Sick to Death of Managed Care

By Jayne Keedle

This article appeared in Hartford Advocate, October 21, 1999

The numbers are staggering. Health care costs in the U.S. add up to more than $1 trillion a year, or$4,000 per person annually. We pay twice as much as people living in Sweden, Germany and Canada -- and every man, woman and child in those counties has health care coverage.

By contrast, the latest American statistics show that 44.3 million Americans have no health insurance, an additional 40 million are underinsured and, according to a 1998 Census Bureau report, about 125,000 people lose coverage each month.

"It's untenable. In a free and civilized society, you can't have this number of people at risk for their very health," says Judith Kurland, the Boston-based regional director of the U.S. Department of Health and Human Services.

"We're seeing more people lose health insurance than gain it. That is foolhardy and dangerous," she adds. "The solution is we have to have universal health care."

Universal health care is not a new idea. In fact, it's been seriously proposed by politicians at least five times this century, beginning all the way back in 1915. It gained momentum in 1965, when Medicare was passed, against the wishes of the American Medical Association.

President Bill Clinton raised the issue most recently in 1994 -- to embarrassing defeat, largely because of a prevailing belief that for-profit businesses could do it better than government. That perception, however, is beginning to change.

"I conduct workshops, and I always ask people, 'Has your health delivery system changed in the last five years?'" says Diane Lardie, national coordinator of the Universal Health Care Action Network, a coalition of grassroots organizations dedicated to health care reform. "And everybody's has changed; they're paying more, they've had services denied."

More and more people are literally sick and tired of not being able to receive the care they need. Grassroots organizations are beginning to use this growing dissatisfaction as a rallying point to push elected officials to adopt the idea of universal health care. And for the first time, they're finding allies in the medical community.

Historically, doctors, and the American Medical Association in particular, have resisted the idea of government-run universal coverage. Their argument, says Dr. Quinten Young, founder of the Chicago-based 8,000-member Physicians for a National Health Program, was that they would lose their autonomy and be buried by governmental red tape.

Now, of course, physicians are overwhelmed by paperwork generated by the dozens of managed care and traditional indemnity insurance companies, in addition to governmental programs such as Medicare, Medicaid and SCHIP, that cover the elderly, the poor and children. Additionally, their diagnoses and treatment decisions are questioned or blocked by bureaucrats from managed care companies, the subject of both litigation and new legislation with the Patients' Bill of Rights. As a result, something almost unheard of is beginning to happen.

"More and more you hear physicians whisper about universal health care," says Dr. Frank Scarpa, president of the Fairfield County Medical Association.

Many, like Scarpa, have decided to stop whispering and, instead, are speaking out. Scarpa, for instance, brought up the issue of universal care at a forum on health care hosted by Congressman Christopher Shays (R-4th District) last week. And he wasn't alone.

"Most reasonable people would say if there are 44.3 million people without insurance, something ought to be done universally," says Joseph Coatsworth, vice president for government relations for the Connecticut Hospital Association, which represents 31 non-profit hospitals, many already struggling to keep their heads above water financially.

Academic medical facilities, in particular, are in dire straits. As teaching and research facilities, they have higher operating costs that managed care companies don't want to pay for. They have come out 3 to 1 in favor of a single payer system.

"All kinds of people who were comfortable in 1992 are not comfortable now," says Lardie.

There are a number of reasons why. More people don't have any health insurance in part because of the way the workforce has changed. Currently, the fastest growing sector of the economy is in the service industry, which traditionally hasn't provided many benefits. Add to that a larger percentage of people who are self-employed, working as independent contractors or consultants, and the number of working people without insurance is much larger than it used to be.

Ironically, as people are losing insurance, health care costs are rising. Part of this has to do with the rising expense of new pharmaceuticals. At the same time, our population is aging. Thanks to medical advances, doctors can extend life expectancy well beyond the three-score years and 10 Medicare planned for. As Scarpa sees it, "We may be a victim of our own success."

As the baby boom generation moves into its golden years, costs are only going to increase. At the same time, managed care has set limits on treatment. The Federal Balanced Budget Act of 1997 also set hospital spending limits. Today, health care providers say they are no longer being reimbursed for the cost of treating patients. And that has prompted a sea change in the way doctors and hospitals feel about universal health care.

"We are all health care consumers, and your uncertainty is the same uncertainty providers have -- are we going to be paid?" says Coatsworth.

Interestingly, from the point of view of most health care providers, universal care is already a fact of life. Doctors and hospitals are ethically obligated to treat all patients, regardless of their ability to pay. So what people like Coatsworth and Scarpa are really talking about is universal coverage, a system under which everyone's health care needs will be paid for.

Although Scarpa and Coatsworth studiously avoid discussing solutions, both say it's unlikely a single-payer government system similar to the one in Canada would find acceptance here. On the other hand, people like Dr. Quinten Young, a founder of the 8,000 member strong Physicians For a National Health program sees the single payer plan as the only cost-effective alternative.

In the early 1990s, remember, managed care was viewed as the solution. It was posited as the panacea to rising medical fees and viewed as a model of care that emphasized prevention over those costlier cures. While the shift towards managed care certainly addressed both those issues, today it's seen as a billion-dollar industry that puts profits before people. A recent Connecticut Hartford Courant poll revealed that while people say they still have faith in their doctors, many no longer trust the managed care system.

Faced with rising public awareness of the barriers to obtaining health care, lawmakers struggle to enact legislation designed to combat some of the worst offenses. Proposals such as the Patients' Bill of Rights, the SCHIP program and the Kennedy Kassenbaum Act have been passed to attempt to address the most glaring problems, but they only chip away at the edges of the issue.

