The Economic Crisis and Medical Care Usage
The economic crisis has adversely affected access to medical care for millions of Americans, according to a recent study. Cutbacks in obtaining routine medical care have been particularly sharp, and have been much deeper in the US than in countries with government-run health care systems.
The study, “The Economic Crisis and Medical Care Usage,” co-authored by Annamaria Lusardi, Daniel Schneider, and Peter Tufano and published by the National Bureau of Economic Research, analyzed data from surveys conducted in the US, Britain, Canada, France and Germany.
It found that “Americans, who face higher out-of-pocket health care costs, have reduced their routine medical care” much more than people in the other countries, with more than a quarter of US respondents reporting they have cut back on routine care. In all of the countries studied, reductions in income and job loss were strongly associated with cutbacks in routine medical care.
In the US, however, where individuals are responsible for paying a much greater proportion of health care costs, reductions in routine care were far more dramatic. The study also noted that about 15 percent of people in the US lack health insurance of any kind, further compounding the economic burden.
The study interviewed a total of 6,485 respondents between the ages of 18 and 65, including 2,148 in the US, 1,001 in Britain, 1,132 in Canada, 1,097 in France and 1,107 in Germany. Although the samples were designed to be nationally representative of each country’s population, the authors note that the study likely under-represented the most vulnerable groups in society, including immigrant workers and the homeless.
Survey participants were queried on the use of routine medical care since the onset of the global economic crisis in 2007. Respondents were asked, “Since the economic crisis have you increased, decreased, or kept the same trips to the doctor for routine medical and non-emergency treatment?”
Among Americans responding, 26.5 percent reported reducing their use of routine medical care during this period. Figures for reductions in care in the other countries were significant, but lower: 5.3 percent in Canada, 7.6 percent in Britain, 10.3 percent in Germany and 12 percent in France.
The study also showed that “change in wealth” was more dramatic in the US than in the other countries, with 55 percent of US respondents reporting a loss in income due to the recession. This includes 13 percent who lost less than 10 percent of wealth, 21.5 percent whose wealth decreased by 10-29 percent, 11.3 percent whose wealth decreased by 30-50 percent, and 9 percent whose wealth was cut by more than 50percent.
Across all the countries studied, those with lower incomes were significantly more likely to have cut back on routine medical care. Relative to individuals in the top income quartile, those in the lower three quartiles were more likely to have reduced care: bottom quartile, 5.7 percent more likely; 26-50th quartile, 5.9 percent more likely; and 51st to 75th quartile, 2 percent more likely.
The young were most likely to have cut back on routine care. Compared to those aged 50 to 65, individuals ages 16-49 were about 8 percent more likely to have cut back, with the youngest, under 25 years of age, 11.7 percent more likely to have reduced routine care.
The study showed economic distress has had a direct impact on an individual’s access to routine medical care, with job loss being particularly devastating. Respondents reported being unemployed and looking for work at the following rates: Germany, 14.4 percent; United States, 13.8 percent; France, 10.1 percent, Britain, 6.6 percent (Canadian unemployment figures were not collected).
It is notable that despite the higher jobless rate found by the study in Germany, 10.3 percent of individuals in Germany reported cutting back on routine care compared to 26.5 percent of people in the US.
Among respondents of all countries, those who said they were unemployed and looking for work reported cutting back on routine care by 28.3 percent, compared to a 15.7 percent reduction for the balance of study participants.
A survey by the American Hospital Association (AHA) also demonstrates the impact of the recession on patient care in the US. According to data from the AHA’s “Telling the Hospital Story Survey,” 70 percent of hospitals reported lower overall patient volumes and 72 percent reported depressed levels of elective procedures.
The study also showed that economic hardship in the current crisis has resulted in a dramatic 65 percent increase in enrollment in Medicaid, the Children’s Health Insurance Program (CHIP), and other programs for low-income individuals and families. Nearly nine in ten hospitals also reported an increase in medical care for which the hospital received no payment at all.
In the face of these conditions, hospitals responding to the survey report making cutbacks that will serve to reduce the quality and quantity of patient care. More than half of hospitals, 53 percent, have reduced their staffs and 25 percent have cut medical services. Of those hospitals making such cutbacks, 89 percent indicated they have not added back employees that had been cut and 98 percent have not restored services.
