PNHP

More of the Same Is Not Health Care Reform, It's a Placebo

More of the Same Is Not Health Care Reform, It's a Placebo

Prepared by Leonard Rodberg, PhD, Professor of Urban Studies at Queens College/CUNY and Research Director of the NY Metro Chapter of Physicians for a National Health Program

Summary

There is little reform, and no serious cost control, in the health care reform plans that President Obama and the Congress are proposing:

Most people will continue to get their coverage through private insurance companies and will be forced to buy insurance of questionable value.

Employer-based insurance will continue unchanged, with employers free to change coverage at any time, insurers free to change their physician and hospital networks, and employees still locked into their jobs if they want to keep their coverage.

While the uninsured will be mandated by law to purchase health insurance, the Congressional bills place no limit on what the private insurance companies can charge for premiums or how great their deductibles and co-pays can be.

The structure of health care finance is in no way changed, and no serious cost control measures are built into these plans.

The “health insurance exchange” and its “public option,” the only new structural features of these plans, will affect little more than 10% of the population and will have no significant impact on the overall health care system. Those who receive insurance through their employer are not permitted to access the exchange or the public option.

The “public option” must be self-sustaining and follow the same rules as private insurers. Once set up, it will receive no government funds.
The subsidies for low- and moderate-income individuals and families are completely inadequate. Many will find insurance unaffordable, and underinsurance will continue.

Tens of millions of people will continue to be uninsured.

These plans are not reform; they are little more than a placebo, a detour from the path to true reform of our health care system.

President Obama has enunciated a set of goals for health care reform. These include (from his budget statement in February):

Aim for universality… put the United States on a clear path to cover all Americans.

Make health coverage affordable… reduce growing premiums and administrative costs.

Guarantee choice… provide a choice of physicians… keep your doctor.

Provide portability of coverage… workers not locked into their job just to secure health coverage.

We share the President’s goals. And yet the proposals coming out of Congress will not achieve them.

Unique among the nations of the world, the United States relies on private, for-private insurance companies to provide health insurance for the majority of its citizens. The plans that Congress is developing do not change this. In fact, they reinforce the very system that, in our view, is responsible for the problems we face. They simply delay movement toward the kind of system that can truly address them effectively. They are a detour on the path to true reform of our health care system.

In fact, employer-provided health insurance, on which 60% of us depend, will be little changed, even if Congress creates a “public option” or a new “health insurance exchange.” Actually, employer-based insurance will become even more prominent, as employers are required either to provide insurance to their employees or pay a fee to government that will fund subsidies that will enable them to purchase insurance through the “exchange.” (One change is proposed for employer-provided insurance: it could not include any annual or lifetime limits on coverage. While this is clearly desirable, by thus incorporating catastrophic insurance into basic plans, this will undoubtedly raise their cost).

Employer-based insurance will continue unchanged: Private health insurance companies will continue to operate exactly as they do now. Employers will be free to change coverage at any time; insurers will be free to change their physician and hospital networks; and employees will still be locked into their jobs, if they want to keep the same doctor, hospital or insurance coverage they now have.

President Obama’s mantra “if you like what you have, you can keep it” has been converted into “if you already have insurance, you have to keep it.” Everyone is required to have insurance, and employees offered insurance by their employers are required (if the price is not too high) to take it. The House and Senate bills only allow access to the “exchange” to people who don’t have insurance through their employer, and employees have to accept whatever plans their employer offers. They cannot choose the public option.

Obama has said his goal is health reform that will “ensure that you won’t lose your coverage even if you lose your job, or if you change your job,” but nothing in these bills provides this assurance. Again, employer-provided insurance is not touched by these plans.


Everyone will be required (or “mandated”) to have health insurance, either from their employer or purchased on their own. If their incomes are below 133% of the Federal poverty level, they will be eligible for Medicaid. The rest will have to purchase insurance through the new health insurance “exchange” and will there have access to the new “public option.”

Congress is specifying that only those who are uninsured or who do not receive insurance from their employers will have access to the “exchange” and the subsidies available through it. The Congressional Budget Office (CBO) estimates that between 30 and 40 million people might obtain coverage through the exchange. These Congressional plans, which are supposed design to “overhaul a broken system,” actually will affect barely 10% of the American people.

Clearly, a health insurance exchange that affects only 10% of the population cannot have a great much impact on the rising cost of health care. In particular, a “public option” that is accessible only through the exchange will have such a small member base that it could have only a marginal impact on the overall health care system. Perhaps they understand that, if a public plan, that was less expensive than private insurance and better “behaved” in reimbursing for claims, were to be opened to everyone, that could well be the end of private insurance as we know it.

The subsidies to help the uninsured purchase private health insurance are likely to be totally inadequate. A family of four earning $88,000 per year will receive no subsidy. Since the average family policy today costs more than $12,500, a family without subsidy will have to spend 14% of their income on just the premium alone. Add in the co-pays and deductibles not covered by insurance, and health care will be completely unaffordable for this family. While the uninsured will be mandated by law to purchase health insurance, the Congressional bills place no limit on what the private insurance companies can charge for premiums, or how great their deductibles and co-pays can be. And no limits are placed on drug prices, nor is there any plan to have the government negotiate drug prices with the pharmaceutical companies, as many advocates have urged for the Medicare program.

If we look at what has happened in Massachusetts, whose “universal health care” plan is the model for the Congress, we can see how inadequate will be the insurance that the uninsured will be required to buy. Individuals in Massachusetts face deductibles of at least $2,000 per year, and families’ deductibles are $4,000 per year. Even after spending thousands of dollars on private health insurance premiums, they must spend thousands of dollars more before the insurance actually provides them with any coverage at all.

