mn-uhcan joel albers solving the health care crisis in minnesota minnesota universal health care...

MN-UHCAN Joel Albers

Solving the Health Care Crisis in Minnesota

Minnesota Universal Health Care Action Network

Prepared and Researched by: Joel M. Albers health economics researcher, clinical pharmacist

Website: www.uhcan-mn.org, www.drugindustrywatch.bravepages.com

Email: joelalbers@uhcan-mn

Tel: 612-384-0973

http://www.uhcan-mn.org/

http://www.uhcan-mn.org/

http://www.drugindustrywatch.bravepages.com/


Outline• Documentation of the health care crisis

• Analysis of power structure of the industry

• What’s causing the health care crisis ?

• Compare universal publicly-funded single-payer model to private HMO, multi-payer, job-based market approach.

• What polls, studies show about various health care reform models ability to cover all without increasing costs.

• Solving the Crisis by Building a Movement


Essence and Summary of Health Reform Debate

• Health care system that is market-based in which health care is a commodity, distributed according to ability to pay ?

• Health care system that is social insurance distributed according to need?


Documentation of the health care crisis


Is There Really a Health Care Crisis in MN and U.S. ?

• “The American Health system is in need of fundamental change. It is failing both clinicians, and patients, and their frustration levels have never been higher”, U.S. Institute of Medicine, 2001 Report


WHO: Health System Rating

• US Ranks 37th in the World

who.int/whr/2000/en/report.htm


Uninsured in Minnesota

• Point in time: 5.4% (266,000), at time of survey

• Uninsured at some point in year:8.1%

• Uninsured at some point in 2 yrs:20% or 941,000**

Source: * MN Health Dept ‘01 Health Access Survey;** Robert Wood Johnson

Foundation. Survey did not ask about mental health coverage .

Minnesota’s population = 5 million 2004


Underinsured in MN• 16% lack prescription drug insurance

• 50% of seniors lack prescription drug coverage

• 34% lack dental coverage

• Large unmeasured % lack mental health coverage

• Private insurance and Medicare generally do not cover long term care (neither nursing home nor home health care)

Source: * MN Health Dept ‘01 Health Access Survey


2001 Minnesota Uninsured Rates by Race/EthnicitySource: MN Health Dept 2001 Health Access Survey

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

16.00%

18.00%

Am Ind Afr Am Hisp/Lat AsiAm/PI White

16.1% 15.6%17.3%

6.6%

4.5%


International Comparison: Canada’sSingle-Payer v. U.S. Multi-Payer System

• Life expectancy 2 years longer

• Infant deaths 25% lower

• Universal comprehensive coverage

• More MD visits, hospital care; less bureaucracy

• Quality of care equivalent to insured Americans’

• Free choice of doctor/hospital

• Health spending half U.S. level


8 MN Labor Union Strikes Provoked by Health Care Costs 2000 - 2004

• 2004 Transit Union ATU 1005

• 2003 AFSCME 3800 U of MN

• 2002 Teachers in Red Wing

• 2002 Teachers in International Falls

• 2001 Nurses Fairview Hospital

• 2001 MN Association of Professional Employees

• 2000 HERE, Hotel and Restaurant Employees

• 2000 Teamsters Minneapolis Pepsi workers


MN 2003 Legislature Cut $200 Million From Public Assistance Programs

• 38,000 people will lose public health insurance by 2007

• Severe restrictions for people still on MNCare,GAMC

Source: MN Dept of Human Services


Effects of Budget Cuts on only Remaining Public Hospital: Hennepin Cty Medical Center

• Overcrowded emergency rooms

• Understaffing,higher workloads, longer shifts

• Lower quality health care

• $30 million in federal government cuts

• $7.8 million in other cuts

• Less revenue from public assistance patients, more uncompensated care

• Serious $ problems, 190 “nonclinical” staff fired.Source: www.savehcmc.org

Save HCMC Coalition 612-338-3331

http://www.savehcmc.org/


Power structure of the industry


Power Structure of MN Health Care Industry:Medical-Industrial-Government-Academic Complex

• Health Professional Associations: MMA, MPubHA, MN pharmacists Assoc.

