Plain Talk: Medicare for all still the best idea

By Dave Zweifel, Cap Times editor emeritus
The Cap Times
June 9, 2010

But what’s still so befuddling is that health care reform could have been so much better — and easier for everyone to understand.

In fact, following the 2008 presidential election, the opportunity to finally get the United States to adopt a universal single-payer health care system seemed at hand.

Many of the Democrats who had been swept into office that fall had campaigned for single-payer and there were strong indications that the congressional leadership was ready to introduce legislation that, in effect, would reduce the eligibility for Medicare from age 65 to 0.

People were beginning to understand that there’s enough administrative waste in the existing system that extending health coverage to every American from birth to death could be accomplished without substantial added cost. Yes, the Medicare payroll tax would need to be increased, but that increase would be more than offset by the elimination of insurance premiums for both employers and employees.

Further, single-payer isn’t some kind of experimental, untested idea. It’s working all around us, has been for years. For decades the Canadians, the British, the French, the Germans and countless other so-called advanced countries have had a universal health care system that covers all of their citizens.

Yet by the time Congress fiddle-faddled its way through a bunch of meetings and pro-insurance company legislators were placed in key positions to come up with a bill that would somehow appeal to Republicans as well as so-called Blue Dog Democrats, single-payer didn’t even make it to first base. The entrenched interests — those with money to throw into campaign coffers and into lobbying — succeeded in shoving it aside.

http://host.madison.com/ct/news/opinion/column/dave_zweifel/article_fea11bd1-f781-58b0-b709-c1a02c3d97d6.html

Just because Congress passed and the President signed a bill labeled “health care reform” doesn’t mean that the policy debate has been retired. Single payer Medicare for all is “still the best idea.”

The public will soon understand that “passing reform” did not guarantee insurance for everyone, it did not guarantee that insurance benefits will be adequate to prevent financial hardship, and it did not prevent insurers from denying patients choice by restricting care to their limited networks of providers.

But what will really convince everyone that we didn’t get real reform is that individuals, employers and the government will continue to see intolerable increases in the costs of health care. Skyrocketing insurance premiums for low actuarial value products that fail to protect personal household finances will drive the demand for the reform we need.

We don’t have to wait until 2020 or later to fix it. Before the November elections, let the candidates know that we want an improved Medicare for all now.

Few Health Reform Options Would Have Covered More People at Lower Cost Than New Law

RAND
June 8, 2010

The recently enacted federal health care reform law provides health insurance coverage to the largest number of Americans while keeping federal costs as low as reasonably possible, according to a new analysis from the RAND Corporation.

The only alternatives that would have covered more Americans at a lower cost to the federal government were all politically untenable—substantially higher penalties for those who don’t comply with mandates, lower government subsidies and less-generous Medicaid expansion, according to research published in the June edition of the journal Health Affairs.

Researchers simulated more than 2,000 different policy scenarios using the RAND COMPARE microsimulation model, which was designed by RAND to provide independent analysis about how different reform proposals would impact the American health care system.

“Of all the proposals on the table that would expand health insurance to more Americans, the final health reform law included those that covered the largest number of people at the lowest cost to the federal government,” said Elizabeth A. McGlynn, the study’s lead author and a senior researcher at RAND, a nonprofit research organization.

http://www.rand.org/news/press/2010/06/08/

RAND article in Health Affairs:
http://content.healthaffairs.org/cgi/content/full/29/6/1142

RAND COMPARE:
http://www.randcompare.org/

Prior qotd on RAND COMPARE:
http://www.pnhp.org/news/2009/january/rand_compare.php

RAND created a microsimulation model called RAND COMPARE that was designed to “provide independent analysis about how different reform proposals would impact the American health care system.” Using this model, Dr. Elizabeth McGlynn concludes, “Of all the proposals on the table that would expand health insurance to more Americans, the final health reform law included those that covered the largest number of people at the lowest cost to the federal government.”

On a RAND Webinar event held in January of last year announcing the release of RAND COMPARE, I noted that a single, public insurance model (single payer or Medicare for all) was not an option available on the RAND COMPARE website. Dr. McGlynn then assured me that it was a model that should be added. In followup, others also contacted RAND to request that this model be added, and they received assurances that the matter was being addressed.

If you check the RAND COMPARE website, you will find that they did add well over 100 legislative proposals before Congress. They marked each proposal as to whether or not they addressed specific policies evaluated by the RAND COMPARE model. Some of the policies considered included individual mandate, employer mandate, tax credits, Medicaid eligibility, high deductible health plans, bundled payment, comparative effectiveness, and others. In the chart, H.R. 676, John Conyers’ Medicare for all bill received no marks whatsoever, as if it did absolutely nothing under the RAND COMPARE model.

Everyone who understands the single payer model knows that the final health reform law will not cover “the largest number of people” since single payer would have covered tens of millions more – that is, everyone. Also the single payer model would be far more effective in slowing health care cost increases than would the legislation enacted. RAND dodges this by repeatedly stating that the bill represents the “lowest cost to the federal government,” but it is our total national health expenditures and not the federal budget that matters.

The slogan for RAND COMPARE on their website is “Facts you can use, analysis you can trust.” Well, that sounds “Fair and Balanced.” It’s only people who need health care that are being victimized.

A conversation with Howard Dean

By André Picard
The Globe and Mail
June 7, 2010

On Monday (June 7), a group of prominent American and Canadian physicians (debated), in Toronto, the question: “Be it resolved that I would rather get sick in the U.S. than in Canada.” One of the panelists is Howard Dean.

Q. Health-care reform dominated the headlines for a long time. Was it successful?

We didn’t pass reform. All we did pass was putting more money into what we already have. It’s successful in a sense that 1) we got a major bill passed, which is something for a new administration; 2) we created a system that’s going to force reform because of the financial realities; 3) a great many more people are going to have coverage. But this system is still not nearly as effective and efficient as the Canadian system.

Q. What’s the single most important lesson that Americans can take from the Canadian system?

It covers everybody with a relative lack of bureaucracy. I know Canadians think there is bureaucracy, but you haven’t seen anything until you work in a system with several hundred insurance companies that all do something different. American hospitals have a whole floor occupied by a billing office. You don’t have that in Canada.

Q. Conversely, what’s the most important lesson Canadians can take from the U.S. health-care system?

I’m afraid I’m not sure there is one. There is more cutting-edge innovative technology, but the cost of that is to pay 70 per cent more than Canadians do for health insurance. Canadians will have to decide if that’s a lesson they want to learn.

Q. Bottom line, which system is better for the patient?

I’ve spent a lot of time in both countries and there is no doubt that you’re better off getting sick in Canada.

Q. But don’t you have the best health care in the world? We hear that mantra constantly.

We have the best health care in the world for people who can afford it. But Canada has very, very good health care for everybody.

http://www.theglobeandmail.com/news/opinions/where-would-you-rather-get-sick-us-or-canada/article1592943/

Toronto Debate (almost 2 hours):
“Be it resolved that I would rather get sick in the United States than Canada.”
Pro team: William Frist and David Gratzer
Con team: Howard Dean and Robert Bell
http://www.munkdebates.com/debates/Healthcare (Click on “Watch the Debate” for video)

Debate results:
Pro: 27%
Con: 73%

As Howard Dean states, “We didn’t pass reform. All we did pass was putting more money into what we already have.” This is precisely why a debate on the Canadian versus the U.S. health care systems is more timely than ever.

If you don’t have two hours to watch the full debate, you may want to watch the opening statements, and then slide the time bar forward to catch the closing statements (though I watched the full debate live-streamed, and it was well worth my time).

The importance of this message is that this is a crucial debate that has not gone away in spite of the enactment of PPACA. We should all do our part to see that everyone in the United States becomes fully informed on the true facts.

Build foundation for health care on Medicare: Johnathon Ross, M.D.

By Johnathon Ross, M.D.
The Plain Dealer (Cleveland)
May 30, 2010

Mrs. Brown (not her real name) was recently in to check on her blood pressure. She knows I’ve worked decades for a national health plan that would benefit individuals and businesses alike.

