Town Hall on Health Care

President Obama
The White House
July 1, 2009

Here’s the problem, is that the way our health care system evolved in the United States, it evolved based on employers providing health insurance to their employees through private insurers. And so that’s still the way that the vast majority of you get your insurance. And for us to transition completely from an employer-based system of private insurance to a single-payer system could be hugely disruptive. And my attitude has been that we should be able to find a way to create a uniquely American solution to this problem that controls costs but preserves the innovation that is introduced in part with a free market system.

We want to build on what works about the system and fix what’s broken about the system.

http://www.whitehouse.gov/the_press_office/Remarks-of-the-President-in-an-Online-Town-Hall-on-Health-Care-Reform/

And…

Health Insurance Coverage: Early Release of Estimates from the National Health Interview Survey, 2008

by Robin A. Cohen, Ph.D. and Michael E. Martinez, M.P.H., M.H.S.A.
CDC

In 2008, 60.2% of unemployed adults aged 18-64 years and 22.2% of employed adults in this age group had been uninsured for at least part of the past year.

Among persons under age 65 with private health insurance, 17% with employer-based coverage were enrolled in a HDHP, compared with almost 45% of those with a private plan that was directly purchased or obtained through means other than an employer.

http://www.cdc.gov/nchs/data/nhis/earlyrelease/insur200906.pdf

Everywhere you turn those rejecting single payer, including President Obama, say that we want to build on what works and fix what’s broken. They say that what works is our employer-sponsored system of coverage. But does it?

Employer-sponsored plans fail to cover about one-fifth of the workforce. Of those who are covered many have been switched to high-deductible health plans (HDHP), a form of inadequate underinsurance that has been more characteristic of the individual insurance market.

Although the employer-sponsored system falls short for far too many of us, one of the most serious deficiencies is that it is dependent on employment. Well, of course. But that means that three-fifths of the unemployed remain without coverage. And of those insured who do not receive their coverage through their work, 45% have HDHP underinsurance products.

This is really a lousy insurance infrastructure that we are trying to prop up. And nobody in Washington is considering seriously the massive amount of tax subsidies that would be required to help everyone purchase plans with adequate benefits. Establishing an insurance exchange for employers and individuals is of little help if the subsidies won’t fill the gap of affordability. But adequate subsidies are off the table because they are budget busters.

How about dumping what’s broken, and building on a system that works - Medicare.

I just returned from the annual conference of the National Health Care for the Homeless Council, where the link between medical bankruptcy and homelessness was made more clear than ever.

Which raises the question: Will the health reform we get end the “Only in America” phenomenon of medical bankruptcy? Just asking….

I am not usually the one to write about individual horror stories.  I will have my usual statistics and facts later in this diary. But one speaker’s story summed up so much of what is wrong Only in America.

Let me tell you the story of Joe Benson:

Checking In With James Gelfand, U.S. Chamber of Commerce

By Jenny Gold
Kaiser Health News
July 1, 2009

The Chamber of Commerce is not mincing words. The senior manager of health policy for the Chamber, James P. Gelfand, says: “The problem is instead of focusing on the 90% of issues that everyone can agree on, we’re getting stuck on the 10% ideological, uncompromisable, unworkable provisions… like creating a government-run insurance plan, forcing employers to provide health insurance. That’s the kind of stuff that reads like a poison pill.”

Q: In congressional testimony, the Chamber’s senior vice president Randel Johnson said the [employer mandate] pay-or-play proposal “holds a Sword of Damocles over the necks of America’s job creators.” Do you believe it represents that kind of threat?

A: You [have to] pare this down to the simplest form — what does this employer mandate do? It makes people who don’t make a lot of money worth less to their employers. Say to yourself, I want to hire someone. I want them to do a simple task. It’s probably worth about $7 an hour. And then you realize, oh wait, because of a new law, I’m going to have to provide gold-plated health insurance. So instead of $7 an hour, it’s going to be more like $20 an hour. Let me tell you something, that person is not getting a job. So we’re just trying to make Congress understand this is a bad, bad policy. It’s gonna hurt the people they want to help.

