Solving the Health Care Crisis in Minnesota Minnesota Universal Health Care Action Network

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Solving the Health Care Crisis in Minnesota
Minnesota Universal Health Care Action Network

• Prepared and Researched by Joel M. Albers
  health economics researcher, clinical pharmacist
• Website www.uhcan-mn.org,
  www.drugindustrywatch.bravepages.com
• Email joelalbers_at_uhcan-mn
• Tel [phone]

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Outline

• Documentation of the health care crisis
• Analysis of power structure of the industry
• Whats causing the health care crisis ?
• Compare universal publicly-funded single-payer
  model to private HMO, multi-payer, job-based
  market approach.
• What polls, studies show about various health
  care reform models ability to cover all without
  increasing costs.
• Solving the Crisis by Building a Movement

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Essence and Summary of Health Reform Debate

• Health care system that is market-based in which
  health care is a commodity, distributed according
  to ability to pay ?
• Health care system that is social insurance
  distributed according to need?

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Documentation of the health care crisis
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Is There Really a Health Care Crisis in MN and
U.S. ?

• The American Health system is in need of
  fundamental change. It is failing both
  clinicians, and patients, and their frustration
  levels have never been higher, U.S. Institute of
  Medicine, 2001 Report

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WHO Health System Rating

• US Ranks 37th in the World

who.int/whr/2000/en/report.htm
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Uninsured in Minnesota

• Point in time 5.4 (266,000), at time of survey
• Uninsured at some point in year8.1
• Uninsured at some point in 2 yrs20 or 941,000
• Source MN Health Dept 01 Health Access
  Survey Robert Wood Johnson
• Foundation. Survey did not ask about mental
  health coverage.
• Minnesotas population 5 million 2004

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Underinsured in MN

• 16 lack prescription drug insurance
• 50 of seniors lack prescription drug coverage
• 34 lack dental coverage
• Large unmeasured lack mental health coverage
• Private insurance and Medicare generally do not
  cover long term care (neither nursing home nor
  home health care)
• Source MN Health Dept 01 Health Access Survey

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2001 Minnesota Uninsured Rates by
Race/EthnicitySource MN Health Dept 2001 Health
Access Survey
17.3
16.1
15.6
6.6
4.5
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International Comparison CanadasSingle-Payer
v. U.S. Multi-Payer System

• Life expectancy 2 years longer
• Infant deaths 25 lower
• Universal comprehensive coverage
• More MD visits, hospital care less bureaucracy
• Quality of care equivalent to insured Americans
• Free choice of doctor/hospital
• Health spending half U.S. level

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8 MN Labor Union Strikes Provoked by Health
Care Costs 2000 - 2004

• 2004 Transit Union ATU 1005
• 2003 AFSCME 3800 U of MN
• 2002 Teachers in Red Wing
• 2002 Teachers in International Falls
• 2001 Nurses Fairview Hospital
• 2001 MN Association of Professional Employees
• 2000 HERE, Hotel and Restaurant Employees
• 2000 Teamsters Minneapolis Pepsi workers

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MN 2003 Legislature Cut 200 Million From Public
Assistance Programs

• 38,000 people will lose public health insurance
  by 2007
• Severe restrictions for people still on
  MNCare,GAMC
• Source MN Dept of Human Services

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Effects of Budget Cuts on only Remaining Public
Hospital Hennepin Cty Medical Center

• Overcrowded emergency rooms
• Understaffing,higher workloads, longer shifts
• Lower quality health care
• 30 million in federal government cuts
• 7.8 million in other cuts
• Less revenue from public assistance patients,
  more uncompensated care
• Serious problems, 190 nonclinical staff
  fired.
• Source www.savehcmc.org
• Save HCMC Coalition 612-338-3331

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Power structure of the industry
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Power Structure of MN Health Care
IndustryMedical-Industrial-Government-Academic
Complex

• Health Professional Associations MMA, MPubHA, MN
  pharmacists Assoc.
• Corporate HMOs, drug, medical device, biotech
  corporationsattorneys,lobbyists
• Big Business, MN Business Partnership, Chamber
  of Commerce
• Trade Assocs MN Council of Health Plans (HMO),
  MNBio (biotech)
• Think tanks Interstudy (HMO),MedicalAlley (Tech)
• Foundations HealthPartners Research Foundation
• Government agenciesLegislature, MN Dept of
  Health
• Commissions Pawlenty-Durenberger
• Academia U of MN

