The Amazing Maze of US Health Care

Premiums absolutely should be based on income and absolutely should not be based on age.  I say that not just because I am in the 60+ age bracket and you likely are not.  I say that because of my 25+ years in employee benefits.  However, I do agree that there should be a penalty for delayed enrollment similar to what Medicare Part B imposes.

When you come right down to it, the whole health care debate boils down to two issues.  How do you expand health care coverage and how do you pay for health care.

Expanding coverage is important because it spreads the risk among the sick and the healthy equally.

Make it straightforward and uncomplicated

But when it comes to paying for health care we are locked into a conversation that is driven by the cost of health insurance for an individual or a family.  Consequently, in efforts to get money where it is needed we come up with goofy schemes like taxing “Cadillac” plans.

Instead we should think collectively.  How do we transfer money from those who have more of it to those who have less of it?  This is a principle we have already agreed to with Medicare and Medicaid and some employers charge their employees on a percentage of income basis – some even on a sliding scale.

The simplest, most straightforward, uncomplicated approach is to pay based on ability to pay.

My idea is that employers be charged a flat percentage of total compensation for health care.  Total compensation needs to include all forms of compensation and should include payments for contract labor (sometime referred to as free lancers or consultants).  These payments would be reduced by payments made for employer sponsored health care.

Focus on the main issue

The immediate consequence of this approach is twofold.  High wage earning industries would subsidize the health care costs of low wage earning industries.  Employers not providing health insurance would be paying a “fair share” for health care costs.

Several numbers could guide the actual premium rate.  Health care consumes about 18% of GNP.  According to the Employee Benefits Research Institute, employers in 2008 paid 7.9% of total compensation for health care costs.  Employees paid between 65% and 75% of health care costs.  That puts actual health care costs somewhere around 12% of total compensation.  By my calculation, that puts the employee share at around 3% of total compensation.  (I would appreciate any comment on the calculation of these numbers.)

So 6% is low as a percentage of total compensation, but high as a percentage of employee share.

If we want to lower those percentages, then we need to lower that first number – health care costs as a percentage of GNP.

To the extent that older workers tend to earn more than younger workers, there is an inherent age bias to this approach.    But not all old people earn more money nor are they always sicker.  Certainly, I am not sicker (knock on wood).

If the goal is to transfer money from those who have more of it to those who have less of it, then don’t confuse that goal with other objectives such as punishing only those over a certain income threshold or punishing the recipients of “rich” benefit plans.

This plan does not address the complications of how very small businesses should pay their share.  But if we can agree on the first two goals I outlined above this should be a manageable challenge.

The NOW! Blog

Ed Hanway, CEO of Cigna, one of the nation’s largest health insurance companies, will step down at the end of this year, in just over a week. When he does, he’ll get $73,200,000 as compensation for a job well done.

What makes Hanway worth $73.2 million? Well, for one example, he’s presided as Cigna denied a liver transplant to 17-year-old Nataline Sarkisyan, causing her death and widespread outrage. Wendell Potter, Cigna’s former spokesperson turned whistle-blower, was at the company during the Sarkisyan scandal, and he explains its effect on him personally, as well as how the company thinks about denying care:

NOW! Blog » Merry Christmas! Ed Hanway, Cigna CEO, is getting a $73,200,000 golden parachute

Howard Dean says the health bill would do more harm than good.

Bill Clinton says “Don’t let the perfect be the enemy of the good.”

A snow job?

How did we get this close to health care reform legislation, but many progressives believe that it could actually do more harm than good.

Because the “progressive” position was already a compromised position?

Because “single payer” was never on the table.  Because political operatives and policy makers didn’t trust the American people.

The current health care debate certainly demonstrates the power of money over popular sentiment.  But could it be that the power of money was so intimidating to some reformers that they chose to misrepresent public opinion?

But what is the popular sentiment?

Despite outrageous and obstreperous tactics by right wing opponents of health care reform during the August congressional research, polls indicated support for health care actually ticked up in the early fall.

Kip Sulllivan recently asked the question, why do some polls show support for a single payer system and some don’t?

How did the “public option” come to the fore of policy discussions?

The short answer – people use the polls that support their position, and when they don’t support their position, they make it sound like they do and if that fails, they make stuff up.

