America, the last holdout

Health care abroad: the myths

Excerpts from an article in The Oregonian

by T.R. Reid, guest opinion

Saturday August 29, 2009, 5:45 PM

As Americans search for the cure to what ails our health care system, we've overlooked an invaluable source of ideas and solutions: the rest of the world. All the other industrialized democracies have faced problems like ours, yet they've found ways to cover everybody -- and still spend far less than we do.

I've traveled the world from Oslo to Osaka to see how other developed democracies provide health care. Instead of dismissing these models as "socialist," we could adapt their solutions to fix our problems. To do that, we first have to dispel a few myths about health care abroad:

1. It's all socialized medicine out there.

Not so. Some countries, such as Britain, New Zealand and Cuba, do provide health care in government hospitals, with the government paying the bills. Others -- for instance, Canada and Taiwan -- rely on private-sector providers, paid for by government-run insurance. But many wealthy countries -- including Germany, the Netherlands, Japan and Switzerland -- provide universal coverage using private doctors, private hospitals and private insurance plans.

2. Overseas, care is rationed through limited choices or long lines.

Generally, no. Germans can sign up for any of the nation's 200 private health insurance plans -- a broader choice than any American has. If a German doesn't like her insurance company, she can switch to another, with no increase in premium. The Swiss, too, can choose any insurance plan in the country.

3. Foreign health care systems are inefficient, bloated bureaucracies.

Much less so than here. It may seem to Americans that U.S.-style free enterprise -- private-sector, for-profit health insurance -- is naturally the most cost-effective way to pay for health care. But in fact, all the other payment systems are more efficient than ours.

4. Cost controls stifle innovation.

False. The United States is home to groundbreaking medical research, but so are other countries with much lower cost structures. Any American who's had a hip or knee replacement is standing on French innovation. Deep-brain stimulation to treat depression is a Canadian breakthrough. Many of the wonder drugs promoted endlessly on American television, including Viagra, come from British, Swiss or Japanese labs.

5. Health insurance has to be cruel.

Not really. American health insurance companies routinely reject applicants with a "pre-existing condition" -- precisely the people most likely to need the insurers' services. Foreign health insurance companies, in contrast, must accept all applicants, and they can't cancel as long as you pay your premiums. The plans are required to pay any claim submitted by a doctor or hospital (or health spa), usually within tight time limits.

The key difference is that foreign health insurance plans exist only to pay people's medical bills, not to make a profit. The United States is the only developed country that lets insurance companies profit from basic health coverage.

In terms of results, almost all advanced countries have better national health statistics than the United States does. In terms of finance, we force 700,000 Americans into bankruptcy each year because of medical bills. In France, the number of medical bankruptcies is zero. Britain: zero. Japan: zero. Germany: zero.

Given our remarkable medical assets -- the best-educated doctors and nurses, the most advanced hospitals, world-class research -- the United States could be, and should be, the best in the world. To get there, though, we have to be willing to learn some lessons about healthcare administration from the other industrialized democracies.

Copyright: 2009, The Washington Post

T.R. Reid, a former Washington Post reporter, is the author of "The Healing of America: A Global Quest for Better, Cheaper, and Fairer Health Care."

Cheap Insurance for expensive Classic Cars

Excerpts from anLA Times article by KATHY KRISTOF

kathy.kristof@latimes.com

Got a classic car, like a 1960s-era Mustang or a gull-wing Mercedes? You could be paying too much to insure it.

Roughly half of classic car owners put their vehicles on a standard auto insurance policy without realizing that they could be paying too much for inadequate coverage.

"A lot of people who are into car collecting as a hobby might not be paying attention to things like insurance," he said. "They just call their agent and add the car to their policy."

Insuring a classic with a traditional auto policy is a mistake for various reasons, Heacock said.

For one, traditional insurance is based on the notion that a car’s value will decrease over time. But a classic car is likely to appreciate, especially if you’re restoring it. You don’t want to get a depreciated value if something happens to your pristine 1967 Jaguar XKE, he noted. But if you have a standard policy, that’s generally what you’ll get.

