demonstrated in a 2005 study, which showed that three-quarters of the 750,000 American families entering into bankruptcy proceedings each year due to illness or medical bills actually had health insurance coverage at the time (4).

In the opinion of many, ending our reliance on the private insurance industry and adopting a single-payer health care system in the United States has long been the clear solution to these problems. Why is a single-payer health care system the best and only realistic solution to the crisis of the uninsured and underinsured?

The answer is simplicity, inclusiveness (everyone is in, no one is left out), breadth of service, equality, preservation of the current private delivery system, and, perhaps most of all, affordability. Multiple state and federal studies show that by eliminating the overhead associated with private insurance and negotiating prices with drug companies, it is possible to offer lifetime coverage to everyone in the country for an amount similar to that which we currently pay for coverage of only part of our population (5). Health insurance would be uncoupled from employment, so that individuals who lost or changed jobs would keep the same coverage, regardless of age, preexisting conditions, or state of residence. No one would be without health insurance, accomplishing in the simplest way possible the overall goal of health reform–improving access to health care for all Americans.

Funding for a single-payer health care system would come from a combination of payroll tax for employers (about 7% of payroll, or less than the amount typically paid for employee health care coverage) and an increase in the federal tax on income (an increment of about 2%, or less than most people currently pay for out-of-pocket health care expenses). Patients would be free to choose any physician or hospital in the country, as opposed to the current system, in which patient choice is frequently limited to providers within the various health plan networks. Because, under the current system, most employers offer only one or two health plans, it is frequently the case that employers, not patients, in effect determine our choice of doctors, hospitals, and other health care providers. Providers of patient care would see significant reductions in paperwork, having to interact with only one health plan instead of the seemingly endless number of plans and subplans with which we now deal. A single-payer system would also facilitate comprehensive health planning, which could include regional disease management programs, strategies aimed at solving physician shortage issues, collective adoption of a unified electronic medical record, and a cohesive approach to the distribution of innovative health care technologies (6).

Given the social, clinical, and economic benefits of single-payer health care, the only barrier would seem to be that of political feasibility. Indeed, adoption of a single-payer health care system will be challenging in today’s economic climate and in a country seemingly dedicated to a free-market ideology. Yet many current social programs faced similar political obstacles at the time of adoption, including Social Security and Medicare.

Ironically, today it is the disbanding of these programs that would be considered not politically feasible. Although some major stakeholders (mainly the insurance and pharmaceutical industries) may be unalterably opposed to single-payer health care, the most important and relevant stakeholders are the American people and their health care providers. It is becoming evident that these factions increasingly support a single-payer system: 65% of the United States population and 59% of American physicians voiced this opinion in recent polls (7, 8). Finally, while there are major cost concerns regarding the proposed increased role for the private insurance industry in covering just some of the uninsured, a single payer system would cover all comprehensively (something no other proposed system can claim) at a cost no higher than we are currently spending, and potentially significantly less, if the experience of other industrialized nations is any guide. The time for true universal health coverage is now, and the best path to universal coverage is through single-payer health insurance.

John A. Day, Jr., M.D.
Day Kimball Hospital
Putnam, Connecticut
and
University of Massachusetts Medical School
Worcester, Massachusetts

Conflict of Interest Statement: The author does not have a financial relationship with a commercial entity that has an interest in the subject of this manuscript.

References

1. Kuttner R. Market-based failure–a second opinion on U.S. health care costs. N Engl J Med 2008;358:549-551.

2. Woolhandler S, Campbell T, Himmelstein DU. Costs of health care administration in the United States and Canada. N Engl J Med 2003; 349:768-775.

3. Treo Solutions. Costs, commitment and locality: a comparison of forprofit and not-for-profit health plans. Inquiry 2004;41:116-129.

4. Himmelstein DU, Warren E, Thorne D, Woolhandler S. Illness and injury as contributors to bankruptcy. Health Aff (Millwood) 2006;25:w74-w83.

5. Woolhandler S, Himmelstein DU, Angell M, Young QD. Proposal of the physicians’ working group for single-payer national health insurance. JAMA 2003;290:798-805.

6. Ginsburg JA, Doherty RB, Ralston JF Jr, Senkeeto N. Achieving a high-performance health care system with universal access: what the United States can learn from other countries. Ann Intern Med 2008; 148:55-75.

