Fwd: qotd: McCanne on free markets in health care

_______________________________________________
Quote-of-the-day mailing list
Quote-of-the-day@mccanne.org
http://two.pairlist.net/mailman/listinfo/quote-of-the-day

-------- Original Message --------
Subject: qotd: McCanne on free markets in health care
Date: Thu, 6 Sep 2012 08:02:30 -0700
From: Don McCanne <don@mccanne.org>
To: Quote-of-the-Day <quote-of-the-day@mccanne.org>



The Orange County Register
August 19, 2012
First, do no harm; second, nationalize
By Teryl Zarnow

(Dr. Don) McCanne, now 74, volunteers as a policy fellow for Physicians
for a National Health Program, where he was a past president. His group
favors a single-payer national health program often called "Improved
Medicare for All."

It's not socialized medicine, just socialized insurance.

I can't decide if the doctor is out of touch with reality or a prophet
in blue jeans.

Link for full article:
http://www.ocregister.com/news/-183873-ocprint--.html

And...

The Orange County Register
August 25, 2012
Health care cure is an Rx for economic ruin

NEWPORT COAST, Anita Boyd:

Columnist Teryl Zarnow failed to do her homework. "First, do no harm;
second, nationalize" [Aug. 19] would be better titled, "No choice for
patients." What was presented as a "news" article was a one-sided
promotional piece for socialized medicine.

Perusing the online mission statement of "Physicians for a National
Health Care Program," one notes that "the program should be financed by
truly progressive taxation," and "views this campaign as part of the
campaign for social justice in the United States." Among its allied
groups are All Unions Committee for Single Payer Healthcare, Progressive
Democrats of America, and Healthcare-NOW!

The leadership, membership and network are particularly illustrative of
those wishing to "change" America, including Kim Gandy and Terry
O'Neill, past and present presidents of NOW, respectively; Medea
Benjamin of Code Pink San Francisco. The California Nurses Association
participates to "provide leadership in winning organized labor support
for HR676," which is the single-payer bill sponsored by John Conyers,
D-Mich., in the House of Representatives.

The smiling Dr. Don McCanne and his cadre of liberal progressives
speciously suggest that the "cure" for health care in America is another
entitlement to be paid for through the income tax system, as if this
country is not already $16 trillion in debt (not counting unfunded
liabilities.) The state of our entitlement system is completely ignored:
Social Security is operating in the red with more funds flowing out than
in for the first time in our nation's history, propped up by a "trust
fund" consisting of IOU's from the Treasury. Medicare will follow that
scenario sooner, rather than later, now that Obamacare has siphoned $716
billion in funding from Medicare over the next 10 years. All of this
while Dr. McCanne proposes to place yet another burden on the barely 50
percent of Americans who pay taxes, mostly to be borne on the backs of
the middle class, for that is where one finds the real wealth of this
country. McCanne's "cure" for health care is a prescription for the
financial collapse of this country.

Using Nobel Laureate Milton Friedman's logic, a medical system that
provides the best quality to the most must necessarily embrace
free-market principles, but the free market is absent in our health care
industry today. In 1945 Congress passed the McCarran-Ferguson Act, which
exempted the business of medical insurance from federal antitrust laws.

Thus insurance companies may freely conspire to price-fix without legal
repercussion, and consumers cannot readily compare prices for products
and services. Coupled with expensive and unnecessary tests defensively
prescribed to ward off meritless malpractice suits, our system is
certainly sick, but it is not incurable. Just as the computer evolved
from a slow, clunky but pricey desktop to a sleek, fast laptop at less
than one-fourth the price of the original 30 years ago, competition and
innovation can bring down the cost of health care, improve quality and
enhance affordability. A free-market prescription begins with the
embrace of free-market principles: repealing McCarran-Ferguson, posting
prices for services and products, competition across state lines, tort
reform and empowering the consumer.

The inevitable result of McCanne's alternative is all too evident in the
United Kingdom's single-payer system, where months-long waits for simple
surgeries are commonplace, and breast cancer patients were denied the
use of life-saving Tamoxifen until public outrage became so loud that
the government caved. How many lives were lost before this concession?
There was no choice for patients under this plan. There will be none
under Dr. McCanne's.

http://letters.ocregister.com/2012/08/25/health-care-cure-is-an-rx-for-economic-ruin/

And...