When buying a classic car insurance policy, which is offered by dozens of specialized companies nationwide, you and the insurer agree to the car’s replacement value. That price will be based on your assessment of the car’s value and the price the car has brought at auction and in collectors’ sales. If the car is destroyed, you’ll get that agreed-to value without having to dicker about depreciation.

It may seem counterintuitive that the premiums would be lower on a policy that provides a higher replacement cost. But the reason is simple: Classic and collectible cars are pampered (and driven infrequently and carefully).

How much cheaper is classic car insurance? The answer varies widely based on the insurer and vehicle.

A State Farm spokesman said it might cost $470 annually to cover a 1968 Camaro with a traditional policy — with a lot of caveats: the driver has 30 years of experience, multiple discounts and a perfect driving record.

Why? Because State Farm uses dozens of factors to price your policy, while Heacock has a simpler model. It looks mainly at the car’s value and how it is going to be used. If you’re driving it solely in parades and to and from auto shows, the chance of getting T-boned on the highway — or slamming into another driver — is pretty slim, Heacock said.

The low prices come with plenty of restrictions, however. Heacock doesn’t cover youthful drivers. (Don’t apply if you’re younger than 30.) The car can’t be driven more than 5,000 miles a year, and it had better have a home in the garage, not in the driveway or yard. State Farm specifies that it’s insuring you to drive in parades and to car shows — not to work or to the supermarket.

"We’re not looking to insure your second car," Heacock said. "We’re only interested in insuring cars that are getting some extra attention."

What isn’t necessarily required to secure classic car insurance is an expensive antique vehicle. If a car draws enthusiasts and is driven like a collectible, it can probably be insured like a collectible, said Candysse Miller, executive director of the Insurance Information Network of California and an avowed car buff.

But the right insurer and policy are going to vary based on the type of car you have and how (or whether) you drive it.

This is a highly specialized market, Miller noted. Some companies specialize in antique cars, some in muscle cars or race cars, others in elegant classics.

Moreover, the premium charged for a car that is on display is a fraction of what it is for a car that’s on the road, Heacock said. Heacock figures that a collectible car can typically be insured for a premium amounting to 1 percent of its value.

If you’re in a car club, ask your fellow Duesenberg or Corvair enthusiasts where they bought their insurance, she said.

California insurance commissioner to fight sale of part of workers' comp fund

Excerpts from an August 28, 2009 Los Angeles Times article
By Marc Lifsher

California's regulator is expected today to file a lawsuit to try to stop the governor from selling $1 billion worth of business at state-run workers' compensation insurance company.

Last month, Gov. Arnold Schwarzenegger and the Legislature approved the proposed sale to raise money to partially plug a $24-billion hole in the state budget.

Insurance Commissioner Steve Poizner vowed to fight it. "This is bad politics; it's illegal, and I'm going to stop it," he said. And he warned that a sale could increase the price of workers' comp insurance for millions of workers.

Poizner said he would ask a Sacramento County Superior Court judge for an injunction preventing any sale of policies at the $21-billion company known as State Fund.

To net $1 billion, the state would have to sell a significant portion of State Fund's best, least risky business, officials estimate. But doing that, Poizner warned, could drive up rates for policyholders at both State Fund and private companies.

"They may have to raise rates by thousands of dollars a year per policy to make up for this $1 billion," he said. "It could ripple through the entire workers' compensation system."

Selling assets "can be accomplished in a manner that is legal and that maintains the integrity of the fund," said H.D. Palmer, a spokesman for Schwarzenegger's finance department.

But selling a big chunk of State Fund would violate a provision of the state Constitution approved by voters in 1918, Poizner said. That statewide vote set up a legal system for providing medical care and compensation to injured workers. State Fund's board of directors, nine of 11 of whom are appointed by the governor, has also gone on record opposing the proposed sale.

Money collected by selling State Fund assets legally belongs to policyholders, not California taxpayers, said Nicholas Roxborough, a Los Angeles attorney who specializes in employers' rights in workers' compensation disputes.

Trying to balance the budget by selling State Fund business is "pie in the sky, Fantasyland stuff," he said. "For the governor to propose this means he either truly does not understand what is State Fund or this is nothing more than a ruse."

