Bipartisan plan to gut Medicare: Vouchers, Premium Support, and Competition

Bipartisan plan to gut Medicare: Vouchers, Premium Support, and Competition

Democrat Ron Weiden and Republican Paul Ryan are pushing a plan to send the Medicare we know into a death spiral.  Medicare would become voucher system, with recipients receiving checks based on the premiums of the second-cheapest Medicare-HMO in an area.  Annual voucher increases would be limited to Gross National Product  growth plus one percent, far less than the historical growth rates of Medicare costs.  Medicare’s premiums would be higher than HMOs premiums, because Medicare would be forced to accept sicker, more expensive patients, who would not survive under HMOs managed care.  Medicare recipients would have to pay the difference between Medicare’s higher premiums and the vouchers based on the 2nd-cheapest-HMO plan, out of their own pockets, which would steadily drive healthier patients out of Medicare.  Medicare would fall into a death spiral of higher premiums, fewer, sicker patients, and less funding.  This plan was also promoted in the 2003 Medicare Modernization Act.  See http://tinyurl.com/7enm8eo .

New York Times, December 14, 2011

Lawmakers Offer Bipartisan Plan to Overhaul Medicare

By ROBERT PEAR

WASHINGTON — A Democratic senator, Ron Wyden of Oregon, and a Republican member of the House, Paul D. Ryan of Wisconsin, unveiled a bipartisan plan on Wednesday to revamp Medicare and make a fixed federal contribution to the cost of coverage for each beneficiary.

The lawmakers aim to reshape the debate over the giant health insurance program by addressing concerns that have provoked fierce opposition to similar ideas in the past.

Just as important as the details of their proposal was the fact that the two were working together on an issue that both parties have exploited for political advantage.

In 2010, many Republicans won House seats — and the support of older voters — by arguing that President Obama’s health care law would damage Medicare. Democrats are hoping to retake the House by arguing that Mr. Ryan and other House Republicans are pushing for the privatization of Medicare, which they say could greatly increase costs for beneficiaries.

The new Wyden-Ryan proposal, by blurring the contrast between the parties on this issue, could make it more difficult for Democrats to win the argument.

The proposal would make major structural changes in Medicare and limit the government’s open-ended financial commitment to the program.

Under the proposal, known as premium support, Medicare would subsidize premiums charged by private insurers that care for beneficiaries under contract with the government.

Congress would establish an insurance exchange for Medicare beneficiaries. Private plans would compete with the traditional Medicare program and would have to provide benefits of the same or greater value. The federal contribution in each region would be based on the cost of the second-cheapest option, whether that was a private plan or traditional Medicare.

In addition, the growth of Medicare would be capped. In general, spending would not be allowed to increase more than the growth of the economy, plus one percentage point — a slower rate of increase than Medicare has historically experienced.

To stay under the limit, Congress could cut payments to providers and suppliers responsible for the overspending and could increase Medicare premiums for high-income beneficiaries, the lawmakers said.

The proposal is sure to come under fire from beneficiaries and Democratic lawmakers who see themselves as the pre-eminent defenders of Medicare.

For his part, Mr. Wyden said: “Medicare is the most important fiber in the social safety net. I would never do anything to shred it, weaken it or harm it in any way. Our proposal places traditional Medicare, long supported by progressives, alongside a menu of private alternatives that provide the choice and competition long supported by conservatives.”

Unlike the Ryan budget blueprint approved by the House in April, Mr. Ryan said, the new proposal would preserve the traditional fee-for-service Medicare program as an option for all beneficiaries. “Our proposal harnesses the power of competition to address the root cause of medical inflation,” said Mr. Ryan, the chairman of the House Budget Committee.

Democrats expressed concerns about the proposal based on policy and politics. A senior Democratic Congressional aide said, “This plan gives bipartisan political cover to Ryan and other Republicans against whom we have been waging a very successful political offensive.”

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Severe, Long-Term Medicare and Medicaid Cuts Planned Will Impact Jobs Picture

The New York Times says cutbacks in healthcare planned in future years are so severe that the resulting layoffs and hiring freezes will  worsen the nation’s unemployment.   We need to take this very seriously. Half the Obama’s health plan is funded by scaling back $575 billion in planned increases in Medicare spending over the next decade, money intended to care for baby-boomers as they age into Medicare. Democrats and Republicans alike are calling for hundreds of billions in additional Medicare cuts.  All of these Medicare cuts are aimed at the doctors, hospitals, nursing homes, rehab facilities serving Medicare patients.  The cuts will result in many of these providers either dropping out of Medicare or giving dangerous care because of short-staffing.  Read more at http://wp.me/p3xLR-pJ . Proposed cuts to Medicaid providers, and cuts in Medicaid enrollment and services are even worse.

Capping and even cutting Medicaid and Medicare spending while allowing costs to rise to accommodate insurance, drug, and hospital profits means that government and its corporate partners are tossing away the notion of equal care for seniors, children, people with disabilities, and low-income workers.

New York Times, Thursday, August 18, 2011

Cuts in Health Care May Undermine Role in Labor Market

By REED ABELSON and KATIE THOMAS

Even during months of stubborn unemployment, the health care industry has provided a solid underpinning, reliably adding jobs in an otherwise dismal environment.

For example, hospitals, nursing homes and the like added about 430,000 jobs during the recession, as the country shed 7.5 million jobs. With the latest government reports showing a meager overall gain of 117,000 jobs in July, health care remained a significant contributor with an additional 31,000 jobs for the month, a tad higher than an average monthly addition of 25,000 health jobs in the last year. Hospitals, which had a slight decline in June, added 14,000 jobs in July.

While few experts can predict how the stock market’s gyrations and government cutbacks this month will affect the health industry, several health industry analysts warn that the sector is showing signs of economic sluggishness that has long kept other business sectors beleaguered.

The situation has led many in the health industry to caution that it cannot be relied upon to keep hiring workers. “It’s not realistic to believe that we’re going to continue to generate job growth when you’re speaking about Medicare and Medicaid reductions in the hundreds of billions of dollars over the next few years,” said Daniel Sisto, president of the Healthcare Association of New York, which represents the state’s hospitals and health systems.

Companies that rely on government spending have been bracing for deeper reductions, and President Obama recently alluded to another round of belt-tightening from one of the industry’s bedrock payers — Medicare.

Signs of a gloomier outlook have been surfacing in various spots, from a slowing in new construction plans to falling share prices of nursing home companies to announced layoffs among hospital support staff.“Nobody is sure what will happen,” said Alan M. Garber, a physician and health policy expert at Stanford. The cuts in government programs like Medicare and Medicaid, and pressure to reduce costs, are thwarting health care employers in trying to meet the rising demand for their services.

“The health care industry is facing greater uncertainty than in any time in memory,” Dr. Garber said.

Yet even though economists and other experts still predict increasing demand for health care as the population ages, with an accompanying demand for job growth, health care officials and executives cite a daunting cascade of recent events as reasons to reassess any expansions.

They point to Congress’ intent to reduce spending, economically depressed states struggling to deal with a rash of cuts in Medicaid programs and the continued uncertainty of financial costs that will be imposed by the federal health care law, including contradictory lower court decisions about the constitutionality of various provisions.

A survey by the Conference Board, a business research group, found that help-wanted ads for health care providers and technicians fell by 61,200 listings in July.

In Florida, for example, health care led the state in job gains during the recession — it was the only industry that did not lose jobs during that time. But since September of last year, the leisure and hospitality industry has been adding more jobs, according to a state economist.

The Palo Alto Medical Foundation, a large physician group in Northern California that employs 5,500 people, including 1,000 doctors, says it has no plans to add many more people in the near future. “Really our focus these days is to do more with the assets we have,” said Cecilia Montalvo, the vice president for strategic development for the medical group.

Hospitals also appear to be slowing the pace of building, as projects begun before the recession started are now being completed. The volume of tax-exempt debt for hospitals in the first half of the year has fallen by nearly half from a year ago, said David Johnson, a managing director at BMO Capital Markets. “We’re overinvested in hospitals and hospital beds,” he said.

