The shame of health care in America - The Record (Bergen County, NJ)

MARY ELLEN SCHOONMAKER
The Record (Bergen County, NJ)
12-02-2004

The shame of health care in America
MARY ELLEN SCHOONMAKER
Date: 12-02-2004, Thursday
Section: OPINION
Edtion: All Editions.=.Two Star B. Two Star P. One Star B

THE UNITED STATES spends more on health care than any other nation, and our medical care is widely considered the best in the world. But it's not for everyone.

Top-notch specialized care in this country is only guaranteed to the rich and those with gold-standard health plans. Even the most basic care is only guaranteed to the poor and the elderly, through Medicare and Medicaid, and to the rapidly shrinking number of Americans lucky enough to be insured by an adequate and affordable plan.

Those with no insurance - even in doctor-drenched Bergen County, where there are 963 listings in the Physicians and Surgeons section of the Hackensack area Yellow Pages alone - take their chances.

In my last column, I asked uninsured North Jersey readers to describe their experiences. We need to hear more voices like these.

* A single 38-year-old construction worker, who does seasonal work that pays an hourly wage: 'It is impossible for me to afford individual health insurance coverage as I need to pay for rent, utilities and transportation to get me to the jobs. Even though blessed with good health for the most part, I ended up in the hospital emergency room last winter for 10 hours. I could not pay the extraordinary amount charged to me for my care.'

* A 56-year-old woman, who works for a lawyer in private practice, cannot afford health insurance and has not been to a doctor in more than three years: 'Forget about preventive medicine like mammograms. I cannot afford it. I'm not ashamed to say that when I needed an antibiotic I used my daughter's leftover dose. I often wonder what would happen to me if I needed surgery and a prolonged hospital stay.'

* A 63-year-old laid-off truck driver: 'I could have picked [insurance] up with COBRA at a cost of $725 a month. I never could understand why my single rate is the same as a family of five. Common sense shows there would be a greater need with the latter. It is a shame I have to take a gamble with my health.' (COBRA allows the unemployed to stay insured by paying the same monthly premium as their former employer.)

* A 29-year-old divorced woman who does facials at spas that do not offer insurance: 'I go to Planned Parenthood for my annual gynecological visit. When I get sick, my parents have to pay my doctor visits. I hate taking from them, but there is no alternative. I have something that should be looked at, but I am afraid. When and if I get insurance, I don't want them to say I am not eligible.'

* A 24-year-old home health aide who says she has had 'horrific experiences dealing with emergency rooms': 'One treated me like a drug seeker once the staff passed the word I was uninsured. I was treated so badly I promised myself I would be almost near death before I went to another ER. Last winter I visited an emergency room only because I had an infection for over two months. I was in so much pain the staff couldn't believe I waited so long.'

* A woman who was offered COBRA coverage for $1,200 a month but could not afford it and later had some temporary bare-bones coverage through her husband: 'I was hospitalized during this time with chest pains. I was in the hospital for a day and a half and had two outpatient procedures, and my bill was $31,000. The insurance paid just under $3,000.'

*

It's a well-kept secret that hospitals often charge far more than the actual cost of treatments - and often charge the uninsured far more than the insured for the same procedures. In a recent study, New Jersey ranked second behind California in the number of hospitals that charge the highest markups. Generally, patients with insurance don't pay the highest prices, since big insurers have the leverage to bargain for discount rates. But uninsured patients can sometimes end up paying bills for years or even going bankrupt.

The huge inequities are perhaps the most infuriating part of the American health care system. They mean that in Bergen County, one of the richest counties in the nation, some women with breast cancer will get state of the art treatment and access to the latest life-saving advances. And some women who can't afford it will go without the first and cheapest step, a mammogram - maybe until it's too late.

According to the Institute of Medicine, which advises the government on health policy, uninsured women with breast cancer have a 30 percent to 50 percent greater risk of death than women who are insured.

As of now, America's uninsured - 44 million people - equal the entire population of 14 states, as authors Donald Barlett and James Steele point out in their new book, 'Critical Condition.' They say no other industrialized nation would - or does - tolerate this injustice.

How much longer will we?

