Single-Payer Healthcare

February 11, 2009 11:54 AM EST | Gather

by Col. George W.

***** I received this from Public Citizen. It is an organization claiming to have no political afilliation the promotes issues of interest to the public. Instead of the letter they sent I went to the explanation of the program.

What do you all think? It looks as though there will be some form of national healthcare soon. Maybe this one would be the ticket? There are a couple of things that bother me a little.

i.e. "It would be based Medicare" Medicare only pays 80% +- that other 20 is a killer.

I see nothing about us retired folks on Medicare so am left to assume SS recipiants would be paying either 4.5% of income or 3.3% depending on how this bill is read, Perhaps nothing. It is not clear because it seems to be only for employed persons.

Before I back this bill I would have to know a lot more about it but it looks better than others I have seen. Keep in mind that this article is written by someone who wants it so has no opposition statements.

What is Single-Payer Healthcare?

Single-payer is a term used to describe a type of financing system. It refers to one entity acting as administrator, or "payer." In the case of healthcare, a single-payer system would be setup such that one entity-a government run organization-would collect all healthcare fees, and pay out all healthcare costs.

In the current US system, there are literally tens of thousands of different healthcare organizations-HMOs, billing agencies, etc. By having so many different payers of healthcare fees, there is an enormous amount of administrative waste generated in the system. (Just imagine how complex billing must be in a doctor's office, when each insurance company requires a different form to be completed, has a different billing system, different billing contacts and phone numbers-it's very confusing.)

In a single-payer system, all hospitals, doctors, and other healthcare providers would bill one entity for their services. This alone reduces administrative waste greatly, and saves money, which can be used to provide care and insurance to those who currently don't have it.

Access and Benefits

All Americans would receive comprehensive medical benefits under single-payer. Coverage would include all medically necessary services, including rehabilitative, long-term, and home care; mental healthcare, prescription drugs, and medical supplies; and preventive and public health measures.

Care would be based on need, not on ability to pay.

Payment

Hospital billing would be virtually eliminated. Instead, hospitals would receive an annual lump-sum payment from the government to cover operating expenses-a "global budget." A separate budget would cover such expenses as hospital expansion, the purchase of technology, marketing, etc.

Doctors would have three options for payment: fee-for-service, salaried positions in hospitals, and salaried positions within group practices or HMOs. Fees would be negotiated between a representative of the fee-for-service practitioners (such as the state medical society) and a state payment board. Government would serve as administrator, not employer.

Financing

We propose an equitable financing program in which everyone pays their fair share. Under this program, all employers and employees will pay a modest payroll tax. This will produce a dramatic savings for those responsible private employers and state and local governments which currently purchase health insurance for their employees. By drawing on the immense wealth that has accrued to the richest Americans and large corporations over the past 25 years, 95% of all Americans will pay less for their healthcare than they are currently paying. Some of the key components to financing HR 676:

• Eliminates all employer contributions to private insurance premiums-replacing them with a modest payroll tax of 4.5% (in addition to the 1.45% currently paid towards Medicare).
• Eliminates all individual premiums, co-pays, deductibles and nearly all other out-of-pocket costs-replacing them with a modest payroll tax of 3.3% (in addition to the 1.45% currently paid towards Medicare).
• Relieves state and local governments of the immense burden of paying insurance premiums for medical coverage for their current and retired employees-replacing them with a modest payroll tax of 4.5% (in addition to the 1.45% currently paid towards Medicare).

Administrative Savings

The General Accounting Office projects an administrative savings of 10 percent through the elimination of private insurance bills and administrative waste, or $150 billion in 2002. This savings would pay for providing medical care to those currently under served.

Cost Containment

The Congressional Budget Office projects that single payer would reduce overall health costs by $225 billion by 2004 despite the expansion of comprehensive care to all Americans. No other plan projects this kind of savings.

Different Perspectives on the Benefits of Single-Payer Patients

Each person, regardless of ability to pay would receive high-quality, comprehensive medical care, and the free choice of doctors and hospitals. Individuals would receive no bills, and copayment and deductibles would be eliminated. Most people would pay less overall for health care than they pay now.

Doctors

Doctors' incomes would change little, though the disparity in income between specialties would shrink. The need for a "wallet biopsy" before treatment would be eliminated; time currently wasted on administrative duties could be channeled into providing care; and clinical decisions would no longer be dictated by insurance company policy.

Medical endorsements include PNHP (9,000), the American Public Health Association (30,000), American Association of Community Psychiatrists, Massachusetts Academy of Family Practice, American Medical Women's Association (13,500), Alameda-Contra Costa Medical Society, American Medical Student's Association, D.C. Medical Society, National Medical Association (6,500), American College of Physicians (Illinois Chapter), Long Island Dermatological Society, Islamic Medical Association, American Nurses Association, the Nurses' Network for a National Health Program, and the D.C. chapter of the American Medical Association.

Hospitals

The massive numbers of administrative personnel needed to handle itemized billing to 1,500 private insurance companies would no longer be needed. A negotiated "global budget" would cover operating expenses. Budgets for capital would be allocated separately based on healthcare priorities. Hospitals would no longer close because of unpaid bills.

Insurance Industry

The need for private insurance would be eliminated. One single payer-bill currently in the House (H.R. 1200) would provide one percent of funding for retraining displaced insurance workers during its first few years of implementation.

Business

In general, businesses would see Single-Payer limit their health costs and remove the burden of administering health insurance for their employees. Read more about how single-payer helps small business in the Healthcare Now Small Business Brochure.

Congress

Single-payer would be the simplest and most efficient healthcare plan that Congress could implement. It would be based Medicare, one of the most successful national healthcare programs.

Insurance Company to Offer Same-Sex Health Benefits

Story Published: Jul 28, 2008 at 8:30 PM EDT

By John Borsa | WKBW.com

Blue Cross & Blue Shield of Western New York announced on Monday that it would immediately begin offering spousal health insurance benefits to same-sex couples that have been legally married.

The change in policy comes three weeks after the New York Civil Liberties Union filed a lawsuit against the Buffalo-based health insurance carrier on behalf of a Cheektowaga Central School District employee and her same-sex spouse.

Jeanne Kornowicz, a school psychologist, applied for spousal health insurance with the permission of her employer, but was denied by Blue Cross.

NYCLU sued the company, citing a recent victory by an appeals court that unanimously ruled that New York State must recognize the valid out-of-state marriages of gay and lesbian couples.

Kornowicz and her partner, Joy Higgins, were legally married in Ontario, Canada in 2006. Higgins gave birth to the couple's daughter, Elizabeth Higgins, in July, 2007. Kornowicz legally adopted Elizabeth in January of this year.

"As spouses and parents, Jeanne and Joy deserve the same protections that every other family in New York State enjoys," said NYCLU attorney Matt Faiella. "We're so relieved for their family that they will finally know some piece of mind."

In a statement from Blue Cross, spokeswoman Karen Merkel-Liberatore said, "While this situation brought to light an outdated police that no longer met the needs of our customers, it also presented an opportunity to more more responsive and showed the company ways that, despite being in a highly-regulated industry, we can be more progressive in taking action to please our customers."

Gay and lesbian rights advocates call the decision by Blue Cross, a major victory.

"If one company can change this police, then all company's should," said Bryan Whitley-Grassi, executive director of Pride Center of Western New York.

Many large companies offer domestic partner benefits through their health insurance coverage. Whitely-Grassi said these are not the same benefits offered to married couples.

"Domestic partner benefits are not only lesser benefits," he said. "But you're taxed on the income before spending it on your partner's health care."

