PNHP

Will a Public Plan Bring Better Care?

Will a Public Plan Bring Better Care?

Letters
New York Times
Published: June 24, 2009

To the Editor:

Re “A Public Health Plan” (editorial, June 21):

A public plan option that competes with private insurers won’t fix health care. Competition in health insurance involves a race to the bottom, not the top. Insurers compete by not paying for care: by seeking out the healthy and avoiding the sick; by denying payment and shifting costs onto patients. These bad behaviors confer a decisive competitive advantage; a public plan would either emulate them — becoming a clone of private insurance — or go under.

Moreover, the savings on overhead from a public plan option are far smaller than you suggest. While it might cut insurers’ profits (which is why they hate it), that’s only 3 percent of the roughly $400 billion squandered on health bureaucracy annually.

Far more goes for armies of insurance administrators who fight over payment, and to their counterparts at hospitals and doctors’ offices — all of whom would be retained with a public plan option. In contrast, a single-payer reform would radically simplify the payment system and redirect the vast savings to care.

Steffie Woolhandler
Cambridge, Mass., June 21, 2009

The writer, an associate professor of medicine at Harvard, is a primary care doctor.

To the Editor:

Your editorial suggests that primary care physicians are paid more by commercial health plans than by Medicare. In my practice as a family physician in the Bronx for almost 30 years, it just isn’t so.

Over the last few years the commercial plans have taken advantage of their one-sided contracts to pay about 70 percent of Medicare rates, or about $48 for a visit. CMS Medicare pays $71; the commercial Medicare Advantage plans pay me about $42, and require many administrative tasks.

Health Affairs reported last month that primary care doctors average $72,675 in annual costs for fulfilling commercial insurance’s authorizations, certifications and billing work ($14 a visit).

Medicare has proven far more efficient over 40 years for patients and primary care. That is why the New York State Academy of Family Practice has supported a single-payer plan.

Bob Morrow
Bronx, June 21, 2009

The writer is on the board of trustees of the New York State Academy of Family Practice.

Paul Starr and Steffie Woolhandler on the public option

Perils of the Public Plan

A badly designed public plan could turn out to be the opposite of what progressives intend.

By Paul Starr
The American Prospect
June 24, 2009 (web)

In the current battle over health reform, progressives may have set themselves up for trouble by pinning all their hopes on the creation of a government-run insurance plan.

All the proposals receiving serious consideration in Congress allow employers to continue to insure their workers and dependents directly. They also call for new “insurance exchanges” as an alternative means for individuals and employee groups to purchase coverage. If there is a new government-run plan, it would be one of the options in those exchanges.

The great danger is that the public plan could end up with a high-cost population in a system that fails to compensate adequately for those risks. Private insurers make money today in large part by avoiding people with high medical costs, and in a reformed system they’d love a public plan where they could dump the sick.

Entry into the public plan for the eligible employed would be a two-stage process. First, employers would choose between paying into the exchange and buying insurance directly to cover their workers. Unless the exchange is such a good deal that nearly all employers take it, firms with a young, healthy work force would tend to buy insurance on their own, while those with higher-cost employees would go into the exchange’s pool. As a result, the pool would suffer “adverse selection” — it would get stuck with a higher-risk population.

Second, within the exchange, the government-run plan would compete against private insurers, yet it would likely abstain from the marketing strategies used by private plans to avoid high-risk enrollees. This double jeopardy of adverse selection could then more than nullify the advantage the public plan derives from its lower overhead (as a result of less money going for salaries, profits, and marketing).

Here’s the delicate political problem: Unconstrained, the public plan could drive private insurers out of business… Over-constrained, the public plan could go into a death spiral itself as it becomes a dumping ground for high-risk enrollees, its rates rise, and it loses its appeal to the public at large. Creating a fair system of public-private competition — giving the public plan just enough power to offset its likely higher risks — wouldn’t be easy even if it were up to neutral experts, which it isn’t.

There are a lot of ways to defeat reform, not just by blocking it entirely, but by setting it up for failure. Those who think a public plan is a good idea no matter how badly designed are not thinking ahead.

(Paul Starr received the Pultizer Prize for “The Social Transformation of American Medicine.”)

http://www.prospect.org/cs/articles?article=perils_of_the_public_plan

And…

Will a Public Plan Bring Better Care?

The New York Times
June 24, 2009

To the Editor:

Re “A Public Health Plan” (editorial, June 21):

A public plan option that competes with private insurers won’t fix health care. Competition in health insurance involves a race to the bottom, not the top. Insurers compete by not paying for care: by seeking out the healthy and avoiding the sick; by denying payment and shifting costs onto patients. These bad behaviors confer a decisive competitive advantage; a public plan would either emulate them — becoming a clone of private insurance — or go under.

Moreover, the savings on overhead from a public plan option are far smaller than you suggest. While it might cut insurers’ profits (which is why they hate it), that’s only 3 percent of the roughly $400 billion squandered on health bureaucracy annually.

Far more goes for armies of insurance administrators who fight over payment, and to their counterparts at hospitals and doctors’ offices — all of whom would be retained with a public plan option. In contrast, a single-payer reform would radically simplify the payment system and redirect the vast savings to care.

Steffie Woolhandler
Cambridge, Mass., June 21, 2009

The writer, an associate professor of medicine at Harvard, is a primary care doctor.

Comment:

By Don McCanne, MD

The heated debate over the proposal to offer a public plan option is certainly warranted, but the much of the debate misses the point. While most people are arguing over the design of the public option, they are neglecting the fundamental flaws of our multi-payer system.

Adding a public option to this system, no matter the design of the option, can only result in a perpetuation of the waste, inequities and unaffordable costs that should be the primary drivers of reform.