* * *

Mary Ellen Schoonmaker is a Record editorial writer. Contact her at schoonmaker@northjersey.com. Send comments about this column to oped@northjersey.com.

Health Debate Has America Feeling Dizzy - Chicago Sun-Times

Are you confused about the health care debate?

Are you a bit dizzy from trying to distinguish among the Clintonplan, the Cooper plan, the Senate Finance Committee plan, the HouseWays and Means Committee plan, the Mitchell plan, the Gephardt planand the Dole plan?

Of course you are. That's because we're confused as a peopleabout what we want, and how we think it should be paid for.

Here's one example, provided by Hillary Rodham Clinton. Thereports of her comments focused on the 'personal attack' shesupposedly made on Texas Sen. Phil Gramm. But the substantive pointshe made deserves examination.

How does Gramm feel, she asked, about government-mandatedpayroll deductions in order to support health care for an entireclass of Americans regardless of their economic need?

In fact, we have such a program. It's called Medicare. Itcovers every American over the age of 65. And it's almost impossibleto find a senator who will stand up and say this program should berepealed or drastically curtailed.

Medicare is one of the most costly 'entitlement' programs run bythe federal government. In hospital insurance alone, Medicare cost$67 billion in 1990; when the program was passed in 1965, costprojections for 1990 were estimated at $9 billion.

Could we cut the cost of Medicare? Sure - provided we werewilling to tell senior citizens: 'You can spend this amount of moneyfor health insurance, and no more.'

It's called 'rationing.' And given the clout of the seniorcitizens' lobby, the odds on enacting some form of rationing areabout the same as the chance that we will cede Oregon and Idaho toCanada.

At the same time, the specter of the government somehow gainingany more control over the nation's health care system is frighteningto millions of Americans.

In part, this is a product of the multimillion-dollaradvertising campaign; Harry and Louise have done their jobs.

In part, this fear is rooted in a belief that the governmentwill louse up anything it gets its hands on. This is exemplified bythe argument that a government-run health care system will combine'the efficiency of the Postal Service with the compassion of theInternal Revenue Service.'

What all this adds up to is a citizenry whose politicalschizophrenia was dramatically demonstrated by a recent NBC poll.

When asked if they favored cuts in 'entitlements' to cut federalspending, 61 percent of those polled said 'yes.'

But when asked if they favored cuts in 'government programs suchas Social Security, Medicare and Medicaid' - the three biggestentitlements - 66 percent of those polled said 'no.'

It is in this atmosphere, then, that the Senate health caredebate will take place: with the public favoring a health care planthat covers everyone, provides all the health care that we desire,preserves all the choice that most Americans have, and costs lessthan what we now pay.

Meanwhile, the rest of the industrialized world, which has hadsome form of government-supplied health care for decades, looks on inconfusion.

What's the Future of Health Care in America? - The Washington Post

What is about to happen-or not happen-to health care in America,at least for the next few years?

We're not going to see any quick, large-scale expansion offederal health benefits to replace private health insurance.

We're not going to see any broad replacement for the catastrophicMedicare benefits passed by Congress, then dropped like a hot potatowhen too many seniors objected to paying for them.

When we do see new federal benefits-when and if in the shortterm-there will have to be new taxes or premiums or payments in oneform or another.

In an attempt to control costs, more of us are going to begetting care quarterbacked by someone-or someones-who decide whatkind of care we may have, what kind of care is appropriate for us andwhat is not. This is called 'managed care.'

Doctors, hospitals and patients-us-will all be subject toincreasing 'incentives' to give or get care 'efficiently.' Translatethat into: Don't spend too much, or it'll come out of your pocket.

And those who argue for some broad new 'national health plan' tosolve health problems-including the problem of all the 30-somemillion Americans with no health insurance and millions more with badhealth insurance-had better not hold their breath. Any near-termprogress will be incremental, not sweeping.

These are my predictions after a meeting last week with thegovernment's chief payer for health care, Gail Wilensky, the newadministrator of the Health Care Financing Administration.

This Medicare-Medicaid agency currently spends $165 billion ayear paying for care for 55 million old or poor Americans. The waysit spends it and the rules it adopts tend to set the pattern for thenation's entire spending on health, now in the $650 billion ball parkand growing.

