PNHP

A 'public plan option' won't ensure quality care

A 'public plan option' won't ensure quality care

By QUENTIN D. YOUNG
Politico
Letter to the editor
5/5/09 4:29 AM EDT

While Carrie Budoff Brown accurately reflects some of the arguments for single-payer health reform, such as the vast savings in administrative costs our nation stands to reap from national health insurance (“Groups strategize for single-payer plan,” April 28), a casual reader might mistakenly get the impression that single-payer advocates are pressing their case merely as a bargaining chip to win a lesser reform — specifically, the creation of a “public plan option.”

Not true. Single-payer advocates, including our 16,000-member Physicians for a National Health Program, are still pressing full-bore for single-payer national health insurance. A public plan option simply can’t deliver the savings and other efficiencies we need to ensure universal, quality care. Nor is it a “stepping stone” toward single payer.

As my colleague Dr. David Himmelstein told a congressional subcommittee last week, “A health reform plan that includes a ‘public plan option’ might realize some savings on insurance overhead. However, as long as multiple private plans coexist with the public plan, hospitals and doctors would have to maintain their costly billing and internal cost-tracking apparatus. Indeed, my colleagues and I estimate that even if half of all privately insured Americans switched to a public plan with overhead at Medicare’s level, the administrative savings would amount to only 9 percent of the savings under single payer.”

Only a true single-payer system (“Everybody in, nobody out”) can yield the administrative savings — estimated at $400 billion annually — needed to provide comprehensive, affordable care to everyone.

Placebos that preserve the role of the private health insurance industry, such as the reform measures proposed by the Obama administration and key lawmakers like Sens. Max Baucus (D-Mont.) and Ted Kennedy (D-Mass.), with or without a public option, can’t even come close to these results.

Adoption of a publicly financed health care system has become an economic and moral imperative.

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

The Uninsured Are the Symptom, Not the Disease

By Claudia Chaufan, M.D., Ph.D.
KQED Radio Healthy Ideas
April 28, 2009

I was invited to join the [KQED] health care reform debate by addressing a set of questions falling under the general theme “Covering the Uninsured.” The problem is that to answer these questions I have to challenge fundamental assumptions underlying them — if one asks the wrong question or misunderstands the nature of a problem, the chances of getting the right answer or solving the problem are slim.

And this is precisely what happens with the three questions I was asked, namely, should all Americans be required to purchase health insurance; what options for coverage should the uninsured and underinsured have; and how do you assess when coverage is affordable. They all assume that the problem is the uninsured or the underinsured. But these are only the “symptom.” The real “disease” is the financial organization of our system.

In all industrialized economies, but ours, individuals do not “purchase” insurance as you “purchase” shoes or cell phone plans. Rather, they contribute to a system whose goal is to eliminate financial barriers to health care. Those systems, to varying degrees, pool risks and are financed by compulsory cooperative contributions.

What does this mean? Well, pooling risk simply means putting everybody into large pools, the bigger the better, and budgeting for people’s medical needs in the same way families budget for their members’ nutritional or educational needs. And why would they do this? They do this because given that the goal of the system is to eliminate financial barriers to care universally and according to medical need, these systems seek to optimize the use of members’ money.

And pooling risk does so in three ways. First, it allows the system to cross-subsidize, which means that at any given moment the healthy or least costly majority pays for the medical care of the less healthy and most costly minority. Cross-subsidizing is critical for any insurance system to be sustainable: if a system includes only sick people it will quickly go bankrupt (this, incidentally, is the problem of our American Medicare, because it enrolls only the elderly, who tend to have higher medical costs, and the disabled, whose costs are the greatest. This problem would be resolved by putting all of us into Medicare, and of course getting rid of all the private middle-men that have corrupted it, e.g. “private fee for service Medicare,” “part D,” etc.).

The second thing that pooling risk does is to dramatically reduce administrative overhead, i.e., waste that comes from pushing paper around — to separate people into plans, to market those plans, or to underwrite policies (essentially to deny paying for care). While paper-pushing is the lifeblood of private or liability insurance, because it helps it achieve its ultimate goal, which is not to provide a social service but to make a profit, from the point of view of systems whose goal is to eliminate financial barriers to health care paper-pushing is waste.

Third and last, pooling risks gives those systems important market leverage, precisely the leverage Americans lack, which is why we pay the highest prices on the planet for services and goods (e.g. pharmaceuticals) that cost a fraction elsewhere. (And don’t worry: doctors and pharmaceutical companies elsewhere do just fine!)

What about cooperative compulsory financing? Well, this means that participation is not optional and is based on cooperation, or solidarity, if you will. And by making participation compulsory those systems have a guaranteed supply of money. But the cooperative dimension means that nobody is forced to pay what they cannot afford, because that would defeat the very purpose of the system. So contributions are a proportion of income, a mix of taxes or payroll deductions, and align, more or less, with the World Health Organization’s requirement pertaining to “financial fairness”. For the WHO, a system that forces you to forgo health care, or to have to choose between health care, rent or food, or that pushes you to bankruptcy (as we do) is decidedly unfair. The rule of thumb is that any system into which people pay over 10 percent of their income in medical bills (including monthly contributions and out of pocket, extra costs) is “financially unfair.” And mind you, we pay at least that much to finance an extremely dysfunctional system, even this system leaves you on the cold when you need health care (Remember that your taxes foot the bill of all public programs, for the elderly, the disabled, or those who qualify as “poor,” even before you are eligible for any services yourself. In truth, you are “cleaning” the market of “bad customers” and leaving all the “good customers” to the private health insurance sector.)

