Posts Tagged 'Baucus'

Senate Health Bill is a Milestone … In Rationing

I find this a pretty convincing argument that the Senate healthcare bill is about rationing, if you define rationing as Ewe Reinhardt did in a recent NY Times piece, meaning decisions by insurers about what will be covered, versus what has to be paid for out-of-pocket. As this article indcates, in the future these decisions by insurers are more likely to be made collectively in response to various pressures including taxes on high-cost plans, government guidelines on effective and cost-effective treatment such as the recent breast and cervical cancer screening recommendations, the bi-partisan Medicare cost-control Commission, and finally reimbursement reform including moving away from fee-for-service and toward payments for doctors and hospitals bundled together for particular medical care episodes akin to managed care.

As this and another recent NY Times piece explain, the Obama administration favors the Senate bill, as it incorporates its 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.

If the whole package costs roughly $900 billion over ten years, that roughly $90 billion per year. For comparison, sending 35,000 troops to Afghanistan, at $1 million/individual troop/year will cost roughly $35 billion.

The Atlantic, Nov 21 2009, 11:29 am by Ronald Brownstein

A Milestone in the Health Care Journey

When I reached Jonathan Gruber on Thursday, he was working his way, page by laborious page, through the mammoth health care bill Senate Majority Leader Harry Reid had unveiled just a few hours earlier. Gruber is a leading health economist at the Massachusetts Institute of Technology who is consulted by politicians in both parties. He was one of almost two dozen top economists who sent President Obama a letter earlier this month insisting that reform won’t succeed unless it “bends the curve” in the long-term growth of health care costs. And, on that front, Gruber likes what he sees in the Reid proposal. Actually he likes it a lot.

“I’m sort of a known skeptic on this stuff,” Gruber told me. “My summary is it’s really hard to figure out how to bend the cost curve, but I can’t think of a thing to try that they didn’t try. They really make the best effort anyone has ever made. Everything is in here….I can’t think of anything I’d do that they are not doing in the bill. You couldn’t have done better than they are doing.”

Gruber may be especially effusive. But the Senate blueprint, which faces its first votes tonight, also is winning praise from other leading health reformers like Mark McClellan, the former director of the Center for Medicare and Medicaid Services under George W. Bush and Len Nichols, health policy director at the centrist New America Foundation. “The bottom line,” Nichols says, “is the legislation is sending a signal that business as usual [in the medical system] is going to end.”

Both the Senate bill’s priority on controlling long-term health care costs, and its strategy for doing so, represents a validation for Senate Finance Committee chairman Max Baucus (D-MT). When Baucus released his health reform proposal last September, after finally terminating months of fruitless negotiations with committee Republicans, Democratic liberals excoriated his plan as a dead end. And on several important fronts–such as subsidies for the uninsured, the role of a public competitor to private insurance companies, and the contribution required from employers who don’t insure their workers–Reid moved his product away from Baucus toward approaches preferred by liberals.

But the Reid bill’s fiscal strategy, and its vision of how to “bend the curve,” almost completely follows Baucus’ path from September. Baucus’ bill was the first to establish the principle that Congress could expand coverage while reducing the federal deficit; now that’s the standard not only for the Senate but also the House reform legislation. And, perhaps even more importantly, the Reid bill maintains virtually all of Baucus ideas’ for shifting the medical payment system away from today’s fee-for-service model toward an approach that more closely links compensation for providers to results for patients. In the Reid bill, there is some backtracking from Baucus’ most aggressive reform proposals, but not much.

Almost everything Baucus proposed to control long-term costs have survived into the final bill. And, with only a few exceptions, that’s just about all the systemic reforms analysts from the center to the left have identified as the most promising strategies for changing the economic incentives in the medical system. (The public competitor to private insurance companies championed by the Left would affect who writes the checks in the medical system, but not what the checks are written to pay for.) Most of the other big ideas for controlling costs (such as medical malpractice reform) tend to draw support primarily among Republicans. And since virtually, if not literally, none of them plan to support the final health care bill under any circumstances, the package isn’t likely to reflect much of their thinking.

