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PHYSICIANS FOR A NATIONAL HEALTH PROGRAM 29 EAST MADISON SUITE 602 CHICAGO, IL 60602 TEL: (312) 782-6006 WWW.PNHP.ORG

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PNHP health reform overview

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Page 1: Pnhp Health Reform Slide Set 11 09

PHYSICIANS FOR A NATIONAL HEALTH PROGRAM

29 EAST MADISONSUITE 602CHICAGO, IL 60602TEL: (312) 782-6006

WWW.PNHP.ORG

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The Uninsured

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Financial Suffering Among the INSURED

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Rising Economic Inequality

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Persistent Racial Inequalities

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Racial Disparity in Access to Kidney Transplants

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Rationing Amidst a Surplus of Care

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Unnecessary Procedures

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Variation in Medicare Spending:Some Regions Already Spend at Canadian Level

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Half of Americans Live Where Population Is Too Low for Competition

Source: NEJM 1993;328:148

A town’s only hospital will not compete with itself

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Profit-Driven HMOs: A Problem, Not a Solution

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Medicare HMOs:A Cautionary Tale About

Competition Between Public and Private Plans

(AKA Public Plan Option)

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Despite Medicare’s Lower Overhead, Enrollment of

Medicare Patients in Private Plans Has Grown

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Private Medicare Plans Have Prospered by Cherry Picking

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Investor-Owned Care:Inflated Costs, Inferior Quality

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For-Profit Hospitals’ Death Rates are 2% HigherSource: CMAJ 2002;166:1399

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For-Profit Hospitals Cost 19% MoreSource: CMAJ 2004;170:1817

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For-Profit Dialysis Clinics’ Death Rates are 9% Higher

Source: JAMA 2002;288:2449

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Drug Companies’ Cost Structure

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High Deductible Insurance:Except for the Healthy and

Wealthy, It’s Unwise

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Mandate Model Reform:Keeping Private Insurers

In Charge

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“Mandate” Model for Reform

• Proposed by Richard Nixon in 1971 to block Edward Kennedy’s NHI proposal

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“Mandate” Model for Reform

1. Expanded Medicaid-like program Free for poor Subsidies for low income Buy-in without subsidy for others

2. Employer Mandate +/- Individuals3. Managed Care / Care Management

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“Mandate” Model - Problems

• Absent cost controls, expanded coverage unaffordable

• Computers, care management, prevention not shown to cut costs

• Adds administrative complexity and cost; retains wasteful private insurers

• Impeccable political logic, economic nonsense

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The Massachusetts Reform: Headed Towards Failure

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Massachusetts Health Massachusetts Health ReformReformNew CoverageNew Coverage

< 150% Poverty - < 150% Poverty - Medicaid Medicaid HMOHMO

150% - 300% poverty - 150% - 300% poverty - Partial Partial subsidysubsidy

> 300% poverty – > 300% poverty – Buy Your Buy Your OwnOwn

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Massachusetts: Required Massachusetts: Required CoverageCoverage(Income > $31k)(Income > $31k)

Premium: $4,800 Annually (56 Premium: $4,800 Annually (56 year old)year old)

$2000 deductible$2000 deductible

20% co-insurance AFTER 20% co-insurance AFTER deductible is reacheddeductible is reached

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Crimes and Punishments in Crimes and Punishments in MassachusettsMassachusettsThe CrimeThe Crime The The

FineFineViolation of Child Labor LawsViolation of Child Labor Laws $50$50

Employers Failing to Partially Employers Failing to Partially Subsidize a Poor Health Plan for Subsidize a Poor Health Plan for WorkersWorkers

$295$295

Illegal Sale of Firearms, First OffenseIllegal Sale of Firearms, First Offense $500 max.$500 max.

Driving Under the Influence, First Driving Under the Influence, First OffenseOffense

$500 min.$500 min.

Domestic AssaultDomestic Assault $1000 $1000 max.max.

Cruelty to or Malicious Killing of Cruelty to or Malicious Killing of AnimalsAnimals

$1000 $1000 max.max.

Communication of a Terrorist ThreatCommunication of a Terrorist Threat $1000 $1000 min.min.

Being Uninsured In MassachusettsBeing Uninsured In Massachusetts $1068$1068

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How Many are Uninsured in How Many are Uninsured in Massachusetts?Massachusetts?