Wilensky is a health economist with wide experience in and out ofgovernment. Those who know her find her both realistic and humane, acombination she might find agonizing when trying to provide humanecare without new dollars. There are no perfect prophets, but she isin as good a position as any American to tell us what the Bushadministration and Congress may be able to agree upon in theforeseeable future, which-in today's climate-I'd define as maybe ayear.

Her statements in an hour-long session with a health reporters'group:

On medicare benefits: If they are increased, 'we should do it ona more thorough basis, not by a piecemeal addition of three or fourbenefits,' for example, the mammography benefit for older women lostwhen the catastrophic legislation was canceled. But 'until we solveother problems'-most outstandingly the problem of financing-newbenefits of any kind may have to be postponed.

On financing: As for the March 2 report of Congress's BipartisanCommission on Comprehensive Health Care, 'the Pepper Commission,'recommending an $86 billion program of health insurance for theuninsured and for long-term care, 'I'm troubled by the lack of afinancing scheme . . . While it's okay to say that is a problem oftax-writing committees to some extent,' they might have suggested afew ways.

On long-term care for the aged and disabled, a crying need in themind of many seniors: 'An issue we've got to deal with is to whatextent do we use private insurance, and what is the government'srole?' Whatever the role of government, 'I don't think it needs to bebudget-neutral'-translation, not exceeding the current budget-'at alltimes . . . I do assume that any kind of program to come out of thisadministration would have its own financing attached.'

But whether we think about long-term care or other new benefits,we have to realize we're dealing with an aging population, 'we'llhave to be cautious in bringing in new entitlement programs.'

And given the rapidly aging population-a population that iscertain to cost more to care for in sheer numbers-'it is a questionwhether we will be able to broaden benefits regardless of income.'

On the uninsured or underinsured employed: 'I have great concernabout mandating employers to provide benefits,' for fear of thwartingnew small-business activity and putting minimum-wage workers out of ajob. 'We're struggling now {in this administration} with finding away to encourage employers or to give them a push, without raisingsome of the problems of mandated insurance.'

On value for money: 'There are a lot of concerns that we are notgetting value for our money, that some health care may not benecessary or appropriate. I think if we could make people believethey are getting good value, they'd be substantially less concernedabout the money they're spending.' On oversight of the quality ofcare, on research to determine the best ways of care-much of itresearch just starting-'not enough people have been minding thestore.'

On managed care: 'I'm a strong advocate of managed care' in manyforms-various forms of HMOs and other prepaid health plans, and planswith 'incentives' for a more conservative, more cost-conscious use ofone's health plan.

'I'm not for coercing people into managed care. I think theyshould have options, and should be able to opt out of a plan.' But'I'm for such incentives as paying a higher deductible if you choosea more expensive plan, or paying a higher co-pay if you go out ofyour plan' for care.

'Managed care plans have particularly great potential for theelderly, who have so much chronic disease and often take severalmedications, some with adverse potential. This is far easier tocontrol in a managed system.'

On doctors' medical liability insurance and its high cost becauseof so many malpractice suits: 'This is one problem that has to besolved, particularly if there is to be sufficient participation ofobstetricians in Medicaid and other programs' to give prenatal careto needy and high-risk women.

On hospitals: 'When we look at nationwide hospital bed occupancyrunning about 60 percent-and when most people think an efficientoccupancy rate ought to be about 85 percent-it's a pretty good cluethat there may be a problem' of too many hospitals. 'I'm not forfederal regulation of occupancy rates. I am for financial pressuresand financial incentives to encourage efficiency.' And we may needto make exceptions to make sure some needed hospitals stay open.

On hospital mortality rates, published annually by HCFA in thepast few years but much criticized by hospitals for lack of validity:'We'll keep publishing them. I hope we can improve them.'

Wilensky is obviously a believer, as she has often said, in'incremental,' step-at-a-time improvements in the health system,rather than some sweeping change to a nationwide, government-paidsystem a` la Canada or Britain. This may be realistic in a time whena President pledges 'no new taxes,' when any new payment methods forhealth care, whether called 'taxes' or something else, will bedifficult to enact, and when the nation has many other needs besideshealth care.

