Improved/Single Payer MEDICARE FOR ALL and HEALTH INSURANCE REFORM

1
Improved/Single Payer MEDICARE FOR ALL and
HEALTH INSURANCE REFORM

• Oliver Fein, M.D.
• Professor of Clinical Medicine and Public Health
• Associate Dean
• Office of Affiliations
• Office of Global Health Education
• Weill Cornell Medical College
• Medicine Housestaff Conference
• Weill Cornell Medical Center
• September 17, 2010

2
DISCLOSURES

• Dr. Oliver Fein has no relevant financial
  relationships with commercial interests
• Dr. Oliver Fein is President of
• Physicians for a National Health Program (PNHP),
  a non-profit educational and advocacy
  organization. He receives no financial
  compensation from PNHP.

3
PRESENTATION OUTLINE

• History of U.S. Health Reform
• Challenges facing U.S. Health Care System
• Comparison of Single Payer and
• 2010 Health Reform

4
Progress(?) of US Health Reform
Employer mandate
Medicare
Individual mandate
??
each eligible individual must enroll in an
applicable health plan for the individual and
must pay any premium required with respect to
such enrollment. (S.1775)
Public option
you can choose to enroll in the new public
plan
5
HEALTH REFORMOBAMAS FATEFUL CHOICE

• He did not want to start from scratch
• He had two fundamental choices
• 1) to build on the public sector (Medicare)
• or
• 2) to build on the private sector
• He chose to try to reach universal coverage by
• expanding private insurance

6
PURPORTED ADVANTAGES OF THE PRIVATE SECTOR

• Covers 52 of population
• Increases access (via affordability)
• Controls costs (via the market)
• Provides greater choice
• Improves the quality of care

7
WHAT HAPPENED TO THEPUBLIC OPTION?

• The original robust Plan
• Open enrollment Medicare for everyone who wants
  it
• Medicare rates, backed by the government
• 119 million members (Lewin)
• The House Plan
• Restricted enrollment (only the uninsured)
• 6 million members (lt2 of the population)
• Negotiated rates, self sustaining
• The Senate Plan
• No public option

8
HEALTH CARE vs INSURANCE REFORM

• The Patient Protection and Affordable Care Act
  (P-PACA)
• March 23, 2010
• House For 219 Against 212 (No Repubs 39
  Dems)
• Senate For 60 Against 39 (all Repubs)
• The Health Care Education Affordability
  Reconciliation Act
• March 25, 2010
• House For 220 Against 211 (No Repubs 38
  Dems)
• Senate For 56 Against 43 (No Repubs 3 Dems)

9
CHALLENGES FACING HEALTH CARE REFORM

• Declining access
• Escalating costs
• Defining of benefits
• Restricted choice
• Uneven Quality
• Lack of primary care
• How to pay for reform

10
CHALLENGE 1

• DECLINING ACCESS

11
(No Transcript)
12
The Epidemic of Underinsurance
Number of people spending more than 10 of
income on health care (Millions)
Source Too Great a Burden, Families USA,
December 2007
13
ImprovedMEDICARE FOR ALL

• Automatic enrollment
• Federal guarantee
• All residents of the United States
• Everybody in, nobody out

14
HEALTH INSURANCE REFORM (P-PACA)

• Mandates purchase of private HI (2014)
• Expands Medicaid eligibility to 133 FPL (2014) -
  single 14,403 family 19,378
• Subsidizes premiums up to 400 FPL
• (2014) - single 43,320 family 88,200
• Insurance market reforms Guaranteed
• issue no rescissions no annual/life limits

15
Trend in the Number of Uninsured Nonelderly,
20122019Under Current Law and House and Senate
Bills
15
Millions
Note The uninsured includes unauthorized
immigrants. With unauthorized immigrants excluded
from the calculation, nearly 94 and 96 of legal
nonelderly residents are projected to have
insurance under the Senate and House proposals,
respectively. Data Estimates by The
Congressional Budget Office.
16
CHALLENGE 2

• ESCALATING COSTS

17
Insurance Premiums Workers Earnings
Inflation 1999-2008
Kaiser/HRET Survey of Employer-Sponsored Health
Benefits, 2000-2008. Bureau of Labor Statistics,
Consumer Price Index
18
High Cost of Health Insurance Premiums Its Even
Too Expensive for the Middle Class Today

• National Average for Employer-provided
  Insurance
• Single Coverage 5,049 per year
• Family Coverage 13,770 per year
• Note Annual income at minimum wage
  13,624
• Annual income of average
  Wal-Mart worker 17,114
• Source Kaiser Family Foundation/HRET
  Survey of Employee Benefits, 2010

19
RISE IN PERSONAL BANKRUPTCIES

• 62 of personal bankruptcies are due to medical
  expenses and over 75 had health insurance at the
  outset of their
• bankrupting illness.
• Himmelstein, et.al. Am J Med, August, 2009

20
ImprovedMEDICARE FOR ALL

• Low Administrative Costs Single Payer
• Administrative cost and profit
• - Medicare 2-3
• - Private insurance 16-30
• 400 billion redirected to cover the uninsured
• and to expand coverage for the underinsured
• NEJM 2003349768-775