Q: Many people say the plans on the table right now help lower income people the most. Why does the employer mandate hurt those people who are unable to get insurance?

A: Let’s look at the plan as a whole and what it’s going to do for people who don’t make a whole lot of money. If they’re lucky enough to keep their jobs, which many of them will not be — in fact, a model developed by the president’s own chair of the Council of Economic Advisers found that 4.7 million jobs would be lost based on this employer mandate — well, their benefits are going to be taxed. We’re going to tax them when they buy Coca-Cola. We’re gonna tax them when they buy alcohol. We’re going to force them, if they have a small health plan that they can afford and that appeals to them, to buy a big, rich, expensive health plan. Yeah, I think they’re getting the shaft here.

Q: So far, advertising on health care has been fairly restrained. At what point is it time to ramp up opposition? And what might it look like?

A: You don’t start a battle with nuclear weapons. First thing we’re going to do is try to work inside the system, try to work especially with Sen. Baucus to fix this thing. We don’t want to launch nukes. We don’t want to have a war. We want to support legislation. What will happen at the end of the day? Will Charlie Rangel work with us? I don’t know. I can tell you that at the hearing, he specifically, clearly said, we need the Chamber to get this done. He’s right. And I think as Congress slowly comes to the realization, oh wait, we can’t jam this down America’s throat, we can’t roll employers, we can’t roll the U.S. Chamber, I think the process is going to improve, and hopefully we won’t have to do any of these war tactics of buying air time and stuff like that. Just keep in mind, though, that we could if we had to. We have a massive grassroots network. We put out one e-mail asking people to write letters to Congress about the employer mandate and about the public plan, and we generate somewhere around 50,000 letters to Congress. So I think Congress is realizing that it’s gonna be trouble if they try to roll us.

We really do need reform, and I’m sorry that things have gotten to the point where we’re having to beat up on members of Congress who are proposing wacky schemes instead of pragmatic legislation.

http://www.kaiserhealthnews.org/Checking-In-With/Gelfand.aspx

Wal-Mart, SEIU, CAP letter to President Obama:
http://www.kaiserhealthnews.org/Daily-Reports/2009/June/30/~/media/Images/KHN%20Features/2009/June/30/CAPwalmartSEIU.ashx

“So I think Congress is realizing that it’s gonna be trouble if they try to roll us,” and “I’m sorry that things have gotten to the point where we’re having to beat up on members of Congress.” Was this guy nurtured on “The Sopranos,” or is he the real thing?

Regardless, are the owners of America’s businesses really as heartless as this jerk implies? Do they really believe that their workers would be “getting the shaft” by having health insurance with adequate benefits?

Even Wal-Mart can’t stomach this anymore. In a letter to President Obama yesterday, they stated, “We are for shared responsibility. Not every business can make the same contribution, but everyone must make some contribution. We are for an employer mandate which is fair and broad in its coverage, but any alternative to an employer mandate should not create barriers to hiring entry level employees. We look forward to working with the Administration and Congress to develop a requirement that is both sensible and equitable.”

Employer-mandated insurance is a primitive, inefficient and inequitable method of financing health care. Maybe Wal-Mart and the other business interests are ready to consider a model that is fair for all, efficient, and really does ensure that everyone has affordable access to health care. And if they walk away from the U.S. Chamber of Commerce, they will find advocates that can show them that they don’t even have to break any kneecaps to achieve that.

Dr. Donald J. Palmisano, a past president of the American Medical Association, recently wrote that our country’s health care system “the finest in the world” and went on to say how a publicly financed health care system could ruin what has been built. He cites such potential horrors as long waits for specialists, bureaucratic intervention in medical decisions, and taxpayers bearing the burden of a government plan as reasons to oppose the creation of one.

I have one question for Dr. Palmisano: What country do you live in? In my country, America, we have the best doctors in the world. However, the system we have placed them into is stifling their ability to treat patients to the best of their ability.