Some say that private plan regulation will resolve these problems, but you need only look at the perversities of the regulated Medicare Advantage plans to understand that this is a fiction.

Decisions have already been made to include hardship waivers that would leave tens of millions without insurance, and to require only the lowest tier of coverage – the very definition of underinsurance.

The intensive labor and political capital that is being frittered away on the public option is a tragic diversion of human resources that should be directed toward resolving the fundamental flaws in our financing system. Once we get the financing right, we can use that power to ensure that all of us receive higher quality health care.

Obama's Doctor Knocks ObamaCare

By David Whelan
Forbes
06.18.09

David Scheiner, an internist based in the Chicago neighborhood of Hyde Park, has a diverse practice of lower-income adults from the nearby housing projects mixed with famous patients like U.S. Sen. Carol Mosely Braun, the late writer Studs Terkel and, most notably, President Barack Obama.

Scheiner, 71, was Obama’s doctor from 1987 until he entered the White House; he vouched for the then-candidate’s “excellent health” in a letter last year. He’s still an enthusiastic Obama supporter, but he worries about whether the health care legislation currently making its way through Congress will actually do any good, particularly for doctors like himself who practice general medicine. “I’m not sure he really understands what we face in primary care,” Scheiner says.

Scheiner takes a few other shots too. Looking at Obama’s team of health advisors, Scheiner doesn’t see anyone who’s actually in the trenches. “I have a suspicion they pick people from the top echelon of medicine, people who write about it but haven’t been struggling in it,” he says.

Scheiner is critical of Obama’s pick for Health and Human Services secretary–Kansas Gov. Kathleen Sebelius, who used to work as the chief lobbyist for her state’s trial lawyers association.

“He doesn’t see all the pain, it’s so tragic out here,” he says. “Obama’s wonderful, but on this one I’m not sure if he’s getting the right input.”

What should the president be focused on? Scheiner thinks that a good health reform would be “Medicare for all,” a single-payer system where the government would cover everyone and pay for it by cutting out waste in the system. “A neurosurgeon gets paid $20,000 for cutting into the neck of my patient. Have him get paid $1 million a year instead of $2 million or $3 million. He won’t starve,” Scheiner says.

Scheiner thinks that Obama’s “public plan” reform doesn’t go far enough. He supports the idea of that option for people who don’t like or can’t afford their HMO. But he worries that it will be watered down or not happen at all. “It’s nonsense that the private insurance companies need to be protected,” he says. “Why? Because they’ve done such a good job?”

He thinks that Americans have been scared into believing that they will lose the coverage they already have if a public plan is created. And he worries that nobody cares about the 50 million uninsured. “I have people who have lost their jobs and come to me and I give them drug samples,” he says.

Scheiner says he thinks that Obama probably sees the virtues of a single-payer system but has decided it would be politically impossible to create one.

Reid Cherlin, an assistant White House press secretary who covers health issues, wrote in an e-mailed statement, “The President has been clear that while a single-payer system may work in some countries, it makes the most sense for us to build on what works in the system we have and to fix what’s broken.

“He would certainly agree that there’s too much waste in the system–where families, businesses and governments pay too much for too little,” he added, “and that’s why he’s committed not just to expanding coverage but to reforming the health system to provide high-quality care at a lower cost to more Americans.”

Scheiner says he never thought it was appropriate to talk about health policy with Obama, especially once he became a U.S. Senator. The one exception was medical malpractice reform. “I once briefly talked to him about malpractice, and he took the lawyers’ position,” he says.

Obama reiterated his opposition to caps on medical malpractice-related damages when he addressed an audience of doctors earlier this week at the American Medical Association’s annual meeting. (See “Will Doctors Buy Obamacare?”)

Scheiner, like most others in his profession, thinks that it should be harder to sue doctors and that awards should be capped. He says that he and other doctors must order too many tests and imaging studies just to avoid being sued.

Scheiner graduated from Princeton and then started at Columbia University’s College of Physicians and Surgeons 50 years ago. After training in internal medicine in Chicago he joined a practice in Hyde Park. His partner was Quentin Young, a doctor known for supporting universal coverage and for briefly being the personal physician of Martin Luther King Jr.

Before selling his practice, he watched his income decline over the years to what he calculated to be $22 an hour ($2,100 every two weeks after withholding for taxes, health insurance and malpractice insurance.)

Scheiner thinks that any health reform should involve paying primary-care doctors better so they don’t have to rush through appointments to make ends meet. He says that the medical students he encounters are no longer even taught how to do a patient history and physical exam. Patients get imaging studies and lab work instead of actual work-ups. “It’s like in Star Trek where Bones had the thing he would wave up and down. They don’t even talk to patients,” he says.

Obama’s Doctor Knocks ObamaCare

By David Whelan
Forbes
06.18.09

David Scheiner, an internist based in the Chicago neighborhood of Hyde Park, has a diverse practice of lower-income adults from the nearby housing projects mixed with famous patients like U.S. Sen. Carol Mosely Braun, the late writer Studs Terkel and, most notably, President Barack Obama.

Scheiner, 71, was Obama’s doctor from 1987 until he entered the White House; he vouched for the then-candidate’s “excellent health” in a letter last year. He’s still an enthusiastic Obama supporter, but he worries about whether the health care legislation currently making its way through Congress will actually do any good, particularly for doctors like himself who practice general medicine. “I’m not sure he really understands what we face in primary care,” Scheiner says.

Scheiner takes a few other shots too. Looking at Obama’s team of health advisors, Scheiner doesn’t see anyone who’s actually in the trenches. “I have a suspicion they pick people from the top echelon of medicine, people who write about it but haven’t been struggling in it,” he says.

Scheiner is critical of Obama’s pick for Health and Human Services secretary–Kansas Gov. Kathleen Sebelius, who used to work as the chief lobbyist for her state’s trial lawyers association.

