Physicians for a National Health Program | Open Letter to the Vermont Legislature: Enact Single-Payer Health Care

Open Letter to the Vermont Legislature: Physicians to the Vermont Legislature - Enact a single-payer health care system

Single-Payer Updates with Action Item for Today - Call the Rules Committee Members

Speaker Nancy Pelosi
November 6, 2009
Press Release

Pelosi Statement on Congressman Anthony Weiner’s Single Payer Alternative

Washington, D.C. – Speaker Nancy Pelosi issued the following statement today on Congressman Anthony Weiner’s single payer alternative:

"Within the next few days, the House will vote on the most comprehensive health care legislation in our history. Our bill will provide affordability to the middle class, security to our seniors, and responsibility to our children by not adding a dime to the deficit. While our bill contains unprecedented reforms, including an end to discrimination for pre-existing conditions and a prohibition on raising rates or dropping coverage if you become ill, our bill cannot include provisions some strongly advocated. The single payer alternative is one of those provisions that could not be included in H.R. 3962, but which has generated support within the Congress and throughout the country.

"Congressman Anthony Weiner has been a forceful and articulate advocate for the single payer approach and our legislation. His decision not to offer a single payer amendment during consideration of H.R. 3962 is a correct one, and helps advance the passage of important health reforms by this Congress. While single payer, like other popular proposals, is not included in the consensus bill we will vote on this week, Congressman Weiner has been a tireless and effective advocate for progress on health care, and his work has been a vital part of achieving health care reform."

Committee on Energy and Commerce
Chairman Henry A. Waxman
November 6, 2009

Chairman Waxman's Statement on Rep. Weiner's Single-Payer Amendment

Today Chairman Henry A. Waxman released a statement in response to Rep. Anthony Weiner's decision not to offer a single-payer amendment to the House Democratic health care legislation.

"Rep. Anthony Weiner has been one of the most tireless and effective advocates for health care reform. His decision not to offer his amendment on the floor was a difficult one for him, and for supporters of the measure. I believe Rep. Weiner's choice will be enormously helpful in passing the health care reform package. His step is a correct and courageous one. I thank Rep. Weiner for it, and look forward to working with him closely. Rep. Weiner deserves a great deal of credit for helping to make quality, affordable health care more available to millions of Americans."

Comment by Ida Hellander, M.D., Executive Director, Physicians for a National Health Program:

Next steps and interpretation -

1) The fact that single payer got so far along in the House is a testament to the strength of our single payer movement. The huge number of calls by single payer advocates in support of single payer and the Weiner amendment in recent days have been noted by several members of Congress.

2) It appears that nobody, particularly the President, expected our single payer option to be alive in the Congress for so long. As you know, they attempted to keep it "off the table" from the very beginning.

3) The President was directly involved in the decision to not hold a vote on the Weiner single payer amendment, and Weiner will be meeting with him later today. Stay tuned.

4) We need to increase pressure on the Congress and the White House for Medicare for All through lobbying, civil disobedience, media outreach, and grassroots organizing. Sen. Sanders will call for a vote on single payer in the Senate - this could come up anytime in the next month. Encourage your Senator to support the Sanders bill and also an amendment he will offer for a state single payer option. The California Nurses Association/NNOC has already started lobbying visits in the Senate in D.C.

5) We have been asked how to tell members to vote on the House bill. Our response is that the bill is "like aspirin for breast cancer."

Note from David Swanson and Action Items below...

Read more »

ACTION TIME: Upcoming votes on single payer

From PNHP:

While media coverage of the health reform debate is focused on the Senate Finance Committee's bill (which was largely drafted by current and former executives at Wellpoint, the nation's largest private health insurance company), several portentous congressional votes on single-payer Medicare-for-All loom on the horizon.

You can help determine the outcome of these votes, which are truly without historical precedent.

Quick Actions:
[Note that the text in the messages needs a bit of updating since it is now Oct. and we need to add a request for a CBO scoring of HR-676 in the one for the Weiner Amendment]

1. Write your representative in support of the Weiner amendment
2. Write your representative in support of the Kucinich amendment

Detail:

1. In the House - Ask your representative to support the Weiner and Kucinich amendments

Sometime in the next two or three weeks, Rep. Anthony Weiner's (D-N.Y.) amendment to substitute single-payer legislation (along the lines of Rep. Conyers' H.R. 676) for the House leadership's bill, H.R. 3200, will come up for an up-or-down vote on the House floor.

This is the first time single payer will have been put to a full floor vote in our nation's history, and it presents us with a unique opportunity to hold our representatives accountable on this issue. While the individual mandate approach to reform embodied in the Senate Finance bill would leave 25 million Americans uninsured, single payer would assure coverage for every American, as even President Obama has admitted. (You can find the number of people uninsured in your congressional district here.)

Additionally, Rep. Dennis Kucinich (D-Ohio) has secured a provision in H.R. 3200 that would allow individual states to adopt their own single-payer systems.

• Join the Facebook Group to support the Weiner Amendment.
• Contact your representative today and ask him or her to vote "YES" on the Weiner Amendment for single payer and insist that the Kucinich amendment remains in the final House bill..
• You can find out more about the amendments and take action at www.pnhp.org/amendment. 
• The Congressional Switchboard number is (202) 224-3121.

2. In the Senate

Sen. Bernie Sanders (I-Vt.) will introduce two single-payer amendments to the Senate bill, one to create a national single-payer plan (along the lines of S. 703), and the other to allows individual states to adopt single payer.

• Urge your senators to vote "YES" on the Sanders' single payer amendments. 
• The Congressional Switchboard number is (202) 224-3121.

Talking points and lobbying materials are located at www.pnhp.org/change.


Some recent media highlights

1.  A new study estimating that lack of health insurance causes 45,000 deaths annually, by Dr. Andrew Wilper and PNHP co-founders Drs. David Himmelstein and Steffie Woolhandler, was covered by the New York Times, CBS Evening News, Reuters, Amednews, and more. Dr. John Geyman wrote an opinion piece about the study at The Huffington Post. Dr. Deb Richter's op-ed citing the study appeared in The Progressive.
   
   Political figures, commentators and editorial writers are now routinely citing the study's finding of 45,000 deaths annually in their discussions of our health care crisis. Even Sen. Max Baucus has cited it, erroneously asserting that "[my] bill would fix that." (Actually, his bill would leave some 25 million uninsured, which translates into about 25,000 deaths annually.)
   
   
2. PNHPer and "Mad as Hell Doctor" Dr. Paul Hochfeld was admitted at the last minute to Obama's press event with physicians Monday and appeared on Keith Olbermann's "Countdown" show on MSNBC. The Mad as Hell Doctors, led by Hochfeld and Dr. Mike Huntington, wound up their 26-city, nationwide tour with a rally in Washington, D.C., on Sept. 30. They received extensive regional press.
   
   
3. Finally, an excellent article by Michael Moore and the California Nurses Association's Rose Ann DeMoro explains "Why the current bills don't solve our health care crisis," and why an improved and expanded Medicare for All is the only effective Rx. Activists are encouraged to use the article's talking points for their own op-eds and letters.

Register today for PNHP's Annual Meeting on Saturday, Oct. 24, in Cambridge, MA, at the Royal Sonesta Hotel. Guest speakers include Dr. Marcia Angell, former editor of the New England Journal of Medicine; Harvard health economist William Hsiao, Ph.D.; journalist T.R. Reid; Sen. Bernie Sanders and Rep. Anthony Weiner and more. You won't want to miss this extraordinary gathering!

PNHP Supports the Weiner Amendment - Will you?

Physicians for a National Health Program asks you to support the Weiner Amendment by sending a letter to your rep.

The Weiner amendment would replace Division A of HR 3200 with the text of HR 676, the "U.S. National Health Care Act," sponsored by Rep. John Conyers. This would effectively transform HR 3200 into single-payer legislation. Single-payer is a superior reform to HR 3200 in many ways:

• Single payer would provide universal and comprehensive coverage for all medically necessary services. Unamended, HR 3200 would leave millions uninsured or with skimpy coverage.
  
  
• Single payer allows patients free choice of doctor and hospital. Under HR 3200, insurance companies would continue to deny care and restrict access to services.
  
  
• Single payer pays for itself by eliminating $400 billion in insurance company administrative waste and redirecting it to care. HR 3200 requires $1 trillion in new revenue in the next decade.
  
  
• Single payer establishes proven and effective cost-containing mechanisms to ensure that benefits are sustainable over the long run. HR 3200 lacks effective cost controls.

The Weiner amendment presents an historic opportunity for Members to register their support for single-payer national health insurance as the best way to solve the U.S. healthcare crisis. It additionally will provide a vote that Members can stand by when approached by constituents.

Please take a moment to use their form to let your representative know you support Medicare For All.

The "chicken and egg" problem: Can the "public option" succeed where Prudential failed?

