Mike Malloy

[greg]

I’m surprised this Wall Street Journal story, detailing how hedge funds manage to obtain profitable inside information, hasn’t gotten more attention. The whole story seems pretty explosive. I’d like to pull out a bit at the end, about how some hedge-fund players learned that key Democratic moderates in the Senate would jettison the public option in the health care bill in 2009:

http://www.readersupportednews.org/off-site-opinion-section/59-59/9039-focus-insider-trading-source-congress
_________________
"I hold it that a little rebellion, now and then, is a good thing" Thomas Jefferson 1743-1826

[Doc]

December 26, 2011
Highmark looks to expand hospital and physician ownership
By Emily Berry

Faced with a future where its home region's largest health system could be outside of its network, Pittsburgh-based Highmark plans to buy and affiliate with more hospitals and physician practices.

Highmark's June announcement that it would purchase West Penn Allegheny Health System established its first large-scale foray in the clinical side of the health care business. It also contributed to the deterioration of contract negotiations with the University of Pittsburgh Medical Center, which sees West Penn as a competitor.

Highmark's new direction is similar to what other insurers are trying to do. Insurers, hospitals and physicians are merging, affiliating and contracting in new ways as they seek alternatives to fee-for-service payment arrangements and look ahead to a post-reform health system, said Kevin Ryan, a Chicago-based attorney.

During a conference call with reporters Dec. 8, Highmark Executive Vice President David O'Brien said the West Penn deal "is only a small part of our strategy going forward."

"We are in discussions with physicians and hospitals," O'Brien said. "We're looking to expand our footprint in the provider world. We think the future for us strategically is being able to work closely with providers, to be in the provider space."

UPMC sees Highmark's strategy as aimed primarily at undercutting UPMC's standing in the market so that Highmark can drive members of its health plan to cheaper care settings, UPMC spokesman Paul Wood said.

"What Highmark is doing is essentially transforming from a neutral insurer where every subscriber could go to any hospital, to a competing integrated delivery and financing system. That puts them in direct competition with UPMC," he said. UPMC and Highmark are fighting in federal court over issues arising during contentious contract negotiations. UPMC's contract with Highmark expires on June 30, 2012.

http://www.ama-assn.org/amednews/2011/12/26/bisb1226.htm


Comment: Highmark, a Blue Cross Blue Shield licensee in Pennsylvania and West Virginia, is "transforming from a neutral insurer where every subscriber could go to any hospital, to a competing integrated delivery and financing system," according to spokesman Paul Wood of the University of Pittsburgh Medical Center (UPMC). Or as Highmark's David O'Brien says, they are moving into "the provider space." This is yet one more example of the insurers trying to take over the health care delivery system.

Besides providing a management that places it own business interests before all else, it also locks in the exorbitantly high administrative costs characteristic of these organizations. Even worse, patients already had lost provider choice when plans such as Blue Cross and Blue Shield switched from indemnity plans to preferred provider organizations with their restrictive provider networks, but now, by now becoming the actual providers, the plans will no doubt establish severe penalties (zero coverage?) for obtaining care outside of their own intrinsic health care delivery systems. How does that benefit patients?

Many do recognize that the private insurance model is no longer sustainable, and that it is only a matter of time before the switch to a single payer system becomes inevitable. The question is, what will we do with the private insurers once they are the health care delivery system? Scary thought.

[Doc]

Nurses Say Private Equity Firm Starving Massachusetts Hospitals
Tuesday 20 December 2011
by: Mark Brenner and Mischa Gaus, Labor Notes [3] | Report

Nurses sang sour carols today to the private equity firm they say is starving Massachusetts hospitals and pitting workers against each other.

Massachusetts nurses came to the headquarters of Cerberus Capital in Manhattan because Cerberus is the money behind Steward Health Systems, which took over the troubled Catholic hospital system Caritas last year and now is squeezing patients and workers for ultra-profits.

Hundreds of fellow members of National Nurses United, the Massachusetts nurses’ national union, sang and chanted outside Cerberus this afternoon.

Realizing that private equity firms specialize in stripping troubled businesses down and flipping them to new owners, the Massachusetts Nurses Association had insisted during the takeover on guarantees that practices and specialties could not be phased out.

Hospital workers did take concessions, but MNA secured a multi-employer pension plan and set the stage for negotiating with the chain collectively across four of its hospitals rather than one by one.

Now Steward is challenging MNA’s pension plan, closing down units, and threatening to shutter whole hospitals in order to get nurses to open up their contracts.

“Their whole pitch was to keep the community hospitals alive,” said Linda Tasker, a telemetry nurse at Merrimack Valley Hospital. “But they’re robbing Peter to pay Paul, and picking out the hospitals that will make the most money.”

Steward is also laying off many staff nurses—especially those at the top of the seniority list and pay scale.

Victoria Webster and Lynne Blanchard were two of 13 nurses fired in May at Carney hospital’s psychiatric unit in Dorchester. They say the firings, which included 19 mental health counselors, came after they blew the whistle on patient violence and poor staffing at the facility. Steward hired a crop of inexperienced new nurses, they say.

Cerberus, with reported holdings of about $20 billion, has a checkered history in health care: One of its companies held a contract at Walter Reed Hospital in Washington, D.C., where abysmal conditions for wounded veterans came to light in 2007. A Congressional oversight committee said the decision to privatize support services to the Cerberus outfit “led to a precipitous drop in support personnel.”

Extreme Savings

Nurses say the search for cost savings is reaching extremes.

When a floor is short-staffed, nurses say, local hospital administrators can’t hire per-diem contract nurses without corporate approval.

“We can’t even give patients a cup of coffee,” said Cheryl Laorenza, a psychiatric nurse at Holy Family hospital in Methuen. Nurses at the Norwood hospital campaigned around Steward’s food cutbacks—they brought loaves of bread to the floor and tacked a picture on the bulletin board with the caption “Got Bread?”

Jane Emery, a telemetry nurse at Merrimack Valley Hospital, said administrators are turning the temperature down on the heating blankets in chemotherapy to save on electricity.

Administrators won’t provide them with enough alarms to warn when patients are at risk of falling out of bed—but if they do fall, the nurse gets the blame for not responding fast enough. “People are so fearful,” Emery said.

Patients are signing themselves out of the hospital against medical advice, she added, because administrators keep them waiting on stretchers for hours until enough patients accumulate to open another floor.

SEIU Sides With Steward

Steward is breaking its promises, MNA says.

The union says that in the limited master agreement negotiated during Steward’s acquisition of Caritas, it not only won the pension plan but also secured guarantees to maintain services and funding.

But now the union says Steward is slowly turning the spigot off, closing down a specialized unit at St. Elizabeth’s Medical Center in Brighton, consolidating lab tech services, and demanding aggressive concessions from workers.

The Service Employees union, which represents service workers at the Steward hospitals, signaled its openness to proposed takeaways.

When MNA would not, SEIU put out worksite flyers repeating the boss’s accusation that resisting cuts imperils the hospital chain’s future—which infuriated the nurses.

“It is our understanding,” the SEIU leaflet reads, “that the MNA plan adds costs to the system that the system cannot afford without further layoffs, program closures and potentially closure of hospitals.”