Health care benefits for individuals, spouses and families are tax-deductible.

Head to head on health care

Jul. 14, 2008 02:35 PM
The Arizona Republic

	Barack Obama	John McCain
Uninsured	Obama: Advocates a new national health plan that would be similar to the Medicare program that provides coverage for senior citizens. All children would be covered, either through an expanded State Children's Health Insurance Plan (SCHIP) or private plans. Young adults could be carried on their parents' insurance until they are 25. His goal is universal health coverage by 2012.	McCain: Would reduce the ranks of the uninsured through a combination of tax credits, promoting health-savings accounts and increased competition among private insurers. He would eliminate the tax exclusion on employer-paid benefits. The federal government would give a $2,500 tax credit for individuals or $5,000 for families to purchase private insurance or sock away in a medical savings account. Also, McCain would work with states to create a "guaranteed access plan" that would provide coverage for people who have had difficulty securing private insurance due to pre-existing medical conditions or other reasons.
Impact on employers	Obama: Employers would be required to help pay for health insurance for employees or contribute a portion of their payroll to a national health plan. Some small businesses would be exempt (based on revenue thresholds).	McCain: It's unknown what impact McCain's plan would have on employer-sponsored health plans. Employees would have the option of taking the tax credit and dropping their employer-based health coverage. Some experts believe that would be an appealing option for younger, healthier workers who can purchase inexpensive private insurance.
Private insurance companies	Obama: Private insurers would be subject to oversight by a group called the national health insurance exchange. Insurance companies would be required to issue a policy to every applicant and could not reject applicants based on pre-existing medical conditions.	McCain: His plan to offer tax credits to consumers may bolster private insurance plans, particularly those that sell to individual consumers rather than groups such as large employers.
Consumers	Obama: Consumers could purchase private insurance or the government's plan.	McCain: People would get tax credits and would have access to portable insurance that provides coverage even if they switch jobs.
Prescription drugs	Obama: Would allow consumers to purchase cheaper prescription drugs abroad if they are proven safe. Wants generic drugs to be made available sooner.	McCain: Would allow consumers to purchase cheaper prescription drugs abroad if they are proven safe. Wants generic drugs to be made available sooner.
Technology	Obama: Would spend $50 billion over five years to establish advanced information technology for health providers to reduce costs, medical errors and inefficiency. Also would advocate federal funding to biomedical research.	McCain: Would spend an unspecified amount to establish advanced information technology for health providers to reduce costs, medical errors and inefficiency. Also would advocate federal funding to biomedical research.

L.A. city attorney sues insurer over health policy cancellations

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Liz O. Baylen / Los Angeles Times

Los Angeles City Attorney Rocky Delgadillo, right, meets with Ana Maria and Augustine Simoes and their attorney, William Shernoff, before announcing a lawsuit accusing Blue Shield of California of illegally canceling the health insurance coverage of hundreds of Californians. The couple say they were saddled with $60,000 in medical bills when their policy was rescinded after Ana Maria Simoes had to have emergency gall bladder surgery.

Delgadillo's suit contends Blue Shield of California has illegally rescinded the coverage of more than 850 policyholders since 2002.

By Lisa Girion
Los Angeles Times Staff Writer
July 17, 2008 | Los Angeles Times

When Blue Shield of California learned that Ana Maria Simoes needed emergency surgery to remove her gall bladder, the company OKd the operation but also turned the case over to its investigative unit, according to corporate records disclosed Wednesday.

A Blue Shield investigator scrutinized Ana Maria's medical records and compared them to the application she filled out for coverage, the investigator's notes show. Ultimately, the investigator scribbled "unable to prove" in her notes, and then opened an investigation into Ana Maria's husband, Augustine.

This time, the investigator concluded the Chino dairy farmer had failed to disclose that he had high cholesterol, and the omission was used to justify canceling the couple's coverage.

The cancellation was highlighted by Los Angeles City Atty. Rocky Delgadillo as an example of the allegedly abusive practices at the heart of a lawsuit he filed Wednesday on behalf of the residents of Los Angeles against Blue Shield. The suit contends that Blue Shield has illegally canceled the coverage of more than 850 policyholders including people like the Simoeses since 2002.

Blue Shield spokesman Tom Epstein defended the cancellation of the Simoes' coverage and called the suit "a cheap political stunt" that was "totally without merit."

In the past, Blue Shield has said that it cancels policies rarely and that the practice is a legal and necessary tool to combat fraud. The Blue Shield suit is similar to those that Delgadillo filed earlier this year against insurers Anthem Blue Cross and Health Net. Like Blue Shield, those companies have denied wrongdoing and say they rescind coverage only when necessary.

The latest suit accuses Blue Shield, a nonprofit company based in San Francisco, of using complex and confusing applications for coverage to trick individuals into making mistakes that can later be used against them. The suit seeks fines and penalties of more than $1 billion.

"For decades, health insurers have gamed the system and reaped billions," Delgadillo said. "The time has come to . . . set things right."

The suit also accuses Blue Shield of falsely advertising its coverage, alleging that the company often reneges when its members need substantial medical care.

Dr. Richard Frankenstein, president of the California Medical Assn., and Dr. Robert Bitonte, president-elect of the Los Angeles County Medical Assn., praised Delgadillo's efforts to stop the practice known as rescission.

"Having health insurance does not mean you will receive healthcare when you need it," Frankenstein said. "Insurance companies may promise you the moon and a thousand doctors, but if you really need your medical care you can bet they will be looking for a way to deny treatment or cancel your policy."

Blue Shield's Epstein said Delgadillo "asserts that we have committed unfair practices regarding the payment of claims for 400,000 individual policyholders without a shred of evidence that our actions were improper. He fails to mention that, since 2002, we have paid nearly $4 billion in claims for those policyholders. He claims that we used intentionally misleading applications, but our applications were reviewed and approved by two state regulators."

The company also criticized Delgadillo's consultations with policyholder "lawyers who have a financial interest in rescission cases," Epstein said, saying that "he never spoke to anyone in our company nor asked for any documents in our files."

Blue Shield has "always been careful in our underwriting of health coverage policies and in our investigations of the rare contracts that are rescinded," Epstein said. "This is why we have rescinded a fraction of 1% of individual and family policies."

Blue Shield believes that it is the responsibility of applicants to tell the truth, Epstein said.

"If there were no consequences for applicants who misrepresent significant medical conditions, insurance rates would skyrocket for the vast majority of Californians who complete their applications accurately," he said.

The Simoeses say the cancellation saddled them with $60,000 in unpaid medical bills. They say they were harassed by collection agents, and Ana Maria's credit was ruined.

"I hope that nobody else has to go through this, and I hope there will be somebody out there who can stop the insurance companies," Ana Maria said in an interview after standing next to Delgadillo at a news conference. "It is so upsetting to me and my family."

The Simoeses said they were as honest as they knew how to be on the application. English is a second language for the Portuguese immigrants, and they went to an insurance agent to buy their coverage. They said the agent filled out the application.

They said they gave the agent their physicians' names and telephone numbers as he was filling out the application. They signed the application, giving Blue Shield permission to review their medical records before issuing coverage and, they said, that is what the agent told them would happen.

Delgadillo contends that, to save money, Blue Shield routinely fails to pull records and verify information on applications.

Augustine Simoes said he was not aware he had an elevated cholesterol level. He said his doctor prescribed Lipitor, a cholesterol controller, and explained only that men his age often needed it.

