News

California Healthline
April 28, 2006
Candidates Endorse Single-Payer Health System

All six candidates for the Democratic nomination for the 6th District Assembly seat support a single-payer health care system, the Santa Rosa Press Democrat reports. The 6th District represents Marin and southern Sonoma counties.

http://www.californiahealthline.org/index.cfm?Action=dspItem&itemID=120829

And…

California Healthline
April 25, 2006
Candidates Support Single-Payer System

San Francisco County Supervisor Fiona Ma and Golden Gate Bridge Director Janet Reilly — candidates for the Democratic nomination for the 12th District Assembly seat — both support a single-payer health care system to expand coverage to the uninsured in California, the San Francisco Chronicle reports.

http://www.californiahealthline.org/index.cfm?action=dspItem&itemID=120775&changedID=120694

Comment:

By Don McCanne, M.D.

Those who state that single payer reform is not politically feasible need to listen to the candidates. When the candidates are competing for the claim of being the one that really, really, really does support single payer, the feasibility argument fades into oblivion.

Janet Reilly’s website statement, “A Prescription for a Healthier California,” demonstrates how intense the support for single payer has become.

A Prescription for a Healthier California (Janet Reilly):
http://www.janetreilly.com/healthcare.html

Part I of her booklet expands on this:
http://www.janetreilly.com/pdf/hcare_booklet.pdf

Even the opponents understand the feasibility of single payer. Outspoken consumer-directed advocate Greg Scandlen had this to say about the flawed Massachusetts plan:

“Having it fail wouldn’t bother me,” Scandlen said, “except many people would conclude, ‘Well, we tried individual responsibility and it failed, so the only thing left is single payer.’”

http://www.heartland.org/Article.cfm?artId=18932

Posted by pnhp at 08:15 AM | Permalink

Is consumer-driven health care a good idea?
Family Practice News
April 1, 2006

Point
Regina Herzlinger, D.B.A., is chair of the business school at Harvard University, Boston.

Unlike the automotive industry, there is no Henry Ford in the health insurance industry to make things cheaper, and there are few choices of health insurance policies. Consumer-driven health care will liberate the Henry Fords of health insurance and allow them to offer more options.

Consumer-driven health care will also liberate health care providers.

Remember that 20% of the health care users account for 80% of health care costs. So you will see health care “focused factories” that concentrate on the sick. Initially, they will focus by procedure or patient group, but more importantly, they will focus on diseases and disabilities. For instance, diabetes patients with numerous comorbidities really need a team to help manage their disease. In a consumer-driven health care system, the Henry Fords of health care will be motivated to organize teams that help these patients or address such underserved populations as African Americans who have sickle cell disease. Consumers will respond to insurance policies that offer these focused factories.

The consumer-driven health care industry will also need a J.D. Power - someone to monitor health care quality the way J.D. Power monitors automobile quality. This kind of business will emerge, as it does in every consumer-driven market.

Counterpoint
Alain Enthoven, Ph.D., is professor emeritus at the Stanford (Calif.) University business school.

The main appeal of consumer-driven health plans is to employers who are eager to find ways to move costs back to employees. The costs are shifted to people with chronic conditions, who usually will reach and exceed their deductibles.

Consumer-driven health plans, especially those with health savings accounts, are great for the healthy and wealthy, who will take it up in a hurry and who can benefit from the tax shelter these plans provide. So while these plans could catch on rapidly, the result will give Americans one more reason to doubt the fairness of our private health care financing and delivery system.

High-deductible consumer-driven health plans are based on the idea that the key to economy is to keep people away from the doctor. That might be true in acute care and in disaggregated fee for service, where there is a lot of unnecessary surgery, but it will not be true in our society, where so many people have or will soon have chronic diseases.

High-deductible consumer-driven health plans move in the wrong direction, distancing people from health care rather than reaching out to support them, to improve their lifestyles, and to manage their chronic conditions so they can avoid hospitals and more costly complications.

I think consumer-driven health plans will lead to the underfunding of primary care and prevention, and will reinforce the present trend of young American doctors who forsake primary care for the “sub-sub-subspecialties”
of radiology, in which they can make a whole lot of money. It will draw more resources into the open-ended fee-for-service sector, whose appetite is insatiable.

http://www.familypracticenews.com/article/PIIS0300707306729115/fulltext

Comment:

By Don McCanne, M.D.

These noted authorities from prestigious schools of business have continued to promote their versions of how we can make competition in the marketplace work to improve the way we fund health care. Professor Enthoven advocates for his model of managed competition (though not in this point-counterpoint), and Professor Herzlinger advocates for her model of consumer-driven health care.

History is in the process of discarding most of the elements of managed competition, while Professor Enthoven explains why the consumer-driven approach will never work either.

Neither managed competition nor the consumer-driven model are free market models anyway. Both rely on third party payers to control prices, and both restrict choice to providers selected by the third party payers.

A single payer system would also control prices, but it would do so through mechanisms that would improve resource allocation for the benefit of all of us rather through the current mechanisms that are designed to benefit the third party payers at the cost of efficiency and equity.

Regarding choice of physicians, hospitals and other providers, whereas managed competition and consumer-driven products restrict choices by contracting, a single payer system allows free choice of all providers. It is ironic that these market models are more oppressive to the health care consumer than would be a government-administered single payer system.

Posted by pnhp at 09:31 AM | Permalink

Midweek Perspectives: Health insurance for all — yes, we can
While Massachusetts receives national attention, Pennsylvania has a plan of equal merit
Wednesday, April 26, 2006 | Pittsburgh Post Gazette

By Steven Larchuk and Scott Tyson, M.D.

With great fanfare Massachusetts Gov. Mitt Romney, Republican, and his Democratic legislature have found enough common ground to pass a mandatory health insurance plan. Some have hailed it as a model for every state; others have challenged it as a sell-out to the private insurance industry. Regardless of its merits, the passage of the Massachusetts act establishes the important precedent that health-care reform can be tackled at the state level.

The ice is broken — and it’s time for Pennsylvania to act on its own proposal.

Pennsylvania Senate Bill 1085, the “Balanced and Comprehensive Health Reform Act,” is now in committee in Harrisburg. The Senate leadership and the governor await a sign that Pennsylvanians are serious about health-care reform.

There are significant differences between the Pennsylvania plan and the Massachusetts act, but the essential goal is similar: universal health care for all in their respective states. We have an opportunity to pilot two distinctly different programs to see which is most successful in achieving that elusive dream.

Under the Massachusetts act, everyone that’s not covered by Medicare or an employer’s group insurance plan must purchase their own private health insurance. Those earning less than three times the poverty level will be provided some level of government subsidy to help pay for insurance; those earning more are on their own. Anyone who fails to purchase private insurance must report it on their annual tax return and pay a fine equal to half of the cost of such insurance. This blends stick and carrot, but it relies upon the belief that private companies can be trusted to create “affordable” insurance policies.

In contrast, the Pennsylvania approach sees private insurance companies as part of the problem, not part of the solution. Instead of making the purchase of private insurance compulsory, Pennsylvania would substantially eliminate health insurance companies. Instead, our health-care dollars would be placed in a common trust fund managed by appointed health-care management experts, not insurance executives. Payment would be made directly and promptly to every provider, hospital, pharmacy and care facility.

This approach is similar to Medicare as it exists today. It would simplify administration and reduce waste. Every Pennsylvanian is covered regardless of who they work for, unemployment, pre-existing conditions or student status. This is what is commonly known as a single-payer system.

Under Massachusetts law, at least in theory, everyone will be covered, but health-care providers and patients will still have to navigate through a myriad of insurance plans, each with distinct rules, requirements and procedures. This unavoidably increases costs but assures profits for private insurers. This waste tends to be in the range of 20 percent for most large insurers, meaning that only 80 cents of every dollar goes to providing care. By comparison, Medicare manages on just a 3 percent administrative overhead and the Pennsylvania plan has a built-in statutory cap of 5 percent, assuring that 95 percent of every health-care dollar is well spent.

A multiplicity of insurers also encourages the denial of claims with one insurer able to shift the costs of an individual’s care to another insurer or to the patient’s own pocket. Anyone who’s been caught in the middle of this maddening game knows it is the very definition of frustration. By contrast, a single-payer system would emphasize service and efficiency, rather than maximizing the bottom line.

But wait, there’s more — much more. While champions of the Massachusetts act predict there will be some cost savings through more efficient usage of hospital emergency rooms, the Pennsylvania plan goes substantially further to shrink the need for health care and to address other aspects of our health-care crisis. For starters, the Pennsylvania plan envisions a robust wellness curriculum in our schools to put the focus on health, not just health care.

SB1085 also includes malpractice reform which assures swift and fair compensation where deserved and yet reduces malpractice insurance premiums to zero. This is unique to the Pennsylvania plan and will save billions of dollars currently wasted on defensive medicine. It will also make Pennsylvania once again an attractive place to practice medicine and help to stem the loss of our physicians, as recently documented by the Pennsylvania Medical Society.

Cynics may simply call this a choice between big insurance and big government. If that is so, then Massachusetts opts to trust its fate to big insurance. If Pennsylvania passes SB1085, or “single payer plus,” then America will have a golden opportunity to compare and contrast these two approaches in real time, with real people and on a national stage.
__________________________________________________
Steven Larchuk, a lawyer in Sewickley, is chairman of the Pennsylvania HealthCare Solutions Coalition (www.pahcsc.org). Scott Tyson, M.D., is a Pittsburgh-area pediatrician and president of Pennsylvanians United for Single Payer Health (www.just-healthcare.org).

Posted by pnhp at 02:35 PM | Permalink

Shredding the Social Contract: The Privatization of Medicare
by John Geyman, 322 pp, with illus, paper, $16.95, ISBN 1-56751-376-X, Monroe, Me, Common Courage Press, 2006.

JAMA. 2006;295:1950-1951.

In Shredding the Social Contract, John Geyman examines the development of the largest social insurance program in the country�\Medicare�\identifies the multitude of influences that have led to the current state of the Medicare program, and suggests that national health insurance (NHI) may be the only solution to its problems.

In an investigative reporting style with generous use of quotations from policy makers, physicians, institutional providers, and beneficiaries, Geyman makes the case that Medicare’s problems pose challenges to a broad array of stakeholders. He cites research demonstrating Medicare’s impact on the federal budget and the financial health of practitioners and institutional providers; brings in information from media accounts, public documents, and scholarly journals; and offers personal accounts from beneficiaries to illustrate the obstacles that stem from hastily implementing new programs or reinterpreting existing ones. After reading these accounts, the reader comes away convinced that “fixing” Medicare will not be easy given the political, social, and economic forces molding the program’s future.

Geyman’s concern is that Medicare as an entitlement program is incrementally being eroded. The chapter on “Means Testing and Medicare” asks the question whether Medicare services should be delivered on the basis of economic need. Medicare is an entitlement program, whose benefits are to be equitably distributed to enrollees regardless of ability to pay or income level. Medicaid is a social welfare program, whose benefits are to be distributed according to means. This is an important distinction between the two programs. Yet Medicare’s prescription benefit program is being administered according to means, and thus it breaks the social contract that the US Government has with its citizens. Since a portion of Medicare is now means-tested, there may be serious consideration given to making all of Medicare means-tested, especially with the current political rhetoric predicting the insolubility of the Medicare trust funds. The inevitable question becomes, Will Social Security become the next convert to means-tested distribution of benefits?

In Geyman’s view, Medicare is being eroded in part by the economic interests of proprietary insurance and pharmaceutical companies and in part by a Congress amenable to the privatization of public services. He explains how this erosion is inherent in a system that allows private insurance companies to be fiscal intermediaries�\and how it has been exacerbated by Medicare + Choice (now called Medicare Advantage), in which beneficiaries have the option to join a managed care plan that delivers Medicare services. He points out that the overhead of managed care companies administering Medicare benefits is five to nine times that of traditional Medicare. And he notes that the recently enacted prescription drug plan was designed with the pharmaceutical companies’ interests in mind, not the needs of beneficiaries. This shift toward favoring private interests is due in part to the political clout of private-sector lobbies. Their support of legislation favorable to their business interest neutralizes the interests of the middle class and outweighs the economically disadvantaged, who are socially marginalized, not inclined to vote, and in any case too poorly organized to impact legislation.

Geyman sees health care as a basic human need, not a commodity for private interests to package and sell in the marketplace. From this perspective, any reform must concentrate on the needs of the population, not the economic self-interest of managed care organizations and proprietary supplies of health care. Thus, Geyman suggests that creating NHI is the only way to repair the problems of Medicare. He suggests that a single-payer system under NHI can address the macroeconomic disadvantages of the current system. He points out that administrative overhead and profit taking account for up to 31% of the cost for direct patient care. Those without adequate insurance coverage delay seeking treatment until their condition further deteriorates and requires more costly treatment. Furthermore, incremental reforms during Medicare’s tenure have not reduced overall cost and improved access to services.

Achieving NHI will meet with resistance in the current political and economic environment. Any attempt at a universal health plan may be thwarted by political compromises that could relegate the system to proprietary interests. Furthermore, administering NHI would have the same challenges faced by Medicare. One such challenge is inherent in our federal system of governance. Each state has the authority to regulate insurance contracts and license practitioners and health facilities. Thus, states determine the supply of health care services available in a given geographic area. Would control by the states change with NHI?

Additionally, Medicare was established as a means of distributing acute, short-term medical services to the elderly, but the greatest need today is for chronic care, and that problem would still have to be solved with NHI. Furthermore, the direction of Medicare or NHI has to be resolved. Should Medicare be administered as a public program or through partnerships with proprietary interests? And whose needs should take precedence? Those of the beneficiaries or those who insure or provide health care services?

Shredding the Social Contract is easy reading for general audiences, but there is an overabundance of lengthy quotations from policy makers and scholars. Health policy experts will have little difficulty sifting through the varied sources and synthesizing the book’s essential messages. It may be more difficult for others to assess the strength of the argument made by the author. A condensed version might serve well as a catalyst to help the general public become more vigilant over the changes that are made to their entitlement program. Clearly Medicare needs fixing, and NHI would certainly be an ideal solution. The book’s implicit message, however, is that the road to NHI will be met with challenges from the stakeholders. In the meantime, Geyman’s explicit message is a wake-up call to the nation that Medicare as an entitlement program is being eroded by private interest.

Robert R. Kulesher, PhD, Reviewer
School of Allied Health Sciences
East Carolina University
Greenville, NC
kulesherr{at}ecu.edu

Posted by pnhp at 01:11 PM | Permalink

Gaps in Health Insurance: An All-American Problem
By Sara R. Collins, Ph.D., Karen Davis, Ph.D., Michelle M. Doty, Ph.D., Jennifer L. Kriss, and Alyssa L. Holmgren
The Commonwealth Fund
April 2006

Gaps in health insurance coverage - a problem that has long afflicted lower-income U.S. families - is increasingly becoming an all-American problem.

Percent of working-age adults in 2005 who were uninsured at some time in the past year, including those currently uninsured, by income level:

53% of low income (<$20,000)

41% of moderate income ($20,000-$39,999)

18% of middle income ($40,000-$59,999)

7% of high income ($60,000 or more)

Rates of medical bill problems and debt were high among people in both lower-income and higher-income households who experienced a time uninsured.

Indeed, rates were highest among those with higher incomes. Nearly three of five (59%) adults with incomes of $40,000 or more reported difficulties with medical bills or accrued debt. Forty-six percent of adults with higher incomes were paying off unpaid medical bills over time.

More than one-third (34%) of adults ages 19 to 64 (both insured and
uninsured) either had medical bill problems in the past year or were paying off accrued medical debt.

Executive summary:
http://www.cmwf.org/publications/publications_show.htm?doc_id=367876

Full report:
http://www.cmwf.org/usr_doc/Collins_gapshltins_920.pdf

Comment:

By Don McCanne, M.D.

The problem of potentially being uninsured now has become a major concern for the average American. Even being insured is not protecting Americans from medical debt. Can we cover everyone and prevent medical debt at the same time?

The authors of this report call for building on “group forms of coverage already in place, including employer plans, Medicare, Medicaid, the State Children’s Health Insurance Program, and state and federal employee benefits plans.” Such expansions would increase costs at a time when individuals and employers already are finding it difficult to meet the current level of spending. Consumer-directed models would be even worse since, in shifting costs to patients, the problem of medical debt would be further compounded.

The government is the only payer that could manage equitably the costs of comprehensive care for everyone. If the government is to foot the bill, it needs to fulfill its fiduciary responsibility by demanding efficiency and value. That can be achieved through a single payer system, but not through an industry that spends so much in devising and executing ways to not pay for essential health care.

Single payer is the solution that Americans are seeking. Most just don’t realize it yet. It’s our job to explain it to them.

Posted by pnhp at 12:30 PM | Permalink

By Sara R. Collins, Ph.D., Karen Davis, Ph.D., Michelle M. Doty, Ph.D., Jennifer L. Kriss, and Alyssa L. Holmgren
Commonwealth Fund, April 26, 2006

Overview

Watch a multimedia presentation about the findings, with audio and slides, by lead author Sara R. Collins, Ph.D., senior program officer and director of the Fund’s Program on the Future of Health Insurance.

Gaps in health insurance coverage�\a problem that has long afflicted lower-income U.S. families�\is increasingly becoming an all-American problem. Findings from the Commonwealth Fund Biennial Health Insurance Survey show that, while lack of insurance continues to be highest among families with incomes under $20,000, uninsured rates for moderate- and middle-income earners and their families are rising, putting their health and financial security at risk. The survey finds that most of these individuals reside in working families: Of the estimated 48 million American adults who spent any time uninsured in the past year, 67 percent were in families where at least one person was working full time. In addition, survey respondents were asked about problems with medical bills and accrued medical debt; difficulties in accessing needed health care; problems managing chronic conditions; utilization of routine preventive care, like mammograms and colonoscopies; and coordination and efficiency of care.

Executive Summary

National health care spending is climbing by more than 7 percent per year, outpacing economic growth by a substantial margin. As health care costs have climbed, so has the number of people without health insurance in the United States, even during a period of overall economic growth. In 2004, according to U.S. Census data, nearly 46 million people of all ages were uninsured, an increase of 6 million over 2000. This combination of eroding health insurance coverage and rapidly rising health care costs raises concerns about the ability of U.S. families to obtain timely medical care, protect their finances from catastrophic health care costs, and save for retirement.

The Commonwealth Fund Biennial Health Insurance Survey, a nationally representative survey of 4,350 adults age 19 and older, presents new information on the health insurance coverage of Americans and the health and financial consequences families face when they experience breaks in insurance. The survey, conducted between August 2005 and January 2006, finds that while the lowest-income families have always been most at risk of not having insurance coverage, more moderate- and middle-income earners and their families are also in jeopardy. In addition, one of five of all adults under age 65 is currently paying off debt from medical bills incurred in the past. Those who lack insurance are particularly affected by this burden. The survey also finds that uninsured people with chronic health conditions like diabetes and asthma are much more likely to skip medications for their conditions and go to an emergency room or hospital than are those who are insured.