7. The Associated Press/Yahoo Poll. WAVE2 conducted by knowledge networks. [Accessed May 14, 2009] Available from: http://news.yahoo.com/page/election-2008-political-pulse-voter-worries

8. Carroll AE, Ackermann RT. Support for national health insurance among U.S. physicians: 5 years later. Ann Intern Med 2008;148:566.

Am J Respir Crit Care Med Vol 180. pp 920–922, 2009
Internet address: www.atsjournals.org

Lack of health care killed 2,266 US veterans last year: study

Agence France Presse (AFP) News
Nov. 11, 2009

WASHINGTON — The number of US veterans who died in 2008 because they lacked health insurance was 14 times higher than the US military death toll in Afghanistan that year, according to a new study.

The analysis produced by two Harvard medical researchers estimates that 2,266 US military veterans under the age of 65 died in 2008 because they lacked health coverage and had reduced access to medical care.

That figure is more than 14 times higher than the 155 US troop deaths in Afghanistan in 2008, the study says.

Released as the United States commemorates fallen soldiers on Veterans Day, the study warns that even health care provided by the Veterans Health Administration (VA) leaves many veterans without coverage.

The analysis uses census data to isolate the number of US veterans who lack both private health coverage and care offered by the VA.

“That’s a group that’s about 1.5 million people,” said David Himmelstein, an associate professor of medicine at Harvard Medical School and co-founder of Physicians for a National Health Program who co-authored the study.

Himmelstein and co-author Stephanie Woolhandler, also a Harvard medical professor, overlaid that figure with another study examining the mortality rate associated with lack of health insurance.

“The uninsured have about a 40 percent higher risk of dying each year than otherwise comparable insured individuals,” Himmelstein told AFP.

“Putting that all together you get an estimate of almost 2,300 — 2,266 veterans who die each year from lack of health insurance.”

Only some US veterans have access to medical care through the VA and coverage is apportioned on the basis of eight “priority groups.”

“They range from things like people who were prisoners of war, who have coverage for life, or who have battle injuries and therefore have coverage for their injuries for life,” said Himmelstein.

Veterans who fall below an income threshold that is determined on a county-by-county basis can qualify for care, but many veterans are “working poor” and fall just above the bracket.

“The priority eight group, the lowest priority, are veterans above the very poor group who have no other reason to be eligible and that group is essentially shut out of the VA,” according to Himmelstein.

The study comes as the US Senate weighs health care reform legislation and whether to offer government health insurance.

Himmelstein warns that congressional proposals could still leave veterans uncovered and favors a national health care program similar to those in Britain and Canada.

http://www.google.com/hostednews/afp/article/ALeqM5iXSJa5eFMuXF2Uxwptns_JOxRcMA

Misguided fixation on premiums

Health savings? No one knows

By Carrie Budoff Brown
Politico
November 11, 2009

Barack Obama ran for president on a promise of saving the typical family $2,500 a year in lower health care premiums.

But that was then.

No one in the White House is making such a pledge now.

It’s one of the most basic, kitchen-table questions of the entire reform debate: Would the sweeping $900 billion overhaul actually lower spiraling insurance premiums for everyone?

Jonathan Gruber, the favorite economist of the White House, said the bill “really doesn’t bend the cost curve.”

Reminded that Obama demanded a bill that lowers health care spending, Gruber said: “That is what he would like to do. But he’s not doing it.”

If premiums are the benchmark by which reform is judged, “we are setting ourselves up to fail,” Gruber said.

http://www.politico.com/news/stories/1109/29421.html

Comment:

By Don McCanne, MD

From the very start, the two most important goals for reform allegedly were to cover everyone and to control health care costs. But the precondition that reform be based on an expansion of private health plans within our dysfunctional, fragmented financing system immediately eliminated universal coverage as a goal. It proved to be impossible to balance all of the variables in this dysfunctional system to ensure that everyone would be covered. So they gave up.

Efforts were then directed to creating policies that would slow the growth in health care costs, again with the precondition that the role of private insurers would be protected and expanded. This led to the profusion of magical thinking – pretending that numerous vague innovative concepts included in the bill would somehow slow the growth in health care costs. Since the Congressional Budget Office does not have a data base on magical solutions, they were unable to score any of these innovations as effective instruments to control costs. As Jonathan Gruber said, the bill “really doesn’t bend the cost curve.”

So they decided to forget about universal coverage and to forget about total costs, but they still had a problem unique to our financing system based on private health plans. In a high cost system like ours, how do you make premiums affordable?