"The records of everything were at the doctor's office," he said. "I don't know why they are accusing me of lying. I didn't make anything up."

Blue Shield's Epstein said the insurer acted properly throughout. "When all the evidence is in, it will be clear that both Simoeses misrepresented significant facts on their applications," he said.

William Shernoff, a lawyer for the Simoeses and other policyholders, is cooperating with Delgadillo's office on the litigation. He criticized regulators at the Department of Insurance and the Department of Managed Health Care for "simply not doing their job."

But Cindy Ehnes, director of the Department of Managed Health Care, defended that agency's actions.

"We have protected consumers and restored coverage quickly to more than 1,200 consumers to date," Ehnes said.

Noting Anthem Blue Cross' and Blue Shield's failure to reissue coverage on rescinded policies, she said, her agency was "going back through each of their approximately 2,170 rescission cases to pursue individual fines in each case."

"The terrible practice of rescissions has caused irreparable harm . . . by making some individuals responsible for large medical bills and hindering their ability to get and keep health coverage," she said.

lisa.girion@latimes.com

Injured By a Spacecraft? There’s a Diagnostic Code for That

July 15, 2008 @ 6:09 pm
By Jacob Goldstein | The Wall Street Journal Health Blog

So we’ve got this patient here who was injured in this spaceship accident. You know, just a routine, uh, orbital mishap. But how do we account for that? Oh, right, it’s ICD-9 code E845 — “Accident involving spacecraft.”

Apropos of nothing in particular, this billing code popped up on a couple of medical blogs last week (KevinMD and Dr. Secretwave101). Intrigued, we did a little reporting.

This extended definition notes that the code includes “launching pad accident,” but excludes “effects of weightlessness in spacecraft,” which has its own code (E928.0).

ICD (International Classification of Diseases) codes are the basic international health codes that exist for just about everything (as this spaceship thing suggests). They’re used both for billing purposes and for tracking trends in public health.

A spokesman for the Centers for Medicare and Medicaid, one of the key agencies that deals with the codes in this country, told us that E845 was in the current version of U.S. ICD-9 code when it was first published in 1979. The code was created by the World Health Organization as part of ICD-9, the spokesman said. Other places in the world use ICD-10, we’ve stuck with ICD-9-CM.

A little creative Googling turned up a citation of the same code all the way back in 1966.

Just because a code exists, it doesn’t mean anybody’s ever used it. “Whether someone was injured [by a spacecraft] or not was immaterial because somebody thought, ‘What If?’ ” Sheri Poe Bernard, a VP at the American Academy of Professional Coders told us.

It didn’t take much to get Poe talking about all the strange things that have their own codes. Bite of a non-venomous arthropod. Dog bite. Rat bite. Scorpion sting. “A centipede has its own code — E905.4,” she said. “Accident caused by paintball gun, E922.5 Accident by fireworks, explosion, E923.0″

If you can think of a way to be killed or injured, there’s a code for it. “Terrorism has all kinds of codes associated, involving marine weapons, aircraft, explosions, conflagration,” she said. “Terrorism involving nuclear weapons, E979.5; biological weapons E979.6; chemical weapons E979.7.”

Uh, thanks Sheri. If you need us, we’ll be huddling under our desk, fearing for our lives. What’s the ICD code for that?

Billings Used Dead Doctors' Names

By Christopher Lee, Washington Post Staff Writer
washingtonpost.com | Wednesday, July 9, 2008

Medicare has paid as much as $92 million since 2000 to medical suppliers who billed the government for wheelchairs and other home equipment purportedly prescribed by physicians who, according to records, were dead at the time, congressional investigators said yesterday.

The Centers for Medicare and Medicaid Services (CMS) honored about 500,000 such claims despite pledging six years ago to correct the problem, which was identified by the Health and Human Services Department's inspector general in 2001.

In more than half the cases studied, the doctor listed as having ordered the equipment had died more than five years earlier, said a report by the Senate Homeland Security and Governmental Affairs Committee's permanent subcommittee on investigations.

"We discovered that some medical equipment suppliers have scammed the Medicare system -- and the American taxpayers -- out of massive amounts of money," Sen. Norm Coleman (Minn.), the panel's top Republican, said in a statement. "Using the ID numbers of dead doctors, these scam artists have treated Medicare like an ATM machine, drawing money out of the government's account with little fear of getting caught."

The report is part of the committee's ongoing investigations into waste, fraud and abuse in the fast-growing federal health program, which serves more than 43 million elderly and disabled Americans. Medicare pays annually more than $400 billion in benefits and is a fixture on the Government Accountability Office's "high-risk" list of troubled programs.

Last year, the government established a Medicare Fraud Strike Force to crack down on a problem that officials estimate costs taxpayers tens of billions of dollars annually. The program's durable medical equipment component, in particular, has been a frequent target of companies seeking to bilk the government. The subcommittee has scheduled a hearing on the problem today. When the system works properly, a physician writes a prescription for home medical equipment for a Medicare beneficiary. He takes the order to a supplier, who sells or rents the equipment to him. The supplier, in turn, submits a claim for payment to a Medicare contractor for processing. The claim includes a number issued by Medicare that identifies the prescribing physician.

Senate investigators obtained from the American Medical Association a computer file of physicians who had died between 1992 and 2002. They selected 1,500 at random and asked Medicare officials to turn over medical-equipment claims filed with those doctors' Medicare ID numbers between 2000 and 2007.

During that time, the review said, ID numbers for 734 deceased doctors were used to file 21,458 claims that totaled $3.4 million. Investigators counted the claims only if the equipment was bought more than a year after the doctor's death.

Extrapolating from the sample, investigators estimate that 384,730 to 572,238 such fraudulent claims were submitted during that period, and Medicare paid an estimated $60 million to $92 million. There are still active ID numbers in Medicare's system for as many as 2,895 dead physicians, investigators said.

They examined separate data for Florida, home to many retirees and a perennial leader in Medicare fraud. They found that more than a quarter of deceased Medicare doctors there still have active ID numbers in Medicare's system.

The ID for one doctor, who died in 1999, appeared on 83 claims submitted by Professional Gluco Services Inc., a Miami company, between November 2005 and September 2006. A federal grand jury indicted two of the company's owners last year on charges of defrauding the government of $1.3 million for equipment that had never been ordered or delivered. Both men pleaded guilty.

Medicare officials had promised to do a better job screening claims after the 2001 inspector general's report found that the agency had paid $91 million for medical supply claims with invalid or inactive physician ID numbers in 1999.

Medicare officials said several new steps should help, including a plan to match monthly Social Security Administration data about U.S. deaths against a revamped Medicare provider-identification system. They also pointed to new accreditation requirements for suppliers under a new program, opposed by the industry, that sets some equipment prices through competitive bidding.

"Fraud and abuse in the context of Medicare-covered durable medical equipment has been a focal point of ours in recent years," said CMS spokesman Jeff Nelligan. "Before this program, anyone could become a supplier, but now they must be fully accredited based on strict financial and quality standards."

Muscling in on Medicare

Legislative fight in Washington puts patients in midst of doc-insurer struggle

July 8, 2008 | Newsday.com

A Medicare tweak on the table in Washington is pitting doctors against insurers - with patients in the middle. Doctors are facing a steep cut in Medicare payments, and many say that if that happens, they'll reduce or end their participation in the program. And that will make it harder for elderly patients to get care.

The alternative is to trim what Washington pays private, Medicare Advantage plans. Insurers, some of whom underwrite those plans, are airing television commercials warning that will mean patients losing coverage or paying more.

