Medicine in the dark

By Michael Hochman and Danny McCormick
Los Angeles Times
March 10, 2010

Some doctors treat patients with early-stage prostate cancer with radiation. Others favor surgery, while some advocate only close monitoring. Which approach is most successful? No one knows.

When it comes to diabetes management, doctors don’t have answers to key questions: At what point should insulin be started? Is it safe to lower the blood sugar to normal levels? What is the best way to monitor blood sugar control?

Similarly, endocrinologists don’t know what is the best way to treat patients with hyperactive thyroids. Doctors in Europe typically use medications, while those in the U.S. more frequently give radioactive iodine. Only limited evidence is available to guide the decision.

It may seem perplexing that there is so much uncertainty about these relatively simple questions. All of the above treatments have been around for decades. Shouldn’t we have definitive answers by now?

In this week’s issue of the Journal of the American Medical Assn., we report the results of a study that may help explain why we don’t. In the study, we analyzed 328 medication studies recently published in six top medical journals and found that just 32% were aimed at determining which available treatment is best. The rest were either aimed at bringing a new therapy to market or simply compared a medication with a placebo. Whether the therapy was better or worse than other treatments was simply not addressed.

Research involving new therapies is of course crucial for medical progress, but there is also a need for research that compares the effectiveness of the rapidly growing array of existing therapies and approaches.

So why, then, did only a third of medication studies focus on helping doctors use existing therapies more effectively? The answer lies in the fact that pharmaceutical companies fund nearly half of all medication research, including the lion’s share of large clinical trials. For obvious reasons, commercially funded research is primarily geared toward the development of new and marketable medications and technologies. Once these products have won approval for clinical use, companies no longer have incentives to study exactly how and when they should be used.

In support of this claim, we found that 87% of the comparative effectiveness studies we analyzed were funded entirely or in part by non-commercial sources, such as nonprofit foundations or government institutions. In addition, 91% of studies comparing medications with non-pharmacologic therapies (such as surgery or lifestyle changes) received non-commercial funding, as did 94% of studies comparing different medication strategies (such as different blood sugar targets in patients with diabetes) and 90% of studies comparing the safety profiles of medications. Non-commercial sources funded 100% of studies comparing the cost- effectiveness of different treatments, though only 2% of the studies we reviewed included such analysis.

Congress recently appropriated more than $1 billion in the American Recovery and Reinvestment Act to promote comparative effectiveness research. This is a good first step, but the money will need to be spent carefully. We believe studies that address fundamental clinical decisions — such as when to use medications versus surgery or how to use therapies more effectively — should be favored over those that simply compare two alternative medications. There is also clearly a need for more research on the comparative safety and costs of different treatments. And although many researchers are thankful for the new research funds, it may soon become apparent that $1 billion is far from sufficient.

Reform is also necessary to ensure that commercially funded research is designed in a way that is more helpful to doctors. Our study showed that two-thirds of commercially funded randomized trials compared medications with a placebo rather than with another active therapy. Though placebos are appropriate when no alternative therapies are available, in many of the trials we examined, we suspect alternative therapies could have been used instead. For this reason, we believe that regulatory agencies such as the Food and Drug Administration should only approve new therapies that have been shown to be at least as good as existing therapies whenever such alternatives exist. Alternatively, though more controversial, some experts have proposed that pharmaceutical companies should be allowed to fund — but not design — clinical studies.

As medical science advances, clinical decision-making will only become more complex. Only by expanding public funding for comparative effectiveness research can we hope to put existing medical treatments and healthcare services to their best use. Doing so would ensure that national research priorities are determined by patient needs rather than by corporate agendas.

Michael Hochman, MD, is an assistant professor of clinical medicine at USC’s Keck School of Medicine. Danny McCormick, MD, MPH, is an assistant professor of medicine at Harvard Medical School.

http://www.latimes.com/news/opinion/commentary/la-oe-hochman10-2010mar10,0,3812725.story

JAMA – Characteristics of Published Comparative Effectiveness Studies of Medications, by Michael Hochman, MD and Danny McCormick, MD, MPH:
http://jama.ama-assn.org/cgi/content/full/303/10/951

JAMA editorial – Charting a Path From Comparative Effectiveness Funding to Improved Patient-Centered Health Care, by Patrick H. Conway, MD, MSc and Carolyn Clancy, MD:
http://jama.ama-assn.org/cgi/content/full/303/10/985

Rather than using excerpts from the JAMA article by Hochman and McCormick as today’s qotd, their op-ed in today’s Los Angeles Times provides an even better summary of their findings along with their astute comments.  Their op-ed obviates the need for me to provide any additional commentary.

The “public option” and the wheelbarrow parable: Part 2
By Kip Sullivan JD

It is way past time for “public option” advocates to take a stand either for or against an insurance industry bailout.

Do “option” advocates support the individual mandate in the Democrats’ legislation (a requirement that all uninsured Americans buy health insurance from the bloated insurance industry) and the subsidies that will allegedly make the mandate affordable, even if these provisions are enacted without an “option”? Or do they oppose the mandate and the subsidies if there is no “option” in the final legislation? Does the “robustness” of the “option” have any bearing on their decision, or will any provision with the title “public option” in it suffice to win their support for an insurance industry bailout?

For the last two years, the leaders of the “option” campaign have been extraordinarily vague about what sort of “option” they stand for and whether the “option” is more important to them than an insurance industry bailout. They have refused to adopt minimum criteria that would guarantee that the “option” would be large and they have refused to make the “option,” even the tiny “option” unveiled by congressional Democrats last June, a precondition for their support of the Democrats’ “reform” bills. On the other hand, they have urged their followers to support the Democrats’ bills and, in the case of the Senate bill, they have even urged their followers to support the bill after the “option” was stripped from it.

These tactics – creating a hullabaloo over a vaguely defined “option” but then supporting bailout legislation that contains no “option” – remind me of an old parable about an employee of a factory who, night after night for many years, left the factory pushing a wheelbarrow filled with straw. At the factory gate, the security guard carefully lifted the straw to see what if anything the employee might be stealing and, finding nothing, waved the guy on. On his last day of work, the employee approached the factory gates without his usual wheelbarrow filled with straw and said goodbye to the guard. “What were you stealing all those years?” the guard asked. “I’m sure you were stealing something but I never figured it out.”

“Wheelbarrows!” replied the employee.

Like the wheelbarrow thief who induced the guard to focus on the straw, leaders of the “option” campaign have been promoting a bailout of the health insurance industry – the centerpiece of a plan proposed by the insurance industry — right under the noses of progressives and the media. They have done so by focusing all their rhetoric on the “option.” The public has been inundated by a blizzard of news stories, blog comments and email appeals about the politics of the “option” and how it will work. Will this or that party or politician support it? Will it be open to large employers? Will the co-op version work as well as the more abstract version in the House bill? Will the “option” have the authority to use Medicare’s rates plus 5 percent? Will it attract more than its share of sick enrollees? Should it be in place prior to 2013? And so on.

On the other hand, the “option” campaign has been utterly silent on the most fundamental question one could ask about the bailout: Should Congress enact a requirement that most non-elderly Americans become compulsory customers of the insurance industry and should the taxpayer finance massive subsidies for the insurance industry, with or without an “option”?

Health Care for America Now (HCAN), the most prominent advocate of the “option,” and its allies both inside and outside Congress have been silent on virtually every issue raised by this question: Is it ethical to force Americans to purchase the product of a particular industry? Could the individual mandate backfire on Democrats, especially when the news media starts publishing stories about the IRS enforcing fines against middle-income Americans who don’t or can’t obey the mandate? Will the bailout strengthen the insurance industry and thereby postpone the day America enacts a Medicare-for-all system? Will federal courts decide that the individual mandate, the subsidies and the exchanges pre-empt state single-payer legislation and thereby snuff out the state-level single-payer movement? (See discussion of this issue in my opening statement for a recent live blog and the discussion that followed.) How, if at all, are the answers to any of these questions altered by the enactment of the tiny “option” contained in the House bill?

On these and other critical questions about the bailout – the mandate that Americans buy insurance plus the tax-financed subsidies for the insurance industry in the amount of a half-trillion dollars per decade – the “option” leadership has been silent. Their silence on these issues coupled with (a) their refusal to endorse criteria for the “option” that would guarantee the “option” would be large, (b) their hype about the “option” and (c) their support for the Democrats’ bills even if they contain only a tiny “option” or no “option” at all indicates their true priorities. Like the wheelbarrows in the parable, the “option” leadership’s true priority – the enactment of an insurance industry bailout – has been in plain sight for a long time.

In the remainder of this article I review the evidence indicating the “option” campaign failed to promote to the public or to members of Congress criteria that would have guaranteed the “option” would be large enough not only to survive but to take on the gigantic insurance companies that dominate every market in America today. In the last part of this three-part series, I review evidence indicating the “option” campaign never informed congressional Democrats that an “option” of any sort (large or small) was a precondition for their support of the Democrats’ “reform” legislation.

No minimum criteria for the “option”

The first sign that the “option” campaign would give higher priority to the bailout than the “option” was HCAN’s refusal to adopt any criteria at all for the “option” until long after the Democrats began writing their “reform” bills. Although the bill-writing process began no later than late 2008, HCAN waited until June 2009 to release four vague criteria, and then promptly ignored them.

The bill-writing process began formally in January 2009 in the Senate Finance and Senate Health, Education, Labor, and Pensions (HELP) committees when the new Congress convened, and informally as early as 2008 when Senator Ted Kennedy (chairman of the HELP Committee) convened secret meetings of the “workhorse group.“ (According to the Wall Street Journal, this group began meeting in early 2008. According to the New York Times, it began meeting in the fall of 2008.) The process began in the House in March 2009 when the chairmen of the three committees with jurisdiction over health care reform agreed to write a single House “tri-committee” bill. The bill-writing process was completed by the Senate HELP committee on June 9, 2009 and by the House “tri-committee” on June 19, 2009. On those dates those committees published draft versions of their bills. Nearly identical versions of these bills were formally introduced a few weeks later.

HCAN was well connected in Congress and must have known long before the public did that the HELP Committee and the tri-committee would recommend tiny, ineffective versions of the “option.” (The AFL-CIO, an HCAN steering committee member, was a member of the “workhorse group.”) Nevertheless, HCAN waited until June 12, 2009 to post four vague “option” criteria. Of these, only two related to size, and both of these (“national and available everywhere” and “bargaining clout”) were merely expressions of a desired goal, not descriptions of criteria that had to be met to achieve the goal. Merely expressing the wish that the “option” be “available everywhere,” for example, does nothing to ensure that the “option” is big everywhere.

HCAN could have endorsed Hacker’s original criteria

If HCAN had been serious about promoting a large “option,” it would have endorsed the five criteria proposed by Jacob Hacker, the godfather of the modern “option,” and it would have done so early in the bill-writing process, not after the bills were written.

In papers published in 2001 and 2007 Hacker set forth five criteria that would have guaranteed massive size in the “option:

(1) The program had to be pre-populated (he proposed that states “shift” current Medicaid and SCHIP enrollees and the uninsured into the program prior to the start of operations);

(2) People who enrolled in the public program would get tax-financed subsidies to pay the the public program’s premiums while people who signed up with insurance companies would not;

(3) All non-elderly Americans would be eligible to enroll in the public program;

(4) The public program would have the authority to use Medicare’s reimbursement rates; and

(5) The insurance industry would have to offer the same coverage required of the public program.

According to Hacker as well as the Lewin Group (which published analyses of Hacker’s proposal in 2003 and 2008), a public health insurance company that met these five criteria would be able to insure half the nonelderly population – in 2007, 129 million people – and charge premiums far below those of the insurance industry.

But because the HELP committee and the three House committee chairmen who wrote the House “tri-committee” bill were far more interested in being able to say the “option” would “compete with the insurance companies on a level playing field” than they were in creating a huge “option,” they incorporated only the fifth criterion (insurance companies had to offer comparable coverage) and abandoned the other four. The abandonment of the other four, especially the criteria calling for pre-population and subsidies only for the “option,” resulted in a much weaker and smaller “option” program than the one envisioned by Hacker. The Congressional Budget Office estimated the HELP committee “option” would insure no one and that the House bill would insure only 6 million people. (I have written elsewhere about why even this dismal estimate of the House “option’s” size by the CBO was excessively rosy.)

“Option” proponents cave

June 2009, then, would have been an obvious time for HCAN, Hacker and other “option” proponents to rise up on their hind legs and demand that if Democrats wanted their support for an insurance industry bailout the Democrats would have to take their sick little “option” back to the drawing board and draft an “option” based on Hacker’s original criteria. That didn’t happen. As I have reported earlier, in June 2009 the “option” campaign entered the “switch” phase of what was turning out to be a “bait and switch” campaign. Even though they had to have known by June 2009 that the “option” in the HELP and tri-committee bills were travesties of Hacker’s original proposal, the “option” campaign pretended otherwise. They called the Democrats’ microscopic “options” “robust” and “strong,” and lavished praise on the bills – bills which contained the bailout provisions so coveted by the insurance industry.

