Over at Jon Cohn’s TNR blog, The Treatment, Harold Pollack a, professor at the University of Chicago School of Social Service Administration and Special Correspondent for The Treatment points to a major piece of misinformation in today’s New York Times.
In an interview, a reporter asked: Would any of the plans under discussion on Capital Hill reduce the rate of medical bankruptcies?"
The single-payer advocate responded: "Only the single-payer plan sponsored by Representative John Conyers, Jr. and Senator Bernie Sanders. The others pretty clearly do little or nothing for medical bankruptcy.”
As Pollack points out, this simply isn’t true—the House bill caps how much money a family of four earning $55,000 a year can spend out-of pocket on health care at $368 a month–even if they were in an auto accident and ran up $300,000 worth of medical bills. (Their monthly medical premium would be capped at $322 a month) See his full explanation here.
More reporters need to read the House bill and explain what is in it to their readers. Otherwise, people will continue to repeat lies like this one until everyone believes them. (Let me be clear: I am not suggesting that the single-payer advocate deliberately lied. My guess is that he just hasn’t read the House bill carefully, and is relying on what other single-payer advocates have told him.)
Pollack ends his post: “I don’t blame single-payer advocates for pushing their own bill, HR676. Still, I am baffled by the apparent hostility with which some single-payer advocates regard current health care reforms. I am also baffled by the apparent equanimity with which some regard the prospect of these measures [the House bill and the Senate HELP bill) going down to defeat—a defeat that would badly damage the Obama presidency. Pollack links to this interview.
Addressing the single-payer advocates, Pollack writes: “Wake up guys. We need the help.” Do they really want to see Obama become a one-term president?
It would help to begin with the correct numbers. Under HR 3200 a family of four with a $55,000 income would pay $322 per month premiums (or $368 under the Energy and Commerce version) – $3864 per year. The additional out-of-pocket cap is $4400 per year. Those two ($8624) are over 15% of family income. At that income level many in the policy community consider costs over 10% as constituting a financial hardship. Further, out-of-pocket expenses could be higher because of two sources that don’t apply to the cap: 1) often services are provided out-of-network through no fault of the patient, and 2) health care services that are not a benefit of the plan do not apply to the cap.
The bankruptcy studies show that individuals with medical problems often have other debts and sometimes reduced income. For far too many, this 15% burden is enough to cross the threshold for bankruptcy.
HR 3200 tables:
http://www.kaiserhealthnews.org/Stories/2009/September/04/House-Bill-Premiums.aspx
Don – thank you for the important clarification. More and more it seems absurd to think that Congress will come up with a way to provide comprehensive quality affordable coverage to everyone under the Rube Goldberg type of “reform” policies that are being proposed. How can these bills even get us started going the right path?
What’s coming out of both the House and the Senate really does look more and more like the failing “Massachusetts Plan” that is largely sham reform. The Mass. Plan does nothing to reduce costs, is soaking state taxpayers (who pay for all the “subsidized coverage”) while benefitting private insurers, and is not helping many middle-income residents and employers who continue to be crushed by high health care costs.
Speaking of a “Truth Squad”, I live and work as a nurse in Massachusetts and know a group of concerned state residents who are trying to speak truth to power about the realities of the Mass. Plan. You can learn more about their efforts here http://masshealthlawtruth.org
Dear Ann,
You have it right, to the industry its:
Reform = Opportunity to grab more cash
Yet to us:
Reform = Remove money from medicine
Who will win, the people or the monied interests? We citizens understand that and bold leaders need to speak the truth, not this Policitally Correct BS.
Simple, get the money out of medicine to make things start heading in the right direction.
Question, does anyone in DC have the guts to tell the truth??
Don–
I’m disappointed to hear you trying to distort what I said– and what the single-payer advocate said.
First– On including the “right numbers” — I linked to TNR where you coudl see the maxiumum premium as well as out-of-pocket costs, explaning you coudl get full details there.
Since i wrote 3 posts yesterday I didn’t have time to cross-post all of the details.
Secondly, as you well know, under the House bill, a family of four earning $55,000 would be eligible for a subsidy– so they wouldnt’ be paying the full premiums.
Third, financial “hardship” is one thing. Bankruptcy quite difrerent.
The single payer advocate stated that none of the bills would protect against bankruptcy.
With a subsidy, a family earning $55,000 would no have to declare bankruptcy over a medical bill of roughly $6,000. Boths doctors and hosptials would allow them to pay it off over time.
You are an intelligent person. You know all of this.
Do you really hope that the Obama administratoin fails, that we have no health care reform (or a conservative plan) and that the conservatives take the White House again in 3 1/2 years?
Don–
I’m disappointed to hear you trying to distort what I said– and what the single-payer advocate said.
First– On including the “right numbers” — I linked to TNR where you coudl see the maxiumum premium as well as out-of-pocket costs, explaning you coudl get full details there.
Since i wrote 3 posts yesterday I didn’t have time to cross-post all of the details.