For patients, this all sounds like heads you lose, tails you lose. But things aren't that bleak. Not if Medicare Advantage plans take the hit, as they should.

The problem is that doctor reimbursements will be slashed 10.6 percent unless Congress acts to stop it. A cut that deep is unrealistic. The House voted June 24 to increase payments to physicians by 1.1 percent. But the bill is stalled in the Senate and, should it pass, President George W. Bush has threatened a veto. The sticking point is cost.

The bill would take the money from those private plans - which is where it should come from. Medicare Advantage plans were pushed by private marketers who said they would save taxpayer dollars. But Washington pays the plans 13 percent more per beneficiary than it would cost to cover that same person under government-run Medicare.

Pitting private plans against traditional Medicare is a sound idea. Competition should make each better. But a fair contest requires a level playing field, and right now it isn't. Not with private plans being paid more per patient.

The pending legislation wouldn't end that disparity. But it would reduce it and free up money to pay doctors. That would be a win for most Medicare patients and taxpayers.

FACTBOX: McCain and Obama on health care and retirement

Mon Jul 7, 2008 9:41am EDT | REUTERS

(Reuters) - Health care has ranked among the top issues with U.S. voters in this presidential election cycle, and the Social Security retirement program is a perennial issue for the country's influential elderly population.

Both Barack Obama, who has claimed the Democratic nomination, and John McCain, the presumptive Republican nominee, have offered health care and retirement proposals. Here is a summary of their positions.

HEALTH CARE

McCain would end tax breaks for employer-provided health insurance and instead provide a refundable tax credit of $2,500 per person, or $5,000 for families, to help people buy health policies. He would promote competition by allowing people to buy insurance across state lines and he would make it tougher to sue doctors in some cases.

Obama has proposed a national insurance program to allow individuals and small businesses to buy affordable health care similar to that available to federal employees, funded by a tax on employers who don't provide coverage. Individuals would not lose coverage when they switch jobs.

He would lower premiums through a program that would reduce the exposure of employer health plans to the costs of a catastrophic illness. Drug costs would be lowered by allowing patients to buy drugs from abroad and letting the government negotiate for lower prices.

SOCIAL SECURITY

McCain has said he would work with Congress to rein in the growing costs of retirement programs and has suggested changing the way benefits are indexed to inflation. He has also supported creating private retirement accounts for younger workers.

Obama opposes private retirement accounts. Affluent workers would pay more in taxes to ensure that Social Security is fully funded.

Obama wants to automatically enroll workers in retirement plans to boost savings, though employees could opt out if they choose.

(Compiled by Andy Sullivan, Donna Smith and JoAnne Allen; editing by David Wiessler)

Healthcare groups use ads to lobby lawmakers on Medicare bill

July 03 2008 | McKnight's Long Term Care News

Congress may be on break this week, but two industry groups launched ads spurring the Senate to take action on a Medicare bill that affects nursing home residents and other older adults when it returns from the Fourth of July recess.

The American Medical Association unveiled an advertising campaign to encourage passing the bill, H.R. 6331. Targeted towards opponents of the legislation, the ads say the issue boils down to a choice: insurance company profits, or seniors and disabled vets who will lose their access to healthcare. Meanwhile, insurance lobbyists are working on their own anti-H.R. 6331 advertising blitz. They argue that the cuts to Medicare Advantage plans that would fund the bill would limit choices, reduce benefits and pass on higher costs to seniors.

This week, two harmful actions went into effect: the expiration of the exceptions process for Part B outpatient therapy caps, and a freeze on Medicare physician payments. Therapy caps, which affect nursing home residents, impose a $1,810 limit on physical therapy and speech therapy combined and $1,810 on occupational therapy for nursing home residents. Residents in Medicare-certified beds at a skilled nursing facility will not have therapeutic services covered past $1,810, according to a note from the Centers for Medicare & Medicaid Services. Others who exceed the cap, however, may obtain medically necessary therapy services at a hospital.

EDS unit to process Medicare claims in four states

07/02/08 -- 01:37 PM
By David Hubler | Washington Technology

NHIC Corp. will process Medicare payment claims from health care providers in four Northwestern states under a $148 million contract from the Centers for Medicare and Medicaid Services.

The contract, which has a one-year base period and four one-year options, will serve about 54,000 physicians and health care practitioners and 233 hospitals in Alaska, Idaho, Oregon and Washington state.

NHIC, a subsidiary of EDS Corp., will provide a variety of administrative functions for hospitals, skilled nursing facilities and physicians in those states and will be the providers’ first point of contact for processing and payment of Medicare Parts A and B fee-for-service claims.

The company will also handle appeals, audits and reimbursements, provider enrollment, educational outreach, print and mail services, financial and accounting services, contact-center support, electronic data exchange, mailroom operations, and medical and utilization reviews.

The contract will help CMS meet the requirements of the Medicare Modernization Act of 2003, which requires the agency to transition Medicare fee-for-service claims from fiscal intermediaries and carriers to Medicare administrative contractors, NHIC said in a statement.

NHIC is one of the largest Medicare Part B contractors in the country, serving more than 150,000 health care providers in California, Maine, Massachusetts, New Hampshire and Vermont.

EDS, of Plano, Texas, ranks No. 10 on Washington Technology’s 2008 Top 100 list of the largest federal government prime contractors.

Vet Groups to Appeal Judge's Decision Over VA's Treatment of PTSD Cases

By Jason Leopold | The Public Record | Published in : Nation/World
Saturday, June 28, 2008

A federal Judge has ruled that he lacks the legal authority to force the Department of Veterans Affairs to immediately treat war veterans suffering from post-traumatic stress disorder (PTSD) and could not order the VA to overhaul its internal systems that handle benefits claims and medical services for war veterans.

Two veterans advocacy groups, Veterans for Common Sense (VCS) and Veterans United for Truth, filed a lawsuit seeking class-action status against the VA last year claiming a systematic breakdown at the agency had led to an epidemic of suicides among war veterans.

The lawsuit claimed that some war veterans were turned away from VA hospitals after they sought care for PTSD and later committed suicide. PTSD is a psychiatric disorder that can develop in a person who witnesses, or is confronted with, a traumatic event. Mental health experts have described PTSD as an event of overwhelming magnitude in which a victim's nervous system is afflicted with intense fear, helplessness and horror. The victim shuts down only to re-experience the traumatic event over and over again. Studies have shown that PTSD is the most prevalent mental disorder arising from combat.

Moreover, the complaint alleged, that a massive backlog of benefits claims had led to serious financial hardships among hundreds of thousands of veterans.

Those claims were borne to some extent by evidence that surfaced during the course of a three-week trial earlier this year.

Additionally, the lawsuit exposed the extent to which the VA went to conceal that information from the public. The federal lawsuit resulted in congressional hearings about the issue and led members of Congress to call for the resignation of several top VA officials.

In an 82-page ruling issued on June 25, U.S. District Court Judge Samuel Conti said that while it is “clear to the court” that “the VA may not be meeting all of the needs of the nation’s veterans...the court cannot find systemic violations system-wide that would compel district court intervention.”

Conti wrote that the appropriate parties to address the matter are “Congress, the Secretary of the Department of Veterans Affairs, the adjudication system within the VA, and the Federal Circuit.”

“The remedies sought by Plaintiffs are beyond the power of this Court and would call for a complete overhaul of the VA system, something clearly outside of this Court's jurisdiction,” Conti wrote in his ruling. "VCS plans to appeal the Court’s decision primarily on the grounds that the Judicial Branch must enforce the laws of the Legislative Branch ignored by the Executive Branch."

