The So-called Public Option

 
I’ve been hearing and reading some unsettling things about the  vaunted “public option” Congressional Democrats have included in the health plan they rolled out on October 29. Since this is the heart of what the Dems have supposedly done to provide “health care for all,” the effect, as has been apparent for many months now, is to vitiate to almost nonentity the idea that the United States of America will have decent coverage for all its people any time soon.

            Here’s what the Democrats, under pressure from their conservative wing and the idiotic dregs left of the Republican Party (not to mention that traitorous pig Joe Lieberman), have done. First, in their “public option,” the government would not get to use the lower rates it has long established through the Medicare system already in place. No. The lobbies have raised hell about that, because our devoted “health care providers” (i.e. doctors and hospitals and companies who provide monitors and equipment and all the other paraphernalia Americans have come to expect in their sick rooms) were worried that their remuneration would be too low. How, after all, could doctors and hospital execs afford a new Mercedes each year, if they had to provide a special rate for massive numbers in a government plan? Only Walmart and Exxon Mobil get to do that kind of bargaining. So the new plan decrees that the government plan will have to “negotiate rates with doctors and hospitals” individually. And you know what that means. It’ll be like the Pentagon negotiating with Cheney and Halliburton.

            Then the second thing these spineless pols have done is reserve the so-called public option for only those individuals who currently do not have insurance. In other words, if you have insurance through your job, you don’t get to choose the public option, no matter how attractive it might be. Nor can your company choose it, unless it’s a very small business. This means that the “competition” Obama and the other Dems have been trumpeting is less than meaningless—because the only people who can opt for the public option are those without insurance (estimates now run at about 6 million people). And most are either too poor, or too jobless, or too sick to get insurance on the private market. What the hell kind of competition is that? The insurance companies don’t want these people. Furthermore, the Congressional Budget Office has already estimated that the public health plan will probably cost MORE than the private plans, because the public option would be insuring those more likely to be or get sick—so even without the overhead of the private insurers, the public plan, because of its demographics, would spend more covering all those sick people. And, of course, the lobbies all know this because the reason single payer would work, and put them out of business, is that it would cover everyone, with the young and healthy subsidizing the older and more sickly.

            So what we’ve got here, as many have noted before (Miles Mogulescu’s Oct. 30 column at huffingtonpost.com contains great details), is little more than a huge bonanza for the existing insurance companies and the doctors and hospitals they collude with. Because the main provision of this 1,000-page plan, is simple: every American has to obtain insurance, or pay a penalty. And most insurance would come, as it does now, from private insurance companies—the ones who are driving this nation towards bankruptcy. The reason? It’s a big business, folks, amounting to something like one-sixth of the entire American economy. That’s many billions of dollars, a nice chunk of which goes into the pockets of the very people who are supposedly “fixing” this system—our fair politicians.

            So when you see the Democrats rejoicing on the steps of the Capitol because they’re closer to passing a health reform bill, take a minute to wonder what’s in the bill, and who benefits. And then take a very large pill.

 

Lawrence DiStasi

The News Today, Oh Boy

 
I read the news today, oh boy. (some of you may remember this Beatles’ line from one of their albums, Sgt. Pepper maybe.)

            Actually, most of these itemscome from sources other than newspapers.

            Barbara Ehrenreich’s new book, for example, is reported to contain this lovely statistic:

            Between 1979 and 2007, the top 1% of American households saw their share of all pretax income nearly double—while the share of the bottom 80% of households fell by 7%! To put this in another perspective, according to the NY Times, it is as if every household in the bottom 80% had written a check for $7,000 every year and sent it to the top 1%.

            The question is, why has there been no reaction to this???