Taken together, these two surveys indicate the severely detrimental impact of the economic crisis on the provision of basic medical services, particularly in the US. Cutbacks in routine medical care—including annual exams, immunizations and screening tests for cancers and other medical conditions—will inevitably result in increased levels of disease and loss of life.
Hardest hit by these reductions in services are those individuals and families who have seen large cuts in income as well as job losses. This situation will worsen with the implementation of the Obama administration’s health care legislation, which aims to slash hundreds of billions from the Medicare program for the elderly and force millions of people into the cut-rate Medicaid program for the poor.
The Obama health bill will also establish an Independent Payment Advisory Board, a 15-member panel appointed by the president to recommend cutbacks in Medicare payments to doctors and health care providers. The board will inevitably take aim at “excessive” Medicare spending and “unnecessary” tests and procedures, worsening what is already a desperate health care crisis for millions of older Americans and their families
The Remedy: Single Payer
Single-payer national health insurance is a system in which a single public or quasi-public agency organizes health financing, but delivery of care remains largely private.
Currently, the U.S. health care system is outrageously expensive, yet inadequate. Despite spending more than twice as much as the rest of the industrialized nations ($8,160 per capita), the United States performs poorly in comparison on major health indicators such as life expectancy, infant mortality and immunization rates. Moreover, the other advanced nations provide comprehensive coverage to their entire populations, while the U.S. leaves 46.3 million completely uninsured and millions more inadequately covered.
The reason we spend more and get less than the rest of the world is because we have a patchwork system of for-profit payers. Private insurers necessarily waste health dollars on things that have nothing to do with care: overhead, underwriting, billing, sales and marketing departments as well as huge profits and exorbitant executive pay. Doctors and hospitals must maintain costly administrative staffs to deal with the bureaucracy. Combined, this needless administration consumes one-third (31 percent) of Americans’ health dollars.
Single-payer financing is the only way to recapture this wasted money. The potential savings on paperwork, more than $350 billion per year, are enough to provide comprehensive coverage to everyone without paying any more than we already do.
Under a single-payer system, all Americans would be covered for all medically necessary services, including: doctor, hospital, preventive, long-term care, mental health, reproductive health care, dental, vision, prescription drug and medical supply costs. Patients would regain free choice of doctor and hospital, and doctors would regain autonomy over patient care.
Physicians would be paid fee-for-service according to a negotiated formulary or receive salary from a hospital or nonprofit HMO / group practice. Hospitals would receive a global budget for operating expenses. Health facilities and expensive equipment purchases would be managed by regional health planning boards.
A single-payer system would be financed by eliminating private insurers and recapturing their administrative waste. Modest new taxes would replace premiums and out-of-pocket payments currently paid by individuals and business. Costs would be controlled through negotiated fees, global budgeting and bulk purchasing.
The links below will lead you to more specific information on the details of single-payer.
Wednesday, August 25, 2010
Saturday, August 21, 2010
Dr. Hsiao Lays the Groundwork for his Designs
By Ethan Parke, Vermont for Single Payer Supporter, Montpelier
It was an impressive performance on August 5th by Professor William Hsiao, the Harvard health policy economist who has been hired to design three universal health care systems for Vermont. Dr. Hsiao was in Montpelier to give a progress report to the Vermont Health Care Reform Commission.
Using his courteous, often humorous demeanor, and his total command of the subject, Dr. Hsiao deftly fielded skeptical questions and gave every indication that the health care designs he and his team are working on will be comprehensive, evidence-based, and tailored to fit Vermont.
“We’re not doing a design in an ivory tower,” said Dr. Hsiao. “We’re designing something in the real world.” Hsiao said his researchers have been interviewing health care providers, insurance companies, and state officials, to gather background data and to fully understand Vermont’s health care problems and the possible solutions.
Throughout Hsiao’s presentation, what came clear was that in order to control costs and to make health care universal, there must be a rational system. Right now Vermont only has a patchwork of unaffordable insurance based on adverse selection, various government programs, problematic fee-for-service provider compensation, and fragmented financing, Hsiao said.
“No country can control costs unless it has a health care system operating as a whole,” declared Dr. Hsiao. He said Taiwan reduced costs by 8 percent in the first year of its universal health care program—but only because it created a single payer financing mechanism.
State Representative George Till, who is a physician, challenged that assumption. “I agree with your diagnosis, but I don’t agree that the problem must be corrected by a single payer system,” said Till. He asked Hsiao if costs couldn’t be controlled simply by paying all providers the same rate, much like Medicare does.
