PNHP

AHIP’s proposal to reduce costs

AHIP’s proposal to reduce costs

AHIP Outlines Plan to Reduce Health Care Costs by $145 Billion

America’s Health Insurance Plans (AHIP)
May 29, 2008

The U.S. could reduce total health care spending and improve the quality of patient care if the plan proposed today by America’s Health Insurance Plans (AHIP) was implemented. PricewaterhouseCoopers reviewed AHIP’s proposals and estimates and concluded that if these proposals are fully implemented, the nation’s total health care expenditures could be $145 billion lower than currently projected by the year 2015.

Principle #1: Patients and their doctors must have the information and tools they need to evaluate treatment options and make health care decisions on the basis of safety, quality and cost.

AHIP Proposal: Access to information that compares the effectiveness and cost of treatments: Give providers, patients and purchasers access to a trusted source where they can find up-to-date and objective information on which health care services are most effective and provide the best value.

Principle #2: Patients and doctors want an efficient, interconnected health care delivery system that reduces medical errors.

AHIP Proposal: Health information technology: Encourage widespread adoption of tools such as electronic health records (EHRs), personal health records (PHRs), secure e-visits with physicians, and e-prescribing.

Principle #3: Doctors and nurses need the freedom to practice medicine without worrying about frivolous lawsuits.

AHIP Proposal: Reforming the legal system: Replace the current medical liability system with a dispute resolution process consisting of an objective, independent administrative process to provide quick and fair resolution to disputes while promoting evidence-based medicine.

Principle #4: Health insurance plans are transitioning to a system that more closely aligns payments with the quality of care patients receive.

AHIP Proposal: Build health care reform around quality improvement by rewarding safety, value and effectiveness: Work for the broader adoption of value-based reimbursement mechanisms and provide consumers with more actionable information about health care value.

Principle #5: The nation must move towards a system of care that focuses on keeping people healthy, detects disease at the earliest possible stage and rewards chronic care management.

AHIP Proposal: Enhanced disease management, care coordination and prevention programs: Deploy a new generation of strategies that emphasize prevention, improve chronic care and tailor healthcare for patients to help them live longer and stay healthier.

AHIP press release
http://www.ahip.org/content/pressrelease.aspx?docid=23426

Full report: A Shared Responsibility: Advancing Toward a More Accessible, Safe, and Affordable Health Care System for America
http://www.ahip.org/content/default.aspx?docid=23427

Comment:

By Don McCanne, MD

Health care costs have become intolerable for most individuals, employers, and the government, and the prospect is that costs will continue to increase well in excess of the rate of inflation. Most current political proposals are focused on expanding coverage. Although the proposals include token programs for cost containment, most are not much more than rhetorical fluff except for the consumer-directed proposals that would make health care access even less affordable by shifting payment responsibility to patients in need of care. This is not the direction in which we should be headed.

The majority of Americans now receive their health care coverage through private health plans. While the private insurance industry has been in control for decades, they have been unable to restrain the escalation in health care costs. They understand that the viability of their industry is threatened if the issue of affordability is not adequately addressed. Let’s look at their proposal released today that theoretically would control health care spending.

Of their five proposals, the PricewaterhouseCoopers analysis shows that only three of them are projected to provide any significant savings: (2) Health information technology, (3) Medical liability reform, defensive medicine, and (5) Disease management, chronic care, prevention. How effective would these be?

Health information technology certainly can provide benefits such as increased efficiency and error reduction, but the problem of maintaining patient confidentiality within an integrated network has not been solved and may never be. Even if we did move forward with such a system, the private industry is poised to produce and control the technology for medical records and integrated systems. When you consider who the wealthiest person on earth is, it is difficult to imagine that such a system, which will certainly not be free, will reduce health care costs in the future. That technology will be expensive and it will be designed to continue to generate an enormous amount of user fees.

The direct costs of medical liability are only a very small part of our national health expenditures. If totally eliminated, it would have only a negligible impact on reducing spending. The important question is whether or not defensive medicine is wasting resources. When physicians decide to order tests to prevent lawsuits, they are not tests that couldn’t possibly provide any information that might help the patient. Most defensive medicine tests are ordered to be certain that a less likely but very real threat does not exist. These tests may be approaching the flat of the curve, but they are tests which occasionally do reveal a threat for which intervention can be effective, even life saving. Do we really want to abandon the use of lower-yield tests merely because they also happen to provide liability protection from having missed a serious disorder?

Substituting our current tort approach to malpractice with a dispute resolution process may be a good idea, but we should not expect major cost savings from that change. Currently, the overwhelming majority of medical-injury victims do not sue and never receive compensation for their injuries. If we were to establish a process in which medical injury is automatically compensated, it is likely that it would be considered to be an entitlement program, much like workers compensation. Imagine the costs of a program in which almost all medical injury is compensated. Even if it’s a good idea, based on the number of individuals to be compensated, it would increase rather than decrease health care costs.

Much has been written about disease management, chronic care, and prevention. Appropriate disease management and chronic care should be provided by our primary care professionals rather than by wasteful third-party administrators. An advantage of introducing processes that improve care is that ongoing needs for diagnostic and therapeutic interventions are more readily identified and acted upon. Prior studies have shown that even people with the best of care are not receiving all of the services that they should be. Improving care by providing these additional, appropriate services will not reduce costs, it will increase costs.

Prevention is important, but most important preventive measures fall outside of the realm of the health care delivery system. Even AHIP states that recommended steps include the “development of a national approach to consumer education and physical fitness, leading with a national discussion aiming to develop new strategies to promote early intervention of preventable disease.”

The insurance industry’s proposals to make health care affordable will more likely increase costs, so we should ask ourselves if they really provide us with any services that actually are of value. In this report they list services that they say are worth the extra cost that we pay over and above the publicly-administered Medicare program. According to AHIP, in contrast to Medicare, “private insurers develop a range of products, sell them to an under-65 population, develop and support provider networks, promote wellness and prevention, offer disease management services, access to health information, and offer consumer support services related to choice of providers and treatment plans.”

Well let’s break this out. They “develop a range of products,” which means that they market undesirable products that reduce benefits and increase cost sharing – measures that make access to health care less affordable. They sell their products to the “under-65 population,” certainly a healthier population than those over 65, but does that mean that we should be paying more for these marketing services that Medicare doesn’t face? They “develop and support provider networks,” which take away your freedom to choose your hospitals and health care professionals. They “promote wellness and prevention,” but who doesn’t? They “offer disease management services,” which are a costly administrative intrusion into primary care. They provide “access to health information,” as if they haven’t heard of the Internet. They “offer consumer support services related to choice of providers and treatment plans,” which are decisions to be made by patients and their health care professionals, not by an intrusive private bureaucracy.