Key findings of the survey include:

Rising Numbers of Uninsured Individuals Are in Moderate- and Middle-Income American Families

Many Americans Report Medical Bill Problems and Medical Debt

People with Gaps in Coverage Have Difficulty Managing Chronic Conditions

Individuals with Gaps in Coverage Are Much Less Likely to Get Preventive Care

People with Gaps in Coverage Experience Inefficient Care

It is clear from the findings of this survey and from prior research that the health care�\and ultimately the health and productivity�\of the U.S. population is being damaged as the nation’s insurance problem continues to grow. Real solutions that build on group forms of coverage already in place, including employer plans, Medicare, Medicaid, the State Children’s Health Insurance Program, and state and federal employee benefits plans, will help to fill insurance gaps with meaningful, affordable coverage that helps link families and providers. Preventive care routines, like cancer screenings, blood pressure and cholesterol tests, dental exams, as well as care for chronic conditions, should be the shared reality of all Americans.

Citation:
S. R. Collins, K. Davis, M. M. Doty, J. L. Kriss, and A. L. Holmgren, Gaps in Health Insurance: An All-American Problem, The Commonwealth Fund, April 2006

Copyright 2006 © • The Commonwealth Fund |

Posted by pnhp at 12:13 PM | Permalink

Apr. 2006

The prevalence of inappropriate actions in healthcare drives additional margins in the industry’s supply, delivery and financing sectors, says contributor Fred Goldstein. It is at the root of our cost explosion and our healthcare crisis, and is based on an ingrained acceptance of unethical behaviors.

I have worked in healthcare for 20 years as a hospital administrator, an HMO senior executive and, most recently, the president of a disease management company. During this time ‘�fve experienced a lot of what is right with the American healthcare system. But I have also seen enough fraud, abuse and unethical behavior to sicken even the heartiest soul. This characteristic of American healthcare is far too prevalent, and it undermines our efforts to control cost, build access and—most importantly—assure quality care. In the late 1980s, I worked for two major hospital corporations that routinely “cooked” their books. At one company it was referred to as “dialing for dollars” because the divisional CFOs would call the hospital controller each month and ask for more earnings. More recently, we�fve learned these facts from mainstream news sources:

Unethical behavior exists among healthcare organizations and professionals of all types. Organizations that try to do the right thing are often outmaneuvered by those that do not. Self-interest is often hidden behind a façade of patient concern. “We do this for the patient. If you withhold our services, you will hurt the patient.” Worse, these self serving behaviors have become so common that professional outrage has been dulled. But to save healthcare, we can�ft just take these acts for granted.

The prevalence of inappropriate actions in healthcare drives additional margins in the industry�fs supply, delivery and financing sectors. It is at the root of our cost explosion and our healthcare crisis. And, it is based on an ingrained acceptance of unethical behaviors. The recent movement toward transparency and quality reporting will shine a bright light on some of these practices, and should tone down the environment of opportunism. But many of these behaviors have been well known for years. I have little faith that, with so much money at stake, any reforms can be substantial enough to turn around the industry.

This is especially true if change does not support and engage much more participation from payers and consumers. In 2005, then-Federal Reserve Chairman Alan Greenspan spoke with MBA students at Wharton. He said, “Material success is possible in this world, and far more satisfying when it comes without exploiting others.” He also said, “In virtually all our transactions, whether with customers or with colleagues, with friends or with strangers, we rely on the word of those with whom we do business. If we could not do so, goods and services could not be exchanged efficiently.”

I am not naïve and do not expect that a plea for ethics will have much impact. I believe that a free market, with openly available information, offers a healthier path to a better society for all our citizens. Healthcare is an industry in which, perhaps above all others, we must strive for and reward integrity. However, unless we find a way back to honesty and decency in our commerce—the ethical behaviors that have been the basis of the healthiest civilizations—we won�ft achieve the solutions our healthcare system needs. The common interest will continue to be exploited, our market-based system will falter and our healthcare system could well collapse.

________________________________________
Fred Goldstein is founder and president of Specialty Disease Management, a disease management firm based in Jacksonville, Fla. He may be reached at fgoldstein@specialtydisease.com.

Posted by pnhp at 03:26 PM | Permalink

Dr. Peter Mott
Guest essayist
Rochester Democrat and Chronicle

(April 12, 2006) — If we as a nation or state try to fill in health care gaps one at a time — first to cover those with no health insurance (more than 45 million Americans), then those with partial coverage (another 50 million), we would add new costs to the ongoing ones — a huge overall increase.

Thorough studies have been made of the costs of various national or statewide health insurance options. Economists found, and the General Accounting Office confirmed, that only one would save money. A Canadian-style, single-payer plan could save $200 billion per year, while covering all citizens for all necessary health services. As in Canada, this would include preserving private hospitals and patient choice of doctors.

How does a single-payer system cut costs so dramatically? Such a system means no competing insurance corporations, no advertising, practically no billing or collecting, no stockholder profits. Usually it also means more regional health planning to avoid wasteful duplication of equipment but adding needed services. This cooperative approach is similar to the way hospitals worked together in the Rochester region during the 1960s and 1970s, making the area a model at that time.

Why isn’t the public calling for a single-payer system? Several years ago I attended a health conference in Toronto at which a full-page advertisement in the Toronto Globe and Mail was shown to participants. It listed many complaints about Canadian “Medicare” but, in small print at the bottom, it said the ad was paid for by the U.S. health insurance industry. That was typical of the propaganda we hear about Canadian health care: long waits, doctors leaving Canada. However, according to polls, the vast majority of Canadian doctors like their system, and they have had 42 years of experience since the provincial plans merged in 1964. Waiting time in Ontario did increase when the Conservative premier cut hospital budgets, fired nurses and closed hospitals to reduce costs. It is ironic that he made that effort in a province where total health costs per capita are almost half those in the United States. Moreover, total costs are rising in Canada more slowly than in America.

Here in Rochester the Interfaith Health Care Coalition has joined the New York State Health Care Campaign to push the state Senate to fund a study of our options. If such a study shows again that all options will add enormously to total costs except for the single-payer health care plan — and that kind of statewide health insurance would save billions of dollars — then only politics could prevent a simple decision. And the people should then demand to know what are those political influences, and who pays for them.

Mott, of Pittsford, is a member, Interfaith Health Care Coalition.

Posted by pnhp at 02:40 PM | Permalink

UnitedHealth Panel May Face Scrutiny
By Joshua Freed | SFGate.com
Originally published April 23, 2006

The huge paydays for UnitedHealth Group Inc. Chairman and CEO William McGuire grabbed attention last week - but that could soon be turning to the people who signed off on his pay package.

Most companies, including UnitedHealth, have compensation committees made up of a few directors who set pay for executives. McGuire’s $1.6 billion in unexercised stock options have some people wondering whether UnitedHealth’s three-member compensation committee was doing its job.

The Wall Street Journal first reported that the timing of McGuire’s stock options, when UnitedHealth stock was at its lowest so he would benefit as much as possible, raised the possibility that they had been backdated.

Compensation consultant Paul R. Dorf, managing director of Compensation Resources Inc., called backdating options “highly unethical, if not illegal.”

“The over-$1 billion that Dr. McGuire currently holds in paper gains shows that the committee has not applied the “holy cow” test, as fiduciary duty requires,” ISS (Institutional Shareholder Services Inc.) wrote.

http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2006/04/23/financial/f152633D51.DTL&hw=health+care&sn=009&sc=216

Comment:

By Don McCanne, M.D.

Holy cow!

UnitedHealth Group’s medical loss ratio for 2005 was 78.6%. That means that UnitedHealth retained for its own intrinsic uses, including profits, 21.4% of premiums paid. Profit for 2005 was $3.3 billion. For that performance, CEO McGuire receives $1.6 billion in unexercised stock options.

Holy cow!!

And we continue with public policies that keep this industry in charge?

Holy cow!!!

Posted by pnhp at 12:42 PM | Permalink

by Blake Fleetwood
The Huffington Post - Apr 23, 2006

Statistics don’t lie.

Figures from the World Health Organization clearly show that The United States lags behind 36 other countries in overall health system performance ranging from infant mortality, to adult mortality, to life expectancy.

20 countries in Europe and four countries in Asia have a better life expectancy than the U.S. If you are a male between the ages of 15 and 59, your chances of dying are higher in the U.S. (140 per thousand) than in Canada, 95, Costa Rica 127, Chile 134, and Cuba, 138.

The U.S. Health system looks especially dysfunctional when you consider how much money we spend per capita on healthcare — $6,000 plus per year, twice as much as any other country— and how little we get for it.

Canada spends $2,163 and boasts a life expectancy of 79.8 years, two and a half years longer than the US. Their infant mortality rate per thousand is also better than ours, as is their adult mortality rate.

Switzerland spends about 11% of its Gross Domestic Product on universal health care for all its citizens, while the U.S. (with 50 million uninsured this year) spends 15% of GDP with embarrassing results.

One grand irony, Cuba whose economy has been bankrupt for the last decade - food shortages, drug shortages, chronic unemployment, etc. — and which annually spends a miserly $185 per person on health care, has better infant and adult mortality rates than the US, and has a life expectancy nearly equal to ours.

Why has our vaunted free enterprise system - which has produced such great benefits in delivery of most goods and services — failed so completely with regard to this most fundamental need?

Simple, buyers don’t shop for health care. Sick people don’t negotiate with doctors or hospitals or drug companies. They don’t care what it costs; insurance or the government will pay. This vulnerability has been exploited and
hijacked by greedy doctors, drug companies, insurers, personal injury lawyers, HMOs, and hospitals. About 50% of health care funds never even get to doctors or hospitals — which themselves run bloated operations.

Maybe we have finally reached the “Tipping Point”. Not because people are needlessly dying, but because big business is being crippled by astronomical health costs.

US companies — with employer funded health plans — are having a hard time competing in world markets. General Motors spends more on worker health care ($1,400 per vehicle) than they spend on steel for each car they produce. “The three big auto makers are “HMOs on wheels” says Goldman Sachs analyst Gary Lapidus.

Employer funded health insurance is a relic of the past according to the growing clamor by big business. We don’t want to pay for it any more and the added costs make our products uncompetitive in world markets.

The new Massachusetts law mandating health insurance - just as the state requires auto insurance - is a bold leap into an uncertain future, but it is an ad hoc band-aid which hopefully will lead to something more.

The long-term answer is obvious. Adopt a single payer system like Canada’s. Not socialized medicine. Doctors would remain private. By cutting out the bureaucracy, needless lawsuits, and curbing greed, the US could save 50% of the monies now being squandered, more than enough to cover the 50 million uninsured, according to a General Accounting Office and Congressional Budget Office report.

Ironically, we already have a successful single-payer healthcare program. Medicare, which covers people over 65, has an administrative and overhead cost of just 2%. Compare this low figure with the $399 billion spent on administrative middleman services in the free-market sector of health care last year. The simple step of data sharing of medical records could save $140 billion per year according too a recent Federal study.

Critics charge than a single payer system would lead to a rationing of medicine and long waits. But we already ration medicine, not by need, or efficacy of the treatment, but by how much money you have. If you are rich, you can have all you want. If you are poor, unemployed, self employed, sorry. 18,000 Americans die each year for lack of care according to the Institute of Medicine.

The right says that single-payer systems have not been adequately tested. But this is an obvious pretext by for-profit interest groups. Single-payer systems have been worked for many decades in 20 countries around the world.

The facts are clear: single-payer systems work and they save money. The Germans, French, Australians, Swiss, and Canadians all benefit from universal healthcare at less than half the cost that Americans pay for an incomplete system. Our for-profit healthcare system is a gambling scheme with the explicit goal of excluding the sick.

Good luck Massachusetts. Maybe your example, big business, and growing outrage will goad the dithering federal government into action.

Someday, inevitably, America will join the civilized world and provide universal care. It should be sooner rather than later.

Via NY Transfer News Collective * All the News that Doesn’t Fit

http://www.huffingtonpost.com/blake-fleetwood/cuba-has-better-medical-c_b_19664.html

Posted by pnhp at 10:57 AM | Permalink

The Wall Street Journal
Government-Funded Care Is the Best Health Solution By Benjamin Brewer, M.D.
April 18, 2006

A recently approved Massachusetts plan designed to force all residents to get health insurance was a step in the right direction, but it doesn’t go far enough.

Under the Massachusetts approach, there will still be a maze of plans provided by any number of insurers. That multiplicity is the problem. Multiple insurers and multiple plans create layers of unneeded expense and bureaucracy related to billing, collections and the entire assembly line of middlemen between the service rendered and the payment.

The solution that would really put health-care dollars, and providers, to their best use would be a single-payer system — namely, government-funded health coverage for all.

It took me a while to conclude that a single-payer health system was the best approach. My fear had been that government would screw up medicine to the detriment of my patients and my practice. If done poorly, the result might be worse than what I’m dealing with now.

But increasingly I’ve come to believe that if done right, health care in America could be dramatically better with true single-payer coverage; not just another layer — a part D on top of a part B on top of a part A, but a simplified, single payer that would cover all Americans, including those who could afford the best right now.

For the full article:
http://online.wsj.com/public/article/SB114528925682927634-_ZwDiTbxugmJW0cqxJ_jJ_ogY8g_20060517.html?mod=tff_main_tff_top

Comment:

By Don McCanne, M.D.

Many were surprised to see this frank endorsement of single payer reform appearing in The Wall Street Journal. Perhaps even more remarkable was the decision of the editors to provide free access to this particular article, ensuring much broader distribution than most of the Journal’s subscription-only content.

The editors have not endorsed single payer. In fact, an editorial today calls for tackling the problem of the uninsured by allowing the market to “start operating as it should.” Yet all credible economists agree that the market has no realistic answers for the uninsured who have limited income and significant health care needs. The editors of The Wall Street Journal do understand this as well, even if they remain silent on it.

They also certainly recognize the pressing need for reform and that it needs to be a well informed process by including all options in our national dialogue. Maybe they are ready to give passive support to the democratic process, even if that means that the government will be involved.

Posted by pnhp at 12:48 PM | Permalink

CALGARY and OTTAWA - Bowing to public pressure at home and opposition in Ottawa, Alberta has shelved its controversial health-care reforms that would have allowed doctors to collect paycheques in both the private and public systems and patients to buy private insurance.

An “aggressive” work-force policy to bring more health-care workers to Alberta cities and rural areas to alleviate waiting lists will be adopted rather than allowing patients to pay for certain services to speed access, the province announced yesterday.

“The most important thing is to build a stronger public health-care system where an Albertan’s ability to pay will never influence the type of care or the design of care that they can receive,” Health Minister Iris Evans told reporters in Calgary after an all day caucus meeting.

Both Prime Minister Stephen Harper and federal Health Minister Tony Clement had expressed concern in recent weeks that Alberta’s proposed reforms, which Premier Ralph Klein had dubbed the Third Way, could violate the Canada Health Act — something Ottawa could address by withholding transfer payments.

Mr. Klein took the federal government to task yesterday, saying it offered no alternatives. He said those who opposed the province’s plan had confused the public about what it would mean.

“It has always been expedient to be the protector of medicare as we know it today,” he said.

Alberta will move ahead with a Health Care Assurance Act this spring, which is a framework for future health-care legislation. It will also call for more consultation with Albertans, which could revive the debate, Ms. Evans said.

But that may not happen for another year as Alberta’s Progressive Conservative Party prepares to pick a new leader this fall.

Mr. Klein said he is disappointed he will not be able to see the matter through because he will be out as premier by the end of the year.

“It’s being postponed, but someone is going to have to deal with it,” he said. When asked what advice he had for those who take up the torch for medicare reform, he replied, “Good luck.”

Ms. Evans insisted that the Third Way is not dead. “Far from being dead, it’s alive, and we have created an opportunity for Albertans to give us even more feedback,” she said.

Ms. Evans, who met with Mr. Clement this week, said he left the door “slightly ajar” for more discussions about potential reforms.

Mr. Clement could not be reached yesterday, but an official in the Prime Minister’s Office said Mr. Harper had made Ottawa’s position clear on the Third Way proposal.

“The Prime Minister was clear in a private meeting he had with Premier Klein that anything Alberta wishes to propose to reform health care is great as long as it respects the Canada Health Act,” he said.

The change of heart was hailed as a victory by those opposed to the Third Way.

The province received more than 4,000 letters and 2,000 calls on the reforms — the vast majority of them expressing concern about two-tier medicine and the prospect of paying for services.

“This is clearly a defeat for the government,” said Alberta’s New Democratic Leader Brian Mason. “. . . I think Iris Evans pushed very hard for this legislation. The Premier pushed for the legislation and the people of Alberta pushed back.”

Harvey Voogd, co-ordinator of the Friends of Medicare, which has been lobbying against the Third Way, said dramatic reforms died when Mr. Klein’s party embarrassed him with only 55 per cent support of his leadership.

Karl Belanger, the press secretary to federal NDP Leader Jack Layton, expressed cautious optimism: “It sounds like it could come back in a year, so we will keep pushing for a fully public health-care system.”

Mr. Layton had demanded a federal law banning doctors from operating in both the public and private systems as the price for his continued support of the Liberal government last fall. When a deal could not be reached, the NDP joined the Bloc Québécois and the Conservatives and triggered a federal election.

A spokesperson for federal Liberal Leader Bill Graham was pleased with the decision, adding that innovation in health must take place within the framework of a universal health-care system.

Ms. Evans said Alberta is still looking for ways to cut costs to its health-care spending, which currently eats up more than a third of the province’s budget, but acknowledges that focusing on recruitment could cost the province even more.

The province figures it will spend $10.3-billion on health care in 2006-07, which is $735-million or 7.7 per cent more than the government expected it would spend during the last fiscal year.

Since 1995-96, health spending in Alberta has grown by an average of 10 per cent a year. Now, itboasts among the country’s highest per capita spending for health care.

Alberta Health and Wellness hopes to rein in costs over three years through reforms, but it expects another 7.7 per cent hike in program spending in 2007-08, before it cuts the spending increase to 3.7 per cent in fiscal 2008-09.

Posted by pnhp at 11:09 AM | Permalink

World Health Care Congress
April 19, 2006
Bush Administration’s Health Reform Plan Allan Hubbard, Director, National Economic Council, The White House

Allan Hubbard: …there are three visions, but the third vision is not sustainable, the third vision being the status quo… I promise you, things are going to change, and we can go one of two ways. One way… is a single payer system, basically expand Medicare to take over everything. Medicare will set prices. They will find that it costs more than they expect, so they will cut back reimbursement. They will cut back the options that people have in terms of doctors, in terms of procedures. Eventually care will be rationed, and that’s one vision, and that’s what happened in every other country that had a single payer system… Or we can go to a consumer-directed health care system where the consumer is incentivized to be a wise consumer, incentivized to care about price, to care about quality… That is the vision of this president. We believe health savings accounts are exactly the way to go, with high deductible, low cost health insurance policies, and then… tax deductions for your contributions to your health savings accounts, which means what you pay for out-of-pocket gets the same tax advantage as what’s paid for by insurance, and then you have an incentive to be a wise consumer…

Later…

Stuart Altman, reading a question from the audience: You talked about consumers as a way to reduce prices and increase efficiency. What about the medical emergency situation, when the patient doesn’t have a choice about when, where, and what type of care takes place?

Allan Hubbard: Obviously it doesn’t work there, and I think we all know that, but that’s the exception. You can only shop in a non-emergency.

Later, in response to another question…

Allan Hubbard: Now for the chronically ill, to be perfectly frank, that is the biggest challenge in health care. The president has two proposals on that. And when I talk about chronically ill, it’s the people who have predictably high costs year in and year out… The president’s proposals are the following - an employer provided health savings account… it will put extra money into the health savings accounts of the chronically ill… And then, secondly, the president wants to provide 500 million dollars to the Secretary of HHS to be able to award to up to ten states a year, for innovative ideas in accommodating the chronically ill. But, I want to be perfectly frank, the chronically ill is a problem that is very difficult to solve.

http://www.worldcongress.com/events/NW600/index.cfm

Comment:

By Don McCanne, M.D.