In their November 17 letter to Obama, the group of economists led by Dr. Alan Garber of Stanford University, identified four pillars of fiscally-responsible health care reform. They maintained that the bill needed to include a tax on high-end “Cadillac” insurance plans; to pursue “aggressive” tests of payment reforms that will “provide incentives for physicians and hospitals to focus on quality” and provide “care that is better coordinated”; and establish an independent Medicare commission that can continuously develop and implement “new efforts to improve quality and contain costs.” Finally, they said the Congressional Budget Office “must project the bill to be at least deficit neutral over the 10-year budget window and deficit reducing thereafter.”

As OMB Director Peter Orszag noted in an interview, the Reid bill met all those tests. The CBO projected that the bill would reduce the federal deficit by $130 billion over its first decade and by as much as $650 billion in its second. (Conservatives, of course, consider those projections unrealistic, but CBO is the only umpire in the game, and Republicans have been happy to trumpet its analyses critical of the Democratic plans.)  “Let’s use the metric of that letter,” said Orszag, who helped shape the health reform debate for years from his earlier posts at CBO and the Brookings Institution. “Deficit neutral; got that. Deficit-reducing second decade, got that. Excise tax: That was retained. Third is the Medicare commission: has that. Fourth is delivery system reforms, bundling payments, hospital acquired infections, readmission rates. It has that. If you go down the checklist of what they said was necessary for a fiscally responsible bill that will move us towards the health care system of the future, this passes the bar.”

McClellan, the former Bush official and current director of the Engleberg Center for Health Care Reform at the Brookings Institution, was one of the economists who signed the November letter. McClellan has some very practical ideas for improving the Reid bill (more on those below), but generally he echoes Orszag’s assessment of it. “It has got all four of those elements in it,” McClellan said in an interview. “They kept a lot of the key elements of the Finance bill that I like. It would be good if more could be done, but this is the right direction to go.”

Reid gave ground on one Baucus proposal that the economists identified as a priority-taxing high-end insurance plans. Like many health reformers, the economists who wrote Obama argue that such a tax “will help curtail the growth of private health insurance premiums by creating incentives to limit the costs of plans to a tax-free amount.” Amid intense opposition from unions, Reid raised the thresholds at which family plans would face that excise tax from $21,000 to $23,000. But given all the pressure from labor, the more striking thing may have been that Reid didn’t increase the thresholds even more; the CBO calculated the proposal, which the House excluded from its bill, would still raise $35 billion annually by 2019. “They held pretty strong,” said one administration health care expert. “It’s not like unions haven’t been making the case that it shouldn’t have been a much higher number.”

On delivery reform, Reid stayed even closer to the Baucus blueprint. The Finance bill laid out a series of measures to change the way providers are paid for delivering care to Medicare recipients; the hope was that once Medicare instituted these reforms, private insurers would also adopt many of them. “The goal here is that the things we do in Medicare will translate over into the private sector, and there is quite a bit of historical precedence for that,” said one Democratic aide involved in drafting the package.

The Baucus delivery reform ideas revolved around two central aims. One was to reward Medicare providers who deliver care more efficiently and penalize those that don’t. The Reid bill upholds the major proposals Baucus offered to advance that goal. For instance, hospitals under current law must report on their performance in treating patients for common conditions like heart problems and pneumonia; under the bill, their Medicare payments, for the first time, would be affected by their ranking on those reports. Hospitals would also be penalized if they readmit too many patients after surgery or allow too many to acquire infections while in the hospital itself. Another provision would begin the process of applying such “value-based purchasing” toward other providers like hospice providers and inpatient rehabilitation facilities.

