Thursday, May 30, 2013

Health Law Spared Young Adults From High Hospital Bills

More From Shots - Health News HealthAdministration Touts Competition In Insurance ExchangesHealthHeaded To Mars? Watch Out For Cosmic RaysHealthJoblessness Shortens Life Expectancy For White WomenHealthImmigrants Subsidize, Rather Than Drain, Medicare

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Wednesday, May 29, 2013

New Hampshire AFL-CIO Endorses HR 676

From UnionsForSinglePayer.org –

�On Saturday, May 4th the New Hampshire AFL-CIO unanimously passed a resolution supporting HR 676 and the adoption of a national single payer health care system that covers all Americans for all necessary medical care including prescription drugs and dental,� reported President Mark MacKenzie.

New Hampshire is the 42nd State AFL-CIO Federation to endorse HR 676, Expanded and Improved Medicare for All, sponsored by Congressman John Conyers (D-MI).

�HR 676 will save hundreds of billions of dollars by eliminating the private health insurance industry with its high overhead and profits,� said MacKenzie.

�As President of the New Hampshire AFL-CIO I am proud to have our members actively participate in the movement to win passage of HR 676 and to make health care a human right.�

On May 21, 2013, HR 676 gained another co-sponsor in Congress with the addition of Danny Davis (IL-7). HR 676 now has 42 co-sponsors.

Tuesday, May 28, 2013

NC Could Save $18.7B by Adopting Single-Payer

North Carolina could save as much as $18.7 billion next year on health-care costs if it changed the way it finances health care.

The catch? That change would require a switch to a single-payer system in which one entity collects all health-care fees and pay related costs, says Gerald Friedman, a professor of economics at the University of Massachusetts at Amherst.

“We have a system that was broken 10 years ago, and it�s getting worse,� he says. �You can�t fix it unless you change its fundamental basis.”

Friedman spoke Thursday night in Charlotte at the Health Care Justice meeting. That organization wants everyone in the community to have access to health care. It is a chapter of the Physicians for a National Health Program, which supports single-payer national health insurance.

Friedman has drafted financing plans for single-payer health systems for Maryland, Massachusetts and the United States. If adopted, he estimates such a payment model could result in $2 trillion in savings nationwide over the next decade mainly by cutting administrative costs and controlling prescription drug prices.

On Thursday night at the Midwood International and Cultural Center, he touted the need for universal-comprehensive coverage, in which everyone would have access to care. Individuals, businesses and the government stand to benefit, Friedman said.

Universal coverage would minimize billing expenses, avoid wasteful competition among insurers and eliminate adverse selection against people who are sickest, he said.

Friedman estimates that nationwide there is $1.5 trillion in waste annually when it comes to health-care spending. Such spending now accounts for roughly 18 percent of the gross domestic product. And it is expected to rise to 22 percent of the GDP within five years.

In North Carolina, health-care spending has risen more than 400 percent in North Carolina since 1990, Friedman said.

At the same time, per capita income has barely doubled, which puts increased pressure on a family�s income. In 1960, health-care spending accounted for just 7 percent of a family�s take home pay. That rose to 39 percent in 2010.

�More and more money is going to health care,� he said.

The current health-care payment system is unsustainable because it is focused on making profits, Friedman said. That results in waste, fragmented care delivery and significant administrative costs and monopolistic pricing, he added.

For example, he said drug prices are 60 percent higher in the U.S. than elsewhere.

Health insurers will spend nearly $200 billion on administrative costs in 2013, he noted.

Friedman expects the current payment system will collapse. He notes expanded access through federal health-care reform will fall short of providing universal coverage and does not do enough to stem rising health-care costs.

That means health insurance premiums will continue to rise, making it unaffordable for more individuals.

�Right now health-care is a lump-sum tax on individuals, especially sick individuals,� he said.

Friday, May 24, 2013

Healthcare For A Family Now Costs More Than Groceries To Feed Them For A Year

As medical costs continue to rise, the annual health expenses for a family of four now exceed the typical of cost of their groceries during the same time period, according to a new report from consulting firm Milliman, Inc.

The firm estimates that a typical family of four with an employer-sponsored health plan will end up incurring about $22,030 for all of their medical costs in 2013. That represents a 6.3 increase from last year, when the typical family racked up $20,728.

Some of that total sum ends up being covered by the family�s health insurance plan � the firm�s analysts found that employers paid about 58 percent of the total health care costs � but a big chunk of it falls onto the family itself. The average family pays more than $9,000 in payroll deductions and out-of-pocket bills for their health care, which is more than they typically spend on groceries and gas for an entire year:

�It is a huge expense,� Chris Girod, principal and consulting actuary at Milliman Inc. said in an interview. �Although the trends are slowing down, the total dollar amount has risen $1,300 per year each of the last four years.�

Meanwhile, the share a family and employees pay continues to rise as employers push more costs onto their workers. Therefore, the total share of the overall costs continues to mount, surpassing other household milestones like food and a year�s worth of gas.