More magical thinking. Pretend that there is a “basic” level of insurance that will take care of all of our basic health care needs. Gold, or platinum, or Cadillac tiered health plans should be made available for wealthier individuals who want more comprehensive plans and are willing to pay for them. But do those more comprehensive plan cover services that the rest of us really don’t need?

It is almost impossible to sort out health care products and services based on whether or not they are essential. For a person with a disabling osteoarthritis of the hip, is a hip replacement essential? Or should the surgery be reserved for those with platinum plans? A wheelchair for gold plans? A walker for the silver plans? And for the bronze plans, an instruction sheet on how to carve a cane out of a stick of wood?

Since they really couldn’t establish tiers based on the specific services provided, they based them on the actuarial value – the percentage of costs that the plan would pay for. Basic plans have been defined in the legislation as having an actuarial value of 65 or 70 percent. The patient is responsible for 30 or 35 percent of the costs. You can see how “basic” these lower tier plans are when you consider that the average employer-sponsored plan has an actuarial value of 80 percent and some are as high as 88 percent.

Designating this basic plan as the standard created two more problems. The premiums would still be unaffordable for the majority of us, and the out-of-pocket expenses would bankrupt those who developed major medical problems. The answer? Subsidize the premiums and the out-of-pocket expenses with two more administratively complex programs that attempt to match the subsidies to ever-changing income levels. Now do that within a $900 billion ten year budget that has to meet many other demands.

It doesn’t work. Low income individuals who would be mandated to purchase private plans (those not qualifying for Medicaid) do not have the discretionary income to pay even the very modest out-of-pocket expenses required. For moderate and moderately-high income individuals, the portions of the premium and out-of-pocket spending would create financial hardships, especially for those with health care needs.

Only the wealthy would fare well, and they’re the only ones who could afford the highest tier plans. The concept of tiered health plans allows the wealthiest of us to eliminate financial barriers to care, protecting the wealth of the wealthy, while leaving the majority of us with financial barriers that have been proven repeatedly to impair access to essential health care services. What a sick concept!

The precondition of building reform on an infrastructure of private health plans has resulted in a fixation of trying to make premiums and out-of-pocket expenses affordable when it is an impossibility under this model.

Even Jonathan “let’s-get-everyone-covered-and-then-figure-out-how-to-pay-for-it” Gruber says that if premiums are the benchmark by which reform is judged, “we are setting ourselves up to fail.”

It’s not too late to do it right. We can strip down the current legislation to the important beneficial features, including ending private insurer abuses, and pass it as a temporary emergency measure, codifying “temporary” and “emergency.”

We can include in the legislation language that the process must move forward immediately with reform that will ensure that health care is universal, accessible, comprehensive, portable, and publicly administered. That would set us up for success.

New Evidence of Pharma’s Sweetheart Deal

By Jonathan Cohn
Senior Editor
The New Republic
November 10, 2009

Critics have complained that a drug industry got a sweetheart deal when it struck a bargain with the White House and Senate Finance Committee over health care reform.

There’s new reason to think those critics were right.

It comes from an October forecast by IMS Health, a respected global research and consulting firm. The report, which IMS distributed to clients and which a source provided, projects that the drug industry will see average annual growth of 3.5 percent between 2008 and 2013.

Back in March, IMS had projected no growth at all during that same five-year stretch. In fact, it projected the drug business would actually contract slightly–with negative annual growth of 0.01 percent.

What changed? A major factor, according to IMS, was the emerging details of health care reform.

Health reform, as currently envisioned, wouldn’t merely bring coverage to the uninsured. It would also fill in the “donut hole” in Medicare Part D–the gap in coverage that leaves beneficiaries with serious health problems paying for hundred if not thousands of dollars in out-of-pocket prescription costs.

In addition, because it will take several years to close the donut hole, reform relies on voluntary discounts from the pharmaceutical industry to make drugs more affordable in the intervening years. But those discounts would apply only to name-brand drugs, not generics.

Put it all together, and you have more demand for name-brand drugs. As a result, IMS believes, pharmaceutical companies would be able to raise their prices–enough to boost revenue significantly: “If this bill is implemented,” the report concludes on page 138, “an increase in prices on new drugs can be expected.”