What about a Voucher System for Health Care?

August 25, 2009, 10:00 pm

A Reading List on Insurance Choice

By David Leonhardt

InIn my ColumnI talk about an idea that’s missing from the current versions of health reform: allowing people to choose an insurance plan other than the ones offered by their employer.

Ezekiel Emanuel, an oncologist now working in the Obama budget office, and Victor Fuchs, a Stanford economist, lay out their version of a plan here.

Comment by Phil

Get ready to suspend disbelief and spend some time reading a serious proposal that has real merit. Jump to page 10 of the adobe pdf file for a brief summary of the plan. It will be worth your time.

An Independant Study Group's conclusions

Mon Aug 24 08:07:40 2009 Pacific Time

RAND Analysis Finds Certain Health Reform Policy Options Would Significantly Reduce Number of Uninsured Americans

SANTA MONICA, Calif., Aug. 24 (AScribe Newswire) -- New analysis from the RAND Corporation shows that a mandate requiring individuals to obtain health insurance -- an option in various current legislative proposals -- would increase the number of Americans with coverage by 9 million to 34 million, while a mandate requiring employers to offer insurance would boost the figure by 1.8 million to 3.4 million.

The findings are from a micro-simulation model created as a part of RAND COMPARE, an ongoing, independent effort to provide objective information about health care reform. The latest analysis, released today at www.randcompare.org, examines policy options designed to expand coverage to the uninsured.

In addition to individual policy options, the analysis examined a plan proposed in the lead-up to the current health care debate by U.S. Sen. Max Baucus. Researchers evaluated the likely effect of the proposal on coverage, spending, consumer financial risk and health. RAND's analysis of that plan, outlined in a white paper in November, concludes it would reduce the number of people without insurance by an estimated 60 percent to 85 percent, depending on specific design choices.

That proposal relates to draft legislation that is still being negotiated by the Senate Finance Committee, of which Sen. Baucus (D-Montana) is chairman. Not all of the elements examined by RAND will necessarily be part of the legislation that ultimately emerges from that committee, but many of the features are similar to those found in the House Tri-Committee bill and the Health, Education, Labor and Pensions (HELP) Committee bill.

Researchers from RAND, a nonprofit, nonpartisan research organization, found that under different design choices the Baucus proposal could significantly cut the number of uninsured Americans with almost no increase in overall spending on health care, although government costs would increase by an estimated 5 percent to 7 percent.

"What is clear is that the extent of subsidies to help people purchase insurance, as well as the size of the penalty for an individual who fails to purchase insurance or an employer who fails to offer it, can make a substantial difference," said Elizabeth McGlynn, co-director of COMPARE and associate director of RAND Health. "These are some of the key decisions that face Congress when it returns after the recess."

The plan as outlined in the white paper would be implemented over time and would include: a requirement that all employers above a certain size offer health insurance to their employees, an expansion in the eligibility for Medicaid and the State Children's Health Insurance Program and a requirement that all individuals have health insurance coverage.

The white paper did not specify which employers would be required to offer insurance or what the penalty would be for those who choose not to offer it. Researchers examined the effect of excluding companies with fewer than 5, 10 or 25 employees from the mandate, as well as the effect of penalties set at 5 percent, 10 percent and 20 percent of total payroll.

RAND estimates that before implementation of the individual mandate, the number of people who would become newly insured through employer-sponsored coverage could range from 2 million to 7.2 million, depending on assumptions.

Before the individual mandate is implemented, expanding eligibility for Medicaid and the State Children's Health Insurance Program results in about 5 million more people obtaining health insurance coverage than under the employer mandate alone.

All of the health reform bills introduced by chairs of committees with jurisdiction thus far include some type of new national health insurance exchange that would allow individuals to purchase health insurance in a national market, rather than only among those plans offered in the state where they live. Once this exchange is operational, the plan RAND analyzed would require everyone to have insurance through either a public program (Medicaid, State Children's Health Insurance Program, TRICARE) or through private sources (employer, individual policies, exchange).