The Orange County Register
September 5, 2012
How the U.S. should fix health care

SAN JUAN CAPISTRANO, Don McCanne, M.D., Senior Health Policy Fellow,
Physicians for a National Health Program:

Letter-writer Anita Boyd ["Health care cure is an Rx for economic ruin,"
Aug, 23], in responding to Teryl Zarnow's column on me and my advocacy
for single-payer reform ["First, do no harm; second, nationalize," Aug.
19], stated, "Using Nobel Laureate Milton Friedman's logic, a medical
system that provides the best quality to the most must necessarily
embrace free-market principles, but the free market is absent in our
health-care industry today."

She then proposes a "free-market prescription." In doing so, she ignores
Nobel Laureate Kenneth Arrow's seminal work of a half century ago
demonstrating that health care fails competitive market preconditions,
and "when the market fails to achieve an optimal state, society will, to
some extent at least, recognize the gap and nonmarket social
institutions will arise attempting to bridge it."

In 2004, I was on a panel debate with Milton Friedman discussing
prescription drugs. In that debate he said, regarding the government's
defense of patents, "My initial reaction was to say, of course we want
to let the market completely work, and instead of having the government
defend the patent, let the patent owner defend it. But the more you look
at it, the more you see that's inconsistent." He also acknowledged the
importance of government in drug research. Even in Friedman's view, pure
free markets are an illusion.

Further, the oracle of free markets, Noble Laureate Friedrich A. Hayek,
in "The Road to Serfdom," wrote, "There is no reason why, in a society
which has reached the general level of wealth ours has, (the certainty
of a given minimum of sustenance) should not be guaranteed to all
without endangering general freedom; that is: some minimum of food,
shelter and clothing, sufficient to preserve health. Nor is there any
reason why the state should not help to organize a comprehensive system
of social insurance in providing for those common hazards of life
against which few can make adequate provision."

Every other wealthy nation provides comprehensive health care to
virtually everyone, and they do it at a per person cost that averages
close to half of what we spend. The secret is that they all use some
form of social insurance, acknowledging the fact that health care
markets inevitably fail for far too many with significant health care needs.

The Affordable Care Act of President Barack Obama supposedly relies on
market principles by expanding competition of private health plans.
Under the act, 30 million people will remain uninsured, inadequate
health plans with low actuarial values will become the new standard and
costs will continue to increase out of control. This is the most
expensive of all possible models of health care reform, and yet falls
miserably short of achieving a high-performance system. It is a mistake
to pretend that markets will work since free markets do not and cannot
possibly ever exist in health care, as the current reform effort once
again demonstrates.

As Herbert Stein would say, the current status cannot continue. It is
absolutely inevitable that eventually we will enact some form of social
insurance. Although there are several possible models, the most likely
for the United States will be our popular Medicare program, in an
improved version. It would cover everyone. It would rely on progressive
taxes to make it affordable based on ability to pay. It would improve
efficiency, especially by eliminating the profound administrative waste
that characterizes our current, fragmented, dysfunctional financing
system. It would remove private insurer intrusions, returning choice in
actual health care to the patient. Though a public social insurance
program, it would perpetuate our private health care delivery system
(i.e., it is not socialized medicine). Especially important is that it
would exercise its purchasing power as a public monopsony, finally
bending the cost curve to sustainable levels.

Much of the debate today includes distortions and exaggerations, driven
by ideology. In this information age, the true facts are readily
available. Instead of chasing after the ever-elusive fantasy of free
markets in health care, we should join together in supporting the
crafting of a bona fide social insurance program that works for all of
us, based on solid health policy science.

http://letters.ocregister.com/2012/09/05/how-the-u-s-should-fix-health-care/

Fwd: qotd: Swiss lessons on cost sharing

_______________________________________________
Quote-of-the-day mailing list
Quote-of-the-day@mccanne.org
http://two.pairlist.net/mailman/listinfo/quote-of-the-day

-------- Original Message --------
Subject: qotd: Swiss lessons on cost sharing
Date: Wed, 5 Sep 2012 11:09:15 -0700
From: Don McCanne <don@mccanne.org>
To: Quote-of-the-Day <quote-of-the-day@mccanne.org>



Preventive Medicine
In press - Draft published online August 23, 2010
High prevalence of forgoing healthcare for economic reasons in
Switzerland: A population-based study in a region with universal health
insurance coverage
By I. Guessous, J.M. Gaspoz, J.M. Theler, H. Wolff

Health insurance is compulsory for all citizens in Switzerland and
insurance premiums are paid independently of income. Health insurance
covers the costs of medical treatment and hospitalization for the
insured. The insured person pays part of the cost of treatment: an
annual flat deductible, called the franchise, chosen by the insured
person (with premiums adjusted accordingly) and a 10% co-pay of the
costs up to a stop-loss annual amount of CHF 700 (1CHF≈1$). Between 1099
and 2010, health insurance premiums increased by 77%, coupled with
increasing out-of-pocket payments. Increasing out-of-pocket spending
may, at least in some settings, reduce the use of clinically important
services and drugs to prevent the onset and progression of chronic
disease (Paez et al., 2009).