By Kip Sullivan, JD - Source: PNHP's Official Blog

In a previous paper I described the transformation of the “public option” from an enormous program that would insure 130 million people to a tiny program in the Democrats’ health “reform” legislation that will insure somewhere between zero and 10 million people. I predicted that the “options” in the Democrats’ bills would be unable to succeed in all or most markets in the country. I characterized the main barrier facing the Democrats’ shrunken “options” as a “chicken and egg” problem: A person or group trying to create a new insurance company can’t tell prospective customers what the premium will be until they have determined how much they will pay providers; but the person or group can’t know how much it will pay providers until it knows how many people it will insure.

In this comment I elaborate on this chicken-egg barrier by presenting an illustration of the barrier at work – the departure of the Prudential Insurance Company from the Minnesota managed care health insurance market in 1994. Although Prudential was (and still is) a huge Fortune 500 company, it was unable to survive Minnesota’s highly concentrated group health insurance market and was forced to withdraw. If a company as large and as experienced as Prudential could not crack the Minnesota market, why should we hold out any hope for the little “options” proposed by the Democrats?

A recap of the transformation of the “public option”

Jacob Hacker laid out his vision of what is now called “the public option” in papers published in 2001 and 2007. Hacker spelled out five criteria he believed the “option” had to meet:

1. It had to be pre-populated with tens of millions of people;
2. Only “option” enrollees could get subsidies (people who chose to buy insurance from insurance companies could not get subsidies);
3. The “option” and its subsidies had to be available to all non-elderly Americans (not just the uninsured and employees of small employers);
4. The “option” had to be given authority to use Medicare’s provider reimbursement rates (which are typically 20 percent below the rates paid by insurance companies); and
5. The insurance industry had to offer the same minimum level of benefits the “option” had to offer.

Although I question some of the assumptions Hacker made in these papers, including his assumption that the “option” will inevitably enjoy Medicare’s low overhead costs, I have little doubt that an “option” which met Hacker’s five criteria would stand an excellent chance of surviving its start-up phase in most markets in the U.S. (I am ignoring here the question of whether an “option” as strong as Hacker’s original has a better chance of being enacted than a single-payer system does. Events of the last few months should disabuse the entire world of that myth.)

But when the Democrats drafted legislation early in 2009 that included provisions creating an “option,” they abandoned the first four of Hacker’s criteria and kept only the last one (the one requiring insurance companies and the “option” to cover the same benefits). Proponents of the “option,” including Hacker, did not raise a fuss about this. Not surprisingly, the “option” provisions of the bills introduced in July – one by the Senate Health, Education, Labor and Pensions (HELP) Committee and the other by the chairs of the three House committees with jurisdiction over health care reform – were basically unchanged from those in the draft versions. The Congressional Budget Office estimates the HELP Committee’s “option” will insure approximately zero people and the “option” in the House bill (HR 3200) will insure roughly 10 million people.

The advent of managed care augmented the chicken-egg problem

Prior to the advent of what came to be called “managed care,” an entrepreneur or group seeking to start a new insurance company only needed to focus on amassing a large number of customers as opposed to providers (clinics and hospitals). But with the advent of managed care in the 1980s, groups seeking to start a brand new insurance company also had to amass a supply (or “network”) of clinics and hospitals as well. Some insurers amassed this critical supply of providers by buying them out (or merging with them), but most did so by signing contracts with them.

This new provider-network requirement for market entry arose because the spread of managed care tactics meant that survival and success would go to the insurance company with the greatest ability to exert influence over providers. Insurance companies throughout the country sought to increase their influence over providers by limiting patient choice of provider so that they could steer their enrollees to fewer providers. Developing this power to steer more patients to some providers and away from others gave an insurance company two substantial advantages over an insurance company that did not do that. First, it gave the insurer the ability to force the providers they dealt with to give them discounts off their usual charges. Second, it enhanced the power of the insurer to force providers to play by the insurer’s “managed care” rules (for example, rules requiring providers to get permission from the insurer before hospitalizing a patient).

But creating a network of providers that is large enough to satisfy a widely dispersed customer base but still exclusive enough to give the insurer leverage over the in-network providers is a time-consuming and expensive process. This requirement gives an enormous advantage to the home team – the insurers that have been doing business for a long time in a given market – and, conversely, creates an enormous barrier to entrepreneurs seeking to create new insurance companies.

When the U.S. Department of Justice investigated a proposed merger between Aetna and Prudential in 1999, it concluded that “effective new entry for an HMO or HMO/POS [point-of-service] plan [that is, an insurance company that limits patient choice of provider] in Houston or Dallas typically takes two to three years and costs approximately $50 million.” Because insurance markets have become more concentrated in the decade since the DOJ published this report, the time and money required to break into today’s markets is even greater than that required a decade ago.

Insurance companies which failed to grasp this new rule of the managed care era – that success will depend not only upon the size of your customer base but also your ability to limit patient choice of provider – lost market share and many went out of business. The decision by Prudential Insurance Company to leave the highly concentrated Minnesota health insurance market in 1994 illustrates this trend.

Prudential’s departure from Minnesota’s group market

As of 1994, Minnesota’s four largest health insurance companies insured 80 percent of all Minnesotans who had health insurance of any sort. Blue Cross Blue Shield of Minnesota enrolled 1.33 million people, Medica enrolled 900,000, HealthPartners enrolled 650,000, and PreferredOne enrolled 450,000. Two of these insurers – Medica and HealthParters — were so powerful in the Twin Cities area they could extract discounts from Twin Cities hospitals that were approximately equal to Medicare’s (at that time, a discount of about one-third). They extracted these discounts not because they were as big as Medicare was (nationally Medicare insured 40 times more people than Medica did in 1994 and about 55 times as many as HealthPartners), but because they were big in the Twin Cities insurance market and, unlike Medicare, they made a point of limiting patient choice of provider. This meant they could exercise enormous leverage over the providers they did choose to deal with.

Even though Prudential was and still is a huge company nationally (it is a Fortune 500 company and is among the nation’s largest health insurance companies) and had been selling health insurance for decades, it did not react fast enough to the gradual spread of managed care tactics in Minnesota during the 1970s and 1980s. (Minnesota, along with California, led the nation down the managed care path.) By 1994 Prudential decided it couldn’t compete in the Minnesota market.

Prudential made its decision known on July 8, 1994. As the following excerpt from a Minneapolis Star Tribune article published the next day indicates, Prudential had established a toehold – it was well on its way to creating both a customer base and a provider network – but the toehold wasn’t enough.

… Prudential Insurance Co. said Friday that it will discontinue its Twin Cities managed care health plan due to intense competitive pressures. Eighty metro-area jobs will be eliminated….While Prudential … is now in 42 cities, only the Twin Cities market posed a particular problem and will be shut down….

Prudential Plus of Minnesota operates mainly in the Twin Cities and deals with 800 primary care physicians and 1,500 specialists. Nationwide, the managed care plan has 5 million members. Regardless, Prudential did not grow large enough or fast enough in the Twin Cities market to maintain a substantial lead, analysts said. The firm was easily overshadowed by heavyweights such as HealthPartners and Medica…. And these bruisers and others like them are merging or forming alliances that kept welterweights like Prudential Plus on the ropes. Gary Schultz, executive director of Prudential Plus of Minnesota, said, “Recent mergers, acquisitions and strategic alliances involving health care plans and providers … have combined to make it increasingly difficult to compete in this market place….

“Prudential only has 30,000 (members) in the Prudential Plus plan,” [Prudential marketing director Pat] McLaughlin said. “They are not the big player they needed to be and as a result may not have been able to negotiate the best deals with providers” (Dee DePass, “Prudential to discontinue managed care health plan,” Star Tribune, July 9, 1994, 1D).

An article in BNET reported an identical explanation for Prudential’s demise in Minnesota: “A Prudential spokesperson said the clout of its bigger competitors had made it difficult to recruit a critical mass of new employers and enrollees.”

Lessons for “option” advocates

This story illustrates three facts “option” advocates must address.

First, it clearly illustrates the “chicken and egg” problem facing the “option” program, or to be more precise, facing the corporations that will be hired by the Secretary of the Department of Health and Human Services to create the “option” program. (Both the HELP bill and HR 3200 authorize the Secretary to contract with corporations that the HELP bill calls “contracting administrators” for the purpose of creating the “options” throughout the U.S.) The contracting administrators are going to have to build up provider networks and a customer base from scratch, simultaneously, and market by market, even though they will suffer the disadvantage of entering the insurance business long after the insurance companies they are competing with began introducing themselves to customers and cobbling together their own provider networks.

Second, this story should put the entire country on notice that the “option” may never be able to deliver on the promise, made over and over by “option” advocates, that the “option” will offer complete freedom to choose one’s doctor and hospital. If the contracting administrators who create the “options” around the country refuse to create “options” that limit enrollees’ choice of provider, those “option” programs will have less power to drive provider rates down. That means, of course, those “option” programs will have to set their premiums higher than existing insurers that do limit patient choice of provider. That will in turn make attracting a critical customer base very difficult if not impossible.