“He doesn’t see all the pain, it’s so tragic out here,” he says. “Obama’s wonderful, but on this one I’m not sure if he’s getting the right input.”

What should the president be focused on? Scheiner thinks that a good health reform would be “Medicare for all,” a single-payer system where the government would cover everyone and pay for it by cutting out waste in the system. “A neurosurgeon gets paid $20,000 for cutting into the neck of my patient. Have him get paid $1 million a year instead of $2 million or $3 million. He won’t starve,” Scheiner says.

Scheiner thinks that Obama’s “public plan” reform doesn’t go far enough. He supports the idea of that option for people who don’t like or can’t afford their HMO. But he worries that it will be watered down or not happen at all. “It’s nonsense that the private insurance companies need to be protected,” he says. “Why? Because they’ve done such a good job?”

He thinks that Americans have been scared into believing that they will lose the coverage they already have if a public plan is created. And he worries that nobody cares about the 50 million uninsured. “I have people who have lost their jobs and come to me and I give them drug samples,” he says.

Scheiner says he thinks that Obama probably sees the virtues of a single-payer system but has decided it would be politically impossible to create one.

Reid Cherlin, an assistant White House press secretary who covers health issues, wrote in an e-mailed statement, “The President has been clear that while a single-payer system may work in some countries, it makes the most sense for us to build on what works in the system we have and to fix what’s broken.

“He would certainly agree that there’s too much waste in the system–where families, businesses and governments pay too much for too little,” he added, “and that’s why he’s committed not just to expanding coverage but to reforming the health system to provide high-quality care at a lower cost to more Americans.”

Scheiner says he never thought it was appropriate to talk about health policy with Obama, especially once he became a U.S. Senator. The one exception was medical malpractice reform. “I once briefly talked to him about malpractice, and he took the lawyers’ position,” he says.

Obama reiterated his opposition to caps on medical malpractice-related damages when he addressed an audience of doctors earlier this week at the American Medical Association’s annual meeting. (See “Will Doctors Buy Obamacare?”)

Scheiner, like most others in his profession, thinks that it should be harder to sue doctors and that awards should be capped. He says that he and other doctors must order too many tests and imaging studies just to avoid being sued.

Scheiner graduated from Princeton and then started at Columbia University’s College of Physicians and Surgeons 50 years ago. After training in internal medicine in Chicago he joined a practice in Hyde Park. His partner was Quentin Young, a doctor known for supporting universal coverage and for briefly being the personal physician of Martin Luther King Jr.

Before selling his practice, he watched his income decline over the years to what he calculated to be $22 an hour ($2,100 every two weeks after withholding for taxes, health insurance and malpractice insurance.)

Scheiner thinks that any health reform should involve paying primary-care doctors better so they don’t have to rush through appointments to make ends meet. He says that the medical students he encounters are no longer even taught how to do a patient history and physical exam. Patients get imaging studies and lab work instead of actual work-ups. “It’s like in Star Trek where Bones had the thing he would wave up and down. They don’t even talk to patients,” he says.

PNHP testimony before two House committees today

Testimony of Quentin D. Young, M.D.

U.S. House Committee on Ways and Means
June 24, 2009
I wish to make two points to the Members of this Committee. The first is that the best health policy science, literature, and experience indicate that the Tri-Committee proposal will fail miserably in its purported goal of providing comprehensive, sustainable health coverage to all Americans. And it will fail whether or not it includes a so-called “public option” health plan.
The second point I wish to make is that single-payer national health insurance is not just the only path to universal coverage, it is the most politically feasible path to health care for all, because it pays for itself, requiring no new sources of revenue.
http://waysandmeans.house.gov/hearings.asp?formmode=detail&hearing=684
Testimony posted on PNHP website:
https://pnhp.org/news/2009/june/testimony_of_quentin.php

And…

Testimony of Steffie Woolhandler, M.D.

Health Subcommittee of the House Energy and Commerce Committee
June 24, 2009
Private insurance is a defective product. Unfortunately, the Tri-Committee health reform plan would keep private insurers in the driver’s seat, and, indeed, require Americans to buy their shoddy goods.
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. Only single payer national health insurance can assure all Americans the care they need at a price they can afford.
http://energycommerce.house.gov/index.php?option=com_content&view=article&id=1691:energy-and-commerce-committee-and-health-subcommittee-hearing-on-comprehensive-health-reform-discussion-draft&catid=132:subcommittee-on-health&Itemid=72
Testimony posted on PNHP website:
https://pnhp.org/news/2009/june/testimony_of_steffie.php

Single payer is now a part of the dialogue in Congress. Now if only we can convert the single payer dialogue into single payer policy.

PNHP testimony before two House committees today

Testimony of Quentin D. Young, M.D.

U.S. House Committee on Ways and Means
June 24, 2009

I wish to make two points to the Members of this Committee. The first is that the best health policy science, literature, and experience indicate that the Tri-Committee proposal will fail miserably in its purported goal of providing comprehensive, sustainable health coverage to all Americans. And it will fail whether or not it includes a so-called “public option” health plan.

The second point I wish to make is that single-payer national health insurance is not just the only path to universal coverage, it is the most politically feasible path to health care for all, because it pays for itself, requiring no new sources of revenue.

http://waysandmeans.house.gov/hearings.asp?formmode=detail&hearing=684

Testimony posted on PNHP website:
https://pnhp.org/news/2009/june/testimony_of_quentin.php

And…

Testimony of Steffie Woolhandler, M.D.

Health Subcommittee of the House Energy and Commerce Committee
June 24, 2009

Private insurance is a defective product. Unfortunately, the Tri-Committee health reform plan would keep private insurers in the driver’s seat, and, indeed, require Americans to buy their shoddy goods.