So AHIP is attempting to legitimize the continued existence of the private health insurance industry by proposing cost containment measures that can’t work, and by trying to convince us that their expensive, detrimental administrative services are worth the extra we are paying. Why should we be paying extra for services that make affordability and access worse?

This report from AHIP is a desperate attempt to convince us that the worthless services of the private insurance industry somehow provide us with value. John Geyman is right. The insurance industry is in its death throes, and we should not attempt to resuscitate it.

John Geyman, “Do Not Resuscitate:”
http://www.commoncouragepress.com/index.cfm?action=book&bookid=396

Insurers don’t like to ‘share’

Dr. Susanne King
Berkshire Eagle, MA
Saturday, May 24

The current mantra of those who support our private insurance model for health care is “shared responsibility.” Their goal is to ratchet up the amount that individuals will have to pay for medical costs, by buying insurance policies that have higher deductibles, larger co-payments, and higher costs for prescription drugs. What “shared responsibility” is about is maintaining insurance company profits.

Under pressure from Wall Street for disappointing earnings during the first quarter of 2008, CEOs from the two largest health insurance plans, United Health Group and Wellpoint, told investors last week that they would “continue to protect their (profit) margins” and “not sacrifice profitability for membership” i.e., they aren’t going to hold down premium increases to keep members on their rolls. Wellpoint’s CEO, Angela Braly, also said that her company’s market power would give it the ability to lean hard on its network doctors to accept lower reimbursements. What she didn’t add was that her predecessor, retired CEO Larry Glasscock, left Wellpoint in 2007 with a $23.9 million farewell package. The private insurance model benefits neither patients nor doctors.

The truth is that when we examine who ultimately pays for health care, it is neither employers nor the government, but the individual. Employed individuals are paying for employer-sponsored health insurance plans rather than getting wage increases. Employees pay out-of pocket expenses for their share of premiums and health care costs that aren’t covered by insurance. And employed individuals also pay taxes to the government. We, as working people, provide the financial support for our current private insurance-based system.

Meanwhile, insurance companies aren’t working for us. They are busy working for their investors, and distributing our hard-earned dollars to them, as well as stoking the fortunes of their CEOs, like Wellpoint’s retired CEO Glasscock.

If we had a single-payer health care system, a national health insurance system that covered everyone and was administered by the government, there would truly be shared responsibility. The system would be funded by a modest tax on earnings, which would be an affordable, progressive tax. National health insurance would be real insurance, in which everyone is covered and the risk is distributed across the entire group, rather than the cherry-picking of healthy, working individuals that now occurs with private insurance. Everyone would have access to medical care. Coverage would be comprehensive, and would include medical care, dental care, mental health care, medications, and long term care. Patients could choose their own doctors and hospitals. There would be no co-payments or deductibles, and no denials or hidden costs when a patient needed his insurance.

Polls show that the majority of people support national health insurance. The obstacle to health care reform is corporate special interests that profit from the current health care system, and their tenacious grip on the political process, through their lobbying efforts and political donations. This leads some to say that significant health care reform, like replacing our private health insurance system with national single-payer health insurance, is not politically feasible.

But there is a growing grassroots movement for single payer health care. More and more doctors are joining the organization Physicians for a National Health Program (www.pnhp). There is legislation at the federal level for a national health insurance program, HR 676, currently sponsored by 90 legislators, including Rep. John Olver and seven other representatives from Massachusetts.

Recently, in his New York Times column, Thomas Friedman wrote this about his mother and her perseverance. Every time life knocked her down, she got up, dusted herself off, and kept marching forward, motivated by the saying that pessimists are usually right, optimists are usually wrong, but most great changes were made by optimists. Health care reform activists are optimistic and marching forward; please join us to reform the health care system.

Susanne L. King, M.D., is a Lenox practitioner.

Perceptions of quality not related to Medicare spending

Relationship Between Regional Per Capita Medicare Expenditures and Patient Perceptions of Quality of Care

By Floyd J. Fowler Jr, PhD; Patricia M. Gallagher, PhD; Denise L. Anthony, PhD; Kirk Larsen, MA; Jonathan S. Skinner, PhD
JAMA
May 28, 2008

Context: Wide variations in Medicare expenditures exist across regions, but little is known about whether beneficiaries residing in low-expenditure regions perceive receiving lower-quality care than those in high-expenditure regions.

Objective: To evaluate how Medicare beneficiaries’ perceptions of their health care are related to per capita expenditure in the areas where they live.

Conclusion: In this representative sample of Medicare beneficiaries, no consistent association was observed between the mean per capita expenditure in a geographic area and the perceptions of the quality of medical care of the people who live in those areas.

Our survey respondents differed in their rates of use of health care in ways that parallel the aggregate analyses previously reported by Fisher et al. There is little basis for attributing those differences to access to care, concerns about costs, or the health status of the populations. Most important, the results taken together document that spending more on medical care does not improve patients’ perceptions of the medical care they receive. On average, those in the lower-expenditure areas reported no more perceived unmet needs for care and a perceived quality of ambulatory care similar to that in high-expenditure areas; furthermore, they rated the overall quality of their health care at least as highly as those in high-expenditure areas.

Ultimately, the culture that develops in particular medical communities seems to be an important factor in how much medical care is delivered and how much it costs. This study suggests that, should fundamental changes in the structure of the US health care system occur so that the lowest-expenditure quintile is viewed as the benchmark, the fraction of patients who view their care as inadequate or constrained will not, in the long term, increase above current levels. Instead, we suspect that the limiting factor in restraining cost growth or in fundamental reform will be the extent to which the medical community will be able to adjust to new standards for what constitutes appropriate medical practice.

http://jama.ama-assn.org/cgi/content/full/299/20/2406

And…

Spending on Medical Care

More Is Better?

By Gerard F. Anderson, PhD; Kalipso Chalkidou, MD, PhD
JAMA editorial

The article by Fowler et al adds to the discussion concerning whether the economic principles of “more is better,” diminishing returns, and comparison with others apply in health care. When patients are able to access good-quality objective information on the risks and benefits of the various treatment alternatives, they do not necessarily choose more aggressive or more costly interventions. Currently, the United States spends more than twice as much as most other industrialized countries on health care services, some regions of the United States spend twice as much as other regions of the country, and some institutions or clinicians are twice as expensive as others. In terms of outcomes and satisfaction, the United States may have reached the position of diminishing returns for spending on medical care.

http://jama.ama-assn.org/cgi/content/full/299/20/2444

Comment:

By Don McCanne, MD

There are now a plethora of studies that demonstrate that the current lowest-expenditure quintile may serve us well as the benchmark for optimal health care spending in the United States in that further spending produces diminishing returns.

That does not mean that we should establish a health care budget funded at that lower level and then use a meat cleaver approach to slash spending. We are seeing that in state Medicaid programs, and it is a disaster.