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How MN HMO Drug Corporate Money Controls MN
Legislature,2000
House Health Human Services Policy Cmte 28,187
Senate Health Family Security Cmte 24,943
House Senate Legislative Caucuses 194,221
MN DFL Party 4,500
Republican Party of MN 178,880

Source MN for Fair and Clean Elections, Caucuses are the legislative leaders PACs
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Whats causing the health care crisis ?
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MN Statewide Health Care Cost Trends Current Law
60.8
37.2
Billions
20.4
Year
Sources Center for Medicare and Medicaid
Services www.hcfa.gov Health spending
projections for 2001-2012,Health Affairs, 2/3/03
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Double-Digit Health Care Cost Increases in Every
Sector of MN

• Total Statewide
• State government
• Seniors
• Business
• Labor Unions
• Households

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Market-based System Since 1994 Results in
Oligopoly4 Private HMOs Control MN Health Care
Market 2002

• Blue Cross-Blue Shield, 2 million members
• Medica, 1 million members
• HealthPartners,660,000 members
• Preferred One, 600,000 members
• These 4 insure 9 of every 10 Minnesotans,
• Own or investors in most of MNs major hospitals
  clinics
• Source HMO companies

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Twin Cities Hospital Market Share,1996
2001 Measured as Percent of Inpatient Admissions
Childrens 5,5.6
Other non-affiliated 3,3.9
Methodist 6
Allina 27, 29.2
HealthPartners,(was Regions) 7,7.6

N.Memorial 7,7.8
Hennepin Cty 8,6.3
Fairview University 26, 20.9
HealthEast12.0, 12.1
Source MN Dept of Health, Consolidation in MNs
Health Care Market, Issue Brief 98-04, MN Managed
Care Review 2002, Part 1
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What is causing health care costs to spiral out
of control?

• Medical-industrial-government-academic-complex
• strategy blame consumer demand
  overutilization
• Drink too much alcohol
• Smoke too much
• Overweight
• Dont feel cost of care
• Aging population
• Malpractice costs

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Myth The US Health System Costs so Much Because
Americans Drink and Smoke so Much
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Myth US Health Care Costs so Much Because
Americans are so Fat
www.iuns.org/features/obesity and Obesity Res
200192306
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Myth US Health Care Costs so Much Because
Americans Dont Feel the Cost of Care
of total health spending WHO 2000
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Myth US Health Care Costs so Much Because
Americans dont personally pay for Health Care
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Myth US Health Care Costs so Much Because
Americans are Really Old!
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Per Capita Spending and Elderly
of Population over 65
Health Aff 200221170
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Myth Malpractice costs are why US Health care
costs so much

• of total US Health Spending
• Premiums MD and Hosp .07
• Defensive medicine .12
• Comp Ther 199824455-9

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What is REALLY causing health care costs to
spiral out of control?

• In reality, the CAUSE comes from the supply side
• HMO premium prices, administrative costs
• Drug,medical device, biotechnology company prices

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Its the Prices and Administrative costs

• Health Care Costs Price X Volume adm costs

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Excess Administrative Costs ( of Revenues) in
U.S. Compared to Canada,1999
Source Woolhandler S., Campbell T., Himmelstein
D. Costs of Health Care Administration in the
U.S. and Canada. New England Journal of Medicine
2003349768-75
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International Comparisons

• Every other industrialized nation has a
  healthcare system that assures medical care for
  all
• All spend less than we do most spend less than
  half
• Most have lower death rates, more accountability,
  and higher satisfaction

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U.S. Public Spending Per Capita for Healthis
Greater than Total Spending in Other Nations
Note Public includes benefit costs for govt.
employees tax subsidy for private
insuranceSource NEJM 1999 340109 Health Aff
2000 19(3)150
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How are profits made in Health care ?

