Jarnagin 1 Neal W.

Jarnagin English 106, Section D November 27, 2006 Major Paper #3 The Death of American’s and Its Result: A Heavier Wallet I was left with $70,000 in uncovered medical bills as a result of an episode of severe depression ten years ago. This coverage deficit was not the result of a miserly employer; I was the President of an environmental consulting firm and I chose the policy. I reviewed more than 10 policies and was surprised to find that they all severely limited mental health coverage through higher deductibles and co-pays and restrictive annual and lifetime maximums. The policy we purchased was great for everything except it had a separate $750 deductible, 50/50 co-pay, $1,500 annual outpatient maximum and $2,500 inpatient maximum for mental health treatment (Health). I have a brain tumor. Naturally, the health insurance industry has labeled me as having a ‘pre-existing’ condition and will not provide my coverage. I pay $255 a month for 5 pills to subdue my tumor. For the time being, I am paying for this out of pocket, but I need a permanent solution (Health). I am an Army mom, who can't afford health insurance while my husband and I agonize over our son's precarious fate. The psychological and emotional toll on us both is paralyzing. While I frantically look for a job, I still must support my mother and sister financially. I pay $300 monthly for catastrophic health insurance, but cannot afford prescription drugs, lab tests, and specialist visits. I cannot survive with these stresses for much longer (Health). All of the proceeding comments were sent to Representative John Conyers, Jr. of Michigan and while the above individuals come from various financial backgrounds, they all have one concern; that of health care and its rising costs. While every American has complained in the past about the rising costs and quality of their healthcare, recently the discussion of reform has been on the lips of every taxpayer and politician heading to the polls. Presently over 46 million Americans are uninsured with millions more underinsured, and while the United States spends more than double what the other industrialized countries do, healthcare reform is the only feasible solution. According to the Physicians for a National

Jarnagin 2 Health Program, cost is not the only reform that urgently needs to take place; it is that of quality. “The United States performs poorly in comparison on major health indicators such as life expectancy, infant mortality and immunization rates” (Single) With other healthcare reforms failing at an alarming rate, single-payer national health insurance is the only one that has been proven to work but has not yet been attempted in the United States. The most disturbing factor in regards to the cost increases and quality decreases is that of money. While the United States government seems to believe that providing quality, inexpensive healthcare is an issue of value, most American’s would argue that it is one of morality. Single-payer national health insurance, in essence, “is a healthcare system in which one government agency organizes health financing, but delivery of care remains largely private” (Single). Similar to Medicare and other countries health policies, it would cover every necessary medical service to include primary care, inpatient care, outpatient care, emergency care, long term care, prescription drugs, durable medical equipment, mental health services, dentistry, eye care, chiropractic, and substance abuse treatment but with the added benefit of having every single American receiving these services rather than those only over the age of 65 or the poor. Patients have their choice of enrolled physicians, hospitals, clinics, and medical practices and no co-pays or deductibles are permitted. In a report to the Chairman of the Committee on Government Operations of the House of Representatives entitled Canadian Health Insurance: Lessons for the United States, the General Accounting Officer describes how a single-pay insurance system has benefited Canada. He outlines the basic structure of their program as health insurance being universal and that health insurance does not change when moving from one job to the next as often happens within the

Jarnagin 3 United States. “The Canadian system is administered in each province by a public agency, which is responsible both for reimbursing providers and for health planning. The provincial governments are the single payers of physicians and hospitals and make the key decisions on health financing” (Report). He goes on to contrast the Canadian system and the United States system by reporting that one entity is responsible for the financial healthcare of Canadians while in the United States, several entities are involved such as federal and state governments, private insurers, and businesses but none of which are ultimately responsible. Continuing, the Canada Health Act covers all residents in all provinces for necessary physician and hospital care. In the United States, coverage depends primarily on whether health insurance is provided by an employer or through public programs serving the poor or elderly. Direct patient payments to providers for covered services are banned in Canada and hence, no copayments or deductibles are paid, while in the United States, copayments and deductibles are common and it is not uncommon for health care providers to bill the patient for charges in excess of the standard insurance reimbursement. In 1989 when the report was developed Canadians paid on average $670 less per person than those of the United States (Report). Dr. Marcia Angell, the senior lecturer for the Department of Social Medicine of Harvard Medical School and the former Editor-in-Chief of the New England Journal of Medicine believes that “the underlying problem is that we treat health care like a market commodity instead of a social service. Health care is targeted not to medical need, but to the ability to pay” (“Statement”). Most employed Americans receive tax-free benefits from their employers. Those employers then pay insurers a portion of the premiums for health coverage, however, not all employers offer benefits and those that do may not have comprehensive plans. The system as it