So the president’s proposal for consumer-directed health care doesn’t work for acute problems since individuals are not in a position to be informed consumers, and it doesn’t work for chronic disease since they haven’t figured out a way to pay for it.

Since it doesn’t work for either acute or chronic problems, apparently the president’s proposal works only for those without significant medical needs. Are healthy individuals really the appropriate target for health care reform?

Why would the administration support a reform proposal that they quite frankly concede will not work? It’s because they recognize that the status quo is not sustainable, and the only other realistic option is a single payer system. Although Hubbard drags out the canard of rationing, it is only because their bogeyman bag is otherwise relatively empty. Their real reason for opposing single payer is that their anti-government ideology overrides all other considerations and trumps reform that they know will work, merely because it is a government solution. Should reform be driven by ideology, or by health policy science?

Allan Hubbard is right about one thing. He promises us that there will be change. He has explained why the consumer-directed nonsense cannot lead us to reform. It looks like it will have to be single payer, by default.

Posted by pnhp at 08:15 AM | Permalink

San Diego Physician
February/March 2006
Single Payer, By Default
By Don McCanne, M.D.

(Editor’s Note: Though Dr. McCanne’s article is not the position of the San Diego County Medical Society, it will - it is hoped - stimulate discussion.)

Regardless of personal ideology or political persuasion, everyone in the policy community understands the strengths of the single-payer model of national health insurance. It would provide truly comprehensive coverage for absolutely everyone while putting into place mechanisms that would slow the rate of healthcare inflation.

There is no mystery about how this would be accomplished. Coverage would be automatic for everyone, from birth on. All reasonable, beneficial health services would be included. The current, highly inequitable mechanisms of funding care would be replaced with a single, equitable system of public funding. Numerous micro-simulations and the experiences of other nations have confirmed that replacing our highly inefficient, fragmented private and public insurance systems with a single, publicly administered program would free up more than enough wasted funds to pay for the deficiencies in healthcare coverage today.

The real task before us is to ensure that the large number of us who are healthy pay into a fund that covers care for the 20 percent of individuals who use 80 percent of health services. The most equitable method of doing that would be to establish a single risk pool. A multi-payer system might work, but it would have to be so tightly regulated that it functions as a single-payer system. Furthermore, micro-simulations have shown that multi-payer systems are the most expensive method of achieving universal coverage, whereas a single-payer system actually reduces healthcare spending.

We’ve tried most everything else, but high costs and fragmentation grow worse. Current trends, including CDHC, will only compound the problems. Employers and patients want something done now. More voices are joining the call for a “national solution.” The nation is growing weary of waiting for someone to come up with a better solution. Since there really isn’t any, we will soon have a single-payer program of national health insurance, even if only by default. Once Americans become comfortable with it, they will be as supportive as they are of our other social insurance programs: Social Security and Medicare.

For the full article (1200 words, single page):
http://www.pnhp.org/PDF_files/singlepayerbydefault.pdf

Comment:

By Don McCanne, M.D.

Reform advocates may find this single-page article to be useful as a handout to explain to others why national health insurance is inevitable.

Posted by pnhp at 12:36 PM | Permalink

(Today’s message addresses one of the most important perversities in our flawed system of funding health care. It needs to be included in every dialogue on reform. Please share this message with others who really do care about the future of health care in America.)

American Medical Association
Competition in Health Insurance
A Comprehensive Study of U.S. Markets
2005 Update

The study’s purpose is two-fold: first, to identify problem markets where competition is diminished and second, to prompt discussion about the long-term impact of consolidated health insurance markets on the health care system. This year’s study demonstrates that competition is undermined in hundreds of markets across the country.

Our study shows unequivocally that physicians across the country have virtually no bargaining power with dominant health insurers and that those health insurers are in a position to exert monopsony power. In 280 of the
294 markets surveyed, one health insurer accounts for at least 30 percent of the combined HMO/PPO market.

In terms of market concentration (HHI or Herfindahl-Hirschman Index, a measure of market concentration used by the Department of Justice), the study found the following:

In the combined HMO/PPO product market, 95 percent (279) of the MSAs (metropolitan statistical areas) are highly concentrated (HHI>1800).

In the HMO product market, 99 percent (290) of the MSAs are highly concentrated (HHI>1800).

In the PPO product market, 99 percent (293) of the MSAs are highly concentrated (HHI>1800).

While a number of large health insurers (including WellPoint and United) are posting record profits, premiums for consumers have increased without any increase in benefits. Instead, consumers are paying more out-of-pocket for their health care, through increased deductibles, co-payments and co-insurance. It is clear that patients - the ultimate consumers of health care - are not benefiting from these mergers.

The American Medical Association (AMA) has long been concerned about the impact of consolidated markets on patient care. Today it appears that the physician’s role as patient advocate is being systematically undermined as dominant insurers impose take-it-or-leave-it contracts that directly impact the provision of care and the patient-physician relationship. This role has never been more important. Physicians have a professional and ethical obligation to their patients; health insurers’ primary legal obligation is to their shareholders.

The AMA believes that it is time to reexamine the legal landscape that has allowed unfettered consolidation of health insurance markets. If not corrected, the imbalances in the marketplace will have serious negative long-term consequences for the health care system.

AMA press release:
http://www.ama-assn.org/ama/pub/category/16197.html

Full report:
http://www.ama-assn.org/ama1/pub/upload/mm/368/competitionstud_406.pdf

Comment:

By Don McCanne, M.D.

This study provides one of the most important additions to the overwhelming body of evidence confirming the principle that private insurers should no longer control health care funding.

This report discusses the monopsony (single buyer) power of private insurers. Through consolidation, private insurers now control the markets both as monopolies and as monopsonies.

By using the contracting process to gain control of the providers of health care, the private insurers have gained monopolistic control of the market in which they sell their insurance products. By gaining control of patients through their restricted-panel insurance products, the private insurers have gained monopsonistic control of the market in which they purchase their health care services and products.

Free markets promote fair pricing. Monopolistic and monopsonistic control of markets drive prices up while reducing investment in products and services.
What better example could there be than these very expensive and highly profitable private insurance plans that are leaving patients much more exposed to the costs of health care.

Market perversities absolutely mandate government intervention. It would require a treatise to explain why a simple increase in regulatory oversight would be totally inadequate to correct the perversities in our private insurance system. Suffice it to say that it is time for the government to take over the funding of health care through a single payer program of national health insurance.

Posted by pnhp at 12:32 PM | Permalink

UnitedHealth Directors Strive To Please ‘Brilliant’ Chief;
New Questions on Options
Selling Trout for 40 cents a Pound

By GEORGE ANDERS
April 18, 2006
Page A1 Wall Street Journal

MINNETONKA, Minn. — When William McGuire switched careers in 1986, he was so restless that a pay cut of more than 30% didn’t faze him. Health maintenance organizations were booming, and Dr. McGuire wanted to help run one. So he jettisoned a six-figure income as a pulmonologist in favor of an HMO management job that paid about $70,000 a year.

Savvy move. Today, the 58-year-old Dr. McGuire is chief executive officer of UnitedHealth Group Inc., one of the nation’s largest health-care companies. He draws $8 million a year in salary plus bonus, enjoying perks such as personal use of the company jet. He also has amassed one of the largest stock-options fortunes of all time.

Unrealized gains on Dr. McGuire’s options totaled $1.6 billion, according to UnitedHealth’s proxy statement released this month. Even celebrated CEOs such as General Electric Co.’s Jack Welch or International Business Machines Corp.’s Louis Gerstner never were granted so much during their time at the top.

Dr. McGuire’s story shows how an elite group of companies is getting rich from the nation’s fraying health-care system. Many of them aren’t discovering drugs or treating patients. They’re middlemen who process the paperwork, fill the pill bottles and otherwise connect the pieces of a $2 trillion industry.

The middlemen credit themselves with keeping the health system humming and restraining costs. They’re bringing in robust profits — and their executives are among the country’s most richly paid — as doctors, patients, hospitals and even drug makers are feeling a financial squeeze. Some 46 million Americans lack health insurance.

UnitedHealth’s main business is offering health plans to employers and Medicare beneficiaries. Bigger employers usually pay employees’ medical bills out of their own coffers and hire UnitedHealth to administer the health benefit. Smaller employers pay an annual insurance premium to UnitedHealth in exchange for having the insurer take on the risk of covering employees’ health care.

The “risk” business has been a particular gold mine for UnitedHealth and its rivals in recent years. As health-care inflation eased, insurers still raised premiums at double-digit rates. UnitedHealth’s stock price tripled between January 2003 and January 2006, helped by acquisitions, although it has fallen back somewhat since the beginning of this year. UnitedHealth’s net income in 2005 totaled $3.3 billion, nearly four times the figure in 2001.

UnitedHealth directors in the late 1990s allowed Dr. McGuire the rare freedom to time his stock-option grants. In several cases the grants carried dates when the company’s share price was particularly low, allowing him to profit when it recovered. The company’s options-granting practices were among several scrutinized in a page-one article in The Wall Street Journal last month and are being examined by the Securities and Exchange Commission.

The Journal’s analysis of 12 options grants to Dr. McGuire from 1994 to mid-2002 found that if the options had been randomly dated, the odds of their occurring at such propitious times were about 1 in 200 million. It raised the possibility that the options grants were backdated. Backdating an options grant isn’t necessarily illegal, but civil or criminal actions could be brought if disclosure of the practice were inadequate, securities lawyers say. A UnitedHealth spokesman said the grants were appropriate, but the company’s board is reviewing options-granting procedures.

The arrival of the $1 billion CEO would be a head-turner in any industry. But it’s especially controversial in health care, where “people tend to view each dollar of executive pay as money that isn’t spent on them,” says Jonathan Weiner, a health-policy expert at Johns Hopkins University. Dr. McGuire and his supporters say the U.S. would be in even worse shape if it weren’t for insurers such as UnitedHealth weeding out unnecessary treatments, bargaining with doctors and encouraging patients to seek out the highest-quality care.

Ever since missing a stock-market windfall in the late 1980s, Dr. McGuire has pursued stock-options wealth tirelessly, as an iron-willed leader surrounded by an admiring board. He declined to discuss his pay, but current and former directors talked at length about their desire to do whatever is necessary to keep Dr. McGuire happy.

“We’re so lucky to have Bill,” says Mary Mundinger, a UnitedHealth director who sits on the company’s compensation committee. “He’s brilliant.” She says his income gives him extra credibility in health-policy debates because it shows his success. “He needs to be compensated appropriately so that his business model has believability in the market,” says Ms. Mundinger, who is dean of the nursing school at Columbia University.

Robert Ryan, another UnitedHealth director, notes that the company’s stock-market capitalization has climbed 112-fold since Dr. McGuire took over in 1991. “A lot of the board’s job here is to keep him motivated,” says Mr. Ryan, a retired chief financial officer of Medtronic Inc.

Bill McGuire was born in Troy, N.Y., but moved to Texas as a boy when his father got a job as an oil-company engineer. He grew up in League City, Texas, a blue-collar town near Galveston. Friends remember him as shy, pleasant and dead-certain of his expertise in areas ranging from sports to math.

He grew to be 6-foot-6, and as a high-school senior he was the starting center on a basketball team that nearly won the state championship. “Bill did all my scouting reports for me,” recalls Bill Krueger, who was in his first year as coach. “I’d never played our opponents before. Bill had. He remembered all the other players’ strengths and weaknesses.”

After college, Bill McGuire attended medical school in Galveston, Texas, at the urging of family doctor Ned Dudney. Varsity athletes who go into medicine often end up as surgeons. But Dr. Dudney pegged his young friend as more of an intellectual problem-solver and pointed him toward internal medicine. “Bill liked the challenge of diagnosing the rare, complicated disease,” Dr. Dudney recalls.

At medical school, Dr. McGuire became famous for his side income as a commercial fisherman, selling speckled trout to Galveston’s best restaurants at 40 cents a pound. The night before one exam, he slipped away to the Gulf of Mexico and spent hours catching fish.

“It flabbergasted us,” recalls classmate Robert Hendler. “The rest of us were struggling to learn the material. Bill had it down cold. He could go fishing and still get one of the best scores on the test.”

In the early 1980s, Dr. McGuire settled into private practice as a lung-disease specialist in Colorado Springs, Colo. Much of his job involved hospital care of the desperately sick at all hours of the day and night. In one case, Dr. McGuire — who wasn’t certified as a cardiac surgeon — reopened the chest incision of a critically ill patient in the emergency room and massaged his heart. That audacious step kept the patient alive until a surgeon arrived.

Looking for a new challenge, Dr. McGuire joined Peak Health Plan Inc. in 1984 as its assistant medical director. He helped found a smaller health plan, CostGuard Inc., in which he took a 10% ownership stake. “Bill gave us a lot of credibility,” recalls Stephen Hyde, Peak’s CEO at the time. “I was trying to expand our provider network, and I couldn’t get doctors to come to our recruiting meetings. Bill could.”

Within two years, both Peak and CostGuard were sold to UnitedHealth, a larger Minnesota company that had been founded in 1974, for a total of about $95 million. Dr. McGuire was irked that the company he had recently joined was suddenly sold, associates say. He earned about $1 million on his CostGuard stake but he didn’t own any Peak stock, so he missed out on bigger windfalls that Peak’s three founders collected. “Bill didn’t let me forget about it for years,” Mr. Hyde says.

The managed-care industry in the late 1980s was experiencing booming but chaotic growth. Big corporations, instead of simply paying whatever medical bills their employees submitted, tried steering them into more restrictive HMOs to hold down runaway costs. Members streamed in so fast that many health plans’ computer systems buckled.

Dr. McGuire moved to UnitedHealth’s headquarters in Minnesota, where he quickly became the company’s No. 2 executive. In 1988 and 1989, he performed the business world’s version of emergency surgery on a company that was stretched too thin. After he helped sell or close a half-dozen regional plans that weren’t working out, UnitedHealth became a smaller but more profitable company.

“When we saw Bill’s talent and potential, we started providing him with some big stock options to give him some incentives,” recalls Robert Ditmore, a former UnitedHealth director in the late 1980s. By the end of 1990, Dr. McGuire had options on 229,277 shares, or 0.7% of the company.

This was the beginning of a period when U.S. corporations began making options a big part of pay packages, seeking to align the interests of executives and shareholders. Traditionally, hired CEOs enjoyed big salaries but their puny stockholdings left them no hope of approaching the epic wealth of the Rockefellers or DuPonts.

But as stock options took off, highflying bosses such as Dr. McGuire propelled themselves into the top ranks of their companies’ shareholder registries. As stock prices rose, these bosses became tycoons, too.

The stock jumped 10-fold during Dr. McGuire’s first five years at the company. Directors purred. “We knew we had a really strong leader in Bill,” recalls Walter Mondale, the former presidential candidate, who was a member of the UnitedHealth board’s compensation committee in the early 1990s. “We wanted to keep him and help him with incentives.”

During his first seven years as CEO, Dr. McGuire’s base salary more than tripled, to $1.3 million in 1998. His bonus jumped nearly as briskly for a few years. Then in 1997 and 1998, Dr. McGuire told directors that he would forgo his bonus. The company’s stock price and earnings growth had stalled amid a backlash against restrictive health plans.

His sacrifice impressed directors. As the expiration of his contract approached in mid-1999, the directors and the CEO met repeatedly to talk about a new contract.

Dr. McGuire at the end of 1998 had unrealized gains of $22 million on his existing options. That might have seemed like a huge sum a decade earlier. But Leonard Abramson, the founder of U.S. Healthcare Inc., netted about $900 million when he sold his company to Aetna Inc. in 1996. And dot-com mania was at its peak. CEOs of health-care start-ups such as WebMD Inc. held 5% or bigger stakes in their companies, which looked like passports to great wealth.

In contract negotiations, Dr. McGuire pushed for more options, and directors agreed. When his contract was renewed, effective Oct. 13, 1999, he got options equivalent to 2% of UnitedHealth’s shares outstanding. That was the biggest slice Dr. McGuire had ever received. “Clearly we were aware of people getting huge gains on Internet-stock situations. That was perhaps a factor in our mind,” says director William Spears.

The dot-coms’ onslaught proved laughably brief, but UnitedHealth kept rising. As the industry consolidated — spurred by several deals Dr. McGuire engineered — health-plan operators found it easier to raise prices. Employers rarely complained, or if they did they directed their anger at the health-care system generally.

The better UnitedHealth fared, the more valuable Dr. McGuire’s options became. Since 2000, he has cashed out $488 million of options, yet the value of his remaining options keeps rising. The 1999 grant has proved about seven times as valuable as the company projected when it was issued.

In Minnesota, such riches have infuriated some people. Joel Albers, a Minneapolis pharmacist, regularly impersonates Dr. McGuire at state fairs, donning a tuxedo, holding up an enlarged picture of Dr. McGuire on a stick and handing out leaflets denouncing corporate greed. Most people chuckle and walk on. But Mr. Albers says he has a serious point. He has been urging Dr. McGuire to spend his options proceeds on providing free health coverage for Minnesota’s 77,000 uninsured children.

UnitedHealth executive John Penshorn says outsiders’ efforts to tell Dr. McGuire how to spend his money are “very parochial” because “the issues are broader than just Minnesota.” Dr. McGuire has been speaking out about national health system reform and UnitedHealth has opened advanced clinics that serve some of the nation’s poorest neighborhoods. Dr. McGuire also has set up a family foundation that gives away millions on behalf of education, science and the arts.

Some of Dr. McGuire’s most eye-catching gifts are unrelated to health care. In January, he announced he was giving $10 million to help thousands of disadvantaged Minnesota children attend college. Dr. McGuire also has given nearly $10 million to the University of Florida for a biodiversity center that includes one of the world’s largest butterfly research institutes. An avid lepidopterist himself, Dr. McGuire discovered the brown Texas butterfly Euphyes mcguirei.

As long as UnitedHealth stock keeps climbing, big shareholders say they aren’t likely to badger Dr. McGuire for a pay cut. “It’s hard to say what someone like that is worth,” says Tom Marsico, head of Marsico Capital in Denver, which owns about 5% of UnitedHealth’s shares. “But compared with hedge-fund managers or athletes, he’s probably doing more to improve the world.”

Even so, UnitedHealth directors huddled several times last year to discuss whether they have showered Dr. McGuire with too many options. His 1999 employment contract obligated the company to award him further options on 2.6 million shares each year, adjusted for splits.

“The number [of options] became larger than we were comfortable with,” says Mr. Spears, a member of the UnitedHealth compensation committee. Directors in August 2005 eliminated the options guarantee. Dr. McGuire received options last year on 1.7 million shares, down 35% from the previous year.

But several directors say they have no desire to peel away some of the CEO’s longtime perks, such as a $139,000 travel allowance and $69,100 of financial planning last year — even though Dr. McGuire is long past the point of needing help with everyday living costs.

“If we did reduce these things, Bill would take it as a signal that directors weren’t enthusiastic about his leadership,” says Mr. Spears. “That would be a distraction, at the very least. Bill takes these things as a benchmark of how directors feel about him.”

