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MN-UHCAN Joel Albers
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@uhcan-mn
Tel: 612-384-0973
MN-UHCAN Joel Albers
Outline• Documentation of the health care crisis
• Analysis of power structure of the industry
• What’s 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
MN-UHCAN Joel Albers
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?
MN-UHCAN Joel Albers
Documentation of the health care crisis
MN-UHCAN Joel Albers
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
MN-UHCAN Joel Albers
WHO: Health System Rating
• US Ranks 37th in the World
who.int/whr/2000/en/report.htm
MN-UHCAN Joel Albers
Uninsured in Minnesota
• Point in time: 5.4% (266,000), at time of survey
• Uninsured at some point in year:8.1%
• Uninsured at some point in 2 yrs:20% or 941,000**
Source: * MN Health Dept ‘01 Health Access Survey;** Robert Wood Johnson
Foundation. Survey did not ask about mental health coverage .
Minnesota’s population = 5 million 2004
MN-UHCAN Joel Albers
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
MN-UHCAN Joel Albers
2001 Minnesota Uninsured Rates by Race/EthnicitySource: MN Health Dept 2001 Health Access Survey
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
16.00%
18.00%
Am Ind Afr Am Hisp/Lat AsiAm/PI White
16.1% 15.6%17.3%
6.6%
4.5%
MN-UHCAN Joel Albers
International Comparison: Canada’sSingle-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
MN-UHCAN Joel Albers
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
MN-UHCAN Joel Albers
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
MN-UHCAN Joel Albers
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
MN-UHCAN Joel Albers
Power structure of the industry
MN-UHCAN Joel Albers
Power Structure of MN Health Care Industry:Medical-Industrial-Government-Academic Complex
• Health Professional Associations: MMA, MPubHA, MN pharmacists Assoc.
• Corporate: HMOs, drug, medical device, biotech corporations:attorneys,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 agencies:Legislature, MN Dept of Health
• Commissions: Pawlenty-Durenberger
• Academia: U of MN
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
MN-UHCAN Joel Albers
What’s causing the health care crisis ?
MN-UHCAN Joel Albers
0
10
20
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50
60
70
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
MN Statewide Health Care Cost Trends; Current Law
Billions $
Year
Sources: Center for Medicare and Medicaid Services www.hcfa.gov ; “Health spending projections for 2001-2012,Health Affairs, 2/3/03
20.4
37.2
60.8
MN-UHCAN Joel Albers
Double-Digit Health Care Cost Increases in Every Sector of MN
• Total Statewide
• State government
• Seniors
• Business
• Labor Unions
• Households
MN-UHCAN Joel Albers
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 MN’s major hospitals & clinicsSource: HMO companies
MN-UHCAN Joel Albers
Allina 27%, 29.2%
Fairview University 26%, 20.9%HealthEast12.0%, 12.1%
Hennepin Cty 8%,6.3%
HealthPartners,(was Regions) 7%,7.6%
Methodist 6%
Children’s 5%,5.6% Other non-affiliated 3%,3.9%
Twin Cities Hospital Market Share,1996 & 2001Measured as Percent of Inpatient Admissions
Source: MN Dept of Health, Consolidation in MN’s Health Care Market, Issue Brief 98-04, MN Managed Care Review 2002, Part 1
N.Memorial 7%,7.8%
MN-UHCAN Joel Albers
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
• Don’t feel cost of care
• Aging population
• Malpractice costs
MN-UHCAN Joel Albers
Myth: The US Health System Costs so Much Because Americans Drink and Smoke so Much
0
5
10
15
20
Aus
Ast
lB
elg
Den Fin
F
raG
re Ire
Jap Ita Hol
Nor
Spa
Sw
eS
wz
UK
US
A
0
10
20
30
40
Liters/yr % adult smoke
MN-UHCAN Joel Albers
Myth: US Health Care Costs so Much Because Americans are so Fat
www.iuns.org/features/obesity and Obesity Res 2001;9:2306
MN-UHCAN Joel Albers
Myth: US Health Care Costs so Much Because Americans Don’t Feel the Cost of Care
% of total health spending: WHO: 2000
MN-UHCAN Joel Albers
Myth: US Health Care Costs so Much Because Americans don’t personally pay for Health Care
$0
$100
$200
$300
$400
$500
$600
$700
$800
UK
France NZ
Germ
any
Japan
Australi
a
Canad
a US
$ OOP/yr
MN-UHCAN Joel Albers
Myth: US Health Care Costs so Much Because Americans are Really Old!