Neither HCAN, Hacker nor any other leading individual or group within the “option” campaign made an effort to restore the pre-population and subsidy criteria, and apparently none made any effort to restore the criterion calling for the “option” to be universally available. When Richard Kirsch, HCAN’s campaign director, testified in favor of the House “reform” bill before a subcommittee of the House Energy and Commerce Committee on June 23, 2009, Kirsch knew or should have known that the “option” in that bill did not meet Hacker’s pre-population, subsidy, or universally available criterion. Kirsch, however, made no effort to call his listeners’ attention to that fact. To the contrary, he concealed the small size of the “option” by telling the committee it would be available to everyone.

The only criterion of the four abandoned by Democrats that “option” leaders went to bat for was the one authorizing the “option” to use Medicare’s rates to reimburse clinics and hospitals, and even here they could not bring themselves to fight for Hacker’s original criterion. They pushed not for Medicare’s rates (which are about 20 percent below the rates insurance companies pay), but Medicare’s rates plus 5 percent.

But without Hacker’s first three criteria – the pre-population, subsidy, and available-to-all criteria, which were essential to guaranteeing the “option” would start out large and stay large – the demand that the “option” be given the authority to use Medicare’s rates plus 5 percent was meaningless. Giving a microscopic “option” the authority to use low rates is like giving first-graders the authority to bench press 400 pounds. They can’t do it, and giving them permission to do it doesn’t change that fact. Similarly, an “option” program that represents zero to 6 million people cannot expect clinics and hospitals to agree to be paid below-industry rates (see my discussion of “the chicken and egg” problem here). No dispensation or blessing from Congress is going to change that. What the “option” needed from its supporters was an uncompromising insistence upon large size on the day it opened for business. But the “option” campaign made no effort to fight for the criteria that would guarantee large size. (As “option” proponent Jon Walker recently explained, “option” proponents did, however, adopt the ludicrous label “robust” to distinguish a tiny “option” with the authority to use Medicare rates plus 5 percent from a tiny “option” that does not have that authority. The label was extremely misleading.)

“Option” proponents in Congress equally incompetent

Members of Congress who supported the “option” adopted tactics virtually identical to those of the “option” campaign, and thereby revealed that they too cared more about the bailout than the “option.” They refused to adopt criteria that would guarantee large size in the “option,” they refused to alert the public that the Democrats’ “option” was a mere shadow of Hacker’s original version, and they insisted on calling the Democrats’ scrawny “option” “robust” if it included the Medicare-rates-plus-5-percent provision.

In one of their first letters to the Democratic leadership in the House expressing support for the “option,” the Democratic Congressional Progressive Caucus (CPC) failed to say a word about Hacker’s original criteria. In fact, they made things worse. Two criteria the CPC did endorse in that letter – that subsidies should go to the insurance industry as well as the “option,” and that the “option” pay providers “competitive rates” – nullified two of Hacker’s original criteria (the subsidy and Medicare-rates criteria). The nullification of these criteria would have greatly reduced the power of the “option” vis a vis Hacker’s original version.

Like HCAN, the CPC waited till long after the bill-writing process had begun to develop a list of criteria for the “option.” On June 8, 2009 (four days before HCAN released its four vague “option” criteria), the CPC released the contents of a June 5 letter to Speaker Nancy Pelosi which contained a one-page mish-mash of “principles” they said the “option” had to meet. The mish-mash included, for example, a call for dental coverage and “transparency” in the “option.” On the other hand, it mentioned only one of Hacker’s original principles (the one requiring that all non-elderly Americans be allowed to join the “option”). To make matters worse, the mish-mash included the same two criteria the CPC had adopted earlier which nullified Hacker’s subsidy and Medicare-rate criteria. Unlike HCAN, which never summoned the courage to say it would oppose legislation that did not meet its criteria, the CPC did say in this letter to Pelosi that it would “oppose” the final House bill if it did not include an “option” that met its “principles.” As we shall see in Part 3, this threat turned out to be a bluff.

“Option” proponents in the Senate were even less assertive about spelling out criteria for the “option” and demanding that they be met than the CPC was. A May 29, 2009 letter from 16 Senators to Senators Baucus and Kennedy (chairs, respectively, of the Finance and HELP committees) urging them to include an “option” in their committees’ bills mentioned no criteria. Over the next nine months, nothing changed. On February 16, 2010, Senator Michael Bennet (D-Utah) and three of his colleagues sent a letter to Senator Harry Reid (D-NV) urging him to restore “a strong public option” to the Senate bill. (This letter was subsequently endorsed by two dozen other Senators.) Although this one-page letter used the phrase “public option” 15 times, and although half the time the word “strong” preceded the phrase, the letter made no attempt to define what “strong” meant.

Senator Ron Wyden made an effort late in the 2009 session to make the “option” available to all non-elderly. He received very little support from “option” proponents and his effort failed.

These isolated and, in the case of the CPC, confused efforts by members of Congress to reinvigorate the moribund “option” are further evidence that HCAN and other advocates of the “option” were doing nothing to create pressure on Congress to adopt minimum criteria that would guarantee that the “option” would start out large and stay large.

Compromising on the large “option” had consequences

The small size of the “option” endorsed by Democrats, and the disinterest among “option” proponents both inside and outside Congress in strengthening the “option,” meant the Democrats’ “option” would pose virtually no threat to the insurance industry. It meant the “option” would not be available to the vast majority of Americans (according to the Congressional Budget Office it would be available to about 10 percent of us), and would have very little impact on health care costs in the US.

The small size of the “option” meant, furthermore, that the “option” campaign’s slogans, which arguably had some integrity prior to the introduction of the Democrats’ mouse version of the “option” in June 2009, became false advertising thereafter. No longer could the campaign say they were promoting “quality affordable health care for all.” They were only promoting coverage for some. No longer could they say, “If you like your health insurance you can keep it.” The reality was that the individual mandate plus the tiny “option” meant, “If you don’t like your health insurance, you must keep it (because unless you’re among the 10 percent of Americans with access to the exchange, you won’t have access to the ‘option’”). No longer could the “option” campaign claim the “option” would cut the cost of health care in the US.

As health policy, the “public option” was worthless. But as a political tool it was priceless. As the straw distracted attention from the wheelbarrow, so the “option” distracted attention from the fact that the health care “reform” promoted by the “option” campaign will criminalize the uninsured and transfer hundreds of billions of dollars of public funds to private insurance companies.

Kip Sullivan is a member of the steering committee of the Minnesota chapter of Physicians for a National Health Program.

Health Reform Passes the Cost Test

By David M. Cutler
The Wall Street Journal
March 9, 2010

Many people are worried that the health-care reform proposed by President Obama and congressional Democrats will fail to bend the “cost curve.” A number of commentators are urging no votes because of this, and Republicans have asked the president to start health reform over, focusing squarely on the issue of cost reduction.

These calls overlook the actual legislation. Over the past year of debate, 10 broad ideas have been offered for bending the health-care cost curve. The Democrats’ proposed legislation incorporates virtually every one of them. Here they are:

• Form insurance exchanges. These would help curb underwriting and inefficient marketing practices that raise costs in the small-group and individual insurance markets. This is addressed in all the House and Senate bills, and the president’s proposal. Grade: Full credit.

• Reduce excessive prices, including those of supplemental plans enrolling Medicare beneficiaries. The president’s proposal reduces these Medicare Advantage overpayments and others to different providers, even in the face of Republican claims that reducing such overpayments is tantamount to rationing care for seniors. Grade: Full credit.

• Moving to value-based payment in Medicare. Both Democrats and Republicans have called for moving from a system where volume drives reimbursement to one where value drives reimbursement. The president’s proposal includes virtually every idea offered for doing this. Grade: Full credit.

• Tax generous insurance plans. Health-insurance benefits are excluded from income taxation, providing incentives for excessively generous insurance. Many economists have proposed capping the tax exclusion to reduce these incentives. The president’s proposal taxes some of the most generous policies, though it has deferred the date by which these taxes take effect. Grade: Partial credit.

• Empower an independent Medicare advisory board. Interest-group politics intrudes too deeply within the mechanics of Medicare policy, raising program costs and hindering efforts to improve care. Despite powerful opposition, the president proposes this independent board and a process for fast-tracking such recommendations through Congress. Grade: Full credit.

• Combat Medicare fraud and abuse. The administration has started an active task force to combat these problems. Other ideas to reduce fraud and abuse were presented at the recent health-care summit, and were incorporated in the president’s proposal. Grade: Full credit.

• Malpractice reform. Defensive medicine is a small but important driver of medical spending. The reform proposal makes some headway, encouraging states to experiment with alternative mechanisms to reduce malpractice burdens. More could be done—for example, specialized malpractice courts and a safe harbor for physicians practicing evidence-based medicine—but the president’s proposal makes a start. Grade: Partial credit.

• Invest in information technology. Many studies suggest savings in the tens of billions of dollars from IT investment. The stimulus bill passed a year ago contains funds to wire the medical system over the next few years, and the administration is supplementing this with significant funds to analyze the comparative effectiveness of different treatments—even in the face of “death panel” claims. Grade: Full credit.

• Prevention. The president’s proposal includes significant public-health investments, provides new incentives for physicians to focus on preventive and chronic care, and opens Medicare to finding new ways of supporting prevention. The only area of weakness is the lack of a junk food tax or tax on sugar sweetened beverages. Grade: Partial credit.

• Create a public option. A public insurance option would provide competition for insurers in areas that are nearly a monopoly and provide a path for reforms in Medicare to expand readily in the under-65 population. The public option was eliminated because of Republican opposition, however. Grade: No credit.

So reform gets full credit on six of the 10 ideas, partial credit on three others, and no credit on one. The area of no credit (a public option) is because Republicans opposed the idea. One area receives only partial credit because of Democratic opposition (malpractice reform) and two other areas reflect general hesitancy to increase taxes (taxing Cadillac plans and taxing drivers of obesity).

Why is reform viewed so negatively? In part, it may reflect the perfect being the enemy of the good. If the only passing grade is 10 out of 10, then reform clearly fails. But given where the Republican Party is on a public option, no reform will get a passing grade. If both parties were willing to raise taxes and Republicans negotiated malpractice reform for their overall support, we could probably get a nine out of 10.

Reform is also viewed negatively because official scorekeepers do not believe anything on this list other than reducing prices will save much money. The Congressional Budget Office has consistently estimated that policies built around changing incentives and thus encouraging more efficient care will not have any effect on cost trends. My own calculations, mirrored by other observers and a host of business and provider groups, suggest that the reforms will save nearly $600 billion over the next decade and even more in the subsequent one.

Of course, no one knows precisely how much medical spending increases will moderate. But one cannot doubt the commitment to try. What is on the table is the most significant action on medical spending ever proposed in the United States. Should we really walk away from that?

Mr. Cutler is a professor of economics at Harvard University. He was senior health-care adviser to the Obama presidential campaign.

http://online.wsj.com/article/SB10001424052748703936804575108080266520738.html

There is an important debate taking place as to whether or not the Obama proposal, based on the Senate bill, will control health care costs. President Obama and his supporters contend that every idea on controlling costs is in this bill. The private insurance industry contends that premiums will continue to increase at unsustainable levels because this measure does very little to control rising costs. Who is right?

Harvard economics professor David Cutler served as a health care adviser to the Obama presidential campaign and is well situated to present the arguments in support of the position that the Obama proposal will “bend the cost curve,” slowing the rise in health care costs. Let’s look at the arguments that he presents in this WSJ article.

*  Form insurance exchanges.

Private insurance plans to be offered through the exchanges will have higher premiums than plans currently in the individual market because the increased costs of the required benefits will more than offset any administrative efficiencies of these plans. Since the actuarial value of the exchange plans will be lower than the average of today’s employer-sponsored group plans, patients will have to bear a significant portion of the costs. The exchanges themselves create additional administrative costs which will reduce the savings from administrative efficiencies.

Although the administrative waste in our current fragmented financing system is profound, reform that would recover much of this waste was rejected before the process began. If there is any net savings at all from the exchanges, it will not qualify as even a footnote in the annual report on our national health expenditures (NHE).

*  Reduce excessive prices, including those of supplemental plans enrolling Medicare beneficiaries.

Studies have shown that one of the largest and most important contributors to our health care spending is the very high health care prices in the United States, when compared to other nations. In other nations, the government plays a significant role in pricing, but our legislators rejected any type of administered pricing that was not already in force in our public programs, instead leaving it to market competition of private plans. The fact that we have the highest prices is proof that the private plans have not been capable of controlling prices.