The third fact the Prudential story illustrates is that the size of an insurer at the national level is not an important factor in decisions by clinics and hospitals about whether to sign contracts with an insurer and whether to give that insurer discounts. What matters to clinics and hospitals is size at the local level. Minneapolis hospitals, for example, could have cared less whether Prudential insured 20,000 people in Tulsa or half-a million in Florida. (Size at the national level does have some bearing on whether an insurer can extract discounts from drug and equipment manufacturers. But drugs and equipment amount to roughly 15 percent of medical costs for the non-elderly. It is clinic and hospital costs that make or break an insurance company.)

The “chicken and egg” problem is, of course, not limited to entrepreneurs trying to break into the Minnesota market. The conditions that create the “chicken and egg” problem – high concentration levels within the insurance industry and near-universal use of managed care tactics including limited choice of provider – exist throughout the country. As Senator Charles Schumer (D-NY) said in a press release about a May 2009 report from Health Care for America Now, the entire U.S. health insurance industry suffers from “extreme … consolidation.” According to the HCAN report, eleven states have more concentrated insurance markets than Minnesota does.

“Option” advocates should stop comparing the “option” to Medicare

To test your understanding of the “chicken and egg” problem, let me end with a pop quiz: Did Medicare face a “chicken and egg” problem when it started up?

The answer is: No, it did not. It did not because it didn’t have to create a “customer” base from scratch. Its base was created by the law (signed on July 30, 1965) that created Medicare.

Medicare is, by design, the sole insurer for people over age 64. That means that Medicare’s administrators had a precise idea of how many Americans they would be representing on July 1, 1966, the day Medicare commenced operations. Equally importantly, every clinic and hospital in America had a good idea of how many elderly patients they would be getting if they participated in Medicare and, conversely, how many they would lose (and how much money they would lose) if they refused to accept Medicare patients. And because the Medicare law gave the nation’s entire elderly population – the portion of the population with the greatest need for medical care – to Medicare, Medicare’s administrators had a good idea of how much leverage they had on day one over the nation’s providers. This allowed them (eventually) to make an offer to America’s providers that the providers could not refuse – accept Medicare’s below-average rates or lose a lot of money. The offer was not refused. Today, virtually all American clinics and hospitals accept Medicare enrollees even though there is no requirement in the Medicare statute that providers accept Medicare enrollees. In short, having pre-established enrollment, which in turn gave Medicare the ability to set its rates below those of the insurance industry, meant that Medicare did not face the “chicken and egg” problem.

More importantly, Medicare didn’t face a “chicken and egg” problem because it has always been the single insurer for the services covered under Medicare. Medicare has never had to compete with the insurance industry for “customers.” A pernicious consequence of the tendency of “option” advocates to describe the “option” as “just like Medicare” is that “public option” supporters and members of Congress have been lulled into thinking the “option” is bound to succeed just as Medicare did. The tendency of “option” advocates to ignore the daunting “chicken and egg” problem is one manifestation of the lazy thinking that has been induced by the constant comparison of the “option” to Medicare. ”Option” advocates should stop comparing the “option” to Medicare.

Kip Sullivan is a member of the steering committee of the Minnesota chapter of Physicians for a National Health Program. He is the author of The Health Care Mess: How We Got Into It and How We’ll Get Out of It (AuthorHouse, 2006).

PNHP Physicians prescribe single-payer health care

McCaine's town hall meeting fostered disinformation and fear until one advocate from the audience explained how HR 676 "Medicare For All" worked. Unbelievable, McCain confessed he's never heard of the Bill but said he would not support it, anyway.

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Exploring the Concept of Single Payer

The fact that the entire August issue of the Journal of Health Politics, Policy and Law is devoted to exploring single payer certainly indicates that the concept has not died within the policy community.

Although a majority (but by no means all) of the political community dismisses single payer as not being politically feasible, much of the policy community accepts it as a feasible policy approach that would bring affordable health care to everyone. Even those opposed based on ideology understand clearly the feasibility of single payer from the policy perspective. Otherwise why would the opponents of reform keep insisting that policies that improve our health care financing would inevitably lead to a single payer system?

Read it all at PNHP's Official Blog

Reply to critics of “Bait and switch: How the ‘public option’ was sold”

The original, "Bait and switch: How the “public option” was sold" by Kip Sullivan is linked here.

From Kip's Reply to those who wrote in response to that article:

How many times must universal coverage advocates rush onto the battle field to promote a multiple-payer solution and get slaughtered before they realize they can’t get to universal coverage that way? How many defeats will it take till they know that universal coverage without cost containment is not politically feasible? How many times can they be fooled into thinking that there are ways to cut costs other single-payer?

There are several reasons why the lessons of previous defeats don’t sink in with many universal coverage advocates. I’ll discuss two here: (1) insufficient knowledge of how social change happens; and (2) insufficient knowledge about the role that promoters of market-based solutions to the health care crisis played in marginalizing single-payer legislation in Congress.

This view of social change is often expressed in the mantra quoted above, “Single payer is not within the realm of possibility this term.” The implication is that if single-payer advocates cannot demonstrate that they have at least 51 percent of the votes lined up, they should retreat to the sidelines and watch the “political yes buts” do their thing. It implies that social change must occur within a single session of Congress rather than over the course of many sessions. It implies that movements for social change should, in the event that they do not have a majority vote locked up at the beginning of any given session of Congress, put their campaign in moth balls and forgo the opportunity to educate the public and build their movement through lobbying, testimony, rallies and all the other tools associated with campaigns to move bills in Congress.

In short, it implies an absurd Catch-22. To get the “political yes buts” to join them, single-payer advocates must show proof of having a majority of Congress on their side; but to get a majority of Congress on their side, the single-payer movement must build and wage a campaign relentlessly over many years in the face of active discouragement from the “yes buts” – and without pestering Congress with ideas unfairly characterized as utopian.

These demands, when they are spelled out, are obviously irrational. Universal coverage under a single-payer system is going to be difficult to achieve. The difficulty may be on the order of the difficulty of ensuring voting rights for women and civil rights for black people, to name just two examples of movements that took decades to accomplish their goals. If the leaders and supporters of these movements had accepted the Alice-in-Wonderland rules recommended by the “yes buts,” the women’s suffrage and civil rights movements would never have happened.

There have been three cycles of health care reform in the last half century – 1970-73, 1992-1994, and 2007 to date. At the dawn of each cycle, single-payer legislation had already been introduced. But early in the cycle, single-payer legislation was “taken off the table” (to quote a statement Sen. Max Baucus now wishes he had never made). Each time the Democratic leadership chose instead market-based proposals that had no track record and no evidence to support them. Each time they favored reform deemed more “politically feasible” than single-payer because it left the insurance industry in place. In all three cycles, the alternative, market-based proposal was promoted by one or two policy entrepreneurs (that is to say, it wasn’t an idea that bubbled up from the grassroots).

I am not going to quote all of the history of those first two cycles detailed in this article, but it would be well worth your time to read. On to the thrid one - now...

The cycle we’re in now bears many similarities with the last two cycles. When this cycle began (2007 is as good a year to pick as the first year of this cycle, although that is somewhat arbitrary), single-payer legislation was better positioned than ever before to be taken seriously by Democrats. Single-payer bills had been introduced in several states as well as the US House (Sen. Bernie Sanders would introduce a single-payer bill in the Senate in 2008). Polls were showing that two-thirds of Americans and 60 percent of doctors support single-payer (or “Medicare for all”) legislation.

But once again an articulate policy entrepreneur appeared on the scene to sell a market-based alternative to single-payer that would leave the insurance industry at the top of the health care food chain, and once again the Democratic leadership fell for it. This time the entrepreneur was not Paul Ellwood. This time the policy entrepreneur was Jacob Hacker, a professor of political science at Berkeley. Just as Ellwood and the Jackson Hole Group had before him, Hacker said enhanced “competition” among insurance companies was the solution to the health care crisis. (The name of Hacker’s latest paper is “Healthy competition.”) This time enhanced competition would not come from “managing” competition, but from the creation of a “public option.” This time the coalition that promoted the alternative to single-payer was not the Jackson Hole Group, but HCAN, assisted by a sister coalition called the Herndon Alliance.

The Herndon Alliance was founded in 2005 by many of the same groups that would create HCAN in 2008. The Herndon Alliance paved the way for HCAN’s promotion of the “public option” with some laughable “research” claiming to find that Americans want a “public-private-plan choice” approach and don’t want a single-payer system. I have written elsewhere about the bogus “research” conducted by the Herndon Alliance. Suffice it to say here the Herndon Alliance cooked up a new and more insidious version of the “political feasibility” argument.

