PNHP

Tour Schedule for the Mad as Hell Doctors

Tour Schedule for the Mad as Hell Doctors

8/25 Sequim, WA
9/8 Seattle, WA Langston Hughes Performing Arts Center, 5-8 p.m.
9/9 Spokane, WA
9/9 Kennewick, WA
9/10 Helena, MT
9/11 Idaho Falls, ID
9/11 Pocatello, ID
9/12 Salt Lake City, UT
9/13 Ft. Collins, CO
9/14 Denver, CO
9/15 Des Moines, IA
9/16 Twin Cities, MN
9/17 Madison, WI
9/18 Gary, IN
9/18 Ft. Wayne, IN
9/19 Bloomington, IN
9/20 Nashville, TN
9/22 Louisville, KY
9/23 Xenia, OH
9/24 Detroit, MI
9/25-26 Chicago, IL
9/27 Toledo, OH
9/28 Cleveland, OH
9/28 Pt. Clinton, OH
9/29 Pittsburgh, PA
9/30 Gettysburg, PA
9/30-10/1 Washington, DC

For more information, see www.madashelldoctors.com/

IT'S THE INSURANCE COMPANIES, STUPID!

Rules rein in Medicare Advantage marketing

By Tom Murphy
Associated Press
Regulators clamped down last fall on shady sales practices for privately run Medicare health insurance for the elderly.
But customers and advocate groups say the plans’ confusing nature still leaves room for pitches bordering on the deceptive, and abuses still crop up.
Medicare Advantage plans are privately run versions of the government’s Medicare program, which provides health coverage for the elderly and disabled. The government subsidizes these plans, and the industry has developed what can be a mind-numbing array of them.
Seniors report being pressured with unsolicited phone calls or home visits that are clearly prohibited. Some have signed up for plans that didn’t include their longtime doctors or hit them with unexpected costs, things they learn weeks later.
CMS learns every year about areas that need more vigilance, said Timothy Hill, deputy director for the Center for Drug and Health Plan Choice.
http://abcnews.go.com/Business/wireStory?id=8446040

And…

Some question private Medicare plans’ advantage

By Matt Sedensky
Associated Press
Seniors have flocked by the millions to Medicare Advantage, privately run plans offered as an alternative to traditional, government-run Medicare.
In the debate on overhauling the U.S. health care system, Advantage has been criticized as an example of a broken system that costs too much, confuses enrollees and suffers from a lack of oversight.
But even many backers acknowledge one of its toughest problems is few seniors understand the essential difference in private plans: Even services covered by traditional Medicare that doctors deem medically necessary routinely need the insurers’ advance approval and are sometimes denied.
Participants have been denied visits to specialists, rehabilitation to help them walk again and countless other services they’d be entitled to under traditional Medicare.
“Every decision is based on not what’s right for the patient, but what’s right for the bottom line,” said Dr. Michael Sedrish, who coordinates HMO payments for Medisys Health Network, which runs three New York City hospitals.
With basic Medicare, seniors generally know what sort of coverage they’re getting. That’s not the case with the roughly 7,000 Medicare Advantage plans, where one person’s coverage could be completely different from a next door neighbor’s.
A 2008 Government Accountability Office report found wide differences in enrollee costs depending on the plan, including home health service costs that could be up to 84 percent more than traditional Medicare.
“The plans tell them they have the same coverage,” said Delores Bowman, who handles calls to the Medicare Rights Center, “and they don’t.”
http://www.washingtonpost.com/wp-dyn/content/article/2009/08/29/AR2009082900957.html

What’s beautiful about the Medicare Advantage program is that it has provided us with a real-life laboratory experiment which allows us to compare the functioning of highly-regulated private insurance plans as contrasted with the functioning of a public insurance program: traditional Medicare. The results are in, though that would be tough to ascertain if you simply observe the response of Congress.
What have we learned? The private plans take away the choice of health care providers that the traditional public program offers. The private plans insert intrusive interventions between the patient and the physician – interventions that are not found in the public plans. Private plans divert more resources to excessive, wasteful administrative services while increasing the administrative burden on the health care providers and on the public stewards who must provide oversight of our tax dollars that are diverted to this industry. Private plans also provide more entry points for the criminal element to cheat the taxpayers, patients, and providers. And for this we are paying far more of our tax dollars than we do in the traditional Medicare program for comparable levels of care. The obvious lesson is that we should dump the private plans.
What has Congress learned? They have decided that we should provide more subsidies to the private plans so that they can expand their markets!? And they have apparently decided that we will not even have a genuine public plan because it would provide unfair competition to the private plans because of Medicare’s greater efficiency and lower costs!?
It is true that a fragmented, multi-payer system is much more expensive and much less equitable, leaving too many exposed to suffering and financial hardship. But our Medicare Advantage experiment has demonstrated that it is the private plans that must be jettisoned, and it is Medicare that must be granted to everyone after modest, appropriate reengineering so that it works even better than it does now.
We need to send this urgent message to Congress and the administration, immediately:
IT’S THE INSURANCE COMPANIES, STUPID!

Helena Handbag

by Cathy Siegner
Queen City News
Wednesday, July 29, 2009

I’ve never met Max Baucus, but I know plenty of people who have, and their opinions range from loathing to admiration. People who like him say he’s got a good heart and genuinely tries to help his constituents and his country. If he cares about an issue, say preserving the Rocky Mountain Front or funding the SCHIP program, he digs in his heels and refuses to budge.