 

            Another item, this one heard on “This American Life,” NPR’s radio show hosted by Ira Glass, added to my ire about healthcare, which was the theme of the show. The first segment was titled “One Pill Two Pill, Red Pill Blue Pill”—after Obama’s admonition to consumers to buy the blue pill if it’s cheaper. On the segment, Planet Money’s Chana Joffe-Walt explained the scam behind the drug companies’ generosity in handing out prescription drug coupons. Here’s how it works. First, the ploy was invented to combat the moves by Health Insurers to use co-pays (what the customer pays after his Health plan pays part of the drug’s cost) to discourage customers from choosing very expensive, name-brand drugs and choosing cheaper generics instead. That is, generics, in virtually all cases, are just as effective as name brand drugs like Lipitor, but are many magnitudes cheaper. If you use the generic, the Health plans make your co-pay considerably less, because their payment is also less. Seems to make sense.

            But the drug companies couldn’t let their cash cows be dissed this way. And so they came up with the prescription coupon. You get the coupon “free”—either from your doctor, or directly from the drug company. With it, you can get a huge discount on your prescription. Thus, one name-brand drug used by a guy with acne, sold for about $600-800 a month. His co-pay had been $130, but with the prescription card, it was only $10. What a great deal! he thought. And who wouldn’t? The problem comes in the details: though the drug company only got $10 from the consumer, it billed the health care provider over $600. And it worked beautifully: the doctor prescribes the name brand, knowing his patient can get it cheaply, and having no idea that the drug company is making a huge profit from the health provider. But that’s not the end of it. In order to stay profitable with this kind of payout, the health care provider will naturally have to charge its customers more—all of which comes back to the poor consumer in the end, who is hit with rising costs for health care.

            This is really the gorilla in the room of the whole health care debate. Doctors say they can’t be expected to know how much drugs cost—so they just assume patients have health care, and prescribe name brands which cost 10 or 20 times what the generics do. Who makes money? Pfizer and their ilk. And who gets screwed? As always, it’s John/Jane Q. Public.

            As for the doctors, whom everyone seems inclined to excuse from having any role in rising health care costs, a recent medical experience I had demolished that theory as well. I had a knee problem, and though I was wary of the suggestion, after two months or so of pain agreed to have the knee x-rayed—even though my GP (a damn good one) allowed as how it probably wouldn’t show much, but was a necessary step in the progression. Anyway, since he had no x-ray machine, he sent me to the local hospital (Marin General). I knew it was going to be bad when I had to go through a full registration, the way one does when admitted. Finally got the knee x-rayed after a fairly long wait—with three or four pics taken. Then they told me the report would be sent to my doctor. “But I thought I was getting the results,” I said. “We’ll give you copies of the x-rays,” they said, “but our radiologist will send the diagnosis.” I knew that was trouble, but had no idea how much.

            The x-rays came back showing the normal degeneration of a knee in my age range. No help. But for that little diagnosis (which, by the way, any competent doctor can do unaided by specialists), I received two bills. One was from Marin General: my charge was $59.50, but only after Medicare paid $409.50 (i.e. the total charge for a simple knee x-ray was $469.00). My daughter tells me that in a veterinarian’s office, the x-ray charge is usually around $90. Same x-ray, same competent diagnosis. But that’s not the worst of it. I also received another bill, this one from Advanced Imaging Medical Association, for diagnosis—you know the guy who reads the x-ray—and for his services, the total charge was $719.86. Medicare paid most of that, but the point is clear. For one x-ray (actually they took 3 shots), which contributed virtually nothing to the diagnosis or the healing of my knee, the charge was $1189.86. And though one tends to imagine that because Medicare pays for this, it’s free, the truth is, it’s not. Ultimately, we all pay for this stuff. And there can be little question that everyone—the doctors, the hospitals, the insurance companies, and everyone in between—is in on the take.

            Finally, today’s news had a piece about foreclosure auctions going on in long-suffering Detroit, once the thriving Motor City, now the most depressed and distressed city in the nation. Homes were starting at $500. There were pages and pages of them. One comparison showed the number of homes in foreclosure (or abandoned completely), if put together, would cover an area the size of Boston. And who was getting to buy most of these places? You guessed it, not Detroit natives who were hoping to be able to get a house cheap and live there, but mostly speculators from California and New York, seeking to make a killing while the killing was still good.