Until about 2007, when the Herndon Alliance first began publishing its “research,” there was only one variant of the “political feasibility” argument, the one that said the insurance industry is too powerful to beat. The Herndon Alliance variant claimed single-payer is not feasible because Americans don’t want it. According to this variant, American “values,” not the insurance industry, are actually the greatest impediment to single-payer. According to the Herndon Alliance, Americans “value choice of insurance company” and “they like the insurance they have and want to keep it.” HCAN and Hacker picked up these refrains and promoted them vigorously to the public and to members of Congress. This inexcusable attack on single-payer no doubt helped key committee chairs in Congress (Kennedy, Baucus, Waxman, Rangel and Miller) feel more comfortable taking single-payer off the table and concentrating on the “public option.”

By early 2009, it was clear the Hacker-HCAN-Herndon Alliance propaganda for the “public option” and against single-payer had worked with the Democratic leadership, and that the Democratic leadership would fall once again for a market-based alternative and remove single-payer from the table. The removal of single-payer legislation took place without the firing of a single shot in public by the insurance industry and the right wing. It took place at the request of the “yes but” wing.

In the House, single-payer legislation, HR-676, has been rammed back onto the table, thanks to hell-raising by the single-payer movement, including the arrests of some brave doctors and nurses who disrupted hearings in the Senate Finance Committee last May. Last Friday night, Speaker Nancy Pelosi agreed to allow a floor vote on whether to substitute HR 676 for HR 3200, the Democratic leadership’s “public option” bill. This is a significant victory for the single-payer movement, but it should not have come so late in the 2009 session. If Pelosi and the three committee chairmen who wrote HR 3200 had permitted HR 676 to go through the normal committee hearing process, single-payer advocates would have had more time to educate Congress and the public about why a single-payer system is superior to all other alternatives.

It appears almost certain that the reform cycle we’re in now will end the way the last two did – with the Democrats’ competition-based alternative to single-payer going down in flames. It is extremely important that progressives, especially progressives in the “yes but” camp, understand why this happened. Yes, the ultimate villain in these dramas was the insurance industry and their conservative allies. But universal coverage advocates must understand the role of the “yes buts,” and the policy entrepreneurs they listened to, in splitting the universal coverage movement and in seducing Democrats to support legislation that was no more likely to pass than single-payer legislation and wouldn’t have cut costs if it had passed. If they don’t see this – if they persist in believing the insurance industry is the only force single-payer advocates have to contend with – they will, wittingly or unwittingly, help perpetuate the pattern we have seen in the last three reform cycles. They will, in short, perpetuate the insanity of doing the same thing over and over, seeing it fail, and not learning from failure.

The argument that any “public option” is better than none has rarely been articulated, but I suspect we will hear it more often as the reality sinks in that the “public option” in the Democrats’ bill is a joke. “Public option” advocates who learn for the first time that the “option” in the Democrats’ bill will insure few or zero people have only two choices: to abandon the “public option” movement, which is no doubt emotionally difficult to do for those who have invested heavily in the movement, or to continue to work for the Democrats’ version of the “public option” and rationalize that choice with the argument that a tiny “public option” can always be improved once it is established.

The problem with this argument is that the “public option” is not your typical government program. The “public option” is not like the space program or the various college loan programs, to take a few examples, all of which can be expanded or contracted as the years go by without seriously threatening the very existence of the program. The “public option” will be a business. And this particular government-run business may never get very big; it may not even survive. If it doesn’t get big, or doesn’t survive, it won’t develop the huge public fan base that protects popular programs like Social Security and Medicare. In fact, the reverse could happen. A miserable early performance may cause Americans to turn against the idea of a Medicare-like program for the non-elderly. Unlike public programs, businesses don’t have an indefinite time period to develop a supportive public. Businesses don’t automatically take root and go on living forever. The “public option” must prove its ability to survive and undersell the insurance industry quickly. Moreover, the “public option” will be attempting to break into a business that has been consolidating over the last few years. The insurance industry is extraordinarily difficult to crack.

“Public option” proponents who urge us to support even a token “public option” must remember how much is at stake here. At stake is not only the willingness of the public to believe that government health insurance programs can outperform the insurance industry. At stake as well is whether Congress will give the insurance industry a trillion dollars per decade of taxpayer money.

A well-fed insurance industry is bad news for both single-payer and “public option” advocates. An insurance industry strengthened by a trillion dollars per decade of new tax dollars will not only be in a better position to oppose single-payer legislation, it will also be in a stronger position to lobby Congress and the regulators to ensure the “public option” remains stunted.

“Public option” advocates should start talking about the “public option” as if it were inextricably tied to an insurance industry bailout. They should write the phrase “public-option-insurance-industry-bailout” on a Post-it note and paste it to their bathroom mirror to remind them to be honest with themselves and the public about this fact.

To sum up: “Public option” proponents who claim that any “public option” is better than no “public option” because even a skinny little program can be beefed up later are sadly mistaken. A weak “public option” may not survive to be beefed up later, and whether it survives or not, it will serve as fig leaf that will let Congress justify an insurance industry bailout. A strengthened insurance industry is the last thing either the “public option” or the single-payer wing of the universal coverage movement needs. Please say after me: A weak public option is far worse than none at all.

I am under no illusion that a single-payer bill would have passed Congress in 2009 given the world as it was in December 2008. I do believe, though, that if the “yes but” wing of the universal coverage movement had thrown their considerable weight behind single-payer prior to 2009, say, in 1992 when the last reform cycle began, we would either have a Medicare-for-all style system by now, or we’d be on the verge of enacting one now.

Will HCAN and Hacker put out a call to their followers to do all they can to win the floor vote on HR 676 this fall? Or will they give lip service to HR 676 and sit on their hands? When the 2009 session of Congress ends, will HCAN et al. offer their usual misinterpretations of why reform failed?

How quickly America enacts a single-payer system will depend in part on whether progressives learn the real lessons of the failure of the “public option” movement in 2009. If the “yes but” wing draws the same lessons it drew from the failure of the Clinton bill – that the “base” was not well enough organized, or that the Clintons didn’t “sell” their plan skillfully – unity within the universal coverage movement seems unlikely, and the day we get to a single-payer system will be postponed.

I believe the “yes buts” must confront some inconvenient truths immediately. The “political feasibility” rationale for doing nothing to assist the single-payer movement was never a good one or, at minimum, after two decades of constant use, has become an embarrassment and must be discarded. It is foolish to argue that even the tiniest “public option” will constitute a victory that can be built on later. If the “yes buts” see these truths, then unity within the universal coverage movement should be possible. And if unity comes to the universal coverage movement for the first time in 40 years, single-payer can’t be far behind.

Please read it all here at PNHP's Official Blog and share with your progressive friends. More people will die if we fail. Our Grandchildren will be fighting the same battle in another 20 years.

PNHP's Case for Single Payer Health Insurance Slideshow

A tad out of date, but still great information.

Uploaded on authorSTREAM by pnhpnymetro

Subsidizing Our Way To Affordable Health Insurance: A Futile And Unaffordable Quest

Although still very much under-recognized and fought against by the medical industrial complex and complicit corporate media, there is only one solution to cost containment of our runaway market-based health care system. H. R. 676, coupled with a private delivery system, is a paygo alternative that assures universal coverage of necessary health care for all Americans. It would save up to $400 billion a year and provide a structure within which to put in place other cost-saving efficiencies.

The private health insurance industry is an impediment to reform, not part of the solution. It has survived to this time only through generous subsidies from the government, whether in the employer-based or individual markets or privatized Medicare and Medicaid programs. Until we recognize this, all of our incremental approaches to build on our multi-payer system will be of no avail.

Read it all at PNHP’s official Blog

Single-Payer Teach-In

Healthcare-NOW! and Physicians for a National Health Program NY Metro are holding a Single-Payer teach in on organizing for single-payer national health care in New York today. You can download copies of some of the presentations and materials here: Single-Payer Teach-In - Healthcare-NOW!

More Medical Bankruptcy-Have Insurance, Go Bankrupt - PNHP Press Release

Press Release:

Medical problems contributed to nearly two-thirds (62.1 percent) of all bankruptcies in 2007, according to a study in the August issue of the American Journal of Medicine that was published today online. The data were collected prior to the current economic downturn and hence likely understate the current burden of financial suffering. Between 2001 and 2007, the proportion of all bankruptcies attributable to medical problems rose by 49.6 percent. The authors’ previous 2001 findings have been widely cited by policy leaders, including President Obama.

Surprisingly, most of those bankrupted by medical problems had health insurance. More than three-quarters (77.9 percent) were insured at the start of the bankrupting illness, including 60.3 percent who had private coverage. Most of the medically bankrupt were solidly middle class before financial disaster hit. Two-thirds were homeowners and three-fifths had gone to college. In many cases, high medical bills coincided with a loss of income as illness forced breadwinners to lose time from work. Often illness led to job loss, and with it the loss of health insurance.