• Corporate: HMOs, drug, medical device, biotech corporations:attorneys,lobbyists

• Big Business, MN Business Partnership, Chamber of Commerce

• Trade Assocs: MN Council of Health Plans (HMO), MNBio (biotech)

• Think tanks: Interstudy (HMO),MedicalAlley (Tech)

• Foundations: HealthPartners Research Foundation

• Government agencies:Legislature, MN Dept of Health

• Commissions: Pawlenty-Durenberger

• Academia: U of MN

How MN HMO & Drug Corporate Money Controls MN Legislature,2000

House Health & Human Services Policy Cmte $28,187

Senate Health & Family Security Cmte $24,943

House & Senate Legislative Caucuses* $194,221

MN DFL Party $4,500

Republican Party of MN $178,880

Source: MN for Fair and Clean Elections, *Caucuses are the legislative leaders’ PACs


What’s causing the health care crisis ?


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MN Statewide Health Care Cost Trends; Current Law

Billions $

Year

Sources: Center for Medicare and Medicaid Services www.hcfa.gov ; “Health spending projections for 2001-2012,Health Affairs, 2/3/03

20.4

37.2

60.8

http://www.gov/stats/NHE-Proj/2000/Tables


Double-Digit Health Care Cost Increases in Every Sector of MN

• Total Statewide

• State government

• Seniors

• Business

• Labor Unions

• Households


Market-based System Since 1994 Results in Oligopoly4 Private HMOs Control MN Health Care Market 2002

• Blue Cross-Blue Shield, 2 million members

• Medica, 1 million members

• HealthPartners,660,000 members

• Preferred One, 600,000 members

• These 4 insure 9 of every 10 Minnesotans,

• Own or investors in most of MN’s major hospitals & clinicsSource: HMO companies


Allina 27%, 29.2%

Fairview University 26%, 20.9%HealthEast12.0%, 12.1%

Hennepin Cty 8%,6.3%

HealthPartners,(was Regions) 7%,7.6%

Methodist 6%

Children’s 5%,5.6% Other non-affiliated 3%,3.9%

Twin Cities Hospital Market Share,1996 & 2001Measured as Percent of Inpatient Admissions

Source: MN Dept of Health, Consolidation in MN’s Health Care Market, Issue Brief 98-04, MN Managed Care Review 2002, Part 1

N.Memorial 7%,7.8%


What is causing health care costs to spiral out of control?

Medical-industrial-government-academic-complex

strategy: blame consumer demand & overutilization

• Drink too much alcohol

• Smoke too much

• Overweight

• Don’t feel cost of care

• Aging population

• Malpractice costs


Myth: The US Health System Costs so Much Because Americans Drink and Smoke so Much

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Liters/yr % adult smoke


Myth: US Health Care Costs so Much Because Americans are so Fat

www.iuns.org/features/obesity and Obesity Res 2001;9:2306


Myth: US Health Care Costs so Much Because Americans Don’t Feel the Cost of Care

% of total health spending: WHO: 2000


Myth: US Health Care Costs so Much Because Americans don’t personally pay for Health Care

$0

$100

$200

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France NZ

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Japan

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$ OOP/yr


Myth: US Health Care Costs so Much Because Americans are Really Old!

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Over 65


Per Capita Spending and % Elderly

$0

$500

$1,000

$1,500

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DevelopedNationsUSA

% of Population over 65 Health Aff 2002;21:170


Myth: Malpractice costs are why US Health care costs so much

% of total US Health Spending

• Premiums MD and Hosp .07%

• Defensive medicine .12%

– Comp Ther 1998;24:455-9


What is REALLY causing health care costs to spiral out of control?

In reality, the CAUSE comes from the supply side

• HMO premium prices, administrative costs

• Drug,medical device, biotechnology company prices


It’s the Prices and Administrative costs

• Health Care Costs = Price X Volume + adm costs


Excess Administrative Costs (% of Revenues) in U.S. Compared to Canada,1999

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Insurer Employer HospitalNursing Home Practitioner

HomeCare

Total

5.9%

1.9%

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1.0%

24.3%

12.9%

19.2%

12.2%

26.9%

16.1%

35.0%

15.8%

31.0%

16.7%

Source: Woolhandler S., Campbell T., Himmelstein D. Costs of Health Care Administration in the U.S. and Canada. New England Journal of Medicine 2003;349:768-75


International Comparisons

• Every other industrialized nation has a healthcare system that assures medical care for all

• All spend less than we do; most spend less than half

• Most have lower death rates, more accountability, and higher satisfaction


U.S. Public Spending Per Capita for Healthis Greater than Total Spending in Other Nations

Note: Public includes benefit costs for govt. employees & tax subsidy for private insuranceSource: NEJM 1999; 340:109; Health Aff 2000; 19(3):150

$1,670

$1,750

$1,850

$2,230

$2,430

$2,620

$1,760 $2,600

$0$1,000$2,000$3,000$4,000$5,000

U.K.

