Analyzing Sen. Baucus' Health Care Plan
by Maggie Mahar
Today, Senate Finance Chairman Max Baucus issued a “Call to Action” for Health Care Reform. And it is shockingly honest. The bombshell in the plan is that it would require every American to purchase health insurance. There would be sliding subsidies for everyone under four times the Federal poverty level ($70,400 for a family of 3), but there would be no exemptions.
The individual mandate is necessary because Baucus is barring insurers from charging higher premiums or denying coverage outright to people with pre-existing conditions. (Today, in the vast majority of states, insurers can shun the sick–or charge them whatever it chooses).
As HealthBeat has explained here, if you insist that insurers must cover everyone, old or young, sick or healthy, at the same price, you must have the individual mandate. Otherwise, many young, healthy people would wait until they became sick to join a pool—safe in the knowledge that an insurer could not charge them more—and expect people who had been paying premiums into that program for years to now pick up their medical bills. If that happened, ultimately only the sick and the elderly would buy insurance—and prices would levitate to a point that virtually no one could afford it.
What Baucus doesn’t mention is that community ratings are likely to hike premiums in many states because suddenly, the very sick will be included in the insurance pool. As Time magazine reported in 1994: In 1993, [when] New York State tried community ratings, “thirty- year-old males watched their premiums soar 170%, according to the Council for Affordable Health Insurance, while men aged 60 enjoyed a 45% cut. The rate hike for 30-year-old women was 82%, and women twice their age saw rates slashed by a quarter.”
This does not mean that we would see similar hikes under Baucus’ plan. Subsidies would soften the blow, especially for those under the Federal poverty level. But those who have enjoyed very low premiums based on good health and relative youth could expect to pay more.
When news of the Baucus plan broke, some observers thought this meant that we will see universal coverage next year. But in a press conference, Baucus just told his audience: “It will take time. At least three years. But some features can come in earlier, like Medicaid and Medicare eligibility changes.” (Hat-tip to Ezra Klein for attending the press conference).
That makes sense. In his clear-eyed summary of the problems in our health care system—and his candid description of the obstacles—Baucus makes it clear that overhauling the system, and providing healthcare for all will probably require more than one piece of legislation. As he puts it, “The solution will demand time and attention to make sure that we get it right.”
Moreover, he emphasizes his plan “is not intended to be a legislative proposal…This plan is most certainly a work in progress. But this Call to Action is intended to encourage constructive input by policymakers, stakeholders, and health policy thought leaders to move us forward. I look forward to discussing this plan with President-Elect Obama, with my colleagues in Congress, and with stakeholders in the health care system, working collaboratively with all to enact effective health reform.”
Baucus’ plan is generous. How much will it cost? “Many components would require an initial investment,” Baucus concedes, “but, over time, would vastly improve the quality of the health care that Americans receive and reduce the cost of that health care.
“The policies in this paper are designed so that after ten years the U.S. would spend no more on health care than is currently projected, but we would spend those resources more efficiently and would provide better-quality coverage to all Americans.” If we wind up spending as much, ten years from now, as is currently projected, this plan is not putting a brake on health care inflation—at least not over the short-term. On the other hand, the proposals, which range from allowing 55-64 year olds to buy-into Medicare, to providing Medicaid and SCHIP to legal immigrant children and pregnant women—are excellent. (Today legal immigrants must wait five-years to become eligible for these programs).
The Call to Action/Health Care Reform 2009 proposal released 11/13/08
(http://www.finance.senate.gov/) by Senator Max Baucus is a disaster.
The Baucus plan is an expansion and continuation of the status-quo
mixture of a government subsidized ineffective private health
maintenance insurance industry operating parallel to and within Medicare
Insurance.
7 Specific Reasons Why the Baucus Health Reform 2009 Plan Fails.....
1) The Baucus plan fails to enroll all Americans in a single payer
National Health Insurance such as the most efficient health insurance
plan (Medicare) which is already contracted with most doctors,
hospitals and clinics in the Country. Medicare has the lowest operating
expenses and the best morbidity (sickness rates) and mortality (death
rates) compared to all other insurance companies. The Baucus plan will
therefore divert $700 Billion to $1 Trillion per year away from
patients, hospitals, doctors, clinics, nurses, pharmaceuticals,
therapist and researchers into the overhead pockets of health private
insurance company administrators and executives.