During their August 2005 overhaul of Dr. McGuire’s contract, directors did eliminate an unusual provision that let Dr. McGuire choose when his options would be awarded. As this newspaper reported on March 18, option grants to Dr. McGuire in 1997, 1999 and 2000 carried dates on which UnitedHealth’s stock hit its low for the year. Mr. Spears said in March that he wasn’t aware of anything inappropriate about the options grants. (Read the March 18 article and see stock charts showing the options grants.)

In an SEC filing April 7, UnitedHealth said a committee of independent directors will work with outside lawyers to review the company’s “current and historic stock option grant procedures.” The company said the board review was Dr. McGuire’s idea.

Write to George Anders at george.anders@wsj.com

Posted by pnhp at 02:53 PM | Permalink

THE DOCTOR‘S OFFICE

By BENJAMIN BREWER, M.D.
THE WALL STREET JOUNRAL
April 18, 2006

A recently approved Massachusetts plan designed to force all residents to get health insurance was a step in the right direction, but it doesn’t go far enough.

Under the Massachusetts approach, there will still be a maze of plans provided by any number of insurers. That multiplicity is the problem. Multiple insurers and multiple plans create layers of unneeded expense and bureaucracy related to billing, collections and the entire assembly line of middlemen between the service rendered and the payment.

It took me a while to conclude that a single-payer health system was the best approach. My fear had been that government would screw up medicine to the detriment of my patients and my practice. If done poorly, the result might be worse than what I’m dealing with now.

But increasingly I’ve come to believe that if done right, health care in America could be dramatically better with true single-payer coverage; not just another layer — a part D on top of a part B on top of a part A, but a simplified, single payer that would cover all Americans, including those who could afford the best right now. Representatives and senators in Washington should have to use the same system my patients and I do were they to vote it in.

Doctors in private practice fear a loss of autonomy with a single-payer system. After being in the private practice of family medicine for 8 1/2 years, I see that autonomy is largely an illusion. Through Medicare and Medicaid, the government is already writing its own rules for 45% of the patients I see.

The rest are privately insured under 301 different insurance products (my staff and I counted). The companies set the fees and the contracts are largely non-negotiable by individual doctors.

The amount of time, staff costs and IT overhead associated with keeping track of all those plans eats up most of the money we make above Medicare rates. As it is now, I see patients and wait between 30 and 90 days to get paid. My practice requires two full-time staff members for billing. My two secretaries spend about half their time collecting insurance information. Plus, there’s $9,000 in computer expenses yearly to handle the insurance information and billing follow up. I suspect I could go from four people in the paper chase to one with a single-payer system.

It would be simpler and better for the patient, and for me, if the patient could choose a doctor, bring their ID card with them, swipe it in a card reader at the time of service and have the doctor get paid on the spot with electronic funds transfer.

Instead, patients have to negotiate a maze of deductibles, provider networks, out-of-network costs, exclusions, policy riders, ER surcharges, etc. Wouldn’t a card swipe be simpler? No preexisting conditions to worry about. No indecipherable hospital bills. One formulary to deal with and one set of administrative rules to learn instead of 300.

With a single-payer system, there are concerns about waiting times for procedures and not getting access to the “best doctors.” These are real issues, but not unsolvable ones. We have these disparities now. Fact is, they are mostly a matter of geography, insurance status and personal wealth.

A single-payer system would increase access to care for the uninsured and the underinsured, including the working poor. It would lower total health costs, in part by replacing 50 different state Medicaid programs and umpteen insurers with one system. This approach has the potential to improve quality and lower costs by improving care for chronic illnesses such as diabetes, high blood pressure and heart disease.

Such a system of care would rely on evidenced-based interventions, that is, providing the right care at the right time to the right patients, according to generally accepted best practices, and it would reduce the disparities in access to and quality of care among ethnic groups. Better tracking of chronic diseases, outbreaks and identification of bioterrorism would also be benefits.

There are powerful forces that oppose a single-payer system — the health insurance industry for one. The insurance industry got its share of the Medicare drug benefit pie, as did the pharma industry. It would have been better and simpler for the government to design one plan with a standard drug fee schedule that everyone could understand, as the government does with care that doctors provide to Medicare patients. But that’s not the way it happened.

Doctors have been supportive of the idea of universal access to care, but not necessarily a single-payer system. Some fear delays in obtaining necessary testing and surgeries. What I suspect they fear most is a loss of income and the fear of the unknown.

A single-payer system would admittedly lower fees for subspecialty care, such as radiology and cardiology. But if more doctors went into family medicine or obstetrics and fewer into subspecialties like plastic surgery, that shift might help correct the physician manpower imbalances that exist now. That wouldn’t necessarily break my heart.

I suspect doctors would be more likely to support a single-payer system if national malpractice reform was part of the package — which it should be.

I used to think a single-payer system would keep my income down and inject bureaucracy into my medical decision-making. But with the efficiency it could bring, it would at worst be an economic wash; more likely, the trimmed costs would more than make up for any foregone revenue. As for autonomy, I’m already struggling to maintain it amid the interference of insurers.

On the whole, the efficiency — and equality — that a single-payer system would provide would more than compensate for its shortcomings.

Write to Dr. Benjamin Brewer at thedoctorsoffice@wsj.com

Posted by pnhp at 02:01 PM | Permalink

Public Employees’ Health Benefits Survive Major Threats, So Far Public-sector workers continue to receive benefits that help offset their more modest salaries compared with their private-sector peers.

Health Affairs
By Robert E. Hurley, Laurie Felland, Anneliese Gerland, and Jeremy Pickreign
April 18, 2006

State and local elected officials have shown much restraint in their approach to modifying public employees’ benefits. Despite budget pressures, few public employers indicated that they felt political pressure to make deep cuts in health benefits. Many elected officials value the contributions of public workers and expressed great concern about not making major reductions in the workforce, given the responsibilities borne by state and local government agencies. Likewise, officials themselves often have a personal stake in the benefits, including health care coverage, so preservation might be a matter of self-interest.

http://content.healthaffairs.org/cgi/content/abstract/hlthaff.25.w195

Comment:

By Don McCanne, M.D.

Many still express the view that they would prefer to continue to rely on their private individual or employer-sponsored health insurance plan rather than changing to a government program, because “the government” can’t do anything right.

This study confirms that “the government,” as an employer, has been very effective in maintaining traditional comprehensive coverage for its own employees. Although the government uses private insurers, it has maintained a strong stewardship over these programs. Compared to the private sector, it looks like “the government” has been doing it right.

The efficiency that would be attained by changing to a single payer system will not be discussed here other than to state that the government would have to be the steward. Based on the track record, it looks like putting “the government” in charge actually would be the right thing to do.

Posted by pnhp at 01:55 PM | Permalink

By DINAH WISENBERG BRIN and VANESSA FUHRMANS
Wall Street Journal
Originally published April 18, 2006

UnitedHealth Group Inc. Chairman and Chief Executive William W. McGuire said Tuesday he is recommending that the insurer, which is under scrutiny for the timing of past stock-options awards, forgo equity-based payments and grants for most senior executives.

The company also said it posted higher-than-expected first-quarter earnings but lowered its guidance for next year. Earnings at the country’s second-biggest health insurer climbed 21% to $899 million, or 63 cents a share, in the quarter, from $743 million, or 55 cents per share, a year earlier. UnitedHealth’s acquisition of PacifiCare Health Systems Inc., which it completed late last year, and its new Medicare drug-benefit plans helped fuel profits, as a well as a 58% jump in first-quarter revenues to $17.59 billion.

As a result, Dr. McGuire said the company now expects full-year earnings between $2.88 and $2.92 a share — a 22% to 24% increase from 2005 — compared with its earlier projection of between $2.85 to $2.90 a share.

Dr. McGuire prefaced his discussion of the company’s performance with his first comments on the controversy over his massive financial windfall from stock options, now totaling $1.6 billion in unrealized gains. In a move that could prove to be a significant pullback from what has been an enormously generous remuneration package, Dr. McGuire said he was recommending that the company eliminate change-in-control severance payments and “noncash perquisites,” for the most senior executives, as well as capping supplemental retirement plans and eliminating further equity-based grants “for the foreseeable future.” UnitedHealth’s board will consider that idea at its next meeting in May, he said.

Dr. McGuire’s suggestion does not restrict him or other executives from exercising options they’ve already received, and a company spokesman declined to specify what perks Dr. McGuire suggested be eliminated.

Earlier this month, UnitedHealth said a committee of its independent directors would review the company’s options-grant practices in light of Securities and Exchange Commission scrutiny of options grants at numerous companies, including UnitedHealth.

The Wall Street Journal reported last month that Dr. McGuire’s options grants were regularly dated just before substantial run-ups in share price and after a sharp fall.

Monday, Comverse Technology Inc. said that after a preliminary review of its stock-option practices, it expects to restate more than five years of financial results because the grant dates used in its accounting “differed” from the actual grant date.

Several UnitedHealth executives frequently received stock-options grants dated at or near quarterly low points in the company’s share price, raising questions about how the Minnetonka, Minn., health insurer timed options grants, the paper reported this week.

“I and all of us at UnitedHealth Group take these concerns seriously,” Dr. McGuire said. “It is extraordinarily difficult and frustrating not to respond to media reports” about company options practices, especially those that “impugn” management, Dr. McGuire said.

“To my knowledge, every member of management in this company believed at the time that we followed appropriate practices” for granting options executives and other employees, he said. The CEO, questioned by an analyst, wouldn’t specify whether he had received backdated stock options, saying the company didn’t want to bias the independent review committee. “We sleep with good conscience,” he added.

By the quarter’s end, UnitedHealth had signed up about 70 million consumers, an increase of 27% over the prior year. The company said it had 4.5 million seniors using its Medicare Part D prescription drug benefit, generating $1.2 billion in revenue for the quarter. The company’s Part D plans saw their margins squeezed due to the costs of assimilating new members, but it said it expects to see margins expand by year’s end.

Dr. McGuire was the subject of a Page One article in The Wall Street Journal today that looked at how an elite group of companies is getting rich from the nation’s fraying health-care system. Many of them are middlemen who process the paperwork, fill the pill bottles and otherwise connect the pieces of a $2 trillion industry.

UnitedHealth directors in the late 1990s allowed Dr. McGuire the rare freedom to time his stock-option grants. In several cases the grants carried dates when the company’s share price was particularly low, allowing him to profit when it recovered.

The Journal’s analysis of 12 options grants to Dr. McGuire from 1994 to mid-2002 found that if the options had been randomly dated, the odds of their occurring at such propitious times were about 1 in 200 million. It raised the possibility that the options grants were backdated. Backdating an options grant isn’t necessarily illegal, but civil or criminal actions could be brought if disclosure of the practice was inadequate, securities lawyers say.

Write to Dinah Wisenberg Brin at dinah.brin@dowjones.com10 and Vanessa Fuhrmans at vanessa.fuhrmans@wsj.com11

MORE ON MCGUIRE
• Option grants to Dr. McGuire in 1997, 1999 and 2000 carried dates on which UnitedHealth’s stock hit its low for the year. Read more about the grants and those made to other companies’ executives in The Perfect Payday (March 18, 2006) and see charts of the option grants.

Posted by pnhp at 01:02 PM | Permalink

Healthcare plan needs dose of common sense

By Marcia Angell
The Boston Globe
April 17, 2006

If Governor Romney thinks the state’s new plan for universal health coverage will carry him to the White House, he should think again. This Rube Goldberg contraption won’t even get him off the ground because it doesn’t touch the underlying problem — our reliance on multiple private insurance companies.

Private insurers compete not by offering better healthcare, but by avoiding high-risk individuals, limiting services for those they do cover, and, whenever possible, shifting costs to other payers or to individuals in the form of high deductibles and copayments. It’s a chaotic and fragmented system that requires a mountain of paperwork, which is one reason premiums are so high. Those employers who still offer health benefits react by capping their contributions, so that workers pay more out of pocket and bear the full brunt of premium increases. Massachusetts does better than most states, but healthcare in Massachusetts is also the most expensive in the nation.

If this system is left essentially intact, as it is under the new plan, expanding coverage will inevitably increase costs. That is common sense: Coverage and costs have to move in tandem if the system stays the same. Furthermore, the plan does nothing to keep costs from growing. For years, premiums have been rising much faster than the consumer price index. At current rates, even if the state were able to cover its proposed contributions to the plan at launch, it wouldn’t be able to keep up with soaring prices.

But already it’s clear that the governor and legislators don’t know how to pay for it even at launch. One legislator told Boston Globe columnist Joan Vennochi: ”We don’t yet know what it’s really going to cost us or where we’re going to get the money from. To some extent you might call it a Hail Mary pass.” The essence of this faith-based plan is to squeeze employers and individuals, with a relatively small state contribution. But employers who don’t offer health insurance can get away with paying a penalty of only $295 per employee per year — in a state where health insurance for individuals costs about $7,200 per year.

Individuals not covered by employers and whose income is at least 300 percent of the federal poverty level (now about $30,000) will have to buy their insurance or pay income tax penalties. Romney thinks premiums can be held to $2,400 a year with a cap of $2,100 on deductibles, but that is wildly implausible. If premiums are higher than that and continue to escalate faster than income, this will amount to fining people because they can’t afford health insurance, which, in effect, will punish them twice — an unsavory prospect.

Those individuals whose income is less than 300 percent of poverty level would receive state subsidies. That will require an enormous bureaucracy to determine what insurance is adequate and ”affordable” and who can really afford it, and there will be incessant legal and regulatory wrangling. The legislation calls for a new state agency, the Commonwealth Health Insurance Connector, to oversee insurance plans, and that is just the beginning.

Like the Medicare prescription drug benefit, the Massachusetts healthcare plan is a complicated morass that might limp along for a while, but will never cover all the people it is meant to cover, and will become increasingly unaffordable. Most likely, it will meet the same fate as the much celebrated 1988 legislation to provide universal coverage in Massachusetts, which shriveled and died with scarcely a whimper.

The only answer is to change the system entirely, so that we can expand coverage while controlling costs. Romney said, ”The old single-payer canard is gone.” No, it isn’t. Sooner or later, that is exactly what we’ll need if we’re really serious about universal healthcare. There’s no other way.

(Dr. Marcia Angell is a senior lecturer in social medicine at Harvard Medical School and former editor-in-chief of the New England Journal of Medicine.)

http://www.boston.com/news/globe/editorial_opinion/oped/articles/2006/04/17/healthcare_plan_needs_dose_of_common_sense/

Comment:

By Don McCanne, M.D.

Dr. Angell’s perspicacious comments apply to our entire health care system.

Health care coverage must be automatic for everyone. It must be comprehensive. It must be efficient. It must include mechanisms that improve allocation of our resources. It must be affordable.

The Massachusetts plan and every other proposal fails on these measures, except for one model: a single payer national health program.

Posted by pnhp at 03:55 PM | Permalink

By Marcia Angell
Originally published April 17, 2006

IF GOVERNOR Romney thinks the state’s new plan for universal health coverage will carry him to the White House, he should think again. This Rube Goldberg contraption won’t even get him off the ground because it doesn’t touch the underlying problem — our reliance on multiple private insurance companies.

Private insurers compete not by offering better healthcare, but by avoiding high-risk individuals, limiting services for those they do cover, and, whenever possible, shifting costs to other payers or to individuals in the form of high deductibles and copayments. It’s a chaotic and fragmented system that requires a mountain of paperwork, which is one reason premiums are so high. Those employers who still offer health benefits react by capping their contributions, so that workers pay more out of pocket and bear the full brunt of premium increases. Massachusetts does better than most states, but healthcare in Massachusetts is also the most expensive in the nation.

If this system is left essentially intact, as it is under the new plan, expanding coverage will inevitably increase costs. That is common sense: Coverage and costs have to move in tandem if the system stays the same. Furthermore, the plan does nothing to keep costs from growing. For years, premiums have been rising much faster than the consumer price index. At current rates, even if the state were able to cover its proposed contributions to the plan at launch, it wouldn’t be able to keep up with soaring prices.

But already it’s clear that the governor and legislators don’t know how to pay for it even at launch. One legislator told Boston Globe columnist Joan Vennochi: ”We don’t yet know what it’s really going to cost us or where we’re going to get the money from. To some extent you might call it a Hail Mary pass.” The essence of this faith-based plan is to squeeze employers and individuals, with a relatively small state contribution. But employers who don’t offer health insurance can get away with paying a penalty of only $295 per employee per year — in a state where health insurance for individuals costs about $7,200 per year.

Individuals not covered by employers and whose income is at least 300 percent of the federal poverty level (now about $30,000) will have to buy their insurance or pay income tax penalties. Romney thinks premiums can be held to $2,400 a year with a cap of $2,100 on deductibles, but that is wildly implausible. If premiums are higher than that and continue to escalate faster than income, this will amount to fining people because they can’t afford health insurance, which, in effect, will punish them twice — an unsavory prospect.

Those individuals whose income is less than 300 percent of poverty level would receive state subsidies. That will require an enormous bureaucracy to determine what insurance is adequate and ”affordable” and who can really afford it, and there will be incessant legal and regulatory wrangling. The legislation calls for a new state agency, the Commonwealth Health Insurance Connector, to oversee insurance plans, and that is just the beginning.

Like the Medicare prescription drug benefit, the Massachusetts healthcare plan is a complicated morass that might limp along for a while, but will never cover all the people it is meant to cover, and will become increasingly unaffordable. Most likely, it will meet the same fate as the much celebrated 1988 legislation to provide universal coverage in Massachusetts, which shriveled and died with scarcely a whimper.

The only answer is to change the system entirely, so that we can expand coverage while controlling costs. Romney said, ”The old single-payer canard is gone.” No, it isn’t. Sooner or later, that is exactly what we’ll need if we’re really serious about universal healthcare. There’s no other way.

Dr. Marcia Angell is a senior lecturer in social medicine at Harvard Medical School and former editor-in-chief of the New England Journal of Medicine.

Copyright 2006 Globe Newspaper Company

http://www.boston.com/news/globe/editorial_opinion/oped/articles/2006/04/17/healthcare_plan_needs_dose_of_common_sense/

Posted by pnhp at 02:06 PM | Permalink

Insurance CEOs fattened on the suffering of many

By Howie Wolf
Originally published April 16, 2006
Boulder Camera

A brilliant and widely read book by Malcomb Gladwell called “The Tipping Point” calls our attention as to why there are so many changes in our society which seem to happen unexpectedly and suddenly. The sudden rise in popularity of “Hush Puppies” in the ‘50s was an example.

Then Gladwell shows that not only fashion trends, but social movements and reform also may reach a “tipping point” wherein it is realized by the populace that something needs to give. The civil rights movement of the ‘60s is an example of how a longstanding wrong reached the point when most of society could not tolerate racial inequality. Recently across our country people are marching in protest of impending anti-immigration legislation in Washington. Tipping points are being reached.

There is clearly a growing movement in our nation regarding health-care reform. We are spending far more for health care per capita and of our GDP than any industrialized nation. We have 46.8 million uninsured and many millions more underinsured. This means lack of access to care or delay in seeking care which translates into the grim reality that an estimated 18,000 Americans will die annually. Those who lack health insurance make around 50 percent of all bankruptcies, but 70 percent were “insured” when their medical condition began.

We do have outstanding health care being delivered in our country, and scientific advances abound. But these aren’t affordable for the uninsured.

