DATA UPDATES EXCERPTS (September 1998)
Uninsured & Underinsured
Only 68.4% of Americans report having a "regular source of care," a strong predictor of access to health care services. People without a regular source of care are more like to be uninsured, young, male, Hispanic, and low-income. Only 44.6% of uninsured adults in Arizona have a regular source of care, the lowest among 10 states survey by the Centers for Disease Control (MMWR, 4/17/98).
14.8% of all children are uninsured, with the rate varying dramatically by race. 28.9% of Hispanic children are uninsured, compared to 18.8% of black children and 13.9% of white children (U.S. Census Bureau, 1998).
Uninsured kids in Alabama, Mississippi, and Texas, which are home to one out of six uninsured children in the country, are unlikely to be helped by the new children's health plan. According to a study by the Children's Defense Fund, these states are expanding coverage only minimally, e.g. to "poor teens with family incomes up to $13,650 for a family of three." In addition, nine states are charging premiums of $200 a year or more for coverage, and one (Wyoming) has declined to expand coverage altogether (CDF, 5/12/98).
Almost 3.4 million of the nation's 10.6 million uninsured children are eligible for Medicaid but are not enrolled. 64.4% of the eligible but uninsured children in California are Hispanic (USA Today, 4/27/98).
Among poor children under six years of age, 21% of those without health insurance lack a usual source of care, compared with 4% of those with health insurance (National Center for Health Statistics study, HHS release, 7/30/98).
14% of near-elderly people (aged 55 to 64) are uninsured. The near-elderly spend 45% more on health care services than do individuals between 45 and 54, and their median family income is 25% lower (GAO report 98-133).
The Decline of Employer-Sponsored Health Insurance
According to a study of employer-sponsored health plans, between 1988 and 1997, mental health benefits have been cut by 54%, while general health benefits have been cut by 7%. Total employer-paid health benefits per covered individual fell from $2,237 in 1988 to $2,156 in 1997, while mental health benefits plummeted from $154 to $69 per person, and from 6.2% to 3.1% of overall benefit packages. Both outpatient and inpatient treatment benefits were cut (Health Care Plan Design and Cost Trends: 1988 through 1997, Hay Group, American Health Line, 5/8/98).
Costs
Many employers are facing double-digit increases in health insurance costs this year. Benefits consultants estimate that the increases will average 7 percent nationally, five times the 1.4 percent inflation rate, but could be higher as HMOs try to make up for huge losses in 1997. Higher premiums are cheering investors, who have bid up shares of WellPoint Health Networks, PacifiCare, and United by one-third (New York Times, 4/27/98).
Minnesota is facing a 13% hike in health insurance costs for state employees in 1999. The state government is the largest employer in Minnesota, and the increases it faces make it a "bellwether" for other employers. One of the largest HMOs in the state, Medica, is increasing premiums 25% (Minneapolis Star and Tribune, 6/25/98).
The Real Drug Lords: Pharmaceuticals, Inc.
Eight medications used in the treatment of mental illness cost up to six times more in the U.S. than in Europe. A study by the consumer group Public Citizen found that the cost of five antidepressants and three antipsychotic drugs to pharmacists in the U.S., Mexico, Canada, and 14 European nations was always highest in the U.S., often by a wide margin. A month's supply of fluoxetine was $72.16 in the U.S. versus $25.93 in Spain. A month's supply of the antipsychotic clozapine was $317.03 in the U.S. compared to $51.94 in Spain. The cost differential persisted even when the medications were developed in Europe, as in the case of clozapine and risperidone. Drug firms are able to extract large profit margins in the U.S. because of the lack of a national health system to negotiate price discounts for consumers (Public Citizen Health Research Group, 7/15/98).
Five FDA-approved drugs have been pulled off the market since January 1996. The number of drugs approved annually by the FDA has climbed from 26 in the 1980's and early 1990's to 39 in 1997 (USA Today, 7/10/98).
Women's Health, Inc.
HMOs tailor their marketing to women because women make 75% of family decisions on health care, and 90% of physician-referral and health information calls. Indianapolis-based Anthem insurance company's latest advertising campaign is targeted at women. Dr. Bernardine Healy, former NIH director under President Bush, is kicking off Anthem's "Healthy Women" campaign with a speaking tour (Anthem release, 6/19/98).
Medical and Socio-economical Inequality
Metropolitan areas with high income inequality and low average income have 140 more deaths per 100,000 people each year than cities with more equitable distribution of wealth. According to University of Michigan epidemiologist John Lynch, 140 excess deaths per 100,000 is equivalent to the combined loss of life from lung cancer, diabetes, motor vehicle accidents, HIV infections, suicides, and homicides. The study was based on a review of mortality and income data from 282 metropolitan areas (Lynch, American Journal of Public Health, July 1998).