“The remedies to the problems, deficiencies, delays and inadequacies complained of are not within the jurisdiction of this Court. Congress has bestowed district courts with limited jurisdiction. Congress has specifically precluded district courts from reviewing veterans' benefits decisions and has entrusted decisions regarding veterans' medical care to the discretion of the VA Secretary. The broad injunctive relief that Plaintiffs request is outside the scope of this Court's jurisdiction,” he added.

Paul Sullivan, the executive director of Washington, D.C.-based Veterans for Common Sense, said his organization and Veterans United for Truth would immediately appeal the ruling.

“This ruling will only cause us to redouble our efforts and our pursuit of justice for our nation’s veterans,” Sullivan said. “We will not rest until our job is finished.”

Gordon Erspramer, the lead attorney representing the veterans advocacy groups, said if the decision is upheld on appeal it “would suggest that veterans have no enforceable rights in America, and the Constitution does not apply to veterans.”

“For all Americans, the implications of this decision are profoundly disturbing,” Erspamer said.

Sullivan said that as of June 2008, the VA has diagnosed 75,000 Iraq and Afghanistan war veterans with PTSD, but the agency has only been providing disability benefits covering the diagnosis to 37,000 veterans.

Early warnings ignored, Congress Slow to Act

Prior to the U.S. Invasion of Iraq in March 2003, the VA issued a report to Pentagon and White House officials saying that it expected that the number of U.S. troops who would suffer from PTSD would reach a maximum of about 8,000.

Sullivan, the executive director of Veterans for Common Sense, told lawmakers before the U.S. invasion of Iraq that those estimates were extremely low. He continued to sound early warning alarms about the extent of PTSD cases and the likelihood of veteran suicides during numerous appearances before Congress over the years.

“The scope of PTSD in the long term is enormous and must be taken seriously. When all of our 1.6 million service members eventually return home from Iraq and Afghanistan, based on the current rate of 20 percent, VA may face up 320,000 total new veterans diagnosed with PTSD,” Sullivan told a congressional committee in July 2007. If America fails to act now and overhaul the broken DoD and VA disability systems, there may a social catastrophe among many of our returning Iraq and Afghanistan war veterans. That is why VCS reluctantly filed suit against VA in Federal Court . . . Time is running out.”

Sullivan has urged Congress to enact legislation to overhaul the VA.

“Congress should legislate a presumption of service connection for veterans diagnosed [with] PTSD who deployed to a war zone after 9/11,” Sullivan told lawmakers last year. “A presumption makes it easier for dedicated and hard-working VA employees to process veterans’ claims. This results in faster medical treatment and benefits for our veterans.”

Yet despite Sullivan’s dire predictions and calls for legislative action the issue has not been given priority treatment by lawmakers. Instead, Congress has continued to fund the war in Iraq.

VA’s Backlog

Meanwhile, a backlog of veterans’ benefits claims continues to pile up at the VA.

The VA said it has hired more than 3,000 mental healthcare professionals over the past two years to deal with the increasing number of PTSD cases, but the problems persist.

In opening statements in the federal court case, Richard Lepley, a Justice Department attorney, defended the VA, calling its network of hospitals a “world-class healthcare system.”

But Erspamer, the lead attorney representing the two veterans groups, said the VA has arbitrarily denied coverage to thousands of vets, that it takes nearly a year to decide whether it will provide coverage to veterans suffering from PTSD, and takes as long as four years to address veterans appeals cases.

“Seeking help from the Department of Veterans’ Affairs … involves a two-track system,” according to the plaintiff’s trial brief. “A veteran will go to the Veterans’ Health Administration for diagnosis and medical care; and a veteran goes to the Veterans’ Benefits Administration to apply for service-connection and disability compensation.

“VA is failing these veterans as they move along both of these parallel tracks. They are not receiving the healthcare to which they are entitled (and where they do receive it, it is unreasonably delayed) and they are not able to get timely compensation for their disabilities, which means that they have no safety net.

“These two problems combine to create a perfect storm for PTSD veterans: they receive no treatment, so their symptoms get worse; and they receive no compensation, so they cannot go elsewhere for treatment. The failings of these two separate but interrelated systems are what this action seeks to address.”

The lawsuit alleged that numerous VA practices stemming from a 1998 law violate the constitutional and statutory rights of veterans suffering from PTSD by denying veterans mandated medical care.

Justice Department attorneys had argued in court papers filed in March that Iraq and Afghanistan veterans were not “entitled” to the five years of free healthcare upon their return from combat as mandated by Congress in the “Dignity for Wounded Warriors Act.”

Rather, the VA argued, medical treatment for the war veterans was discretionary based on the level of funding available in the VA’s budget.

Explosive Emails

Two weeks before Conti issued his ruling, he hauled Justice Department attorneys into court to explain why a crucial email written by a VA official was not turned over to the plaintiffs.

The March 20 email was written by Norma Perez, a psychologist and the coordinator of a post-traumatic stress disorder clinical team in Temple, Texas.

“Given that we are having more and more compensation-seeking veterans, I’d like to suggest that you refrain from giving a diagnosis of PTSD straight out,” Perez’s email, titled “Suggestion,” says. “We really don’t or have time to do the extensive testing that should be done to determine PTSD.”

Other internal VA emails obtained by the veterans groups during the discovery phase of the trial also revealed that senior Veterans Health Administration officials covered up the rate of suicides among war veterans.

On Feb. 13, 2008, Ira Katz, the VA’s mental health director, and Ev Chasen, the agency’s chief communications director, exchanged e-mails discussing P.R. strategy for handling this troubling news.

The exchange came in the context of how to handle inquiries from CBS News, which was reporting on the surge of suicides among U.S. veterans – reaching an average of 18 per day – with part of that rise attributed to soldiers returning from the wars in Iraq and Afghanistan.

In an e-mail headlined “Not for the CBS News Interview Request,” Katz notified Chasen that the VA had identified some 1,000 suicide attempts per month among war veterans treated by the VA.

“Shh!” Katz wrote to Chasen. “Our suicide prevention coordinators are identifying about 1,000 suicide attempts per month among the veterans we see in our medical facilities. Is this something we should (carefully) address ourselves in some sort of release before someone stumbles on it?”

Chasen responded to Katz with suggestions about how to avoid too much negative attention to the data.

“Is the fact that we’re stopping [suicides] good news, or is the sheer number bad news? And is this more than we’ve ever seen before?” Chasen wrote to Katz, adding:

“It might be something we drop into a general release about our suicide prevention efforts, which (as you know far better than I) prominently include training employees to recognize the warning signs of suicide.”

In testimony to the House Veterans’ Affairs Committee on Dec. 12, 2007 – just two months before the e-mail exchange – Katz had stressed the VA’s successes in treating mental health problems and preventing suicides.

He also disputed that veterans from Iraq and Afghanistan face any special risk of suicide.

“VA’s latest data do not demonstrate an increased risk of suicide among [Afghan and Iraqi theatre] veterans compared to the age and gender matched American population as a whole,” Katz said.

Three days after the testimony, on Dec. 15, Katz painted a grimmer picture in an e-mail to Brig. Gen. Michael J. Kussman, the Veteran Health Administration’s undersecretary for health.

Katz’s e-mail said that from the total population of U.S. veterans from all wars, an average of 18 vets commit suicide each day. Katz said the data, which the VA obtained from the Center for Disease Control, showed that 20 percent of suicides in the United States are identified as war veterans.

