HealthCare Guaranteed Blog
March 16, 2008
Why Business Needs HealthCare Reform
Better Health Care Together has done an excellent job of summarizing why business in America needs health care reform. Here is a summary from their report. Their website has the full reportHealthCost Crossroad: Executive Summary
This issue brief describes how the problems in the health system affect U.S. businesses; how this
situation affects workers and families; and why reform is needed by 2012.
Highlights include:
Rising Health Costs Stress Businesses: Businesses provide health insurance for 61 percent of all nonelderly Americans and finance a quarter of our $2 trillion health system. Yet, jobbased health insurance premiums have risen by 98 percent between 2000 and 2007, nearly five times faster than the rate of inflation.
This affects all companies in different ways:
" New challenges in a changing economy: The volatility of the booming service industry makes it expensive for these businesses to provide workers with health insurance. In 2007, 59 percent of the companies in the service industry offered health benefits, compared to 78 percent of manufacturing firms. The rapidly changing nature of work calls into question the employerbased insurance model for an increasing portion of the workforce.
" Perennial challenges for small businesses: Health benefit costs tend to be higher for businesses that have fewer workers to bear the administrative costs and risk. Because of this, only 45 percent of businesses with fewer than 10 workers provided health insurance in 2007 down from 57 percent in 2000.
" Diminished global competitiveness: Health care costs continue to rise rapidly, which impedes
American companies viability in the global marketplace. Although it has since rebounded, the
United States fell to sixth place in the World Economic Forums global competitiveness ranking in
2006, in part due to health costs.
" Burgeoning cost of covering retirees: Rising health care costs are preventing employers from
covering their retirees. By 2007, only 33 percent of large firms offered retiree health benefits. The costs have become so great that, in 2006, 46 percent of large employers capped spending on retiree health benefits.
Few Options for Businesses:
Businesses have few options to ease the burden of high health costs. While many have pioneered costcontrol strategies, others actions have resulted in:
" Less coverage: The proportion of firms offering health benefits fell from 69 to 60 percent between
2000 and 2007. About 80 percent of the uninsured are in working families.
" A hidden tax : Reduced coverage does not eliminate health costs; costs often get shifted to those who can pay, adding as much $500 to $1,500 to premiums.
Unsustainable Trends: By 2012, if trends persist: the number of uninsured will climb by 7 million (to 54 million), health costs will top $10,000 per capita, and business costs will rise by 55 percent.
Solution: The solution for businesses and the nation is systemwide reform that covers all, improves value, promotes wellness, and shares responsibility for managing and financing a new American health care system.
Better Health Care Together is a coalition aiming to achieve this reform by 2012.
12/4/2008 ~ What bothers me is that big business, except for maybe GM, has been strangely silent on health care reform, even though it would appear to be in their interest to change the old employer-based system. Is it possible they still like to dangle health plans as a way to retain employees?012/6/2008 ~ Don't you think that having healthcare promotes work ethic? One of the primary reasons people want jobs, go to school to get great jobs, and work so hard to keep their jobs is for the benefits associated. Don't you think there will be a problem with this plan when Americans who are working so they can have healthcare quit their jobs? As a result less financing will be going into the system. What happens then? Do you tax us more, as if the proposed tax associated with this plan isn't excessive?0
December 2, 2007
An End to Employer-Based Health Insurance
Something must be afoot when the American Medical Association, the Committee for Economic Development and the Mayo Clinic for Health Policy Research each comes out in favor of eliminating employer-sponsored health insurance and shifting the decision to the individual. While the parties have different ideas of what else needs to be done beyond to reform a very broken system, the fact that there is a readiness to take on the very foundation of America's modern health system speaks to the seriousness of the current situation. It is unfortunate that not one of the leading presidential candidates is willing to think as boldly.In reviewing the current literature coming from some of the major think tanks, there is emerging a consensus that any comprehensive health system reform plan must meet a certain threshold of attributes. My list includes five essential features:
* Guaranteed coverage for all Americans
* Individual choice of health plans
* Framework for cost and quality control
* Politically independent administration
* Dedicated and inviolable funding
Of the three major flavors of comprehensive reform that are currently circulating - Single Payer, Individual Mandates and Universal Health Vouchers - only the latter addresses all five essentials in an integrated manner. Single Payer plans do cover everyone, but fail to provide a framework for cost and quality control, as witnessed by Medicare, the model single payer plan. Individual mandate plans preserve a competitive health insurance market with its incentives to innovate that single payers would eliminate, but they do not claim to cover everyone, as witnessed in Massachusetts. More importantly, mandates require means testing to determine financial eligibility, necessitating a significant administrative burden, and often rely on the continuation of current means tested programs such as Medicaid and SCHIP. The funding mechanisms for both tend to consist of a patchwork of sources that defies accountability.
