Critical: What We Can Do About the Health-Care Crisis

    by Tom Daschle

Reviewed by Theresa Welsh

Former Senator Tom Daschle, once slated to be Secretary of Health and Human Services in the Obama administration, understands the health care problem. He "gets it" that millions of Americans do without the health care they need because health insurance is too expensive and, for many, unavailable at any price. He knows that Americans are driven to bankruptcy by their high medical bills, and he repeats in this book many of the horror stories I've heard before and many new ones as well. I am glad that he is listening to these stories.

DECLINE OF EMPLOYER-PROVIDED HEALTH INSURANCE

I am also glad that he recognizes that getting health insurance through an employer is a practice that no longer works for millions of Americans. He writes about the "increasing number of independent contractors, temporary employees, and part-time employees…" who do not qualify for employer-provided insurance. I have been one of those workers and I've seen the options shrink for anyone who is part of the contingent or self-employed workforce. Daschle has a good sense that an employer-based system cannot meet our needs. Nor, in my opinion, is it fair. Why should people who work for large, prosperous companies get better health care than someone who works for a neighborhood restaurant or does free-lance writing? Why should your employment situation determine whether or not you get health care? No other country on earth has such a system, and many American employers find it an increasing burden that puts them at a disadvantage in a global economy.

HEALTH CARE REFORM: A LONG TIME COMING

The book has a nice summary of historic events that shaped our current non-system, including a few I didn't know. I didn't realize that Teddy Roosevelt made National Health Insurance part of his platform in 1912 or that the labor movement tried to get government-funded health insurance way back in 1914. It was opposition to this that led some employers to consider providing insurance to their employees. During the Depression years, hospitals tried to keep their beds filled by offering prepaid plans. These later evolved into the Blue Cross plans that originally were based on a social insurance model but later adopted the same practices as commercial insurance companies.

But the modern history of attempts to bring government-funded universal coverage to Americans begins with Franklin Roosevelt. He intended to give us universal health care in the Social Security Act, but, facing serious opposition, mainly from the AMA, he pushed the legislation through without the health care provision. It wasn't until the administration of Lyndon Johnson that we got Medicare and Medicaid. These government-funded plans have helped millions, but they exist along with for-profit insurance companies whose objective is to make money, not help people who need medical care. Our legacy is an unplanned, almost accidental, health care environment that does not serve the American people and is so expensive that, if costs continue rising at the same rate, health care will consume 100% of our income by 2025. Obviously, this is not sustainable.

A "HEALTH CARE BOARD" TO SORT OUT WHAT WORKS?

While I'm satisfied Daschle understands the severity of the problem, I'm not sure he has a handle on the best solution. He does have one very good idea though, and that is that we should have a national health board that oversees health policy and determines the details of how a reformed health care system should work. He compares this to the Federal Reserve Board which oversees banking and financial institutions. Despite the current financial melt-down, which some might say shows the Federal Reserve can't guarantee financial stability, we might be in even bigger trouble if we didn't have an independent board capable of acting quickly, once the danger to our economy is obvious. Any concept of having a group of experts deal with the details of running a complex system like health care or financial markets is subject to the expertise and ethical principles of those who serve on the board. But I think our President and his advisors could find capable people who would operate in the public interest.

This is a good idea because, as Daschle points out, our Congressmen and Senators are hardly health care experts and most probably don't know or understand the complexity of delivering health care to a nation. For them to decide all the details of how health care should work seems inappropriate, and is a slow and clumsy process when changes are needed. Congress should lay out broad principles, then leave it to the board to come up with the details.

CAN INSURANCE COMPANIES DELIVER US WHAT WE NEED?

But even using broad strokes, a number of decisions must be made up front. Daschle does not suggest kicking out the insurance companies and going with a pure government-funded, single-payer system. Why not? He mentions the Massachusetts plan in a favorable light a number of times in the book, but that plan still leaves large numbers of people uninsured, despite the "individual mandate" that all residents must buy insurance. People do not comply because they still can't afford the premiums or feel the skimpy coverage is not worth the price of the monthly premium.

If you postulate a plan that says "we'll use private insurance, but we'll subsidize people below a certain income level" then you have to have some way to determine who qualifies for the subsidy. You have to create a bureaucracy to constantly requalify people based on their income. You have to make some provision for the fact that people can lose their income and it doesn't conveniently happen at one time of the year when policies come up for renewal. Someone with a job today can pay his premium, but next month when he's laid off, maybe he can't. How fast can you get him a subsidy? Insurance companies cancel people when they don't make a payment. Since peoples' circumstances can change, you will still have people jumping from one plan to being uninsured to another plan, back and forth. The lack of continuity in our coverage is a major problem with what we have, and why I don't buy the argument that "some people like what they have." Do they like that they can lose "what they have" as soon as they can't make a payment or lose their job? Why adopt a system that perpetuates this problem?