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. Only single payer national health insurance can assure all Americans the care they need at a price they can afford.

http://energycommerce.house.gov/index.php?option=com_content&view=article&id=1691:energy-and-commerce-committee-and-health-subcommittee-hearing-on-comprehensive-health-reform-discussion-draft&catid=132:subcommittee-on-health&Itemid=72

Testimony posted on PNHP website:
https://pnhp.org/news/2009/june/testimony_of_steffie.php

Comment:

By Don McCanne, MD

Single payer is now a part of the dialogue in Congress. Now if only we can convert the single payer dialogue into single payer policy.

Testimony of Quentin Young, M.D., to the House Ways and Means Committee

[The following testimony is the prepared text of the remarks given by Dr. Quentin Young at a hearing on health care reform conducted by the House Ways and Means Committee on June 24 in Washington.]

Testimony of Quentin D. Young, M.D., M.A.C.P., national coordinator, Physicians for a National Health Program

Mr. Chairman, members of the Committee, thank you for giving me the opportunity to comment on the proposal that has emerged from the three key House committees and to articulate the single-payer alternative. I am national coordinator of Physicians for a National Health Program, an organization of 16,000 American physicians who support single-payer national health insurance. Our organization represents the views of the majority of U.S. physicians, 59 percent of whom support national health insurance.

I wish to make two points to the Members of this Committee. The first is that the best health policy science, literature, and experience indicate that the Tri-Committee proposal will fail miserably in its purported goal of providing comprehensive, sustainable health coverage to all Americans. And it will fail whether or not it includes a so-called “public option” health plan.

The second point I wish to make is that single-payer national health insurance is not just the only path to universal coverage, it is the most politically feasible path to health care for all, because it pays for itself, requiring no new sources of revenue.

The difference between single payer and the Tri-Committee proposal could not be more stark: single-payer has at its core the elimination of U.S.-style private insurance, using huge administrative savings and inherent cost control mechanisms to provide comprehensive, sustainable universal coverage. The Tri-Committee discussion draft preserves all of the systemic defects inherent in reliance on a patchwork of private insurance companies to finance health care, a system which has been a miserable failure both in providing health coverage and controlling costs. Elimination of U.S.-style private insurance has been a prerequisite to the achievement of universal health care in every other industrialized country in the world. In contrast, public program expansions coupled with mandates, like those in the Tri-Committee proposal, have failed everywhere they’ve been tried, both domestically and internationally.

First, because the discussion draft is built around the retention of private insurance companies, it is unable — in contrast to single payer — to recapture the $400 billion in administrative waste that private insurers currently generate in their drive to fight claims, issue denials and screen out the sick. A single-payer system would redirect these huge savings back into the system, requiring no net increase in health spending.

Second, because the discussion draft fails to contain the cost control mechanisms inherent in single payer, such as global budgeting, bulk purchasing, negotiated fees and planned capital expenditures, any gains in coverage will quickly be erased as costs skyrocket and government is forced to choose between raising revenue and cutting benefits.

Third, because of this inability to control costs or realize administrative savings, the coverage and benefits that can be offered under the discussion draft will be of the same type currently offered by private carriers, which cause millions of insured Americans to go without needed care due to costs and have led to an epidemic of medical bankruptcies.

Virtually all of the reforms contained in the discussion draft have been tried, and have failed repeatedly. Plans that combined mandates to purchase coverage with Medicaid expansions fell apart in Massachusetts (1988), Oregon (1992), and Washington state (1993); the latest iteration (Massachusetts, 2006) is already stumbling, with uninsurance again rising and costs soaring. Tennessee’s experiment with a massive Medicaid expansion and a public plan option worked — for one year, until rising costs sank it.

The inclusion of a so-called “public option” cannot salvage this structurally defective reform package. A public plan option does not lead toward single payer, but toward the segregation of patients, with profitable ones in private plans and unprofitable ones in the public plan. A quarter-century of experience with public/private competition in the Medicare program demonstrates that the private plans will not allow a level playing field. Despite strict regulation, private insurers have successfully cherry-picked healthier seniors, and have exploited regional health spending differences to their advantage. They have progressively undermined the public plan — which started as a single-payer system for seniors but has now become a funding mechanism for HMOs — and a place to dump the unprofitably ill.

The $1 trillion price tag on the Tri-Committee proposal already threatens to capsize our new President’s flagship initiative. In contrast, single payer avoids these hazardous political waters entirely because it requires no new sources of funding.

In tumultuous economic times, single payer is the only fiscally responsible option. Two-thirds of the American people support it. The majority of physicians are in favor of it, as are the U.S. Conference of Mayors, 39 state labor federations and hundreds of local unions across the country. Millions of Americans are mobilized to struggle for single payer, but your leadership is crucial. I hope this Committee will see fit to provide it.

Thank you.

Testimony of Steffie Woolhandler, M.D., to the Health Subcommittee of the House Energy and Commerce Committee

[The following testimony is the prepared text of the remarks given by Dr. Steffie Woolhandler at a hearing on health care reform conducted by the Health Subcommitee of the House Energy and Commerce Committee on June 24 in Washington.]

Testimony of Steffie Woolhandler, M.D., M.P.H.

Mr. Chairman, members of the Committee. I’m Steffie Woolhandler. I am a primary care doctor in Cambridge, Massachusetts, and associate professor of medicine at Harvard. I also co-founded 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 – will fail.

Private insurance is a defective product. Unfortunately, the Tri-Committee health reform plan would keep private insurers in the driver’s seat, and, indeed, require Americans to buy their shoddy goods. Once failure to buy health insurance is a federal offense, what’s next? A Ford Pinto in every garage? Lead-painted toys for every child? Melamine-laced chow for every puppy?