• HMOs,other insurers are fiscal intermediaries
  (middlemen) do it by denying care,
  underutilization
• Drug, device, biotech companies do it by
  overpromotion, overutilization
• Thus, the system suffers from both
  overutilization, AND underutilization of health
  care services

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What is single-payer compared to current HMO
multi-payer enterprise ?
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Single-payer is publicly financed
andadministered, yet privately practiced, social
insurance system

• Public financing public taxes replace private
  premiums
• Public Admin the single-payer- a citizen board-
  replaces multi-payers
• Social insurance All in,None out healthy
  subsidize sick, disperse financial risk over
  entire population.No bankruptcy
• Socialized medicine ONLY if govt EMPLOYS
  practitioners and OWNS hospitals, nursing homes
  etc

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Health Care is a Public Good

• like roads, fire protection, parks
• something we all need but cannot afford to pay
  for ourselves

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Basic principles of a single-payer system

• Universal it covers everyone
• Comprehensive covers all needed health care
  services
• Cost Containment sets fee schedules for
  practitioners, budgets for hospitals, controls
  prices ends insurance co. waste.
• Choice of Practitioners patients choose
  practitioners
• ? Fairly Financed funds health care by
  consolidating existing public programs, a tax
  that replaces premiums copays.
• Publicly Accountable a board of citizens sets
  fee schedules for providers, budgets for
  hospitals, and ensures quality of care.

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Models for Single-payer Health Care ?

• U. S. Medicare 41 million elderly and disabled
• Internationally Canada, Sweden, Norway, Denmark

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Myths About Single-payer perpetuated by
Medical-Industrial- Government- Academic Complex

• We cant afford it
• Its socialized medicine
• Its not politically feasibility
• It will stifle innovation
• We would have to ration care
• Will increase taxes
• It would be government run

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Difference Between Single-payer and
Multipayer-HMO system

• Analogy
• Fences (Macromanagement)
• Reins (micromanagement)

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How the HMO System Works in MN

• Micromanagement system to control costs by
  restrict or deny services
• Managed care hands-on supervision of
  practitioners
• Transferred financial risk to physicians
  (capitation bonuses)
• Utilization review,
• Heavier workloads
• Sometimes limiting choice of physician.
• Managed competition theory competition among
  HMOs controls costs.

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What the polls, studies, and cost analyses show
about various health care reform models.
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opinions regarding health care services
Which of these do you think is more important?
Providing health care coverage for all Americans,
even if it means raising taxes
Holding down taxes, even if it means some
Americans do not have health care coverage.
(Base795)
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Eight out of ten Minnesotans are willing to pay
higher taxes in order to ensure that all
Americans have health care coverage.
20
20
80
80
80
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Washington Post/ABC Poll Oct 2003

• 62 of the U.S. supports a national health care
  system that covers everyone
• 32 favor the current system
• 6 dont know
• Most think Canadas (single-payer) system is
  better

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56 of Medical Students FacultyFavor Single
Payer,Majority of Med School Deans Concur
What is the best health care system for the most
people?
Source NEJM 1999 340928
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9 State Studies Conclude Single-Payer Financing
Saves While Covering All

• Massachusetts Medical Society, 2 studies, 1998
• California, funded by State legislature, 2002
• Oregon, Health Care for All, 2001
• Vermont State publicly funded study, 2001
• Maryland, privately funded
• Maine
• Rhode Island 2002
• Missouri 2003
• Evaluations carried out by The Lewin Group, Inc

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7 National Studies Conclude Single-Payer
Financing Saves , Covers All U.S.

• Economic Policy Institute (private) 1998
• 4 studies by Congressional Budget Office, 91-93
• U.S. General Accounting Office, 1991
• Physicians for a National Health Program,PNHP,91