That’s why it’s so difficult to understand why he’s digging in his heels in opposing something a significant number of Americans want: single-payer health-care reform. He seems to think his congressional colleagues won’t vote for it no matter how many people they hear from supporting it, so that’s that.

In Washington, D.C., this is the common, pragmatic view, especially when lobbyists are telling elected officials to slow down, take their time, and not to stick their necks out — messages members of Congress tend to listen to, given their general lack of backbone and avid interest in staying in office.

The latest tool in the anti-single-payer toolbox is the price tag: ranging from tens of billions up to $1 trillion over 10 years, depending on whoĆ¢ā‚¬ā„¢s doing the estimating. Supporters say any cost estimate is inherent misleading because of all the money we’re wasting with our current inefficient system.

For example, they say that private insurance companies skim off an estimated $400 billion per year in administrative costs, and lobbying groups are said to be shelling out an estimated $1.5 million per day to defeat reform.

To hear reform opponents talk, you’d think they guarded every penny coming out of Washington. Yet they didn’t bat an eye last fall when approving $700 billion in virtually undocumented corporate bailout money. And you never hear them talk about how much our current health-care system is costing us (an estimated $6,401 per person in 2005, or 15.3 percent of GDP that year).

When people oppose a single-payer system, I wonder if they have health coverage and whether it’s Medicare, VA, or some other government-funded plan; in other words, a single-payer system. A lot of times, they do. So basically, it’s okay for all of us to pay for them to have single-payer coverage, but they’ll be doggoned if they’ll chip in so everybody else can have it, too. In my world, thatĆ¢ā‚¬ā„¢s called hypocrisy.

President Obama noted as much during his speech last week. He acknowledged that he has the best health care in the world and that a doctor literally follows him around to make sure he’s okay. I suspect that Obama sees this hypocrisy inherent in the health-care reform debate and doesn’t care for it.

(Interestingly, even Obama’s personal physician before he became president, Chicago internist David Scheiner, has publicly called for a single-payer health care system.)

Baucus has to be reeling from the letters, emails, petitions, and other negative feedback he’s been getting because of his opposition to single-payer health care. No member of Congress, regardless of seniority or how many “powerful” committees he chairs, likes that. It’s bad for morale and bad for getting reelected.

Then there’s the tons of money he’s gotten from the insurance industry and others who don’t want health-care reform, at least not the kind that cuts out their profits. Some dot-connecting was made visible in Helena and other cities last Friday when single-payer advocates marched from Blue Cross Blue Shield to the senator’s office carrying big replicas of donation checks.

National Public Radio ran an embarrassing piece last week called “Who has access to Max Baucus?” (available at http://www.npr.org/templates/story/story.php?storyId=106655060&sc=emaf).

It discussed how Montana’s senior senator received nearly half of his 2008 re-election haul of $11.6 million from sources outside the state and those involved in health insurance and other industries which the Finance Committee oversees. Only 13 percent came from Montanans. He reportedly quit accepting money from health-industry political action committees (PACs) June 1, but then took, and later returned, $5,000 from a Schering Plough fund June 15.

NPR also mentioned his ski and snowmobile weekends with donors, golf and fly-fishing trips ($2,500 per person), and his successful Glacier PAC. There was even a “Baucus influence map” provided, showing five former staffers are now lobbying for pharmaceutical firms and other corporations, which graphically illustrates the value of access on influence (and income) in Washington.

Also mentioned was “Camp Baucus”, his annual soiree for supporters taking place this weekend at Big Sky, where tickets start at $2,500 per person. Some single-payer supporters from Helena were planning to drive down there later this week and hold signs along the road heading up to Big Sky showing their position on health-care reform.

Congress will be taking August off without voting on health-care reform, although iconoclastic U.S. Rep. Dennis Kucinich, D-Ohio, managed to get bipartisan committee support a couple weeks ago for his amendment permitting states to adopt their own form of single-payer health care. That move could turn out to be a significant one and bears watching.

IT'S THE INSURANCE COMPANIES, STUPID!

Rules rein in Medicare Advantage marketing

By Tom Murphy
Associated Press

Regulators clamped down last fall on shady sales practices for privately run Medicare health insurance for the elderly.

But customers and advocate groups say the plans’ confusing nature still leaves room for pitches bordering on the deceptive, and abuses still crop up.

Medicare Advantage plans are privately run versions of the government’s Medicare program, which provides health coverage for the elderly and disabled. The government subsidizes these plans, and the industry has developed what can be a mind-numbing array of them.

Seniors report being pressured with unsolicited phone calls or home visits that are clearly prohibited. Some have signed up for plans that didn’t include their longtime doctors or hit them with unexpected costs, things they learn weeks later.

CMS learns every year about areas that need more vigilance, said Timothy Hill, deputy director for the Center for Drug and Health Plan Choice.

http://abcnews.go.com/Business/wireStory?id=8446040

And…

Some question private Medicare plans’ advantage

By Matt Sedensky
Associated Press

Seniors have flocked by the millions to Medicare Advantage, privately run plans offered as an alternative to traditional, government-run Medicare.

In the debate on overhauling the U.S. health care system, Advantage has been criticized as an example of a broken system that costs too much, confuses enrollees and suffers from a lack of oversight.

But even many backers acknowledge one of its toughest problems is few seniors understand the essential difference in private plans: Even services covered by traditional Medicare that doctors deem medically necessary routinely need the insurers’ advance approval and are sometimes denied.