�The total share of this cost borne directly by the family � $9,144 in payroll deductions and out-of-pocket costs � now exceeds the cost of groceries for the (Milliman Medical Index�s) typical family of four,� the study says. �The out-of-pocket cost alone � $3,600 for co-pays, coinsurance and other cost sharing, is more than the average U.S. household spends on gas in a year.�

That�s been a consistent trend over the past several years. As the cost of health care increases, Americans� contributions to their health plans have risen at a much faster rate than their employers� share. Since 2003, workers in every single state have had to increase their contributions to their family health plans by nearly 75 percent. At the same time, workers� wages have stagnated. As struggling Americans aren�t able to afford the treatment they need, they�re putting off doctor�s visits and skipping out on their medication.

And, if the regular health costs that a typical American family incurs over the course of the year already represent such a big expense, it�s easy to see how just one catastrophic medical event could plunge Americans into serious debt. The average trip to an emergency room costs 40 percent more than what most Americans spend on monthly rent. It�s even worse for those with ongoing conditions that need expensive treatment � for instance, the Americans who are battling cancer are twice as likely to go bankrupt, even if they have health insurance.

Thursday, May 23, 2013

Class of 2013: Graduate with Peace of Mind

To the Class of 2013:

Congratulations on a well-earned graduation. I know how much hard work it took to get here today.

This is a time when you�re making big decisions about the future. You might be embarking on a new career, transitioning to a different city, and thinking about the start of this next exciting stage in life.

I�m sure the last thing you�re thinking about is health insurance. But unfortunately, the unexpected can happen.

The good news is that now the Affordable Care Act provides protections and benefits that give you greater control of your health care.� The law helps you by:

Making it possible to stay on your parent�s health plan until you turn 26, giving you the flexibility to make choices about your future without worrying about where you�re going to get health insurance.Requiring most insurance plans to cover proven preventive services�like birth control and certain cancer screenings�without you paying a penny.Barring insurers, beginning in 2014, from denying you coverage because of a pre-existing condition, like cancer, asthma, or acne, or making you pay more just because you are a woman.�Creating an online Health Insurance Marketplace, where you can find coverage that meets your needs and budget. You can also find out if you qualify for financial assistance. Sign up now at HealthCare.gov for updates; enrollment begins October 1, 2013.

Bottom line: Because of the Affordable Care Act, you�ll be able to begin this next chapter of your life with the peace of mind and security health insurance provides.

Congratulations on your achievement!

Tuesday, May 21, 2013

Latest Health Hurdle: Buying Insurance Without A Bank Account

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Friday, May 17, 2013

Oregon Single-Payer Activists Keep Dream of Universal Healthcare Alive

In Oregon, a separate measure, giving state sponsorship of a comprehensive study on universal healthcare financing, makes its way through the Committee on Ways & Means.

May 15, 2013 � Wes Brain was uninsured last winter when a tonsillectomy showed signs of throat cancer. He qualified for the high-risk Oregon Medical Insurance Pool, which the state has administered through Regence BlueCross BlueShield.

But gaining access to that insurance soon proved a big obstacle for the Ashland resident, when Regence erroneously told him he hadn�t submitted his driver�s license.

�Denial and delay, denial and delay are the way these insurance companies work. They make money this way,� Brain vented to the House Health Committee on Tuesday. He had previously lost his daughter after a nine-year struggle with leukemia while contending with insurance companies over access to necessary healthcare services.

Eventually, his policy was approved. He paid $2400 � three month�s premium. His doctor ordered a PET scan for March 1. But then Regence came back and told him no, he�d have to wait until March 1 to even begin authorization.

His clock was ticking. His throat cancer could be spreading.

He enlisted his local Rep. Peter Buckley, D-Ashland, to help him. He got the state Insurance Division on his case.

They came through. He received his PET scan, and spent four days at Oregon Health & Science University, receiving additional tonsil surgery. �They cut the hell out of me,� said Brain, who’s now cancer-free.

�There is no way that Regence should have delayed my care at all,� Brain added. �That�s how they do business. They kill people doing it. Let�s get them the hell out of it, and let�s pass this bill.�

Buckley and 23 other Democrats have signed on to support House Bill 2922, which would throw out the private health insurance industry and set up a single-payer health insurance system administered by the Oregon Health Authority.