16 communities on the south and west sides of Chicago average less than 2 doctors per 10,000 population, compared with 15 communities along the "gold coast" that averages 16.8 doctors per 10,000 population (Chicago Reporter, July 1998).
Nursing Homes, Inc.
Most U.S. nursing homes are investor-owned, making the nursing home industry an important case study of the impact of for-profit ownership on quality of care.
The General Accounting Office (GAO) just completed a nine-month investigation into nursing homes in California. They found that 30% of the homes had committed violations "that caused death or life-threatening harm to patients." Another 33% had violations that "harmed patients without threatening their lives," and 35% had "deficiencies that could harm patients if not corrected." Only 2% of the homes had no violations or minimal deficiencies. The GAO reviewed inspection reports on 1,370 California nursing homes inspected between 1995 and 1998. Clinical researchers also reviewed medical records of a small sample of cases involving resident deaths. They found that more than half (34 of 62) of the suspicious deaths studied "were probably caused by poor care." Charlene Harrington, R.N., Ph.D. noted that "California is symptomatic of all the states," and that it is actually better than many other states in detecting substandard care (New York Times, 7/29/98).
Vencor, the nation's fourth-largest for-profit nursing home chain, illegally evicted Medicaid patients in Florida and Kentucky. Florida fined the firm $260,000 (the maximum $5,000 for each of 52 patients illegally sent 30-day eviction notices) and required Vencor to allow 10 evicted patients to return. Florida is also asking the federal government to levy an additonal $100,000 fine against the company. In Kentucky, Vencor illegally evicted 11 Medicaid patients from the Hermitage Manor nursing home in Owensboro, Kentucy in February, telling the patients they had to "pay privately or move out." The firm is also facing government scrutiny in California, Colorado, and Georgia (AP/Owensboro Messenger, 6/22/98, St. Petersburg Times, 4/11/98).
Corporate Money and Care
Milliman & Robertson (M & R), the actuarial and consulting firm that teaches HMOs how to skimp on care, is issuing a $500 volume of pediatric guidelines this fall. According to the Wall Street Journal, the guidelines recommend treating bone infections with as little as two nights in the hospital, followed by IV or oral antibiotics at home. For endocarditis, children would be allowed a three-night stay, followed by IV antibiotics at home--a dictate that makes pediatricians "shudder". Insurers use the M & R guidelines to refuse to pay for treatments that take longer than the book says they should (Wall Street Journal, 6/15/98).
The M & R guidelines for hospital stays for adults following major surgery are also skimpy. The firm suggests a 3- to 4-day stay for aortic valve repair, CABG, and partial colectomy, while the average LOS for such procedures performed at 157 North Carolina hospitals in 1996 was between 8 to 10 days ("Milliman and Robertson Fail Surgeons' Reality Check", Physicians Weekly, 6/98).
In response to an inquiry regarding their guidelines, M & R admitted that "we do not base our guidelines on any randomized clinical trials or other controlled studies, nor do we study outcomes before sharing the evidence of most efficient practices with colleagues." (Wall Street Journal, 7/1/98).
Harris Methodist Health Plan in Texas was fined $800,000 for illegally encouraging its physicians to limit medically-necessary treatment. Under the HMO's policy, physicians received bonuses or fines based on the amount they spent on pharmacy costs. Judge Bonnie Sudderth said the policy led to "denial of medically-necessary care to Harris HMO members", "cherry-picking, patient dumping...and outright denials of treatment, referrals and prescriptions" (Dallas Morning News, 5/12/98).
Galloping Towards Oligopoly
The conversion of non-profits to for-profits has spawned the creation of about 70 foundations with nearly $9 billion in assets. However, there is little oversight of these foundations and enormous potential for personal and corporate gain at public expense. According to the New York Times, "in at least a half a dozen hospital conversion cases, the hospital official who arranged the deal ended up running the new foundation--drawing a substantial salary and controlling millions of dollars. And usually, hospital board members who approve the deal get many of the seats on the new charity's board." In addition, foundation funds are not all going to charity care or even health care. For example, the Jackson Foundation in Tennessee, whose two officers are partners in a small airplane business, spent $170,000 on airplanes for flying lessons for high school students (New York Times, 4/27/97).