Participants have been denied visits to specialists, rehabilitation to help them walk again and countless other services they’d be entitled to under traditional Medicare.

“Every decision is based on not what’s right for the patient, but what’s right for the bottom line,” said Dr. Michael Sedrish, who coordinates HMO payments for Medisys Health Network, which runs three New York City hospitals.

With basic Medicare, seniors generally know what sort of coverage they’re getting. That’s not the case with the roughly 7,000 Medicare Advantage plans, where one person’s coverage could be completely different from a next door neighbor’s.

A 2008 Government Accountability Office report found wide differences in enrollee costs depending on the plan, including home health service costs that could be up to 84 percent more than traditional Medicare.

“The plans tell them they have the same coverage,” said Delores Bowman, who handles calls to the Medicare Rights Center, “and they don’t.”

http://www.washingtonpost.com/wp-dyn/content/article/2009/08/29/AR2009082900957.html

Comment:

By Don McCanne, MD

What’s beautiful about the Medicare Advantage program is that it has provided us with a real-life laboratory experiment which allows us to compare the functioning of highly-regulated private insurance plans as contrasted with the functioning of a public insurance program: traditional Medicare. The results are in, though that would be tough to ascertain if you simply observe the response of Congress.

What have we learned? The private plans take away the choice of health care providers that the traditional public program offers. The private plans insert intrusive interventions between the patient and the physician – interventions that are not found in the public plans. Private plans divert more resources to excessive, wasteful administrative services while increasing the administrative burden on the health care providers and on the public stewards who must provide oversight of our tax dollars that are diverted to this industry. Private plans also provide more entry points for the criminal element to cheat the taxpayers, patients, and providers. And for this we are paying far more of our tax dollars than we do in the traditional Medicare program for comparable levels of care. The obvious lesson is that we should dump the private plans.

What has Congress learned? They have decided that we should provide more subsidies to the private plans so that they can expand their markets!? And they have apparently decided that we will not even have a genuine public plan because it would provide unfair competition to the private plans because of Medicare’s greater efficiency and lower costs!?

It is true that a fragmented, multi-payer system is much more expensive and much less equitable, leaving too many exposed to suffering and financial hardship. But our Medicare Advantage experiment has demonstrated that it is the private plans that must be jettisoned, and it is Medicare that must be granted to everyone after modest, appropriate reengineering so that it works even better than it does now.

We need to send this urgent message to Congress and the administration, immediately:

IT’S THE INSURANCE COMPANIES, STUPID!

IT’S THE INSURANCE COMPANIES, STUPID!

Rules rein in Medicare Advantage marketing

By Tom Murphy
Associated Press

Regulators clamped down last fall on shady sales practices for privately run Medicare health insurance for the elderly.

But customers and advocate groups say the plans’ confusing nature still leaves room for pitches bordering on the deceptive, and abuses still crop up.

Medicare Advantage plans are privately run versions of the government’s Medicare program, which provides health coverage for the elderly and disabled. The government subsidizes these plans, and the industry has developed what can be a mind-numbing array of them.

Seniors report being pressured with unsolicited phone calls or home visits that are clearly prohibited. Some have signed up for plans that didn’t include their longtime doctors or hit them with unexpected costs, things they learn weeks later.

CMS learns every year about areas that need more vigilance, said Timothy Hill, deputy director for the Center for Drug and Health Plan Choice.

http://abcnews.go.com/Business/wireStory?id=8446040

And…

Some question private Medicare plans’ advantage

By Matt Sedensky
Associated Press

Seniors have flocked by the millions to Medicare Advantage, privately run plans offered as an alternative to traditional, government-run Medicare.

In the debate on overhauling the U.S. health care system, Advantage has been criticized as an example of a broken system that costs too much, confuses enrollees and suffers from a lack of oversight.

But even many backers acknowledge one of its toughest problems is few seniors understand the essential difference in private plans: Even services covered by traditional Medicare that doctors deem medically necessary routinely need the insurers’ advance approval and are sometimes denied.

Participants have been denied visits to specialists, rehabilitation to help them walk again and countless other services they’d be entitled to under traditional Medicare.

“Every decision is based on not what’s right for the patient, but what’s right for the bottom line,” said Dr. Michael Sedrish, who coordinates HMO payments for Medisys Health Network, which runs three New York City hospitals.

With basic Medicare, seniors generally know what sort of coverage they’re getting. That’s not the case with the roughly 7,000 Medicare Advantage plans, where one person’s coverage could be completely different from a next door neighbor’s.

A 2008 Government Accountability Office report found wide differences in enrollee costs depending on the plan, including home health service costs that could be up to 84 percent more than traditional Medicare.

“The plans tell them they have the same coverage,” said Delores Bowman, who handles calls to the Medicare Rights Center, “and they don’t.”

http://www.washingtonpost.com/wp-dyn/content/article/2009/08/29/AR2009082900957.html

Comment:

By Don McCanne, MD

What’s beautiful about the Medicare Advantage program is that it has provided us with a real-life laboratory experiment which allows us to compare the functioning of highly-regulated private insurance plans as contrasted with the functioning of a public insurance program: traditional Medicare. The results are in, though that would be tough to ascertain if you simply observe the response of Congress.