            But then again, this is the free market, folks. And the “free” market, after all, is the most efficient and most humane of all systems yet devised by man. Oh boy.

 

Lawrence DiStasi

Death Panels and Kindred Spirits

Hey, I have a right to make a buck
I’m a corporation with rules to protect me
If you get hit by a puck
And once had a scratch on your knee
Then why should I pay for your care?
That pre-condition was there
And I will fight to the death
Or until you take your last breath
To prove you haven’t a claim
Because it is you who’s to blame


The California Nurses Association recently conducted a study to determine the claim rejection rate of major insurers in California. As you may have already heard, the rejection rate averaged 22%. These insurers rejected over 45 million claims according to numbers that the insurers themselves submitted. While the rejections were not characterized in terms of rationale, the sheer numbers are staggering and indicate several issues that underlie insuring healthcare. The insurers claim that many of the rejections are related to paperwork as though that was something over which they had no control. They also were unable or unwilling to provide numbers to support their defense of claim acceptance.

The claims rejection numbers varied from a high of 39.6 for Pacificare to 6.5% for Aetna with Cigna coming in at 33% and Healthnet rejecting 30%. Anthem Blue Cross and Kaiser each reported 28% rejections. We know that the claims business is complicated. I personally have three levels of claim including Medicare, a paid for supplement by an insurance company and Tricare (the military medical insurance). This often results in confusion when my healthcare provider (physician or hospital, for example) has difficulty fitting a claim into the right category and to the proper insurer, even though two of the three are government entities. Providers don’t always get it right. According to my physician son, who is a gifted analyst and has an IQ over 180, the process is obscure and requires a medical administrative expert rather than an automated system or a “fill in the blanks” approach. There are medical procedures that are similar to each other and yet the reimbursement rate may vary according to the description, so there is no guarantee that a claim will be paid at the rate expected or paid at all. This alone sometimes results in multiple applications and rejections. He has also learned that not all insurance companies have the same rules, so the combinations and permutations of filing a correct claim approach infinity as the number of providers and the number of insurers increase. That alone may be a good reason to consider a single payer system, although single payer is anathema to the “free” market approach. I use the word “free” because free market is a relative term since one insurer in Alabama (Blue Cross), for example, covers 89% of those insured. There may, in reality, be few choices in the “free” market. We have outlined a few sources for increasing costs and reducing coverage of those who happen to be insured. Denial of claims may also lead to denial of coverage for pre-existing conditions. We will consider that separately in the paragraphs ahead. First, let us look at the history of the healthcare insurance system we have cobbled together over the years. It may hold the key to some of our frustration.

Healthcare and heath insurance, as we now know it, really began after World War II, but there were precursors of note. Prior to about 1920, hospitals did not deliver the preponderance of healthcare, but individual physicians did and often they delivered care to the patient’s home. In 1929, Baylor University began the first medical insurance system that eventually became Blue Cross by offering to insure against hospital expenses for a cost of about $1.20 per month. Physicians later, concerned that hospitals could take their place in delivering care followed up with what eventually became Blue Shield as a way to help in getting paid for their work without depending on hospitals. Only a few years later, the depression forced everyone to rethink insurance as hospital endowments were lost to the economics of the time and many physicians were going unpaid. In the 1920s and earlier, medical care was actually less expensive than the loss of wages for being sick or incapacitated. People and corporations became aware that it was cheaper to pay for insurance than it was to pay for an unstable workforce that might miss work due to injury or illness. That is right. It was CHEAPER to have insurance than to lose wages or to lose the critical skills of a worker. The government was not involved. Businessmen protected their businesses and individuals protected themselves through cheap insurance. After WW II, however, the march of technology was such that the cost of care began to rise to pay for the increasingly more complex equipment, procedures and chemistry involved. Insurance was still cheaper than losing the services of a worker, but the margin began to narrow and it was commonplace for corporations to contract for medical care insurance coverage offered as a benefit to employees. The government remained apart from healthcare or insuring citizens for care. Other nations developed systems that essentially viewed healthcare as a benefit provided by a tax system that could ensure that providers could be compensated without worrying about endowments and that citizens could receive care regardless of job status. Kaiser was a major government production contractor, but it developed its own healthcare system to ensure a steady workforce. Kaiser Permanente survives today despite the decline of Kaiser Industries. We did not choose the same path as most nations and thereby built up a whole industry out of the accidental circumstances of the 1920s and 1930s. This served us reasonably well until medical costs spiraled out of control and the understandable reaction of corporations was to reduce or eliminate health insurance. Despite an increasing population, the number of insured declined. With a reduction in the number of insured and a need to stay economically viable in an environment of increasing medical costs, the price for insurance went up thereby causing even more employers to reduce or eliminate coverage. A cobbled system began to fail and eventually fall apart. If you were unfortunate enough to suffer a major illness or injury, you became a likely subscriber to bankruptcy that, in turn, placed further pressure on individuals and corporations, including insurance companies. Our healthcare system depends on timely and accurate financial support. The system is now broken.
Health insurance companies depend on a regular flow of premiums into their coffers in order to provide a service of insuring people from loss due to some undesirable health condition. That is a given. It is the way of the corporate world. That is capitalism 101 and it is to be expected…or is it?