With physicians, the Reid plan takes a step back from the Finance Committee bill but still a long step beyond current law. The Finance Bill proposed automatic reimbursement reductions for doctors who order up the most care for Medicare recipients with similar medical and demographic characteristics. That was meant to respond to the research showing big disparities in spending on medical services for similarly-situated patients in different communities. But, Democratic sources say, that proposal ran into charges that it would promote rationing-and even function as “a death panel by proxy”-by compelling doctors to arbitrarily reduce care. So the final bill takes a less direct route toward a similar end. It requires Medicare to begin studying the utilization patterns of doctors participating in the program. And then it establishes a “values based payment modifier” that would, in a budget-neutral manner, increase reimbursements for physicians found to deliver high-quality care at lower cost, and reduce them for physicians at the other end of that spectrum. “It will, we believe, have the same net effect [as the original proposal],” said the Democratic aide. “It should change behavior around that threshold.”

The other set of Baucus proposals were intended to promote more coordination among providers. These have survived almost verbatim into the final bill. The bill encourages groups of providers to establish doctor-led “accountable care organizations” to more comprehensively manage patients’ care by allowing them to share in any savings for Medicare they produce. It also establishes a voluntary national pilot of “bundled” payments that would encourage hospitals, doctors and other providers to work more closely together. Another pilot program would test coordinated home-based care for chronically ill seniors.

Finally, the Reid bill maintains the two powerful institutions the Finance legislation proposed to promote these reforms and develop new ones. The one that’s attracted the most attention is an independent “Medicare Advisory Board.” Under the Senate bill, that board would be required to offer cost-saving proposals when Medicare spending rises too fast; Congress could not reject its proposals without substituting equivalent savings. Since the board would be prohibited from offering changes that raise taxes or “ration care,” and since the legislation initially exempts hospitals from its recommendations, it could choose to promote the sort of payment reforms the bill establishes. (More prosaically it might also clear away some of the expensive coverage mandates that Congress imposes on Medicare under pressure from different elements of the medical industry). Given the limitations imposed on the commission, an equally important means to expand these reforms might be a second institution the legislation creates: a Center for Medicare and Medicaid Innovation in the Health and Human Services Department. Though this center has received much less attention than the Medicare Commission, it could have a comparable effect. It would receive $1 billion annually to test payment reforms; in a little known provision, the bill authorizes the HHS Secretary to implement nationwide, without any congressional action, any reform that department actuaries certify will reduce long-term spending. While the House bill omitted the Medicare Commission (a top priority for Obama) it included the innovation center.

No one can say for certain that these initiatives will improve efficiency enough to slow the growth in health care spending. Some are only pilots; others would affect only a small portion of providers’ revenue from Medicare. CBO typically evaluates them skeptically: it generally scores little or no savings from most of them. Former CBO director Robert Reischauer, who signed the November 17 letter, says that’s not surprising. “CBO is there to score savings for which we have a high degree of confidence that they will materialize,” says Reischauer, now president of the Urban Institute. “There are many promising approaches [in these reform ideas] but you…can’t deposit them in the bank.” In the long run, Reischauer says, it’s likely “that maybe half of them, or a third of them, will prove to be successful. But that would be very important.”

While generally supportive of Reid’s approach, McClellan, the former Medicare administrator under Bush, offered several specific ideas for strengthening it. He says the Senate should improve the capacity of HHS to more quickly evaluate whether the payment reforms are working, and also to provide data and technical assistance to new physician groups like the accountable care organizations that will be attempting to better coordinate care. “Ideally you’d both be able to tell the organizations involved and Congress what is working or not, and give the organizations the feedback and data they need to know whether they are doing a good job,” he says. McClellan also believes that the plan needs sharper sticks-tougher penalties on providers who don’t provide efficient and effective care. “There are a lot of carrots and not so many sticks,” he maintains. Of course, tougher penalties might provoke more opposition from provider groups like hospitals and physicians now tenuously supporting the legislation.