What have we learned? The private plans take away the choice of health care providers that the traditional public program offers. The private plans insert intrusive interventions between the patient and the physician – interventions that are not found in the public plans. Private plans divert more resources to excessive, wasteful administrative services while increasing the administrative burden on the health care providers and on the public stewards who must provide oversight of our tax dollars that are diverted to this industry. Private plans also provide more entry points for the criminal element to cheat the taxpayers, patients, and providers. And for this we are paying far more of our tax dollars than we do in the traditional Medicare program for comparable levels of care. The obvious lesson is that we should dump the private plans.

What has Congress learned? They have decided that we should provide more subsidies to the private plans so that they can expand their markets!? And they have apparently decided that we will not even have a genuine public plan because it would provide unfair competition to the private plans because of Medicare’s greater efficiency and lower costs!?

It is true that a fragmented, multi-payer system is much more expensive and much less equitable, leaving too many exposed to suffering and financial hardship. But our Medicare Advantage experiment has demonstrated that it is the private plans that must be jettisoned, and it is Medicare that must be granted to everyone after modest, appropriate reengineering so that it works even better than it does now.

We need to send this urgent message to Congress and the administration, immediately:

IT’S THE INSURANCE COMPANIES, STUPID!

Former Jasper County Republican Chairman on Single Payer

Beware health-industrial complex

By Jack Bernard
Ledger-Enquirer
August 23, 2009
I am a Republican, former chairman of the Republican Party in Jasper County, Ga., and chair of that county commission. Under our two-party system, it is easy to see why we Republicans oppose Democratic Party reform proposals. We are the opposition party and do not want them to get the political credit for solving a nasty problem.
Since the Democrats are in the driver’s seat, it is up to them to lead and bring their stragglers in line. However, the Democrats are fighting internally, failing to articulate a straightforward vision of the future or even one bill (Obamacare, if you will).
Republican pundits are sitting back and chuckling, as they always do when reform is mentioned, and repeating the same self-serving platitudes.
What amazes me is that no one is calling these individuals to account. In my view, it is unpatriotic to continue to lie to the American public about the situation facing us. Over the last 10 years, wages have gone up by about one-fourth. Health insurance premiums have gone up well over 100 percent. We cannot continue along this path to fiscal destruction. Inaction is not an option.
It is also against American values to mislead the public into believing that everyone can get good care even if they do not have insurance. The mark of a great nation is not how well it treats its privileged, but rather how well it treats its downtrodden. On this measure, we fail miserably; strange for a nation that prides itself on being the most religious democracy in the world.
Very few health or insurance professionals advocate for a single-payer system, the best way to control costs and ensure access. I hear all sorts of reasons: rationing (really, like HMOs do not do that now), paperwork (apparently insurance company bureaucracy does not count), socialism (come on — practitioners will still be independent and we all know it) and so forth. It is rare that we hear the underlying cause openly stated: greed. It will cut my income.
The members of Physicians for a National Health Plan are an exception to this rule. If you take a look at their Web site, www.pnhp.org, the rationale for a single-payer system is clearly articulated.
Universal Medicare will both control costs and achieve universal access to high quality care. Congressmen would get the same insurance as you and I. You better believe your coverage would be just as good as or better than what you are getting now.
The problem is not technical; it is political. It is high time we put the country ahead of ourselves and establish a single-payer system.
(Jack Bernard is CEO of Monticello (Ga.) Health Care Solutions and a former chairman of the Jasper County Commission and the Jasper County Republican Party.)
http://www.ledger-enquirer.com/sunday_voices/story/814348.html

If you set politics aside and look at proposed policies for reform, the logic of a single-payer, improved Medicare for all should unite those with views as diverse as a Democrat fighting for health care justice and a Republican demanding common sense business principles that would provide all of us with much greater value in health care.
The Republicans would do well to listen to former Jasper County Republican Party chairman Jack Bernard. But it’s also the Democrats who must lay down their swords and health insurer lobby money, and listen to this gentleman. The price of maintaining a partisan barrier is too high.

Former Jasper County Republican Chairman on Single Payer

Beware health-industrial complex

By Jack Bernard
Ledger-Enquirer
August 23, 2009

I am a Republican, former chairman of the Republican Party in Jasper County, Ga., and chair of that county commission. Under our two-party system, it is easy to see why we Republicans oppose Democratic Party reform proposals. We are the opposition party and do not want them to get the political credit for solving a nasty problem.

Since the Democrats are in the driver’s seat, it is up to them to lead and bring their stragglers in line. However, the Democrats are fighting internally, failing to articulate a straightforward vision of the future or even one bill (Obamacare, if you will).

Republican pundits are sitting back and chuckling, as they always do when reform is mentioned, and repeating the same self-serving platitudes.

What amazes me is that no one is calling these individuals to account. In my view, it is unpatriotic to continue to lie to the American public about the situation facing us. Over the last 10 years, wages have gone up by about one-fourth. Health insurance premiums have gone up well over 100 percent. We cannot continue along this path to fiscal destruction. Inaction is not an option.

It is also against American values to mislead the public into believing that everyone can get good care even if they do not have insurance. The mark of a great nation is not how well it treats its privileged, but rather how well it treats its downtrodden. On this measure, we fail miserably; strange for a nation that prides itself on being the most religious democracy in the world.

Very few health or insurance professionals advocate for a single-payer system, the best way to control costs and ensure access. I hear all sorts of reasons: rationing (really, like HMOs do not do that now), paperwork (apparently insurance company bureaucracy does not count), socialism (come on — practitioners will still be independent and we all know it) and so forth. It is rare that we hear the underlying cause openly stated: greed. It will cut my income.