Take wait times for specialists. We live in a country where 18 percent of the population lacks health insurance. This means that right from the start at least 46 million people have been cut out of the waiting line. Certainly this shortens the wait time for those of us with insurance, but at what cost in human life and health?

And if you want to go on anecdotal evidence, how do you explain the six-week wait I was told I had when I tried to make an appointment with an orthopedist for back pain?

How about the bureaucratic demons that are plaguing our doctors and patients now? Wait, aren’t these just called HMOs? Private health insurance in the U.S. interferes with the doctor-patient relationship all the time. Pre-approval for procedures, denial of payment, and pharmaceutical formularies – all of these are par for the course in the American health system.

According to the Commonwealth Fund, American doctors spend on average 142 hours annually interacting with health plans, at an estimated annual cost to physician practices of $31 billion, or $68,274 per physician. This works out to be about 3 hours per week. For primary care physicians the time is about 3.5 hours/week.

Now, Dr. Palmisano, if we divide this number by the average appointment time of 18.7 minutes, we see that doctors would be able to see an extra 11 patients per week if we did not have the administrative waste of our current system.

Finally, I agree with you that in these tough economic times, no one wants to saddle anything on taxpayers that they do not already pay. However, our country spent $2.4 trillion in 2008 on health care, with 46 percent coming from government money. This accounted for 17 percent of our GDP. The world’s second-largest spender was Switzerland, and they covered everyone by spending only 10.8 percent. We are already paying more for what we don’t get in the first place.

Our health system is wasteful and inefficient. I agree with you 100 percent when you say that reform should not weaken our health care. That is why I support a single-payer health program, like that in Taiwan, not Britain.

Taiwan spends only 6 percent of their GDP on health care, yet all their citizens are covered and get comprehensive, quality care. How do they do this? Simply put, they cut out all the administrative waste that is burdening the U.S. system. The government pays the bills, the doctors take care of the patients. It’s that simple.

The people there have free choice of physician, and the only thing that causes a wait time is the demand for the particular doctor. This is no different than trying to get an appointment with a high-end neurosurgeon here in the U.S.

Their system is publicly financed, but privately run. Were we to adopt such an approach here, very little would change in the work of our doctors except to lift from their shoulders the enormous paperwork burden that they presently carry. They wouldn’t have to worry about becoming government employees, for example, or told they can’t work in a given area.

Patients would have ultimate choice in provider. All doctors would be in “their plan,” including the one they are seeing now.

At the end of Dr. Palmisano’s article he asked, “Will we have a system that puts the patient in control with the doctor as trusted adviser, or a government-run system…?” My only response is: Why can’t we have both?

Ryan McIntyre is a second year medical student at Albany Medical College and an MPH candidate at SUNY Albany School of Public Health in Albany, NY. He is also a member of Physicians for a National Health Program. He can be reached at mcintyre.ryan@gmail.com.

Debating the Public Option

Paul Starr, Robert B. Reich and Robert Kuttner
The American Prospect
June 29, 2009

In “The Perils of the Public Plan,” Paul Starr warns that a public-insurance option could turn into exactly the opposite of what progressives want. Here he discusses the problems with the Prospect’s two other co-founders, Robert Kuttner and Robert Reich.

Paul Starr:

The public plan will likely end up as a dumping ground for high-cost, mostly low-income people if the exchanges are open only to the individual and small-group market and have inadequate power to risk-adjust premiums or to regulate private insurers’ marketing and benefit design.

In other words, we could get a public plan that instead of “disciplining” private insurers, as the president said last week, actually buttresses their dominance of the system. Watch what you wish for.

Robert Kuttner:

The public option, as it is evolving, is even more dubious than Paul Starr’s apt critique suggests. Under the House leadership bill, people who have coverage through their employers are ineligible. So the proposed, head-to-head competition between the public plan and private competitors is left to employers, not individuals.