Our co-pays and premiums are rising dramatically for those of us “lucky enough” to have insurance. Sadly for many Americans it is a choice of medication or food or a heating bill. Trying to understand most EOBs (Explanation of Benefits) reports from insurance companies is usually a complex task. Worse, there is no accountability, and insurance companies rake off 15 percent to 30 percent of our premiums to keep their companies rolling, which includes CEO salaries in the $20 million-per-year range. Most medical facilities must employ extra people to do the communicating with each insurance company with their varied rules and formularies. Payment to providers is made with predictable delays and dramatic cuts.

As a family physician who has practiced in this county for more than 43 years, I have seen the realities of what it is like for my patients who lack insurance and who face frightening medical doctor bills. An ethical and moral dilemma probably occurs with any provider who treats patients lacking insurance; we simply cannot offer the same services, treatment or medicine to the underinsured person.

Something needs to be done! Most national legislators seem uninterested in significant reform. The insurance and pharmaceutical lobbies have supported those in Congress who resist change. Indeed, the Medicare part D you’ve been hearing about is not only complex, but will be useful and money-saving for but a few Americans, while reaping nice profits for insurance and pharmaceutical companies.

Consider the savings that could have been achieved had prescription drug prices been a negotiable item, but that option was deliberately omitted. It was unconscionable how they swung this deal, leaving many seniors with costly choices. Why should a senior have to pay more than three to four times more for Lipitor than what Pfizer’s charges the VA Health care system?

Over 60 percent of all Americans favor a single-payer universal system, similar to the Canadian model. We would prefer a system that is affordable, accountable and accessible and includes preventive care and management of costly resources. Countries which have universal care can cover everybody - and have preventative care as well - at less cost than we are now paying. Their outcomes - longevity, maternal and infant mortality figures - are better than ours. Many of us who are activist in health care reform believe that - until the masses -including the uninsured and underinsured - create enough power to reach the “tipping point,” we’re stuck with the status quo.

Perhaps politicians will “listen better” when the streets swell with millions of people - as with the recent crowds demanding immigrants’ rights - but this time demanding health care for all. We are the only industrialized country without a universal system. Most systems are funded publicly but run privately. Canada’s operating cost is 2 percent to 3 percent compared to the 15 percent to 30 percent in our country.

I have learned that incremental reform will not do. A major fix is needed. Yes, the Health Savings Accounts are nice for those who have youth, money and good health. But for those who become very sick, the costs can be unaffordable, plus they do nothing to address the uninsured. Tying health insurance to employment seems absurd. People often get laid off, lose their insurance, and COBRA costs are out of sight. Employers get stuck because fewer of them can afford the rising rates. Why should employers carry the burden of health insurance anyway?

Are we close to reaching the “tipping point” with health care?

Howie Wolf, M.D., is a Boulder physician.

Posted by pnhp at 11:11 AM | Permalink

Health costs destroying our economy
National health plan only way to protect workers and employers
Detroit News
April 14, 2006
By James P. Hoffa, president of the International Brotherhood of Teamsters

Our nation’s health care system is broken. America must act now.

Health care costs are destroying our nation’s economic edge. The cards are stacked against American companies as they try to compete with low-cost, low-wage foreign producers.

The only real solution to this crisis is national health care. Meeting such a basic need should not force government budgets, companies and workers into the red. As the crisis grows, more and more Americans, workers and corporate leaders alike, are calling for government action.

We invite General Motors, Delphi, Sikorsky, UTC, Waste Management and other corporations to stop fighting against us and start fighting along side us.
It’s time for all Americans to join this fight for a country that rewards hard work and where working families don’t have to choose between going to the doctor and paying the rent.

http://www.detnews.com/apps/pbcs.dll/article?AID=/20060414/OPINION03/604140315&SearchID=73241530077956

Comment:

By Don McCanne, M.D.

The crescendo of the drum beat is now almost deafening. Isn’t it time?

Posted by pnhp at 08:19 AM | Permalink

Dr. Don McCanne editorial in the San Diego Physician (PDF File)

Posted by pnhp at 03:44 PM | Permalink

DID YOU KNOW THAT:

•Most uninsured people will now have to buy their own insurance without any or with very little financial support?

•The Bill will not help the underinsured or those with poor quality insurance, including those on Medicare paying high out-of-pocket costs?

•It will not attempt to reduce the costs of health insurance for individuals and businesses paying the highest prices in the world?

DID YOU KNOW THAT:

•40 percent of the uninsured in Massachusetts, the 292,000 who earn more than three times the poverty level income, will be forced to purchase their own health insurance without any help or subsidies from the state? Bad insurance for someone earning three times the poverty level will cost them 20 percent of their total income.

•The Bill raises only $170 million per year in new spending to help subsidize 748,000 uninsured people in Massachusetts? This is not enough to pay for 45,000 people. All other funds used by the Bill are a shell game, most taken out of Free Care - which provides medically necessary health services for the uninsured - and moved into more wasteful plans run by commercial insurance companies.

•This Bill, which will affect the lives of hundreds of thousands, was bought and paid for by healthcare industry lobbyists? Industry lobbyists spent over $7.5 million this year to make your health care Bill work for them. Forcing uninsured people into private insurance plans will create new business and new profits for insurers, without reforming the system of waste and discriminatory health care access for Massachusetts residents.

DID YOU KNOW THAT: every developed nation in the world offers comprehensive health care for all of its residents, except the United States? And they pay less for it? Let’s organize against these attempts to shift health care costs on to low-income people. Let’s fight for the universal, quality health care that we know is possible!

Posted by pnhp at 01:44 PM | Permalink

State Governments Overreach in Taking on Problems Best Solved at the National Level
The New York Times
April 13, 2006
By Robert H. Frank

In most of the world… the primary responsibility for ensuring access to health care, regulating environmental quality and supporting basic scientific research is exercised by national governments. But in this country, these tasks are increasingly managed by state, and even local, governments.

Last week, for instance, Massachusetts became the first state to enact legislation trying to ensure that all its citizens have access to health care. At least 19 other states considered legislation expanding health care coverage in 2005.

In each case, there are compelling economic reasons for delegating the activities to national, rather than state or local, governments. Yet in each,arena, the federal government has failed to act.

Although it is no mystery why states are beginning to take the lead in thesem domains, it is important to understand why the recently enacted programs are destined to fall far short of what could have been achieved at the federal level.

The explanation begins with the question of why we have multiple levels of government in the first place. Almost all of us are subject to taxation and regulation by governments at the local, state and national level. Although multitiered government entails substantial redundancy and inefficiency, there are good economic reasons for it.

As the economist Charles M. Tiebout explained in a seminal paper published in 1956, an important advantage of providing public services at the local level is that this enables us to better achieve our desired mix of public and private consumption.

People who like lots of parkland, well-maintained roads, large police forces and good schools can thus gather in high-tax communities that provide these amenities, while others can choose low-tax communities and spend more of their income on private consumption. Local government also minimizes the distance between citizens and the lawmakers who tax and regulate them.

But for some public services, like national defense, scale advantages rule out primary reliance on local government.

Scale advantages, however, do not explain why health care policy, environmental regulation and support for basic scientific research are best delegated to the federal government. Rather, the problem is that in each of these instances, programs at the state and local levels create perverse economic incentives.

A case in point is a proposal recently discussed in Ithaca, N.Y., where I live. Activists in this progressive upstate community (sometimes called “the

People’s Republic of Ithaca”) called for a local income tax to finance a single-payer health care system for local residents. According to health policy experts, such a system would eliminate the substantial waste associated with attempts by insurance companies to limit authorized services and avoid covering people with chronic medical conditions.

Yet, despite this advantage, a health system operated at the local level could never work. Because people are free to move, such a plan would attract uninsured people with chronic conditions from surrounding cities, substantially raising the program’s cost. In turn, the need to raise income tax rates would induce many of the community’s more affluent taxpayers to flee to neighboring cities. The resulting death spiral would quickly doom the program.

Like local borders, state borders are completely permeable. So, unless a large number of other states simultaneously enact comprehensive health care legislation of their own, the new Massachusetts program will confront the same problem.

My point is not that states are foolish for having extended their reach. Again, the federal government has completely dropped the ball in these domains. The recent state actions may not be the most efficient ways of dealing with our most pressing problems. But they are an unmistakable signal of voter impatience with ineffective government at the federal level.

(Robert H. Frank, an economist at the Johnson School of Management at Cornell University, is the co-author, with Ben S. Bernanke, of “Principles of Economics.”)

http://www.nytimes.com/2006/04/13/business/13scene.html

Comment:

By Don McCanne, M.D.

Professor Frank has provided a highly credible explanation of the principle that many are now recognizing instinctively: We need a national solution to our health care crisis. That doesn’t mean that we should abandon efforts on the state level to compensate for the failures of our federal government. Rather, it means that we must intensify our efforts to enact an efficient, comprehensive, universal program of single payer health insurance on a national level.

Posted by pnhp at 01:01 PM | Permalink

The New Yorker
by Hendrik Hertzberg
Issue of 2006-04-17 | Posted 2006-04-10

Perhaps you have been wondering who or what is to blame for the high cost of medical care in this land of ours - and, more broadly, for the ungainly, unjust mess that is the American health-care system. If so, wonder no more. Your government has fingered the culprit: it’s “the vast majority of Americans.”

The perp having been collared, the trial held, and the verdict rendered, only the sentencing phase remains. Providentially, our leaders have come up with a punishment that fits the crime. We, the guilty, are to be condemned - or invited, but in any case for the rest of our natural lives, without possibility of parole - to turn over our bodily well-being to “consumer-directed Health Savings Accounts” in conjunction with “high-deductible health policies.”

This judgment was handed down last Monday, in the form of an article on the Op-Ed page of the Times. The piece was no Dowdy jestfest or Friedmanesque memo-to-the-mullahs, and not only because of the dreariness of its style and the banality of its content. Its author, Allan B. Hubbard, identified as “assistant to the president for economic policy and director of the National Economic Council,” has lately emerged as the White House point man on health policy, and, in subsequent days, his Op-Ed proved to have been the overture to a veritable symphony of spin conducted by President Bush himself, including an Air Force One ride to Bridgeport, Connecticut, for a stagy “Panel on Health Savings Accounts.”

Hubbard’s article, headlined “The Health of a Nation,” begins with a frank-sounding acknowledgment that “in the past five years” - that is, since the present Administration took office - “private health insurance premiums have risen 73 percent,” with the result that “some businesses” have dropped coverage altogether. “What is driving this unsustainable run-up in health insurance costs,” Hubbard asks, “and how can we make things better?” Then comes what bloggers call the money quote:

Health care is expensive because the vast majority of Americans consume it as if it were free. Health insurance policies with low deductibles insulate people from the cost of the medical care they use - so much so that they often do not even ask for prices.

Can this really be the Administration’s view of the health-care crisis? That its root cause is that Americans are (a) malingerers and (b) freeloaders who perversely refuse to go comparison shopping when illness strikes? That we�fre overinsured? Hard as it is to believe that this is what they say, it’s even harder to believe that this is what they believe.

Health care is indeed expensive, but not because people are too quick to call the doctor when they experience a scary symptom or merely an annoying one, and not because some of them may bridle at entrusting their health to the lowest bidder. Throughout the Western world, health care is expensive, first of all, because it is expensive, and is bound to get more so as populations age and medical technology advances. Indeed, it should get more expensive, both in absolute terms and as a proportion of national income, because what it aims to provide - healing, the relief of suffering, the staving off of death - is of such inestimable value.

American health care is the most expensive on earth, but this, too, has little to do with overindulgence in seeking medical attention. (Overindulgence in cheeseburgers is another matter.) It has a lot to do with the waste built into what Paul Krugman calls our crazy-quilt health-care system, which has a lot to do with the fact that so much of that system is private rather than public, which in turn has a lot to do with two other factors. One is historical: during the Second World War, industry (with prodding from organized labor) got around wage controls by offering workers health benefits in place of cash, thus saddling the United States with “employer-based” private health insurance - a system now in slow-motion collapse under the competitive pressures of globalization. The other is institutional: even though there has long been popular support here for universal, government-run health care, as there is in Europe and Canada, America’s fragmented political system - riddled with weak points where well-organized, well-financed minorities can thwart the unfocussed will of a majority - has been able to deliver only for seniors and, less generously, for the poor.

Medicare - a mixed system, under which the insurance function is socialized while the care itself remains in private hands - dedicates two per cent of its resources to administration. By contrast, the private health-insurance industry spends a fortune - more than ten per cent of its income - on administrative dreadnoughts devoted largely to vetoing treatments, sloughing off sick or potentially sick clients, and scheming to stick someone else with the bill. In the United States, we spend fifteen per cent of our gross domestic product on health care, close to six thousand dollars per person. The French and the Canadians spend ten per cent of G.D.P., about three thousand dollars per head. Yet their “health outcomes,” measured by indices like longevity, are better than ours. If they spent the kind of money we do, they’d live forever.

Hubbard - who, by the way, is a finalist to be Bush’s next Secretary of the Treasury - is an initiate of the cult of the market, which he evidently regards as the fundamental model for all human relations. For him, sick people who require care are “consumers.” That word and its derivatives appear ten times in the eight hundred and fifty words of his Times piece. (“Patient” appears once. “Sick,” “ill,” and “under the weather” do not appear at all.) Accordingly, the solution that he and Bush are pushing - so-called health savings accounts - puts the onus on “consumers” to fend for themselves in the medical �gmarketplace.�h It�fs probably unnecessary to add that this solution would solve nothing. It would be yet another gift to people in the higher tax brackets, would undermine traditional insurance by pulling young and healthy people out of risk pools, and, with a fine evenhandedness, would discourage people from going to the doctor for real and imaginary illnesses alike. This is a worthy follow-up to the Administration’s prescription-drug program for seniors, another excrescence of market cultism. The elderly had hoped for a straightforward benefit that would have allowed them to acquire, at some affordable price, the medicines their doctors prescribed. What they got was a parody of “choice,” sadistic in its complexity, which forces them or their children or caretakers to game out which of dozens of private “plans” might give them access both to the medicines they need now and the ones they might unpredictably need in the future. The solicitude their government might have bestowed on them was reserved instead for the insurance and pharmaceutical industries. The Administration�fs message to the old and sick is the same as its message to the country after the September 11th attacks: Go shopping. Well, caveat emptor.

Posted by pnhp at 12:43 PM | Permalink

The American health care system seems in an accelerating downward spiral:
wasteful, unsustainably costly, inadequate in quality, and unable to protect millions against the financial burden of illness.

The Harvard Forums underscored the important notion of local communities functioning as laboratories for innovation and testing, assessing what does and does not work before broader adoption.

The authors offer a vision that is sufficiently challenging to encourage our most thoughtful, creative efforts, and also sufficiently realistic to be attainable. They propose a set of steps over a twenty-year period that will put our nation on a course towards a health care system that assures universal health insurance coverage to all Americans, provides optimal quality of care, is affordable, assures improvements in population health, and provides the greatest possible value for health care expenditures.

Stage One - Strengthening and Leveraging Existing Efforts

In this model, state and local governments will act as regulatory enablers, while private stakeholders - large anchor corporations, local health plans, major health care providers, unions, consumer groups - will provide leadership and expertise to launch local health care reform.

Specifically, over the next five years, this strategy advocates strengthening the tax credit and health savings account (HSA) approaches through careful elaboration of all the options and developing devices to mitigate possible unintended consequences and by evaluating these programs to see how well they perform in terms of reaching coverage, population health, and cost goals.

Stage Two - Phasing in a Federalist Approach to Reform

State plans must commit to achieving quantifiable, five year goals for expansion of health insurance coverage, and at least one other domain of the vision outlined above (e.g., quality, affordability, value, population health). (Don’s comment: Note that this does not require universal coverage, and, besides, which three goals would you decide to omit?)

…goals might stipulate…

…goals might include…

…states might propose…

…states could focus…

…States could put in place…

…States could take steps…

…states could undertake…

…(etc., etc.)…

Stage Three - Implementation of State-Based Programs throughout the United States

States that come late to the health care reform table will have the benefit of 15 to 20 years of systematic experimentation with local and state level health system reforms addressing the nation’s most fundamental health care problems. Those experiments will have been carefully evaluated, the results published and thoroughly vetted, and the strategies themselves will have become familiar to the American people. A cadre of experienced health policy leaders will exist in both the public and private sectors that can testify to the strengths and weaknesses of alternative approaches, and will be available to implement change throughout the United States. In other words, the intellectual and human capital necessary for effective change will be ready and waiting for a more comprehensive effort at health system change, whatever form that effort ultimately takes. We further expect that this eventual program of reform will continue to rely heavily on state management, will provide considerable autonomy to state government, and will consist of varied solutions to common problems across the United States.

Conclusion

Policy-making, like politics, should be viewed as the art of the possible.
The current climate cries for action, but the political climate determines the form such action can take. We believe that the program we have outlined will improve the lives of Americans in ways that foster learning, prepare us for all eventualities, and precludes no options as changes in our health care system unfold over the next twenty years.

Harvard University Program for Health Systems Improvement http://www.phsi.harvard.edu/

A Strategy for Health Care Reform: Catalyzing Change from the Bottom Up http://www.phsi.harvard.edu/pdfs/reform.pdf

Comment:

By Don McCanne, M.D.

Wow!

Some of the greatest minds at Harvard University have been given five years to produce a report providing us with a strategy for health care reform in the United States. While acknowledging the profound deficiencies in our very costly system, these geniuses have proposed that we sit around for another two decades waiting to see if someone can do something on the state or local level. Just what do they think the states and counties have been doing during the past century of federal inaction? And tax credits and health savings accounts? We need to bring them out of their closets!

If a freshman Harvard student were to produce this paper in response to an assignment on proposing a strategy for health care reform, the instructor would certainly grade it with an “F” as being totally non-responsive to the assignment.

Posted by pnhp at 10:53 AM | Permalink

By Joseph Lord
Star Staff Writer
04-10-2006

Dr. Henry Duke was touched by what he saw in Mobile after Hurricane Katrina.

He saw people, lots of them, in need of medical help - many of them caught up in the storm�fs destructive wake without medical insurance, or without enough of it.

Duke, a resident physician at Regional Medical Center, long had advocated for universal health care, but he was moved to greater action after he volunteered his expertise and time on the Gulf Coast.

That led to the groundwork being laid for a new advocacy group, which held its first organizational meeting on Sunday in Anniston.

Duke and a handful of local and state activists on Sunday convened the first meeting of Alabama Health Care for All, a membership group that advocates a national, single-payer, universal healthcare program - in essence, government-sponsored health insurance for everyone.

“When you stop and think about it, as rich as this nation is it is a disgrace that we have to have a forum to discuss health care,” said Debra Foster, a former Anniston City Council member.

Foster attended on behalf of the Southern Christian Leadership Conference.

The goal for the statewide organization is to educate the public on the current health-care system�fs problems, and to pressure Congress, particularly representatives from Alabama, to enact universal healthcare, said Duke.

Duke said 45 million Americans don�ft have health insurance. That caused the premature deaths of 18,000 people last year, according to information provided by the organization.

“We want to start making a difference,” Duke told the group.

He wore a T-shirt that quoted Martin Luther King Jr. It read, “Of all the inequalities, injustices in healthcare are the most shameful and inhumane.”

He said the group will be funded through private contributions.

The Rev. Jack Zylman, co-chair of the group with Duke, said their goal can be reached through perseverance.

The group supported House Bill 676 in Congress, which would create a single-payer, universal healthcare program. It also is pushing for passage of legislation that would allow National Guardsmen to receive affordable health-care coverage when they�fre not on active duty.