The bill has no chance of passage this session, but House Health Committee Chairman Rep. Mitch Greenlick allowed fellow Portland Democrat and chief sponsor Rep. Michael Dembrow to lead single-payer health care advocates in an informational public hearing.

Brain and other activists aired their support for a privately delivered, government-sponsored health system that would revolutionize Oregon healthcare and make it similar to health systems in Japan, Europe, Canada and the rest of the developed world.

HB 2922 closely parallels House Bill 3510 from the 2011 session, but at 76 pages, it�s 30 percent longer than the previous measure, repealing newly acted reforms such as Cover Oregon, which offers subsidized private insurance for people with moderate incomes.

No Republicans have yet come on board as supporters, but the single-payer bill has twice as many sponsors this session from Democrats across the state, including rural districts as well as Portland and Eugene. Two of the state’s largest unions � the Oregon Nurses Association and the Oregon Education Association � have also thrown their support behind the measure.

Study Bill Moves Forward

Dembrow has also sponsored House Bill 3260, which had a budget hearing on Tuesday. That bill, which passed unanimously earlier this session from the House Health Committee, would solicit $250,000 to $600,000 in private funds to comprehensively study how best to implement universal healthcare in Oregon.

The study will look at several different options, including single-payer, a public option and the basic health plan envisioned for low-income people who wouldn’t qualify for Medicaid by the Affordable Care Act.

Chunhuei Chi, a professor at Oregon State University�s College of Public Health and Human Sciences, told The Lund Report the study would aim for transparency, be replicable and available for peer review. The Oregon Health Authority could either choose Oregon State or another entity to conduct the study.

Previously, Health Care for All Oregon, which supports the single-payer bill, had considered asking the Northwest Health Foundation to conduct such a study. But according to Dembrow, a state-sanctioned study would lend more credibility.

Earlier, he told The Lund Report that while he expects single payer the best route to universal healthcare, he believes the underlying bill is written well enough to turn into the best solution for Oregon, and he will support its recommendations.

�This is exactly the way it�s done,� said Sen. Elizabeth Steiner Hayward, D-Portland, who favors doing such a study but has not come out in support of the single-payer option. �I like that you�ve laid out a menu of options, and that it doesn�t make a predetermined decision,� she added, calling the study outcome-based rather than motivated by political ideology.

Contrasting Systems

Alan Journet, a retired professor and dual British-U.S. citizen, pointed out that in Great Britain, socialized medicine is so popular even Conservative icon, former Prime Minister Margaret Thatcher, was a big supporter.

While living in the U.S., he came down with cancer and was given two months to live, absent treatment. �Thanks to insurance, I didn�t have to worry much about the cost of treatment, but I did constantly have to worry about the insurance company approving doctor-recommended treatment,� Journet said.

Journet said he felt lucky � his insurance company approved his treatment, unlike his sister-in-law who fell ill earlier.

�Her insurance company denied treatment, and she died,� Journet said. �We often hear the complaint that we should fear government functionaries making decisions on treatment, as though we are better served having insurance company functionaries make such decisions, employees whose income encourages denying treatment and generating a sizable profit.�

Dembrow said his passion for single-payer healthcare started following the birth of his two children. His daughter, who was born in France, received exemplary care, including house calls from physicians for just a small co-payment and a tax taken out of the family paychecks.

His son, on the other hand, was born in Indiana. At the time, insurance companies weren’t required to cover infants for the first 30 days of their life. His son had a digestive abnormality called pyloric stenosis that required surgery. A graduate student at the time, Dembrow and his wife had to deplete their savings to pay for the care.

�The contrast of those experiences have committed me to try to do things differently in this country,� Dembrow said.

Dembrow praised the reform efforts of Gov. Kitzhaber to deliver healthcare for the poor through coordinated care organizations and also lauded many of the aspects of the Affordable Care Act, including the expanded Oregon Health Plan and the insurance exchange. Yet, he said these reforms fall far short of an equitable universal healthcare system.

�We�ll continue to have jobs kept temporary or part-time for no good reason other than to keep workers from being eligible for coverage,� he said. �Our system will still rely on private insurance companies who charge high administrative fees, create administrative burdens for doctors and other healthcare professionals, and whose primary interest is their own profits. � At best what we�re going to continue to have an expensive, complicated patchwork system.�

Oregon Single-Payer Activists Keep Dream of Universal Healthcare Alive

In Oregon, a separate measure, giving state sponsorship of a comprehensive study on universal healthcare financing, makes its way through the Committee on Ways & Means.

May 15, 2013 � Wes Brain was uninsured last winter when a tonsillectomy showed signs of throat cancer. He qualified for the high-risk Oregon Medical Insurance Pool, which the state has administered through Regence BlueCross BlueShield.