Exactly what this would mean in actual dollar terms isn’t clear. But from some back-of-the-envelope calculations, it appears that IMS thinks revenues for the makers of name-brand drugs could grow by hundreds of billions of dollars over the next ten years. (To be clear, this is a very rough guess, based on extrapolations from the report’s tables–and I have not run it by experts.)

That brings us back to the deal that the Pharmaceutical Researchers and Manufacturers of America, which represents those companies, made with the White House and Senate Finance Committee.

The deal–details of which came to light in reports by the New York Times and Huffington Post–was pretty straightforward. The industry agreed to embrace health care reform and, later on, launched a massive advertising campaign to promote the cause. In exchange, the White House and Senate Finance–which had been asking various industries to pledge concessions that would help pay for the cost of coverage expansions–promised not to seek more than $80 in reduced payments to drug makers.

To an industry as big and profitable as the drug makers, giving up $80 billion over ten years wouldn’t seem like much of a sacrifice–a point critics started making right away. But if IMS is right, the drug industry wouldn’t even be giving up $80 billion, in any meaningful sense of the term. If anything, it’d be making more money. Maybe quite a lot of it.

Of course, the projections from IMS–like any such projections–are full of uncertainty. That’s why there are so many “coulds” and “mights’ in the explanation above.

And even if the drug industry is getting a sweetheart deal, the political reality remains what it was all along. As I noted in my recent article on the drug deal, the drug industry has enormous leverage in Congress: When relatively liberal congressional committees tried limit the exclusivity period for biological drugs, industry lobbyists beat back the effort easily.

Given the tight squeeze in Congress–remember, even the House passed reform with only a tiny, five-vote margin–it’s entirely possible that declaring war on the drug lobby would have undermined the whole reform effort.

Then again, the House version of reform does seek greater concessions from the drug industry than the Senate Finance bill does. And the two chambers’ bills must eventually be reconciled in conference committee.

The drug industry will complain about any efforts to alter their deal. But the IMS projection suggests they’ll be just fine.

Note: Calls and emails to IMS were not returned.

2,266 Veterans Died In 2008 Because They Were Uninsured

By Elyse Siegel
The Huffington Post
Nov. 11, 2009

According to a study released by the Harvard Medical School, 2,266 veterans under the age of 65 died last year as a result of not having health insurance. Researchers emphasize that “that figure is more than 14 times the number of deaths (155) suffered by U.S. troops in Afghanistan in 2008, and more than twice as many as have died (911 as of Oct. 31) since the war began in 2001.”

The 1.46 million working-age veterans that did not have health insurance last year all experienced reduced access to care as a consequence, leading to “six preventable deaths a day.”

Like other uninsured Americans, most uninsured vets are working people — too poor to afford private coverage but not poor enough to qualify for Medicaid or means-tested VA care,” said Dr. Steffie Woolhandler, a professor at Harvard Medical School. […]

Dr. David Himmelstein, the co-author of the report and associate professor of medicine at Harvard, commented, “On this Veterans Day we should not only honor the nearly 500 soldiers who have died this year in Iraq and Afghanistan, but also the more than 2,200 veterans who were killed by our broken health insurance system. That’s six preventable deaths a day.”

http://www.huffingtonpost.com/2009/11/10/2266-veterans-died-in-200_n_353033.html

Study: Over 2,200 US Veterans Died in 2008 Due to Lack of Health Insurance

Amy Goodman
Democracy Now
Nov. 11, 2009

Watch the interview here: http://www.democracynow.org/2009/11/11/study_over_2_200_us_veterans

On Veterans Day, a new study estimates four times as many US Army veterans died last year because they lacked health insurance than the total number of US soldiers who were killed in Iraq and Afghanistan in the same period. A research team at Harvard Medical School says 2,266 veterans under the age of 65 died in 2008 because they were uninsured. We speak to the report’s co-author, Dr. Steffie Woolhandler, professor of medicine at Harvard University and co-founder of Physicians for a National Health Program.

Guest: Dr. Steffie Woolhandler, professor of medicine at Harvard University and a primary care physician in Cambridge. She is also a co-founder of Physicians for a National Health Program. She testified about uninsured veterans before Congress in 2007.

AMY GOODMAN: Today is Veterans Day. We begin with a new study that estimates four times as many US Army veterans died last year because they lacked health insurance than the total number of US soldiers who were killed in Iraq and Afghanistan in the same period. A research team at Harvard Medical School says 2,266 veterans under the age of 65 died in 2008 because they were uninsured. Their estimates are based on their recently published findings in the American Journal of Public Health that shows how being uninsured raises a person’s odds of dying prematurely by 40 percent.