It does mean that we need fundamental reform of our health care financing system so that we can achieve greater value in our health care purchasing. When you look at the reform proposals of the presidential candidates, their cost containment recommendations would have very little impact in controlling spending because they fail to address the major waste resulting from our flawed, fragmented system of financing health care.

What fundamental reform do we need? Much has been said about the hundreds of billions of dollars that would be saved each and every year by simply changing to a single payer health care financing system, so we won’t address it further here, other than to state that it is essential that we make that change if we are serious about health care financing reform.

This article and others, especially the Dartmouth studies, reveal that there is a great potential for reducing wasteful spending so that the funds can be redirected to those individuals with unmet health care needs. The easier step would be to realign incentives in order to enhance our primary care infrastructure – a model that has been demonstrated to provide care at lower costs without impairing and sometimes actually improving the quality of care. Much of the cost savings is due to a reduction in the flat-of-the-curve care characterized by diminishing returns.

The more difficult step would be to identify the care that is producing diminishing returns, and, again, realign incentives to discourage wasteful, poor quality care. That won’t be easy, but it would be possible within the framework of a single payer national health program. It is almost impossible now with our fragmented system of financing care. Even Medicare would have difficulty putting into place policies that would achieve the goals of a more efficient health care delivery system because it controls spending for only about 13.7 percent of 304 million Americans and can have only a very limited impact in improving the health care delivery infrastructure.

A single national health program would have the buying power to reduce the administrative waste, to reinforce our primary care infrastructure, and to reduce excesses in the flat-of-the-curve care. Based on the current political climate, it is likely that both the Democratic and Republican platforms will fall far short on these goals.

That is not to say that there are no differences between the parties. One party understands that the government must play a major role in health care financing. The other would prefer to turn rely more heavily on the marketplace. A single payer national health program functions well in only one of these scenarios.

Democrats in Colorado, New Hampshire back single-payer health plan

FOR IMMEDIATE RELEASE
May 28, 2008

CONTACTS:
Rocky White, M.D., (719) 587-3346, whiteroc@slvrmc.org
Marcosa Santiago, M.D., (603) 786-2700, cosy@diacad.com
Quentin Young, M.D., (312) 782-6006, info@pnhp.org

State Democratic Party conventions in Colorado and New Hampshire gave strong backing this month to single-payer national health insurance, a public system of health care financing whose supporters say would guarantee quality care for everyone.

Meeting in Colorado Springs on May 16-17, the Colorado party’s 6,000 convention delegates adopted a new health care plank that reads in part: “In the United States, as a matter of social justice, we support a quality universal health care system not tied to employment, as a basic right of all citizens.

“To that end,” the plank continues, “we support guaranteed, quality, affordable and comprehensive health care for all through a not-for-profit, single-payer financed system.”

Dr. Rocky White, who attended the convention as a candidate for the Colorado Legislature, House District 62, said, “We moved the health care issue up from the eighth highest priority in the 2006 platform to the second highest priority this year, just after the Iraq war. More and more people are recognizing the current system is broken and there’s no way to fix it without radical change.”

The Colorado gathering drew a record-breaking 10,000 participants.

Meanwhile, on the same weekend, in Manchester, N.H., a gathering of 1,000 Democrats – the biggest convention in 30 years, one organizer said – also took a clear-cut stand in support of single-payer national health insurance.

“Support for single payer is much higher in New Hampshire than you might expect,” said Dr. Marcosa Santiago, a psychiatrist and member of Physicians for a National Health Program (PNHP) in Rumney, N.H. “The merits of such a system are compelling, even to a traditionally conservative state.”

The 500 voting delegates adopted a resolution introduced by Dr. Santiago that says in part, “Resolved, that the New Hampshire Democratic Party endorses and respectfully urges the United States Congress to enact the U.S. National Health Insurance Act (H.R. 676) sponsored by Representative Conyers, and adopt its goal of universal single-payer health insurance.”

As in New Hampshire, the Colorado convention also endorsed the principles of H.R. 676, the bill introduced by Rep. John Conyers Jr. of Michigan. Conyers’ bill currently has 90 congressional co-sponsors, more than any other proposal for health care reform. It has also been endorsed by over 400 labor organizations, including 33 state chapters of the AFL-CIO.

The Colorado party’s health care plank will be forwarded to the national party’s platform committee for consideration at the national convention in Denver this August.

Single-payer systems typically eliminate or substantially reduce the role of private insurance companies in the health care financing system, but still allow patients to go to the doctor or hospital of their choice. Most industrialized nations have adopted a variant of the single-payer model, and the U.S. system of Medicare is based on the same principle.

“While public attention has focused on the Democratic Party’s presidential nominating contest, following daily tallies, for example, of Barack Obama’s and Hillary Clinton’s delegate count, there is growing evidence that, down below and perhaps beneath the radar, the party’s base has been energized in new and unexpected ways,” said Dr. Quentin Young, national coordinator of PNHP.

“The position taken by the Colorado and New Hampshire conventions is more far-reaching than the positions the party’s standard-bearers take,” he said. “Both Obama and Clinton would leave private insurance companies in place as the dominant players in the U.S. health care system, although they each say they would make incremental reforms to help alleviate the current health care mess.

“But this support for single payer is in accord with public opinion polls and the views of most U.S. doctors,” Young said. “And it’s the only reform that will work.”

The full text of the Colorado and New Hampshire resolutions are available to the press at the Physicians for a National Health Program web site, www.pnhp.org/conventions.

Physicians for a National Health Program, a membership organization of over 15,000 physicians, supports a single-payer national health insurance program. PNHP is headquartered in Chicago and has chapters across the United States. To contact a physician-spokesperson in your area, contact info@pnhp.org or call (312) 782-6006.

Howard Dean on single payer

10 Questions for Howard Dean

TIME
May 22, 2008

Question: As a former physician, what are your thoughts on the Democratic candidates’ health-care plans vs. a single-payer system?

Howard Dean: I think while someday we may end up with a single-payer system, it’s clear that we’re not going to do it all at once, so I think both candidates’ health-care plans are a big step forward. Certainly compared to Senator [John] McCain, who represents a big step backward.

http://www.time.com/time/magazine/article/0,9171,1808614,00.html

Comment:

By Don McCanne, MD

Let’s assume that in 2009 we will have a Democratic president, a solid Democratic majority in the House of Representatives, and sixty filibuster-proof Democrats in the Senate. We also know that, amongst Democrats, there is tremendous support for the single payer model of health care reform. That’s all we need to enact a single payer national health program. Right?

Sorry. The Democrats are already assuming that they will be in control, and the message from them is very clear. “Although single payer may be the best way to finance health care, we can never get there in one step,” is the gospel (small g) as recited by the majority of veteran Democratic legislators (with the notable exception of John Conyers and the supporters of HR 676). The majority of Democrats believe that it would be impossible to skip the next step of first using our existing programs to expand coverage to (almost) everyone.