“VA’s own data demonstrate 4-5 suicides per day among those who receive care from us,” Katz wrote.

On March 20, 2008, CBS News reported that it had obtained an internal VA study showing that 1,784 vets who received VA services still committed suicide in 2005, an increase from 1,403 such suicides in 2001.

Underscoring just how under-prepared the VA was for the number of PTSD cases that would emerge from the Iraq and Afghanistan wars, documents released to support the veterans’ lawsuit show that prior to the U.S. invasion of Iraq the VA believed it would likely see a maximum of 8,000 cases where veterans showed signs of PTSD.

PTSD Epidemic

In April, the RAND Corporation released a study that said about 300,000 U.S. troops sent to combat in Iraq and Afghanistan are suffering from major depression or PTSD, and 320,000 received traumatic brain injuries.

Since October 2001, about 1.6 million U.S. troops have deployed to the wars in Iraq and Afghanistan. Many soldiers have completed more than two tours of duty meaning they are exposed to prolonged periods of combat-related stress or traumatic events.

“There is a major health crisis facing those men and women who have served our nation in Iraq and Afghanistan,” said Terri Tanielian, a researcher at RAND who worked on the study.

“Unless they receive appropriate and effective care for these mental health conditions, there will be long-term consequences for them and for the nation. Unfortunately, we found there are many barriers preventing them from getting the high-quality treatment they need.”

Soldier’s suicide warnings ignored

Chris Scheuerman, a retired Special Forces masters sergeant, testified before a congressional committee in March and told lawmakers of an urgent need for mental health reform in the military.

Scheuerman said his son, Pfc. Jason Scheuerman, went to see an Army psychologist because he had been suicidal.

The Army psychologist wrote up a report saying Jason Scheuerman “was capable of (faking) mental illness in order to manipulate his command,” according to documents the soldier's father turned over to Congress.

“Jason desperately needed a second opinion after his encounter with the Army psychologist,” Chris Scheuerman testified in mid-March before the Armed Services Committee’s Military Personnel Subcommittee.

“The Army did offer him that option, but at his own expense. How is a PFC (private first class) in the middle of Iraq supposed to get to a civilian mental health care provider at his own expense?” he said. “I believe a soldier should be afforded the opportunity to a second opinion via teleconference with a civilian mental health care provider of their own choice.”

Jason Scheuerman shot himself with a rifle on July 30, 2005. The 20-year-old’s suicide note was nailed to the closet in his barracks. It said, “Maybe now I can get some peace.”

Dr. Arthur Blank, a renowned expert on PTSD who has worked closely with the VA, testified during the federal court hearing in San Francisco last month that multiple deployments are largely responsible for an increase in veterans suicides.

"I think it's because of multiple deployments, which means one is exposed to trauma over and over again," Blank testified.

Last update: Sunday, June 29, 2008

Texas Attorney General Abbott's Medicaid Fraud Control Unit Uncovers $6.1 Million Scheme; 11 Indicted

Eleven Houston suspects face felony Medicaid fraud charges

Texas Attorney General News Release
June 23, 2008

Austin, Texas – Texas Attorney General Greg Abbott’s Medicaid Fraud Control Unit (MFCU) has arrested three Medicaid providers for their involvement in a $6.1 million scheme to defraud Texas taxpayers. Seven other providers also were taken into custody while one fugitive remains at large. Harris County District Attorney Ken Magidson’s office will prosecute the suspects, who face multiple felony charges for participating in organized criminal activity.

The arrests stemmed from MFCU’s investigation into a Humble-based medical billing service, Frazier Medical Marketing, and its owners Dyain Eligha Frazier, 35, and Tajuana Krischell Frazier, 35. According to MFCU investigators, the Fraziers colluded with eight durable medical equipment companies to bill the Texas Medicaid program for supplies that were never delivered to recipients.

“These defendants are charged with orchestrating a complex scheme to bill Texas taxpayers for services not rendered,” Attorney General Abbott said. “The Medicaid program is designed to help the neediest Texans, including children and seniors, with basic health care services. Unfortunately, some Medicaid providers submit false billing records, thereby illegally enriching themselves to the detriment of the taxpayers and patients who depend upon Medicaid for health care.”

Attorney General Abbott added: “Thanks to an outstanding effort by the Medicaid Fraud Control Unit, the Texas Health and Human Services Commission and the Harris County District Attorney’s Office, a multi-million dollar scam to defraud the taxpayers has been shut down. We are grateful to HHSC for bringing this case to our attention and to Harris County District Attorney Ken Magidson for prosecuting the suspects in this case.”

MFCU investigators arrested the Fraziers on June 10 at a luxury automobile dealership in Houston, where the couple was attempting to trade in a 2006 Bentley for a new Mercedes-Benz and cash. The suspects were booked into the Harris County Jail.

The MFCU also arrested Charles Robertson Wickware, 26, on May 30, on charges that he received more than $400,000 in fraudulent reimbursements. On July 12, Mississippi authorities arrested another suspect, Vincent Alan Walker, 38, who operated Dreammakers Medical Supply in Humble. Walker is accused of receiving more than $300,000 in fraudulent Medicaid reimbursements.

Six providers voluntarily surrendered to law enforcement authorities, including:

• Demetria Monique Boston, 34, who operated Anointed Medical Supply in Houston; accused of stealing more than $1.9 million

• Marcus Lee Jefferson, 34, a former contractor with Anointed Medical Supply; accused of supplying illegally obtained Medicaid recipient numbers used to bill the program

• Wilma Perkins Gibson, 42, who operated Perkins Mobility in Houston; accused of stealing more than $300,000

• Christopher Charles Williams, 37, who operated Resource Solutions Medical Supply in Houston; accused of stealing more than $400,000

• Robert Christopher Turner, 38, and Jeffrey Bernard Scales, 37, who operated First American Medical Supplies in Humble; accused of stealing more than $400,000

Jacqueline Ann Briscoe, 41, who operated Briscoe Medical Supply in Houston, is accused of receiving more than $180,000 in illegal Medicaid reimbursements. Briscoe remains a fugitive. Texans with information on her whereabouts should contact the Medicaid Fraud Control Unit at (800) 252-8011.

The cases stemmed from a November 2006 MFCU investigation into 32 Harris County businesses that illegally billed Medicaid for adult diapers, wheelchairs and other medical supplies that were never provided to recipients. Thirty-three people were indicted in a scheme that cost Texas taxpayers more than $7 million. During the 2006 investigation, MFCU personnel conducted more than 1,200 interviews and prepared numerous investigative reports, including evidence against C&M Medical Equipment, which uncovered the Fraziers’ unlawful billing scheme.

In 2006 alone, the costs of the Medicaid program in Texas totaled more than $17 billion. As the state’s chief law enforcement official, Attorney General Abbott has dramatically expanded the Medicaid Fraud Control Unit to save more taxpayer dollars and increase protection for Texas seniors. The Unit has established field offices in Corpus Christi, Dallas, El Paso, Houston, Lubbock, McAllen, San Antonio and Tyler through authorization and funding from the 77th Texas Legislature. Attorney General Abbott’s MFCU works with federal, state and local agencies to identify and prosecute those who defraud Medicaid.

Attorney General Abbott’s MFCU was honored in 2004 by the U.S. Department of Health and Human Services with the Inspector General’s State Fraud Award for effectiveness and efficiency during federal fiscal year 2003 in combating fraud, patient abuse and neglect in the Medicaid program.

To obtain more information about the Attorney General’s efforts to fight Medicaid fraud, access the agency’s Web site at www.texasattorneygeneral.gov.