Would the existence of a “public option” change this? The public plan that the Congress has designed is required to be financially self-sustaining, just like the private insurance with which it competes. Why would such a plan be attractive to consumers, other than perhaps its “public” label and its likely lower cost, estimated by the CBO to be about 10% below the cost of comparable private plans? The proposed public option will provide three kinds of plans — “basic, enhanced, and premium plans” just like private insurance. Since the public option has to operate under the same financial rules as private insurance, it is, in fact, just private insurance masquerading as a public entity.

Finally, central to Obama’s goals is holding down health care costs. However, the structure of health care finance is in no way changed by these Congressional bills, and no serious cost control measures are built into them. Administrative costs will not be reduced. In fact, the director of the CBO has said, “We do not see the sort of fundamental changes that would be necessary to reduce the trajectory of federal health spending by a significant amount.”

Most people will continue to get their insurance coverage through multiple employer-provided private insurance companies, while those who are currently uninsured will be forced to buy insurance of questionable value. The “health insurance exchange,” the only new structural feature of these plans, will affect such a small portion of the population that it could have no significant impact on the overall cost of the health care system.

The CBO also finds that, even after spending more than $1 trillion in the next ten years, nearly twenty million people will remain uninsured. We estimate that, to cover everyone and remove all financial barriers to care would require that we spend between $200 and $300 billion more each year on health care. Where would we get that amount of money? The only answer, but one which the leading committees of the Congress have steadfastly ignored, is through adoption of a single payer system, that is, an improved and expanded Medicare-for-All. This would achieve, by our best estimates, as much as $400 billion savings each year by eliminating the excessive overhead and administrative costs of the private insurance industry, along with the administrative and billing costs which that industry imposes on physicians, hospitals, and every other health care provider.

A great deal of effort has gone into developing a plan that will manifestly fail. Had Congress focused instead on developing a single payer, Medicare for All program, which address both the need for broad access to care and the need to contain costs, they would have made much more progress toward the health care system that would really serve the American people. The struggle for real health care reform will go on.

More of the Same Is Not Health Care Reform, It’s a Placebo

Prepared by Leonard Rodberg, PhD, Professor of Urban Studies at Queens College/CUNY and Research Director of the NY Metro Chapter of Physicians for a National Health Program

Summary

There is little reform, and no serious cost control, in the health care reform plans that President Obama and the Congress are proposing:

Most people will continue to get their coverage through private insurance companies and will be forced to buy insurance of questionable value.

Employer-based insurance will continue unchanged, with employers free to change coverage at any time, insurers free to change their physician and hospital networks, and employees still locked into their jobs if they want to keep their coverage.

While the uninsured will be mandated by law to purchase health insurance, the Congressional bills place no limit on what the private insurance companies can charge for premiums or how great their deductibles and co-pays can be.

The structure of health care finance is in no way changed, and no serious cost control measures are built into these plans.

The “health insurance exchange” and its “public option,” the only new structural features of these plans, will affect little more than 10% of the population and will have no significant impact on the overall health care system. Those who receive insurance through their employer are not permitted to access the exchange or the public option.

The “public option” must be self-sustaining and follow the same rules as private insurers. Once set up, it will receive no government funds.
The subsidies for low- and moderate-income individuals and families are completely inadequate. Many will find insurance unaffordable, and underinsurance will continue.

Tens of millions of people will continue to be uninsured.

These plans are not reform; they are little more than a placebo, a detour from the path to true reform of our health care system.

President Obama has enunciated a set of goals for health care reform. These include (from his budget statement in February):

Aim for universality… put the United States on a clear path to cover all Americans.

Make health coverage affordable… reduce growing premiums and administrative costs.

Guarantee choice… provide a choice of physicians… keep your doctor.

Provide portability of coverage… workers not locked into their job just to secure health coverage.

We share the President’s goals. And yet the proposals coming out of Congress will not achieve them.

Unique among the nations of the world, the United States relies on private, for-private insurance companies to provide health insurance for the majority of its citizens. The plans that Congress is developing do not change this. In fact, they reinforce the very system that, in our view, is responsible for the problems we face. They simply delay movement toward the kind of system that can truly address them effectively. They are a detour on the path to true reform of our health care system.

In fact, employer-provided health insurance, on which 60% of us depend, will be little changed, even if Congress creates a “public option” or a new “health insurance exchange.” Actually, employer-based insurance will become even more prominent, as employers are required either to provide insurance to their employees or pay a fee to government that will fund subsidies that will enable them to purchase insurance through the “exchange.” (One change is proposed for employer-provided insurance: it could not include any annual or lifetime limits on coverage. While this is clearly desirable, by thus incorporating catastrophic insurance into basic plans, this will undoubtedly raise their cost).

Employer-based insurance will continue unchanged: Private health insurance companies will continue to operate exactly as they do now. Employers will be free to change coverage at any time; insurers will be free to change their physician and hospital networks; and employees will still be locked into their jobs, if they want to keep the same doctor, hospital or insurance coverage they now have.

President Obama’s mantra “if you like what you have, you can keep it” has been converted into “if you already have insurance, you have to keep it.” Everyone is required to have insurance, and employees offered insurance by their employers are required (if the price is not too high) to take it. The House and Senate bills only allow access to the “exchange” to people who don’t have insurance through their employer, and employees have to accept whatever plans their employer offers. They cannot choose the public option.

Obama has said his goal is health reform that will “ensure that you won’t lose your coverage even if you lose your job, or if you change your job,” but nothing in these bills provides this assurance. Again, employer-provided insurance is not touched by these plans.


Everyone will be required (or “mandated”) to have health insurance, either from their employer or purchased on their own. If their incomes are below 133% of the Federal poverty level, they will be eligible for Medicaid. The rest will have to purchase insurance through the new health insurance “exchange” and will there have access to the new “public option.”