Being able to sue an HMO for denying treatment doesn't help the person now who can't benefit from that lifesaving operation. Nor is litigation likely to lead to anything but inflated insurance premiums. (See "The Cost of True Reform," pg. 19)

The SCHIP program, like the Husky program in Connecticut, was designed to provide coverage for children of working parents without medical benefits, but too few people know about these programs and enrollment is low.

The Kennedy Kassenbaum Act was supposed to prevent insurers from denying coverage for people with pre-existing conditions, but the bill omitted any mention of rates. Thanks to that loophole, fewer people are refused coverage, but they're paying through the nose to get it.

Kurland says this piecemeal approach to problems in the system hinders the efforts of those interested in real reform. "People think they've identified the problem and the solution," says Kurland. "If we have to do it incrementally, so be it. But the increments have to be large and they have to be fast."

Ultimately, the battle to pass these meager reforms has only distracted everyone from the main issue: too many people don't have access to affordable health care.

"We have a very complex system that was never designed. We grew by accident," says Lardie. "So we've got a gerrymandered non-system that really needs a major overhaul."

The problem, of course, is getting government to act.

Insurance companies collectively receive $250 billion of America's one trillion health care dollars, and they're not afraid to use it to fight any and all proposals that threaten their position. In 1994, a single-payer resolution was put on the California ballot. The insurance industry spent $10 million on a misinformation campaign to defeat it.

And that was just one proposal in one state. The industry will spend astronomical amounts should a national movement gain momentum. Lobbyists for the insurance industry, pharmaceutical companies and the growing number of for-profit health care institutions have the cash to buy a lot of political goodwill. So much, in fact, that the ever forthright Kurland says, "One of the best things we could do to improve health would be to reform campaign finance."

That's about as realistic at the moment as finding a presidential candidate to come out in favor of the single-payer health system. The spectacular failure of Clinton's complicated, lengthy and ultimately costly proposal for a multiple-payer system has scared all other presidential candidates away from the issue ever since 1994.

Initially, single-payer proponents were optimistic Democratic Presidential hopeful Bill Bradley would make universal health care a core issue.

"We should move from universal care to universal coverage," he was quoted in April in the Washington Post talking to the New York Academy of Medicine. "We should commit to the goal that every American has health care insurance and we will not back away from that, no matter how challenging it will be to find the best means to get there, even if it is phased in."

His proposal so far has disappointed. PNHP's Dr. Ida Hellander describes Bradley's idea to mandate parents cover their children, as "thin gruel." Her colleagues, Drs. David Himmelstein and Steffie Woolhandler, denounced his plan in an editorial in USA Today as a rehashing of failed reforms that would increase costs instead of cutting them. "The American people will have to look elsewhere for health-care leadership," the two concluded.

The Universal Health Care Action Network has decided to look to Congressional candidates for change. The nonprofit is expected to announce next week a new grassroots campaign to pressure candidates for Congress to make universal health care one of their top priorities.

How Congress might achieve that is less obvious. Given the size and diversity of the U.S. population, and the current resistance to big government programs or tax increases, Shays doesn't see much support for a single-payer system in this country.

"One size doesn't fit all. I believe there are limits to what the federal government can do," says Shays. "Some of the greatest innovations come at the state level."

Indeed, leadership on the issue of universal health coverage is more likely to be found at the state level, just as Canada's single-payer policy began in the provinces before being adopted countrywide.

In Chicago, PNPH is pushing a constitutional amendment that would make universal health care a right, thereby forcing the Illinois legislature to act on the issue. Polls show citizen support for such a measure in that state is overwhelming.

Another state being closely watched, in part because of its proximity to the Capitol, is Maryland. Last month, under the leadership of Baltimore City Health Commissioner Dr. Peter Bielenson, the recently formed Maryland Citizen's Health Initiative Education Fund launched a massive campaign for universal health care.

In August, the Initiative released the results of a survey, conducted by Penn, Schoen & Berland Associates on its behalf. It found that, "87 percent of Marylanders say that every working resident is entitled to quality health care...78 percent say every Maryland resident is entitled to comprehensive health care coverage without reference to employment....They strongly support a proposal to provide health care coverage for all Maryland residents." The survey also found that residents would vote for any candidate, Republican or Democrat, who supported a universal coverage proposal.

Now the Initiative hopes to get 2,000 organizations to publicly support the idea of universal health care. That, says Initiative Executive Director Vincent DeMarco, should be sufficient to force the Maryland legislature to take up the issue.

With the nuts and bolts of any reform set to be hashed out at the legislative level, reform advocates are primarily concerned with drumming up the public support needed to make sure that debate takes place.

Past proposals for universal health coverage, however, offer some suggestions for how a government-run program might work.

In 1994, a bill modeled on Canada's single-payer system introduced by Congressman James McDermott (D-WA) attracted about 100 co-sponsors. Under the American Health Security Act. Instead of paying ever-rising premiums to profit-driven insurance companies (and battling to get our money's worth), people pay the government. The government, then, becomes the "single payer" that finances health insurance for all Americans equally.

States would negotiate fees with health care providers, who would be paid on a fee-for-service basis. Government would control price increases. State and federal governments would also save money by eliminating the need to administer dozens of other insurance programs provided through workers' compensation benefits, the Veterans administration, Medicaid, Medicare and the SCHIP program for children of the working poor. The large pool of participants in one insurance program would also spread the risk more evenly, keeping costs down.

Consumers would have unrestricted freedom to choose their own health care providers. There would be no deductibles, no co-payments, no forms to fill out. Health care providers would save money on administrative costs. Medical teaching and research facilities could be fully-funded. The savings realized would keep the overall cost of providing universal health coverage down.

Compared to our current exorbitantly priced mishmash of programs, this is a brilliantly simple plan, one that could have proven as cost effective as Canada's and provided every American with health insurance for life.

It was, of course, defeated.