But gaining access to that insurance soon proved a big obstacle for the Ashland resident, when Regence erroneously told him he hadn�t submitted his driver�s license.

�Denial and delay, denial and delay are the way these insurance companies work. They make money this way,� Brain vented to the House Health Committee on Tuesday. He had previously lost his daughter after a nine-year struggle with leukemia while contending with insurance companies over access to necessary healthcare services.

Eventually, his policy was approved. He paid $2400 � three month�s premium. His doctor ordered a PET scan for March 1. But then Regence came back and told him no, he�d have to wait until March 1 to even begin authorization.

His clock was ticking. His throat cancer could be spreading.

He enlisted his local Rep. Peter Buckley, D-Ashland, to help him. He got the state Insurance Division on his case.

They came through. He received his PET scan, and spent four days at Oregon Health & Science University, receiving additional tonsil surgery. �They cut the hell out of me,� said Brain, who’s now cancer-free.

�There is no way that Regence should have delayed my care at all,� Brain added. �That�s how they do business. They kill people doing it. Let�s get them the hell out of it, and let�s pass this bill.�

Buckley and 23 other Democrats have signed on to support House Bill 2922, which would throw out the private health insurance industry and set up a single-payer health insurance system administered by the Oregon Health Authority.

The bill has no chance of passage this session, but House Health Committee Chairman Rep. Mitch Greenlick allowed fellow Portland Democrat and chief sponsor Rep. Michael Dembrow to lead single-payer health care advocates in an informational public hearing.

Brain and other activists aired their support for a privately delivered, government-sponsored health system that would revolutionize Oregon healthcare and make it similar to health systems in Japan, Europe, Canada and the rest of the developed world.

HB 2922 closely parallels House Bill 3510 from the 2011 session, but at 76 pages, it�s 30 percent longer than the previous measure, repealing newly acted reforms such as Cover Oregon, which offers subsidized private insurance for people with moderate incomes.

No Republicans have yet come on board as supporters, but the single-payer bill has twice as many sponsors this session from Democrats across the state, including rural districts as well as Portland and Eugene. Two of the state’s largest unions � the Oregon Nurses Association and the Oregon Education Association � have also thrown their support behind the measure.

Study Bill Moves Forward

Dembrow has also sponsored House Bill 3260, which had a budget hearing on Tuesday. That bill, which passed unanimously earlier this session from the House Health Committee, would solicit $250,000 to $600,000 in private funds to comprehensively study how best to implement universal healthcare in Oregon.

The study will look at several different options, including single-payer, a public option and the basic health plan envisioned for low-income people who wouldn’t qualify for Medicaid by the Affordable Care Act.

Chunhuei Chi, a professor at Oregon State University�s College of Public Health and Human Sciences, told The Lund Report the study would aim for transparency, be replicable and available for peer review. The Oregon Health Authority could either choose Oregon State or another entity to conduct the study.

Previously, Health Care for All Oregon, which supports the single-payer bill, had considered asking the Northwest Health Foundation to conduct such a study. But according to Dembrow, a state-sanctioned study would lend more credibility.

Earlier, he told The Lund Report that while he expects single payer the best route to universal healthcare, he believes the underlying bill is written well enough to turn into the best solution for Oregon, and he will support its recommendations.

�This is exactly the way it�s done,� said Sen. Elizabeth Steiner Hayward, D-Portland, who favors doing such a study but has not come out in support of the single-payer option. �I like that you�ve laid out a menu of options, and that it doesn�t make a predetermined decision,� she added, calling the study outcome-based rather than motivated by political ideology.

Contrasting Systems

Alan Journet, a retired professor and dual British-U.S. citizen, pointed out that in Great Britain, socialized medicine is so popular even Conservative icon, former Prime Minister Margaret Thatcher, was a big supporter.

While living in the U.S., he came down with cancer and was given two months to live, absent treatment. �Thanks to insurance, I didn�t have to worry much about the cost of treatment, but I did constantly have to worry about the insurance company approving doctor-recommended treatment,� Journet said.

Journet said he felt lucky � his insurance company approved his treatment, unlike his sister-in-law who fell ill earlier.

�Her insurance company denied treatment, and she died,� Journet said. �We often hear the complaint that we should fear government functionaries making decisions on treatment, as though we are better served having insurance company functionaries make such decisions, employees whose income encourages denying treatment and generating a sizable profit.�

Dembrow said his passion for single-payer healthcare started following the birth of his two children. His daughter, who was born in France, received exemplary care, including house calls from physicians for just a small co-payment and a tax taken out of the family paychecks.

