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July 30th: Medicare’s 49th Anniversary

June 6, 2014 by  

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July 30, 2014 will mark the 49th anniversary of Medicare, our only publicly financed, universal health plan, which lifted a generation of seniors out of poverty. Each year Healthcare-NOW! coordinates Medicare’s birthday as a national day of action for single payer healthcare.

Please email Ben to let us know if you would like to plan or are planning an action this year, so we can email you educational materials, help publicize your event to activists in the area, and put you in touch with others who are planning actions elsewhere in the country.
 
In years past Healthcare-NOW! has coordinated up to 50 actions on or around July 30th. We want this whole week to be filled with events across the country that will help the movement increase its visibility and outreach. This will be a great organizing opportunity for local and national organizations, and a way for even small actions to become part of a larger movement for the week!

Timeline of National Single Payer Healthcare Legislation

October 11, 2017 by  

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Timeline of National Single-Payer Legislation

The long history of efforts to win national healthcare in the United States is, in the words of one scholar, “a drama in too many acts.” Below is a timeline of national health reform efforts in Congress, which links to hundreds of pages of legislation, Congressional analysis, and public hearings. This timeline encompasses the complete transformation of medical care in the United States, the abolition of Jim Crow in the South, and the eventual birth of a social movement for single-payer healthcare.

You can also view our sortable list of national legislation, a graph of growing sponsorship levels of single-payer legislation since the 1970s, a listing of Congressional hearings on single-payer in the 1940s and 1970s, and a listing of economic impact studies of single-payer at the state and the national levels.

Jump to a Time Period:


Healthcare Excluded from the Social Security Act Healthcare Excluded from the Social Security Act Senator Robert Wagner’s National Health Act of 1939 Senator Robert Wagner’s National Health Act of 1939 Beveridge Report & the Wagner-Murray-Dingell National Social Insurance Proposal Beveridge Report & the Wagner-Murray-Dingell National Social Insurance Proposal President Truman and the Wagner-Murray-Dingell National Health Act President Truman and the Wagner-Murray-Dingell National Health Act Act Two for President Truman and the Wagner-Murray-Dingell Bill Act Two for President Truman and the Wagner-Murray-Dingell Bill The Eisenhower Years and a Retreat from National Health Insurance The Eisenhower Years and a Retreat from National Health Insurance

Growth of Private Health Insurance & Passage of Medicare and Medicaid Growth of Private Health Insurance & Passage of Medicare and Medicaid President Nixon and Ted Kennedy’s Health Security Act President Nixon and Ted Kennedy’s Health Security Act The Reagan Era and the Beginning of Grassroots Organization The Reagan Era and the Beginning of Grassroots Organization Single-Payer Alternatives to the Clinton Health Security Act Single-Payer Alternatives to the Clinton Health Security Act Growth of the Movement and Passage of the Affordable Care Act Growth of the Movement and Passage of the Affordable Care Act Failure of the Right, Surge in Single-Payer Support Failure of the Right, Surge in Single-Payer Support

1935 Healthcare Excluded from the Social Security Act

President Roosevelt signs the Social Security Act

President Roosevelt and Democratic leadership in Congress strip all mention of healthcare from the Social Security Act after opposition threatens the entire bill. The Social Security Act is passed into law on August 14, 1935.

1939 Senator Robert Wagner’s National Health Act of 1939

President of the AMA Lobbies Against the National Health Act

President Roosevelt convenes a National Health Conference in July 1938, out of which comes Senator Wagner’s National Health Act of 1939, which provides for federal grants-in-aid to states for voluntary expansion of healthcare coverage and public health. The bill, considered on the eve of World War II, faces fierce opposition from the American Medical Association at Senate hearings, and fails to advance with the onset of war.

1943 Beveridge Report & the Wagner-Murray-Dingell National Social Insurance Proposal

The U.K’s “Beveridge Report” proposing social insurance.

In 1942 the United Kingdom publishes the wildly popular “Beveridge Report,” a government proposal to establish a welfare state, including a national health service. The author William Beveridge tours the U.S. in 1943, and his proposal for a broad program of social insurance is embodied in the Wagner-Murray-Dingell Bill, which proposes compulsory medical insurance for workers, as well as disability benefits, unemployment compensation, maternity benefits, and more. The bill’s authors introduce it to start a conversation, but don’t expect it to advance in Congress.

1945 President Truman and the Wagner-Murray-Dingell National Health Act

Senator Wagner testifying to a Senate subcommittee.

At the end of 1944 President Roosevelt finally instructs his administration to make a push for national health reform, but dies shortly thereafter in Apr. 1945. Harry Truman becomes President and delivers a Special Message to Congress calling for a Comprehensive Health Program on November 19. Senators Wagner and Murray and Rep. Dingell team up again to introduce the National Health Act, which would cover seniors, working residents, and their dependents through a national program, and provides separately via grants to states for the unemployed, mothers, and children. Major hearings are held by the Senate in 1946, which Republicans boycott. With poor prospects in the House, Sen. Murray shelves the bill for next session, but Republicans retake Congress in 1946, holding their own hearings from 1947-48 to attack Truman’s healthcare plan as socialist during an election year.

1948 Act Two for President Truman and the Wagner-Murray-Dingell Bill

President Harry Truman at the White House.

During the 1948 elections Truman campaigns on a national healthcare platform, and takes office with large Democratic majorities in both houses. Murray, Wagner, and Dingell revise their bill, re-filing it as the National Health Insurance and Public Health Act, which receives 15 days of public hearings by the Senate in 1949. The bill fails to gain support from Southern Democrats necessary for passage.

1950s The Eisenhower Years and a Retreat from National Health Insurance

Representative John Dingell of Michigan in Congress.

With Dwight Eisenhower serving as President from 1953 through 1961, and Republicans controlling both houses of Congress from 1955 through 1961, the prospects for a national health program diminish. However, upon the death of Rep. John Dingell Sr. in 1955, his son John Dingell wins a special election to take his seat and introduces the National Health Insurance Act in 1957 based on the legislation his father had filed in the 1940s, a bill he will introduce every session for 54 years through 2010.

1960s Growth of Private Health Insurance & Passage of Medicare and Medicaid

President Lyndon Johnson signing Medicare and Medicaid into law.

Employer-sponsored health insurance coverage grows rapidly through the 1950s and early 1960s, and both organized labor and Democratic leadership shift focus towards winning healthcare coverage for seniors and the low-income. In 1961 John F. Kennedy becomes President and Democrats win large majorities in both houses. The “Social Security Amendments of 1965,” which include the Medicaid and Medicare programs, are signed into law on July 30th, 1965.

1970s President Nixon and Ted Kennedy’s Health Security Act

Senator Ted Kennedy pitching his health reform to an AFSCME meeting.

During the early 1970s runaway inflation leads President Nixon to impose wage and price controls across the economy, including healthcare services. A sense of inevitability pervades Congress that national health reform of some sort will pass. The primary legislative vehicle for single payer healthcare is Senator Ted Kennedy’s Health Security Act. An alternate single-payer proposal is sponsored by Republican Senator Jacob Javits. These bills, along with competing proposals from President Nixon, the American Medical Association, and the American Hospital Association, receive extensive public hearings in 1971. These include Kennedy’s “Health Care Crisis in America” hearings that tour around the country, as well as additional hearings in the House and the Senate. In 1974 Sen. Kennedy introduces compromise legislation that preserves a role for health insurers as intermediaries, losing support from unions in the process, but a deal with Nixon is derailed by Watergate and his resignation from office in August. When Gerald Ford succeeds to the Presidency, Rep. Mills attempts to move an even further compromised bill through House Ways & Means, but is unable to gain support from Republicans and Southern Democrats.

1980s The Reagan Era and the Beginning of Grassroots Organization

An AMA recording from 1961 featuring Reagan, attacking “socialized medicine”

Ronald Reagan, who in the 1960s had been recruited by the American Medical Association to attack national healthcare as socialist, serves as President from 1981 through the end of the decade. Reagan leads an assault on organized labor and the role of government in public life. No proposals for single-payer healthcare receive significant attention during this period. However, Physicians for a National Health Program is launched in 1986, and from 1988-1990 the bipartisan “Pepper Commission” in Congress develops a recommendation for universal healthcare that sets the stage for the next round of healthcare reform.

1990s Single-Payer Alternatives to the Clinton Health Security Act

Rep. McDermott filed H.R. 1200 in the House for 24 years.

In early 1991 during the second term of George H.W. Bush, Representative Marty Russo introduces the Universal Health Care Act, which gains 72 co-sponsors – a record high for single-payer legislation in the House. Later in ’91 Harris Wofford becomes the first Democrat in 23 years to win a Senate seat in Pennsylvania during a special election, closing a 44 percent polling gap by campaigning for national health insurance. Bill Clinton wins the 1992 Presidential elections promising to implement a universal healthcare plan, and while his Presidential Task Force on National Health Reform meets behind closed doors during 1993, Rep. Jim McDermott and Sen. Paul Wellstone introduce their single-payer proposal, the American Health Security Act with 90 co-sponsors in the House and 4 in the Senate. Clinton instead proposes his “Health Security Act” based on employer mandates, subsidies for the unemployed, and “managed competition,” but the bill fails to advance through Committee. Democrats lose control of both houses of Congress for the next decade.

2000s Growth of the Movement and Passage of the Affordable Care Act

Rep. Conyers’s HR676 came to receive unprecedented support in the House.

George W. Bush serves as President from 2001-2008, but a network of grassroots organizations fighting for single-payer healthcare forms across the country during the 1990s and early 2000s. In 2003, Rep. John Conyers introduces the Expanded and Improved Medicare for All Act, H.R. 676, and Healthcare-NOW is launched in 2004 to advocate for it. For two sessions from 2005-2008, Senator Ted Kennedy and Rep. Dingell file a new national healthcare proposal, the Medicare for All Act. However, when Barack Obama is elected President in 2008 along with Democratic majorities in both houses of Congress, Democratic leadership keeps single-payer proposals off the table while debating and passing the Affordable Care Act from 2009 to 2010.

2010s Failure of the Right, Surge in Single-Payer Support

Sen. Bernie Sanders at a rally for Medicare-for-All.

While the Affordable Care Act is not fully implemented until 2014, in 2011 Bernie Sanders introduces a Senate companion bill to the American Health Security Act, which Rep. McDermott had continued sponsoring in the House since 1993. In 2016 Donald Trump is elected President along with Republican majorities in both houses, promising to repeal the Affordable Care Act. National opposition not only prevents the GOP “repeal and replace” effort, but leads to a surge in support for single-payer healthcare. By 2017 Rep. Conyers’s Expanded and Improved Medicare for All Act hits an historic high of 120 co-sponsors in the House, and Sen. Bernie Sanders introduces a new single-payer bill, the Medicare-for-All Act with 16 co-sponsors in the Senate.

American Health Security Act

September 21, 2017 by  

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American Health Security Act (H.R. 1200, S. 491, S. 915, S. 1782)

Introduced by Rep. Jim McDermott as H.R. 1200 to the 103rd-114th Congresses (1993-2016). A companion bill was introduced by Sen. Paul Wellstone as S. 491 to the 103rd Congress (1993-1994), and by Sen. Bernie Sanders as S. 915 to the 112th Congress (2011-2012) and as S. 1782 to the 113th Congress (2013-2014).


Photo: From left to right, Representative Jim McDermott (D-WA), Senator Paul Wellstone (D-MN), and Senator Bernie Sanders (I-VT).