She is also is a believer in controlling today's rapidlyescalating health costs by (1) managed care, which ideally restrictsthe care we get to that which is needed and of proved effectiveness;(2) financial incentives-or penalties-to encourage doctors, hospitalsand patients tobe cost-conscious about care; and (3) accelerated research to learnwhat kinds of care are really effective and should be provided.

Is it realistic to think these steps alone can control healthcosts? I fear not. I fear that, as time goes by, some of us mayhave to sometimes accept less care-effective but expensive care-thanwe'd like, a process that is already happening in underfundedinner-city hospitals like D.C. General Hospital.

But this is called 'rationing,' so I hope Wilensky is right.

REP. ALTMIRE VOTES TO PROTECT HEALTH CARE FOR AMERICA'S CHILDREN - US Fed News Service, Including US State News

Rep. Jason Altmire, D-Pa. (4th CD), has issued the following news release:

U.S. Representative Jason Altmire (PA-4) voted today in support of the bipartisan House-Senate compromise to reauthorize the State Children's Health Insurance Program (SCHIP). The $35 billion package would protect health care coverage for over 6 million children currently enrolled in the program and add up to 4 million more. Congressman Altmire strongly urged President Bush to withdraw his veto threat and to quickly sign the measure into law before the SCHIP program expires on September 30, 2007. Without an extension of SCHIP, health care coverage for 180,000 Pennsylvania children could be threatened.

'President Bush continues to ignore the stark reality faced by thousands of Pennsylvania's working families, families who work hard and play by the rules but are finding it increasingly difficult to afford health care coverage for their children,' said Congressman Altmire. 'Rather than joining us in our effort to ensure that every child has a healthy future, he stubbornly continues to push policies that would instead cut children from the health care rolls. I again call on the president to end the political gamesmanship with children's health care coverage and to work with Congress to solve the problem of providing 9 million uninsured children with health care.'

'One out of every eight American children - over 280,000 in Pennsylvania - are uninsured. Congress is doing its part, and now it's the president's turn,' continued Congressman Altmire. 'We must act now to extend the SCHIP program and protect the health care coverage of Pennsylvania's children.'

The State Children's Health Insurance Program Reauthorization Act of 2007 invests $35 billion over five years to strengthen and improve SCHIP. The bill ensures that the over 6 million children who currently participate in SCHIP will continue to receive health coverage and provides states with the resources to add up to 4 million additional children to the program. Further, the measure will also provide enrolled children with quality dental care and mental health services on par with medical and surgical benefits currently covered under SCHIP.

The House passed the State Children's Health Insurance Program Reauthorization Act today by a bipartisan vote of 265 to 159. Senate passage is expected later this week. The bill has been endorsed by AARP, America's Health Insurance Plans, Consumer Health Coalition, Families USA, Pennsylvania Partnerships for Children, and over 270 other organizations.

The Affordable Health Care For America Act ("AHCAA").(United States. Congress. House) - Mondaq Business Briefing

The U.S. House of Representatives moved closer to an overhaul of the nation's health care delivery system by passing the Affordable Health Care for America Act ('AHCAA' or the 'Act') late in the evening of November 7, 2009. Passage of AHCAA was not a foregone conclusion headed into the weekend. However, a visit to the Hill by President Obama and adoption of an amendment restricting public funding for abortions ultimately swayed a number of key Democrats who originally had opposed it to vote for the Act. The Act was approved by the House with a vote of 220-215.

The key provisions of the Act include employer mandates, individual mandates, a regulated health insurance marketplace, known as the 'Exchange,' a public health plan and various revenue generators to pay for the program. The key provisions of the Act are summarized below:

Employer Mandate--Play Or Pay. Starting in 2013, the Act will require employers to either provide health coverage (an 'offering employer') to employees and their eligible dependents or pay a federal payroll tax equal to 8% of all compensation paid to employees (certain small employers are exempt from this tax or are subject to a graduated tax rate). An offering employer generally must automatically enroll eligible employees in their employment-based health plan and offer the employees the option of selecting individual or family health coverage. Under the Act, employers must contribute 72.5% of the premium cost for individual and 65% of the premium cost for family coverage, for the lowest-cost qualified plan. Family coverage under AHCAA includes the employee's spouse and qualifying children. The Act also requires an offering employer to contribute to the Exchange for each employee who declines employer coverage but enters the 'Exchange' (described below) for insurance if the cost of the employer's insurance is greater than 12% of the employee's income. The contribution is generally 8% of the average salary for the employee. Small employers with annual payrolls at or below $500,000 are exempt from this requirement. The contribution phases up from 0-8% between an annual payroll of $500,000 and $750,000, at which point employers are subject to the full 8% contribution requirement.

