Friday, May 31, 2013

California exchange plans take away provider choice

Los Angeles Times
May 24, 2013
Insurers limit doctors, hospitals in state-run exchange plans
By Chad Terhune

California's health insurance rates for a new state-run marketplace came in lower than expected this week, but one downside for many consumers will be far fewer doctors and hospitals to choose from.

People who want UCLA Medical Center and its doctors in their health plan network next year, for instance, may have only one choice in California's exchange: Anthem Blue Cross. Another major insurer in the state-run market, Blue Shield of California, said its exchange customers will be restricted to 36% of its regular physician network statewide.

Paul Markovich, chief executive of Blue Shield, said renegotiating with hospitals and physician groups for lower reimbursements was a key factor for insurers in holding down rates. Medical providers are sometimes willing to accept lower payments in return for higher patient volume from these narrow networks.

And Cedars-Sinai Medical Center, one of Southern California's most prestigious and expensive hospitals, said it's not included in any exchange plans at the moment.

Those types of exclusive arrangements, increasingly tight networks and outright exclusions are becoming more common as insurers and government officials search for ways to hold down rising medical costs.

More employers have been adopting these narrower networks and the government's overhaul of the individual insurance market is accelerating the trend.



Comment:  There was quite a celebration amongst Affordable Care Act (ACA) enthusiasts when California, a leader in health care financing innovation, announced that premiums for plans to be offered through the state exchange would not increase sharply over current health plan rates. What is now evident is that the anticipated increases were at least partially offset by further limiting the number of in-network hospitals and physicians, made possible by insurers negotiating lower provider payments in exchange for a promise of greater volume.

This exposes the big lie of the ACA promise of "Choice." As has been stated so many times, the choice we really want - the choice of health care professionals and institutions - was taken away by the insurers by means of their restricted networks of providers.

Now choice is being restricted even further by narrowing down these networks of providers. These further restrictions in choice are also being adopted in the employer-sponsored market. It can be anticipated that narrow networks will become the new standard in health plans.

At least the traditional Medicare program does not restrict patients to networks, though the private Medicare Advantage plans do. It is true that physicians can totally opt out of Medicare, but very few do. If an improved version of the traditional Medicare program covered all of us, this injustice of taking away patient choice would not exist.

Thursday, May 30, 2013

Immigrants subsidize our Medicare program

Health Affairs
June 2013
Immigrants Contributed An Estimated $115.2 Billion More To The Medicare Trust Fund Than They Took Out In 2002–09
Leah Zallman, Steffie Woolhandler, David Himmelstein, David Bor and Danny McCormick

Abstract

Many immigrants in the United States are working-age taxpayers; few are elderly beneficiaries of Medicare. This demographic profile suggests that immigrants may be disproportionately subsidizing the Medicare Trust Fund, which supports payments to hospitals and institutions under Medicare Part A. For immigrants and others, we tabulated Trust Fund contributions and withdrawals (that is, Trust Fund expenditures on their behalf) using multiple years of data from the Current Population Survey and the Medical Expenditure Panel Survey. In 2009 immigrants made 14.7 percent of Trust Fund contributions but accounted for only 7.9 percent of its expenditures—a net surplus of $13.8 billion. In contrast, US-born people generated a $30.9 billion deficit. Immigrants generated surpluses of $11.1–$17.2 billion per year between 2002 and 2009, resulting in a cumulative surplus of $115.2 billion. Most of the surplus from immigrants was contributed by noncitizens and was a result of the high proportion of working-age taxpayers in this group. Policies that restrict immigration may deplete Medicare’s financial resources.

Conclusion

Having ourselves witnessed immigrants dying needlessly because of lack of health care, we (and many of our colleagues) are motivated by the belief that all patients have a human right to health care. But economic concerns—including the worry that immigrants are driving up US health care costs—have often dominated the debate over immigration. Our data offer a new perspective on these economic concerns.

Policies that reduce immigration would almost certainly weaken Medicare’s financial health, while an increasing flow of immigrants might bolster its sustainability. Because Social Security’s eligibility criteria and payroll tax–based funding closely track those of Medicare, our findings support the argument that immigration helps sustain Social Security.

Providing a path to citizenship for currently undocumented immigrants would affect Medicare’s finances in multiple ways. It would likely increase payroll tax collections by reducing immigrants’ “off the books” employment and removing barriers that keep them out of higher-paying jobs. But in the long term it would probably increase the number of immigrants eligible for Medicare, and hence expenditures on their behalf.

However, the age structure of the immigrant population is far more important than either of these factors. Encouraging a steady flow of young immigrants would help offset the aging of the US population and the health care financing challenge that it presents.



Comment:  Everyone should have health care when needed. Immigrants are taxed to support our Medicare program, yet many of them are prohibited from participating in Medicare, Medicaid, and the state insurance exchanges currently under development. Not fair.

We should have a universal health care financing system - covering all of us - in which we pay in, based on ability, and draw out, based on medical need. As long as immigrants are an integral part of our society, they should be included on the same basis.

Tuesday, May 28, 2013

Millions of the poorest will remain uninsured

The New York Times
May 24, 2013
States’ Policies on Health Care Exclude Some of the Poorest
By Robert Pear

The refusal by about half the states to expand Medicaid will leave millions of poor people ineligible for government-subsidized health insurance under President Obama’s health care law even as many others with higher incomes receive federal subsidies to buy insurance.

More than half of all people without health insurance live in states that are not planning to expand Medicaid.

People in those states who have incomes from the poverty level up to four times that amount ($11,490 to $45,960 a year for an individual) can get federal tax credits to subsidize the purchase of private health insurance. But many people below the poverty line will be unable to get tax credits, Medicaid or other help with health insurance.



Comment: The poorest of the poor, those living below the federal poverty level, are ineligible for subsidies for the exchange plans, and they will not be able to enroll in Medicaid in those states that have refused to expand eligibility beyond those who are already qualified.

For those living in poverty, the Affordable Care Act (ACA) could have provided plans through the state exchanges with subsidies for 100 percent of the premiums and 100 percent of the out-of-pocket costs. Instead, it was decided to cover those in poverty with Medicaid, while limiting the income-indexed exchange subsidies to those living above 100 percent of the federal poverty level.

That was before the Supreme Court ruled that state participation in the Medicaid expansion could not be made mandatory. Since so many states opted out, millions of the very poor will not be eligible for Medicaid nor for the exchange plan subsidies. They will simply remain uninsured.

Because of the obstructionists in Congress, no legislative remedy is possible at this time. Too many members of Congress want to prove that ACA won't work. Of course, they do not advance any program that will.

Even if all glitches were eliminated, the fundamental structure of ACA is irreparably flawed. It will leave 31 million uninsured, establish under-insurance as the new standard, and fail to control costs. So let's replace it with a system that covers not only the poorest of the poor, but covers all of us - an improved Medicare for all.
 