The Universal Health Voucher plan is relatively new on the national agenda, but one that is worthy of serious consideration in the upcoming reform debate. Under this plan, everyone would receive a risk-adjusted health voucher redeemable for a qualified health plan. To qualify, a plan must offer a basic set of services, comparable to the FEHBP, for the value of the risk-adjusted voucher; individuals could buy up from the basic plan. A National Health Board, supported by Regional Health Boards, appointed by the President for fixed terms and approved by Congress would administer the program. The plan would be funded by a dedicated Value Added Tax that would be immune from Congressional raids and could only be increased by increasing the tax rate.
In one stroke UHV's would eliminate those elements of our current system that continually compromise quality and increase cost. The employer is completely out of the picture and purchasing decisions are shifted to the individual. Health plans are given the incentive to compete for customers in an economic environment that is for the first time bounded. The plan is administered in the public interest by institutions that are relatively immune from political pressures. Everyone participates in funding the plan and everyone participates in its benefits.
12/6/2008 ~ You keep talking about this "basic plan" that everyone will receive. Why do you think it is ethical to make those of us who have spent our lives trying to make good decisions and better ourselves so that we can have theses luxuries pay THREE TIMES AS MUCH as we are already paying for second-rate (basic plan) healthcare? Yes luxuries, I do not think there is any "right" or "entitlement" to healthcare. Isn't it a fundamental ethic that you should get what you've worked for?0
November 13, 2007
Everybodys Whipping Boy
Clearly tired of being more of a critical target than one of its chief rivals, Target, Wal-Mart Stores has succeeded in dampening the criticism over its poor record on health insurance coverage for its employees, at least according to an article in 13 November's NY Times Walmart. As an indication of progress, the article reports that Wal-Mart provides insurance for 100,000 more workers now than it did just three years ago. In spite of this progress, however, it still provides insurance for fewer than one half of its 1.4 million workers.I have never been a fan of the Wal-Mart leave-no-prisoners approach to retail competition and I have been surprised by the paltry benefits it offers its employees. Wal-Mart is doing to its employees what it has done to its suppliers, milk every possible cost out of them that is possible and then demand a discount. Wal-Mart compensates, wages plus benefits, poorly, but apparently not so poorly as to keep it from maintaining a viable work force. As best as I can determine, Wal-Mart is making the biggest splash it can to keep its critics at bay while doing as little as possible that will impact its bottom line.
Wal-Mart, like most employers who provide health insurance to their employees, pays a fixed amount per employee for health insurance. In reducing the time it takes for employees to become eligible for coverage from two years to one, it has increased its labor costs. This should not be taken lightly given that this is an after-tax benefit meaning that it is worth more to the employee than its dollar value would suggest, even at the low end of the wage scale. However, given its corporate culture, I cannot believe that what Wal-Mart giveth in benefits it will taketh away in wages.
The company apparently is also offering its employees a broader range of health insurance policies to choose from. This is a good thing, but one that does not cost the company a cent. It is up to the employee to pay the difference between the company's fixed contribution to health insurance and the cost of the plan selected. The company should be given credit for offering its employees a choice or plans, but it does not appear to have made a significant difference on overall coverage. According to the article, the number of part-timers enrolled in company plans has more than doubled, to about 11 percent, not exactly earth shattering.
Perhaps most telling is the agreement reached earlier this year with Andrew Stern, president of the Service Employees International Union, to seek universal health coverage. That is something I support without qualification.