The researchers also found that nearly one-and-a-half million veterans between the ages of 18 and 64 were uninsured last year. While most veterans are eligible to receive care from the Veterans Administration, those who were not injured in combat and whose income is above a certain threshold are often ineligible.

The report’s authors say the healthcare legislation pending in the House and Senate will not significantly improve the situation.

The co-author of the report, Dr. Steffie Woolhandler, joins me here in our firehouse studio. She’s professor of medicine at Harvard University and a primary care physician in Cambridge. She is also co-founder of Physicians for a National Health Program and testified about uninsured veterans before Congress in 2007.

We welcome you to Democracy Now! I mean, these are astounding figures. Tell us exactly what you found.

DR. STEFFIE WOOLHANDLER: Well, the risk of dying is actually elevated by about 40 percent among people who have no health insurance, and there’s just under 1.5 million uninsured veterans nationally. So applying those odds to those folks, it turns out that there’s almost 2,300 folks who die–veterans who die every year due to lack of health insurance.

Many of these folks, these veterans, would not be helped under the bills before the House and Senate, because they’ll be too affluent to qualify for Medicaid. If they get subsidies at all, the subsidies will be too small to make health insurance affordable. And they’re mostly working families, folks who don’t have the money to buy private insurance, but they have too much money to qualify for Medicaid or means-tested VA benefits.

AMY GOODMAN: I think people would be very surprised to know that once you’re a vet, no matter what your income level, you’re not covered by VA healthcare system for the rest of your life.

DR. STEFFIE WOOLHANDLER: Oh, well, that’s been true for a long time. The VA will cover you if you have a service-connected injury, like you get your leg shot off. They do provide a safety net for people with very low incomes, eligible for Medicaid, or slightly higher incomes. However, many middle-income vets are not eligible for VA care, and that’s who these uninsured veterans are. And sadly, many of them will continue to be uninsured under the House or Senate bills, which, even if they work as planned, will leave somewhere between a third and a half of all uninsured people still uninsured in the year 2020.

AMY GOODMAN: What’s the VA saying about this?

DR. STEFFIE WOOLHANDLER: The VA did show up at the hearings, and I think they would love to have more money in order to be able to expand the care that they give. In fact, I think the VA is a good system and actually a good safety net, if you can get access to it. But currently there’s just not the funding within the VA system to allow them to cover all veterans.

AMY GOODMAN: Are there any examples you can share with us of what has happened to a veteran?

DR. STEFFIE WOOLHANDLER: Well, we do–we did hear stories from people. Often they were folks in the middle-income ranges. They had been out of the service for two or three or five years. They were working, but they were not getting insurance through their work, and they could not qualify for VA care. Similarly, there’s only a limited number of VA facilities. They’re in a lot of cities, but not all cities. And many people just couldn’t get to a VA facility even if they were eligible.

AMY GOODMAN: How does this fit into the bigger picture of what’s happening in the United States today?

DR. STEFFIE WOOLHANDLER: Well, I support Medicare-for-all, single-payer national health insurance. I work with a group of doctors called Physicians for a National Health Program that advocates that. We think everyone–everyone–needs healthcare through a Medicare-for-all approach. And I think the plight of the veterans epitomizes what happens to working families generally. Working families get caught in the middle. They can’t get Medicaid. They can’t get means-tested VA. They can’t afford private insurance. And the House and Senate bills don’t really fix that problem.

AMY GOODMAN: When the House voted on the bill, 220-to-215, what was your reaction? And can you analyze it for us?

DR. STEFFIE WOOLHANDLER: Well, we think that the Congress needs to start from scratch on this bill. The reform process in Washington has been hijacked by the private health insurance industry. If you look at the Baucus framework, which was the basis of the Senate bill–it’s on the Senate Finance Committee website. Just right-click on that document, and it turns out the author of the document was Elizabeth Fowler, who’s a former vice president of Wellpoint, the nation’s largest private insurance company, covering 35 million people. So the private insurance industry has hijacked the process. What’s come out of the House, what’s likely to come out of the Senate, is a completely inadequate bill that takes about $500 billion in taxpayer money and hands it over to the private health insurance industry.