Index of Information on the American Health Security Act


Details of the American Health Security Act

The American Health Security Act would cover all U.S. citizens with comprehensive healthcare benefits with no cost sharing, under state-administered plans. The bill establishes standards for state health plans, and allows the federal government to place plans under receivership in states not fully implementing the universal healthcare program. The bill also requires portability of benefits across states.

States would reimburse hospitals and other institutions via prospective global budgets. Participating physicians are entitled to receive payments on the basis of fee-for-service, but states can provide alternative payment methodologies as options as well.

The program is nationally financed, and a federal budget is established that allocates funds to states based on costs and medical need. Like the Universal Health Care Act of 1991, the federal budget each year would be capped at the rate of general inflation.

The program is financed through more than 20 tax provisions, including closing a number of tax loopholes, a surtax on individual incomes over $1 million, and a new monthly premium for long-term care.


Contemporary Summaries & Analysis of the American Health Security Act

In July of 1993 the Congressional Budget Office released a “Preliminary Estimate of the Effects of S. 491, American Health Security Act of 1993,” the Senate version of the bill introduced by Paul Wellstone.

The CBO estimate – almost identical to its analysis of the Universal Health Care Act the previous session – found that enactment of S. 491 would raise national health expenditures at first but would reduce spending about 5 percent by 2003. The administrative savings from switching to a single-payer system would offset some of the cost of the additional services demanded by consumers. Over the longer run, the cap on the growth of the national health budget – assumed to be 75 percent effective – would hold the rate of growth of spending on covered services below the baseline.


In January of 1994, the Congressional Research Service released a “Summary Comparison of Major Health Care Reform Bills,” which offered a side-by-side comparison of the American Health Security Act with five other health reform bills, including President Clinton’s Health Security Act, H.R. 3600/S. 1757:


Information on the House Bill, H.R. 1200

American Health Security Act, H.R. 1200 – 114th Congress (2015-2016)
Read the full House bill from 114th Congress (2015-2016).
Read the summary of H.R. 1200 from the 114th Congress (2015-2016).
See the list of 1 Congressional cosponsor for the 114th Congress (2015-2016).


American Health Security Act, H.R. 1200 – 113th Congress (2013-2014)
Read the full bill from 113th Congress (2013-2014).
Read the summary of H.R. 1200 from the 113th Congress (2013-2014).
See the list of 0 Congressional cosponsors for the 113th Congress (2013-2014).


American Health Security Act, H.R. 1200 – 112th Congress (2011-2012)
Read the full House bill from 112th Congress (2011-2012).
Read the summary of H.R. 1200 from the 112th Congress (2011-2012).
See the list of 11 Congressional cosponsors for the 112th Congress (2011-2012).


American Health Security Act, H.R. 1200 – 111th Congress (2009-2010)
Read the full bill from 111th Congress (2009-2010).
Read the summary of H.R. 1200 from the 111th Congress (2009-2010).
See the list of 8 Congressional cosponsors for the 111th Congress (2009-2010).


American Health Security Act, H.R. 1200 – 110th Congress (2007-2008)
Read the full bill from 110th Congress (2007-2008).
Read the summary of H.R. 1200 from the 110th Congress (2007-2008).
See the list of 17 Congressional cosponsors for the 110th Congress (2007-2008).


American Health Security Act, H.R. 1200 – 109th Congress (2005-2006)
Read the full bill from 109th Congress (2005-2006).
Read the summary of H.R. 1200 from the 109th Congress (2005-2006).
See the list of 62 Congressional cosponsors for the 109th Congress (2005-2006).


American Health Security Act, H.R. 1200 – 108th Congress (2003-2004)
Read the full bill from 108th Congress (2003-2004).
Read the summary of H.R. 1200 from the 108th Congress (2003-2004).
See the list of 44 Congressional cosponsors for the 108th Congress (2003-2004).


American Health Security Act, H.R. 1200 – 107th Congress (2001-2002)
Read the full bill from 107th Congress (2001-2002).
Read the summary of H.R. 1200 from the 107th Congress (2001-2002).
See the list of 28 Congressional cosponsors for the 107th Congress (2001-2002).


American Health Security Act, H.R. 1200 – 106th Congress (1999-2000)
Read the full bill from 106th Congress (1999-2000).
Read the summary of H.R. 1200 from the 106th Congress (1999-2000).
See the list of 21 Congressional cosponsors for the 106th Congress (1999-2000).


American Health Security Act, H.R. 1200 – 105th Congress (1997-1998)
Read the full bill from 105th Congress (1997-1998).
Read the summary of H.R. 1200 from the 105th Congress (1997-1998).
See the list of 27 Congressional cosponsors for the 105th Congress (1997-1998).


American Health Security Act, H.R. 1200 – 104th Congress (1995-1996)
Read the full bill from 104th Congress (1995-1996).
Read the summary of H.R. 1200 from the 104th Congress (1995-1996).
See the list of 58 Congressional cosponsors for the 104th Congress (1995-1996).


American Health Security Act, H.R. 1200 – 103rd Congress (1993-1994)
Read the full bill from 103rd Congress (1993-1994).
Read the summary of H.R. 1200 from the 103rd Congress (1993-1994).
See the list of 90 Congressional cosponsors for the 103rd Congress (1993-1994).


Information on the Senate Bills, S. 491, S. 915, and S. 1782

American Health Security Act, S.1782 – 113th Congress (2013-2014)
Read the full Senate bill from 113th Congress (2013-2014).
Read the summary of S. 1782 from the 113th Congress (2013-2014).
See the list of 0 Congressional cosponsors for the 113th Congress (2013-2014).


American Health Security Act, S.915 – 112th Congress (2011-2012)
Read the full Senate bill from 112th Congress (2011-2012).
Read the summary of S. 915 from the 112th Congress (2011-2012).
See the list of 0 Congressional cosponsors for the 112th Congress (2011-2012).


American Health Security Act, S. 491 – 103rd Congress (1993-1994)
Read the full Senate bill from 103rd Congress (1993-1994).
Read the summary of S. 491 from the 103rd Congress (1993-1994).
See the list of 4 Congressional cosponsors for the 103rd Congress (1993-1994).


Bibliography of Historical Writings on the American Health Security Act

Health care law did not end discrimination against those with pre-existing conditions

March 10, 2015 by  

By Kay Tillow on Firedoglake

In 2010 the giant health insurance company WellPoint created an algorithm that searched its database, located breast cancer patients, and targeted them for cancellation of their policies.

A few years earlier Michael Moore’s stunning documentary, “Sicko,” showed an unending list of illnesses that had been used by insurers to refuse to sell people policies, to charge them much more, or to deny payment for “pre-existing conditions.”

The public became acutely aware of these harmful, widespread practices and sharply condemned them.  So it was not by chance that this insistent popular support resulted in inclusion of a ban on these practices in the Affordable Care Act (ACA) that was passed in 2010.

The government website explains.  “Your insurance company can’t turn you down or charge you morebecause of your pre-existing health or medical condition like asthma, back pain, diabetes, or cancer.  Once you have insurance, they can’t refuse to cover treatment for your pre-existing condition.”

Even some Republicans who are trying to repeal the ACA insist that they stand for keeping a provision against such discrimination.  “We would protect people with existing conditions,” say Reps. Paul Ryan, John Kline, and Fred Upton.

Regardless of opinions on mandates or the health reform law in general, the entire nation embraced the part of the legislation that outlawed discrimination on the basis of illness.

So we’ve won, right, at least this much reform?  Sadly, no.

Last July, over 300 patient advocacy groups wrote to Sylvia Burwell, Secretary of Health and Human Services, to express their concerns.  “…(W)e are increasingly aware of evidence that new enrollees, especially those with chronic health conditions, are still facing barriers to care,” the letter said.

The groups that signed the letter are well known.  They include the American Lung Association, Epilepsy Foundation, The Leukemia and Lymphoma Society, National Alliance on Mental Illness, The Parkinson’s Association, Easter Seals, and the AIDS Institute.  They praised the ACA for helping many of their members to finally get coverage.  All of these groups supported the ACA prior to its passage and still do.

The letter urges action against discriminatory benefit designs that limit access for patients that were subjected to pre-existing conditions restrictions prior to the ACA.  They spell it out.  Some plans do not include all the drugs prescribed for enrollees.  Some plans don’t cover critical medications including combination therapies.  Plans can remove medications during the plan year.  Some plans are restricting access to drugs by requiring prior authorization, step therapy, and quantity limits.  The network of physicians and hospitals in some plans is so narrow as to deny patients the specialty care needed.  Much of the information needed for patients to choose the most appropriate plan is not available.

The letter details the damage.  High cost sharing means patients don’t get the drugs they need.  Some plans sold on the exchanges require patients to pay 30, 40 or 50% for drugs that go for several thousand dollars a month.  HIV drugs, certain cancer medications, and multiple sclerosis drugs are among them.

The Leukemia & Lymphoma Society found exchange plans in several states that charged patients with blood cancer as much as 50% co-insurance rates.

Charis Hill, a biking enthusiast from Sacramento, California, counted on the medication Enbrel to keep her moving despite her diagnosis of ankylosing spondylitis.  But then the cost went up to $2,000, far more than she could afford.  “Insurance companies are basically singling out certain conditions by placing some medications on high-cost tiers,” Ms. Hill said.  She called it “pretty blatant discrimination.”

Julie Davis, a young wife and mother of two from Louisville, Kentucky, is struggling with the consequences of this failure to end the discrimination.  Her epilepsy medication, Keppra, that had kept her stable and seizure free suddenly skyrocketed from $60 per month co-pay to $1,200.  The high price forced her to change medications in spite of the professional judgment of her physician.  The seizures returned.  With the problem not yet solved, Ms. Davis has written an Op Ed and testified before the Kentucky Senate Health and Welfare Committee.  She and her organization, the Epilepsy Foundation of Kentuckiana, are publicizing the injustice and working to pass state legislation to cap drug co-pays in Kentucky.

HIV/AIDS patients have had to struggle to obtain the drugs crucial to their survival.  Carl Schmid, Deputy Executive Director of the AIDS Institute, asserted that “limited benefit coverage, cost-sharing for medications that can reach as high as 50%, and lack of transparency…mean many patients…are not receiving the care and medications they need.”

Even the insurance commissioner of the state of Washington, Mike Kreidler, said “there is no question” that “discrimination is creeping back.”

After spelling out the many ways in which patients with chronic conditions are denied access to medications and specialists, the letter concludes:  “We believe these practices are highly discriminatory against patients with chronic health conditions and may, in fact, violate the ACA non-discrimination provisions.”

On October 27, 2014, Secretary Burwell responded to the letter.  She said they would take a look at all of the issues and work to make it better for the future.

The dialog between Burwell and the patient advocacy groups continues.  The advocacy groups urge a crackdown on the companies that continue to discriminate.

As of February, 2015, a study by Avalere Health found that some exchange plans place all drugs used to treat complex diseases – such as HIV, cancer, and multiple sclerosis – on the highest cost-sharing tier.  In 2015 an even higher number of the plans in the exchanges have placed drugs necessary for special conditions on tiers out of reach for patients.   “In spite of the pushback, it’s getting worse, not better,” said Don McCanne, MD, Physicians for a National Health Program policy expert.

When patients can see that their medication is not covered or is far too expensive, they will avoid those plans.  That will allow those insurers to “lemon drop,” to keep those who have expensive chronic conditions out of their plans.  The impact is the same as underwriting and rescission.  Good for profits, bad for patients.

