Marcia Angell, MD on the Massachusetts plan

Healthcare plan needs dose of common sense
Boston Globe op-ed
By Marcia Angell | April 17, 2006

IF GOVERNOR Romney thinks the state's new plan for universal health coverage will carry him to the White House, he should think again. This Rube Goldberg contraption won't even get him off the ground because it doesn't touch the underlying problem -- our reliance on multiple private insurance companies.

Private insurers compete not by offering better healthcare, but by avoiding high-risk individuals, limiting services for those they do cover, and, whenever possible, shifting costs to other payers or to individuals in the form of high deductibles and copayments. It's a chaotic and fragmented system that requires a mountain of paperwork, which is one reason premiums are so high. Those employers who still offer health benefits react by capping their contributions, so that workers pay more out of pocket and bear the full brunt of premium increases. Massachusetts does better than most states, but healthcare in Massachusetts is also the most expensive in the nation.

If this system is left essentially intact, as it is under the new plan, expanding coverage will inevitably increase costs. That is common sense: Coverage and costs have to move in tandem if the system stays the same. Furthermore, the plan does nothing to keep costs from growing. For years, premiums have been rising much faster than the consumer price index. At current rates, even if the state were able to cover its proposed contributions to the plan at launch, it wouldn't be able to keep up with soaring prices.

But already it's clear that the governor and legislators don't know how to pay for it even at launch. One legislator told Boston Globe columnist Joan Vennochi: ''We don't yet know what it's really going to cost us or where we're going to get the money from. To some extent you might call it a Hail Mary pass." The essence of this faith-based plan is to squeeze employers and individuals, with a relatively small state contribution. But employers who don't offer health insurance can get away with paying a penalty of only $295 per employee per year -- in a state where health insurance for individuals costs about $7,200 per year.

Individuals not covered by employers and whose income is at least 300 percent of the federal poverty level (now about $30,000) will have to buy their insurance or pay income tax penalties. Romney thinks premiums can be held to $2,400 a year with a cap of $2,100 on deductibles, but that is wildly implausible. If premiums are higher than that and continue to escalate faster than income, this will amount to fining people because they can't afford health insurance, which, in effect, will punish them twice -- an unsavory prospect.

Those individuals whose income is less than 300 percent of poverty level would receive state subsidies. That will require an enormous bureaucracy to determine what insurance is adequate and ''affordable" and who can really afford it, and there will be incessant legal and regulatory wrangling. The legislation calls for a new state agency, the Commonwealth Health Insurance Connector, to oversee insurance plans, and that is just the beginning.

Like the Medicare prescription drug benefit, the Massachusetts healthcare plan is a complicated morass that might limp along for a while, but will never cover all the people it is meant to cover, and will become increasingly unaffordable. Most likely, it will meet the same fate as the much celebrated 1988 legislation to provide universal coverage in Massachusetts, which shriveled and died with scarcely a whimper.

The only answer is to change the system entirely, so that we can expand coverage while controlling costs. Romney said, ''The old single-payer canard is gone." No, it isn't. Sooner or later, that is exactly what we'll need if we're really serious about universal healthcare. There's no other way.

Dr. Marcia Angell is a senior lecturer in social medicine at Harvard Medical School and former editor-in-chief of the New England Journal of Medicine.

Read in full

Approaches to Health Care for All

Press Release
April 10, 2006
Mark Dunlea
Associate Director, Hunger Action Network of New York State
518 434-7371, ext 1

New York Needs a Commission to Develop Cost-Effective Approaches to Health Care for All

New Massachusetts Health Care Plan is Seriously Flawed

Universal health care advocates said today that New York should followed the lead of the State of Massachusetts in taking action to provide quality, affordable health care coverage to all its residents.

The groups however said that the Massachusetts program is seriously flawed, focusing more on increasing payments to hospitals and insurance companies rather than on ensuring universal access to quality, affordable health care.

The groups called on NYS to join half a dozen other states in creating a Commission on Health Care Coverage to do independent cost-benefit analysis of the various ways NY could provide health care to all New Yorkers.