Dr. Hsiao replied that mandating a uniform payment rate is one aspect of a single payer system, but that in order to control costs you must also unify the payment source as much as possible. Only by taking this extra step can cost shifting be eliminated, and fraud and abuse be kept in check, he said. Hsiao’s implication was that a system that consolidates financing can build in incentives and disincentives to achieve desired results, whereas fragmented financing encourages each provider to find ways for others to pick up costs.
Another commission member, State Senator Kevin Mullen, voiced skepticism on two issues. He said when lawmakers tried to enact health care reform several years ago, IBM objected that it would not want to have employee insurance in Vermont that was different from insurance covering its employees elsewhere. Mullen also said he thought the federal ERISA law would block reform efforts in Vermont. “I worry that we will just be spinning our wheels again,” said Mullen. “I would like to see some real progress next year.”
Hsiao deflected the point about IBM, saying that a company doing business all over the world would be very used to publicly financed health care systems. On the subject of ERISA, Dr. Hsiao joked that “It’s my nightmare.” He said he knows full well that the ERISA law has many interpretations, but added that he is talking to experts at Harvard Law School about the issue.
Two commission members, Con Hogan and State Representative Topper McFaun, said they hoped Hsiao’s work would include as much economic analysis as possible.
Unfortunately, said Hsiao, there is only so much his team can accomplish with the funding that has been provided and the short time frame allowed. A key member of Hsiao’s team, renowned MIT economist Jonathan Gruber, will test the three designs using a micro-economic model, Hsiao said. Gruber’s job will be to see how the designs would affect households and employers, but a full macro-economic analysis, looking at the effect of reform on the entire economy, is beyond the scope of Hsiao’s contract. Pressed on this point, Hsiao said he will certainly provide economic analysis, but it will be mostly qualitative and based on economic theory, not on precise numbers.
The three models to be designed by Hsiao’s team are (1) a state run single payer system, (2) a public option within a framework prescribed by the law passed last spring by the legislature, and (3) a consultant-designed plan. This third plan, according to Hsiao, will be designed within political and institutional constraints posed in Vermont.
These constraints will be determined, in part, through “stakeholder analysis,” said Hsiao. It was unclear how the third plan might differ from the first, especially given Hsiao’s successful experience with single payer systems worldwide. One possible explanation is that the first design would be more or less a “pure single payer” and the third plan might be a single payer that is modified to fit Vermont realities.
Time will tell which design, if any, the next legislature and the new governor will decide to implement. For the time being, however, single payer supporters should be thrilled that the world’s foremost health system designer is working for Vermont. Dr. Hsiao’s breadth of knowledge, his pragmatic approach, his optimism, and his matter-of-fact endorsement of single payer dazzled his audience last Thursday in Montpelier.
Vermont for Single Payer Blog
It was an impressive performance on August 5th by Professor William Hsiao, the Harvard health policy economist who has been hired to design three universal health care systems for Vermont. Dr. Hsiao was in Montpelier to give a progress report to the Vermont Health Care Reform Commission.
Using his courteous, often humorous demeanor, and his total command of the subject, Dr. Hsiao deftly fielded skeptical questions and gave every indication that the health care designs he and his team are working on will be comprehensive, evidence-based, and tailored to fit Vermont.
“We’re not doing a design in an ivory tower,” said Dr. Hsiao. “We’re designing something in the real world.” Hsiao said his researchers have been interviewing health care providers, insurance companies, and state officials, to gather background data and to fully understand Vermont’s health care problems and the possible solutions.
Throughout Hsiao’s presentation, what came clear was that in order to control costs and to make health care universal, there must be a rational system. Right now Vermont only has a patchwork of unaffordable insurance based on adverse selection, various government programs, problematic fee-for-service provider compensation, and fragmented financing, Hsiao said.
“No country can control costs unless it has a health care system operating as a whole,” declared Dr. Hsiao. He said Taiwan reduced costs by 8 percent in the first year of its universal health care program—but only because it created a single payer financing mechanism.
State Representative George Till, who is a physician, challenged that assumption. “I agree with your diagnosis, but I don’t agree that the problem must be corrected by a single payer system,” said Till. He asked Hsiao if costs couldn’t be controlled simply by paying all providers the same rate, much like Medicare does.
