Now that we're into the recess period of bitter and distorted controversy over the shape of health care reform when Congress re-convenes in September, it is timely to reassess the extent to which legislation this year may or may not meet the goals for reform. Recall that the three major objectives are to provide near-universal access to affordable health care, contain health care costs, and improve quality of care.
It seems certain that the House bill (H.R. 3200) will be the most generous bill to come out of Congress to help people afford medical care. The Senate Finance Committee opposes a public option, favoring instead co-ops, which are unlikely to work. The Senate is also more likely to restrict eligibility for subsidies to help lower-income people purchase health insurance under the individual mandate. And we can expect that any conference committee between the House and Senate bills will further attenuate whatever comes out of the House.
But even H.R.3200 in its present form, even if it could overcome strong opposition by Republicans and Blue Dog Democrats, will not make health insurance more affordable or contain health care costs, two of its essential goals. How can we say that? Here are some of the reasons:
1. It leaves a dying private health insurance industry in place. The nation's 1,300 plus insurers are mostly for-profit and investor-owned, are beholden to shareholders to maximize their revenues, limit their "losses" (payments for medical care), and provide the best returns to investors. They take about one-fifth of the health care dollar for providing mostly administrative services, with overhead and profit-taking five to nine times larger than public financing through Medicare's three percent overhead. The two largest insurers, WellPoint and UnitedHealth Group, made profits in 2007 of $3.3 and $4.6 billion, respectively. Annual compensation for insurer CEO's in 2007 ranged up to $23 million (Aetna).
As described in my recent book, Do Not Resuscitate: Why the Health Insurance Industry Is Dying, and How We Must Replace It, we have never been able to effectively regulate this industry, which has many ways to game any system by cherry-picking the market. In exchange for their pledge to stop denying patients coverage on the basis of pre-existing conditions, the industry gains employer and individual mandates, together with new federal subsidies, to increase its market by up to 50 million people. AHIP and its lobbyists have already succeeded in neutering the public option to a small program without enough potential market share or flexibility to set its own premiums to effectively compete with private insurers. Moreover, the industry has been lobbying behind the scenes to restrict whatever definition of minimal coverage benefits ends up in any final reform package. Thus, private insurers stand to gain millions of new enrollees, many subsidized by government. We can also expect that coverage will be limited and that premiums, cost-sharing and out-of-pocket costs for patients and their family will continue to go up.
2. None of the reform bills have effective mechanisms to rein in costs of health care in our market-based system. Reimbursement policies are not likely to be changed enough to reduce incentives for providers and hospitals to provide unnecessary or limited benefit services. Providers and facilities will still have wide latitude to set their own prices. And although H.R. 3200 does include a provision to establish a Center for Comparative Effectiveness Research, an E & C Committee amendment prohibits the use of comparative effectiveness findings "to deny or ration care or to make coverage decisions in Medicare."
3. Government subsidies to prop up the private insurance industry come at a high price. If the House bill's eligibility criteria prevail (subsidies for people making less than 400 percent of the federal poverty level), the CBO estimates that their costs will be $773 billion between 2013 and 2019. In addition, the CBO projects that Medicaid expansion for families of four with incomes up to $33,000 a year would cost about $500 billion over ten years. On the other hand, if the Senate and a House-Senate conference committee further limit eligibility for subsidies and levels of coverage, as seems certain, we can anticipate that patients and families will pay even more for health insurance and care than they do now. Recall that the average costs of insurance and care already exceed 19 percent of family income for a family of four, considered by the Commonwealth Fund to be a hardship level.
4. If anything, we'll end up with a mandate for underinsurance, whether through employers or individuals. H.R. 3200 already calls for four levels of coverage to be offered through the Exchange, ranging from 70 to 95 percent of the costs of benefit costs). In an effort to shave costs of a reform package, Senate committees are considering coverage plans down to only 60 percent of benefit costs. So people will end up paying more for less coverage.