The proposal reduces the overpayments to private plans, but leaves in place their administrative excesses. Spending in Medicare actually could be reduced by eliminating both the Medicare Advantage plans and the Medigap plans. Medigap provides the very worst value of private health plans. It would be far less expensive to roll the extra benefits that are of value in these plans into the traditional Medicare program. That would enable modest savings while providing Medicare beneficiaries with a better program.

*  Moving to value-based payment in Medicare.

Cutler says that the president’s proposal “includes virtually every idea offered” for “moving from a system where volume drives reimbursement to one where value drives reimbursement.” Nice rhetoric, but the plethora of health policy literature provides almost nothing on how to do this. Current measurements of value in health care are very primitive and would have very little impact on our total health care delivery system.

Much of health care is not particularly productive even if provided in large volumes, but it is exceedingly difficult to slash the volume without slashing the truly beneficial services blended into that volume. We should certainly make greater strides in trying to sort out beneficial and non-beneficial services, but that is not dependent on the passage of this bill.

Many of the financing experiments in the proposal are limited to Medicare and wouldn’t even apply to the remaining 85 percent of our population. When we do find out how to obtain greater value in health care, we need to apply those principles to our entire population and not simply to Medicare beneficiaries. To do that would require an improved Medicare-like financing structure that includes everyone, because the fragmented market of private insurance plans could never pull their act together.

*  Tax generous insurance plans.

Employer-sponsored plans formerly provided an actuarial value of about 89 percent, leaving 11 percent of the costs as the responsibility of the employee. In an attempt to control premium increases – not cost increases – more of the costs have been shifted to employees, reducing the average actuarial value to about 80 percent. The exchanges will be offering plans at a 70 percent actuarial value.

In one of the great deceptions of the reform process, plans that actually protect patients from financial hardship are now called “generous insurance plans” which allegedly need to be taxed. The intent of the tax is to ratchet down the actuarial value of employer-sponsored plans to control the premiums, while reducing spending by increasing financial barriers through greater patient cost sharing. We need policies to help get patients the care that they need, not hinder access.

*  Empower an independent Medicare advisory board.

As discussed in a recent Quote of the Day, we do need a greater government role in improving our health care financing, which can help to transform health care delivery into a high performance system, whether that is through an Independent Medicare Advisory Board – an empowered MedPAC – or some other appropriate institution. Again, this should not be a role limited to 15 percent of our population. To be effective it should be applied to an improved Medicare that covers everyone. The Obama plan, since it perpetuates our fragmented system, would not enable such an institution to provide the impact that it should have.

*  Combat Medicare fraud and abuse.

Since the beginning of Medicare everyone knows that fraud and abuse are problems because of all of the reports of the government cracking down on these criminal activities. This legislation is not essential to perpetuate the government oversight that we need to reduce these losses. What we need instead is an expansion of this oversight to our entire health system and not limited to the government programs. The federal government formerly partnered with the private insurers in fraud prosecution, but it doesn’t anymore since the private insurers contributed very little but merely wanted a cut of the recovery. Can you imagine the insurers ever risking offending their network panels by conducting fraud investigations against them?

*  Malpractice reform.

Our malpractice tort system fails to provide most individuals who experience medical injury with any compensation. It isn’t working and needs to be reformed. If we do provide compensation for all victims of medical injury, costs will increase. Although that is appropriate, we can’t pretend that costs will decrease merely because of the enactment of this legislation.

*  Invest in information technology.

Electronic medical records and integrated information technology systems are expensive. Most studies indicate that they increase costs. One study demonstrated that they have enabled upcoding, resulting in higher prices for the same services. Well designed systems may provide some benefit, but don’t look for cost savings, and certainly don’t think that this legislation provides the key to unlock the IT world.

*  Prevention.

Prevention is very important, but overall it does not save money, and it is certainly not dependent on the enactment of this legislation.

*  Create a public option.

There is no public option in the Obama plan. Even if there were, it would not reduce the waste in our dysfunctional health care system, just as Medicare has been largely unable to do. In our fragmented system Medicare is merely an additional player, adding to the complexities and costs of health care financing and health care delivery. As a single entity covering everyone, an improved Medicare would provide the efficiencies that would recover hundreds of billions of dollars that could be used to fully cover the uninsured and underinsured.

Conclusion

The confusion in costs and “bending the curve” has resulted from the fact that the discussion primarily has been limited to consultations with the Congressional Budget Office on the federal budget and not on our national health expenditures. The very modest bending of the curve has related to federal budget projections. Much of that was accomplished by placing a greater financial burden on the people, especially moderate and upper-moderate income individuals and families. We need to fix the problem of our escalating total costs, and then adjust the federal budget to match the solution.

Now do like David Cutler and go back and score these “ten broad ideas that have been offered for bending the health-care cost curve.” Negative scores are not only permitted but should be used when appropriate.

Your final score?  (Ouch!)

Health plans extend their market dominance

By Emily Berry
American Medical News
March 8, 2010

Members of Congress and state lawmakers have called health insurance executives on the carpet to make them explain why their companies are hiking individual insurance rates so steeply across the country. A recently released American Medical Association study of health insurance markets gives one answer: Because they can.

The AMA’s most recent look at the health insurance market — “Competition in health insurance: A comprehensive study of U.S. markets,” released Feb. 23 and based on 2009 data — finds that 99% of 313 metropolitan areas tracked would be considered to have “highly concentrated” insurance markets under guidelines used by the U.S. Dept. of Justice and the Federal Trade Commission. In its 2009 version of the study, the AMA found that 94% of metropolitan areas were ranked “highly concentrated.”

One insurer held 70% or more of the health plan market share in 24 of 43 states measured, up from 18 in 42 states in the previous year’s study. In 92% of the 313 markets in the report, one insurer held at least a 30% share.

In past releases of its survey, the AMA has noted that insurer market dominance has allowed health plans to force physicians into take-it-or-leave-it contracts. But this year the AMA — echoing other experts — noted that market dominance has allowed plans to give patients take-it-or-leave-it pricing.

http://www.ama-assn.org/amednews/2010/03/08/bil20308.htm

And…

A front-line perspective on 2010 commercial price & product trends

Transcript of conference call with Willis
Goldman Sachs
March 3, 2010

Matt Borsch, Goldman Sachs:  Let me jump right in here with, perhaps, the most important question from the standpoint of institutional investors looking at the sector, and that is, what are you seeing in terms of competition between the carriers, specifically relative to last year or two years ago or whatever you want to use as the baseline, has price competition increased or decreased?

Steve Lewis, regional leader for the employee benefits practice of Willis, the third largest insurance broker in the world:  As a specific answer to that, we would say, price competition is down from year ago. An overall theme that we would characterize this year, meaning, when I say this year, the just completed January 1 renewals, and continuing up and through today. We feel this is the most challenging environment for us and our clients in my 20 years in the business.

Not only is price competition down from year ago (when we had characterized last year’s price competition as being down from the prior year), but trend or (healthcare) inflation is also up and appears to be rising. The incumbent carriers seem more willing than ever to walk away from existing business resulting in some carrier changes.

And that’s a significant adjustment from last year where we saw aggressive pricing on the renewal front but not so much on the new business front.

http://graphics8.nytimes.com/packages/pdf/health/20100307_GOLDMAN.pdf

So 99 percent of metropolitan areas have “highly concentrated” private insurance markets, and price competition of private insurers continues to decrease as private insurers are “more willing than ever to walk away from existing business.” Competitive pricing has almost disappeared from the private insurance market, so insurance has become a “take it or leave it” proposition.

And precisely what does the legislation before Congress do to ensure a competitive market of private insurance plans? Look at the Senate bill which forms the basis of the Obama proposal. When you read “Part II – Consumer Choices and Insurance Competition through Health Benefit Exchanges,” you will see that this legislation does virtually nothing to expand insurer competition in these concentrated markets.

President Obama and the members of Congress need to give up on the idea that they can legislate a thriving, competitive market of private health plans that will bring affordable health care to all of us. The changes that would be required are not in this bill, and, besides, they would be more complex, more expensive, and less effective than merely replacing the private insurers with a single payer national health program – an improved Medicare for all.

Once again today, in a pep talk at Arcadia University near Philadelphia, President Obama said that they put all ideas on the table, but they didn’t. They left single payer off. He did mention that people on the left wanted single payer, and judging by the cheers, apparently the audience wants single payer as well. Too bad he doesn’t listen.

The “public option”and the wheelbarrow parable
(Part 1 of 3)
By Kip Sullivan, JD

On July 8, 2008, Health Care for America (HCAN) announced its existence. The press release HCAN published that day described HCAN’s “vision” for health care reform in these words:

Health Care for America Now offers a bold new vision for health care reform: Americans can keep the private insurance they have, join a new private insurance plan, or choose a public health insurance plan.

It is clear today that HCAN’s position is quite different from the “vision” HCAN announced in July 2008. If HCAN had announced on July 8, 2008 the position it promoted during 2009, its announcement would have sounded like this:

HCAN offers a bold new vision: Ten percent of nonelderly Americans will be given the opportunity to enroll in a public health insurance plan, the other 90 percent will be forced to buy health insurance from the insurance industry, and the taxpayer will be asked to fork over half-a-trillion dollars per decade to the insurance industry. HCAN will not go to the mat for the tiny public program. If necessary, HCAN will jettison the little public program and throw their full support behind an insurance industry bailout. It is more important to HCAN that the insurance industry get millions of new customers and its half-trillion from the taxpayer than it is to enact a tiny “option.”

But despite the passage of almost two years, the leadership of HCAN and the “option” campaign has yet to announce to the public that the “option” is dispensable and that HCAN’s highest priority is an insurance industry bailout: tens of millions of compulsory customers plus massive tax-financed subsidies for the industry. To the contrary, the “option” campaign’s leadership continues to employ the tactics it has used from the beginning of the campaign, namely, to generate a great public fuss over the tiny “option” while simultaneously expressing support for bailout legislation that contains an ineffective “option” or no “option” at all.

This behavior reminds me of a parable about a company employee who stole wheelbarrows from the company right under the nose of the company’s security guard. He would leave work every night pushing a wheelbarrow filled with straw. The guard at the factory gate was fooled into thinking the straw hid something and focused all his attention on the straw and never thought to ask about the wheelbarrow. He would carefully lift the straw and look for stolen goods, and, finding none, would wave the employee on.

If we substitute a health insurance industry bailout for the wheelbarrow, and the “option” for the straw, the parable illustrates the strategy of the “option” campaign. By creating a great ruckus over the “option” but all the while supporting bailout legislation (with or without an “option”), the “option” campaign has fooled its followers and the public into thinking its highest priority is the “option” when in fact its highest priority is a bailout.

In this three-part series, I summarize the evidence for this conclusion – that the “option” campaign cares more about the bailout than the “option.” In Part 2 I present the evidence indicating the “option” campaign never adopted criteria that would guarantee the “option” would be large and that it did little or nothing to educate Congress about such criteria. The result of the “option” campaign’s failure to promote such criteria was predictable: Democrats in Congress adopted a very tiny, ineffective “option.” Part 2 also presents evidence indicating “option” proponents within Congress adopted very similar tactics.

Part 3 summarizes the evidence indicating that the “option” campaign’s leaders never made the tiny “option” a precondition for their support of the Democrats’ health care “reform” bills and, to make matters worse, when Democrats in the Senate passed a bill with no “option” in it, the “option” campaign’s leaders continued to support the Senate bill. Part 3 also presents evidence indicating “option” proponents within Congress were almost as wishy-washy about the “option” as the leadership of the “option” campaign was.

Kip Sullivan is a member of the steering committee of the Minnesota chapter of Physicians for a National Health Program.

How Much Fraud and Abuse Is There in U.S. Health Care?

By Uwe E. Reinhardt
The New York Times
March 5, 2010

One of the more remarkable proposals put on the table at last week’s bipartisan summit on health care reform was an idea from Senator Tom Coburn, an Oklahoma Republican, to deploy undercover agents posing as patients in an effort to ferret out fraud and abuse by doctors and hospitals.

It subsequently became one of the ideas from Republicans that President Obama offered to incorporate in a revised health reform bill. One wonders whether the president was sincere or just being a bit naughty.

After all, the idea to legislate the infiltration of undercover agents into private medical practices and hospitals in America does not exactly square with the loudly voiced opposition of Republicans to government intrusion into American health care. Can one imagine anything more intrusive?

Senator Coburn is a physician and may have reasons to put forth such a controversial idea. As someone outside of the profession, I would not be in a position to second-guess him on that issue.

…

If the president and Congress wish to constrain the growth of the administrative cost of American health care, they should look not only to the private health insurance industry. They might commission a study exploring how government-run health systems in other nations manage to pay hospitals and doctors without imposing on them the huge administrative burden borne by American providers of health care. Perhaps Congress can learn from such a study.

A proper slogan here might be “evidence-based administration” (E.B.A.), meaning that just as the use of clinical procedures should be based on solid empirical evidence that they work and are worth their cost, the ever-new administrative burdens that government imposes on health-care providers should meet the same evidence-based test.