Insurance companies have more tricks than wily coyote.  Their power at the center of our profit-based health care system leaves them in position to defy the law and call the shots.  With most of the enforcement left to understaffed state regulators and violations ubiquitous, we can expect the insurance companies to continue to avoid the sick, to price care beyond their reach, and to find ways to refuse payment.

No other nation in the industrialized world allows insurance companies to run their health care system.  Discrimination is inherent in for-profit health care.  The United States has tried every solution that the insurance companies and their paid experts can devise.  It’s now time to admit that to end the discrimination we must move to single payer public financing that frees our health care from the control of the insurance and drug industries.

All Unions Committee for Single Payer Health Care–HR 676

Kentuckians for Single Payer Health Care

Laborers call for a fix to ACA’s “destructive” impact on unions

August 13, 2013 by  

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From Unions for Single Payer

The Laborers International Union of North America (LIUNA) was one of a handful of unions that did not support the enactment of the Patient Protection and Affordable Care Act (PPACA or ACA). LIUNA was concerned that the law would have an adverse impact on the multiemployer plans on which their members, retirees and families rely for health coverage. The union was assured that their concerns would be addressed. These issues are not yet resolved. Terry O’Sullivan, General President of LIUNA sent this letter to the president, the vice president, Senate Majority Leader Reid, and House Minority Leader Pelosi. LIUNA represents over 500,000 workers in the construction industry.

The letter by the president of LIUNA follows similar letters by the presidents of the IBEW, IBT, UFCW, UNITE-HERE and the Roofers International Union.

July 18, 2013

President Barack Obama
The White House
1600 Pennsylvania Avenue, NW
Washington, DC 20500

Dear Mr. President:

On behalf of the Laborers’ International Union of North America (LIUNA), I am compelled to express our concerns over the destructive consequences of the Patient Protection and Affordable Care Act (PPACA) for multiemployer health and welfare funds. During the drafting and Congressional enactment of this law, LIUNA raised serious concerns that our Union had with aspects of the law and its impacts on the health insurance system that has served millions of hard working Americans and their families over the last forty years. Many of the objections we raised were dismissed out of hand or, we were assured, would be addressed later as the law was implemented.

Unfortunately, policymakers do not seem to appreciate these non-profit, labor-management trust funds that have been providing medical, hospitalization and other health benefits to our members, retirees, and their families for generations. Were it not for these funds, most of LIUNA’s members and families would have lacked health care coverage because of the mobile work patterns in the building and construction industry. These benefits have been gained over the decades through self-help. The funds are simply pools of workers’ money funded by collectively bargained contributions that are wage substitutes.

During the legislative process that led to the enactment of the law, it was clear that the unique nature of the multi-employer plans was poorly understood by the Congress and the Administration. We were assured that our plans would not be adversely affected by the law and that as the law was implemented the issues unique to our universe would be addressed.

As you are well aware, because of our concerns over the impact the PPACA would have on the members of our Union and their families, the Laborers were one of a few handful of unions that did not support enactment of the law. Now, we have watched as the implementation of the law has progressed, our fears have become reality. Instead of working to assure that these insurance pools can continue to provide health care for the workers they serve, administrative decisions have compounded the problem.

The recent announcement by the Department of Treasury that the Administration will provide an additional year before the ACA mandatory employer and insurer reporting requirements begin, along with a delay in the required “employer shared responsibility payments”, only makes this unfair treatment worse. It is bad enough that the employer mandate only applies to companies with more than 50 employees, which excludes most of the construction industry, but now larger “low road” employers are being given an extra year to continue their efforts to subvert the law.

The ACA imposes substantially higher costs on multi-employer funds and union members, while enabling non-union employers to continue escaping responsibility and shift their employees’ health insurance costs to the taxpayers. The law enables non-union contractors to avoid any cost for their employee health insurance, giving them a grossly unfair competitive edge. ACA does not require them to provide health insurance coverage for their employees. There is a “free rider penalty”, but even that small amount applies only to “large employers” and can be easily evaded by any employer.

The ACA encourages non-union contractors to send their employees to the new Health Exchanges for Government-subsidized health insurance. Underscoring the unfairness, the Administration is interpreting ACA as preventing union members with health and welfare fund coverage from receiving Government subsidies for that coverage, even if they meet all of the subsidy eligibility standards.

In other words, non-union contractors’ employees get Government-subsidized health insurance coverage, and union members get to pay for their own coverage through collectively bargained contributions to health and welfare funds. A complicated “two trust solution” has been devised to supposedly correct this subsidy problem, but it is absolutely unworkable. Moreover, it does not address the broader problem of ACA giving non-union contractors an unfair competitive advantage. Our unions are committed to seeing the playing field leveled between the union and non-union sectors of the construction industry.

Health and welfare funds’ costs are increasing because of various benefit mandates and regulatory requirements unnecessarily imposed on the funds. But even more outrageous is ACA’s taxes on funds. The so-called temporary reinsurance tax alone will cost every health and welfare fund $63.00 per covered life for just 2014, for a fund covering 10,000 lives (members and dependents), the tax will be $630,000.00.

The proceeds of this tax will be used by the Government to subsidize insurance companies offering health plans in the Health Exchanges. In effect, ACA takes money from the pocket of each laborer covered by a health and welfare fund and gives it to forprofit insurance companies. The worker gets nothing in return. That is offensive and inexcusable.

At what point will responsible behavior be rewarded?

ACA’s costs will inevitably require increases in collectively bargained contribution rates for health and welfare. This puts more pressure on the total wage package for members. In a competitive environment, higher labor costs generally means fewer jobs.

In short, for unionized construction workers, their employers, and their health and welfare funds, the ACA is proving to be a destructive program that was supposed to control health care costs as was promised. Approximately, 3 million laborers, retirees, and their families now face the very real prospect of losing their health benefits. This, I must remind you, was something that you promised would not happen.

We believe that there are opportunities that the Administration can take to help alleviate some of the impacts that the law is having on our health care plans. We hope that you will work with us to see that these common sense changes are implemented.

Sincerely yours,

TERRY 0’SULLIVAN
General President

Lawmakers and Advocates Rally for Expansion of Program to Include Every American

August 5, 2013 by  

U.S. Rep. John Conyers, U.S. Sen. Bernie Sanders, U.S. Rep Keith Ellison, Others Push for Single-Payer Health Care System

From Public Citizen

WASHINGTON, D.C. – To mark the 48th anniversary of Medicare, congressional lawmakers and consumer advocates today called for Medicare to be expanded to provide health insurance to all Americans and highlighted a new study showing that a Medicare-for-all, or single-payer, system would save enough money to cover all of the 44 to 50 million uninsured Americans.

Participants in a rally outside the U.S. Capitol included U.S. Rep. John Conyers (D-Mich.), U.S. Sen. Bernie Sanders (I-Vt.), U.S. Rep. Keith Ellison (D-Minn.) other members of the Congressional Progressive Caucus and representatives from Public Citizen, Physicians for a National Health Program, Labor Campaign for Single Payer Healthcare, Kentuckians for Single Payer Healthcare, Health Care Now! and All Unions Committee for Single Payer Health Care–HR 676.The event was preceded by a congressional briefing about the cost savings of a Medicare-for-all system and followed by lobby visits.

Although the Affordable Care Act (ACA) is designed to ensure that many more Americans are covered by the time the plan is fully implemented, a single-payer system would achieve far greater savings than the ACA, which maintains the role of the costly and wasteful private insurance industry. It also would be less complicated to put into place because it is already in place for Americans over 65 in the form of Medicare.

“The solution to our nation’s healthcare crisis isn’t cutting Medicare,” said Robert Weissman, president of Public Citizen. “It’s strengthening Medicare and expanding it to cover everyone. A Medicare-for-all, single payer system will ensure that every American is covered as a matter of right, and will save hundreds of billions of dollars by eliminating costs imposed by the wasteful private insurance industry.”

The new study, done by Gerald Friedman, professor of economics at the University of Massachusetts Amherst and released today by Physicians for a National Health Program, shows that upgrading the nation’s Medicare program and expanding it to cover people of all ages would yield more than a half-trillion dollars in efficiency savings in its first year of operation, enough to pay for high-quality, comprehensive health benefits for all residents of the United States at a lower cost to most individuals, families and businesses.

Under the single-payer system envisioned by “The Expanded & Improved Medicare For All Act” (H.R. 676), the U.S. could save $592 billion – $476 billion by eliminating administrative waste associated with the private insurance industry and $116 billion by reducing drug prices – in 2014.

“The evidence is clear,” said Dr. Robert Zarr, a Washington pediatrician and national board member of Physicians for a National Health Program, “An improved Medicare-for-all program is the most equitable and cost-effective way to assure that everyone, without exception, gets high-quality care. As a doctor who sees hard-pressed patients every day, I can tell you that the need for fundamental health care reform has never been greater.”

Savings from a single-payer plan would be more than enough to fund $343 billion in improvements to the health system such as expanded coverage, improved benefits, enhanced reimbursement of providers serving indigent patients, and the elimination of co-payments and deductibles. The savings also would fund $51 billion in transition costs such as retraining displaced workers and phasing out investor-owned, for-profit delivery systems.

Medicare was signed into law on July 30, 1965.H.R. 676, introduced into the 113th Congress by Conyers and 37 co-sponsors, would establish a single authority responsible for paying for medically necessary health care for all residents of the United States.

“Access to quality, affordable health care is more than just a moral imperative,” said Conyers. “It is a basic human right. The Affordable Care Act was a first step in reforming our broken health care system, but it cannot be the last. Until our coverage is truly universal, I will continue to fight – alongside groups like Public Citizen – for single-payer health care that will deliver quality health care to all Americans.”

“It is long past time that we recognize health care is a right, not a privilege,” said Sanders. “It boggles the mind that today, in America, we do not guarantee high-quality, affordable health care for all of our people. I am proud that Vermont is leading the nation in working to establish a single-payer health care system to provide better care at less cost.”

“Medicare-for-all is the high road solution to the fiscal crisis impacting all levels ofgovernment,” said Mark Dudzic, national coordinator of the Labor Campaign for Single Payer Healthcare. “Instead of solving this crisis on the backs of working people, Dr. Friedman’s study shows how we can save hundreds of billions of dollars while making quality health care a birthright for everyone in America.”

States Pushing Medicaid Ruling to Cut Rolls Immediately

July 9, 2012 by  

By David Dayen for FireDogLake

It’s true that states could, after 2014, reduce their Medicaid rolls without the potential consequences of losing their entire federal share of funding. But some states aren’t waiting until 2014.

The court, which upheld most of the law, struck down penalties for states choosing not to expand Medicaid. A few states are also trying to go farther, arguing that the ruling justifies cuts to their existing programs.

Within hours of the Supreme Court’s ruling on June 28, lawyers in the Maine attorney general’s office began preparing a legal argument to allow health officials to strike more than 20,000 Medicaid recipients from the state’s rolls—including 19- and 20-year-olds—beginning in October to save $10 million by next July.

“We think we’re on solid legal ground,” Attorney General William Schneider said in an interview. “We’re going to reduce eligibility back to the base levels in a couple of areas,” he said. Maine, like some other states eyeing cuts, earlier expanded its Medicaid program beyond national requirements.

Other states, including Wisconsin and Alabama, are expected to follow Maine’s lead, though there is disagreement over whether the high court gave the states such leeway. That could lead to battles between states and the federal government that could drag the health law back to the courts. New Jersey and Indiana also said they were evaluating the decision and did not rule out challenging the requirements.

This looks to me like an expansion of what the Court actually said. The Court’s ruling specifically regarded tying the Medicaid expansion to the initial program funding as unconstitutional. If the cuts contemplated now started before the expansion, that seems to fall under the same maintenance of effort rules that remain in place until 2014. This will take further litigation and a new ruling to figure out.