Daschle also talks about expanding use of the Federal Employees Health Benefit Plan (FEHB), but he doesn't explain what this is except to call it "a menu of private health plans." If it is just more private insurance, how can it help us out of the mess we have now?

It seems to me that if you polled the American people and asked if they prefer "what they have" to a plan that requires no monthly payments and can never be taken away, you'd hear a giant whooshing sound as Americans rushed to Washington to demand such a system from their representatives.

REAL HEALTH SECURITY MEANS AUTOMATIC, CONTINUOUS COVERAGE

What is health security? Is it just being able to say "I have health insurance?" I may have it today, but I can lose it tomorrow. Real security is a plan in which you are automatically enrolled and from which you can never be cut off. A plan that offers continuity of coverage and of care, that does not require you to requalify or recertify to stay in the plan. It means never having to worry about being bankrupted by sickness. And, in my humble opinion, it also means never having to deal with an insurance company. They are in the denial business, taking your money every month, then doing their best to deny you care when you need it. They have shown they cannot be trusted and they have no interest in building a system of universal health care coverage. Their purpose is solely for making profits and perpetuating their existence. Mr. Dashle, how can you support the concept "build on what we have now" when what we have now has failed us so badly and is so expensive it threatens our total economy?

The cost of health insurance will consume 100% of household income by 2025 if current trends continue.

Do Not Resuscitate: Why The Health Insurance Industry is Dying and How We Must Replace it

    by Dr. John Geyman

DOES OUR INSURANCE ACTUALLY PROTECT US?

In this highly researched and well-written book, Dr. John Geyman lays out in clear language the repeated failure of the private health insurance industry to bring affordable and comprehensive coverage to the American people. He demonstrates with a wealth of facts and figures how the inexorable and continuous rise of health care costs have meant insurance companies must work hard at excluding anyone who might require expensive treatment, reduce coverage for everyone and constantly raise premium rates.

This has led to awareness on the part of the public that their insurance may not protect them from medical bankruptcy. Americans now see that a serious illness can run up huge debt, wipe out their retirement savings and even mean selling their home to pay the bills. With this new public awareness, it is more and more difficult for health insurance companies to paint themselves as having the answer to our health care woes.

FOCUS ON PROFITS, NOT PEOPLE

The insurance industry was not always as focused on profits as it is now. Geyman takes us on a tour through the history of private coverage, showing how the original Blue Cross/Blue Shield plans were about spreading risk across a broad pool and keeping coverage affordable. As commercial carriers came into the market, they brought with them "medical underwriting" which looks at applicants in terms of how much they might cost the company. For-profit companies structured their coverage to minimize their risk (by denying coverage to those who need it the most) and maximize their profits. The Blues could not survive without doing the same thing. Today, most of the Blue Cross companies are for-profit, many having been acquired by one of the big players in health insurance.

While Congress has required employer-sponsored group insurance to take everyone in the group and charge them all the same rate, companies are free to deny coverage to people who apply on their own and to offer unaffordable rates to older, sicker people. Companies have a long list of risk factors that trigger a denial. Some of these: leukemia, schizophrenia, emphysema, obesity, high blood pressure, AIDS… and the list goes on. Here's some reasons used by California insurers in 2006 to deny coverage: attention deficit disorder, breast implants, infertility, herpes, gender reassignment, migraines, miscarriage, bed-wetting, ringworm, varicose veins… and more.

PUBLIC HEALTH INSURANCE PROFITING PRIVATE COMPANIES

Health insurance is largely regulated by the states, so there is great variation in what insurers can do. In many states, for example, coverage can include a lifetime dollar limit. The large players in health insurance operate nationally and can find many ways to game the system. While these companies like to disparage government health care programs, they have been quick to jump on the bandwagon of these same programs when they could profit from them. The Bush administration didn't think it worthwhile to increase funding for SCHIP (the Children's Health Insurance program) but allowed private insurance to profit by offering "Medicare Advantage" policies to Medicare recipients that pays companies an override over the cost of original Medicare, and it gave a windfall to the pharmaceutical industry through its so-called drug benefit; this is a boondoggle that is totally structured to "benefit" only the insurance and drug companies. Insurance companies have also been allowed into Medicaid, which is administered by the states, and, though it is supposed to cover health care for the poor, often has such a low threshhold that few qualify (and when they qualify, they have to constantly requalify).

It is partly this rush to profit from government programs that leads Geyman to his conclusion that the health insurance industry is a dying industry. With Americans demanding reform, the current health insurance industry has two enormous costs that are not present in publicly-funded coverage: The huge profits they take out and their lower efficiency.

AVOIDING "MEDICAL LOSS"

Health insurance companies regard the payments they make for subscribers' health care as "medical loss." Most try to keep this "loss" at under 80% (meaning they keep 20% of premium payment for administration and profit). This reminds me of another practice that I found outrageous when I first read about it. Pharmaceutical companies see opportunity in illness. They refer to various diseases as "markets" - as in "the cancer market" or the "diabetes market." Our disease is their profit center. For insurance companies, their profit center is healthy, younger people, certainly not those who actually need health care - insuring them would increase their "medical loss." These companies operate to retain their profit centers, and profits trump helping people.