Jarnagin 4 stands is completely voluntary and when employers are competing for workers, they offer good benefits but when unemployment rises, they drop them. Dr. Angell continues by describing how insurers with whom employers do business with are mostly investor-owned, for-profit managed care businesses. They try to keep premiums down and profits up by stinting on medical services. In fact, the best way for insurers to compete is by not insuring high-risk patients at all; limiting the coverage of those they do not insure; and by passing costs back to patients by denying claims or as deductibles and co-payments. We are the only nation in the world with a health care system based on dodging sick people. These practices add greatly to overhead costs because they require a mountain of paperwork (“Statement”). The monies that are paid into the health care system are immediately skimmed off. Private insurers take the first 10 to 25 percent for administrative costs, marketing, and profits. The remainder goes to brokers, disease-management and utilization review companies, drugmanagement companies, legal services, marketing consultants, billing agencies, and information management firms. Doctor’s in turn only receive approximately 50 cents on the dollar for services rendered while they also have the high overhead costs in dealing with multiple insurers. In essence the only people that benefit from the current health care system are the healthy and investors. While this may not seem fair, it is only getting worse. On average the private health insurance premiums are rising at about 13 percent per year and as much as 25 percent in some areas of the country. While coverage shrinks and premiums rise, in the long run, nobody will benefit from the current system. So what has been done? What can be done? In April 2006, Massachusetts passed an individual mandate bill which requires residents to purchase a private health insurance plan or face tax penalties. Financial assistance is provided for low-income residents, and a state agency was developed to assist residents in finding a plan.

Jarnagin 5 In June of 2006, the American Medical Association endorsed the mandate concept and a number of other state legislatures introduced copycat bills. In the article Massachusetts Health Reform Bill: A False Promise of Universal Coverage, Dr. Steffie Woolhandler and Dr. David Himmelstein attack the bill and question the state of Massachusetts on their fact-finding abilities. They first describe how the state did a phone survey conducted in English and Spanish. Anyone without a phone or who speaks another language is counted as uninsured. The politicians, therefore assumed that only about 500,000 people were uninsured when in actuality, based on a door to door survey, 748,000 people are uninsured in the state. The plan provides no funding for the other 248,000 people that were ignored from the survey. Dr’s. Woolhandler and Himmelstein add that there is a false assumption that uninsured people will be able to find affordable health plans. “A typical group policy in Massachusetts costs about $4500 annually for an individual and more than $11,000 for family coverage. Only 12.4% of the 748,000 uninsured in Massachusetts are both young enough to qualify for low-premium plans and affluent enough to readily afford them” (“Massachusetts”). Of these people, only half report that they are in excellent health. Ultimately, the requirement that most of the uninsured purchase coverage will either require them to pay money they don’t have, or buy nearly worthless stripped down policies that represent coverage in name only. In another attempt to reform the current health care system, political conservatives introduced the idea of Consumer-directed health care (CDHC). The program which is based on the idea that Americans currently have too much insurance coverage and would be more prudent purchasers if

Jarnagin 6 forced to pay more of their own health care costs. CDHC plans have deductibles of about $10,000 for a family and come with an attached health savings account, a private bank account that can be used to pay health expenses. Not surprisingly, half of all the employees enrolled in CDHC have nothing in their health savings account (Consumer). The idea that Americans have too much health insurance coverage is at best, an assumption. In the report Illness and Injury as Contributors to Bankruptcy, researchers did a study in 2001 in which they found that 1.458 million American families filed for bankruptcy. Their goal was to find the number of those families that filed for bankruptcy due to medical illnesses or injuries. The team of researchers surveyed 1771 personal bankruptcy filers in five Federal courts, and completed interviews with 931 of them. They found that approximately half of those debtors cited medical causes for filing bankruptcy indicating that between 1.850 and 2.227 million Americans (filers plus dependents) experienced medical bankruptcy. Among those individuals whose illness led to bankruptcy, out-of-pocket expenses averaged $11,854 since the start of the illness and that 75.7% had insurance at the onset of the illness (Himmelstein). In reality, plans such as CDHC and the Massachusetts Health Reform Bill only add more complex layers of administration which will exacerbate wasteful health spending. One solution to the rising costs and limited coverage American’s receive is that of a SinglePayer National Health Insurance. The Proposal of the Physicians’ Working Group for SinglePayer National Health Insurance has four principles for developing an Americanized version of a National Health Insurance and was written by a 30-member committee, then reviewed and endorsed by 412 other physicians. 1. Access to comprehensive health care is a human right. It is the responsibility of society through it’s government, to assure this right. Coverage should not be tied to