Politically, protecting the public option from industry mischief is no less a heavy lift than single-payer. It’s a pity that all the progressive energy that’s gone into defending the public option hasn’t gone to advocate national health insurance.

Robert Reich:

I’d prefer a single-payer, but it’s got no skin in the game. The only practical hope we have for expanding coverage and taming health-care costs lies with the public option. That’s why it’s the epicenter of the current fight. The House is supportive, but the Senate is backing off because Republicans and Blue Dog Democrats have been told it’s a Trojan horse for single-payer. And the medical-industrial lobbies are hard at work convincing the public that the public option will lead to a wholesale government takeover of the health-care system.

Yesterday the president said he might sign a health-care bill that did not include a public option. That’s exactly the wrong message. If progressives fail to work hard for a public option because it’s not a single-payer, or we allow the other side to demagogue a public option, we miss the moment.

Paul Starr:

The public option has gotten all the political attention, but the real “crux” of reform is the system of rules that govern all competing plans. If the Democrats can’t get a strong public plan through the Senate but can get a strong design of the exchanges by trading off a weak public plan, they should take that deal and pass the bill.

Robert Kuttner:

It’s interesting and significant that the three co-founders of the Prospect are reprising the three major strands of progressive views on health reform. Robert Reich is arguing that the Obama plan, with the public option, is the best practical brand of reform available. Paul Starr, holding out for something that looks a lot like the Clinton plan, argues (convincingly in my view) that the most likely form of the public option will backfire. And I continue to be the single-payer guy. We’ve been having different versions of this friendly argument for two decades, as has the progressive community.

Reich says that single-player has “no skin in the game.” Well, let’s put some there, rather than being apologists for a threadbare cloak of a public option.

Where Starr and I disagree is on both his diagnosis of Medicare for All, and on his optimism that “exchanges” could be designed in a way that would meet his hopes (the exchanges sound a lot like the purchasing pools of the Bill Clinton plan that Paul Starr helped devise).

Although Starr and Reich seem to disagree, they have one thing in common. They are both somewhat wishful about what it would take politically to legislate the crucial details of either the Obama public option (Reich) or the exchanges (Starr) necessary to achieve meaningful reforms. In order for the fine print in either approach to do the job, progressives would need first to crush the industry influence in Congress that is very likely to hobble either strategy. And both Reich and Starr are right that a weakened version of the Obama plan could well be worse than nothing.

The political reality is that Medicare for All is no harder politically than a version of the Obama plan that would meet all the tests that Reich and Starr apply. And it would be far simpler and more cost effective.

The regulatory and political nightmare of doing everything that Starr insists is necessary to get a system of insurance exchanges to work efficiently is actually far more of a daunting challenge than having a single system under direct public control. And the odds are that the Obama administration, by the time it is done reassuring Max Baucus, the health insurance industry, the drug companies, and the Blue Dogs, will settle for far less than Starr’s formula.

Reich may say that if we just work hard enough, we can prevent that fate and still get a good program. But Obama began with less than what we need, and he has not painted this as a battle of the people against the interests. The bill gets weaker with each succeeding round. I suspect that by the time there is finally legislation for him to sign, Reich and Starr will both feel that it falls way short. It is high time for progressives to stop settling for badly flawed second bests and to throw their energy into a first best that could rally popular support and produce a system that serves everyone.

To read the full article:
http://prospect.org/cs/articles?article=debating_the_public_option

To rephrase the very important point that Paul Starr brings to this debate, it is not the design of the public option that is crucial to successful reform under the model being advanced in Congress, but rather it is that the design of the insurance exchanges must be absolutely compliant with the rules of social insurance. If the exchanges are poorly designed, the public option would become a Medicaid-like dumping ground for low-income people with high-cost problems, and would suffer from a lack of willing providers because of chronic underfunding. And poorly designed exchanges could never meet the test of social insurance.