Friday, May 24, 2013

Fwd: qotd: Health care CEOs have highest pay

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-------- Original Message --------
Subject: qotd: Health care CEOs have highest pay
Date: Fri, 24 May 2013 14:07:54 -0700
From: Don McCanne <don@mccanne.org>
To: Quote-of-the-Day <quote-of-the-day@mccanne.org>



The Washington Post
May 23, 2013
Health care tops other industries for highest median CEO pay

Here's a look at median CEO pay by industry last year, as calculated by
executive pay research firm Equilar. For the fourth time in five years,
health care CEOs got the most pay and utilities CEOs got the least.

—Health care: $11.1 million

—Industrial goods: $11 million

—Services: $10.9 million

—Financial: $9.8 million

—All companies: $9.7 million

—Consumer goods: $9.5 million

—Basic materials: $9.3 million

—Technology: $9.2 million

—Utilities: $7.5 million

http://www.washingtonpost.com/business/health-care-tops-other-industries-for-highest-median-ceo-pay/2013/05/23/8003ef12-c3be-11e2-9642-a56177f1cdf7_story.html


Comment: So health care CEOs have the highest median pay of all
industries in the United States. But notice that their pay is not much
higher than the median CEO pay in all industries. That brings up a
couple of questions.

What do CEOs do?

Does their "contribution" to society warrant that level of pay?

Considering what CEOs do, do we really even want them in our health care
system since it is an "industry" apart from all the rest?

Thursday, May 23, 2013

Fwd: qotd: Important: Milliman Medical Index now $22,030

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-------- Original Message --------
Subject: qotd: Important: Milliman Medical Index now $22,030
Date: Thu, 23 May 2013 08:36:01 -0700
From: Don McCanne <don@mccanne.org>
To: Quote-of-the-Day <quote-of-the-day@mccanne.org>



Milliman
May 2013
2013 Milliman Medical Index (MMI)

The MMI represents the projected total cost of medical care for a
hypothetical American family of four (two adults and two children)
covered under an employer-sponsored PPO health benefit program.

Key findings

* As measured by the 2013 MMI, the total annual cost of healthcare for
a typical family of four covered by an employer-sponsored preferred
provider plan (PPO) is $22,030.
* The 6.3% increase over 2012 is the fourth consecutive year of
decreasing trends, but the total dollar increase of $1,302 is the fourth
year in a row of increases over $1,300.

* Of the $22,030 healthcare cost for a family of four, the employer
pays about $12,886 in employer subsidy while the employee pays the
remaining $9,144, which is a combination of $5,544 in payroll deductions
and $3,600 in employee out-of-pocket costs. For employees, this
represents a cost increase of 6.5% over last year's total employee cost
of $8,584.

* We expect that the emerging reforms required by the Patient
Protection and Affordable Care Act (ACA) will have little impact on the
cost of care for our family of four in 2013 because this family tends to
be insured through a large group health plan. Some of the most
far-reaching reforms will not become effective until 2014, and they are
focused primarily on the individual and small employer markets.
Additionally, while those reforms will likely have immediate impacts on
premium rates in those markets, it is unclear whether they will have any
near-term effects on growth in the cost of healthcare services for a
given person.

http://publications.milliman.com/periodicals/mmi/pdfs/mmi-2013.pdf


Comment: According to the Milliman Medical Index (MMI), the average
projected cost for health care today for the typical family of four with
an employer-sponsored preferred provider plan (PPO) is $22,030. That
includes an employee contribution to the premium of $5,544,
out-of-pocket expenses of $3,600, both totaling $9,144, plus an employer
contribution of $12,886 which is actually paid by the employee through
forgone wage increases.

Median annual household income is now $51,404 (February 2013). Although
that does not represent the same demographic group as working families
with four members, it does give you a general perspective of the burden
of today's health care costs on families and households.

An important point made in the MMI report: "the Patient Protection and
Affordable Care Act (ACA) will have little impact on the cost of care
for our family of four in 2013 because this family tends to be insured
through a large group health plan," and ACA is "focused primarily on the
individual and small employer markets." Since employment remains the
primary source of health care coverage, the majority of families can
anticipate little relief from these health care cost burdens.

A fundamental flaw in employer-sponsored coverage is that the entire
burden of health care costs is placed on the employee (when considering
forgone wages), yet it is clearly not affordable for low- or
middle-income families. Progressive financing of health care is an
imperative.

ACA provides at least modest income-indexed public subsidies which
extend into the middle-income ranges, though they are still inadequate.
Premiums for employer-sponsored plans are tax deductible, which is a
form of public subsidy (tax expenditure), but since the premiums
represent forgone wages, this tax subsidy benefits higher-income
individuals much more than those with lower incomes. Thus the financing
of health care through employer-sponsored coverage is terribly
regressive (lower-income families pay a much larger percentage of their
income for health care than do higher-income families).

This outrageous $22,000 burden on typical working families should be
enough to provide us with an incentive to fix our health care financing
system. A single payer national health program that includes everyone
and is financed with progressive taxes is precisely what we need. Keep
in mind this $22,000 burden when you discuss health care reform with
others. ACA is not going to make that go away.

Wednesday, May 22, 2013

Fwd: qotd: Insurers dump debt on physicians

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-------- Original Message --------
Subject: qotd: Insurers dump debt on physicians
Date: Wed, 22 May 2013 11:20:57 -0700
From: Don McCanne <don@mccanne.org>
To: Quote-of-the-Day <quote-of-the-day@mccanne.org>



The Sacramento Bee
May 22, 2013
Loophole in health care law could stick doctors with tab
By Jim Sanders

A loophole in California's upcoming health care overhaul could be
exploited by families gaming the system or responding to hardship in a
way that doctors say could leave a pile of unpaid bills.

A chain of events would create a two-month period during which a family
has medical coverage but no insurer must pay its claims.

Nonpayment of premiums for subsidized policies would trigger the oddity:
Federal law provides a three-month grace period before cancellation -
but insurers are responsible only for the first month.

The U.S. Department of Health and Human Services, in written comments,
conceded that nonpayment of premiums would "increase uncertainty for
providers and increase the burden of uncompensated care." But it
rejected a handful of proposals for cracking down on families whose
policies lapse.

During the three-month grace period, insurers are required to pay claims
for the first month, after which policyholders would be asked to pay
their doctor's bill or their insurance premium. If they pay neither,
doctors get stuck with the tab.

http://www.sacbee.com/2013/05/21/5438115/loophole-in-health-care-law-could.html


Comment: This looks like another provision of the Affordable Care Act
(ACA) designed specifically to protect insurers, at least partially,
from untoward losses.

To protect patients who have financial hardships that prevent them from
paying their premiums on time, ACA requires that their insurance remain
in force for three months before it can be cancelled for non-payment.
Physicians contracted with the insurers providing plans through the
exchanges will have to continue to provide services for three months
after non-payment begins. The insurers, on the other hand, are required
to pay the bills for only the first month. After that, the physicians
bear the losses.

This is one more example of the role played by the private insurers in
both creating ACA and then in implementing it, taking care of their own
interests first.

