News

For-profit health care costly, inefficient
Toronto Star
Sep. 19, 2005

An edited excerpt of a speech by former Saskatchewan premier Roy Romanow about the June 9 Supreme Court decision that quashed Quebec’s ban on private health insurance. Romanow conducted a royal commission into health care in
2001-2002:

Let’s consider a few of the major studies that have chronicled the health-care system in the United States, a system which, according to 2003 data compiled by the OECD, spends 15 per cent of its GDP on health care. In Canada, by contrast, this figure amounts to 9.9 per cent …

In a study on medical bankruptcies in the United States, which accounts for half of all bankruptcies in that country, it was reported that in 2001, between 1.9 and 2.2 million Americans filed for bankruptcy because of medical causes. Moreover, another study reveals that, in 1999, the cost of paperwork for health care in the United States amounted to $1,059 (U.S.) per capita, per year while in Canada, the figure was $307 (U.S.) per capita, per year.

These differences demonstrate the inefficiencies associated with private for-profit delivery and, more precisely, how it would impact on, in the words of some of the justices, on “human reactions.” … Simply put, single-payer systems offering universal coverage obviate the need of thousands of hours being spent designing employee health benefit plans, selecting which HMO or provider to contract with and for what basket of services, variable deductibles, eligibility of family members for benefits, the costs of signing people on - and off - benefit plans based on their employment, and on and on. And that’s before we get to the unique challenges of insuring those who frequently change employer or who go from job to job, or who are simply too ill to work.

The implied conclusion that timely access to health-care services will be improved with the establishment of a parallel private scheme flies in the face of all of the evidence with which I grappled for 18 months as royal commissioner …

http://www.thestar.com/NASApp/cs/ContentServer?pagename=thestar/Layout/Article_Type1&c=Article&cid=
1127054226181&call_pageid=968256290204&col=968350116795

Comment: Thanks to the work of David Himmelstein, Steffie Woolhandler, Elizabeth Warren and others, Romanow’s statement could be modified for the United States as follows:

The implied conclusion that timely, universal access to affordable health-care services will not be improved with the establishment of a single payer system flies in the face of all of the evidence with which Himmelstein, Woolhandler and Warren grappled for the past decade as health policy researchers…

Posted by pnhp at 11:31 AM | Permalink

2005 Year in Review: Health Affairs’ 25 Most-Read Articles
Health Affairs
December 28, 2005 (e-mail)

In 2005, Health Affairs’ Web readership topped 9 million pageviews. The article on medical bankruptcy by David Himmelstein and colleagues of Harvard University tops the list with nearly 70,000 viewings. Each of the top 10 papers were viewed over 20,000 times during the time period.

1. David U. Himmelstein, Elizabeth Warren, Deborah Thorne, and Steffie Woolhandler, Illness And Injury As Contributors To Bankruptcy Health Affairs 24 (2005): w63-w73 (published online 2 February 2005; 10.1377/hlthaff.w5.63).
http://content.healthaffairs.org/cgi/content/abstract/hlthaff.
w5.63v1
(article accessible for two weeks)

Top 25 Papers for 2005:
http://www.healthaffairs.org/Top25_2005.php

Comment: The bankruptcy article has redefined the most important flaw in our system of funding health care in the United States. Until now, the problem has been framed largely as an impairment of affordability and access for the 46 million without insurance coverage, but the remaining 85% of us with coverage were not thought to be directly affected. This article showed that average-income individuals who develop medical problems (potentially anyone) may suffer severe financial hardship in spite of having health insurance.

Thus the flaw we must address is not merely the failure to expand our insurance products to cover the uninsured; the fundamental flaw is in the structure of our insurance system which fails to provide financial security and ensure affordable access for each and every individual with medical needs, insured or not.

Medical bills do not have to be an additional burden for those with medical needs. The following describes two insured individuals, in two different systems.

Two women, two cancers, two health-care systems
By Tom O’Brien
San Francisco Chronicle
December 29, 2005

I moved back to the United States with my Canadian wife and two small boys after living 15 years in Toronto and Ottawa. U.S. health care now looks both expensive and scary, leading me to conclude that we’d do better with an entirely different system.

Nowhere has this been put in sharper relief than in the story of two colleagues. Struck in March with cancer, an American colleague worried about death, insurance loss and bankruptcy. In contrast, a Canadian colleague and cancer victim had only her disease to fight.

http://www.sfgate.com/cgi-bin/article.cgi?file=/chronicle/archive/2005/12/29/EDGG6GDPDA1.DTL
(This short article is well worth downloading.)

Posted by pnhp at 11:20 AM | Permalink

Government turns down national health scheme Swissinfo
NZZ Online
December 10, 2005

The cabinet has come out against a proposal to set up a national health insurance scheme, saying that it would not help to reduce spiraling health costs.

The proposal, which was launched by the centre-left Social Democrats, wants to set up a single non-profit insurance system based on an individual’s income.

The plan is still expected to be put to a nationwide vote next year.

The interior ministry said on Friday that the cabinet would rather stick with the status quo, where more than 100 private insurers compete against each other.

The government believes that a system which relies on different insurers - where people can switch companies without any restrictions - offers better perspectives than a state-run monopoly.

It adds that competition slows rising costs and presents a wealth of choice.

The government rejects the proposed structure of a single health scheme.

Suggestions that premiums could be paid according to a person’s income as part of a national health scheme were also rejected.

http://www.nzz.ch/2005/12/10/eng/article6303166.html

Comment: Advocates of consumer-directed health care (CDHC) in the United States have used the Swiss example of competition between private health plans as being close to a model that we should emulate, but there are serious problems with their system.

Global health care costs in Switzerland are very high, exceeded only by the costs in the United States. CDHC advocates admire the very high out-of-pocket health-care spending in Switzerland, much higher than most OECD nations, since that theoretically makes the Swiss more value-oriented health-care shoppers. Contrary to their view, having higher access costs (cost sharing) has not been effective in controlling health-care spending. Also, Switzerland’s system is quite inequitable since it is one of the most regressively funded systems of OECD nations.

In spite of its deficiencies, Switzerland’s system functions much more effectively than ours, but it is not because of the impact of CDHC. Switzerland’s insurance industry is very tightly regulated, causing it to have more features in common with a single payer system than does our fragmented system here in the United States. It is not market competition but rather government oversight that has made their system more effective.

Although their regulatory environment reduces some of their administrative waste, they could achieve greater efficiencies by switching to a single, non-profit insurance system as proposed by the Social Democrats. With a single system, funding could be made much more equitable, and the ineffectual and detrimental out-of-pocket cost sharing could be eliminated. As a monopsony, the single payer insurer could address the real causes of high health-care spending, such as non-beneficial high-tech excesses.

Will the Swiss support a change to a single-payer system? That depends on whether they have enough solidarity to support a more egalitarian system. Just don’t look to the United States; we won’t even spring for a crutch for Tiny Tim.

Posted by pnhp at 04:16 PM | Permalink

Lowering Financial Burdens and Increasing Health Insurance Coverage for Those with High Medical Costs
By Linda J. Blumberg, Lisa Clemans-Cope, and Fredric Blavin
The Urban Institute
December 2005

Health care expenses associated with high-cost medical cases in the United States are increasingly being shifted to the individual, a phenomenon exacerbated by recent trends in product design.

As the costs of medical care are spread less broadly, financial burdens for seriously ill individuals with high medical costs can increase dramatically. This brief identifies evidence of the severity of these problems and presents policy options designed to address them.

Policy Options

While the government can subsidize those with high health care needs in many ways, we categorize those options into two general groups: (1) approaches that subsidize coverage obtained through existing private insurance carriers; and (2) approaches that subsidize coverage in an insurance context distinct from existing markets and open only to individuals (and possibly their dependents) that qualify based on health status. In this brief, we outline one policy option in each general category as examples of initiatives that can improve the coverage and access to care of those with high-cost illnesses. Both options discussed here specifically target individuals whose health care costs constitute a large share of income and minimize disruption of existing private insurance systems.

Option 1. Assignment of Risk to Existing Insurance Carriers Combined with Government Subsidies

Option 2. Federal Financing of State High-Risk Pools Combined with Federal Guidelines on Benefits and Eligibility

Neither policy option described in this brief would be considered a minor, incremental reform. Either would lead to a significant redistribution of private costs and would increase public spending on health care. However, both approaches can be implemented incrementally, for example, by initially targeting even one chronic disease or condition, such as diabetes.

Regardless of the approach taken, the need is clear. Mounting empirical evidence, policy research, and reports in the popular press attest that the U.S. health care system is currently inadequate to ensure access to care for those with the greatest health care needs. Many insured as well as uninsured high-cost individuals are at financial risk and at risk for poor health outcomes as a result.

http://www.urban.org/UploadedPDF/311261_financial_burdens.pdf

Comment: This health policy brief describes well the financial burdens and impaired access to care faced by those with significant medical needs, including those who are insured. Unfortunately, the policy recommendations fall woefully short and will never ensure affordable access and coverage.

It is not as if we have no experience with their recommendations. Previous efforts to risk adjust the Medicare + Choice (Medicare Advantage) options have been deferred indefinitely because of technical difficulties and insurer resistance, even though the concept remains in play as a desirable goal. Likewise, high-risk pools already exist but have been successful in insuring only about 180,000 individuals nationally, hardly a policy triumph.

It is amazing that the authors of this report consider these failed policy approaches to be much more than minor, incremental approaches. To appease the incrementalists, they suggest that these policies could be adopted for a single disease!?

Enough kowtowing to the incrementalists! The deterioration in affordability, coverage, and access is accelerating so rapidly that the incremental tweaks cannot possibly keep up with the rapid decline in security afforded by our private health plans.

What’s the next step? Do we apply two failed policies to diabetics, or shall we skip the incremental steps and adopt policies that would ensure affordable access to comprehensive coverage for everyone? Incremental steps increase health care spending whereas comprehensive single payer reform wouldn’t. Why are we still debating this?

Posted by pnhp at 11:14 AM | Permalink

In G.M.’s Sight Lines: Washington and Tokyo
By William J. Holstein
The New York Times
December 18, 2005

An interview with Rick Wagoner, the chairman and chief executive of General Motors

Q. Were your problems caused by internal decisions, or external forces?

A. Well, it’s obviously a combination of both. I think it would be disingenuous for us to point to things like U.S. health care policy or trade policy and the exchange rates, things like that, and say they are the whole cause of the problem. The flip side, though, is that anybody who says they are not part of the problem just doesn’t have their feet placed in reality.

Like it or not, if we pay $1,500 per car for health care and our cheap global competitors pay $200, that’s a disadvantage. And we don’t have that situation because we’re stupid - it’s been the U.S. government policy for us to pay that bill and we’ve been doing it.

Q. What should the government do?

A. I don’t understand why the U.S. government isn’t more proactive on health care. Regardless of whether one believes in sort of the individual-responsibility model or single-payer system, there’s a lot of things that can be done to get the cost of health care and the quality of health care moving in the right direction. I think this is an area where strong leadership from the government could play a key role. Information technology is one possibility. Another is leveraging the buying power of the government, which is the biggest purchaser of health care under Medicare and things of that sort.

http://www.nytimes.com/2005/12/18/business/yourmoney/
18advi.html?pagewanted=all

Comment: Leaders of all three major U.S. auto corporations have been calling for a “national solution” to the burden caused by the escalating costs of employer-sponsored health plans, but they have been hesitant to endorse a single-payer national health insurance program.

One advantage of an interview is that it is frequently possible to extract more candid views from the person being interviewed. Wagoner’s statement that “regardless of whether one believes in sort of the individual-responsibility model or single-payer system” certainly indicates that Wagoner does acknowledge the credibility of the single payer model, without the necessity of actually endorsing it. More importantly, his use of “sort of” in the phrase “sort of the individual-responsibility model,” indicates that he has not been convinced that this is a clearly defined model that would effectively resolve the health care crisis issues.