But it does show that states view the Medicaid program as something to raid, not something to nurture. They want to push the limits of the ruling to make as many cuts as possible. So suggestions that red state governors will not be able to pass up a “good deal” like the Medicaid expansion doesn’t match with this reality.

Meanwhile, given these statistics out of Texas, it’s not clear whether an expansion will really result in an expansion.

The number of Texas doctors willing to accept government-funded health insurance plans for the poor and the elderly is dropping dramatically amid complaints about low pay and red tape, showed a survey by the Texas Medical Association provided to The Associated Press on Sunday before its Monday release.

Only 31 percent of Texas doctors said they were accepting new patients who rely on Medicaid, the health insurance program for the poor and disabled. In 2010, the last time the survey was taken, 42 percent of doctors accepted new Medicaid patients. In 2000, that number was 67 percent.

Texas doesn’t have enough primary-care doctors to serve the size of the state or its rapid population growth. The doctors’ reluctance to take on new Medicaid patients comes at a bad time, since the new federal health care law proposes adding 6 million additional people to the Texas Medicaid rolls with the intent of ensuring every U.S. citizen has access to health insurance. The state ranks last in the nation in terms of percentage of people insured, with 27 percent of Texans without any kind of insurance, according to a March Gallup poll.

Obviously, having health insurance coverage that 31% of doctors will honor is better than having no coverage at all. But geographic distribution matters here. Texas is a big place, and a low-income resident, on the off chance that the state expands its Medicaid coverage, may not be able to find a doctor for many miles. The primary-care doctor problem is central to this debate. States predisposed to reject the expansion will justify it by saying they don’t have the resources to accommodate all these new eligible patients on the Medicaid rolls.

Investors with a Conscience Should Divest from Health Insurance Companies

September 21, 2011 by  

By Rob Stone for Tikkun.org

I was the doctor on duty one night in August when the ambulance rushed a man into our Midwestern hospital ER. As I walked into the room, the scene was right out of TV. A nurse was trying to start an IV. Someone was running an EKG. A student had just put oxygen in the patient’s nose. The room seemed crowded. The paramedics were sweating and slightly out of breath.

But my attention was on a pale, thin, fifty-five-year-old man sitting bolt upright on a gurney, clutching his chest and straining to breathe. Cold sweat dripped off his nose. I asked a couple of quick questions as I leaned him forward to listen to his lungs. Someone handed me his EKG showing an acute heart attack.

I slipped out of the room for a second to get the cardiologist on the phone. He would be right in, along with the rest of his team. But it was a Thursday night, late, and they were coming in from home. It would be at least twenty minutes until high-tech medicine could work its wonders, until the cardiologist could thread a thin plastic catheter into the patient’s heart and put in a stent to open his blockage.

I was back to the room in a flash, and he looked no better. We gave him intravenous nitroglycerin, morphine, and powerful blood thinners. He began to look less frightened and some color crept back into his face. We still had a few minutes before they would be ready for him in the cardiac catheterization lab.

Just then I became aware of a woman quietly sobbing in a chair in the corner of the room, probably his wife. I walked over toward her and, as I neared, I reached out to touch her shoulder. She suddenly turned a fierce face up at me, saying: “When he told you he’d been having pain for two hours, he was lying! He’s been having chest pains for the last two weeks!”

She didn’t let up: “We were in the ER six months ago with his chest hurting, and they told him to see his cardiologist, but we don’t have any insurance. They won’t see him again without cash up front! What are we supposed to do?”

Her voice rising, she added: “And you know what else? They’re suing us in small claims court right now over the bill from our last ER visit!”

Here was this poor woman, in my ER, not only deathly afraid that she might lose her husband tonight, but also afraid that whether he lived or died they might face an impossibly huge medical bill and lose their house, their car, everything.

The patient was a self-employed house painter, and he’d had a previous heart problem. Self-employed and a pre-existing condition — in America today with those two strikes, you are out. There is no way to afford health insurance. Is the Affordable Care Act going to fix this?

The Affordable Care Act and the Health Care Lobby

The Affordable Care Act (ACA) faces an uncertain future. The 11th Circuit Court of Appeals in August ruled the individual mandate unconstitutional. Judge Hull, who cast the deciding vote, was a Clinton appointee. The verdict states:

This economic mandate represents a wholly novel and potentially unbounded assertion of congressional authority: the ability to compel Americans to purchase an expensive health insurance product they have elected not to buy, and to make them re-purchase that insurance product every month for their entire lives.

The ACA was essentially written in the Senate Finance Committee chaired by Max Baucus. The actual author was his chief health care aide, Liz Fowler. Her job before working for Baucus? Vice president of WellPoint/Anthem/Blue Cross, the country’s largest health insurer.

bill

President Obama signs the Patient Protection and Affordable Care Act at the White House on March 23, 2010. Credit: Creative Commons/Keith Ellison.

The health insurance industry played both sides against the middle during the congressional debate. While publicly claiming to be in favor of reform, they secretly funneled millions to front groups and organizations like the Chamber of Commerce, which fought the bill tooth and nail. What the insurers wanted most out of the deal was the individual mandate — a federally enforced requirement that all Americans buy their defective products, with taxpayer-financed subsidies for those who couldn’t afford the premiums. What they wanted least were regulatory burdens that might limit their profitability.

Not being able to buy insurance if you are sick is one of the catch-22 aspects of our crazy system. In the eyes of insurance bureaucrats, it seems that life itself is a pre-existing condition. The ACA’s ban on the use of pre-existing conditions to deny insurance coverage is scheduled to go into effect in 2014. Preventing that will be the next target of their lobbying fury.

It’s Good to Be an Insurance Company

In this down economy, there are few bright spots for investors. Thank God for health insurance.

The Big Five health insurers — WellPoint, UnitedHealth, Aetna, Humana, and CIGNA — together cover almost 100 million of us. Their profits from April to June 2011 totaled over $3.3 billion, 13 percent over their second quarter profits in 2010. Last year was their best year ever. For the twelve months ending in July 2011, these giants saw their average stock price rise almost 50 percent. These are huge corporations: WellPoint and UnitedHealth are in the top fifty of the Fortune 500.

What to do with all that profit? WellPoint, the behemoth created a decade ago from formerly nonprofit Blue Cross plans in fourteen states, spent $67 million on lobbying over the past three years. They paid their CEO, Angela Braly, $13 million in 2010, but that was paltry compared to the reimbursement package of UnitedHealth CEO Stephen Hemsley, who cleared $37 million, including the stock options he exercised.

health care profits

Health insurance companies are raking in ever-rising profits, even as patients with insurance are driven into debt. Credit: Creative Commons/Images_of_Money.

Those stock options take on extra significance when company stock repurchases are considered. WellPoint, to take only one example, spent $21.6 billion of patients’ premium dollars to buy back its own stock from 2003 through 2010.

Spending billions on stock buybacks benefits a tiny elite of CEOs, board members, and top officers, who are compensated largely with stock options. They buy the stock back to push the price upward. Their options increase in value as the share price rises. This is an enormous transfer of wealth from individuals and employers to top management. It benefits the largest Wall Street stockholders as well, but not you, not me, not patients.

This industry exists to collect premiums and process claims, and while they have no problems collecting our premiums, it’s a different story when they have to pay. The June 2011 AMA Health Insurer Report Card revealed commercial health insurers have an average claims-processing error rate of 19.3 percent, an increase of 2 percent compared to last year. The increase in overall inaccuracy represents an extra 3.6 million in erroneous claims payments compared to last year and added an estimated $1.5 billion in unnecessary administrative costs to the health system. Medicare, by comparison, had an error rate of less than 4 percent.

They are obviously not using their piles of cash to improve service. What about lowering premiums? In our dreams.

Health insurance premiums have more than doubled over the last ten years, rising at four times the overall rate of inflation. (Over the same period Medicare premiums have barely risen at all, with no increase in out-of-pocket expenses.) While premiums have risen, coverage has shrunk. Copays and deductibles increase every year. People with individual coverage can have annual deductibles of $10,000 and more. No wonder illness leads to bankruptcy, even if you have insurance.

Bankruptcy, Moral and Financial

Every business day in America, 3,700 families file for bankruptcy caused by illness and medical bills, and that number is rising. This shameful situation happens in no other wealthy democracy. It would be a scandal anywhere else. Most medically bankrupt families were middle-class before they suffered financial setbacks. Roughly 60 percent of them had attended college; twenty percent of families included a military veteran or active-duty soldier.

hospital bed

Unexpected stays in a hospital bed drive thousands of middle-class and working-class families to declare bankruptcy every day. Credit: Creative Commons/misguidedsouls.

Most astoundingly, 60 percent of the individuals whose illness led to bankruptcy had private health insurance when they got sick. Don’t we buy health insurance to avoid financial ruin? High deductibles lead directly to bankruptcy and foreclosure. To make matters worse, they cause people to postpone needed care. All of which lead to higher insurance company profits.

The insurers don’t like to tell their customers this, but when they talk to their Wall Street masters, they sing a different tune. Angela Braly of WellPoint, speaking during a conference call for financial analysts in 2008, was asked if she would consider lowering premiums if that would increase enrollment in Anthem policies. Her reply, “We will not sacrifice profitability for membership,” was just what they wanted to hear.

That sentiment hasn’t changed. Recently Aetna’s chief financial officer, Joseph Zubretsky, made similar comments on a conference call. Concerned that investors might think Aetna was willing to grow by adding people to its rolls who could have substantial medical needs, Zubretsky soothed their fears, “We would like to have both profit and growth, but if you have to choose between one or the other, you take margin and profit and you sacrifice the growth.”

Recall that these are the same companies that developed algorithms to target women diagnosed with breast cancer so they could scour their health records for an excuse to cancel their policies. This inhuman practice, known as rescission, has supposedly been banned by the ACA.

Buying Doctors

If insurance companies are not lowering premiums to attract more customers or investing in infrastructure to reduce errors, what else besides their own stock (and some politicians) are they buying? Doctors! UnitedHealth is quietly buying medical groups who treat patients covered by its plans in several areas of the country. WellPoint announced in June that it would acquire CareMore, which operates twenty-six clinics in the Los Angeles area. CIGNA claims that it saves 9 percent on patients treated by doctors in a Phoenix medical group it controls. Is this a good thing?

In July, Kaiser Health News, in an article titled “Managed Care Enters The Exam Room As Insurers Buy Doctor Groups” said:

Some observers watching the developments say the health law, which in part was sold as a way to rein in insurers, has had the opposite result, opening the door for the companies to take control of even more parts of the health system.

“There’s a gigantic Murphy’s law emerging here,” said Ian Morrison, a California-based health care consultant who does some work for United, as well as most of its competitors. “The very people who were the demons in all of this, that the public can’t stand — managed-care firms — are the big winners.”

And the losers? Patients, and those of us paying premiums.

Health, Health Care, and Health Insurance

No other wealthy democracy spends as much on health care as we do. It’s not even close. Most of our peer countries spend about half as much per capita as we do.

If you hear politicians proclaim “America has the best health care in the world,” you can stop listening to them at that point. They are not reality-based. We may be paying the most on the planet for health care, but there is no objective evidence to support the claim that our health care is the best. Again, it’s not even close. The World Health Organization ranks U.S. health care thirty-seventh, just below Costa Rica.

No other wealthy democracy relies on for-profit insurance companies. Here we stand alone.