MNA wants to hold the line. The nurses are looking to repair staffing levels, protect benefits, and keep the community hospitals open until Cerberus starts looking for the next big thing to exploit.

[Doc]

When Medicare Isn't Medicare

By Wendell Potter, Common Dreams

27 December 11



Let's say you have a Ford and decide to replace everything under the hood with Hyundai parts, including the engine and transmission. Could you still honestly market your car as a Ford?

That question gets at the heart of the controversy over who is being more forthright about GOP Rep. Paul Ryan's plan to "save" Medicare, Republicans or Democrats.

If you overhaul the Medicare system like you did your Ford and tell the public it's still Medicare, are you doing so honestly?

As I noted last week, PolitiFact, the St. Petersburg Time's fact checker, decided that the Democrats' claim that Ryan's plan would mean the end of Medicare was so blatantly untrue it merited designation as the 2011 "Lie of the Year." Republicans, whose erroneous claims about health care reform garnered "Lie of the Year" prizes in 2009 and 2010, cheered. Democrats, as you might imagine, jeered -- as did some journalists and pundits.

PolitiFact's Washington-based editor defended the choice by contending that Ryan's proposal to restructure Medicare by providing beneficiaries subsidies to buy private insurance would not "end" the program. It would still be Medicare, he reasoned.

What he's missing is that Ryan's proposal would change the program so fundamentally as to represent the equivalent of replacing the engine and transmission.

Ryan's plan would be a continuation of what Yale professor Jacob Hacker wrote about in his 2006 book, The Great Risk Shift. As Hacker pointed out, big corporations, aided and abetted by their political allies, have been methodically shifting more and more of the risk of providing benefits from them to us. Ryan's plan would accelerate the trend and take it a major step further by gradually shifting much of the financial obligation of paying for benefits from the government to Medicare beneficiaries. Under Ryan's blueprint, the government would be doing just what big corporations have been doing for several years now: off-loading risk.

The corporate world started doing this when big banks and multi-line insurance companies with financial services divisions persuaded them to phase out their pension plans and replace them with 401(k)s, so-called because of the section of the federal law that authorized their creation.

In the early part of my father's career, 401(k)s had not yet been invented. Soon after he was hired as a shift worker at a Tennessee glass factory, he was enrolled in his employer's pension plan. When he retired more than 25 years later, he began receiving a predetermined pension benefit every month until he died last December. The payments weren't nearly as big as the paycheck he received while on the job, but it was an enormous help financially.

By contrast, when I went to work for CIGNA in 1993, pensions were an endangered species. CIGNA still offered one, but the company changed the structure soon after I was hired, which meant that I would get less each month upon retirement than colleagues who had joined the company a few years earlier. CIGNA was among the first companies to offer a 401(k) plan because, at the time, it was one of those multi-line insurance companies that had a financial services division. That division created and managed 401(k)s for several large employer customers, CIGNA itself being one of them.

Aetna also had a financial services division back then. So two of the biggest health insurance firms in the country, Aetna and CIGNA, played key roles in the early years of the great risk shift by ushering in the era of 401(k)s and bringing the pension era to an end. Employers began phasing out pensions in the 1990s as rapidly as they began jettisoning indemnity health insurance plans in favor of HMOs and other managed care plans (which, of course, Aetna and CIGNA also marketed, and still do).

Transitioning from pensions to 401(k)s meant that employers would have much more money available to reward shareholders because they would be paying less in revenues over time to retired employees. The winners consequently have been the wealthy individuals and institutions who own today's corporations, while the losers have been the ones who work for them.

Instead of being "defined" benefits plans like pensions, 401(k)s are referred to as defined "contribution" plans. That means that workers enrolled in such plans no longer get a certain amount of money every month when they retire as my father did, but instead will get whatever is in their 401(k) balances, most of which they contributed themselves.

Highly compensated employees, including CEOs, are pleased with the shift because they have the means to sock away more money in their 401(k)s than the rank and file. And the money they sock away is tax-deferred, so 401(k)s have become a favorite tax shelter for the well-to-do.

Ryan's Medicare scheme would replicate what 401(k)s have done to the rank and file. The vouchers the government would provide beneficiaries are the equivalent of a defined contribution. And the vouchers invariably would become less valuable over time as the cost of insurance increased. The wealthy among us wouldn't be nearly as disadvantaged when that occurred as low- and middle-income earners who would have to dig deeper into their own pockets to buy health care coverage from private insurers. And undoubtedly, they would find that the only plans they could afford would be those with high deductibles.

If backers of Ryan's plan would drop the word "Medicare" and name it something with a bunch of numbers and a letter or two in parenthesis, that would be far more honest than calling it Medicare or anything similar. At least the proponents of the great risk shift didn't have the audacity to call 401(k)s pensions. They're entirely different creations with engines and transmissions that bear little resemblance to each other. That ain't no lie, PolitFact.

[Doc]

The American Prospect
November 7, 2011
A Model of Health
By Robert Kuttner

The New York hotel workers' plan provides comprehensive coverage at its own health centers, including full dental and optical care, with no deductibles or co-pays and a core philosophy that emphasizes primary care, wellness, and prevention.

In the office of Dr. Robert Greenspan, who has headed the plan for 12 years, hangs the official charter signed by New York Governor Thomas E. Dewey in 1949 authorizing Local 6 to operate the nation's first medical practice run by a union.

The plan may well be the best in the nation at providing so much coverage while effectively constraining costs. All doctors are salaried, with general practitioners being paid slightly more than specialists, in order to reward primary care.

From a small clinic on Manhattan's West Side, the plan has grown into five comprehensive health centers, serving approximately 88,000 hotel workers, their family members, and union retirees. Even those who've been laid off keep their health coverage. The plan boasts New York's highest rate of patient satisfaction.

The plan's sole out-of-pocket charge is for drugs. While ordinary prescriptions require a modest co-pay of $5 or $15 for non-generics, the charge is eliminated for patients on long-term treatments, such as for high blood pressure. "Bob [Greenspan] experimented with free drugs for patients who are chronically ill," says union president Peter Ward. "He found that this dramatically reduced visits to the ER; there were fewer catastrophic events. So now, we waive all co-pays for patients on long-term drug therapy."

"The difference isn't just financial - it's philosophical," Greenspan says. "We want you to come in. We want unlimited access to primary care. It pays off over the long term. All of the co-pays and deductibles do the opposite of what is claimed. They don’t assure that scarce medical resources are used as efficiently as possible or deter excessive use. They are simply barriers to care. People say, 'Maybe it will clear up by itself, so I won't see the doctor,' or 'I'll stretch out the medicine supply by taking less than the prescribed dose.' All you are doing is inducing people not to be compliant with the medical program. Then you wonder why costs keep going up - it's because people get sicker, and their eventual treatment is more expensive. We do just the opposite."

Last year, the hotel workers' health plan cost $411.24 a month for an individual and $1,027.56 for an average family. By comparison, Healthfirst, the cheapest HMO in New York City, cost roughly three times as much - $1,116 a month for an individual and $3,316 for a family - while it excluded many services offered by the union such as dental and optical care and piled on deductibles and co-pays. Factoring in benefits not provided by other plans, the typical commercial insurance package costs about four times as much as the hotel workers' plan.