“So what do you think of the reform bill, Doc?” she asked, hoping I’d be pleased.

I replied with a question of my own: “Would you add a third floor to a house that has a crumbling foundation?” Because that is what Congress just did.

The crumbling foundation is our private, for-profit, insurance-based system of financing health care. As nonprofit, community-service organizations, health insurers were once a boon to millions of workers and thousands of companies. Now, they are a very bad bargain, indeed.

Private insurers make money by denying claims. They cause us to waste enormous amounts of money on excess paperwork and bureaucracy — their own paperwork and the paperwork they inflict on hospitals, patients and doctors like me. An estimated 31 cents of every health care dollar goes toward administration in U.S. health care, at least half of it unnecessary.

The problem is getting worse. The number of administrative personnel in health care jumped more than 3,000 percent over the past three decades, while the number of doctors, nurses and other caregivers has grown by less than 200 percent.

In effect, health care has been overtaken by an army of bureaucrats whose “generals” — the CEOs — get astronomical salaries. Money-changers and paper-pushers thrive chasing the money to pay for care — not deliver it. In our complex, multipayer system, chasing money is expensive work.

Does the new law remedy this? No. “Insurance exchanges” will add yet another layer of private bureaucrats and IRS agents to determine eligibility for subsidies and enforce fines for those who fail to purchase insurance.

Private insurers in the new exchanges will continue to advertise and market their products, bill for premiums, determine eligibility for coverage, coordinate benefits, manage a multitude of yearly contracts with brokers, businesses, individuals, doctors, hospitals and other providers and, lastly, pay stockholders a high rate of return.

Each hospital and doctor will continue to track myriad contracts, discount arrangements, benefit packages, drug formularies, limited referral networks and insurance rules designed to reduce utilization of our medical resources and to increase insurance company profits.

The new law perpetuates this wasteful overhead and guarantees insurers more profits as we spend $447 billion over 10 years to subsidize the mandatory purchase of shoddy private insurance by 16 million uninsured Americans.

The exchanges are supposed to bring down prices by promoting “market competition” among various insurers. But Massachusetts and several other states have had plenty of experience with such exchanges, and the verdict is clear: They don’t control costs. In fact, Massachusetts now has the highest health care costs in the world.

As a rule, “market competition” doesn’t work well in health care. Health care is not an ordinary product that people want. Rather, it is a necessity that they must have. The most expensive care is most often not optional, predictable or negotiable.

Businesses are groaning under the burden of the rising costs of employee and retiree health care benefits. They, too, need to get out from under the heel of the private health insurance industry and the skyrocketing, volatile prices that come with it.

So what’s the alternative? It’s building on the solid foundation of our tax-financed, low-overhead Medicare system, and extending it to cover everyone without exception. The administrative savings from such a streamlined system would amount to $400 billion per year, enough to provide comprehensive coverage to all with no significant out-of-pocket expenses and with complete choice of doctor and hospital.

A single-payer system would also have the clout to negotiate drug prices and provider fees, and to allocate resources efficiently and wisely. It would possess powerful tools for improving quality and controlling costs.

Conventional wisdom suggests we have to “wait and see” how the administration’s new law plays out. But we can’t afford that: With about 50 million uninsured this year, some 50,000 people will die because they lack coverage, a recent study estimates. By 2019, those figures will only be halved, experts say.

It’s not too late to do the right thing. The sooner we adopt an expanded and improved Medicare-for-all, the better off our patients and our economy will be.

Johnathon Ross is past president of Physicians for a National Health Program (pnhp.org) and a leader of the Single Payer Action Network in Ohio (spanohio.org).

http://www.cleveland.com/opinion/index.ssf/2010/05/build_foundation_for_health_ca.html

Also posted on the PNHP website:
http://www.pnhp.org/news/2010/june/build-foundation-for-health-care-on-medicare

Because of the complexity of the Patient Protection and Affordable Care Act (PPACA) and the intense attention that has been diverted to the details of the act, almost no consideration is being given to correcting the fundamental flaws in the health care financing structure of PPACA. The prevailing attitude is that the legislative task is finished, except for a few tweaks, and so this is the law that we are going to have to live with indefinitely.

Today’s qotd included Johnathon Ross’s piece in its entirety because it explains so well, in a single, easily read article, why we need to dismiss this idea that the legislative task has been completed, and why we must revise the financing system by getting rid of the private insurers and Medicaid, and replace the entire financing system with an expanded and improved Medicare for all.

The article can be downloaded to be used in your advocacy work by distributing it electronically or by printing it out to be distributed as handouts.

We must reopen the national dialogue on comprehensive reform, and this article can be used to initiate the requisite conversation. Failure to do so will result in more suffering, hardship, and even death. As a civilized society, we simply can no longer allow that.

Financial Incentives for Health Care Providers and Consumers

By Jill Bernstein, Deborah Chollet, and Stephanie Peterson
Mathematica Policy Research, Inc.
May 2010

Health reform will emphasize financial incentives for providers and consumers to promote the use of effective health services and discourage the use of marginally effective or inappropriate services. This brief looks at evidence on the impacts of financial incentives and draws lessons for policymakers.

Consumer Incentives Affect Their Choices

Most private and public insurance plans use financial incentives to constrain consumer demand for care. This strategy is premised on the idea that consumers will make better decisions about seeking care and using cost-effective services when they bear responsibility for a portion of the cost. So-called “consumer-directed” health plans attempt to extend this model, coupling high cost sharing with consumer information about treatment alternatives.

Indeed, research shows that cost sharing — including deductibles, coinsurance, and copayments — does affect health care use and expenditures. However, cost sharing can have important negative effects on health, and high cost sharing may ultimately have little impact on total costs.

When people respond to greater cost sharing by reducing their use of health services, they may forgo services that are necessary and effective as well as those that are more discretionary or ineffective. Forgoing care in response to higher cost sharing may not have significant health consequences for people with good overall health status and average income. But people with health problems and those with lower income and education enrolled in high-deductible health plans may suffer worse outcomes when they forgo or delay care. Vulnerable populations are especially likely to experience negative health outcomes related to cost sharing.

In addition, financial incentives may not significantly change the overall costs of care. Consumers with serious health problems account for most health care costs. Even if strong incentives induce these consumers to use care judiciously, most of their care is nondiscretionary, and costs that exceed their cap on out-of-pocket spending may account for most of the total cost of their care.

Value-Based Purchasing

A growing number of private and public payers (including Medicare) use financial incentives targeted to providers, consumers, or both, and linked to measures of health care quality and efficiency. These strategies have come to be known generally as value-based purchasing.

Value-based purchasing efforts that focus on providers typically use evidence-based measures of quality, effectiveness, and efficiency to classify or select providers, and to determine how much they are paid. These payment strategies, generally known as “pay for performance” (P4P), may also take into account measures of consumer experience or satisfaction. Most commercial P4P systems use hybrid approaches that combine fee-for-service payment with payment bonuses or withholds that reflect provider performance on specific measures of quality or patient satisfaction.

Value-based systems have encountered various problems related to consumer education and continuity of care that have affected their ability to meet program goals. For example:

* Consumers sometimes associate higher prices with higher quality, leading them to select inefficient, lower-quality health plans with higher premiums.

* Adverse outcomes — and ultimately greater cost — may result when conversions to new evidence-based treatment protocols disrupt care. Disruptions may be especially problematic for patients with serious, chronic illnesses and close ties to their care providers. Although careful targeting of incentives can protect vulnerable patients by identifying those who would most benefit from specialized care, it may also entail additional costs for technical and clinical expertise and for educating and communicating with patients.

SOME LESSONS LEARNED

Evidence on the impacts of financial incentives in private and public insurance plans is limited, but we do know that:

* In general, financial incentives work best when carefully targeted to a specific population, set of services, or health condition. However, providing high quality, effective care can be expensive, even when it is targeted.

* Incentives that improve care and reduce cost present challenges. For plan administrators, designing and using effective incentives can be technically demanding and administratively expensive. For providers, performance reporting can be time consuming. For consumers, choosing among plan options, providers, and treatments can be difficult.