Even middle-class families with supposedly good coverage are just one serious illness away from financial ruin. My colleagues and I recently found that medical bills and illness contribute to 62 percent of all personal bankruptcies — a 50 percent increase since 2001. Strikingly, three-quarters of the medically bankrupt had insurance — at least when they first got sick.

In case after case, the insurance families bought in good faith failed them when they needed it most. Some were bankrupted by co-payments and deductibles, and loopholes that allowed their insurer to deny coverage. Others got too sick to work, leaving them unemployed and uninsured. And insurance regulations like those proposed in the tri-committee bill cannot fix these problems.

We in Massachusetts have seen in action a plan like the one you’re considering. In my state, beating your wife, communicating a terrorist threat and being uninsured all carry $1,000 fines. Yet despite these steep fines, most of the new coverage in our state has come from expanding Medicaid-like programs at great public expense. According to the state’s disclosure to its bondholders, our health reform has cost about $5,000 annually for each newly insured adult. That’s equivalent to over $200 billion annually to cover all of America’s uninsured.

But even such vast expenditures haven’t made care affordable for middle-class families in Massachusetts. If I were to lose my Harvard coverage I’d be forced to lay out $4,800 for a policy with a $2,000 deductible before it pays for any care, and 20 percent co-payments after that. Skimpy, overpriced coverage like this left 1 in 6 Massachusetts residents unable to pay their medical bills last year.

Meanwhile, rising costs have forced the Legislature to rob Peter in order to pay Paul. Funding cuts have decimated safety-net hospitals and clinics, and the current budget drops coverage for 28,000 people.

As research I published in the New England Journal of Medicine showed, a single-payer reform could save about $400 billion annually by shrinking health care bureaucracy — enough to cover the uninsured and to provide first dollar coverage for all Americans. A single-payer system would also include effective cost-containment mechanisms like bulk purchasing and global budgeting. As a result, everyone would be covered with no net increase in U.S. health spending. But these savings aren’t available unless we go all the way to single payer.

Adding a public insurance plan option can’t fix the flaws in Massachusetts-style reform. A public plan might cut private insurers’ profits, which is why they hate it. But their profits account for only about 3 percent of the money squandered on bureaucracy. Far more goes for marketing (to attract healthy, profitable members) and demarketing (to avoid the sick). 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.

And overhead for even the most efficient competitive public plan would be far higher than Medicare’s, which automatically enrolls seniors when they turn 65 and disenrolls them only at death, deducts premiums directly from Social Security checks, and does no marketing.

Unfortunately, competition in health insurance involves a race to the bottom, not the top. 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.

In contrast, a single-payer reform would radically simplify the payment system and redirect the vast savings to care. Hospitals could be paid like a fire department, receiving a single monthly check for their entire budget, eliminating most billing. Physicians’ billing could be similarly simplified.

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. Only single payer national health insurance can assure all Americans the care they need at a price they can afford.

Thank you.

The Health Care Industry vs. Health Reform

By Wendell Potter
Center for Media and Democracy
June 24, 2009

I’m the former insurance industry insider now speaking out about how big for-profit insurers have hijacked our health care system and turned it into a giant ATM for Wall Street investors, and how the industry is using its massive wealth and influence to determine what is (and is not) included in the health care reform legislation members of Congress are now writing.

Although by most measures I had a great career in the insurance industry (four years at Humana and nearly 15 at CIGNA), in recent years I had grown increasingly uncomfortable serving as one of the industry’s top PR executives. In addition to my responsibilities at CIGNA, which included serving as the company’s chief spokesman to the media on all corporate and financial matters, I also served on a lot of trade association committees and industry-financed coalitions, many of which were essentially front groups for insurers. So I was in a unique position to see not only how Wall Street analysts and investors influence decisions insurance company executives make but also how the industry has carried out behind-the-scenes PR and lobbying campaigns to kill or weaken any health care reform efforts that threatened insurers’ profitability.

I also have seen how the industry’s practices — especially those of the for-profit insurers that are under constant pressure from Wall Street to meet their profit expectations — have contributed to the tragedy of nearly 50 million people being uninsured as well as to the growing number of Americans who, because insurers now require them to pay thousands of dollars out of their own pockets before their coverage kicks in — are underinsured. An estimated 25 million of us now fall into that category.

What I saw happening over the past few years was a steady movement away from the concept of insurance and toward “individual responsibility,” a term used a lot by insurers and their ideological allies. This is playing out as a continuous shifting of the financial burden of health care costs away from insurers and employers and onto the backs of individuals. As a result, more and more sick people are not going to the doctor or picking up their prescriptions because of costs. If they are unfortunate enough to become seriously ill or injured, many people enrolled in these plans find themselves on the hook for such high medical bills that they are losing their homes to foreclosure or being forced into bankruptcy.

As an industry spokesman, I was expected to put a positive spin on this trend that the industry created and euphemistically refers to as “consumerism” and to promote so-called “consumer-driven” health plans. I ultimately reached the point of feeling like a huckster.

I thought I could live with being a well-paid huckster and hang in there a few more years until I could retire. I probably would have if I hadn’t made a completely spur-of-the-moment decision a couple of years ago that changed the direction of my life. While visiting my folks in northeast Tennessee where I grew up, I read in the local paper about a health “expedition” being held that weekend a few miles up U.S. 23 in Wise, Va. Doctors, nurses and other medical professionals were volunteering their time to provide free medical care to people who lived in the area. What intrigued me most was that Remote Area Medical, a non-profit group whose original mission was to provide free care to people in remote villages in South America, was organizing the expedition. I decided to check it out.

That 50-mile stretch of U.S. 23, which twists through the mountains where thousands of men have made their living working in the coalmines, turned out to be my “road to Damascus.”