Even apparently well-insured families often faced high out-of-pocket medical costs for co-payments, deductibles and uncovered services. Medically bankrupt families with private insurance reported medical bills that averaged $17,749 vs. $26,971 for the uninsured. High costs – averaging $22,568 – were incurred by those who initially had private coverage but lost it in the course of their illness.

Individuals with diabetes and those with neurological disorders such as multiple sclerosis had the highest costs, an average of $26,971 and $34,167 respectively. Hospital bills were the largest single expense for about half of all medically bankrupt families; prescription drugs were the largest expense for 18.6 percent.

The research, carried out jointly by researchers at Harvard Law School, Harvard Medical School and Ohio University, is the first nationwide study on medical causes of bankruptcy. The researchers surveyed a random sample of 2,314 bankruptcy filers during early 2007 and examined their bankruptcy court records. In addition, they conducted extensive telephone interviews with 1,032 of these bankruptcy filers.

Their 2001 study, which was published in 2005, surveyed debtors in only five states. In the current study, findings for those five states closely mirrored the national trends.

Subsequent to the 2001 study, Congress made it harder to file for bankruptcy, causing a sharp drop in filings. However, personal bankruptcy filings have soared as the economy has soured and are now back to the 2001 level of about 1.5 million annually.

Dr. David Himmelstein, the lead author of the study and an associate professor of medicine at Harvard, commented: "Our findings are frightening. Unless you’re Warren Buffett, your family is just one serious illness away from bankruptcy. For middle-class Americans, health insurance offers little protection. Most of us have policies with so many loopholes, co-payments and deductibles that illness can put you in the poorhouse. And even the best job-based health insurance often vanishes when prolonged illness causes job loss – precisely when families need it most. Private health insurance is a defective product, akin to an umbrella that melts in the rain."

"For many families, bankruptcy is a deeply shameful experience." noted Elizabeth Warren, Leo Gottlieb Professor of Law at Harvard and a study co-author. Professor Warren, a leading expert on personal bankruptcy, went on: "People arrive at the bankruptcy courts exhausted—financially, physically and emotionally. For most, bankruptcy is a last choice to deal with unmanageable circumstances."

According to study co-author Dr. Steffie Woolhandler, an associate professor of medicine at Harvard and primary care physician in Cambridge, MA: "We need to rethink health reform. Covering the uninsured isn’t enough. Reform also needs to help families who already have insurance by upgrading their coverage and assuring that they never lose it. Only single-payer national health insurance can make universal, comprehensive coverage affordable by saving the hundreds of billions we now waste on insurance overhead and bureaucracy. Unfortunately, Washington politicians seem ready to cave in to insurance firms and keep them and their counterfeit coverage at the core of our system. Reforms that expand phony insurance - stripped-down plans riddled with co-payments, deductibles and exclusions – won’t stem the rising tide of medical bankruptcy."

Dr. Deborah Thorne, associate professor of sociology at Ohio University and study co-author stated: "American families are confronting a panoply of social forces that make it terribly difficult to maintain financial stability—job losses and wages that have not kept pace with the cost of living, exploitation from the various lending industries, and, probably most consequential and disgraceful, a health care system that is so dysfunctional that even the most mundane illness or injury can result in bankruptcy. Families who file medical bankruptcies are overwhelmingly hard-working, middle class families who have played by the rules of our economic system, and they deserve nothing less than affordable health care."

"Medical bankruptcy in the United States, 2007: Results of a national study," David U. Himmelstein, M.D; Deborah Thorne, Ph.D.; Elizabeth Warren, J.D.; Steffie Woolhandler, M.D., M.P.H. American Journal of Medicine, June 4, 2009

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Medical Bankruptcy – Q&A

1 - What is a "medical bankruptcy"?

A number of medical factors can contribute to a family’s financial collapse, including high medical bills or lost time from work. Because different researchers use different definitions, we supplied a detailed analysis of debtors who:

• Specifically identified medical problem of the debtor or spouse (32.1%) or another family member (10.8%) as a reason for filing bankruptcy.
• Specifically said medical bills were a reason for bankruptcy. (29.0%)
• Lost two or more weeks of wages because of lost time from work to deal with a medical problem for themselves or a family member. (40.3%)
• Mortgaged their homes to pay medical bills. (5.7%)
• Spent more than $5,000 or 10% of annual household income in out-of-pocket medical bills (34.7%)

• Total, one or more of the above criteria: 62.1%

The vast majority (92%) of bankruptcies that we classified as medical had medical bill problems as indicated by: listing medical bills as a specific reason for their bankruptcy; or having medical bills of bills $5,000 or 10% of household income or that forced them to mortgage their home. The remaining 8% whose bankruptcy was classified as "medical" indicated that a medical problem or income loss due to illness was a cause of bankruptcy.

2 - Why do only 29% of bankrupt people identify medical bills as a reason for filing bankruptcy, but you say the total percentage of medical bankruptcies is 62.1%?

Families characterize their problems differently. Someone may mortgage a home to pay for surgery, then be unable to pay off the mortgage, describing the reason for filing bankruptcy as "unable to pay the mortgage." Similarly, some people explain that they have lost too much time from work when they have taken off to care for a child who has been hospitalized. We believe that multiple ways of asking about medical bankruptcies give the most complete picture, but we publish the breakdown in responses so that any other research or commentator can draw his or her own conclusions.

Finally, it should be noted that many people who are financially ruined by illness are undoubtedly too ill, too poor or demoralized to pursue formal bankruptcy, and are not counted in our study.

3 - What is the impact of health insurance?

More than three-quarters (78%) of the families that met the criteria for medical bankruptcy had health insurance at the onset of their illness or accident. By comparison, 80% of the non-elderly adult population and 85% of the entire U.S. population had health insurance in 2007. Hence, it appears that health insurance offers only modest protection against medical bankruptcy.

4 - Is the problem of medical bankruptcies just because of the recession?

No. The families in this study filed for bankruptcy between January-April of 2007, before the recession began. Since then, the financial stress on families has grown.

5 - Is this a national sample of all families filing for bankruptcy?

Yes. The sample was drawn from bankruptcy filings across the country.

6 - How did you get your information?

We contacted a random sample of all personal bankruptcy filers in the U.S. during the winter of 2007. Written questionnaires were returned by 2,314 debtors, and we also analyzed their bankruptcy court records. We also carried out extensive telephone interviews with 1,032 of these debtors.

Finally, to be sure that the debtors who returned our survey were similar to those who did not, we also analyzed the court records of 99 of the non-respondents. They were almost identical to those who returned the survey in terms of debts, income, assets and other characteristics.

7 - What’s the basis for saying that the proportion of bankruptcies that are medical rose by 50% between 2001 and 2007?

In order to compare the medical bankruptcy rates in 2007 and in our 2001 study we had to use the same definitions in both years. Our 2001 study had used a less stringent ("legacy") definition of medical bankruptcy that included families with more than $1000 in unpaid medical bills. Using this "legacy" definition, the medical bankruptcy rate rose from 46.2% in 2001 to 69.1% in 2007 – a 49.6% increase. The 2001 estimate relied on data collected from bankruptcy filers in five states. Analysis of the 2007 data confirmed that the five states included in the 2001 survey also saw a 50% increase in medical bankruptcies.

8 - Would health reform eliminate the problem of medical bankruptcy?

Many debtors described a complex web of problems involving illness, work, and family. Separating medical from other causes of bankruptcy is difficult. Hence, we cannot presume that eliminating the medical antecedents of bankruptcy would have prevented all of the filings we classified as "medical bankruptcies." The high rate of insurance among the medical bankrupts suggests that any health reform that fails to improve existing private coverage is unlikely to make a major impact on medical bankruptcy. Moreover, our data also highlight the need for improved disability coverage.

9 - Why do some others claim that medical bankruptcy rates are much lower?

Ours is the only study based on direct surveys and interviews with a large sample of families filing for bankruptcy. Others have based their findings on bankruptcy court records alone (with no direct surveys or interviews) or on surveys of the general public that inquire about bankruptcy filings. Court records fail to identify medical bankruptcies because many medical bills are charged to credit cards and hence cannot be identified as "medical" in court records. Similarly, when medical providers turn debts over to collection agencies they would not appear as "medical." Because bankruptcy carries a substantial stigma, about half of all respondents who are bankrupt deny that fact. As a result, surveys of the general public are an unreliable source of information on medical bankruptcy. For these reasons, the only way to accurately assess medical bankruptcy is to directly survey families who file for bankruptcy.

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Medical Bankruptcy – Fact Sheet

• In May 2009, more than 5,000 families filed for bankruptcy every business day. For all of 2009, the total is expected to reach about 1.4 million. The average personal bankruptcy involves 2.71 debtors and dependents. In total, an estimated 3.8 million Americans will be involved in personal bankruptcy filings this year.