This particular defect is directly related to the fact that Congress,
with the support of the Obama administration, selected a highly flawed
model of reform - expanding our fragmented, dysfunctional system of
private and public plans.

A much greater problem than this transitional coverage issue for
non-payment is what then follows. After three months, the patient may
remain uninsured, especially if not eligible for Medicaid. The financial
hardship that caused the lapse of insurance in many instances will
prevent the person from obtaining any other coverage.

Although we can be angry with the insurers for dumping on the
physicians, we should hold greater contempt for the politicians and
policy makers who brought us this highly flawed financing system. They
know that we could have prevented these problems by enacting an improved
Medicare that automatically includes everyone, forever, but they didn't
do it.

We still can, you know.

Tuesday, May 21, 2013

Fwd: qotd: Evolving Role of Emergency Departments

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-------- Original Message --------
Subject: qotd: Evolving Role of Emergency Departments
Date: Tue, 21 May 2013 11:01:13 -0700
From: Don McCanne <don@mccanne.org>
To: Quote-of-the-Day <quote-of-the-day@mccanne.org>



RAND Health
May 20, 2013
The Evolving Role of Emergency Departments in the United States
By Kristy Gonzalez Morganti, Sebastian Bauhoff, Janice C. Blanchard,
Mahshid Abir, Neema Iyer, Alexandria Smith, Joseph V. Vesely, Edward
Okeke, Arthur L. Kellermann

To develop a more complete picture of how EDs (emergency departments)
contribute to our modern health care system, the Emergency Medicine
Action Fund asked RAND to conduct this mixed-methods study.

Key findings include the following:

• Between 2003 and 2009, inpatient admissions to U.S. hospitals grew at
a slower rate than the population overall. However, nearly all of the
growth in admissions was due to a 17 percent increase in unscheduled
inpatient admissions from EDs. This growth in ED admissions more than
offset a 10 percent decrease in admissions from doctors' offices and
other outpatient settings. This pattern suggests that office-based
physicians are directing to EDs some of the patients they previously
admitted to the hospital.

• In addition to serving as an increasingly important portal of hospital
admissions, EDs support primary care practices by performing complex
diagnostic workups and handling overflow, after-hours, and weekend
demand for care. Almost all of the physicians we interviewed—specialist
and primary care alike—confirmed that office-based physicians
increasingly rely on EDs to evaluate complex patients with potentially
serious problems, rather than managing these patient themselves.

• As a result of these shifts in practice, emergency physicians are
increasingly serving as the major decisionmaker for approximately half
of all hospital admissions in the United States. This role has important
financial implications, not only because admissions generate the bulk of
facility revenue for hospitals, but also because inpatient care accounts
for 31 percent of national health care spending.

• Although the core role of EDs is to evaluate and stabilize seriously
ill and injured patients, the vast majority of patients who seek care in
an ED walk in the front door and leave the same way. Data from the
Community Tracking Study indicate that most ambulatory patients do not
use EDs for the sake of convenience. Rather, they seek care in EDs
because they perceive no viable alternative exists, or because a health
care provider sent them there.

• Medicare accounts for more inpatient admissions from EDs than any
other payer. To gain insight into whether care coordination makes a
difference in the likelihood of hospital admission from an ED, we
compared ED admission rates among Medicare beneficiaries enrolled in a
Medicare Choice plan versus beneficiaries enrolled in Medicare
fee-for-service (FFS). We found no clear effect on inpatient admissions
overall, or on a subset of admissions involving conditions that might be
considered "judgment calls."

• Irrespective of the impact of care coordination, EDs may be playing a
constructive role in constraining the growth of inpatient admissions.
Although the number of non-elective ED admissions has increased
substantially over the past decade, inpatient admissions of ED patients
with "potentially preventable admissions" (as defined by the Agency for
Healthcare Research and Quality) are flat over this time interval.

Our study indicates that: (1) EDs have become an important source of
admissions for American hospitals; (2) EDs are being used with
increasing frequency to conduct complex diagnostic workups of patients
with worrisome symptoms; (3) Despite recent efforts to strengthen
primary care, the principal reason patients visit EDs for non-emergent
outpatient care is lack of timely options elsewhere; and (4) EDs may be
playing a constructive role in preventing some hospital admissions,
particularly those involving patients with an ambulatory care sensitive
condition. Policymakers, third party payers, and the public should be
aware of the various ways EDs meet the health care needs of the
communities they serve and support the efforts of ED providers to more
effectively integrate ED operations into both inpatient and outpatient
care.

http://www.rand.org/pubs/research_reports/RR280.html


Comment: This RAND Health report provides an excellent perspective on
how emergency departments (EDs) have evolved into institutions providing
a greater central role in health care delivery. It is a particularly
valuable report because it sets aside many misperceptions about ED
functions - misperceptions that can lead to flawed policy recommendations.

It is crucial that we continue to assess and recommend improvements in
the health care delivery system. This report reflects the benefit of
such an approach since EDs have expanded their roles in very beneficial
ways. As they continue to evolve, integration with both inpatient and
outpatient care should become more efficient, especially from the
perspective of benefiting patients.

The current focus of policy reform seems to be not so much on the
improvement of health care delivery, but rather on mechanisms that
supposedly would slow the growth in health care spending. Accountable
care organizations, bundling of payments, innovative insurance designs
such as those that erect financial barriers to care, are the types of
policy approaches that will have very little impact on overall costs
while inappropriately expanding the administrative excesses of our
dysfunctional system.

This report is well worth downloading. As you read it, you can see many
opportunities to further expand the progress that we have seen through
the evolving improvements in the role of EDs in our health care system.
Thinking about how further improvement in integrating their role with
both inpatient and various community outpatient services can help us
envision further opportunities to achieve the goals of a
high-performance system.

An example of the misguided and misdirected emphasis on innovative
payment reform is the failure to find any clear effect on inpatient
admissions when comparing the public Medicare program with the much more
expensive private Medicare Advantage plans. Payment innovation is simply
not where it's at.

We need to get this right. Let's continue to work on fixing the health
care delivery system so that it works best for patients. That is the key
to improving value in health care. It will work as long as we adopt a
financing system that is designed exclusively to fund a high-performance
health care system (single payer), as opposed to one that is designed to
keep policy wonks and insurance administrators employed in bringing us
ever-expanding payment innovations that we don't want (Obamacare).

Monday, May 20, 2013

Fwd: qotd: Some employers, insurers conspire on bare-bones plans

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-------- Original Message --------
Subject: qotd: Some employers, insurers conspire on bare-bones plans
Date: Mon, 20 May 2013 11:13:32 -0700
From: Don McCanne <don@mccanne.org>
To: Quote-of-the-Day <quote-of-the-day@mccanne.org>



The Wall Street Journal
May 19, 2013
Employers Eye Bare-Bones Health Plans Under New Law
By Christopher Weaver and Anna Wilde Matthews

Employers are increasingly recognizing they may be able to avoid certain
penalties under the federal health law by offering very limited plans
that can lack key benefits such as hospital coverage.