Jarnagin 7 employment. Private insurance firms’ past record disqualifies them from a central role in managing health care. 2. The right to choose and change one’s physician is fundamental to patient autonomy. patients should be free to seek care from any licensed health care professional. 3. Pursuit of corporate profit and personal fortune have no place in caregiving and they create enormous waste. The U.S. already spends enough to provide comprehensive health care to all Americans with no increase in total costs. However, the vast health care resources now squandered on bureaucracy (mostly due to efforts to divert costs to other payers or onto patients themselves), profits, marketing, and useless or even harmful medical interventions must be shifted to needed care. 4. In a democracy, the public should set overall health policies. Personal medical decisions must be made by patients with their caregivers, not by corporate or government bureaucrats (“Proposal”). Their proposal is to provide health coverage to every American in a single public plan covering all medically necessary services. Boards of experts and community representatives would determine which services were unnecessary or ineffective. Similar to Canada, they propose that alternate insurance coverage for services included under the national health program would be eliminated, as would patient co-payments and deductibles. Each hospital would receive an annual lump-sum payment to cover all operating expenses which would be negotiated with the state national health program payment board and would be based on past expenditures, previous financial and clinical performance, projected changes in levels of services, wages and other costs, and proposed new and innovated programs. The national health program would include three payment options for physicians and other practitioners: fee-for-service payment, salaried positions in institutions receiving global budgets, and salaried positions within group practices or HMO’s receiving per capita payments. The national health insurance would be funded based on an income tax or other progressive tax as it is the most fair and most efficient solution and all federal funds that currently are allocated to Medicare and Medicaid would be paid to the national health program. Additionally,

Jarnagin 8 all state and local funds for health care expenditures would be forfeited as well. Those employers that contribute to medical benefits could credit the cost of those benefits toward their national health program tax liability until their preexisting contract ran out. In addition, private health insurance plans that duplicate the coverage provided by the national health program would be phased out over a three year period and any monies they receive for those services must be turned over to the national health program. With the proposed program all American’s would receive a national health program card entitling him or her to all necessary medical care without co-payments or deductibles. The card could be used with any fee-for-service practitioner and at any institution receiving a global budget. From a physician’s standpoint, they would have a free choice of practice settings. Treatment to the patient would no longer be constrained by the patient’s insurance status and their income would change very little. While the program may sound too good to be true, they have certainly influenced enough politicians on capital hill and a growing number of Americans. In 2003, U.S. Representative Conyers along with 78 other Representatives first introduced The United States National Health Insurance Act or H.R. 676 in which he suggested nearly in its entirety the Proposal of the Physicians’ Working Group for Single-Payer National Health Insurance. It was first introduced in the House of Representatives on May 2nd, 2006. Although no major actions have taken place since, us as American’s can only hope that soon, our government will realize the current deficiencies and act.

Jarnagin 9 Dr. John P. Geyman, Professor Emeritus of Family Medicine at the University of Washington wrote a document entitled Myths as Barriers to Health Care Reform in the United States. In the report he identifies and defuses six myths that drive opponents: 1. 2. 3. 4. Everyone gets care anyhow. We don’t ration care in the United States. The free market can resolve our problems in health care. The U.S. health care system is basically healthy, so incremental change will address it’s problems. 5. The United States has the best health care system in the world 6. National health insurance is so unfeasible for political reasons that it should not be given serious consideration as a policy alternative (Geyman). Regarding the first myth, “everyone gets care anyhow,” according to Dr. Geyman, a 1997 study of low-income patients hospitalized, 60 percent received no care before admission, and only 17 percent had been seen in an emergency room. Another study done in 2001 reports that 7,500 adults between the ages of 51 and 61 who lacked continuous health insurance found that almost three times as many persons experienced a decline in their health or functional status if continuously uninsured than if insured. And lastly, in another study of 1,900 Medicare beneficiaries, only 4 percent without prescription drug coverage were receiving statins, compared with an estimated 60 percent who could benefit from their use (Geyman). The myth “we don’t ration care in the United States” is one that even the most laymen of individuals could dispose of. Dr. Geyman once again reports that sick HMO patients have about twice as much difficulty in seeking needed care as do healthy patients in HMO’s and goes on to state that many managed mental health programs have overly restrictive admission policies for detoxification, such as requiring delirium tremens to occur before hospital admission is approved. Even more shocking though is that the use of essential drugs decreased by 9 percent