The members of Physicians for a National Health Plan are an exception to this rule. If you take a look at their Web site, www.pnhp.org, the rationale for a single-payer system is clearly articulated.

Universal Medicare will both control costs and achieve universal access to high quality care. Congressmen would get the same insurance as you and I. You better believe your coverage would be just as good as or better than what you are getting now.

The problem is not technical; it is political. It is high time we put the country ahead of ourselves and establish a single-payer system.

(Jack Bernard is CEO of Monticello (Ga.) Health Care Solutions and a former chairman of the Jasper County Commission and the Jasper County Republican Party.)

http://www.ledger-enquirer.com/sunday_voices/story/814348.html

Comment:

By Don McCanne, MD

If you set politics aside and look at proposed policies for reform, the logic of a single-payer, improved Medicare for all should unite those with views as diverse as a Democrat fighting for health care justice and a Republican demanding common sense business principles that would provide all of us with much greater value in health care.

The Republicans would do well to listen to former Jasper County Republican Party chairman Jack Bernard. But it’s also the Democrats who must lay down their swords and health insurer lobby money, and listen to this gentleman. The price of maintaining a partisan barrier is too high.

Fiscal Responsibility and Health Care Reform

Robert A. Levine, M.D.
New England Journal of Medicine
August 26th, 2009

It has been clear for some time that the primary hurdle to enacting health care reform is figuring out how to pay for it. Virtually all Republicans and some Democrats have been unwilling to sign on to increasing taxes on high-income Americans as a partial answer. The idea of taxing the most generous health insurance benefits has met with resistance as well. The use of electronic health records and an emphasis on prevention and early treatment of illnesses have been ballyhooed as ways to generate savings to help pay for reform, but there is no solid evidence that these measures will reduce spending anytime soon, although they might improve care. Unfortunately, legislators are ignoring the option of funding reform by harvesting available savings from within the health care system itself. I believe Congress must go back to the drawing board. Given the state of the economy and the continuing rapid growth in health care expenditures, lawmakers need the political will to devise a plan that will control accelerating costs and be budget-neutral — and to disregard the expected backlash from stakeholders (organized medicine, the insurance companies, the pharmaceutical industry, and the trial lawyers) and an uninformed public.

Time and again over the past century, there have been attempts to make the health care system more effective and efficient, the only real success being the passage of Medicare and Medicaid in 1965. Since then, various stakeholders have managed to block any efforts at restructuring that have threatened their profits. When the U.S. economy faced its most severe test during the Great Depression, Social Security was enacted over vigorous opposition. The current crisis presents a similar opportunity to provide high-quality health care coverage to all Americans while bringing spending back in line. Comprehensive reform might also act as a government stimulus package, freeing up cash that consumers would otherwise be spending on medical care and thereby aiding the recovery.

Some drivers of health care costs (such as demographic changes) cannot be controlled; others (such as unhealthy lifestyles) are difficult to attack. However, great savings could be achievable in two areas: administrative costs and unnecessary care. In the current health care system, administrative costs are generally estimated to account for 15 to 25% of total expenditures1; if we settled on an estimate of 20%, that would amount to $500 billion annually. The complexity of the present system, with multiple sources of coverage, is the main cause of such high administrative costs. Every insurance plan has different benefits with different copayments and deductibles, and many require preapprovals for various tests. The multiple interactions this complexity necessitates between physicians’ offices and insurance companies — to get authorization and to haggle over payment — translate into personnel requirements (and associated costs) on both sides. Insurance companies also conduct extensive vetting of applicants for individual policies to determine whether any preexisting conditions disqualify them from coverage and what their premiums should be — an activity that, along with spending on marketing, further raises companies’ overhead.

Unnecessary care is believed to be responsible for as much as 30% of health care spending,2 or up to $830 billion this year alone. This problem results largely from the perverse incentives built into the health care system, in which there is a clear conflict of interest. Physician remuneration depends on the volume of patients seen, particularly on the number and intensity of the procedures performed. The need for these services is determined by the very physicians who then arrange for or perform the procedures. This is not the way a high-quality health care system should work. Unnecessary surgery and other invasive procedures may be ordered simply to augment physicians’ incomes, the potential for adverse outcomes notwithstanding. Even if all physicians were highly ethical and ordered only tests and treatments they deemed truly important, it would take saints not to have their judgment skewed in favor of decisions that will provide them with financial rewards. Defensive medicine also generates unnecessary care, as do duplication of tests when data are unavailable and patients’ demands for tests or treatments not in keeping with good medical practice.

The dollars lost to fraud are difficult to quantify but may be considerable; one estimate puts the cost at 3% of annual health care expenditures3 — a conservative estimate that would translate into $75 billion this year. Costs for the use of technology that has not been proved effective are also difficult to estimate but are believed to be substantial.

All told, then, administrative expenditures, unnecessary care, and fraud probably account for $1 trillion or more in health care spending that does not go toward providing appropriate care. These are the areas in which the proper reform measures could generate savings that could pay for universal coverage.

To reduce administrative costs and simplify the system, I believe that a single-payer system that provides universal coverage is mandatory. Of course, this concept is anathema to free-marketeers and does not currently have much public resonance — largely because Americans have been misled by negative advertising and denigration of the single-payer approach by politicians and others who label it “socialized medicine” and government interference in medical care. A new advertising campaign using the Internet as well as traditional media might help to educate the public about the benefits of this approach. A single-payer system could be run by a federal board that would be independent of the government, appointed by the president, and confirmed by the Senate. The board would function in a manner similar to that of the Federal Reserve, with the assistance of committees of experts and immunity to political interference. Regional health care entities operating under the board’s aegis could be used for the day-to-day management of health care delivery.