Sweden

Japan

France

Canada

Germany

U.S.

$ Per Capita

Total SpendingU.S. PublicU.S. Private


How are profits made in Health care ?

• HMOs,other insurers are fiscal intermediaries (middlemen) do it by denying care, underutilization

• Drug, device, biotech companies do it by overpromotion, overutilization

• Thus, the system suffers from both overutilization, AND underutilization of health care services


What is single-payer compared to current HMO multi-payer enterprise ?


Single-payer is: publicly financed andadministered, yet privately practiced, social insurance system• Public financing; public taxes replace private premiums

• Public Admin: the single-payer- a citizen board- replaces multi-payers

• Social insurance: All in,None out; healthy subsidize sick, disperse financial risk over entire population.No bankruptcy

• Socialized medicine: ONLY if gov’t EMPLOYS practitioners and OWNS hospitals, nursing homes etc


Health Care is a Public Good:

• like roads, fire protection, parks

• something we all need but cannot afford to pay for ourselves

Basic principles of a single-payer system • Universal – it covers everyone

Comprehensive – covers all needed health care services

Cost Containment – sets fee schedules for practitioners, budgets for hospitals, controls prices; ends insurance co. waste.

Choice of Practitioners – patients choose practitioners

Fairly Financed – funds health care by consolidating existing public programs, & a tax that replaces premiums & copays.

• Publicly Accountable – a board of citizens sets fee schedules for providers, budgets for hospitals, and ensures quality of care.


Models for Single-payer Health Care ?

• U. S. Medicare 41 million elderly and disabled

• Internationally: Canada, Sweden, Norway, Denmark


Myths About Single-payer perpetuated by Medical-Industrial- Government-

Academic Complex

• We can’t afford it

• It’s socialized medicine

• It’s not politically feasibility

• It will stifle innovation

• We would have to ration care

• Will increase taxes

• It would be government run


Difference Between Single-payer and Multipayer-HMO system

Analogy

• Fences (Macromanagement)

• Reins (micromanagement)


How the HMO System Works in MN • Micromanagement system to control costs by restrict or deny services

• Managed care: hands-on supervision of practitioners

• Transferred financial risk to physicians (capitation bonuses)

• Utilization review,

• Heavier workloads

• Sometimes limiting choice of physician.

• Managed competition theory: competition among HMOs controls costs.


What the polls, studies, and cost analyses show about various health

care reform models.


Which of these do you think is more important?

80%80%

20%20%(Base=795)

Providing health care coverage for all Americans, even if it means raising taxes

Holding down taxes, even if it means some Americans do not have health care coverage.

opinions regarding health care servicesopinions regarding health care services

Eight out of ten Minnesotans are willing to pay higher taxes in order to ensure that all Americans have health care coverage.

ABCNEWS Poll Comparison:The response was very similar in the national poll with 17% favoring holding down taxes and 80% favoring providing health care for all Americans.

80%80%

20%20%20%

80%


Washington Post/ABC Poll Oct 2003

• 62% of the U.S. supports a national health care system that covers everyone

• 32% favor the current system

• 6% don’t know

• Most think Canada’s (single-payer) system is better


56% of Medical Students & FacultyFavor Single Payer,

Majority of Med School Deans Concur

Source: NEJM 1999; 340:928

22%

56%

3%19%

Managed Care Single PayerNo Preference Fee-for-service

“What is the best health care system for the most people?”


9 State Studies Conclude Single-Payer Financing Saves $ While Covering All

• Massachusetts Medical Society, 2 studies, 1998• California, funded by State legislature, 2002*• Oregon, Health Care for All, 2001• Vermont State publicly funded study, 2001 *• Maryland, privately funded*• Maine• Rhode Island 2002• Missouri 2003

*Evaluations carried out by The Lewin Group, Inc


7 National Studies Conclude Single-Payer Financing Saves $, Covers All U.S.

• Economic Policy Institute (private) 1998

• 4 studies by Congressional Budget Office, ‘91-’93

• U.S. General Accounting Office, 1991

• Physicians for a National Health Program,PNHP,’91


Projected Universal Single-payer Health Plan

Savings for MN 2005 (in millions) Total Health Care Expenditures (current law) $ 37,194

Additional health care utilization from extending coverage to under and uninsured, & eliminating cost sharing

+$ 3,905

(10.5% of total costs)