The University of Michigan Health System, for example, is adding some 560 jobs as a result of new children’s and women’s hospitals it plans to open soon and an expansion of its emergency department. But Doug Strong, who heads the system’s hospitals, said his overall goal is to shrink his work force in future years as he tries to make the system more efficient.

While he expects the demand for health care services to rise, he believes he needs to deliver that care with fewer people at less cost. “I think that is what the nation is asking of all of us,” he said.

The impact of state cuts in Medicaid are already being felt in doctor’s offices, hospitals, nursing homes and home health agencies around the country. Hospitals experienced reductions in Medicaid reimbursement in 37 states for next year’s budgets, according to Lisa Goldstein, an analyst at Moody’s, who predicts further cuts.

At the Elliot Health System in Manchester, N.H., the seemingly abrupt decision by state lawmakers to sharply reduce hospital reimbursements led the hospital to recently lay off 182 people.

“For the last 10 years, we’ve been pretty stable and we’ve been able to grow,” said Elliot’s chief executive, Doug Dean. But faced with the loss of millions of dollars in Medicaid revenue that would wreak havoc on the coming hospital budget, Mr. Dean said he had no choice but to cut jobs. “It was simply because of the economics of Medicaid,” he said. Elliot is among a group of hospitals filing a lawsuit to stop the cuts.

Health care employers are also confronting cuts to the federal Medicare program. In July, nursing home operators learned their reimbursements would be cut by 11 percent in October, and hospitals expect further reductions in what they are paid under the new health care law as well as in future efforts to reduce the federal deficit.

Still, these continue to be boom times in many corners of the industry. Partners in Care, a New York nonprofit provider of home health care services, is hiring so many home health aides that it recently opened a second training center to handle the flood of new employees.

Its staff of aides has grown from close to 5,800 in 2006 to about 9,200 today. In June, the group, which is part of the Visiting Nurse Service of New York, hired 374 new people, the second-biggest month in its history.

Jay Conolly, vice president of human resources at Partners in Care, said his group is benefiting, not just from the growing elderly population, but also from the consolidation of nursing homes and hospitals in the New York area and a heightened interest in low-cost alternatives to inpatient care. The Bureau of Labor Statistics has predicted that jobs will grow faster in the home health care area than in any other section of the health care industry.

“There’s never been enough home health aides, and there never will be,” Mr. Conolly said.

And many expect that when the economy finally does rebound, hiring will, again, take off, especially when more people are expected to be insured under the federal health care law. Geraldine Bednash, chief executive of the American Association of Colleges of Nursing, expects there is pent-up demand for their services, especially for nurse practitioners and nurse midwives, who would work in primary care. “We are going to see this huge onslaught of need for nurses,” she said. “So we’re in a blip, that’s all.”

There are some who wonder whether the country should continue to rely on health care as a stalwart supplier of new jobs. If spending on health care continues at its current pace, it will choke out other vital sectors and end up hurting the rest of the economy, said Joshua Shapiro, chief United States economist at MFR Inc. “I think the path that we’re on now is clearly unsustainable,” he said.

Tom Torok contributed reporting.

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“Everybody In! Nobody out!” Means No Exclusion of Undocumented Immigrants

Since its inception, Single-Payer healthcare’s most enduring rallying theme has been “Everybody In!  Nobody Out!”  This vision, which resonates with our most basic striving for equality, is being challenged now, as progressives and sections of labor rally behind Bernie Sanders’ new single-payer law, S.915, which contains the fatal flaw of excluding undocumented immigrants.  (Section 102, Universal Entitlement)  Single Payer has always been about EQUAL, comprehensive, accessible, affordable, economical healthcare for EVERYONE.  The damage the working class would suffer from passing this bill as is, and splitting us into “legal” and “not legal” groupings, would negate any advances that would be made by getting rid of  insurance companies.

I would like to present a resolution that was submitted to the American Public Health Association in response to the Obama Health Plan’s exclusion of undocumented immigrants.  In the year before the American Public Health Association (APHA) had its 2010 annual meeting on the theme of “Social Justice,” a massive health reform law had passed which totally excluded some 12 million undocumented immigrants. And while immigrants had been hoping for far-reaching reforms and a measure of long-delayed justice, harassment and deportation of undocumented immigrants had markedly increased.  In response, members of the Health-Not-War group at APHA proposed the following resolution to send an unequivocal message that this is intolerable to us as human beings and as public health workers.

Opposing the Exclusion of Undocumented Immigrants from Health Care Reform

November 5, 2010

The American Public Health Association,

Noting that this March, 2010, Congress passed and the President signed a massive Patient Protection and Affordable Care Act (PPACA), which not only leaves at least 23 million uninsured¹, but explicitly excludes ALL undocumented immigrants,¹ and,

Noting that the PPACA even forbids undocumented immigrants from using their own money to buy health insurance at discounted prices through the exchanges,² and,

Noting that, of all groups, undocumented immigrants have arguably the greatest need of having healthcare expanded to them because:

FIRST: Undocumented immigrants are twice as likely to be uninsured as documented immigrants,³ and,

SECOND: Undocumented immigrants are generally excluded from Medicaid and SCHIP by federal law, and state-funded exceptions to this pattern will become rarer as state budgets languish. Moreover, most undocumented immigrants must wait five years after gaining legal residency to apply for Medicaid and SCHIP.⁴

THIRD: Undocumented immigrants’ future access to healthcare will be more challenging because  (1) increasing raids⁵ and deportations⁶, Arizona’s SB 1070⁷, and the Secure Communities Initiative⁸ are likely to make undocumented immigrants more fearful of registering at health facilities and traveling to them, (2) State and County budget cuts are eliminating health services for  undocumented immigrants⁹, (3) Anti-immigrant groups are pressing jurisdictions to withdraw health services from undocumented immigrants¹⁰, and (4) Legislators are considering withdrawing citizenship from US-born children of undocumented immigrants, compromising their children’s access to healthcare as well as overturning a 150-year old constitutional right,¹¹ and,

FOURTH:  Many of the factors contributing to poor access to healthcare for immigrants in general are worse for undocumented immigrants, such as immigrants’ fears of presenting at health institutions, immigrants’ increasing unemployment rates combined with the higher cost of buying individual insurance, and health institutions’ fear of losing funding for treating immigrants.   Even among the insured, immigrants’ and their children’s access to ambulatory and emergency care is worse than that of citizens,¹² and,

FIFTH: Future funds for hospitalization of the uninsured, including undocumented immigrants, will be reduced, as PPACA reduces Medicare and Medicaid Disproportionate Share Hospital payments to hospitals serving the uninsured. Though these hospitals’ burden of uninsured will drop over time, PPACA specifies DSH payments must drop faster¹³, and Center for Medicare & Medicaid Services Chief Actuary estimated that the combined reductions at $64 billion over ten years.¹⁴

SIXTH: Reducing undocumented immigrants’ already poor access to healthcare is particularly dangerous and morally indefensible in light of their increased rates of injury, illness¹⁵, and death¹⁶ from hazardous  occupations¹⁷ and housing¹⁸, compounded with their vulnerability to deportation if they report dangerous conditions or seek treatment.