Private insurance is massively less efficient than public insurance because of the large workforce needed to do underwriting, claims processing and denials. Some companies even do "rescissions" -- canceling someone's insurance when they get sick by claiming they lied or misrepresented something on their application. Between 2000 and 2005, despite a drop in the number of people with private insurance, their workforce grew by one third. How can this industry possibly bring down the cost of health care and provide affordable coverage? They can't. Geyman explains that the industry "is pricing itself beyond the reach of a declining private market, even as it seeks out a broader, subsidized role in public programs."

WHAT VALUE?

Geyman discusses something not mentioned by supporters of reform that involves keeping private insurance, and that is the fact that they are allowed to offer so-called "insurance" that is so skimpy it really provides no protection. Many are marketing "Limited Benefit Policies" (LBP) to younger and lower-paid workers. Aetna Affordable Health Choices caps hospital benefits at $2000 and accident/ER benefits at $1000. I know from my own experience in an ER a few years ago that bills are typically much higher than that (mine was around $2500 for 4 hours in the ER!) and that $2000 hospital cap will barely pay for the aspirin and bed pan.

Interestingly, Geyman also mentions "Medigap" plans as low value. My husband turned 65 one year ago and we studied the government Medicare website to get information on these plans. I was delighted to find that these plans are regulated according to what's covered and identified by letter (plan A, plan B, etc). We looked at all of them, got costs from different companies and looked at my husband's usual use of medical services and concluded that these plans were not a good deal. Over the long run, we would be better off paying out of pocket costs not covered by Medicare. We concluded the same thing about the so-called drug benefit. None of the plans were cheaper than just paying for the relatively inexpensive medications my husband takes.

Another sleazy trend not mentioned by Geyman is the rise of "health care discount" programs that often masquerade as insurance. People sign up at reasonable rates, get a nice plastic card for their wallet, then find all they have is a discount on health care services, if they can find a provider who will actually give them the discount (it may be the same discount they could negotiate on their own). I am also personally alarmed at the ads on TV that exploit the rising fear over health care costs. These commercials openly cite high health care costs and one even quotes the Harvard study showing that medical bills are the leading cause of personal bankruptcy. They hope your fear of being a health care victim will get you to buy whatever they are selling. Beware!

THE SAME OLD IDEAS: THEY DON'T WORK

Geyman explores the various incremental reforms that have been tried and shows how none have solved the problem. During the 2008 presidential campaign, we heard about "mandates" that, along with community rating (charging everyone the same rate) and guaranteed issue (having to take all who apply), was supposed to insure everyone and bring down costs. But employer mandates are ineffective because of the inherent weaknesses and unfairness in a system relying on employer-sponsored insurance. The "individual mandate" as implemented in Massachusetts has proved unworkable as well, as the state agency (the Connector) tasked with making sure everyone has coverage has exempted thousands of people from the fines because they cannot offer these people any coverage they can actually afford.

The idea that insurance companies will "compete for your business" is an absurdity, given the priorities of health insurance companies (low "medical loss" and high profits for shareholders). Geyman states the problem clearly:

       "…private insurers don't compete with each other by delivering better care at lower cost. That would be in line with what is understood as a classical form of competition where the consumer comes out on top. Insurance competition is different: Who can avoid the most enrollees with higher medical costs, and who is most effective at delaying or denying payment when they can?"

READ THIS BOOK!

This book was written before the financial meltdown and the election of President Obama, but Geyman mentions the possibility of serious recession a number of times in the book. Geyman has done his homework. Every chapter has a huge bibliography, with all sources listed. The book is full of charts and tables. Geyman is not just expressing his own negative opinion of the industry, but writes from facts. I highly recommend this book as the best exposition of why private insurance cannot get us to universal, affordable health care.

Americans have never needed health care reform more than they do today, with so many on fragile financial ground. Most of us are one illness away from financial disaster. The insurance industry, the pharmaceutical industry and the medical device industry will all fight any meaningful reform, and we will probably see a rollout of Harry and Louise type ads once again, warning us about the dangers of "socialized medicine." But this time, the public might be a bit more aware of how insurance companies actually operate and in whose interests. Harry and Louise might have changed their tune as well and maybe they are ready to reject the false promises of a failed industry.

       Donna Smith, who was featured in Michael Moore's film, Sicko, gave elequent testimony before Congress about her personal health care hell.

“ I lived the American Dream as my father taught me and as his father taught him. I worked. I educated myself, I voted, I bought a home and then moved up to a better home. I raised my children responsibly and served in my community - and you left me broken and battered because you failed to act on health care reform.”
  (Donna Smith had to sell her home and move in with a daughter because of a mountain of medical bills.)

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