No Health Care Bill is Better Than a Bad Bill

The new House bill for health care reform (HR 3962), unveiled by Speaker Nancy Pelosi on October 29th, will not fundamentally reform U.S. health care.

If you were to believe the hype that accompanied its release, you might think that it would be as important as Medicare and Social Security. The New York Times concluded that "This bill will take a long stride toward universal coverage while remaining fiscally responsible." Nobel laureate economist Paul Krugman added: "The political environment is as favorable for reform as it's likely to get. The legislation on the table isn't perfect, but it's as good as anyone could reasonably have expected."

But this bill is not good enough to pass. It will not make a big enough difference in addressing the three main problems requiring reform--containing the spiraling costs of health care, providing universal access to affordable health care, and improving its quality. If we look at the provisions of this 1,990-page bill concerning just the first two of these three goals, we see that it will fail to deliver real reform.

After all of the political compromises along the way that have led to the introduction of the new bill (HR 3962), on the positive side we can say that it will introduce some limited reforms to the health insurance market, expand health insurance to some of the uninsured (primarily by expansion of Medicaid and by often-inadequate government subsidies to individuals and small employers for the purchase of private insurance); and help to address some other problems, such as the growing shortage of primary care providers.

But the negative side far outweighs the positive:

• Although supporters of the new House bill claim that it would expand coverage for as many as 30 million uninsured, we are actually likely to see an increase in the number of uninsured in coming years for these kinds of reasons--as costs keep going up, many Americans will be forced to drop
their present coverage because of inability to afford rapidly rising costs of premiums, deductibles and co-payments; there is no guarantee that the uninsured will be able to afford new private coverage (even with subsidies, which won't kick in for another four years); and expansion of Medicaid will
not take place until 2013 (many states are already pushing back with concerns that the their recession-strained budgets will not allow them to pay their share in adding to their Medicaid programs, potentially leaving millions of the poorest Americans uninsured.

• There are no effective cost containment mechanisms built into the bill, either for the costs of health insurance or for health care itself. As it whines about weakening of the individual mandate that will likely limit some of its big increase in the insurance market, the health insurance industry is already warning that sharp premium increases will result. The most the bill will do is to require disclosure and review of premium increases, without any regulatory teeth. Although the bill would set up a Health Benefits Advisory Committee to recommend a minimal essential benefits package (with four tiers), insurance industry lobbyists will argue for the most minimal levels of coverage, and we can anticipate an exponential growth in underinsurance. Moreover, there are no price controls to be applied anywhere in the system, except perhaps in authorizing the government to negotiate drug prices with manufacturers. But that provision will almost certainly not clear the Senate, where we can expect even less concern for affordability and prices.

• Although the public option has been the target of intense controversy, it will play a negligible role in health care reform. The CBO has concluded that it would cover no more than 6 million Americans, just two percent of the population, in 2013, and will cost more than private programs, mostly due to adverse selection in attracting sicker individuals and its inability to set reimbursement rates for physicians and hospitals as is done by Medicare. Moreover, middle-income families may be required to spend 15 to 18 percent of their income on insurance premiums and co-payments.

• HR 3962 will not result in making health care more affordable, despite allocating some $605 billion over ten years for subsidies to low- and middle-income Americans to buy insurance on Exchanges. We can count on continued increases in the cost of health insurance as far as the eye can see, together with less actuarial value of coverage.

• Buried in the fine print of this monster bill are many provisions that will benefit corporate stakeholders in the medical industrial complex on the backs of patients and their families. These examples make the point:

• Although medical loss ratios (MLR) (the proportion of premium revenue actually spent on medical care) are specified at a minimum of 85 percent, this loophole has been added--"while making sure that such a change doesn't further destabilize the current individual health insurance market." By way of comparison, the Senate Commerce Committee has found that the average MLR for the largest insurers in the individual market is only 74 percent, with 26 percent of premium revenue going to marketing, administrative overhead and profits.

• Although the bill would create a much-needed Center for Comparative Effectiveness Research, it would have no say over reimbursement and coverage policies. As the bill says, it "contains protections to ensure that research findings are not construed to mandate coverage, reimbursement or other policies to any public or private payer."

In sum, this $1.055 trillion plan over ten years will not fix the major problems of cost and affordable access to health care in our deteriorating system, will add new layers of bureaucracy and complexity to the present system, is not fiscally responsible, and is not sustainable.