Noting that measures taken to deny healthcare to undocumented immigrants often result in citizens losing healthcare also, as exemplified by the 2004 cancellation of Colorado’s Presumptive (Medicaid) Eligibility program, which had allowed pregnant women to receive prenatal care while their Medicaid applications were being processed. The entire program was eliminated because about half of the women were found to be ineligible by immigration status. Citizen and immigrant women alike were put at risk, as well as their unborn children.¹⁹

Noting that  APHA has taken a clear positions against withholding medical care from undocumented immigrants in its resolution 2001-23, which “Urges the President and the Congress to oppose denial of eligibility for programs providing nutritional, prenatal, public health, medical care, and behavioral health benefits and services to any person residing in the United States on the basis of her or his immigration status”;²⁰  its resolution 9501, which “Opposes any mandates and initiatives that would limit access to public health interventions and health services for undocumented and documented immigrants and their children;”²¹ and its resolution LB04-07, which “Deplores and warns against measures curtailing, eliminating, or disrupting health care to undocumented immigrants.”²²

And finally, noting that the recent passage of this massive Health Reform law that explicitly and categorically excludes the grossly underserved undocumented immigrant population presents public health advocates with a grave challenge,

Therefore, the American Public Health Association

1.  Calls on the President, and Congress to end the exclusion of healthcare for undocumented immigrants from Health Reform, and

2.  Calls on the President and Congress to support health reform that provides equal, comprehensive, affordable, accessible healthcare for every person, regardless of their status of health, employment, income, or legalization,  and

3.  Calls on the President and Congress to assure that community health centers receiving $11 billion of dollars of federal aid over the next five years through the PPACA²³ continue to give undocumented immigrants comprehensive health care, and

4.  Encourages public health advocates to attend future events on immigration reform (public rallies, demonstrations, press conferences and the like) with the demand of comprehensive, affordable, accessible medical care for all immigrants, regardless of legalization status.

References:

1.  Kaiser Health News. Some Will Remain Uninsured After Reform. Available at: http://www.kaiserhealthnews.org/Stories/2010/March/24/Some-Will-Remain-Uninsured.aspx.   Accessed October 3, 2010.

2.  Lewin Group.  Patient Protection and Affordable Care Act (PPACA): Long Term Costs for Governments, Employers, Families and Providers.   Available at: http://www.lewin.com/content/publications/LewinGroupAnalysis-PatientProtectionandAffordableCareAct2010.pdf.  p. 22.  Accessed October 3, 2010.

3.    Pew Hispanic Center.  Hispanics, Health Insurance and Health Care Access.   Available at: http://pewresearch.org/pubs/1356/hispanics-health-insurance-health-care-access.  Accessed October 3, 2010.

Working Immigrants.  Health uninsured rates among immigrants: far higher.  Available at: http://www.workingimmigrants.com/2009/08/health_uninsured_rates_among_i.html.  Accessed October 3, 2010.

4.   Kaiser Commission on Medicaid and the Uninsured,  Summary: Five Basic Facts on Immigrants and Their Health Care.   Available at: http://www.kff.org/medicaid/upload/7761.pdf.  Accessed October 3, 2010.

5.   Coalicion de Derechos Humanos.  Massive ICE sweep terrorizes Arizona communities following state passage of anti-immigrant profiling law.   Available at: http://www.derechoshumanosaz.net/index.php?option=com_content&task=view&id=166&Itemid=1.  Accessed October 3, 2010.

6.   Common Dreams.  Obama Administration Immigration Deportations Exceed Bush’s Record.   Available at: http://www.commondreams.org/print/56327.  Accessed October 3, 2010.

7.   Arizona Daily Star, National Physician Groups Condemn Arizona SB 1070.  Available at: http://azstarnet.com/news/blogs/health/article_ca3a8c46-62c6-11df-9a0a-001cc4c002e0.html.  Accessed November 3, 2010.

8.   San Francisco Immigrant Legal and Education Network.   San Francisco Immigrant Legal And Education Network Opposes The Implementation Of The Dangerous Secure Communities Program In San Francisco.   Available at: http://www.sfimmigrantnetwork.org/comments/sfilen_opposes_implementation_of_secure_communities_program_in_san_francisc, Accessed October 3, 2010.

9.   New York Times.  Reprieve Eases Medical Crisis for Illegal Immigrants.   Available at: http://www.nytimes.com/2010/01/06/us/06grady.html.  Accessed October 3, 2010.

Kaiser Daily Health Policy Report.  Economic Recession Forcing Local Health Departments To Reduce Services to Undocumented Immigrants.   Available at: http://www.kaisernetwork.org/daily_reports/rep_index.cfm?DR_ID=57497.  Accessed October 3, 2010.

New York Times,   Immigrants Facing Deportation by U.S. Hospitals.   Available at: http://www.nytimes.com/2008/08/03/us/03deport.html?_r=1&hp=&pagewanted=all.  Accessed October 3, 2010.

10.   Washington Independent.   Anti-Immigration Activists See Opportunity in Health Care Debate.  Available at: http://washingtonindependent.com/55044/anti-immigration-activists-see-opportunity-in-health-care-debate.   Accessed October 3, 2010.

11.   Newsweek Magazine.  The Next Front on Immigration.   Available at: http://www.newsweek.com/2010/08/01/the-next-front-on-immigration.html.  Accessed October 3, 2010.

Politico.  John McCain backs citizenship hearings.  Available at: http://www.politico.com/news/stories/0810/40589.html.  Accessed October 3, 2010.

12.   Health Affairs.  Left Out: Immigrants’ Access to Health Care and Insurance January/February 2001.   Available at: http://www.projectshine.org/files/shared_images/Left_Out.pdf ,   Accessed October 20, 2010.

13.   The Hospital & Healthcare Association of Pennsylvania.  The Patient Protection and Affordable Care Act

(PPACA) of 2010 and the Health Care and Education Affordability Reconciliation Act (HCEARA) of 2010. Available at: http://www.haponline.org/downloads/HAP_Summary_2010_PPACA_HCEARA_April2010.pdf.  Accessed November 4, 2010.

14.  Centers for Medicare & Medicaid Services. Estimated Financial Effects of the “Patient Protection and Affordable Care Act,” as Amended.  Available at https://www.cms.gov/ActuarialStudies/Downloads/PPACA_2010-04-22.pdf.  Accessed November 4, 2010.

15.  Moure-Eraso R,  Friedman-Jimenez G.  (2004) Occupational health among Latino workers: a needs assessment and recommended interventions.  New Solutions. 14/4:319-47.  Available at: http://www.nap.edu/openbook.php?record_id=10641&page=129.  Accessed November 4, 2010.

16.   Richardson, S. Fatal work injuries among foreign-born Hispanic Workers. Monthly Labor Review, October, 2005.   Available at:  http://www.bls.gov/opub/mlr/2005/10/ressum.pdf.   Accessed on November 4, 2010.

17.   APHA Policy Statement 2005-4: Occupational Health and Safety Protections for Immigrant Workers.  December 14, 2005.  Especially see Richardson S, Ruser J, Suarez P. Hispanic Workers in the United States: An Analysis of Employment Distributions, Fatal Occupational Injuries, and Non-fatal Occupational Injuries and Illnesses in National Research Council: Safety is Seguridad. Washington, D.C., National Academies Press, 2003.  Available at: http://www.nap.edu/openbook.php?record_id=10641&page=48  and http://www.nap.edu/openbook.php?record_id=10641&page=57.  Accessed November 4, 2010.

18.   Robert Wood Johnson Foundation.  Living in America: Challenges Facing New Immigrants and Refugees.  Available at: http://www.rwjf.org/files/publications/other/Immigration_Report.pdf.  Accessed November 4, 2010.

19.   Wall Street Journal.   Prenatal Care Is Latest State Cut In Services for Illegal Immigrants.   Available at: http://www.uniset.ca/naty/maternity/wsj_imm_med.htm.  Accessed October 3, 2010.

20.   APHA Policy Statement 2001-23: Protection of the Health of Resident Immigrants in the United States.  Available at: http://www.apha.org/advocacy/policy/policysearch/default.htm?id=262.   Accessed October 3, 2010.

21.   APHA Policy Statement 9501: Opposition To Anti-Immigrant Statutes.   Available at: http://www.apha.org/advocacy/policy/policysearch/default.htm?id=96.   Accessed October3, 2010.

22.   APHA Policy Statement LB04-07: Responding to Threats to Health Care for Immigrants.  November 9, 2004.

23.   PPACA Health Care Reform Timeline.   Available at: http://stabenow.senate.gov/healthcare/Health_Care_Timeline.pdf.  Accessed October 3, 2010.

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Health Reform may not be able to cover the uninsurables

The Hill, July 1, 2010

Health law risks turning away sick
By Julian Pecquet – 07/01/10 07:13 PM ET

The Obama administration has not ruled out turning sick people away from an insurance program created by the new healthcare law to provide coverage for the uninsured.