November 2, 2007
AMA Takes on Health Insurance Reform
Maybe I have not given the AMA enough credit for being forward looking, but I came across an article in the Gazette Online (http://www.gazetteonline.com/apps/pbcs.dll/article?AID=/20071101/BUSINESS/711010023/1007/business) out of Iowa that could change all that. It seems that the president of the AMA, Dr. Ronald Davis, is in Iowa leading the group's campaign for Health insurance reform. Their plan is based on individual ownership of health insurance policies rather than the current system dominated by employer-based health insurance coverage.There's more. According to the article, the AMA proposal has three pillars:
- Tax credits or vouchers would provide subsidies for those who need financial help in obtaining health insurance
- Individuals would have a choice of which plan best suits their needs
- Insurance market requirement to provide high-risk individuals or individuals with pre-existing conditions access to the health insurance
This plan is a significant step forward in the debate over healthcare reform. While the plan does not address cost and quality issues, implicit in the call for individual ownership of health insurance is a competitive element that would drive costs down and improve quality. The HealthCare Voucher plan explicitly addresses cost and quality issues through the instrument of the Institute for Technology and Outcomes Assessment that would play a proactive role in containing costs and improving quality. The government would also be responsible for developing the rules by which insurance companies could play in the market, another cost and quality focused feature of HealthCare Vouchers.
The AMA plan is significant in that it calls for a government role in regulating the health insurance industry and in assuring that everyone has access to affordable health insurance. Kudos and we will be watching the AMA for further developments.
November 1, 2007
How We Rate
A common defense of the American healthcare system is that, for all of its faults, it is still the best in the world. Well, probably not, at least according to a study supported by the Commonwealth Fund that appears on the Website of Health Affairs (http://www.healthaffairs.org/). The study is long, detailed and filled with comparative charts, but the conclusion is crystal clear, America's healthcare system is failing to provide its population with safe, cost-effective and readily available health care.Probably the most telling conclusions are related to America's s healthcare infrastructure that was designed for a different era of medical practice to say nothing of the issue of the uninsured and under insured. The study's findings "reveal multiple indicators of inefficient care, including medical record/test result delays and mistakes, duplication, time spend on paperwork or disputes, and perceptions that doctors provide care of little value." In addition, the US ranks at the top, or is it bottom, of this list for waits for primary care, including after hours care, and ER utilization, "symptoms of a primary care system under stress." Given the fragmented nature of the American healthcare system, there is little incentive or ability to resolve these systemic failures.
As we move forward in the national healthcare reform debate it is important to ask which of the alternatives is most likely to promote integrated care, the kind of care that is most appropriate for today's chronic care requirements. Certainly not more of the same employer-based health insurance which has led us to where we are today. The leading presidential candidates are basically focused on making incremental changes to the existing system. Single payer plans have the potential to change the infrastructure, but thus far have been focused on eliminating insurance companies to the neglect of everything else. Even were these plans to turn their attention to promoting cost and quality, they would do so by government fiat, an approach that is doomed to failure in the US.
HealthCare Vouchers, on the other hand, promote the creation of competing healthcare systems that assume responsibility for their members. The Federal government establishes the rules under which these plans can operate and compete, but leaves it to the plans to determine how they are going to organize and deliver their services. Key to this competition is the creation of healthcare systems that have a vested interest in the health of their members for the long term. Given a long term relationship, it is in the interest of the health plans to focus on wellness, integrated care, follow-up attention, IT investment, among other best practice ideas.
October 31, 2007
Uninsured Veterans
The uninsured veteran population rose twice as fast as the uninsured in the general population in the first half of this decade, according to a study by researchers at the Harvard Medical School and published online on 30 October in the American Journal of Public Health.The increase in veterans lacking insurance is attributable to Bush Administration policies aimed at limiting the number of veterans eligible for VA coverage. The Administration stopped marketing veterans health care in 2002 and in 2003 cut off access to future veterans earning more than $30,000 to $35,000 annually on average. Only those veterans disabled by military service are automatically eligible for VA care; coverage continues for veterans already enrolled, poor veterans, Purple Heart recipients and former prisoners of war. "Most uninsured veterans are low- to middle-income workers who may be too poor to afford private coverage but are not poor enough to qualify for Medicaid or free VA care," the study concluded.