2) The Baucus plan fails to technologically upgrade, integrate and
centralize medical billing and records systems in order to optimize
examination of clinical outcomes, pharmaceutical efficacies and monitor
fraud and abuse. In addition, by failing to centralize and
technologically upgrade billing and records systems within a single
National Health Insurance plan, America will be unable to instantly
monitor disease outbreaks and instantly respond to natural and man made
disasters or bio-nuclear terrorism..
3) The Baucus plan fails to control drug costs by failing to allow a
single efficient national health insurance company such as Medicare to
bid on pharmaceuticals. In addition, the Baucus plan by failing to put
all Americans on a National Health Insurance Plan such as Medicare does
little to shrink the 'risk pool' of insured, thereby failing to decrease
insurance premium expenses for all Americans.
4) The Baucus plan fails to provide funding for scientific, clinical and
epidemiological research and development by allowing private private
insurance companies to divert funds from medical research and
development to instead support their massive and profitable
administrative and executive bureaucratic overheads.
5) The Baucus plan fails to provide physicians with the same legal
protection from malpractice lawsuits which have been established for
commercial health insurance corporations during the last 3 decades.
6) The Baucus plan fails to explain where to find the 1.5 million new
health care workers which will be needed once 100 million new Americans
obtain health care insurance. Health care workers can be found easily by
shutting down the wasteful and inefficient private health insurance
companies, putting all Americans on National Health Insurance such as
Medicare. The 1.5 million former private insurance company bureaucrats
can then be remployed to actually deliver health care in hospitals,
clinics, nursing homes, assisted living facilities, pharmacies and home
health services such as Alzheimer family assistance.
7) The Baucus Plan fails to address this problem of disenfranchised
physicians. Many physicians in this country have left the practice of
medicine, or downsized their practices due to private insurance company
abuses, malpractice threats and direct pharmaceutical marketing. A
recent national poll of physicians based on the AMA database
demonstrated that 60% of physicians support a single payer National
Health Insurance such as Medicare. A continuation and technological
upgrading of our most fair Medicare Health Insurance for all based on
the concepts outlined above, would undoubtedly motivate those
disenfranchised physicians to return to the profession and bright
younger physicians to invigorate the field.
The Baucus plan is wasteful, inefficient, fragmented, creates a new
redundant bureaucracy and will continue to provide no potential future
health improvements for America. Only an efficient National Health
Insurance carrier such as a technologically upgraded Medicare Insurance
company will be able to provide low cost health insurance and pharmaceuticals
for all Americans while maintaining the quality of private physician practices and Hospitals.
H. Green, MD, FACP, FAAD, FACMS
Posted by: H. Green | November 14, 2008 at 09:26 PM
The Call to Action/Health Care Reform 2009 proposal released 11/13/08
(http://www.finance.senate.gov/) by Senator Max Baucus is a disaster.
The Baucus plan is an expansion and continuation of the status-quo
mixture of a government subsidized ineffective private health
maintenance insurance industry operating parallel to and within Medicare
Insurance.
7 Specific Reasons Why the Baucus Health Reform 2009 Plan Fails.....
1) The Baucus plan fails to enroll all Americans in a single payer
National Health Insurance such as the most efficient health insurance
plan (Medicare) which is already contracted with most doctors,
hospitals and clinics in the Country. Medicare has the lowest operating
expenses and the best morbidity (sickness rates) and mortality (death
rates) compared to all other insurance companies. The Baucus plan will
therefore divert $700 Billion to $1 Trillion per year away from
patients, hospitals, doctors, clinics, nurses, pharmaceuticals,
therapist and researchers into the overhead pockets of health private
insurance company administrators and executives.
2) The Baucus plan fails to technologically upgrade, integrate and
centralize medical billing and records systems in order to optimize
examination of clinical outcomes, pharmaceutical efficacies and monitor
fraud and abuse. In addition, by failing to centralize and
technologically upgrade billing and records systems within a single
National Health Insurance plan, America will be unable to instantly
monitor disease outbreaks and instantly respond to natural and man made
disasters or bio-nuclear terrorism..
3) The Baucus plan fails to control drug costs by failing to allow a
single efficient national health insurance company such as Medicare to
bid on pharmaceuticals. In addition, the Baucus plan by failing to put
all Americans on a National Health Insurance Plan such as Medicare does
little to shrink the 'risk pool' of insured, thereby failing to decrease
insurance premium expenses for all Americans.