Although Wagoner may not be ready to risk offending his friends who oppose social insurance by leading the charge to single payer, he has telegraphed that he has no intention of standing in the way of comprehensive reform. In fact, he continues to plead that the U.S. government must be more proactive on health care.

Posted by pnhp at 11:10 AM | Permalink

Budget Accord Could Mean Payments by Medicaid Recipients
By Robert Pear
The New York Times
December 20, 2005

The final Congressional agreement on a budget bill gives states sweeping new authority to impose premiums and co-payments on Medicaid recipients…

Under the agreement, states can charge premiums and higher co-payments for a wide range of Medicaid benefits, including prescription drugs, doctors’ services and hospital care.

States can scale back benefits, capping or eliminating coverage for services that federal law now guarantees.

In addition, states can end Medicaid coverage for people who fail to pay premiums for 60 days or more. Pharmacists can refuse to fill prescriptions, and doctors and hospitals can deny services, for recipients who do not make the required co-payments.

Medicaid recipients can be charged 10 percent of the cost of any item or service if their family incomes were 100 percent to 150 percent of the federal poverty level, $12,830 to $19,245 for a family of two. Recipients with incomes above that can be required to pay 20 percent of the cost of any item or service.

Drug makers and health insurance companies escaped largely unscathed. Negotiators rejected several provisions of the Senate bill that would have cut their payments.

Representative Joe L. Barton, Republican of Texas, the architect of the Medicaid provisions, said the higher co-payments were needed to “encourage personal responsibility” among low-income people.

http://www.nytimes.com/2005/12/20/politics/20health.html

Comment: In the glorious spirit of Christmas, Congress is extending policies that shower gifts on the health insurance industry and pharmaceutical firms.

And for Tiny Tim? They are giving him the gift of “personal responsibility.” He can go out and get his own damn crutch!

Posted by pnhp at 12:06 PM | Permalink

In eyeing a new run for governor, he thinks on a revolutionary scale
By David Steves
The Register-Guard, Eugene, Oregon
Saturday, December 17, 2005

The last time John Kitzhaber put Oregon on the map as a health care pioneer, it was by working within the decades-old system that delivers medical care. This time, the former doctor and governor wants to bulldoze what he sees as an antiquated system and replace it with a 21st-century model that would deliver universal health care to every Oregonian.

It’s a big enough idea to have Kitzhaber publicly contemplating a return to the governor’s office, where he says he could see it to fruition. That effort probably would involve ballot-measure or legislative campaigns. It also would be likely to involve the enlistment of Oregon’s congressional delegation and the White House to let Oregon out of the 20th-century rules of federal Medicare and Medicaid spending and to end tax exemption for employer-provided health insurance.

Kitzhaber on Friday said he plans to meet next week with Gov. Ted Kulongoski to discuss his health care ambitions and his interest in challenging Kulongoski in next May’s Democratic primary. The ex-governor said Friday he also has met with state teachers union officials, business leaders and others as he contemplates a political comeback.

Regardless of whether he runs for governor - something he plans to decide on next month - Kitzhaber said he wants to champion reforms. That could mean a ballot measure in 2006 or 2008 or a push for legislation in 2007 through the Legislature, he said.

In an hourlong interview Friday to discuss his ideas for reforming the health care system, Kitzhaber said he wants to start a national movement toward universal health care by designing a system for Oregon that would provide basic care to everyone.

After leaving office in January 2003 and getting involved with national health care research and education programs, Kitzhaber has observed rapidly gathering storm clouds. Health care costs are rising. Employers and governments are dropping coverage for workers, driving a growing number of uninsured people to emergency departments with chronic health problems that get shifted back onto insurance premium costs. The Medicare program, a federal entitlement that can’t be easily cut, is about to be swamped by aging, ailing baby boomers, resulting in trillions of dollars in national debt.

“I think it’s just terrifying,” Kitzhaber said. “That’s the situation, and clearly, something needs to be done. And I think it needs to be done very, very soon because this is really coming down right now.”

Kitzhaber once called Oregon “ungovernable” as he prepared to leave the state’s highest office. But Friday he exuded optimism as he described the enthusiastic reception he’s received while meeting with national audiences and in-state advisers from business, labor and the health care industry.

“People are looking for a place to engage in this debate,” he said.

Kitzhaber described a two-pronged goal: to actually bring universal health care to Oregon, and to force the debate at the national level - in Congress and perhaps even the 2008 presidential campaigns.

A rationing system

Kitzhaber made a mark in health care reform with the Oregon Health Plan, which he designed as Senate president in the 1980s and shepherded along while governor in 1995-2003. The health plan expanded the number of people who qualified for Medicaid by getting the federal government’s blessing to modestly limit care and to use the savings to let low-income people who didn’t fit into a Medicaid-eligible category - they weren’t elderly, blind, or pregnant women, for instance - get coverage.

This time, Kitzhaber says he wants to go much farther. Instead of dealing with those “working poor” who fall through the cracks, he envisions a basic coverage plan for all Oregonians - those who currently get coverage through work, those who aren’t insured, and those who qualify for government coverage such as Medicare.

How would Oregon pay for universal health care? Kitzhaber said his idea is to continue using the public dollars already going into Oregon’s system of delivering medical care, without raising taxes.

One element would be to persuade the federal government to remove its strings for how Medicaid and Medicare dollars are spent and put them into the universal health care pot.

Added to that would be the tax dollars that currently go uncollected on the money that employers pay for workers’ medical insurance premiums. The idea here - which Kitzhaber has yet to fully flesh out - is that employer-provided health care is a form of tax-exempt compensation to workers, a practice that began during the wage-control era of World War II and was added to the tax code in 1954.

With universal coverage, employers would not need to buy insurance for their workers. So, employers could use that money instead to pay wages, which would remove the tax exclusion currently available under state and federal law. Kitzhaber calls the current tax exemption a subsidy paid by all U.S. residents amounting to $200 billion a year.

With that combination, Oregon would have about $6.3 billion a year to pay for universal health care.

Per capita, that $6.3 billion would break down to about $2,000 per Oregonian. That’s not enough to cover everyone’s basic needs, Kitzhaber said, given the inefficiency of Oregon’s current medical care delivery system - doctors’ practices, private and government-sponsored health insurance, hospitals and clinics.

But if the state replaced that system with one designed from scratch, guided by the principle of maximizing Oregonians’ health in the most cost-effective way, it would be enough, he said. He said Italy achieves better health outcomes than does the United States at a cost of about $2,000 per person.

Designing a new system

Kitzhaber said his new system would deliver basic health care to all Oregonians - from private-sector employees to retirees, children, and the poor.

That step would involve scrapping everything about the current system - employer-provided medical coverage rooted in the 1940s, and 1960s-era Medicaid and Medicare programs. He said he’d model a new system on other public services, such as education, police and fire - services that all citizens are entitled to, regardless of where they live, their incomes, or other factors.

Using the education system as an analogy, Kitzhaber envisions a basic level of care that everyone would be eligible for. Just as those with the resources can seek out more specialized education through private schooling, so could individuals buy insurance for things not covered by the universal health care program, he said.

Continuing coverage for those currently receiving it and adding it for the 609,000 Oregonians who lack insurance would be costly.

But Kitzhaber said he thinks it could be done using existing public health care dollars and increasing the efficiency of hospitals, doctors and clinics.

For instance, if all Oregonians were entitled to medical coverage, it would be easier to ensure that people with high blood pressure get moderately priced instruction and monitoring to reduce and control the condition, rather than leaving it untended until they suffer strokes and require expensive care, he said.

Any such reforms would need federal approval. But Kitzhaber said he has no interest in pursuing them by running for the U.S. Senate - something he was urged to do in 2002, but rejected. He said he would prefer to launch such a system at the state level, then push it nationally.

“I could be a U.S. senator today and I couldn’t do anything about this, unless my state or some state actually blew in something that we had to deal with,” he said. “It doesn’t start there. That’s where it ends, but it’s got to start outside.”

Public or private role?

Kitzhaber doesn’t rule out that another governor might be able to champion his reforms, or that he could do so himself from outside government.

Up to now, Kitzhaber has been able to pursue his ideas as a private citizen, thanks to his expertise and stature in health care policy circles, as well as his involvement with health policy groups. He holds various posts at academic and medical organizations where he is developing his ideas.

Kitzhaber said he began to consider running for governor earlier this year.

Republican lawmakers who remember Kitzhaber as a governor who was quick to veto their bills and reluctant to compromise said it’s difficult to imagine him succeeding in a bid.

“You’ll have to do a lot more convincing for me to believe that he is really serious about being chief executive and dealing with the whole universe of challenges facing Oregon,” said Senate Republican Leader Ted Ferrioli of John Day, citing land use, employment issues and housing. “I think it’s inappropriate for him to even consider a run for the governorship if he’s just trying to use it as a bully pulpit to frame health care issues.”

But independent Portland-based pollster Adam Davis said Kitzhaber’s re-emergence is well timed, given his credibility on health care and the voters’ demands for change.

Health care “is the sleeping giant of issues right now. The whole cluster of health care quality and health care costs is really very much on the minds of Oregonians and is an issue that we see showing up over and over again as a big blinking dot on the radar screen,” he said. “It’s interesting that you have a guy like Kitzhaber. He just happens to be the guy who’s most qualified to talk on this issue. I think he would have credibility on it.”

Kitzhaber said running for governor could hurt his health care reform cause.

“You politicize the issue if you run,” he said.

Kitzhaber said if he does run, health care would be his big campaign issue. But he said other concerns, such as education and the economy, would be on his agenda. But reforming Oregon’s health care system is critical, he said.

“Health care is impacting our ability to grow our economy,” he said. “It’s impacting our ability to invest in education.”

He said his critics will prevail if they can seize on certain details and fuel voters’ skepticism about taxes, spending and the loss of a system that serves some people - those with good medical coverage - very well.

Kitzhaber said his message “has to be about empowerment - that we don’t have to wait for the future … that we can step up and actually take care of ourselves.”

HEALTH CARE CRISIS

Numbers that point to what many, including former Gov. John Kitzhaber, see as an impending crisis in health care.

Oregon Health Plan coverage:
2002: 475,000 people (including 109,000 on OHP Standard)
2005: 409,000 (including 25,000 on OHP Standard)
Oregonians without health insurance
1996: 11 percent
2002: 14 percent
2004: 17 percent

Bankruptcy:
50 percent of U.S. households declaring bankruptcy cite medical causes; 76 percent had medical insurance at onset of illness.

Insurance premiums:
Average annual cost: $10,800
Employees’ average share: $2,713
Employees’ increase from 2004: 9.2 percent
Employees’ wage increase from 2004: 2.7 percent
Employees’ premium increases since 2000: 73 percent

Decline in employer-provided medical coverage:
1990-2000: Employers providing coverage declines by 2 percent a year.
Since 2000: Employers providing coverage declines by 4 percent a year.

Federal safety-net health care spending:
2001: $546 per uninsured person
2004: $498 per uninsured person

— Sources: Oregon Office of Health Policy & Research; Harvard law professor Elizabeth Warren; Kaiser Family Foundation; Portland Business Journal; Foundation for Medical Excellence

Posted by pnhp at 12:03 PM | Permalink

Speakers at town hall meeting call for universal coverage through government program

By Patrick Cain
Special to the Times Union
Thursday, December 15, 2005

ALBANY, New York — Medicaid referrals aren’t easy for Dr. Paul Sorum.

“I virtually throw my hands up trying to find a provider” who will accept payment through the government insurance program for the poor, said Sorum, chair of the Capital District chapter of Physicians for a National Health Program. “We want to treat not only some of our patients but all of our patients.”

Sorum spoke recently at a town hall meeting at which doctors, governmental officials, advocates and local residents shared their concerns about the need for health care reform. The event drew about 70 people.