On August 10, 2011, the Saint Louis Post-Dispatch editorialized, “If America truly is serious about dealing with its deficit problems, there’s a fairly simple solution. But you’re probably not going to like it: Enact a single-payer health care plan.” The editorial goes on to explain that the “way for government to address its health costs is not to shift them, but to reduce them. This is what a single-payer health care system would do, largely by taking the for-profit players (insurance companies for the most part) out of the loop.”

The editorial asserts, “the ACA didn’t go far enough,” and concludes: “Eventually, the United States will have a single-payer plan. But we’ll waste a lot of money and time getting there.” Its authors could have added “and waste a lot of lives” too.

What is a “single-payer plan” like the Post-Dispatch endorses? Robert Reich, author, professor, and secretary of labor under Bill Clinton, explained it this way in February 2011:

If the individual mandate to buy private health insurance gets struck down by the Supreme Court or killed off by Congress, I’d recommend President Obama immediately propose what he should have proposed in the beginning — universal health care based on Medicare for all.

Medicare is a single-payer plan. Everyone over age sixty-five is covered by this simple, single plan, which is publicly financed and privately delivered. How would a single-payer plan save money? The Post-Dispatch explains, “Streamlining payment through a single nonprofit payer would save more than $400 billion per year, enough to provide comprehensive, high-quality coverage for all Americans.”

The respected journal Health Affairs published more evidence of the economic advantage of a single payer system on August 19, 2011. The article “US Physician Practices Versus Canadians: Spending Nearly Four Times As Much Money Interacting With Payers” found that U.S. physicians’ office staff “spent 20.6 hours per physician per week interacting with health plans — nearly ten times that of their Ontario counterparts. If U.S. physicians had administrative costs similar to those of Ontario physicians, the total savings would be approximately $27.6 billion per year.”

The evidence is overwhelming: the for-profit insurance industry adds a huge amount of inefficiency, bureaucracy and cost to our system while adding no value, only hassle. These companies are parasitic middlemen we would be better off without. Their interest is in wealth care, not health care.

cartoon

Reprinted with permission from Mike Luckovitch (CMG-Atlanta).

On top of that, the insurance industry is the single greatest barrier to achieving an efficient and affordable system to cover all Americans. If you have any doubt, read Wendell Potter’s Deadly Spin: An Insurance Company Insider Speaks Out on How Corporate PR Is Killing Health Care and Deceiving Americans. During the debate over the ACA, health insurance lobbyists sank the president’s public option, even though 70 percent of the public favored it. Their war chests overflow with money and their influence grows every day.

Hoping Congress will fix this leads only to despair. We need new ways to weaken the death grip this powerful industry has on us.

Divestment

There is a battle going on for the soul of America. Before he died, Ted Kennedy wrote to President Obama about health care reform, calling it “the great unfinished business of our society.” Kennedy avowed, “What we face is above all a moral issue; that at stake are not just the details of policy, but fundamental principles of social justice and the character of our country.”

Back in the ER on that hot August night, I sent my man to the cath lab and they successfully stented his blockage. He went home the next day with a bill for $25,000. I tried to call him a few months later, but the phone number was “no longer in service.”

Congress and the politicians are “no longer in service.” We’ve got to look elsewhere.

Could we simply boycott health insurance? No, over 50 million are without insurance now, and they are living sicker and dying younger because they have barriers to care.

Stockholders with a conscience have tried for years to engage corporate leadership and have attempted shareholder resolutions to reform the industry from the inside. Despite their best efforts, they have had no significant positive effect so far.

It is time to move beyond resolutions and on to divestment.

The Divestment Campaign for Health Care is one group that is organizing a push in that direction.

From 1985 to 1990, over two hundred U.S. companies cut all ties with South Africa, resulting in a loss of $1 billion in direct American investment. This economic pressure hastened the fall of apartheid. It happened as a result of people power, democracy in action. Pension funds divested from companies doing business with South Africa. Faith communities declared they would not support injustice. Students called on their universities to cleanse their endowments. An idea was born — “socially responsible investing.”

There is nothing socially responsible about investing in the health insurance industry.

Up to now, they have received little scrutiny from investors. One exception is Domini Social Investments, whose Global Investment Standards give “support [for] government’s responsibility to provide basic public goods that are as varied as health care, prisons, primary school education, and national security.” Domini is “concerned about the extent to which health insurance privatizes a public good.” As a result, Domini has disqualified most health insurers from their portfolios.

In contrast, the $4 billion TIAA-CREF Social Choice Equity Fund holds $24 million in WellPoint stock, as well as Aetna and Humana from the health insurance Big Five. WellPoint stock may only represent 0.6 percent of the total fund, but in this large, diversified mutual fund, which includes over 800 individual stocks, WellPoint is in the top 5 percent of the fund’s largest holdings. TIAA-CREF has refused to exclude health insurance companies.

The Presbyterian Church USA, often in the vanguard of the faith community, is there again. Their General Assembly meets in the summer of 2012 and they will vote on an “Overture” to “implement divestment procedures as well as encourage individual Presbyterians and congregations to divest of holdings in the [publicly traded health insurance] companies.” Other faith groups cannot be far behind.

We have nothing to lose. Health insurance companies have everything to lose as their stock prices drop and their influence wanes. Go to your church, your union, your pension plan, your 401k advisor, your university endowment, your city council, your friends and neighbors, and tell them it’s time to get the health insurers out!

Who can defend these corporations? There is no business case, no health care case, no moral case to support their ongoing existence. They make their profits by avoiding taking care of sick people — by refusing to issue policies, canceling policies, or denying payment. I went to medical school in order to care for the sick.

The health insurance industry must go.

Rob Stone is a gardener, grandfather, and teacher. He has practiced emergency medicine in Bloomington, Indiana, since the early 1980s, and for the past year has been transitioning his medical career to hospice and palliative medicine. He is founder and director of Hoosiers for a Commonsense Health Plan and serves on the board of directors of Physicians for a National Health Program.

How Libby, Montana Got Medicare for All

June 16, 2011 by  

By Kay Tillow –

In 2009 when the Washington beltway was tied up with the health care reform tussle, Montana Democratic Senator Max Baucus, chairman of the all powerful Senate Finance Committee, said everything was on the table–except for single payer. When doctors, nurses and others rose in his hearing to insist that single payer be included in the debate, Baucus had them arrested. As more stood up, Baucus could be heard on his open microphone saying, “We need more police.”

Yet when Senator Baucus needed a solution to a catastrophic health disaster in Libby, Montana, and surrounding Lincoln County, he turned to the nation’s single payer healthcare system, Medicare, to solve the problem.

Baucus’ problem was caused by a vermiculite mine that had spread deadly airborne asbestos killing hundreds and sickening thousands in Libby and northwest Montana. The W. R. Grace Company that owned the mine denied its connection to the massive levels of mesothelioma and asbestosis and dodged responsibility for this environmental and health disaster. When all law suits and legal avenues failed, Baucus turned to our country’s single payer plan, Medicare.

The single payer plan that Baucus kept off the table is now very much on the table in Libby. Unknown to most of the public, Baucus inserted a section into the health reform bill that covers the suffering people of Libby, Montana, not just the former miners but the whole community—all covered by Medicare.

They don’t have to be 65 years old or more.
They don’t have to wait until 2014 for the state exchanges.
No ten year roll out—it’s immediate.
They don’t have to purchase a plan—this is not a buy-in to Medicare—it’s free.
They don’t have to be disabled for two years before they apply.
They don’t have to go without care for three years until Medicaid expands.
They don’t have to meet income tests.
They don’t have to apply for a subsidy.
They don’t have to pay a fine for failure to buy insurance.
They don’t have to hope that the market will make a plan affordable.
They don’t have to hide their pre-existing conditions.
They don’t have to find a job that provides coverage.

Baucus inserted a clause in the Affordable Care Act to make special arrangements for them in Medicare, and he didn’t wait for any Congressional Budget Office scoring to do it.

Less than two months after the passage of the health reform bill on March 23, 2010, Nancy Berryhill of the Social Security Administration in Denver joined personally in setting up an office in Libby to sign up these newly eligible people. “This is a new thing,” Berryhill told the Missoulian. “No other group like this has ever been selected to receive Medicare.” Berryhill issued a nationwide alert to inform anyone who had lived or stayed in Lincoln County of their eligibility. She opened a storefront in Libby at the old downtown city hall where she signed up 60 people on the first day. She plastered the towns of Whitefish and Eureka with pamphlets explaining the program and added three new staffers to the office in Kalispell.

Berryhill said she did not know how much the care would cost. That kind of analysis was beyond her directive to sign the people up. There have been no reports of competition from the private for-profit Medicare Advantage plans. The sick are not profitable.

No one should begrudge the people of Lincoln County. The mine wastes were used as soil additives, home insulation, and even spread on the running tracks at local schools. Miners brought the carcinogens home on their clothes. The W. R. Grace Company dumped much of the clean up costs onto the federal government. A June 17, 2009, order by the Environmental Protection Agency, the first of its kind, declared Lincoln County a public health disaster. The Libby Medicare provision in the health reform law is based on the area covered by that EPA order.

Baucus gave his reasons to the New York Times for its only story on this unique benefit: “The People of Libby have been poisoned and have been dying for a decade. New residents continue to get sick all the time. Public health tragedies like this could happen in any town in America. We need this type of mechanism to help people when they need it most.”

Health tragedies are happening in every town. Over 51 million have no insurance. Over 45,000 uninsured people die needlessly each year. Employers are cutting coverage and dropping plans. States in economic crisis are slashing both Medicaid and their employees’ plans. Nothing in last year’s reform law will mitigate the skyrocketing costs. Most insurance is threadbare and doesn’t cover. More than 50% of us now go without necessary care. As Baucus said of Medicare, “We need this mechanism to help people when they need it most.” We all need it now.

Bill Clinton recently stated that the U. S. could give coverage to all for one trillion dollars a year less than we now pay if we adopted the system of any other advanced nation. (Unfortunately, he did not say this when it would have mattered most during the 1993 and 2009 health care reform debates.)

Other industrialized countries have found that to cover everyone for less they must remove the profit-making insurance companies. Congressman John Conyers has reintroduced HR 676, the Expanded and Improved Medicare for All Act, which does exactly that. There are 60 cosponsors. It would cover all medically necessary care for everyone including dental and drugs by cutting out the 30% waste and profits caused by the private insurers.

So as the Ryan Republicans try to destroy Medicare and far too many Democrats use the deficit excuse to suggest cuts in its benefits, let us counter with the Libby prescription to clean up the whole mess. Only a single payer, improved Medicare for All, can save and protect Medicare, rein in the costs, and give us universal coverage.

Medicare will celebrate its 46th birthday on July 30, 2011, and all are invited to join in the festivities. Medicare was passed in 1965 and implemented within less than a year. When we pass HR 676, this single payer bill, we can all be enrolled in the twinkling of an eye.

www.unionsforsinglepayer.org

All Unions Committee for Single Payer Health Care–HR 676

The Obama Health Plan Has Serious Threats to Medicare

October 4, 2010 by  

By Michael Lyon, SF Gray Panthers

Obama’s Health Plan is fatally flawed because it uses insurance companies to deliver healthcare, but the Health Plan also directly threatens Medicare.

People talk about “the healthcare crisis,” but actually there are two healthcare crises.

For us, the healthcare crisis is 51 million uninsured, stripping workers’ health plans, unaffordable health insurance that denies claims and charges high co-pays and deductibles, medical bankruptcies, a tattered safety net, dangerous mistakes in hospitals, and some of the worst health indicators in the industrialized word.