* If not carefully designed, financial incentives can have unintended adverse consequences, including poorer health outcomes and higher long-term costs.

http://www.mathematica-mpr.com/publications/PDFs/Health/reformhealthcare_IB5.pdf

Considerable attention has been paid to controlling health care costs through financial incentives to constrain consumer demand for care (e.g., consumer-directed health care, or CDHC) or to encourage value-based purchasing (e.g., pay for performance, or P4P). This is more than just a theoretical construct since the Patient Protection and Affordable Care Act (PPACA) “focuses on developing financial incentives to improve quality of care and constrain costs.”

A great many readers have told me that they often skip the excepts from the resource, and go straight to my comment. Today’s surprise is that I do request that you read the excerpts above so that you understand more clearly why CDHC and P4P are yet other diversions that will not save money and yet would risk adverse outcomes.

(I’ll omit the comment that a single payer financing system would bring all of us true consumer choice of health care, absent financial barriers, while providing us value-based purchasing though the power of our own public monopsony. Er… I guess I didn’t omit that after all.)

Critics Question Study Cited in Health Debate

By Reed Abelson and Gardiner Harris
The New York Times
June 2, 2010

In selling the health care overhaul to Congress, the Obama administration cited a once obscure research group at Dartmouth College to claim that it could not only cut billions in wasteful health care spending but make people healthier by doing so.

But while the research compiled in the Dartmouth Atlas of Health Care has been widely interpreted as showing the country’s best and worst care, the Dartmouth researchers themselves acknowledged in interviews that in fact it mainly shows the varying costs of care in the government’s Medicare program. Measures of the quality of care are not part of the formula.

The mistaken belief that the Dartmouth research proves that cheaper care is better care is widespread — and has been fed in part by Dartmouth researchers themselves.

The debate about the Dartmouth work is important because a growing number of health policy researchers are finding that overhauling the nation’s health care system will be far harder and more painful than the Dartmouth work has long suggested. Cuts, if not made carefully, could cost lives.

http://www.nytimes.com/2010/06/03/business/03dartmouth.html?hp=&pagewanted=all

A graphic comparing “The Dartmouth Atlas of Health Care” with Medicare’s “Hospital Compare”:
http://www.nytimes.com/interactive/2010/06/03/business/Dartmouth-maps.html

And…

Monarch HealthCare, HealthCare Partners, and Anthem Blue Cross Chosen for Innovative National Healthcare Program

Marketwire
May 25, 2010

Two of Southern California’s leading physician-governed medical groups, along with Anthem Blue Cross, have been selected for participation in a new and innovative, nationally-recognized healthcare model that rewards providers for improving patient outcomes, while slowing cost growth.

Monarch HealthCare, an Irvine, California-based Medical Group and Independent Physician Association (IPA), and HealthCare Partners, a Torrance, California-based Medical Group and IPA, will collaborate with Anthem Blue Cross in an Accountable Care Organization (ACO) pilot project led by the Engelberg Center for Health Care Reform at Brookings and The Dartmouth Institute for Health Policy and Clinical Practice. The selection of the two California organizations furthers the nationwide demonstration project already underway in three other communities. The demonstration project expects to produce a successful model that will be replicable throughout the country.

Jay Cohen, M.D., president and chairman of the board at Monarch, believes “this is a very exciting development for anyone who supports innovative ideas designed to improve healthcare delivery in the communities we serve. Monarch has always been a leader in this regard and is delighted to have been selected as a pilot site for this project.”

http://www.marketwire.com/press-release/Monarch-HealthCare-HealthCare-Partners-Anthem-Blue-Cross-Chosen-Innovative-National-1265703.htm

The Dartmouth Atlas of Health Care has been an important contribution to the health policy literature because it demonstrates that regional variations in health care spending are very real. The reasons for these differences are complex and certainly not fully understood at this time.

In spite of the lack of adequate comprehension of the multiple factors involved, the Dartmouth researchers and the Washington politicians are pushing us into accountable care organizations (ACOs) that would arbitrarily reduce spending in high cost areas even though that spending might be medically appropriate and such reductions could impair health care outcomes.

Examples of other important factors that should be considered include the rates of poverty in the region, the population health status in the region, adequacy of health insurance and other financing programs, prices being charged for health care services, excess or deficient capacities in health care facilities especially for high-tech services, and whether or not the variations in frequency and intensity of services are medically appropriate. All potential factors should be well defined through further study, and then policy decisions should be made on the facts.

Unfortunately, moving forward with ACOs is not based on solid policy science. The prototype already initiated by the Dartmouth Institute and others, as mentioned in the Marketwire article above, is really not much different from the HMO concept.

Each year Jay Cohen, MD, MBA, the president and chairman of Monarch HealthCare, and I coach competing debate teams at the University of California at Irvine School of Medicine. The debate is on single payer versus managed care. I can assure you that the ACO under Monarch HealthCare will be structured based on markets and money, with “accountable” prioritized over “care.” Who in their right mind would ever believe that a new label for an old entity will somehow magically reduce our health care spending?

We do need to proceed with studies that could lead to promising efficiencies, but we should not allow the dubious ACO experiment to divert us from introducing proven efficiencies now. The most obvious would be to introduce a single payer national health program. That would provide us with much greater value in our health care purchasing while slowing the rate of cost growth throughout the future. And, oh yes, it would ensure that all of us would receive the care that we need – a mission not on the agendas of ACOs.

British Doctors Must Now Ask: Tell Us How Much You Drink

America’s Health Insurance Plans (AHIP)
(Source – Rebecca Smith, The Daily Telegraph)
June 2, 2010

Under new guidelines set by the National Institute for Health and Clinical Excellence (NICE), British healthcare providers are required to inquire about their patients’ drinking habits as a means to curb the nation’s problem with drinking. NICE recommends that doctors and pharmacists alike gauge patient-consumption tendencies through a series of “alcohol screening” questions – the line of interrogation including no less than 10 questions.

http://www.ahiphiwire.org/International/News/Default.aspx?doc_id=589183&utm_source=6/2/2010

And…

PH24 Alcohol use disorders: preventing harmful drinking: guidance

National Institute for Health and Clinical Excellence (NICE)

Recommendation 9: screening adults

Where screening everyone is not feasible or practicable, NHS professionals should focus on groups that may be at an increased risk of harm from alcohol and those with an alcohol-related condition. This includes people:

− with relevant physical conditions (such as hypertension and gastrointestinal or liver disorders)
− with relevant mental health problems (such as anxiety, depression or other mood disorders)
− who have been assaulted
− at risk of self-harm
− who regularly experience accidents or minor traumas
− who regularly attend GUM clinics or repeatedly seek emergency contraception.

Full report (100 pages):
http://www.nice.org.uk/nicemedia/live/13001/48984/48984.pdf

The 10 questions used for screening (page 16 of 35 pages):
http://www.nice.org.uk/nicemedia/live/13001/49023/49023.pdf

About NICE: “NICE produces guidance on public health, health technologies and clinical practice.”
http://www.nice.org.uk/aboutnice/whatwedo/what_we_do.jsp

Great Britain’s National Institute for Health and Clinical Excellence (NICE) produces guidance on public health, health technologies and clinical practice. Their efforts are directed at improving value in health care, especially reducing spending for ineffective or inappropriate services and products.

America’s Health Insurance Plans (AHIP) has repeatedly called for government policies that would help control spending. You would think that AHIP would be supportive of the NICE concept, but by distributing today’s release that falsely states, in essence, that British physicians are being required to invade the privacy of every one of their patients by submitting them to a questionnaire on alcohol use, it seems that AHIP is joining forces with the conservatives who have been condemning NICE as a program of socialistic government rationing. Nowhere in the 100 page NICE report does it state that universal alcohol screening is an absolute requirement. Also for a physician to discuss alcohol problems with a patient is no more an invasion of privacy than discussing any other factors that might influence the patient’s health.

The good news is that the United States has taken a step forward by expanding the role of comparative effectiveness research (CER). Although it is unclear as to whether CER would have much impact on total health care spending, there is no question but that it will provide greater value in our health care.

If we really do care about attaining greater value then we need to expand NICE-like policies while eliminating the profound waste of the superfluous insurance industry represented by AHIP.

