PHYSICIANS FOR A NATIONAL HEALTH PROGRAM

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

WWW.PNHP.ORG

The Uninsured

Financial Suffering Among the INSURED

Rising Economic Inequality

Persistent Racial Inequalities

Racial Disparity in Access to Kidney Transplants

Rationing Amidst a Surplus of Care

Unnecessary Procedures

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

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

Profit-Driven HMOs: A Problem, Not a Solution

Medicare HMOs:A Cautionary Tale About

Competition Between Public and Private Plans

(AKA Public Plan Option)

Despite Medicare’s Lower Overhead, Enrollment of

Medicare Patients in Private Plans Has Grown

Private Medicare Plans Have Prospered by Cherry Picking

Investor-Owned Care:Inflated Costs, Inferior Quality

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

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

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

Source: JAMA 2002;288:2449

Drug Companies’ Cost Structure

High Deductible Insurance:Except for the Healthy and

Wealthy, It’s Unwise

Mandate Model Reform:Keeping Private Insurers

In Charge

“Mandate” Model for Reform

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

“Mandate” Model for Reform

• Government uses its coercive power to make people buy private insurance.

“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

“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

The Massachusetts Reform: Headed Towards Failure

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

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

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

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

Tried and Failed:State Experiments with Mandate Model

and Other Incremental Reforms

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.”

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.”

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.”

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

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.”

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

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 . . . .”

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.”

Public Plan Option:The Next Disappointment

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

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.

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

Public Money, Private Control

The U.S. Trails Other Nations

Canada’s National Health Insurance Program

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

A National Health Program for the U.S.

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

Public Opinion Favors Single Payer National Health Insurance