The first meeting of Alabama Healthcare for All, at the public library on 10th Street, was attended by about a dozen people, whose roles ranged from doctors and nurses to religious leaders.

They�fll meet again at 6 p.m. on Thursday at the Seventeenth Street Baptist Church in Anniston.

Meetings also are planned for Opelika, Huntsville and other cities across Alabama.

Posted by pnhp at 02:29 PM | Permalink

By Dr. Susanne L. King
Berkshire Eagle

Tuesday, April 11

LENOX

MANY PEOPLE have been cheering the new health care bill that was passed by the Massachusetts Legislature, which is supposed to provide universal health care coverage for our state. The bill has three provisions to expand health care coverage to the uninsured. The first is to expand Medicaid eligibility, by allowing more people to qualify for this government program. The second is to offer government subsidies to low-income individuals. And the third is to require those making more than three times the poverty level (about $30,000 for a single person), to buy insurance or pay a fine. The politicians want us to believe that this is a home run, but I am not cheering.

Extending health care to the uninsured so that everyone is covered (universal health insurance) is an important aspect of health care reform. However, it is unclear whether this bill will be able to achieve that goal. In addition, universality is only the first of the five criteria proposed by the Institute of Medicine for health care reform. The other four criteria are not addressed in the current bill: that health care be continuous, i.e., not tied to a job (2); affordable for individuals and families (3); affordable for society (4); and equitable and patient-centered (5).

Politicians have assumed that only 500,000 people in Massachusetts are uninsured. However, the Census Bureau reports 748,000 uninsured, 50 percent more people than were counted in the Legislature’s figure-crunching for the bill. That leaves out a lot of people from the new bill, or costs a lot more money than the Legislature anticipated.

Since health care insurance will still be tied to jobs with this health care bill, it is not possible for it to be continuous. One of the thrusts of the current legislation is to make businesses accountable in supplying health care insurance to their employees. When your health care insurance is tied to a job, it is not portable if you change jobs; and you are forced to change insurance if your employer shifts to a different carrier.

Is the current legislation affordable for Massachusetts? The funding for the bill is nebulous. The state hopes to retain the federal Medicaid dollars that were in jeopardy without an expansion of coverage, but that is a small portion of the current $59 billion health care budget, which is estimated to increase by $25 billion over the next three years. Businesses with more than 10 employees may have to pay $295 per employee if they don’t offer insurance, but Medicaid hikes to hospitals (provided in the bill) will triple the amount garnered from businesses. And the bill projects savings from “market reform” and patients being treated in doctors’ offices instead of emergency rooms. These savings may be imaginary.

Another false assumption is that people will be able to buy affordable insurance. None of the insurance companies have yet offered such plans, but the estimate from the Statehouse is that these low-cost plans may set an individual back about $325 a month. Along with the insurance plan deductible allowed by the legislation, this would work out to more than 20 percent of the income from an individual making $30,000, scarcely an affordable plan.

Is this legislation equitable and patient-centered? Patients still will not have their choice of doctors or hospitals: the insurance plans will continue to dictate who you can see and where you can go for your health care. The promises that the uninsured would be offered comprehensive care through this legislation is also an empty one: the only way to get cheaper plans, and still maintain insurance company profits, is to boost deductibles and co-payments, and provide fewer covered services. Comprehensive coverage is not a feature of this bill. It remains to be seen what devastating gaps will be created. Equitable insurance would be for everyone in the state to have the same health care benefits that our elected representatives have.

Finally, is this legislation affordable for Massachusetts? It does nothing to contain the skyrocketing costs of health care in our state. Instead, it gives new infusions of cash to the private insurers and some big hospitals. The Boston Globe reported that lobbyists for insurance companies, some hospitals, and other major players in the health care industry were paid at least $7.5 million in 2005, as the Legislature took up this bill. This is not health care reform: this is business as usual for the private health care insurance industry.

And as usual, the insurance industry will not just maintain, but will increase, its profits. The American Medical News reported that health plans made more money, and spent less on health care in 2005, than in previous years. While the insurance companies make money providing coverage for the healthy workforce and their young healthy families, we taxpayers foot the bills for those segments of the population with greater health care needs.

If we were to take the $9,100/ year per person that we spend in Massachusetts (more than any state or country in the world), and use it for health care rather than insurance company profits, we would be able to provide truly universal, affordable, continuous, equitable and comprehensive care to the citizens of the commonwealth. We need a single-payer health care system, in which the government collects and administers the funds for health care, eliminating the insurance company middlemen.

That would be a spectacular home run for the state of Massachusetts.

Posted by pnhp at 02:25 PM | Permalink

Press Release

For Release: April 10, 2006
For More Info: Mark Dunlea, 518 434-7371, ext 1

Universal health care advocates said today that New York should followed the lead of the State of Massachusetts in taking action to provide quality, affordable health care coverage to all its residents.

The groups however said that the Massachusetts program is seriously flawed, focusing more on increasing payments to hospitals and insurance companies rather than on ensuring universal access to quality, affordable health care.

The groups called on NYS to join half a dozen other states in creating a Commission on Health Care Coverage to do independent cost-benefit analysis of the various ways NY could provide health care to all New Yorkers.

“Health care for all is an essential goal. We can not afford to spend one of out six dollars in our economy to prop up a patchwork, inadequate health care system that excludes tens of millions of America from coverage. Every other industrial country has already figured in out. America should be able to figure out how to put the public good ahead of campaign contributions from special interests. And with Congress stalling, individual states have to step forward to create their own universal health care plans to protect taxpayers and consumers,” stated Mark Dunlea of the Hunger Action Network of New York.

The Commission, endorsed by more than 250 organizations, would evaluate proposals such as Medicare for All (single payer); the new Massachusetts program; employer mandates; Medical Savings Accounts; and tax credits. This commission process was used in Maine to develop its proposal to provide health care to all residents.

Many of the groups support the proposal by the Physicians for a National Health Program to expand Medicare to cover all Americans. Such a single payer system would save hundreds of billion of dollars, starting with a major reduction in administrative costs. A recent study by the Lewin group estimated that a single payer system just for California would save $38 billion annually.

Dr. David Himmelstein, the national cofounder of PNHP, said that the recent Massachusetts proposal fell far short of providing quality affordable health care for all.

“The linchpin of the plan is the false assumption that uninsured people will be able to find affordable health plans,” observed Dr. Himmelstein. A typical group policy in Massachusetts costs about $4500 annually for an individual and more than $11,000 for family coverage. According to Census Bureau figures, only 12.4% of the 748,000 uninsured in Massachusetts are both young enough to qualify for low-premium plans (under age 35) and affluent enough (incomes greater than 499% of poverty) to readily afford them. Yet even this 12.4% figure may be too high if insurers are allowed to charge higher premiums for persons with health problems.”

“The legislation promises that the uninsured will be offered comprehensive, affordable private health plans. But that’s like promising chocolate chip cookies with no fat, sugar or calories. The only way to get cheaper plans is to strip down the coverage – boost co-payments,, deductibles, uncovered services etc. Hence, the requirement that most of the uninsured purchase coverage will either require them to pay money they don’t have, or buy nearly worthless stripped down policies that represent coverage in name only,”Himmelstein added.

“Finally, the legislation will do nothing to contain the skyrocketing costs of care in Massachusetts – already the highest in the world. Indeed, it gives new infusions of cash to hospitals and private insurers. Predictably, rising costs will force more and more employers to drop coverage, while state coffers will be drained by the continuing cost increases in Medicaid. Moreover, when the next recession hits, tax revenues will fall just as a flood of newly unemployed people join the Medicaid program or apply for the insurance subsidies promised in the reform legislation. The program is simply not sustainable over the long – or even medium – term,” he concluded.

“Access to health care is a matter of human dignity. It is about the stewardship of our resources. Our elected representatives must listen to the voices of all New Yorkers, especially those who have no access to decent medical care, whose voices are marginalized. These are the people whom we all have a special responsibility to support and protect. Enacting the Commission and the process of open hearings and public studies is an important step in ensuring that the best interests of all the people is our priority,” stated Rev. Cass Shaw, General Presbyter for the Albany Presbytery.

“Despite the fact that health care is now half of the state budget, the Governor and Legislature have failed to embrace comprehensive approaches to controlling costs while providing quality, affordable health care to all. The fact that millions of New Yorkers â€�g as many as one in three during any one year – lack adequate health care coverage is a huge factor in causing financial problems both for Medicaid and hospitals, yet state lawmakers refuse to tackle the problem due to the power of the insurance and drug companies. Instead, they continue to offer incremental changes in coverage while the overcall cost of health care continues to skyrocket,” said Mark Dunlea, Associate Director of the Hunger Action Network of New York State.

Legislation to establish such a commission has been introduced in New York by Assemblymember Richard Gottfried (A6575) and Senator John Marchi (S 4928), among others. In Illinois, the Legislature is required to adopt a universal health care program within a year after the Commissions studies are completed. Advocates want NY to adopt a similar model, with the commission to start on January 1, 2007 to meet objections by Senator Hannon that the Hospital Closing Commission should first finish its work. The groups agree with Senator Marchi that the Governor should appoint the Chairperson of the Commission.

“One of our main concerns in patient safety. What kind of patient safety do you have if you lack health insurance? 3 million people in New York State lack health insurance and patient safety. They have documented excess illness and deaths. Their preventive care is nil. Serious illness is unsafe for a family’s finances. Costly and inefficient healthcare is unsafe for the competitivensss of our economy. Society as a whole would benefit from a universal healthcare financing system that includes all citizens. The needs of patients and healthcare professionals must come first. A legislative commission is needed to study and act on our worsening healthcare non-system, concluded Richard Propp, MD, Chairperson, Capital District Alliance for Universal Healthcare.

Posted by pnhp at 02:19 PM | Permalink

Originally Published April 8, 2006

Des Moines Register Editorial Board

On Tuesday, the Massachusetts Legislature passed a bill mandating all residents purchase health insurance. The philosophy is right: Everyone should have health insurance. It should be affordable. When people are uninsured, everyone pays.

But it’s difficult to get too excited about what Massachusetts did to cover its roughly 550,000 uninsured residents. The bill requires businesses to offer insurance or face financial penalties, but it doesn’t guarantee that insurance be adequate. Individuals must buy insurance or face tax penalties, but it doesn’t define what “affordable” health insurance means. It expands health care for lower-income residents, but much of the money comes from shuffling
existing dollars.

Worst of all, it mandates residents participate in a dysfunctional system that largely ties health care to employment. Every other industrialized country in the world knows it’s a bad idea to tie health care to jobs. It kills entrepreneurial spirit, saddles business with huge costs and forces employers to choose between their bottom lines and the best health policies for workers.

The Massachusetts bill also funnels even more dollars to private insurance companies that may waste money on administration. According to a 2003 Harvard Medical School study, nearly one-third of all U.S. health-care expenditures goes to administration and bureaucracy. That includes insurance-company paper pushers and all the people doctors offices employ to navigate the thousands of insurance plans.

Massachusetts Gov. Mitt Romney, who is considering a run for president, has boasted that the plan gets everyone covered without new taxes or a government takeover.

Yet when it comes to health care, the government is hardly the enemy. Indeed, it may be the best hope.

Medicare provides uniform coverage with low administrative costs for more than 40 million seniors and disabled people. Though it needs some fixing, a Medicare-like system for everyone would be more efficient and use fewer dollars on administration than private insurance.

Given the inaction on health-care reform at the federal level, state legislatures are trying to take on the job. While the desire by Massachusetts lawmakers to cover everyone is philosophically right, the approach isn’t.

The fix has to come from a different group of lawmakers - the ones in Washington.

Posted by pnhp at 02:08 PM | Permalink

The New York Times
Published: April 9, 2006

To the Editor:
Your reports about Massachusetts’ health reform legislation treat politicians’ overblown claims as gospel.

The legislation completely ignores one-third of the uninsured, dismissing the Census Bureau’s estimate that 748,000 lack coverage in Massachusetts in favor of an estimate of 500,000 derived from a phone survey.

The linchpin of the promised coverage is a requirement that most of the uninsured buy their own coverage, and assurances that private insurers will offer affordable, comprehensive policies.

But already reports have surfaced that these new policies will be far costlier than promised, putting them out of reach of most of the uninsured and sharply raising the costs of state subsidies to help the very poor.

Predictably, rising costs will force more employers to drop coverage, while state coffers will be drained by the continuing cost increases in Medicaid. When the next recession hits, tax revenues will fall just as a flood of newly unemployed people join the Medicaid program or apply for the insurance subsidies promised in the reform legislation.

The program is simply not sustainable over the long or even short term. In contrast, a single-payer reform could save $9 billion a year on bureaucracy in Massachusetts, more than enough to cover the uninsured and to upgrade coverage for the rest of us.

David U. Himmelstein, M.D.
Steffie Woolhandler, M.D.
Cambridge, Mass., April 6, 2006
The writers, associate professors of medicine at Harvard, co-founded Physicians for a National Health Program.

Posted by pnhp at 01:57 PM | Permalink

Originally Published 4/4/2006

Countries that have national health services easily accessible to people of all ages are more likely to have better survival rates for their teenagers and young adults (TYAs) with cancer, than are countries where individuals have to pay for their own medical insurance.

This is the suggestion that arises from new research presented at the 4th International Conference on Teenage and Young Adult Cancer Medicine, in which the health care systems of the United States of America and Australia were compared.

Professor Archie Bleyer told the conference, organised by Teenage Cancer Trust, that Australia’s system of health insurance for all, regardless of age, meant that TYAs were more likely to survive cancer in Australia than they were in the USA.

Prof Bleyer, who is medical advisor at the Cancer Treatment Center, St Charles Medical Center, Bend, Oregon, said: “However, both countries have a lower survival rate for their TYAs than for their younger and older patients, proving that TYAs remain the most neglected group of cancer patients across the globe.

“Our previous research has shown that the survival of older teenagers and young adults with cancer in the United States has lagged behind progress in younger and older patients. We found that diagnosis was delayed in TYAs who either lacked health insurance or had inadequate insurance, and therefore this lack of progress might be due to the USA health care system and less expected in countries with national health insurance.

“During the past year we have compared survival of TYAs in the USA with those in Australia, a country similar in many demographics to the USA, but with health insurance provided to all citizens regardless of age.

“From 1982 to 1998, the rate of improvement in the five-year survival from invasive cancer in Australia exceeded that which occurred in the USA, such that by the late 1990s, TYAs in Australia had an overall five-year cancer survival that was higher than in the USA. The deficit begins at 16 and ends at 55, the same years that national health insurance is not available in the USA. It ranges from 5% for 18 to 25 year-olds to 12% for those aged 30 to 35. This difference suggests that the health care system in Australia, with universal health insurance, was able to provide better cancer care to its TYAs.

“The advantage for Australian TYAs was not apparent in their children or older adults with cancer. This suggests that the need for private health insurance in the USA is responsible for the worse survival of TYAs, in that children and older adults in the USA are more adequately insured than TYAs.”

In the USA the greatest improvement in survival occurred amongst patients aged over 65 for whom national health insurance is provided.
Prof Bleyer said: “Both countries, however, had a lower rate of improvement in the five-year cancer survival rate among TYAs than in either younger or older patients, albeit the relative deficit was greater in the USA than in Australia.

“These comparisons indicate that the relative lack of progress in cancer outcome among TYAs in the USA is due, at least in part to the lack of health insurance,” he said.

However, he warned that even in countries where there was national health insurance for all, this didn’t necessarily guarantee access to good diagnosis and treatment for cancer patients, and particularly not for TYAs.

“Good health care systems make a huge difference in prolonging survival and reducing deaths amongst TYAs with cancer,” he said. “The failure to improve survival amongst 15 to 29-year-olds over the last quarter of a century is striking and there are reasons that are common between different countries. These include the tendency for adolescents and young adults to wait longer before consulting a doctor about symptoms, lack of a regular and usual source of primary care, delays in diagnosis by doctors not used to seeing young people with cancer, the wide spectrum of cancers contracted by TYAs, physicians poorly trained in caring for TYAs with cancer, and, most importantly, the lack of participation in clinical trials for this age group.”

Some countries belatedly were waking up to this problem, he said. In the UK, the National Institute for Health and Clinical Excellence (NICE) issued new guidance for the treatment of under-19s in August 2005. “In the USA the National Cancer Institute has initiated a major review of the national status of cancer in this age group. Known as a Progress Review Group, the nation’s experts will evaluate all available data, determine the severity and potential solutions, and provide an official report of recommendations,” he said.

“In addition, the President’s Cancer Panel is working on a similar report on the survivorship of young Americans with cancer. Both efforts include a review of the role of health insurance and health care delivery systems in the new medical frontier that is TYA oncology.”

Posted by pnhp at 01:50 PM | Permalink

Conference Committee Report
Health Care Access and Affordability
The Commonwealth of Massachusetts
4/3/2006

This Conference Committee Report contains a comprehensive plan for increasing health insurance coverage for all residents of Massachusetts.

This bill is a bridge between principles in the House and Senate bills, H 4479 and S 2282. The bill would redeploy current public funds to more effectively cover currently uninsured low-income populations, and would make quality health coverage more affordable for all residents of the Commonwealth. The bill promotes individual responsibility by creating a requirement that everyone who can afford health insurance obtain it, while also responding to concerns about barriers to health care access. Provisions in the bill aim at achieving nearly universal health insurance coverage, but also maintain a strong safety net that has historically distinguished the state. Finally, the bill would ensure that the Massachusetts Medicaid program complies with the terms of the new federal waiver, maintaining continued receipt of annual payments from the federal Medicaid program.

http://www.mass.gov/legis/summary.pdf

House Act No. 4850
http://www.mass.gov/legis/bills/house/ht04/ht04850.htm

And…

Lobbyists took in $7.5m on health bill
By Scott Helman
The Boston Globe
April 5, 2006

The House and Senate both passed the healthcare bill overwhelmingly yesterday, sending it to Governor Mitt Romney, who is expected to sign the bill, though he may veto some components of it.

Lobbyists for hospitals, insurance companies, and other major players in the healthcare industry were paid at least $7.5 million in 2005 as the Legislature took up a major healthcare bill, records show.

The bill provides a potential boon to health plan providers such as Blue Cross-Blue Shield of Massachusetts and Harvard Pilgrim Health Care, each of whom spent six-figure sums on lobbying in 2005. The healthcare bill calls for tens of thousands of uninsured people to purchase new subsidized insurance plans, which means insurers stand to get many new customers. For lower-income people, the state will help pay for private insurance coverage.

http://www.boston.com/news/local/massachusetts/articles/2006/04/05/
lobbyists_took_in_75m_on_health_bill/?page=full

Comment: By Don McCanne, M.D.

Our goal is affordable, comprehensive health care for everyone. This bill meets the private insurers’ goal of an expanded market for their administrative excesses.

This bill supposedly promises comprehensive benefits for 99 percent of Massachusetts residents, at an affordable cost for all. But where’s the money? As an example of the nebulousness of the funding, employers who do not provide insurance for their employees will be assessed $295 per uninsured employee per year, if Gov. Romney doesn’t line-item veto even that provision. What would that buy?

Also, though they contend that benefits are comprehensive, the legislation does allow innovations such as health savings accounts and policies for the young invincibles providing “only the coverage they need,” such as coverage for skateboard fractures. There is question as to how much benefit innovation will be allowed.