[[McClellan stands at the forefront of centrist Republican thinking on health. Even the more ideologically conservative health care thinkers to his right generally don’t oppose long-term reform ideas like bundling payments (John McCain promoted that during his presidential campaign). But they tend to view them as insufficient or tangential to the real problem. Their view highlights a fundamental difference between the parties’ on health care. To save costs, Democrats mostly want to change the incentives for providers. Republicans mostly want to change the incentives for patients by shifting toward a model where insurance covers only catastrophic expenses and people pay for more routine care from tax-favored health savings accounts. In essence, the Republican view is that the best way to hold down long-term costs is to directly expose patients to more of them. Few Democrats accept that logic though and it has little influence on either chamber’s legislation.

Another Republican cost-containment priority missing from the bill is meaningful medical malpractice reform. (The bill only encourages states to think about it.) Nichols, of the centrist New America Foundation, would like to see that included as well. Its omission is one reason he says he gives the plan a “b” rather than an “a”; the other is he’d like to see mechanisms to more quickly diffuse into the private insurance system reforms that show promise in Medicare. Democratic sources say a group of centrist Democrats led by Virginia Senator Mark Warner is trying to devise a package designed to do just that, perhaps by expanding the role of the independent Medicare advisory commission.

The attempt in all these ideas to nudge the medical system away from fee-for-service medicine toward an approach that ties compensation more closely to results captures how much the health care debate has shifted toward cost-control. So far, the rise in health care spending has proven almost invulnerable to every previous attempt to tame it, like the managed care revolution in the 1990s. Even if Obama signs into law a final bill embodying all these reform proposals, many skeptics wonder if they can bend, much less break, the seemingly inexorable increase in health care spending. Reischauer understands that skepticism, but isn’t able to entirely suppress a kernel of optimism that this latest reform agenda may prove more effective than its predecessors. “One never knows whether we’re turning the corner or if this is just playing the same old game for another inning,” he says. “But I sense there’s something different out there. I think the medical profession and its leaders have read the handwriting on the wall and are trying to evolve.” If so, the ideas the Senate will begin voting on tonight could mark a milestone in that journey.

Silence = Death: A Healthcare Call to Action

Silence = Death: A Healthcare Call to Action

By John Iversen

Decisions in the coming weeks will affect the delivery of healthcare in America for decades to come. We are at a crossroads.

On Thursday, October 29, House Speaker Nancy Pelosi pulled Dennis Kucinich’s (D-OH) state single payer (Medicare for All) initiative amendment from the House bill with no notice, no discussion and no vote. This is what Pelosi’s democracy looks like. Pelosi is probably well aware that Canadians obtained their national health system province by province. God forbid states like Vermont, Massachusetts, Minnesota and California should lead the way to a similar system in the U.S!

I was lucky enough to be born into the first American healthcare co-operative started by local unions in Two Harbors, Minnesota in 1944, and be covered by it for my first 21 years. The Two Harbors model was a precursor to HMOs such as Kaiser and Medica. Recently the Two Harbors Community Clinic/First Plan was bought out by Blue Cross, as they were too small to compete. Larger groups such as Group Health in Minneapolis also buckled under the competition. So the Max Baucus (D-MT)/Kent Conrad (D-ND) co-op idea is a failed one and either shows their lack of knowledge or disingenuousness to sabotage a strong public option that includes state single payer (Medicare for All) initiatives as supported by Kucinich, John Conyers (D-MI) and Bernie Sanders (I-VT).

As a person disabled by AIDS and arthritis in 1991 I’ve had the good fortune of receiving Medicare. Every American should have access to the care I had growing up in the first medical co-op and for the last 18 years with Medicare.

So what groups are on the ball and supporting the Conyers-Kucinich-Sanders amendments? I’ve been taking attendance and here are a few: Progressive Democrats of America (, Tikkun Magazine (, California Nurses Association (, Physicians for a National Health Program (,, Network of Spiritual Progressives (,,, and the California State Employees Association. Progressive media such as Democracy Now!, MSNBC, and the Ed Schultz Show have also given the issue coverage. Local and state organizations can be found at: and

Noticeably absent from class are most labor unions, single issue groups, all national LGBT, people of color and women’s groups. They are resting on their laurels of passing Medicare for All resolutions and then doing nothing to back it up.

