Thursday, November 19, 2009

Enough Reform to Succeed?

The Affordable Health Care For America Act (HR 3962): Enough Reform To Succeed?
Posted by John Geyman MD on Wednesday, Nov 18, 2009
As we know, the House passed its health care reform bill on October 29, 2009 after many months of contentious debate. By a narrow margin, 220-215, the 1,990 page, almost 20 pound bill was passed. It laid out the most liberal health care reform that might be expected out of Congress this year, since any bill that may clear the Senate will certainly be more restrictive.
In order to answer our question as to the value of the House bill, we need to re-state the original major goals of reform: (1) contain skyrocketing costs of health care and health insurance; (2) expand access to care by including everyone; and (3) improve the quality of care.

At a gross cost of $1.055 trillion over ten years, the House bill would do some good things, including reduction of the uninsured by up to 30 million; helping many Americans to pay for insurance through government subsidies; helping small business to provide coverage to their employees; expanding Medicaid and community health centers; establishing a new Center for Comparative Effectiveness Research to study and recommend the most effective treatments; initiating limited reforms of the health insurance industry, such as termination (four years hence) of its common practice of denying coverage based on health status and pre-existing conditions; phasing out government overpayments to private Medicare Advantage plans; revoking a decade-old anti-trust exemption for insurance companies; and creating a new long-term care program (CLASS ACT) to supplement Medicaid and/or private long-term care insurance.

However, the negatives far outweigh the positives, and adopting this bill would delay real reform for years to come. Despite a chorus of accolades about the bill by its supporters, even comparing it with the historic importance of Social Security and Medicare, this monster bill instead bears the heavy imprint of corporate stakeholders who themselves are largely responsible for out-of-control health care costs. After months of lobbying and campaign contributions to legislators crafting the legislation, their multiple conflicts of interest and political compromises, this bill ends up being a bailout for the insurance industry and a bonanza for stakeholders in the medical industrial complex.
Here are some of the major problems with the bill:

• It will not “bend the cost curve” for many reasons—with the exception of a provision that the government negotiate drug prices with manufacturers (as the VA does so effectively), there are no real restraints on the prices of health insurance or health care services; insurers have already warned that premiums will continue to surge in future years; perverse incentives would remain in the system to continue providing large amounts of inappropriate and unnecessary services, especially by specialists in more highly reimbursed areas; and recommendations based on studies by the new Center for Comparative Effectiveness Research could not be used to mandate coverage or reimbursement policies.

• As the crisis in declining access to care only grows (with already 46 million uninsured and at least another 30 million underinsured), expansion of Medicaid, subsidies, and limited restrictions on insurers would not take place for four more years. And as many states struggle with their deficits during the recession, access and benefit levels available to patients on Medicaid will be seriously jeopardized in many parts of the country. Meanwhile 45,000 Americans are dying each year as a result of being uninsured—one every 12 minutes.

• Because of a number of small-print provisions in the bill, bought by industry interests and crafted by their representatives, we would see a growing epidemic of underinsurance among the newly insured. These are some of the reasons: low requirements for actuarial value, the proportion of health care costs that insurers are required to pay for care (probably ending up as low as 65 or 70 percent when further compromises are made with the Senate); restricted levels of benefits to be covered (the minimal essential benefits package would be in four tiers, has yet to be developed, and we can expect that it will fall far short of all necessary care); in a last-ditch effort to pass the bill and assuage pro-life legislators, new anti-choice language was added by the Stupak amendment that would deny coverage of abortion care to millions of women; and coverage shortcomings of private plans already in force will be grandfathered in without reform.

• Even after the expenditure of more than $1 trillion, the bill would still leave some 18 million Americans uninsured.

• The public option, diminished as it has been to the point where it could only include 2 percent of Americans by 2019, would not have enough market clout to “keep the insurers honest.” The Congressional Budget Office (CBO) has already concluded that the public option would not offer real competition to private insurers, and that its premiums would even have to be higher than private premiums. It would not be available until 2013 through the new Health Insurance Exchange, and then only to the uninsured and some employees of small businesses without coverage. Moreover, such Exchanges have no track record of success. After 15 years of experience in California, that Exchange failed, mostly due to lack of pricing power and adverse selection by attracting sicker enrollees.

• The CBO has projected that rising insurance costs could mean that middle-income families would spend 15 to 18 percent of their income on premiums and co-payments.

• This bill would not reverse the unraveling of the employer-sponsored insurance system because of rising health care costs that outpace the rest of our economy; despite subsidies to small business, employer-sponsored insurance would remain unsustainable.

• This bill would only add to the already large burden of complexity and bureaucracy, together with their additional costs. At the same time, it would forego savings of some $400 billion a year that could otherwise be achieved through a simplified, more efficient single-payer system.

So in sum, this bill, while well intentioned, is fatally flawed. It would not effectively address the three major system problems demanding urgent reform, and would delay real reform by letting much of our population falsely think that reform is at hand. It would leave in place an inefficient, exploitive insurance industry that is dying by its own hand, even as it props it up with enormous future profits through often subsidized individual and employer mandates.

The most fundamental single question about how to reform our health care system should be whether or not we abandon our multi-payer, mostly investor-owned financing system or move to a not-for-profit single-payer system, Medicare for All, which this year’s political process has carefully kept off the table. The lesson of history in this country tells us that, as long as we retain private health insurance at the core of our health care system, we can never achieve universal access to affordable, comprehensive high-quality care.

Dr. John Geyman is professor emeritus of family medicine at the University of Washington School of Medicine in Seattle, a past president of Physicians for a National Health Program and author of “Do Not Resuscitate: Why the Health Insurance Industry Is Dying, and How We Must Replace It.”

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