No attempt will be made here to cover the many flaws in this legislation. Suffice it to say that the stand-alone goal of near-universal coverage is not adequate. The coverage must be truly universal, truly comprehensive, and truly affordable. Enlisting the private insurers will bring us far more administrative services than we can afford, but the insurers, in turn, will fail the back-of-the-envelope test. As they craft pseudo-comprehensive plans for everyone, they’ll have the same question that we have: where’s the money?

Well, it’s already there. We simply need to take it away from the insurers and spend it on health care. We could do that merely by adopting an efficient, single-payer system.

Posted by pnhp at 03:45 PM | Permalink

For Immediate Release: April 5, 2006

Contacts:
Steffie Woolhandler, M.D., 617-497-1268
David Himmelstein, M.D., 617-665-1032
Nick Skala, 312-782-6006

Statement by Steffie Woolhandler, M.D., M.P.H. and David U. Himmelstein, M.D.

It’s a stirring scene. The Governor, legislative leaders and leaders of Health Care For All standing in the State House Rotunda declaring victory in the fight for universal health coverage. Unfortunately, this weeks tableau merely repeats one from 20 years ago when Governor Dukakis was celebrating passage of his universal healthcare bill. That plan imploded within two years, and today about 250,000 more people are uninsured in Massachusetts than the day it was signed. Unfortunately, Massachusetts’ new health reform legislation looks set to repeat that disaster.

What’s in the New Bill?

The new bill includes three key provisions meant to expand coverage. First, it would modestly expand Medicaid eligibility. Second, it would offer subsidies for the purchase of private coverage to low-income individuals and families, though the size of the subsidies has yet to be determined. Finally, those making more than three times the poverty income (about $30,000 for a single person) would have to buy their own coverage or pay a fine.

To help make coverage more affordable, a new state agency will connect people with the private insurance plans that sell the coverage, and allow people to use pre-tax dollars to purchase coverage (a tax break that mostly helps affluent tax payers who are in high tax brackets). This new agency is also supposed to help design affordable plans.

Businesses that employ more than 10 people and fail to provide health insurance will be assessed a fee (not more than $295) to help subsidize care. Additionally, hospitals won a rate hike assuring them better payments from state programs, and several provisions were included that are meant to attract additional Federal funding to help pay for the Medicaid expansion.

What’s Wrong With This Picture?

First, the politicians assumed that only about 500,000 people in Massachusetts are uninsured. The Census Bureau says that 748,000 are uninsured. Why the difference? The 500,000 figure comes from a phone survey conducted in English and Spanish. Anyone without a phone or who speaks another language is counted as insured. The 748,000 figure comes from a door-to-door survey carried out in many languages (including Portuguese and Haitian Creole, common languages in Massachusetts). In sum, the reform plan wishes away 248,000 uninsured people who don’t; have phones or don’t speak English or Spanish. It provides no funding or means to get them coverage.

Second, the linchpin of the plan is the false assumption that uninsured people will be able to find affordable health plans. A typical group policy in Massachusetts costs about $4500 annually for an individual and more than $11,000 for family coverage. A wealthy uninsured person could afford that, but few of the uninsured are wealthy. A 25 year old fitness instructor can find a cheaper plan. But few of the uninsured are young and healthy. According to Census Bureau figures, only 12.4% of the 748,000 uninsured in Massachusetts are both young enough to qualify for low-premium plans (under age 35) and affluent enough (incomes greater than 499% of poverty) to readily afford them. Yet even this 12.4% figure may be too high if insurers are allowed to charge higher premiums for persons with health problems; only half of uninsured persons in those age and income categories report that they are in excellent health.

The legislation promises that the uninsured will be offered comprehensive, affordable private health plans. But that’s like promising chocolate chip cookies with no fat, sugar or calories. The only way to get cheaper plans is to strip down the coverage, boost copayments, deductibles, uncovered services etc.

Hence, the requirement that most of the uninsured purchase coverage will either require them to pay money they don’t have, or buy nearly worthless stripped down policies that represent coverage in name only.

Third, the legislation will do nothing to contain the skyrocketing costs of care in Massachusetts, already the highest in the world. Indeed, it gives new infusions of cash to hospitals and private insurers. Predictably, rising costs will force more and more employers to drop coverage, while state coffers will be drained by the continuing cost increases in Medicaid. Moreover, when the next recession hits, tax revenues will fall just as a flood of newly unemployed people join the Medicaid program or apply for the insurance subsidies promised in the reform legislation. The program is simply not sustainable over the long - or even medium - term.

What Are the Alternatives?

The legislation offers empty promises and ignores real - and popular - solutions.

A single payer universal coverage plan could cut costs by streamlining health care paperwork, making health care affordable. Massachusetts Blue Cross spends only 86% of premiums paying for care. It spends the rest - more than $700 million last year - on billing, marketing and other administrative costs. Harvard Pilgrim and Tufts Health Plan ・our other big insurers - are little better; each took in about $300 million more than it paid out. That痴 ten times as much overhead per enrollee as Canada痴 national health insurance program. And our hospitals and doctors spent billions more fighting with insurers over payments for each bandaid and aspirin tablet.

Overall, Massachusetts residents will spend $13.3 billion on health care bureaucracy this year - nearly one third of our total health bill. If we cut bureaucracy to Canada痴 levels we could save $9.4 billion annually, enough to cover all of the 748,000 uninsured in Massachusetts and to improve coverage for the rest of us.

Study after study - by the Congressional Budget Office, the General Accounting Office and even the Massachusetts Medical Society - have confirmed that single payer is the only route to affordable universal coverage.

And single payer is popular. The Massachusetts Nurses Association supports it along with dozens of other labor, seniors and consumer groups; so do 62% of Massachusetts physicians according to a recent survey. National polls find that almost two-thirds of Americans favor a tax-funded plan like Medicare that would cover all Americans.

But single payer national health insurance threatens the multi-million dollar paychecks of insurance executives, and the outrageous profits of drug companies and medical entrepreneurs.

It’s time for politicians to stand up to the insurance and drug industries and pass health reform that can work.

Steffie Woolhandler and David Himmelstein are primary care physicians at Cambridge Hospital and Associate Professors at Harvard Medical School. They co-founded Physicians for a National Health Program.

Physicians for a National Health Program is an organization of 14,000 physicians that support universal access to health care. PNHP is headquartered in Chicago and has chapters and spokespeople across the U.S. To contact a physician-spokesperson in your area, contact nick@pnhp.org or call 312-782-6006. www.pnhp.org.

Posted by pnhp at 03:39 PM | Permalink

By Milt Freudenheim
The New York Times
Published March 31, 2006

Critics who say the private insurance industry got too big a role in the new Medicare prescription drug program may not know the half of it.

For patients, the program’s rollout has had mixed reviews, with many happy customers but more than a few tales of woe. But for many big insurers, the new Medicare program is shaping up as a great opportunity. And prescription drugs may be only a starting point.

So far, about 18 million Americans are participating in the new drug program, known as Medicare Part D. If things play out the way some big insurers hope, the drug program could prove to be a feeder system into a much greater private presence in Medicare � a longstanding goal of the Bush administration.

Insurers like Humana, which says it has signed up 1.7 million Medicare drug plan members, know that the real money is not in providing drug insurance. The rewards are much richer in other types of Medicare policies, including complete managed care plans called Medicare Advantage, which are operated by the private insurers but subsidized by Medicare. Michael B. McCallister, Humana’s chief executive, refers to the new Medicare Part D drug program as part of a broader “Medicare opportunity” for his company.

“There’s going to be a lot of people that are going to have Part D cards that are going to become interested in a Medicare Advantage plan,” said Mr. McCallister, who has been unusually candid about the springboard strategy.

In January and February, which were the first months of the Part D drug program, Humana was also able to add more than 140,000 new Medicare Advantage customers to its rolls.

One of them was Frank Stallings, 78, a retired college professor in Highland Heights, Ky., who recently switched from a Part D plan to a Humana Medicare Advantage plan.

“So far, Part D has worked O.K.,” he said. “I felt like I needed something else to help me out with other things not covered by Medicare.”

Unlike his Part D drug plan, which carried a monthly premium of $26, there is no premium for his full-coverage Medicare Advantage plan � although his drug co-payments are a bit higher, and there will be co-payments for some other medical services.

Other big insurers like Wellpoint and the UnitedHealth Group � the Part D leader so far, with 4.5 million enrollees � are also recruiting members for Medicare Advantage, as well as customers for Medigap, another type of Medicare-related policy. Medigap is a supplemental policy that helps with the remainder of medical expenses not fully covered by conventional Medicare.

While the stand-alone Part D drug plans are expected to give insurers a small profit, the margins are likely to be thin � 1 percent to 3 percent before taxes, Humana estimates. That is partly because Humana is offering low premiums and co-payments to attract customers. And the federal subsidy for each customer in a stand-alone Medicare drug plan is only about $75 a month.

But for providing a full Medicare Advantage health policy to a patient, the government pays the insurer $900 to $2,000 a month beyond whatever premium, if any, the patient pays. With that revenue, come bigger profit margins � 3 percent to 5 percent, according to James H. Bloem, Humana’s chief financial officer.

For UnitedHealth, the Part D drug business by itself would not be particularly lucrative, adding only 5 to 7 cents to earnings a share, according to Jason Nogueira, an analyst who tracks health care companies for the investment firm T. Rowe Price. That would be no more than 2 cents on the sales dollar for UnitedHealth, which had $45 billion in 2005 revenue and expects profit of $2.90 a share this year.

So the real financial opportunities lie in upgrading Part D enrollees to other Medicare-linked policies. In essence, the high federal subsidies for Medicare Advantage policies are the government’s reward to insurers for taking people out of traditional, federally supervised Medicare and into the commercial world of managed care. In fact, Medicare now pays private insurers 15 percent more, on average, to take a patient than it spends in a traditional government program for each patient.

Critics of Medicare’s approach, including a number of senior Democrats in Congress, have asked the Congressional Budget Office to examine the issue. The budget office estimated that Medicare could save more than $40 billion over the next 10 years if subsidies to insurers were scaled back to the levels the program now pays directly to doctors and hospitals.

Representative Pete Stark of California, the senior Democrat on the Ways and Means Committee, said in an interview that insurance agents “are out trying to promote seniors into Medicare Advantage plans, and switch them out of plans they are in.”

The Medicare law that created the Part D program, Mr. Stark said, “was written by insurance company lobbyists with the help of pharmaceutical company lobbyists.”

In a telephone interview, Michael O. Leavitt, the secretary of health and human services, defended the administration’s market-based approach to Medicare, saying that market forces were pushing prices lower and that any kinks in Part D would be worked out.

“The market will become simplified because consumers want that,” Mr. Leavitt said.

As long as the incentive of federal subsidies stays at current levels, insurers have every reason to pursue them, especially as the industry struggles with slowing growth in its traditional core business of managing employer-sponsored health benefits.

Charles Boorady, a health care securities analyst at Citigroup, said that by expanding Medicare-subsidized offerings, the insurance industry had a potential revenue opportunity of more than $450 billion a year “or enough to almost double the revenue of the managed care industry.”

Even before the new drug plan went into effect in January, some insurers had significant numbers of Medicare Advantage customers. Humana, for example, had 558,000. UnitedHealth had 1.1 million in Medicare Advantage; it also had an additional 2.5 million AARP customers with Medigap cards, and most of them have added the Part D coverage that UnitedHealth is offering through AARP.

By the end of February, Humana had already raised its total of Medicare Advantage members to 700,000 and had set a goal of 900,000 to 1.1 million by Dec. 31. The company expects to add more in 2007. New figures released by Medicare last week indicate that 6.3 million of the 18 million people enrolled in Plan D voluntarily signed up for the drug program; in all, 43 million people are eligible for it. An additional 5.7 million in the program are people who were subscribers to Medicare Advantage health plans that did not cover prescription drugs but they added the coverage.

The government’s real gift to the insurers was 6.4 million low-income people on Medicaid or other public-assistance programs who were automatically assigned to Part D or Medicare Advantage plans. They were allocated among insurers ready to meet Part D rules, with most going to those that had Medicare Advantage plans throughout the United States.

Under this allocation, the government gave UnitedHealth 1.2 million Medicaid assignees; the next biggest were Humana and Wellpoint, which each got about 600,000.

Those insurers can be sure of collecting 100 percent of the premium from the government for the lowest-income enrollees, and they are paid on a sliding scale if the enrollees are eligible for other state assistance.

Not everyone, though, sees a huge opportunity in the industry using the Medicare drug program as a springboard into fuller lines of coverage.

Ed Kroll, an analyst at the investment research firm SG Cowen, notes that in the past, prescription drug coverage was a major reason people signed up for a Medicare Advantage managed care plan. Now, with Part D, people can have their drugs paid for without joining a broader plan, he said, and can simply let plain old Medicare benefits cover their other health needs.

Aetna, the third-largest insurer, after Wellpoint and United, has not made a big push into Part D. The company has only 375,000 Part D drug plan enrollees so far. Aetna � like Cigna, the No. 4 insurer � is more concerned with commercial customers and is “not strategically focused on Medicare or Medicaid,” Mr. Boorady of Citigroup said.

Even for companies like Humana, which do have that focus, the big challenge will be overcoming the bad publicity the Part D program has tended to receive in the early going. And for those who do agree to trade up, insurers will not be able to take their loyalty for granted.

Florence Bryan 65, a retired grocery worker in Winchester, Va., met a Humana saleswoman in a Wal-Mart store late last year; she was promoting Part D and Medicare Advantage. “I went on her recommendations,” said Ms. Bryan, who joined a Humana Medicare Advantage plan in January. Now, she has her “first glitch.” Her Humana plan covers only half her monthly requirement of 60 Prevacid pills, which she for stomach problems. “The Humana representative said the doctor should call an 800 number to get an authorization,” she said. “But the doctor’s office said the insurance company needs to fill out a form and send it to the doctor.” When contacted, a Humana spokesman said the company intended “to resolve this issue for Mrs. Bryan as soon as possible.”

Posted by pnhp at 12:54 PM | Permalink

Effective, efficient health care for everyone
By Ivan Imm, guest columnist
Published Wednesday, March 29, 2006
Winona Daily News

Our health care system in America is broken and in crisis. Millions of hard-working Americans have no health insurance, and those who have it are paying more every year for poorer coverage and higher deductibles. Last fall, I wrote a column describing a simple, workable solution to this crisis. Called �single-payer� health care, it would provide health insurance to every person in America.

Medicare is a �single-payer� system already in place. Those older than 65 visit the doctor of their choice, and the government (the �single-payer�) pays that doctor. It�s simple. No insurance companies are involved; no HMO bureaucrat is telling you what�s not covered or what doctor you can or can�t see.

That�s the way a national, universal single-payer health system would work. Also known as �Medicare-for-All,� it would extend this Medicare model to cover every American, regardless of age. But is Medicare a good enough program to extend to the entire population? Let�s take a look.

Most anyone enrolled in Medicare will tell you that it is a well-run, efficient system, and that they are generally quite satisfied with it. The one exception to this is Part-D, the new drug-coverage portion of Medicare.

Medicare is lean and efficient. Its administrative costs are 3 percent. This means that for every dollar we put into it, only 3 cents goes toward paperwork, salaries and other overhead.

Let�s compare that with the health care situation we who are younger than 65 are saddled with. For every dollar we put into the current non-Medicare system, 30 cents is used up by overhead. That�s not surprising, when you think about all the costs involved: legions of paper-pushers handling millions of billing statements, people hired to second-guess and hamstring your doctor in how she can treat you, rules and regulations on what providers you can use.

The man who directs the entire Medicare program is paid about $140,000 a year, whereas the total compensation of the top executive of a leading HMO over past two years was more than $120 million! That is truly obscene. Any wonder medical costs are shooting sky-high?

The fact that Medicare is well-run and efficient should be enough for us to support a move to extend it to all of us. What other positive benefits would there be?

Would strengthen business, schools

For one thing, changing to a Medicare-for-All system would strengthen American business. Most employers provide health insurance to their workers, but a growing number of small businesses cannot afford to continue offering their employees insurance. Even for behemoths such as Ford, GM and Northwest Airlines, the cost of health insurance is pricing them out of the market, and they are slashing the benefits they provide to their workers, as well as being forced to raise prices.

For another, a single-payer system can help assure the strength of our schools and local government services, both of which now are drowning in health care costs. It isn�t primarily the price of books or the salaries of teachers that is causing K-12 school systems to cut staff and programs. It is the cost of health care. With all of the money suddenly made available because it no longer had to pay for its employee health insurance, a school system would have much less need for referendums and bake sales.

Important questions

Is the quality of U.S. health care superior to that found in other countries?

How do the costs of U.S. health care compare with the cost in other countries?

Would Medicare for all be a clone of the system Canada uses?

How will research and development of new drugs be affected by such a change?

What exactly are �consumer-driven� health care and Health Savings Accounts?

Who benefits most from Health Savings Accounts?

Does the media perpetuate a �blame the victim� approach in discussing healthcare solutions?

Would a change to a single-payer happen all at once? Or in steps?

How would the middle-class be affected by adoption of single-payer?

Is there anything an average citizen can do to help change our health care system for the better?

I�ll tackle these questions in my final couple of columns on health care.

Ivan Imm served as director of public health planning units and public health programs for the state of Wisconsin, served on the board of the Wisconsin Consortium for Primary Care and was vice chairman of the Wisconsin Statewide Healthcare Workforce Forum. He has been a member of the Minnesota State College and University System Health Education Industry Partnership Council and is a health care consultant to the MnSCU system. He can be reached at imm3944@acegroup.cc.

Guest views are opinions of the author and don�t necessarily reflect the views of the Winona Daily News. They are published to stimulate thought and to provide an expanded forum on issues of local interest.

Posted by pnhp at 12:49 PM | Permalink

Opinion
Daily Gazette, Schenectady, NY
Published Sunday, March 26, 2006

Advocates of a new state law that would mandate medium- to large-sized employers to pay for their workers’ health insurance have cause to be frustrated by the status quo in health care: It’s an inadequate system that in New York alone has pushed hundreds of thousands of low-wage workers onto the Medicaid rolls and left even more without any insurance. Still, their pro posal would be ruinous for thousands of New York businesses, and driving them into bankruptcy or across state lines would hardly do the working poor - or state and local governments - much good.

The bill would be incredibly expensive, forcing businesses to pay $3 per working hour for each employee. Some of these workers - in the retail sector, for example - may only be making $8 or $9 an hour; so the bill would effectively raise their employers’ payroll costs by a third. In a competitive business world, that kind of hit could be fatal. If the business were near a border and had to compete across state lines, for example, they couldn’t raise prices enough to cover their costs. And even if they could, would the resulting inflation be good for the economy?

In addition, the bill would be a disincentive for small- to medium-sized companies - those with fewer than 100 workers - to keep growing, lest they crossed the threshold and had to start paying for health insurance.

Health insurance is an enormous burden on whoever has to pay for it - individual, employer, employee or government. While ideally, all employers would offer their workers some coverage, the idea of forcing them to is flawed - especially when the plan would be so expensive and when only certain employers would have to go along.

It pretty much has to be an all-or-nothing proposition, and all is clearly preferable. But to be done properly, it should be offered by a single payer - the U.S. government - which would allow far greater economies of scale than any other option.

Posted by pnhp at 12:40 PM | Permalink

Letter to the Editor
Huntsville Times
Published Monday, March 27, 2006

The Association Health Plans proposed by President Bush and now being considered by Congress will not be of any help to middle-class and working families. It is a plan for the rich who can already afford health care.