AMY GOODMAN: I mean, explain exactly that, as people are suffering in the midst of this, you know, tremendous economic downturn, this global economic meltdown. You’re talking once again, not only with the bankers, but with the insurance company, of forcing people to buy health insurance, but to buy it from private insurers. So this is an incredible deal for the private insurers.

DR. STEFFIE WOOLHANDLER: Right. Well, the private insurers are getting millions of mandatory new customers. The taxpayers are going to give subsidies. It’s not going to make healthcare affordable, but it’s going to cost the taxpayers a lot of money to give these subsidies.

Private health insurance is a defective product. We know from our studies of bankruptcy that the majority of Americans who face medical bankruptcy start their illness with private health insurance but are bankrupted anyway by gaps in coverage, like co-payments
, deductibles and uncovered services.

And under the House and Senate bills, they’ve done nothing to fix private health insurance. They’ve merely made private health insurance mandatory for middle-income working people and forcing those folks to take lots of money out of their pocket to buy this defective product.

AMY GOODMAN: And, of course, most bankruptcies in this country are caused by medical problems; they are medical bankruptcies.

DR. STEFFIE WOOLHANDLER: Right. In our studies, we found that 62 percent of all bankruptcies in the United States are due at least in part to medical illness or medical bills and that the majority of folks in medical bankruptcy started that illness with private health insurance.

AMY GOODMAN: But what about those who perhaps do even support Medicare for all or single payer who are saying, “Well, at least now you’re talking about tens of millions of people who will be insured, who weren’t otherwise”?

DR. STEFFIE WOOLHANDLER: What’s happened in the past when bills like this have passed in the states is that they run out of money very quickly, healthcare is simply unaffordable, and then you start to see the coverage expansions cut back. The subsidies shrink, the Medicaid shrinks, and then you’re back at square one, where you’ve spent a lot of money and not made any progress. And we’ve seen this over and over in the United States–in Massachusetts in 1988, in Oregon in 1992, in Washington 1993–passed bills virtually identical to what’s being passed in the House right now, and there was no durable improvement in the number of uninsured in those states. Healthcare was not affordable ten years after those bills were passed.

The problem with the House bill is it simply won’t work. And, you know, if we want to expand Medicaid, fine, we should expand Medicaid. If we want more primary care, good, let’s expand primary care. But doing it through $500 billion in subsidies to the private health insurance industry will have the effect of making the health insurance industry more powerful, making the health insurance lobby more powerful. And just as they’ve hijacked this process in Washington, it makes them more able to hijack political processes in the future.

AMY GOODMAN: And the cost of drugs? So it’s not only the mandatory–mandating that people buy health insurance from private companies, but the deal that was worked with the pharmaceutical industry in this country. Explain that.

DR. STEFFIE WOOLHANDLER: OK. Well, the deal with the pharmaceutical industry was minimal. The pharmaceutical industry gave up very little. They said for Medicare recipients who are in the doughnut hole, they would make low-priced generics available. That’s a very small share of the population. For the rest of us, who may be unable to afford expensive medications, we got nothing out of the pharmaceutical industry.

The pharmaceutical industry, frankly, is thrilled with this bill. And despite all their squawking, the health insurance industry is pretty happy, too. You know, Wall Street has rewarded them by driving up the value of their stocks. And I think any fair and honest reading of this bill would say that it’s a tremendous victory for the health insurance industry. And what we need to do to get to universal healthcare is start from scratch, go for that Medicare-for-all, single-payer approach.

AMY GOODMAN: And the issue of women, reproductive healthcare and abortion?

DR. STEFFIE WOOLHANDLER: Well, that is a horrendous provision in the House bill, which would essentially extend a ban on abortion to private health insurance. In the past, the Hyde Amendment applied only to people who were getting publicly funded care. But in the new bill, any insurance product that’s offered through the exchange has to–

AMY GOODMAN: And explain the exchange.

DR. STEFFIE WOOLHANDLER: Yes. The exchange would be this marketplace where you would go to buy your insurance. If you had subsidized coverage, you would have to buy your insurance through the exchange.

And any insurance plan purchased through the exchange would have to exclude coverage of abortion. So, for the first time, Congress has stepped in and said that even with your own money, with private money, it’s illegal for insurance to cover abortion. It’s a tremendous step backwards for women’s rights.

AMY GOODMAN: And do you think it will make its way through to the final bill?