Benefits advisers and insurance brokers—bucking a commonly held
expectation that the law would broadly enrich benefits—are pitching
these low-benefit plans around the country. They cover minimal
requirements such as preventive services, but often little more. Some of
the plans wouldn't cover surgery, X-rays or prenatal care at all.

Federal officials say this type of plan, in concept, would appear to
qualify as acceptable minimum coverage under the law, and let most
employers avoid an across-the-workforce $2,000-per-worker penalty for
firms that offer nothing.

The idea that such plans would be allowable under the law has emerged
only recently. Some benefits advisers still feel they could face
regulatory uncertainty. The law requires employers with 50 or more
workers to offer coverage to their workers or pay a penalty. Many
employers and benefits experts have understood the rules to require
robust insurance, covering a list of "essential" benefits such as
mental-health services and a high percentage of workers' overall costs.

But a close reading of the rules makes it clear that those mandates
affect only plans sponsored by insurers that are sold to small
businesses and individuals, federal officials confirm. That affects only
about 30 million of the more than 160 million people with private
insurance, including 19 million people covered by employers, according
to a Citigroup Inc. C +0.20% report. Larger employers, generally with
more than 50 workers, need cover only preventive services, without a
lifetime or annual dollar-value limit, in order to avoid the
across-the-workforce penalty.

Such policies would generally cost far less to provide than paying the
penalty or providing more comprehensive benefits, say benefit-services
firms.

Administration officials confirmed in interviews that the skinny plans,
in concept, would be sufficient to avoid the across-the-workforce
penalty. Several expressed surprise that employers would consider the
approach.

Firms now offering low-cost policies known as mini-meds, generally plans
that cap benefits at low levels, could favor the tactic. Companies
sought federal health department waivers to cover nearly four million
with mini-meds and other similar plans, which will be barred next year.
Some employers are "thinking of this as a replacement for the mini-med
plan," said Tracy Watts, national leader for health-care reform at
Mercer, a consulting unit of Marsh & McLennan Cos.

San Antonio-based Bill Miller Bar-B-Q, a 4,200-worker chain, will
replace its own mini-med with a new, skinny plan in July. The new
plan... will cover only preventive services, six annual doctors' visits
and generic drugs. X-rays and tests at a local urgent care chain will
also be covered. It wouldn't cover surgeries or hospital stays.

Tex-Mex restaurant chain El Fenix also said it would offer limited plans
to its 1,200 workers, covering doctors visits, preventive care and
drugs, but not hospital stays or surgery.

http://online.wsj.com/article/SB10001424127887324787004578493274030598186.html


Comment: Imagine health insurance not covering hospitalizations nor
surgery. Yet this is still possible because the Affordable Care Act
applies the essential health benefit requirement only to plans for small
businesses and individuals and not to larger employers.

This has opened up the opportunity for a conspiracy between larger
employers who could care less whether or not their employees have health
insurance and private insurers who are quite willing to sell these
almost worthless bare-bones products as long as there is a profitable
market for them.

The solution is obvious. Cover all care that people need, and then
provide that coverage to everyone, automatically. Maybe these uncaring
employers might not like that, but when the taxes to pay for an
equitable system are obligatory, they would get used to the idea of
their employees being able to obtain health care when they need it. Not
such a bad idea after all, especially when their competitors are treated
the same.

Friday, May 17, 2013

Fwd: qotd: OECD report on income inequality and poverty

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-------- Original Message --------
Subject: qotd: OECD report on income inequality and poverty
Date: Fri, 17 May 2013 12:16:13 -0700
From: Don McCanne <don@mccanne.org>
To: Quote-of-the-Day <quote-of-the-day@mccanne.org>



OECD
May 15, 2013
Growing risk of inequality and poverty as crisis hits the poor hardest

Income inequality increased by more in the first three years of the
crisis to the end of 2010 than it had in the previous twelve years,
before factoring in the effect of taxes and transfers on income,
according to new OECD report and data.

After taxes and transfers, the richest 10 per cent of the population in
OECD countries earned 9.5 times the income of the poorest 10 per cent in
2010, up from 9 times in 2007. The gap is largest in Chile, Mexico,
Turkey, the United States and Israel, and lowest in Iceland, Slovenia,
Norway and Denmark.

Gini Coefficient (higher = greater inequality)
0.316 OECD average (after taxes and transfers)
0.380 United States (after taxes and transfers)
0.499 United States (before taxes and transfers)
0.320 Canada (after taxes and transfers)
0.447 Canada (before taxes and transfers)

Relative Income Poverty Rates
11.1% OECD average (after taxes and transfers)
17.4% United States (after taxes and transfers)
28.4% United States (before taxes and transfers)
11.9% Canada (after taxes and transfers)
26.0% Canada (before taxes and transfers)

http://www.oecd.org/newsroom/growing-risk-of-inequality-and-poverty-as-crisis-hits-the-poor-hardest-says-oecd.htm

OECD report (8 pages):
http://www.oecd.org/els/soc/OECD2013-Inequality-and-Poverty-8p.pdf


Comment: Compared to the average member nation of the Organization for
Economic Cooperation and Development (OECD), the United States has
higher levels of poverty and a greater inequality in income.

This OECD report does demonstrate that taxes and transfers (social
welfare programs) do reduce the gap, but when you compare the United
States and Canada on the amount of redistribution that takes place as a
result of these policies, you see that we are much less equitable than
Canada.

Although our politicians claim that our taxes are too high and that we
need to cut social programs, these results suggest the opposite - that
we need more progressive taxes and more generous social benefit programs
- maybe like Canada's single payer Medicare program.

Thursday, May 16, 2013

Fwd: qotd: Redistributive function of Canada's single payer

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-------- Original Message --------
Subject: qotd: Redistributive function of Canada's single payer
Date: Thu, 16 May 2013 12:38:40 -0700
From: Don McCanne <don@mccanne.org>
To: Quote-of-the-Day <quote-of-the-day@mccanne.org>



Canadian Institute for Health Information
May 2013
Publicly Financed Health Care in Canada: Who Pays and Who Benefits Over
a Lifetime?

Conclusion

All Canadian taxpayers contribute to publicly financed health care,
regardless of their use of the system. Publicly funded health care
services are available to all on the basis of need, regardless of
ability to pay. When we look at the relationship over a lifetime, only
the most affluent (the top 20%) contribute significantly more to health
care than they receive. For other income groups, the value received from
publicly funded health care is approximately the same as or more than
the value of taxes paid to fund those services. The redistributive
effect of publicly funded health care in Canada is a 16% reduction in
the income gap between the highest- and lowest-income groups. Without
the publicly financed health system, the lowest-income Canadians would
be at risk of going without needed health care or of being impoverished
by paying for it.

https://secure.cihi.ca/estore/productFamily.htm?locale=en&pf=PFC2192


Comment: This report from Canada demonstrates one of the more important
functions of a well designed single payer system. To ensure access while
preventing impoverishment, financing must be redistributive, because
health care costs are unaffordable for moderate and low income
individuals and families. Not only does the redistributive financing
ensure universal access, it also ameliorates, to a limited extent, the
impact of the worsening Gini coefficient (measure of income inequality).