If we encourage the same business behavior of health insurers as we get from manufacturing or accounting services, for example, we would expect unprotected open market competition and also internal scrutiny by each company to reduce costs and increase profits. That makes sense and cents. If I can get cheaper materials or labor and still produce a quality and competitive product or service, then there is no harm to the consumer. On insuring healthcare, however, my profit is affected more directly by denying or delaying care through the claims process so that my premium collection can overweigh my expenses. This simply is not the same as manufacturing or accounting. It does not work and yet we cannot assume that an insurance company will become a non-profit entity because it has altruistic management. The management would and should be fired if they cannot turn a profit. Incompatibility is inherent. Therefore claim denial is increasingly likely as costs rise. If the cost of my raw materials increases and the cost of my labor increases, there simply are not many ways to stay in business unless I price my product higher and reduce my expenses (claims). Pre-existing conditions have become synonymous with claim denial. Unfortunately, the associated logic has more to do with profit than medicine. Exactly how is acne a pre-existing condition for breast cancer, for example? The examples are legend. And they are disturbing. Treating cancer is expensive. Claim denials are cheap.

It is time to develop a system that emphasizes the medical over the fiscal and to think the unthinkable that perhaps the common good is no longer well served by a system that was cobbled together when medicine was crude and cheap. Medicine is now sophisticated and expensive. Get over it. We can help ourselves by either going to a single payer system with one set of rules or we can inject competition into the equation through a combination of government oversight, incentives and penalties and see if that experiment works well enough to save health insurance companies. You decide.