Congress is specifying that only those who are uninsured or who do not receive insurance from their employers will have access to the “exchange” and the subsidies available through it. The Congressional Budget Office (CBO) estimates that between 30 and 40 million people might obtain coverage through the exchange. These Congressional plans, which are supposed design to “overhaul a broken system,” actually will affect barely 10% of the American people.

Clearly, a health insurance exchange that affects only 10% of the population cannot have a great much impact on the rising cost of health care. In particular, a “public option” that is accessible only through the exchange will have such a small member base that it could have only a marginal impact on the overall health care system. Perhaps they understand that, if a public plan, that was less expensive than private insurance and better “behaved” in reimbursing for claims, were to be opened to everyone, that could well be the end of private insurance as we know it.

The subsidies to help the uninsured purchase private health insurance are likely to be totally inadequate. A family of four earning $88,000 per year will receive no subsidy. Since the average family policy today costs more than $12,500, a family without subsidy will have to spend 14% of their income on just the premium alone. Add in the co-pays and deductibles not covered by insurance, and health care will be completely unaffordable for this family. While the uninsured will be mandated by law to purchase health insurance, the Congressional bills place no limit on what the private insurance companies can charge for premiums, or how great their deductibles and co-pays can be. And no limits are placed on drug prices, nor is there any plan to have the government negotiate drug prices with the pharmaceutical companies, as many advocates have urged for the Medicare program.

If we look at what has happened in Massachusetts, whose “universal health care” plan is the model for the Congress, we can see how inadequate will be the insurance that the uninsured will be required to buy. Individuals in Massachusetts face deductibles of at least $2,000 per year, and families’ deductibles are $4,000 per year. Even after spending thousands of dollars on private health insurance premiums, they must spend thousands of dollars more before the insurance actually provides them with any coverage at all.

Would the existence of a “public option” change this? The public plan that the Congress has designed is required to be financially self-sustaining, just like the private insurance with which it competes. Why would such a plan be attractive to consumers, other than perhaps its “public” label and its likely lower cost, estimated by the CBO to be about 10% below the cost of comparable private plans? The proposed public option will provide three kinds of plans — “basic, enhanced, and premium plans” just like private insurance. Since the public option has to operate under the same financial rules as private insurance, it is, in fact, just private insurance masquerading as a public entity.

Finally, central to Obama’s goals is holding down health care costs. However, the structure of health care finance is in no way changed by these Congressional bills, and no serious cost control measures are built into them. Administrative costs will not be reduced. In fact, the director of the CBO has said, “We do not see the sort of fundamental changes that would be necessary to reduce the trajectory of federal health spending by a significant amount.”

Most people will continue to get their insurance coverage through multiple employer-provided private insurance companies, while those who are currently uninsured will be forced to buy insurance of questionable value. The “health insurance exchange,” the only new structural feature of these plans, will affect such a small portion of the population that it could have no significant impact on the overall cost of the health care system.

The CBO also finds that, even after spending more than $1 trillion in the next ten years, nearly twenty million people will remain uninsured. We estimate that, to cover everyone and remove all financial barriers to care would require that we spend between $200 and $300 billion more each year on health care. Where would we get that amount of money? The only answer, but one which the leading committees of the Congress have steadfastly ignored, is through adoption of a single payer system, that is, an improved and expanded Medicare-for-All. This would achieve, by our best estimates, as much as $400 billion savings each year by eliminating the excessive overhead and administrative costs of the private insurance industry, along with the administrative and billing costs which that industry imposes on physicians, hospitals, and every other health care provider.

A great deal of effort has gone into developing a plan that will manifestly fail. Had Congress focused instead on developing a single payer, Medicare for All program, which address both the need for broad access to care and the need to contain costs, they would have made much more progress toward the health care system that would really serve the American people. The struggle for real health care reform will go on.

Single-payer Advocates Make Case in Health Reform

NewsHour with Jim Lehrer
June 26, 2009

JUDY WOODRUFF: The business of passing health care legislation also remained front and center in Washington this week. Health correspondent Betty Ann Bowser has our update. The Health Unit is a partnership with the Robert Wood Johnson Foundation.

BETTY ANN BOWSER, NewsHour Correspondent: Health care reform moved on two fronts this week in Washington: on Capitol Hill and at the White House, where President Obama was once again in campaign mode, this time pushing for elements he wants in health care reform legislation.

Yesterday, Democratic Senator Max Baucus announced his Finance Committee had found a way to cut the projected 10-year cost of its health care reform draft, saying, “We have options that would enable us to write a $1 trillion bill fully paid for.” But the senator did not spell out where the money would come from.

The bill reportedly would tax workers on their insurance benefits and cut the number of low-income people who would qualify for government subsidies to buy insurance.

The other Senate committee working on a bill, the Health Committee, spent the week marking up its draft. But by week’s end, lawmakers were still behind in their original timeline for completion and still worried about how much it was going to cost.

SEN. TOM COBURN ®, Oklahoma: Why is it that we’re writing a bill that increases the cost for health care when, in fact, 50 percent — the cost of health care in this country is 50 percent higher than anywhere else in the world?

Differing views on reform

BETTY ANN BOWSER: The lawmakers also talked about ways to make Americans healthier.

SEN. TOM HARKIN (D), Iowa: We have to change not just the way we do medicine, but the medicine we do, not just the way we pay our bills, but, really, the medicine we do. And the medicine we do ought to be more preventative, and more upfront, and more wellness types of programs, and interventions.

But it has to be comprehensive. You can’t just do a little bit here and say, “Well, we’ve taken care of it in the workplace or we have clinical and we take care of it in the clinical.” It has to broad. It has to be pervasive in our society that we gear ourselves towards a wellness structure.

BETTY ANN BOWSER: On Thursday, several hundred people rallied in the shadow of the Capitol Dome, making it clear they were growing impatient for legislation.

PROTESTORS: We want, we want health care.

BETTY ANN BOWSER: Included in the group health care providers.