His son, on the other hand, was born in Indiana. At the time, insurance companies weren’t required to cover infants for the first 30 days of their life. His son had a digestive abnormality called pyloric stenosis that required surgery. A graduate student at the time, Dembrow and his wife had to deplete their savings to pay for the care.

�The contrast of those experiences have committed me to try to do things differently in this country,� Dembrow said.

Dembrow praised the reform efforts of Gov. Kitzhaber to deliver healthcare for the poor through coordinated care organizations and also lauded many of the aspects of the Affordable Care Act, including the expanded Oregon Health Plan and the insurance exchange. Yet, he said these reforms fall far short of an equitable universal healthcare system.

�We�ll continue to have jobs kept temporary or part-time for no good reason other than to keep workers from being eligible for coverage,� he said. �Our system will still rely on private insurance companies who charge high administrative fees, create administrative burdens for doctors and other healthcare professionals, and whose primary interest is their own profits. � At best what we�re going to continue to have an expensive, complicated patchwork system.�

Swell Of Goodwill For First Medicare Chief Confirmed Since 2004

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Tuesday, May 14, 2013

It Came From Norway To Take On A Medical Goliath

More From Shots - Health News HealthParents Get Crib Sheets For Talking With Kids About DrinkingHealthMiddle East Virus Spreads Between Hospitalized PatientsHealthTeens Who Text And Drive Often Take Other RisksHealthCases Of Mysterious Valley Fever Rise In American Southwest

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Please keep your community civil. All comments must follow the NPR.org Community rules and terms of use, and will be moderated prior to posting. NPR reserves the right to use the comments we receive, in whole or in part, and to use the commenter's name and location, in any medium. See also the Terms of Use, Privacy Policy and Community FAQ.

Please enable Javascript to view the comments powered by Disqus.

It Came From Norway To Take On A Medical Goliath

More From Shots - Health News HealthParents Get Crib Sheets For Talking With Kids About DrinkingHealthMiddle East Virus Spreads Between Hospitalized PatientsHealthTeens Who Text And Drive Often Take Other RisksHealthCases Of Mysterious Valley Fever Rise In American Southwest

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Please keep your community civil. All comments must follow the NPR.org Community rules and terms of use, and will be moderated prior to posting. NPR reserves the right to use the comments we receive, in whole or in part, and to use the commenter's name and location, in any medium. See also the Terms of Use, Privacy Policy and Community FAQ.

Please enable Javascript to view the comments powered by Disqus.

It Came From Norway To Take On A Medical Goliath

More From Shots - Health News HealthParents Get Crib Sheets For Talking With Kids About DrinkingHealthMiddle East Virus Spreads Between Hospitalized PatientsHealthTeens Who Text And Drive Often Take Other RisksHealthCases Of Mysterious Valley Fever Rise In American Southwest

More From Shots - Health News

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Please keep your community civil. All comments must follow the NPR.org Community rules and terms of use, and will be moderated prior to posting. NPR reserves the right to use the comments we receive, in whole or in part, and to use the commenter's name and location, in any medium. See also the Terms of Use, Privacy Policy and Community FAQ.

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Friday, May 10, 2013

It Came From Norway To Take On A Medical Goliath

More From Shots - Health News HealthJudge Denies Administration's Request To Delay Plan-B RulingHealthKids With Autism Quick To Detect MotionHealthIt Came From Norway To Take On A Medical GoliathHealthHow Can Identical Twins Turn Out So Different?

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Thursday, May 9, 2013

Privately Insured Americans to Learn about the Health Insurance Marketplaces

Starting in 2014 there will be a new way for you to buy health insurance through the Health Insurance Marketplace.� Whether you�re uninsured, or just want to explore new options, the Marketplace will give you more choice and control over your health insurance options.

Today, the Departments of Health and Human Services and Labor are taking another step to let you know about new insurance options available in 2014.� Over the course of the remainder of the year, businesses and health insurers in the individual market will send Americans information about coverage through the Marketplace.

Among those who will get notices are the approximately 7 million individuals and their dependants who become eligible for coverage through COBRA every year, including people who may be in between jobs and have the option to buy into their former employer�s coverage.� COBRA coverage is generally expensive, and a number of people turn it down and become uninsured.� From now on, people leaving their jobs will learn that they may be eligible for affordable insurance through the Marketplace.� People who purchase coverage through the Marketplace instead of COBRA could cut their premiums by as much as half. �They may also qualify for a new kind of tax credit that lowers monthly premiums right away.

These notices are the just another step in the Administration�s efforts to raise awareness of the new, quality, affordable health insurance options available in 2014.� Open enrollment in the Health Insurance Marketplace begins October 1, 2013. �

To learn more visit www.healthcare.gov/marketplace.