A second problem faced by hospital executives is that they have only partial control over the costs they must book and for which they seek to get paid. The bulk of these costs are driven by the clinical decisions of physicians who are affiliated with hospitals and can use the hospital as a free workshop, so to speak.

http://economix.blogs.nytimes.com/2010/03/05/how-much-fraud-and-abuse-is-there-in-u-s-health-care/

Posted response of Don McCanne, San Juan Capistrano, CA (# 1):

Instances of blatant fraud in health care provide great fodder for the media. The identification and prosecution of criminals in Florida becomes national news.

Those who claim that fraud and abuse are a primary reason for high health care costs use such stories to say that the government is not doing its job in identifying and prosecuting these crooks, when the stories are about the government doing its job in identifying and prosecuting these crooks.

Thieves will always be with us and need to be ferreted out, and the government will continue to do that.

The far greater problem, as Dr. Reinhardt explains, is in physician practice patterns. The great variability in use of resources is not so much a matter of abuse as it is simply a variation in individual and regional concepts of “that’s the way its done.”

Much of the high use is in imaging, or consultations, or referral for high-tech procedures for which the primary physician receives no additional compensation. That is not fraud.

Nor is it defensive medicine. A test or consultation allegedly ordered to prevent a malpractice lawsuit is not ordered out of an intellectual void. It is ordered because the patient has a real risk, even if small, of having a problem that may require intervention.

Most physicians want to practice high quality, efficient medicine. They welcome information such as that generated by the British NICE program – a program designed to identify best practices. The opponents of reform dismiss even these efforts with nonsense accusations of “rationing.”

Not spending money on medical services that are not helpful or even harmful is not rationing. Rather it exemplifies a fundamental concept characteristic of free markets – providing more transparency in order to obtain greater value in our health care purchasing.

The Utility of Trouble Leveling the Playing Field: Giving Municipal Officials the Tools to Moderate Health Insurance Costs

By Bob Carey
The Boston Foundation
February 2010

The Boston Foundation, Greater Boston’s community foundation, is one of the oldest and largest community foundations in the nation… The Foundation is made up of some 900 separate charitable funds established by donors either for the general benefit of the community or for special purposes. The Boston Foundation also serves as a major civic leader, provider of information, convener, and sponsor of special initiatives designed to address the community’s and region’s most pressing challenges.

Executive Summary (excerpts)

The drop in state tax revenues and the subsequent reduction in local aid to cities and towns have forced municipal governments across the Commonwealth to reduce services, impose layoffs, and increase taxes and fees to balance their fiscal 2009 and 2010 budgets. The outlook for fiscal 2011 is hardly encouraging. Compounding this problem is the continued escalation in operating and overhead costs, including the enormous cost of providing health insurance benefits to municipal employees and retirees.

One option for communities to lower their health insurance costs is to join the state’s Group Insurance Commission (GIC), which manages health benefits for state employees, retirees, and their spouses and dependents. The GIC is the largest provider of employer-sponsored health benefits in the Commonwealth, covering over 320,000 individuals.

Over the past ten years, the GIC has moderated the growth in its health insurance premiums by increasing members’ point-of-service cost sharing and offering health plans that utilize tiered provider networks. During this same period, the municipal health plans reviewed in this report remained largely unchanged, with only minor increases in point-of-service cost sharing and no use of tiered provider network plans.

The difference in plan designs – that is, higher point-of-service cost sharing in GIC plans compared to municipal health plans – is the main reason why municipal health insurance premiums are higher than the state’s. This analysis highlights the differences in premiums to demonstrate the would-be savings available to municipalities from altering plan designs.

It is important to qualify that these estimated savings presuppose that cities and towns would not be required to make any associated tradeoffs by way of concessions to unions to secure labor approval for joining the GIC.

The irrefutable point, however, is that there could be significant savings for cities and towns – in a time of severe fiscal challenges – if they were allowed to join the GIC apart from collective bargaining. Furthermore, if municipal managers were provided the same authority that state managers possess to modify plan designs outside the collective bargaining process, it is likely municipalities could attain premium savings comparable to those realized by the GIC.

A prime example of the effect of the differences in management rights occurred earlier this year. A portion of the savings estimates noted above is due to mid-year benefits changes that the GIC made to address a budget deficit in FY 2010 resulting from higher than anticipated health care costs. The benefit changes, approved by the Commission in November 2009 and effective February 2010, increased the amount of cost sharing borne by enrollees and lowered health insurance premiums by an average of 5.5%. These mid-year changes further increased the differences in premiums and point-of-service cost sharing between the health benefits provided municipal employees and those provided state employees.

While the growth in municipal health insurance premiums can be reduced by increasing point-of-service cost sharing, enrollees will incur more out-of-pocket expenses as they utilize the health care system. As this report reveals, the higher cost sharing of the GIC plans compared to municipal health benefits would shift more of the costs to enrollees, although a portion of these expenses would be offset by a reduction in health insurance premiums.

Approval of changes to the GIC’s health benefits requires a majority vote of the Commission. And, while union and retiree representatives serve on the 15-member Commission, they make up a minority of the membership. Therefore, support from union and retiree representatives is not needed to approve the package of health insurance benefits provided to state employees and retirees.

Recommendations

1. Level the playing field between state and local health benefits management by removing the requirement that municipal officials must collectively bargain plan design changes

2. Bring the health benefits provided to municipal employees into line with the health benefits offered state employees and retirees

3. Require all municipal retirees who are eligible for Medicare to enroll in Medicare Part B as a precondition for receiving health benefits from the municipality

4. Adopt a premium contribution strategy that incents members to select more cost-effective health plans

5. As point-of-service cost sharing increases, limit members’ financial exposure by putting in place an out-of-pocket maximum or funding a Health Reimbursement Account (HRA)

The Utility of Trouble (79 pages):
http://www.tbf.org/uploadedFiles/tbforg/Utility_Navigation/Multimedia_Library/Reports/UtilityOfTrouble_2010.pdf

This report from The Boston Foundation contains two very important fundamental proposals designed to reduce health care costs for municipal governments in Massachusetts. One of them directly relates to health policy, but the other, which is perhaps even more important, relates to the freedom of workers to negotiate for a level of total compensation that meets their most basic needs.

First, the health policy lesson. This report adds another invidious voice to those who would control costs for those paying for health benefit programs, not by reducing health care costs, but by shifting those costs to the very individuals who need health care.

As has already happened with most pension plans, health benefit programs are shifting from defined benefit programs to defined contributions. Although they are passed off as providing choice of “more cost-effective health plans,” that is merely a euphemism for requiring workers to pay the full balance of premiums over that of the basic spartan plans.

The increases in “point-of-service cost sharing” again is merely shifting more costs to worker-patients through higher deductibles, co-payments, and ever increasing coinsurance. Anthem Blue Cross has some plans with coinsurance as high as 70 percent, meaning that the insurance pays only 30 percent of only the allowed charges.

We don’t need to repeat here the impact of making individuals pay more of the premiums and greater cost sharing. We’ve heard enough about the financial hardships and physical suffering that these health financing policies cause.

But what we should repeat here is that the proposal before Congress has the same impact. Individuals will have to pay the full premium differences for plans above the basic plans with a low actuarial value, and plans will continue to compete on premiums by using innovations to shift more costs to patients, especially through increased cost sharing.

On the second point, we’ll depart from our usual narrower topic of health policy, and touch on one of the most important issues of these times – the successful attack on social solidarity that has shifted the nation’s wealth up the economic ladder, now leaving middle-income Americans struggling to make ends meet.

With the shift from a manufacturing economy to a service economy, the attack on unions and collective bargaining has been unrelenting. Even government employees’ unions and teachers’ unions have had considerable difficulties maintaining clout.

Look at the recommendations of The Boston Foundation. Take away the health benefit programs that the workers paid for through forgone wage increases. When substituting the cheaper plans, the municipalities should not “make any associated tradeoffs by way of concessions to unions.” Most of the premium reductions will benefit the municipalities with very little going to the workers. Make sure that union and retiree representatives remain a minority of the state’s Group Insurance Commission (GIC) so that their demands can be ignored. This is class warfare, and the rich guys are winning.

The PNHP leadership and others in the policy community have warned that the Massachusetts reform efforts would fall short, and particularly would fail to address the cost issues. This Boston Foundation report is simply one more example of why reform should not have been based on a business model of a market of private plans. It should have been based on the better and less costly public social service model that has a mission to assist everyone in obtaining the health care that they need.

Now President Obama and Congress are making the same mistake by following the same primrose path to the everlasting bonfire. People are going to get burnt.

Daschle: Incremental Health Reforms Won’t Work

Kaiser Health News
March 2, 2010

Q: What are the parallels or contrasts between the Clinton administration’s efforts to get a health care overhaul in 1993-94 and now?

Former Senate Majority Leader Tom Daschle:  … You’ve got a lot more recognition that we don’t have a luxury this time to fail. Per capita costs were $3,400 in 94, they’re $8,000 now. The level of uninsured was 37 million, and now I think it’s over 50 million.

Whether it’s quality, access or costs you can look at all the numbers, they’ve dropped precipitously, and we’ve been able to demonstrate, if anything, out of these last 15 years that incremental reform doesn’t work. We’ve tried incremental reform with SCHIP and with the passage of Part D and maybe portability, a couple things here and there. We’ve seen everything go south, and it’s going to continue to do that until we put in place the corrective policy building blocks to address this more comprehensively.

Daschle: Are you satisfied that the Senate bill does enough to control costs?

A. I don’t think that either version of the bill does enough. I look at this whole effort as having three components: insurance reform, payment reform and delivery reform. And all three components have cost containment elements in them. Not nearly as much as I’d like, but I think a lot of the building blocks are going to be in place. But you can’t expect one bill to comprehensively deal with each one of these components to everyone’s satisfaction. I tell audiences all over the country, that if this passes I think we’re on the 30-yard line, that we’ve got 70 yards to go to accommodate really significant change in the system, adequate enough to be able to say we’ve addressed cost, access and quality in a meaningful way.

http://www.kaiserhealthnews.org/Checking-In-With/Daschle-Incremental-Health-Reforms-Wont-Work.aspx

And…

Why Incremental Reforms Will Not Solve the Health Care Crisis

By Don McCanne, MD
Journal of the American Board of Family Practice
16:257-261 (2003)

The record of incrementalism to date is unimpressive. Medicaid, the State Children’s Health Insurance Program, and the Health Insurance Portability and Accountability Act have been important programs that have provided access and coverage for many who need it. These programs alone, however, have been grossly deficient in filling the greater voids in our system. The numbers of uninsured Americans continue to increase. Health care costs continue to escalate well beyond the rate of inflation, while no efforts are being made to reduce the egregious waste of our administrative excesses. We are spending more on health care administration alone than is allocated for our entire national military defense budget. Health care outcomes continue to be much worse in the United States than in other industrialized nations that provide coverage for everyone at a much lower cost than that of our fragmented and inefficient system. Furthermore, inadequate coverage is now threatening the financial security of many of those that actually do have insurance.

Despite the failure of incrementalism, these approaches continue to have support primarily because of the perception that the nation does not want a “taxpayer-funded, government solution.” Ironically, health care is already 60% publicly funded, and nearly all incremental proposals involve public policy, especially tax policy, and actually further increase taxpayer funding of health care.

Conclusion

Incremental models of reform perpetuate our flawed, fragmented system of funding health care. They perpetuate inequities both in the funding of health care and in the allocation of our health care resources. They limit choice of health care providers. None assures continuity of coverage and care. Many incremental proposals barely have an effect on the numbers of uninsured, and none of them ensure truly universal coverage. All incremental approaches substantially increase health care costs, and most current proposals assure neither financial security nor health security.

In contrast, a single payer program would provide affordable, equitable, comprehensive care for everyone.

Whether through tax policy, public programs, regulatory oversight, mandated coverage, or a combination of these and other interventions, the government will be intimately involved in our health care funding. We can no longer afford to dismiss any valid option because it is a government solution, especially in that all proposals are government solutions. We must decide how we can best use our government resources to be sure that we are receiving the greatest value for our health care investment. Limiting our consideration to various incremental solutions closes the door on the health care reform goals of equity, affordability, and efficiency, and it threatens the goals of universality, provider choice, access, and comprehensiveness. When all are readily achievable, why accept less?

http://www.jabfm.org/cgi/content/full/16/3/257

To understand that incremental reforms have not worked, all you have to do is look at the increasing numbers of uninsured, the greater numbers with inadequate insurance, the steep increases in health care prices, the perversities of the private insurers, and the administrative waste and other dysfunctions of our multi-payer and non-payer system. Everyone agrees that incrementalism has failed us, even Tom Daschle and Don McCanne.

Daschle and McCanne also agree that the policies contained in the House and Senate bills also fall far short. As Tom Daschle states, “… that if this passes I think we’re on the 30-yard line, that we’ve got 70 yards to go to accommodate really significant change in the system, adequate enough to be able to say we’ve addressed cost, access and quality in a meaningful way.”