The consensus is that, above all, we must protect the vested interests if we are to achieve this next “big step forward.” “Vested interests” is not code language; it is the private insurance industry (and to some extent, the pharmaceutical firms, which will not be discussed here).

In health care financing, the private insurers are not the solution to our problem; the private insurers are the problem. (I would apologize to President Reagan, except in his version he got it wrong.)

Those who missed yesterday’s Quote of the Day (Memorial Day) should check it out. It discussed John Geyman’s new blog and his new book on why the private insurance industry is on a death march, and why we shouldn’t resuscitate it. The “big step forward” of the Democrats will only prolong and expand the suffering and financial hardship of our fellow Americans.

We must understand the fundamental issues if we are to avoid the big misstep forward into the health care chasm. We must leap over the chasm for a safe landing on the solid foundation of a single payer national health program.

Yesterday’s Quote of the Day from John Geyman:
https://pnhp.org/news/2008/may/geymans_do_not_resu.php

Click on the following link for information about John Geyman’s book on why the health insurance industry is (and should be) dying. You can pre-order it now to receive a copy as soon as it is printed, thereby qualifying you as an authority in the national dialogue on reform.

http://www.commoncouragepress.com/index.cfm?action=book&bookid=396

America already has several models for health-care reform

By Christine B. Helfrich
The Salt Lake Tribune
05/23/2008

The May 11 Salt Lake Tribune editorial endorsed the Hillary Clinton plan for health-care reform and on May 12 gave support to the Bennett/Wyden Senate proposal.

The Tribune sought to reassure us that these plans would not be a single-payer, government-financed plan but would “force insurance companies to compete on price, benefits and quality.”

Let’s be clear, universal coverage, as discussed by the current presidential candidates and the Bennett/Wyden plan, does not mean equal coverage.

Let’s look at the much-maligned term “socialized medicine.” As op-ed writer Stas Mintowt-Czyz (“Look to England’s example for ways to solve America’s health-care problem,” Opinion, May 18) points out, this system works quite well in England.

The government both provides and pays for the health care. Hospital doctors are paid salaries, and office-based health-care providers are paid based on the number of patients they see. In fact, our own Veterans Health Administration is also government-owned and the physicians are government employees. Apparently socialized medicine is acceptable for our veterans.

In Canada health care is provided in the “social insurance” model, which means health-care providers are self-employed but the government pays for the services in the private health-care delivery system.

The Canadians call their system “Medicare” and coincidentally this is exactly how our U.S. system of Medicare works.

So, if we have successful models of socialized medicine and social insurance operating in our country, why is it such a leap to consider covering all Americans under a single system? I fear our presidential candidates have been intimidated by the “Harry and Louise” misinformation campaigns of the 1990s.

Next time you visit your health-care provider, ask how many office employees are required for the billing and preauthorization of insurance claims. This administrative burden is estimated to consume 12 percent of insurance premiums. Another 20 percent is consumed by private insurance industry administration, marketing and profits.

UnitedHealth Group CEO Stephen Hemsley recently told investors, “We will not sacrifice profitability for membership.” Do we really think the private insurance industry is going to step forward to care for our uninsured with chronic health problems?

In fact, the current position of AHIP, the national trade association representing 1,300 health insurance companies, is that private industry should not cover individuals with significant health-care needs because that drives premiums so high that they are priced out of the market. AHIP prefers that taxpayer-funded programs pay for the 80 percent of health care used by the 20 percent who have chronic or serious health-care needs.

Those of us with employer-subsidized health insurance may be unaware of some of the deficiencies of our own insurance plans. You may have a plan that allows $120 per month for prescription drugs. This sounds generous until you get a cancer diagnosis and discover that you need $13,000 (Gleevec) a month, or $150,000 (Avastin) a year, or $100,000 (Herceptin) a year for drugs delivered in an outpatient setting. And you thought hospitalization insurance was your biggest concern?

Did you know that more than half of the insurance plans offered to college students offer benefits of $30,000 or less? Hope your college kid doesn’t need a bone marrow transplant for leukemia.

If we replaced all of our public and private insurance plans with a single national health insurance plan we could eliminate $350 billion in wasteful administrative and marketing expenditures.

The United States already has a successful program that covers 40 million people and allows us to choose our health-care providers and facilities and it manages this with only 3 percent overhead for administrative expense. This health-care plan is called Medicare. Don’t we all deserve Medicare?

CHRISTINE B. HELFRICH is an employee of the University of Utah.

Viewpoints: The Health Care Debate – Dr. David Himmelstein

Physicians for a National Health Program Co-Founder David Himmelstein – Posted May 21
Listen (mp3 | wma)

www.kaisernetwork.org/health_cast/health2008hc.cfm?hc=2599#physicians

David Himmelstein, co-founder of Physicians for a National Health Program, which advocates for a universal, single-payer national health program, and Associate Professor of Medicine at Harvard Medical School, talks with the Foundation’s Jackie Judd about how a single payer model will lead to universal coverage, the obstacles to achieving it and the implications of such a plan on health care providers and the insurance market.

Transcript

JACKIE JUDD: Dr. David Himmelstein is the co-founder of Physicians for a National Health Program, thank you for joining us on Health08.org today.

DAVID HIMMELSTEIN: Thanks for having me.

JACKIE JUDD: Let me ask you a question that we are asking everyone else as part of this interview series and that is in your organization’s view, identify the single biggest problem facing the health care system today.

DAVID HIMMELSTEIN: Well, the greatest problem is the large number of people who are uninsured and have great difficulty in getting any care at all, and related to that is a growing number of Americans who have insurance but also cannot afford care because of gaps in their coverage. So our view is that the lack of access to care is most acute for the uninsured, but growing for the insured as well – this is the biggest problem we face.

JACKIE JUDD: I know when you co-founded the organization about two decades ago now, it was founded on a single issue and that issue was to create a single-payer plan. Is that the remedy you still see today, all these many years later?

DAVID HIMMELSTEIN: Very much so. In fact, we think the evidence is much more striking than it was two decades ago that nothing else can get us to universal coverage at a cost the nation can afford. That is the only viable solution.

JACKIE JUDD: And for people who are uninitiated, describe how the single-payer plan works.

DAVID HIMMELSTEIN: Single-payer national health insurance would be very simple. Basically government would be the insurer for all Americans in a single, public plan that would be paid for out of taxes, much as the Medicare program is today, but instead of covering just the elderly it would cover everybody for all necessary medical care. Unlike Medicare, we would include full prescription drug coverage, much more extensive outpatient coverage and home care coverage than Medicare does at present, and nursing home care as well.