DR. STEFFIE WOOLHANDLER: Well, I’m not sure about that. Certainly President Obama has weighed in to say, “Well, let’s try to return to what was there before, with just a ban on public funding of abortion,” which is bad enough. It remains unclear what’s going to happen in the Senate, whether the right-to-life folks will step in and get an anti-choice plank in the Senate bill, as well. They certainly were successful in the House. And, of course, that’s one of the many reasons that we think we need to start from scratch on a new health reform bill.

AMY GOODMAN: Steffie Woolhandler, you come from Massachusetts. That’s often held up as the model. I recently saw on CNN your former Governor Weld interviewed about his plan that has been adopted by all of Massachusetts. Explain the Massachusetts plan and then how we, as Americans, fit into the rest of the world when it comes to our healthcare system.

DR. STEFFIE WOOLHANDLER: OK. Well, the Massachusetts plan is considered the model for the national legislation. There’s a mandate that makes it illegal to refuse to purchase private health insurance. The fine is up to $1,068. The good thing with the Massachusetts plan was there was a big Medicaid expansion, but you didn’t need to do the mandates in order to do the Medicaid expansion.

Much of the Massachusetts plan has been wildly expensive. According to the state’s report to its bondholders, it’s cost $1.3 billion this year. The state has opted to pay for that by stealing money from safety net clinics and hospitals, so that safety net providers that care for immigrants, the mentally ill, people with substance abuse, that provide primary care, they’ve seen their funds shrunken, so that money could be handed over to purchase insurance policies. Massachusetts now has the highest healthcare costs in the history of the world.

You have to compare that to what goes on internationally. With the average per capita cost of healthcare about half those in the United States, yet people in Canada and western Europe live about two years longer. They have complete free choice of doctor and hospital. They have lower infant mortality. People in other developed nations use some form of nonprofit national health insurance to get better care for less money. And that’s why our group supports the Medicare-for-all approach.

AMY GOODMAN: So the question is where that fits in today. Finally, former President Clinton met with Senate Democrats yesterday and basically said nothing–said something is better than nothing, pass this now. What do you feel about that?

DR. STEFFIE WOOLHANDLER: Well, I think we know–we now know the outlines of what they’re going to pass. It’s not an abstract something; it’s something real. And it’s quite bad. It’s $500 billion in new subsidies to the private health insurance, millions of mandatory new customers for private health insurance.

The public plan option is incredibly puny. According to the Congressional Budget Office, fewer than 2 percent of Americans will enroll. And the premiums will actually be higher–higher–than premiums in the private sector. So the public plan option will be an expensive, tax-funded subsidy to private health insurance, because the public plan option will take the sickest patients off their hands. It’s not going to be something that’s going to generate coverage or decrease costs.

< p>So, we know what the outlines are of the plan, and there are so many bad and harmful planks to the plan that we do need to start from scratch on health reform.

AMY GOODMAN: Since it doesn’t look like they will, will you not support what is coming out right now? Would you have voted no if you were a congressman–Congress member? Would you vote no in the Senate?

DR. STEFFIE WOOLHANDLER: Well, I’m a, you know, doctor; I’m not a politician. I feel a little bit like we’re debating whether to give aspirin or Tylenol to a patient with breast cancer. The patient needs surgery. And what’s being debated in Washington is really Tylenol or aspirin. And I had said for awhile we’d have to see the final shape of the bill, because, of course, we’d–I’d love to see more Medicaid money. Medicaid is very helpful for very poor people. It’s not perfect, but it’s much better than nothing. But I think there’s so many bad planks in the bill that this bill needs to be scratched, and we need to start over.

AMY GOODMAN: Do think this is a better deal for the health insurance industry, for the private health insurance industry in this country, than we have right now?

DR. STEFFIE WOOLHANDLER: I actually do. Their number one demand was the so-called individual mandate that would make it illegal to not have health insurance. It will become a federal crime to be uninsured. If you have private health insurance through your work, and you hate your private health insurance, tough luck, you have to keep that insurance. The mandate means you have to keep it. You can’t buy the public option. You probably won’t be able to go through the exchange. So they’ve made private health insurance mandatory, giving them hundreds of billions in new–mandatory new customers.

There’s some minimal insurance regulation, and I think more regulation is better than less regulation of insurance, but that’s going to be counterbalanced by the tremendous economic boost that will be given to the private health insurance industry through this bill. And as we know, if you have a lot of money, you can buy a lot of political influence. I think down the line we’re actually likely to be worse off in handing over so much taxpayer money to what is essentially a private health insurance industry bailout.