What to do now? Rather than accept an unworkable bill that is politically expedient, we would be better off to make a major course change. That vote could take place as early as tomorrow.

If that fails, shelving this bill would be the best option. Until a few days ago, I would have added that lawmakers should be pressed to retain the amendment proposed by Dennis Kucinich (D-Ohio) to allow states to experiment with single-payer plans, as a number of states would like to do (e.g. California, Colorado, Illinois, Maine, New Mexico, New York and Pennsylvania). Although that amendment had already been passed by a rare bipartisan vote of 27-19 in the House Education and Labor Committee, it has been stripped from the bill.

The best first option would be to call for a floor vote, as originally promised by the House Speaker Pelosi, for the amendment proposed by Anthony Weiner (D-NY) to substitute HR 676, a single-payer proposal, for HR 3962. If that fails, shelving this bill would be the best option, but if that is not possible, lawmakers should be pressed to retain the amendment proposed by Dennis Kucinich (D-OH) to allow states to experiment with single-payer plans, as a number of states would like to do (eg. California, Colorado, Illinois, Maine, New Mexico, New York and Pennsylvania).

That amendment has already been passed by a rare bipartisan vote of 27-19 in the House Education and Labor Committee. Whether a health care bill survives the end game in both chambers of Congress in this session is still up in the air. If a bill is finally enacted into law, however, it will be ineffective in remedying the big problems of cost and access to health care. We should be gearing up for an intense effort in 2010 to push for real health care reform--Medicare for All.

Dr. John Geyman is professor emeritus of family medicine at the University of Washington School of Medicine in Seattle, a past president of Physicians for a National Health Program and author of "Do Not Resuscitate: Why the Health Insurance Industry Is Dying, and How We Must Replace It." Buy John Geyman's Books at: www.commoncouragepress.com

 

Comments

[rmonroe]

Well geez, what do you expect with the Democrats in the White House, controlling Congress, and a super majority in the Senate? Did you expect some real reform? Ridiculous isn't it, we haven't had this type of control ever yet we still don't get real health care reform that was promised to us by Obama. Nice change buddy.

[artemrss]

No one will be denied health insurance because of a pre-existing condition, no one will be purged from a policy they have been paying on for years because the insurance company refuses to pay, no one will have their insurance stop because they reached the cap due to some horrific accident or illness. The donut hole will be reduced, more than 36 million Americans will now be covered. The costs will be taken care of by the reduction in paper work with electronic medical records, there will be reductions in Medicare insurance fraud; yes, these will not take place overnight, but each year we will see improvements. This is a start. This is a very significant and monumental achievement; give it its just due. What has happened to us? This is a good thing for the American people and for our country. This will help to put us up there with the global economy where the Western Industrialized countries have had health care for their citizens in place for decades. If there is any downside, it is that abortion will not be funded by the insurance reform. This is such a backward move. This is a legal procedure and should be between a woman and her doctor. There are many reasons this procedure should be kept and it absolutely must remain a woman's right to choose. This is a medical decision and a medical procedure. The back alley butchers will be back; what a travesty.

[Matt7]

So, if NO bill is passed, how likely is it that we'll get this close to trying to pass another one, anytime in the near future?

[Nivloc]

Dear Matt7,

What will happen if nothing is passed? Things will get much much worse. The insurance companies will cause an enormous amount of suffering and many more people will die for their profits. Then, only after an onslaught of public outcry, will real change happen.

Now, let's consider what happens when the Obama administration passes this piss poor reform bill currently being voted on tomorrow. It will increase access for many, it will drive up the cost, it will act as a bandaid that is left on a wound too long. It will get tirty and ultimately cause infection.

If you read my 3 part post that just preceeds this you will understand why I say that. In the end the same thing will happen. A massive public outcry will demmand a Single Payer system replace the criminal institution we call healthscare.

[Awake-and-Sing]

It may never come again, or things with continue to decline and pressure to change with increase.

That's still not a reason to force tens of millions of people to buy for-profit insurance at extortion level rates with heavy tax penalty if they don't, with no access to a robust public option.

Only the tiniest fraction of people may access it and that leaves tens of millions of people the victims of extortion.

It's utterly immoral to force tens of millions of people who cannot afford health care now to buy for profit insurance as a form of trillions of dollars of corporate welfare.

[Nivloc]

Yup. Couldn't agree more.