We aimed to determine the characteristics of participants who report
forging healthcare and to describe the past 4-year trend for forgoing
healthcare for economic reasons.

Abstract

Objective

To investigate the determinants and the 4-year evolution of the forgoing
of healthcare for economic reasons in Switzerland.

Method

Population-based survey (2007–2010) of a representative sample aged
35–74 years in the Canton of Geneva, Switzerland. Healthcare forgone,
socioeconomic and insurance status, marital status, and presence of
dependent children were assessed using standardized methods.

Results

A total of 2601 subjects were included in the analyses. Of the subjects,
13.8% (358/2601) reported having forgone healthcare for economic
reasons, with the percentage varying from 3.7% in the group with a
monthly income ≥ 13,000CHF (1CHF ≈ 1$) to 30.9% in the group with a
monthly income < 3000CHF. In subjects with a monthly income < 3000CHF,
the percentage who had forgone healthcare increased from 22.5% in 2007/8
to 34.7% in 2010 (P trend = 0.2). Forgoing healthcare for economic
reasons was associated with lower income, female gender, smoking status,
lower job position, having dependent children, being divorced and
single, paying a higher deductible, and receiving a premium subsidy.

Conclusion

In a Swiss region with universal health insurance coverage, the reported
prevalence of forgoing healthcare for economic reasons was high and
greatly dependent on socioeconomic factors. Our data suggested an
increasing trend among participants with the lowest income.

Highlights

► Forgoing healthcare for economic reasons is frequent in a region of
Switzerland.

► This prevalence varies with reported monthly household income category
from 3.7% to 30.9%.

► Data suggest an increasing 2007–2010 trend among participants with the
lowest income.

► Risk factors include gender, smoking, occupation, children, being
divorced, and insurance status.

► Forgoing healthcare is associated with worse self-rated health status.

http://www.sciencedirect.com/science/article/pii/S0091743512003787


Comment: Conservatives in the United States often praise the Swiss
health care financing system largely because it is composed of a choice
of private health plans (although they may not like the facts that it is
compulsory, that it is heavily regulated, and that it is one of the most
expensive financing systems in the world). So what is the policy lesson
from this study of the Swiss system?

The out-of-pocket deductibles and coinsurance result in a high
prevalence of forgoing health care for economic reasons. The prevalence
is inversely related to household income, but even at the highest income
levels, some do forgo health care for economic reasons. Forgoing health
care is associated with worse self-rated health status, and reduces the
use of clinically important services and drugs.

Other nations have shown that you do not have to have deductibles,
co-payments, and coinsurance to control health care spending. Since
these cost sharing measures do have the detrimental effect of reducing
the use of clinically important services and drugs, they should be
rejected as bad policy. The other measures inherent in a well designed
single payer system obviate the necessity of patient cost sharing.

qotd: Covering part time and seasonal employees

Health Affairs Blog
August 31, 2012
Implementing Health Reform: A Summer Lull
By Timothy Jost

Employment Status And Waiting Periods

On August 31, 2012, the IRS released Notice 2012-58 addressing the
question of how full-time employment status is to be determined for
deciding whether an employer owes a tax penalty for under section 4980H
for failing to provide health insurance (or adequate or affordable
health insurance) to full-time employees who consequently receive
premium tax credits. On the same day, the IRS, Department of Labor, and
Department of Health and Human Services jointly released notice 2012-59
addressing the question of how the ninety-day waiting period limit for
employment-based health insurance enacted by the Affordable Care Act as
section 2708 of the Public Health Services Act would be applied.

The application of both the penalty and waiting period is quite
straightforward for employees hired on a full-time basis. An employer
that offers health insurance must cover a new full-time employee no
later than 90 days after employment. A large employer (with more than
50 full-time-equivalent employees) must offer adequate and affordable
coverage to employees hired as full-time employees or risk owing a tax
penalty if an employee goes to the exchange to obtain a premium tax credit.