To limit unnecessary care, physicians’ incentives for increasing the volume of services must be curbed, breaking the link between income and the number of tests or procedures generated. To accomplish this task, a variety of mechanisms could be used — among them, capitation, global payments, a salary system for physicians, payment for episodes of care, and intensive monitoring of physicians’ services — each of which has its advantages and disadvantages. The simplest approach, and the one most likely to succeed, is putting physicians on salary, as more than 30% of U.S. physicians already are. To end defensive medicine, which also contributes to unnecessary care, malpractice reform must also be a part of any health care reform package. A review of all malpractice claims by peer panels should be a first step in the process to decide whether malpractice has actually occurred.

I believe that neither the government nor individual Americans would have to spend a penny more to reform health care, including provision of universal coverage,4 if administrative costs and unnecessary care could be substantially reduced. Enough money is available in the current system to completely fund reform; it simply has to be redirected. Although overcoming opposition from the insurance industry, organized medicine, and other stakeholders to produce a sensible reform plan may seem impossible, the recent financial meltdown has changed the political landscape. Initiatives that were previously unthinkable might now have a chance if properly presented, particularly given the public concern about the ballooning federal deficit. But to ensure that cost constraints become the guiding principle of health care reform, Americans must comprehend the gravity of the situation and force their legislators to act accordingly. If Congress passes reform that does not tackle the problems of excessive administrative spending and unnecessary care, major revisions will be required in the future. Unfortunately, such revisions would come only after Americans had suffered additional economic pain.

No potential conflict of interest relevant to this article was reported.

Source Information

From Norwalk Hospital, Norwalk, CT.

This article (10.1056/NEJMp0906503) was published on August 26, 2009, at NEJM.org.

References

1. Himmelstein DU, Woolhandler S, Wolfe SM. Administrative waste in the U.S. health care system in 2003: the cost to the nation, the states, and the District of Columbia, with state-specific estimates of potential savings. Int J Health Serv 2004;34:79-86. [CrossRef][Web of Science][Medline]

2. Orszag PR. Opportunities to increase efficiency in health care: statement at the Health Reform Summit of the Committee on Finance, United States Senate, June 16, 2008. Washington, DC: Congressional Budget Office, 2008.

3. Iglehart JK. Finding money for health care reform — rooting out waste, fraud, and abuse. N Engl J Med 2009;361:229-231. [Free Full Text]

4. Levine RA. Shock therapy for the American health care system — why comprehensive reform is needed. Santa Barbara, CA: Praeger, 2009.

Single Payer: A Conversation with David Himmelstein and Steffie Woolhandler

Health Care Cost Monitor
The Hastings Center
Aug. 27, 2009

One of the biggest arguments against a public choice option is that it would lead to a single payer system. Many critics frame this as a frightening prospect, a radical intrusion of government into health care. But many doctors and others regard a single payer system as the best way — perhaps the only way — to control health care costs well enough to provide coverage for all. Advantages include saving hundreds of billions of dollars and helping to reduce regional inequities in available medical services. David Himmelstein, M.D., and Steffie Woolhandler, M.D., M.P.H., cofounders of Physicians for a National Health Program, answered questions about the single payer system and why they think it is superior to a public choice option.

Why do you support a single payer health care system?

We support nonprofit, single-payer national health insurance because it would greatly improve access to medical care; ameliorate the dire financial consequences of illness; realize large savings on bureaucracy that would make a transition to universal, comprehensive coverage affordable; establish a framework for restraining the growth of medical costs in the long run; and address the regressive nature of current U.S. health care financing.

Health reform must cover the uninsured, but also address the cost crisis for insured Americans. Illness and medical bills contributed to almost two-thirds of all personal bankruptcies in 2007, a 50 percent increase since 2001.

Covering the 50 million uninsured and upgrading coverage for the tens of millions who are underinsured will cost hundreds of billions each year. A single-payer reform would make this affordable through vast savings on bureaucracy and profits.

As we’ve shown, administration consumes 31 percent of health spending in the United States, nearly double what Canada spends. If we cut our bureaucratic costs to Canadian levels, we’d save nearly $400 billion annually — more than enough to cover the uninsured and to eliminate copayments and deductibles for all Americans.

Altogether, U.S. hospitals could save about $120 billion annually on bureaucracy under a single payer system. And doctors in the U.S. could save about $95 billion each year, which they now waste fighting with insurance companies and filling out useless paperwork.

Single payer national health insurance would also facilitate (though not ensure) rational health planning, a proven cost control strategy. Today’s market-driven capital allocation mechanism has resulted in an expensive surplus of high-tech facilities in many regions, which inevitably leads to unnecessary and even dangerous tests and interventions. Meanwhile investments in underserved communities and underprovided services (e.g., public health and mental health) lag.

National health insurance would establish explicit capital allocation mechanisms, separating operating and capital funds, allowing restraints on the supply of medical resources that are keys to long-term cost containment.

In sum, a single-payer national health insurance would make universal, comprehensive coverage affordable by diverting hundreds of billions of dollars from bureaucracy to patient care, and sustainable by enabling rational health planning. Lesser reforms cannot realize such savings. While reforms that maintain a major role for private insurers may seem politically expedient, they are economically and medically nonsensical.