Think of what he has said. The policies contained in these bills are highly flawed incremental steps that won’t even get us one-third of the way there, at the same time that he tells us that incremental reform won’t work.

In my article (link above) I discuss some of the incremental policies and why they have not worked and will not work. Although some of the terminology and policy proposals have evolved since the article was written, it does discuss several of the concepts in the legislation supported by Congress and President Obama. The basics are the same; incremental health reforms won’t work.

For those who say, “yes, but the insurance market reforms are an improvement over what we now have,” we need to acknowledge that not only are these incremental steps, but they take us down the WRONG path. They lock us into a profoundly wasteful and inefficient financing system that, by design, draws off much needed and evermore scarce health care dollars by prioritizing the interests of a parasitic industry over the interests of patients.

Tom Daschle explains that, once this legislation passes, most of the work will still be left to do. The flaw with this strategy is that everyone will walk away pretending that health care has been reformed. It will take another decade or two of financial hardship, suffering and even death before our elected leaders will admit that this didn’t work. That is far too great of a price to pay for us to let them off the hook now.

Addendum:  If the legislation does pass, PNHP is not walking away. Get used to listening to our clamoring.

Originally published in the Berkshire Eagle.

Aetna, Cigna, Humana, United Health, and Wellpoint scored record profits totaling $12.2 billion. In 2008, Ron Williams, CEO of Aetna, received over $24 million in compensation, about $450,000 per week. His weekly compensation would be enough to pay the yearly salary of three family doctors, whose median income in the United States is $159,000 per year.

While middle class families were struggling to pay their escalating health insurance premiums, rising deductibles and co-payments, Wellpoint’s profits increased by 91 percent in 2009, $2.3 billion over the previous year. Not content with this level of profiteering, Wellpoint’s subsidiary, Anthem Blue Cross of California, seeks to raise its premiums for some by an astounding 39 percent this year.

A study in the Journal of the American Medical Association last week reports that physician fees, adjusted for inflation, decreased by 25 percent between 1996 and 2006. This coincided with a decrease of 5.7 percent in the number of hours that doctors worked per week, a reduction that amounts to the equivalent of a loss of 36,000 doctors from the work force, had the hours per physician not changed.The authors’ suggested “the possibility that economic factors such as lower fees and increased market pressure on physicians may have contributed, at least in part, to the recent decrease in physician hours. Further reductions in fees and increased market pressure on physicians may therefore contribute to continued decreases in physician work hours in the future.”

Will President Obama’s health reform proposal, crafted to gain bipartisan support from a Congress that has been lobbied by the Big Five with $16. 8 million last year, actually reform health care? Not a chance, because the proposal preserves a central role for the for-profit insurance industry. This leads to several problems.

First, his plan will give subsidies to people who are unable to afford insurance policies. While more people would have insurance coverage, this is the equivalent of giving billions of taxpayer dollars to the private health insurance industry.

Second, the individual mandate he proposes will force millions of middle class Americans to buy inadequate insurance products, which have rapidly escalating premiums, and high deductibles and co-payments. This will contribute to financial hardship and medical bankruptcy for those who suffer serious illnesses, and actually need to use their insurance.

And, third, at least 23 million people will remain uninsured.

Dr. Quentin Young, speaking for Physicians for a National Health Program, said, “This proposal is an insurance company bonanza, not good, evidence-based reform. The president would do better by abandoning the insurance and drug companies and instead taking up the single-payer approach . . . By building on and improving the already popular Medicare program, we could put our patients’ interests first. Were Obama to do so, he would meet with strong public support, including from the medical community.”

Obama’s proposal supports the health insurance industry to the detriment of the American people. Private health insurance companies have been given our health care dollars in order to pay doctors and hospitals: they are robbing the coffers, with their exorbitant compensation packages for CEOs and profits for their investors. An improved “Medicare for All” would cover everyone, and provide payment for care people need when they are ill: that is the health care reform Americans need and want.

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

Report to the Congress: Medicare Payment Policy

Medicare Payment Advisory Commission (MedPAC)
March 1, 2010

The goal of Medicare payment policy is to get good value for the program’s expenditures, which means maintaining beneficiaries’ access to high-quality services while encouraging efficient use of resources.

Managing base rates will not solve the fundamental problem with current Medicare payment systems, discussed in our June 2008 report, that providers are paid more when they deliver more services (fee-for-service), without regard to the quality or value of those additional services. To address that problem directly, the Commission was an early proponent of payment reforms now widely discussed, including “medical homes,” “bundling,” and “accountable care organizations.”

For two reasons, however, comprehensive reform of Medicare’s payment systems is not a ready panacea. First, the new payment models need to be tested and refined; it is one thing to conceptualize a new model but quite another to implement it on a broad scale. Second, reorganization of how care is delivered may be necessary for payment reform to work. For example, “bundling” would pay a lump sum to the hospital, physicians, and post-acute providers caring for a patient during an inpatient admission plus some interval post-discharge (e.g., 30 days). Currently, those providers often act independently of one another and have no formalized means for collaborating, much less for sharing financial risk. Payment reform will often require reorganizing the delivery of care, a complex and time-consuming activity in its own right.

As much as reformers – including the Commission – may wish to hasten a sweeping overhaul of Medicare payment systems, Medicare is likely to continue using its current payment systems for some years into the future. This fact alone makes unit prices – both their overall level and the relative prices of different services – an important topic. In addition, unit prices under the current payment systems could affect the prospects for payment reform for the following reasons:

• The level of unit prices has an immediate and direct effect on Medicare expenditures. By limiting unnecessary updates, the Congress can achieve budget savings and lower beneficiary premiums and cost sharing. Although some critics of Medicare claim that it pays too little for each unit of service, in their 2003 Health Affairs article, Uwe Reinhardt, Gerard Anderson, and others found that high unit prices are one of the most important reasons that total U.S. health expenditures per capita are the highest in the world.

• By limiting and altering Medicare’s unit prices, Medicare provides an impetus for providers to volunteer for experiments with new payment methods. Medicare payment reform will often require changes in how providers are organized. Therefore, payment reform will likely need to proceed, at least initially, on a voluntary basis. Voluntary reform poses two challenges: First is the challenge of getting enough volunteers; after all, reorganizing can be difficult work since it may well entail a redistribution of income among participants. A physician subspecialist, for example, is unlikely to volunteer to participate in an accountable care organization that intends to redistribute income from subspecialists to primary-care providers – unless the subspecialist believes that redistribution is likely to happen under the current payment system. The second challenge is that if there is no financial pressure on providers that choose to stay in the current fee-for-service payment systems, their incentive to take a risk on a new system will be limited – and only providers who expect that they will fare better financially under the new payment method will volunteer. As a result, all other things being equal, voluntary payment reform could increase, not decrease, Medicare expenditures. Steady pressure on unit prices under Medicare’s current payment systems, coupled with appropriate redistribution of payments, will help address both of these challenges.

• The relative values used in Medicare’s payment systems signal what the program values and can, by themselves, shape the delivery system. On the one hand, inappropriately high unit prices may encourage heavy investment in equipment (e.g., MRI or computed tomography scanners) or programs and facilities (e.g., cardiac specialty hospitals and programs) that institutional providers are then reluctant to abandon. In extreme cases, badly mispriced services may leave the program vulnerable to fraud and abuse. On the other hand, comparatively low unit prices may discourage providers from delivering certain services. Take, for example, the relatively low amount paid for primary care services as opposed to subspecialty services. The comparatively low compensation for primary care has contributed to the dramatic decline in the number of U.S. medical school graduates choosing careers in primary care.

In conclusion, changing Medicare’s payment methods is essential to improving efficiency and value in health-care delivery. But such payment reform is unlikely to happen – or at least will not happen as quickly – without steady pressure on the level of prices paid by Medicare as well as attention to the relative values assigned to different services. We hope this report contributes to that effort.

MedPAC Report to the Congress (381 pages):
http://www.medpac.gov/documents/Mar10_EntireReport.pdf

And…

Patient Protection and Affordable Care Act

U.S. Senate
December 24, 2009

SEC. 3403. INDEPENDENT MEDICARE ADVISORY BOARD.

There is established an independent board to be known as the ‘Independent Medicare Advisory Board’.

PURPOSE.—It is the purpose of this section to, in accordance with the following provisions of this section, reduce the per capita rate of growth in Medicare spending.

http://thomas.loc.gov/ Click Bill Number; Insert H.R. 3590; Click Search; Click Text of Legislation; At end of version 5 click PDF (2409 pages); Go to pages 982-1033 for SEC. 3403 on the Independent Medicare Advisory Board.

Wake up! Big changes are coming in health care financing!

For those who are upset about the 21 percent cut in Medicare payments instituted yesterday, this provides you with hardly an inkling of what may be ahead.

The sustainable growth rate (SGR) was a well intentioned effort to slow the increase in Medicare payments to more closely match the rate of inflation. MedPAC (Medicare Payment Advisory Commission) played an advisory role in establishing SGR, but it required the action of Congress to institute it.

Because physicians then increased the frequency and intensity of services, the SGR formula required a very modest rate reduction – each year. Congress was reluctant to approve the rate reductions and so they postponed them – each year. But the reductions were cumulative and have remained on the books. This year Congress has failed to act so the cumulative 21 percent reduction was applied as of yesterday. HHS is withholding payments for the next ten days to give Congress one more chance to halt the reductions for this year, but no definitive resolution is in sight.

If this is what has happened when MedPAC has had only an advisory role, just think of the possibilities of an empowered MedPAC. The Independent Medicare Advisory Board (IMAC) that would be established by the enactment of the Senate health care reform legislation has tremendous powers to move forward with their recommendations, with Congress being relegated to having only limited veto powers on their actions.

When you read MedPAC’s Medicare Payment Policy report presented to Congress yesterday, you can begin to imagine the potential of IMAC as an empowered MedPAC. It is likely that we would be moving ahead with the initial phases of accountable care organizations (ACOs) and bundled payments. A recent qotd discussed how these concepts might actually increase spending instead of achieving their goal of reducing spending, that is for private insurers negotiating with a more highly consolidated delivery system. But the IMAC rules would apply to Medicare exclusively, and Medicare doesn’t have to negotiate.

Health care cost increases must be contained. I’m not as concerned about those who can afford the high prices of health insurance and health care as I am about those who will not be receiving the health care that they need because they can’t pay for it and government support will be inadequate to remove the financial barriers to care.

The private insurers have proven to be incapable of controlling spending. The government has been effective, but in what way? For Medicaid, they have simply underfunded the program. The government is depending on both captive providers and provider charity to absorb the losses on Medicaid.

What about Medicare? Actually Medicare has been very effective in using innovations to slow cost increases, including some innovations recommended by MedPAC. The problem is that there is now a perception on the part of many providers that Medicare has been too aggressive in slowing spending, and there are early signs that access may become impaired for Medicare beneficiaries because of a lack of willing providers. It is crucial that Medicare maintains a balance between fair compensation for the providers while at the same time not supporting today’s excesses in health care pricing.

Are you still awake? Here’s where I’m going to lose some of you.

We do need an Independent Medicare Advisory Board, but not for Medicare as we know it. Letting the private insurance industry have free rein while allowing Medicare to ratchet down rates risks converting Medicare into another underfunded Medicaid program.

What we need instead is an Independent Medicare Advisory Board (or a public administrative equivalent) that strives for optimal payment policies for our entire health care system, i.e., for a single payer Medicare for all program. Patient and provider push back would ensure that we would have the balanced compensation rules that we need.

It’s too bad that we can’t use reconciliation to enact an improved Medicare for all. Or can we?

What do we need health insurers for anyway?

By Michael Hiltzik
Los Angeles Times
February 28, 2010

(Before a congressional subcommittee, WellPoint’s chief executive Angela) Braly was forced to make an implicit admission that her industry almost never makes explicitly: The nation’s health coverage system is so hopelessly broken that even the health insurance industry can’t handle it anymore.

Her testimony, and other statements she and other WellPoint executives have made, suggests that insurers can’t profitably manage through periods of high unemployment. They can’t price policies in a way that keeps healthy young people in the same pool as older people, producing a mockery of the very point of indemnity insurance. Despite a decade of unobstructed consolidation, which was sold to regulators as a way to control healthcare costs by creating mega-insurers like hers, her industry can’t control healthcare costs.

Braly’s words are a reminder of the most important unasked question in the entire healthcare debate: What do we need insurance companies for, anyway?

The only way insurers can remain profitable at all is by selling healthy people on policies that don’t offer much coverage at all, while squeezing older, less healthy people remorselessly so they either pay for most of their care out of pocket or get priced out of the insurance market completely (thus becoming a burden for taxpayers).