Dr. Hsiao replied that mandating a uniform payment rate is one aspect of a single payer system, but that in order to control costs you must also unify the payment source as much as possible. Only by taking this extra step can cost shifting be eliminated, and fraud and abuse be kept in check, he said. Hsiao’s implication was that a system that consolidates financing can build in incentives and disincentives to achieve desired results, whereas fragmented financing encourages each provider to find ways for others to pick up costs.
Another commission member, State Senator Kevin Mullen, voiced skepticism on two issues. He said when lawmakers tried to enact health care reform several years ago, IBM objected that it would not want to have employee insurance in Vermont that was different from insurance covering its employees elsewhere. Mullen also said he thought the federal ERISA law would block reform efforts in Vermont. “I worry that we will just be spinning our wheels again,” said Mullen. “I would like to see some real progress next year.”
Hsiao deflected the point about IBM, saying that a company doing business all over the world would be very used to publicly financed health care systems. On the subject of ERISA, Dr. Hsiao joked that “It’s my nightmare.” He said he knows full well that the ERISA law has many interpretations, but added that he is talking to experts at Harvard Law School about the issue.
Two commission members, Con Hogan and State Representative Topper McFaun, said they hoped Hsiao’s work would include as much economic analysis as possible.
Unfortunately, said Hsiao, there is only so much his team can accomplish with the funding that has been provided and the short time frame allowed. A key member of Hsiao’s team, renowned MIT economist Jonathan Gruber, will test the three designs using a micro-economic model, Hsiao said. Gruber’s job will be to see how the designs would affect households and employers, but a full macro-economic analysis, looking at the effect of reform on the entire economy, is beyond the scope of Hsiao’s contract. Pressed on this point, Hsiao said he will certainly provide economic analysis, but it will be mostly qualitative and based on economic theory, not on precise numbers.
The three models to be designed by Hsiao’s team are (1) a state run single payer system, (2) a public option within a framework prescribed by the law passed last spring by the legislature, and (3) a consultant-designed plan. This third plan, according to Hsiao, will be designed within political and institutional constraints posed in Vermont.
These constraints will be determined, in part, through “stakeholder analysis,” said Hsiao. It was unclear how the third plan might differ from the first, especially given Hsiao’s successful experience with single payer systems worldwide. One possible explanation is that the first design would be more or less a “pure single payer” and the third plan might be a single payer that is modified to fit Vermont realities.
Time will tell which design, if any, the next legislature and the new governor will decide to implement. For the time being, however, single payer supporters should be thrilled that the world’s foremost health system designer is working for Vermont. Dr. Hsiao’s breadth of knowledge, his pragmatic approach, his optimism, and his matter-of-fact endorsement of single payer dazzled his audience last Thursday in Montpelier.
Vermont for Single Payer Blog
Friday, August 20, 2010
"We believe Medicare For All is inevitable in the US. It's up to all of us to determine when the inevitable becomes reality."
Single Payer Health Care: Medicare For All
A trio of progressives in Congress invoked the 45th birthday of Medicare Friday to call for a national single payer health insurance system, predicting it’s “inevitable” if Americans want lower costs.
“It has never been more important to have a strong movement behind Medicare for All,” wrote Sen. Bernie Sanders (I-VT) and Reps. Dennis Kucinich (D-OH) and John Conyers (D-MI) in a letter addressed to “friends of health care for all.”
The trio, all of whom have sponsored single payer bills, argued that cost controls are insufficient in the health reform law enacted March and claimed the growing need to save money would galvanize support for such a system.
“As we honor Medicare’s 45th birthday today, I am proud to say that the movement for Medicare for All remains strong and vibrant,” Kucinich said.
While various lawmakers have endorsed single payer proposals, it remains far out of the reach of Congress due to the prevalence of anti-government public sentiments and the political influence of the private insurance industry, which would be torn down.
The Affordable Care And Patient Protection Act, enacted by President Barack Obama in March, is projected by the Congressional Budget Office to cover nearly all Americans and reduce the deficit. It has no new public insurance programs.
Although Sanders, Kucinich and Conyers all voted for the new law, they said in the letter that it “does not adequately contain costs” for Americans.
“In my view, the single-payer approach is the only way we will ever have a cost-effective, comprehensive health care system in this country,” said Sanders.
A Commonwealth Fund report last month found that Americans spend roughly twice as much on medical costs than residents of other industrialized nations yet the US system lags in areas of quality, efficiency and equity.