For Patients: Medical billing advocates can help you steer clear of costly mistakes

12:00 AM CDT on Monday, June 23, 2008
By PAMELA YIP / The Dallas Morning News

If you don't have the energy to deal with high medical bills because you're seriously ill, don't panic. There are professionals who can help you.

A medical billing advocate will comb through your medical bill for errors that cost you more money than you should pay.

Nora Johnson, vice president and director of education and compliance at Medical Billing Advocates of America in Salem, Va., said there are duplicate charges "in almost every [inpatient] bill."

She's also seeing more errors in outpatient bills.

"It's increasing 1,000-fold," Ms. Johnson said.

Billing advocates typically charge a percentage – ranging from 25 percent to 50 percent – of the savings they get for you.

Some charge by the hour or a combination of hourly and percentage rates. It depends on the time required to work on your case.

When you hire a billing advocate, you typically will sign release forms authorizing your health care provider, insurance company and other relevant parties to discuss your case with the advocate.

Before hiring an advocate, ask about his or her background. The person should have experience in medical billing, health insurance or health care administration.

Make sure you feel comfortable with the advocate before hiring. Ask about the advocate's experience and the largest amount saved for a client on a medical bill.

To find a medical billing advocate, visit www.billadvocates.com or call 540-387-5870.

AMA launches campaign to cut waste from chaotic insurance claims process, unveils new health insurer report card

Delayed and inaccurate insurance payments add cost, inefficiency to health care system

June 16, 2008

CHICAGO — To help reduce the substantial administrative burden of ensuring accurate insurance payments for physician services, the American Medical Association (AMA) today launched the Cure for Claims campaign to help heal the ailing system of processing medical claims with health insurers, and unveiled the first AMA National Health Insurer Report Card on claims processing.

"The goal of the AMA campaign is to hold health insurance companies accountable for making claims processing more cost-effective and transparent, and to educate and empower physicians so they are no longer at the mercy of a chaotic payment system that take countless hours away from patient care," said AMA Board Member William A. Dolan, MD.

The inefficient and unpredictable system of processing medical claims adds unnecessary cost to the health care system, estimated as much as $210 billion annually, without creating value. Physicians divert substantial resources, as much as 14 percent of their total revenue, to ensure accurate insurance payments for their services.

"Eliminating the inefficiencies of the billing and collection process would produce significant savings that could be better used to enhance patient care and help reduce overall health care costs," said Dr. Dolan. "To diagnose the areas of greatest concern within the claims processing system, the AMA has developed its first online rating of health insurers."

The AMA's new National Health Insurer Report Card provides physicians and the public with an objective and reliable source of information on the timeliness, transparency and accuracy of claims processing by health insurance companies. Based on a random-sample pulled from more than 5 million electronically billed services, the report card provides an in-depth look at the claims processing performance of Medicare and seven national commercial health insurers: Aetna, Anthem Blue Cross Blue Shield, CIGNA, Coventry Health Care, Health Net, Humana and United Healthcare.

Key findings include:

• Denials. There is wide variation in how often health insurers pay nothing in response to a physician claim (from less than 3 percent to nearly 7 percent), and in how they explain the reason for the denial. There was no consistency in the application of codes used to explain the denials, making it extremely expensive for physician practices to determine how to respond.
• Contracted payment rate adherence. Health insurers reported to physicians the correct contracted payment rate only 62 to 87 percent of the time. Additional analysis will be necessary to determine how often these errors were tied to inaccurate payment. When health insurers report an amount that does not adhere to the contracted rate, it adds additional, unnecessary costs to the physician practice to evaluate the inconsistency.
• Transparency of fees and payment policies. More than half of the health insurers do not provide physicians with the transparency necessary for an efficient claims processing system.
• Compliance with generally accepted pricing rules. There is extremely wide variation among payers as to how often they apply computer generated edits to reduce payments (from a low of less than .5 percent to a high of over 9 percent). Payers also varied on how often they use proprietary rather than public edits to reduce payments (ranging from zero to as high as nearly 72 percent). The use of undisclosed proprietary edits inhibits the flow of transparent information to physicians, adding additional administrative costs to reconcile claims.
• Payment timeliness. Prompt pay laws appear to have been effective in ensuring a relatively quick response to physician's electronic claim. Further analysis will be necessary to determine the extent to which this response is accompanied by accurate payment if the claim.

The report card will be available for the first time today on the AMA Web site.

"Physicians want to focus on caring for their patients, not fighting health insurance red tape that may delay, deny or shortchanged payments for their services," said Dr. Dolan. "The report card provides a useful snapshot of how each of the nation's biggest health insurers can improve the process they use to pay their bills."

The report card demonstrates the inconsistency and confusion that results from each health insurer using different rules for processing and paying medical claims. This variability requires physicians to maintain a costly claims management system for each health insurer.

The report card also suggests that both physicians and health insurers can help reduce unnecessary administrative costs if electronic transactions and full transparency are widely adopted. The costs of re-submitting claims can also be reduced if health insurers make better use of voluntary fields and reason and remark codes in electronic transactions to communicate crucial information to physicians about their claims.

The AMA Cure for Claims campaign will empower physicians to create a systematic approach to claims management so they spend less time and resources on payment hassles with health insurers. To help physicians submit timely and accurate claims, the AMA has created the Practice Management Center, an easy-to-use online resource offering physicians and their staff members tools for preparing claims, following their progress and appealing them when necessary.

The Practice Management Center's library of education materials and practical tools are available online.

###

For additional information, please contact:

Robert Mills,
AMA Media Relations
(312) 239-4991 or (312) 464-5970

Last updated: Jun 16, 2008
Content provided by: Media Relations

Keeping healthcare reform on the front burner

By Ellen Lutch Bender | June 16, 2008 | boston.com

NO SINGLE reform would do as much to improve the wealth of our nation and the lives of Americans as a comprehensive overhaul of our healthcare system. But the best chance of swift and major reform may have died with the end of Hillary Clinton's run for the White House.

Senator Clinton kept healthcare on the front burner, promising action in her first term. Healthcare has already slipped as the top domestic concern, a position it held earlier in the campaign for the first time since the last Clinton campaign in 1992. The economy has passed it. But you can't have a healthy economy without a functioning healthcare system.

Unfortunately, there are no easy fixes, no simple wands that can be waved to solve what ails our healthcare delivery system. Also, there are far too many constituents to alienate along the way.

America should be the envy of the world when it comes to delivering healthcare, since we pay more per capita than any other nation, soon nearly 20 percent of our gross domestic product. In many areas of medicine, particularly in research, we are leading the world. But in others, we are not keeping pace.

We have the second-worst newborn mortality rate in the industrialized world, and rank highest in preventable medical errors. Even worse, one in six Americans has no access to high-quality medical care. What we need from the next president is real leadership and a vision for changing what's wrong with our healthcare system.

Senators John McCain and Barack Obama have reform plans that take divergent paths, neither of which is as comprehensive as Clinton's. Obama would require that children have health coverage, but not adults. The problem with that is if there is no mandate for adults, the young and the healthy will opt out, leaving the older and sicker in the system. This would likely force premiums up.

Obama takes a page from the Massachusetts health reform law and would require employers to offer "meaningful coverage" or contribute to a new public plan for the uninsured and small businesses. He also says health insurance would be more affordable with lower co-pays and deductibles, and he would require insurers to offer coverage without exclusion for preexisting conditions. He would also allow those without insurance through an employer to buy into plans now available to some federal employees.