Wednesday, May 15, 2013

Fwd: qotd: CBO now estimates 31 million will remain uninsured

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-------- Original Message --------
Subject: qotd: CBO now estimates 31 million will remain uninsured
Date: Wed, 15 May 2013 10:37:10 -0700
From: Don McCanne <don@mccanne.org>
To: Quote-of-the-Day <quote-of-the-day@mccanne.org>



Congressional Budget Office
May 14, 2013
CBO's Estimate of the Net Budgetary Impact of the Affordable Care Act's
Health Insurance Coverage Provisions Has Not Changed Much Over Time

Proposed regulations recently issued by the Department of Health and
Human Services and the Department of the Treasury expanded the number of
people who will be exempt from paying a penalty for being uninsured
relative to our previous expectations. CBO and JCT now expect that, as a
result of those regulations, between 500,000 and 1 million fewer people
will obtain health insurance coverage each year. In our current
projections for 2023, the ACA reduces the number of people without
health insurance by 25 million, leaving 31 million uninsured (compared
with 30 million in our February estimate).
http://www.cbo.gov/publication/44176


Comment: After the Affordable Care Act is fully implemented ten years
from now, the number of people who will remain uninsured is estimated to
be 31 million. Since there will be a net gain of 25 million with
insurance, that means that Obamacare - a plan to cover everyone - will
have been only 45 percent effective in the goal of reducing the net
number of uninsured. Pretty lousy.

This result on the uninsured will put us just about where we were when
the Clintons began their effort to achieve universal coverage. It was a
crisis then, and it will still be a crisis after we've expended far too
much money and time on this terribly flawed effort.

Forget repeal, REPLACE!

Tuesday, May 14, 2013

Fwd: qotd: The Huffington Post May 6, 2013 GOP Candidates' Top Campaign Issue Will Be Obamacare 'Train Wreck' By Wendell Potter Will the implementation of some of the most important provisions of ObamaCare this fall and next year result in the "train wreck" Senate Finance Chairman Max Baucus (D-Mont.) predicted a few days ago? No. But you can be certain that there will be no shortage of political candidates and high-powered political spin doctors who will be working relentlessly between now and the 2014 midterms to convince us that it will be. If the Democrats and consumer advocates who support ObamaCare are not at work developing their own strategies to counter the coming barrage of misleading spin, the GOP will have an excellent chance of controlling Capitol Hill after the next elections. http://www.huffingtonpost.com/wendell-potter/gop-candidates-top-campai_b_3222876.html Comment: Of those who are serious about health care reform, some want to abandon the Affordable Care Act (ACA) and immedi

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-------- Original Message --------
Subject: qotd: The Huffington Post May 6, 2013 GOP Candidates' Top
Campaign Issue Will Be Obamacare 'Train Wreck' By Wendell Potter Will
the implementation of some of the most important provisions of ObamaCare
this fall and next year result in the "train wreck" Senate Finance
Chairman Max Baucus (D-Mont.) predicted a few days ago? No. But you can
be certain that there will be no shortage of political candidates and
high-powered political spin doctors who will be working relentlessly
between now and the 2014 midterms to convince us that it will be. If the
Democrats and consumer advocates who support ObamaCare are not at work
developing their own strategies to counter the coming barrage of
misleading spin, the GOP will have an excellent chance of controlling
Capitol Hill after the next elections.
http://www.huffingtonpost.com/wendell-potter/gop-candidates-top-campai_b_3222876.html
Comment: Of those who are serious about health care reform, some want to
abandon the Affordable Care Act (ACA) and immedi
Date: Tue, 14 May 2013 12:00:41 -0700
From: Don McCanne <don@mccanne.org>
To: Quote-of-the-Day <quote-of-the-day@mccanne.org>



The Huffington Post
May 6, 2013
GOP Candidates' Top Campaign Issue Will Be Obamacare 'Train Wreck'
By Wendell Potter

Will the implementation of some of the most important provisions of
ObamaCare this fall and next year result in the "train wreck" Senate
Finance Chairman Max Baucus (D-Mont.) predicted a few days ago?

No. But you can be certain that there will be no shortage of political
candidates and high-powered political spin doctors who will be working
relentlessly between now and the 2014 midterms to convince us that it
will be.

If the Democrats and consumer advocates who support ObamaCare are not at
work developing their own strategies to counter the coming barrage of
misleading spin, the GOP will have an excellent chance of controlling
Capitol Hill after the next elections.

http://www.huffingtonpost.com/wendell-potter/gop-candidates-top-campai_b_3222876.html


Comment: Of those who are serious about health care reform, some want
to abandon the Affordable Care Act (ACA) and immediately enact single
payer, and others want to abandon the single payer cause and move full
steam ahead with implementation of the ACA. But should we really abandon
either approach?

It is clear that ACA alone will be grossly deficient. Thirty million
people will remain uninsured, inadequate low actuarial value plans will
become the new standard, and wasteful spending will continue because of
the highly flawed, administratively complex model of ACA. So single
payer should not be abandoned since it is an imperative if we want to
have affordable health care for everyone.

Why shouldn't we abandon ACA? Because, quite simply, it is all that we
have right now, and it will provide some limited relief for millions of
people. If we were to abandon ACA now, mobilizing a social movement and
then enacting and implementing single payer would still take many years
- too long for those who would receive some benefit from ACA now.

So we should do both. Let the ACA enthusiasts continue with the
implementation, while single payer forces step up the social movement
for health care justice though advocacy for an improved Medicare for
everyone.

So where is the train wreck? There isn't any. But Wendell Potter is
right. The opponents of reform will latch onto every ACA implementation
glitch, real or imagined, and onto the criticisms which will inevitably
follow. They will attempt to frame the implementation as a debacle, and
run with that in their effort to use election politics to advance their
anti-government agenda.

This complicates the message for the single payer camp. We need to
educate people as to why ACA will fall intolerably short of reform
goals, but we do not want that to become part of the Repeal ACA message.
The opponents initially supported Repeal and Replace, but they have
largely abandoned Replace, concentrating on Repeal. So how do we counter
the Repeal message?

We need to emphasize the positive message of single payer - truly
affordable health care for everyone. We can add that we don't need to
repeal ACA since it can help some during the transition to single payer.
But our action message should be Replace - letting the public know that
we really do have a much better program that will work for everyone,
whereas the opponents do not.

So perhaps a unifying message for the supporters of health care justice
should be:

Forget Repeal, REPLACE!

Fwd: qotd: Can we talk about the ACA train wreck?

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-------- Original Message --------
Subject: qotd: Can we talk about the ACA train wreck?
Date: Tue, 14 May 2013 12:04:00 -0700
From: Don McCanne <don@mccanne.org>
To: Quote-of-the-Day <quote-of-the-day@mccanne.org>



The Huffington Post
May 6, 2013
GOP Candidates' Top Campaign Issue Will Be Obamacare 'Train Wreck'
By Wendell Potter

Will the implementation of some of the most important provisions of
ObamaCare this fall and next year result in the "train wreck" Senate
Finance Chairman Max Baucus (D-Mont.) predicted a few days ago?