21
Covering Everyone and Saving Money through
Medicare for All
B

• Additional costs
• Covering the uninsured and poorly-insured
  6.4
• Elimination of cost-sharing and co-pays
  5.1
• Savings
• Reduced insurance administrative costs
  -5.3
• Reduced hospital administrative costs
  -1.9
• Reduced physician office costs
  -3.6
• Bulk purchasing of drugs equipment
  -2.8
• Primary care emphasis reduce fraud
  -2.2

134 107 241
Total Costs 11.5
-111 -21 -76 -59 -46 -313
Total Savings -15.8
Net Savings - 4.3 - 73
Source Health Care for All Californians Plan,
Lewin Group, January 2005
22
(No Transcript)
23
Private insurers High Overhead
24
SINGLE PAYER OFFERS REAL TOOLS TO CONTAIN COSTS

• Global budgeting of hospitals
• Capital investment planning
• Emphasis on primary care coordination of care
  alternative ways of paying for care
• Bulk purchasing of pharmaceuticals

25
HEALTH INSURANCE REFORM(P-PACA)

• Saves costs by mandating penalties for
  Uninsurance (forcing low risks into risk pool)
• 1. Individual mandate (2014)
• 2.5 of income or 695 (singles)
• to 2,085 (family)-(2016)
• 2. Employer mandate (if 50 or more employees)
• 2,000/employee

26
HEALTH INSURANCE REFORM(P-PACA)

• Leaves many of the undesirable features of
  employment-based insurance unchanged
• Employers can change coverage and plans
• Insurers can change provider networks
• Employees must accept the employer plan

27
HEALTH INSURANCE REFORM (P-PACA)

• Offers unproven tools to contain costs
• Health Information Technology (HIT)
• Chronic Disease Management
• Payment reforms (e.g., medical homes)

28
Total National Health Expenditures (NHE),
20092019Current Projection and Alternative
Scenarios
NHE in trillions
6.6 annual growth
4.8
4.7
4.5
6.4 annual growth
6.0 annual growth
2.5
Notes Modified current projection estimates
national health spending when corrected to
reflect underutilization of services by
previously uninsured. Source D. M. Cutler, K.
Davis, and K. Stremikis, Why Health Reform Will
Bend the Cost Curve, Center for American Progress
and The Commonwealth Fund, December 2009.
29
CHALLENGE 3DEFINING BENEFITS

• Service Coverage Doctors, NPs, Hospitals, Rxes
  Dental, Mental Health, Home care/nursing home
• Financial Coverage Copays and deductibles

30
ImprovedMEDICARE FOR ALL

• Comprehensive coverage
• - Preventive services
• - Hospital care
• - Physician services
• - Dental services
• - Mental health services
• - Medication expenses
• - Reproductive health services
• -Home Care/nursing home care
• All medically necessary services
• Any exclusions? How decided?

31
ImprovedMEDICARE FOR ALL

• Eliminates Co-Pays or Deductibles
• Reduce use of needed and unneeded
• services equally
• Results in under use of primary care services
• Not as effective in reducing over use of
  technology intensive services, as
• - Eliminating self-referral to MD owned
  facilities
• - Reducing defensive medicine

32
HEALTH INSURANCE REFORM (P-PACA)

• No Standard Benefit Package mandated
• Mandates coverage of check-ups and other
  preventive services
• Reduces or eliminates co-pays and deductibles,
  but only on preventive services

33
CHALLENGE 4RESTRICTED CHOICE

• 42 of employees have no choice
• Private health insurance limits choice to
• the network of doctors and hospitals with
• whom they have negotiated contracts
• You pay more to go out of network

34
ImprovedMEDICARE FOR ALL

• Expands Choice for Everyone
• No limit to a network of providers
• Free choice of doctor and hospital
• Delinks health insurance from employment

35
HEALTH INSURANCE REFORM (P-PACA)

• Creation of HI Exchanges Expands Choice for Some
• House National Exchange with State option
• - Combines individual and small group
  markets into one insurance pool and one
  Exchange
• - National public option
• Senate State exchanges with federal back-up
• - Separate pools for individual and small
  groups
• - No public option
• No state single payer until 2017

36
HEALTH INSURANCE REFORM (P-PACA)

• Restricts Choice when it comes to abortion
• House Stupak Amendment
• - Codifies Hyde Amendment
• - Bans abortion coverage in public option
• - Bans abortion coverage in any private plan
• that accepts public subside funds
• - Allows separate abortion riders
• Senate Nelson Amendment
• - Allows states to prohibit abortion coverage
• in state-run exchanges
• - If states allow abortion coverage, requires
• enrollees or employers to send two checks
• - Insurers must keep abortion coverage money
• separate from federal subsidies

37
CHALLENGE 5UNEVEN QUALITY

• In 2008, U.S. was last among 19 industrialized
  nations in mortality amenable to health care.
• In 2006, we were 15th.
• Commonwealth Fund (2009)