But what about the questions posed by KQED? Well, let me rephrase them.

Should Americans be required to purchase health insurance? As I said, the concept of “purchase” does not fit the systems I just described, which is the one I believe we should have in America, because people elsewhere do not “purchase” health insurance the way we do.

And what “options” should the uninsured and underinsured have? Again, others do not “shop around” for “options,” which implies that you need to second guess if you will need an appendectomy, diabetes care, or one week rather than two days in a given operation. Whatever expenses others have for care that the system has considered “medically necessary” will be paid for out of the common pot. If they want over and above that, they pay for it as you do for that pair of shoes that no reasonable person considers is your “right” to have, or is a “basic human need” (especially if like me, you have more than you will ever be able to wear!).

And last, how do you assess your coverage is affordable? Well, if you consider that unpaid medical bills are our first cause of personal bankruptcy, you know where we stand in that one.

Last, will the Obama plan solve our mess? I wish I could believe so, but I do not. For one, it sticks to the wrong conception about how to finance a health care system, assuming of course that the goal of the system is to eliminate financial barriers to health care universally rather than to create a profitable “illness market” or appease the folks who finance your political campaigns. And any system that sends people “shopping around” for policies while leaving the for-profit motive at the center of the system intact is likely to fail. It has repeatedly, for reasons studied ad-infinitum (yes, health policy is not rocket science!) and we have no reason in the world to believe it will be different this time.

http://blogs.kqed.org/healthyideas/2009/04/28/the-uninsured-are-the-symptom-not-the-disease/

Doctors, Single Payer Activists Arrested, Make History at Senate Finance Roundtable

By Donna Smith
California Nurses Association/National Nurses Organizing Committee
May 5, 2009

It has finally happened right here in the United States. Citizens who believe healthcare is a human right have been arrested and are being processed like criminals through the Southeast District of Columbia police station. Their crime? Asking for single payer healthcare reform — publicly funded, privately delivered healthcare — to be discussed during the Congressional hearings on reform.

Doctors and other single payer activists were handcuffed and went to jail today speaking up for single payer to be at the table in the Senate finance Committee’s roundtable discussion on healthcare access and coverage. In stark contrast, Karen Ignagni, head of the industry lobby group American Health Insurance Plans (AHIP) was escorted into the room like royalty by staff members of the Senate committee. Clearly, the position of the United States Senate is not with the majority of Americans who support a national, public insurance system.

It made me physically ill to see Maryland pediatrician Margaret Flowers cuffed like a criminal and pushed out the door as the Senators waited to begin their staged roundtable discussion. It made me want to scream. It made me proud of them for being bold but ashamed that not one Senator spoke up for their own citizen-protestors and asked that they at least be allowed to speak. But the insistence that the citizens rising in protest be arrested continued from the chair with each incident.

Simply asking to have single payer be included and fully vetted is a crime. Profiting as the for-profit health insurance companies do at the expense of 22,000 American lives every year, however, gets you a run of the table in this healthcare reform discussion. Just ask the Senators who are drafting what this nation’s health system will look like — and watch their behavior today — if you want evidence of how your voice will be heard in the process.

The protestors were stoic and respectful but direct. One by one they stood. One by one they asked why single payer reform was not “at the table” of 15 witnesses Senator Max Baucus and his finance Committee gathered to map out what sort of coverage Americans might expect in the Senate reform bill now being crafted.

Sen. Baucus eventually spoke and indicated that he was respectful of those who believe in single payer — as he acknowledged many of his constituents in Montana do — but he made no attempt to explain why no single payer voice has been included in any Senate discussion to date. He urged any others in the audience who might have any designs on speaking up like the protestors did to not do so, and then he moved on to his roundtable discussion.

The press seated comfortably at the press table first looked amused and then puzzled by the procession of protest in the chamber. The C-SPAN cameras fixed on both the Committee’s table at the front of the room and the witness table directly across from them could have easily picked up the protests but the network chose to keep their cameras fixed only on Chairman Baucus — though the protestors’ words could be heard in the audience. Only two reporters of the 20 or so assembled were curious enough or industrious enough to rise and exit the room to see the arrests being carried out in the hallway.

While neither the Finance Committee or the press allowed their proceedings to be disrupted for very long, the air in the room and the atmosphere had changed — the giddy and gleeful assembly of industry lobbyists who had been chattering in rapt anticipation of the coming of their carefully chosen witnesses could not deny that some brave and patriotic fellow citizens had just been hauled out for arrest for nothing more than demanding that a point of view held by a majority of patients, nurses, physicians and other healthcare providers be included in the national discussion.