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Projected Universal Single-payer Health Plan
Savings for MN 2005 (in millions)
Total Health Care Expenditures (current law) 37,194
Additional health care utilization from extending coverage to under and uninsured, eliminating cost sharing 3,905 (10.5 of total costs)
Minus excess administrative costs now incurred by insurers, employers, hospitals, practitioners,nursing homes, home health care - 6,309 (17 of total costs)
Savings from prescription drug discounts a/ - 982 (2.6 of total costs)
Total Health Care Expenditures, Single-payer 33,808
Total Savings under Single-payer AFTER covering all 3,386 (9.1 of total costs)
Source Joel Albers
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State-by-State Estimates of Single-payer
SavingsMN Ranks 3rd in U.S. Administrative
Savings Available Per Uninsured Resident
2003 Projected Health Expend. Current System Millions Admin. Expenses in Millions Potential Admin. Savings in Millions Uninsured Residents in 2001 1000s Admin. Savings Available per Uninsured Resident
D.C. 6,226 1,816 1,244 70 17,771
Mass. 43,603 12,090 8,556 520 16,453
MN 28,862 7,885 5,793 392 14,777
R.I. 6,353 1,672 1,174 80 14,677
WI 28,598 7,727 5,527 409 13,513
Harvard/Public Citizen Report by Himmelstein
D.U., Woolhandler S, Wolfe S. , Administrative
Waste in the U.S. Health Care System in 2003
The Cost to the Nation, the States, and the
District of Columbia, With State-Specific
Estimates of Potential Savings. August 27, 2003.
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Future Savings, Minnesota Total Health Care
Spending current system v. single-payer
Cost growth under current trend of 7.3 per year
60.8
56.7
52.9
49.3
45.9
42.8
49.3
39.9
37.2
46.7
44.3
billions
42.0
39.8
37.7
35.7
33.8
Single-payer limit cost growth to 5.5 per year
Year
Cumulative savings from 2005 - 2012 56.2
billion
Source Joel Albers
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Projected Health Expenditures 2005 Transition
to, Implementation of Single-payer, (in millions)
Single-payer expenditures in 2005 33,808
Admin. costs 1st yr of plan operation(6 of program costs)a/ 2,029
Health Care Operating Budget b/ 35,837
Additional 1 of Operating budget for displaced worker training c/ 358
Construction Account, 1.15 of Op budget d/ 389
Reserve Account e/ 290
Total Health Plan Budget 36,874
Source Joel Albers
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Estimated Financing of Single-payer Health
Plan,2005 (in millions)
Government programs such as Medicare, Medicaid,and State employees, 44 of base personal health care expenditures 16,365
Payroll tax at 9.5 of 108.9 billion 10,563
Income tax at 5.1 of 179.9 billion Personal Income 10,794
Transfer of workers compensation medical payments 470
Transfer of medical portion of automobile insurance 573
Total projected revenue 36,929
Source Joel Albers
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Building a Movement

• Organizing Model
• Goals
• Objectives
• Strategies
• Tactics
• Timeline

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Organizing Model affinity group-spokescouncil-con
sensus is one model

• Networking Coordinating (v. Centralized
  Single-issue Coalition) organizations
  horizontally linked, diverse, inclusive
• Organizational Structure decentralized,
  non-bureaucratic, non-hierarchical, organizations
  send reps to spokescouncil mtg
• Decisionmaking process All decisions democratic
  by consensus, participatory, every voice heard
  equally.
• Develop Work Plan to proactively set mission,
  goals, objectives, strategy, narrowed down to
  specific Tactics and Timeline
• 
  

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Infrastructure working groups

• Actions strikes, rallies,marches, street
  theater, creative, continuity
• Outreach flyering, tabling, endorsements,
  resolutions, petitions
• Education forums,conferences, speakers bureau,
  HC resource center
• Legislation bills, lobbying, hearings
• Media independent, mainstream, incite sustained,
  accurate debate
• Research cost analysis, analysis of policy
  proposals, surveys
• Communications website,e listserve, phone tree

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Goal and Objectives

• Goal
• Implement Universal Single-payer
• Objectives
• Political State Legislation Single-payer
• Economic Organizing huge purchasing groups
  until reach one state pool.

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Strategy and Tactics

• Strategy
• Create fair democratic debate in MN,
  demarginalize us
• Build grassroots base and capacity of
  organizations into Network labor, practitioners,
  seniors, community
• Tactics
• Guerrilla health care change debate spin w/ few
  resources
• Protest any publicly unaccountable institution.
  corp or gov
• Striking labor unions can mobilize groups.

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Of All Of The Forms Of Inequality, Injustice in
Health Care is The Most Shocking and Inhumane --
Martin Luther King jr.