EDIE FALCO, Actress: Hi. I’m a nurse.

BETTY ANN BOWSER: Actress Edie Falco.

EDIE FALCO: We can no longer wait for a health care system that every individual, business, family in this country can afford.

BETTY ANN BOWSER: And union workers from across the country.

UNION WORKER: I’m here to support health care for everyone.

UNION WORKER: I’m worried about them taxing my health care.

BETTY ANN BOWSER: Most Republicans and moderate Democrats also oppose taxing employer-sponsored benefits. And the House Republican leadership has consistently hammered away at the House’s so called tri-committee bill drafted by Democrats.

Minority Leader John Boehner.

REP. JOHN BOEHNER (R-OH), House Minority Leader: When it comes to the issue of health care, the Congress shouldn’t rush through health care like we did with the stimulus plan several months ago. A Washington takeover of health care I think will limit the flexibility of our states and hurt working families around our country.

Single-payer system

BETTY ANN BOWSER: This spring, a group of people who support the concept of a single-payer plan were ejected from a hearing and arrested. But this week, they got a chance to be heard in a House committee.

Harvard Professor Dr. Steffie Woolhandler spoke on behalf of the organization Physicians for a National Health Plan.

DR. STEFFIE WOOLHANDLER, Physicians for a National Health Program: Our 16,000 physician members support nonprofit, single-payer national health insurance because of overwhelming evidence that lesser reforms, even with a robust public plan option, lesser reforms will fail. Private insurance is a defective product.

BETTY ANN BOWSER: A single-payer plan would make the federal government the sole payer for all health care services using revenue from taxes. Dr. Woolhander says that would fix the broken U.S. health care system.

DR. STEFFIE WOOLHANDLER: A single-payer lets you have administrative simplification that saves you about $400 billion a year. And then you take that $400 billion and use it to cover the uninsured and plug the gaps in coverage for people who now have private coverage so you can improve coverage for everyone without increasing total health care spending by a single penny.

Single-payer system debate

BETTY ANN BOWSER: But a hearing is all single-payer advocates got. No committee writing health care reform legislation is considering including it.

LEN NICHOLS, New America Foundation: They’re just not willing to spend time debating it since they know it cannot pass.

BETTY ANN BOWSER: Len Nichols directs health policy at the New America Foundation.

LEN NICHOLS: If you actually did single-payer, you would be outlawing private insurance, you would be outlawing any form of nonprofit health insurance, you would be ending health insurance as we know it all across the country, so, A, there would be a lot of capital that would have to be disposed of that would at some level become worthless overnight. Second, an awful lot of people would lose their jobs.

BETTY ANN BOWSER: Nichols says there might be initial cost reductions, but…

LEN NICHOLS: You would take a big chunk out of our current costs, probably 15 percent, maybe 20 percent, but that’s a one-year, one-time kind of thing.

The president’s argument

BETTY ANN BOWSER: At the White House, President Obama ramped up his public profile on health care reform, devoting almost an entire day to national television coverage on ABC, including a live town hall meeting where he once again pressed his argument for a public insurance plan.

BARACK OBAMA, President of the United States: Unfortunately, government, whether you like it or not, is going to already be involved. You know, we pay for Medicare and we pay for Medicaid. There are a whole host of rules both at the state and federal level governing how health care is administered.

And so the key is for us to try to figure out, how do we take that involvement, not to completely replace what we have, but to build on what works and stop doing what doesn’t work? And I think that we can do that through a serious health care reform initiative.

BETTY ANN BOWSER: Lawmakers will resume their work on health care reform after they return from next week’s July 4
th recess.

Would a MedPAC-like IMAC effectively control costs?

Centrists Win Backing on Medicare Cost Cuts

By Greg Hitt and Naftali Bendavid
The Wall Street Journal
July 22, 2009
Democratic centrists said they won a tentative commitment from the White House to back a proposal to curb the growth of Medicare costs, as party leaders braced for a vote next week on health-care legislation.
One proposal pushed both by President Barack Obama and some centrists is to give the executive branch the authority to implement cuts to Medicare spending that would be recommended by independent experts. Congress could stop the cuts, but only if it acted swiftly. Fiscal conservatives say that under the current system, which gives Congress more power, lawmakers shy away from politically tough votes to restrain Medicare costs.
After a more-than-two-hour meeting at the White House Tuesday, centrists said they secured a verbal commitment to add such a mechanism on Medicare cost-cutting to the House bill.
White House budget chief Peter Orszag was among those at the meeting, and said the mechanism was a big focus of discussion. He said adding it would alleviate the concerns of fiscally conservative “Blue Dog” Democrats. “I think it’s probably the most important piece that could be added to the House legislation,” he said.
http://online.wsj.com/article/SB124822098850870337.html?mod=googlenews_wsj

And…

IMAC, UBend

By Peter Orszag, Director
Office of Management and Budget (OMB)
July 17, 2009
… one of the most potent reforms is a change in the process of health care policymaking: empowering an independent, non-partisan body of doctors and other health experts to make recommendation about Medicare payment rates and other reforms.
Today, the Administration sent a letter to congressional leaders outlining our support for this approach, with a proposal for an Independent Medicare Advisory Commission (as well as Senator Rockefeller’s similar proposal to accomplish this through the existing MedPAC) to detail how one might accomplish this goal.
The Independent Medicare Advisory Council (IMAC) would be an independent, non-partisan body of doctors and other health experts, appointed by the President, confirmed by the Senate, and serving for five-year terms. The IMAC would issue recommendations as long as their implementation would not result in any increase in the aggregate level of net expenditures under the Medicare program; and either would improve the quality of medical care received by the program’s beneficiaries or improve Medicare’s efficiency.
http://www.whitehouse.gov/omb/blog/09/07/17/IMACUBend/