Braly in her testimony assured the subcommittee that even with the latest California rate increases, “a 40-year-old woman in Los Angeles can obtain coverage with a $1,500 deductible for as low as $156 per month.”

She didn’t specify what kind of coverage. So let’s check out what her company offers. Leaving aside whether that 40-year-old woman might have a preexisting condition that would drive up her premium or make her uninsurable — anything from diabetes to a history of hay fever — the insurer’s California package with a $1,500 deductible requires the customer to pay up to 70% of the cost of “covered services,” including routine mammograms and Pap tests, plus as much as $500 a day for hospital stays.

Maternity isn’t covered at all, so our 40-year-old Angelena better have gotten her lifetime childbearing out of the way before picking up the phone to sign up.

“Our plans fit the way you live,” the CoreGuard brochure says. What it really means is: You better fit the plan, or you’re out of luck.

Shouldn’t that have been on the agenda at the Washington summit?

http://www.latimes.com/business/la-fi-hiltzik28-2010feb28,0,1011707.column

And…

Our plans fit your plans

Anthem Blue Cross

Anthem Blue Cross CoreGuard Benefits for California

Deductible: choices of $750 to $20,000 (with a second deductible for Out-of-Network services)

Coinsurance (In-Network): 50%
Coinsurance (Out-of-Network): 70%

Inpatient Services (In-Network): 50% Coinsurance plus $500 Copay per day (3 days)
Inpatient Services (Out-of-Network): 70% Coinsurance plus $500 Copay per day (3 days)

http://www.ehealthinsurance.com/ehealthinsurance/benefits/ifp/CA/CAAthem_CoreGuard.pdf

When WellPoint’s CEO Angela Braly boasts that a 40 year old woman can purchase $1,500 deductible coverage from them for only $156 per month, it’s important to see how they define that coverage.

Although Angela Braly didn’t state which $1,500 deductible plan has a premium “as low as $156,” let’s look at the Anthem Blue Cross $1,500 deductible CoreGuard plan as an example. Under that coverage, a 40 year old woman would have to pay twelve monthly premiums, the first $1,500 of In-Network care, the first $1,500 of Out-of-Network care, one-half of allowed In-Network charges after the deductible (coinsurance), 70% of allowed Out-of-Network charges after the second deductible (coinsurance) (Anthem Blue Cross paying only 30% of allowed charges!), an additional $500 per day for up to three days for hospitalization (a copayment on top of the coinsurance!), all maternity care (Anthem Blue Cross paying nothing!), and… well… you get it.

When Anthem Blue Cross promotes this product as a $1,500 deductible plan, they are being so deceptive that it is dishonest. They call these “look alike plans” – it looks like a $1,500 deductible plan, but it isn’t. The patient is paying most of the health care costs while Anthem Blue Cross pretends that this is insurance.

The more sophisticated insurance purchaser might look at this plan and recognize that it is almost worthless except that it has an out-of-pocket maximum of $3,500 for the year. So maybe it is worth the premium as a catastrophic plan, limiting losses to $3,500. But look closer. The fine print excludes the deductible from counting towards the out-of-pocket costs, so it is really $5,000, but only for In-Network services. Another $9,000 ($7,500 plus $1,500 deductible) has to be paid for Out-of-Network services as well. So the exposure is the total of monthly premiums, the In-Network $5,000, the Out-of-Network $9,000, all Out-of-Network costs in excess of the allowable charges, and any services, such as maternity care, that are not a benefit of the plan. This is another one of those you’re-covered-if-you-don’t-get-sick plans.

To show how ridiculous this can be, using the same benefit guide (link above) for a family with a $10,000 deductible plan, the out-of-pocket maximum looks like it is $7,000, but it is actually $17,000 for In-Network services ($7,000 plus $10,000 deductible), plus $25,000 for Out-of-Network ($15,000 plus $10,000 deductible). In addition to this $42,000, the family must pay monthly premiums, all Out-of-Network costs in excess of the allowable charges, and any services that are not a benefit of the plan (no maternity benefits for a young family!).

Angela Braly admits that WellPoint, the largest mega-insurer in the nation in terms of enrollees, cannot control health care costs, and neither can the rest of their industry. Their solution to keeping premiums affordable is to shift more of the health care costs to the individuals and families who need care, defeating the purpose of risk pooling.

Michael Hiltzik has asked the right question: What do we need insurance companies for, anyway?

Unchecked Provider Clout In California Foreshadows Challenges To Health Reform

By Robert A. Berenson, Paul B. Ginsburg and Nicole Kemper
Health Affairs
February 25, 2010

Abstract

Faced with declining payment rates, California providers have implemented various strategies that have strengthened their leverage in negotiating prices with private health plans. When negotiating together, hospitals and physicians enhance their already significant bargaining clout. California’s experience is a cautionary tale for national health reform: It suggests that proposals to promote integrated care through models such as accountable care organizations (ACOs) could lead to higher rates for private payers. Because antitrust policy has proved ineffective in curbing most provider strategies that capitalize on providers’ market power to win higher payments, policy makers need to consider approaches including price caps and all-payer rate setting.

Excerpts

As the dominant payer for the elderly and disabled, Medicare sets prices and is generally indifferent to providers’ negotiating clout. Private payers, which must negotiate with all hospitals and large physician practices, generally agree to pay much higher rates than Medicare pays to persuade providers to enter into a contract with them.

If accountable care organizations lead to more integrated provider groups that are able to exert market power in negotiations — both by encouraging providers to join organizations and by expanding the proportion of patients for whom provider groups can negotiate rates — private insurers could wind up paying more, even if care is delivered more efficiently.

Lessons from California, then, can inform current discussions about whether health delivery and payment reforms would reduce the rate of health care spending growth, not only in Medicare but overall. Our findings suggest the opposite: a definite shift in negotiating strength toward providers, resulting in higher payment rates and premiums. As one medical group executive said, “We are making out hand over fist.” In some cases, payment rates to hospitals and powerful physician groups approach and exceed 200 percent of what Medicare pays, with annual negotiated double-digit increases in recent years.

From the Discussion

The shift in who holds the upper hand in negotiating payments — once held by health insurance plans but now resting with health care providers — has had a major impact on California premium trends. According to some survey respondents, the dynamic needs urgent policy attention. “I am shocked there isn’t an outcry over the fact that our costs are driven out of control,” a health plan executive complained. “We would like to establish some sort of boundary, beyond which these guys can’t go. We’d welcome some regulatory intervention to break up these monopolies, because they are just killing us.”

A single “must-have” hospital can develop enough clout to obtain payment rates much higher than Medicare’s, acknowledging that many providers believe Medicare payments to be inadequate. Indeed, across other markets studied by the Center for Studying Health System Change, providers are developing increased leverage through single-specialty group formation and merger-and-acquisition strategies that do not involve integration. Nevertheless, given the push in Congress and elsewhere to restructure health care delivery with accountable care organizations, it is instructive that whatever their merits in improving quality and efficiency, California-style integrated care systems currently produce higher prices that undermine cost containment.

Unless market mechanisms can be found to discipline providers’ use of their growing market power, it seems inevitable that policy makers will need to turn to regulatory approaches, such as putting price caps on negotiated private-sector rates and adopting all-payer rate setting. Indeed, some purchasers who believe strongly in the long-term merits of increased integration of care delivery believe that price regulation may be a prerequisite for payment reforms that encourage integration.

http://content.healthaffairs.org/cgi/reprint/hlthaff.2009.0715v1?ijkey=p3Di/BAt8Oh0w&keytype=ref&siteid=healthaff

And…

AHIP Statement on Premium Increases

America’s Health Insurance Plans (AHIP)
Press Release
February 18, 2010

AHIP recently sent a letter to Capitol Hill to highlight the key factors contributing to increases in health insurance premiums. These factors include:
* sharp increases in provider rates;
* increased cost-shifting as providers seek to offset the costs of treating more Medicaid patients;
* an increase in uncompensated care costs;
* consolidation among hospitals and other health care providers;
* a wide range of new state laws, including benefit mandates, regulations, and premium taxes; and
* economic factors that have caused some people to drop coverage resulting in a risk pool that is more heavily weighted with older, less healthy persons.

http://www.ahip.org/content/pressrelease.aspx?docid=29497

And…

White House says health-care bills contain cost-cutting remedies

By Shailagh Murray
The Washington Post
November 26, 2009

Unless lawmakers institute changes across the entire system, (AHIP’s Karen) Ignagni said in a statement Wednesday, “Health costs will continue to weigh down the economy and place a crushing burden on employers and families.”

http://www.washingtonpost.com/wp-dyn/content/article/2009/11/25/AR2009112503474.html

The private insurers claim that health care costs are the major cause of high health insurance premiums. That is true. So where do we place the blame for failure to slow cost escalation?

The private insurers can be blamed for their despicable policies that prevent patients from receiving the care that they should have, but they can’t really be blamed for the fact that health care prices in the United States are much higher than in any other nation. So should they share some of the blame for failing to use their clout to slow down health care spending? Or is it that the private insurers really have no clout?

Are the health care providers to blame? The Health Affairs article by Robert Berenson and his colleagues at the Center for Studying Health System Change should be read by everyone interested in health system reform. They show that some California physicians and hospitals have been able to reverse the cost restraints that characterized the managed care revolution by using consolidation to greatly increase their negotiating clout. As an example of the impact, California hospitals were able to increase their prices for privately insured patients by 10.6 percent per year during 1999-2005.

Some may want to point to the greed and profit motives of the health care providers as being the primary problem. So which nefarious organizations are these? Sutter Health. Catholic Healthcare West. Hospitals in the University of California system. Ceders-Sinai Medical Center. These are not evil investor-owned institutions that take their directions from Wall Street. Since we can’t really blame Wall Street for high prices in California, do we blame the providers for failing to contain their own excesses? Or are they merely trying to meet the demand of patients who want the very latest and best in health care?

The current reform proposal before Congress calls for accountable care organizations (ACOs) and bundled payments as means to slow the growth in health care spending. That might work for Medicare though it wouldn’t save much, but, as explained in this Health Affairs article, it would likely lead to higher private insurance costs through the market impact of provider consolidation.

When we’re deciding where to place the blame, we should keep in mind a very important declaration from this article: “As the dominant payer for the elderly and disabled, Medicare sets prices and is generally indifferent to providers’ negotiating clout. Private payers, which must negotiate with all hospitals and large physician practices, generally agree to pay much higher rates than Medicare pays to persuade providers to enter into a contract with them.”

Private insurers do not have the clout to obtain best pricing, but a single payer such as Medicare does. Best prices are prices that are adequate to ensure that physicians and hospitals will be there when you need them but are not so high that they result in waste on non-beneficial excesses. If a universal public payer were to exercise too much clout, push back by patients and providers would moderate it.

So where should we place the blame for the failure to slow our excessive cost escalation? It is President Obama and Congress who have refused to consider a publicly financed and publicly administered program such as an improved Medicare for all that would finally allow us to receive the care that we need while still being able to pay for it.

But the real culprits? We, the people. We have failed to let our leaders know how truly passionate we are about achieving honest-to-goodness health care justice for all. We can change that.

Letter to the President
by David V. Clough, MD

Dear President Obama:

Health care reform is necessary for the maintenance of a productive society. Modern medicine has advanced so rapidly during 50 years since I began Family Practice that much of what I learned as a medical student and Resident is out of date and technically non existent. The advances are truly amazing and expensive.

I am a member of PNHP (Physicians for a National Health Program). The cost savings of a single system would easily exceed the expense of covering everyone, lower the administrative cost burden for the practicing physician, while decreasing the National tax payer burden. The current proposals fall short due to their complexity.

In 1963, I opened a private Family Practice. I needed a part-time nurse, and a part time receptionist/billing clerk—Today insurance billing, prior approval, varying and often conflicting rules and reports, require at least four full time employees to support one physician.

Primary Care cannot be forced into 10-15 minute time slots to “improve productivity” without destroying good Doctor-Patient relationships, and most likely produce serious errors of omission. If we were to remove all of the unnecessary paper work, the practice of medicine could again become the best of Professions with superior productivity. Primary care would remain attractive to more doctors, be highly effective and reduce the need for excessive dependency on technology and frequent referrals to specialists.

I urge you to abandon the current health reform proposals and return to consider a uniform system that would save money and produce superior care. Please give serious attention to PNHP, Doctor Flowers, and other supporters. Consider their plan – you said, if you have a better plan let me hear it – over 50% of Doctors, and 60% of the public agree.

Sincerely,
David V. Clough, MD
Gloversville, NY

Copy to Congressmen Paul Tonko and Nancy Pelosi. Senators Max Baucus, Harry Reid, Kirsten Gillibrand and Charles Schumer.