Critics of the $5 billion high-risk pool program insist it will run out of money before Jan. 1, 2014. That’s when the program sunsets and health plans can no longer discriminate against people with pre-existing conditions.

Administration officials insist they can make changes to the program to ensure it lasts until 2014, and that it may not have to turn away sick people. Officials said the administration could also consider reducing benefits under the program, or redistributing funds between state pools. But they acknowledged turning some people away was also a possibility.

“There’s a certain amount of money authorized in the statute, and we will do our best to make sure that that amount of money insures as many people as possible and does as much good as possible,” said Jay Angoff, director of the Office of Consumer Information and Insurance Oversight at the Department of Health and Human Services (HHS). “I think it’s premature to say [what happens] when it’s gone.”

The administration has not discussed asking Congress for more money down the line if the $5 billion runs out before Jan. 1, 2014. Uninsured sick people could start applying for participation in the high-risk insurance pools on Thursday.

Healthcare experts of all stripes warned during the healthcare debate that $5 billion would likely not last until 2014. Millions of Americans cannot find affordable healthcare because of their pre-existing conditions, and that amount would only cover a couple hundred thousand people, according to a recent study by the chief Medicare actuary.

Republicans continued to hammer that point on Thursday, asking HHS officials to brief them about the program.

We are “deeply concerned that these pools may not provide quality coverage or will limit enrollment,” Reps. Joe Barton (R-Texas), John Shimkus (R-Ill.) and Michael Burgess (R-Texas), the ranking members on the Energy and Commerce panel and its health and oversight subcommittees, wrote in a letter to HHS Secretary Kathleen Sebelius.

The letter requests a briefing on high-risk pools by July 15, particularly on three topics: protections and services in place “to make sure that access is efficient and unimpeded; whether HHS believes the program is financially sustainable through 2013; and details about how each state’s pool will be administered and what options they’ll have available.”

Leading health reform advocate Ron Pollack, founding executive director of Families USA, said the pools were a “very imperfect tool that could be implemented quickly” but were the best option available for the interim period before 2014.

“The pools are going to be helpful for a significant number of people,” he told The Hill, “but nobody thought they’re the ultimate answer for helping people with pre-existing conditions.”

Still, he didn’t rule out that Families USA could press lawmakers to allocate more money in a few years if it looks like the program needs it.

Each state has a certain budget allocation for its pool, and the first step to stay under budget would be to shift money around between states that don’t see a lot of applicants and those that do, said Richard Popper, deputy director of the Office of Consumer Information and Insurance Oversight at HHS.

“If we have that situation where we have strong demand in one state and not as strong demand in another state, the secretary of HHS after a year or two has the authority to reallocate the funding,” said Popper, who used to run Maryland’s high-risk pool.

“Along with that, we can work with the states to adjust their benefit structure, the deductibles, the co-pays, the overall plan structure to address some of those cost drivers, again to help the plan make it to 2014, when it will no longer be needed.”

In addition, Popper said, many people won’t be able to afford to participate in the program since premiums will range between about $140 and $900 a month, depending on applicants’ age and where they live. HHS estimates that at least 200,000 people will be in the program at any one time. To be eligible, applicants have to be citizens or nationals of the United States or be lawfully present; have a pre-existing medical condition; and have been uninsured for at least six months before applying for the high-risk pool plan.

“There are going to be meaningful premiums that are going to be required to stay in this plan — premiums in the hundreds of dollars every month,” Popper said. “There are a significant number of people out there with pre-existing conditions who are uninsured, but a significant number of those people … also have limited income. And some of them, while they may need this plan, the premiums may not be something they can afford.

“We have that to think about as well,” he added. “But for those who can afford it, this is going to be a great, great plan.”

If it looks like too many people are signing up — states will get monthly updates on how many people they can cover with the money they have left — there’s always the option of turning people down.

The bill “does give the secretary authority to limit enrollment in the plan … nationally or on a state-by-state basis,” Popper said. “So that is present, but at this point, we’re starting with no one in the plan as of today … so we don’t see that happening anytime soon.”

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British Medical Journal: ‘Obama’s reform: no cure for what ails us’

British Medical Journal, March 30, 2010

Obama’s reform: no cure for what ails us

By David U. Himmelstein and Steffie Woolhandler

British Medical Journal, March 30, 2010

As the applause fades for President Obama’s health reform, David Himmelstein and Steffie Woolhandler fear that the new law will simply pump funds into a dysfunctional, market driven system

It was a stirring scene: President Obama signing the new health reform law before a cheering crowd, and a beaming vice president whispering in his ear, “This is a big f*cking deal.” As doctors who have labored for universal health care we’d like to join the celebration, but we can’t. Morphine has been dispensed for the treatment of cancer – the reform may offer a bit of temporary relief, but it is certainly no cure.

The new law will pump additional funds into the currently dysfunctional, market driven system, pushing up health costs that are already twice those in most other wealthy nations. The Medicaid public insurance program for poor people will expand to cover an additional 16 million poor Americans, while a similar number of uninsured people with higher incomes will be forced to buy private policies. For the “near poor” the government will pay part of these private premiums, channeling $447 billion in taxpayer funds to private insurers over the next decade.

Unfortunately, private insurers win in the marketplace not through efficiency or quality but by maximizing revenues from premiums while minimizing outlays. They pursue this goal by avoiding the sick and forcing doctors and patients to navigate a byzantine payment bureaucracy that currently consumes 31 percent of total health spending. The health reform bill’s requirement that uninsured people buy insurers’ defective products will fortify these firms financially and politically.

Meanwhile insurers will exploit loopholes to dodge the law’s restrictions on their misbehaviors. For instance, the limit on administrative overheads will predictably elicit accounting gimmickry, for example by relabeling some insurance personnel as “clinical care managers.” While insurers are prohibited from “cherry picking” – selectively enrolling healthy, profitable patients – they’ve circumvented similar prohibitions in the Medicare health maintenance organizations (HMOs). The ban on revoking policies after an individual falls ill similarly replicates existing but ineffective state bans.

Sadly, even if the reform works as planned, 23 million people will remain uninsured in 2019. Meanwhile the public and other safety net hospitals that uninsured people rely on will have to endure a $36 billion cut in federal government funding.

Moreover, many Americans will be left with coverage so skimpy that a serious illness could lead to financial ruin. At present, illness and medical bills contribute to 62 percent of all bankruptcies, with three-quarters of the medically bankrupt being insured. The reform does little to upgrade this inadequate coverage; it mandates that private policies need cover only 70 percent of expected medical costs. The president has often promised that “if you like your current coverage you can keep it.” Yet Americans who now get job based insurance will be required to keep it – whether they like it or not. And many who receive full coverage from an employer will face a steep tax on their health benefits from 2018.

Soaring costs and rising financial strains seem inevitable, despite claims that the reform will “bend the cost curve.” Computer vendors have trumpeted imminent cost savings for half a century (see, for instance, a video made by IBM in the 1960s, available at http://bit.ly/cckdtB). Prevention, though laudable, does not generally reduce costs. Windfalls from prosecuting fraud and abuse have been promised before. The new Medicare advisory board merely tweaks an existing panel. Without an enforcement mechanism, stepping up comparative effectiveness research cannot overcome drug and equipment makers’ promotion of profligate care. Existing insurance exchanges where patients can compare and shop among private plans haven’t slowed growth in costs for public workers nationally or in California. And the mandated experiments with capitated payment systems are warmed-over versions of President Nixon’s pro-HMO policies and subsequent failed initiatives to fix America’s health cost crisis through managed care.

Experience with reforms in Massachusetts in 2006 – the template for the national bill – is is instructive. Our state’s costs, already the highest of any state, grew by 15 percent in the first two years after reform, twice the national rate. Moreover, capitated physician groups had costs at least as high as those who were paid on a fee for service basis. Meanwhile, after initial improvements in the state, access to care has begun to deteriorate, and the state has begun to cut back coverage.