The other things that we would do differently than Medicare is that instead of paying hospitals on a piecework basis, patient by patient, we would use what’s called global budgets for hospitals and other institutions. So as a fire department is currently paid, they get one check a month to cover all of their work and we think that is a much more rational way to pay hospitals, clinics, nursing homes that are institutional providers of care in our system. So it would tremendously simplify the billing apparatus for those institutions.

JACKIE JUDD: And so all private insurance goes away, all insurance through employers goes away?

DAVID HIMMELSTEIN: That is right. Virtually all insurance. You might still have a very small private insurance market for things like private rooms when they are not medically indicated, some of the luxuries that are not medically necessary but that a few wealthy individuals might want, could remain privately insured. But for the vast majority of medical services, private insurance would disappear.

JACKIE JUDD: Why does the organization believe that this is the only remedy when it would cause such disruptions to what so many people are currently accustomed to.

DAVID HIMMELSTEIN: First, for patients and doctors and nurses the disruptions would in fact be miniscule. Every patient would have complete coverage from the patient’s point of view. You would have an insurance card that would be good at any doctor, any hospital, any clinic in the country. You could go and get your care and the disruption of actual care would be zero. For doctors it would tremendously simplify our billing, virtually all of us who bill Medicare are familiar with the kind of billing that would be involved.

So the disruption for the actual delivery of care would be minimal. But it’s a huge disruption for the insurance industry, that is actually the biggest thing. And for employers it is a disruption. I think for many of them it would be a welcome disruption because it would relieve them of the burden of providing coverage and of administrating coverage for their workers.

The reason that we think that this politically difficult step is worth taking is that first you get enormous potential administrative savings, so by cutting out the insurance companies who are now the middlemen, you save something like $80 billion a year just on their overhead alone, so for every dollar we pay in to a private insurance plan, we only get about 87 cents worth of care out and the rest pays for the administrative costs of the plan and the CEO’s income and the other things.

We know that Medicare can do that same job for 3 percent. The Canadian national health insurance program runs for 1 percent overhead. So we could save $80 billion just on insurance overhead, but also private insurance inflicts on providers, on hospitals and doctors and nursing home a mountain of paperwork that we ought to be able to do away with.

Again, if you pay a hospital like a fire department, they don’t have to bill for each aspirin and band-aid, you cut out a tremendous administrative burden on hospitals and similarly for doctors offices. If they are billing one program with one set of rules, you simplify my colleagues and my administrative work and we have done detailed studies on that published in the New England Journal of Medicine and the potential savings are on the order of about $350 billion each year. That is enough to cover all of the uninsured and to upgrade coverage for the rest of us so that we would have first-dollar coverage, no co-payments and deductibles, without any increase in health spending at all.

That is the only way you can actually give people terrific coverage and not drive up the cost. And other things it then makes possible is much improved quality improvement possibilities, because you have got the data for the health system in one place, you can monitor practice patterns and look at where problems are. It also gives you leverage to negotiate prices with the drug industry and medical suppliers and to do many other things that need doing in our health care system. It really creates the infrastructure to move forward and also frees up the funds to solve the acute crisis.

JACKIE JUDD: In other countries that have some parts of what you have just described, you will often hear complaints about care being rationed, about a long waiting list to get some kind of service that an individual patient feels he or she needs, that a doctor is compelled to see more patients than is reasonable in order to get their incomes up. Would all of that happen here?

DAVID HIMMELSTEIN: Well, we currently spend about twice as much per person as, for instance, Canada does and if we were to cut our budget down to the Canadian level, half, we would have to limit certain expensive high technology kinds of care. If we are willing to go on spending at our current level, we ought to be able to deliver really terrific care to every American without any significant limitations on that care.
Now, that said, it is also true that we are doing large volumes of procedures that probably do no good for patients. So many of the coronary artery stents that are put in are clearly unnecessary. A lot of the spine surgery doing no good and some of the knee surgeries, many of the CT scans and other diagnostic procedures delivering high radiation doses are not actually improving our patient’s outcome.

We ought to be limiting, to some extent, the care we are giving because at present the financial incentive in our system are really creating some terrible practices. But, we ought to limit those things because that could improve the quality, not because the finances are not there.

In terms of doctors, if you ask Canadian and American doctors, for instance, how happy are you with your practices and this has been done with surgeons who have practiced on both sides of the border, generally they are happier with practice in Canada than in the U.S. Sure, there are problems, but they are generally smaller than ours. And I think the issue of how much doctors ought to make is going to be a contentious issue under any health system.

At present American doctors are making about $200,000 per doctor per year, that is after they pay their malpractice costs and office expenses, and I think that is a plenty good income. The budgeting we have done for single-payer national health insurances, you could continue paying doctors at that level without really any problem under the kind of system we are proposing.

JACKIE JUDD: I would like you to talk for a moment or two about what the big obstacles are to achieving this vision. Certainly it has been talked about for many decades in this country. Earlier in the interview you described it as politically difficult, but it is also culturally difficult, isn’t it?

DAVID HIMMELSTEIN: I think it is culturally difficult for the insurance industry because we are saying we you are not doing anything useful in the health care system and we have no place for you and that is the major obstacle. We are taking a $500-billion-dollar-a-year industry and saying you no longer have a place in our national life. And they have tremendous financial clout and political clout that goes along with it.

The second major obstacle is the drug industry, because they are very well aware that when you have got a single payer, you have got the clout to bargain with the drug industry. So in Canada the reason they have lower drug prices is because provincial drug plan have bargaining power and have driven those prices down. If we had a national health insurance program with a single payer we would drive drug prices down. Now they still make a profit in Canada, but they do not make nearly the huge profits that they make in the U.S. So for the drug industry, national health insurance would be a hit on their profits.

I think for most other Americans it is not a big cultural shift. Your own group, Kaiser, has done surveys that have shown about 60 percent of Americans favor a Medicare-like program paid for out of taxes covering all Americans, and 59 percent of doctors favor a single-payer national health insurance program in a recent random sample survey of American doctors.

I think the people in this country, doctors, patients, clearly nurses; the American Nurses Association favors it as do the California Nurses Association/National Nurses Organizing Committee. The people on the ground are ready for national health insurance, but powerful players in our health system and in our political life are dead set against it.

JACKIE JUDD: I have a final question and that is if, as we move into 2009, a new administration and there is serious consideration of changes in the current health care system, short of adopting a single-payer plan which does not seem in the cards at the moment. What would your priorities be? If there could be one smaller change, what would it be?

DAVID HIMMELSTEIN: It is very hard for me to tell you that because I am not a political person, I am a doctor, I am a primary care doctor and I generally view my role as telling my patients and my community the truth and helping them to make decisions as I do with my patients. If one of my patients has a serious cancer, and I have a cure for it that I can offer them, I offer that to them and they say to me, what about aspirin, what about Tylenol, what about narcotics, I need to tell them those may dull the pain for a little while, but they will not cure the cancer and we do have a cure. So think short of national health insurance those other things fall short.

