PNHP note: Medicare’s administrative costs are 3 percent

By Robert Dodge, M.D.
Ventura County Star (Calif.)
Sunday, July 26, 2009

July 30 marks the 44th anniversary of Medicare providing healthcare to all over the age of 65. That system has provided a safety net to all of our seniors, irrespective of their ability to pay. As a single-payer system with the lowest administrative costs, it has proved the most cost-efficient for our nation.

It is the most fair and moral way to deliver healthcare.

When you get sick, you get care and the bill is paid. Nothing could be simpler.

Prior to Medicare, the whims of health, illness, luck and infirmity were the gamble facing the oldest segment of our population. Today, that same dilemma faces more than 45 million Americans — yes, 1 in 6 without health insurance.

According to a 2004 report by the Institute of Medicine of the National Academy of Sciences, this has resulted in the deaths of 50 Americans each and every day because they lacked health insurance! That is more than 18,000 American lives lost every year, not from war or the H1N1 flu pandemic, but lack of health insurance. Additionally, an estimated 50 million Americans have inadequate insurance, putting them in the precarious position of being one illness away from health or financial disaster.

As practicing physicians, every day, we face decisions of how to provide the best healthcare to our patients. Let there be no misconception. Our current system rations care based on financial means and ability to pay. Even those with coverage face the idiosyncrasies and gaps of health-insurance companies.

This is perhaps best said in recent testimony before the U.S. Senate Committee on Commerce, Science and Transportation by Wendell Potter, former head of corporate communications at Cigna: “I know from personal experience that members of Congress and the public have good reason to question the honesty and trustworthiness of the insurance industry. Insurers make promises they have no intention of keeping, they flout regulations designed to protect consumers and they make it nearly impossible to understand — or even to obtain — information we need.”

These realities do affect outcomes and severity of illness, resulting in higher costs. In the words of former Surgeon General Dr. Joycelyn Elders, the U.S. has the best “sick care” in the world. This has also resulted in the most expensive care in the world. The excess costs are paid by all of us — each individual and business each and every day. We pay in cost-shifting, bankruptcy costs and, lastly, when businesses add their employee health costs to their product price and we reimburse them at the cash register.

Two-thirds of U.S. bankruptcies in 2007 were due in part to medical bills or illness, amounting to 1 million bankruptcies annually. Three-quarters of these individuals had insurance at the onset of their illness.

Healthcare is the fastest-growing part of our economy, currently consuming 18 percent of gross domestic product and growing. This is not sustainable.

How should we respond to this unacceptable and unethical dilemma? There is a solution to provide cost-effective, comprehensive healthcare to all. A reformed “Medicare for All,” as embodied in Rep. John Conyers’ bill (HR 676 in the House) with its 83 co-sponsors, provides the answer. This proposal involves removing the insurance company middlemen from the healthcare equation, substituting a “Medicare for All” single-payer program. This provides public financing with a private delivery system. Polls show that 62 percent of the public and 59 percent of physicians support this option.

How will it be paid for?

It is estimated that private insurance companies spend 31 percent of premium dollars on administration compared with 9 percent for Medicare. This amounts to approximately $400 billion annually in excess of the administration costs of the Medicare program. Under a single-payer “Medicare for All” program, these dollars would be put to healthcare delivery.

The estimated costs of the current healthcare-insurance proposals being considered by Congress (and used to engender fear by the opposition and vested interests) amount to $100 billion to $150 billion annually — far less than the expected savings amounting from a single-payer system. Thus, coverage for all under this plan would provide better care with far greater savings.

In addition, choice of physician and hospital would be maintained. Also, the focus would be changed to wellness and preventative health.

Americans have spoken and have the right to universal healthcare. Our elected officials who are often “bought” by corporate American dollars work for the people.

The problem is both Democrats and Republicans have shared in the $46 million in campaign contributions from the insurance industry and current estimates of $1.5 million spent daily by the industry to defeat these proposals. Our leaders have the obligation to respond to our demands to provide a solution to this crisis in healthcare. Divergent views will be held, but, make no mistake of what is at stake. The status quo is not acceptable. Proposals that do not cover all Americans with uniform, nonfragmented healthcare are not solutions, but only added problems to be dealt with at a later date.

Now, at long last, is the time to realize the goal first stated by President Harry Truman in 1945 of healthcare for all.