So why is the plan virtually unknown in the health-policy debate? For one thing, the union has emphasized publicizing the plan among New York hotel workers, and Greenspan has focused on improving care for members, not crusading for national reform.

Except for single-payer advocates, reformers have pursued cost-effective care within the context of an insurance-dominated system - something of a fool's errand - whereas the hotel workers' plan begins by dispensing with third-party insurers. To review all the ways that the hotel workers' plan delivers better care more cost-effectively is to appreciate the vast inefficiency in the rest of America's health system - and to see that cost-containment gurus are mostly looking in the wrong places for efficiencies.

For starters, by dispensing with insurance-company middlemen, the plan eliminates a whole layer of costs. A doctor treats the patient according to his or her best medical judgment. There is no army of staffers dealing with patient billing, claims, and insurance reimbursement; no arguing with insurance-company case reviewers.

Second, doctors are all on salary. So there is no incentive to undertreat or overtreat.

Further, the plan's core principle is unlimited access to primary care, with all of the prevention and early-detection benefits that approach brings. In most systems, specialists drive costs. "We don't waste specialists on routine cases," Greenspan says. "We do want specialists to see appropriate cases, which is both more cost effective and more professionally challenging to the physician."

The union, which knows something about negotiating, engages in hard bargaining with all of its vendors, from drug manufacturers to hospitals, and is relentless about eliminating middlemen. Most conventional health plans use "pharmacy benefit managers" who negotiate with drug companies on the plan's behalf and, of course, take a cut for themselves. The union negotiates directly. It also dispenses with cadres of consultants, from human-resource departments to utilization reviewers and behavioral-health companies, all of which add costs under the guise of shaving costs.

In New York, some medical specialists in high demand have market power to raise prices. "Have you heard the term, RAPER?" Greenspan asks. "It stands for Radiologists, Anesthesiologists, Pathologists, and ER doctors." Most New York hospitals now contract out these services to specialists' groups who charge whatever the market will bear. In recent bargaining with one of its hospitals over a proposed rate increase, the hotel workers were told that the increase partly reflected higher charges billed by anesthesiologists. Greenspan requested the hospital to push back. Not our problem, the hospital contended; we don’t control these costs. "We told them, OK, next week our members stop using your hospital," Greenspan says. The costs came down.

At some point, the public must realize that the choice is drastic reform or drastic cuts. More than any other in America, the hotel workers' plan points the way to an efficient and humane system of health care.

http://prospect.org/article/model-health


Comment: New York's Local 6 has achieved many of the goals of single payer reform by working from the bottom up. They are providing very comprehensive health care services at only about one-third of the costs of other New York plans, and with the highest patient satisfaction ratings.

The key is that they have been able to to create a health care delivery infrastructure dedicated to optimal patient care that is removed from our current dysfunctional system dominated by insurer middlemen. This was all about patients, not insurers.

One important example of the difference is that they recognized that co-pays and deductibles were barriers to care. As Dr. Greenspan says, "They do the opposite of what is claimed." People should have unlimited access to primary care. To show how wrong the policy community is in their support of cost sharing, Dr. Greenspan's group has eliminated these barriers, yet their costs are far less than New York's least expensive HMO. You do not need deductibles and co-pays to control health care spending.

Although this was a bottom up success, it is improbable that it could be used as an insurance model for the rest of the nation. Their success was dependent on the unique efforts of a local union. Also their members have no coverage outside of their system. Our health care delivery systems and our health care financing systems are too fragmented to permit the creation of a nation of Local 6-type institutions, especially when the solidarity characteristic of unions is lacking in most other environments.

Although a top down approach contrasts sharply with what Local 6 has done, nevertheless, a well designed single payer model can accomplish the same results, with the added benefit of ensuring patient choice of their health care professionals and institutions. But we'll have to get the private insurers out of the way. They would never accept a system with so little money in it.

[Doc]

Center for Studying Health System Change
December 2011
Medical Bill Problems Steady for U.S. Families, 2007-2010
By Anna Sommers, Peter J. Cunningham

While problems paying medical bills stabilized in recent years, the proportion of Americans in families with medical bill problems remained significantly higher in 2010 compared with 2003 - 20.9 percent vs. 15.1 percent. And, in 2010, many people in families with problems paying medical bills continued to experience severe financial consequences, with about two-thirds reporting problems paying for other necessities and a quarter considering bankruptcy.

Underscoring uninsured people’s lack of financial protection from health care expenses, uninsured children and working-age adults in 2010 were more likely to have medical bill problems (31.5%) than their insured counterparts (20.2%).

http://www.hschange.org/CONTENT/1268/


Comment: Although the uninsured would be expected to have problems paying medical bills, we should be very concerned that one-fifth of insured individuals under age 65 also face significant medical debt.

Most of these individuals are insured through their work. Since the state insurance exchange subsidies for purchase of insurance and for out-of-pocket expenses will not apply to employer-sponsored plans, it can be anticipated that the Affordable Care Act will not reduce medical bill problems for a majority of our workforce.

When we know that the Affordable Care Act will fall far short of what we need to ensure financial security in the face of medical need, why aren't we as a nation busy with efforts to enact a program that actually would work?

[Doc]

The Tennessean
December 27, 2011
High-deductible health plans on rise
By Tom Wilemon

Corporate employers, small businesses and nonprofit organizations are increasingly requiring their workers to spend between $1,200 and $5,000 before filing a health insurance claim.

Nearly three in four employers will offer at least one of these plans next year, according to a survey by the National Business Group on Health, a nonprofit association that represents large employers.

Helen Darling, its president, predicts that by 2016 the majority of all health plans will have high deductibles.

http://www.tennessean.com/article/20111227/NEWS07/312270017/High-deductible-health-plans-rise


Comment: The National Business Group on Health (NBGH) is composed of the nation's largest employers, predominantly Fortune 500 companies. They provide health coverage for over 50 million workers, retirees and their families. When NBGH's president, Helen Darling, says that three years from now the majority of all plans will have high deductibles, you can bank on it.

Although this development is independent of the measures in the Affordable Care Act (ACA), it has greater consequences than any other feature of ACA, merely based on the number of people who will be impacted - not just the Fortune 500 company employees, but virtually everyone else as well.

Most workers and their families obtain their health care coverage through their employment. With large employers leading the way, high deductible plans will become the national standard. For median-income households, the deductible is large enough to create a financial hardship should a family member have significant health care needs. Thus, under-insurance is becoming the new norm, not only for employer-sponsored plans, but also for the low actuarial value plans to be offered through the state insurance exchanges.

The rationale usually given for high deductibles is to make patients more sensitive to the costs of health care so that they will use less of it. This has been shown not only to decrease the use of beneficial health care services, but it also potentially exposes people to financial hardship when they develop problems for which health care is absolutely essential.

So the question is, does this really save enough money to warrant these adverse consequences? Let's look at the RAND HIE and also the experiences of other nations.

The RAND Health Insurance Experiment demonstrated that health care use was reduced by 30 percent in patients with cost sharing as compared to first dollar coverage, supposedly without resulting in harm (though low-income people were harmed). But that study was limited to healthy workers and their young healthy families during a few healthy years of their lives. It does not apply to the relatively unhealthy 20 percent of people who use 80 percent of our health care dollars - care that is not influenced by deductibles. Reducing spending by 30 percent on healthy people who use very little care - perhaps an office visit or two - is not going to reduce our national health expenditures significantly.