In Massachusetts we have had a reform that is far short of national health insurance that includes government essentially providing free insurance coverage for people below the poverty level and then partial subsidies up to 300 percent of the poverty level and then above 300 percent you are supposed to buy it yourself.

What we have said to our patients and our colleagues here is we are happy that the patient under 150 percent of poverty are getting free coverage and that is a step forward, but also we must warn that that system will not work and that we have been that route before, this is the fourth time we have tried a mandate-like system, the three previous ones have failed because cost continued to rise, the recessions that came strapped the state budget with high costs for subsidizing the growing number of poor just as the tax revenues went down. And they were then repealed and we bounced back to more uninsured than before those programs were ever passed.

What I hear is that lesser reforms cannot possibly work and that we build up expectations and then disappoint them and give them the impression that it is impossible to fix the health care system. I guess that said, the one lesser reform that I could imagine working is to say we are going to do a single payer for inpatient hospital care.

So one could imagine that that is the way they did it initially in Canada is to say we will cover every American for inpatient care, we will pay hospitals on a global budgeted basis and we will take that out of the private insurance market. For the drug industry that is probably a little less noxious for the insurance industry, it leaves them with some business, but I am skeptical that they would be prepared to see that without a huge fight because they would see where that leads as it lead in Canada.

People said we are doing this for the hospitals; it makes sense to do it for all care. And it would distort care because it would say to the uninsured; you are insured, but only on the inpatient side. We would start doing all kinds of irrational things driven by that. But that is about the only incremental step I would see.

JACKIE JUDD: Thank you very much Dr. David Himmelstein.

DAVID HIMMELSTEIN: Thank you.

Health care for veterans should be a priority

By Jonathan Walker
Fort Wayne Journal Gazette
Monday, May 26, 2008

If you spend much time reading the news in Fort Wayne, you would get the impression that “Veterans Don’t Deserve Health Care” reflects how we feel about our veterans. For instance, there have been numerous reports about veterans trying to maintain the inpatient services at the Fort Wayne VA Medical Center so that they don’t have to drive to Indianapolis to obtain care. And veterans are not the only ones having trouble with health care. The family members of active-duty soldiers are given an insurance plan that is so bad that it can be hard to find a doctor. I have a patient who is married to a soldier in Iraq, and she has to drive from LaGrange to Huntington to see the only primary care doctor who will accept patients on the plan.

It gets worse. A recent study in the American Journal of Public Health indicated that almost 2 million veterans are uninsured, along with almost 4 million of their family members. This means that one in every eight uninsured Americans is a veteran or a member of a veteran’s household. You may have thought that veterans can automatically be treated at a VA hospital, but this is not the case. Veterans who have a service-connected injury can get care, but uninjured veterans face a “means test” before they are allowed into the VA system. They have to make less than 80 percent of the local median income before they are eligible, which explains why there are so many uninsured veterans – they make too much to be eligible for the VA (or Medicaid) but not enough to afford their own insurance. This rule was implemented in 2003 to save money.

Unfortunately, even if the VA was allowed to cover every veteran, it would still leave about half the uninsured veterans without care because they do not live near a VA hospital. Think about that for a minute. Although the VA can provide excellent care, it is impossible to have a VA hospital near every veteran. There are laws that make it illegal for an insurance company to force patients to drive an excessive distance just to stay in the network, yet we think nothing of making veterans drive long distances to get the care to which they are entitled.

It seems strange that a society that prides itself on “supporting the troops” would treat our veterans so poorly when it comes to health care. It so happens that if you become sick and lose your insurance, you will eventually become eligible for Medicare and Medicaid, assuming you can survive long enough to go bankrupt. You have to hit bottom first, but then you can get free medical care anywhere.

It would be so simple to expand these programs to veterans and their family members – so they never have to hit rock-bottom. It would even be cheaper than leaving them uninsured: A 2004 Kaiser Commission study found that the uninsured cost society twice as much compared to the cost of simply giving them insurance in the first place.

Veterans should have unfettered access to the best care we can give them. We should be ashamed that so many of them go without the care they deserve.

Jonathan D. Walker, M.D., is a member of Hoosiers for a Commonsense Health Plan. He wrote this for The Journal Gazette.

Geyman's Do not resuscitate the insurance industry

The Most Basic Question in the Health Care Reform 'Debate'

Posted by John P. Geyman, M.D.
Professor Emeritus of Family Medicine
University of Washington

PNHP Blog
Inaugural posting
May 23, 2008

Adapted from my book Do Not Resuscitate: Why the Health Insurance Industry Is Dying, and How We Must Replace It (2008), with permission of the Publisher, Common Courage Press

The most basic question underlying the so-called debate over reform of U.S. health care is being dodged by most participants, policymakers, and politicians. As health care costs spiral out of control and exclude more and more millions of Americans from even the most rudimentary health care services, what debate we have deals with incremental tweaks as delusional and false hopes of reform. The air is filled with claims and hopes for a long and growing list of ‘reforms’ — for starters, these include employer and individual mandates, expanding prevention programs, chronic disease management, pay-for-performance, state high-risk pools, association health plans, information technology, tax credits/vouchers, and more. Within this cacophony of noise, the big issue is being missed.

What then is the big question? It is whether or not we should continue with private multi-payer financing of health care. Although private health insurance served the public interest in its earlier years, those times have long since passed. The industry has been transformed over the last 50 years to a largely investor-owned industry within which profits to shareholders and CEOs trump service to patients and the public.

The industry’s track record speaks for itself. It is on a death march. The costs of insurance premiums alone have become unaffordable for tens of millions of Americans, and are increasing several times faster than costs-of-living and median family incomes. Insurance covers less and less of total health care costs. Access to affordable health care has become a major concern affecting all middle-class Americans, with no relief on the horizon. Private insurers go to great lengths to avoid coverage of sick individuals and even high-risk groups. As the employer-based market shrinks, they seek out new lucrative markets in generously subsidized public markets, especially Medicare and Medicaid, for revenue growth. This industry is unsustainable, as some insiders are starting to fear. Even Wall Street analysts are beginning to see dark clouds on the industry’s horizon.

The industry’s 60-year report card is in, and it has failed the public interest. It is now time to require an efficient, equitable, and sustainable financing system that can enable universal coverage of all Americans for necessary health care by spreading risk across our entire population. Subsequent commentaries will focus on the many ways in which private health insurance cannot meet that challenge.

https://pnhp.org/news/2008/may/the_most_basic_quest.php

“Do Not Resuscitate: Why the Health Insurance Industry Is Dying, and How We Must Replace It” by John Geyman, Common Courage Press:
http://www.commoncouragepress.com/index.cfm?action=book&bookid=396

Comment:

By Don McCanne, MD

Today, Memorial Day, we commemorate the U.S. men and women who perished while in military service for our country. Somehow it doesn’t seem right that this day has become associated with hazardous sporting events, travel with excess fuel consumption, picnics with the requisite beer, and a surge in slaughter on our highways. It seems much more appropriate to contemplate what our men and women were fighting for. After all, they did give their lives for us.