“We’re headed in the wrong direction,’ said Dr. Glenn McGee, director of the Alden March Bioethics Institute at Albany Medical College. He and others who spoke backed a bill on Capitol Hill, HR 676, which would provide universal health care coverage.

The measure would be good for Albany resident Beeca Leet, who explained her circumstances. She said she spends more than $600 a month on medication — that’s half of what she earns, which is too much to qualify for government services, but not enough to meet her medical needs.

U.S. Rep. Michael McNulty, a co-sponsor of HR 676 in the House of Representatives, was pessimistic about its chances for passage. “With the Bush White House and a Republican-controlled Congress, the bill doesn’t have a chance,” said McNulty, a Green Island Democrat. Slamming his fist on the table, McNulty expressed anger that some people resort to cutting their pills in half. “I have people in my office tell me they do this to make their prescription last longer,” he said.

Erick Cheung, a third-year student at Albany Medical College, equated today’s health care system with an obsolete classic. “You can’t make a Model-T fly,” he said.

Posted by pnhp at 11:34 AM | Permalink

Now patients who can’t pay, or who have high deductibles, can get credit cards specifically for medical care. But the rates can reach 23%.

By Daniel Costello
LA Times Staff Writer
December 12, 2005

With many Americans struggling to pay their medical bills - and more of those bills going unpaid - hospitals and medical providers are scrambling for solutions. They may have found at least a partial one: credit cards that can be used only for healthcare expenses.

The cards can help patients meet their deductibles and other out-of-pocket expenses, obtain elective surgery, even help pay for care that might otherwise be off-limits.

They could also increase the nation’s already staggering medical debt by increasing the amount of interest on unpaid hospital bills.

Kaiser Permanente last year began offering credit cards with $5,000 limits to customers in Hawaii and Colorado and is considering expanding the program to other states, including California. Hospital chains such as the Carolinas HealthCare System and Kansas-based Via Christi Health System are also signing up patients with cards. GE Capital has started offering credit cards to patients in several pilot programs around the country.

There are many pluses to the new cards. The primary benefit is that patients can more easily obtain procedures and tests when they’re most needed. Although federal law requires that hospitals treat patients for all emergency care, many people without insurance or with high-deductible health plans skip other necessary treatments because they can’t afford them.

In turn, hospitals and providers hope to see a reduction in patients who skip out on their bills. When patients pay with specialty credit cards, hospitals or other providers still get paid; it’s typically up to the banks that issued the cards to collect on the debt.

Healthcare credit cards “were once a trickle issue, but it’s turned into a steady business that could soon become a flood,” said Mark Rukavina, director of the Access Project, a Boston-based nonprofit group focused on consumer health access.

Still, patient advocates worry that the cards may do more harm than good. A big complaint: The cards have interest rates as high as 23%; comparatively, patients who set up payment plans with hospitals often pay nominal or no interest.

What’s more, patients who are offered credit cards may be less inclined to pursue other payment alternatives, such as researching if they’re eligible for charity care through the hospital. (The majority of hospitals around the country are nonprofit institutions and are required to give a certain amount of discounts and free care to patients.)

“These products ultimately could increase financial difficulties facing patients,” said Melissa Jacoby, an associate professor of law at the University of North Carolina at Chapel Hill who specializes in medical debt.

Many of the cards can only be used for health expenses, and hospitals typically offer them to patients after they have had medical treatment and report that they can’t pay the full tab. Other patients can ask to sign up on their own or contact banks directly to apply. Cards obtained directly through a bank can be used with any provider; those obtained through a hospital are for use there only.

Some of the cards, such as Citibank’s Citi Health card, can only be used to pay for “lifestyle” procedures such as fertility treatments or vision care. But many of the cards can pay for any healthcare charge. Some hospitals are going so far as to underwrite the cards with patients, meaning even those with poor credit are eligible. (In those cases, the hospital pays the bill if patients default.)

Many experts within the healthcare industry believe medical credit cards and other types of creative financing will become more common as health costs continue to rise and the number of Americans living without health insurance - now at 45 million - grows.

Also fueling the growth in medical credit cards are new consumer-directed health plans. These plans typically combine high-deductible insurance with a savings account that consumers can use to keep cash for out-of-pocket expenses. But some people are likely to have a hard time paying their initial deductible, which can be $2,000 a year or more.

The cards work in different ways. With Kaiser, for instance, patients pay 9.9% interest for the first year and then 23% on unpaid balances after that. In other programs, such as the Carolina Health System, patients who agree to pay the bill off during the first year get charged no interest, otherwise the rate is about 13%. Some providers will deduct the estimated interest on the outstanding credit balance from the overall hospital bill.

Dr. Rusty Salton, president of AccessOne, a niche North Carolina-based medical credit card provider with 30,000 clients, said that people apparently perceive a greater obligation to pay a credit card bill than an outstanding hospital bill. His clients have paid about 80% of their bills, he said, more than twice the industry average. “This isn’t about trying to make money off of people,” said Salton. “The fact is most people want to pay their bills, and this just helps them do it a little more easily.”

Kaiser Permanente chief executive George Halvorson said, “We’re helping people find a little more time to pay their deductibles and other expenses.”

Studies show that many low- and middle-income families are already strained by rising medical debt. More than half of all bankruptcies today result from unpaid medical bills.

A study released last month by the Access Project and Brandeis University found that medical debt is becoming a threat to homeownership and housing stability for many working families, including those with health insurance.

Among 1,700 people surveyed, more than a quarter of those with medical debt reported having housing problems. The most commonly reported problem was the inability to qualify for a mortgage; others reported not being able to pay their rent or their mortgage or that they had to move to less-expensive
housing.

Another concern is how credit card companies will try to collect from patients who don’t pay them. After state lawmakers threatened to restrict hospitals from aggressive debt collections practices such as placing liens on people’s homes and garnishing their wages, the California Hospital Assn. agreed last year to voluntary guidelines that bar hospitals from such practices.

Said Jacoby of the University of North Carolina at Chapel Hill: “Bringing in a third party to collect the debt means we don’t really know what they are up to.”

http://www.latimes.com/business/la-he-credit12dec12,1,5053108.story?coll=la-h
eadlines-business

Posted by pnhp at 11:26 AM | Permalink

Health Care for All, Just a (Big) Step Away
By Eduardo Porter
The New York Times
December 18, 2005

Next year, the federal government expects to provide about $130 billion for Americans to buy health insurance (through the tax break for employer-sponsored coverage).

Although subsidizing health insurance may seem a worthy effort, a positive contribution to the goal of universal coverage, it is among the most inefficient spending in the nation’s fiscal arsenal.

… if the objective is to expand health care coverage, a bolder option is available: focusing the bulk of the money on the bottom end of the income distribution.

Added to what is already spent on Medicaid, this financing would be roughly enough to make health insurance free for people earning up to three times the poverty level, and perhaps somewhat more, said Jonathan Gruber, an economics professor at the Massachusetts Institute of Technology who has studied the efficiency of alternative methods for financing health insurance.

To make insurance universal, two other things would be needed, Mr. Gruber said. As soon as the tax break was eliminated, company-provided health insurance would be likely to disappear, too. So some mechanism would be needed to pool groups of people and to avoid leaving higher-risk people to face enormous insurance costs. Such a mechanism would probably make health insurance affordable for all. And to make it universal, a mandate would be needed to make people buy it.

http://www.nytimes.com/2005/12/18/business/yourmoney/18view.html?pagewanted=all

And…

Tax Policy for Health Insurance
By Jonathan Gruber
National Bureau of Economic Research
December 2004

Despite a $140 billion existing tax break for employer-provided health insurance, tax policy remains the tool of choice for many policy-makers in addressing the problem of the uninsured. In this paper, I use a microsimulation model to estimate the impact of various tax interventions to cover the uninsured, relative to an expansion of public insurance designed to accomplish the same goals. I contrast the efficiency of these policies along several dimensions, most notably the dollars of public spending per dollar of insurance value provided. I find that every tax policy is much less efficient than public insurance expansions: while public insurance costs the government only between $1.17 and $1.33 per dollar of insurance value provided, tax policies cost the government between $2.36 and $12.98 per dollar of insurance value provided. I also find that targeting is crucial for efficient tax policy; policies tightly targeted to the lowest income earners have a much higher efficiency than those available higher in the income distribution.

http://www.nber.org/papers/w10977

Comment: Professor Gruber has demonstrated that a tax-payer funded government insurance program would be a far more efficient use of public dollars than tax-payer funded tax credits for the purchase of either employer-sponsored or individual private insurance plans. Even targeted tax credits for private insurance are much less efficient than tax-funded public programs.

Those who insist that we should use policies supporting private insurance to expand coverage do recognize the inequities of their proposals. Realizing that low-income individuals cannot afford reasonable coverage, they have recommended tax credits that are specifically targeted to this sector. Without considering all of the other inefficiencies and inequities of private insurance, Dr. Gruber’s work should lead to the conclusion that private insurance approaches should be abandoned as being a terrible waste of public dollars.

It is true that a publicly-funded, universal insurance program would increase public spending, but the important difference is that it would provide greater insurance value by eliminating many of the inefficiencies and inequities of our fragmented public/private system, thereby improving overall efficiency.

Not only those on the right want to see an efficient system, and not only those on the left want to see an equitable system. It seems that equity and efficiency should provide us with a common ground for crafting reform.

Posted by pnhp at 11:47 AM | Permalink

A reader writes, “What are your thoughts about the statement by Matt Santos, the Democratic presidential nominee on TV’s ‘The West Wing,’ that extending Medicare to all Americans would be an inexpensive and effective way of providing national health insurance?”

My first thought is what Matt Santos might have been reading lately.

It’s possible he was reading one of my old columns, for example, http://www.lansingcitypulse.com/030212/health2/index.html. There I mentioned that both the UAW and General Motors had concluded that national health insurance was the best way to get the auto industry to stop hemorrhaging red ink (and that was well before recent bankruptcies and plant closings).

Or else Santos might have been perusing the recent columns by Paul Krugman of The New York Times, who, I admit, gets a bit more exposure. Krugman has been teaching his readers a crash course in Health Economics 101 and basically saying that no matter how you add up the numbers, some sort of single-payer national insurance makes the most sense.

Finally, ol’ Matt may have been paying attention to the literature put out by the Physicians for a National Health Program. For some years they have been talking about “universal Medicare,” and it’s from them that I picked up the phrase to use in my 2003 column. The thinking is that we need some sort of single-payer national health insurance. But if we call it “Canadian style single-payer,” it’s a non-starter right away in the U.S. political landscape. Medicare, as we have seen in the last couple of years, is extremely popular; even the most-far-right conservatives are afraid to mess with it too much. And it just so happens that Medicare is the closest thing we have in the United States to a single payer system, even though it serves only a part of the population. So maybe “universal Medicare” is the way to get the average Joe on the street to think about it.

What about Santos’ claims that this will save money? Lots of people have done that math too, and it keeps coming out favorably. We continue to believe the myth that the government is inherently inefficient and the private sector is a model of efficiency. The administration of the Medicare program costs about 3 percent of total revenues. The average U.S. private health insurer spends between 15percent and 25 percent of revenues on administrative overhead and bureaucracy. It’s been frequently estimated that switching to a single-payer system would immediately save the U.S. some $150 to 200 billion annually, which is enough to provide good health care for all of those now uninsured.

By contrast, no one advocating a “free market” solution to the U.S. health care implosion has been able to come up with a plan that will both provide universal access and also control costs.

The proof seems to lie in the international experience. The most developed nations of the world all manage to provide high quality care for all their citizens while spending around 8-9 percent of their GDP to do it. All have some sort of nationally-run or at least nationally-coordinated plan, though some, like Germany, are not true single-payer.