While this Congress may pass something very different than single payer reform, it will not do so without hearing the cries of the people left so openly exposed to personal health and financial ruin by the corrupt system that celebrates only profit. The citizens who stood for the thousands and thousands of dead today will not let this democracy give itself completely over to the big money interests in healthcare. Not without a fight. Not on their lives or yours or mine.

Single-payer

Best health insurance

Editorial
Charleston Gazette
May 1, 2009

President Obama wants to create universal health insurance covering all Americans, a safety net of the sort that already exists in other advanced democracies. President Harry Truman first sought this reform in the 1940s, and other Democrats have pursued it intermittently, but each attempt has been scuttled by big-money interests that enjoy the current for-profit medical system.
Best health insurance

President Obama wants to create universal health insurance covering all Americans, a safety net of the sort that already exists in other advanced democracies. President Harry Truman first sought this reform in the 1940s, and other Democrats have pursued it intermittently, but each attempt has been scuttled by big-money interests that enjoy the current for-profit medical system.

It’s disgraceful that U.S. medical care is the world’s most expensive, yet 45 million Americans are left without insurance and the nation’s health levels are inferior to those elsewhere. High overhead costs among hundreds of competing U.S. insurance firms wastes billions – money that could pay to cover the left-out families, if it weren’t squandered. The for-profit corporations employ high-paid “subrogation” specialists who try to duck payment of medical bills, shifting them to other insurers or leaving them unpaid.

Sen. Jay Rockefeller, D-W.Va., is fighting for universal coverage. Earlier this month, he came to Charleston to receive a “Champion of Health Care Reform” award from a labor and activist coalition.

“This seems like the year when we can get it all done,” he told the group. He pointed out that “I have never seen many Republicans for health- care reform,” but the new Democratic control of Congress opens a window of opportunity. “We are on a sacred journey to remake America.”

Half of all West Virginia bankruptcies stem from uncovered medical bills, Rockefeller said, and the state’s economy loses $8 billion a year from lost work productivity caused by inadequate care. But commercial insurers don’t care, as long as they can manipulate rates to keep profits high.

“Insurance companies are making you pay more, and they pay less, so they can make more money,” the senator said.

On Capitol Hill in Washington, battle lines are drawn between Democrats who want government-run national health coverage and Republicans trying to protect the profits of private insurance corporations. Negotiators hope to draft a plan that would accommodate commercial insurers, but the firms say they can’t compete against low premiums that could be attained through savings in a governmental system. They fear that federal coverage would put them out of business.

Well, good riddance. Universal, government-run, “single payer” national health insurance is the most frugal and sensible method. The immense size of a governmental system can force price reductions and eliminate the paperwork costs of competing private insurers.

Almost half of Americans already fall under tax-paid systems: Medicare, Medicaid, the Children’s Health Insurance Program, veterans treatment, public employees coverage, etc. Why not consolidate and expand this principle to serve the whole society?

AARP protested that Americans pay more for medical care than for food. This extreme expense puts a severe burden on employers, who must insure workers. In nations with universal coverage, businesses aren’t singled out for this cost, thus they have an advantage over U.S. firms in the global marketplace.

President Obama says horrendous costs of the current medical system damage this country. It’s long past time for America to join the rest of the world in attaining universal insurance.

Doctors protest exclusion of single-payer at Senate Finance Committee

For Immediate Release
May 5, 2009

Contact:
Russell Mokhiber, Single Payer Action, (202) 468-8868, russellmokhiber@gmail.com
Katie Robbins, Healthcare-NOW! (330) 618-6379, healthcarenow08@gmail.com
Margaret Flowers, M.D., Physicians for a National Health Program – Maryland chapter, (410) 591-0892, nose1@aol.com
Kevin Zeese, ProsperityAgenda.us, (301) 996-6582, kzeese@earthlink.net
Mark Almberg, PNHP, (312) 782-6006, (312) 622-0996, mark@pnhp.org

VIDEO footage:
Sen. Max Baucus (D-Mont.) reacts to protesters,
http://www.youtube.com/watch?v=XKP05AyfRsI

Russell Mokhiber, Single Payer Action, speaks at hearing
http://www.youtube.com/watch?v=G5vhTtxad30

Margaret Flowers, MD & Katie Robbins, Healthcare-NOW
http://www.youtube.com/watch?v=1zOShsL4UJo

Carol Paris, MD, PNHP
http://www.youtube.com/watch?v=RdIUcrVxGwA

Mark Dudzic, Labor Campaign for Single-Payer Healthcare
http://www.youtube.com/watch?v=r1nl32aAh7M

Adam Schneider
http://www.youtube.com/watch?v=I26EkvnjZuQ

Pat Salomon, MD & Kevin Zeese
http://www.youtube.com/watch?v=iDHJH7W-ZEo

WASHINGTON – Doctors and other advocates of a national single-payer health system – also known as an improved Medicare for All – directly confronted senators at a Senate Finance Committee “roundtable” on health reform today.

One-by-one, eight single-payer advocates in the audience stood up during the opening comments of the hearing and asked why single-payer experts were being excluded from the proceedings. They each spoke out in turn until they were removed from the committee hearing room and arrested, one-by-one, by U.S. Capitol police.