Overall, President Obama’s is a conservative bill, drafted in close consultation with the drug and insurance industries. Its modest salutary provisions – such as an extra $1 billion a year for community health centers and the expansion of Medicaid – mirror measures that have been passed even under Republican regimes. Its central tenet, that the government should force citizens to buy coverage from a for-profit firm, was first proposed by Richard Nixon when faced with the seeming inevitability of national health insurance in 1972. Similarly, Mitt Romney, a favorite of conservatives, embraced the Nixon approach as Massachusetts governor in 2006, a stance he has now abandoned. Democrats, having retreated from their traditional push for national health insurance, freed Republicans to move still further to the right.

Throughout the reform debate we, and the 17 000 others who’ve joined Physicians for a National Health Program, advocated for a far more thoroughgoing reform: a non-profit, single payer national health insurance program. We will continue to do so. Our health care system has not been cured or even stabilized. For now, we will continue to practice under a financing system that obstructs good patient care and squanders vast resources on profit and bureaucracy.

Passage of the health reform law was a major political event. But for most doctors and patients it’s no “big f*cking deal.”

David U. Himmelstein, M.D., is associate professor of medicine at Harvard Medical School and Steffie Woolhandler, M.D., M.P.H., is professor of medicine at Harvard Medical School. They are also co-founders of Physicians for a National Health Program.

Cite this as: BMJ 2010;340:c1778

http://www.bmj.com/cgi/content/full/bmj.c1778?ijkey=qLFfFBwLmfvN8vo&keytype=ref

Physicians for a National Health Program

29 E Madison Suite 602, Chicago, IL 60602

Phone (312) 782-6006 | Fax: (312) 782-6007

www.pnhp.org | info@pnhp.org

PNHP 2010

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Health Reform? Off the Table.

SF Gray Panthers Newsletter, April 2010

Health Reform? Off the Table.

First single-payer was off the table. Then a public option anyone could use was off the table.  Then the Medicare buy-in was off the table. And negotiated drug prices.  And cost controls. And .. And…

Most of us are angry, and whipsawed back and forth between pessimism and optimism. The health bill is a gigantic bailout for insurance, drug, hospital, and doctor industries, forcing us onto private insurance, while at the same time forcing down the value of that insurance and making us pay more out-of-pocket, and taking five hundred billion dollars from Medicare over the next ten years.  Our optimistic side says maybe 30 of the 50 million uninsured will get insured in four years, though many won’t be able to afford it and will choose to pay extra taxes instead.  Many of us have children barely able to keep a roof over their heads, maybe they’ll qualify for Medicaid, though Obama wants to cut Medicaid costs. And what if this awful health bill  failed?   These thoughts drive us nuts.

It has been a very bitter pill to see how marginalized we are.  Deep down, we hoped or expected  that once business realized the cost of insurance-based healthcare was unsustainable, our day would come, and our plan of removing insurance companies would be taken seriously. We were wrong.

The truth is we do not have a movement that’s capable of mounting a serious threat to the functioning of the economy or government, through strikes, sit-ins, or occupations.  We do not have the General Strikes that forced the government to cough up Social Security.  Nor the emerging sit-ins and marches against Jim Crow racism that forced them to cough up Medicare and Medicaid.  We cannot expect different results until we have the kind of movement, that can, and will, stop the gears for long enough to inflict serious pain.

Is healthcare more of a human right than food, when a quarter of US children are food-insecure. Is healthcare more of a human right than housing, when families with kids wait for months for shelter beds in San Francisco?  What about education?

We need to stop asking for our needs to be on the table.  We need to kick the table over.

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First single-payer was off the table. Then a public option anyone could use was off the table.  Then the Medicare buy-in was off the table. And negotiated drug prices.  And cost controls. And .. And…

Most of us are angry, and whipsawed back and forth between pessimism and optimism. The health bill is a gigantic bailout for insurance, drug, hospital, and doctor industries, forcing us onto private insurance, while at the same time forcing down the value of that insurance and making us pay more out-of-pocket, and taking five hundred billion dollars from Medicare over the next ten years.  Our optimistic side says maybe 30 of the 50 million uninsured will get insured in four years, though many won’t be able to afford it and will choose to pay extra taxes instead.  Many of us have children barely able to keep a roof over their heads, maybe they’ll qualify for Medicaid, though Obama wants to cut Medicaid costs. And what if this awful health bill  failed?   These thoughts drive us nuts.

It has been a very bitter pill to see how marginalized we are.  Deep down, we hoped or expected  that once business realized the cost of insurance-based healthcare was unsustainable, our day would come, and our plan of removing insurance companies would be taken seriously. We were wrong.

The truth is we do not have a movement that’s capable of mounting a serious threat to the functioning of the economy or government, through strikes, sit-ins, or occupations.  We do not have the General Strikes that forced the government to cough up Social Security.  Nor the emerging sit-ins and marches against Jim Crow racism that forced them to cough up Medicare and Medicaid.  We cannot expect different results until we have the kind of movement, that can, and will, stop the gears for long enough to inflict serious pain.

Is healthcare more of a human right than food, when a quarter of US children are food-insecure. Is healthcare more of a human right than housing, when families with kids wait for months for shelter beds in San Francisco?  What about education?

We need to stop asking for our needs to be on the table.  We need to kick the table over.

High Premiums in Senate Democrats’ Health Plan

A family of four earning $54,000 in 2016 would be eligible for a subsidy of $10,100 to help defray the cost of insurance …  By then, one of the most popular federal plans, a nationwide Blue Cross and Blue Shield policy, is projected to cost more than $20,000, with monthly (out of pocket) premium costs of more than $825, (about 1/6 of monthly income). Some people ages 55 to 64 could “buy in” to Medicare, starting in 2011. That could cost about $7,600 a year per person or $15,200 for a couple … No subsidies would be available until 2014.

New York Times, December 11, 2009

High Premiums in Senate Democrats’ Health Plan

By DAVID M. HERSZENHORN and ROBERT PEAR

WASHINGTON — Senate Democrats have provided few details about their latest health care proposal, but this much seems clear: Anyone who wants to buy the same health benefits as members of Congress, or to buy coverage through Medicare, should be prepared to fork over a large chunk of cash.

According to the Congressional Budget Office, a family of four earning $54,000 in 2016, when the health legislation is fully in effect, would be eligible for a subsidy of $10,100 to help defray the cost of insurance under the health legislation being debated by the Senate. By then, one of the most popular federal plans, a nationwide Blue Cross and Blue Shield policy, is projected to cost more than $20,000.

That could leave the family earning $54,000, slightly more than the current median household income, with monthly premium costs of more than $825.

The Democrats’ proposal would also allow some people ages 55 to 64 to “buy in” to Medicare, starting in 2011. That could cost about $7,600 a year per person or $15,200 for a couple, according to a budget office analysis of an earlier version of the concept. No subsidies would be available until 2014.

Senate Democrats have been careful to say that their proposal is not intended to offer exactly the same benefits that members of Congress have. In many cases, federal subsidies would cover a smaller share of the premium than what the government contributes to the cost of health insurance for federal employees.

The Medicare buy-in proposal is intended to fill a gap in the social safety net for millions of people nearing retirement who are unable to obtain or afford insurance. In general, the new Medicare option would be available only to people who are uninsured. People 55 to 64 who have employer-sponsored insurance would be expected to keep it.

Preliminary back-of-the-envelope calculations reflect the steep challenges that Senate Democrats face as they await a new cost analysis of their plan. The numbers also reflect potential pitfalls in the politically appealing message to constituents that they might get benefits similar to those of federal lawmakers.

Affordability for individuals and families, however, is hardly the only challenge facing Senate Democrats as they struggle to put together a proposal that can win the 60 votes needed for passage of the broader health care bill.

Senators from rural states voiced deep reservations on Thursday about the Medicare buy-in plan, which they said would hurt hospitals, doctors and other health care providers back home.