For corporations, the healthcare crisis is the high cost of healthcare premiums for employers, raising the price of US goods so they can’t compete in the world market.

As the debate over healthcare reform developed, media attention shifted from our healthcare crisis to the corporate healthcare crisis. Obama certainly talks about the healthcare crisis from the corporate perspective, and we can see the Obama health plan reduces healthcare costs for government and business, but does not reduce costs for workers and their families.

In fact, the Obama health plan introduces huge increases in costs, by guaranteeing trillions of dollars in profits for health corporations, particularly insurance and drug companies. If the Obama health plan was structured to guarantee huge profits for health corporations, where is the cost containment supposed to come from? Whose costs will get reduced?

Medicare is where costs will be reduced. In fact, more than half the cost of the entire Obama health plan comes from reductions in Medicare spending over the next ten years. The entire Obama health plan will cost about $1 trillion over the next 10 years, and $575 billion[1] will come from scaling back future Medicare increases that are needed to balance out inflation and to care for the baby boomers, who start getting Medicare in 2011.

How big a cut is this $575 billion? Total Medicare spending for 2010 to 2019 was expected to exceed $7 trillion[2], so this $575 billion reduction is up to an 8% cut, applied over the same period that 35 million baby-boomers will enter Medicare. Put differently, for the past 20 years Medicare spending grew 8%[3] per year. The Obama Plan will clamp down Medicare cost growth to 6%[4] per year. It’s not fair: Medicare and its patients would have to reduce their healthcare enough to achieve overall cost savings, even though monumental waste has just been cemented in place.

What’s insidious about this plan is that these Medicare cuts will NOT be felt by Medicare patients as direct cost increases or healthcare restrictions. Instead, the Medicare cuts will be to providers of Medicare treatment: the doctors, and hospitals, and home care agencies, rehabilitation facilities, and even durable medical equipment suppliers. These cuts will reduce providers’ incentive to treat Medicare patients, until the providers finally stop taking them. Like today’s Medicaid patients, Medicare patients will have problems finding someone to care for them.

From 2010-2019, future Medicare increases will be scaled back by $575 billion’
Some highlights:

* $145 billion in payment cuts to private Medicare Advantage plans, scaling their payments back to the level of traditional Medicare.

* $233 billion cuts in direct payments to the providers of Medicare hospital and outpatient care, plus penalties for their expected failure to meet “productivity” goals.

* $50 billion in cuts to Medicare “DSH” payments to hospitals serving low-income Medicare, Medicaid, and uninsured patients.

* $24 billion in cuts ordered by the Independent Payment Advisory Board, a new, independent, high-power, cost-containment commission built into the Obama Plan.

* Payment reforms: putting Medicare doctors under Managed Care.

* Cuts in payments to “inefficient” hospitals, mostly in low-income, medically-underserved areas, often large teaching hospitals serving the poor and uninsured.

Let’s look at these cuts in more detail:

$145 billion in payment cuts to private Medicare Advantage plans, scaling their payments back to the level of traditional Medicare.

In 2012[5], Medicare will begin reducing payments to the privately-operated Medicare Advantage Plans. This will take 3-7 years, depending on how much reduction is needed to bring an individual plan’s payment down to traditional Medicare levels. This is the Medicare cut most people have heard about. Obama has tried to get us to support the Medicare cuts by conjuring up images of him slashing the bloated payments to greedy private insurance companies administering Medicare Advantage plans. (While off-camera he gives private insurers tens of millions of new customers in 2014!)

Medicare Advantage never should have happened. Traditional Medicare was developed in the mid-1960s. Since that time there have been significant developments in medicine such as pharmaceuticals, an increased ability to treat illness on an outpatient basis, and technical advances such as medical imaging, endoscopic surgery, and prostheses. Also, since the mid-1960s, there has been a new attention to diseases of older people, such as chronic disease or mental problems. The potential of these advances has unquestionably been marred by market forces, yet, on balance, they are advances.

These advances should have been incorporated into the government’s basic Medicare plan, allowing Medicare to advance in step with medical science. Instead, corporate forces have blocked Medicare’s evolution, and many of the last 45 years of medical advances are only available to Medicare patients through private corporations. Medicare patients’ two choices are either (1) private Medigap insurance policies, which Medicare patients buy themselves to add benefits on top of their traditional Medicare benefits or pay for their traditional Medicare’s patient charges, or (2) private Medicare Advantage plans, which contract with Medicare to provide all Medicare services, and are paid for mostly by patients buying into the plan, but partly by government subsidies to the corporations running the plans.

The government and Medicare didn’t intend to subsidize these private Medicare Advantage plans. In 1997, HMOs and their lobbyists originally promoted these plans promising that these private corporations could provide traditional Medicare services plus modern medical advances and make a profit. Almost 5 million seniors enrolled in these plans. But the HMOs found they could not make enough profits to satisfy investors, and they started withdrawing their plans. By 2003, 2.4 million patients had been dropped. [6] Rather than responding to this crisis by adding modern medical advances to basic Medicare, the government caved in to corporate pressure, and increased its payments to Medicare Advantage plans. Payments to Medicare Advantage plans have been roughly 120% of payments for comparable patients in traditional Medicare.

It is this government subsidy to private plans which the Obama Health Plan eliminates. The Obama administration is OK with letting Medicare patients bear the extra cost of buying private Medigap policies for complete and modern healthcare. This explains why AARP, which sells Medigap policies, did not oppose the Obama Plan. And the Obama administration is OK with letting patients with just traditional Medicare pay out-of-pocket for additional services. But the Obama administration does NOT want the government to even partly subsidize complete and modern healthcare for Medicare recipients. Once again, the Obama health plan lowers costs for government, but raises costs for beneficiaries.

The payments cuts to Medicare Advantage plans are expected to lead to huge premium increases, benefit cuts, or outright cancellation of programs, which would decrease Medicare Advantage enrollment by 50%[7]. Before we gloat, remember, private insurers might lose up to 5 million Medicare Advantage customers, but they’ll be gaining at least four times that number in 2014 when “universal coverage” kicks in. But the millions on Medicare Advantage patients who are forced back onto traditional Medicare will be stuck with higher out-of-pocket costs or forced to buy private Medigap policies.

To be sure, people’s feelings do differ about the government’s cutting back on payments to private Medicare Advantage plans, but the important thing to remember is that these cuts to Medicare Advantage plans are only ¼ of the total Medicare cuts. What are the rest of the cuts, and how will they affect Medicare beneficiaries?

$233 billion cut in direct payments to the providers of Medicare hospital and outpatient care, plus penalties for their expected failure to meet “productivity” goals. This will lead to a shortage of Medicare providers.

These two kinds of cuts apply to virtually every kind of Medicare provider except doctors. They include hospitals, long-term care hospitals, skilled nursing facilities, inpatient rehabilitation facilities, inpatient psychiatric facilities, hospices, home health agencies, and even durable medical equipment suppliers.

The first kind of cut is a scaling-back of the yearly payment increases these providers get to compensate for their increased costs in providing care to Medicare patients. Actually, these payment increases have never kept up with inflation of medical costs. The yearly payment increases have ranged from 2.0-3.5%[8] over the last decade, but medical care costs in general have increased about 6% annually. In spite of this, the Obama plan will deduct a significant fraction[9] of each year’s payment increase, and the deduction gets worse as time goes on. Medicare providers will have less and less incentive to treat Medicare patients.

The second kind of cut is a one-time penalty if providers cannot increase their “productivity” as fast as the rest of the nation’s economy. CMS, the Centers for Medicare & Medicaid Services, knows it will be virtually impossible for providers to meet this “productivity” target, and has already counted these penalties as an income source. Even if facilities know they can’t meet their productivity targets, there will still be a strong incentive to rush Medicare patients through as fast as possible, to maximize their productivity and minimize the penalty. One medical adviser wrote[10] “Within the next 6-12 months, healthcare organizations will need to find a way to reduce their expenses or increase revenue by 3-5% to offset Medicare productivity adjustments.”

The combination of the across-the-board reductions and the penalties for not meeting productivity targets means many providers will experience absolute decreases in funding from one year to the next.

Medicare’s own Actuary estimates these two types of payment reductions could cause 15 percent of hospitals and other institutions to become unprofitable and stop providing Medicare services by 2019. By 2030 it would be 25 percent of hospitals[11]. According to Richard Foster’s April 23, 2010 report “providers for whom Medicare constitutes a substantive portion of their business could find it difficult to remain profitable and, absent legislative intervention, might end their participation in the program (possibility jeopardizing access to care for beneficiaries). Simulations by the Office of the Actuary suggest that roughly 15 percent of Part A (inpatient) providers would become unprofitable within the ten year projection period (2010-2019) as a result of the productivity adjustments.”[12]

Cuts in payments to “inefficient” hospitals, mostly in low-income, medically-underserved areas, often large teaching hospitals serving the poor and uninsured.

Obama’s speeches on his health plan have tried to reassure older people that the Medicare cuts would be benign because they would be restricted to (1) cutting the bloated payments to greedy Medicare Advantage companies, and (2) improving efficiency in the Medicare system. The concept of efficiency has come to the forefront in the discussion of healthcare financing. How has this happened?

For two decades, the Dartmouth Institute for Health Policy and Clinical Practice has studied Medicare hospital costs and published its results in the Dartmouth Atlas[13]. The Atlas shows big geographic differences in how much is spent, and purports to demonstrate that the high-spending hospitals don’t have better medical outcomes, and sometimes have worse outcomes.

This has all been put together into wild claims by health policy researchers and Obama officials that 30%[14] of medical spending is waste and could be cut without affecting quality of care. Donald Berwick, Obama’s appointee to direct the Centers for Medicare & Medicaid Services, CMS, which administers Medicare and Medicaid, says 50%[15] of medical spending is waste and could be eliminated without affecting quality of care.

A cottage industry of motivational speakers has sprung up, urging seniors to empower themselves and assert their rights to refuse complex medical treatment. For example, pathologist Dr. George Lundberg spoke at San Francisco’s Commonwealth Club in July. He waved his arms and practically shouted to seniors in the audience “Forget those heart by-pass operations! You don’t need them!” He said the same thing about CAT scans and mammography and even advised women not to examine their breasts. After his talk, he praised the Dartmouth Atlas to the sky, and sold autographed copies of his book Severed Trust, Why American Medicine Hasn’t Been Fixed, which advocates limiting access to the healthcare system. Dr. Lundberg is currently editor of the online journal Medscape and was editor of the Journal of the American Medical Association.

Not surprisingly, Dartmouth Atlas director Elliot Fisher is a consultant[16] for the Peter G. Peterson Foundation, which has spent years trying to gut Social Security, Medicare, and Medicaid. Nor is it surprising that insurance companies help finance[17] the Dartmouth Atlas.[18]

One glaring problem with the Dartmouth Atlas study is that it only looks at patients who died 6-24 months after their hospital admission. So patients whose costly care improved their health and saved them from dying are excluded from the study. This biases the results to say that more spending does not improve outcomes. Other studies which include survivors say the opposite: that more costly care can improve outcomes. A December 23, 2009 NY Times article[19] focused on a comparison of hospitals treating heart failure, which included survivors. The UCLA hospital, often cited as high-cost by the Dartmouth Atlas, had 1/3 fewer deaths from heart failure.

The other glaring problem is that the high-spending poor-outcome “inefficient” hospitals cited by the Dartmouth Atlas are in urban or rural areas with high poverty, unhealthy living and working conditions, and poor access to medical care. Patients are already sicker when they go into Medicare, so they need more treatment, and more expensive treatment. These patients also have fewer resources for good after-hospital care. So of course these hospitals’ Medicare costs are higher and their medical outcomes are worse than the “efficient” hospitals in upper-middle class white areas.