Those are my words, not Sullivan’s

Over six lengthy articles on the web site of Physicians for a National Health Plan, Sullivan describes polls that demonstrate broad support over a long period of time for a single payer health system.

He examines closely the polls that show support for a single payer solution and those that show less support.

His conclusion – the more poll respondents know about single payer – the more they like it.

Questions that offer accurate information to explain single payer and give examples to illustrate a single payer system, Medicare, Canada, England, consistently show that two-thirds of Americans support a single payer.

I have just condensed into a few paragraphs what Sullivan exquisitely details over several thousand words.

He shows us the polls, the results, the questions.

Three of the polls asked doctors about single payer revealing that physician support for single payer is only slightly lower than it is in the general population.

For Sullivan, the best example of the judgement of an informed citizenry is the citizen jury.  He cites two citizen jury panels convened to review health reform options in the nineties to prove his point that an informed judgement is a judgment for single payer..

The citizen jury is a concept developed by the Jefferson Center.  In 1993 at the height of the debate over President Bill Clinton’s health reform legislation, 24 randomly selected jurors were convened to hear a panel of 30 experts present and discuss three health reform ideas – Clinton’s managed competition plan, a free market approach that has since evolved into what is called “consumer driven health care”. and a single payer approach.

Although the panel was ostensibly balanced, only one of the speakers is clearly identified with the single payer approach, Senator Paul Wellstone, (D-MN).  Of the thirty panelists, only one was invited back – twice, Senator Paul Wellstone.

The lopsided panel produced lopsided results.  But not exactly what was expected.  After 5 days, the citizen jury voted 24- 0 against the consumer driven health care concept.  They voted 19-5 against Clinton’s managed competition plan.  They voted 17-7 in favor of the single payer approach.  That’s 71% in support of single payer proposal that relied on a single proponent to explain it.  When citizens have the opportunity to hear and question all of the options themselves, they will support a single payer.

A briefer version a few years later produced similar results.

How did we get lost?

So how did we get from strong support for a single payer system to luke warm support for a watered down compromise called the public option.

Sullivan goes on to detail how thought leaders like Jacob Hacker, author of the public option idea, and political operatives like Roger Hickey, co-director of Campaign for America’s Future, sold the American public short early on.  By distorting some of the very same poll results cited by Sullivan, they convinced many in the progressive community that the American public would not support a single payer system.

According to Sullivan, Hickey enlisted the Herndon Alliance who hired Celinda Lake, one time single payer booster, to create poll results that showed the public preferred a public option strategy to a single payer approach.  Actually, Sullivan doesn’t use the word “create”, but he challenges Lakes methodology of her focus groups and their lack of transparency and the objectivity of her polls.  Unlike the citizen jury approach, Lake has refused to reveal the questions used in her focus groups.

One might argue that a public option is a satisfactory political compromise, given the overwhelming power of the health care status quo.

The tragedy is that the American public was sold down the river early in the debate.  Sullivan goes on to say that policy should not be driven by polls, but by what is good policy.  But when polls support good policy, why run away from them?

Unless they don’t support your policy.

- News digest – Quality/Equality – RWJF

Providers have made significant improvements in patient safety since the Institute of Medicine’s (IOM) groundbreaking To Err is Human report, which shed light on the prevalence of medical errors in U.S. hospitals when it was released a decade ago, but many of the report’s recommendations “remain elusive,” Modern Healthcare reports. The IOM report famously determined that as many as 98,000 patients in U.S. hospitals die annually because of “medical harm,” calling for a series of systemic changes and reforms to reduce errors and mortality in the health care industry.

A Decade After ‘To Err is Human’ Report, Patient Safety Challenges Remain – News digest – Quality/Equality newsroom – Quality/Equality – RWJF

Washington, DC – Representative Anthony Weiner (D- Brooklyn & Queens), a member of the House Energy and Commerce Health Subcommittee released the following statement in advance of President Obama’s meeting with the Senate Democratic Caucus at the White House:

“Snowe? Stupak? Lieberman? Who left these people in charge? It’s time for the President to get his hands dirty. Some of us have compromised our compromised compromise. We need the President to stand up for the values our party shares. We must stop letting the tail wag the dog of this debate.”

Anthony Weiner – New York’s 9th District