4) The Baucus plan fails to provide funding for scientific, clinical and
epidemiological research and development by allowing private private
insurance companies to divert funds from medical research and
development to instead support their massive and profitable
administrative and executive bureaucratic overheads.
5) The Baucus plan fails to provide physicians with the same legal
protection from malpractice lawsuits which have been established for
commercial health insurance corporations during the last 3 decades.
6) The Baucus plan fails to explain where to find the 1.5 million new
health care workers which will be needed once 100 million new Americans
obtain health care insurance. Health care workers can be found easily by
shutting down the wasteful and inefficient private health insurance
companies, putting all Americans on National Health Insurance such as
Medicare. The 1.5 million former private insurance company bureaucrats
can then be remployed to actually deliver health care in hospitals,
clinics, nursing homes, assisted living facilities, pharmacies and home
health services such as Alzheimer family assistance.
7) The Baucus Plan fails to address this problem of disenfranchised
physicians. Many physicians in this country have left the practice of
medicine, or downsized their practices due to private insurance company
abuses, malpractice threats and direct pharmaceutical marketing. A
recent national poll of physicians based on the AMA database
demonstrated that 60% of physicians support a single payer National
Health Insurance such as Medicare. A continuation and technological
upgrading of our most fair Medicare Health Insurance for all based on
the concepts outlined above, would undoubtedly motivate those
disenfranchised physicians to return to the profession and bright
younger physicians to invigorate the field.
The Baucus plan is wasteful, inefficient, fragmented, creates a new
redundant bureaucracy and will continue to provide no potential future
health improvements for America. Only an efficient National Health
Insurance carrier such as a technologically upgraded Medicare Insurance
company will be able to provide low cost health insurance and pharmaceuticals
for all Americans while maintaining the quality of private physician practices and Hospitals.
H. Green, MD, FACP, FAAD, FACMS
Posted by: H. Green | November 14, 2008 at 09:26 PM
Dr. Green--
Here is the simple fact that stands in the way of single-payer today: We live in a democracy, and 85 percent of Americans have employer-based insurance.
They do not want to be told that they have to switch to a government-run single payer plan.
Most people are afraid of change.
Moreover, today employers pay 100% of the premium for 15$ of "better paid" workers (earning, if memory serves, over $65,000). These employees pay nothing toward their insurance.
They know that a single-payer plan would cost them more than zero (in the form of higher taxes.)
Employers pay roughly 60% of the premiume for the rest of "better-paid" employees.
If we had single-payer,presumably employers would pay what they now pay for their own employees into a common pool. But as the dollars were redistributed in the system, better-paid employees would inevitably be paying more to cover the people who are now uninsured--the majority of whom will need a full or partial government subsidy.
I have no problem with redistributing wealth in this way.
But most people who how have a very good deal from
the employer are reluctant to give it up.
This is why Congress won't vote for single-payer now. Too many votes are against it.
The fact that you and many other single-payer-advocates are for it--and that your group includes many doctors--doesn't change the fact that most people are afraid of it. Even after years of attempting to educate the public, you haven't been able to break through.
Moreover, you should keep in mind that the relatively efficient health care systems in Europe (which spend, on average 1/2 of what we do, per person, for healthcare and
enjoy significantly better outcomes and patient and doctor satisifaction) are NOT SINGLE-PAYER.
Only the UK and Canada are single-payer. Germany, France, Sweden, Denmark, the Netherlands, have some combination of private sector and public sector care. Depending on who you talk to either Sweden or France or Denmark has the best care.
I think Americans will have to see a government-run health care plan in action--competing with a regulated private insurance industry--in order to come around to accepting the idea.
Finally, Medicare is not the most efficient insurance with the best outcomes in the country. Kasier Permanente is the most efficient large insurer with the best outcomes in the country. (It's non-profit, employs its doctors on salary, and has very low turnover among both doctors and patients. It also makes better use of medical tehcnology, refusing to cver a drug or treatment unless there is medical evidence that it is more effective for patients fitting a particular profile than a less costly treatment. Medicare doesn't do that. As a result, Medicare patients are reguarly harmed by overtreatment.)
The administrative costs of private insuers have been greatly exaggerated. All told what insuers spend on marketing, advertising, underwriting, lobbying, exectuive salarie adn profits for investors equals 4.5% of the more than $2 trillion we spend on healthcare. (These are public figures) Meanwhile, health care inflation has been runnign about 6 percent per year. Eliminate the private insurance industry tomorrow, health care inflation swallows your savings in less than a year.