In addition, the large, high-cost, “inefficient” hospitals are usually in big cities where salaries are higher, so all healthcare is more expensive. These hospitals are also often teaching hospitals, which have added expenses that are routinely (and legally) charged to Medicare.

The Dartmouth Atlas people, and their supporters in the Obama Administration, claim that they’ve factored these differences in, but other knowledgeable health policy people say this isn’t the case. A June 2, 2010 NY Times article[20] focuses on these issues.

The Dartmouth mania ties into Medicare cost reductions because in future years the Obama plan will decrease payments to “inefficient” hospitals with higher costs and/or worse outcomes. In 2012, incentive payments will go to hospitals with good quality-of-care data for heart attack, heart failure, pneumonia, surgeries, and healthcare-acquired infections. In 2013, incentive payments would also reward hospitals with low spending per Medicare patient[21]. These quality-of-care provisions of the Obama Plan must be “budget neutral,” so other hospitals’ payments will be reduced to pay for the incentive payments. There will also be penalties that will especially hit hospitals with sicker or poorer patients, and hospitals with tighter budgets. There will be $8.2 billion in penalties for hospitals with higher readmissions and $3.2 billion in penalties for hospitals with higher rates of hospital-acquired infections.

The “efficiency” and “quality” rewards and punishments are the medical equivalent of the “No Child Left Behind” program, which lowers school funding overall, and closes low-performing schools in areas of poverty, non-English-speaking populations, and chronically underfunded education.

$50 billion in cuts to Medicare “DSH” payments to hospitals serving low-income Medicare, Medicaid, and uninsured patients.

The Disproportionate Share Hospital (DSH) program provides special funding to hospitals in recognition of their higher costs in treating low-income patients. Starting in 2014, Medicare “DSH” payments to these hospitals will get big cuts.

The Medicare “DSH” payments to individual hospitals were started in 1986 to reflect the higher cost of treating Medicare patients in poor areas where Medicare patients are sicker. Over time, the rationale for Medicare DSH payments was expanded to assure hospital access for all poor and uninsured patients, and payments were based on individual hospital’s days of care for poor Medicare and Medicaid patients. In March of 2007, Medicare’s advisory board MedPAC estimated that 75% of DSH payments were not “empirically justified.”[22]

Beginning in 2014, hospitals receiving Medicare DSH funds will be assured of receiving only 25% of their normally-calculated DSH funds.

The remaining 75% of normally-calculated DSH funds have a percentage cut each year equal to that year’s percentage drop in uninsured population compared to 2013, plus an additional percentage which increases every year from 2014 to 2019. [23] The result is that the hospital’s DSH funds are cut faster than its drop in uninsured patients.

After 2019 DSH funds would be distributed to hospitals based on each hospital’s level of uncompensated care compared to total uncompensated care for all hospitals.

The CMS Actuary estimates these cuts be $50 billion from 2014 to 2019. [24]

$24 billion in cuts ordered by the Independent Payment Advisory Board, a new, independent, high-power, cost-containment commission built into the Obama Plan.

The Independent Payment Advisory Board (IPAB) is charged with clamping down the growth of average per-person Medicare costs. Its powers are essentially beyond the reach of Congress. The Board’s 15 unelected members are experts in medicine, health policy, health care delivery etc., and are appointed by the President with Senate concurrence. The Board can also recommend measures to cut total national health spending.

Starting in 2013, each year’s growth in average per-person Medicare cost will be compared with a threshold growth, based on a modified Consumer Price Index, or later, the Gross National Product. If, in any year, average per-person Medicare cost growth exceeds that year’s threshold, the Board must recommend legislation to either (1) reduce per-person Medicare spending up to 1.5%, or (2) otherwise limit Medicare cost growth to that year’s threshold, whichever is less. [25]

The Board’s cost-cutting recommendations become law unless the House and the Senate each adopt a resolution to block them, by a three-fifths majority. If Congress does reject the proposals, Congress must pass its own solutions yielding equivalent cost reduction within 7 months or Health and Human Services will implement the Board’s recommendation. No judicial review of a Board action is allowed.[26]

Since the Obama Health Plan gives insurance and drug companies such large profits and so little regulation, Medicare beneficiaries’ costs are bound to rise faster than the Consumer Price Index or the Gross Domestic Product, and the Board will have to clamp down on Medicare spending almost every year. Medicare’s own Actuary states that if such a Board had been established 25 years ago, it would have had to act in 21 of those years.[27]

The Board is prohibited from rationing care, increasing taxes, and changing Medicare’s benefits, eligibility or beneficiary cost-sharing, and there is a Consumer Panel that advises the Board to make sure the prohibitions are not broken. So the Board has to reduce payments to providers; physicians, home health, pharmaceutical and medical devices, durable medical equipment, and after 2020, to hospitals.[28] Medicare specialists are very worried.[29]

The Independent Payment Advisory Board is the Medicare cost-cutter of last resort. If any other cost-cutting mechanism fails, the board will make recommendations to make up the difference.

In Medicare Actuary Richard Foster’s April 22, 2010 Report, he wrote “limiting actual Medicare cost growth to a level below medical price inflation alone would represent an exceedingly difficult challenge. Actual Medicare cost growth per beneficiary was below the target level in only 4 of the last 25 years, with 3 of those years immediately following the Balanced Budget Act of 1997; (and) the (negative) impact of the BBA prompted Congress to pass legislation in 1999 and 2000 moderating many of the BBA provisions.”[30] (The 1997 Balanced Budget Act, that ended welfare as we know it, included Medicare cuts even more severe than the Obama Plan, including the Sustainable Growth Rate, SGR, formula for limiting Medicare doctor payments.)

Champion budget hawk Peter Orzag said the IPAB is among the most important of the health reform provisions for “sustaining” Medicare, saying for Congress it represented “the single-biggest yielding of power to an independent entity since the creation of the Federal Reserve.” Orzag called it more than a means of cutting government spending, but also a means of wresting the constitutional responsibility for budgeting away from powerful Congressional committee chairmen.[31]

Payment reforms: putting Medicare doctors under Managed Care

Much attention is being given to “payment methodology” reforms in how Medicare doctors get paid. Almost everyone is familiar with cases of real or hyped abuse of the “fee-for-service” payment system, where doctors are paid for each visit, procedure, or test they order, and so there is a profit incentive to over-treat patients.

But patient abuse also occurs under “per-capita” payment system, where doctors are paid a fixed amount to cover a patient for a year. Here, there is a profit incentive to under-treat patients or treat them as little as possible, since any treatment cuts into the amount of money the doctor was given to cover the patient. (In fact, the only way to remove incentives to over-treat or under-treat is for doctors to be paid by salary as workers, not business-people.)

Managed Care is a variation of the per-capita payment system, where an organization that hires doctors is paid the fixed amount to cover a patient for a year, and the organization maximizes its profits by encouraging the doctors to treat patients as little as possible, through either rewards, penalties, or threats. In the late 1980s and early 1990s, managed care dominated healthcare, which led to large numbers of cases of HMOs denying necessary medical care or providing poor medical care. A major push-back of patients led to patient protection laws and letting up of managed care pressures.

The main thrust of the payment reforms in the Obama plan is to move Medicare doctors away from fee-for-service payment, and instead to work under managed care payment.

One new way to push doctors into managed care is Payment Bundling. In Payment Bundling, doctors, hospitals, nursing homes, and other providers would work together to be jointly accountable for providing care for eight kinds of patient care, such as a hip replacement or cardiac by-pass. For each patient care episode, the group would receive its set fee and divide the money between the doctor, the hospital, the nursing home etc. Hospitals already get a fixed payment for particular episodes of patient care, called the DRG system, but Bundled Payments extend this managed care payment to doctors, since they would get a fixed payment per episode. Payment Bundling is an experimental program beginning in 2013, and Health and Human Services has not chosen what kinds of patient care would use bundled payment.[32]

Another new way to push Medicare doctors into managed care is Accountable Care Organizations (ACOs). ACOs would be groupings of doctors and hospitals who form a legal structure to (1) take responsibility for complete care of at least 5,000 Medicare patients, (2) accept fixed payments from Health and Human Services, and (3) distribute the fixed payments to the providers in the ACO. If, during a 3-year period, an ACO can reduce its average per-person Medicare spending to meet a goal set by Health and Human Services, the ACO can collect an award.[33] If ACOs significantly reduce Medicare costs, planners envisage them managing the healthcare of 40-75% of Medicare patients.[34]

As with any per-capita payment method, the incentive in both Bundled Payments and ACOs is to give less care, since any care given eats into the fixed payment the group receives. If the patient develops an infection, or fails to recover as fast as expected, any extra care given represents a loss in profits.

Many of these new payment reform strategies, like Bundled Payments or ACOs, are sketched out in the Obama Health Plan as “pilot projects,” meaning they are yet to be planned out and tested even on a small-scale basis. The term “pilot project´ has a legal meaning: it can be completely planned, expanded, and put into general practice by the Department of Health and Human Services, an arm of the Executive branch, without any oversight by Congress.[35] A particular pilot project could be completely planned out in secret, to be revealed only at the beginning of a 60-day comment period.

Are business and government serious about making these Medicare cuts?

The Obama Health Plan stabilizes and guarantees billions in profits to insurers, drug companies, and hospitals, yet demands that Medicare alone reduce its future expenses enough to control overall health costs, even as 79 million baby boomers are about to enter the system. This is patently unfair. As Brookings Institution’s Henry Aaron told the House Budget Committee in his June 2008 testimony, “Growth of Medicare spending per person has closely tracked growth of per person spending on health care in general. That parallelism simply reflects the central purpose of Medicare and Medicaid: to assure that the elderly, disabled, and poor receive care similar to that available to the general population. … Holding growth of per person spending on Medicare and Medicaid below that for the general population would imply the gradual abandonment of the national commitment to assure the elderly, disabled, and poor standard health care.”[36]

Many critics, both from the left and the right, criticize the Obama plan, saying it cannot control costs. Critics from the left point to the huge profits to healthcare companies. But many other critics are saying the Medicare cuts we’ve outlined will never happen; that as the cuts come due, Congress will reverse them.

As evidence, they point to the limits on Medicare doctor payments that were written into the severe cuts in the 1997 Balanced Budget Act. These laws said Medicare doctor payments could not grow faster than a so-called Sustainable Growth Rate (SGR). Year after year Congress backed away from enforcing the SGR limit, so that enforcing it now would require a 21% payment cut to doctors. (Attempts to appropriate money to fill this hole were called the “doc fix.”)

Nobody has a crystal ball to see the future with certainty, but I see absolutely no reason why Congress would prevent these cuts from being made. Given the determination of business and government to cut services, particularly federally mandated services to seniors, and given the enthusiasm in Congress to make the same cuts, I think it highly probable they will try to make these Medicare cuts, even as they see the wave of 79 million seniors approaching. But before we place our bets, let’s look at some aspects of the Obama plan that might show promise.

Government Intervention: Quality Control? Cost Control? Is there a distinction?

These new payment reforms are being combined with much greater monitoring and oversight of doctors’ and hospitals’ practices, quality of care, and costs, This new monitoring and oversight are described as “value-based purchasing” or “rewarding value over volume.” These methods would standardize patient care, by adopting standard care plans and prescribed drugs that would be developed through studies of comparative effectiveness and cost. The methods would also require doctors and hospitals to report detailed data on their Medicare costs and quality-of-care indicators. “Quality-of-care” data would report both bad indicators like dosage errors, infections, bedsores, falls, etc. Quality-of-care data would also measure adherence to the standard treatment plans and drug choice protocols.