And…

OMB proposed legislation to create IMAC

Short Title
This Act may be cited as the “Independent Medicare Advisory Council Act of 2009.”
(The four pages of the proposed act describe the establishment of the Council, its authority to make annual Medicare payment updates, and its authority to recommend Medicare reforms.)
http://issuu.com/thenewrepublic/docs/section-by-section_analysis?mode=embed&viewMode=presentation&layout=http%3A%2F%2Fskin.issuu.com%2Fv%2Flight%2Flayout.xml&showFlipBtn=true

And…

Report to the Congress: Improving Incentives in the Medicare Program

Medicare Payment Advisory Commission (MedPAC)
June 2009
In this report, the Commission:
* describes Medicare’s role in graduate medical education and offers future directions;
* examines ways accountable care organizations could affect the growth in service volume;
* lays out principles for reporting resource use to physicians so they can actively and collaboratively participate in appropriately constraining service volume;
* provides new information on the role of self-referral in imaging use and the effect of imaging use on Medicare cost growth;
* explores ideas to ensure that pricing for follow-on biologics produces value for Medicare;
* examines restructuring Medicare’s benefit design to provide beneficiaries with better incentives and protections;
* analyzes various aspects of Medicare Advantage payment, fulfilling a requirement mandated by Section 169 of the Medicare Improvements for Patients and Providers Act of 2008; and
* discusses care management for beneficiaries with chronic conditions, as required by Section 150 of the Medicare Improvements for Patients and Providers Act of 2008.
Entire “Report to the Congress” (299 pages):
http://www.medpac.gov/documents/Jun09_EntireReport.pdf

And…

Providing Better Health Care For Less Money

By Julie Rovner
NPR
July 22, 2009
An even larger problem is that while there is relative consensus that Medicare’s current payment system encourages doctors and hospitals to provide too much of the wrong care, no one is quite sure how to revise it to encourage just the right amount of care.
“I guess the way I would put it is even if I was a benevolent dictator for a day, I wouldn’t feel comfortable at this point, given the state of knowledge, completely overhauling the Medicare payment system,” said White House Budget Director Peter Orszag, who has been studying the issue for several years.
That has led to a conundrum in lawmakers’ efforts to try to achieve long-term savings in the health care system. They know that overhauling Medicare payments is a key means to achieving that goal. They also know that if they do it wrong, they could leave the health care system — and the patients it serves — worse off than it is now.
http://www.npr.org/templates/story/story.php?storyId=106875583

There has been intense interest in providing the administration with greater control over Medicare spending in order to bend down the trajectory of projected increases in spending. Members of Congress and the administration have been considering an Independent Medical Advisory Council (IMAC) much like the Medicare Payment Advisory Commission (MedPAC), but with one very important difference.
Currently MedPAC serves only in an advisory capacity to Congress, and any recommendations must be specifically enacted by Congress. Under this proposal, IMAC would have the power to put into force these recommendations, with the approval of the President. Congress’s power would be limited to the ability to reject, by a joint resolution of Congress, the intact, full package of IMAC reforms and updates.
To get an idea of what IMAC might be able to accomplish in controlling spending through independent decisions, we might look at an example of a MedPAC function that was enacted by Congress. The Sustainable Growth Rate (SGR) was a sincere effort to slow the increases in aggregate physician payments by making adjustments based on 1) changes in physician fees, 2) changes in the number of Medicare beneficiaries, 3) change in GDP per capita, and 4) changes due to new laws or regulations. This seemed to be a very reasonable approach that was fair for physicians and fair for taxpayers.
What was not anticipated was the degree to which physicians would increase the frequency and intensity of services. Growth in imaging services was especially problematic. This resulted in a measured excess growth in aggregate physician payments, with calculations requiring a reduction in physician payments, now for several consecutive years. Each year, Congress has overridden the scheduled reductions, but the deficits have been carried forward. This is the source of the $245 billion excess deficit scored by the CBO but that the administration and Congress don’t count because they were going to give it back anyway.
This is not a criticism of the intent of the SGR adjustments. It merely demonstrates an example of how the MedPAC/Congress interaction has not been nearly as effective in slowing Medicare cost increases as had been hoped.
Imagine if MedPAC had already been converted to IMAC. Look at the report MedPAC released last month on the recommendations to improve incentives in the Medicare program. Now imagine that these recommendations were accepted by the President and placed into effect.
As only one example in this 299 page report, value-based insurance design is discussed as a method of motivating patients to consider value by varying the amount of patient cost-sharing based on the value of the service or product. Think about the difficulties they would have in attempting to accomplish that. Then imagine such a policy becoming the national standard merely on the action of one committee and the stamp of approval of the President. Scary.
An Independent Medical Advisory Council might have some legitimate role in our dysfunctional multi-payer system, but no matter how noble the recommendations, it cannot begin to correct the severe deficiencies in both our health care financing and our health care delivery system. To do that it would take the fundamental structural reform of a single payer national health program.
The Blue Dogs have demanded an IMAC or independent MedPAC, and the amendments are being prepared to include the concept in the tri-committee legislation. It will be yet another patch on a financing framework that is structurally unsound. Those still wanting to move the proverbial deck chairs around need to be reminded of the condition of the framework of the Titanic.

Would a MedPAC-like IMAC effectively control costs?

Centrists Win Backing on Medicare Cost Cuts

By Greg Hitt and Naftali Bendavid
The Wall Street Journal
July 22, 2009

Democratic centrists said they won a tentative commitment from the White House to back a proposal to curb the growth of Medicare costs, as party leaders braced for a vote next week on health-care legislation.

One proposal pushed both by President Barack Obama and some centrists is to give the executive branch the authority to implement cuts to Medicare spending that would be recommended by independent experts. Congress could stop the cuts, but only if it acted swiftly. Fiscal conservatives say that under the current system, which gives Congress more power, lawmakers shy away from politically tough votes to restrain Medicare costs.