AMY GOODMAN: Dr. Steffie Woolhandler, I want to thank you very much for being with us, professor of medicine at Harvard University, primary care physician in Cambridge, co-founder of Physicians for a National Health Program. We’ll have a link to their study on our website at democracynow.org.

Uninsured veterans

Over 2,200 veterans died in 2008 due to lack of health insurance

Physicians for a National Health Program
Press Release
November 10, 2009
A research team at Harvard Medical School estimates 2,266 U.S. military veterans under the age of 65 died last year because they lacked health insurance and thus had reduced access to care. That figure is more than 14 times the number of deaths (155) suffered by U.S. troops in Afghanistan in 2008, and more than twice as many as have died (911 as of Oct. 31) since the war began in 2001.
The Harvard group analyzed data from the U.S. Census Bureauā€™s March 2009 Current Population Survey, which surveyed Americans about their insurance coverage and veteran status, and found that 1,461,615 veterans between the ages of 18 and 64 were uninsured in 2008. Veterans were only classified as uninsured if they neither had health insurance nor received ongoing care at Veterans Health Administration (VA) hospitals or clinics.
“Like other uninsured Americans, most uninsured vets are working people – too poor to afford private coverage but not poor enough to qualify for Medicaid or means-tested VA care,” said Dr. Steffie Woolhandler, a professor at Harvard Medical School. While many Americans believe that all veterans can get care from the VA, even combat veterans may not be able to obtain VA care, Woolhandler said.
Dr. David Himmelstein, the co-author of the analysis and associate professor of medicine at Harvard, commented, “On this Veterans Day we should not only honor the nearly 500 soldiers who have died this year in Iraq and Afghanistan, but also the more than 2,200 veterans who were killed by our broken health insurance system.”
https://pnhp.org/news/2009/november/over_2200_veterans_.php

And…

A Word, Mr. President

By Bob Herbert
The New York Times
November 9, 2009
Reforming the chaotic and unfair health care system in the U.S. is an important issue. But in terms of pressing national priorities, the most important are the need to find solutions to a catastrophic employment environment that is devastating American families and to end the folly of an 8-year-old war that is both extremely debilitating and ultimately unwinnable.
If you were to take a walk around one of the many military medical centers, like Landstuhl in Germany or Walter Reed in Washington, your heart would break at the sight of the heroic young men and women who have lost limbs (frequently more than one) or who are blind or paralyzed or horribly burned. Hundreds of thousands have suffered psychological wounds. Many have contemplated or tried suicide, and far too many have succeeded.
“Mr. President,” I would say, “weā€™ll never be right as a nation as long as we allow this to continue.”
http://www.nytimes.com/2009/11/10/opinion/10herbert.html?hp

How can we continue to support a fragmented, dysfunctional financing system that allows some of our veterans (not to mention tens of thousands of others of us) to die merely because we have placed a higher priority on nurturing the private insurance industry than we have on improving access for everyone through a more effective health care financing system? Our veterans. How can we let them down like this?
On a personal note, Veterans Day has always been a difficult day for me. In August of 1964, when I was driving from California to Texas to report for duty as an Army medical officer, we heard on the radio that our close friend, Dick Sather, was the Navy pilot who was just shot down and killed in the Gulf of Tonkin incident. (The other pilot shot down, Everett Alvarez, was held captive for over eight years.)
I was already a pacifist, but strictly on an ethical and not a religious basis. I believe, like so many others, that war is not healthy for children and other living things. The very worst possible way to negotiate international disagreements is to engage in war. And yet the United States does it over and over again. The school yard excuse, “but they started it,” doesn’t even seem to apply anymore.
After medical officer basic training in San Antonio, my first assignment to season me before being sent overseas, was as a battalion surgeon in Fort Hood, Texas. Yes, that Fort Hood.
Now you understand why I seem to be off message – the combination of my Veterans Day grief, the tragic slaughter that just occurred at my former military base, and now this new report on the unnecessary deaths of so many veterans due to a broken health insurance system.
Veterans Day is a day to think about the impact on not just our veterans but all of us, of record unemployment, war, and the unfair health care system that Bob Herbert writes about. We can fix all of them.
So what are we doing? More government money for Wall Street, and less for jobs. More troops for the war in Afghanistan, instead of withdrawal. More money for private insurers, while health care becomes ever less affordable for patients.
Is this what our veterans were fighting for?