Nothing could have prepared me for what I saw when I reached the Wise County Fairgrounds, where the expedition was being held. Hundreds of people had camped out all night in the parking lot to be assured of seeing a doctor or dentist when the gates opened. By the time I got there, long lines of people stretched from every animal stall and tent where the volunteers were treating patients.

That scene was so visually and emotionally stunning it was all I could do to hold back tears. How could it be that citizens of the richest nation in the world were being treated this way?

A couple of weeks later I was boarding a corporate jet to fly from Philadelphia to a meeting in Connecticut. When the flight attendant served my lunch on gold-rimmed china and gave me a gold-plated knife and fork to eat it with, I realized for the first time that someone’s insurance premiums were paying for me to travel in such luxury. I also realized that one of the reasons those people in Wise County had to wait in long lines to be treated in animal stalls was because our Wall Street-driven health care system has created one of the most inequitable health care systems on the planet.

Although I quit my job last year, I did not make a final decision to speak out as a former insider until recently when it became clear to me that the insurance industry and its allies (often including drug and medical device makers, business groups and even the American Medical Association) were succeeding in shaping the current debate on health care reform. While the thought of speaking out had crossed my mind during the months leading up to the day I gave notice, I initially decided instead to hang out my shingle as a consultant to small businesses and nonprofit organizations.

I decided to take the shingle down, though, at least for a while, when I heard members of Congress reciting talking points like the ones I used to write to scare people away from real reform. I’ll have more to say about that over the coming weeks and months, but, for now, remember this: whenever you hear a politician or pundit use the term “government-run health care” and warn that the creation of a public health insurance option that would compete with private insurers (or heaven forbid, a single-payer system like the one Canada has) will “lead us down the path to socialism,” know that the original source of the sound bite most likely was some flack like I used to be.

Bottom line: I ultimately decided the stakes are too high for me to just sit on the sidelines and let the special interests win again. So I have joined forces with thousands of other Americans who are trying to persuade our lawmakers to listen to us for a change, not just to the insurance and drug company executives who are spending millions to shape reform to benefit them and the Wall Street hedge fund managers they are beholden to.

Take it from me, a former insider, who knows what really motivates those folks. You need to know where the hard-earned money you pay in health insurance premiums — if you lucky enough to have coverage at all — really goes.

I decided to speak out knowing that some people will not like what I have to say and will do all they can to discredit me. In anticipation of that, here are some facts:

* I am not doing this because my former employer was pushing me out the door or because I had become a disgruntled employee. I had not been passed over for a promotion or anything like that. As I noted earlier, I had a financially rewarding career in the industry, and I’m very grateful for that. I had numerous promotions, raises, bonuses, stock options and stock grants over the years. When I left my last job, I was as close on the corporate ladder to the CEO as any PR person has ever climbed at the company. I reported to the general counsel, the company’s top lawyer, whose boss is the chairman and CEO, a man I like and worked closely with over many years.

* The decision to leave was entirely my own, and I left on good terms with everybody at the company. In fact, I agreed to postpone my last day at work by more than two months at the company’s request. My coworkers gave me a terrific going-away party, and I received dozens of kind notes from people all across the country including friends at other companies and at America’s Health Insurance Plans, the industry trade association.

I still consider all of them my friends. In fact, the thing I have missed most since I left is working as part of a team, even though I eventually came to the conclusion that I was playing for the wrong side. Being a consultant has its advantages, but I have missed the camaraderie. After a few months, I thought that maybe I should consider working for another company again. At one point, a former boss told me that another insurer had posted a PR job and encouraged me to contact a former CIGNA executive who worked there about it. Against my better judgment, I did, but I immediately decided not to pursue it. The last thing I wanted to do was to go from one big insurer to another one. What the hell was I thinking?

I’m writing this because, knowing how things work, I’m fully expecting insurers’ PR firms to quietly feed friends of the industry (which include a roster of editorial writers and pundits, lawmakers and many others who fall under the broad category of “third-party advocates,”) with anything they can think of to discredit me and what I say. This will go on behind the scenes because the insurers will want to preserve the image they are working so hard to cultivate — as a group of kind and caring folks who think only of you and your health and are working hard as real partners to Congress and the White House to find “a uniquely American solution” to what ails our system.

I expect this because I have worked closely with the industry’s PR firms over many years whenever the insurers were being threatened with bad publicity, litigation or legislation that might hinder profits.

One of the reasons I chose to become affiliated with the Center for Media and Democracy is because of the important work the organization does to expose often devious, dishonest and unethical PR practices that further the self interests of big corporations and special interest groups at the expense of the American people and the democratic principles this country was founded on.

After a long career in PR, I am looking forward to providing an insider’s perspective as a senior fellow at CMD, and I am very grateful for the opportunity to speak out for the rights and dignity of ordinary people. The people of Wise County and every county deserve much better than to be left behind to suffer or die ahead of their time due to Wall Street’s efforts to keep our government from ensuring that all Americans have real access to first-class health care.

Wendell Potter is the Senior Fellow on Health Care for the Center for Media and Democracy in Madison, Wisconsin.

Physicians to tell House panels: single payer is only true health reform

Doctors say Democrats' plan offers micro-coverage for macro-costs

Media Advisory
June 23, 2009

Contacts:
Quentin Young, M.D., (312) 782-6006
Steffie Woolhandler, M.D., M.P.H., steffie_woolhandler@hms.harvard.edu
Mark Almberg, PNHP, (312) 782-6006, cell: (312) 622-0996, mark@pnhp.org

Two leading physician advocates for single-payer national health insurance will testify on Capitol Hill Wednesday, June 24, telling lawmakers that the latest House “Tri-Committee” proposal to reform the U.S. health care system — with or without a “public plan option” — will be unable to deliver on its stated goal of providing comprehensive and sustainable health coverage to all Americans. Only single payer can accomplish that goal, they will say.