After a more-than-two-hour meeting at the White House Tuesday, centrists said they secured a verbal commitment to add such a mechanism on Medicare cost-cutting to the House bill.

White House budget chief Peter Orszag was among those at the meeting, and said the mechanism was a big focus of discussion. He said adding it would alleviate the concerns of fiscally conservative “Blue Dog” Democrats. “I think it’s probably the most important piece that could be added to the House legislation,” he said.

http://online.wsj.com/article/SB124822098850870337.html?mod=googlenews_wsj

And…

IMAC, UBend

By Peter Orszag, Director
Office of Management and Budget (OMB)
July 17, 2009

… one of the most potent reforms is a change in the process of health care policymaking: empowering an independent, non-partisan body of doctors and other health experts to make recommendation about Medicare payment rates and other reforms.

Today, the Administration sent a letter to congressional leaders outlining our support for this approach, with a proposal for an Independent Medicare Advisory Commission (as well as Senator Rockefeller’s similar proposal to accomplish this through the existing MedPAC) to detail how one might accomplish this goal.

The Independent Medicare Advisory Council (IMAC) would be an independent, non-partisan body of doctors and other health experts, appointed by the President, confirmed by the Senate, and serving for five-year terms. The IMAC would issue recommendations as long as their implementation would not result in any increase in the aggregate level of net expenditures under the Medicare program; and either would improve the quality of medical care received by the program’s beneficiaries or improve Medicare’s efficiency.

http://www.whitehouse.gov/omb/blog/09/07/17/IMACUBend/

And…

OMB proposed legislation to create IMAC

Short Title
This Act may be cited as the “Independent Medicare Advisory Council Act of 2009.”

(The four pages of the proposed act describe the establishment of the Council, its authority to make annual Medicare payment updates, and its authority to recommend Medicare reforms.)

http://issuu.com/thenewrepublic/docs/section-by-section_analysis?mode=embed&viewMode=presentation&layout=http%3A%2F%2Fskin.issuu.com%2Fv%2Flight%2Flayout.xml&showFlipBtn=true

And…

Report to the Congress: Improving Incentives in the Medicare Program

Medicare Payment Advisory Commission (MedPAC)
June 2009

In this report, the Commission:

* describes Medicare’s role in graduate medical education and offers future directions;
* examines ways accountable care organizations could affect the growth in service volume;
* lays out principles for reporting resource use to physicians so they can actively and collaboratively participate in appropriately constraining service volume;
* provides new information on the role of self-referral in imaging use and the effect of imaging use on Medicare cost growth;
* explores ideas to ensure that pricing for follow-on biologics produces value for Medicare;
* examines restructuring Medicare’s benefit design to provide beneficiaries with better incentives and protections;
* analyzes various aspects of Medicare Advantage payment, fulfilling a requirement mandated by Section 169 of the Medicare Improvements for Patients and Providers Act of 2008; and
* discusses care management for beneficiaries with chronic conditions, as required by Section 150 of the Medicare Improvements for Patients and Providers Act of 2008.

Entire “Report to the Congress” (299 pages):
http://www.medpac.gov/documents/Jun09_EntireReport.pdf

And…

Providing Better Health Care For Less Money

By Julie Rovner
NPR
July 22, 2009

An even larger problem is that while there is relative consensus that Medicare’s current payment system encourages doctors and hospitals to provide too much of the wrong care, no one is quite sure how to revise it to encourage just the right amount of care.

“I guess the way I would put it is even if I was a benevolent dictator for a day, I wouldn’t feel comfortable at this point, given the state of knowledge, completely overhauling the Medicare payment system,” said White House Budget Director Peter Orszag, who has been studying the issue for several years.

That has led to a conundrum in lawmakers’ efforts to try to achieve long-term savings in the health care system. They know that overhauling Medicare payments is a key means to achieving that goal. They also know that if they do it wrong, they could leave the health care system — and the patients it serves — worse off than it is now.

http://www.npr.org/templates/story/story.php?storyId=106875583

Comment:

By Don McCanne, MD

There has been intense interest in providing the administration with greater control over Medicare spending in order to bend down the trajectory of projected increases in spending. Members of Congress and the administration have been considering an Independent Medical Advisory Council (IMAC) much like the Medicare Payment Advisory Commission (MedPAC), but with one very important difference.

Currently MedPAC serves only in an advisory capacity to Congress, and any recommendations must be specifically enacted by Congress. Under this proposal, IMAC would have the power to put into force these recommendations, with the approval of the President. Congress’s power would be limited to the ability to reject, by a joint resolution of Congress, the intact, full package of IMAC reforms and updates.

To get an idea of what IMAC might be able to accomplish in controlling spending through independent decisions, we might look at an example of a MedPAC function that was enacted by Congress. The Sustainable Growth Rate (SGR) was a sincere effort to slow the increases in aggregate physician payments by making adjustments based on 1) changes in physician fees, 2) changes in the number of Medicare beneficiaries, 3) change in GDP per capita, and 4) changes due to new laws or regulations. This seemed to be a very reasonable approach that was fair for physicians and fair for taxpayers.

What was not anticipated was the degree to which physicians would increase the frequency and intensity of services. Growth in imaging services was especially problematic. This resulted in a measured excess growth in aggregate physician payments, with calculations requiring a reduction in physician payments, now for several consecutive years. Each year, Congress has overridden the scheduled reductions, but the deficits have been carried forward. This is the source of the $245 billion excess deficit scored by the CBO but that the administration and Congress don’t count because they were going to give it back anyway.

This is not a criticism of the intent of the SGR adjustments. It merely demonstrates an example of how the MedPAC/Congress interaction has not been nearly as effective in slowing Medicare cost increases as had been hoped.

Imagine if MedPAC had already been converted to IMAC. Look at the report MedPAC released last month on the recommendations to improve incentives in the Medicare program. Now imagine that these recommendations were accepted by the President and placed into effect.