The United States is the sole outlier. We leave about 46 million uninsured, or up to 80 million if you count those who lack insurance for at least part of a two-year period. We spend 15 percent of GDP on this boondoggle. And for all that, we get a health care system that on recent international charts ranks around 30th in the world, somewhere around Slovenia’s.

Experts in health policy have been saying this for years. Now the TV politicians appear to be saying it. When are the real politicians going to speak up?

(Howard Brody is a family practice physician and professor of medical ethics at MSU.)

Posted by pnhp at 12:40 PM | Permalink

Consumer-Directed Health Insurance: The Next Generation
An interview: John Rowe, a physician, is chairman and chief executive officer of Aetna, one of the nation’s largest insurance companies. James Robinson is the Kaiser Permanente Distinguished Professor of Health Economics at the University of California, Berkeley, School of Public Health.
Health Affairs
December 13, 2005

The Limits Of High Deductibles

Robinson: One of the criticisms of high-deductible products is that they are financially more onerous to high users of care than they are to the healthy. Healthy people don’t need much medical care, and so they won’t use much, whereas sick people do need medical care, and they spend more. High-deductible products reduce the subsidy from the healthy to the sick that operates through low-deductible health insurance.

Rowe: At this point, you know, we’re talking about two percent or so of the insurance pool being enrolled in these products, and so we haven’t reached the tipping point.

Robinson: How far, as you and your colleagues think about this, will the deductibles increase?

Rowe: Employers are still raising them. We haven’t hit the limit of cost sharing… Some people consider increases in the deductible to be a bad sign and believe there will be significant pushback from employees and that it won’t go much higher. But my sense is that for many employers, raising the deductible is the alternative to not offering insurance at all. And so I would not be surprised to see much higher deductibles in the small-business and middle markets. I don’t think you’ll see that in the larger corporate accounts, however.

We’re talking as if the products are uniform in the marketplace in high-deductible health plans, but they are not. In the market you see two very different types. You see plans such as the Aetna plan where the deductibles are moderate and where preventive services and medications and other things are out of the deductible and reimbursed on a first-dollar basis. But then you can also find, on the Internet, products with a $10,000 deductible-very-high-deductible health plans with nothing out of the deductible [in terms of preventive services and drugs]. Those are not the kinds of products we at Aetna think are in people’s best interest. Those are not the products that we sell.

Robinson: That’s an interesting distinction.

Rowe: They are giving high-deductible health plans a bad name.

http://content.healthaffairs.org/cgi/content/abstract/hlthaff.w5.583v1

Comment: Checking the Aetna website for California, plans available include, amongst others, California PPO 5000, California High-Deductible PPO2 (HSA Compatible), and California PPO Value 5000. If you remain within the Aetna network of providers, these plans have a deductible of $5,000 for individuals and $10,000 for families. For care obtained out-of-network, the deductibles are $10,000 for individuals and $20,000 for families (plus fees beyond Aetna’s allowable schedule). The only listed services for which the deductible is waived are an annual routine OB/GYN exam (but no maternity visits), and up to $200 for an annual physical with a $25 or $50 copay (though in some plans the pharmacy deductible may be lower).

These may not be the kinds of products that, in Dr. Rowe’s words, “we at Aetna think are in people’s best interest,” but they do sell them.

By pretending that Aetna is not part of the problem, I would say that Dr. Rowe is himself giving “health plans a bad name,” and quite deservedly so. Even the best of the private insurers are catering preferentially to insurance purchasers rather than patients, by marketing products that abandon their primary role of providing financial security for those with health-care needs.

Clearly it is time to dismiss the private insurers as the stewards of our health care dollars. By establishing our own, single-payer, national health insurance program, we would establish policies that would ensure that health-care dollars be spent on… health care!

Posted by pnhp at 11:41 AM | Permalink

California Nurses Association

– EMBARGOED FOR RELEASE -
December 13, 2005

Contact: Charles Idelson, 510-273-2246, 415-559-8991 (pg/cell), or the IHSP at 510-267-0634.

New research on pricing practices of over 4,200 hospitals across the U.S. documents that huge markups in charges to patients are continuing, even after federal changes in Medicare reimbursement policies that were supposed to help contain skyrocketing costs.

The research is contained in the third annual report on charges by the Institute for Health and Socio-Economic Policy (IHSP), the research arm of the California Nurses Association. For the third consecutive year, the report documents a strong correlation between huge hospital markups on their sticker prices over their costs, high profits and the growth of large corporate hospital chains.

What may be most striking in the new report is that charges continue to be scandalously high even after Medicare changed its reimbursement policy following the huge public outcry over outlier payments, made for especially complicated medical procedures.

But, the new report shows, the nation’s 100 most expensive hospitals set their gross charges at an average of 680% (up from 673% in 2002-2003) of their costs– meaning the average top 100 hospitals would bill $680 for a patient’s case where the actual costs were $100, or a 680% charge to cost ratio. The national average for all 4,184 hospitals surveyed was 244% of costs, an increase from 232% the prior year.

Notably, 77% of the hospitals – and 95 of those in the 100 most expensive – had at least one fiscal quarter included in their cost reports after the Medicare changes were announced.

Medicare, noted IHSP director Don DeMoro, adjusted the financial threshold at which outlier payments would kick in, with a resulting decline in reimbursements of $1.8 billion for those hospitals included in this year’s report. “Yet it’s abundantly clear that hospitals, in the aggregate, responded by raising their charges at an increasing social cost. The impact of the Medicare ruling overall appears to be minimal.”

“The result,” said CNA President Deborah Burger, RN, “is that more people than ever are priced out of access to care. High hospital charges are a direct contributor to skyrocketing increases in healthcare costs that result in more people losing healthcare coverage, more employers eliminating benefits or raising co-pays or deductibles, and the ongoing implosion of our health care system.”

Burger noted that since the Medicare ruling went into effect, hospitals have recorded all time record profits, an aggregate $22.6 billion in 2003 and $26.3 billion in 2004, and the number of uninsured has climbed to 46 million. “The system is working for well-heeled execs of the healthcare industry, but not for the rest of us.”

Included in the report is a listing of the nation’s 100 most expensive and 100 least expensive hospitals, the top 10 most expensive hospitals by state, and the 40 hospitals that charge the most for operating room services, prescription drugs, and medical supplies. The research is based on federal cost reports with aggregated data for over 30.5 million patient discharges in fiscal years 2003-2004 filed for all patient services and other financial categories for 4,222 U.S. hospitals.

Among the key findings:

• Higher charges correlate to higher profits.
• Higher charges are also associated with hospital chains, and large hospitals. 89 of the top 100 hospitals were system affiliated, compared to only 30 of the 100 least expensive.
• For-profit hospitals had the highest average charges, 366% of cost, government hospitals the lowest, 181%.
• Hospital markups are much higher for drugs, medical supplies, and operating rooms, which are now primary profit center for hospitals. For drugs, medical supplies, and operating rooms, the top 40 hospitals had respective average charges of 2,319%, 5,090%, and 1,073% of costs.
• High hospital charges are, in part, a result of the hospitals battle with other segments of the healthcare industry, especially pharmaceuticals and HMOs.
• New Jersey, Florida, California, and Pennsylvania are the most expensive places to get sick. New Jersey hospitals charges were an average 415% of costs.

The report contradicts two notable paradigms:

a- Public oversight, or regulation, reputedly reduces profit and harms the public interest. But, the most regulated state, Maryland, for the second year in a row, had the lowest average hospital charges while the number of Maryland hospitals making profits is right at the national average.

b- Mergers supposedly produce greater efficiency for consumers and thus lower costs. However, the efficiencies gained seem to produce higher charges and profits and more marketing, not lower costs.

Hospital industry officials have contended that the charges don’t matter, but:

a- Charges, or the list price, are the starting point for negotiations with HMOs and other insurers, the higher the charge, the higher the eventual payment.

b- Medicare’s “flat” reimbursement rates vary by individual hospital and are influenced by a number of variables, including a federally computed relative weighting system for each DRG. The DRG weights are heavily impacted by the list prices for products or services. Rather than saying Medicare rates are “flat” or “fixed” it would be more accurate to say the rates “float” year by year relative to variables in the reimbursement system, of which gross charges are a main factor.

c- Self-payers, the uninsured, are forced to pay the full list price.

“This report, said Burger, “reinforces that no amount of market tinkering can resolve the healthcare crisis. All sectors drive up costs, reducing access to care and undermining quality. Only fundamental change, a universal system based on a single standard of care for all, will end this vicious spiral and produce a humane system that works for Americans.”

Posted by pnhp at 03:57 PM | Permalink

Price Check: The Mystery of Hospital Pricing
California HealthCare Foundation
December 2005

In 2004, the California Legislature passed… AB 1626, requiring hospitals to provide information to patients on fees for 25 common services and to post notices informing patients that information was available to them.

That same year, the California Hospital Association developed and encouraged member hospitals to adopt voluntary guidelines… that hospitals should have clearly stated written payment and financial assistance policies, that hospitals should post notices about these policies, and that hospitals should train staff on communicating these policies.

In an effort to evaluate hospital-pricing practices, the California HealthCare Foundation sent a group of would-be patients to 64 hospitals throughout California. These “mystery shoppers” posed as low-income, uninsured patients who needed to find a hospital for an upcoming test or procedure.

Key Findings

• Better systems are needed

• Getting a price can be a frustrating process

• Type of procedure partially determines whether hospitals provide a price

• Hospitals must expand training to ensure employees understand how to deliver pricing and payment information

• Hospital pricing information is inconsistent, making it difficult to shop for the best value

• Financial assistance can be a “Catch-22”

• Written notices communicating financial assistance are often inadequate or inaccessible

Although some of the shoppers had positive experiences, overall the project revealed a wide communications gap between hospitals and their patients - a gap that has poor implications for patients who must pay all or part of their medical bills.

http://www.chcf.org/documents/hospitals/
PriceCheckMysteryHospitalPricing.pdf

Comments: Access to health-care price information theoretically would be important not only for the uninsured (over 6 million in California alone), but also for the insured if price sensitivity of consumer-driven health plans (CDHP) were to have any significant impact on reducing health care spending. This study demonstrates that voluntary efforts and even legislation have not been very effective in informing price-sensitive health-care shoppers of their options.

This report recommends that improvements be made in providing information on pricing, but this conclusion should be challenged on the basis that the framing of the problem was inappropriate.

Sending a patient out on his/her own, with very limited financial resources, to find best prices when options may be limited or nil, is not an effective policy for cost containment. If a patient needs a C-T scan or cardiac catheterization, that patient is really limited to the facilities that his/her physician utilizes if care is to be properly coordinated.

We should be directing our efforts to providing maximum value for beneficial health-care services. A much more effective solution would be to enlist the power of a monopsonistic, single-payer purchaser that would negotiate for all patients not only the best prices, but also the best services and products.

It’s time to give up on bending or breaking the health-care system merely to make it pliable to free-market competition. What is this really all about?
The whims of free-market theorists, or the health of the people?

Posted by pnhp at 03:46 PM | Permalink

State Plans Medi-Cal Rate Pinch
By Evan Halper
Los Angeles Times
December 13, 2005

Gov. Arnold Schwarzenegger is planning to cut the rates the state pays doctors to treat the poor, a move medical groups warn would result in more Californians losing access to healthcare.

The administration announced in a bulletin mailed to Medi-Cal providers Monday that it planned to temporarily cut reimbursement rates by 5% through 2006. The news comes at a time when the rates already are so low that many doctors refuse to participate in the program.

“We are paying doctors at the lowest rate of any state,” said Dr. Jack Lewin, chief executive of the California Medical Assn. “Half the doctors in this state have dropped out of the program. The rest are staying involved almost as a goodwill service for their communities. This sends the message from the state that these patients are not that important.”