5. Though touted by their advocates for their potential to save money, there is solid research that tells us that programs emphasizing prevention and wellness, as well as expanded use of information technology, are instead likely to add to the cost of health care.
To be fair, H.R. 3200, as a work in progress, still has some potentially very useful provisions. For example, the recent amendment to H.R. 3200 passed by the House Energy and Commerce Committee would allow the government to negotiate the prices of drugs for Medicare patients. This came as a shock to PhRMA and the White House, who thought that assurance of no price controls would be the quid pro quo for the industry's pledge to kick in $80 billion over the next 10 years toward health care reform. As another example, H.R. 3200 calls for the Secretary of Health and Human Services "to limit health plans' medical loss ratios to a specified percentage, to be enforced through a rebate back to consumers." But if you think that the battle over health care reform is wild now, just imagine the response from AHIP if such a goal is established at five or ten percent (compared to three percent for Medicare)!
Despite some useful provisions, however, it is wishful thinking to believe that health care "reform", as projected by current proposals being considered in Congress, can actually make health insurance more affordable and "bend the cost curve" sufficiently to make a real difference to people already burdened by their spiraling costs. That raises an interesting question as the political forces advance to the next stage in the battle:
Since there is a paygo bill in the House with 85 co-sponsors, H.R. 676, the Conyers bill) that would assure universal coverage and save money for government, employers, taxpayers, patients and families, and since Speaker Nancy Pelosi has promised that it will come to a floor vote in the House this Fall, can we imagine that it could be passed with bipartisan support of fiscally conservative Republicans, Blue Dog Democrats, and other liberal and progressive
Democrats? If the debate is all about saving money (either for the government, taxpayers or patients) that's a logical question that we'll consider more in our next post.
John Geyman, M.D. is the author of The Cancer Generation and Do Not Resuscitate: Why the Health Insurance Industry is Dying, and How We Must Replace It, 2008 by John Geyman. With permission of the publisher, Common Courage Press.
Buy John Geyman's Books at: http://www.commoncouragepress.com
http://www.hr676.org/
http://www.tribstar.com/news/local_story_224190857.html
sign the petitions, call you congress folks.
Medicare for all.
End this bs compromise.
This is NOT what I voted for, this is NOT the health care platform Obama ran on. He ran on a STRONG public option, which I understood as an expansion of Medicare to the rest of us. I figured we'd either pay a direct premium for that Medicare or have it taken out of our paychecks- either way it'd be way less than private insurance premiums. But that's not even close to what's currently being proposed.
H.R. 676 is the only way to go. I cannot in good faith support the public option in it's current watered-down form.
2) If a the medical community used "Best Medical Practices" and can prove it (third-party) you would get the same savings as tort reform (100 billion).
3) Since the workbooks always represent the best possible care and are always learning, America would indeed have the best healthcare in the world.
4) Because the workbooks are in XML what is covered or not can be completed in real-time using a web-service and not require a phone call to the insurance company (Senator Sander's 400 billion in administrative costs.)
The president mentioned this checklist in his townhall in Montana, curious, I went looking for the source.
http://www.newyorker.com/reporting/2007/12/10/071210fa_fact_gawande
If more programs like this were employed, the savings could be huge. Simple, effective, and common sense practices.
http://projects.washingtonpost.com/staff/email/
We let Wall Street hijack medicine. We have let insurance companies avoid their fundamental role of insuring risk. We have allowed profit driven parasites to stick their nozzle into the river of money that funds care. At the end of the day we spend twice per capita what any European country spends and get lousy care (37th according to the WHO), which leaves out nearly 50 million people. But like those abused children we are easily frightened into acting against our own interests. We fear change because things might get even worse.
If this nation was serious about health care reform we would have begun by having a discussion on whether to go with a single payer system (like medicare and Canada) or a nationalized system (like the VA and England). Instead our president took them off the table in a move who's sole purpose was to save the utterly valueless private insurance industry. That first move told me what the real aims of this bill would be all about.