“Health care for all is an essential goal. We can not afford to spend one of out six dollars in our economy to prop up a patchwork, inadequate health care system that excludes tens of millions of America from coverage. Every other industrial country has already figured in out. America should be able to figure out how to put the public good ahead of campaign contributions from special interests. And with Congress stalling, individual states have to step forward to create their own universal health care plans to protect taxpayers and consumers,” stated Mark Dunlea of the Hunger Action Network of New York.

The Commission, endorsed by more than 250 organizations, would evaluate proposals such as Medicare for All (single payer); the new Massachusetts program; employer mandates; Medical Savings Accounts; and tax credits. This commission process was used in Maine to develop its proposal to provide health care to all residents.

Many of the groups support the proposal by the Physicians for a National Health Program to expand Medicare to cover all Americans. Such a single payer system would save hundreds of billion of dollars, starting with a major reduction in administrative costs. A recent study by the Lewin group estimated that a single payer system just for California would save $38 billion annually.

Dr. David Himmelstein, the national cofounder of PNHP, said that the recent Massachusetts proposal fell far short of providing quality affordable health care for all.

“The linchpin of the plan is the false assumption that uninsured people will be able to find affordable health plans,” observed Dr. Himmelstein. A typical group policy in Massachusetts costs about $4500 annually for an individual and more than $11,000 for family coverage. According to Census Bureau figures, only 12.4% of the 748,000 uninsured in Massachusetts are both young enough to qualify for low-premium plans (under age 35) and affluent enough (incomes greater than 499% of poverty) to readily afford them. Yet even this 12.4% figure may be too high if insurers are allowed to charge higher premiums for persons with health problems.”

“The legislation promises that the uninsured will be offered comprehensive, affordable private health plans. But that’s like promising chocolate chip cookies with no fat, sugar or calories. The only way to get cheaper plans is to strip down the coverage – boost co-payments,, deductibles, uncovered services etc. Hence, the requirement that most of the uninsured purchase coverage will either require them to pay money they don’t have, or buy nearly worthless stripped down policies that represent coverage in name only,”Himmelstein added.

“Finally, the legislation will do nothing to contain the skyrocketing costs of care in Massachusetts – already the highest in the world. Indeed, it gives new infusions of cash to hospitals and private insurers. Predictably, rising costs will force more and more employers to drop coverage, while state coffers will be drained by the continuing cost increases in Medicaid. Moreover, when the next recession hits, tax revenues will fall just as a flood of newly unemployed people join the Medicaid program or apply for the insurance subsidies promised in the reform legislation. The program is simply not sustainable over the long – or even medium – term,” he concluded.

“Access to health care is a matter of human dignity. It is about the stewardship of our resources. Our elected representatives must listen to the voices of all New Yorkers, especially those who have no access to decent medical care, whose voices are marginalized. These are the people whom we all have a special responsibility to support and protect. Enacting the Commission and the process of open hearings and public studies is an important step in ensuring that the best interests of all the people is our priority,” stated Rev. Cass Shaw, General Presbyter for the Albany Presbytery.

“Despite the fact that health care is now half of the state budget, the Governor and Legislature have failed to embrace comprehensive approaches to controlling costs while providing quality, affordable health care to all. The fact that millions of New Yorkers - as many as one in three during any one year – lack adequate health care coverage is a huge factor in causing financial problems both for Medicaid and hospitals, yet state lawmakers refuse to tackle the problem due to the power of the insurance and drug companies. Instead, they continue to offer incremental changes in coverage while the overcall cost of health care continues to skyrocket,” said Mark Dunlea, Associate Director of the Hunger Action Network of New York State.

Legislation to establish such a commission has been introduced in New York by Assemblymember Richard Gottfried (A6575) and Senator John Marchi (S 4928), among others. In Illinois, the Legislature is required to adopt a universal health care program within a year after the Commissions studies are completed. Advocates want NY to adopt a similar model, with the commission to start on January 1, 2007 to meet objections by Senator Hannon that the Hospital Closing Commission should first finish its work. The groups agree with Senator Marchi that the Governor should appoint the Chairperson of the Commission.