The doctors and others said that a publicly funded, privately delivered single-payer system is the only solution to the crisis plaguing our nation’s non-system of health care, noting that single-payer national health insurance would guarantee coverage for everyone and contains costs.

Despite polling that shows a clear majority of public and physician support for a single-payer system, Sen. Max Baucus (D-Mont.), chair of the Senate Finance Committee, has stated on multiple occasions that single payer is “off the table” of health reform.

Today’s round table, the second of three, consisted of 15 witnesses with no single-payer advocates among them. By contrast, several witnesses have direct ties to the for-profit, private health insurance industry.

The doctors and activists were dressed in black, which they said was in memory of the 22,000 people who die every year due to lack of health insurance. They represented a coalition of single-payer advocacy organizations including Physicians for a National Health Program (PNHP), Healthcare-NOW, Single Payer Action, Private Health Insurance Must Go, the Campaign for Fresh Air and Clean Politics, Prosperity Agenda, and Health Care for the Homeless.

“Health insurance administrators are practicing medicine without a medical license,” said Dr. Margaret Flowers, co-chair of Maryland chapter of PNHP. “The result is the suffering and death of thousands of patients for the sake of private profit. The private health insurance industry has a solid grip on patients, providers and legislators. It is time to stand up and declare that health care is a human right.”

Much to the frustration of Baucus, the multiple disruptions demanding single-payer be on the table set the tone for the second of three roundtables on Health Reform by the Senate Finance Committee.

Katie Robbins, assistant national coordinator of Healthcare-NOW, said: “The current discussion on health reform is political theater at its best. Our elected officials are hosting these events to go through the motions of what developing effective national health policy should look like. There is a big difference between getting health policy experts in the room and the witnesses here today who would profit the most from reform. That difference means our hard-earned dollars will go to further insurance industry profits, not to guarantee health care to the American people.”

“It’s a pretty spectacular display of raw political power,” said Russell Mokhiber of Single Payer Action. “The health insurance industry demands that not one of the 15 people who testified today shall be a single-payer advocate. And the industry gets what it wants. It’s time for the American people to storm the gates and demand – put single payer on the table.”

Single payer is successfully implemented in the United States’ own Medicare system providing comprehensive care to the elderly, as well as in many of the best health care systems in the world. A single-payer system, as embodied in legislation H.R. 676 and S. 703, would provide guaranteed, quality care to all Americans with no increase in U.S. health spending.

The single-payer advocates said they will continue to use direct actions and nonviolent civil disobedience to urge the inclusion of a publicly funded, privately delivered system.

Other methods of communication with elected officials have failed in delivering the demand for single-payer national health care as evidenced by the exclusion of single-payer advocates from official hearings on health reform.

###

Healthcare-NOW! is a national grassroots advocacy organization in support of single-payer national health care with a network of activists in 42 states. More information can be found at www.healthcare-now.org

Single Payer Action is a nonprofit activist fueled organization. Find out more at www.singlepayeraction.org

Maryland Chapter Physicians for a National Health Program is a chapter of Physicians for a National Health Program (www.pnhp.org), a nonprofit research and education organization of 16,000 physicians, medical students and health professionals who support single-payer national health insurance. More information can be found at www.md.pnhp.org

Prosperity Agenda includes single payer national health care as one of the policy changes needed to create an economy that benefits all Americans, not just the wealthiest. www.prosperityagenda.us. Prosperity Agenda is an economic justice project associated with The Campaign for Fresh Air & Clean Politics (www.FreshAirCleanPolitics.net).

A ‘public plan option’ won’t ensure quality care

By QUENTIN D. YOUNG
Politico
Letter to the editor
5/5/09 4:29 AM EDT

While Carrie Budoff Brown accurately reflects some of the arguments for single-payer health reform, such as the vast savings in administrative costs our nation stands to reap from national health insurance (“Groups strategize for single-payer plan,” April 28), a casual reader might mistakenly get the impression that single-payer advocates are pressing their case merely as a bargaining chip to win a lesser reform — specifically, the creation of a “public plan option.”

Not true. Single-payer advocates, including our 16,000-member Physicians for a National Health Program, are still pressing full-bore for single-payer national health insurance. A public plan option simply can’t deliver the savings and other efficiencies we need to ensure universal, quality care. Nor is it a “stepping stone” toward single payer.

As my colleague Dr. David Himmelstein told a congressional subcommittee last week, “A health reform plan that includes a ‘public plan option’ might realize some savings on insurance overhead. However, as long as multiple private plans coexist with the public plan, hospitals and doctors would have to maintain their costly billing and internal cost-tracking apparatus. Indeed, my colleagues and I estimate that even if half of all privately insured Americans switched to a public plan with overhead at Medicare’s level, the administrative savings would amount to only 9 percent of the savings under single payer.”

Only a true single-payer system (“Everybody in, nobody out”) can yield the administrative savings — estimated at $400 billion annually — needed to provide comprehensive, affordable care to everyone.

Placebos that preserve the role of the private health insurance industry, such as the reform measures proposed by the Obama administration and key lawmakers like Sens. Max Baucus (D-Mont.) and Ted Kennedy (D-Mass.), with or without a public option, can’t even come close to these results.

Adoption of a publicly financed health care system has become an economic and moral imperative.