Wednesday, May 8, 2013

The Unhappy Marriage of Economics and Health Care

America’s health care system is collapsing, and we can blame the Economics profession. Most economists approach health care in the wrong way, viewing it as a commodity like shoes or the laptop on which I write. Instead, health care is an idiosyncratic commodity, subject to uncertainty and “asymmetric information” leading to destructive behavior. Trying to force health care into a box, treating it like other commodities, economists have promoted cost sharing, market competition, and insurance oversight of health care providers that have inflated the administrative burden while denying ever more Americans access.

Health care spending has been rising throughout the world as aging and more affluent populations spend on their health. Nowhere, however, has the cost of health care risen as fast as in the United States where costs soared because of rising administrative expense. Compared with other affluent countries in the Organization for Economic Cooperation and Development (the OECD), the United States spends over twice as much per person as is spent elsewhere. Before 1971 when Canada enacted its Medicare program, a single-payer government funded health care system, Canada spent a higher share of its national income on health care than did the United States; since then, however, while Canada has controlled costs, spending has soared in the United States so that we now spend over $3000 more per person. That is $12,000 for a family of four that is not available for travel, education, housing, or food.

Elsewhere, increases in health care spending have been associated with improvements in the provision of health care and, therefore, go with increasing life expectancy. In the United States, however, spending has increased because of rising administrative costs and increases in the price of prescription drugs and, therefore, has yielded relatively few benefits in improvements in care. Comparing changes in health-care spending and life expectancy between 1971 and 2008, other affluent OECD members gained a year of life expectancy for every $453 in spending; in the United States, however, life expectancy has increased less and spending has risen sharply more so that each year of increased life expectancy has cost over twice as much as in these other countries. Health care spending in the United States has increased by $1283 for every additional year of life expectancy; had our spending per year of added life increased at only the rate of other countries we would be spending over $4500 less per person, $18,000 saved for the average family of four. Most of the difference in relative expenditures, most of the growing waste in spending in the United States, is due to increasing administrative costs in the provision of private health insurance and in the billing and insurance operations within doctors’ offices and in hospitals. The average physician in the United States now spends four-times as much interacting with insurance companies as does the average physician in Ontario, Canada, over $80,000 per physician compared with a little over $20,000 in Ontario. Prescription drug prices and administrative expenses have been the fastest rising costs in the United States health care system; from 1980 to 2005, administrative costs rose by 1300% while drug prices rose by nearly 2000%. There are now 2.5 million administrative support personnel in the American health care system; more than the number of nurses, and five times the number of physicians. We now have more health-care managers than physicians and surgeons.

Rising costs drive up health insurance premiums so that a family health insurance plan now costs about 40% of the average family wage income, up from 7% in 1960. Rising costs are denying ever more Americans access to health care even while businesses and governments wrestle with rising health care spending that squeezes resources available for other purposes. While other countries have controlled health care costs by restraining administrative expenses and drug prices, ballooning costs in the United States come from policies promoted by economists who have urged governments and providers to control costs by making consumers responsible for more of the costs even while raising administrative costs and ignoring monopolistic pricing of pharmaceuticals. Viewing the injured, sick, and disabled as “consumers,” economists see insurance as the source of rising costs because they are not responsible for the costs of care they receive and, therefore, overuse health care. Rising copayments and deductibles are intended to discourage “consumers” from “abusing” health care, as if the victims of auto accidents or cancer should shop around for cheaper, and competition among insurers while limiting provider services by providing more administrative supervision. Ignoring evidence that Americans are less likely to see doctors and other health providers than are residents of other affluent countries, these economists have blamed the high cost of our health care on insurance which, they assume, leads to wasteful over-practice and the provision of unnecessary health care services. Their solution is greater cost sharing, more regulation of providers, capitation, and even the end to insurance by substituting medical savings accounts for insurance.

For 40 years, many economists’ have promoted increasing cost sharing through higher copayments and deductibles, the replacement of fee-for-service payment systems with capitation where providers are paid a fixed amount for patients as in Health Maintenance Organizations, and competition where multiple insurers offer a variety of plans catered to individual consumer’s interests and in competition with each other. Far from limiting health care cost increases, these practices have produced the worst of all worlds, rising costs along with restrictions on access. Costs have risen because these recommendations have inflated the administrative burden in health care, the costs of the billing and insurance activities within provider offices as well as the cost of the health insurance industry itself. While restricting access, limiting the benefit to Americans of some of the dramatic improvements in health care practice of the last decades, these practices have not bent the cost curve or slowed health care inflation even while denying more and more Americans access to affordable health care.