• Illness and medical bills were a cause of at least 62.1% of all personal bankruptcies in 2007. Based on the current bankruptcy filing rate, medical bankruptcies will total 866,000 and involve 2.346 million Americans this year – about one person every 15 seconds.

• Using identical definitions in both years, the proportion of bankruptcies attributable to medical problems rose by 49.6% between 2001 and 2007.

• Most medically bankrupt families were middle class before they suffered financial setbacks. 60.3% of them had attended college and 66.4% had owned a home; 20% of families included a military veteran or active-duty soldier.

• Most medical debtors had some health insurance, but many suffered gaps in coverage:

77.9% of the individuals whose illness led to bankruptcy had health insurance at the onset of the bankrupting illness; 60.3% had private insurance.
69% of debtor families had coverage at the time of their bankruptcy filing
60% of families had continuous coverage
Only 0.3% of the uninsured went without coverage voluntarily, i.e. because they though they didn’t need it – most others couldn’t afford it.

• Among medical debtors, hospital bills were the largest medical expense for 48% drug costs for 19%, doctors’ bills for 15% and insurance premiums for 4%. In 38% of cases, lost income due to illness was a factor.

• Out-of-pocket medical costs since the onset of illness averaged $17,943.

• For the privately-insured, out-of-pocket costs averaged $17,749.
• For the uninsured, out-of-pocket costs averaged $26,971.
• Patients with neurologic disorders such as multiple sclerosis faced the highest costs, and average of $34,167, followed by diabetics at $26,971.
  

• According to earlier studies, between 7.1% and 14.3% of Canadian bankruptcies are due to "health/misfortune" (a category that includes some non-medical problems).

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Downloadable copies of press release and info above is at the PNHP website here.

And again, downloadable full text of professional peer review journal article is here.

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More:

In addition to whatever else your minimal demand is, mine is for what would seem to be a non-radical, non-shrill, non-extremist minimal demand, and one that some senators and congresscritters claim to have agreed to (but need pressure to help them keep them promise):

"There must be a complete, honest, side-by-side comparison of all proposals, including single payer HR-676 (Conyers) and SB-703 (Sanders), by the Congressional Budget Office.

The side-by-side comparison should include projected costs to state governments, employers and to households of different income levels. For 2010 and beyond."

Because the only way to actually control costs and provide universal and comprehensive coverage is single payer.

It is crticial that whatever it is we are going to be allowed to get, and whatever it is we are not getting, be honestly and transparently compared for all to see:

The best we have for now is the January 2009 report from the Commonwealth Fund done by the Lewin Group comparing congressional proposals, as summarized in their graph and table below:

1. "Stark"=Single Payer (expanded and improved Medicare for All)

2. "Building Blocks" = Obama/Baucus (mandates to buy private for-profit health insurance + real Public Option + expanded Medicaid)
   
   

Total Change in National Health Expenditures, in 2010 (in Billions) Under Different Health Reform Proposals:

and

Change in Health Spending by Stakeholder Group, Billions of Dollars, 2010

That is why Senator Baucus keeps asking the CBO to "fix the numbers."

Call these critical Democratic Senators, and let your voice be heard:

• Senator Max Baucus at (202) 224-2651
• Senator Charles Schumer at 202-224-6542
• Senator Edward Kennedy at (202) 224-4543
• Senator John Rockefeller at (202) 224-6472
• Senator Ron Wyden at (202) 224-5244
• Senator Kent Conrad at (202) 224-2043
• Senator Jeff Bingaman at (202) 224-5521
• Senator John Kerry at (202) 224-2742
• Senator Blanche Lincoln at 202-224-4843
• Senator Debbie Stabenow at (202) 224-4822
• Senator Maria Cantwell at 202-224-3441
• Senator Bill Nelson at 202-224-5274
• Senator Robert Menendez at 202-224-4744
• Senator Thomas Carper at (202) 224-2441

Cross Posted from Daily Kos with a Hat Tip to Dr. Steve

Inside the Baucus Single-Payer Meeting--What Was Said, What's Next

Today’s meeting of the nation’s leading single payer activists with Sen. Max Baucus was historic, and a recognition of the power of the tens of thousands of nurses, doctors, and grassroots activists across the country who have been turning up the heat on the policy makers in Washington.

Make no mistake – your voices are being heard. And, the protests and pressure will continue.

As Rose Ann DeMoro, executive director of the California Nurses Association/National Nurses Organizing Committee, told Baucus, 'there is a groundswell' across the country that will continue to press for single payer reform, and Baucus and other policy makers in Washington 'are going to get to know us very well.' In a later press conference, DeMoro blasted the conventional wisdom that single payer is not politically viable. 'Is it politically viable to let people die and suffer from a lack of political will?' Noting the fight for women’s suffrage and the civil rights movement, she emphasized, 'we’re going to have to turn up the heat. Women did not get the right to vote by voting on it.'

While Baucus continued to aver that single payer can not pass the legislature, the nurses and doctors pressed him to:
• Hold a hearing in which the merits of single payer can be contrasted with the plans now rapidly advancing in the Senate. While Baucus said the tight timeline made that very difficult, Sanders noted that Sen. Chris Dodd is considering a health committee hearing on single payer, which Baucus could co-sponsor. Baucus said, "let me think about it."
• Have the Congressional Budget Office score, do a financial analysis, of single payer legislation in addition to other health bills it scores.
• Support legislation to allow federal waivers for individual states to enact single payer systems as national role models (another Sanders bill).
• Assist in arranging a similar meeting between single payer leaders and President Obama.

Ultimately, Baucus threw the ball back to the President, citing the demand of the President to Congress to have a bill on his desk by October. "He wants a big win on healthcare reform," Baucus said.
But the rush to adopt a flawed bill would hardly serve the Senate or the President well, DeMoro noted. "The President would be putting himself in a very bad position. We don’t want that to happen."

PNHP President Dr. Oliver Fein cited the study last year reported in the Annals of Internal Medicine that 59 percent of physicians support a single-payer type system, and a new study showing doctors waste three to four weeks a year on paperwork that could be spent caring for patients.
Sanders later praised the efforts of nurses, doctors and activists who have made single payer an inescapable part of the public discourse. "When you have the nurses and physicians saying the current system is not working," scores of people saying health care is a right and single payer the most cost effective approach, we’re seeing this grassroots movement growing and gaining momentum.

If you agree, why don’t you fax Max Baucus, maybe a couple times, and let him know that we need real healthcare reform, not lobbyist-driven pablum and nonsense statements.

Read More . . .

Baucus to Meet with Single Payer Advocates

Guess who’s coming to dinner?

After months of proclaiming that single payer is off the table, Senator Max Baucus (D-Montana) has invited five key single payer advocates to meet with him in Washington, D.C. this week.

On Wednesday June 3, Senator Baucus will meet with Dr. David Himmelstein, Associate Professor of Medicine at Harvard Medical School and co-founder of Physicians for a National Health Program (PNHP), Dr. Marcia Angell, Senior Lecturer, Harvard Medical School and former editor-in-chief of the New England Journal of Medicine, Dr. Oliver Fein, Associate Dean, Cornell Weill Medical School, and President of PNHP, Rose Ann DeMoro, executive director of the California Nurses Association, and Geri Jenkins, president of California Nurses Association.

“Bowing to mounting pressure from single payer advocates around the nation, Senator Baucus has asked to meet with some representatives of the single payer movement,” Dr. Himmelstein said. “It’s the thirteen people who braved arrest at Senate Finance Committee hearing, the hundreds of single payer supporters who’ve shadowed Senator Baucus in his home state of Montana, and the thousands who have put pressure other members of Congress who have created this opening. We have no illusions that our discussions alone will persuade Senator Baucus to back a single payer bill. But the meeting is a clear indication that demonstrations and activism can move even our money-corrupted political culture.”

Read More at Single Payer Action

Bill Moyers Interview with Dr. Sidney Wolfe and Dr. David Himmelstein

"Washington's abuzz about health care, but why isn't a single-payer plan an option on the table? Public Citizen's Dr. Sidney Wolfe and Physicians for a National Health Program's Dr. David Himmelstein on the political and logistical feasibility of health care reform."

Video and Transcript here

Ways to Reduce the Cost of Health Insurance

David Himmelstein, Associate Professor of Medicine at Harvard University, testifies at a hearing investigating ways to reduce the cost of health insurance for employers, employees and their families on April 23, 2009.

Dr. McCanne tells us:

The definitive legislation on health care reform that will be supported by the Democratic leadership in Congress has not yet been written. This important testimony by PNHP’s David Himmelstein confirms that single payer reform is still in play, in spite of dismissive comments by many of those involved.

Instead of sitting back and observing the process, it is imperative that we intensify our efforts to deliver the single payer message. The physical and financial health of the people of our nation depend on it.