These interventional aspects of the Obama Health Plan could actually improve patient care by promoting “evidence-based medicine” and close monitoring of quality-of-care data. This standardization and quality control could be very welcome to committed clinicians who are discouraged because so much medical research is sponsored by drug companies or who are outraged because of the laxness and lack of uniformity in medical practice, where a doctor can prescribe powerful adult anti-psychotic drugs off-label to an 18 month old child, as reported recently.[37]

But Dr. Marcia Angell, former editor of the New England Journal of Medicine wrote an important and fresh perspective on these improvements in the Obama plan: “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.”[38]

Marcia Angell’s position is a very different from Obama’s position, which states that these improvements in healthcare will save significant money. Why is this difference important? It is important because by conflating healthcare improvement with cost reduction, Obama is making the Medicare “savings” seem benign, as though the “savings” are an additional payoff of these measures to improve care. It is similar to Obama’s casting Medicare cuts as improvements in efficiency in order to make the cuts seem benign.

In fact, these interventional measures give Health and Human Services and Centers for Medicare & Medicaid Services tremendous centralized power to ratchet back costs to the point of compromising patient care. It gives the government power to standardize patient care plans and drug choices, to reduce payments to doctors for not following the plans, to reduce payments to doctors who spend too much, to reduce payments to hospitals for not meeting productivity standards, to set the payments doctors and hospital get for particular treatments, to push doctors into managed care and then set the payment for coverage per-person per-year, and finally to give an independent commission carte blanche power to reduce provider payment. Given the rampant deficit hysteria in Washington, and demands for corporate tax cuts “to stimulate the economy,” can we be sure these interventions aren’t to ration care to Medicare beneficiaries?

Ultimately, our decision whether to embrace these interventions as a prelude to better healthcare, or fight them as a prelude to rationing, should depend on how much influence we have over policy development. Judging by our recent struggle just to have single-payer mentioned, I would say we have little influence, and therefore these interventions are a threat we need to warn people about.

One can’t ignore the context in which these cuts are being introduced. – Deficit hysteria cultivated in Washington. — Strong agitation by both Democrats and Republicans to cut Social Security, Medicare, and Medicaid. – Demands for corporate tax breaks “to stimulate the economy.” — Economic meltdown followed by persistent, high, long-term unemployment. — Years of huge projected shortfalls in State and County budgets with deep health and welfare cuts. — Years of war projected to secure oil, pipelines for oil and gas, or containment of China or Russia.

These are times when business’s and government’s backs are to the wall. For them, health and social services for elders, people with disabilities, kids, and poor people are not necessary. We are going to have to fight like hell to keep them.

My earlier remarks on health reform still apply:

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.[39]

[1] Centers for Medicare & Medicaid Services, ”Estimated Financial Effects of the “Patient Protection and Affordable Care Act,” as Amended,” April 22, 2010, p. 2

(Available at https://www.cms.gov/ActuarialStudies/Downloads/PPACA_2010-04-22.pdf )

[2] Congressional Research Service, “Medicare Provisions in the Patient Protection and Affordable Care Act (PPACA): Summary and Timeline,” June 30, 2010, p. 5

(Available at http://www.aamc.org/reform/summary/crstimeline.pdf )

[3] Congressional Research Service, “Medicare Provisions in the Patient Protection and Affordable Care Act (PPACA): Summary and Timeline,” June 30, 2010, p. 7-8

(Available as http://www.aamc.org/reform/summary/crstimeline.pdf )

[4] Congressional Research Service, “Medicare Provisions in the Patient Protection and Affordable Care Act (PPACA): Summary and Timeline,” June 30, 2010, p. 7

(Available as http://www.aamc.org/reform/summary/crstimeline.pdf )

[5] The Commonwealth Fund, “Timeline for Health Care Reform Implementation: System and Delivery Reform Provisions,” April 1, 2010, Accessed Sept 15, 2010, listed under “2011, Medicare Advantage”

(Available in cached version at http://tinyurl.com/29cqu4e )

[6] San Francisco Chronicle, “40,000 could lose Medicare, U.S. insurers say payments not up with medical costs” September 9, 2003

(Available at http://tinyurl.com/25zhtsu )

[7] ABC News, “Report Says Health Care Will Cover More, Cost More” April 23, 2010

(Available at http://abcnews.go.com/print?id=10454567 )

[8] Centers for Medicare & Medicaid Services, “Actual regulation market basket updates,” July 29, 2010

(Available at http://www.cms.gov/MedicareProgramRatesStats/downloads/mktbskt-actual.pdf )

[9] Congressional Research Service, “Medicare Provisions in PPACA (P.L. 111-148),” April 21, 2010, p. 88, Appendix B. (Available at http://www.aahsa.org/WorkArea/DownloadAsset.aspx?id=11313 )

[10] West Johnson and Gordon Mountford, “Key Healthcare Reform Initiatives – Medicare Market Basket Productivity Adjustments,” August 12, 2010.

(Available at http://www.goarticles.com/cgi-bin/showa.cgi?C=3218684 )

[11] Centers for Medicare & Medicaid Services, “Projected Medicare Expenditures under an Illustrative Scenario with Alternative Payment Updates to Medicare Providers,” (August 5, 2010), p. 6

(Available at http://tinyurl.com/2cokhh5 )

[12] Centers for Medicare & Medicaid Services, “Estimated Financial Effects of the ‘Patient Protection and Affordable Care Act,’ As Amended,” (April 22, 2010), p. 9-10

(Available at http://tinyurl.com/2cw2e2e )

[13] The Dartmouth Atlas of Healthcare, a project of Dartmouth Institute for Health Policy and Clinical Practice

(Available at http://www.dartmouthatlas.org/ )

[14] Dartmouth Institute for Health Policy Clinical Practice, “Reflections on Geographic Variations in U.S. Health Care,” May 12, 2010, p. 3

(Available at http://www.dartmouthatlas.org/downloads/press/Skinner_Fisher_DA_05_10.pdf )

[15] Health Leaders Media, “Berwick’s First Reimbursement Challenge,” July 26, 2010

(Available at http://www.healthleadersmedia.com/content/FIN-254267/Berwicks-First-Reimbursement-Challenge )

[16] Fiscal Sustainability Teach-In, “Countering the Peterson Foundation’s “Let Them Eat Catfood (and die) Summit,”” April 27, 2010

(Available at http://www.fiscalsustainability.org/node/58 )

[17] New York Times, “Critics Question Study Cited in Health Debate” (June 2, 2010)

(Available at http://www.nytimes.com/2010/06/03/business/03dartmouth.html?pagewanted=all )

[18] Dartmouth Atlas, “About Us.”

(Available at http://www.dartmouthatlas.org/AboutUs.aspx )

[19] New York Times, “Weighing Medical Costs of End-of-Life Care,” (December 22, 2009)

(Available at http://www.nytimes.com/2009/12/23/health/23ucla.html?pagewanted=all )

[20] New York Times, “Critics Question Study Cited in Health Debate” (June 2, 2010)

(Available at http://www.nytimes.com/2010/06/03/business/03dartmouth.html?pagewanted=all )

[21] Foley & Lardner, “Health Care Legal News Alert,” (May 2010), p. 1

(Available at http://www.foley.com/abc.aspx?Publication=7151 )

[22] Congressional Research Service, “Medicare Provisions in PPACA (P.L. 111-148),” April 21, 2010, p. 9.
(Available at http://www.aahsa.org/WorkArea/DownloadAsset.aspx?id=11313 )

[23] 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,” April 9, 2010, p. 6

(Available at http://www.haponline.org/downloads/HAP_Summary_2010_PPACA_HCEARA_April2010.pdf )

[24] Centers for Medicare & Medicaid Services, ”Estimated Financial Effects of the “Patient Protection and Affordable Care Act,” as Amended,” April 22, 2010, p. 26, section 3133

(Available at https://www.cms.gov/ActuarialStudies/Downloads/PPACA_2010-04-22.pdf )

[25] Timothy Stoltzfus Jost, “The Independent Payment Advisory Board,” (April 28, 2010), slides 3 and 4

(Available at http://www.fresh-thinking.org/docs/workshop_100504/Jost_4_28_2010.ppt )

[26] Timothy Stoltzfus Jost, “The Independent Payment Advisory Board,” (April 28, 2010), slides 7 and 8

(Available at http://www.fresh-thinking.org/docs/workshop_100504/Jost_4_28_2010.ppt )

[27] Centers for Medicare & Medicaid Services, “Estimated Financial Effects of the ‘Patient Protection and Affordable Care Act,’ As Amended,” (April 22, 2010), p. 10

(Available at https://www.cms.gov/ActuarialStudies/Downloads/PPACA_2010-04-22.pdf )

[28] Timothy Stoltzfus Jost, “The Independent Payment Advisory Board,” (April 28, 2010)

(Available at http://www.fresh-thinking.org/docs/workshop_100504/Jost_4_28_2010.ppt )

[29] Fierce Healthcare, “Specialty Physicians Support Senate Bill to Repeal the IPAB,” (July 27, 2010)

(Available at http://tinyurl.com/2dplc4y )

[30] Centers for Medicare & Medicaid Services, “Estimated Financial Effects of the ‘Patient Protection and Affordable Care Act,’ As Amended,” (April 22, 2010), p. 10

(Available at https://www.cms.gov/ActuarialStudies/Downloads/PPACA_2010-04-22.pdf )

[31] New York Times, “For Budget Chief, Not All Farewells Are Fond,” (July 28, 2010)

(Available at http://www.nytimes.com/2010/07/29/us/politics/29bai.html )

[32] Foley & Lardner Legal Newsletter: Health, “PPACA Will Drive Quality Health Care Reform,” “National Pilot Program on Payment Bundling”

(Available at http://www.foley.com/publications/pub_detail.aspx?pubid=7141 )

[33] Foley & Lardner Legal Newsletter: Health, “PPACA Will Drive Quality Health Care Reform,” “Medicare Shared Savings Program — Accountable Care Organizations (ACOs)”

(Available at http://www.foley.com/publications/pub_detail.aspx?pubid=7141 ) and

Congressional Research Service, “Medicare Provisions in the Patient Protection and Affordable Care Act (PPACA): Summary and Timeline,” June 30, 2010, p. 31

(Available at http://www.aamc.org/reform/summary/crstimeline.pdf )

[34] National Healthcare Reform Magazine, “Bending the Curve(s),” (August 3, 2010)

(Available at http://healthcarereformmagazine.com/article/bending-the-curve-s-.html )

[35] Health Beat, “What Many Liberals Don’t Understand About Health-Care Reform,” (June 16, 2010)

(Available at http://tinyurl.com/276xpjj )

[36] Henry J. Aaron, TESTIMONY to COMMITTEE ON THE BUDGET, U.S. HOUSE OF REPRESENTATIVES

on H.R. 3654, June 24, 2008, p. 4

(Available at http://budget.house.gov/hearings/2008/06.24aaron.pdf )

[37] New York Times, “Child’s Ordeal Shows Risks of Psychosis Drugs for Young,” (September 1, 2010)

(Available at http://www.nytimes.com/2010/09/02/business/02kids.html?pagewanted=all )

[38] Boston Globe, “Held hostage by the health system,” (May 23, 2009)

(Available at http://tinyurl.com/oosgxs )

[39] Michael Lyon,” Health Reform? Off The Table,” (March 23, 2010)

(Available at http://wp.me/p3xLR-nL )

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