Peace,
George Giacoppe
15 August 2009

Health Care on Life Support

As progressives have watched in horror and disbelief—can it be possible that the same right-wing fools who gave us Bush/Cheney, the war in Iraq, and its related bag of lies, fraud, raiding of the public treasury and outright criminality, have regained the initiative?—the alleged movement for health care reform has been chopped to pieces and is now threatening to collapse altogether into some fraud tailored to the specifications of big Pharma and big Healthcare. Sarah Palin has accused the new Democratic proposals of providing “death panels” to threaten the life of her Down’s syndrome child (has there ever been so shameless a public figure, willing to use her handicapped child to score political points?), while health care companies like United Health have urged their employees to mob the Democrats’ vaunted town hall meetings and shout them down with their slogans. To top it off, several of these yahoos have shown up at town meetings packing guns—one yo-yo at a recent Obama event with an assault rifle slung over his shoulder was featured in every newscast.
            The coup de grace came this week, with both Obama himself and Health and Human Services Secretary Kathleen Sebelius saying that the “public option” wasn’t really essential to health care reform, and that co-ops could be a way to go. This was mightily pleasing to both Republicans and that “key” senator from the crucial state of North Dakota, Kent Conrad, who characterized co-ops as a workable compromise that could pass the Senate.
            In the midst of the sinking feeling that whatever does emerge as health care reform will be so gutted as to be meaningless (or worse: it turns out that Obama has already made a deal with big Pharma that his health care plan won’t, repeat WILL NOT use the government’s bargaining power to get lower prices for drugs!), two recent proposals seem worth considering.  One was posted by Thom Hartmann on Common Dreams August 17. In the form of a letter, it suggested to the president that a simple solution would be: let all who choose to buy into Medicare. No new program to invent. No nonsense about forcing people into something they don’t like. Simply amend Medicare so that
“any American citizen can buy into the Medicare program at a rate to be set by the Centers for Medicare and Medicaid Services (CMS) and the Department of Health and Human Services (HHS), which reflects the actual cost for us to buy into it….To make it available to people of low income, raise the rates slightly for all currently non-eligible people under 65, to cover the cost of below-200%-of-poverty people. Revenue neutral.” 
Seems like a plan to me. Nearly everyone who has Medicare seems to be quite satisfied with it (even the morons who have been ranting at town-hall meetings that they’re dead set against government-controlled health care, most of whom actually have Medicare!). Hartmann’s point is, why limit it to just people over 65? Let everyone buy in, pay for their own coverage until they reach 65, and thus cover everyone who’s dissatisfied with the Health-Care pirates.
            The other is a brilliant piece by renowned linguist and activist George Lakoff, who analyzed what’s wrong with the Obama approach so far. In a piece titled “The PolicySpeak Disaster for Health Care,” (commondreams.org, 8/20/09), Lakoff points out what he’s been trying to drum into Democrats for years, the importance of “framing.” The Republicans, by imitating marketing techniques, have long since mastered this stuff. The Democrats seem to think it’s manipulating the public and try, instead, to employ Policy Speak to appeal to the public’s reason. According to Lakoff, this is based in 17th century views that “if you just tell people the policy facts, they will reason to the right conclusion and support the policy.” In other words, rational discussion and logic will persuade people of the rightness of liberal democratic principles. WRONG. As Lakoff points out, even though 80% of the public wants a public plan, calling it the “public option” is a disaster. As cognitive neuroscientists have discovered—and marketers and Republicans, unlike Democrats, have taken into account—you have to appeal to people as they really think, in a way that resonates with them, and inspires them to act. Emotions are a big part of this, and emotions as well as the moral sense must be appealed to (Republicans appeal to emotions in the most calculating, irrational, and truly nefarious ways: “death tax,” “death panels,” “socialized medicine,” even Obama with a Hitler mustache—at the same time he’s accused of being a Commie).
            Accordingly, Lakoff suggests a simple narrative, using a simple patriotic title: The American Plan. It would tell the truth, but tell it simply, without fear of appealing to morality:
            “Insurance company plans have failed to care for our people. They profit from denying care. Americans care about one another. An American plan is both the moral and practical alternative to provide care for our people.
            “The insurance companies are doing their worst, spreading lies in an attempt to maintain their profits and keep Americans from getting the care they so desperately need. You, our citizens, must be the heroes. Stand up, and speak up, for an American plan.”
Lakoff also suggests using other simple, but emotional/moral language and slogans instead of boring “policy speak”: Doctor-patient care; Coverage is not Care; Insurance Company profit-based plans ration care; Doctors care, insurance companies don’t; and so on.
            Lakoff also punctures the simple-minded Democrat attempt to avoid the dreaded accusation, “culture wars.” As he notes, the culture war is already on and can’t be ignored. Call the villains and liars out, in public. The president has the biggest bully pulpit in the land. He has to start using it, instead of continuing to make a vain attempt to achieve some longed-for spirit of bipartisanship. He needs to demonstrate some passion, if for no other reason than to counter the evil passions being stirred up by his opponents, and that includes so-called moderates like Senator Chuck Grassley. Grassley displayed no reluctance at all to suggest, on the Newshour recently, that Obama’s plan was a government takeover of all health care and equivalent to socialism. There’s no way to make nice or use logic with such people. Use the power of the presidency, and the power of the Democratic majority, letting the Republicans know that if they wish to come along, fine, but if not, they will be accused of placing their corporate constituents ahead of the majority’s welfare.
            I would also add that it’s time the administration started to play hardball with the so-called Blue Dog Democrats. Why should these refugees from conservative districts, along with a few white-bread legislators from small-population states like Montana and North Dakota, shape and control the most important legislation of our time? Every Democrat should know that a “public option” (finding another name for it) is critical, that it must be included in any bill that the president will sign, and that failure to support it will be dealt with by means of all the patronage tactics available to the party’s leadership.
            Short of these course corrections—and it’s not too late, though the fight now, if Obama has the political and moral courage to engage it, will be long and dirty—the signature initiative of the Obama presidency will go down in flames. With it will go the hopes that the United States might be saved from the military/corporate/privatizing corruption that has engulfed it these last thirty years.
 