Dr. Quentin Young, national coordinator of Physicians for a National Health Program, is scheduled to testify shortly after 9 a.m. EDT before the House Ways and Means Committee in the main committee hearing room, 1100 Longworth House Office Building. The committee is chaired by Rep. Charles Rangel (D-N.Y.).

Dr. Young’s testimony reads in part: “I wish to make two points to the Members of this Committee. The first is that the best health policy science, literature, and experience indicate that the Tri-Committee proposal will fail miserably in its purported goal of providing comprehensive, sustainable health coverage to all Americans. And it will fail whether or not it includes a so-called ‘public option’ health plan. The second point is that single-payer national health insurance is not just the only path to universal coverage, it is the most politically feasible path to health care for all, because it pays for itself, requiring no new sources of revenue.”

Dr. Steffie Woolhandler, associate professor of medicine at Harvard Medical School and a primary care physician in Cambridge, Mass., is set to testify before the Health Subcommittee of the House Energy and Commerce Committee at 1 p.m. EDT or shortly thereafter in Room 2123 of the Rayburn Office Building.

Her testimony reads in part: “As research I published in the New England Journal of Medicine showed, a single-payer reform could save about $400 billion annually by shrinking health care bureaucracy — enough to cover the uninsured and to provide first dollar coverage for all Americans. A single-payer system would also include effective cost-containment mechanisms like bulk purchasing and global budgeting. As a result, everyone would be covered with no net increase in U.S. health spending. But these savings aren’t available unless we go all the way to single payer.”

Both Dr. Young and Dr. Woolhandler will be available for comment upon the adjournment of their respective panels.

David Brooks – Kill this effort and start over

Something for Nothing

By David Brooks
The New York Times
June 22, 2009
On May 12, the Senate Finance Committee held a hearing on health care reform. There was a long table of 13 experts, and a vast majority agreed that ending the tax exemption on employer-provided health benefits should be part of a reform package.
They gave the reasons that experts — on right or left — always give for supporting this idea. The exemption is a giant subsidy to the affluent. It drives up health care costs by encouraging luxurious plans and by separating people from the consequences of their decisions. Furthermore, repealing the exemption could raise hundreds of billions of dollars, which could be used to expand coverage to the uninsured.
Democratic Senator Ron Wyden piped up and noted that he and Republican Senator Robert Bennett have a plan that repeals the exemption and provides universal coverage. The Wyden-Bennett bill has 14 bipartisan co-sponsors and the Congressional Budget Office has found that it would be revenue-neutral.
The Finance Committee’s chairman, Senator Max Baucus, looked exasperated. With that haughty and peremptory manner that they teach in Committee Chairman School, he told Wyden and the world that this idea was not going to happen.
In the World’s Greatest Deliberative Body, senators don’t run things. Chairmen and their staffs run things. During the spring, as the Obama administration faded to invisibility, the finance and health committees separately put together plans. These plans did not alter the employer exemption. They did build on the current system. They did include approaches that have been around since Richard Nixon.
The problem with the committee plans is that they don’t do much to change the underlying incentives, and consequently don’t do much to control costs. “The single most expensive option is to build on the existing system,” says the health care costs guru John Sheils of the Lewin Group.
The C.B.O. measured the plans, and the results were devastating. A successful plan has to be revenue-neutral for the government over the next 10 years, and it has to reduce the total health care burden over the long term so the country doesn’t go bankrupt. The Senate committee plans failed both criteria. They would cost the government more than $1 trillion this decade and send total health care costs zooming at least twice as fast as the economy as a whole.
The C.B.O. reports sent shock waves through Washington. Senators and staffs began casting about for a way to get a good C.B.O. score. President Obama redoubled his rhetoric about fundamentally reducing health care costs. Everybody continued looking around for a compromise that could get a bipartisan majority.
Now you might think that in these circumstances someone might take a second look at the ideas incorporated in the Wyden-Bennett plan, which already has a good C.B.O. score, bipartisan support and a recipe for fundamental reform.
If you did think that, you are mistaking the Senate for a rational organism. For while there are brewing efforts to incorporate a few Wyden-Bennett ideas, there is stiff resistance to the aspects that fundamentally change incentives.
The committee staffs don’t like the approach because it’s not what they’ve been thinking about all these years. The left is uncomfortable with the language of choice and competition. Unions want to protect the benefits packages in their contracts. Campaign consultants are horrified at the thought of fiddling with a popular special privilege.
So the process is moving along as it has been. There is a great deal of talk about the need to restrain costs. There’s discussion about interesting though speculative ideas to bend the cost curve. There are a series of frantic efforts designed to reduce the immediate federal price tag. Some senators and advisers suggest cutting back on universal coverage. Others have come up with a bunch of little cuts in hopes of getting closer to the trillion-dollar tab. The administration has ambitious plans to slash Medicare spending.
But there is almost nothing that gets to the core of the problem. Under the leading approaches, health care providers would still have powerful incentives to provide more and more services and use more expensive technology.
We’ve built an entire health care system (maybe an entire government) on the illusion of something for nothing. Instead of tackling that basic logic, we’ve got a reform process that is trying to evade it.
This would be bad enough in normal times. But the country is already careening toward fiscal ruin. We’ve already passed a nearly $800 billion stimulus package. The public debt is already projected to double over the next 10 years.
Health care reform is important, but it is not worth bankrupting the country over. If this process goes as it has been going — with grand rhetoric and superficial cost containment — then we will be far better off killing this effort and starting over in a few years. Maybe then there will be leaders willing to look at the options staring them in the face.