Many other nations have first dollar coverage with no deductibles, yet spend far less than we do, and with no evidence of significant overuse of medical services. There are far more effective and much more patient-friendly methods of controlling spending than the use of deductibles and other cost sharing, as these nations have demonstrated.

The Affordable Care Act is not providing us the framework that would ensure affordable care for everyone. Trying to modify the Act to make it work better won't help because the financing infrastructure is so fundamentally flawed that legislative tweaking cannot repair it. Though getting rid of deductibles would be an improvement, it wouldn't reduce our high costs, but would merely shift them, making insurance premiums even less affordable.

For this new year, we really have our work cut out for us. The public at large needs to understand the irreparable flaws in the ACA model of reform. People need to know that we can control spending while making health care accessible and affordable for everyone. We can do this by enacting a far better way to finance health care - a single payer national health program: an improved Medicare for all.

[Doc]

Super Committee: Oppose Cuts to Medicare, Medicaid, and Social Security

The debt ceiling package recently signed into law by President Obama created a Joint Select Committee on Deficit Reduction (Super Committee). This committee is tasked with identifying at least $1.2 trillion in cuts with the supposed goal of balancing the federal budget.

The creation of the Super Committee makes three of our country’s most vital safety net programs - Medicare, Medicaid, and Social Security - targets for cuts. But these programs are not the problem, they are the solution. Our social insurance programs keep people healthy and out of poverty, which is particularly important during times like these when so many people are experiencing economic hardship. Medicare, Medicaid, and Social Security should be strengthened, not cut. Medicare should be improved and extended to all.

The Super Committee needs to prioritize the preservation of Medicare, Medicaid, and Social Security and focus on finding a means of balancing the budget that doesn’t harm working families.

Demand that any legislative language approved by the Super Committee not reduce benefits for Social Security, Medicare, and Medicaid recipients by sending an email to your Representative.
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http://salsa.wiredforchange.com/o/6055/p/dia/action/public/?action_KEY=4702

[Doc]

[Doc]

The American Prospect
Jan-Feb/2012
In Dire Health
By Arnold S. Relman

Most people assume that insurance is an essential part of the health-care system. Some think it should be provided through public programs like Medicare, while others prefer to see it purchased from private insurance companies, but the majority believe that insurance is needed to help pay the unpredictable and often catastrophic expenses of medical care. That is why so much public policy focuses on extending coverage to as many people as possible and controlling its cost. I think this emphasis on insurance is mistaken. We would have a much better and more affordable health-care system if the reimbursement of medical expenses through public or private insurance plans was replaced by a tax-supported universal access to comprehensive care, without bills for specific services and without insurance plans to pay those bills.

Insurance is not simply a mechanism for spreading financial risks and paying for medical care. Because it usually tries to limit payments to providers, insurance often is an intrusive third party in the doctor-patient relationship and, particularly with private insurance, restricts the freedom of doctors and patients to select the services, specialists, and facilities they want to use.

Furthermore, all insurance plans have administrative expenses, and most private plans take profits that add to the cost of their premiums. The billing and collecting operations that are an integral part of any insured health system are a major expense for doctors and hospitals as well.

For-profit insurance companies, which control most of the private market, are the greatest problem. They have a direct conflict of interest with their customers, because a plan's net income is increased by avoiding coverage of patients with serious illness (who, of course, are most in need of insurance), restricting access to services, and limiting coverage of expensive medical services.

There is, however, a practical alternative to health insurance and the fee-for-service system with which it is usually associated: a not-for-profit system in which a public single payer provides universal access to comprehensive private care delivered by primary-care physicians cooperating with medical specialists in group-practice arrangements.

I do not underestimate the complexity of the changes I am proposing. The odds against it are daunting. Congress might not even begin to debate major reform until the health system is near collapse. But what seems clear is that the best - possibly the only - hope for achieving universal, affordable care lies in the eventual elimination of private insurance and fee-for-service payment and in the creation of a tax-supported system based on group practice. Although this proposal makes good medical, social, and economic sense, its ultimate fate will be decided in the political arena. It cannot become a reality without an informed and aroused public bolstered by the medical profession's strong support for the reform.

(Arnold S. Relman is a professor emeritus of medicine and social medicine at Harvard Medical School and the former editor of The New England Journal of Medicine.)

http://prospect.org/ (As of Jan. 3, Jan-Feb/2012 issue not yet posted online)


Comment: It seems appropriate to begin the new year with the words of the venerable Arnold Relman. Much media attention on reform will be misdirected this year to implementation of the private-insurance-based Affordable Care Act and to its challenge in the U.S. Supreme Court. Dr. Relman reminds us that instead we need to move forward with informing and arousing the public in support of fundamental reform that actually would bring affordable care to all.

[Doc]

Do We Need Health Insurance?
Thursday 15 December 2011
by: Philip Caper, Bangor Daily News [3]



Do Americans need health insurance? The short answer is no — at least not in the form it currently exists in America.

It is true that in many wealthy countries private insurance companies are used in the financing of universal health care systems. But they are nothing like American companies. They are regulated public utilities and are told by their governments who to insure, what to cover and how much and when to pay. Most are prohibited from making a profit and are required to pay any willing provider. Not exactly the American model.

The purpose of health care financing systems should be — and is in all other wealthy countries — to facilitate the delivery of health care services, to protect individuals and families against huge medical care expenses and to avoid breaking the national bank while they do so. But in America, our private insurance system actually interferes with the delivery of health care and is rapidly becoming too expensive.

Last month I argued for adopting a universal health care system on moral, ethical and economic grounds. It is not only more humane but cheaper to cover everybody. We have moved in fits and starts toward that goal since the enactment of Medicare in 1965.

The recent federal health reform law took a few steps forward. But we are now taking a couple steps back, especially in Maine. Last week Gov. Paul LePage proposed disqualifying 65,000 beneficiaries of MaineCare. Earlier this year, the Legislature enacted PL90 that rolls back regulations intended to spread the financial risks of illness and improve access to health care for those most in need of it.

A little history may be informative. Private employment-based health insurance in America was not a planned system, but grew out of World War II wage and price controls. It was one of the few ways employers could attract and retain employees in a tight labor market. The spread of these benefits received a boost when the federal government exempted them from federal taxes.

Private health insurance was dominated by nonprofit Blue Cross and Blue Shield plans until about 1990. That changed when Blue Cross plans across the country began to convert to for-profit status, arguing that it would improve their efficiency. Maine Blue Cross made that transition in 2000 when it changed from a company whose mission was facilitating health care to one whose mission was maximizing shareholder wealth.

The business model of for-profit insurance companies is pretty simple. The creation of wealth for shareholders, including many of their executives, depends upon profitability. To maximize profitability they must charge premiums as high as the market will bear, offer skimpy policies that limit coverage, impose high deductibles and minimize what they must pay out for the services they do cover.

Maximizing premiums, imposing high deductibles and limiting the scope of coverage are pretty straightforward. Minimizing payouts for services they do cover is a little more complicated. Four techniques are used. First companies try to avoid insuring people likely to require health care, such as those with a history of illness or who are elderly or in dangerous occupations.