In addition to allowing people to buy in to Medicare, the Democrats’ latest plan would designate the federal Office of Personnel Management to oversee at least two new nonprofit national insurance plans.

The plans would be administered by private companies, but the personnel office would negotiate prices as it does now for the Federal Employees Health Benefits Program.

Federal employee unions and retiree groups expressed apprehension about asking the agency to take on the task of supervising health plans for millions more people.

Margaret L. Baptiste, the president of the National Active and Retired Federal Employees Association, said: “O.P.M. should be in the business of attracting the best and brightest to federal service.” The agency’s mission, she said, is “is too important to dilute with the massive undertaking of creating and administering a new health care system.”

Some insurance experts said that creating a menu of national plans could provide consumers with an array of interesting new choices that could meet their personal health care needs.

“It’s more choice for consumers, and it’s more good choice for consumers,” said Walton J. Francis, an insurance consultant and expert on the program for federal employees.

But Mr. Francis warned against the Medicare buy-in proposal, which he said would undermine the new national plans and would leave people nearing retirement with insufficient coverage.

“Medicare is not a good health plan,” Mr. Francis said. Even with coverage of prescription drugs, he said, “it still doesn’t have catastrophic protection.”

In response to questions from the Congressional Budget Office, Senate leaders provided additional details of the proposal announced hastily on Tuesday by the Senate majority leader, Harry Reid, Democrat of Nevada:

¶The new Medicare option would be available only to individuals, not to families. In a household consisting of a 60-year-old man, his 50-year-old wife and their 18-year-old daughter, only the man would be eligible for Medicare.

¶People 55 to 64 would receive the same benefits as people in the traditional Medicare program. The Democrats’ bill would limit out-of-pocket spending on health care by people in private plans ($5,000 a year for individuals and $10,000 for families). Medicare does not have such limits.

¶Medicare premiums for people under 65 would differ from those paid by people 65 and older, and the two parts of the program would be financed separately.

Marilyn Moon, a health economist and former public trustee of Medicare, said that for people 55 to 64, Medicare premiums could be higher than premiums charged by private health plans.

Health policy experts said that the people who chose to enroll in Medicare were likely to be heavy users of health care, with higher-than-average costs.

Moreover, Ms. Moon noted, private plans would have large numbers of healthy people under the age of 55, whose premiums could help cover costs for those 55 to 64. “Such cross-subsidies would not be available under the new Medicare option,” she said.

Democratic senators generally shied away from explaining or defending their Medicare proposal, on the ground that it was being analyzed by the budget office.

Republicans denounced the proposal, saying it would add new financial obligations to a program that could not afford its existing commitments.

“If the Titanic is sinking, the last thing you want to do is to put Grandma and more of your family on the boat,” said Senator Charles E. Grassley, Republican of Iowa.

But several liberal House Democrats welcomed the Medicare proposal.

“Extending this successful program to those between 55 and 64 would be the largest expansion of Medicare in 44 years and would perhaps get us on the path to a single-payer model,” said Representative Anthony Weiner, Democrat of New York.

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Commissions and Feinstein: The Next Threats to Medicare and Social Security

Upcoming issue of CARA (California Alliance for Retired Americans) Alert

Commissions and Feinstein: The Next Threats to Medicare and Social Security

By Michael Lyon

Four years after Bush tried to privatize Social Security and cut its benefits, there is new clamor to restructure Medicare and Social Security and to cut their future costs. This time it is led by Democrats, and California Senator Dianne Feinstein is in the thick of it.  These lawmakers want to slash the healthcare and income of seniors and people with disabilities to pay for the war in Afghanistan and for the insurance and drug company bailouts that pass for health reform. Forcing through these cuts involves huge concentration of government power, and overturns decades of budget principles to guarantee benefits for retired and poor people.

Feinstein and Texas Republican Cornyn are promoting their bill, S.276, calling for a “National Commission on Entitlement Solvency.” Almost half of Feinstein’s Commission would be Presidential appointees and the rest are leaders of House and Senate Committees on revenue and spending. Each grouping has equal numbers of Democrats and Republicans, so neither party has to accept blame for the cuts. For a year, the Commission would hold town hall meetings on fiscal responsibility across the nation, and would then propose sweeping laws cutting Medicare and Social Security, which would be fast-tracked through Congress. The Commission would be permanent, and would submit new fast-tracked legislative packages to Congress every five years.

Congress has several more bills to reduce Medicare, Social Security, and Medicaid.  A House bill, HR 1557, with nearly 70 co-sponsors, proposes a “Securing America’s Future Economy Commission,” to restructure Medicare and Social Security as well as the tax system. There is a Senate equivalent, S. 1056. (PDF, p. 5, part of a lengthy discussion of Commissions) In the Senate, Budget Committee leaders Kent Conrad and Judd Gregg are demanding a “Bipartisan Task Force for Responsible Fiscal Action” with powers to “improve the long-term fiscal balance of the Federal Government, including the fiscal balance of Social Security and Medicare.” Over a dozen Democrats, including Feinstein, threatened to bring government to a halt by refusing to raise the national debt limit unless their Task Force was formed.    Like Feinstein’s Commission, these groups would be bipartisan, would include House and Senate finance committee leaders, and would have their recommendations fast-tracked through Congress, in some cases with no amendments allowed.

These Commissions are set up to be powerful and independent for a reason.  For decades, Medicare, Social Security, and Medicaid benefits have been guaranteed by having their funding increase automatically as the number of recipients increases. Both Democratic and Republican lawmakers have wanted to eliminate this protection for years, but they are pressing harder as millions of baby-boomers prepare to retire and deficits mount from oil wars, tax cuts, bank bailouts, and giveaways to health insurance and drug companies.

CARA fought against Feinstein’s earlier Commission bill, S 355, in early 2007, and it is now dead.  A new national coalition, including the Alliance for Retired Americans has formed to protect Medicare and Social Security, and we will have an important role in California.   We have worked all our lives. We deserve and demand healthcare and a living income!

Also see the video “William Greider on the Looting of Social Security” and Greider’s more extensive article in The Nation “Looting Social Security.”    (Thanks to Dandelion Salad.)

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Crusading Professor Challenges Dartmouth Atlas On Claims Of Wasteful Health Care Spending

The Obama administration demands four cornerstones of healthcare reform: (1) a Medicare cost-containment Commission, (2) taxing high-cost private insurance, (3) reform of medical payment incentives, and (4) deficit reduction. Each of these cornerstones has serious potential to reduce our health coverage, while the rest of ObamaCare guarantees huge and sustained profits for the insurance, pharmaceutical, and hospital industries.Part of the reform of medical payment incentives cornerstone involves reduction of Medicare payments to hospitals historically shown to have much higher Medicare expenses compared to hospitals in other regions of the country, as documented by the Dartmouth Medical Atlas for many years. Nobody contests that these differences exist, but some doctors contend that many of these hospitals are high-spending because they are in poor, minority, unhealthy, and medically underserved, areas and that Obama’s plan of reducing those hospitals’ payments would drive healthcare quality further down in racially and economically discriminatory way. It would be the medical equivalent of No Child Left Behind. The health plans being considered all reduce funding to public and safety-net hospitals already.

Kaiser Health News, December 3, 2009

Crusading Professor Challenges Dartmouth Atlas On Claims Of Wasteful Health Care Spending

By Jordan Rau

KHN Staff Writer

As he raced through the U.S. Capitol this fall, Dr. Richard “Buz” Cooper, a 73-year-old University of Pennsylvania medical school professor, didn’t mince words. He denounced as “malarkey” a reigning premise of the health care debate — that one-third of the nation’s $2.5 trillion in annual health spending is unnecessary — and said that the idea came from “a bunch of clowns.”

The harsh language underscores Cooper’s disdain for highly regarded work — as close to a sacred cow as anything in health care — developed over two decades by the Dartmouth Atlas of Health Care. The work by Dartmouth Medical School researchers shows huge geographic variations in the amount of care that hospitals and doctors provide, with spending in some areas running three times as much as in others. Dartmouth argues much of the high spending is due to extra procedures and tests that often don’t help patients, but bring in more money for doctors and hospitals.

