qotd: Evaluation of the ColoradoCare initiative by PNHP's founders and Policy Director

Physicians for a National Health Program
October 27. 2015
Brief Comments on ColoradoCare
By Ida Hellander, M.D., David U. Himmelstein, M.D., and Steffie
Woolhandler, M.D., M.P.H.

Organizers for the ColoradoCare ballot initiative have contacted some
activists in Physicians for a National Health Program seeking their
endorsement and financial support. We summarize, below, our
understanding of the initiative.

Description of the program

ColoradoCare is a ballot initiative for a publicly financed, universal
health plan for the state of Colorado that would be operated by a
private cooperative under a 21-person elected Board. While the ballot
measure spells out the program's governance and Board structure in
considerable detail, key aspects of the program are not specified,
and/or left to the discretion of the Board. In the past the drafters
made clear in public statements that ColoradoCare is NOT a single-payer
plan.

The initiative would cover all Colorado residents under a publicly
funded, cooperative insurance plan. While the new program would replace
most private insurance, Medicaid and CHIP coverage, it would serve only
as supplemental coverage for those covered by Medicare, the VA and
TriCare. The initiative would not prohibit the purchase or sale of
private coverage duplicating the public plan. However, proponents expect
that little private insurance would persist, since most businesses and
individuals would not want to pay twice for coverage.

The proposal would cover a broad range of benefits, but would not cover
dental care for adults, or long-term care for most individuals.

ColoradoCare would be funded via a payroll tax of 6.67 percent on
employers and 3.33 on employees, or 10 percent of non-payroll income
(excluding pensions and annuities), along with federal funds that would
have come to the state via subsidies for private coverage under the ACA,
for Medicaid, and for other programs.

The drafting of ColoradoCare was spearheaded by Colorado Sen. Irene
Aguilar and psychologist Ivan Miller. Volunteers and paid staff gathered
the signatures necessary to put it on the ballot. Journalist T.R. Reid
has become a champion and spokesperson for the plan both inside and
outside of Colorado.

Strengths of ColoradoCare

1. The proposal if implemented would cover all, or nearly all of
Colorado's uninsured – apparently (and laudably) including the undocumented.

2. The proposal includes some useful cost-control features, notably the
creation of an annual budget, and the ability to negotiate lower prices
with pharmaceutical companies.

3. The plan allows for a free choice of primary care doctor.

4. The financing plan is more progressive than the current system.

5. ColoradoCare's organizers have mounted an impressive campaign with
considerable mobilization.

Weaknesses of ColoradoCare

1. Multiple payers would persist – probably including private insurers.
As a result, it sacrifices much of the administrative savings that could
be realized through a true single-payer reform because providers would
have to maintain much of their current cost tracking and billing
apparatus in order to apportion costs among the multiple payers.
Published cost estimates for ColoradoCare overstate the savings that
could be achieved through single payer, and do not take into account the
additional costs entailed by ColoradoCare's failure to adopt a full
single-payer structure.

2. The initiative makes no mention of how hospitals or other
institutions would be paid – apart from a rhetorical nod favoring ACOs.
It makes no mention of global budgeting, separating operating and
capital payments, or other constraints on hospital capital spending.
Global budgeting is critical to achieving administrative savings;
separating operating and capital payments is a bedrock of effective
health planning, which is essential for long-term cost containment.

3. The initiative would not ban for-profit hospitals or other providers,
despite clear evidence that they inflate costs and compromise quality.
For-profit ACOs (indistinguishable from HMOs in most respects) might
also flourish.

4. Patients would NOT have a free choice of specialists or hospitals.

5. While the plan would outlaw deductibles, the Board would be empowered
to impose copayments.

6. While the 10 percent tax rate would apply to both the rich and poor
(including those with incomes below the poverty line), income over
$350,000 would not be taxed.

7. The campaign's anti-government rhetoric is problematic.

8. Rather than specifying critical aspects of the plan, the initiative
leaves many of these to be decided later by the Board. Delaying such
decisions has often favored corporate interests, who can intervene after
the popular mobilization required to pass a reform has subsided. In the
case of the ACA, corporate lobbying during the rule-making process
attenuated cuts in Medicare HMO overpayments; reduced promised funding
for public health and community clinics; effectively neutered limits on
insurance overhead; and watered down the mandated benefit package. In
Vermont, the broad-brush program initially passed by the legislature was
whittled down in the detailed design stage, leading to rising cost
estimates and ultimate rejection by the governor.


Dr. Ida Hellander is director of health policy and programs at
Physicians for a National Health Program. Drs. David Himmelstein and
Steffie Woolhandler are internists, professors at the City University of
New York School of Public Health, lecturers in medicine at Harvard
Medical School, and co-founders of PNHP.

http://www.pnhp.org/news/2015/october/brief-comments-on-coloradocare

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Comment by Don McCanne

Until the nation supports a political environment in which a bona fide
single payer national health program can be enacted, it is wise for
activists to advance beneficial health policies that can reduce
suffering and hardship on an interim basis. Until then, PNHP will
continue to carry out its mission of educating the public as we advocate
for a single payer system. As others continue with their efforts to
improve the system, we encourage them to simultaneously actively support
the golden standard of a single payer national health program. All of us
share the common goal of health care justice for all.