Second, they dispute the need for health care that is recommended or has already been provided to their customers by micromanaging the decisions of doctors and patients and denying as many claims as they can. This is a very expensive and contentious process that often damages the quality of care.

Third, they bargain down the prices health care providers charge as much as possible, shifting costs to other payers. This has created the curious and uniquely American situation where uninsured people pay the highest prices for health care products and services.

Fourth, many companies try to find a reason to retroactively dump sick customers who have filed claims by asserting that they have failed to accurately state their health care history, therefore defrauding the insurance company.

These people end up on public insurance or on the roles of the uninsured. This practice, called “rescission,” is particularly unfair but nevertheless appears to have become widespread. It has been banned by the new federal health care reform act.

What is the problem with this picture? It is not that for-profit insurance companies are failing in their mission. In fact, they are doing a very good job of exactly what their mission demands, maximizing the wealth of shareholders. The problem is that their mission fundamentally conflicts with the mission of a decent health care system.

What can we do to fix this problem? The obvious first step — but not the last — is to replace for-profit insurance companies. They are like a camel entered into the Kentucky Derby. No matter how much it is trained, how hard it tries, how hard it is whipped or who the jockey is, it never wins. It just wasn’t designed for the job.

Although insurance companies could play a role in a redesigned system by becoming public utilities, that is not the most efficient way to finance a system that includes everybody. For example, private insurance companies are currently fighting the new federal health care law’s requirement that they keep their overhead below 20 percent. Medicare, financed through publicly mandated premiums and taxes, spends less than 5 percent on overhead and interferes with health care decisions much less than private carriers.

Maybe it’s time to replace that camel with a racehorse. While we’re at it, why not go for a thoroughbred? An improved Medicare-like system for all Mainers could provide better coverage while spending less. What’s not to like about that?

[Doc]

Journal of the American Board of Family Medicine
January-February 2012

Increasing Graduate Medical Education (GME) in Critical Access Hospitals (CAH) Could Enhance Physician Recruitment and Retention in Rural America
By Imam M. Xierali, PhD, Sarah A. Sweeney, BS, Robert L. Phillips Jr., MD, MSPH, Andrew W. Bazemore, MD, MPH and Stephen M. Petterson, PhD

Critical Access Hospitals (CAHs) are geographically isolated, small rural hospitals that are typically the sole source of care for their community, providing not only acute care but a broad spectrum of basic health services. There was a robust increase of CAH designations from 50 in 1998 to 1,310 in 2009.

Rural communities struggle to recruit and retain health care providers. In 2008, 81% of rural counties were or contained areas designated as Primary Care Health Professional Shortage Areas. Encouraging evidence shows that residents trained in a rural setting are much more likely to continue to serve in rural or underserved settings. Analysis of Medicare hospital cost report data suggests that very few CAHs ever have reported intern and resident training. As rural hospitals and as hospitals without prior graduate medical education (GME) programs, CAHs are eligible for starting or becoming funded members of GME training programs.

Increasing the capacity for CAHs to create and expand training programs could improve access to care in rural communities and strengthen existing rural training programs, many of which are threatened or closing. Recent policies promoting primary care training, such as the teaching health center program, also mean opportunity for CAHs to play an important role in GME expansion. Though this role for CAHs requires no legislative changes, CAHs will face additional hurdles related to accreditation and staffing.

http://www.jabfm.org/content/25/1/7.full

And...

Critical Access Hospital (CAH) Graduate Medical Education (GME): Too Little, and Maybe Too Late
By Frederick M. Chen, MD, MPH

In the context of national scrutiny on graduate medical education (GME) from both the Medicare Payment Advisory Commission and the Joint Select Committee on Deficit Reduction, Xierali et al, bring our attention to the ongoing needs of rural underserved communities and the potential role of critical access hospitals (CAHs) in training the rural physician workforce. Their analysis demonstrates the minuscule number of CAHs that have reported resident training within their walls. The literature shows that physician training in rural settings is successful in producing rural physicians but also is endangered with the number of rural training tracks and rural residencies in free-fall over the past 10 years.

Although CAHs may be an untapped resource for GME, there are significant barriers to their success. Xierali et al point out the challenges of accreditation and staffing. CAHs, like RTTs, are by definition located in small communities that tend to be under-resourced for physician faculty and other medical education needs. Often the loss of a single physician in these settings results in the loss of the training site.

Financing is always an important consideration. Though CAHs may be eligible for Medicare GME payments because they are free of the resident cap, many CAHs have a low percentage of Medicare inpatients, resulting in payments that are insufficient to cover the costs of residency training. On the other hand, this has not precluded urban hospitals from claiming the time that residents spend in CAHs. Though this enables some residency training time in CAHs, the flow of funds, if any, from the urban hospital to the CAH is unknown, except to hospital financial officers.

Enabling and encouraging more residency training in rural settings is a priority if rural communities are to have adequate access to health care. New training models that encourage community-based training also encourage CAHs to participate in physician training. However, changes to GME financing are needed if CAHs are going to be able to play a larger role in rural physician training.

http://www.jabfm.org/content/25/1/6.full?etoc


Comment: Critical Access Hospitals serving rural communities provide an opportunity to train physicians who would more likely stay in these communities, many of which are designated as Primary Care Health Professional Shortage Areas.

If our current fragmented system of financing health care were replaced with a single payer national health program - an improved Medicare for all - the coordinated allocation of our health care funds could ensure that these training programs for rural physicians would be adequately funded, not to mention ensuring the perpetuation of Critical Access Hospitals wherever they are obviously needed.

[Doc]

Bloomberg
January 5, 2012
Insurers Profit From Health Law They Fought
By Sarah Frier

Insurance companies spent millions of dollars trying to defeat the U.S. health-care overhaul, saying it would raise costs and disrupt coverage. Instead, profit margins at the companies widened to levels not seen since before the recession, a Bloomberg Government study shows.

Insurers led by WellPoint Inc. (WLP), the biggest by membership, recorded their highest combined quarterly net income of the past decade after the law was signed in 2010, said Peter Gosselin, the study author and senior health-care analyst for Bloomberg Government. The Standard & Poor's 500 Managed Health-Care Index rose 36 percent in the period, four times more than the S&P 500.

"The industry that was the loudest, most persistent critic of this law, the industry whose analysts and executives predicted it would suffer immensely because of the law, has thrived," Gosselin said. "There is a shift to government work under way that is going to represent a fundamental change in their business model."

The report compares the 18 months before and after the overhaul became law, Gosselin said. The companies studied are Wellpoint; UnitedHealth Group Inc. (UNH), of Minnetonka, Minnesota; Aetna Inc. (AET), of Hartford, Connecticut; Humana Inc. (HUM), in Louisville, Kentucky; and Philadelphia-based Cigna Corp. (CI)

The companies saw their average operating profit margins expand to 8.24 percent in the six quarters since the overhaul became law, compared with 6.88 percent for the 18 months before it was passed.