The argument has been embraced by President Barack Obama’s administration and several lawmakers, who have repeatedly said that the nation could save as much as $700 billion a year — if only doctors and hospitals in high-spending areas, such as Philadelphia, Los Angeles and Chicago, would end their profligate practices and adopt the thriftier ways of say, the Geisinger Health Systems, based in Danville, Pa. The House has inserted provisions in the health bill that could punish high-spending hospitals in Philadelphia and elsewhere, while rewarding low-spending facilities in places such as Albuquerque, N.M., Madison, Wis., or Portland, Ore.

The Poverty Factor

But Cooper and some allies say that would be a disaster and hurt efforts by doctors and hospitals to care for the poor. Cooper says the Dartmouth research doesn’t take into account the high cost of helping the impoverished, who often spend more time in hospitals because they don’t have people to care for them at home and often return to the hospital when they can’t afford needed medications.

“There is abundant evidence that poverty is strongly associated with poor health status, greater per capita spending, more hospital readmissions and poorer outcomes,” he wrote in an Oct. 24 post on his blog. “It is the single strongest factor in variations in health care and the single greatest contributor to ‘excess’ spending.”

“Don’t say our failure is that medicine is bad in Mississippi and the South Bronx,” Cooper adds in an interview. “That’s a social problem. We’re bad because we don’t spend enough in areas of poverty.”

Cooper is emerging as the most provocative voice among a small group of health care experts raising doubts about Dartmouth’s methods, which focus on comparing how hospitals treat Medicare patients in their final two years of life. It is from those studies that Dartmouth came to its most far-reaching conclusion: that too much medical care can actually hurt patients rather than help them. But the skeptics say the way hospitals treat Medicare patients can’t be translated into firm conclusions about the country’s overall health spending and trends.

Dartmouth researchers say that Cooper is flat-out wrong. They say that even when you take the socio-economic levels of patients and sicker populations into account, some hospitals spend far more than others without good reason. And they say their studies show Medicare spending is a good indication of how hospitals generally operate.

“It’s impossible to carry on a debate with somebody who does not understand statistics, and seems uninterested in learning,” Jonathan Skinner, a senior author of the Atlas, says of Cooper.

Other critics of Cooper — and there are many — say he has not offered a better way to analyze spending variations among hospitals, but instead takes potshots. They say he tends to embrace data that back up his long-held view that the country needs more doctors, and is too eager to flout professional customs. In December, he was banned from writing for the journal Health Affairs for five years for breaking a rule against sharing articles before publication.

Hospitals Defend Spending

The counterattacks haven’t slowed Cooper down. These days, he’s working with several Democratic members of Congress, including Rep. Allyson Schwartz, D-Pa, whose district includes parts of Philadelphia, and Rep. Shelley Berkley, D-Nev. Cooper’s criticisms are also being cited by the lobbyists for the nation’s teaching hospitals and some state hospital associations, including New York’s. All are trying to ensure the health overhaul bills don’t lead the government to unfairly penalize high-spending parts of the country.

“Our institutions are barely getting by,” says Atul Grover, chief advocacy officer at the Association of American Medical Colleges. “They’re struggling to take care of people who can’t get care anywhere else, and now they’re talking about cutting them, saying they’re inefficient.”

Hospitals in the greater Philadelphia area certainly have reason to worry. Overall, the region’s hospitals billed Medicare $66,974 on average for patients in the last two years of life, according to the most recent Dartmouth data, covering the years 2001 through 2005. That was 25 percent above the state average of $53,373, and 27 percent above the national average of $52,838.

The highest-spending hospitals – such as Temple University Hospital, which Dartmouth says spent $85,538 on the average Medicare patient for the period – say they provide more treatment because their patients are poor and enter Medicare with greater health problems. A Temple spokeswoman says they treat more Medicaid patients than any other hospital in the state. Teaching hospitals in the city note that under Medicare rules they get paid extra.

“Our costs are higher because we have more technology, we have a wider range of programs,” says Ralph Muller, chief executive officer of the University of Pennsylvania Health System, which spent $80,727 on Medicare patients in their final two years of life. “When you adjust for a teaching hospital, a lot of the variation goes away.”

Dartmouth researchers counter that they have compared hospitals with similar patients’ populations and still found wide differences in spending.

“There are a lot of people and a lot of hospitals, particularly in big cities, that feel threatened by the message of the Dartmouth Atlas,” says Skinner. “For them to find a spokesperson who is absolving them of all sin is very appealing to them.”

So who’s right? To help find an answer, the House health overhaul legislation would direct the prestigious Institute of Medicine to research the causes of geographic variations. The institute then would recommend how Medicare can best identify and clamp down on regions where the spending is unjustifiably high. In a partial victory for Cooper and his allies, the bill requires that the institute take into account “socio-economic factors” as well as the health status of patients.

Other researchers’ work is raising questions about Dartmouth’s conclusions. A recent study published in Circulation, the journal of the American Heart Association, followed patients at six California teaching hospitals who had been hospitalized for heart failure. The study found that those who received more treatment from the hospital — through procedures, tests or days as a patient — were more likely to survive than those who got less medical care.

Measuring Waste

Dan Mendelson, president of Avalere Health, a consulting firm in Washington, says some low-spending hospitals may be providing insufficient care, while higher spenders may be giving the needed amount. “What the Cooper analysis does is show why it’s so difficult to change the system,” says Mendelson, a top health budget expert in the Clinton administration.

But many of the nation’s most prominent health economists, including Princeton University’s Uwe Reinhardt and Harvard University’s David Cutler, argue there is substantial variation among hospital spending even when the special needs of high poverty areas are fully analyzed.

“I have yet to meet anyone who really plays around in the health care system who really thinks there’s less than 20 percent waste,” says Cutler, who advised Obama during his presidential run.

More answers are coming. The Medicare Payment Advisory Commission, an independent congressional agency, is performing its own analysis. Early on, it has found that regional spending differences persist even after patients’ health is taken into account. But the disparities are not as wide as Dartmouth’s.

“Before Dartmouth came along, nobody measured anything,” says Skinner. “We did use the methods we thought would work the best, given our very scarce resources. Are they the best measures? No. Are there better measures? Yes. But there is certainly information in these measures that cannot be denied by the people who want to deny them.”

Ultimately, Cooper may be vindicated not for his denunciations of Dartmouth, but for being an early, vocal doubter that the government can pinpoint excessive health care spending with enough precision to justify paying doctors and hospitals less.

“The thing with Buz Cooper is he does raise significant and important issues that challenge the status quo’s thinking and conventional wisdom and he should always be taken seriously,” says Reinhardt, the Princeton economist. “If he goes around the Hill and says, ‘Don’t cut Florida and don’t cut Louisiana and Texas until you know more,’ I would be on his side with that one. If he totally belittles the (Dartmouth) work, I think that would be totally wrong.”

Cooper’s Presentation
“The Crisis of Physicians Supply and the Myths of Health Care Reform” (.pdf)

Reaction To Cooper’s Challenge Against Dartmouth Atlas

Related Links
* Dartmouth Atlas Project (.pdf)
* Dartmouth Atlas Policy Recommendations (.pdf)
* Richard “Buz” Cooper’s blog
* Cooper OpEd: Wrong Map For Health Reform
* Richard “Buz” Cooper’s critique in Health Affairs
* Responses to Cooper’s Health Affairs article – Part 1 and Part 2
* Health Affairs letter banning Cooper from the journal for 5 years
* Circulation article (.pdf)

Interactive Dartmouth Graphic: Regional Differences In Medicare Spending

By Jordan Rau

KHN Staff Writer

Barbara Ehrenreich, The Swine Flu Vaccine Screw-up

Tom Dispatch

posted 2009-11-03 16:27:36

Tomgram: Barbara Ehrenreich, Why Your Child May Not Get a Swine Flu Shot Soon

This week, the Obama White House released a very partial record of those who had visited since January 20, 2009. This it hailed as “transparency like you’ve never seen it before” and as the beginning of a new White House visitor transparency policy. Unfortunately, the policy applies mainly to post-September 15th visitors and has a caveat that, in time, could prove large enough to drive a Humvee through. As the White House website puts it, all names of visitors will be released after a lag of 90-120 days, “aside from a small group of appointments that cannot be disclosed because of national security imperatives or their necessarily confidential nature (such as a visit by a possible Supreme Court nominee).”