The term “single payer” is normally used to characterize tax-based, national health insurance systems (Canada, the United Kingdom, and Sweden). Do you think they are better than the social insurance systems (France, Holland, Switzerland)?

A single payer national health insurance has several advantages over social insurance systems — particularly those with multiple insurers. First, national health insurance is administratively far simpler and less expensive.

From the providers’ point of view, multiple payers result in sharply increased administrative costs — as we found several years ago when we studied the administrative costs of Germany’s social insurance system for the Office of Technology Assessment. Moreover, as Hans Maarse’s recent post here illustrates, the diffusion of responsibility for financing care to multiple payers makes cost control far more complex.

We are also concerned that the flat tax financing used for many social insurance programs (e.g., Medicare’s payroll tax) is less healthy than a system based on an income tax or other progressive levy, and that an employment-based system is ill suited to the current economic situation in the U.S.

Moreover, the transition from our current health financing system to a functional social insurance system would be no easier than a transition to national health insurance.

Instituting a reasonably stable social insurance system (we would not include the still unfolding experiment in the Netherlands in this category) would require a complete recasting of our insurance firms — changing their ownership, control, and regulatory frameworks. Similarly, regulation of health facilities would have to be completely revamped. It’s far simpler to establish a national health insurance payment system than to conjure up a completely revamped set of insurers and regulations for a social insurance system.

Do you consider a public choice plan designed to compete with the private insurers to be a reasonable compromise?

Unfortunately, adding a public plan option as a patch to the current private insurance system cannot correct its flaws. As long as multiple private plans coexist with the public plan, hospitals and doctors would have to maintain their costly billing and internal cost tracking apparatus. Indeed, we estimate that even if half of all privately insured Americans switched to a public plan with overhead at Medicare’s level, the administrative savings would amount to only 9 percent of the savings possible under single payer.

There’s no evidence that competition from a public plan would restrain costs, as Daniel Callahan has argued here. A public plan might cut private insurers’ profits, which is why they hate it. But their profits account for only 3 percent of the money squandered on bureaucracy.

Far more goes for marketing (to attract healthy, profitable members). And tens of billions are spent on the armies of insurance administrators who fight over payment and their counterparts at hospitals and doctors offices. All of these would be retained with a public plan option.

Unfortunately, competition in health insurance involves a race to the bottom. Insurers compete by not paying for care: by denying payment and shifting costs onto patients or other payers. These bad behaviors confer a decisive competitive advantage.

A public plan option would either emulate them — becoming a clone of private insurance — or go under. A kinder, gentler public plan option would quickly fail in the marketplace, saddled with the sickest, most expensive patients, whose high costs would drive premiums to uncompetitive levels.

Eight decades of experience teach that private insurers cannot control costs or provide families with the coverage they need. A government-run clone of private insurers cannot fix these flaws.

David Himmelstein, M.D., is an associate professor of medicine at Harvard. His research focuses on problems in access to care, administrative waste, and the advantages of a national health program. Steffie Woolhandler, M.D., M.P.H., is a professor of medicine at Harvard and codirector of the Harvard Medical School General Internal Medicine Fellowship program. She was previously a Robert Wood Johnson Foundation health policy fellow at the Institute of Medicine and the U.S. Congress.

http://www.thehastingscenter.org/HealthCareCostMonitor/Default.aspx?id=3818&blogid=87870

Liar, Liar … Well, Healthcare Pants on Fire

by Donna Smith
CommonDreams.org
Published on Thursday, August 27, 2009

So, we’ve been told over and over again that under the healthcare reform plans currently defended and pushed by the President and Congress that we can keep what we’ve got if we like it. No one will take your health insurance bennies away. Not under our employer-based, for-profit system.

Well, tell that to the latest batch of employees in Chicago to have their insurance benefits cut right out from under them — they sure didn’t get to keep what they had.

The workers at SK Tools had no choice. Their health insurance benefits were cancelled. Sick family member? Too damn bad. Need a doctor. Tough luck. The company representatives say the recession has hurt them, and they have no choice. The company is also asking for 20 percent cuts in hourly wages. Wow.

Now, the workers have voted to strike. And there will perhaps be some resolution for this bunch of employees. Folks will cry out, perhaps even President Obama will step in, and this situation will probably get resolved — though folks will suffer in the interim.

But the larger issue remains. Just how gullible are we when we trust that any private company will be forced to keep any benefit plan it chooses not to keep?

Employers will still be able to change up healthcare plans to meet the company’s needs — and if that means you have to see another doctor or pay a higher co-pay or drive to a more distant in-network provider, that will not be your decision. And health insurance companies will still be able to change their provider lists and covered services and all sorts of other things without any input from policyholders.

So, America, it just isn’t true that you can keep what you have if you like it when it comes to private, employer-based healthcare benefits. It’s a big, fat lie. And the company noted in the article above provides but one example. There will be many more.

The House bill on healthcare reform, the Senate plan for healthcare reform and the President’s plan for healthcare reform — none of these actually guarantee that you can keep what you have if you like it, because tomorrow your employer or your insurance company may change what you like to suit their bottom line. That’s the truth.