Jarnagin 10 in elderly persons and by 14 percent in welfare recipients after cost-sharing was introduced, resulting in a doubling of the rates of serious adverse reactions in both groups (Geyman). “The free market can resolve our problems in health care.” The idea of for-profit health care corporations is just that, for-profit. In Dr. Geyman’s report he states that even in our recession, some for-profit hospital chains have reported profits of 45 percent or more and in 1998, 85 percent of dialysis centers, 70 percent of nursing homes, and 64 percent of HMO’s were forprofit. As previously discussed and verified by Dr. Geyman, the overhead of investor-owned HMO’s is 25 to 33 percent higher for some of the largest HMO’s than nonprofit HMO’s (Geyman). “The U.S. health care system is basically healthy, so incremental change will address its problems.” Incrementalism has occurred over the last 30 years and is still the most politically popular approach to health care reform however as most politicians have their hand in the cookie jar, health care is no different. Insurance companies and their allies spent $60 million in lobbying against a Patients’ Bill of Rights during the first six months of 1998 and in 2000 the pharmaceutical industry spent $80 million supporting candidates opposed to a Medicare prescription drug benefit. Of the 22 candidates supported by the drug industry, 18 were elected to Congress (Geyman). “The United States has the best health care system in the world.” Quite simply, the average ranking for the United States on 16 health indicators in a 1998 comparative study of 13 countries was twelfth. The top five, in decreasing order, were Japan, Sweden, Canada, France, and Australia. In another study of 11 Western countries, the U.S. was ranked dead last with respect

Jarnagin 11 to its primary care base and its per capita health care expenditures, while ranking poorly on public satisfaction, health indicators, and use of medication (Geyman). “National health insurance is so unfeasible for political reasons that it should not be given serious consideration as a policy alternative.” This way of thinking is purely one of laziness. Because the national health insurance would require restructuring of the health care system, it poses a threat to the stakeholders in the present system. In California, where 22 percent of the population is uninsured, nine alternative reform proposals were studied under the California Health Care Options Project. All of the nine reforms would have increased health care costs without providing universal coverage. On the other hand, they discovered that single-payer proposals would provide comprehensive care for the entire population while reducing costs by $8 billion (Geyman). Unfortunately, the idea of single-payer health insurance is at this point only a pipe dream. As long as the American investor and corporate America are making money, politicians will continue to have a job and health insurance will remain for-profit. The American voter however continues to scream for reform. American’s are dying and while pharmaceutical companies and for-profit HMO’s are profiting from it, the voter can only hope they chose an honest candidate.

Jarnagin 12 Works Cited “Consumer Directed Health Care and Health Savings Accounts.” Physicians for a National Health Program. 15 Nov. 2006 <http://www.pnhp.org/single_payer_resources/consumer_ directed_health_care_and_health_savings_accounts.php> Geyman, John P. “Myths as Barriers to Health Care Reform in the United States.” International Journal of Health Services 33 (2003): 315-321. 15 Nov. 2006 <http://www.pnhp.org/reader /Section%208%20-%20Myth%20Busters/Myths%20as%20Barriers%20(Geyman).pdf> “Health Lobby.” 16 Nov. 2006. Yahoo! Messenger Chat. 16 Nov. 2006. Himmelstein, David Elizabeth Warren, Deborah Thorne, Steffie Woolhandler. Illness and Injury as Contributors to Bankruptcy. Pre-Publication Manuscript, 2005. 15 Nov. 2006 <http://www .pnhp.org/bankruptcy/Illness%20&%20Injury%20as%20Contributors%20to%20Bankruptcy. pdf.> “Massachusetts Health Reform Bill: A False Promise of Universal Coverage.” Physicians for a National Health Program. 5 Apr. 2006. 15 Nov. 2006 <http://www.pnhp.org/news/2006/ april/Massachusetts_health.php> “Proposal of the Physicians’ Working Group for Single-Payer National Health Insurance.” Physicians for a National Health Program. 15 Nov. 2006 <http://www.pnhp.org/publications /proposal_of_the_physicians_working_group_for_singlepayer_national_health_insurance.php > “Report to the Chairman, Committee on Government Operations, House of Representatives.” Canadian Health Insurance Lessons for the United States. Jun. 1991. 15 Nov. 2006 <http:// pnhp.org/reader/Section%206%20-%20Canadian%20Health%20System/Canada%20GAO%

Jarnagin 13 Works Cited 20Report.pdf> “Single-Payer National Health Insurance.” Physicians for a National Health Program. 15 Nov 2006 <http://www.pnhp.org/facts/single_payer_resources.php> “Statement of Dr. Marcia Angell introducing the U.S. National Health Insurance Act.” Health Care Reform Resource Site. Physicians for a National Health Program. 15 Nov. 2006 <http://www.pnhp.org/facts/statement_of_dr_marcia_angell_introducing_the_us_national_ health_insurance_act.php>