Today’s New York Times reported on the problems small businesses have in securing healthcare insurance for their employees. This is a huge problem since “Of the 47 million uninsured people in this country, at least 20 million are employed by small businesses or work for themselves — a figure that has increased by an average of more than 500,000 a year since 2000.”
Small businesses pay about 18% more than do major firms for the same type of coverage. They face wild jumps in rates when they replace a younger worker with an older worker or a male with a female. In some cases, workers must also qualify, that is prove that they are in good health; something older workers have a harder time doing.
The abuses in the healthcare system are many. They will continue as long as we allow the healthcare providers the freedom to do whatever they will. Last year, even as the CEO of Anthem Blue Cross received $42 million in bonuses, in an act called rescission, they have been systematically dropping individuals’ healthcare policy after they seek service for major illnesses and refusing to pay valid hospital claims. You can imagine most of those affected are in their middle or older years. (Recently, 480 California hospitals banded together and successfully sued Blue Cross).
The fact that these types of abuses are a part of our healthcare system is an indictment against our society. Does the right of these firms to exploit us trump the rights of the people to have reasonable healthcare? With more of the population working for small companies, this issue deserves serious attention, since an unhealthy society cannot compete in this globalized world.
A typical Wal-Mart walker can be had for $59.92. Medicare pays close to $110 for the same or a similar walker. This is going to change on July 1st, or at least that’s what’s supposed to happen. Traditionally the price for walkers and various medical equipment is set by Congress. This price is well above market value and according to the New York Times has the effect of “handing out a few hundred million dollars of corporate welfare to the equipment makers.” As of July 1st companies will have to submit competitive bids if they want to continue selling products to Medicare.
But enter the lobbyists. Lobbyists have stepped up their contributions to Congress, while making absurd claims that competitive bidding will deprive patients of needed oxygen equipment, and will cause job loss. Congress, of course is caving. After all its allegiance is to medical equipment makers, and not to the taxpaying public. A bill supported by Pete Stark and John Dingell, two Democratic committee chairmen, and John Boehner, the House Republican leader and overwhelmingly passed by the House aims to throw out competitive billing. According to the New York Times
A small number of companies, including Invacare, Pride, Praxair and the Scooter Store, want to keep the billion-dollar subsidy that they’re receiving every year. Or at least they want to keep as much of it as possible — which explains their strong support for the current House bill, even though it includes a 10 percent fee reduction. They recognize that the alternative — competition — would be worse for them
A similiar bill will soon be taken up by the Senate.
I am reprinting this posting on the argument against privatizing health care. The title is Should our health care be further privatized?
Is the primary purpose of my life to make those already rich, even richer? Health care is a general good just like education, military and police. Is government’s reason for being to ensure or to promote the general good? Do the rights of a small group of individuals to make money off my health triumph my right to this general good? I ask these questions as I reflect on John McCain’s free market approach to health care.
If we believe that government’s reason for being is to promote the common good, a free market approach to health care can be disastrous. Already our privatized health care system is ranked a low 37 by the World Health Organization. To put this in perspective, when it comes to health care, countries like Costa Rica and Columbia rank higher than the US.
John McCain’s proposed health care plan would shift the responsibility for health care from employers or the government onto individuals. He plans to do this by shifting the tax benefits that now go to employers onto individuals. Under his plan individuals would receive a $2500 credit, families a $5000 credit. The fear is that change would cause some businesses to drop coverage. The result would be a large number of workers flooding the system as they try to obtain individually based plans.
The problem with individually based plans is that individuals have to qualify. For the young and healthy that might not be a problem. But the elderly and those suffering from chronic health problems might be unable to purchase health care plans. A second problem is that the administrative costs of individual polices are at least triple of those of employer based policies.
McCain also wants to deregulate the insurance industry; a step he believes would promote competition. A possible downside of deregulation is that it could lead to looser standards and higher costs and diminished coverage. As it stands now each state sets minimum standards under which plans can be sold. McCain’s plan could override state regulations. Companies would be able to sell in every state any policy that was approved in any state. That means that if an insurer’s policy was approved in a state with looser standards, a state with higher standards could not impose those standards on the insurer. For example if one state require insurers to pay for specific procedures such as mammograms, a state that does not set this standard is the one whose rules ensurers must follow. Or if one state sets a minimum deductible, a state that sets a higher deductible is the one that prevails.
Centinela Hospital Center in Inglewood is where residents of the City of Inglewood go for healhcare. Since acquiring the hospital, its new owners, Victorville-based Prime Healthcare Services Inc. has closed many of the hospital’s departments and has laid off 13% of the 1700 who work there. It has also cancelled most private insurance contracts.
This is very much how Prime Healthcare does business and may be the blueprint that other healthcare providers follow. Prime Healthcare already owns nine area hospitals, eight of which were bought in the last four years. When it takes over a hospital it cancels private insurance contracts. This forces patients to enter into its emergency system which is open to everyone. Emergency services pay more and because its hospitals are not bound by insurance contracts it is able to collect higher reimbursements. It also suspends services that provide relatively little income, including chemotherapy treatments, mental health care and birthing centers. This helps to provide them with a profit margin of as much as 15% per hospital, way beyond the industry average. It has already closed seven of Centinela’s operating rooms.
The changes at Centinela adds to an already difficult healthcare situation in Southern California. Within the region, the general hospital Martin Luther King Jr-Harbor Hospital has shut down. Brotman Medical Center in Culver City filed for bankruptcy protection. In April, Prime Healthcare bought the majority of Brotman Medical Center’s loans. Downey Regional Medical Center does not know how much longer it can remain open. For more information on the healthcare crisis in Los Angeles County, go to the L.A. Times website.