"We found that the individual mandate has the largest effect on reducing the number of people without health insurance," said Christine Eibner, lead researcher on the analysis of the white paper and an economist at RAND. She noted that the Baucus proposal specifies that subsidies to help purchase insurance would be offered to people with incomes of up to 400 percent of the federal poverty level.

She said the individual mandate is the one policy option that addresses the different characteristics of the uninsured. It will affect both the 44 percent of people who already have an offer of health insurance through their employer or Medicaid, but have not taken it, as well as the remaining group that would have to seek out insurance.

The white paper did not specify the size of penalty that would be imposed on people who do not comply with the mandate to purchase insurance. Researchers examined the effect of penalties set at 25 percent, 50 percent and 75 percent of the premium an individual would have to pay for a policy from an insurance exchange. Assuming a moderate employer mandate, increasing the penalty from 25 percent to 75 percent of the premium an individual would pay on the national insurance exchange would reduce the number of uninsured by 32.5 million -- a 71 percent reduction. By contrast, a penalty of 25 percent would reduce the number of uninsured by 20.8 million, a 46 percent reduction.

Most of the major proposals in Congress include some new health insurance marketplace (such as the "exchange" in the white paper and the House Tri-Committee bill, and "gateways" in the HELP Committee bill). Subsidies to offset the costs of purchasing health insurance are generally only available to people who purchase via the exchange; and access to the exchange in many bills is limited to those who do not have any other source of coverage. The RAND team estimated that if this restriction were relaxed, 38.3 million people would be newly insured -- an 85 percent reduction in the rate of uninsurance.

RAND researchers also estimated the increase in national spending on health care, the increase in government spending, the effect for consumers in different types of households, and the change in the health of the population that might be caused by adopting provisions in the white paper.

Under all of the policy options, the increase in national spending on health care was negligible, meaning that increasing the number of people with insurance would not likely change the rate of growth in health spending. Government spending would increase by 5 percent to 7 percent under the most likely scenarios; however, if the insurance exchange were open to a much wider group of people, government spending could increase by as much as 9 percent, according to the RAND analysis.

Consumers who are currently uninsured would likely spend more on health care if the proposals in the white paper were implemented than they do today. RAND researchers estimate that people without insurance currently spend about 2 percent of their income on health care on average, compared with 6 percent among those with insurance. The analysis suggests the plan would prompt those who become newly insured to increase their spending on health care to about 5 percent, on average.

Researchers also evaluated whether any change would occur in the proportion of population likely to experience very high rates of spending on health care. They found that about one-quarter of the nation's population would spend more than 10 percent of their income on health care after the policy change, the same proportion that faces high levels of spending today.

A unique feature of the RAND analysis is the ability to estimate the impact of these policy changes on the health of the nation. Researchers estimate that under full implementation, the white paper's proposal would add 9.3 million life years to the U.S. population.

RAND developed COMPARE to provide objective facts and analysis to inform the dialogue about health policy options. Individuals, corporations, corporate foundations, philanthropic foundations, and health system stakeholders have funded COMPARE. The new analysis is presented on the Web site's "dashboard" (see http://randcompare.org/analysis/), which allows users to compare different policy options across a broad set of criteria.

RAND Health, a division of the RAND Corporation, is the nation's largest independent health policy research program, with a broad research portfolio that focuses on quality, costs and health services delivery, among other topics. RAND Health is the developer of COMPARE (Comprehensive Assessment of Reform Efforts), a one-of-a-kind online resource that provides objective analysis about national health care reform proposals.

The RAND Corporation is a nonprofit research organization providing objective analysis and effective solutions that address the challenges facing the public and private sectors around the world. To sign up for RAND e-mail alerts: http://www.rand.org/publications/email.html .

A Public Option that Works

By WILLIAM H. DOW, ARINDRAJIT DUBE and CARRIE HOVERMAN COLLA

Published: August 21, 2009

TWO burning questions are at the center of America’s health care debate. First, should employers be required to pay for their employees’ health insurance? And second, should there be a “public option” that competes with private insurance?

Answers might be found in San Francisco, where ambitious health care legislation went into effect early last year. San Francisco and Massachusetts now offer the only near-universal health care programs in the United States.