“One of our main concerns in patient safety. What kind of patient safety do you have if you lack health insurance? 3 million people in New York State lack health insurance and patient safety. They have documented excess illness and deaths. Their preventive care is nil. Serious illness is unsafe for a family’s finances. Costly and inefficient healthcare is unsafe for the competitivensss of our economy. Society as a whole would benefit from a universal healthcare financing system that includes all citizens. The needs of patients and healthcare professionals must come first. A legislative commission is needed to study and act on our worsening healthcare non-system, concluded Richard Propp, MD, Chairperson, Capital District Alliance for Universal Healthcare.

Read in full

WAMC Forums continue

April 10, Noon-1:30 – What would an expanded “Medicare for All” look like? What difficulties would have to be overcome in implementing it and getting it to work?

Alan Chartock moderates each forum. Sponsors of the forums, in addition to PNHP, the League of Women Voters and WAMC, include the Capital District Alliance for Universal Healthcare, the Hunger Action Network of NY State, the Labor-Religion Coalition, Albany Medical Center, Albany Law School, the MBA Program in Healthcare Management of the Graduate College of Union University, the Medical Society of Albany County, the New York State Nurses Association and Rekindling Reform.

Speakers on April 10, Noon-1:30 – What would an expanded “Medicare for All” look like? What difficulties would have to be overcome in implementing it and getting it to work? will include:
• Diane Archer, Esq., founder, former president, and current special counsel of the Medicare Rights Center
• Kevin Fleming, MD, assistant professor of Medicine and Neurology, specializing in geriatrics, at the Mayo Clinic, and consultant for the Heritage Foundation
• David Himmelstein, MD, associate professor of Medicine at Harvard Medical School, co-founder of Physicians for a National Health Program
• David Pratt, JD, Professor of Law at Albany Law School, co-author of Social Security and Medicare Answer Book

April 24, Noon-2:00 - Can we institute “Medicare for All” in a single state, namely New York?

Panelists include:
• Alexander B. (“Pete”) Grannis, chair of the NY Assembly Finance Committee
• Paul Macielak, president and CEO of the New York Health Plan Association
• Deborah Richter, M.D., president of Vermont Health Care for All
• Leonard Rodberg, Ph.D., chair of the Urban Studies Department at Queen's College and treasurer of the NY Metro chapter of Physicians for a National Health Program
• Elliott Shaw, director of government affairs for the Business Council of New York State and its health-policy lobbyist
• Robert A. Scher, M.D., chief of ophthalmology at Huntington Hospital, president of the Medical Society of the State of New York

The public is welcome to all the forums free of charge. Seating is, however, limited. To confirm your attendance or for more information, please email the Capital District Chapter of Physicians for a National Health Program at pnhpalbany@verizon.net or telephone at 518-391-2508. Audience members may bring their lunches.

Read in full

Massachusetts Health Reform Bill: A False Promise of Universal Coverage

April 5, 2006
Statement by Steffie Woolhandler, M.D., M.P.H. and David U. Himmelstein, M.D.

It's a stirring scene. The Governor, legislative leaders and leaders of Health Care For All standing in the State House Rotunda declaring victory in the fight for universal health coverage. Unfortunately, this weekly tableau merely repeats one from 20 years ago when Governor Dukakis was celebrating passage of his universal healthcare bill. That plan imploded within two years, and today about 250,000 more people are uninsured in Massachusetts than the day it was signed. Unfortunately, Massachusetts' new health reform legislation looks set to repeat that disaster.

What's in the New Bill?

The new bill includes three key provisions meant to expand coverage. First, it would modestly expand Medicaid eligibility. Second, it would offer subsidies for the purchase of private coverage to low-income individuals and families, though the size of the subsidies has yet to be determined. Finally, those making more than three times the poverty income (about $30,000 for a single person) would have to buy their own coverage or pay a fine.

To help make coverage more affordable, a new state agency will connect people with the private insurance plans that sell the coverage, and allow people to use pre-tax dollars to purchase coverage (a tax break that mostly helps affluent tax payers who are in high tax brackets). This new agency is also supposed to help design affordable plans.

Businesses that employ more than 10 people and fail to provide health insurance will be assessed a fee (not more than $295) to help subsidize care. Additionally, hospitals won a rate hike assuring them better payments from state programs, and several provisions were included that are meant to attract additional Federal funding to help pay for the Medicaid expansion.

What's Wrong With This Picture?