Secondly, as you well know, under the House bill, a family of four earning $55,000 would be eligible for a subsidy– so they wouldnt’ be paying the full premiums.
Third, financial “hardship” is one thing. Bankruptcy quite difrerent.
The single payer advocate stated that none of the bills would protect against bankruptcy.
With a subsidy, a family earning $55,000 would no have to declare bankruptcy over a medical bill of roughly $6,000. Boths doctors and hosptials would allow them to pay it off over time.
You are an intelligent person. You know all of this.
Do you really hope that the Obama administratoin fails, that we have no health care reform (or a conservative plan) and that the conservatives take the White House again in 3 1/2 years?
Ann–
See my reply to Don.
His comment was filled with misinformation–and outright lies.
I’mn disappointed that you would “thank” him for his “clarification.’
Ed–
The real question is: does anyone in the single-payer movement have the guts to tell the truth about the House bill?
Maggie,
I know you have a penchant for accuracy, so excuse me if I address this one more time.
When I made a comment about using the correct numbers, I was reacting to your statement that for a family with $55,000 income, out-of-pocket spending was capped at $368 a year. Professor Pollack had stated that out-of-pocket spending was capped at $368 per month. Actually the number provided by House Ways and Means is $4,400 per year which, with the $300,000 medical that bill he mentioned, could all be due in one month.
The $322 monthly premium is the amount the family pays after the subsidy, and is not the premium before the subsidy, as you stated in your response. From the same table, a family with an income of $29,327 would have a monthly premium of $37, whereas for a family income of $88,200 it would be $809. Obviously those numbers are after the subsidy has been applied.
Don
Don–
Obviously “per year” rather than “per month” was a typo .
Anyone who took a look at the TNR link got the correct info.
What’s important here is not the detaili, but the fact a major single-payer advocate said that none of the bills other than the single-payer bill woudl prevent medical bankruptcy.
That is a lie.
No one earnign $55,000 goes bakrupt if he owes $6,000 (as I originally calucalted) or $7,400 (as you calculate.(The exact amounts of the subsidies that will be available three years from now are still unknown –so this is all speculatoin.)
And no hospital or doctor insists that a bill be paid in 30 days–or even in 90 days.
Typically, hospitals let patients pay off bills over a year or more.
So the notion that anyone could be forced into bankruptcy under the House bill is absurd.
To say otherwise, is simply fear-mongering.
Moreover, the well known single payer advocate who spoke to the Times was talking specifically about “bankruptcy.”
I gave him the benefit of the doubt and suggested he he wasn’t consciously lying. He just didn’t bother to read the House bill.
If so he is extremely lazy, and quite frankly, has no business commenting on the bills on the table in the press, misusing his position as an M.D. and a well known healh policy advocate.
This is not the first time that leaders of the Single-Payer movement have done spead misnifraomtion. .
They have consistnetly exaggerated how much for-profit insuers profits and administative expenses cost our health care system.
Since insuers pay only 36% of the $2.6 trillion in health care bills, their administrative expenses and profits equal just under 7% of the total.
As you know, this is all public information. Wall Street knows exactly how much each insurers pays out in reimbursements and how much each insurers keeps.
And when Medicare Advantage is rolled back, as it will be this year,
insurers will be paying closer to 33% of the bills and their share of the pie will be closer to 4% –where it was in 2006.
Paying only around 1/3 of our health care bills, private insurers just aren’t as big a part of the system as single-payer people like to pretend.
Single-payers often talk about how profitable the insurers are. Their profit margin is currently 3%–and has been very low for years.
In temrs of profitablity, they rank 87th among all U.S. industries.
Single-payers don’t like to hear this becase they want to pretend the insurers are the big problem.
Ultimately, Single-payers seem much more intersted in “winning” their argument than in fixing our heatlh care system.
Rarely, do you hear single-payer advocates talking about the unnecessary tests, treatments adn surgeries, the over-priced and often not fully tested drugs and devices that bloat our health care system.
A singll payer advocate who came to a town-hall meeting that I co-hosted
expressed what I’m afriad the single payer movement has taught too many foolish people to believe they should have :
“I want whatever treatment I want, whenever I want it, and I dont’ ever want to see a bill! That’s what single-payer means.”
Passion is good but passion misdirected is a distraction from our work. Keep your eye on the prize (I’m saying this to myself). Don’t take the easy path which is to argue amongst ourselves and take our eyes off the prize…
Maggie, Don, and I, and countless others, share a vision of reform that seeks to create a health care system that’s humane and effective–clinically and fiscally effective–and we are passionate about realizing that vision.
Streamlined and publicly accountable financing of health care in the form of “single-payer” could address some of the gross inefficiencies and the immorality that characterizes our current system, but it would not solve all of the root causes of our severely dysfunctional system.
We’ve got so much more in common than we have points of disagreement (Maggie, Don, and I) so I propose we don’t trample on our solidarity but instead try our best to create the space to air and discuss our disagreements. I think there’s a lot to gain from having respectful and passionate discussions here at Health Beat and other places.