Commercial business now accounts for less than half of the companies' combined revenue for the first time in at least two decades, according to the study. That's partly a result of the companies' growing investments in plans that provide services to Medicare and Medicaid patients, the report said.

http://www.bloomberg.com/news/2012-01-05/health-insurer-profit-rises-as-obama-s-health-law-supplies-revenue-boost.html

Peter Gosselin discusses his report, "Despite Predictions, Health Insurers Prosper Under Overhaul" (5 minute video):
http://www.youtube.com/watch?v=4rMOz5E5Du8


Comment: Peter Gosselin's Bloomberg Government report, "Despite Predictions, Health Insurers Prosper Under Overhaul," is further confirmation that, as long as we leave the private insurers in charge, they will always find a way to stick it to us, as we now witness a dramatic increase in insurers cornering taxpayer-financed health insurance programs - Medicare and Medicaid - not to mention the private plans that taxpayers purchase for government employees on all levels.

These trends are very healthy for the private insurance industry, but they're enough to make us sick.

(The Bloomberg Government report is available only to subscribers, but Peter Gosselin provides the essence of his conclusions in the brief video available at the link above.)

[Doc]

Foreign Affairs
January/February 2012
The Future of History
Can Liberal Democracy Survive the Decline of the Middle Class?
By Francis Fukuyama

Something strange is going on in the world today. The global financial crisis that began in 2008 and the ongoing crisis of the euro are both products of the model of lightly regulated financial capitalism that emerged over the past three decades. Yet despite widespread anger at Wall Street bailouts, there has been no great upsurge of left-wing American populism in response. It is conceivable that the Occupy Wall Street movement will gain traction, but the most dynamic recent populist movement to date has been the right-wing Tea Party, whose main target is the regulatory state that seeks to protect ordinary people from financial speculators. Something similar is true in Europe as well, where the left is anemic and right-wing populist parties are on the move.

The Absent Left

One of the most puzzling features of the world in the aftermath of the financial crisis is that so far, populism has taken primarily a right-wing form, not a left-wing one.

In the United States, for example, although the Tea Party is anti-elitist in its rhetoric, its members vote for conservative politicians who serve the interests of precisely those financiers and corporate elites they claim to despise. There are many explanations for this phenomenon. They include a deeply embedded belief in equality of opportunity rather than equality of outcome and the fact that cultural issues, such as abortion and gun rights, crosscut economic ones.

But the deeper reason a broad-based populist left has failed to materialize is an intellectual one. It has been several decades since anyone on the left has been able to articulate, first, a coherent analysis of what happens to the structure of advanced societies as they undergo economic change and, second, a realistic agenda that has any hope of protecting a middle-class society.

The main trends in left-wing thought in the last two generations have been, frankly, disastrous as either conceptual frameworks or tools for mobilization. Marxism died many years ago, and the few old believers still around are ready for nursing homes. The academic left replaced it with postmodernism, multiculturalism, feminism, critical theory, and a host of other fragmented intellectual trends that are more cultural than economic in focus. Postmodernism begins with a denial of the possibility of any master narrative of history or society, undercutting its own authority as a voice for the majority of citizens who feel betrayed by their elites. Multiculturalism validates the victimhood of virtually every out-group. It is impossible to generate a mass progressive movement on the basis of such a motley coalition: most of the working- and lower-middle-class citizens victimized by the system are culturally conservative and would be embarrassed to be seen in the presence of allies like this.

****

Elites in all societies use their superior access to the political system to protect their interests, absent a countervailing democratic mobilization to rectify the situation. American elites are no exception to the rule.

That mobilization will not happen, however, as long as the middle classes of the developed world remain enthralled by the narrative of the past generation: that their interests will be best served by ever-freer markets and smaller states. The alternative narrative is out there, waiting to be born.

(Francis Fukuyama is a Senior Fellow at the Center on Democracy, Development, and the Rule of Law at Stanford University.)

http://www.foreignaffairs.com/articles/136782/francis-fukuyama/the-future-of-history


Comment: In this essay, Francis Fukuyama describes the historical background of the middle class, bringing us to the troublesome present in which the stability of the middle class is in question. He suggests that we need a new political and economic ideology that "could provide a realistic path toward a world with healthy middle-class societies and robust democracies."

The views of Fukuyama are not without controversy. Indeed, he has changed his own views over time (e.g, his views on neoconservatism and the Iraq invasion). Nevertheless, his writings are quite provocative and are helpful in broadening conceptualizations of societal problems and their potential solutions.

It is difficult to provide enough content in a few excerpts to provoke gainful contemplation on how we should approach the middle-class crisis - a crisis which is important to understand if we ever hope to ensure health care justice for all. For that reason, the entire article should be downloaded, savored and shared. Although Foreign Affairs charges $2.95 for the article (link above), this one is worth giving up today's latte.

When you read it, consider what you already know in disciplines such as economics, political science, and sociology, but do not be bound by them in your contemplation. We have to get beyond simplistic, rigid analyses such as boxing solutions into either a government approach or a private market approach. That type of thinking has resulted in our polarized political gridlock that has prevented us from moving forward with health care reform that would best serve not only the middle class, but everyone.

Think in the broadest terms about what new political and economic ideology might lead us in the right direction. According to Fukuyama, "The alternative narrative is out there, waiting to be born."

Fukuyama is famous for proposing that liberal democracy represents "The End of History" but not the end of events. Let's see if we can create the events that would make our democracy work for the betterment of us all, by contemplating "The Future of History" and then acting on our thoughts.

[Don Smith]

The "gridlock" is so pervasive that any quick analysis is specious.
In a society where "capitalism" is equated with "freedom", and social insurance, paid for by the populace for years can be dismissed as an "entitlement", the separation of people with a common language is too obvious.
So far as popular opinion goes, it is imperative that some idea, phrase, or whatever be found that expresses the single payer idea in a way that "grabs" the people.I know, single payer is accepted by the majority of those polled during the recent medical "reform" debates, trouble is, the solons ignored it and stuck with the money.
How to break out of this?
_________________
" A bayonet is a tool with a worker at both ends."- Lenin
Patriotism is a manifestation of the Stockholm Syndrome.
"How does it become a man to behave toward this American government to-day? I answer that he cannot without disgrace be associated with it."
-Thoreau
"Information is the currency of Democracy." Jefferson

[Doc]

[Doc]

The Local - Germany's News in English
January 8, 2012
Many seek to switch to public health insurance

Shocked by premium increases of as much as 50 percent, many Germans with private health insurance are seeking to switch to a national health plan, the news magazine Der Spiegel reported Sunday.

Many private health insurance plans pushed through hefty premium increases at the beginning of the year and that's behind the move to switch, the magazine said.

"We've gotten increased telephone inquiries from those privately insured who want to come to the AOK," Wilfried Jacobs, the head of the AOK in Rheinland/Hamburg, told the magazine. The AOK, with 15 regional branches and some 24 million members, is Germany's largest public health insurance organisation. The magazine said other public health insurers have received similar inquiries.

But it's not so easy to switch once you've opted for private insurance. German law only allows people to change from public to private in exceptional situations.

These include when someone has lost their job. You can also switch if you are an employee whose salary falls below the € 45,900 level. Workers who used to be self-employed but now have a full-time position with a similar salary may also change.

But a public health organization manager said, "There are tricks that we can use to help private patients, providing the employer cooperates."

The Barmer GEK public health organization reported that 27,600 people switched from private competitors in 2011 – nine percent more than in 2010.

http://www.thelocal.de/national/20120108-39989.html

And...