What distresses me most is the steely silence of supposedly progressive large internet groups. Here is their contact information: most notably Move On:;;;; activist@ Please ask these groups to put out alerts asking folks to call Pelosi’s San Francisco office: 415-556-4862. Calls to her DC office are rerouted like a hot potato once they ascertain you do not live in her district. As Speaker of the House, I think she owes an ear to all of us. She needs to support rather than sabotage the movement for Medicare for All at the state level. Also consider donating to the groups present, and boycotting those absent on this timely and important issue.

Senate Majority Leader Harry Reid (D-NV) is accepting calls from everyone at his DC office: 202-2243542. Rep. Joe Stupak should also be called at his Michigan office: 906-228-3700 or FAX: 202-225-4744. Ask Pelosi and Reid to appoint John Conyers, Dennis Kucinich and Bernie Sanders to the Joint Senate/House Conference Committee on Health Insurance Reform.

If we are to progress we must ACT UP and make a joyful and thunderous noise throughout the land NOW. Silence does indeed equal death for 45,000 Americans annually under the present broken system. As Bill Moyers says. “This is not the time to sit on the sidelines. Get busy.” So email the abstaining internet groups, call Pelosi, Reid and Stupak, call your union, church or any group you to which you belong. To quote another Minnesota boy, Bob Dylan: “Let us stop talking falsely now, the hour’s getting late.”

John Iversen is an internationally known, honored and proclaimed AIDS and health activist from Berkeley, CA, and has been HIV + for 29 years.

ObamaCare Takes Form: Race to the Bottom vs. Our Aspirations

SF Gray Panthers Newsletter, October 2009

ObamaCare Takes Form: Race to the Bottom vs. Our Aspirations

SB 810 is a Single Payer bill for California.

SB 810 is a Single Payer bill for California.

In spite of recent news that 45,000 die each year in the US from lack of insurance, it’s clear that business and government want healthcare “reform” to control their costs while protecting and stabilizing the profits of the insurance, drug, and hospital industries. It’s not about providing everyone with comprehensive, affordable healthcare, let alone equal healthcare! It’s about forcing everyone to buy private insurance, with little assurance the insurance will cover them, or be affordable. It’s déjà vu of the bank bail-out; insurance companies will clean up. And forget undocumented workers.

Reducing healthcare costs for government and corporations is top priority. The House’s HR 3200 says half of the $1 trillion 10-year cost would come from savings in Medicare. Obama’s health speech said most of his $900 billion plan would come from savings in Medicare and Medicaid. And Max Baucus’ Senate Finance Committee plan doesn’t require any payment from companies that don’t offer insurance, unless the workers qualify for the skimpy government assistance.

Business and government are unwilling to do the things that could really control costs: (1) eliminate private health insurance with its outrageous profits and administrative costs (single payer), (2) negotiate drug prices and hospital charges, and (3) put doctors on salaries so their practices are no longer businesses with built-in incentives to either over-treat us or under-treat us.

So how do they plan to save at least $400-500 billion over ten years? Obama talks about eliminating the overpayments to HMO-based Medicare Advantage plans, which is good, but CBO estimates this will save only $150 billion. Obama talks about preventive and primary care, comparing drugs and treatments for effectiveness, systematic care of chronic disease, and electronic medical records. These would give better care, but don’t save much money, say knowledgeable experts.