“We recognize that this rate reduction is a hardship to healthcare providers,” said Ken August, a spokesman for the California Department of Health Services. “But California continues to face a deficit.”

Now California is in much better financial shape. Although the state technically continues to run a deficit - it is on track to spend more money next year than it will bring in - an unexpected surplus in receipts in recent months has left state coffers flush with enough cash to balance it out.

http://www.latimes.com/features/health/medicine/la-me-medical13dec13,1,4645251.story?coll=la-health-medicine

And…

House and Senate Still Far Apart on Medicaid Changes
By Robert Pear
New York Times
December 12, 2005

Members of Congress will soon plunge into battle over the future of Medicaid as House and Senate negotiators try to resolve huge differences in legislation that would allow states to cut benefits and increase charges for millions of low-income people, including many children.

In a detailed analysis of the House bill, the Congressional Budget Office predicted that 70,000 to 110,000 people would lose Medicaid coverage for failure to pay premiums.

Democrats, who are generally opposed to the House and Senate budget bills, are excluded from the current negotiations.

http://www.nytimes.com/2005/12/12/politics/12medicaid.html?pagewanted=all

Comment: As a program that funds health care for low-income individuals, Medicaid is a welfare program. The political support for providing aid to people in need has significantly waned. The shift toward the emphasis on individual responsibility began before President Bush took office, as it was President Clinton who set out to “end welfare as we know it.” The issues are much more political than they are partisan.

Low-income individuals lack a forceful political voice. A tax-funded health insurance program designed specifically for them will always be vulnerable to the budget-cutting process. Since adjustments never match the rate of inflation, underfunding is compounded over time.

With increasing financial losses for those caring for Medicaid patients, the number of willing providers declines. Concentrating money-losing patients amongst fewer providers is creating a variation of the death spiral since the increases in losses are not sustainable. As providers withdraw, impairment of access and outcomes is inevitable.

The federal government and the states are not going to search for new revenue sources to pump up the Medicaid budget. Instead, the search is on for benefit reductions that address budget issues rather than health-care needs. The problems of Medicaid will only grow worse. We don’t need more partisanship, but we do need constructive politics to make it happen.

Rather than a welfare program, low-income individuals should be placed in an equitable, universal system of social insurance. Just as our current social insurance program - Medicare - has strong political support, so would a universal, single-payer Medicare for All.

Posted by pnhp at 03:43 PM | Permalink

Early Experience With High-Deductible and Consumer-Driven Health Plans:
Findings From the EBRI/ Commonwealth Fund Consumerism in Health Care Survey
By Paul Fronstin, EBRI, and Sara R. Collins, The Commonwealth Fund
Employee Benefit Research Institute
December 2005

This report presents findings from the first EBRI/Commonwealth Fund Consumerism in Health Care Survey. The online survey of privately insured adults ages 21-64 was conducted to provide national data regarding the growth of high-deductible health plans with and without savings accounts and their impact on the behavior and attitudes of health care consumers. The sample was randomly drawn from Harris Poll Online, Harris Interactive’s online sample of Internet users who have agreed to participate in research surveys. The final sample of adults participating in the survey is skewed toward higher-income, more highly educated individuals and also under represents minorities.

Despite its limitations, this is the first national survey of individuals with high-deductible health plans who also have savings accounts (HSAs or HRAs), or so-called consumer-driven health plans (CDHPs), and people with high-deductible health plans who are eligible to contribute to a health savings account but who currently do not have an account (HDHP).

Health Care Spending

When combined with premiums, outlays on health care as a share of income rose substantially among those with HDHPs and CDHPs, particularly among those with low incomes or health problems. More than two-fifths (42 percent) of people with HDHPs and 31 percent of those in CDHPs spent 5 percent or more of their income on out-of-pocket costs and premiums, compared with 12 percent of people in comprehensive plans. Nearly everyone (92 percent) with HDHPs with incomes under $50,000 spent 5 percent or more of their income on out-of-pocket costs and premiums, and one-third spent 10 percent or more. This compares with 34 percent of people in that income group in comprehensive plans who spent 5 percent or more of their income and 10 percent who spent 10 percent or more. People with health problems in HDHPs were also vulnerable to spending large shares of their income on out-of-pocket costs and premiums: more than half (53 percent) of those in HDHPs with health problems spent 5 percent or more and 18 percent spent 10 percent or more.

Cost-Related Access Problems

While people reported using health services at similar rates across health plans, adults with CDHPs and HDHPs were significantly more likely to report that they had avoided, skipped, or delayed health care because of costs than were those with comprehensive insurance, with problems particularly pronounced among those with health problems or incomes under $50,000. The survey asked whether in the last year respondents had delayed or avoided getting health care services when they were sick because of costs. About one-third of people in CDHPs (35 percent) and HDHPs (31 percent) reported delaying or avoiding care, twice the rate of those in comprehensive health plans (17 percent). Having a health problem made it more likely that people avoided or delayed care. Among people who reported being in fair or poor health or having at least one chronic health condition, those in CDHPs or HDHPs reported delaying or avoiding care at higher rates than those in comprehensive plans: 40 percent of those in CDHPs and 31 percent of people in HDHPs, compared with 21 percent in comprehensive plans.

Attitudes and Satisfaction

Overall, individuals with comprehensive health insurance were more satisfied with their health plan than individuals with CDHPs and HDHPs. Specifically, 63 percent of individuals with comprehensive health insurance were extremely or very satisfied with their health plan, compared with 42 percent among CDHP enrollees and 33 percent of individuals with HDHPs.

Availability and Use of Cost and Quality Information

The survey asked respondents whether their health plans provided any information regarding the cost and quality of providers. Just 1 in 7 people (12-16 percent) in all plan types said that their plans provided either type of information on doctors and hospitals.

More than 70 percent of people enrolled in CDHPs and 60 percent of those in HDHPs strongly or somewhat agreed that the terms of their health plans made them consider costs when deciding to see a doctor when sick or fill a prescription; less than 40 percent of those in comprehensive plans felt this way.

Conclusion

At its most fundamental level, consumerism in health care is an attempt to wrest control of the galloping increase in health care costs experienced by employers over the first half of this decade by addressing the incentives surrounding the demand for health care. This survey finds that consumer plans do, in fact, significantly raise consumer sensitivity to costs and reduce use.

But the survey also demonstrates that at least one factor crucial to the success of consumer-driven health plans-realistic, useful, accessible health-cost information-does not yet exist on a widespread basis. Further, the survey also demonstrates that cost-related reductions in demand are highest among individuals with the most to lose-those who are sick and those who have low incomes. To the extent that the health care cost problem is a problem owned by all of us, early evidence from the consumerism movement suggests that solving it through blunt, demand-side instruments like high deductibles gives disproportionate responsibility for the problem to the most vulnerable among us.

http://www.ebri.org/pdf/briefspdf/EBRI_IB_12-2005.pdf

Comment: Although the negative impact of CDHPs and HDHPs were fully predicted and then confirmed by this survey, one finding is shocking in the intensity of the negative impact: “Nearly everyone (92 percent) with HDHPs with incomes under $50,000 spent 5 percent or more of their income on out-of-pocket costs and premiums, and one-third spent 10 percent or more.” The introduction of financial disincentives to care resulted in widespread financial hardship.

A fundamental principle of health care research is that when preliminary results demonstrate significant harm that cannot be offset by any potential benefit, it is an ethical imperative that the study be terminated immediately. The experiment with CDHP and HDHP has already crossed that threshold. Further experimentation can only define more precisely the enormity of financial hardships created. Health policy researchers have the same ethical obligation as biomedical researchers; they should call for an immediate end to this disastrous experiment.

What feature of this model is causing the harm? The HSA plays an insignificant role in that it is merely a restricted savings account. The patient must still meet the out-of-pocket expenses whether they come from other income or savings or from this account distinguished primarily by an inequitable, regressive tax benefit.

The real harm is caused by the high-deductible requirement of both the CDHPs and the HDHPs. Extensive data already exist that confirm the harm done by high deductibles in impairing access and health outcomes and in creating a financial burden for those in need. This study indicates that the financial hardship appears to be far more extensive than previously thought.

What can we do? Existing HSAs can be converted into IRAs, and future HSAs should be prohibited as bad tax policy, bad pension policy and bad health policy. HDHPs should be prohibited. Financial hardship created by the need to access the health-care system can be eliminated by covering all beneficial services through a single risk pool. Since insurers will never attempt to corner the market on those who need care, this can be accomplished only by public policies requiring a universal pool. It’s time for single payer.

Posted by pnhp at 04:50 PM | Permalink

A system that works for America
By Register Editorial Board
The Des Moines Register
December 7, 2005

The U.S. health-care system doesn’t work for ordinary people. It doesn’t work for Bill Cotton of Des Moines, who is spending his life savings for his wife’s nursing-home care. Or Hollee Crees of West Des Moines, who has had to fight the state of Iowa to keep her son on Medicaid. Or John Greener of Washington, Iowa, who can’t retire from teaching because his health care would be unaffordable.

And they’re insured. Then there are the 45 million Americans without health insurance.

The Register’s editorial board has pushed repeatedly for a tax-financed system of health care that provides basic care for all Americans. We have suggested using Medicare as a financing model that could be gradually expanded to cover everyone. Why Medicare? It’s a proven model that provides uniform coverage with low administrative costs - around 3 percent, compared with an average of 15 percent in the private sector. Medicare is familiar, which makes it politically palatable.

Medicare was created 40 years ago because seniors needed help with health care. Now everyone needs it. It makes sense to build on the idea of pooling people together, lowering costs through economies of scale and greater negotiating leverage, and offering uniform benefits people can understand.

We realize our suggestion is hardly simple. Medicare would need to be reformed before it could be expanded - and not in the way Congress “reformed” it in 2003. It should provide a uniform drug benefit that allows the government to negotiate the cost of drugs. It should offer a more comprehensive package of benefits, which would eliminate the need to purchase supplemental insurance. It should do a better job of coordinating patients’ care.

But wouldn’t a system like that break the budget? No. A taxpayer-financed system, covering all Americans, could save 1.1 trillion health-care dollars over 10 years, concluded a recent study by the nonprofit, nonpartisan National Coalition on Health Care, the nation’s largest alliance working to improve health care.

The coalition offered four scenarios for reforming health care in this country. All are comprehensive reform plans, not tinkering around the edges. All would provide everyone with health insurance, increase efficiency and improve quality of care. All four would save money. The one that would save the most money: a universal, publicly financed program.

Kenneth Thorpe, a former government economist, estimated the cost and savings using Congressional Budget Office methodology. He assumed employers would pay 75 percent of the tax for covering employees and workers would pay the remaining 25 percent through payroll taxes. The benefits wouldn’t be bare bones either. They would be similar to what federal employees enjoy. The system would provide drug coverage and wouldn’t require purchasing supplemental insurance.

The coalition isn’t a bunch of left-wing nuts. It’s co-chaired by former Iowa Gov. Robert Ray, a Republican. Members include Principal Financial Group, AARP and Blue Shield of California.

None of the coalition’s coverage and cost scenarios exactly matches the expansion of Medicare that the Register advocates. But they clearly indicate that Medicare expansion would be feasible and save money.

The alternative to comprehensive reform is to keep putting Band-Aids on a system that doesn’t work even for the insured. Quality and availability of care varies for those covered by Medicare versus Medicaid versus benefits through public jobs versus thousands of different plans through private employers versus insurance bought in the open market. And millions are uninsured. The fractured system’s very structure - or lack of it - makes it wasteful.

Instead, the United States could use the money it’s already spending on health care to cover all Americans.

One system. Everyone pays for it. Everyone is insured by it. It would be more efficient and more humane.

It would work for ordinary people. It would work for America.

The obstacle: Special interests

So what stands between America and a tax-financed system of health care?

Powerful special interests that funnel cash to politicians for their political campaigns and lobby heavily to protect their bottom lines.