[Nivloc]

part 3 of 3

The gist is they lied to portray the prices PRIOR TO NEGOTIATION as being LOWER than they actually were. With that as a starting point HMO's, hospitals and doctors were being fed crumbs while being asked to see ever more patients in a smaller and smaller amount of time. As a consequence rushed work is shoddy work, patient care suffers, and our adverse prescription drug reaction rates, nosocomial infection rates, missed diseases, and iatrogenic injuries have soared. If we factor in all of those attributes, AND then realize that the premium paid by the patient has not come down despite the so called negotiations with the various providers, we see that the price we pay for that simple X-ray is astronomical BECAUSE the insurance companies are involved. I have to point out that malpractice insurance is not a major contributor to cost, and neither are malpractice lawsuits. They do contribute something, but all real reports only attribute a small fraction to them combined. If you really want to bring down the cost of health care, Destroy the For-Profit­-Health-In­surance system. That alone will make us save money, and healthier as a nation.

[blizb]

The insurance companies have grown too powerful to care about the people they take money from.

Everyone knows that bills that pass can be amended, changed, repealed, etc, etc.

I say better to move forward with something to see if it will start progress in saving our people and saving some money and adjust it as needed to serve the people.

Politicians seem like they don't want to work for the people.

They want it their way and the way that causes them to avoid work.

It sounds to me like they don't want to pass it because dealing with in and legislating changes to it are too much work for them.

None of them have cancelled their own government insurance but will go to "Tea Parties" and protest their own healthcare.

If any of these individuals, Republican or Democrat really believe "no government plan" then they would cancel their own insurance and go private.

Put your money where your mouth is and cancel your government insurance.

Not one of the critics will do so in any political office.

[Nivloc]

Part 2 of 3
Radiologist look at hundreds of films a day - that's all they do - and they are paid well for it, as they should be. But right now they are paid via a clearing house called an insurance company that has negotiated with that Radiologist (who agreed to certain terms when he/she went to work for that HMO, hospital or otherwise) to be paid less than the "cash rate" for the benefit of being funneled cases to work on. So, if you're astute you will have noticed that if you want to pay cash, probably because you don't have insurance, you will pay more. In what other business do you pay more when you pay with cash? Who determines what that "cash rate" is? How many foxes are in this hen house? The insurance companies have hired various firms that were supposed to collect data on what doctors charge and what a service cost and then to suggest a price that would be considered the Standard and Customary Fees charged if Insurance companies were not negotiating on our behalf. I submit this to you as a refresher on the topic; http://www.washingtonpost.com/wp-dyn/content/article/2009/07/22/AR2009072202216.html

[strangelet]

Sorry to put up a 2-part comment. In the first part, I attempted to point out that HR3962 actually contains some very significant reforms, and (though not universal) will extend coverage to, perhaps, 36M Americans who do not have insurance right now. Today.

In this comment, I'd like to address two of your "fine-print" concerns. You suggests that lobbyists will water down coverage, and therefore increase under-insurance. I'm sure they will try. However, the essential benefits package, its actuarial coverage level, and its cost-sharing limits are defined IN THE STATUTE. The law would have to be changed to reduce the minimum required level of coverage. Ultimately, there is no defense against changes to the law, except voting for the right folks.

As to your complaint about the fine print on the MLR spec -- (1) there is no loophole with respect to the group market; (2) the "loophole" can only be exercised by HHS; it's not a freebie for the industry. Again, we all still have to continue to pay attention.

Sadly, your points about the absence of meaningful cost-containment are correct, because any meaningful cost-containment requires a major restructuring in the way we pay for health care (e.g., eliminating insurance companies) and/or government oversight of diagnostic and treatment procedures (i.e., "rationed care"). Eventually, both of these things are inevitable, but right now both of them are absolute political poison. HR3962 is MUCH better than nothing.

[Nivloc]

Dear Strangelet,
I appreciate your thoughtful evaluation of Geyman's article. I'd like to address a point on cost's. Currently we have a skewed perception on what something costs. For example, a standard medical X-ray of the chest to check for lung cancer, rib fx, Pot's disease, or what have you. The actual cost of the film (if it isn't digital) is a few bucks, and nothing if it is digital, or near nothing as pixels are bought in bulk these days. We could go into the cost of the old style chemical developers, still used in some offices, but since they are going by the wayside we can forgo that. Then there is the X-ray machine itself. Pretty hardy pieces of equipment really, except the x-ray tube, which can run several thousand dollars to replace when they burn up. But repairs are infrequent and so those expenses are negligible. The real expense is from the Radiologist who analyzes the film, writes a report, stakes his/her reputation on those findings and guarantees that he/she didn't miss anything.