Minus excess administrative costs now incurred by insurers, employers, hospitals, practitioners,nursing homes, home health care

-$ 6,309

(17% of total costs)

Savings from prescription drug discounts a/ - $ 982


Total Health Care Expenditures, Single-payer $ 33,808

Total Savings under Single-payer AFTER covering all $ 3,386


Source: Joel Albers


State-by-State Estimates of Single-payer SavingsMN Ranks 3rd in U.S. Administrative Savings Available Per Uninsured

Resident

2003 Projected Health Expend. Current System

Millions $

Admin. Expenses in

Millions $

Potential Admin. Savings in

Millions $

Uninsured Residents in 2001

1000s

Admin. Savings Available per Uninsured

Resident $

D.C. 6,226 1,816 1,244 70 17,771

Mass. 43,603 12,090 8,556 520 16,453

MN 28,862 7,885 5,793 392 14,777

R.I. 6,353 1,672 1,174 80 14,677

WI 28,598 7,727 5,527 409 13,513

Harvard/Public Citizen Report by Himmelstein D.U., Woolhandler S, Wolfe S. , “Administrative Waste in the U.S. Health Care System in 2003: The Cost to the Nation, the States, and the District of Columbia, “ With State-Specific Estimates of Potential Savings. August 27, 2003.


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Year

billions

Cost growth under

current trend of 7.3% per year

Single-payer: limit costgrowth to 5.5% per year

Future Savings, Minnesota Total Health Care Spending: current system v. single-payer

Cumulative savings from 2005 - 2012 = $ 56.2 billion

37.2

33.8

60.8

49.3

56.7

46.7

52.9

44.3

49.3

42.0

45.9

39.8

42.8

37.7

39.9

35.7

Source: Joel Albers


Projected Health Expenditures 2005: Transition to, Implementation of Single-payer, (in millions)Single-payer expenditures in 2005 $ 33,808

Admin. costs 1st yr of plan operation:(6% of program costs)a/ +$ 2,029

Health Care Operating Budget b/ $ 35,837

Additional 1% of Operating budget for displaced worker training c/

$ 358

Construction Account, 1.15% of Op budget d/ $ 389

Reserve Account e/ $ 290

Total Health Plan Budget $ 36,874

Source: Joel Albers


Estimated Financing of Single-payer Health Plan,2005 (in millions)

Government programs such as Medicare, Medicaid,and State employees, 44% of base personal health care expenditures

$ 16,365

Payroll tax at 9.5% of $108.9 billion $ 10,563

Income tax at 5.1% of $179.9 billion Personal Income $10,794

Transfer of workers compensation medical payments $ 470

Transfer of medical portion of automobile insurance $ 573

Total projected revenue $ 36,929

Source: Joel Albers


Building a Movement

• Organizing Model

• Goals

• Objectives

• Strategies

• Tactics

• Timeline


Organizing Model: affinity group-spokescouncil-consensus is one model

• Networking & Coordinating (v. Centralized Single-issue Coalition) : organizations horizontally linked, diverse, inclusive

• Organizational Structure: decentralized, non-bureaucratic, non-hierarchical, organizations send reps to spokescouncil mtg

• Decisionmaking process: All decisions democratic by consensus, participatory, every voice heard equally.

• Develop Work Plan to proactively set mission, goals, objectives, strategy, narrowed down to specific Tactics and Timeline


Infrastructure: working groups

• Actions: strikes, rallies,marches, street theater, creative, continuity

• Outreach: flyering, tabling, endorsements, resolutions, petitions

• Education: forums,conferences, speaker’s bureau, HC resource center

• Legislation: bills, lobbying, hearings

• Media: independent, mainstream, incite sustained, accurate debate

• Research: cost analysis, analysis of policy proposals, surveys

• Communications: website,e listserve, phone tree


Goal and Objectives

Goal:• Implement Universal Single-payer

Objectives:• Political: State Legislation Single-payer• Economic: Organizing huge purchasing

groups until reach one state pool.


Strategy and TacticsStrategy• Create fair democratic debate in MN, demarginalize us

• Build grassroots base and capacity of organizations into Network: labor, practitioners, seniors, community

Tactics• Guerrilla health care: change debate spin w/ few resources• Protest any publicly unaccountable institution. corp or gov • Striking labor unions can mobilize groups.


Of All Of The Forms Of Inequality, Injustice in Health Care is The Most Shocking and Inhumane -- Martin Luther King jr.

mn-uhcan joel albers solving the health care crisis in minnesota minnesota universal health care...

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