Reforming the current system theoretically could eliminate the health-insurance industry, although parts of that business would likely remain. Consumers in many countries with national health-care systems buy insurance policies to cover care beyond what the government provides. The pharmaceutical industry would see smaller profits if a government system negotiated down the cost of drugs for everyone.

Two other key players, physicians and businesses, have historically opposed a taxpayer-financed system. Their main national associations continue to do so. As members’ costs and frustration mount, however, views are starting to change.

Business associations have long advocated market-based solutions rather than a government system. Yet, in part because of existing government involvement, the free market hasn’t worked in health care. Businesses large and small see that each year when they receive their annual health-insurance rate increases.

The American Medical Association, too, has fought the idea of a national system, but some physician groups are coming around. Many doctors are growing tired of the paperwork burden of dealing with thousands of different private insurance plans in addition to government programs. And physicians embrace a credo of providing health care to everyone.

The business and medical lobbies wield considerable clout in the halls of Congress. If some of that clout shifted toward pushing reform, rather than resisting it, Congress would be forced to respond.

http://desmoinesregister.com/apps/pbcs.dll/article?AID=/20051207/OPINION03/512070328/1035/OPINION

Posted by pnhp at 04:47 PM | Permalink

Blue Cross starting bank for health-related matters
By Sarah Skidmore
The San Diego Union-Tribune
December 6, 2005

The Blue Cross and Blue Shield Association announced yesterday that it will start its own bank (Blue Healthcare Bank) to provide members a place to handle their health-insurance related banking.

This is the second recent financial offering by the Blue Cross and Blue Shield Association. Last month, the association announced an agreement to work with Visa on a branded debit card to pay for health services.

The bank will provide financial services for members enrolled in plans that require dedicated accounts for their health care spending, such as health savings accounts, flexible spending plans or other health reimbursement arrangements.

Such plans are part of a small but growing trend in insurance toward “consumer-directed health plans,” which essentially put more of the decision-making and financial responsibility on the consumer.

Health plan members would use the bank to save and withdraw money for health expenses, even using check or debit cards to do so. The bank will offer some credit lines to members to pay for health care expenses and various investment opportunities.

“It’s a strategic investment for the blues,” said Maureen Sullivan, senior vice president of strategic services for the Chicago-based association. “For these (new health) services to succeed long term, we need to provide comprehensive services.”

http://www.signonsandiego.com/news/business/20051206-9999-1b6bank.html

BlueCross BlueShield Association
Press Releases

12/05/2005
Blue Cross And Blue Shield Companies To Develop Bank

11/21/2005
Blues And Visa Enter Into Co-Branded Debit Card Deal

http://onlinepressroom.net/bcbsa/

Comment: Supporters of health savings accounts (HSA) with high-deductible health plans (HDHP) tout the simplicity of paying cash for up-front medical expenses followed by 100% coverage after the HDHP deductible is met. They gloss over the fact that complex, detailed accounting is required to define when the deductible has been met. Factors to be considered include whether services and products qualify, whether they are provided in or out of network, and what amounts are disallowed because they exceeded the contracted rates. Additional accounting may be required to determine tax liability and potential penalties for disallowed distributions.

As the largest marketers of HDHPs, Blue Cross and Blue Shield insurers (BC/BS) faced the possibility of losing control of the administrative task of providing this complex accounting. The alternative would have been to require their beneficiaries to provide reams of documentation at the time that the deductible was believed, by the patient, to have been met. The receipts, cancelled checks, charge card records and whatever else would not have provided enough information for the insurers to qualify the expenses as meeting the deductible. In most instances, many charges would be disqualified and the deductible would not have been met, but the insurer would have expended considerable administrative effort with the end result that no HDHP benefits would be paid out.

In order to maintain control of the administration of the up-front expenses, BC/BS really didn’t have much choice other than to establish Blue Healthcare Bank to segregate the accounts, and the Blue-branded VISA debit card to document access to the accounts. An additional reason for the bank is that BC/BS had to enter the lending business in the form of credit lines attached to the debit cards. For the debit card to function smoothly at the time of service, credit lines have to be in place to cover expenses after the HSAs are depleted, but before the deductible is met. It is not clear whether they also intend to extend credit for the inevitable disallowed charges that occur after the “100% coverage” is in place.

HSAs do not provide administrative simplification. Not only do the HDHPs require the same administrative effort to account for HSA spending, they are now adding the administrative costs of banking and debit cards. It makes you wonder what the driving force is behind the passion of the HSA/HDHP advocates. It certainly isn’t logic.

Posted by pnhp at 04:41 PM | Permalink

By Saul Friedman
Newsday
December 3, 2005

Where were we? Oh, yes. I was saying last week that it’s about time we joined the rest of the civilized and industrialized world in providing publicly financed, universal health care for the American people and their families. But I didn’t say why or how.

After all, the United States has some of the finest, most modern medical facilities in the world. I ought to know; Baltimore’s Johns Hopkins Medical Center saved my life.

Nearby, the National Cancer Institute and the National Institutes of Health, outside Washington, D.C., set the standards for American research. And patients come from abroad seeking help from many U.S. hospitals.

If you don’t have a life-threatening illness, you won’t have to wait weeks, as you might in Canada or Britain, for elective surgery on those cataracts or to repair a hernia - if you have the right insurance.

Ah, there’s the rub for nearly 46 million Americans (including 9 million children) who have no insurance. For a hacking cough bordering on pneumonia, they wait in crowded clinics or go without care. Caring for a child burning up with fever can be frightening enough, with insurance; being uninsured can end up killing that child.

A Florida study found that children who enter a hospital without insurance are more than twice as likely to die as children with insurance. Another study reported that 18,000 Americans die each year because they are uninsured.

Millions more Americans are underinsured or find that their insurance doesn’t cover what they thought. In the United States, administrative costs amount to 25 percent of health care spending, or $300 billion a year, says economics columnist Paul Krugman, partly because the huge bureaucracy is engaged in denying care to those who most need it. The rest of those costs are profits.

According to The New York Times, many of the non-Medicare insured go broke trying to keep up with co-pays for chronic illness or the bills from hospitals, for the room, surgeons, labs, anesthetists, drugs and any other white coat that drops in. A third of American patients spend more than $1,000 a year out of pocket, and 68 percent of those who declared bankruptcy because of medical bills had insurance.

The Washington Post reported weeks ago that the Blue Shield HMO in California, to save money for the company and patients, is sending members from the San Diego area to Mexico for nonemergency care because services are less expensive than in the United States.

A doctor, who performs laser eye surgery on both sides of the border, told the Post he charges in Mexico a third of what he charges in San Diego. A hysterectomy that averages $2,025 in the United States costs $810 in Mexico. Blue Shield said the services on both sides of the border are comparable. And in Mexico the doctors’ parking lots are filled with California cars.

The United States spends more than any nation on health: $5,600 for every American, or 14.6 percent of national income, compared with Germany, 10.9 percent; Canada, 9.6 percent; New Zealand, 8.5 percent; and Britain, 7.7 percent. Yet a recent study for the private, nonpartisan Commonwealth Fund, which surveyed 7,000 of the sickest patients in Australia, Canada, Germany, New Zealand, Britain and the United States, found that American medicine has the highest error rates, the most fragmented and disorganized care and highest costs.

Are we getting our money’s worth?

Infant mortality - the number of deaths of children under one year, probably the best measure of the level of health of any country - actually increased from 6.6 to 7 per thousand live U.S. births. That’s higher than 41 nations, including Italy (6.07), Canada (4.82), Germany (4.2) and Japan, which has the lowest rate in the world at 3.28. The percentage of live births classified as low birth weight, an indication of the mother’s health and prenatal care, is 7.8 percent for the United States, behind Canada (5.6), the Netherlands (4.7), Australia (6.2) and all of Europe.

The United States boasts a life expectancy for men of 77.3 years, but we’re behind 34 other nations, including New Zealand (79), Germany (79), Britain (79), Canada (80), Australia (81) and Japan (82). Need I add that all these countries provide universal health care - the ability to walk into a doctor’s office without worrying about cost? What are we waiting for?

Polls indicate most Americans (75 percent) would support universal health care. And leading newspapers, commentators, economists, lawmakers, 13,000 doctors, former surgeons general, businessmen and a few conservatives have come to the same, obvious conclusion: If we were to pay in taxes just a fraction of what health care now costs us, we could afford it.

But universal health care is much easier said than done. How to deal with the entrenched insurance-medical-hospital complex? How to make the transition relatively painless for medical professionals and patients?

The answer is also obvious: Medicare for every American, or what I proposed years ago, “Medicare for All.” A distinguished panel of health care experts, Democrats, Republicans, financiers, insurance executives and academics concluded in an open letter to the journal Health Affairs, that Medicare must be empowered as the vehicle “to make pay-for-performance a national strategy for better quality.” Lawmakers, medical journals, a couple of former surgeons general and 13,000 doctors have proposed phasing in “Medicare for All.”

And if this administration doesn’t trash the rest of Medicare before it leaves the scene, it remains the most obvious, affordable and doable way to providing universal coverage.

WRITE TO Saul Friedman, Newsday, 235 Pinelawn Rd., Melville, NY 11747-4250, or by e-mail at saulfriedman@comcast.net.

Copyright © 2005, Newsday, Inc.

——————————

This article originally appeared at:
http://www.newsday.com/business/custom/retirement/ny-bzsaul4535330dec03,0,1158012.column?coll=ny-retirement-headlines

Posted by pnhp at 10:13 AM | Permalink

At a hearing in L.A., Garamendi grills insurance company executives about why premiums have soared 60% in four years.
By Lisa Girion, Times Staff Writer
LA Times Business Section
December 2, 2005

Concerned that some health insurers may be price gouging to boost profits, California Insurance Commissioner John Garamendi said Thursday that he might seek to raise the percentage of premium dollars that, by regulation, must be spent on healthcare.

At a hearing in Los Angeles, Garamendi grilled executives of five health insurance companies about why premiums have soared 60% in four years, causing more employers and individuals to drop coverage.

“At the same time that this meltdown is occurring, many insurers continue to enjoy very healthy profit margins,” Garamendi said.

Garamendi singled out Blue Cross of California for criticism, noting that its profit margins on certain insurance plans rose from about 15% to 24% in recent years. The company’s trend on healthcare spending, he noted, was just the opposite ? declining from 80% of premiums in 2000 to 68% last year.

“It’s unconscionable,” Garamendi said.

Blue Cross executives responded that the company’s overall profit margin in California is 6% to 7% when its HMO plans, which are not regulated by Garamendi, were considered.

But some of the company’s fastest growing ? and most profitable ? plans are new ones that offer low premiums in exchange for high deductibles or limited benefits.

The most controversial among them is a plan called Tonik. Aimed at young adults who are generally healthy, Tonik does not cover maternity benefits. Garamendi said such plans amounted to “cherry-picking,” or orienting coverage to attract healthy members, who are cheaper to underwrite.

“They are looking to find individuals that do not ! get sick,” Garamendi said in an interview. The plans “are all designed to appeal to people who don’t need medical services. That increases their bottom-line profit.”

Officials with Blue Cross parent WellPoint Inc. denied the charge. Tonik is designed to serve young people who might otherwise have no insurance at all, they said.

Blue Cross regional Vice President Ann-Louise Kuhns told Garamendi at the hearing that Tonik and some of the other new plans were aimed at people who hadn’t previously bought health insurance because they couldn’t afford it or viewed it as too expensive.

The plans’ popularity, Kuhns said, showed that they were meeting a need. “If we were offering a product that people didn’t like, they don’t have to buy it,” she said.

Kuhns said rapid growth in these high-deductible plans had temporarily cut the share of premiums spent on healthcare. That share is expected to rise as those members remain longer with Blue Cross.