Lawrence DiStasi

Why Lobbyists Love Health Care Reform

 
The more we learn about the Democrats’ plan for health care, the more it seems that, though it might help to cover more people—which would be good—it really won’t address the underlying problem. That problem is simply put: as long as health care is a multi-billion dollar industry run not to care for people but to make huge profits, the profit makers will find ways to continue to drive themselves into profit Valhalla, and the public into sickness and ruin.
            As confirmation, we have a recent report, by the Associated Press no less, informing us why there will indeed be a health care bill this year, even though the industry, and their Republican  (and Democratic) stooges would prefer to keep things as they are. The report—“Lobbyists the silver lining in health care storm?” by Ricardo Alonso-Zaldivar—tells us why “the drug industry, the American Medical Association, hospital groups and the insurance lobby are all saying Congress must make major changes this year.” What? THEY want health care reform? How could this be?
            The answer is elementary. First, they see the writing on the wall: Joe Sixpack can’t afford health care any more. Second, government programs have “gotten increasingly friendly to private insurance companies,” giving them “major roles as middlemen” in Medicare and Medicaid. You know, like Bush’s great prescription-drug boondoggle for Medicare, called, cynically, Medicare Advantage.
            But the real bonanza for these guys is the central requirement, in both House and Senate plans, to require health care for all. That is, the new plan will require everybody to buy coverage. And what will this do? Why it will “guarantee a steady stream of customers subsidized by taxpayers not only for insurers, but for all medical providers.” In other words, 47 million more customers will now have to procure health insurance. And if they can’t afford it—otherwise, why wouldn’t they have it in the first place—good old Uncle Sam, which is the taxpayer, will help them to pay for it. No matter how high the costs go.
            Dr. Marcia Angell, who was a guest on Bill Moyers’ show last Friday, said essentially the same thing. Unless, she said, there’s a change in the system—the economic system of unfettered capitalism willing to sacrifice anyone and everything for profit—all President Obama’s health care reform will do is increase the profits for private health care companies, doctors, and hospitals by presenting them with a CAPTIVE MARKET—i.e., of Americans now FORCED to buy health care.
            The thing is, we already know how this turns out. Massachusetts and a half dozen other states have already enacted this kind of reform, giving subsidies to the poor in order for them to buy insurance from the private health industry. And it has turned out to be more expensive, not less. So it appears that the only way our obscene medical costs will ever be reduced is by means of a government-run plan (the so-called “public option” the Republicans have tried to characterize as, ugh, socialism!), or, even better, a single-payer plan like Medicare. It would be a real plan that, by virtue of the numbers enrolled and the government’s power of mass purchasing, for instance from drug companies, but also from doctors and hospitals, would be able to reverse the trend of ever more expensive treatments for the ever more numerous conditions the industry can soak us for. Without that—and it is not clear at this moment if a “public option” will survive the congressional bartering and lobbying process—the sharks will remain in business, with the predators growing ever fatter, and thus ever more able to bludgeon our so-called representatives in our so-called representative democracy (and I include the President himself) into doing their multibillion-dollar bidding.
            Lawrence DiStasi