Oregon agriculture industry sorts health care

By Harris Meyer
The Oregonian
May 29, 2010

Unlike many agricultural employers, Ken Bailey of Orchard View Farms in The Dalles offers his 85 full-time workers health insurance. The orchard and packinghouse operator pays 80 percent of the premium for workers and their dependents.

But like nearly all growers, Bailey’s company does not offer coverage to the 600 to 700 seasonal workers it hires for about eight weeks each year to pick cherries and pears on its 2,080 acres. It’s estimated that as few as 10 percent of farmworkers nationally have health insurance.

Now, Bailey and other farmers in Oregon and Washington are nervous about the federal health reform law passed in March. It requires employers with 50 or more full-time equivalent workers to provide health coverage starting in 2014 or pay a $2,000 penalty per employee. Bailey, who favored health reform, said he’s comfortable with that. Industry groups say most Pacific Northwest growers are too small to fall under that mandate.

But the new law also may require larger farmers and packers like Bailey who meet the 50-employee threshold to offer insurance to seasonal workers or pay the penalty, depending on how the government writes the rules, according to the American Farm Bureau Federation in Washington, D.C. That would be a major new cost for growers already struggling with the bad economy and lower prices for their products.

“It’s almost impossible for individual growers to cover seasonals,” Bailey said. “It depends on whether there is a reasonable program with a reasonable price.” Farmers might even end up paying for coverage of undocumented workers, he said, since they have no reliable way of verifying their workers’ legal status because so many documents — even Social Security cards — can be faked.

For agricultural employers, though, the biggest concern is whether they’ll be required to cover seasonal workers, whom Pacific Northwest growers depend on heavily for their labor-intensive fruit and vegetable crops. The law excludes seasonals — defined as working 120 days or fewer in a calendar year — from being counted toward the threshold of 50 full-time-equivalent employees that brings employers under the insurance mandate. But a new Congressional Research Service analysis says the law requires employers over that threshold to cover seasonals during the months they are working full-time or pay the penalty.

The seasonal worker issue is just one of many uncertainties facing agricultural employers and workers as the complex new health care law is rolled out.

http://www.oregonlive.com/business/index.ssf/2010/05/oregon_ag_industry_sorts_healt.html

This is yet another of the endless examples of how the Patient Protection and Affordable Care Act (PPACA) is so flawed that it cannot ever result in accomplishing the primary reform goal of covering everyone. Seasonal agricultural workers do not fit into a neat slot in the dysfunctional, fragmented financing system that President Obama and Congress have selected for us.

The first question we might ask is should all seasonal agricultural workers in the United States have the health care that they need without having to suffer potentially severe financial consequences? If you support cultural narcissism and reject social solidarity, then go away. You really wouldn’t fit in with a group of people who believe that we should take care of each other, and our views are apt to only make you more angry.

Those who do believe that seasonal agricultural workers should have health care the year around, if they need it, understand how complex the rules will have to be to cover them with a system that includes an employer mandate, an individual mandate, and varying requirements based on previous, current and future employment, or unemployment, and based on the impact of vacillations in income as related to sliding-scale eligibility or ineligibility for various programs.

Just briefly touching on some of the policies inherent in PPACA: employers with over 50 full-time equivalent employees will have to purchase coverage for their seasonal employees or pay a $2000 penalty per employee, even though that may be a staggering bill because of a temporary ten-fold increase in the number of employees; since most seasonal employees are uninsured, moving in and out of coverage during the harvest season results in instability of coverage; many seasonal workers are undocumented and thus ineligible for purchase of plans in the exchanges, defeating the purpose of the individual mandate; seasonal workers might be able to obtain care through community health centers, though that depends on having clinics accessible and may mean that important specialized services may not be provided, and the mere existence of such clinics may not fulfill the mandate requirements anyway; though the workers and their families might be eligible for Medicaid on an income basis, that may conflict with the employer mandate; etc.

One of the structural problems is that this fragmented system attempts to assign an insurance product, whether employer-sponsored, privately purchased in the individual market, privately purchased in the exchange, provided by the government in the form of Medicaid, or provided as a safety-net function such as the community health centers, when the eligibility and ability to pay is highly variable between individuals and at different points in time. Fragmentation, disruptions, and voids in coverage are inevitable. We need to sever the individual link to a specific insurance product.

What would fix this would be a single payer national health program with automatic enrollment for everyone, financed separately though equitable tax policies. For purely ethical reasons, we can’t accept the new status quo of the highly dysfunctional PPACA. We need to dump it and move on with an improved Medicare for everyone.

For the cultural narcissists who read this far, we would hope to enact a system that would ensure that you will always be able to have the health care that you need, but we would also use the tax system to prohibit you from being a free rider, just as the tax system prevents us from not paying our share of the wars that we oppose.

Anthem Big Outlier In DMHC Actions

Payers and Providers
May 27, 2010

Since the California Department of Managed Health Care (DMHC) began its regulatory mission a decade ago, it has levied nearly 1,200 enforcement actions against health plans, providers and other entities for violating state laws and regulations. The DMHC typically issues penalties for not responding to member grievances or failing to pay claims in a timely fashion.

Among the 170 organizations that have been penalized by the DMHC, Anthem Blue Cross of California stands alone.

The Indianapolis-based Anthem has racked up a remarkable 479 enforcement actions, or more than 40% of the statewide total, according to DMHC records. Some 275 of those actions have been levied against Anthem since early 2009 – including a $2.5 million fine the agency issued last November but has yet to publicize.

Anthem’s overall number is more than quadruple the 102 enforcement actions levied against San Francisco-based Blue Shield of California, the second-largest total.

Anthem Blue Cross equated the number of enforcement actions to its size: “As the state’s largest health benefits company serving more than 8 million people in California each year, it is not surprising that we might have the largest number of inquiries from the DMHC,” the insurer said in a prepared statement. Yet the only insurer of similar size to Anthem in California, Oakland-based Kaiser Foundation Health Plan, has received just 84 enforcement actions from the DMHC. It has 6.7 million enrollees statewide.

“The failure to timely respond to member grievances appears to be due to the lack of administrative capacity,” stated (DMHC spokeswoman Lynne Randolph).

http://www.payersandproviders.com/publications/pp527.pdf

A unique characteristic of the U.S. health care system is the profound administrative waste, in a large part due to the administrative excesses of the private insurers and the administrative burden that they place on the providers of health care. The administrative component of just the private insurers alone is so large that Congress has codified the policy that 15 to 20 percent of health insurance premiums will be allocated for the insurers to use for their own intrinsic administrative services.

Currently outrage is being expressed over the very high insurance premium increases which the insurers attribute to increased health care costs. But the insurers are retaining the same high percentages of these ever higher premiums even though their marginal costs for administrative services should not be increasing at the same rate as health care prices. The increased spending on health care has provided a windfall for the private insurers.

So what are we getting for the massive amount of dollars being retained by the private insurers? Administrative services, and in great excesses at that. Yet why has WellPoint’s Anthem Blue Cross had so many enforcement actions levied against it? As the Department of Managed Care’s spokeswoman states, “The failure to timely respond to member grievances appears to be due to the lack of administrative capacity.”

Lack of administrative capacity?! With what we’re paying them for their administrative services?! And President Obama and Congress want to keep this industry in charge?!

This is not the time to sit back and see how the reform plays out. PPACA cannot ever insure everyone, and it cannot control the intolerable increases in spending. Now, more than ever, is the time for activism! Let’s demand a health care program that we can believe in – an improved Medicare for all!