As only one example in this 299 page report, value-based insurance design is discussed as a method of motivating patients to consider value by varying the amount of patient cost-sharing based on the value of the service or product. Think about the difficulties they would have in attempting to accomplish that. Then imagine such a policy becoming the national standard merely on the action of one committee and the stamp of approval of the President. Scary.

An Independent Medical Advisory Council might have some legitimate role in our dysfunctional multi-payer system, but no matter how noble the recommendations, it cannot begin to correct the severe deficiencies in both our health care financing and our health care delivery system. To do that it would take the fundamental structural reform of a single payer national health program.

The Blue Dogs have demanded an IMAC or independent MedPAC, and the amendments are being prepared to include the concept in the tri-committee legislation. It will be yet another patch on a financing framework that is structurally unsound. Those still wanting to move the proverbial deck chairs around need to be reminded of the condition of the framework of the Titanic.

Medicare for all

Letter to the Editor
Salt Lake Tribune
07/17/2009

Because I am a physician and attorney with many years of experience in both fields, I can say unequivocally that the best way to solve the escalating cost in health care is also the best way to reduce medical errors and nearly eliminate medical malpractice lawsuits. It is also the simplest solution and it pays for itself without resorting to budgetary tricks.

The solution I refer to is single-payer Medicare for all, embodied in Rep. John Conyers’ bill, HR676. Simply put, single-payer Medicare for all eliminates health insurance companies as the middleman. Health care that is publicly financed and privately delivered returns health decisions to their proper place — solely between the doctor and the patient.

People who don’t have to worry about paying for their future medical care are much less likely to sue, even when injured by negligence. Doctors who don’t have to spend 30 percent of their time and income dealing with bills to 1,200 different insurance companies, and with unjustified denials or limitations of care, will have more time to treat their patients carefully and adequately.

Single-payer Medicare for all is a simple solution that already works for seniors, and it will work for all of us.

Clark Newhall
Salt Lake City

Is NPR Ignoring the Single-Payer Health Care Proposal?

By Alicia C. Shepard
NPR ombudsman
July 17, 2009

The dilemma is a classic for all news organizations covering government or elections.

The news media doesn’t cover a proposal or political candidate because the media doesn’t think either has a chance of success. But without news coverage, how will either get enough attention to make a difference?

In this case, it’s the single-payer approach to the current national debate over paying for health care.

More than 300 listeners have complained that NPR is ignoring the single-payer movement in covering Congress’s overhaul of health care. NPR says it’s just being practical.

A single-payer medical system would be similar to a broadened Medicare, with doctors, hospitals and health-care facilities run privately but the government paying the bills with taxpayer money.

Supporters consider it the best solution to a crumbling health care system. Often they cite polls indicating broad public support. For example, an April 2009 CBS/New York Times poll said 57 percent of respondents were “willing to pay higher taxes so that all Americans have health insurance.”

“The majority of Americans want single payer,” wrote Selma Goldberg of Crofton, MD. “It is the health care of choice for almost all other industrialized nations. There is no question it is superior in every way to alternatives. Why are you opting to exclude coverage of this system? I am unhappy with the way you cover the news, bowing as you do to commercial interests.”

But here’s the reality. NPR says it is not avoiding coverage because it is beholden to the health insurers or big Pharma — as claimed by an “NPR Watch” piece for Counterpunch, a political newsletter.

“Revenue in the pharmaceutical category represents only 3 percent of total underwriting revenue,” said John King, operations manager for NPR Sponsorship.

The decision not to devote a lot of attention to single-payer, I’m told, is based on pragmatism.

“This issue is not getting a lot of attention from NPR because it’s simply not on the table in Congress,” said Julie Rovner, NPR’s lead reporter covering the health care overhaul. “I think the reason that single-payer is not on the table is because it’s too big a change.”

There are two major bills in the House and Senate to provide health care to all Americans. H.R. 676, introduced by Rep. John Conyers (D-MI) has 85 co-sponsors and endorsements from 550 labor organizations, according to the Thomas database for the Library of Congress. Senate bill S. 703 introduced by Sen. Bernie Sanders (I-VT) has no co-sponsors. The California state legislature twice passed a single-payer bill. Gov. Arnold Schwarzenegger vetoed both.

NPR’s most recent story solely on single-payer was Dec. 24, 2008 on All Things Considered. It explored the political prospects (not good) for a single-payer system. Last summer, NPR did a series that explored national health plans (each with similarities to a single-payer system) in France, Germany, Great Britain, The Netherlands and Switzerland.

Since late February, the single-payer approach has been mentioned or discussed in broader health care stories at least 25 times. All NPR healthcare stories are aggregated here. On July 8, Talk of the Nation, looked at the politics behind health care for 20 minutes and single-payer was discussed.

“NPR’s coverage is not much different than other media in that it tends to dismiss the single-payer alternative as a marginal phenomenon and discount it as a legitimate solution to the health care crisis,” said Mark Almberg, communications director for Physicians for a National Health Program, a 16,000-member group supporting the concept. “Such discounting excludes us from the political process.”

Rovner said that 160 million Americans now get employer-provided health insurance. “There are enough people who are satisfied with what they have now and it would be too big a shock to do such a massive change,” she said. “All the experts I talk to say this doesn’t have a chance because it would mean getting rid of employer-provided insurance.”
She pointed out that “most polls that offer a wide range of choices show that a good 30 percent of the public is for single-payer.”

“The problem is it’s not a majority,” Rovner said. “I feel like I’m one of the few reporters that has recognized from the beginning that the single-payer supporters are an important element in this debate.” Rovner is one of the most experienced and widely respected reporters covering health care policy in the U.S.

One reality for NPR is that there are dozens of aspects of the health care debate to cover.