— Robert Dodge, M.D., of Ventura is a family physician; Evan Slater, M.D., of Ventura is an oncologist; Thomas F. Golden, M.D., of Ventura is an orthopedic surgeon; Fran S. Larsen, M.D., of Santa Paula is a family physician; Charles L. Murphy, M.D., of Ventura is a family physician; and Geoffrey L. Loman, M.D., of Ventura is a family physician.

http://www.venturacountystar.com/news/2009/jul/26/universal-healthcare-for-all-mandate-whose-time/

by Bob Balhiser
Queen City News
Wednesday, July 15, 2009

To the Editor:

With Barack Obama as our new president, Americans will never have a better opportunity to take our political system back from the lobbyists who are in control now. An ideal place to start would be with health-care reform. To illustrate just how ripe the opportunity is, ask yourself why the health-insurance lobby is spending $1.4 million every day running scare ads designed to prevent meaningful health-care reform.

Even Max Baucus recognizes that our health-care system is the most expensive in the industrialized world. For this, we can thank health-insurance companies that siphon off nearly 30 cents of every health-care dollar for administrative costs and outrageous executive salaries, not to mention the huge collateral costs they impose on doctors, hospitals, and pharmacies, which must pass them on to patients. Isn’t it time we said enough?

The trillion-dollar question before us now is whether we will let lobbyists continue to run health care, or will we regain control? We CAN change the way we pay for health care, and we don’t need to invent a whole new system to accomplish this. I have Medicare and, except for the “parts” managed by private insurers, it works quite well. Let’s upgrade Medicare, make it a “pure” government entity, and make it available to all American citizens. In doing so, we should incorporate some best practices from other successful systems to create an affordable, “world-class” universal health-care system that is the envy of the world.

By George E Curry
NNPA Columnist
6/17/2009

The debate over universal health care heats up this week amid false charges that President Obama wants to institute “socialized medicine” and health reform hurts those already covered by private insurers. One of the most important facts to keep in mind is that although the United States spends twice as much as other industrialized nations on healthcare ($7,129 per capita, it is at or near the bottom when it comes to such indicators as infant mortality and life expectancy.

If providing free, universal health care to all citizens is such a bad idea, why has it been adopted in England, Canada, Brazil, Israel, Germany, Australia and Scotland? In fact, the United States is the only industrialized nation in the world that does not provide universal health care for its citizens. Consequently, at least 43 million Americans are without health insurance and that figure is certain to grow with rising unemployment.

“The reason we spend more and get less than the rest of the world is because we have a patchwork system of for-profit payers,” Physicians for a National Health Program noted on its Web site. “Private insurers necessarily waste health dollars on things that have nothing to do with care: overhead, underwriting, billing, sale and marketing departments as well as huge profits and exorbitant executive pay. Doctors and hospitals must maintain costly administrative staffs to deal with the bureaucracy.

“Combined, this needless administration consumes one-third (31 percent) of Americans’ health dollars.”

By switching to a singlepayer system that covers all medical necessities, it is estimated that savings will amount to more than $350 billion per year.

Obama has made health reform one of his top priorities. Not unexpectedly, some leading Republicans are accusing him of favoring socialized medicine and urging the government to not meddle in affairs that should be handled by the private sector.

A group calling itself Conservatives for Patients’ Rights has already begun running spots on CNN designed to scare the public, saying Obama’s “government-run” plan would cut consumers’ choices.

Factcheck.org notes, “That’s not the type of public plan President Obama has proposed. Nor is such a plan gaining acceptance on Capitol Hill.”

A House summary of the United States National Health Care Act (H.R. 676) introduced by Rep. John Conyers and making its way through Congress states, “The bill would create a publicly financed, privately delivered healthcare system that uses the already existing Medicare program by expanding and improving it to all U.S. residents and all residents living in U.S. territories. The goal of this legislation is to ensure that all Americans will have access, guaranteed by law, to the highest quality and most cost effective healthcare services regardless of their employment, income, or healthcare status. With over 45-75 million uninsured Americans, and another SO million under-insured, the time has come to change our inefficient and costly fragmented non-healthcare system.”

The summary continues, “The program will cover all medically necessary services, including primary care, inpatient care, outpatient care, emergency care, prescription drugs, durable medical equipment, long term care, mental health services, dentistry, eye care, chiropractic, and substance abuse treatment. Patients have their choice of physicians, providers, hospitals, clinics, and practices. No co-pays or deductibles are permissible under this act.”

A recent poll by the New York Times and CBS News found that 57 percent of Americans would be willing to pay higher taxes if it meant universal coverage for all Americans. Thirty-eight percent opposed the idea. Not only is universal health care sound public policy, it can provide an economic advantage as well.