Health care inflation is the problem, and that is largely driven by advanced medical technologies (which covers everything from equipment to drugs to tests and new surgical procedures)which we use very inefficiently. Often the new technologies are unproven, and we use them too broadly, on too many patients who won't bnefit.
Medicare is, enormously inefficient. We have more than two decades of reserach done by doctors at Dartmouth showing that $1 out of every $3 of Medicare's dollars are wasted on unncessary hospitalizations, unproven, ineffective tests and procedures and over-priced drugs adn devices that are no better than the products they have replaced.
Before rolling out "Medicare for all" (even as an alternative to private insurance)we must squeeze out that waste.
A few other points:
On malpractice: the reserach shows that tort reform doesn't work. As Baucus suggests doctors and hospitals need to be more open about admitting to errors; many more cases could be settled without going through discovery.
On need for more healthcare workers: We do not need more specialists; nor do we need more workers in most areas. We need fewer hospitals (too many hospital beds leads to unnecessary hospitalizatins)--which means fewer hospital workers. We need more community clinics in inner cities, but net, if we closed hospitals and opene clinics, there would be fewer jobs..
We do need more primary care docs and more nurses--but people are not lining up to take these jobs (even though we
raise salaries) becuase working conditions are so poor. Today's med students want to work a regular schedule; they do not want to spend their days co-ordinating care for the 15 doctors that their Medicare patients see; they do not want to have to see a patient every 20 minutes (which they would have to do even if we raised pay 15 to 20 percent.)
The only way we will eventually attract more primary care doctors will be to offer them jobs in multi-specialty centers where the other specialties can help support them, working conditions are not so hectic, and where they can work regular hours, on salary, with their malpractice insurance paid by the clnic.
Nurses will not take jobs in our hospitals because they are so chaotic--and so many errors are made. Nurses say that they are afraid they will kill someone. The jobs are too stressful. This is why the average hospital in the U.S. has only 85% of the nurses that it is supposed to have. This, in turn, leads to more chaos,more errors.
The bulk of the problems in the U.S. health care system are not created by private insurers. Private insurers are merely part of the mess.
Posted by: Maggie Mahar | November 15, 2008 at 02:06 PM
Maggie:
Did you read the reply by Himmelstein to Dr. Gawande's New Yorker diatribe against single payer? Many of his comments counter your above argument...
Himmelstein responds to Gawande on single payer
by Don McCanne, MD
In an article in The New Yorker by Atul Gawande, Getting There from Here: How Should Obama Reform Health Care?, his theme was that health care reform in any nation is inevitably “path dependent,” building on “its own history, however imperfect, unusual, and untidy.” He applies this concept to the United States stating that we must build on what we have, selecting out features of our current fragmented system of financing health care that he says should be expanded to achieve our goals. It just happens that the features he selects are those in the current leading Democratic proposal for reform.
His article is very well written, and is quite convincing to those who have not been intensively involved in reform activities and have only a limited understanding of health policy. Since it is such a impressive article it now is being circulated widely as a statement that (superficially) seems to make sense as a guideline for reform.
The problem is that Atul Gawande is flat out wrong. He implies that other nations merely made adjustments in their existing systems to expand coverage to everyone. In fact, these were not simple adjustments to systems that weren’t working; they were revolutionary transformations of their health care financing systems. Some residuals incorporated into their new financing systems might be called “path dependent,” but a more appropriate framing would be the antithesis that the thrust of each reform effort was to eliminate the deficiencies and inadequacies of the existing financing system or non-system. This inevitably required new financing systems. The fundamentals of these new financing systems were not based on path dependency, but they were based on path trailblazing.
Gawande dismisses single payer supporters as reformers “on the left” who “reserve special contempt for the pragmatists, who would build around the mess we have.” He explains later that the path dependent, pragmatic approach that we must follow will still be “exasperating, even disappointing,” while still failing to give single payer even short shrift.
In a Common Dreams article, Russell Mokhiber provided a comment by Atul Gawande in which he expanded on his views of single payer, along with a response by David Himmelstein. When you hear people praise Gawande’s New Yorker article, you should provide them with the following comments.
As for (Gawande’s) opposition to single payer, he remains steadfast. In a q/a with New Yorker readers last week, Gawande defended his opposition to single payer now.