No. But you can be certain that there will be no shortage of political
candidates and high-powered political spin doctors who will be working
relentlessly between now and the 2014 midterms to convince us that it
will be.

If the Democrats and consumer advocates who support ObamaCare are not at
work developing their own strategies to counter the coming barrage of
misleading spin, the GOP will have an excellent chance of controlling
Capitol Hill after the next elections.

http://www.huffingtonpost.com/wendell-potter/gop-candidates-top-campai_b_3222876.html


Comment: Of those who are serious about health care reform, some want
to abandon the Affordable Care Act (ACA) and immediately enact single
payer, and others want to abandon the single payer cause and move full
steam ahead with implementation of the ACA. But should we really abandon
either approach?

It is clear that ACA alone will be grossly deficient. Thirty million
people will remain uninsured, inadequate low actuarial value plans will
become the new standard, and wasteful spending will continue because of
the highly flawed, administratively complex model of ACA. So single
payer should not be abandoned since it is an imperative if we want to
have affordable health care for everyone.

Why shouldn't we abandon ACA? Because, quite simply, it is all that we
have right now, and it will provide some limited relief for millions of
people. If we were to abandon ACA now, mobilizing a social movement and
then enacting and implementing single payer would still take many years
- too long for those who would receive some benefit from ACA now.

So we should do both. Let the ACA enthusiasts continue with the
implementation, while single payer forces step up the social movement
for health care justice though advocacy for an improved Medicare for
everyone.

So where is the train wreck? There isn't any. But Wendell Potter is
right. The opponents of reform will latch onto every ACA implementation
glitch, real or imagined, and onto the criticisms which will inevitably
follow. They will attempt to frame the implementation as a debacle, and
run with that in their effort to use election politics to advance their
anti-government agenda.

This complicates the message for the single payer camp. We need to
educate people as to why ACA will fall intolerably short of reform
goals, but we do not want that to become part of the Repeal ACA message.
The opponents initially supported Repeal and Replace, but they have
largely abandoned Replace, concentrating on Repeal. So how do we counter
the Repeal message?

We need to emphasize the positive message of single payer - truly
affordable health care for everyone. We can add that we don't need to
repeal ACA since it can help some during the transition to single payer.
But our action message should be Replace - letting the public know that
we really do have a much better program that will work for everyone,
whereas the opponents do not.

So perhaps a unifying message for the supporters of health care justice
should be:

Forget Repeal, REPLACE!

Monday, May 13, 2013

Fwd: qotd: Keep people out of Medicaid to avoid fraud?

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-------- Original Message --------
Subject: qotd: Keep people out of Medicaid to avoid fraud?
Date: Mon, 13 May 2013 10:11:19 -0700
From: Don McCanne <don@mccanne.org>
To: Quote-of-the-Day <quote-of-the-day@mccanne.org>



Los Angeles Times
May 10, 2013
Healthcare puts Jerry Brown, Capitol Democrats on different sides
By Anthony York and Chris Megerian

With California's deficit wiped out and its economy starting to hum,
this was to be a year when Gov. Jerry Brown was free of the budget
logjams that have paralyzed the Capitol.

But instead, the governor has a fight on his hands — with his fellow
Democrats. He is on a collision course with them over how to reshape the
state's sprawling, complicated healthcare system to conform with
President Obama's national overhaul.

The sticking points in extending public healthcare to more Californians
include how many to add to state insurance rolls, how much to pay
doctors and hospitals, and how much money to give counties for their
care of the indigent.

The Democrats who control the Legislature — with a veto-proof
supermajority — want to make it easier to obtain public insurance than
Brown does and send more money to the doctors, hospitals and counties
than the governor wants to part with.

The major bill that would expand public insurance under Medi-Cal is from
Assembly Speaker John A. Pérez (D-Los Angeles). The measure would make
it easier for Californians to enroll in the program by allowing people
to sign up online and eliminating requirements that recipients file
semiannual financial reports to prove they are still eligible.

Administration officials have said the governor opposes those changes
out of concern that the easier enrollment process could lead to fraud.

http://www.latimes.com/health/la-me-brown-healthcare-20130511,0,6700749.story


Comment: Isn't the idea of the Affordable Care Act to get as many
people covered as is possible, considering the administrative
complexities of this highly flawed model of reform? So what does
California Governor Jerry Brown recommend? Do not make enrollment easier
since it might lead to fraud!

Enrollment fraud could not possibly occur under a single payer system
since it automatically enrolls everyone. We need a change in attitude. A
single payer system would start us thinking in the right way about how
to cover everyone and still pay for it.

Thursday, May 9, 2013

Fwd: qotd: CMS pushes price transparency

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-------- Original Message --------
Subject: qotd: CMS pushes price transparency
Date: Thu, 9 May 2013 12:08:03 -0700
From: Don McCanne <don@mccanne.org>
To: Quote-of-the-Day <quote-of-the-day@mccanne.org>



Centers for Medicare and Medicaid Services
May 8, 2013
Administration Offers Consumers an Unprecedented Look at Hospital Charges

New data released today show significant variation across the country
and within communities in what hospitals charge for common inpatient
services.

"Currently, consumers don't know what a hospital is charging them or
their insurance company for a given procedure, like a knee replacement,
or how much of a price difference there is at different hospitals, even
within the same city," Secretary Sebelius said.

These amounts can vary widely. For example, average inpatient charges
for services a hospital may provide in connection with a joint
replacement range from a low of $5,300 at a hospital in Ada, Okla., to a
high of $223,000 at a hospital in Monterey Park, Calif.

"Transformation of the health care delivery system cannot occur without
greater price transparency," said Risa Lavizzo-Mourey, M.D., RWJF
president and CEO.

http://www.cms.gov/apps/media/press/release.asp?Counter=4596

Medicare Provider Charge Data
http://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/Medicare-Provider-Charge-Data/index.html


Comment: So now we have access to hospital chargemaster prices -
meaningless numbers that nobody pays. And that is going to make us
better health care shoppers?

What matters are payments, not prices. Actual payments are negotiated
prospectively by private insurers, and even more effectively by
Medicare. Cash paying patients usually feebly attempt to conduct
negotiations retroactively, if they pay at all.

This CMS effort on hospital price transparency will have almost no
impact on controlling total health care spending since chargemaster
prices are a fabrication.

There is a far better way to control spending without forcing patients
to make unwise health care decisions in their efforts to avoid the
financial burdens of health care. Each hospital should be placed on a
global budget, just as we do with our police and fire departments. That
way, services are rendered simply when needed, without having an
associated price tag.

Requiring price shopping as a prerequisite to health care access is
anathema to health care justice.