Robert Reich would have us design an empowered public option that could shape up the private insurers by exerting full competitive pressure within the exchanges. That’s a nice wish, but all Republicans and an insurmountable number of Democrats in Congress have already made an irrevocable decision that an empowered public option will never survive the legislative process. It is possible that the “public option” label might survive, but only if applied to a private market-type plan, public in name only.

So can the insurance exchanges function as a bona fide social insurance program? Look at some of the decisions that have already been made.

Social insurance programs based on private plans require an individual mandate for everyone to purchase the plans, except those whose incomes are too low and therefore qualify for public programs. Congress and the state governors are very concerned about the costs of the Medicaid program and want it to be limited to the poor, especially since Medicaid is crippling many state budgets. Medicaid will not be expanded to include average-income individuals.

Adequate health insurance plans are no longer affordable for average-income individuals and families. Some form of tax subsidies will be required to assist with the mandated purchase of these plans. The amount of tax funds that would be required for everyone to be able to purchase coverage has proven to be far more than members of Congress are willing to budget. Consequently, it has been decided that hardship waivers must be a part of any reform legislation, effectively providing tens of millions of individuals with a government permission slip to remain uninsured.

Just to try to pull a few more in, the government will require insurers to provide multiple tiers of coverage. The lowest tier will be designed to be affordable, even though affordable plans, by design, are underinsurance products that fail to protect those who need health care.

Then the government would regulate the insurance exchanges, but look at the results in the most highly regulated states. No state has escaped the problems that are driving our current efforts at reform. No matter how many regulations are passed, the private insurers have always introduced innovations that relieved them of any real responsibility to address the severe deficiencies in our dysfunctional health care system.

Paul Starr may want well designed insurance exchanges, but this Congress has already rejected them. Robert Reich may want an empowered public plan, but this Congress has already rejected that.

As Robert Kuttner states, “progressives would need first to crush the industry influence in Congress that is very likely to hobble either strategy.”

But then, “It is high time for progressives to stop settling for badly flawed second bests and to throw their energy into a first best that could rally popular support and produce a system that serves everyone.”

And, “The political reality is that Medicare for All is no harder politically than a version of the Obama plan that would meet all the tests that Reich and Starr apply. And it would be far simpler and more cost effective.”

Wealth, Income, And The Affordability Of Health Insurance

By Didem M. Bernard, Jessica S. Banthin and William E. Encinosa
Health Affairs
May/June 2009

There have been debates over how many uninsured people can afford insurance but refuse to purchase it.

The difference in purchasing power between the insured and the uninsured is not fully revealed by income comparisons. Median income of the privately insured was 2.9 times the median income of the uninsured in 2002-03 ($53,130 versus $18,404). However, median net wealth among those with private insurance was 23.2 times that of the uninsured ($78,472 versus $3,384). This discrepancy is even larger when we focus on families in the individual market. Median net wealth among those with nongroup insurance was 34.6 times that of the uninsured without access to employer coverage ($105,819 versus $3,057). Our results suggest that assets are an important determinant of effective affordability, undermining the notion that many people are uninsured by choice.

http://content.healthaffairs.org/cgi/content/abstract/28/3/887

By now you must be annoyed by those on the right who repeatedly claim that we do not have a problem with uninsured individuals. They say that the actual problem is that we are not counting them properly. Most of the uninsured would be insured, if only they showed a little more personal responsibility.

Many of the uninsured have incomes that are low enough to establish their eligibility for public programs. But those denying the problem would exclude these individuals from the count because they are “technically insured,” but merely too lazy to enroll. This ignores the multiple logistical barriers that make it impossible to enroll everyone who is eligible.

Many others without insurance are “illegals” who do not have their immigration papers in order. As long as we continue with national policies that include these individuals in our workforce, regardless of immigration status, then we have to accept the fact that they are part of our intrinsic economy and will access our health care system. Excluding them from the count would understate the issues we face when trying to figure out how to finance the care of uninsured individuals.