“Replacing the entire health-financing system with Medicare would require most working-age people to leave their current insurance plans,” Gawande writes. “It would change the finances of every hospital and doctor in the country overnight. It would require replacing the premiums we pay with a tax, with massive numbers of both losers and winners. It seems simple in theory, but in practice it never is. This would be a whole new path for health care. No country has swept away their health system and simply replaced it like that. As I said in the article, one would have to be prepared for an overnight change in the way people get 3.5 billion prescriptions, 900 million office visits, 60 million operations - because how these are paid for is critical to whether and how they are provided. Doing away with private insurance coverage is no less sweeping than saying we’ll do away with public insurance programs or do away with employer-paid health care. No major country has simply swept away the way so many people’s care is paid for. And the reason is that people have legitimate fears about what will happen to them.”
Dr. David Himmelstein, a founder of Physicians for a National Health Program, calls this argument “bogus.”
“Patients do not care what their insurance plan is -- just that it pays for the care they need. A transition from a system where virtually everyone has only partial coverage to one where they have full coverage is not a disruption for patients,” Himmelstein said when we asked him to respond to Gawande. “Several nations have made abrupt changes in the financing of care. The UK instituted the National Health Service - eliminating insurance and private payment for care at a stroke. Each Canadian province went from a private insurance system very like ours to its current system virtually overnight — though not all provinces underwent the change simultaneously. Taiwan changed to a single payer system about 10 years ago at a stroke.”
“Medicare replaced private coverage for the elderly — who account for about 30% of all hospital patients — about nine months after its passage. That occurred in an era before computers. The entire task of enrolling tens of millions of patients, inspecting virtually every hospital in the nation — to certify that they were desegregated, which was mandated by the Medicare law — and set up a new payment apparatus was carried out using paper records. Why is a shift of the other two-thirds of our system more difficult?”
“The new payment system would be far simpler than the current one — hospitals would receive a global budget, which initially would be based largely on their previous year’s revenues. Medicare currently collects all of the financial info needed to do such budgeting at the outset. Per-patient billing for hospital care would be eliminated. For doctors, Medicare already has a fee schedule, which should be modified somewhat, but already serves as the benchmark for most private plans. Expanding this payment system to cover all fee-for-service billings would be trivial. Paying for drugs is similarly pretty simple and straightforward, with most of the needed infrastructure already in place.”
“In sum, his arguments are bogus unless you assume that we are far less competent than people in other nations, and than we used to be,” Himmelstein said.
Dr. David Himmelstein is an associate professor of medicine at Harvard Medical School and co-founder of Physicians for a National Health Program. The author of numerous studies and books, he is a leader in the movement for universal health care. Don McCanne, MD, is a past president of Physicians for a National Health Program. He writes a daily health policy update, commenting on a health care news story or analysis and it's significance for the single-payer health care reform movement.
Posted by: H. Green | February 21, 2009 at 11:40 AM
Yes, I know Himmelstein.
He's an avid supporter of single-payer.
But I'm afraid he's wrong.
As Dr. Gawande points out, single-payer would mean
persuading Americans to give up their employer-based
insurance.
They do Not want to do that, as I explained in my last comment, in large part
because employers pay an average fo 75% of the premium for
workers earning over $70,000. In 15 percent of all cases,
employers pay 100% of the premium for those workers.
They know that single-payer would cost them more.
And most people don't want to give up what they know (their employer's coverage) for an unknown govt. plan.
Himmelstein never mentions that Medicare requires 20% co-pays for out-patient surgery. Or that its premiums have been going up rapidingly in recent years. Or that after 30 days, co-pays for inpatient care are very high.
Secondly, Himmelstein distorts the history of what has happened in other countires. Gawande gets it right.
(I also know Gawande, have interviewed him and read his books.
He is brilliant and does not play fast and loose with the facts.)
Himmelstein ignores the fact that Medicare spending on haelthcare is rising an average of 6% to 7% a year. As a result, Medicare will not have enough money to pay its hospital bills in 11 years.
And Himmelstein would like to expand it to cover all Americans?? Where would he get the money?
Medicare needs structural reforms. Only then, can we expand it.
And give Americans a choice between Medicare and private insuers. There are a number of excellent non-profit insurers in the the private sector-- Geisinger, Puget Sound, etc. Keeping them in the mix would keep Medicare on its toes
Posted by: Maggie Mahar | February 21, 2009 at 04:18 PM