The version of the story that hit TV screens and most newspapers had to do with William Ayers, Jeremiah Wright, Michael Moore, and Michael Jordan, who were on the list, but weren’t actually William Ayers, Jeremiah Wright, Michael Moore, and Michael Jordan. Not the ones who come to your mind, anyway.

The secondary story was that Oprah Winfrey, George Clooney, Brad Pitt, and Bill Gates were exactly the Oprah Winfrey, George Clooney, Brad Pitt, and Bill Gates you’d imagine, and that in the last eight months a reasonable amount of star power had indeed passed through those well-guarded gates. Then there was labor leader Andrew Stern, fingered by the Wall Street Journal for his 22 visits.

And, oh yes, there were the others, too, even if they didn’t really cause much of a stir. On this already limited list of visitors, for instance, Wall Street was hardly missing-in-action, nor was big oil. Visiting “the people’s house” were Lloyd Blankfein, CEO of Goldman Sachs, who met a mere two times with the President and once with economic advisor Lawrence Summers; James Dimon, chief executive of J.P. Morgan Chase & Co., who made it in but six times, as well as Citigroup CEO Vikram Pandit; Rex Tillerson, chairman and chief executive of ExxonMobil Corp; David O’Reilly, CEO of Chevron; Maurice Greenberg, former head of AIG; and so on, including a striking crew of lobbyists. In other words, no big deal.

Now, me, I wouldn’t mind knowing whether on the unreleased visitors’ lists for these last months lurked Andrew Witty, CEO of GlaxoSmithKline, or Novartis CEO Daniel Vasella (or their lobbyists), not to speak of other Big Pharma types. Did they make it to the White House, and if so, how many times? I’m curious because Barbara Ehrenreich identifies their companies as the ones screwing up the production of the swine flu vaccine, and somehow they did manage to get a modest infusion of $2 billion from the Obama administration to do a less than magnificent job of this. I wonder just what deals might have been broached with them in the people’s name.

In the spirit of Ehrenreich’s remarkable new book, Bright-Sided: How the Relentless Promotion of Positive Thinking Has Undermined America — which I’ve recommended before — I’d like to exhibit a little positive thinking and hope that some enterprising reporter digs up this info for the rest of us, and soon. In the meantime, do check out Ehrenreich’s book (as well as the audio interview she did for TomDispatch to go with today’s piece). It admittedly won’t make you more optimistic, or even healthier, just a lot wiser and far more irritated. Tom

The Swine Flu Vaccine Screw-up

Optimism as a Public Health Problem
By Barbara Ehrenreich

If you can’t find any swine flu vaccine for your kids, it won’t be for a lack of positive thinking. In fact, the whole flu snafu is being blamed on “undue optimism” on the part of both the Obama administration and Big Pharma.

Optimism is supposed to be good for our health. According to the academic “positive psychologists,” as well as legions of unlicensed life coaches and inspirational speakers, optimism wards off common illnesses, contributes to recovery from cancer, and extends longevity. To its promoters, optimism is practically a miracle vaccine, so essential that we need to start inoculating Americans with it in the public schools — in the form of “optimism training.”

But optimism turns out to be less than salubrious when it comes to public health. In July, the federal government promised to have 160 million doses of H1N1 vaccine ready for distribution by the end of October. Instead, only 28 million doses are now ready to go, and optimism is the obvious culprit. “Road to Flu Vaccine Shortfall, Paved With Undue Optimism,” was the headline of a front page article in the October 26th New York Times. In the conventional spin, the vaccine shortage is now “threatening to undermine public confidence in government.” If the federal government couldn’t get this right, the pundits are already asking, how can we trust it with health reform?

But let’s stop a minute and also ask: Who really screwed up here — the government or private pharmaceutical companies, including GlaxoSmithKline, Novartis, and three others that had agreed to manufacture and deliver the vaccine by late fall? Last spring and summer, those companies gleefully gobbled up $2 billion worth of government contracts for vaccine production, promising to have every American, or at least every American child and pregnant woman, supplied with vaccine before trick-or-treating season began.

According to Health and Human Services Secretary Kathleen Sebelius, the government was misled by these companies, which failed to report manufacturing delays as they arose. Her department, she says, was “relying on the manufacturers to give us their numbers, and as soon as we got numbers we put them out to the public. It does appear now that those numbers were overly rosy.”

If, in fact, there’s a political parable here, it’s about Big Government’s sweetly trusting reliance on Big Business to safeguard the public health: Let the private insurance companies manage health financing; let profit-making hospital chains deliver health care; let Big Pharma provide safe and affordable medications. As it happens, though, all these entities have a priority that regularly overrides the public’s health, and that is, of course, profit — which has led insurance companies to function as “death panels,” excluding those who might ever need care, and for-profit hospitals to turn away the indigent, the pregnant, and the uninsured.

As for Big Pharma, the truth is that they’re just not all that into vaccines, traditionally preferring to manufacture drugs for such plagues as erectile dysfunction, social anxiety, and restless leg syndrome. Vaccines can be tricky and less than maximally profitable to manufacture. They go out of style with every microbial mutation, and usually it’s the government, rather than cunning direct-to-consumer commercials, that determines who gets them. So it should have been no surprise that Big Pharma approached the H1N1 problem ploddingly, using a 50-year old technology involving the production of the virus in chicken eggs, a method long since abandoned by China and the European Union.

Chicken eggs are fine for omelets, but they have quickly proved to be a poor growth medium for the viral “seed” strain used to make H1N1 vaccine. There are alternative “cell culture” methods that could produce the vaccine much faster, but in complete defiance of the conventional wisdom that private enterprise is always more innovative and resourceful than government, Big Pharma did not demand that they be made available for this year’s swine flu epidemic. Just for the record, those alternative methods have been developed with government funding, which is also the source of almost all our basic knowledge of viruses.

So, thanks to the drug companies, optimism has been about as effective in warding off H1N1 as amulets or fairy dust. Both the government and Big Pharma were indeed overly optimistic about the latter’s ability to supply the vaccine, leaving those of us who are involved in the care of small children with little to rely on but hope — hope that the epidemic will fade out on its own, hope that our loved ones have the luck to survive it.

And contrary to the claims of the positive psychologists, optimism itself is neither an elixir, nor a life-saving vaccine. Recent studies show that optimism — or positive feelings — do not affect recovery from a variety of cancers, including those of the breast, lungs, neck, and throat. Furthermore, the evidence that optimism prolongs life has turned out to be shaky at best: one study of nuns frequently cited as proof positive of optimism’s healthful effects turned out, in fact, only to show that nuns who wrote more eloquently about their vows in their early twenties tended to outlive those whose written statements were clunkier.

Are we ready to abandon faith-based medicine of both the individual and public health variety? Faith in private enterprise and the market has now left us open to a swine flu epidemic; faith alone — in the form of optimism or hope — does not kill viruses or cancer cells. On the public health front, we need to socialize vaccine manufacture as well as its distribution. Then, if the supply falls short, we can always impeach the president. On the individual front, there’s always soap and water.

Barbara Ehrenreich is the author of 16 books, including the bestsellers Nickel and Dimed and Bait and Switch. A frequent contributor to Harper’s and the Nation, she has also been a columnist at the New York Times and Time magazine. Her seventeenth book, Bright-Sided: How the Relentless Promotion of Positive Thinking Has Undermined America (Metropolitan Books), has just been published. An examination of recent studies of the medical ineffectiveness of positive thinking, mentioned in this essay, can be found in the book. To listen to the TomDispatch audio interview with Ehrenreich that accompanies this piece, click here.

Copyright 2009 Barbara Ehrenreich