Other suggested Medicare savings include an independent agency to set doctor and hospital rates; and encouraging or forcing doctors, hospitals, and nursing homes into accountable care organizations that would receive lump-sum payments for patients’ procedures like hip replacements or cardiac surgery, and be rewarded for cost savings and meeting care standards. HR 3200’s Medicare-friendly provisions, like eliminating major cuts scheduled for Medicare doctors, eliminating co-pays and deductibles for preventive care, reducing the Part D doughnut hole, and increasing Part B and D premium assistance, may be lost as Senator Baucus’ cheaper plan becomes the center of negotiation. However, without single payer, negotiated drug and hospital prices, and salaried doctors, the Medicare savings these plans need would require ending Medicare’s “entitlement” status; its budget would no longer grow automatically as enrollment increases. This is a major threat.

Even as Obama, Baucus, and Pelosi assure us that single payer is off the table, people continue to demand it. Obama officials, who organized the huge Sept. 2   rally at San Francisco City Hall for the public option, were openly hostile to the many people with single payer signs, asking some to move so as to “not block the view.” But the people whom the Obama officials brought to the rally loved the single payer signs, and cheered the people carrying them (including Gray Panthers).

Many public option supporters really wanted Single Payer.

Many public option supporters really wanted Single Payer.

Whatever private-insurance-based plan is chosen, it will neither provide care nor contain costs, as the Massachusetts plan shows. Meanwhile we must demand the plan include the Kucinich amendment so states can have their own single payer plans. This struggle will continue.

Baucus to Meet with Single Payer Advocates

Single Payer Action, May 31, 2009
Baucus to Meet with Single Payer Advocates

Guess who’s coming to dinner.

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

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

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

According to a recent analysis by the public interest group Consumer Watchdog, Senator Baucus, the leading architect of health reform in the Congress, has received more campaign contributions from the health insurance and pharmaceutical corporations than any other current Democratic member of the House or Senate.

According to the report, Senator Baucus received $183,750 from health insurance companies and $229,020 from drug companies in the last two election cycles.

During three recent Senate Finance Committee hearings on health care reform, Baucus invited 41 people to testify — not one of which was a single payer advocate.

This despite the fact that recent polls show that single payer is supported by a majority of Americans, doctors and health economists.

Baucus has been asked repeatedly in recent months to allow a single payer advocate to testify.

He has steadfastly refused.

“We’re keeping our eyes on the prize — enactment of a single payer, everybody in, nobody out, free choice of doctor and hospital health insurance system in the United States,” said Russell Mokhiber of Single Payer Action. “We won’t let up until single payer becomes a reality. And sooner or later single payer will become a reality because it’s the only system that is financially viable, that will cover all Americans, and that will end the nightmare of 60 Americans dying every day from lack of health insurance.”

“Senator Baucus has charged us with ‘disruption of Congress,’” said Mokhiber, who is one of thirteen citizens Baucus had arrested for demanding that single payer advocates be given a seat at the table. “But we are charging Baucus with corruption of Congress. We think we have a stronger case. And we hope to win the court case, break through the corrupt barriers in Congress and secure single payer for the American people.”

The next court date for the Baucus 13 is scheduled for June 22 before D.C. Superior Court Judge Harold L. Cushenberry.

Held Hostage by the Health System

Dr. Marcia Angell brings up a number of points not usually heard in arguments for single payer healthcare:

  • Whether we like it or not, cost containment is becoming a more important driver than the uninsured in healthcare restructuring
  • measures that would improve health outcomes, like electronic records, case management, preventive care, and comparative effectiveness studies won’t save much money.
  • What’s needed is not only abolishing health insurance companies, but eliminating profit in providing healthcare: doctors, hosptals, clinics etc.
  • When doctors are businesspeople and you pay them per patient, there’s an incentive to under-treat us.
  • When  doctors are businesspeople and you pay them per procedure, there’s an incentive to over-treat us.
  • The only way to remove these dangerous incentives is to have doctors on a salary, to have them as workers, not businesspeople.

Her comments also inspire other interesting questions:

If it’s not OK to profit off healthcare, is it OK to profit off food, housing, education, water, and other necessities of life?