Here is what it would do:

Increase the number of uninsured by up to a million workers.

Increase premiums for 86 percent of small businesses.

Deny coverage to older and sick people.

Dodge state coverage requirements, like childhood vaccinations.

Allow exemptions from mandated benefits, like cancer screening.

Eliminate our power to appeal rejected claims.

Hard-working families need relief from the rising costs of health care, not a plan making our insurance less affordable, less accessible and less secure.

We refused to let Bush “privatize” Social Security. We can refuse to let him mess up the health care we have.

What we need is a single-payer, national health care system that covers everybody.

It’s shameful that one-fifth of our population have no health care.

Reese Danley-Kilgo
Huntsville, 35802

Posted by pnhp at 12:37 PM | Permalink

for a printable pdf version of this letter (click here)
for a fact sheet on the Massachusetts bill (click here)

Governor Mitt Romney
State Capitol
Boston, MA 02133

November 3, 2005

Dear Governor Romney, Speaker DiMasi and Senate President Travaglini:

We urge you to abandon your ill-conceived proposals for health care reform and to adopt, instead, a single payer program of universal coverage for the Commonwealth.

As physicians and health professionals, we witness the heavy toll of unnecessary suffering endured by patients who delay care and even forego vital treatment due to costs. While the uninsured bear the heaviest burden, many with insurance also find care unaffordable due to co-payments, deductibles and restrictions on coverage. Reforms should address the grave problems of both groups.

Your plans to loosen regulations on health insurance, allowing ever-skimpier coverage, would perpetrate a cruel hoax. Such cut-rate policies would cost families thousands of dollars yet offer miserly care and little protection from financial ruin in the face of serious illness. Many who currently enjoy adequate coverage would doubtless be forced into plans with gaping holes and onerous restrictions on choice. If there is one thing worse than being uninsured it’s paying dearly for worthless coverage.

Your view that we can achieve universal coverage by forcing people to buy themselves insurance ignores the most basic facts about who is uninsured. Only 12.4% of the 748,000 uninsured in our state are both young enough to qualify for low-premium plans (under age 35) and affluent enough (family incomes greater than 499% of poverty) to readily afford them. Yet even this 12.4% figure may be too high if insurers are allowed to charge higher premiums for persons with health problems; only half of uninsured persons in those age and income categories report that they are in “excellent health” (The statistics in this paragraph were obtained by analyses of data that the Census Bureau collected on Massachusetts residents in March 2005).

Proposals to raid the existing free care pool in order to partially subsidize cut-rate policies would actually worsen the plight of many who are currently uninsured. Under such reforms, patients now eligible for free or low-cost services would often face greater restrictions on care and higher out-of-pocket costs. The only real winners would be the private insurers who would surely gain millions from the sale of near-useless policies.

Replaying Dukakis’ failed employer mandate, i.e. making employers pony up more money for coverage, will not lead to universal coverage. As Dukakis found, relentlessly rising health costs quickly stir rebellion among powerful employers, making the program unsustainable.

While we welcome the expansion of Medicaid as a stopgap measure to cover more poor families, we know that this strategy ultimately leads to a dead end. Inevitably, the next economic downturn will bring a flood of additional families pushed onto the Medicaid rolls just as state tax revenues fall. As in the past, Medicaid will be cut when the need is greatest.

In contrast, a single payer reform would create a stable long-term financing mechanism for health care. It could cut costs by streamlining health care paperwork, making universal, comprehensive coverage affordable. The Commonwealth’s three largest private insurers spend more than $1.3 billion annually on billing, marketing, high executive salaries and other administrative costs. That’s ten times as much overhead per enrollee as Canada’s national health insurance program. And hospitals and doctors spend billions more fighting with insurers over payments for each aspirin tablet, x-ray and doctor’s visit. If we cut bureaucracy to Canada’s levels we could save at least 14% of current health expenditures, enough to cover all of the uninsured in Massachusetts and to improve coverage for the rest of our patients as well.

And single payer is popular. Sixty-two percent of Massachusetts doctors support it (according to a recent study in the Archives of Internal Medicine), joining the Massachusetts Nurses Association and dozens of other labor, seniors and consumer groups.

We recognize that a single payer reform threatens the multi-billion dollar insurance industry, and would force down the high profits enjoyed by drug companies. But such interests must not be placed ahead of the health of the people of Massachusetts. Only a single payer system can assure universal and comprehensive coverage at an affordable price. The people of the Commonwealth deserve no less.

Sincerely,

Dr. Nancee Bershof, Greenfield
Dr. J. Wesley Boyd, Cambridge
Dr. John Day, Boston
Dr. Tina Furcolo, Springfield
Dr. Kathleen Grandison, Shelburne Falls
Dr. Audrey Guhn, Springfield
Dr. David Himmelstein, Cambridge
Dr. Mike Kaplan, Lenox
Dr. Suzanne King, Lenox
Dr. Sarah Kremble, Leyden
Dr. Richard McGinn, Greenfield
Dr. Kathleen McGraw, Montague
Dr. George Milowe, Malden
Dr. Ruth A. Potee, Boston
Dr. Vikas Saini, Hyannis
Dr. John Walsh, Worchester
Dr. Steffie Woolhandler, Cambridge

And The 290 Undersigned Massachusetts Physicians

For a fact sheet on the bill, click here

Posted by pnhp at 11:19 AM | Permalink

America’s ailing health care system
Editorial
Roanoke Times
Published: Monday, March 20, 2006

The free market approach to health care has given the U.S. a system both mediocre and expensive. It’s time to try single-payer insurance.

The good news from the largest study of U.S. health care quality is that Americans receive essentially equal quality of care, regardless of race, gender or income.

The bad news is that care is equally mediocre.

“Not only is no place safe, no one is safe from poor quality,” said Steven Asch, lead author of the study, which was published in the New England Journal of Medicine. “No matter which group we looked at, whether they were black, white, rich or poor, uninsured, insured, educated, uneducated, all of them were receiving mediocre care.”

The United States has the most expensive health care system in the world — both in terms of raw dollars and as a percentage of gross domestic product. The American people are clearly not getting their money’s worth from the current market-driven system.

That system, as Paul Krugman and Robin Wells argue in the latest issue of The New York Review of Books, is incredibly inefficient. As health care costs continue to rise — largely because of increasing medical technology — the price of that inefficiency grows.

An editorial in the latest edition of The New Republic lays out nearly the same convincing case as the one by Krugman and Wells, calling for the United States to adopt a single-payer health system.

Private health insurance companies spend a lot of money and time in an effort to “compete over who can enroll the healthiest patients, since that is the surest way to improve profit margins,” The New Republic editors wrote.

But the expense of culling the unhealthier patients doesn’t increase the overall efficiency of America’s health care system, since somebody will end up paying for their care.

The hallmark of the current system is a fragmentary mess of insurers and providers that “add cost without adding value,” Krugman and Wells write.

That’s how to construct the world’s most expensive mediocre health care system.

President Bush and others on the right think free market economics can solve this. They want consumers to pay more out-of-pocket costs themselves, using tax-free health savings accounts. The “logic” of that argument is that if health care consumers are spending their own money, instead of being sheltered from the true cost of health care by insurance, they’ll make wiser choices.

Several studies, though, have shown that, while patients who pay more out of pocket do cut back on medical expenses, they do so indiscriminately, cutting back equally on beneficial and questionable medical procedures.

Health savings accounts also siphon the healthiest and wealthiest from traditional insurance plans, exacerbating current problems by leaving the weakest and sickest in the insurance pool.

Experience elsewhere in the world, especially Taiwan and France, suggest that the inherent efficiencies of a single-payer system would allow the United States to cover the 46 million uninsured Americans while spending less than it does now.

The best way to make health care affordable — and concentrate efforts on improving quality for everyone — is to spread the risk as broadly as possible. A single-payer system will do that. The free market system for health care has failed.

Posted by pnhp at 11:27 AM | Permalink

Statement at the by John Horgan, member, IBEW Local 2222
and
Jobs with Justice Health Care Action Committee

Community meeting on “How to get health care that works for all Americans,” Boston University School of Public Health
March 22, 2006

We can no longer afford to fund a health care system that wastes 30 percent of every health care dollar on insurance company administrative fees.

Our current system leaves 46 million Americans uninsured and millions more under-insured. The current system creates incentives for health providers to skimp on preventive care and over prescribe for the most expensive procedures.

At every level there is an avalanche of paper work. Caregivers are buried in forms, and forced to waste their valuable time and resources on inefficient and unnecessary bureaucratic red tape. Because we have allowed the insurance industry to run the health care system, malpractice insurance bills threaten to put many doctors and providers out of business.

Cost cutting measures are leaving many hospitals understaffed, forcing caregivers to demand safe staffing legislation.

We all have an important stake in the direction our elected leaders take on health care reform. But the multiple-choice format used at the Citizen Working Group meetings have placed serious limitations on a true dialogue about health care reform. These hearings have created a bogus framework where participants are asked to consider what health care “trade offs” would be acceptable for the future.

In the richest nation in the world, we do not need “trade offs.” Instead we need to “trade up” to a national Medicare for All plan that covers every American. That is the only way to eliminate the high costs associated with the uninsured and the under-insured.

The taxpayer dollars currently being wasted in bureaucratic inefficiency can be redirected to cover everyone. A national Medicare for All plan would have the mass buying power to negotiate reasonable charges for prescription drugs and health care services. By covering everyone, we could eliminate the divisive means testing of the poor.

We all have a shared interest to make sure everyone receives high quality and comprehensive health care. After all, we are only as healthy as the people who ride with us on mass transit, handle our food in the cafeterias and restaurants where we eat, or clean the buildings where we work.

Medicare currently has administrative costs below 2 percent and it effectively insures every American age 65 and over. The Medicare model can be improved and expanded to cover everyone as proposed by Rep. John Conyers in HB 676 and as also proposed by Sen. Edward Kennedy.

This is the approach that Massachusetts Jobs with Justice supports because it has a proven track record. It can hold down costs, help U.S. business remain competitive, and keep people healthy and productive. Health care should be a right for everyone, not a privilege for the few!

Thank you.

Posted by pnhp at 11:25 AM | Permalink

By: Kathryn Caggianelli
The Albany Record
Published March 8, 2006

ALBANY - Though they couldn’t agree on the mechanism for change, four physicians who sat on a panel Tuesday at WAMC’s Linda Norris Auditorium, explored the need for establishing a better healthcare system nationwide. They unanimously agreed that a “one-payer” system was the way to go.

There are 43 million people who are uninsured in the U.S. and 16 million who are under-insured. Often, the people who most need health insurance are often least able to afford it, experts said.

The concept of Medicare for All, an expanded program geared toward providing comprehensive high-quality healthcare to every citizen was put under the microscope along with other proposals to address the disparity. The socialization of medicine does not come cheaply, panelists said.

It was the first in a four-forum series sponsored by the Capital District Chapter of Physicians for a National Health Program and the League of Women Voters, as well as a number of co-sponsors. The discussion, led by Alan Chartock, president of WAMC, saw a good turnout and accomplished at least one of the goals organizers had in mind, physician Paul Sorum said.

“We brought together a distinguished group of experts with different views but the same goal and heard them agree on the fundamental notion that we need to make high-quality healthcare available for everyone,” he said.

Initiating discussions of this nature in the Capital District and laying the groundwork for future talks is a way to educate the public. Everyone has a stake in the future of healthcare, Sorum said.

“If (at the series’ conclusion) we can come to a consensus and figure out a way to proceed, that will be a major achievement,” he said.

Physician Elizabeth Higgins, Sorum’s colleague, began the discussion by recounting how one of her teen-aged patients had fallen through the cracks of the existing healthcare system when her mother lost her job and her health insurance benefits. The girl, who suffered from mental illness, could no longer receive medication and dropped out of school as a result. Eventually her mother went back to work and was able to enroll in another health insurance plan, but in the interim her daughter suffered needlessly and lost a year of school, Higgins said.

“This kind of a case is an outrage. We are the only industrialized nation that links health insurance coverage to employment,” Fein said. McGee said he agreed with Fein that health insurance should not be linked to a person’s employment.

Creating a one-payer health insurance system prototype and testing it in one or more states at a time was an idea that all four panelists seemed to support.

Lazarus proposed an AMA-driven healthcare system that would offer tax credits to help defer the costs of healthcare. Under the AMA plan, people would be able to choose their own type of health insurance.

Cromie talked about non-profit health insurance entities, like CDPHP, that bear the burden of administrative costs bigger, profit-making providers can better afford. In a one-payer system, rationing of services, streamlining administrative costs and providing the highest quality of care in a consistent fashion would be a few of many goals.

Posted by pnhp at 11:18 AM | Permalink

Insurers’ medical-cost ratios are lower than ever
By Jonathan G. Bethely, AMNews staff
Published March 6, 2006

If physicians needed any more indication of tightening reimbursement, how about this — not only did profits for the biggest health plans go up last year, but those plans also continued to cut the percentage of revenue they spend on care.

The medical-cost ratio — also called the medical-loss ratio or medical-care ratio — is the key number for health plans in terms of their level of profitability. That ratio, simply, is the percentage of dollars the companies spend on health care, including physician reimbursement.

Whereas 10 years ago many plans had medical-cost ratios in the high 80s or 90s, now the highest percentage among large, publicly traded health insurers is Health Net, at 83.9%. Aetna, which had a medical-cost ratio well into the 90s when CEO John Rowe, MD, took over in 2000, recorded a ratio of 76.9% in 2005, Dr. Rowe’s final full year before his retirement. That was the lowest medical-cost ratio for the nation’s largest publicly traded plans.

Health plans say they’ve been able to cut their medical-cost ratios through the use of technology and other means to allow for more judicious, health-effective spending. But the AMA and others have argued that health plans have kept a lid on costs because their market power allows them to unfairly dictate reimbursement terms to physicians.

In the eyes of some Wall Street analysts, plans might have pushed medical-cost ratios as low as possible. In part, that’s because efficiencies due to mergers are not expected to go further.

ADDITIONAL INFORMATION:

More in, less out
Profits for the largest plans went up

Aetna
Revenue 2004: $19.9 billion
Revenue 2005: $22.5 billion +13%
Earnings 2004: $2.3 billion ($7.15 per share)
Earnings 2005: $1.6 billion ($5.40 per share) -24%
2004 results included a $775 million tax refund for businesses sold

Cigna
2004 Revenue: $18.2 billion
2005 Revenue: $16.7 billion -8%
2004 Earnings: $1.4 billion ($10.46 per share)
2005 Earnings: $1.6 billion ($12.52 per share) +21%
2005 results are for all business

Health Net
2004 Revenue: $11.6 billion
2005 Revenue: $11.9 billion +2.6%
2004 Earnings: $42.6 million ($0.38 per share)
2005 Earnings: $229.8 million ($1.99 per share) +439.4%
2004 total reflects monies paid toward settling RICO lawsuit against health plans

Humana
2004 Revenue: $13.1 billion
2005 Revenue: $14.4 billion +10%
2004 Earnings: $47.1 million ($1.72 per share)
2005 Earnings: $64.6 million ($1.87 per share) +9%

United-Health Group
2004 Revenue: $37.2 billion
2005 Revenue: $45.4 billion +22%
2004 Earnings: $2.6 billion ($1.97 per share)
2005 Earnings: $3.3 billion ($2.48 per share) +26%

Well-Point
2004 Revenue: $20.8 billion
2005 Revenue: $45.1 billion +116%
2004 Earnings: $960.1 billion ($3.05 per share)
2005 Earnings: $2.5 million ($3.94 per share) +29%
2005 revenue includes Anthem-WellPoint, WellPoint-WellChoice mergers

Medical-cost ratios — the percentage of dollars spent on health care, including physician reimbursement — are in the low 70s or high 80s. (Cigna’s 2005 ratio reflects commercial HMO business only.)

Aetna
2005: 76.9%
2004: 77.8%
Change: up 0.9 percentage points

Cigna
2005: 82.3%
2004: 82.4%
Change: essentially flat

Health Net
2005: 83.9%
2004: 88.0%
Change: up 4.1 percentage points

Humana
2005: 83.2%
2004: 84.1%
Change: up 0.9 percentage points

UnitedHealth Group
2005: 78.6%
2004: 80.2%
Change: up 1.6 percentage points

WellPoint
2005: 80.6%
2004: 82.0%
Change: up 1.4 percentage points

Source: Company 10-K, year-end filings with the Securities and Exchange Commission

Posted by pnhp at 11:06 AM | Permalink

The Incredible Vanishing Push for Universal Health Insurance in Massachusetts
By Alan Sager, Ph.D., Professor of Health Services
Commentary, WBUR-FM Boston Broadcast 20 March 2006

For months, most of us have thought that the Legislature was debating how to cover the three-quarters of a million people in Massachusetts who lack health insurance. But legislation expected to be released this week suggests that when it comes to improving coverage, state government conceived an elephant but gave birth to a mouse.

Let’s follow the money. Over the next three years, business will pay about 144 million dollars more to help cover uninsured employees, while hospitals and others will get 540 million dollars more through Medicaid rate hikes. At the same time, the increase in overall total health spending to finance business as usual will be 25 billion dollars here in Massachusetts.

Why did the goal of insuring people get lost?

Here are some of the reasons.

Support for expanding health insurance has been broad but shallow.

Powerful hospitals and insurers did a better lobbying job than access advocates.

Health care costs so much that no one could find enough money to finance good insurance for people who can’t afford it. Instead, I expect, the legislature will pass the buck and compel individuals to buy flimsy but costly insurance. Business groups said the state’s economy would suffer if employers had to spend a lot more to cover people. But 540 million dollars more for hospitals and 25 billion dollars more for business as usual? No problem.

That’s a cruel double standard.

Since 1987, when our state last tried to insure everyone, health costs have risen by 40 percent as a share of our state’s economy. And 80 percent more people are uninsured�mainly because of higher premiums.

Access advocates ignored cost control for fear it would antagonize powerful hospitals, and that it’s too complicated for legislators. Gov. Romney and Pres. Bush take different approaches but essentially have the same cost control plan�bad insurance that makes sick people pay more out of their own pockets. That won�t encourage careful shopping. It will turn patients into the victims of a cost control war.

Higher out-of-pocket payments plus flimsy insurance will satisfy Washington’s demand that more people look insured on paper, permitting the state to retain special Medicaid payments. But higher out-of-pocket payments won’t cut waste. About half of our state’s 59 billion dollars in health care spending this year will be wasted�on administration, unnecessary care, excess prices, and
outright theft.

Our state’s 25,000 doctors decisions control almost all health spending. Past cost controls have failed because doctors didn’t support them.

Let�s negotiate a trustworthy deal with doctors.

Here’s the deal’s outline. Doctors, if you agree to take care of all of us with the 59 billion dollars already available�that’s over 9,000 dollars per person�we’ll eliminate malpractice suits and 90 percent of your paperwork.

All of us seek medical security�high-quality and timely care, without worries about bills or losing insurance.

We already pay enough. U.S. health spending is four times defense spending. And Massachusetts per person health spending is the world�s highest.

Rising health costs put us all at-risk. Let’s contain cost before the next bad recession and state fiscal crisis hit. Because when the economy stops short, Massachusetts health care will crash through the windshield.

Alan Sager is the Director, Health Reform Program Boston University School of Public Health

Posted by pnhp at 11:04 AM | Permalink