Health Coverage for the High-Risk Uninsured: Policy Options for Design of the Temporary High-Risk Pool

By Mark Merlis
National Institute for Health Care Reform
May 27, 2010

Among the first tasks required by the recently enacted health reform law is creation of a temporary national high-risk pool program to provide subsidized health coverage to people who are uninsured because of pre-existing medical conditions. While as many as 5.6-million to 7-million Americans may qualify for the program, the $5 billion allocated over four years will allow coverage of only a small fraction of those in need, potentially as few as 200,000 people a year. Policy makers will need to tailor eligibility rules, benefits and premiums to stretch the dollars as far as possible. Another consideration is how the new pool will fit with existing state high-risk pools or other state interventions in the private nongroup, or individual, health insurance market. Policy makers also will need to consider how to manage the transition of enrollees from high-risk pools to the new health insurance exchanges scheduled to be operational in 2014 to prevent adverse selection and encourage insurer participation.

http://www.nihcr.org/High-RiskPools.pdf

The Patient Protection and Affordable Care Act (PPACA) allocates $5 billion over four years for a temporary high-risk pool to insure those individuals who have problems obtaining coverage because of preexisting conditions. Although about 7 million Americans fall into this category, this report indicates that only about 200,000 people will be covered by this program, thereby meeting only about 3 percent of the need.

You need to read the full 14 page report to understand the multitude of policy interactions that will result in the failure of this one program. It serves as a proxy for the multitude of other policies contained in PPACA. We haven’t seen anything yet.

This is what happens when members of Congress insist on building health care reform on our dysfunctional, inefficient, highly fragmented system of health care financing. By insisting that we give first priority to protecting and enhancing the role of private insurers, the policy compromises have resulted in a system that will cost more while leaving far too many with inadequate coverage or no coverage at all.

Again, it doesn’t have to be this way. We can still enact a single payer national health program, ensuring all essential health care for everyone.

The Impact of Health Care Reform on Employers

Towers Watson
May 25, 2010

Although U.S. employers view controlling health care costs as their highest health care reform priority, few believe that the recently enacted Patient Protection and Affordable Care Act (PPACA) will stem the tide of rising costs, according to a May 2010 survey by Towers Watson.

In order to cope with anticipated cost increases, many employers plan on:

* Passing on increases to employees (88%)
* Reducing health benefits and programs (74% )
* Absorbing costs in the business (33%)
* Passing on increases to customers (20%)

More than three in four employers (85%) believe that health care reform will reduce the number of large organizations offering employer-sponsored retiree medical benefits. And 43% of employers that currently offer retiree medical plans plan to reduce or eliminate them.

Fifty-eight percent of employers surveyed believe health care reform will drive large employers to adopt total replacement consumer-driven health plans (CDHP) for their active employees.

Press release:
http://www.towerswatson.com/press/1936

Key findings:
http://www.towerswatson.com/research/1935

Report (8 pages):
http://www.towerswatson.com/assets/pdf/1935/Post-HCR_Flash_survey_bulletin_5_25_10(1).pdf

Although we have seen many employer surveys in the past, this one is especially important because it represents the views of employers’ human resources professionals who face the reality that the Patient Protection and Affordable Care Act (PPACA) is now law. Since PPACA was designed to perpetuate the role of employer-sponsored health plans, we need to look at the likely responses of employers.

Most employers (90 percent) believe that PPACA will increase their organization’s health care benefit costs. What is alarming is that employers do not intend to pass those cost increases on to their customers as they would with any other overhead increases, but instead they intend to pass them on to their employees in the form of increased premiums and cost sharing, and a reduction in benefits (which also results in higher out-of-pocket expenses for the employees).

More specifically, 58 percent of employers believe that large employers will adopt total replacement consumer-driven health plans (CDHP) for their active employees. “Total replacement” means that employees would be offered no option other then the high-deductible consumer-driven health plans. That could be disastrous for employees with modest incomes who develop significant health problems.

And future retirees can pretty much forget about receiving any retiree health benefits. Employers indicate that they are likely to take advantage of the fact that retirees under age 65 will be able to purchase plans in the exchanges without being excluded because of preexisting conditions.

This is the insurance that President Obama, during his campaign, promised that you could keep if you wanted to. What he didn’t tell you is that, in most instances, you will not be permitted to drop that plan and select another one in the state insurance exchanges. As long as the employer’s plan has an actuarial value of 60 percent (you pay an average of 40 percent of the medical bills), you are prohibited from selecting a better plan in the exchanges.

Once again, we can still fix this. We can enact a single payer national health program – health care for everyone, without financial barriers.

Antitrust and Healthcare

Remarks by Christine A. Varney, Assistant Attorney General, Antitrust Division, U.S. Department of Justice
American Bar Association/American Health Lawyers Association
May 24, 2010

(Excerpts)

The Patient Protection and Affordable Care Act (the Affordable Care Act), called for by the President and enacted by Congress on March 21, relies, in part, on the belief that robust competition and expanded choice will expand coverage while containing cost.

Yet, like many reforms driven by the power of competition to create consumer welfare, the success of these legislative and regulatory efforts will depend as much upon healthy competitive markets free from undue concentration and anticompetitive behavior as it will upon regulatory change. In short, enactment of the Affordable Care Act makes effective antitrust policy more important than ever.

The repeal of the antitrust exemption in the McCarran-Ferguson Act as it applies to the health insurance industry would give American families and businesses, big and small, more control over their own health care choices by promoting greater insurance competition and outlawing anticompetitive health insurance practices like price fixing, bid rigging, and market allocation that drive up costs for all Americans.

Two significant aspects of the Affordable Care Act are the establishment of new competitive marketplaces — known as Exchanges — for individuals and small employers to purchase health insurance, and the formation of Accountable Care Organizations (ACOs) and other initiatives to provide for more efficient delivery and payment of Medicare services and Medicaid pediatric services. There can be no doubt that the success of the Exchanges and the ACOs will depend, in large part, on effective competition, both among health care insurers and providers.

The ultimate goal of health care reform is to harness the power of competition, together with regulation, to expand coverage, improve quality, and control the cost of health care for all Americans. The role of antitrust is to ensure that competition is preserved and protected, so that it is there to be harnessed.

I. Enforcement

The goals of health care reform cannot be achieved if mergers between significant insurers in a particular market substantially reduce competition; nor can those goals be realized if dominant insurers use exclusionary practices to blockade entry or expansion by alternative insurers. The same is true if health care providers use supposedly quality-improving or cost-reducing measures simply to raise prices.

Over the last ten years in numerous investigations across the country, the Division has found that many providers give the best discounts only to insurers with significant market share. Thus, new entrants cannot negotiate for competitive provider discounts because they have few enrollees, and they cannot win new enrollees because they do not have competitive discounts. This situation makes it difficult for insurers to enter new geographic areas or for insurers with small enrollment to expand within existing markets.

The Division is committed to vigorously, but responsibly, scrutinizing mergers in the health care industry that appear to present a competitive concern. If we determine that our initial concerns were well founded, we will not hesitate to block the merger or to require the settlement concessions necessary to protect consumers. On the other hand, if we find that the merger may not substantially lessen competition, we will promptly close the investigation and allow the parties to try to show, through the competitive process, that better business methods can deliver more efficient medical care and medical insurance to American consumers.

II. Competition Advocacy

It is important to keep in mind that successful antitrust enforcement also includes effective competition advocacy. (Examples of DOJ competition advocacy are given for Michigan and California.)

III. Entry Project

First, and foremost, we confirmed that the biggest obstacle to an insurer’s entry or expansion in the small- or mid-sized-employer market is scale.  New insurers cannot compete with incumbents for enrollees without provider discounts, but they cannot negotiate for discounts without a large number of enrollees. This circularity problem makes entry risky and difficult, helping to secure the position of existing incumbents.

Second, we concluded that it may be easier to enter less concentrated markets, with competition between several large but relatively equal-sized insurers, than it is to enter a market with one or two dominant plans. This is a vitally important finding because it illustrates that a critical economic assumption in antitrust analysis — namely, that the higher profits often associated with concentrated markets will attract new entrants who will help restore competitive pricing — is sometimes made without an adequate evidentiary basis. Indeed, this assumption fails to account for barriers to entry, including barriers based on the inability of entrants to achieve economies of scale that will allow them to compete with incumbents.

One partial explanation for the presence of this phenomenon in health insurance markets comes from our third finding, which is that new entrants or niche players are more likely to receive provider discounts comparable to their competitors’ in less concentrated markets than they are in markets dominated by one or two plans.