Tuesday, May 7, 2013

Fwd: qotd: Health Affairs articles on Medicare reform options

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-------- Original Message --------
Subject: qotd: Health Affairs articles on Medicare reform options
Date: Tue, 7 May 2013 13:26:51 -0700
From: Don McCanne <don@mccanne.org>
To: Quote-of-the-Day <quote-of-the-day@mccanne.org>



Health Affairs
May 2013
Tackling the Cost Conundrum


Medicare Essential: An Option To Promote Better Care And Curb Spending
Growth
By Karen Davis, Cathy Schoen and Stuart Guterman

We describe a new option we call Medicare Essential, which would combine
Medicare's hospital, physician, and prescription drug coverage into an
integrated benefit with an annual limit on out-of-pocket expenses for
covered benefits. Cost sharing would be reduced for enrollees who seek
care from high-quality low-cost providers. Out-of-pocket savings from
lower premiums and health care costs for a Medicare Essential enrollee
could be $173 per month, compared to what an enrollee would pay with
traditional Medicare, prescription drug and private supplemental
coverage. Financed by a budget-neutral premium, we estimate that this
new plan choice could reduce total health spending relative to current
projections by $180 billion and reduce employer retiree spending by $90
billion during 2014–23. Given its potential, such an alternative should
be a part of the debate over the future of Medicare.

http://content.healthaffairs.org/content/32/5/900.abstract


Supplemental Coverage Associated With More Rapid Spending Growth For
Medicare Beneficiaries
By Ezra Golberstein, Kayo Walsh, Yulei He and Michael E. Chernew

Supplemental coverage makes health care more affordable for
beneficiaries but also makes beneficiaries insensitive to the cost of
their care, thereby increasing the demand for care. We found that
supplemental insurance coverage was associated with significantly higher
rates of overall spending growth. Specifically, employer-sponsored and
self-purchased supplemental coverage were associated with annual total
spending growth rates of 7.17 percent and 7.18 percent, respectively,
compared to 6.08 percent annual growth for beneficiaries without
supplemental coverage. Results for Medicare program spending were more
equivocal, however. Our results are consistent with the belief that
current trends away from generous employer-sponsored supplemental
coverage and efforts to restrict the generosity of supplemental coverage
may slow spending growth.

http://content.healthaffairs.org/content/32/5/873.abstract


Public Financing Of The Medicare Program Will Make Its Uniform Structure
Increasingly Costly To Sustain
By Katherine Baicker, Mark Shepard and Jonathan Skinner

In this article we describe a model incorporating the benefits of public
programs and the cost of tax financing. The model implies that the
"one-size-fits-all" Medicare program, with everyone covered by the same
insurance policy, will be increasingly difficult to sustain. We show
that a Medicare program with guaranteed basic benefits and the option to
purchase additional coverage could lead to more unequal health spending
but slower growth in taxation, greater overall well-being, and more
rapid growth of gross domestic product.

Our model thus helps explain the rapid growth in US health care
expenditures relative to other countries. More important, the model
highlights the trade-offs in different approaches to reining in public
spending — from the current approach of providing a uniform benefit that
increasingly crowds out other programs, to a less egalitarian model that
guarantees only a basic benefit and redirects some redistribution toward
other programs.

Our analysis suggests that the policy of providing a uniform benefit to all
— rather than a basic benefit that higher-income residents can augment
— may be increasingly untenable if health care expenditures continue to
rise.

Other excerpts:

Why has the United States diverged so dramatically from its
counterparts? This divergence is probably not explained by commonly
cited factors such as administrative costs — already high by the 1980s —
or physician salaries, which have stagnated over the past decade.

The implications of our model are not dissimilar to the idea of
voucher-type premium support suggested over the years by Ezekiel Emanuel
and Victor Fuchs, Henry Aaron and Robert Reischauer, and Rep. Paul Ryan
(R-WI). Indeed, it may appear that this plan most closely resembles a
Ryan-style premium support plan.

Our "basic" plan does not correspond so much to a high-deductible or
higher-cost-sharing plan, but rather to one that covers a more limited
set of treatments or providers. Unlike high-deductible plans, the basic
plan need not expose poorer households to the risk of substantial cost
sharing. Instead, it is designed to limit coverage to treatments with
proven effectiveness at a reasonable cost. Of course, identifying which
treatments are of high value — and for which patients — poses
substantial challenges.

Perhaps the greatest challenge to offering this kind of plan choice more
widely in Medicare is that it would require setting aside the
egalitarian goals enshrined in the Medicare legislation of 1965.
Publicly providing only basic coverage would implicitly recognize that
higher-income households would probably elect to procure more generous
coverage — and, ultimately, to obtain more health care and possibly
better health outcomes.

http://content.healthaffairs.org/content/32/5/882.abstract

Background paper (40 pages): "Optimal Healthcare Spending with
Redistributive Financing"

http://www.dartmouthatlas.org/downloads/papers/ShepardBaickerSkinner_OptimalHealthSpending.pdf


Three Large-Scale Changes To The Medicare Program Could Curb Its Costs
But Also Reduce Enrollment
By Christine Eibner, Dana P. Goldman, Jeffrey Sullivan and Alan M. Garber

With Medicare spending projected to increase to 24 percent of all
federal spending and to equal 6 percent of the gross domestic product by
2037, policy makers are again considering ways to curb the program's
spending growth. We used a microsimulation approach to estimate three
scenarios: imposing a means-tested premium for Part A hospital
insurance, introducing a premium support credit to purchase health
insurance, and increasing the eligibility age to sixty-seven. We found
that the scenarios would lead to reductions in cumulative Medicare
spending in 2012–36 of 2.4–24.0 percent. However, the scenarios also
would increase out-of-pocket spending for enrollees and, in some cases,
cause millions of seniors not to enroll in the program and to be left
without coverage.

http://content.healthaffairs.org/content/32/5/891.abstract


Additional Reductions In Medicare Spending Growth Will Likely Require
Shifting Costs To Beneficiaries
By Michael E. Chernew

The Affordable Care Act created a projected trajectory for Medicare
spending per beneficiary that is lower than historical growth rates.
Although opportunities for one-time savings exist, any long-term savings
from Medicare, beyond those already forecast, will probably require a
shift in spending from taxpayers to beneficiaries via higher beneficiary
premium contributions (overall or via means testing), changes in
eligibility, or greater cost sharing at the point of service.

http://content.healthaffairs.org/content/32/5/859.abstract


Comment: At a time when our politicians have decided to open
discussions on reducing government spending in Medicare, it likely is no
coincidence that this cluster of articles on ways of reforming the
financing of Medicare appears in the leading journal of health policy -
Health Affairs. But beware; the thrust of most of the articles should
raise our concerns.

The most alarming articles are the pair from Katherine Baicker and her
colleagues. They support unlimited care with "better health outcomes"
for higher-income households, with only "basic" care for for the rest of
us, even though they note that defining basic care "poses substantial
challenges." Class division in health care seems to be a uniquely
American concept. "It would require setting aside the egalitarian goals
enshrined in the Medicare legislation of 1965."