They were defending America. They were defending a nation that has learned to balance our freedom to achieve our personal goals through individual liberty, with our sense of community through social solidarity in making this a better nation for all of us.

The balance between individual freedom and social solidarity is a dynamic. Our policies can be used to improve both sides of that balance, or they can be used create an inappropriate imbalance, often resulting in impairment of both sides. We don’t always get it right.

The nation understands that there is something wrong with the provision of one of our most fundamental needs – health care. On this Memorial Day we should commemorate those who gave to our nation all that they possibly could. We can make our own humble contribution by resolving to do all that we can to make this a better nation. Making our health care system work for all of us would provide the balance we are seeking by using solidarity to enhance the role of the individual through better health.

John Geyman’s new book could not be more timely. There is a surge in activity to move forward with political solutions to our health care crisis. There is a loud call to end the policy debate and move forward with UNITY behind models that build on private insurance plans. But Geyman shows us that private plans are rapidly deteriorating in their ability to provide the health care needs of the individual and in their ability to provide affordable, comprehensive health care financing for the nation. Instead of improving both sides of the balance, health plans are weighting down the scales and causing both sides to crash.

This weekend is the beginning of John Geyman’s blog series on why private health insurance cannot meet our challenge. It is crucial that we understand the fundamentals. Without further dialogue on policy, the momentum for UNITY will move forward with the private plan model and crush our scales of reform. Geyman shows us that the private plan pathway can only lead to greater physical suffering and financial hardship. We can improve both health care for individuals and health care financing for the nation through a single payer national health program, but first we must pass the hurdle of the obsolete, dysfunctional model of private health plans.

In addition to his blog, John Geyman’s book, “Do Not Resuscitate: Why the Health Insurance Industry Is Dying, and How We Must Replace It,” will soon be available. It will be of great importance in our advocacy work with the new administration and Congress. Everyone should have a copy. It can be pre-ordered now at the Common Courage Press website, and is very inexpensive with the publisher’s discount. Even though delivery will not be until this summer, I emphatically recommend that you order it now while you are thinking about it. At least, check out the website at this link:

http://www.commoncouragepress.com/index.cfm?action=book&bookid=396

Geyman’s Do not resuscitate the insurance industry

The Most Basic Question in the Health Care Reform ‘Debate’

Posted by John P. Geyman, M.D.
Professor Emeritus of Family Medicine
University of Washington

PNHP Blog
Inaugural posting
May 23, 2008

Adapted from my book Do Not Resuscitate: Why the Health Insurance Industry Is Dying, and How We Must Replace It (2008), with permission of the Publisher, Common Courage Press

The most basic question underlying the so-called debate over reform of U.S. health care is being dodged by most participants, policymakers, and politicians. As health care costs spiral out of control and exclude more and more millions of Americans from even the most rudimentary health care services, what debate we have deals with incremental tweaks as delusional and false hopes of reform. The air is filled with claims and hopes for a long and growing list of ‘reforms’ — for starters, these include employer and individual mandates, expanding prevention programs, chronic disease management, pay-for-performance, state high-risk pools, association health plans, information technology, tax credits/vouchers, and more. Within this cacophony of noise, the big issue is being missed.

What then is the big question? It is whether or not we should continue with private multi-payer financing of health care. Although private health insurance served the public interest in its earlier years, those times have long since passed. The industry has been transformed over the last 50 years to a largely investor-owned industry within which profits to shareholders and CEOs trump service to patients and the public.

The industry’s track record speaks for itself. It is on a death march. The costs of insurance premiums alone have become unaffordable for tens of millions of Americans, and are increasing several times faster than costs-of-living and median family incomes. Insurance covers less and less of total health care costs. Access to affordable health care has become a major concern affecting all middle-class Americans, with no relief on the horizon. Private insurers go to great lengths to avoid coverage of sick individuals and even high-risk groups. As the employer-based market shrinks, they seek out new lucrative markets in generously subsidized public markets, especially Medicare and Medicaid, for revenue growth. This industry is unsustainable, as some insiders are starting to fear. Even Wall Street analysts are beginning to see dark clouds on the industry’s horizon.

The industry’s 60-year report card is in, and it has failed the public interest. It is now time to require an efficient, equitable, and sustainable financing system that can enable universal coverage of all Americans for necessary health care by spreading risk across our entire population. Subsequent commentaries will focus on the many ways in which private health insurance cannot meet that challenge.

https://www.pnhp.org/news/2008/may/the_most_basic_quest.php

“Do Not Resuscitate: Why the Health Insurance Industry Is Dying, and How We Must Replace It” by John Geyman, Common Courage Press:
http://www.commoncouragepress.com/index.cfm?action=book&bookid=396

Comment:

By Don McCanne, MD

Today, Memorial Day, we commemorate the U.S. men and women who perished while in military service for our country. Somehow it doesn’t seem right that this day has become associated with hazardous sporting events, travel with excess fuel consumption, picnics with the requisite beer, and a surge in slaughter on our highways. It seems much more appropriate to contemplate what our men and women were fighting for. After all, they did give their lives for us.

They were defending America. They were defending a nation that has learned to balance our freedom to achieve our personal goals through individual liberty, with our sense of community through social solidarity in making this a better nation for all of us.

The balance between individual freedom and social solidarity is a dynamic. Our policies can be used to improve both sides of that balance, or they can be used create an inappropriate imbalance, often resulting in impairment of both sides. We don’t always get it right.

The nation understands that there is something wrong with the provision of one of our most fundamental needs – health care. On this Memorial Day we should commemorate those who gave to our nation all that they possibly could. We can make our own humble contribution by resolving to do all that we can to make this a better nation. Making our health care system work for all of us would provide the balance we are seeking by using solidarity to enhance the role of the individual through better health.

John Geyman’s new book could not be more timely. There is a surge in activity to move forward with political solutions to our health care crisis. There is a loud call to end the policy debate and move forward with UNITY behind models that build on private insurance plans. But Geyman shows us that private plans are rapidly deteriorating in their ability to provide the health care needs of the individual and in their ability to provide affordable, comprehensive health care financing for the nation. Instead of improving both sides of the balance, health plans are weighting down the scales and causing both sides to crash.