Finally, our interviews reconfirmed that brokers typically are reluctant to sell new health insurance plans, even if those plans have substantially reduced premiums, unless the plan has strong brand recognition or a good reputation in the geographic area where the broker operates.

IV. Innovation and Efficiency in Health Care Delivery

It is important to keep in mind that not all provider networks involve sufficient financial, clinical, or other economic integration to apply the rule of reason to joint price negotiations with payers. For example, an arrangement among competing providers simply to engage in joint billing, joint collection services, or even joint purchasing of medical supplies or services is generally not the type of economic integration needed to allow providers jointly to set their reimbursement rates under the rule of reason. Rather, such steps simply reflect an effort to coordinate and share some administrative expenses or to receive volume purchasing discounts.

The economic integration that justifies application of the rule of reason to joint price negotiations with payers requires the sharing of some form of financial risk, such as an agreement by providers to accept a capitated rate, a predetermined percentage of revenue from a health plan, or sufficient clinical integration to induce the group’s members to improve the quality and efficiency of the care they provide. While there is no particular formula that can cover all types of legitimate clinical integration, the key is that there must be sufficient clinical integration to motivate the kinds of changes that can achieve real cost-containment or other performance benchmarks.

The Affordable Care Act’s development of ACOs is a good example of how providers might work together to deliver more efficient, high-quality care without inhibiting competition, so long as their collaborations are properly constructed. For example, the ACO encourages competing physicians, and possibly other providers, to coordinate care for a defined Medicare population through redesigning care protocols, utilizing health IT, investing in infrastructure, and meeting quality targets. If the ACO meets quality-of-care and cost targets, it can share the savings with HHS.

Properly constructed, ACOs have the potential to improve health care delivery and drive down costs. Thus, as reform moves forward, the Justice Department will work closely with HHS and providers to offer whatever guidance may be needed to ensure that providers pursue beneficial integrated ACOs without running afoul of the antitrust laws.

In conclusion, let me say that I hope I have made clear that the Justice Department believes that antitrust has — and will continue to have — an essential role to play in health care. If health care reform is to harness the power of competitive markets to produce more and more efficient systems, then we must be up to the challenge of ensuring that our health care markets are, in fact, as competitive as possible — protected from undue concentration or anticompetitive conduct with vigorous but responsible enforcement and effective competition advocacy. In this dynamic environment, a successful effort will require more than “business as usual.” It will require that we provide clear and accessible guidance to health care consumers, providers, and payers so that there is the predictability needed for health care reform to succeed. I think you will find the Department of Justice generally, and the Antitrust Division specifically, up to the task of ensuring that reform is achieved, competition is maintained, and consumers are benefited.

http://www.justice.gov/atr/public/speeches/258898.htm

According to Christine Varney, “The Patient Protection and Affordable Care Act (the Affordable Care Act), called for by the President and enacted by Congress on March 21, relies, in part, on the belief that robust competition and expanded choice will expand coverage while containing cost.”

This is a remarkable statement. Think about it. The President and Congress believe that competition between private health plans will contain costs when decades of experience with the private insurance industry has proven that this is a false belief. Competing private plans have failed miserably in controlling costs.

And the promise of competition within the state insurance exchanges? Private insurers currently have free rein of the markets with virtual unlimited ability to compete. Yet we’ve seen consolidation and concentration within markets, as less dominant companies withdraw. It is likely that only a few major players will be interested in participating in the exchanges. A small player would be unlikely to attract an adequate number of physicians and hospitals to be included in their networks, and consequently would be unable to attract enough individuals to sign up with a plan with such sparse networks. The belief that the state exchanges will promote robust competition between private insurers, which the free market hasn’t done, is a pipe dream.

Now think about costs under the Medicare program. Although a non-competitive government program, Medicare has been far more effective in controlling costs than have the private insurance plans. In fact, the private insurance industry has often followed Medicare’s lead in innovations in the financing of health care.

The attempt to introduce private competition into the Medicare program has been a dismal failure. The care covered by the private plans (Medicare plus Choice, and then Medicare Advantage) has cost more than care provided in the traditional Medicare program for individuals with comparable health care needs. The private plans have been totally unsuccessful in their efforts to compete on a cost basis with our public program – Medicare.

Now back to that remarkable statement – the one that says that the President called for and Congress enacted the Affordable Care Act on the belief that robust competition would contain costs. What a sham! President Obama has known all along that the private insurance industry has failed and that it would take a single payer national health program to cover everyone while controlling costs. He has said as much. The members of Congress know that as well. Why else would they keep saying that if this doesn’t work (which policy science tells us it can’t) then we’ll have single payer?

The last thing we need is the Department of Justice providing antitrust oversight of a dysfunctional private insurance market when the obvious solution is to establish our own public monopsony which controls costs through global budgeting and other proven single payer mechanisms. A monopsony eliminates the need for competition to control costs. That would be detrimental in the private sector, but it would be highly beneficial when it is our own public program.

If we get rid of the private, anti-competitive insurance trusts, then we don’t even need the Department of Justice trust busters on the scene.

NRA partners with UnitedHealthcare

By Paul Frumkin
Nation’s Restaurant News
May 21, 2010

The National Restaurant Association said it has partnered with insurance giant UnitedHealthcare in an effort to make health care coverage more accessible and affordable for foodservice operators and their employees.

The initiative, called “Restaurant Health Care Alliance,” could help provide coverage for the 4 million to 6 million restaurant employees who currently are without insurance, according to Dawn Sweeney the NRA’s president and chief executive. The industry employs about 13 million people.

While details of the plans have not been hammered out, the NRA and UnitedHealthcare said they intend to provide a range of options that will be tailored to the restaurant industry.

“We’re looking at developing a continuum of products,” Sweeney said Friday during a press conference in Chicago announcing the alliance. She said plans could range from discount cards for those employees “who aren’t ready to purchase full health insurance all the way to comprehensive coverage.” Prices could start as low as $100 a month, she added.

Mike Gibbons, the NRA’s chairman of the board, noted that the partnership with UnitedHealthcare would help alleviate the financial burden that national health care reform will put on the restaurant industry.

“The cost of health care reform could be potentially devastating,” he said. “The alliance will give lower cost health care alternatives.”

http://www.nrn.com/article.aspx?menu_id=1368&id=383294

You would think that now that the Patient Protection and Affordable Care Act (PPACA) is law, UnitedHealthcare, the nation’s largest insurer in terms of revenues, would shape up its act by offering expansions of coverage compliant with the alleged intent of the law to provide adequate health insurance for everyone. That’s what you might think, but you’d be wrong.

The National Restaurant Association (NRA) actively opposed PPACA. It’s not too difficult to understand why. There are close to a million businesses in the restaurant industry, most of which operate on fairly narrow profit margins. Because of their sensitivity to overhead expenses, they have left millions of their food services workers with out any health care coverage whatsoever.

Congress recognized that requiring small businesses to offer all employees insurance coverage would create a significant financial burden for many of them. Thus they exempted businesses with less than 50 employees from the penalty for not providing coverage. But those with 50 or more employees will have to provide “minimum essential coverage” to avoid the penalty. That is defined in the law as providing an actuarial value of 60 percent, though NRA is continuing to lobby for regulations that would keep the more specific requirements to a minimum.

With the potential of gaining millions of new insurance customers from the restaurant industry alone, UnitedHealthcare is quite willing to craft the inexpensive products that the restaurant industry is seeking in response to the requirements imposed by PPACA. But discount cards? That’s not even insurance! The other “lower cost health care alternatives” at best would be underinsurance products that will not protect restaurant employees nor their families who may develop health problems. Junk insurance is what they’re selling!

This is UnitedHealthcare in action after PPACA has become law. It is clear that they have no intent to follow any other path than business as usual. Let’s not go that route, but instead let’s blaze a path to a single payer national health program. Then all restaurant workers (and everyone else) would have the health care that they and their families might need.

Our monthly membership "working" meetings have been scheduled:

Tuesday June 15th, 7pm

Tuesday July 6th, 7pm

Sunday September 12th, 3pm

Location for all meetings is - 25 W 43rd Street, 18th Floor - Wheelchair Accessible

For more information please email info@phimg.org

PLEASE NOTE OUR AUGUST 3 MEETING IS CANCELLED. 