The problem is how to handle employees who work variable hours and
seasonal employees. Full-time employment is defined as 30 hours a week
(or 130 hours a month), but many employees work 20 hours one week and 45
hours the next, or may work 40 hours a week but only for two months a
year during the growing or holiday seasons. The notices address how
this situation should be handled.

Notice 2012-58 defines three time periods— measurement periods,
stability periods, and administrative periods. New employees who are
not expected to work full time (variable hour or seasonal employees) can
be employed without health insurance for an "initial measurement period"
of between 3 and 12 months, as determined by the employer, during which
the employees hours are tracked. If at the end of that period it
becomes clear that the employee has been working an average of 30 hours
a week or more, the employer must offer health insurance to the employee
for a "stability period" of at least 6 months or for the length of the
initial measurement period, whichever is longer.

Alternatively, if the employee worked on average less than 30 hours a
week, the employer can treat the employee as a part-time employee for a
subsequent stability period and not offer insurance. The employer can
take up to 90 days for an "administrative period" before the stability
period begins during which the employer can determine eligibility and
add the employee to its health insurance program. In no event, however,
can the combined measurement period and administrative period extend
beyond the last day of the first calendar month beginning on or after
the one-year anniversary of the employee's start date.

Ongoing employees with variable hours can also be made subject to
measurement periods and stability periods, with the measurement periods
lasting 3 to 12 months and the stability periods lasting for the same
period of time but in no event less than 6 months. If an ongoing
employee is determined to be part-time during any measurement period,
the employer can deny coverage to that employee without risking a
penalty for the next stability period. If the employee is determined to
be full-time during the measurement period, the employer must insure the
employee for the following stability period or risk paying a tax penalty.

In sum, variable-hour employees may be insured one year, not insured the
next, depending on their hours of work during the prior "measurement
period." An employer can take up to 90 days following the measurement
period for an administrative period before coverage begins, but if an
employee is already covered under a stability period, the employer must
make the continuing eligibility determination before the stability
period ends to avoid gaps in coverage.

Under notice 2012-59, new employees reasonably expected to work
full-time cannot be required to wait more than 90 days to be enrolled in
coverage offered by an employer. An employer may, however, impose a
measurement period on variable-hour employees of up to 12 months,
consistent with the scheme described in Notice 2012-58, before
determining that an employee is in fact a full-time employee. An
employer may also impose other conditions before enrolling the employee,
such as requiring an employee to complete enrollment forms or work a
reasonable number of hours (not exceeding 1200) before coverage begins,
as long as the condition is not designed to avoid compliance with the 90
day waiting period.

Finally, Notice 2012-58 continues the expressed IRS policy of allowing
an employer to avoid penalties as long as the employee's contribution
for premiums does not exceed 9.5 percent of the employee's W-2 wages,
regardless of the employee's actual household income. The Notice does
not address the important question, currently open, of whether
affordability is to be calculated based on the employee's premium share
for self-only or family coverage. Employers can rely on the safe
harbors provided by both notices through 2014.

Some method is necessary for determining when employees who are hired
without an expectation that they will be full-time employees in fact
become full-time employees. But giving employers more than a year to
figure out whether an employee is working full-time seems excessive.
Under previous proposed guidance, a maximum of 6 months was allowed
for this determination. This approach will end up increasing the number
of the uninsured, or at least those insured through the exchanges
without employer assistance, and is to that extent a disappointment to
consumers.

http://healthaffairs.org/blog/2012/08/31/implementing-health-reform-a-summer-lull/


Comment: The administrative nightmare created by the Affordable Care
Act not only adds to the expensive public and private bureaucratic waste
that characterizes our health care system, it also fails to adequately
address fundamental issues such as equity and universality. This brief
summary of the rules establishing whether or not an employer must
provide coverage for employees based on a variable number of hours
worked and on seasonal variations in employment, and how soon the
coverage must be offered, demonstrates not only the complexity of just
this one issue, but also demonstrates how easy it is for an individual
to fall through the cracks.

Under a single payer system, everyone is covered. There would be no need
to be concerned about part time and seasonal work in determinations of
eligibility. And there would be no need for all of the rest of the
administrative complexity that this law creates - complexity that shoves
patients in and out of different programs and will leave 30 million with
no coverage at all. Insane.