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

Medical student debt and specialty selection

Where Did All the Doctors Go?

The New York Times
May 3, 2009
Letters
To the Editor:
Re “Shortage of Doctors Proves Obstacle to Obama Goals” (front page, April 27), about a lack of primary care providers :
As those of us responsible for delivering health care know, the battle between specialists and primary care doctors has been going on for years, and one side has been winning.
The marketplace has rewarded specialists financially, and like any other special interests, they are amply financed for this conflict. Still, I don’t fault them. They have studied and worked hard, and are responding to market incentives, like good red-blooded Americans.
What we really need is a European-style single-payer system, with primary care doctors who emerge from their training with European-style debt loads: zero.
Georganne Chapin
Tarrytown, N.Y.
The writer is president and chief executive of the Hudson Health Plan, a not-for-profit managed care organization.
http://www.nytimes.com/2009/05/04/opinion/l04doctors.html

And…

Subject: Graduate Medical Education: Trends in Training and Student Debt

GAO (Government Accountability Office)
May 4, 2009
In summary, we found that medical students prefer surgical and procedural specialties, and physician subspecialization is increasing. Relative to the number of available residency positions, more medical students have preferred surgical and procedural specialties over primary care specialties since 1999, according to national data.
Some factors may also lead students to pursue certain specialties while avoiding others. For example, the desire for a controllable lifestyle — a predictable schedule and fewer on-call hours — and high salary may lead students to pursue procedural specialties such as anesthesiology, and avoid other specialties such as primary care.
Medical school tuition and fees have increased significantly since 1998. Medical students can borrow up to $40,500 per year through the federal Stafford loan program with additional funding available through other federal loan programs; these loan programs can cover the full cost of medical school. The median amount of educational debt for indebted medical students graduating in 2008 was $155,000 — a 53 percent increase since 1998, controlling for inflation. Once out of medical school, residents earn stipends ā€” on average about $3,729 a month for a 1st year resident. With $155,000 in debt, a resident’s monthly loan payment could reach over $1,700 (about 48 percent of pretax income). However, residents have repayment options that can reduce their monthly debt payment until they complete postgraduate training.
http://www.gao.gov/new.items/d09438r.pdf

This statement from a highly respected executive of a not-for-profit managed care organization, and this new GAO report, both further confirm what we already knew. Medical students are graduating with excessive debt, and this is likely contributing to the decline in the numbers choosing the primary care specialties.
Without increasing total health care spending, a few policies could be adopted which would realign incentives to improve our primary care infrastructure, while relieving students of the necessity of accumulating debt. That would be much easier to accomplish through a single payer monopsony than through a dysfunctional, fragmented, multi-payer, health care financing system.

Medical student debt and specialty selection

Where Did All the Doctors Go?

The New York Times
May 3, 2009
Letters

To the Editor:

Re “Shortage of Doctors Proves Obstacle to Obama Goals” (front page, April 27), about a lack of primary care providers :

As those of us responsible for delivering health care know, the battle between specialists and primary care doctors has been going on for years, and one side has been winning.

The marketplace has rewarded specialists financially, and like any other special interests, they are amply financed for this conflict. Still, I don’t fault them. They have studied and worked hard, and are responding to market incentives, like good red-blooded Americans.

What we really need is a European-style single-payer system, with primary care doctors who emerge from their training with European-style debt loads: zero.

Georganne Chapin
Tarrytown, N.Y.

The writer is president and chief executive of the Hudson Health Plan, a not-for-profit managed care organization.

http://www.nytimes.com/2009/05/04/opinion/l04doctors.html

And…

Subject: Graduate Medical Education: Trends in Training and Student Debt

GAO (Government Accountability Office)
May 4, 2009

In summary, we found that medical students prefer surgical and procedural specialties, and physician subspecialization is increasing. Relative to the number of available residency positions, more medical students have preferred surgical and procedural specialties over primary care specialties since 1999, according to national data.

Some factors may also lead students to pursue certain specialties while avoiding others. For example, the desire for a controllable lifestyle — a predictable schedule and fewer on-call hours — and high salary may lead students to pursue procedural specialties such as anesthesiology, and avoid other specialties such as primary care.

Medical school tuition and fees have increased significantly since 1998. Medical students can borrow up to $40,500 per year through the federal Stafford loan program with additional funding available through other federal loan programs; these loan programs can cover the full cost of medical school. The median amount of educational debt for indebted medical students graduating in 2008 was $155,000 — a 53 percent increase since 1998, controlling for inflation. Once out of medical school, residents earn stipends Ć¢ā‚¬ā€ on average about $3,729 a month for a 1st year resident. With $155,000 in debt, a resident’s monthly loan payment could reach over $1,700 (about 48 percent of pretax income). However, residents have repayment options that can reduce their monthly debt payment until they complete postgraduate training.

http://www.gao.gov/new.items/d09438r.pdf

Comment:

By Don McCanne, MD

This statement from a highly respected executive of a not-for-profit managed care organization, and this new GAO report, both further confirm what we already knew. Medical students are graduating with excessive debt, and this is likely contributing to the decline in the numbers choosing the primary care specialties.