Individual Mandates. Beginning in 2013, all individuals will be required to have acceptable health insurance coverage that meets or exceeds the qualifications of the federally-defined minimum benefit plan. The federal government will establish the baseline qualifications for coverage. Those who do not have this type of coverage will be required to pay a penalty equal to 2.5% of their income. Waivers are allowed for Native Americans, those with religious objections, dependents and individuals with a financial hardship, defined as premiums over 12% of income. Acceptable coverage generally includes grandfathered individual and employer plans, certain government coverage (e.g., Medicare, Medicaid, certain coverage provided to veterans, military employees, retirees and their families, and members of Indian tribes), and coverage obtained pursuant to the Exchange or an employer offer of coverage.

Health Insurance Exchange. AHCAA establishes a Health Insurance Exchange (to begin in 2013) (the 'Exchange') under the purview of the Health Choices Administration. The Exchange will be a regulated marketplace for individuals and small employers to comparison shop among private and public insurers, including new health insurance co-ops. The Commissioner of the Health Choices Administration is charged with establishing a process through which to obtain bids, negotiate and enter into contracts with qualified plans as well as to ensure that different levels of benefits are offered through the Exchange with appropriate oversight and enforcement. In Year One, individuals not enrolled in other acceptable coverage, as well as small employers with 25 or fewer employees, are allowed into the Exchange. In Year Two, employers with 50 and fewer employees are allowed into the Exchange. In Year Three, the Commissioner is, at a minimum, required to open the Exchange to employers with 100 and fewer employees, but is permitted from that year forward to expand employer participation as appropriate, with the goal of allowing all employers access to the Exchange. States may opt to operate the Exchange at the state level in lieu of participating in the national Exchange, provided an electing state follows the federal rules.

Public Health Insurance Option. Under the Act, a national public plan will be established in 2013 to compete with private insurers in the Exchange. The public option will operate on a 'level playing field' with private insurers, offering the same benefits, abiding by the same insurance market reforms, following provider network requirements and other consumer protections. The Secretary of Health and Human Services will administer the public option and negotiate rates for providers that participate in it. The public health insurance option is provided startup administrative funding, but is required to amortize these costs into future premiums as the option must be self-sustaining - i.e., financed through premiums - after the initial funding. Significantly, providers are presumed to be participants in the public option unless they opt out of participation.

Revenue Generation. The Act contains various provisions meant to generate revenue to pay for the expanded health care coverage called for under AHCAA. Revenue generators under the Act include:

Distributions From FSAs, HRAs, And HSAs For Medicine Qualify Only If For Prescribed Drugs Or Insulin. The Act limits nontaxable reimbursements from health flexible spending accounts, health reimbursement arrangements, and health savings accounts to medicines and drugs prescribed by a medical provider, or insulin. Over-the-counter drugs will no longer be reimbursable through these arrangements under the Act.

Limitation On Health Flexible Spending Arrangements Under Cafeteria Plans. The Act limits salary reduction contributions to health flexible spending arrangements to $2,500 (indexed to the consumer price index).

Increase In Penalty For Nonqualified Distributions From Health Savings Accounts. The Act increases the 10 % penalty on distributions from health savings accounts that are not used to pay for health-related expenditures to 20 %.

Denial Of Deduction For Federal Subsidies For Prescription Drug Plans Which Have Been Excluded From Gross Income. Certain employers are eligible for Federal subsidies with respect to prescription drug benefits provided to retirees, and the subsidies are excluded from gross income. The Act eliminates the ability of employers to deduct expenses for which they are subsidized.