“We are giving single-payer as much attention as it needs given the discussion in the nation’s capital about overhauling health care,” said Anne Gudenkauf, who heads the science desk. “We need to give them [the listeners] information about what’s on the table. Not what’s not.”

Rovner did several news spots in May for newscasts when single-payer advocates, upset they weren’t invited to testify, disrupted several health care hearings. Thirteen were arrested at one.

“We haven’t done a stand-alone single payer story since last year, but as you’ll note in the sheaf of stories I handed you,” said Rovner, “I have gone out of my way to include the single-payer viewpoint in nearly a dozen stories I’ve done this year. I think that’s far more than most of the mainstream media can claim.”

Rovner’s correct about including single-payer views. But I think NPR could have done a few stories directly on the single-payer concept — especially because by Rovner’s own statement, polls show 30 percent of the public supports it.

Shortly before posting this, Rovner stopped by to say that she intends to do a piece next week on single-payer and another long-shot health care proposal that are both noteworthy but won’t pass because they would eliminate employer-provided health insurance. She said it’s been on her list of stories to do for weeks.

PNHP editor’s note: According to a recent poll, 59 percent or more of Americans support national health insurance, not “30 percent” as claimed by NPR’s Julie Rovner. (CBS News/New York Times, Jan 15, 2009).

Why Obama's Public Option Is Defective, and Why We Need Single-Payer.

By Drs. Steffie Woolhandler and David Himmelstein
The Progressive
July 22, 2009

Once Congress finishes mandating that we all buy private health insurance, it can move on to requiring Americans to purchase other defective products.

A Ford Pinto in every garage?

Lead-painted toys for every child?

Melamine-laced chow for every puppy?

Private health insurance doesn’t work.

Even middle-class families with supposedly good coverage are just one serious illness away from financial ruin.

Illness and medical bills contribute to 62 percent of personal bankruptcies — a 50 percent increase since 2001. And three-quarters of the medically bankrupt had insurance, at least when they first got sick.

Coverage that families bought in good faith failed to protect them. Some were bankrupted by co-payments, deductibles, and loopholes. Others got too sick to work, leaving them unemployed and uninsured.

Now Congress plans to make it a federal offence not to purchase such faulty insurance.

On top of that, it’s threatening to tax workers’ health benefits to meet the costs of simultaneously covering the poor and keeping private insurers in business.

President Obama’s plan would finance reform by draining funds from hospitals that serve the neediest patients. His other funding plans aren’t harmful, just illusory. He’s gotten unenforceable pledges from hospitals, insurers and the American Medical Association to rein in costs, a replay of promises they made (and broke) to Presidents Nixon and Carter. And Obama trumpets savings from computerized medical records and better care management, savings the Congressional Budget Office has dismissed as wishful thinking.

The president’s health plan can’t make universal, comprehensive coverage affordable.

Only single-payer health reform — Medicare for All — can achieve that goal.

Single-payer national health care could realize about $400 billion in savings annually — enough to cover the uninsured and to upgrade coverage for all Americans. But the vast majority of these savings aren’t available unless we go all the way to single payer.

A public plan option might cut into private insurers’ profits. That’s why they hate it. But their profits — roughly $10 billion annually — are dwarfed by the money they waste in search of profit. They spend vast sums for marketing (to attract the healthy); demarketing (to avoid the sick); billing their ever-shifting roster of enrollees; fighting with providers over bills; and lobbying politicians. And doctors and hospitals spend billions more meeting insurers’ demands for documentation.

A single-payer plan would eliminate most insurance overhead, as well as these other paperwork expenses. Hospitals could be paid like a fire department, receiving a single monthly check for their entire budget. Physicians’ billing could be similarly simplified.

With a public insurance option, by contrast, hospitals and doctors would still need elaborate billing and cost-tracking systems. And overhead for even the most efficient competitive public option would be far higher than for traditional Medicare, which is efficient precisely because it doesn’t compete. It automatically enrolls seniors at 65 and deducts their premiums through the social security system, contracts with any willing provider, and does no marketing.

Health insurers compete by NOT paying for care: by seeking out the healthy and avoiding the sick; by denying payment and shifting costs onto patients; and by lobbying for unfair public subsidies (as under the Medicare HMO program). A kinder, gentler public plan that failed to emulate these behaviors would soon be saddled with the sickest, costliest patients and the highest payouts, driving premiums to uncompetitive levels. To compete successfully, a public plan would have to copy private plans.

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

Drs. Steffie Woolhandler and David Himmelstein are associate professors at Harvard Medical School. They co-founded Physicians for a National Health Program, a nonprofit research and education organization of 16,000 physicians, medical students, and health professionals who support single-payer national health insurance. For more about the group, go to www.pnhp.org. This piece was distributed by the Progressive Media Project, an affiliate of The Progressive magazine.

We can afford a single-payer health plan

Letter to the Editor
San Francisco Chronicle
Wednesday, July 22, 2009

If congressional leaders are disturbed by the Congressional Budget Office report that their proposed health reform legislation will deepen “the already staggering national debt” (“Fiscal conservatives grumble over tab for reform,” July 20), they need to ask the question: How would the cost of a single-payer program compare?

Many health policy authorities believe that the “Medicare for all” bills introduced by Rep. John Conyers, D-Mich., and Sen. Bernie Sanders, independent-Vt., are the most fiscally prudent and affordable approach to universal, comprehensive, high-quality health care.

It’s time for the president and congressional leaders to stop ignoring reality: The United States can afford national health insurance if the government administers a single-payer program. But what we cannot afford is to continue squandering $400 billion annually on the current dysfunctional patchwork of for-profit private insurance plans.

By adopting a single-payer system, that amount could be plowed back into providing expanded services for the entire population at no additional cost to the country.

LI-HSIA WANG, M.D.
HENRY L. ABRONS, M.D.
Berkeley