Transcript of Dr. Himmelstein's testimony:

Health, Employment, Labor, and Pensions Subcommittee Hearing
United States House of Representatives
Committee on Education and Labor
April 23, 2009

Testimony of David U. Himmelstein, M.D.

Mr. Chairman, members of the Committee. My name is David Himmelstein. I am a primary care doctor in Cambridge, Massachusetts and Associate Professor of Medicine at Harvard. I also serve as National Spokesperson for Physicians for a National Health Program. Our 15,000 physician members support non-profit, single payer national health insurance because of overwhelming evidence that lesser reforms will fail.

Health reform must address the cost crisis for insured as well as uninsured Americans. My research group found that illness and medical bills caused about half of all personal bankruptcies in 2001, and even more than that in 2007. Strikingly, three quarters of the medically bankrupt were insured. But their coverage was too skimpy to protect them from financial collapse.

A single payer reform would make care affordable through vast savings on bureaucracy and profits. As my colleagues and I have shown in research published in the New England Journal of Medicine, administration consumes 31% of health spending in the U.S., nearly double what Canada spends. In other words, if we cut our bureaucratic costs to Canadian levels, we’d save nearly $400 billion annually — more than enough to cover the uninsured and to eliminate copayments and deductibles for all Americans. By simplifying its payment system Canada has cut insurance overhead to 1% of premiums — one twentieth of Aetna’s overhead - and eliminated mounds of expensive paperwork for doctors and hospitals. In fact, while cutting insurance overhead could save us $131 billion annually, our insurers waste much more than that because of the useless paperwork they inflict on doctors and hospitals.

A Canadian hospital gets paid like a fire department does in the U.S. It negotiates a global budget with the single insurance plan in its province, and gets one check each month that covers virtually all costs. They don’t have to bill for each bandaid and aspirin tablet. At my hospital, we know our budget on January 1, but we collect it piecemeal in fights with hundreds of insurers over thousands of bills each day. The result is that hundreds of people work for Mass General’s billing department, while Toronto General employs only a handful — mostly to send bills to Americans who wander across the border. Altogether, U.S. hospitals could save about $120 billion annually on bureaucracy under a single payer system.

And doctors in the U.S. waste about $95 billion each year fighting with insurance companies and filling out useless paperwork.

Unfortunately, these massive potential savings on bureaucracy can only be achieved through a single payer reform. A health reform plan that includes a public plan option might realize some savings on insurance overhead. However, as long as multiple private plans coexist with the public plan, hospitals and doctors would have to maintain their costly billing and internal cost tracking apparatus. Indeed, my colleagues and I estimate that even if half of all privately insured Americans switched to a public plan with overhead at Medicare’s level, the administrative savings would amount to only 9% of the savings under single payer.

While administrative savings from a reform that includes a Medicare-like public plan option are modest, at least they’re real. In contrast, other widely touted cost control measures are completely illusory. A raft of studies shows that prevention saves lives, but usually costs money. The recently-completed Medicare demonstration project found no cost savings from chronic disease management programs. And the claim that computers will save money is based on pure conjecture. Indeed, in a study of 3000 U.S. hospitals that my colleagues and I have recently completed, the most computerized hospitals had, if anything, slightly higher costs.

My home state of Massachusetts recent experience with health reform illustrates the dangers of believing overly optimistic cost control claims. Before its passage, the reform’s backers made many of the same claims for savings that we’re hearing today in Washington. Prevention, disease management, computers, and a health insurance exchange were supposed to make reform affordable. Instead, costs have skyrocketed, rising 23% between 2005 and 2007, and the insurance exchange adds 4% for its own administrative costs on top of the already high overhead charged by private insurers. As a result, one in five Massachusetts residents went without care last year because they couldn’t afford it. Hundreds of thousands remain uninsured, and the state has drained money from safety net hospitals and clinics to kept the reform afloat.

In sum, a single payer reform would make universal, comprehensive coverage affordable by diverting hundreds of billions of dollars from bureaucracy to patient care. Lesser reforms — even those that include a public plan option — cannot realize such savings. While reforms that maintain a major role for private insurers may be politically attractive, they are economically and medically nonsensical.

Do Americans support an individual mandate?

by Don McCanne, MD - PNHP’s official Blog

But what is shared responsibility? The responsibility of the individual is to pay his/her portion of the premium plus all out-of-pocket expenses, including cost sharing and costs of products and services not covered by the insurance plan. The responsibility of the employer is to pay a portion of the employee’s insurance premium, but economists agree that it is really the individual’s forgone wage increases that pays the premium. The government’s responsibility is to pay for part or all of the care provided to individuals who do not have the funds to pay for care, but it is really ultimately individuals who are paying the taxes that fund the government programs. And the responsibility of the private insurance industry? They don’t pay into the system; they take a large amount of funds out of the system - funds that again are ultimately paid by individuals.

So "shared responsibility" is not a sharing of responsibility; all of the responsibility falls on individuals. "Shared responsibility" is merely a rhetorical framing that advances the interests of some of the stakeholders, especially the private insurance industry.

Even if the respondents to the survey accepted the concept of shared responsibility, it would be a real stretch to conclude that a 48 percent support of a stand-alone mandate means that the public is opposed, whereas a 59 percent support of a mandate with shared responsibility is a solid public endorsement (11 percent difference). This is not a ringing endorsement of a concept that is more of a marketing slogan than a genuine policy proposal.

That said, there is an important take-home message from this survey. Those opposed seemed to understand the policy principles involved. Republicans were opposed because of higher taxes and greater government involvement. Democrats were opposed because a single government health program was needed instead of a mandate to purchase private plans that might not be affordable.

Pretending that the marketing ploy of shared responsibility will bring us bipartisan consensus on reform will only reinforce the process that we are about to see. The Republicans have already gained the greatest concession - single payer is off the table - and they will continue to use the process to gain further concessions that will destroy any semblance of health care equity, and then they will vote against the final bill anyway.

Hacker says that public option/private exchange would EXPAND private insurance market

by Don McCanne, MD - PNHP’s official Blog: ""

Offering a public plan option within a market of private health plans has been one of the more controversial proposals during the current national dialogue on health care reform.

The opponents of the public option, especially the private insurance industry and the Republican members of Congress, insist that a government-sponsored plan would be an unfair competitor and drive the private insurance industry out of business. Theoretically, the government would do this by extracting unfair concessions from the health care providers, pricing the public option at a lower level than the private insurance sector could ever meet. (This ignores the more important evidence such as the demonstrated greater efficiencies of our public Medicare program when contrasted with the private Medicare Advantage plans.)

The supporters of a public option, especially the progressive community, contend that the public option would be a superior product made more affordable by reducing administrative inefficiencies. They contend that competition would motivate a massive shift to the public option, bringing us much closer to the single payer model that many in the progressive community prefer. (Much has been said about why this approach actually sacrifices most of the single payer advantages and would likely never lead to a single payer system.)

Professor Jacob Hacker of the University of California at Berkeley (and formerly at Yale) has been a leading proponent of reform based on a national insurance exchange of private plans with the addition of a public plan option. And what does he have to say about the impact that a public plan option would have on market share for the private health plans? He says that under his proposal, “more Americans have private insurance after reform than do before — either through their employer or through the new national insurance exchange.”

Get That? Even with a Medicare-like public plan option, the market for the private insurers will expand! That is the real tragedy of this debate over a public plan option. It has led us away from the debate we should be having instead: an affordable single payer national health program for everyone, versus expansion of our over-priced, inequitable, and inefficient system of financing health care through private plans and public programs

Forget about the public plan option! Let’s get rid of the private health plans, and go with single payer!

Jacob Hacker provides details for public option

by Don McCanne, MD - PNHP’s official Blog
Emphasis mine....

This is a very important paper because addresses one of the most controversial issues in the current health care reform debate: Should a Medicare-like plan be offered in competition with a market of private health plans? UC Berkeley Professor Jacob Hacker adds to his previous contributions on the private plan/public option model of reform by describing in detail what a properly-designed Medicare -like option would look like.

To understand this fairly complex model, you really need to read this 31 page report. But looking at just a few of the problems that he addresses can give you an idea of where this approach is headed.

How would the public option control costs?

From the report: “The great virtue of public plan choice as a means of cost control is that it proposes relatively minimal disruption to existing arrangements compared with other comprehensive reform proposals. It only says that a public health insurance plan will be offered alongside private plans as a coverage option for those without insurance through their employer. It is the competition between private plans and public health insurance, with its distinctive cost-control advantages, that presses both public and private plans to provide more for less and ensures that the goal of affordable quality coverage can be maintained over time at a price the nation can bear.”

DM: In the Medicare Advantage program we have already tested this concept, and the private plans required more money, not less, than the “competing” traditional Medicare program. With a single, universal public program, cost efficiencies would apply to our entire health care system.