38
ImprovedMEDICARE FOR ALL

• National data on health care quality vs.
• proprietary data held by private HI
• National standards and public reporting
• HIT for the nation with patient protections
  every patient their own medical record on a
  credit card

39
HEALTH INSURANCE REFORM (P-PACA)

• Comparative Effectiveness Research
• Innovation Center in CMS to test new payment and
  service delivery models (2011)
• Value based purchasing hospital payments based
  on quality reporting measures (2013)
• Readmission penalties (2013)
• Reduce hospital payments for hospital-acquired
  conditions (2015)

40
CHALLENGE 6LACK OF PRIMARY CARE

• Average medical school debt 160,000
• Primary care is under-reimbursed
• Medical school graduates going
• into specialties

41
ImprovedMEDICARE FOR ALL

• Debt forgiveness for primary care
• Malpractice payment for primary care
• providers (MDs, NPs and PAs)
• Patient-Centered Medical Homes (team
• based care, open access, coordination of
• care phone/internet medicine)

42
HEALTH INSURANCE REFORM (P-PACA)

• 10 Primary Care Bonus Payments (2011-2017)
• Increase Medicaid payment to Medicare rates for
  primary care (2013)
• Independent Payment Advisory Board (2014)

43
CHALLENGE 7

• HOW TO PAY FOR REFORM

44
ImprovedMEDICARE FOR ALL

• Public funding
• - Payroll tax
• - Corporate taxes
• - Income taxes
• No premiums regressive
• No increase in overall health care spending,
  because of administrative savings

45
ImprovedMEDICARE FOR ALL

• Non-profit/private delivery system under local
  control
• - Doctors not salaried by government
• - Hospitals not owned by government
• - This is not socialized medicine
• A publicly funded-privately delivered partnership

46
HEALTH INSURANCE REFORM (P-PACA)

• Increased taxes
• - Excise tax on Cadillac health
  insurance plans (2018)
• - Medicare payroll tax increase from 1.45 to
• 2.35 if income 200-250K
• - 3.8 tax on investment income
• 2. Savings from Medicare
• - Advantage (132 bill over 10 yrs)
• - Cut DSH payments (36 million)
• - Cut Medicare payments to hospitals
• (136 bill over 10 yrs)
• - Cut payments for home care/nursing homes (60
  bill)
• 3. Revenue from reduced fraud and abuse

47
HEALTH REFORM (P-PACA)

• Expanded coverage, but not universal
• Cost control by market means
• No definition of benefits
• Choice thru State-based exchanges,
• but no public option
• 5. Limits on abortion
• 6. Primary care/quality pilots
• 7. Funding Excise tax on Cadillac
• plans and Medicare cutbacks

48
Single Payer MEDICARE FOR ALLTHE PHYSICIANS
PROPOSAL(JAMA, August 13, 2003 P. 798-805)

• Universal coverage/automatic enrollment
• Low administrative costssingle payer
• Comprehensive coverage without co-pays
• and deductibles
• 4. Maximum choice of Doctor, NP, Hospital
• 5. Improved quality through nationwide HIT
• 6. Expanded primary care
• 7. Publicly-funded/privately delivered
• MEDICARE 2.0

49
Conyers HR 676 Expanded and improved
MEDICARE-FOR-ALL Single Payer NH Care(86
Co-sponsors in House of Rep)

• Automatic enrollment
• Comprehensive benefits
• Free choice of doctor and hospital
• Doctors and hospitals remain independent
• Financed through progressive taxes
• Costs contained through capital planning,
  budgeting, quality reviews, primary care emphasis

50
Sanders ( McDermott) American Health
Security Act S 703 (HR 1200)

1. Automatic enrollment
2. Comprehensive benefits
3. Operated by States using Federal standards
4. Free choice of doctor and hospital
5. Doctors and hospitals remain independent
6. Public agency processes and pays bills
7. Financed through payroll taxes

51
IN CONCLUSION

• A system based on private insurance plans
• - will not lead to universal coverage
• - will not create affordable insurance
• A Medicare for All System
• - can lead to universal comprehensive coverage,
  
• without costing more
• - has the greatest potential to increase choice,
  
• improve quality and expand primary care
• - can be financed fairly

52
We Cant Wait Another 16 Years! We Need Real
Health Care Reform Before the Premium Takes All
our Income!
Today
Source American Family Physician, November 14,
2005
53
CONTACTS AND REFERENCES

• PNHP National www.pnhp.org
• PNHP-NY Metro www.pnhpnymetro.org
• Bodenheimer TS, Grumbach K, Understanding Health
  Policy A Clinical Approach. McGraw-Hill, 2005
• Fein O, Birn AE. (editors), Comparative Health
  Systems. Am Jour Public Health 2003 93 1-176
• OBrien ME, Livingston M (editors), 10 Excellent
  Reasons for National Health Care. New Press, 2008
• Geyman J, Do Not Resuscitate Why the Health
  Insurance Industry is Dying and How We Must
  Replace It. Common Courage Press, 2008