Garamendi said medical spending was lower in plans purchased by individuals than in employer-sponsored coverage. He said he believed that was because individuals lacked the purchasing power to drive better deals.

To change that, Garamendi said he might seek to raise the minimum share of individual-plan premiums ? currently 50% ? that insurers must spend on medical care.

But one consumer advocate accused Garamendi, who is running for lieutenant governor, of grandstanding for political gain.

Jamie Court, president of the Santa Monica-based Foundation for Taxpayer & Consumer Rights, said Garamendi should have taken such a step earlier, and that he doubted there was enough time for the commissioner to put through a new regulation before his term ended next year.

“This is an opportunity for Garamendi to score some points without landing any punches on the profiteers,” Court said.

Posted by pnhp at 10:11 AM | Permalink

Detroit, MI—The motor city became the first big urban labor council to endorse HR 676, Single Payer Health Care, a bill introduced by Congressman John Conyers.

Acting at its regular November meeting, the Council, which represents 36 local unions, resolved to “…work with other unions and community groups to build support and action for single payer universal health care and HR 676.” The resolution, which passed unanimously, was introduced by Michele Artt, a delegate from the Detroit Federation of Teachers.

The Detroit AFL-CIO joins a growing list of Central labor bodies that have endorsed HR 676. The Conyers bill now has 57 co-sponsors.

#30#

For a complete list of union endorsers of HR 676 contact:
Kay Tillow
c/o Nurses Professional Organization (NPO)
1169 Eastern Parkway #2218
Louisville, KY 40217
(502) 636 1551or (502) 459 3393
email: Nursenpo@aol.com

Posted by pnhp at 10:08 AM | Permalink

By Andre Picard
The Globe and Mail (Canada)
Thursday, December 1, 2005

Starbucks spends more on health insurance for its American employees than it does for coffee beans — $200-million (U.S.) annually. General Motors spends more on health benefits than it does on steel — the equivalent of more than $1,500 per U.S. vehicle it builds.

Wal-Mart’s annual bill for health benefits is $1.5-billion yet, by some accounts, fewer than half of the company’s 1.3 million U.S. employees are actually insured.

Aside from being fodder for cocktail party conversations, why do these little bits of trivia matter? Because they serve as a graphic reminder that one of the biggest beneficiaries of Canada’s medicare system is big business, and the millions of workers it employs.

When we talk about the right to buy private insurance — a hot topic since the Supreme Court’s Chaoulli decision — one aspect is often overlooked: Who will pay for it? In countries with private health insurance for basic medical care, premiums are invariably paid — in whole or in large part — by employers; they become a key element of contract negotiations. (In Canada, health insurance is available but it covers services not covered by medicare such as prescription drugs, dental care, vision care, etc. The Chaoulli decision extends the right to other basic services if they are not provided by the state in a timely manner.)

The U.S. has an employer-based health-insurance program — 90 per cent of people with health insurance get it through employers. But there are 45 million who are uninsured, and many more who depend on Medicare (for the elderly) and Medicaid (for the poor).

The employer-based health-insurance system is one of the major concerns of U.S. business because it is a drain on profits. Thankfully, the system is collapsing under the weight of its irrationality.

Bob Moffit of the ultraconservative Heritage Foundation said it best: “Why is America the only industrialized country that ties health insurance to employment? It’s nuts.”

“Imagine if auto insurance worked the same way. So if you lost your job, you could no longer drive. That would be absurd.”

Yet, the absurd reality is that, in the U.S., many employees dare not change jobs for fear of losing their health benefits.

According to a recent survey by the Kaiser Foundation, the average health premium in the U.S. is now $10,880 a year — more than the gross earnings of minimum-wage workers. On average, employees with benefits pay $3,718 of that total, with employers picking up the balance.

Even loyal employees are taking it on the neck. Last month, the United Auto Workers approved a contract that will allow GM to cut $15-billion from its retiree health-care liability. Practically speaking, that means retirees will now have to pay additional insurance premiums of up to $750 a year.

Wal-Mart, for its part, is talking about screening policies to avoid hiring employees with health problems and looking for ways to shuffle workers and their families to government-run social services programs like Medicaid.

Wal-Mart is an easy target but it is simply doing what the market demands — maximizing profits. Employer-based health coverage creates an inherent conflict of interest: Companies will always protect profits over the health of workers and retirees.

Still, there are companies — Starbucks, Costco, Verizon, Honeywell — that continue to offer health coverage to all employees. They argue that the only way to get good people is to pay living wages and provide decent benefits. Companies without good benefits have extremely high turnover and, not surprisingly, unhealthy workers.

Howard Schultz, the chairman of Starbucks, has been the most outspoken business leader about the moral responsibility of corporations to provide health benefits. But he has also expressed exasperation: “What’s perverse is that companies like ours who are doing the right thing are actually paying more,” he said on CNBC.

Mr. Schultz noted that those with health insurance are paying more to offset the costs of the 45 million uninsured who depend on government programs and charity. He said public, state-run health programs would be more efficient, cost-effective and just.

In Canada, individuals and corporations pay higher taxes than in the U.S. But when medicare benefits are factored in, the differences are negligible.

A universal program like medicare not only introduces an element of social justice, it also levels the playing field — it does not allow corporations to satisfy the profit demands of Bay Street (and Wall Street) at the expense of their employees’ security and health.

As the U.S. moves inexorably from private sector coverage to public sector coverage, Canadians should take a moment to appreciate their much-maligned system. And business leaders, in particular, should have the courage and the honesty to stand up and declare how good they have it.

Canada’s medicare system is far from perfect, but it has done wonders for the bottom line of corporate Canada.

apicard@globeandmail.ca

Posted by pnhp at 10:04 AM | Permalink

A Widening Rift In Access And Quality: Growing Evidence Of Economic Disparities
By Robert E. Hurley, Hoangmai H. Pham, Gary Claxton
Health Affairs
December 6, 2005

Data from the Community Tracking Study provide a valuable perspective from which to observe how economic disparities—largely a function of different sources of coverage—influence access to medical care in the United States. Many recent investments and initiatives are focused on affluent communities and are accessible mainly to people with employer-based or Medicare coverage. For people with Medicaid or no coverage at all, access to basic care is worsening, as a result of stalled coverage expansions and service cutbacks. An improving economy could forestall further cuts and permit reversal of earlier ones, but progress in closing this rift does not appear imminent.

Coverage And The Hierarchy Of Access To High-Quality Care

A clear hierarchy of access to care is apparent in many communities, which closely corresponds to insurance coverage and its sponsorship. Long-standing anxiety about prospects for a “two-tier” health care system has, in fact, given way to a three-tier reality in the CTS markets:

• Employer-sponsored and Medicare coverage.
• Medicaid and other state and local programs.
• Unsponsored and unfortunate.

There is every reason to expect that Americans will demand and receive more and better health care, shifting more resources into the health care sector. However, not all will be able to afford this care, and there is growing evidence that U.S. society is prepared to tolerate trading off pursuing excellence for some, at the expense of deteriorating care for others.

http://content.healthaffairs.org/cgi/content/abstract/hlthaff.w5.566v1

Comment: It is a gross understatement to say that individuals who have dedicated their lives to health care reform will be dismayed by this report.

The lowest tier of the unfortunate provides perhaps the greatest angst for us as we watch their problems grow ever greater. The middle tier compounds our angst as we recognize that this sector is shifting from having access to basic services to a lower level that could only be described as “unsatisfactory.” And the first tier? We are pouring resources into their affluent communities to provide them not the best, but the highest tech care available. Innumerable studies have shown that the overall quality of care for this first tier would actually improve if we would moderate the infusion of excessive high-tech resources into these communities.

We can get it right. This study confirms that the maldistribution of resources is directly related to the adequacy of coverage of the three tiers. Establishing a single, universal, equitable system of coverage would dramatically improve the allocation of our health care resources. It is not the only factor, but it is the most important one.

But will we get it right? We seem to be captivated by the high-tech glitz of the “greatest health care system on earth.” Those in the first tier seem to be unwilling to exchange some of the unnecessary glitz for greater equity in health care. Maybe we’ll have an awakening when the expansion of cost sharing moves many from the first tier to the second. Then those few remaining in the first tier may not be able to tolerate the cacophony of the masses. But even then, noise cancellation technology has become much more advanced.

Posted by pnhp at 09:59 AM | Permalink

Health Plan Costs Come Under Fire
At a hearing in L.A., Garamendi grills insurance company executives about why premiums have soared 60% in four years.
By Lisa Girion
Los Angeles Times
December 2, 2005

(California Insurance Commissioner John) Garamendi singled out Blue Cross of California for criticism, noting that its profit margins on certain insurance plans rose from about 15% to 24% in recent years. The company’s trend on healthcare spending, he noted, was just the opposite - declining from 80% of premiums in 2000 to 68% last year.

“It’s unconscionable,” Garamendi said.

… some of the company’s fastest growing - and most profitable - plans are new ones that offer low premiums in exchange for high deductibles or limited benefits.

The most controversial among them is a plan called Tonik. Aimed at young adults who are generally healthy, Tonik does not cover maternity benefits. Garamendi said such plans amounted to “cherry-picking,” or orienting coverage to attract healthy members, who are cheaper to underwrite.

“They are looking to find individuals that do not get sick,” Garamendi said in an interview. The plans “are all designed to appeal to people who don’t need medical services. That increases their bottom-line profit.”

Officials with Blue Cross parent WellPoint Inc. denied the charge. Tonik is designed to serve young people who might otherwise have no insurance at all, they said.

Blue Cross regional Vice President Ann-Louise Kuhns told Garamendi at the hearing that Tonik and some of the other new plans were aimed at people who hadn’t previously bought health insurance because they couldn’t afford it or viewed it as too expensive.

The plans’ popularity, Kuhns said, showed that they were meeting a need. “If we were offering a product that people didn’t like, they don’t have to buy it,” she said.

http://www.latimes.com/business/la-fi-profits2dec02,1,630081.story?coll=la-headlines-business

Comment: This is great news for Wall Street. The best insurance stock investments are in those companies that have the lowest medical loss ratios - the companies that spend the lowest percentage of their premium income on health care services for their beneficiaries. The medical loss ratio for for-profit Blue Cross of California, a major subsidiary of WellPoint Inc., is only 68%. They keep one-third of the premium dollar!

Blue Cross of California has been an innovative leader in setting health insurance trends throughout the nation. For those who still believe that private health plans must be a major player in any future model of health care reform, just imagine what it would be like if Blue Cross’ innovations were to dominate the scene. In 2006, we’ll be spending $2 trillion on health care. Under these latest Blue Cross policies, insurers would keep $640 billion of that.

So you say that we would never allow that. But what are we allowing now? We are permitting Blue Cross of California to use nefarious chicanery to segregate out the most healthy sector of our society and sell them a profoundly inadequate product that merely masquerades as health insurance. Again, those of you who have believed that we should keep this industry in charge of health care spending should realize that it’s now time for an epiphany.

We will never get it right until we agree that we need a universal, publicly-funded and publicly-administered national health insurance program. The plundering pirates of the insurance industry will never do it right for us.

Posted by pnhp at 03:27 PM | Permalink

Editorial: Fractured system hurts everyone
By Register Editorial Board
The Des Moines Register
December 4, 2005

If the best minds in the world gathered to devise a health-care system for the United States, it would look nothing like what we have today.

No one would create a fragmented system that provides taxpayer-funded care for some and not for others. A system that leaves 45 million people, about 15 percent of the population, uninsured. That wastes billions on administrative costs. That burdens business. That relegates the United States behind other industrialized countries in life expectancy, infant mortality and immunization rates.

No one would intentionally create a model of health care that was unfair, inefficient and nearly impossible for an average person to navigate.

Yet that is exactly what the United States has. And it hurts everyone.

Reforming (the U.S. health-care system) will take leadership in Washington, pressure from individuals and businesses across the nation and a hard look at what other countries are doing better.