Without increasing total health care spending, a few policies could be adopted which would realign incentives to improve our primary care infrastructure, while relieving students of the necessity of accumulating debt. That would be much easier to accomplish through a single payer monopsony than through a dysfunctional, fragmented, multi-payer, health care financing system.

Himmelstein replies to AARP falsehoods, distortions

Ain't Arguing with the Ruling Powers (AARP)

By Single Payer Action
May 1, 2009

AARP tries to convince the public they are the good guys.

In reality, AARP represents the corporate powers that be.

Take health care reform.

AARP is closely aligned with the private health insurance industry.

Or as Oregon doc Paul Hochfeld told us last year — “AARP is the enemy.”

“AARP has a for-profit side and a not-for-profit side,” Hochfeld said.

“Their for-profit side brings in a big chunk of their annual revenues. They allow insurance companies to use their name — because they have the greatest brand name of any in the county — even better than Nike or Coke.”

And so, AARP has a vested interest in fighting off single payer.

But citizens been pounding AARP in recent weeks over this conflict.

And AARP has now responded with propaganda that would make Karen Ignagni, Max Baucus, Andy Stern and Ron Pollack proud.

We asked Dr. David Himmelstein, a founder of Physicians for a National Health Program, to respond point by point to AARP’s propaganda against HR 676 — the single payer bill in the House.

AARP: H.R. 676 does not address the problem of increasing healthcare costs. Rather, it allows costs to continue to grow. By 2016, projections show total health spending almost doubling to $4.1 trillion and consuming one-fifth of the nation’s gross domestic product. Possible efforts to control costs include: “comparative effectiveness” research, a generic pathway for biologic drugs, and increased attention to prevention and care coordination, none of which are included in H.R. 676.

Dr. David Himmelstein: There is absolutely no evidence that the AARP’s favored cost control mechanisms work. The CBO has refused to credit significant savings from care coordination, or prevention. The recently published Medicare Demonstration project of care coordination found no savings. A New England Journal of Medicine review of prevention found that most prevention efforts result in increased costs, not decreased.

Comparative effectiveness research is worthwhile — as are prevention and care coordination — if done right — but is unlikely to significantly cut costs.

The major recent example is the ALLHT study, a massive federally-financed research project which demonstrated that cheaper drugs for high blood pressure are at least as effective as more expensive ones, but utterly failed to influence prescribing patterns.

Similarly, while pushing generics is worthwhile, the large increase in use of generics in recent years has hardly moderated cost increases.

A single payer program provides a structure within which all of the beneficial aspects of these initiatives could flourish, but does not depend on these vaporware solutions to the cost crisis.

Instead, it relies on massive bureaucratic savings which have been well demonstrated — and credited by the CBO and GAO in the past — as well as improvements in health planning that would slow the proliferation of useless high tech machinery and interventions.

AARP: HR 676 essentially eliminates Medicare, Medicaid, and the SCHIP programs that have served the American public well for many years.

These programs have very finely tuned financing arrangements and have adapted their coverage to meet the needs of many Americans.

Starting over with a new, single-payer program will not eliminate the problems Medicare, Medicaid, and SCHIP currently face, such as the spiraling costs of procedures and prescription medications, as well as technological advances that are often not comprehensively tested to be proven safe or effective before marketing.

Dr. David Himmelstein: HR 676 improves and upgrades Medicare and extends it to all. It would provide far better coverage than SCHIP, and without the onerous enrollment hurdles that keep many needy children off that program. Medicaid is a second class program that is only marginally better than no coverage.

AARP: HR 676 does not promote shared responsibility for healthcare coverage among employers, employees and the government — a basic principle of AARP policy. The bill would relieve employers and individuals of their obligation to contribute toward healthcare coverage.

Therefore, even with the trust fund contained in the bill and other sources of funding, the single-payer system cannot remain solvent for long. Taxes will need to be increased. This means that the bill simply shifts the burden of the rising costs of health care onto the taxpayer alone, with no motivation built in its structure for cost-containment.

Dr. David Himmelstein: Employers and rich people would contribute — by paying taxes, as would employees. Who does the AARP thinks pays taxes if not employers and employees?

AARP: In addition H.R. 676 has not gathered bipartisan support which is important to enacting and implementing any reform.

Dr. David Himmelstein: If freeing the slaves failed to attract bipartisan support would the AARP also oppose it?

AARP: We do, however, support comprehensive healthcare reform. We will continue to monitor H.R. 676 and other legislation regarding the crucial issue of adequate health care for all. We believe quality health care and protecting lifetime financial security are the most pressing domestic issues facing our nation. The time for action is now. Therefore, it is vital that Congress deliver healthcare legislation with the strength to elicit bipartisan support and end the gridlock that continues to obstruct positive change in our country.

Dr. David Himmelstein: The AARP supports reform that protects its massive insurance revenues and has no chance of actually solving the health care crisis.