McCain's plan follows the Republican playbook, that the answer is to cut costs and inspire all Americans to buy insurance by means of tax incentives. His plan would end the tax deduction that employers get for their share of employees' premiums, thus undercutting the employer base of most families' insurance. Instead, he would give families a $5,000 tax credit toward any coverage they buy.

The McCain camp says the tax credit should encourage insurance companies to develop plans that come in at that price, no easy task in high-cost states like Massachusetts. He would encourage competition by allowing insurance to be sold across state lines.

Both plans fall short, and neither truly promises universal access. McCain's plan is particularly radical in that it would eliminate the "safety net" that employees have come to value and would undoubtedly put more of the cost of healthcare directly on individuals and families. It would likely swell the numbers of uninsured rather than reduce them. Furthermore, individual insurance sold on the open market is inevitably more inefficient for insurers and more expensive for consumers. It may make it harder for those with chronic conditions to get health insurance.

There are three areas the next president must focus on, and all three must be in balance: making sure every American has health insurance, improving the quality of care, and controlling costs. Viable solutions to our nation's healthcare crisis will require a bold plan for action, not rhetoric. We can thank Clinton for driving that point home. Whether her health plan was right or wrong, she was tenacious and brave, and her plan was the most comprehensive and detailed. We should demand the same from McCain and Obama.

Ellen Lutch Bender is president and CEO of Bender Strategies LLC, a Boston-based healthcare consulting firm.

Health Insurance Falling Short for More People

Number of underinsured up 60% last year vs. 2003, study finds

By KRISTEN GERENCHER
June 13, 2008 3:38 p.m
Source: wsj.com - The Wall Street Journal

SAN FRANCISCO (MarketWatch) -- People without health insurance risk potential financial disaster if they should need expensive medical care, but a growing number of underinsured Americans also find themselves on shaky financial ground.

Despite the U.S. economy's growth in the last five years, the number of people with health insurance who face high out-of-pocket medical expenses relative to their incomes has risen sharply since 2003, according to a new study.

More than 25 million working-age Americans were underinsured last year, up 60% from the 16 million who had inadequate coverage in 2003, according to a report from the Commonwealth Fund, a private foundation in New York. The rate of underinsurance nearly tripled among middle- and higher-income families, those with at least $40,000 in family income.

"Lack of insurance is only one part of the problem, as even the insured have serious gaps in coverage," said Karen Davis, president of the Commonwealth Fund. "Insurance coverage is the ticket into the health-care system, but for too many, that ticket doesn't buy financial security or genuine access to care."

The upward trend in the underinsured rate reflects how much rising health-care costs have outpaced wage gains. Premiums for family coverage have jumped 78% since 2001, while wages have risen 19% and general inflation has gone up 17% in that time, according to the Kaiser Family Foundation.

Researchers considered people who had coverage all year long underinsured if they had out-of-pocket medical, prescription, dental and vision expenses that amounted to 10% or more of their total household income, or 5% if they were low income. People who had deductibles equal to or greater than 5% of their income also qualified as underinsured because of their potential financial exposure.

During 2007, 42% of adults, or 75 million people, were either uninsured or underinsured, up from one-third in 2003, according to the study of 2,616 people ages 19 to 64. It was published online Tuesday in the journal Health Affairs.

Similar patterns to uninsured

Employers burdened by rapidly rising health-care costs have been shifting more of those costs to workers or limiting benefits, the study found. The underinsured were more likely to have individual or small-group coverage, and those with employer-based health insurance were more likely to work in low-wage jobs or at small firms than their adequately insured counterparts. What's more, the underinsured were more likely to report paying high deductibles and many paid high annual premiums.

The underinsured often resembled the uninsured more so than the insured in their health-care choices and experiences. More than half of the underinsured -- 53% -- and 68% of the uninsured avoided needed care because of cost, compared with 31% of the adequately insured who went without, the study found. That includes not seeing a doctor when sick, not filling prescriptions and not getting recommended diagnostic tests or treatments.

About 45% of the underinsured reported difficulty paying medical bills, being contacted by collection agencies or changing their way of life to keep up on health-care payments, just shy of the 51% of uninsured who said the same.

In the U.S., even people with health insurance can rack up medical debt or face bankruptcy, said Cathy Schoen, senior vice president of the Commonwealth Fund. "As a nation we are losing ground. We need to move in new directions."

Leon Rousso, a certified financial planner in Ventura, Calif., who sells health insurance as part of his business, said he tries to place moderate-income people in health plans that have a sensible annual out-of-pocket maximum and reasonable coverage for their biggest potential out-of-pocket costs. Sometimes that means moving them to a higher deductible plan in exchange for lower premiums.

Of course, many people have to take whatever their employer offers them, he said.

Insured people "don't really have a lot of clout," Rousso said. "Middle to lower middle class, that's really where the vulnerable spot is. You see a lot of people who don't have a lot of money."

Those who shop for their own plan are wise to look for coverage of big-ticket items. Rousso advised focusing on financial protection for hospitalization charges and prescription drugs.

"Those are the biggest places to lose your fortune," he said. "It's all about protecting your assets."

Many of the underinsured are in scaled-down, more affordable health plans, said Nancy Davenport-Ennis, chief executive of the nonprofit Patient Advocate Foundation in Newport News, Va. The group tries to help people with chronic, debilitating and life-threatening conditions get the care they need, with 78% of its annual cases involving cancer patients.

"We actually found that an underinsured consumer has a tougher time getting to resources than a completely uninsured consumer," she said.

The underinsured are often in plans that have limits such as dollar caps on diagnoses and specific services and restrictions on the number and kind of drugs covered, which can undercut the kind of aggressive care many cancer patients count on, Davenport-Ennis said.

"In affordable plans, it's almost standard to see a cap on the number of radiation visits you can have a year - somewhere between 12 and 15 -- while most cancer therapies that have radiation as part of the treatment protocol historically require six consecutive weeks of daily treatments," she said. "If you're capped at 12, you're going to be a private-pay person for the next 18."

The Patient Advocate Foundation offers free case management for health-insurance issues of the seriously ill. Its hotline is 1-800-532-5274.

Controversy over cost controls

The U.S. spends enough on health care -- 16% of its gross domestic product -- to extend adequate health insurance to all, said Alan Sager, a health policy and management professor at Boston University's School of Public Health.

"It's something everyone wants and deserves, and crafting durably affordable health care is essential to rebuilding the economy," he said.

"If we continue to accelerate toward the cliff, we'll be spending more money on care but will have more uninsured and underinsured people, which means hospitals and doctors will work harder to overserve those of us who still have good insurance."

In Massachusetts, a statewide reform law passed in 2006 that aimed to cover all residents "took an important step" but introduced new tensions, he said, especially around politically palatable cost-control methods. Many of the ones currently in vogue in national politics as well won't do the trick, Sager said.

"The ideas that are under widespread political discussion -- electronic medical records, prevention, chronic-care case management or deinsuring patients so they will be more motivated to shop by price and quality -- none of these things will work to contain costs," Sager said. "They're all being pushed because they offer the shallow political promise of containing costs without actually disrupting business as usual in health care. Business as usual in health care means regular, large infusions of more money every year."

Still, Sager said he's optimistic that the next five years will bring major improvements in the nation's health-care system.

"We all know we're medically vulnerable because none of us is going to live forever, but as more of us realize that we're also financially vulnerable, we'll demand change and [solutions] that work financially, medically, ethically and politically."

Write to Kristen Gerencher at kgerencher@dowjones.com