The failure of price incentives and competition to control health care costs could have been predicted had economists appreciated that health insurance is not a commodity and the sick are not consumers like those shopping for the best pair of sandals or brand of peanut butter. Producers of commodities might try to accommodate consumer wishes because they can profit by selling more. Health insurers, on the contrary, can better increase their profits by selling less, by identifying people likely to need care and driving them away (“lemon dropping”) even while attracting the lucky and healthy (“cherry picking”). Most health care expenditures go to a relatively few people, the unlucky who develop an illness or suffer an accident; insurers, therefore, can dramatically lower their costs by finding those who will be expensive and getting rid of their business; encouraging them to find another insurance plan or even to die.

A form of “adverse selection,” or screening of potential customers by insurance companies, can be profitable for the individual firm but it comes at the cost of raising costs for the community as a whole. As a country, we now spend almost $200 billion administering the health insurance industry and over $800 billion in administering the health care industry, or over a quarter of total spending. Add to this the inefficiency in delivery that comes from a fragmented finance system that inhibits coordination of care, and the inflated prices for prescription drugs, and easily a third of total spending is wasted or going to monopolistic profits.

The waste involved in the current system has a redeeming feature: it provides abundant space for an improved system that could improve access and services even while dramatically lowering costs by eliminating administrative waste. If we lowered administrative costs and drug prices to the Canadian level, we could save nearly $600 billion dollars, more than enough to provide coverage to all of the uninsured while improving access for the millions of underinsured. If we see past the bad recommendations of market-fundamentalists, we can improve health care and save money. An outcome that even economists should favor.

Gerald Friedman Professor of Economics University of Massachusetts at Amherst, Amherst, MA. 01003

Professor Friedman has written extensively on single payer health care and HR 676. His article explaining the economics of single payer is available here:

Dollars and Sense: Funding a National Single-Payer System by Gerald Friedman.

Tuesday, May 7, 2013

The Unhappy Marriage of Economics and Health Care

America’s health care system is collapsing, and we can blame the Economics profession. Most economists approach health care in the wrong way, viewing it as a commodity like shoes or the laptop on which I write. Instead, health care is an idiosyncratic commodity, subject to uncertainty and “asymmetric information” leading to destructive behavior. Trying to force health care into a box, treating it like other commodities, economists have promoted cost sharing, market competition, and insurance oversight of health care providers that have inflated the administrative burden while denying ever more Americans access.

Health care spending has been rising throughout the world as aging and more affluent populations spend on their health. Nowhere, however, has the cost of health care risen as fast as in the United States where costs soared because of rising administrative expense. Compared with other affluent countries in the Organization for Economic Cooperation and Development (the OECD), the United States spends over twice as much per person as is spent elsewhere. Before 1971 when Canada enacted its Medicare program, a single-payer government funded health care system, Canada spent a higher share of its national income on health care than did the United States; since then, however, while Canada has controlled costs, spending has soared in the United States so that we now spend over $3000 more per person. That is $12,000 for a family of four that is not available for travel, education, housing, or food.

Elsewhere, increases in health care spending have been associated with improvements in the provision of health care and, therefore, go with increasing life expectancy. In the United States, however, spending has increased because of rising administrative costs and increases in the price of prescription drugs and, therefore, has yielded relatively few benefits in improvements in care. Comparing changes in health-care spending and life expectancy between 1971 and 2008, other affluent OECD members gained a year of life expectancy for every $453 in spending; in the United States, however, life expectancy has increased less and spending has risen sharply more so that each year of increased life expectancy has cost over twice as much as in these other countries. Health care spending in the United States has increased by $1283 for every additional year of life expectancy; had our spending per year of added life increased at only the rate of other countries we would be spending over $4500 less per person, $18,000 saved for the average family of four. Most of the difference in relative expenditures, most of the growing waste in spending in the United States, is due to increasing administrative costs in the provision of private health insurance and in the billing and insurance operations within doctors’ offices and in hospitals. The average physician in the United States now spends four-times as much interacting with insurance companies as does the average physician in Ontario, Canada, over $80,000 per physician compared with a little over $20,000 in Ontario. Prescription drug prices and administrative expenses have been the fastest rising costs in the United States health care system; from 1980 to 2005, administrative costs rose by 1300% while drug prices rose by nearly 2000%. There are now 2.5 million administrative support personnel in the American health care system; more than the number of nurses, and five times the number of physicians. We now have more health-care managers than physicians and surgeons.