The New York Times
December 9, 2011
Social Insurance and Individual Freedom
By Uwe E. Reinhardt

By law, every German must have coverage for a prescribed benefit package. German employees and pensioners earning less than 49,500 euros ($66,350) per year (in 2011) are compulsorily insured under the statutory system.

Employees and pensioners above that threshold are free to opt out of the statutory system and purchase private, commercial coverage, but if they do, they cannot ever return to the statutory system unless they are paupers. The intent is to minimize gaming of the insurance system by individuals.

http://economix.blogs.nytimes.com/2011/12/09/social-insurance-and-individual-freedom/


Comment: It's only January, yet Germany already is providing us one of the most important policy lessons of 2012. It may be great politics to allow more affluent citizens to opt out of public health insurance and to express their personal faith in private markets by selecting private plans, but they may decide that it's terrible policy when the private plans come back to bite them.

In the United States, conservatives continue to push policies that would promote private plans that appeal to the healthier and wealthier sectors of our society. Consumer-directed plans with high-deductibles combined with health savings accounts are such options. Even with Medicare, conservatives have established the private Medicare Advantage plans for Medicare beneficiaries who would prefer to opt out of the public program.

If you just look at the Medicare Advantage plans, we have already seen that the private insurers have gamed the system such that they are receiving $3000 more per patient than the costs for comp[arable patients in the public Medicare program. What if the government required individuals to pay an extra $3000 for the "private upgrade"? It is likely that only the wealthiest and the most passionate anti-government ideologues would stay in the program.

What if, in addition, health care costs increased at rates well in excess of the growth in GDP, and the differences between the higher premiums that would have to be charged by the private plans compared to the more efficient public insurance program had to be paid in full by those enrolled in the private plans? You would see a massive exit from the private plans. Witness the current experience in Germany.

This is not hypothetical policy theory. The Germans fully understand the principles of social insurance. There are clear policy risks in allowing private options to government insurance plans. That is why they did not permit low- and middle-income individuals to make the foolish decision of exiting the public plans. They wanted to ensure both financial security and health security for these more vulnerable populations. If politically-influential wealthier individuals wanted to have the choice of private plans, then so be it, and Germany allowed it.

But no games. If wealthier Germans chose the private plans, then, as long as they maintained their higher incomes, they could not game the system by moving back into the public plan should they lose their bet that they would be better off in the private sector. Many Germans who made that choice are now facing skyrocketing premiums in the private sector. They want back into the public program, but many will have to continue to live with their ill-advised decision to go private.

Another sign of how flawed the private insurance concept is that they are now considering "tricks" that can be used to help private patients. Although tricks may produce winners, they automatically produce losers as well. There is no place for "tricks" in a public insurance program.

What is Germany to do now? It doesn't seem fair to allow those who made this unwise decision to escape the consequences when it would expose the public program to adverse selection. There would be no problem had the government prohibited the wealthy from making an imprudent decision to go private in the first place, which they could have done simply by requiring everyone to participate in the public program.

For those who say that it is unfair to not allow choice, as mentioned the Germans were smart enough to prohibit that choice for low- and middle-income individuals, saving them from potential exposure to financial hardship. Ensuring security is fair; permitting the choice of insecurity is not fair for those who end up losing.

There may be less sympathy for the wealthy caught in a financial bind of their own making, but there are two important reasons why the wealthy also should be required to participate in the public program: 1) the insurance risk pools (sickness funds) benefit from including the contributions of this wealthier and generally healthier population, and 2) the influence of the wealthy provides greater political support for the public program in which they would be required to participate. Consider the great support for Medicare as opposed to the meager political and financial support for Medicaid.

The obvious lesson for the United States is that we should eliminate the over-priced private insurers and establish a single national health program that covers everyone. We still may have some compassion even for those who want to play their ideological games but then run into trouble when they really need health care, but we should not allow them to escape their obligation to contribute equitably, in advance, to a financing system that many of them someday would have to rely upon.

P.S., Canada, listen up!

[Doc]

The Atlantic
December 29, 2011
What Americans Keep Ignoring About Finland's School Success
By Anu Partanen

(Excerpts)

Everyone agrees the United States needs to improve its education system dramatically, but how? One of the hottest trends in education reform lately is looking at the stunning success of the West's reigning education superpower, Finland. Trouble is, when it comes to the lessons that Finnish schools have to offer, most of the discussion seems to be missing the point.

So there was considerable interest in a recent visit to the U.S. by one of the leading Finnish authorities on education reform, Pasi Sahlberg, director of the Finnish Ministry of Education's Center for International Mobility and author of the new book Finnish Lessons: What Can the World Learn from Educational Change in Finland? Earlier this month, Sahlberg stopped by the Dwight School in New York City to speak with educators and students, and his visit received national media attention and generated much discussion.

Yet one of the most significant things Sahlberg said passed practically unnoticed. "Oh," he mentioned at one point, "and there are no private schools in Finland."

This notion may seem difficult for an American to digest, but it's true. Only a small number of independent schools exist in Finland, and even they are all publicly financed. None is allowed to charge tuition fees. There are no private universities, either. This means that practically every person in Finland attends public school, whether for pre-K or a Ph.D.

The irony of Sahlberg's making this comment during a talk at the Dwight School seemed obvious. Like many of America's best schools, Dwight is a private institution that costs high-school students upward of $35,000 a year to attend -- not to mention that Dwight, in particular, is run for profit, an increasing trend in the U.S. Yet no one in the room commented on Sahlberg's statement. I found this surprising. Sahlberg himself did not.

From his point of view, Americans are consistently obsessed with certain questions: How can you keep track of students' performance if you don't test them constantly? How can you improve teaching if you have no accountability for bad teachers or merit pay for good teachers? How do you foster competition and engage the private sector? How do you provide school choice?

The answers Finland provides seem to run counter to just about everything America's school reformers are trying to do.

For starters, Finland has no standardized tests. The only exception is what's called the National Matriculation Exam, which everyone takes at the end of a voluntary upper-secondary school, roughly the equivalent of American high school.

As for accountability of teachers and administrators, Sahlberg shrugs. "There's no word for accountability in Finnish," he later told an audience at the Teachers College of Columbia University. "Accountability is something that is left when responsibility has been subtracted."

And while Americans love to talk about competition, Sahlberg points out that nothing makes Finns more uncomfortable. In his book Sahlberg quotes a line from Finnish writer named Samuli Puronen: "Real winners do not compete." It's hard to think of a more un-American idea, but when it comes to education, Finland's success shows that the Finnish attitude might have merits. There are no lists of best schools or teachers in Finland. The main driver of education policy is not competition between teachers and between schools, but cooperation.

Finally, in Finland, school choice is noticeably not a priority, nor is engaging the private sector at all. Which brings us back to the silence after Sahlberg's comment at the Dwight School that schools like Dwight don't exist in Finland.

"Here in America," Sahlberg said at the Teachers College, "parents can choose to take their kids to private schools. It's the same idea of a marketplace that applies to, say, shops. Schools are a shop and parents can buy what ever they want. In Finland parents can also choose. But the options are all the same."

Herein lay the real shocker. As Sahlberg continued, his core message emerged, whether or not anyone in his American audience heard it.

Decades ago, when the Finnish school system was badly in need of reform, the goal of the program that Finland instituted, resulting in so much success today, was never excellence. It was equity.