The article by Ezra Golberstein and his colleagues calls for diminishing
the financial protection offered by supplemental Medigap and retiree
health benefits "to restrict the generosity of supplemental coverage,"
making beneficiaries more sensitive to the cost of their care, even
though "results for Medicare program spending were more equivocal."
Feeling the pain of their health care spending seems to be the policy
goal even if the total reduction in Medicare spending is only nominal.

Christine Eibner and her colleagues propose, "imposing a means-tested
premium for Part A hospital insurance, introducing a premium support
credit to purchase health insurance, and increasing the eligibility age
to sixty-seven" as three means of reducing overall Medicare spending,
even though these measures would shift costs to the beneficiaries and
cause perhaps millions of them to withdraw from Medicare and remain
uninsured.

Michael Chernew keeps it simple. Lowering the projected trajectory for
Medicare spending "will probably require a shift in spending from
taxpayers to beneficiaries via higher beneficiary premium contributions
(overall or via means testing), changes in eligibility, or greater cost
sharing at the point of service." In other words, reduce the tax
transfer by sticking it to the seniors.

We can thank Karen Davis, Cathy Schoen and Stuart Guterman for not
causing us to lose all hope. Their proposal - "Medicare Essential" - is
designed to increase the coverage and efficiency of Medicare. They would
combine the hospital Part A, physician Part B, and drug Part D programs
into a single program with less administrative complexity. They would
also add much needed catastrophic coverage by placing a maximum on
out-of-pocket expenses. They would also fold in the benefits of
supplemental plans eliminating the need for wasteful, superfluous
Medigap and retiree health plans. Their proposal would actually reduce
spending for most Medicare beneficiaries while enhancing the benefits.

They would leave in place the flawed Medicare Advantage plans, although
competing with a truly superior public plan could make them obsolete -
the goal of "the public option." They would have the deductible apply to
Part A, opening the treacherous territory of a path for more cost
shifting to beneficiaries. Also they do not mention that Medicare
Essential could eventually be expanded to include everyone, becoming an
improved Medicare for all. There are many other important features of
the PNHP version of the single payer model that they do not address, and
that we won't mention here. Suffice it to say, that Medicare Essential
is only a tiny though important step in the direction in which we should
be headed.

For incrementalists, Medicare Essential should captivate you. For those
of us who are impassioned single payer supporters, we should continue to
advocate for moving the political process forward toward achieving an
Improved Medicare for All single payer program as soon as possible.

Monday, May 6, 2013

Fwd: qotd: Gerald Friedman: The Unhappy Marriage of Economics and Health Care

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-------- Original Message --------
Subject: qotd: Gerald Friedman: The Unhappy Marriage of Economics and
Health Care
Date: Mon, 6 May 2013 12:31:46 -0700
From: Don McCanne <don@mccanne.org>
To: Quote-of-the-Day <quote-of-the-day@mccanne.org>



Unions for Single Payer health Care
May 6, 2013
The Unhappy Marriage of Economics and Health Care
By Gerald Friedman, Ph.D., Professor of Economics, University of
Massachusetts at Amherst

America's health care system is collapsing, and we can blame the
Economics profession. Most economists approach health care in the wrong
way, viewing it as a commodity like shoes or the laptop on which I
write. Instead, health care is an idiosyncratic commodity, subject to
uncertainty and "asymmetric information" leading to destructive
behavior. Trying to force health care into a box, treating it like other
commodities, economists have promoted cost sharing, market competition,
and insurance oversight of health care providers that have inflated the
administrative burden while denying ever more Americans access.

While other countries have controlled health care costs by restraining
administrative expenses and drug prices, ballooning costs in the United
States come from policies promoted by economists who have urged
governments and providers to control costs by making consumers
responsible for more of the costs even while raising administrative
costs and ignoring monopolistic pricing of pharmaceuticals. Viewing the
injured, sick, and disabled as "consumers," economists see insurance as
the source of rising costs because they are not responsible for the
costs of care they receive and, therefore, overuse health care. Rising
copayments and deductibles are intended to discourage "consumers" from
"abusing" health care, as if the victims of auto accidents or cancer
should shop around for cheaper, and competition among insurers while
limiting provider services by providing more administrative supervision.
Ignoring evidence that Americans are less likely to see doctors and
other health providers than are residents of other affluent countries,
these economists have blamed the high cost of our health care on
insurance which, they assume, leads to wasteful over-practice and the
provision of unnecessary health care services. Their solution is greater
cost sharing, more regulation of providers, capitation, and even the end
to insurance by substituting medical savings accounts for insurance.

For 40 years, many economists' have promoted increasing cost sharing
through higher copayments and deductibles, the replacement of
fee-for-service payment systems with capitation where providers are paid
a fixed amount for patients as in Health Maintenance Organizations, and
competition where multiple insurers offer a variety of plans catered to
individual consumer's interests and in competition with each other. Far
from limiting health care cost increases, these practices have produced
the worst of all worlds, rising costs along with restrictions on access.
Costs have risen because these recommendations have inflated the
administrative burden in health care, the costs of the billing and
insurance activities within provider offices as well as the cost of the
health insurance industry itself. While restricting access, limiting the
benefit to Americans of some of the dramatic improvements in health care
practice of the last decades, these practices have not bent the cost
curve or slowed health care inflation even while denying more and more
Americans access to affordable health care.

The waste involved in the current system has a redeeming feature: it
provides abundant space for an improved system that could improve access
and services even while dramatically lowering costs by eliminating
administrative waste. If we lowered administrative costs and drug prices
to the Canadian level, we could save nearly $600 billion dollars, more
than enough to provide coverage to all of the uninsured while improving
access for the millions of underinsured. If we see past the bad
recommendations of market-fundamentalists, we can improve health care
and save money. An outcome that even economists should favor.

http://unionsforsinglepayer.org/articles/2013-05-05/the-unhappy-marriage-of-economics-and-health-care


Comment: Which comes first, economic theory or policy? Intuitively, it
seems that a solid understanding of economics should form the basis for
developing policies. The obvious flaw is that economics is not a hard
science, allowing you flexibility to choose economic theory that
conforms to whatever policy you favor.

In the United States we have relied heavily on economists who are
market-fundamentalists. They begin with market theory, and then they
establish policies that supposedly would provide us the greatest value
in health care. Yet we have ended up with a profoundly expensive, highly
wasteful system of mediocre-to-poor quality, while falling far short of
the goals of making health care affordable and accessible for everyone.

It seems unlikely that the market-fundamentalists would contend that
they choose policies first and then use market theory to reach their
goals. If so, then they would have to explain to us why they wanted
today's outcomes. So much for market fundamentalism.

Advocates of health care justice first choose policies that would ensure
quality care for everyone that is affordable for society as a whole.
Then they apply economic theory to achieve the goals of those policies.
Other nations have shown that this works.

In his article, Massachusetts Professor Gerald Friedman explains how we
can get it right - producing better health care while saving money - an
outcome that all economists should favor, that is if they are pure to
the art and science of their profession.