Surcharge On High Income Individuals. The Act levies a 5.4 % tax on modified adjusted gross income in excess of $1 million in the case of a joint return ($500,000 in the case of other returns).

Excise Tax On Medical Devices. The Act establishes a 2.5 % excise tax on medical devices sold for use in the U.S. The excise tax does not apply to exported devices and does not apply to retail sales of devices.

AHCAA grew out of H.R. 3200 (aka America's Affordable Health Choices Act of 2009) and contains a series of compromises and new provisions not found within the predecessor act. The chart below illustrates key differences between AHCAA and H.R. 3200:

> The Senate will now take up deliberations regarding national health care reform. After the House bill passed, key Senators went on record as opposing prominent components of the Act, including the 'public plan.' However, Senate Majority Leader Harry Reid has indicated he supports a public option, which includes the ability for states to 'opt out' if they can provide a reasonable alternative. Additionally, there are key differences between AHCCA and competing bills currently pending in the Senate, including the Health, Education, Labor and Pensions Committee's (HELP's) American Health Care Choices Act, and the Finance Committee's American Health Future Act. The American Health Future Act, for example, does not embrace the 'Play or Pay' approach adopted in the Act with respect to an employer mandate. Rather, the Finance Committee bill provides that, starting in 2013, employers with more than 50 employees who do not offer health care coverage to an employee must reimburse the government for each full-time employee (30 or more hours a week) who receives a 'health care affordability tax credit,' equal to the average national Exchange credit, and a penalty of up to $400 per number of employees. While the Senate's current proposed bills do not include the AHCCA's surtax on high wage earners, the Finance Committee bill includes an excise tax on high-cost insurance plans. This so-called 'Cadillac Tax,' which would again begin in 2013 (after the next presidential election), would be a nondeductible excise tax of 40% on premiums in excess of $8,000 for group health individual coverage and $21,000 for group health family coverage.

If these and other differences cannot be addressed in the Senate version of health care reform, the Act and whatever Senate legislation is passed, if any, will be sent to a joint committee for reconciliation. The reconciled bill would then need to be passed by both the House and the Senate.

In short, there is still a long way to go before we will know all of the requirements of health care reform. It is impossible for anyone to predict what will ultimately appear in a bill that would be sent to the President for his signature. We will continue to issue Client Alerts addressing key issues under the Act and Senate legislation, as well as updating our clients to new developments in this area of the law. In the meantime, please feel free to contact your Proskauer attorney or any member of our Health Care Reform Task Force.

www.proskauer.com

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Health care in America. (Capitol Corridors) (column) - The National Public Accountant

Health Care in America

The debate over the nation's health care situation recently has intensified in earnest here in Washington. The Senate's Democratic leadership has unveiled a plan which it believes will help to solve the health care crisis. As this article is penned, the Republicans are framing their response. The media have labeled health care 'the issue of the '90s.' A great deal is at stake for all Americans, but especially for small businesses and their advisors.

The scope of the health care crisis is staggering. The twin problems of access and cost have taken a heavy toll on the nation's economy. Some 37 million Americans have no health insurance coverage at all; three-fourths of these individuals are working men and women. The price of insurance premiums has grown by double digits each year for the past several years. In a development surprising some business leaders, more and more Americans of every political persuasion are throwing up their hands in desperation and looking to Washington for a solution. The Democrats think they've found the answer in HealthAmerica, their new initiative.

The legislation seeks to assure every American basic health insurance coverage, either through a plan provided by an employer or through a federal-state public insurance program called AmeriCare. Except for long-term care services, AmeriCare would replace Medicaid. The Democrats maintain their plan couples universal health insurance coverage with a comprehensive cost-control program and with provisions to reflect the special needs of small business.

The crux of the plan is what has been dubbed 'play-or-pay.' Employers would be offered a choice of providing coverage meeting specified minimum standards for employees and their families or making a contribution to the public plan. Proponents of HealthAmerica estimate that the contribution would work out to about 8% of payroll. However, the Small Business Administration estimates that current actual health care costs for small business average approximately 12% of payroll. One must ask how the government proposes to provide coverage for one-third less than the private sector does.