It would appear that no one is immune from losing their health insurance coverage. The VA is touted as one of the success stories in managed health care, yet access to it can be denied by callous budget cutters at the stroke of a pen. What veterans are experiencing is business as usual for the American population at large in a system that treats healthcare as a commodity. While 47 million Americans are without health insurance at any one time, fully one third of the population has experienced a loss of health insurance in the past two years.
If veterans are not deserving of healthcare coverage, who is?
October 27, 2007
Gallup Health Care Poll
Gallup Health Care PollGallup has just published (Oct 25) a national poll on how Americans see health care reform. They asked voters to rate 12 different plans to fix our broken health care system that have been proposed by Presidential candidates.
The bottom line for voters:
"Americans may be receptive to almost any remedy for improving the nations healthcare system." This seems to evidence deep dissatisfaction and frustration. It must be more than seeing "Sicko".
Some of the high points:
The broadest support levels are generally seen for proposals aimed at expanding Americans' access to private health insurance, with relatively modest levels of government funding.
* There is near-universal support (94% in favor) for giving tax breaks to small businesses to allow them to provide health insurance for their employees.
* Nearly as many (86%) favor allowing American workers to keep the same medical insurance when they change jobs.
* About four in five Americans (81%) favor requiring large companies either to offer health insurance coverage to their employees or to pay into a pool that would be used to pay for health insurance.
* Along the same lines, 77% favor reducing government regulation to allow more health insurance providers to compete in the system.
* Seventy-six percent favor providing government subsidies to help lower-income Americans buy health insurance.
An additional proposal favored by about 8 in 10 Americans is providing incentives in health insurance plans for those who can demonstrate they live healthy lifestyles (81% in favor).
Once we get down to two candidates for President it will be easier for voters to rate two plans (and the candidates) versus the myriad proposals now.
October 27, 2007
Committee for Economic Development
The Committee for Economic Development released a third in a series of reports of reports on US health Care. The final 137 page report is very impressive and certainly must have been discussed thoroughly before release. CED is a respected business CEO groups of long standing. There begins with a thorough indictment of the current health care system and pronounces the employment based system as kaput. The ground breaking part of the report is they offer a detailed solution.This is a giant step forward. Previous business groups have railed against the current health care system but ducked discussing a real solution.
While reform advocates may disagree with the CED report solution package, it behooves everyone to read this report with an open mind.
If employers, employers and other stakeholders will confine the debate to what solution is most effective in reaching the goal of affordable, quality health care for all Americans, we are half way to the goal post.
October 18, 2007
MSRA Superbug is killing Americans
The media is a buzz with the Journal of American Medical Association report on the annual deaths of 18,000 Americans(more than AIDS). Staph that is antibiotic resistant in the US has been growing and is one of many symptoms of the overall quality problems of US health care. The proposed HealthCare Voucher system would attack this problem head on. The Office of Technology Assessment would systematically deal with measuring and publicizing performance, outcome and best practices for drugs, medical devices and medical practices. We need to implement this type of system immediately.Sadly the 18,000 MSRA deaths annually is only a portion of the needless deaths of Americans each year from our health care system lack of basic quality control system. If jets were flown and maintained by the same system we use for health care we would have many many plane crashes. Time for change.
October 3, 2007
SCHIP has Derailed the Real Debate we need in Congress
Bush is brilliant. Who says Karl Rove is gone? The SCHIP battle between Bush and Congress over whether to increase funding to cover uninsured children has supplied a great opportunity for Bush to shift attention from focus on our broken health care system. The debate in Congress should really be about what option would fix our broken health care system the best. Now advocates for health care reform are forced to expend all their energy trying to save an existing program. If Bush wins the number of uninsured children covered by SCHIP will actually decrease due to health care inflation burning up existing appropriation levels.If we had HealthCare Vouchers for every American there would be no debate about how many uninsured children we would or would not cover. In a world with HealthCare Vouchers insurance companies would compete to get the vouchers of children and supply health coverage. Now insurance companies are quietly going through the back door and Bush is opposing SCHIP arguing that and expanded program would shift some children from private insurance to government coverage. We need to change the incentives in the system.