America’s hodgepodge of health care isn’t the best system for this country. It’s not what the brightest minds would choose now. Americans don’t have to accept it just because it’s the only thing they know.

http://desmoinesregister.com/apps/pbcs.dll/article?AID=/20051204/OPINION03/512040307/1001/NEWS

Today’s edition of The Des Moines Register has a several articles on “Condition Critical,” focusing on “worries about soaring health care costs.”
http://desmoinesregister.com/apps/pbcs.dll/section?Category=NEWS&theme=condition_critical&template=theme

Posted by pnhp at 03:01 PM | Permalink

H.R.676, H.R.1200, and SB 840

Do not waste your time studying these bill summaries, but merely skim through them rapidly. You will see how a fairly simple concept, single payer reform, can become quite complex when reduced to legislative language. The summaries of H.R.676 and H.R.1200 were prepared by the Congressional Research Service, and the summary of SB 840 was prepared by the California Legislative Counsel.

H.R.676
Title: To provide for comprehensive health insurance coverage for all United States residents, and for other purposes.
Sponsor: Rep Conyers, John, Jr.

SUMMARY AS OF:
2/8/2005—Introduced.

United States National Health Insurance Act (or the Expanded and Improved Medicare for All Act) - Establishes the United States National Health Insurance Program (the Program) to provide all individuals residing in the United States and in U.S. territories with free health care that includes all medically necessary care, such as primary care and prevention, prescription drugs, emergency care, and mental health services.

Prohibits an institution from participating in the Program unless it is a public or nonprofit institution. Allows nonprofit health maintenance organizations (HMOs) that actually deliver care in their own facilities to participate in the Program.

Gives patients the freedom to choose from participating physicians and institutions.

Prohibits a private health insurer from selling health insurance coverage that duplicates the benefits provided under this Act. Allows such insurers to sell benefits that are not medically necessary, such as cosmetic surgery benefits.

Sets forth methods to pay hospitals and health professionals for services. Prohibits financial incentives between HMOs and physicians based on utilization.

Authorizes appropriations and provides for appropriated sums to be paid for: (1) by vastly reducing paperwork; (2) by requiring a rational bulk procurement of medications; (3) from existing sources of Government revenues for health care; (4) by increasing personal income taxes on the top five percent income earners; (5) by instituting a modest payroll tax; and (6) by instituting a small tax on stock and bond transactions.

Requires the Program to give first priority in retraining and job placement to individuals whose jobs are eliminated due to reduced administration.

Establishes a National Board of Universal Quality and Access to advise the Secretary and the Director to ensure quality, access, and affordability.

Provides for the eventual integration of the health programs of the Department of Veterans’ Affairs and the Indian Health Service into the Program.

http://thomas.loc.gov/cgi-bin/bdquery/z?d109:HR00676:@@@D&summ2=m&

H.R.1200
Title: To provide for health care for every American and to control the cost and enhance the quality of the health care system.
Sponsor: Rep McDermott, Jim

SUMMARY AS OF:
3/9/2005—Introduced.

American Health Security Act of 2005 - Establishes the State-Based American Health Security Program to provide every U.S. resident who is a U.S. citizen, national, or lawful resident alien with health care services. Requires each participating State to establish a State health security program.

Eliminates benefits under: (1) titles XVIII (Medicare), XIX (Medicaid), and XXI (State Children’s Health Insurance) (SCHIP) of the Social Security Act; (2) the Federal Employees Health Benefits Program; and (3) the Civilian Health and Medical Program of the Uniformed Services (CHAMPUS).

Requires each State health security program to prohibit the sale of health insurance in that State that duplicates benefits provided under the program.

Establishes the American Health Security Standards Board to: (1) develop policies, procedures, guidelines and requirements to carry out this Act; (2) establish uniform reporting requirements; (3) provide for an American Health Security Advisory Council and an Advisory Committee on Health Professional Education; and (4) establish a national health security budget specifying the total Federal and State expenditures to be made for covered health care services.

Establishes the American Health Security Quality Council to: (1) review and evaluate practice guidelines, standards of quality, performance measures, and medical review criteria; and (2) develop minimum competence criteria.

Establishes the Office of Primary Care and Prevention Research within the Office of the Director of the National Institutes of Health (NIH).

Amends the Internal Revenue Code to create the American Health Security Trust Fund and appropriates to the Fund specified tax liabilities and current health program receipts.

http://thomas.loc.gov/cgi-bin/bdquery/z?d109:HR01200:@@@D&summ2=m&

SB 840
Single-payer health care coverage.
Introduced by Sen. Sheila Kuehl

Existing law does not provide a system of universal health care coverage for California residents. Existing law provides for the creation of various programs to provide health care services to persons who have limited incomes and meet various eligibility requirements. These programs include the Healthy Families Program administered by the Managed Risk Medical Insurance Board, and the Medi-Cal program administered by the State Department of Health Services. Existing law provides for the regulation of health care service plans by the Department of Managed Health Care and health insurers by the Department of Insurance.

This bill would establish the California Health Insurance System to be administered by the newly created California Health Insurance Agency under the control of an elected Health Insurance Commissioner. The bill would make all California residents eligible for specified health care benefits under the California Health Insurance System, which would, on a single-payer basis, negotiate for or set fees for health care services provided through the system and pay claims for those services. The bill would require the health care system to be operational within 2 years of enactment, and would enact various transition provisions. The bill would require the commissioner to seek all necessary waivers, exemptions, agreements, or legislation to allow various existing federal, state, and local health care payments to be paid to the California Health Insurance System, which would then assume responsibility for all benefits and services previously paid for with those funds.

The bill would create a health insurance policy board to establish policy on medical issues and various other matters relating to the health care system. The bill would create the Office of Consumer Advocacy within the agency to represent the interests of health care consumers relative to the health care system. The bill would create within the agency the Office of Health Planning to plan for the health care needs of the population, and the Office of Health Care Quality, headed by the chief medical officer, to support the delivery of high quality care and promote provider and patient satisfaction.

The bill would create the Office of Inspector General for the California Health Insurance System within the Attorney General’s office, which would have various oversight powers. The bill would prohibit health care service plan contracts or health insurance policies from being issued for services covered by the California Health Insurance System. The bill would create the Health Insurance Fund and the Payments Board to administer the finances of the California Health Insurance System. The bill would extend the application of certain insurance fraud laws to providers of services and products under the health care system, thereby imposing a state-mandated local program by revising the definition of a crime. The bill would enact other related provisions relative to budgeting, regional entities, federal preemption, subrogation, collective bargaining agreements, compensation of health care providers, conflict of interest, patient grievances, independent medical review,and associated matters.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

http://info.sen.ca.gov/pub/bill/sen/sb_0801-0850/sb_840_bill_20050712_amended_asm.html

(If you are interested in the details of the bills, they can be downloaded at http://thomas.loc.gov/ and
http://info.sen.ca.gov/cgi-bin/pagequery?type=sen_bilinfo&site=sen&title=Bill+Information.)

Comment: We are truly at a transition in the health care reform movement. Everyone understands that we can no longer accept a system that is failing to deliver high-quality comprehensive care to everyone when we are already spending more than enough to have such a system. It is clear that incremental tweaking has increased costs while providing only modest gains that are more than offset by the large losses. The consumer-directed health care movement will soon fizzle as more people realize that you cannot control costs by making health care less affordable for those with significant needs.

All policymakers now understand the single payer model. They understand that it does have the power to fund comprehensive care for everyone while controlling health care costs. Although uncaring, anti-government ideologues will always remain opposed, those who really do care about the health of our people are ready to look at fleshed-out legislative proposals. We are now at that stage of the process.

The process will require the participation of legislators and their staffs on both the federal and state levels. Even if a state established its own single payer system, federal legislation would be required to transfer the funding of federal programs such as Medicare and Medicaid to the state(s). Although federal funding is essential, the federal government is too unwieldy to administer the program as one mega-bureaucracy, so administration needs to be established on a state or regional level.

It is time for federal and state legislators to unify the process. Participants should include those who believe that our health care system must be universal, equitable, accessible, and affordable, while providing high-quality services. The only special interests that should be represented are the patients and those who provide their care. Special interests with other agendas should be dismissed from the process. This is not a time to compromise with powerful, moneyed interests. Rather it is the time to craft single-payer proposals that best serve the health care needs of the people of each of our states and the nation as a whole.

We already understand the policies that would be effective. We don’t need any more study commissions. It is time for federal and state legislators and their health policy staff members to join together to draft the American Health Care Act. Congressmen Conyers and McDermott and Senator Kuehl, amongst others, have given us a great start towards that goal.

Okay. Who is going to convene this unified effort? (I’m serious!)

Posted by pnhp at 02:53 PM | Permalink

What Health Insurance Pools Can and Can’t Do
By Rick Curtis and Ed Neuschler
California HealthCare Foundation
November 2005

Introduction

Policymakers are often attracted to purchasing pools as a way to make health insurance less expensive for small employers and individual purchasers. The common assumption is that pools could aggregate a large number of small purchasers and thus realize administrative economies of scale and negotiate favorable rates with health plans. For small-firm workers, purchasing pools could also offer something not normally available in the small-employer market - choice of competing health plans. For individual purchasers, who can already choose among health plans, pools could help to simplify comparison shopping.

Unfortunately, establishing a purchasing pool does not automatically produce the same “market clout” as a large employer. RAND studied the three largest small-group health insurance purchasing “alliances” begun in the mid-1990s and found that they did not reduce small-group market health insurance premiums, nor did they raise small-business health insurance offer rates. Other kinds of voluntary pools are more prevalent, but they generally have not functioned as assertive purchasers and have not reduced costs.

For example, The Health Insurance Plan of California (now operated by the Pacific Business Group on Health as “PacAdvantage”) negotiated and offered lower rates than had been available in the outside market at its inception in the early 1990s. Yet by 1998, analysts found no evidence that its rates were still lower than the outside market. Rather, the data suggested that they were slightly higher.

Conclusion

Health insurance pools can be useful as vehicles to help achieve coverage and cost goals. Yet merely establishing or designating pools holds no hope for reducing the number of uninsured or the costs of coverage available to individuals or small employers. Unless a pool has the necessary cohesion to attract and retain a large enrollment base, it will not be in a position to achieve economies of scale and negotiate effectively with health plans.

However, these goals can be achieved if the pool represents a large natural group that health plans can effectively reach only through the pool, making it similar to a very large employer. One way to create such a group would be to channel subsidies for low-income workers and families, or low-wage employer groups, exclusively into coverage through the pool. In turn, a stable pool can efficiently perform a number of administrative roles that meet the needs of both its participants and the state.

http://www.chcf.org/documents/insurance/
WhatHealthInsurancePoolsCanAndCantDo.pdf

Comment: If you want to understand why a health insurance purchasing pool can never deliver on the promise of lower insurance costs through the economies of scale, you really need to read this report to understand the complexities of purchasing pools.

The authors suggest that pools could work if they were truly cohesive and could attract and retain a large enrollment base. But the only mechanism they suggest that would do this would be to “channel subsidies… exclusively into coverage through the pool.” In other words, purchasing pools can compete with other coverage only if employers and/or the government subsidize the pools while prohibiting subsidies for plans outside of the pools. And for this, the purchasing pools add the expense of an additional administrative layer on top of the health plan bureaucracies. So much for the magic of the economies of scale!

Purchasing pools using private health plans only perpetuate the waste and inequities of our current system. Instead of pools of health plans, we need a single pool of our health care funds. Then we could eliminate the administrative excesses, while establishing equitable access and coverage for everyone.

Why do the policymakers keep going back to the drawing boards to keep crafting more flawed proposals? Why don’t they finally give up and admit that we really do need a single-payer system?

Posted by pnhp at 02:43 PM | Permalink