For employers choosing to 'play,' employees may be required to pay up to 20% of premium costs. The plan would be required to cover all employees who work more than 17 hours per week and their families. One of the problems still to be ironed out is family coverage for dual-career families.

For those not covered by employment-based insurance, including those whose employers choose to 'pay,' AmeriCare coverage would provide access to the same health care benefits. AmeriCare would be administered by the states, subject to national standards for eligibility, reimbursement and coverage.

Individuals below the poverty line will pay no premium. Those between 100% and 200% of poverty would pay on a sliding scale. Those above 200% of poverty would be charged based on ability to pay.

Of course, the reason the government is feeling pressed to get into the health care business is that the private sector can't afford it anymore. It's tough to imagine the public sector would fare any better without some change, so cost containment measures are included in the bill. The cost containment strategy is organized around steps to reduce unnecessary and ineffective care, to reduce the excessive costs of the pluralistic payment system and to limit unrestrained price and volume increases by providers. The first goal is a little nebulous. The second would be achieved through standardized claim forms. The last item, however, really gets to the heart of the health care crisis - cost.

In order to rein in costs, an independent agency along the lines of the Federal Reserve Board would be established to set national health expenditure goals, in total and by sector of the health care industry. Advisory goals would also be established by state and region. The board would then convene providers (e.g., hospitals, doctors, et. al.) and purchasers (i.e., insurance companies) to conduct negotiations on rates and other methods of achieving expenditure goals. Negotiated rates would be binding.

The states would also be required to establish insurance consortia. It is hoped that, through these consortia, enough economic pressure would be brought to bear on providers to encourage them to negotiate in earnest. However, the bill stops short of actually mandating prices for health care services.

In order to make this medicine a little easier for small business to swallow, several incentives have been included in the legislation. First, the applicability of the law to small business would be phased in over a five-year period. Next, Section 162(1) of the Internal Revenue Code (deduction of health insurance costs for self-employed persons) would be made permanent and expanded to 100%. Finally, very small businesses with low profit margins would receive a tax credit to cover up to 25% of the program's costs.

The Democrats' proposal has received generally favorable reviews, from being labeled an 'important first step' to qualified support. Again, it must be pointed out that this support cuts across traditional ideological boundaries. Moreover, it appears that the Republican response will not include universal coverage. Although it would be premature to comment on a plan that has not even been formally announced, this fact, if true, would seriously damage any proposal's credibility.

Nevertheless, certain important questions about HealthAmerica remain to be answered. Particularly: 1. How can small business be certain

that the 8% figure won't

quickly turn into 12% or even

15% as costs rise and the level of

required health care services is

sought to be expanded? 2. Why are the plan's proponents

mandating coverage, but not

mandating prices? If the consensus

has emerged that the

marketplace must be usurped,

why do so only on one side of the

equation? 3. As with all 'revenue-negative'

legislation in Washington these

days, where will the money come

from to finance the government's

end of this deal?

A competitive vision for health care in America - Dynamic Chiropractic

The 13th century Italian poet Dante observed, 'A great flame follows a little spark.'

Thomas Jefferson said, 'The greatest threat to freedom is the expansion of government power.'

In no other profession is government more involved than in health care in the 21st century.

The Policy Argument

The policy argument against choice in health care runs something like this: Since 90 percent of Americans are in a third-party payment system, we must devote all our energies to 'fixing' that system. We must also fight freedom of choice with regard to doctors outside of managed care networks, because choice brings competition, and competition will increase costs.

It is certainly true that most Americans currently receive health care either paid by the government (Medicare or Medicaid) or their employers (HMOs or managed-care plans), but this is precisely why we should embrace choice rather than reject it. A system that can command (and indeed, enforce) a 90-percent market share is a monopoly, and as everyone knows, monopolies produce bad products at high prices. Why? When there is no competition, customers have no alternatives; when there are no alternatives, customers have to accept whatever a monopoly decides to produce, and pay whatever a monopoly decides to charge.

This is exactly the dismal record of the government's long-standing monopoly in health care. Medicare costs almost 10 times its initial projected costs. The government calls this 'cost overruns,' which gives it a reason to tax more and get even more control over the people. But overall health care has not improved. People are not getting better care at a cheaper cost. The government blames doctors and patients - it is great at pointing the finger, but the public should stop looking where the government is pointing and start looking at the government itself.