More coming-

[strangelet]

With all due respect, you cite "three main problems requiring reform--containing the spiraling costs of health care, providing universal access to affordable health care, and improving its quality", and then assert that "concerning just the first two of these three goals, we see that it will fail to deliver real reform".

Then you mention, sort of in passing, that it will "introduce some reforms to the health insurance market, expand coverage by about 36 million to health insurance by several means...".

Among those "some reforms" are some pretty big items: prohibiting denial for pre-existing conditions; prohibiting cancellation for getting sick; prohibiting annual and lifetime limits; prohibiting recission except in the case of fraud, as verified by an independent third party; limiting the range of age-rating to 2:1; setting minimum limits for Medical Loss Ratio. There are virtually no health insurance policies that currently contain any one of these features.

As far as universal coverage goes, I don't see any excluded class except for aliens not lawfully present. To the 36 million folks who are now NOT insured, but who will be if HR3962 survives, it'll look a lot like universal coverage. (And, BTW, I fully understand that the millions of undocumented aliens are human beings, too; but right now it is not politically possible to cover them. I do not agree that we should withhold coverage to the 36M as a protest).

[Oldwave]

"Among those "some reforms" are some pretty big items: prohibiting denial for pre-existing conditions; prohibiting cancellation for getting sick; prohibiting annual and lifetime limits; prohibiting recission except in the case of fraud, as verified by an independent third party; limiting the range of age-rating to 2:1; setting minimum limits for Medical Loss Ratio. There are virtually no health insurance policies that currently contain any one of these features."

With no mechanism in place to regulate costs, the insurance industry will simply raise their rates ever higher to make up any losses from these "reforms".

[droftim]

I'm not necessarily a fan of single-payer. I am an advocate for a *universal* plan. That might end up being single-payer but I think most people in this country would be more comfortable with all-payer (similar to Germany or France) or a universal individual payer program like the Netherlands or Switzerland.

For that reason, I would prefer to see an amendment that would allow states to experiment with any variation of "universal" coverage

[S E Martin]

Could you explain a little more how those are different than, say, "medicare for all"? What does "all pay" mean? Or universal individual payer? I'm intrigued by the other options.

My idea of single payer is that everyone is basically in one big insurance pool (like Medicare, but for everyone). Everyone has to pay in in their lifetime (like SSI and Medicare.)

[rmonroe]

Single payer means we would start putting people's lives over profits. Simple as that. You know, as any decent human being would do.

[Nivloc]

Thank you, John,

I downloaded the whole document, but it is way too complicated to digest very quickly. I appreciate your critique.

So, we have a terd for a reform bill that will bankrupt more people to add billions to the coffers of corporations. Oh, I forgot, corporations are people (legally anyway). Well we should look into changing that little tidbit in the fourteenth amendment. Instead of reading "...person in law..." it should read "...living, breathing, sentient being, solitary in nature and composed of biological cells..."

Corporations should NOT have more rights than human beings, they should be subservient to the rights of the masses, and serve the various populations in which they function rather than exploit them to thos populations detriment.

Health insurance companies add NOTHING to healthcare while stealing money to do it. They should not exist.

Okay, I'm done. I just had to let that out.

Thanks.

[S E Martin]

Agreed.

We should either abolish health insurance companies completely, or try to figure out a way to make them completely and truly not for profit. I wonder if that would work?

[wonketteRAWKS]

Thank you, thank you, thank you! It is refreshing to finally hear someone say this.

So many seem to be willing to accept a bad bill only because it is a political victory rather than what is best for the American people.

Something so important, that has taken this long to get this far should not be rushed. It should be done right. Otherwise, this quick political victory could eventually become a political liability down the road.

[S E Martin]

I'm certainly not at all happy with the bill, but I think we should pass it.

Here's why: IF it's true that it will raise costs, then it will clearly have failed, and it might actually wake people up to realize we need single payer. In the interim, hopefully we don't all go broke!

Also, once a bill is in place, it's easier to adapt it. We can add to it more easily than recreated it all over again.

Well, at least that's where I stand now. I'm open to being persuaded otherwise.

I truly hoped for single payer, medicare for all. Wishful thinking I guess.

Health insurance companies that are for-profit should be ABOLISHED.

I'd even be open to forcing existing insurance to be run not-for-profit.