 

‘Broad’ health care tax cut for small business leaves out some companies

By Ricardo Alonso-Zaldivar
Los Angeles Times
May 19, 2010

When the administration unveiled the small business tax credit earlier this week, officials touted its “broad eligibility” for companies with fewer than 25 workers and average annual wages under $50,000 that provide health coverage.

Lost in the fine print: The credit drops off sharply once a company gets above 10 workers and $25,000 average annual wages.

It’s an example of how the early provisions of the health care law can create winners and losers among groups lawmakers intended to help — people with health problems, families with young adult children and small businesses. Because of the law’s complexity, not everyone in a broadly similar situation will benefit.

http://www.latimes.com/business/nationworld/wire/sns-ap-us-health-care-tax-cut-fact-check,0,3521831.story

We could have had a health care financing system that automatically included everyone. Instead we enacted a complex, fragmented system with so many eligibility and payment variables for a large variety of plans and programs that it is impossible to fit everyone into a slot. Not only is this the most expensive way to pay for health care, it also ends up being inequitable since individuals with similar circumstances can end up having quite different financial obligations, or even end up with one covered and the other not.

It doesn’t have to be this way. We can still enact a single payer national health program that would cost less and actually work for everyone.

Can Health Care Save Detroit?

By Noah Ovshinsky
NPR
May 20, 2010

A few weeks ago, officials with the Detroit Medical Center, the city’s largest health system, made an announcement that was as startling as it was welcome: that they intended to sell the nonprofit to an investor-owned company. As part of the deal, Nashville-based Vanguard Health Systems promised to spend $850 million on much-needed capital improvements.

The Detroit Medical Center, or the DMC as it’s called locally, is the city’s primary safety net, providing more uncompensated care than any other health system in the state. That commitment comes at a cost. While the DMC has turned a profit for six years in a row, officials say the health system’s payer mix makes raising money on Wall Street all but impossible. As a result, the facilities are showing their age.

Without selling hospitals, turning away needy patients or cutting services, experts say they don’t see how Vanguard will get a good return on its investment.

http://www.npr.org/templates/story/story.php?storyId=126283823&ft=1&f=1001

And…

Vanguard, DMC Announce Letter of Intent

Vanguard Health Systems
March 19, 2010

The Detroit Medical Center (DMC) Board of Trustees and Vanguard Health Systems Inc. announced today that they have signed a letter of intent for DMC to become part of the Vanguard system and for Vanguard to invest $850 million in capital improvements to DMC’s eight-hospital system.

Charles N. Martin, chairman and chief executive officer of Vanguard Health Systems, said… “We are very excited about entering the Detroit market and look forward to working with the DMC management team, who has an outstanding record of delivering care and managing financial challenges.”

(Do not rely on any forward-looking statements as such statements are subject to numerous factors, risks and uncertainties that could cause Vanguard’s actual outcomes, results, performance or achievements to be materially different from those projected. These factors, risks and uncertainties include, among others, Vanguard’s ability to negotiate a definitive agreement for the acquisition of the DMC System and to successfully consummate the acquisition and integrate its operations; Vanguard’s high degree of leverage and interest rate risk; Vanguard’s ability to incur substantially more debt; operating and financial restrictions in Vanguard’s debt agreements; Vanguard’s ability to generate cash to service its debt; potential liability related to disclosures of relationships between physicians and Vanguard’s hospitals; Vanguard’s ability to grow its business and successfully implement its business strategies; Vanguard’s ability to successfully integrate any future acquisitions; the potential that acquisitions could be costly, unsuccessful or subject Vanguard to unexpected liabilities; post-payment claims reviews by governmental agencies that could result in additional costs to Vanguard; conflicts of interest that may arise as a result of Vanguard’s control by a small number of stockholders; the highly competitive nature of the healthcare business; governmental regulation of the industry including Medicare and Medicaid reimbursement levels; changes in Federal, state or local regulation affecting the healthcare industry; the possible enactment of Federal or state healthcare reform; pressures to contain costs by managed care organizations and other insurers and Vanguard’s ability to negotiate acceptable terms with these third party payers; the ability to attract and retain qualified management and personnel, including physicians and nurses; claims and legal actions relating to professional liabilities or other matters; the impacts of weakened economic conditions and volatile capital markets on Vanguard’s results of operations, financial position and cash flows; Vanguard’s failure to adequately enhance its facilities with technologically advanced equipment could adversely affect its revenues and market position; Vanguard’s exposure to the increased amounts of and collection risks associated with uninsured accounts and the co-pay and deductible portions of insured accounts; Vanguard’s ability to maintain or increase patient membership and control costs of its managed healthcare plans; the geographic concentration of Vanguard’s operations; the technological and pharmaceutical improvements that increase the cost of providing healthcare services or reduce the demand for such services; the timeliness of reimbursement payments received under government programs; the potential adverse impact of known and unknown government investigations; and those factors, risks and uncertainties detailed in Vanguard’s filings from time to time with the Securities and Exchange Commission, including, among others, Vanguard’s Annual Reports on Form 10-K and its Quarterly Reports on Form 10-Q.)

http://www.vanguardhealth.com/news/article113.html

Non-profit Detroit Medical Center (DMC) is the city’s primary safety net, providing more uncompensated care than any other health system in Michigan. In spite of difficult economic conditions, DMC has been profitable for the past six years. Even Vanguard’s chairman states that the DMC management “has an outstanding record of delivering care and managing financial challenges.” So why is DMC selling to an out-of-state, for-profit hospital chain?

The reason given is that highly-leveraged (i.e., debt laden) Vanguard intends to infuse funds for capital improvements. But why should DMC relinquish its tax-favored status that helps to ensure that retained profits can be moved to the capital budgets, as with other non-profits? With Vanguard ownership, not only will they lose revenue in taxes, they also will have to divert more revenue to servicing Vanguard’s massive debt.

This says nothing about the fundamental business differences between non-profit hospitals with a sole mission to provide patient care and for-profit hospitals with an SEC-mandated mission to enhance investor value.

Nobody reads the fine print of the “forward-looking statements” disclaimers, but they are customized to provide the type of transparency that we clamor for today. If you think that transferring a major non-profit center that is successfully providing much needed safety-net services to a highly-leveraged, for-profit, out-of-state hospital chain is a good deal, then you should read the fine print of the “forward looking statements” above.

Congressman John Conyers’ Medicare for All bill, H.R. 676, calls for conversion of the for-profit, investor-owned components of our health care system into non-profits. It would be sad indeed if this important center in his own home city of Detroit were to undergo the opposite conversion, placing the demands of rich investors ahead of the needs of low-income patients.

Hospitals criticized over offers to earn or save money by sharing electronic patient data

By Jason Roberson
The Dallas Morning News
May 18, 2010

The $45 billion set aside for electronic health records in the federal government’s 2009 stimulus package created a carrot-and-stick approach to lure providers into the electronic age. Physician practices could be paid up to $44,000 over five years, and hospitals could get a maximum of $15.9 million to install systems that comply with federal rules.

On the other hand, the government would penalize providers that don’t participate, reducing their Medicare and Medicaid payments by 1 percent beginning in 2015. In later years, the penalty grows to 3 percent.

Electronic records are expected to allow doctors to coordinate care for the sickest patients, eliminate paper-transcribing errors that lead to inaccurate prescriptions, and avoid duplicate lab and imaging tests.

But with the promises of efficiency come questions of privacy.

The vendor that Dallas-based Tenet Healthcare Corp. uses has been criticized for sharing patient data with drug companies. The vendor that Fort Worth’s Cook Children’s Health Care System uses is considering offering physician customers discounts for sharing patient data.

Texas Health Resources Inc., an Arlington-based hospital system, and Children’s Medical Center Dallas announced April 27 that patients seen at one hospital will have their records available electronically at the other if they need to be admitted.

This summer, Parkland Health & Hospital System, which operates Dallas County’s public hospital, is expected to join them. That means a patient’s medical records will be seamlessly, electronically transferable to three of North Texas’ largest hospitals.