This weekend is the beginning of John Geyman’s blog series on why private health insurance cannot meet our challenge. It is crucial that we understand the fundamentals. Without further dialogue on policy, the momentum for UNITY will move forward with the private plan model and crush our scales of reform. Geyman shows us that the private plan pathway can only lead to greater physical suffering and financial hardship. We can improve both health care for individuals and health care financing for the nation through a single payer national health program, but first we must pass the hurdle of the obsolete, dysfunctional model of private health plans.

In addition to his blog, John Geyman’s book, “Do Not Resuscitate: Why the Health Insurance Industry Is Dying, and How We Must Replace It,” will soon be available. It will be of great importance in our advocacy work with the new administration and Congress. Everyone should have a copy. It can be pre-ordered now at the Common Courage Press website, and is very inexpensive with the publisher’s discount. Even though delivery will not be until this summer, I emphatically recommend that you order it now while you are thinking about it. At least, check out the website at this link:

http://www.commoncouragepress.com/index.cfm?action=book&bookid=396

Gov. Crist's victory for unaffordable underinsurance

Legislature passes health plan pushed by Gov. Crist to cover uninsured

By Josh Hafenbrack
Sun-Sentinel.com
May 3, 2008

Delivering on Gov. Charlie Crist’s top election-year priority, the Florida Legislature on Friday approved a health insurance package to extend no-frills coverage to the state’s 3.8 million uninsured.

The plans — which aren’t the “Cadillac of coverage,” as Crist concedes — would cover some health screenings, doctor visits and office surgeries, but not medical attention that requires a specialist or prolonged hospital stays.

Crist called the health-care package “historic legislation” that will be a model for the rest of the nation.

http://www.sun-sentinel.com/business/sfl-flfhealth0503sbmay03,0,1207424.story

And…

New Florida Law Allows Low-Cost Health Policies

By Kevin Sack
The New York Times
May 22, 2008

With considerable fanfare, Gov. Charlie Crist traveled the length of his state on Wednesday to sign a bill aimed at providing low-cost health coverage to the uninsured by allowing the sale of stripped-down insurance policies.

… an insurance company could, for instance, choose to limit the number of days of hospitalization it will cover or place a dollar cap on reimbursing certain services.

But the best part, as Mr. Crist, a Republican, explained at news conferences in Miami, Tampa and Tallahassee, is that the law “doesn’t cost taxpayers a dime.”

Mr. Crist… said he was optimistic that uninsured Floridians would buy the plans…

“Even if it’s one person,” Mr. Crist said, “it would be a success…”

http://www.nytimes.com/2008/05/22/us/22crist.html?_r=1&ref=health&oref=slogin

Florida Senate SB 2534 “Cover Florida Health Care Access Program:”
http://www.flsenate.gov/cgi-bin/view_page.pl?Tab=session&Submenu=1&FT=D&File=sb2534er.html&Directory=session/2008/Senate/bills/billtext/html/

Comment:

By Don McCanne, MD

This weekend, Florida’s Gov. Charlie Crist travels to Sen. John McCain’s ranch in Arizona for further vetting as a member of the short list of potential nominees for vice-president. With him he takes his health reform legislative victory that can serve as “a model for the rest of the nation.”

Some model. It would reduce insurance premiums by stripping down benefits through measures such as limiting hospitalization and specialized services and by capping payments. Since this “doesn’t cost taxpayers a dime,” the premiums would still be unaffordable for most individuals currently without coverage. Obviously this model will not work for individuals who have health care needs.

But it might work for one person, and Gov. Crist says that it would then be a success. But as a model for the nation, isn’t that setting a low standard? Or maybe he means fifty people – one in each state.

WellPoint Meeting, 5/21/08

From Dr. Rob Stone in Indianapolis, IN

The WellPoint protest and meeting went very well, and I want to thank everyone who participated. We had over 50 outside the corporate offices and a nice piece in the Indy Star, and check out the great picture. http://www.indystar.com/apps/pbcs.dll/article?AID=/20080521/BUSINESS/80521049.

Five of us who own some stock went into the meeting and were able to address the board, which includes one of former President G H W Bush’s brothers William H T Bush, Sen Don Reigle, and Susan Bayh, amongst others. (The stock is right now trading around $50/share, and so you can buy 5 shares like I own and be able to attend the meeting next year!) We were polite, civil, and relentless. We made our case.

Who recalls the poem “Ozymandias” by Shelly from high school English class? (you can Wikipedia it at http://en.wikipedia.org/wiki/Ozymandias) The poem tells the story of a traveler finding a broken statue in the desert, a forgotten wreckage. On the pedestal the words appear: “My name is Ozymandias, king of kings: Look on my works, ye Mighty, and despair!” This was our message to the stockholders of WellPoint. Yes, you may seem high and mighty today, but soon you will be dust and wreckage in the desert. This is how we should be reframing the question when we hear, “But the insurance companies are so powerful. We will never be able to see real change. They will crush us.” The last lines of the poem:

“Nothing beside remains: round the decay

Of that colossal wreck, boundless and bare,
The lone and level sands stretch far away.”

Here is the question I posed to the Board and CEO, Angela Braly:

“I am a stockholder in WellPoint, and I am an emergency room doctor from down the road in Bloomington, therefore an “in-network provider” with a contract with this company, and I carry an Anthem card in my pocket as a policyholder. I bring all three perspectives to this meeting.

WellPoint has had a bad year. From California, first the court ruling about recision, or post hoc cancellation of policies, then the furor over asking doctors to rat on their patients who might have pre-existing conditions. From here in Indianapolis the scandal and dismissal of CFO David Colby. From Washington, the fines for improper and overly aggressive marketing of Medicare Advantage Plans. From Wall Street, the stock down 30% over the last 3 months. From Connecticut, the shareholder resolution that is clearly aimed at the perspective that the officers are grossly overpaid. And in my hometown of Bloomington, another in a series of bitter, protracted contract negotiations just concluded, this time with the largest physician group in the community. Lots of bad press and hard feelings.

Given that setting, imagine my distress to read in the May 19 issue of American Medical News that Angela Braly was being quoted. The article notes, as many others have, that health insurance companies are pricing themselves out of the market. Currently 47 million Americans are priced out of the market.

The article went on: “We will not sacrifice profitability for membership,” WellPoint President and CEO Angela Braly told analysts during a conference call. In trying to persuade investors that WellPoint’s problems are “fixable,” CEO Braly emphasized WellPoint’s market power, which she said gives it the ability to lean hard on its network doctors to accept lower reimbursement.

Last month a study published in the Annals of Internal Medicine reported that now 59% of physicians in this country support government legislation to establish national health insurance. That number grows every time a physician reads Ms Braly’s quote in American Medical News.

It appears to me that the business plan that has served WellPoint so well the past 10 years now looks more like a car driving off a cliff, or maybe a dinosaur stumbling toward a tar pit. Please comment.”

Ms Braly thanked me for my question and spoke for several minutes in reply, managing to say nothing.

Rob Stone, MD