http://www.nytimes.com/2009/06/23/opinion/23brooks.html

Readers’ Comments:
Don McCanne
San Juan Capistrano, CA
June 23rd, 2009
9:16 am
Two very pertinent points left out would entirely change any conclusions drawn from this commentary:
1) You state that John Sheils has shown that building on the existing system is the single most expensive option for reform. What you didn’t state is that Sheils has also shown that a single payer national health program is the least expensive, and is the most effective in achieving the goals of universality and cost containment.
2) Although you state that Wyden-Bennett has a favorable C.B.O. score, you left out the fact that it was achieved after months of negotiation with the C.B.O. during which numerous changes were made that would shift the burden of future cost increases from the federal budget to individual patients. Financial hardship and bankruptcy due to medical debt is already a problem for insured individuals, and Wyden-Bennett would compound that problem.
Instead of worrying about the federal budget as an isolated problem, Congress needs to start addressing the combined public and private costs for patients. Policy solutions that would work are no secret.

David Brooks – Kill this effort and start over

Something for Nothing

By David Brooks
The New York Times
June 22, 2009

On May 12, the Senate Finance Committee held a hearing on health care reform. There was a long table of 13 experts, and a vast majority agreed that ending the tax exemption on employer-provided health benefits should be part of a reform package.

They gave the reasons that experts — on right or left — always give for supporting this idea. The exemption is a giant subsidy to the affluent. It drives up health care costs by encouraging luxurious plans and by separating people from the consequences of their decisions. Furthermore, repealing the exemption could raise hundreds of billions of dollars, which could be used to expand coverage to the uninsured.

Democratic Senator Ron Wyden piped up and noted that he and Republican Senator Robert Bennett have a plan that repeals the exemption and provides universal coverage. The Wyden-Bennett bill has 14 bipartisan co-sponsors and the Congressional Budget Office has found that it would be revenue-neutral.

The Finance Committee’s chairman, Senator Max Baucus, looked exasperated. With that haughty and peremptory manner that they teach in Committee Chairman School, he told Wyden and the world that this idea was not going to happen.

In the World’s Greatest Deliberative Body, senators don’t run things. Chairmen and their staffs run things. During the spring, as the Obama administration faded to invisibility, the finance and health committees separately put together plans. These plans did not alter the employer exemption. They did build on the current system. They did include approaches that have been around since Richard Nixon.

The problem with the committee plans is that they don’t do much to change the underlying incentives, and consequently don’t do much to control costs. “The single most expensive option is to build on the existing system,” says the health care costs guru John Sheils of the Lewin Group.

The C.B.O. measured the plans, and the results were devastating. A successful plan has to be revenue-neutral for the government over the next 10 years, and it has to reduce the total health care burden over the long term so the country doesn’t go bankrupt. The Senate committee plans failed both criteria. They would cost the government more than $1 trillion this decade and send total health care costs zooming at least twice as fast as the economy as a whole.

The C.B.O. reports sent shock waves through Washington. Senators and staffs began casting about for a way to get a good C.B.O. score. President Obama redoubled his rhetoric about fundamentally reducing health care costs. Everybody continued looking around for a compromise that could get a bipartisan majority.

Now you might think that in these circumstances someone might take a second look at the ideas incorporated in the Wyden-Bennett plan, which already has a good C.B.O. score, bipartisan support and a recipe for fundamental reform.

If you did think that, you are mistaking the Senate for a rational organism. For while there are brewing efforts to incorporate a few Wyden-Bennett ideas, there is stiff resistance to the aspects that fundamentally change incentives.

The committee staffs don’t like the approach because it’s not what they’ve been thinking about all these years. The left is uncomfortable with the language of choice and competition. Unions want to protect the benefits packages in their contracts. Campaign consultants are horrified at the thought of fiddling with a popular special privilege.

So the process is moving along as it has been. There is a great deal of talk about the need to restrain costs. There’s discussion about interesting though speculative ideas to bend the cost curve. There are a series of frantic efforts designed to reduce the immediate federal price tag. Some senators and advisers suggest cutting back on universal coverage. Others have come up with a bunch of little cuts in hopes of getting closer to the trillion-dollar tab. The administration has ambitious plans to slash Medicare spending.

But there is almost nothing that gets to the core of the problem. Under the leading approaches, health care providers would still have powerful incentives to provide more and more services and use more expensive technology.

We’ve built an entire health care system (maybe an entire government) on the illusion of something for nothing. Instead of tackling that basic logic, we’ve got a reform process that is trying to evade it.

This would be bad enough in normal times. But the country is already careening toward fiscal ruin. We’ve already passed a nearly $800 billion stimulus package. The public debt is already projected to double over the next 10 years.

Health care reform is important, but it is not worth bankrupting the country over. If this process goes as it has been going — with grand rhetoric and superficial cost containment — then we will be far better off killing this effort and starting over in a few years. Maybe then there will be leaders willing to look at the options staring them in the face.

Readers’ Comments

Don McCanne
San Juan Capistrano, CA
June 23rd, 2009
9:16 am

Two very pertinent points left out would entirely change any conclusions drawn from this commentary:

1) You state that John Sheils has shown that building on the existing system is the single most expensive option for reform. What you didn’t state is that Sheils has also shown that a single payer national health program is the least expensive, and is the most effective in achieving the goals of universality and cost containment.

2) Although you state that Wyden-Bennett has a favorable C.B.O. score, you left out the fact that it was achieved after months of negotiation with the C.B.O. during which numerous changes were made that would shift the burden of future cost increases from the federal budget to individual patients. Financial hardship and bankruptcy due to medical debt is already a problem for insured individuals, and Wyden-Bennett would compound that problem.

Instead of worrying about the federal budget as an isolated problem, Congress needs to start addressing the combined public and private costs for patients. Policy solutions that would work are no secret.