If society were really restructured to promote health (including mental health) instead of treating sickness:

  • if everyone had the right amount of healthy and safe food and water,
  • if everyone had safe, healthy, and low-stress work places and living places,
  • if everyone had enough time with family and friends to allow sustaining relationships,
  • if everyone had wholesome and empowering education to promote an active, inquiring,  and engaged attitude toward life,

would all this cost more, or cost less, than the billions spent on the sickness-care system we have now?

(I think it would cost more, but we have a right to it, even though it would mean turning the present power relationships of society upside down.)

Boston Globe, Saturday, May 23, 2009

Held Hostage by the Health System

by Dr. Marcia Angell

The Senate Finance Committee’s hearings on health reform earlier this month did not include testimony from any advocate for single-payer insurance. Physicians for a National Health Program, which represents 16,000 doctors, asked the committee to invite me to testify, but it chose not to. If I had been invited, this is what I would have said:

The reason our health system is in such trouble is that it is set up to generate profits, not to provide care. We rely on hundreds of investor-owned insurance companies that profit by refusing coverage to high-risk patients and limiting services to others. They also cream off about 20 percent of the premiums for profits and overhead.

In addition, we provide much of our medical care in investor-owned health facilities that profit by providing too many services for the well-insured and too few for those who cannot pay. Most physicians are paid fee-for-service, which gives them a similar incentive, particularly specialists who receive very high fees for performing expensive tests and procedures. Nonprofits behave much like for-profits, because they must compete with them. In sum, healthcare is directed toward maximizing income, not maximizing health. In economic terms, it’s a highly successful industry, but it’s a massive drain on the rest of the economy.

The reform proposals advocated by President Obama are meant to increase coverage for the uninsured. That is certainly a worthwhile goal, but the problem is that they leave the present profit-driven and highly inflationary system essentially unchanged, and simply pour more money into it – an unsustainable situation. That is what is happening in Massachusetts, where we have nearly universal health insurance, but costs are growing so rapidly that its long-term prospects are poor without cutting benefits and greatly increasing co-payments. Initiatives such as electronic records, case management, preventive care, and comparative effectiveness studies may improve care, but the Congressional Budget Office and most health economists agree that they are unlikely to save much money. Promises by for-profit insurers and providers to mend their ways voluntarily are not credible.

Nearly every other advanced country has a largely nonprofit national health system that provides universal and comprehensive care. Expenditures are on average about half as much per person, and health outcomes are generally much better. Moreover, these countries offer more basic services, not fewer. They have on average more doctors and nurses, more hospital beds, longer hospital stays, and there are more doctor visits. But they don’t do nearly as many tests and procedures, because there is little financial incentive to do so.

It is often argued that the first order of business should be to expand coverage, and then worry about costs later. But it is essential to deal with both together to stop the drain on the rest of the economy and the further fraying of healthcare. The only way to provide universal and comprehensive coverage and control costs is to adopt a nonprofit single-payer system. Medicare is a single-payer system, with low overhead costs, but it uses the same profit-oriented providers as the private system and also preferentially rewards specialists for tests and procedures. Consequently, its costs are rising almost as rapidly as those in the private sector. Representative John Conyers introduced an excellent bill that calls for extending Medicare to everyone in a nonprofit delivery system. That could be done gradually, by lowering the Medicare age a decade at a time.

A single-payer system is ignored by lawmakers because of the influence of the health industry lobbies. They raise the specter of rationing and long waits for care. There are indeed waits for some elective procedures in some countries with national health systems, such as the United Kingdom. But that’s because they spend far less on healthcare than we do. For them, the problem is not the system; it’s inadequate funding. For us, it’s not the funding; it’s the system. We spend more than enough.

I urge you to consider a nonprofit single-payer system. The economic interests of the health industry should not be permitted to hold the rest of the economy hostage and threaten the health and well-being of the public.

© Copyright 2009 Globe Newspaper Company.
Dr. Marcia Angell is a senior lecturer in social medicine at Harvard Medical School and former editor-in-chief of the New England Journal of Medicine.



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