Medicare HMOs: The Next Frontier
Medicare HMOs target their marketing at healthy seniors, and not towards the sick or towards disabled Medicare patients under 65, according to a study of 169 newspaper ads, ads on 129 TV stations, and 21 HMO marketing seminars in four U.S. cities. Over 50% of the TV ads featured seniors running, biking, playing with grandchildren, etc. None of the TV or print ads showed people in hospitals or using walkers, and one-third of the seminars were not wheelchair-accessible. Important information about benefits restrictions was in fine print too small for many seniors to read, and the information often confused even trained researchers. Only one ad was in Spanish, despite large Spanish-speaking populations in three of the four cities studied (Los Angeles, Miami, New York, and Cleveland). Eight ads erroneously claimed that the Medicare beneficiary had to be 65 to qualify for the HMO. For copies, call the Kaiser Medical Policy Project at 1-800-656-4533 and ask for report #1417.
Congress Watch: Bipartisan Failure on Health Care
None of the "patient protection" bills in Congress includes the right to health care, which is Article XXV of the Universal Declaration of Human Rights. 1998 is the 50th anniversary of the U.N.'s Declaration, which has never been ratified by the United States.
The GOP apparently wants to end employer contributions to health coverage, including Medicare. House Ways and Means Health Subcommittee Chair Bill Thomas (R-CA) said the President's Medicare Commission should consider "radical" approaches. Thomas is pushing a proposal that would eliminate the tax break employers receive for purchasing health care for their workers and give individuals a "refundable tax credit" for purchasing their own insurance (Health Legislation, 6/3/98). Representative Newt Gingrich (R-GA) is "enthusiastic" about the Thomas Plan. Gingrich proposed examining the "wisdom of having employers provide health insurance" at a conference of HMO executives earlier this year (Boston Globe, 2/25/98). Phil Gramm (R-TX) "proposes replacing the existing payroll-funded Medicare program with a mandatory savings plan requiring all Americans to maintain [MSAs]" (Washington Times, 3/6/98).
AMA
The AMA's new health policy fits well with the GOP's pitch to cut business' responsibility for providing health insurance to workers. The AMA decided at their last meeting to make "an all-out effort" to make individuals responsible for buying their health insurance with defined contributions from employers, much like the federal employees health benefits plans (FEHBP) (New York Times, 6/18/98). Under the AMA's proposal, most workers are likely to be pushed into cut-rate HMOs with only the highest-paid employees able to afford better coverage. The AMA is also pushing MSA's (medical savings accounts) as a way of creating a new funding stream for care from affluent patients.
The AMA gave $4.1 million to candidates in the 1996 election, with most of the money going to pro-tobacco congressmen. The AMA contributed an average of $5,382 per pro-tobacco representative, and $2,103 to anti-tobacco members. Pro-tobacco candidates almost always endorse malpractice caps, hence attracting more AMA donations (Sharfstein, AJPH, 8/98).
The cigarette industry spent $40 million on the final three months of its campaign against the tobacco bill (Los Angeles Times, 6/19/98). The House Commerce Committee posted about 39,000 once-secret tobacco industry documents online at http://www.house.gov/commerce/TobaccoDocs/documents.html. How long before we see a similar site for proprietary medical and utilization review guidelines and insurance company documents?
Public Opinion
A survey of 600 Americans on President Clinton's policy stances found that only 26% were able to correctly identify that Clinton "favored adjustments to the existing system of private insurance in order to give more people access to the system." A much higher percentage (59%) erroneously thought Clinton "promoted a universal system of national health insurance," a position he never advocated. Similar misunderstandings of Clinton's policies were evident in other areas (e.g., only 13% knew he signed the Republican Welfare Reform Bill). The study found that the public consistently perceives Clinton as being more liberal than the positions he actually takes, perhaps explaining his enduring popularity in the face of ongoing scandals (Extra, May/June 1998).
An NBC/Wall Street Journal poll of 2,006 adults in June found that "the most important health care issue at the present time" is "people without health insurance" (37%), which was ranked first more frequently than the other two choices of "the cost of health care" (29%) and "the quality of health care" (23%).
Overall, twice as many people thought HMOs were "generally" a "change for the worse" (40%) than thought HMOs were a "change for the better" (20%). An even higher margin reported that HMOs made the "quality of health care services worse" (41%) versus "improved the quality of health care" (16%).
The survey also found that more than two-thirds of Americans say the government should guarantee everyone the best and most advanced health care that technology can supply, and that "everyone should have access to health care services." There was about an "equal split" over whether the federal government should guarantee access to everyone, even if it means an extra $2,000 in annual taxes for Americans. Democrats, women, and minorities were more in favor, while Republicans, men and whites were less in favor of the increase in taxes (which is substantially higher than what would be required by single payer). A sizable majority believe that "the amount of money people pay for health care should be based on their ability to pay" (Wall Street Journal, 6/25/98).