Uwe Reinhardt's prescience on the auto industry

Obama Vows Swift Overhaul As Chrysler Enters Bankruptcy

By Peter Whoriskey, Brady Dennis and Kendra Marr
The Washington Post
May 1, 2009
Chrysler, the nation’s third-largest automaker, filed for bankruptcy protection yesterday, with President Obama promising that court relief would give the company a “new lease on life.”
Now largely under government control, Chrysler will seek in court to strip itself of its overwhelming debts.
The new majority owner will be Chrysler’s union retiree health fund, which would receive a 55 percent stake in the new company. Fiat would get a 20 percent stake, with its share potentially rising to 35 percent over time based on performance. The United States would take 8 percent, while the Canadian government, which is also providing financing, would receive 2 percent.
http://www.washingtonpost.com/wp-dyn/content/article/2009/04/30/AR2009043001639.html?sid=ST2009043001828

And…

Bondholders Propose an Alternative to G.M.’s Plan

By Cyrus Sanati
The New York Times
April 30, 2009
Under the proposal released Thursday, G.M.’s bondholders would receive 58 percent of the restructured company in exchange for tearing up their $27 billion in unsecured G.M. bonds.
The United Automobile Workers, through an entity known as a VEBA, which holds workers’ health care obligations, would get about 41 percent to offset the $20 billion G.M. owes the union. Current shareholders would receive 1 percent.
Under (another) proposal that G.M. made this week, bondholders would get 10 percent of the company for their unsecured debt, while the government would receive 50 percent in exchange for forgiving at least half of G.M.’s outstanding Treasury debt by June 1, which G.M. estimates would be about $10 billion. The VEBA would get 39 percent of the equity for giving up $10 billion of the $20 billion G.M. owes it, while current shareholders would get 1 percent.
http://www.nytimes.com/2009/05/01/business/01gm.html?_r=1

And…

UAW, Ford reach agreement on VEBA

By Brent Snavely
Detroit Free Press
February 23, 2009
The UAW said today it has reached a tentative agreement with Ford Motor Co. to modify the payment requirements for a retiree health care trust fund, and is likely to use the agreement as a template for talks with General Motors Corp. and Chrysler.
Ford said the tentative agreement gives it the option to use stock for up to 50% of its payments to fund the Voluntary Employee Beneficiary Association, or VEBA.
The UAW and each of the domestic automakers agreed to create a union-managed retiree health care trust fund during contract talks in 2007, and the UAW is scheduled to begin managing the fund in 2010.
http://www.freep.com/article/20090223/BUSINESS01/90223018/

And…

Health Costs Soaring, Automakers Are to Begin Labor Talks

By Danny Hakim
The New York Times
July 15, 2003
Uwe Reinhardt, a Princeton University health care economist, calls the Big Three “a social insurance system that sells cars to finance itself.”
http://www.nytimes.com/2003/07/15/business/15AUTO.html

It was almost six years ago that Uwe Reinhardt called the Big Three “a social insurance system that sells cars to finance itself.” We have frequently quoted him, even though the statement was an exaggeration to make a point. But how prescient!
Saddled with legacy costs, each of the Big Three negotiated the transfer of their retiree health funds to the United Auto Workers (UAW) in the form of a voluntary employee beneficiary association (VEBA). With further deterioration in the auto industry’s financial status, the VEBAs are now accepting a major ownership position in these firms.
Thus Uwe Reinhardt was spot on. The VEBAs actually are “a social insurance system that sells cars to finance itself.”
Health care reform anyone?

Uwe Reinhardt's prescience on the auto industry

Obama Vows Swift Overhaul As Chrysler Enters Bankruptcy

By Peter Whoriskey, Brady Dennis and Kendra Marr
The Washington Post
May 1, 2009

Chrysler, the nation’s third-largest automaker, filed for bankruptcy protection yesterday, with President Obama promising that court relief would give the company a “new lease on life.”

Now largely under government control, Chrysler will seek in court to strip itself of its overwhelming debts.

The new majority owner will be Chrysler’s union retiree health fund, which would receive a 55 percent stake in the new company. Fiat would get a 20 percent stake, with its share potentially rising to 35 percent over time based on performance. The United States would take 8 percent, while the Canadian government, which is also providing financing, would receive 2 percent.

http://www.washingtonpost.com/wp-dyn/content/article/2009/04/30/AR2009043001639.html?sid=ST2009043001828

And…

Bondholders Propose an Alternative to G.M.’s Plan

By Cyrus Sanati
The New York Times
April 30, 2009

Under the proposal released Thursday, G.M.’s bondholders would receive 58 percent of the restructured company in exchange for tearing up their $27 billion in unsecured G.M. bonds.

The United Automobile Workers, through an entity known as a VEBA, which holds workers’ health care obligations, would get about 41 percent to offset the $20 billion G.M. owes the union. Current shareholders would receive 1 percent.

Under (another) proposal that G.M. made this week, bondholders would get 10 percent of the company for their unsecured debt, while the government would receive 50 percent in exchange for forgiving at least half of G.M.’s outstanding Treasury debt by June 1, which G.M. estimates would be about $10 billion. The VEBA would get 39 percent of the equity for giving up $10 billion of the $20 billion G.M. owes it, while current shareholders would get 1 percent.

http://www.nytimes.com/2009/05/01/business/01gm.html?_r=1

And…

UAW, Ford reach agreement on VEBA

By Brent Snavely
Detroit Free Press
February 23, 2009

The UAW said today it has reached a tentative agreement with Ford Motor Co. to modify the payment requirements for a retiree health care trust fund, and is likely to use the agreement as a template for talks with General Motors Corp. and Chrysler.