The early results are in. Today, almost all residents in the city have affordable access to a comprehensive health care delivery system through the Healthy San Francisco program. Covered services include the use of a so-called “medical home” that coordinates care at approved clinics and hospitals within San Francisco, with both public and private facilities. Although not formally insurance, the program is tantamount to a public option of comprehensive health insurance, with the caveat that services are covered only in the city of San Francisco. Enrollees with incomes under 300 percent of the federal poverty level have heavily subsidized access, and those with higher incomes may buy into the public program at rates substantially lower than what they would pay for an individual policy in the private-insurance market.

To pay for this, San Francisco put into effect an employer-health-spending requirement, akin to the “pay or play” employer insurance mandates being considered in Congress. Businesses with 100 or more employees must spend $1.85 an hour toward health care for each employee. Businesses with 20 to 99 employees pay $1.23 an hour, and businesses with 19 or fewer employees are exempt. These are much higher spending levels than mandated in Massachusetts, and more stringent than any of the plans currently under consideration in Congress. Businesses can meet the requirement by paying for private insurance, by paying into medical-reimbursement accounts or by paying into the city’s Healthy San Francisco public option.

There has been great demand for this plan. Thus far, around 45,000 adults have enrolled, compared to an estimated 60,000 who were previously uninsured. Among covered businesses, roughly 20 percent have chosen to use the city’s public option for at least some of their employees. But interestingly, in a recent survey of the city’s businesses, very few (less than 5 percent) of the employers who chose the public option are thinking about dropping existing (private market) insurance coverage. The public option has been used largely to cover previously uninsured workers and to supplement private-coverage options.

Through our experience working on health-care-reform efforts in California and Washington (one of us worked for President George W. Bush’s Council of Economic Advisers), we have seen how concern over employer costs can be a sticking point in the health care debate, even in the absence of persuasive evidence that increased costs would seriously harm businesses. San Francisco’s example should put some of those fears to rest. Many businesses there had to raise their health spending substantially to meet the new requirements, but so far the plan has not hurt jobs.

As of December 2008, there was no indication that San Francisco’s employment grew more slowly after the enactment of the employer-spending requirement than did employment in surrounding areas in San Mateo and Alameda counties. If anything, employment trends were slightly better in San Francisco. This is true whether you consider overall employment or employment in sectors most affected by the employer mandate, like retail businesses and restaurants.

So how have employers adjusted to the higher costs, if not by cutting jobs? More than 25 percent of restaurants, for example, have instituted a “surcharge” — about 4 percent of the bill for most establishments — to pay for the additional costs. Local service businesses can add this surcharge (or raise prices) without risking their competitive position, since their competitors will be required to take similar measures. Furthermore, some of the costs may be passed on to employees in the form of smaller pay raises, which could help ward off the possibility of job losses. Over the longer term, if more widespread coverage allows people to choose jobs based on their skills and not out of fear of losing health insurance from one specific employer, increased productivity will help pay for some of the costs of the mandate.

The San Francisco experiment has demonstrated that requiring a shared-responsibility model — in which employers pay to help achieve universal coverage — has not led to the kind of job losses many fear. The public option has also passed the market test, while not crowding out private options. The positive changes in San Francisco provide a glimpse of what the future might look like if Washington passes substantial health reform this year.

William H. Dow, who was a senior economist for President George W. Bush’s Council of Economic Advisers, is a professor of health economics at the University of California, Berkeley, where Arindrajit Dube is an economist at the Institute for Research on Labor and Employment and Carrie Hoverman Colla is a doctoral student in health economics.

A thoughtful insight

Excerpt from a middle America Professional news editor

August 24,2009

As you read this, unemployed people are wondering if the cancer treatments they endured five years ago will prevent them from getting an insurance policy.

Hardworking families are filing bankruptcy papers because of medical bills they can’t begin to pay.

The 24-hour news cycle spins and spins, the pundits talk and talk, and the Internet rumors fly. It’s all a great, captivating show but it is surreal. Reality is the stories playing out in our communities, and I fear we’re losing sight of them.

Editorial board member Barbara Shelly can be reached at bshelly@kcstar.com or 816-234-4594. She blogs at voices.kansascity.com