0%
5%
10%
15%
20%
Australi
a
Canad
a
France
Germ
any
Italy
Japan
Nether
lands
Norway
Sweden
Switzer
land
UKUSA
Over 65
MN-UHCAN Joel Albers
Per Capita Spending and % Elderly
$0
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
0 5 10 15 20
DevelopedNationsUSA
% of Population over 65 Health Aff 2002;21:170
MN-UHCAN Joel Albers
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 1998;24:455-9
MN-UHCAN Joel Albers
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
MN-UHCAN Joel Albers
It’s the Prices and Administrative costs
• Health Care Costs = Price X Volume + adm costs
MN-UHCAN Joel Albers
Excess Administrative Costs (% of Revenues) in U.S. Compared to Canada,1999
0
5
10
15
20
25
30
35
U.S.Canada
Insurer Employer HospitalNursing Home Practitioner
HomeCare
Total
5.9%
1.9%
7.0%
1.0%
24.3%
12.9%
19.2%
12.2%
26.9%
16.1%
35.0%
15.8%
31.0%
16.7%
Source: Woolhandler S., Campbell T., Himmelstein D. Costs of Health Care Administration in the U.S. and Canada. New England Journal of Medicine 2003;349:768-75
MN-UHCAN Joel Albers
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
MN-UHCAN Joel Albers
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; 340:109; Health Aff 2000; 19(3):150
$1,670
$1,750
$1,850
$2,230
$2,430
$2,620
$1,760 $2,600
$0$1,000$2,000$3,000$4,000$5,000
U.K.
Sweden
Japan
France
Canada
Germany
U.S.
$ Per Capita
Total SpendingU.S. PublicU.S. Private
MN-UHCAN Joel Albers
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
MN-UHCAN Joel Albers
What is single-payer compared to current HMO multi-payer enterprise ?
MN-UHCAN Joel Albers
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 gov’t EMPLOYS practitioners and OWNS hospitals, nursing homes etc
MN-UHCAN Joel Albers
Health Care is a Public Good:
• like roads, fire protection, parks
• something we all need but cannot afford to pay for ourselves
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.
MN-UHCAN Joel Albers
Models for Single-payer Health Care ?
• U. S. Medicare 41 million elderly and disabled
• Internationally: Canada, Sweden, Norway, Denmark
MN-UHCAN Joel Albers
Myths About Single-payer perpetuated by Medical-Industrial- Government-
Academic Complex
• We can’t afford it
• It’s socialized medicine
• It’s not politically feasibility
• It will stifle innovation
• We would have to ration care
• Will increase taxes
• It would be government run
MN-UHCAN Joel Albers
Difference Between Single-payer and Multipayer-HMO system
Analogy
• Fences (Macromanagement)
• Reins (micromanagement)
MN-UHCAN Joel Albers
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.
MN-UHCAN Joel Albers
What the polls, studies, and cost analyses show about various health
care reform models.
MN-UHCAN Joel Albers
Which of these do you think is more important?
80%80%
20%20%(Base=795)
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.
opinions regarding health care servicesopinions regarding health care services
Eight out of ten Minnesotans are willing to pay higher taxes in order to ensure that all Americans have health care coverage.
ABCNEWS Poll Comparison:The response was very similar in the national poll with 17% favoring holding down taxes and 80% favoring providing health care for all Americans.
80%80%
20%20%20%
80%
MN-UHCAN Joel Albers
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% don’t know
• Most think Canada’s (single-payer) system is better
MN-UHCAN Joel Albers
56% of Medical Students & FacultyFavor Single Payer,
Majority of Med School Deans Concur
Source: NEJM 1999; 340:928
22%
56%
3%19%
Managed Care Single PayerNo Preference Fee-for-service
“What is the best health care system for the most people?”
MN-UHCAN Joel Albers
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
MN-UHCAN Joel Albers
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
MN-UHCAN Joel Albers
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
MN-UHCAN Joel Albers
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.
MN-UHCAN Joel Albers
0
10
20
30
40
50
60
70
2005 2006 2007 2008 2009 2010 2011 2012
Year
billions
Cost growth under
current trend of 7.3% per year
Single-payer: limit costgrowth to 5.5% per year
Future Savings, Minnesota Total Health Care Spending: current system v. single-payer
Cumulative savings from 2005 - 2012 = $ 56.2 billion
37.2
33.8
60.8
49.3
56.7
46.7
52.9
44.3
49.3
42.0
45.9
39.8
42.8
37.7
39.9
35.7
Source: Joel Albers
MN-UHCAN Joel Albers
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
MN-UHCAN Joel Albers
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
MN-UHCAN Joel Albers
Building a Movement
• Organizing Model
• Goals
• Objectives
• Strategies
• Tactics
• Timeline
MN-UHCAN Joel Albers
Organizing Model: affinity group-spokescouncil-consensus 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
MN-UHCAN Joel Albers
Infrastructure: working groups
• Actions: strikes, rallies,marches, street theater, creative, continuity
• Outreach: flyering, tabling, endorsements, resolutions, petitions
• Education: forums,conferences, speaker’s 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
MN-UHCAN Joel Albers
Goal and Objectives
Goal:• Implement Universal Single-payer
Objectives:• Political: State Legislation Single-payer• Economic: Organizing huge purchasing
groups until reach one state pool.
MN-UHCAN Joel Albers
Strategy and TacticsStrategy• 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.
MN-UHCAN Joel Albers
Of All Of The Forms Of Inequality, Injustice in Health Care is The Most Shocking and Inhumane -- Martin Luther King jr.