U.S. House of Representatives

Committee on Energy and Commerce
February 24, 2010

Memorandum
From: Committee on Energy and Commerce Majority Staff
Re: Questions Raised by Internal WellPoint Documents

As part of the Committee’s investigation into premium increases proposed by Anthem Blue Cross, a subsidiary of WellPoint, Inc., the Committee has received over 3,000 documents from WellPoint and its regulators, including internal WellPoint correspondence, presentations to senior corporate management, company-produced actuarial assessments, and regulatory filings. Committee staff also spoke to representatives of the company; received briefings from regulators, including the California Department of Insurance and the National Association of Insurance Commissioners; and spoke to outside experts in the field of health finance.

As summarized below, a review of the documents provided to the Committee and the other information received by the Committee raises multiple questions that members may wish to pursue during today’s hearing.

Question 4: Is WellPoint pushing people into less generous plans?

According to Ms. Braly’s testimony (Angela Braly, WellPoint President and CEO), “Another dynamic in our current challenging economy is that a higher proportion of healthy individuals move to lower cost coverage, such as coverage with a higher deductible, than in more robust economic times.”

Internal documents suggest that WellPoint’s business plan includes moving consumers into less generous plans. This strategy appears to have three components.

First, WellPoint’s highest rate increases seem to apply to their most comprehensive insurance plans. Maternity care is a marker for a more comprehensive package of benefits. A chart of proposed rates shows that WellPoint’s highest rate increases apply to the only two product families regulated by the Department of Insurance with maternity coverage. The chart also shows that for the most part, WellPoint proposed lower increases within specific product lines for the versions with higher deductibles than for the versions with lower deductibles.

Second, WellPoint is developing new products, called “downgrade options,” to promote to consumers facing the high rate increases. In one e-mail, David Shea, the Vice President for Individual Pricing, states: “Jim has asked Bryan to price 5-6 downgrade options to be made available in conjunction with the upcoming rate action.” In another internal e-mail, Mr. Curley, the Regional Vice President and Actuary, proposed that WellPoint “create 5-6 CA look-alike plans for CA with a benefit or two removed to create a downgrade option upon renewal.”

WellPoint also introduced a completely new product line called CoreGuard, advertised to have “some of our lowest monthly rates” and a “higher percentage of member cost-sharing in exchange for lower premiums.” One of the CoreGuard plans has a $20,000 deductible for a family for in-network services and a separate $20,000 deductible for non-network services. On top of that, a family can spend an additional $15,000 for co-payments for non-network services. Enrollees can be liable for another $4,500 in prescription drug costs. This adds up to a potential $59,500 out-of-pocket maximum for a family, who are still liable for the cost of drugs not on the formulary and maternity services.

Third, company officials discussed scaling back benefits for existing plans. In an e-mail, Mr. Shea states: “During our Plan review this morning Brian was mentioning that, in CA in the past, we mitigated rate increases by introducing product changes for existing members. We brought up the introduction of new products but he wanted to pursue existing product changes.” In another e-mail, Mr. Curley described scenarios that would produce a 6% to 10% reduction in benefits for four plans. The options included raising deductibles in three of the four plans and adding 25% coinsurance payments.

http://energycommerce.house.gov/Press_111/20100224/Questions.Raised.by.Internal.WellPoint.Documents.pdf

Testimony of Angela Braly, WellPoint President and CEO:
http://energycommerce.house.gov/Press_111/20100224/Braly.Miller.Testimony.pdf

When most of us are concerned about skyrocketing health care costs, the private insurers have concentrated on their more immediate concern: How can they maintain a market presence by making their health plans more affordable?

To keep premiums at a level that maintains their market, the insurers have reduced benefits and and have increased cost sharing, especially through much higher deductibles and greater coinsurance. Compared to copayments, coinsurance, as a percentage of charges, shifts much more of the costs to those who need a greater amount of health care.

These innovations are resulting in a transformation of the market into a choice of new options, referred to internally by the insurance industry as “downgrade options.” The consumer facing outrageous premium increases would have new choices – either deceptive “look-alike” plans with reduced benefits, or new innovative products such as CoreGuard. With CoreGuard, for a reduced premium, you can have a plan with family cost sharing of only $59,500 plus the cost of products and services that are not included as a benefit.

Of course, these downgrade options represent an expansion in the market of underinsurance products. Downgrade options are a devious method of shifting health care cost increases to those individuals who need health care. It is bad enough to be sick or injured without having to face intensifying financial hardship and perhaps bankruptcy, even if insured.

What will President Obama’s proposal do to rectify the injustices of these downgrade options? For most individuals, almost nothing. They will remain in their employer-sponsored plans or other programs such as Medicare or Medicaid. For the minority who will be able to purchase plans through state insurance exchanges, the plans will have prescribed benefits and an actuarial value at a relatively low 70 percent (60 percent for some), meaning that cost sharing can still pose a major burden. Because these relatively Spartan plans will still be more generous than the downgrade options, the premiums will be higher.

The Obama plan specifies that a family will not have to contribute more than 9.5 percent of income to the premium (less for lower income families), as long as they don’t upgrade to a plan with the benefits that they should have. If they upgrade, they pay the entire difference. Obama’s plan also would limit cost sharing to current HSA limits ($11,900 per family in 2010), but that is misleading since considerable costs can be racked up outside of the plan.

With higher premiums than current individual plans, with some limits placed on the exposure of the family to costs, and with impotent measures to slow cost escalation, an increasing burden will be placed on the taxpayers who are subsidizing this system. That’s us. So we’ll pay, one way or another.

Why is President Obama forcing on us this profoundly expensive, administratively complex, and comparatively ineffectual system when we could have an improved Medicare for all of us that would ensure that we get the care we need while keeping it affordable? More to the point, why aren’t we mounting a rebellion (with civility)?

Purchasing Value in Health Care Selected Findings From the 15th Annual National Business Group on Health/Towers Watson Survey Report — 2010

Towers Watson
February, 2010

The prolonged economic downturn is putting additional pressure on companies to change their health care programs to help relieve financial strain. The results of this year’s survey also show employers are frustrated by employees’ poor health habits and are struggling to effectively motivate behavior change. Additionally, they are uncertain about the future of employer-sponsored benefits, especially in light of the potential for health care reform legislation. Against this backdrop, employers are doing more to hold the line on costs and achieve better health and productivity outcomes.

Key Findings

* Annual median health care cost increases rose slightly in 2009 to 7%, compared with 6% in 2008. This pace is still more than twice the rate of inflation.

* Fifty-seven percent of respondents are very confident that employers will continue to offer health care benefits 10 years from now. This figure is down from 2009, when 62% of employers expressed a high level of confidence.

* Employers report that lack of employee engagement is the biggest obstacle to changing health behaviors. Still, they are trying new ways to encourage employees to become healthier and buy health care services more efficiently.

* There is considerable room for improvement in vendor programs designed to change member health habits and encourage efficient use of health care services. Employers rate these programs as ineffective.

* Today, 54% of companies have a consumer-driven health plan (CDHP) in place – a 6% increase over last year’s findings – and is expected to increase to 61% in 2011.

http://www.towerswatson.com/assets/pdf/1258/WT-2010-15571.pdf

Everyone agrees that it is better to practice good health habits. So who could object to employers providing incentives for their employees to improve their health behaviors?

During the national health reform dialogue, opponents of comprehensive reform frequently attempt to reframe the problem as a lack of individual responsibility for personal health. If people would eat better, exercise, and not smoke, many of the reform proposals would not be necessary.

This concept has now been co-opted by many of the nation’s large employers as they introduce wellness programs into their companies. What has been their experience?

According to this Towers Watson survey (a consolidation of Towers Perrin and Watson Wyatt), “employers are frustrated by employees’ poor health habits.” Employers report that “lack of employee engagement is the biggest obstacle to changing health behaviors.” Regarding their vendor programs that are designed to change employees’ health habits, “employers rate these programs as ineffective.”

Though they rate their wellness programs as ineffective, the sister programs that actually have slowed the growth in employer costs have been the consumer-driven health plans (CHDPs). A majority of large employers have now introduced CHDPs. Although the supporters of CHDPs use the rhetoric of placing the consumer in charge, these plans are nothing more than very high deductible plans which shift more of the responsibility of paying for health care from the employer to the employee.

During the period of employment, most injuries and illnesses for which the employee would require care would not be prevented by the wellness interventions. Employers who shift costs to employees who are unfortunate enough to need health care are being dishonest when they claim that they are doing this to enhance wellness.

During the reform dialogue, we cannot allow the opponents to reframe the debate as the need for wellness programs to address employees’ lack of engagement in correcting poor health habits, while these opponents in truth are supporting passing more costs onto the infirm.

Keep the framing on target. We need to remove financial barriers to care so that absolutely everyone can have the health care that they need. Properly designed wellness programs are fine, but we cannot let them distract us in our efforts to enact a single payer national health program – an improved Medicare for everyone.

The President’s Proposal

The White House
February 22, 2010

Policies to Improve Affordability and Accountability

Example for a family of four with income of $66,000:

Maximum percent of income paid for premiums: 9.5%

Percent of costs paid by health insurance plan: 70%

Penalty for remaining uninsured: (in 2016) the higher of $695 (with indexed increases) or 2.5% of income

Hardship exemption – threshold income below which the penalty is waived: The income tax filing threshold ($9,350 for a single or $18,700 for a married couple in 2009)

http://www.whitehouse.gov/health-care-meeting/proposal

The greatest significance of President Obama’s health care reform proposal released today is that he has now formally placed his stamp of approval on the fundamental policies already contained in the House and Senate reform bills. While remaining silent on some of the third rail issues (public option, Medicare buy-in, pregnancy termination, etc.), he and his staff merely tweaked the bills and added insurance premium rate review, whatever that’s worth, and some rhetoric on waste, fraud, and abuse.

His proposal still falls far short on two of the most important goals of reform: 1) insuring everyone, and 2) ensuring that health care is affordable for each of us. Merely tweaking the Senate version, which is what they did, could not have attained these goals since the most effective policies were already traded away before serious negotiations began.

That said, let’s look at what the President expects a family of four with an income of $66,000 to pay for health care. The premium contribution would be 9.5% of income, or $6270 for the basic plan with an actuarial value of 70%. If they wanted or needed a better plan, they would have to pay the full difference in the premium. At an actuarial value of 70%, they would also have to pay an average of 30% of all health care costs. This can vary considerably because of plan design in the form of deductibles, copayments, coinsurance, non-covered benefits, stop loss, out-of-network care exempt from stop loss, and other factors. If they either elected not to or were unable to pay the premium, they would have to pay a penalty of $1650, but then, of course, they would have no protection at all against potential health care costs.

Clearly, President Obama has not done any better than Congress in protecting families from financial hardship should they have the misfortune of developing significant medical problems. Unaffordable underinsurance is not the change that we needed.

Do Not Resuscitate the ‘Public Option’
by Andy Coates

Like initiating CPR on a patient who was dead in the field and remained dead on arrival, the effort to resuscitate the “public option” is mistaken and futile.

Once upon a time, proponents of the “public plan option” sought a “Medicare-like” program that might enroll every other person in the nation and thus run private insurers out of business.

“A roadblock to reform” cried the insurance companies.

Now nothing in the bills passed by the House and the Senate bills would erect a public insurer that could possibly influence the insurance market.

The House bill included a feeble government plan, to start in 2013, that would enroll perhaps 2 percent of the nation by 2019. The Senate bill simply nixed the idea altogether.

In reality the “public option” was never much more than a K-street phrase, a shadow-puppet, a political posture. All along proponents of adding a new government-sponsored insurer boasted “talking points” but never offered workable health reform.

But the insurance companies oppose the “public option” and that proves its virtue, its supporters exclaim.

Hello? Of course the insurers oppose it.

Why would the insurers want to yield even 2 percent of the market to a public plan (House bill) when they’ve been given the “option” (Senate bill) of keeping 100 percent of the market? Why would the insurance companies not fight for the whole pie when the White House let slip that it saw the “public option” as simply a bargaining chip in private dealmaking?

But there is something else here.

With its reliance on the magic of the marketplace, the “public option” is simply not a progressive idea.

Consider two examples of how the market performs when private insurers compete with a public plan. Example 1: under Medicare Advantage the private insurers enroll the healthy and dis-enroll the sick and yet cost more per patient than traditional Medicare. Example 2: in Maine, a “public option” insurer known as DirigoChoice, was established in 2003. Thus far it has failed to enroll but a tiny percent of the uninsured, has not reduced costs for insurance, nor reduced overall health spending, nor lessened disparities in care – and this year it has fatally tanked.

In the United States a corporate oligopoly of huge insurers, with near-monopoly control in most locales, dominate the market. A government insurer of any size would simply add yet another bureaucracy to the present byzantine insurance mess.

Does it really make any sense to think that a government plan could give the private insurance companies a run for their money – within the contemporary corporate marketplace – without draconian regulation upon the industry? Even with regulation, as former Cigna executive Wendell Potter explained at the PNHP annual meeting this year, insurance companies simply “flaunt regulations.”