Ford said the tentative agreement gives it the option to use stock for up to 50% of its payments to fund the Voluntary Employee Beneficiary Association, or VEBA.

The UAW and each of the domestic automakers agreed to create a union-managed retiree health care trust fund during contract talks in 2007, and the UAW is scheduled to begin managing the fund in 2010.

http://www.freep.com/article/20090223/BUSINESS01/90223018/

And…

Health Costs Soaring, Automakers Are to Begin Labor Talks

By Danny Hakim
The New York Times
July 15, 2003

Uwe Reinhardt, a Princeton University health care economist, calls the Big Three “a social insurance system that sells cars to finance itself.”

http://www.nytimes.com/2003/07/15/business/15AUTO.html

Comment:

By Don McCanne, MD

It was almost six years ago that Uwe Reinhardt called the Big Three “a social insurance system that sells cars to finance itself.” We have frequently quoted him, even though the statement was an exaggeration to make a point. But how prescient!

Saddled with legacy costs, each of the Big Three negotiated the transfer of their retiree health funds to the United Auto Workers (UAW) in the form of a voluntary employee beneficiary association (VEBA). With further deterioration in the auto industry’s financial status, the VEBAs are now accepting a major ownership position in these firms.

Thus Uwe Reinhardt was spot on. The VEBAs actually are “a social insurance system that sells cars to finance itself.”

Health care reform anyone?

Uwe Reinhardt’s prescience on the auto industry

Obama Vows Swift Overhaul As Chrysler Enters Bankruptcy

By Peter Whoriskey, Brady Dennis and Kendra Marr
The Washington Post
May 1, 2009

Chrysler, the nation’s third-largest automaker, filed for bankruptcy protection yesterday, with President Obama promising that court relief would give the company a “new lease on life.”

Now largely under government control, Chrysler will seek in court to strip itself of its overwhelming debts.

The new majority owner will be Chrysler’s union retiree health fund, which would receive a 55 percent stake in the new company. Fiat would get a 20 percent stake, with its share potentially rising to 35 percent over time based on performance. The United States would take 8 percent, while the Canadian government, which is also providing financing, would receive 2 percent.

http://www.washingtonpost.com/wp-dyn/content/article/2009/04/30/AR2009043001639.html?sid=ST2009043001828

And…

Bondholders Propose an Alternative to G.M.’s Plan

By Cyrus Sanati
The New York Times
April 30, 2009

Under the proposal released Thursday, G.M.’s bondholders would receive 58 percent of the restructured company in exchange for tearing up their $27 billion in unsecured G.M. bonds.

The United Automobile Workers, through an entity known as a VEBA, which holds workers’ health care obligations, would get about 41 percent to offset the $20 billion G.M. owes the union. Current shareholders would receive 1 percent.

Under (another) proposal that G.M. made this week, bondholders would get 10 percent of the company for their unsecured debt, while the government would receive 50 percent in exchange for forgiving at least half of G.M.’s outstanding Treasury debt by June 1, which G.M. estimates would be about $10 billion. The VEBA would get 39 percent of the equity for giving up $10 billion of the $20 billion G.M. owes it, while current shareholders would get 1 percent.

http://www.nytimes.com/2009/05/01/business/01gm.html?_r=1

And…

UAW, Ford reach agreement on VEBA

By Brent Snavely
Detroit Free Press
February 23, 2009

The UAW said today it has reached a tentative agreement with Ford Motor Co. to modify the payment requirements for a retiree health care trust fund, and is likely to use the agreement as a template for talks with General Motors Corp. and Chrysler.

Ford said the tentative agreement gives it the option to use stock for up to 50% of its payments to fund the Voluntary Employee Beneficiary Association, or VEBA.

The UAW and each of the domestic automakers agreed to create a union-managed retiree health care trust fund during contract talks in 2007, and the UAW is scheduled to begin managing the fund in 2010.

http://www.freep.com/article/20090223/BUSINESS01/90223018/

And…

Health Costs Soaring, Automakers Are to Begin Labor Talks

By Danny Hakim
The New York Times
July 15, 2003

Uwe Reinhardt, a Princeton University health care economist, calls the Big Three “a social insurance system that sells cars to finance itself.”

http://www.nytimes.com/2003/07/15/business/15AUTO.html

Comment:

By Don McCanne, MD

It was almost six years ago that Uwe Reinhardt called the Big Three “a social insurance system that sells cars to finance itself.” We have frequently quoted him, even though the statement was an exaggeration to make a point. But how prescient!

Saddled with legacy costs, each of the Big Three negotiated the transfer of their retiree health funds to the United Auto Workers (UAW) in the form of a voluntary employee beneficiary association (VEBA). With further deterioration in the auto industry’s financial status, the VEBAs are now accepting a major ownership position in these firms.

Thus Uwe Reinhardt was spot on. The VEBAs actually are “a social insurance system that sells cars to finance itself.”

Health care reform anyone?