First, the politicians assumed that only about 500,000 people in Massachusetts are uninsured. The Census Bureau says that 748,000 are uninsured. Why the difference? The 500,000 figure comes from a phone survey conducted in English and Spanish. Anyone without a phone or who speaks another language is counted as insured. The 748,000 figure comes from a door-to-door survey carried out in many languages (including Portuguese and Haitian Creole, common languages in Massachusetts). In sum, the reform plan wishes away 248,000 uninsured people who don't have phones or don't speak English or Spanish. It provides no funding or means to get them coverage.

Second, the linchpin of the plan is the false assumption that uninsured people will be able to find affordable health plans. A typical group policy in Massachusetts costs about $4500 annually for an individual and more than $11,000 for family coverage. A wealthy uninsured person could afford that -- but few of the uninsured are wealthy. A 25 year old fitness instructor can find a cheaper plan. But few of the uninsured are young and healthy. According to Census Bureau figures, only 12.4% of the 748,000 uninsured in Massachusetts are both young enough to qualify for low-premium plans (under age 35) and affluent enough (incomes greater than 499% of poverty) to readily afford them. Yet even this 12.4% figure may be too high if insurers are allowed to charge higher premiums for persons with health problems; only half of uninsured persons in those age and income categories report that they are in excellent health.

The legislation promises that the uninsured will be offered comprehensive, affordable private health plans. But that's like promising chocolate chip cookies with no fat, sugar or calories. The only way to get cheaper plans is to strip down the coverage -- boost copayments, deductibles, uncovered services etc.

Hence, the requirement that most of the uninsured purchase coverage will either require them to pay money they don't have, or buy nearly worthless stripped down policies that represent coverage in name only.

Third, the legislation will do nothing to contain the skyrocketing costs of care in Massachusetts -- already the highest in the world. Indeed, it gives new infusions of cash to hospitals and private insurers. Predictably, rising costs will force more and more employers to drop coverage, while state coffers will be drained by the continuing cost increases in Medicaid. Moreover, when the next recession hits, tax revenues will fall just as a flood of newly unemployed people join the Medicaid program or apply for the insurance subsidies promised in the reform legislation. The program is simply not sustainable over the long -- or even medium -- term.

What Are the Alternatives?

The legislation offers empty promises and ignores real -- and popular -- solutions.

A single payer universal coverage plan could cut costs by streamlining health care paperwork, making health care affordable. Massachusetts Blue Cross spends only 86% of premiums paying for care. It spends the rest -- more than $700 million last year -- on billing, marketing and other administrative costs. Harvard Pilgrim and Tufts Health Plan -- our other big insurers -- are little better; each took in about $300 million more than it paid out. That's ten times as much overhead per enrollee as Canada's national health insurance program. And our hospitals and doctors spent billions more fighting with insurers over payments for each bandaid and aspirin tablet.

Overall, Massachusetts residents will spend $13.3 billion on health care bureaucracy this year -- nearly one third of our total health bill. If we cut bureaucracy to Canada's levels we could save $9.4 billion annually, enough to cover all of the 748,000 uninsured in Massachusetts and to improve coverage for the rest of us.

Study after study -- by the Congressional Budget Office, the General Accounting Office and even the Massachusetts Medical Society -- have confirmed that single payer is the only route to affordable universal coverage.

And single payer is popular. The Massachusetts Nurses Association supports it along with dozens of other labor, seniors and consumer groups; so do 62% of Massachusetts physicians according to a recent survey. National polls find that almost two-thirds of Americans favor a tax-funded plan like Medicare that would cover all Americans.

But single payer national health insurance threatens the multi-million dollar paychecks of insurance executives, and the outrageous profits of drug companies and medical entrepreneurs.

It's time for politicians to stand up to the insurance and drug industries and pass health reform that can work.

Steffie Woolhandler and David Himmelstein are primary care physicians at Cambridge Hospital and Associate Professors at Harvard Medical School. They co-founded Physicians for a National Health Program.

Physicians for a National Health Program is an organization of 14,000 physicians that support universal access to health care. PNHP is headquartered in Chicago and has chapters and spokespeople across the U.S. To contact a physician-spokesperson in your area, contact Nicholas Skala or call 312-782-6006.

Read in full