Writing in Canada’s Financial Post, Diane Francis said:

“Universal health care is a cornerstone of smart economic policy. Take, for example, the effect of guaranteed health care on economic activity, business expansion or the public’s sense of wellbeing. If a worker in Canada or Europe or Japan loses his or her job this recession, it’s a psychological and financial blow. But if an American loses his or her job, the family faces financial ruin if sickness strikes any member because they are without healthcare coverage.”

She continued, “Bridge coverage is available but unaffordable for anyone but the wealthy. Worse yet, if a major illness is diagnosed during unemployment, a worker becomes unemployable, bringing about a life sentence of poverty.

“Little wonder, then, that consumer spending has ground to a halt in the United States, which makes the economic meltdown that much harder to combat or ever solve.”

It’s time for the United States to catch up with the rest of the industrialized world by providing universal health care.
[Author Affiliation]

George E. Curry, former editor-in-chief of “Emerge” magazine and the NNPA News Service, is a keynote speaker, moderator, and media coach. He can be reached through his Web site, www.georgecurry.com.

By Rep. Anthony Weiner
Politico
July 22, 2009

It seems that big legislation isn’t complete until it develops a collection of catchphrases. (“Shovel ready,” everyone? “Cash for clunkers,” perhaps?) The effort to tackle the long list of failings of our health care system and the way we pay for it has been no exception. This time, we are arguing over the so-called public option.

The phrase has become something of a Rorschach test for lobbyists, commentators and legislators. To the president and to bill writers in Congress, the public option has come to mean that a government-run plan is the only way to truly keep private insurance companies honest, by guaranteeing that at least one provider is focused on something more than the bottom line.

To insurance company lobbyists and — from the sound of it — nearly every Republican, the public option is more a confirmation of their fear that the Obama administration is out to nationalize another industry. They argue that the public option would soon become the only option because it would have too many advantages in the marketplace.

Without acknowledging it, both sides seem to agree with the argument for a single-payer system. But instead of having a debate about its value, both sides have turned the idea into an odd punching bag. The right uses the term “single-payer” to condemn the White House approach, while the White House — and my colleagues in the House and Senate — quickly decry the scurrilous charge and concoct legislative language to make their public option look less, well, public.

By conceding that the public option would have less overhead, be more efficient and have the freedom to focus on health care rather than profits, opponents of the public option are in fact arguing for it. Isn’t complaining about the marketplace “advantage” of the public plan just another way of saying that people are going to want it?

The public option would prompt Americans to ask a basic question of the insurance company that is chasing their business: “What is it that you guys do, exactly?” Insurance companies don’t really do anything to make people healthier. They need to be efficient gatekeepers on behalf of their shareholders. Profits at 10 of the country’s largest health insurance companies rose 428 percent from 2000 to 2007. So if you think that the private “option” won’t be selected by citizens, it stands to reason that they want a public one.

Democrats who have been tasked with drafting the health care bill have been going to great lengths to assure everyone that it will not be a single-payer system. This is more a testament to a branding problem than a policy one. (Remember: It wasn’t a “bailout”; it was a “recovery.”)

But the arguments for a public option do leave you wondering why you would need or want a private insurance plan. We know that insurance companies rely on a formula to provide as little health care as possible for each dollar they take in. This isn’t because they are uncaring. It is because they are good business people.

With taxpayers, consumers and workers paying an enormous amount more than necessary because of this model, it seems odd that we would be so concerned about protecting it.

What would a public-only or a single-payer system look like? It would look like Medicare for everyone. We are all aware of the problems facing Medicare: looming deficits; incentivizing expensive institutional care rather than alternatives; squeezing doctors; etc.

But these are not a reflection of a failure of the single-payer system. They are failures to make smart decisions about what we pay for and how. There is no doubt that we must fix our present single-payer system, but none of its problems change the fact that Medicare is a popular, well-understood, amazingly efficient form of — wait for it — socialized medicine.

The dean of the House of Representatives, John Dingell, had it right when he introduced the notion of Medicare for all in 2006. We can correct the many gaps in today’s Medicare, not by buying stock in an insurance company or by staying on hold for a “benefits specialist” or by complaining to a state insurance commissioner. We do it by passing a law or a regulation that reflects the best interests of the nation.

Implicit in the Democratic plan — and the Republican opposition to it — is a tacit recognition that single-payer health plans like Medicare are the best way to go. I want to engage in this debate and will offer a single-payer plan to a vote as my colleagues and I mark up the health care bill. Maybe this issue is important enough that we can do the right thing even without a great catchphrase.

Rep. Anthony Weiner (D-N.Y.) is a member of the Energy and Commerce Committee’s Subcommittee on Health.