Sanders and Kucinich have led on pushing for national or state-based single payer programs in the Senate and House respectively, but have failed to garner the necessary support.
According to reports, Medicare, a single payer system for the elderly in America, has lower overhead costs and higher satisfaction rates than private insurance on average.
The White House and Democratic National Committee on Friday proclaimed their commitment to sustaining and strengthening Medicare.
“We believe Medicare for All is inevitable in the United States,” the lawmakers wrote. “It is up to all of us to determine when the inevitable becomes reality.”
A trio of progressives in Congress invoked the 45th birthday of Medicare Friday to call for a national single payer health insurance system, predicting it’s “inevitable” if Americans want lower costs.
“It has never been more important to have a strong movement behind Medicare for All,” wrote Sen. Bernie Sanders (I-VT) and Reps. Dennis Kucinich (D-OH) and John Conyers (D-MI) in a letter addressed to “friends of health care for all.”
The trio, all of whom have sponsored single payer bills, argued that cost controls are insufficient in the health reform law enacted March and claimed the growing need to save money would galvanize support for such a system.
“As we honor Medicare’s 45th birthday today, I am proud to say that the movement for Medicare for All remains strong and vibrant,” Kucinich said.
While various lawmakers have endorsed single payer proposals, it remains far out of the reach of Congress due to the prevalence of anti-government public sentiments and the political influence of the private insurance industry, which would be torn down.
The Affordable Care And Patient Protection Act, enacted by President Barack Obama in March, is projected by the Congressional Budget Office to cover nearly all Americans and reduce the deficit. It has no new public insurance programs.
Although Sanders, Kucinich and Conyers all voted for the new law, they said in the letter that it “does not adequately contain costs” for Americans.
“In my view, the single-payer approach is the only way we will ever have a cost-effective, comprehensive health care system in this country,” said Sanders.
A Commonwealth Fund report last month found that Americans spend roughly twice as much on medical costs than residents of other industrialized nations yet the US system lags in areas of quality, efficiency and equity.
Sanders and Kucinich have led on pushing for national or state-based single payer programs in the Senate and House respectively, but have failed to garner the necessary support.
According to reports, Medicare, a single payer system for the elderly in America, has lower overhead costs and higher satisfaction rates than private insurance on average.
The White House and Democratic National Committee on Friday proclaimed their commitment to sustaining and strengthening Medicare.
“We believe Medicare for All is inevitable in the United States,” the lawmakers wrote. “It is up to all of us to determine when the inevitable becomes reality.”
Thursday, August 19, 2010
We're working for single-payer "Medicare for all" health care as part of a Green New Deal. Join us:
Join the Green New Deal Coalition
The Green New Deal is an ambitious program to create economic prosperity together with ecological sustainability.
Here are the 10 policies you endorse by joining the Green New Deal Coalition:
1) Cut military spending at least 70%;
2) Create millions of green union jobs through massive public investment in renewable energy, mass transit and conservation;
3) Set ambitious, science-based greenhouse gas emission reduction targets, and enact a revenue-neutral carbon tax to meet them;
4) Establish single-payer "Medicare for all" health care;
5) Institute tuition-free public higher education;
6) Change trade agreements to improve labor, environmental, consumer, health and safety standards;
7) End counterproductive prohibition policies and legalize marijuana;
8) Enact tough limits on credit card interest and lending rates, progressive tax reform and strict financial regulation;
9) Amend the U.S. Constitution to abolish corporate personhood; and
10) Pass sweeping electoral, campaign finance and anti-corruption reforms.
The Green New Deal is an ambitious program to create economic prosperity together with ecological sustainability.
Here are the 10 policies you endorse by joining the Green New Deal Coalition:
1) Cut military spending at least 70%;
2) Create millions of green union jobs through massive public investment in renewable energy, mass transit and conservation;
3) Set ambitious, science-based greenhouse gas emission reduction targets, and enact a revenue-neutral carbon tax to meet them;
4) Establish single-payer "Medicare for all" health care;
5) Institute tuition-free public higher education;
6) Change trade agreements to improve labor, environmental, consumer, health and safety standards;
7) End counterproductive prohibition policies and legalize marijuana;
8) Enact tough limits on credit card interest and lending rates, progressive tax reform and strict financial regulation;
9) Amend the U.S. Constitution to abolish corporate personhood; and
10) Pass sweeping electoral, campaign finance and anti-corruption reforms.
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