I wrote earlier about the problems Atlanta Grady’s Memorial hospital is experiencing. Since then it has been reported that more of Atlanta’s medical facilities will drop their trauma care designations or devote fewer resources to caring for life-threatening injuries. It turns out Los Angeles County is experiencing some of the same problems. Martin Luther King, one of its trauma center has been forced to shut down its emergency services, and a recent report by the L.A. Times shows that its soon to be open replacement hospital for the Los Angeles County-USC Medical Center is the victim of downsizing.
It’s not just the Medi-Cal patients who might otherwise seek services at County-USC. A study by the Hospital Assn. of California determined that the entire area suffers as a result of this downsizing. That’s because private hospitals in the area experience an increase in patients in their emergency rooms as a result of this downsizing, causing greater delays in service. In addition, if the county hospital doesn’t have enough beds patients will have to travel further to get service, tying up ambulances.
I thought now would be a good time to revisit the revised Medicare prescription plan. The largest change in Medicare’s history took place in 2003. Medicare Part D is part of that change. There has been confusion about just how Medicare Part D works. In this and subsequent postings I will attempt to clear up that confusion.
Over the years as the price of medicines rose, seniors were finding it increasingly difficult to afford them. Medicare Part D was an attempt to address the issue of affordability.
Medicare Part D is a prescription drug benefit that was made available in 2006. It requires significant out-of-pocket costs. Coverage is available only through insurance companies and is voluntary.
Under this plan enrollees pay a minimum monthly premium of $24.80, with an annual deductible that can range from $180 to $265. Enrollees pay 25% of the full drug costs up to $2500. After that limit is met, comes a period commonly referred to as the “donut hole.” During this period, enrollees may be responsible for up to the full amount of drug costs. The donut hole ends when enrollees meet out of pocket amount of $3850. After which enrollees pay 5% of all drug costs.
The problem is that people assume that the $2400 and $3850 are calculated in the same way. This is not the case. The $2400 is a total drug expense. The amount the manufacturer charges for the medicine is applied to the $2400. With the $3850 only what the enrollee has paid towards medicine counts. For example, if the prescription without insurance costs $100, with insurance the enrollee may have a $25 co pay. The full $100 goes towards $2400. But only $25 goes towards the $3850.
It shouldn’t be, but it seems that geography is one of the variables that effect how much you will pay for your hospital stay. A procedure at a hospital in one state may be much more expensive than the same procedure in another state, or even within the same state.
California is a prime example of the effect geography has on determining hospital costs. Recent research shows that patients in Southern California pay markedly higher rates than do those in Northern California. According to the Los Angeles Times, 15 of the most expensive hospitals in California are in the Southern California area. These hospitals charge insurance carriers 5 times as much as do the least expensive hospitals. Depending on who is interpreting the results, this either speaks to the vibrancy of the Southern California market, or it shows how insurers using predatory practices have been more effective in leveraging the Southern California market.
I side with those who fault the insurers. Critics of the insurers point to the fact that in the Southern California market, 17 hospitals have closed in the last 10 years. Many more are in financial distress. While about 42% of hospitals in California are operating at a loss, 50% of Southern California hospitals are losing money.
As I wrote in an earlier post, hospitals in general are facing tough times. I believe that insurers are not making it any easier for them or for us.
One of the reasons for the U.S.’s strong economic success has been that unlike poor, developing countries, we have had an excellent health care system. That kept us strong and productive. Common sense tells us that a sickly people cannot be as productive as those in good health. The sad fact is that while other countries are investing in their health care systems, the U.S. is gradually disinvesting in the health care model that has served it well over the past decades.
Unfortunately, the model that the U.S. is now following is one that puts profits over the health and well being of its citizenry. I was reminded of our lack of commitment to universal health care after reading a New York Times story. The story is about the financial crisis of Grady Hospital in Atlanta, one of the nation’s largest safety net hospitals.
Grady is facing a significant financial shortall, and it is one that neither the federal government nor the state is willing to cover. Grady provides vital services to the entire region, and was once admired for its skill in treating people with social and physical problems.
If Grady is allowed to fail, other hospitals will be flooded with the uninsured patients that were once served by Grady. Since 1 out of every 4 medical doctors are trained by Grady, its failure will also elimate a major place where doctors can get their training.
Hospitals around the nation face the same problems as Grady. Compared to 15 years ago, we have 300 less public hospitals. If this continues we will eventually look more and more like the people in developing countries where only the privileged are able to secure good quality health care. This problem not only affects particular individuals. it affects all of us who are struggling more and more to keep ourselves healthy and free of debt.
A New York Times article reports that the Equal Employment Opportunity Commission has approved new regulations that allow employers to reduce their operating costs. Unfortunately, the reduction comes at the expense of those 65 and older. Thie new regulation affects health care coverage, and allows employers to create two classes of retirees. One class (those under 65) will receive full benefits. The other class (those who are 65 and over) will receive reduced benefits. It is estimated that more than 10 million retireees depend on employer sponsored health benefit either as a primary benefit or as a supplement to Medicare. The rising cost of health care (premiums for employer health care since 2001 has risen 78 percent), and the fact that people are living longer means that employers no longer want to provide retiree health benefits.
While I am against any type of workplace practice that discriminate against one group, I understand the need for employers to reign in health care costs. I believe the solution to our health care crisis should come from the government in the form of universal health care. Other countries such as England and Great Britain and even Cuba are doing it to tremendous success, why can’t we?