State and Blue Cross Surveys – 2.6%State and Blue Cross Surveys – 2.6%

Phone survey, few non-english speakersPhone survey, few non-english speakers Census Bureau – 5.5%Census Bureau – 5.5%

Door-to-door survey, all local languagesDoor-to-door survey, all local languages Mass. Department of Revenue – 5%Mass. Department of Revenue – 5%

of taxpayers, as of 1/1/2008 – based on of taxpayers, as of 1/1/2008 – based on taxtax

returnsreturns

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Tried and Failed:State Experiments with Mandate Model

and Other Incremental Reforms

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Massachusetts 2006

“Every uninsured citizen in Massachusetts will soon have affordable health insurance and the costs of health care will be reduced.

Gov. Romney.”

Sources: Wall Street Journal 4/11/06 and New York Times 4/5/06.

“The bill does what health experts say no other state has been able to do: provide a mechanism for all of its citizens to obtain health insurance.”

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Massachusetts 1988

“I am very proud of the fact that Massachusetts will be the first state in the country to enact universal health insurance.”

Gov. Dukakis`

Sources: New York Times 4/14/88 and 4/26/88

“Massachusetts last week ventured where no state has gone before: it guaranteed health insurance for every resident.”

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Sources:Washington Post 6/9/92 and 3/20/`93

Oregon 1992

“Today our dreams of providing effective and affordable health care to all Oregonians has come true.”

Gov. Roberts

“The most far-reaching health care reform in the nation.”

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Sources: Federal & State Insurance Week 4/12/93; and NY Times 9/16/94

“The most radical health care plan in America.” “Tennessee will cover at least 95% of its citizens with health insurance by the end of 1994.”

Gov. Ned McWherter

Tennessee 1992

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Vermont 1992

“This is an incredibly exciting moment that should make all Vermonters proud.”

Gov. Dean

Source: New York Times 4/12/92

“Governor Howard Dean, the only governor who is a doctor, signed a law here today that sets in motion a plan to give Vermont universal healthcare by 1995.”

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Sources: New York Times 4/19/92; and Richard Reece, Medical World News 7/1/92.

“Minnesota is enacting a program that will be the most sweeping effort yet to provide health insurance to people who lack it . . . the first complete reform proposal in the U.S.”

“Minnesota is about to embark on a plan to solve the health-insurance crisis that could hold lessons for other states and the nation.”

Minnesota 1992/1993

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Washington 1993

Source: New York Times 5/2/93

Washington state “passed one of the most aggressive health care experiments in the nation, a program that would extend medical benefits to all 5.1 million residents of the state . . . .”

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Sources: AP Newswire 4/25/06 and Ellen Goodman, Washington Post Writers Group 7/7/03.

“It’s bold and comprehensive, and it’s now the law of the state.”

Gov. Baldacci

Maine 2003

“Maine has just become the first state in the union to approve a plan to provide universal access to affordable health insurance.”

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Public Plan Option:The Next Disappointment

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In 1962 Republicans Jacob Javits and John Lindsay proposed a Public Plan Option (H.R. 11253 and S. 2664) as an alternative to a public Medicare plan

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Public Plan Option Saves LittleEven if Half of Privately-Insured Switch

• No savings on hospitals’ billing or internal cost tracking Hospitals already use computerized uniform bill (UB-82) Global budgeting could save $90 bil. annually

• No savings on NH/home care bureaucracy ($24 bil. saved with single payer)

• No savings on MD office bureaucracy Single payer would save $85 bil. annually through simple,

uniform fee schedule, eliminating prior-approval etc.

• Insurance overhead reduced $38 bil. v $131 bil. under single payer Private insurers retain significant market share Hospital/NH payment can’t be simplified without global budgets Need to collect premiums, track enrollment disenrollment etc.

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Public Plan Option Cannot Solve Cost Problems

• Achieves only a fraction (1/7th) of administrative savings possible through single payer – makes expanded coverage unaffordable

• Medicare HMO experience shows private plans undermine fair competition despite regulations – avoid expensively ill

• Public plan effectively serves as subsidy for private insurers, taking on many high cost patients and few profitable ones

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Public Money, Private Control

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The U.S. Trails Other Nations

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Canada’s National Health Insurance Program

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Quality of Care Slightly Better in Canada Than U.S.

A Meta-Analysis of Patients Treated for Same Illnesses

(U.S. Studies Included Mostly Insured Patients)

Source: Guyatt et al, Open Medicine, April 19, 2007

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A National Health Program for the U.S.

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Phony vs. Real Reform

Phony

• Choice of HMO/insurer

• Coverage = Copays, exclusions etc.

• Security = Lose it if you can’t work or can’t pay

• Savings = Less care

Real

• Choice of doctor and hospital

• Coverage = First $, Comprehensive

• Security = For everyone, forever

• Savings >$400 bil on bureaucracy

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Public Opinion Favors Single Payer National Health Insurance

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