How would this proposal spur improved quality?

From the report: “… a new public health insurance plan for the nonelderly (and Medicare, through its association with the new plan) can and should be centrally involved in obtaining better information to improve physician and patient decisions, as well as insurer decisions about coverage, pricing, and benefit structure. Because of its broad and national reach, the stability of its enrollment, and the unparalleled opportunity for data collection and use, the new public health insurance plan is the player in the system that will have the largest incentives to make these investments.”

DM: So the public program would bear the costs on research and data collection. Would those costs be allocated exclusively to the patients in the public program? Would the private insurers have a free ride? Since the mission and income needs of the private insurers are different from the public plan, would they even use the results of the research, especially if greater spending would ensue? Would the government even have access to the proprietary information of these plans competing in the private marketplace? Obviously a single, universal public program would have a more complete and accurate information database that could be applied to improve the quality of our entire health care delivery system, rather than allowing private plans to pick and choose based on bottom line issues rather than optimal quality.

What should the public plan look like?

From the report: “More specifically, the new public plan should be national (with the same basic terms nationwide for patients and providers), governmental (a true public health insurance plan, not, say, a nonprofit insurer operating under federal charter), comprehensive (providing defined benefits on the same basic administrative platform), and built on Medicare’s infrastructure.”

DM: So a bona fide public program is proposed, but…

How could the public and private plans compete “on a level playing field”?

From the report: “… a level playing field requires a set of safeguards that are easily remembered as the “three R’s”: rules, risk adjustment, and regional pricing.”

Rules: “Both the public and private plans should also have to abide by the same fundamental rules, the main purpose of which is to prevent plans from profiting by selecting healthy people rather than delivering value. These rules include: community rating, guaranteed issue, limits on marketing, standardized and defined benefits, reserve requirements, transparency…”

Risk adjustment: “…there is also a need for risk adjustment. That is, plans should be paid different amounts by the exchange based on the expected and realized risk of their enrollees. Enrollees and plans should not be penalized when a plan attracts less healthy enrollees. While prospective risk adjustment technologies have come a long way, they are still imperfect. Thus any risk-adjustment system should mix prospective risk adjustment with a retrospective risk-adjustment process at the end of the year that redistributes funds among the plans to ensure that those with very unfavorable mixes of risk are protected. Of course, the public health insurance plan must be part of this arrangement.”

Regional pricing: “… the bids made by both the public plan and private plans should be made on a regional basis. In other words, although the exchange should be nationally administered, the bids should be regionally specific. Many private plans will only wish to provide benefits in certain regions where they operate. The public health insurance plan will of course be truly national. Without regional bidding, the public plan will be disadvantaged in areas where private premiums are low and advantaged where they are high. Neither is conducive to a truly level playing field.”

DM: Merely to counter the attack that the government doesn’t play on a level field, we would have to establish a set of administratively complex rules of competition with which the government must comply, include the difficult task of determining and adjusting for the relative risks in the public and private pools in spite of the private insurers proclivity to game these risks, and then require our national public program to bid in each region to provide fairness for the government program? This adds considerable administrative inefficiency to a government program that should be offering greater efficiency. A single, universal national health program would not require these extra rules, risk adjustments and health plan competitive bidding processes.

How would the premium for the public plan be established?

From the report: “A strong argument can be made for the federal government setting subsidies on the basis of the average weighted premium of plans, as opposed to the cost of the least expensive plan. First, this would reduce the chance that lower-income enrollees would feel pressured by costs to enroll in the least expensive plan. Second, it would at least crudely adjust subsidies to reflect the variance of plan premiums as well as the level. In areas where the range of plan premiums is larger, subsidies based on the average will much better protect enrollees against premium costs than subsidies based on the lowest-cost plan. For these two reasons, the weighted-average-premium approach is preferable to the lowest-cost-plan approach for setting subsidies, and the graphics that follow focus on showing how this approach would work. However, either approach would create the necessary incentive for enrollees to prefer less expensive plans.”

DM: Instead of a complex process to determine a premium for a public program based on the actuarial value of the benefits provided, a single payer program would do away with premiums. The system would be financed with a simpler and much more equitable tax. Also, everyone who believes in health care justice should be deeply troubled by the statement that this approach “would create the necessary incentive for enrollees to prefer less expensive plans.”

Since premiums would be unaffordable for the majority, how would subsidies be administered?

From the report: “… the subsidy could vary with the income of the enrollee. Low-income enrollees would certainly receive even greater assistance, as well as help with cost-sharing. Because most enrollees through the exchange will be workers whose employers have contributed on their behalf, and because coverage should be kept affordable, the subsidies should cover a good portion of the premium for all enrollees. Since the average employer/employee split of health premiums is roughly 80/20 in the private market today, 80 percent seems a reasonable baseline contribution.”

DM: The purpose of government subsidies is to transfer payment for health care from the wealthy to those who cannot afford to pay for their full, evenly-divided allocation of our national health care bill. That now includes middle-income Americans. A subsidy system requires a separate administrative task for everyone included within the system of health care coverage, with further adjustments depending on out-of-pocket expenses, and periodic reevaluation of eligibility requirements. These administrative excesses are made necessary only because we couple the payment of health care to the specific benefit package - the insurance plan. A single payer system eliminates this administrative nonsense by replacing premiums and cost-sharing with tax financing - again, a much simpler and more equitable approach.

What about the all-payer alternative?

From the report: “…allow private plans that pay providers on a more or less fee-for-service basis to piggyback on the public plan in setting their own prices… In practice, all-payer rate setting of this sort would mean that private fee-for-service plans within the exchange would use the same fee schedule that the public plan did. Allowing private plans that use fee-for-service payment to piggyback on the public plan’s rate thus would have broader benefits than simply reducing the opposition of private insurers to the idea of a public plan. It would make cost control more effective, encourage administrative simplification and care improvement, and increase the degree of coordination in American health financing.”

DM: Okay. So we combine the public and private payers into an all-payer program. Then why would any individual in his/her right mind, other than an insurance executive or shareholder, want to keep this worthless, wasteful, expensive industry in play?

PNHP has been under attack by our friends in the progressive community for being opposed to the public Medicare-like option. That is a misstatement of our position. We are opposed to a fragmented, dysfunctional health care financing system that is causing financial hardship, physical suffering, and, all too often, death. Adding a public option will have only a negligible impact on the fundamental flaws that are causing so much personal grief.

Our friends and our enemies know what would fix our system: a single payer national health program. We think we understand the position of our enemies - largely based on greed. Why else would they support such a cruel system?

But our friends? Why do they attack us as they retreat to a secure position within the ranks of the private insurance industry? Besides, just wait and see what the insurers and their purchased representatives in Congress will do with Jacob Hacker’s “Healthy Competition” proposal. You’ll have to look quick because the window of opportunity for reform will have slammed shut.

Chicago Doctors, Nurses Make Case For Single Payer | Progress Illinois

by Angela Caputo

With the White House's final health care forum taking place in Los Angeles yesterday, advocates for a single-payer system rallied in downtown Chicago, determined not to be sidelined in the debate anymore. Among the nurses and doctors who denounced the insurance industry for hijacking and diluting a public mandate for reform was Quentin Young of the Physicians for a National Health Program. He said it's time to put an end to "the profit motive gone mad-system" that's "a catastrophe in the making" for the nation's economy.

One by one, nurses and doctors took to the mic to talk up single-payer as the best approach for patients, as well as businesses. They also warned that the White House-favored alternative would do little to rein in insurance companies that continue to put profits before quality coverage. As one nurse from Cook County's Stroger Hospital put it this afternoon, "We don't have to reinvent the wheel, we just have to get behind it."

There are now two bills floating through Congress -- Rep. John Conyers' (D-MI) HB676 and Sen. Bernie Sanders' (D-VT) Health American Security Act 2009 -- that would essentially extend Medicare to all Americans. But as these activists know all too well -- and as Luke Mitchell masterfully reported in a recent issue of Harper's -- the culture in Washington, D.C. is not at all friendly to the idea.

Meanwhile, State Rep. Mary Flowers (D-Chicago) once again put single-payer on the agenda here in Illinois by introducing HB 311 (one of a handful of state-level single-payer proposals floating around the country). At the rally, she said, "We shouldn't be talking about how much health care is going to cost us because we're spending the money already." Indeed, in a Progress Illinois column penned last year, Young spelled out how such a system would pay for itself in the state.

While Flowers' proposal -- which has 37 co-sponsors-- didn't make the cut among the flurry of bills that passed out of the Illinois House last week, Young said Gov. Pat Quinn, his old friend and fellow health care advocate, might be just the person to push the bill as a real solution for stabilizing the state's finances.

But if there was one common theme at the rally, it was this: If single payer is going to advance at either the state or federal level, it will happen because concerned citizens make their voices heard and begin to rival the insurance industry's influence.