Although these undercounters dismiss most of the uninsured as failures of personal responsibility, they do remain conflicted on higher-income individuals who elect not to purchase insurance. Some consider these to be individuals who are exercising their right to freedom of choice - the freedom to self-insure instead of purchasing an insurance plan. Others consider these to be free riders who transfer the risk of catastrophic costs to the rest of us who are already paying our share.

But are these really individuals who are simply declining to purchase coverage they can afford? With health care costs now averaging $16,700 for an employed worker with a family of four, that takes quite a bit out of a typical income of $60,000. Many of theses families have little in the way of assets, living paycheck to paycheck, and really don’t have enough money to purchase a reasonable health plan.

This Health Affairs study demonstrates that not only income but also net wealth are important determinants of whether or not health insurance is affordable. Expanding net wealth requires both a higher level of discretionary income and a longer interval to accumulate assets. Thus both income margins and time are variables that influence the affordability of health insurance.

Since current proposals for reform would use tax subsidies to help individuals and families purchase private health plans, does this mean that we need to establish an eligibility grid that includes both income and net assets as variables? If we did, we might see an epidemic of personal failure based on the inability of so many to master the logistical requirements of the eligibility grid. (Have you tired calculating your precise net wealth recently?)

Why do we keep playing these games with all of the variables that go into determining our insurance status? Why don’t we simply make it automatic for everyone? If you exist, you’re covered.

An organizer with Healthcare-NOW!, Robbins is helping to ratchet up protests to push Congress to establish a single-payer healthcare system.

As part of the campaign, Robbins and others are donning hospital gowns and shiny plastic buttocks that stick out the back of their gowns. Once dressed, the activists take their message to the public: “Private health insurance is like a hospital gown, chances are your ass is not covered.”

On a recent Saturday afternoon, Robbins and other activists jumped on a subway train on the 1 line. They handed out flyers explaining that healthcare should be a human right and publicly funded insurance for everyone was the best solution to the healthcare crisis. The activists happened upon a Mariachi band, and the combination of outlandish outfits and festive music seemed to inspire subway riders to scoop up the leaflets.

In the past, proponents of single-payer healthcare took a more conventional approach. For 20 years, Physicians for a National Health Program (PNHP) have used academic journals, traditional media and PowerPoint presentations to spread its message. But things are heating up.

In January, doctors, nurses, students, labor unions, religious organizations and activists launched the Leadership Conference for Guaranteed Health Care. Inspired by the Leadership Conference for Civil Rights, which helped pass groundbreaking legislation in the 1960s, the healthcare alliance claims to represent more than 20 million people.

Single-payer healthcare advocates argue that only by having the federal government provide business-and taxpayer-funded health insurance can everyone receive guaranteed healthcare access. This system would also save money by eliminating the health insurance industry’s profits and extensive bureaucracy.

In contrast, the Obama administration and Congress propose new industry regulations, mandates and public subsidies for individuals to purchase private insurance, and perhaps some type of public insurance. These proposals would still leave millions of Americans uninsured while subsidizing for-profit insurers.

To pay for the plans, Democrats, with no shortage of Republican support, are considering $600 billion in cuts to Medicare and Medicaid, a first-ever national sales tax and taxes on employer-based health insurance.

Single-payer healthcare has more support in the public than in the halls of power. Only after single-payer healthcare advocates mobilized a mass call-in campaign and threatened a demonstration of health professionals were they invited to Obama’s healthcare summit in March.

Yet they were excluded from key hearings in the Senate Finance Committee chaired by Sen. Max Baucus (D-Mont.), who raked in more than $1.8 million in healthcare industry donations in the 2008 election cycle.

In May, 13 protesters, including doctors and nurses, were arrested after they disrupted committee hearings by standing up and demanding a seat at the table. Robbins was the third to speak out. She declared, “We want a seat at the table.” In response, Baucus snapped, “We need more police.”

Baucus told one activist at a public event in Washington, D.C., in May that he supports single-payer healthcare but does not push for it because “we don’t have the votes.”