The insurance market cannot be tricked into reforming itself. The health insurance company that wins at the marketplace avoids and jettisons sick and poor patients and enrolls the healthy and the wealthy – and a “public option” will not change this fact. The market that serves the private interests – profiteering at the expense of the sick – would continue to do so.

The proper name for this kind of “market magic” is the race to the bottom. Adding a public plan into the private mix can not and will not change the character of this cruel game.

Any successful “public option” insurance plan would wind up covering the sick and the poor. It would be designed to lose, not win, the market competition. It would not prove affordable or comprehensive. Worst of all, a highly successful “public plan option” could put our nation on a fast-track to permanent two-tiered health services, exacerbating deplorable disparities that plague us.

Regrettably, that the “public option” has been given attention at all is but a measure of how deeply our culture has surrendered to neoliberal ideology, the ideas popularized by Ronald Reagan. It is a lie that the market will always provide, most especially when it comes to health care. So why would some of our friends still seek to revive the false promise of the “public option”?

Marie Gottschalk, University of Pennsylvania Professor of Political Science, identified the psychology at work. In a remarkably prescient essay written in late 2009, she compared health reformers in the United States to victims of the Stockholm Syndrome, in which hostages identify with – and even defend – the hostage-takers.

We ought to reach out with sympathy to our friends who have fallen captive to Ronald Reagan ideology and say – Do not resuscitate the “public option.” It is time to let it go.

All along, adding a feeble public insurance plan to the insurance market has been but a very poor excuse to support “insurance reform” that will criminalize the uninsured, divert billions of tax dollars to subsidize unaffordable private insurance premiums and protect pharmaceutical industry super-profits.

Another world is still possible. It is called Medicare-for-all, expanded and improved.

[An earlier version of this essay appeared at The Progressive and in McClatchy newspapers around the nation.]

Insurance Companies Prosper, Families Suffer: Our Broken Health Insurance System

HealthReform.gov, U.S. Department of Health & Human Services
February 18, 2010

Recently, Anthem Blue Cross of California, an insurance company owned by the for-profit company WellPoint, Incorporated, announced that its individual market premiums would rise by as much as 39 percent in the coming months. This shocking increase isn’t unique. Across the country, families have seen their premiums skyrocket in recent years, and experts predict these increases will continue.

A Broken Health Insurance System Works for Insurance Companies – Not Families

The “value gap” in the health insurance market is evident not just in overall premium hikes, but also in the use of those premium dollars. Over the past decade, the amount private insurance companies spent on administrative costs grew faster than the amount spent on prescription drugs, a trend that is projected to continue through the next decade. Three of the top five insurers cut the proportion of premiums they spent on customers’ medical care last year, committing more to salaries, administrative expenses, and profits.

Lower Premiums.

The Congressional Budget Office estimates that reform will streamline administrative costs of insurance companies and bring more people into the insurance market, lowering premiums of a comparable plan in the individual market by 14 to 20 percent. (25)

(25) Congressional Budget Office. Letter to Senator Bayh. November 30, 2009.

http://www.healthreform.gov/reports/insuranceprospers/index.html

And…

Letter to Senator Bayh

Congressional Budget Office
November 30, 2009.
(Reference 25, above)

Nongroup Policies

CBO and JCT estimate that the average premium per person covered (including dependents) for new nongroup policies would be about 10 percent to 13 percent higher in 2016 than the average premium for nongroup coverage in that same year under current law.

• Average premiums would be 27 percent to 30 percent higher because a greater amount of coverage would be obtained.

• Average premiums would be 7 percent to 10 percent lower because of a net reduction in costs that insurers incurred to deliver the same amount of insurance coverage to the same group of enrollees. Most of that net reduction would stem from the changes in the rules governing the nongroup market.

• Average premiums would be 7 percent to 10 percent lower because of a shift in the types of people obtaining coverage. Most of that change would stem from an influx of enrollees with below-average spending for health care, who would purchase coverage because of the new subsidies to be provided and the individual mandate to be imposed.

New Market Rules Would Reduce Administrative Costs

Compared with plans that would be available in the nongroup market under current law, nongroup policies under the proposal would have lower administrative costs, largely because of the new market rules:

• The influx of new enrollees in response to the individual mandate and new subsidies—combined with the creation of new insurance exchanges—would create larger purchasing pools that would achieve some economies of scale.

• Administrative costs would be reduced by provisions that require some standardization of benefits—for example, by limiting variation in the types of policies that could be offered and prohibiting “riders” to insurance policies (which are amendments to a policy’s terms, such as coverage exclusions for preexisting conditions); insurers incur administrative costs to implement those exclusions.

• Administrative costs would be reduced slightly by the general prohibition on medical underwriting, which is the practice of varying premiums or coverage terms to reflect the applicant’s health status; nongroup insurers incur some administrative costs to implement underwriting.

• Partly offsetting those reductions in administrative costs would be a surcharge that exchange plans would have to pay under the proposal to cover the operating costs of the exchanges.

http://www.cbo.gov/ftpdocs/107xx/doc10781/11-30-Premiums.pdf

Although the Obama administration continues to advocate for reform based on private health plans, they have seized on the current outrage over skyrocketing insurance premium increases to to demonstrate why reform is essential. Although they are attacking the private insurance industry, they continue to push for a reform model that provides this market with tens of millions of new customers.

Do the proposed reforms of the insurance market really provide us with the assurance that everyone will have access to affordable health care? We already know that they could not achieve the goal of covering everyone, and will leave about 25 million with no coverage (RAND 2/10). Also there is doubt that other measures in the legislation will have much impact in containing costs. But what about the egregious administrative waste in our dysfunctional financing system?

In their report released yesterday, the administration claims that “reform will streamline administrative costs of insurance companies and bring more people into the insurance market, lowering premiums of a comparable plan in the individual market by 14 to 20 percent.” They cite the CBO letter to Sen. Bayh as their source for this statement.

And what does the CBO say? First, the premiums will actually be 10 to 13 percent higher because of the offsetting requirement for increased benefits in these plans that would increase premiums by 27 to 30 percent. For those who say that the improved benefits are worth this increase, keep in mind that the benefits move from the current actuarial value of 60 percent to an actuarial value of 70 percent. That is still significantly below the 80 percent actuarial value of current employer-sponsored plans. These individual plans will continue to leave many people who need health care exposed to unaffordable out-of-pocket expenses.

What does CBO say about the 14 to 20 percent administrative savings claimed by the Obama administration? Half of it (7 to 10 percent) isn’t even administrative savings but merely represents a dilution of the risk pool with healthy individuals mandated to purchase private health plans.

The other half of the premium savings, also 7 to 10 percent, stems from a slight reduction of administrative costs since the plans would be sold through an insurance exchange eliminating some of the costs such as underwriting and brokers’ fees. When you look at the CBO explanation of where the administrative savings would occur, it is clear that there is not much there, and some of it would be offset by the additional administrative costs of the new exchanges.

Although the Obama administration is using this to claim administrative savings, the total reduction in our national health expenditures (NHE) would be so infinitesimal that it wouldn’t even warrant a footnote in the annual NHE report.

The profound administrative waste in our system is not limited to the outrageous excesses of the private insurers but it permeates the entire system, including the very high costs of the burden that private insurers place on physicians, hospitals and other sectors of the health care delivery system.

Although the amount of the recoverable waste is disputed, everyone agrees that it is profound. Very solid data demonstrates that somewhere around $4 trillion could be recovered over the next decade merely by changing to a single payer national health program – an improved Medicare that covered everyone. Those who argue that it is only half that need to explain why we should therefore refuse the $2 trillion in savings ($ 2,000,000,000,000).

Most of us have tired of conspiracy theories. But think about this. The Obama plan (to be formally released Feb. 22) is a gift of our tax funds to the private insurance industry. Recent events have suggested that the plan may not survive the legislative process. Polls and focus groups show that the public is outraged by insurance company abuses. The insurers have chosen the most inopportune time in the reform process to cram outrageous premiums into the faces of their customers. Or is it inopportune? Look at the platform that it has given President Obama and the cover that it provides for members of Congress. It is giving them an avenue that will allow them to push through this program that the insurance industry understands that it must have for its own survival.

The Obama plan will leave tens of millions uninsured. It will not adequately control health care spending. It will perpetuate the profound administrative waste in our system. Above all, it will revitalize the private insurance industry for decades to come. If we’re not going to react, then we’re simply going to have to learn to live with it.

L.A. County slashes doctors’ reimbursement rate

By Molly Hennessy-Fiske and Ron-Gong Lin II
Los Angeles Times
February 17, 2010

Emergency room doctors and on-call specialists treating poor, uninsured patients at private hospitals in Los Angeles County saw their reimbursement rate slashed by county supervisors Tuesday.

The rate cut could lead private hospitals to close emergency rooms and send more patients to crowded county hospitals, officials said.

L.A. County reimburses doctors 27% of estimated fees for patients’ first three days of care at private hospitals under the Physician Services for Indigents Program. Supervisors voted unanimously Tuesday to reduce the rate to 18% as of July 1.

The county had expected to pay doctors with $9 million from the state’s Emergency Medical Services Appropriation. But state lawmakers eliminated the fund, and as the number of uninsured grows, private doctors are expected to file more claims than ever with the county this year, Meyer said.

More than half of Los Angeles County’s 72 hospitals are operating at a deficit and two are in bankruptcy, Lott said (Jim Lott, executive vice president of the Hospital Assn. of Southern California). Countywide, 11 hospitals have closed since 2002, all of which had emergency rooms, he said.

http://articles.latimes.com/2010/feb/17/local/la-me-supes-uninsured17-2010feb17

“The County” – a hospital to which emergency patients with no money and no insurance are shipped. Most of us remember when The County was always the provider of last resort.

No longer. Any hospital with an emergency room, for humane reasons, must now provide emergency services to any person who presents with a bona fide emergency, regardless of the ability to pay. Unfortunately, the change in attitude of some occurred only after it became a criminal offense to fail to recognize that “ship ‘em to The County” fell short of a humane response. The fact that this legislation was needed should not reflect on the great many dedicated professionals who have always been ready to help, without any regard to the financial status of the patient.

But what about paying for this care? Should the private hospitals and physicians write this off as charity? When operating at a deficit with bankruptcy around the corner, that won’t work. Should the county, as the health care provider of last resort, pay for at least the costs of the care? State and local governments are struggling with deficits in their budgets. The 18 percent payment by Los Angeles County’s Physician Services for Indigents Program obviously won’t cover costs. And the state certainly is not helping by eliminating their Emergency Medical Services Appropriation.

There is a way we could do this. We could establish a single payer national health program – an improved and expanded Medicare that includes everyone. Under such a system, even those physicians who have had difficulty understanding a humane health care system would change their response. When that emergency call comes in that always means another paying patient, it will become natural for those physicians to say, “Ship ‘em here!”

The following letter was sent to the White House on Feb. 9, two days after President Obama announced his plans to convene a bipartisan summit on health reform on Feb. 25 in Washington.

February 9, 2010

President Barack Obama
The White House
1600 Pennsylvania Avenue NW
Washington, DC 20500

Dear Mr. President,

Physicians for a National Health Program, an organization of 17,000 doctors who support single-payer national health insurance, respectfully requests that you invite one or more of our representatives to participate in your White House health care session on Feb. 25.

We note that in your call for the meeting you urged Republicans, Democrats and health policy experts to gather, go over all the options and “walk through them in a methodical way so that the American people can see and compare what makes the most sense.”

We would like to offer several of our members as health policy experts for this important task.

As you may know, two key research studies that helped drive the health reform process forward this past year – one in the American Journal of Public Health that found 45,000 deaths annually are linked to lack of health insurance, another in the American Journal of Medicine that found 62 percent of personal bankruptcies are linked to medical bills and illness – were the work product of Harvard Medical School research teams guided by PNHP co-founders Drs. David Himmelstein and Steffie Woolhandler.

Drs. Himmelstein and Woolhandler, who are also primary-care physicians in Cambridge, Mass., have had several other groundbreaking studies published in our nation’s leading medical journals, including one in the New England Journal of Medicine that shows administrative costs consume 31 percent of U.S. health spending, most of it unnecessary. They have also frequently testified before Congress on their research. We urge that you invite them to participate in the Feb. 25 meeting.

The presence of Dr. Margaret Flowers, our congressional fellow, would also enhance the meeting. Dr. Flowers, a Maryland pediatrician, has met with numerous members of Congress and testified before two congressional committees last year about the urgent need for single-payer health reform.

Finally, we ask that you invite our president, Dr. Oliver Fein, to participate. Dr. Fein, an internist and professor of clinical medicine and clinical public health in New York City, attended the March 5 White House Summit on health care. He is a past vice president of the American Public Health Association.

Detailed biographies and contact information for each of these doctors are available upon request. Please feel free to call me (312-782-6006) or e-mail me (info@pnhp.org) should you need any additional information.

Sincerely,

Ida Hellander, M.D.
Executive Director