More government is not the solution to our problems. We are told if we just keep plugging away at failed solutions - if we spend more money, hire more healthcare managers and administrators, and create more government commissions and regulators - we will get different results.

In the meantime, what happens to the patient? To defenders of the status quo, the primary concern is not what happens to the patient if he or she is forced to stay in the system, but rather, what happens to the system if corporate bureaucrats or government bureaucrats lose control and the patient is free to leave. By this reasoning, no matter how bad the situation gets, we must not help the patient to leave, lest in leaving, he makes a bad situation worse. Does this make any sense at all?

Does the patient exist to serve the system, or does the system exist to serve the patient? Even if the policy argument were not morally bankrupt, it runs counter to settled economic truths. Long before the Sherman Antitrust Act (a flawed, but popular piece of legislation) was passed in 1890, Americans recognized that monopolies stifle innovation and defraud the customer. The solution has never been to increase the power of the monopoly; the only remedy that has worked consistently is to encourage competition.

The Historical Argument

Competition may be deeply ingrained in our nation, but according to opponents of choice, so is government health care. This is the historical argument against choice, which alleges that America was founded on a system in which government was given the primary responsibility for delivering health care to the people. In other words, government health care constitutes the very underpinnings of our republic, and reflects our founding fathers' deepest aspirations.

The problem with this argument is that it is false. The government delivery system we have come to know as Medicare wasn't established until 150 years after America was founded. The system it forcibly replaced - the system of health care in our country was founded on - was characterized above all by diversity, competition and choice. People could choose from different private practitioners, while competition spurred innovation and expanded services. This approach wasn't perfect, but it worked well, and it was improving steadily. Not only did it produce some of the greatest doctors in history, it also produced a system of health care that led to technological breakthroughs and expanded methods of health-care delivery.

The Civic Argument

Such revelations don't seem to faze the anti-choice crowd. Its members simply 'step over' history and move on to the civic argument against choice. They admit that the free-market approach to health care may have worked in a more homogenous society, but quickly add that in today's diverse culture, we need government health care to promote standards of care and uniform guidelines that are acceptable to everyone.

Conflicts began immediately after the creation of uniform standards of health care. There are over 150 different guidelines just for the treatment of back pain. Which one is correct? Health care is an inexact science, and even if it were exact, there would still be human error. Doctors have to learn how to document all patient records to specific practice guidelines developed by the government and different HMO standards. Fees for services are set according to a uniform standard, rather than the expertise or experience of individual practitioners. Look at the recent battles involving HMOs that denied care for basic procedures that used to be standard. HMO profits are paramount to patient care; a 'one size fits all' policy is developed, and patients who fall between the cracks with complicated cases are just out of luck. The question becomes not whether health care is rationed, but who decides what is rationed? The decisions are made not between patient and doctor, but by corporate or government bureaucrats.

By claiming to deliver what families need, rather than giving them the power to pursue what they want, the government health system needlessly tramples individual rights and creates unnecessary conflict.

The Legal Argument

Why not enable patients to pursue the health care they want? According to the final argument against choice, it is against the law. Patients are caught in a 'catch-22' situation. The same people in government health programs argue that the law prevents them from using a fraction of their tax dollars to leave the system.

Since some patients may flee to doctors outside their network, we are told this represents an unconstitutional establishment or tax-supported health care. In a competitive system, patients would receive the money and do their own choosing. It is almost as if advocates of the government's monopoly in health care have discounted patients for so long, they have forgotten they even exist.

Freedom Is What Matters

The last weapons in the government's health-care-monopoly arsenal are fear and prejudice, disguised as concern for the welfare of the disadvantaged. Thus, its leaders insinuate (in politically correct terms, of course) that poor and minority patients won't make good decisions when it comes to their own health care. This argument underestimates the fundamental value that makes this country great. In America, we must place our faith in freedom and the ability of ordinary, often humble people to make the best decisions, by their own lights, for themselves and their families.

[Author Affiliation]

Allen Unruh, DC President, South Dakota Chiropractic Association

[Author Affiliation]