Cerner Corp. – a Kansas City-based electronic health record vendor with 200 Texas customers, including Tenet Healthcare – shares unidentifiable patient records with drug companies and researchers looking for patients to participate in clinical trials, says a company spokeswoman.

Doctors long have made extra money by referring patients to clinical drug trials. Cerner says it simplifies and cleans up the process by acting as a middleman of sorts between doctors and drug companies.

But Dr. Deborah Peel, an Austin psychiatrist and founder of the nonprofit advocacy group Patient Privacy Rights, questions whether a patient’s most confidential information in their medical records, such as psychological treatment or HIV testing, will be secure at those hospitals.

Cook Children’s electronic records system is different from most others in hospitals. Rather than pay $50 million to $120 million installing software for its 400 physicians in 55 locations, it paid less than $1 million for an online record-keeping service.

But the key difference, Peel said, is that the damage of illegally accessed electronic records is more extensive.

“Once your information is released, it’s like a sex tape that lives in perpetuity in cyberspace,” Peel said. “You can never get it back.”

http://www.dallasnews.com/sharedcontent/dws/bus/stories/051810dnbuspatientprivacy.1372a8f4.html

“… a sex tape that lives in perpetuity in cyberspace…” Certainly very few if any readers of these comments have personal sex tapes that could live in perpetuity once released in cyberspace, but we all have personal medical data that we would just as soon not share with the world, even if we are revealed as living a perhaps boring life of relative purity. Even that is no one else’s business.

Yet the federal government is going to penalize Medicare and Medicaid providers that do not covert their patient data into electronic form. Promises of system security provide little reassurance when people with other interests, whether for business purposes or for more nefarious intent, have access to those records. As mentioned in this article, hospitals are already taking liberties with private patient data.

How well does controlled access work? Rupert Murdoch controls Internet access to certain articles in The Wall Street Journal, limiting them to paid subscribers.

Try this experiment. Log onto The Wall Street Journal at http://online.wsj.com/home-page. Go to the section labeled subscriber content. Click on any article. You will see only the opening preview of the article, but then must subscribe to see the full article. But wait. Cut the precise title of the article and paste it into a Google search box. The first item that comes up in the Google search is likely a selection that lists the same title, with a WSJ link. Click on it and you have – voila – the full article, which already has been released into cyberspace.

Admittedly, electronic health systems vendors will use a higher level of security for patent records, but they are no more secure from hackers than are Murdoch’s subscriber-only articles secure from theft by those of us with only the simplest of computer skills.

At this stage, infallible cybersecurity is only a wish, especially for a system that will eventually have over 300 million patient records with variable degrees of interconnectivity. It is premature for the government to start penalizing us for declining to expose patient data to this potential threat.

Looking for the magic in information systems has been yet one more unfortunate diversion from achieving the most consequential goal of all – affordable health care for everyone through an improved Medicare for All. Let’s work on that first.

The Culture of Excess How America Lost Self-Control and Why We Need to Redefine Success

By J.R. Slosar
Praeger/ABC-CLIO

From the Introduction

The first chapter provides a background of definition and symptoms of narcissism and its application to our culture and society. The complexity of the concept is presented from history, research, and application. Chapter 2 separates out the factors in the economic marketplace that contribute to cultural narcissism. Chapter 3 focuses on coping with the impact of the factors of cultural narcissism, and explores reality and loss, rigidity and self-destruction, and perfectionism and deception. The fourth chapter looks at our avoidance and anxiety of numbers, math or quantitative analysis, a cultural weakness that opens the door to faulty comparisons and poor decisions. A different perspective is offered in Chapter 5, as our health care system is offered as a primary example of how our society sanctions cultural narcissism and self-defeating behavior. Chapter 6 focuses upon changes in reality and hero images as representative of today’s cultural narcissism. An analysis of sports as a dramatic seeking of reality is discussed. Chapter 7 discusses identity theory and development with the focus on today’s youth and how they see and present themselves. Finally, the last chapter summarizes, integrates, and offers structural recommendations to help change directions and return to a more balanced and realistic appraisal of our economic system and our day-to-day lives and decisions.

From Chapter 5 – Health Care: Waste, Excess and Brokers

The dramatic insistence on free market principles and competition determines the way  health care is delivered today. The entire process exemplifies the culture of excess and cultural narcissism. The excess comes from the tremendous waste of money and resources. This is coupled with the ability of brokers and corporate entities to overcharge and take out money at everyone else’s expense. These are the entitled “me” in the equation. The rest of us continue to pay more and more and even get less and less. Or, many just cannot afford health care at all. Facts and meaningful comparisons are dismissed and not considered by the fear of an alternative labeled as Socialism.

From Chapter 8 – Generation We

To address current trends, our culture must develop a new generation that will move toward a different concept and process of attaining success or “making it.” This new concept is based on connectedness with culture and has a broader perspective of inclusiveness. It also involves having less sense of entitlement, more realistic expectations, and more willingness to regulate one’s own behavior and the marketplace we live in. These are the components need to develop a Generation of We. To effect these changes will mean challenging basic economic assumptions and the elevated status of established economic theories and principles. In turn, we must challenge our current definition of success. The transition from a “me” society to a “we” society can be framed as the classic dichotomy of individualism versus collectivism. But it is a larger and more complex issue than that.

The literature in social psychology is extensive in arguing about the issue of what comes first in order to change. Is it necessary to change behavior first, for change to occur – or is it necessary to change attitude before behavior change can occur? The dichotomy of behavior versus attitude for individuals to change is also applicable to our culture. Changes in individual behavior will principally follow changes dictated by policy. Our mass consumption society will only redirect when forced to. Narcissistic entitlement is too high – self-control is pummeled and expectations of voluntary change are naive. The cycle and patterns  of the culture of excess are too ingrained. As a result, regulation in policy will be an important factor in the change process, and replace the conscious efforts of deregulation and no regulation. As discussed earlier, the cultural deregulation and no regulation movement has deregulated our inner mechanisms of individual self-control. Changes in attitude and thinking will also be related to policy; however, confrontation must occur between current attitudes and thinking that is “me based.” Challenging some existing and entrenched beliefs about economics and economic growth will be necessary for change to occur.

http://www.cultureofexcess.com/

When you look at different models of health care delivery and its financing, the logic of single payer prevails. President Obama has stated such, and even many conservatives agree, though ideologically opposed. So it has been difficult for those of us who support health care justice to understand why there has not been an adequate national grassroots uprising demanding the enactment of an improved Medicare for all. Dr. Slosar’s book provides some insight as to why.

In “The Culture of Excess,” Dr. Slosar gives us the perspective of the discipline of psychology, both as applied to individuals and as applied to our culture. He explains how cultural narcissism has permeated our society and has led to the culture of excess. As the “me” society has dominated over the “we” society, narcissism has suppressed the support for collective solutions to our social problems. Within that framing, it is easier to understand why a near-perfect “we” solution for health care reform – single payer Medicare for all – was rejected in favor of the highly-flawed “me” solution – the individual private insurance plans.

Although the process will not be easy, Dr. Slosar shows us why addressing our cultural narcissism must be an integral part of achieving health care justice for all. In a Generation We, everyone will have the health care that they need.

Gingrich in Va.: A Republican Congress could defund health care law

By Rosalind Helderman
The Washington Post
May 14, 2010

(Former House Speaker Newt) Gingrich’s comments came at a health-care industry sponsored conference held by Center for Health Transformation, a project of his consulting firm.

Gingrich argued the federal law has been intentionally designed to encourage businesses to drop health care for their employees, incurring a new fine in the law for not offering insurance. Employees will then enter new individual health exchanges, Gingrich argued, but find them so expensive that they will clamor for a nationalized health care system.

http://voices.washingtonpost.com/virginiapolitics/2010/05/former_speaker_of_the_house.html

Although we don’t agree with Newt Gingrich’s solution for our health system’s problems (computerize and privatize the entire system), we do agree with him and the multitude of other conservatives who state that the intolerable costs of health care eventually will drive the nation to demand a nationalized health care system. It’s just too bad that so much more suffering will take place before we arrive there.