Since the 1980s, the main driver of Finnish education policy has been the idea that every child should have exactly the same opportunity to learn, regardless of family background, income, or geographic location. Education has been seen first and foremost not as a way to produce star performers, but as an instrument to even out social inequality.

In the Finnish view, as Sahlberg describes it, this means that schools should be healthy, safe environments for children. This starts with the basics. Finland offers all pupils free school meals, easy access to health care, psychological counseling, and individualized student guidance.

In fact, since academic excellence wasn't a particular priority on the Finnish to-do list, when Finland's students scored so high on the first PISA survey in 2001, many Finns thought the results must be a mistake. But subsequent PISA tests confirmed that Finland -- unlike, say, very similar countries such as Norway -- was producing academic excellence through its particular policy focus on equity.

That this point is almost always ignored or brushed aside in the U.S. seems especially poignant at the moment, after the financial crisis and Occupy Wall Street movement have brought the problems of inequality in America into such sharp focus.

"When President Kennedy was making his appeal for advancing American science and technology by putting a man on the moon by the end of the 1960's, many said it couldn't be done," Sahlberg said during his visit to New York. "But he had a dream. Just like Martin Luther King a few years later had a dream. Those dreams came true. Finland's dream was that we want to have a good public education for every child regardless of where they go to school or what kind of families they come from, and many even in Finland said it couldn't be done."

Clearly, many were wrong. It is possible to create equality. And perhaps even more important -- as a challenge to the American way of thinking about education reform -- Finland's experience shows that it is possible to achieve excellence by focusing not on competition, but on cooperation, and not on choice, but on equity.

The problem facing education in America isn't the ethnic diversity of the population but the economic inequality of society, and this is precisely the problem that Finnish education reform addressed. More equity at home might just be what America needs to be more competitive abroad.

http://www.theatlantic.com/national/archive/2011/12/what-americans-keep-ignoring-about-finlands-school-success/250564/


Comment: When you read these excerpts from this article on the education system in Finland, what is striking is how much the philosophy behind their vastly superior system contrasts sharply with ours. What is really mind-boggling is that if you re-read the same excerpts, except substitute "health care system" for "education system," you then will have an inkling of what we are doing wrong in both education and health care.

One fundamental concept that has appeared repeatedly on the pages of Physicians for a National Health Program (PNHP) is that excellence is a product of cooperation, not competition. It is not choice between private for-profit and public systems, but rather it is equity within public systems that facilitates excellence.

In both education and health care, Americans emphasize testing, accountability, merit rewards, competition, and choice. Yet Finland does not use standardized testing (analogous to HEDIS testing in health care), nor do they demand accountability - they don't even have a word for it - but rather they expect responsibility. In Finland, all teachers are given prestige, decent pay, and a lot of responsibility. Finns are very uncomfortable with the concept of competition, especially since that interferes with the productivity induced in an environment of cooperation. Nor do they even consider choice - choice between publicly-financed and privately-financed schools - since the latter do not even exist.

So their secret is to establish equity and cooperation within the public sector. Now that it's no longer a secret, we also can have high quality education and health care systems right here in the United States. We just have to shove the MBAs aside and place control in the hands of our own publicly chosen advocates of social justice.

[Doc]

Health Affairs
January 2012
Growth In US Health Spending Remained Slow In 2010; Health Share Of Gross Domestic Product Was Unchanged From 2009
By Anne B. Martin, David Lassman, Benjamin Washington, Aaron Catlin and the National Health Expenditure Accounts Team

Abstract

Medical goods and services are generally viewed as necessities. Even so, the latest recession had a dramatic effect on their utilization. US health spending grew more slowly in 2009 and 2010—at rates of 3.8 percent and 3.9 percent, respectively—than in any other years during the fifty-one-year history of the National Health Expenditure Accounts. In 2010 extraordinarily slow growth in the use and intensity of services led to slower growth in spending for personal health care. The rates of growth in overall US gross domestic product (GDP) and in health spending began to converge in 2010. As a result, the health spending share of GDP stabilized at 17.9 percent.

Conclusion

Health care spending experienced historically low rates of growth in 2009 and 2010 as the impact of the recent recession continued to affect the purchasers, providers, and sponsors of health care. Persistently high unemployment, continued loss of private health insurance coverage, and increased cost sharing led some people to forgo care or seek less costly alternatives than they would have otherwise used. As a result, growth in the use and intensity of health care goods and services in 2010 accounted for a much smaller share of personal health care spending growth than in previous years. Finally, as businesses, households, and state and local governments financed a smaller share of total national health care spending during and just after the recession, the federal government financed a larger share.

http://content.healthaffairs.org/content/31/1/208.abstract


Comment: For the present, growth in health care spending has leveled off at 17.9 percent of our GDP. But how? By high unemployment, continued loss of private health insurance, and increased cost sharing - all measures that prevent people from getting the health care that they should have. If you exclude from consideration this inappropriate decline in health care services, then you can only conclude that health care costs have continued their inexorable rise unabated. We desperately need a sane system of financing health care.

[Doc]

The New England Journal of Medicine
January 12, 2012
Fitness Memberships and Favorable Selection in Medicare Advantage Plans
By Alicia L. Cooper, M.P.H., and Amal N. Trivedi, M.D., M.P.H.

This study examined the consequences of adding a fitness-membership benefit on the self-reported health status of enrollees in Medicare Advantage plans. Using a quasi-experimental design, we found that persons enrolling in plans after the addition of a fitness-membership benefit reported significantly better general health, fewer limitations in moderate activities, less difficulty walking, and higher PCS scores than did persons who enrolled in the same plan before the fitness benefit was added and in matched control plans that never offered a fitness benefit. These patterns persisted in the analyses of 2-year follow-up responses for all measures except self-reported general health. Our findings suggest that there is an association between the adoption of fitness-membership benefits in Medicare Advantage plans and the enrollment of healthier Medicare beneficiaries.

Risk-adjusted payments are designed to reduce incentives for plans to avoid high-cost patients. However, the enhanced Medicare risk-adjustment model has the power to explain only 11% of the total variation in health spending. Furthermore, the model overpredicts costs for persons in good health and underpredicts costs for persons in poor health, yielding overpayments for healthy enrollees and underpayments for less-healthy enrollees. Therefore, the continued limitations of the CMS payment model may not discourage Medicare Advantage plans from engaging in risk-selective activities. Our findings are consistent with the notion that Medicare managed-care plans have continued to selectively market their benefits to healthier beneficiaries, even after the improved risk-adjustment program was instituted.

http://www.nejm.org/doi/full/10.1056/NEJMsa1104273?query=TOC#t=articleTop


Comment: This study further confirms what we have known all along - that private insurers selectively market to the healthy, further cushioning their profits by being paid at rates for those with only average health. Although risk adjustment has been introduced to correct overpayments due to their use of favorable selection, the insurers have found devious ways to use risk adjustment to further expand their profits, even though technically prohibited. It is the nature of private insurers to always work the system to their own advantage, and that will never change.

How many times do we have to say it? It is time to dismiss the private insurers and establish our own single payer national health program in which the benefits accrue to the patients/taxpayers and not to the expensive, intrusive, wasteful insurance intermediaries.