Rising costs drive up health insurance premiums so that a family health insurance plan now costs about 40% of the average family wage income, up from 7% in 1960. Rising costs are denying ever more Americans access to health care even while businesses and governments wrestle with rising health care spending that squeezes resources available for other purposes. While other countries have controlled health care costs by restraining administrative expenses and drug prices, ballooning costs in the United States come from policies promoted by economists who have urged governments and providers to control costs by making consumers responsible for more of the costs even while raising administrative costs and ignoring monopolistic pricing of pharmaceuticals. Viewing the injured, sick, and disabled as “consumers,” economists see insurance as the source of rising costs because they are not responsible for the costs of care they receive and, therefore, overuse health care. Rising copayments and deductibles are intended to discourage “consumers” from “abusing” health care, as if the victims of auto accidents or cancer should shop around for cheaper, and competition among insurers while limiting provider services by providing more administrative supervision. Ignoring evidence that Americans are less likely to see doctors and other health providers than are residents of other affluent countries, these economists have blamed the high cost of our health care on insurance which, they assume, leads to wasteful over-practice and the provision of unnecessary health care services. Their solution is greater cost sharing, more regulation of providers, capitation, and even the end to insurance by substituting medical savings accounts for insurance.

For 40 years, many economists’ have promoted increasing cost sharing through higher copayments and deductibles, the replacement of fee-for-service payment systems with capitation where providers are paid a fixed amount for patients as in Health Maintenance Organizations, and competition where multiple insurers offer a variety of plans catered to individual consumer’s interests and in competition with each other. Far from limiting health care cost increases, these practices have produced the worst of all worlds, rising costs along with restrictions on access. Costs have risen because these recommendations have inflated the administrative burden in health care, the costs of the billing and insurance activities within provider offices as well as the cost of the health insurance industry itself. While restricting access, limiting the benefit to Americans of some of the dramatic improvements in health care practice of the last decades, these practices have not bent the cost curve or slowed health care inflation even while denying more and more Americans access to affordable health care.

The failure of price incentives and competition to control health care costs could have been predicted had economists appreciated that health insurance is not a commodity and the sick are not consumers like those shopping for the best pair of sandals or brand of peanut butter. Producers of commodities might try to accommodate consumer wishes because they can profit by selling more. Health insurers, on the contrary, can better increase their profits by selling less, by identifying people likely to need care and driving them away (“lemon dropping”) even while attracting the lucky and healthy (“cherry picking”). Most health care expenditures go to a relatively few people, the unlucky who develop an illness or suffer an accident; insurers, therefore, can dramatically lower their costs by finding those who will be expensive and getting rid of their business; encouraging them to find another insurance plan or even to die.

A form of “adverse selection,” or screening of potential customers by insurance companies, can be profitable for the individual firm but it comes at the cost of raising costs for the community as a whole. As a country, we now spend almost $200 billion administering the health insurance industry and over $800 billion in administering the health care industry, or over a quarter of total spending. Add to this the inefficiency in delivery that comes from a fragmented finance system that inhibits coordination of care, and the inflated prices for prescription drugs, and easily a third of total spending is wasted or going to monopolistic profits.

The waste involved in the current system has a redeeming feature: it provides abundant space for an improved system that could improve access and services even while dramatically lowering costs by eliminating administrative waste. If we lowered administrative costs and drug prices to the Canadian level, we could save nearly $600 billion dollars, more than enough to provide coverage to all of the uninsured while improving access for the millions of underinsured. If we see past the bad recommendations of market-fundamentalists, we can improve health care and save money. An outcome that even economists should favor.

Gerald Friedman Professor of Economics University of Massachusetts at Amherst, Amherst, MA. 01003

Professor Friedman has written extensively on single payer health care and HR 676. His article explaining the economics of single payer is available here:

Dollars and Sense: Funding a National Single-Payer System by Gerald Friedman.

Friday, May 3, 2013

Colorado Weighs Reopening Psychiatric Hospital For Homeless

More From Shots - Health News HealthFrom Battlefield To Boston: Marine Comforts Bombing SurvivorsHealthUrologists Recommend Less PSA Testing For Prostate CancerHealthPaleo Diet Echoes Physical Culture Movement Of YesteryearNewsOutbreak Of New SARS-Like Virus Kills 5 In Saudi Arabia

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Thursday, May 2, 2013

Ratting Out TB: Scientists Train Rodents To Diagnose Disease

More From Shots - Health News HealthRecovery Begins For Mother, Daughter Injured In BostonHealthImagine A Flying Pig: How Words Take Shape In The BrainHealthMate Doesn't Have Your Back? That Boosts Depression RiskHealthSecond Thoughts On Medicaid From Oregon's Unique Experiment

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Please keep your community civil. All comments must follow the NPR.org Community rules and terms of use, and will be moderated prior to posting. NPR reserves the right to use the comments we receive, in whole or in part, and to use the commenter's name and location, in any medium. See also the Terms of Use, Privacy Policy and Community FAQ.

Please enable Javascript to view the comments powered by Disqus.