If this big lie about healthcare reform rolls off their messaging engines like melting butter on a warm slice of bread, what else do you suppose they are lying about? Come on. Get real. We won’t have what we want in terms of truly having the freedom to choose and keep or change our doctors, our providers and our own treatments until we break free from the lies and produce reform that guarantees a progressively financed, single high-quality standard of care for everybody. Everybody in, nobody out.

Then you can keep what you like. Your choices. Your decisions. Your health. Your healthcare. Your money. Period.

It’s not just the right-wing selling myths in this discussion. We need to admit that and work to be as honest as we can. Too many lives depend on this. There will be no death panels to order Grandma’s demise, but there are also no guarantees that you can keep what you have if you like it under this system. Both things are lies.

We can provide one another the healthcare security that we’re being misled to believe is in the current reform plans. But we will have to help our fellow Americans to understand that a publicly financed, privately delivered healthcare system — like Medicare — for all of us is the most reasoned, most economical and most freedom-protecting choice.

And that’s the truth.

Donna Smith is a community organizer for the California Nurses Association and National Co-Chair for the Progressive Democrats of America Healthcare Not Warfare campaign.

Employers Face 10.5 Percent Health Care Cost Increases

Employers Face 10.5 Percent Health Care Cost Increases, Says Aon Consulting

Aon
August 25, 2009
Aon Consulting surveyed more than 60 leading health care insurers, representing more than 100 million insured individuals, and found that health care costs are projected to increase by 10.4 percent for HMOs, 10.4 percent for POS plans, 10.7 percent for PPOs and 10.5 percent for CDH plans.
In addition, health care rate increases for retirees over the age of 65 are projected to be 6.6 percent for Medicare Supplement plans and 7.3 percent for Medicare Advantage plans.
http://aon.mediaroom.com/index.php?s=43&item=1676

Under the management of private insurers health care costs continue to increase at outrageous rates – this year at 10.5 percent. With the decision of Congress to leave private insurers in charge, and with no measures that would have any major impact on slowing health care spending, it can be anticipated that these outrageous increases will continue even after reform is enacted.
The Medicare Supplement (Medigap) and Medicare Advantage plans are also private insurance plans, and so you might expect their increases to be similar. In fact, though technically complex, rate setting of these plans is linked to spending in the traditional fee-for-service Medicare program. The fact that rate increases in these programs are lower is not due to any efficiencies instituted by the private plans, but is due to greater efficiency of the public Medicare program.
In fact, there is much waste in these private Medicare programs.
The Medicare Advantage plans are overpaid deliberately to give the plans an unfair competitive advantage over the traditional Medicare program, with the intent of privatizing Medicare. Most of the extra payment is wasted in administration and profits, and what little benefit there is should be given to all Medicare beneficiaries, not just those enrolled in these plans.
The Medigap plans provide the worst value in the private insurance market. The insurers pay a much lower percentage of the premiums they collect for actual health care than they do in any of their other insurance product lines. Americans would be receiving a much greater value if the benefits of the Medigap plans were rolled into the traditional Medicare program, and these wasteful private supplemental plans were totally eliminated.
This Aon report should lead to two obvious conclusions: 1) get the private health plans out of our Medicare program, and 2) replace the private employer-sponsored plans with an improved Medicare program for all of us.
If you agree, let President Obama and the members of Congress hear your message loud and clear. Immediately.

Employers Face 10.5 Percent Health Care Cost Increases

Employers Face 10.5 Percent Health Care Cost Increases, Says Aon Consulting

Aon
August 25, 2009

Aon Consulting surveyed more than 60 leading health care insurers, representing more than 100 million insured individuals, and found that health care costs are projected to increase by 10.4 percent for HMOs, 10.4 percent for POS plans, 10.7 percent for PPOs and 10.5 percent for CDH plans.

In addition, health care rate increases for retirees over the age of 65 are projected to be 6.6 percent for Medicare Supplement plans and 7.3 percent for Medicare Advantage plans.

http://aon.mediaroom.com/index.php?s=43&item=1676

Comment:

By Don McCanne, MD

Under the management of private insurers health care costs continue to increase at outrageous rates – this year at 10.5 percent. With the decision of Congress to leave private insurers in charge, and with no measures that would have any major impact on slowing health care spending, it can be anticipated that these outrageous increases will continue even after reform is enacted.

The Medicare Supplement (Medigap) and Medicare Advantage plans are also private insurance plans, and so you might expect their increases to be similar. In fact, though technically complex, rate setting of these plans is linked to spending in the traditional fee-for-service Medicare program. The fact that rate increases in these programs are lower is not due to any efficiencies instituted by the private plans, but is due to greater efficiency of the public Medicare program.

In fact, there is much waste in these private Medicare programs.

The Medicare Advantage plans are overpaid deliberately to give the plans an unfair competitive advantage over the traditional Medicare program, with the intent of privatizing Medicare. Most of the extra payment is wasted in administration and profits, and what little benefit there is should be given to all Medicare beneficiaries, not just those enrolled in these plans.

The Medigap plans provide the worst value in the private insurance market. The insurers pay a much lower percentage of the premiums they collect for actual health care than they do in any of their other insurance product lines. Americans would be receiving a much greater value if the benefits of the Medigap plans were rolled into the traditional Medicare program, and these wasteful private supplemental plans were totally eliminated.

This Aon report should lead to two obvious conclusions: 1) get the private health plans out of our Medicare program, and 2) replace the private employer-sponsored plans with an improved Medicare program for all of us.

If you agree, let President Obama and the members of Congress hear your message loud and clear. Immediately.