Activists targeted Baucus when he came home on recess after the finance committee hearings. Single-payer healthcare supporters were a visible and vocal presence at town hall meetings across Montana. Baucus canceled personal appearances, sending instead a video and a representative for this “listening tour.” A “buy back our senator” campaign is in the works.

Single-payer healthcare advocates have made modest inroads into legislative hearings. Dr. Margaret Flowers, one of the “Baucus 13,” was invited to testify before a Senate committee. Flowers said, “We are no closer to having more support for singlepayer in the Senate, [but] things are a little better in the House,” Flowers said. She added that one goal is to get the Congressional Budget Office to do a financial analysis of single-payer healthcare this year.

Healthcare industry lobbying groups reported $127 million in lobbying expenditures in the first three months of this year. Five trade associations combined have hired more than 20 former government employees as lobbyists, including ex-congressional staffers. PNHP has five staffers for all operations and an annual budget of less than $1 million.

Some opponents of single-payer healthcare have resorted to artificial grassroots movements known as “Astro Turf.” One Boston consulting firm hired by the insurance industry reportedly faked letters from senior citizens in support of Medicare privatization.

Instead of relying on money and underhanded tactics, Flowers says, “We must build a civil rights movement like those that have come before.”

Consumer Choices and Transparency in the Health Insurance Industry

Testimony of Wendell Potter, formerly head of corporate communications at CIGNA
United States Senate Committee on Commerce, Science and Transportation
June 24, 2009

I know from personal experience that members of Congress and the public have good reason to question the honesty and trustworthiness of the insurance industry. Insurers make promises they have no intention of keeping, they flout regulations designed to protect consumers, and they make it nearly impossible to understand - or even to obtain - information we need. As you hold hearings and discuss legislative proposals over the coming weeks, I encourage you to look very closely at the role for-profit insurance companies play in making our health care system both the most expensive and one of the most dysfunctional in the world. I hope you get a real sense of what life would be like for most of us if the kind of so-called reform the insurers are lobbying for is enacted.

When I left my job as head of corporate communications for one of the country’s largest insurers, I did not intend to go public as a former insider. However, it recently became abundantly clear to me that the industry’s charm offensive - which is the most visible part of duplicitous and well-financed PR and lobbying campaigns - may well shape reform in a way that benefits Wall Street far more than average Americans.

http://commerce.senate.gov/public/_files/PotterTestimonyConsumerHealthInsurance.pdf

Wendell Potter, a former CIGNA executive, provides an insider’s view as to what type of behavior we can expect from the private insurance industry after reform is enacted. No matter the details of the reform legislation, the industry will always find innovative ways to advance the interests of their executives and their investors. It is absolutely inevitable that these innovations will be to the detriment of patients and payers.

Many suggest that we can control these abuses through regulation, but states that are already highly regulated have failed to counter the ingenuity of the insurers and their perverse innovations. Think of New York and the UnitedHealth/Ingenix scam, or WellPoint’s perpetuation of the rescission abuses. As regulators patch holes in the private insurance infrastructure, the industry will always find other innovations designed to punch even larger holes in the system. If we think underinsurance is a problem now, just wait until Congress has enacted reform and moved on to other issues.

The private insurance industry isn’t looking out for us. Congress shouldn’t be looking out for them. We need our own universal financing system designed specifically to take care of all of us. The private insurers are pulling us down; Congress needs to cut them loose.

Perils of the Public Plan

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

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

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

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

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

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

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

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

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

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

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

And…

Will a Public Plan Bring Better Care?

The New York Times
June 24, 2009

To the Editor:

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

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

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

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

Steffie Woolhandler
Cambridge, Mass., June 21, 2009

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

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

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

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

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

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

Testimony of Quentin D. Young, M.D.

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

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

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

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

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

And…

Testimony of Steffie Woolhandler, M.D.

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

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

Eight decades of experience teach that private insurers cannot control costs or provide families with the coverage they need. A government-run clone of private insurers cannot fix these flaws. Only single payer national health insurance can assure all Americans the care they need at a price they can afford.

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

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

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