I’m grateful to Maggie and to Don for their tireless commitment to using their well-honed expertise on health policy and health reform advocacy to advance the public good. Heaven knows, we need it.
Ann —
Thanks very much.
I realize that you would prefer single-payer, but
accept the public option as your second choice.
I just wish more single-payer advocates could see it that way. Over time,
the public option could lead to a situation simliar to the situtaiton in most of Europe, where the governmetn plan domintates the health care system.
When that happens, for-profit companies (drug-makers, device-makers, hopstials etc. ) no longer set the rules for the healthcare system.
I do respect Don McCanne, which is why I was suprised that he would support the statement that no plan under discussion would prevent medical bankruptcies.
I’m also sorry about the typo, and the fact that I was too rushed to give all of the details from the TNR post.
But I certainly wasn’t trying to mislead.
And it really is true that medical bills of $6,000 to $7,000 are not going to drive a family earnign $55,000 into bankruptcy.
There is much to like in the House bill and I wish that, since single-payer is not gong to be on the table this year, Don and others could endorse it as a “second-best” alternative.
We then have 3 years to make the House bill better. (Universal coverage won’t be rolled out until 2013.)
One of the reasons I liked the TNR piece–and one of the reasons I linked to it–is that Pollack is not attacking the single-payer idea, or individual advocates.
He’s just saying “Hey guys– we need your help. At this point, we should all be on the same side, united against those who want to neuter health care reform.
.
Professor Pollack seems oblivious to the fact that the out-of-pocket limits in the Democrats’ bills apply only to covered services. Thus, under my policy through Harvard (which easily meets all the requirements specified in the House bill) a routine knee injury left me responsible for $5000 in UNCOVERED physical therapy bills, on top of the ubiquitous co-payments and deductibles. In fact, such loopholes in coverage commonly lead to bankruptcy, and nothing before Congress short of HR 676 would close them.
Moreover, while he may dismiss a medical bill of $6000 as trivial, for most working Americans it is not. As Jacobs and Claxton showed in a 2008 Health Affairs article, the median financial assets of INSURED Americans with incomes above 300% of poverty was only $5700. In other words, they’d empty their savings – and then some – to pay the bill Pollack views as modest. And often, illness means not just medical bills but lost income because a breadwinner is too sick to work – or has to miss work to care for a loved one. Hence, the paycheck stops just as the medical bills arrive.
Massachusetts is the proof that these are not just theoretical concerns. We have in place a “health reform” that closely follows the one Pollack lauds. Yet medical bankruptcy remains common, one in six Massachusetts residents say they still can’t afford needed care (and that number is rising), and the so-called reform has gutted the safety-net institutions that care for the hundreds of thousands who remain uninsured. To put it personally, many of my previously uninsured patients are worse off after the reform than they were before it.
Before Pollack calls me names, he should check his facts.
Please revise your column to show what was really said, the maximum out of pocket costs for a family on the edge of poverty in most of the US is $368 a month, not a year.
Why is everybody lying about the health care burden that is going to be placed on the middle class?
So, the premiums for the poor young working family will be HUGE..
I grew up in such a situation and I can tell you, unless we were literally dying, we didn’t go to the doctor. Ever. If I did, it was impressed on me, we would lose our house.
This kind of idiocy is going to create a nation of people with serious, very expensive to treat, chronic diseases.
Howard–
Yes, we’ve already discussed the typo.
Read the thread.
Am travelling– don’t have time to fix, but as the TNR link tell you, it shoudl be monthly.
$55,000 a year is not working class.
It is middle class (median income–half of all American households earn less)
No one earning $55,000 will go bankrupt if they have a $7,000 or $8,000 bill. They would pay it off over time.
Dr. Himmelstein:
I’m afraid that once again you have your facts wrong.
You write:
“Professor Pollack seems oblivious to the fact that the out-of-pocket limits in the Democrats’ bills apply only to covered services.
“Thus, under my policy through Harvard (which easily meets all the requirements specified in the House bill) a routine knee injury left me responsible for $5000 in UNCOVERED physical therapy bills, on top of the ubiquitous co-payments and deductibles.
“In fact, such loopholes in coverage commonly lead to bankruptcy, and nothing before Congress short of HR 676 [the single-payer plan] would close them.”
The truth is that your Harvard plan does NOT meet all the requirements specified in the House bill. The House bill does cover physical therapy.
On p. 28, the House bill specifically states that the minimal benefit package must cover Professional services of physicians and other health professionals.”
Later on p. 28 the House bill is even more specific saying that the tasic benefit package must cover:
“REHABILITATIVE and habilitative services whether delivered in institutional settings, physicians offices, patients’ home, or other settings, as appropriate.”
If you are going to make claims about the House bill you really need to read it.
Perhaps “as appropriate” is what bothers you. But as a tax-payer I am not willing to pay subsidies for your $5,000 worth of physical therapy unless it is medically appropriate.
I don’t think we can leave it to the patient to make that decision. A physical therapist needs to state a diagnosis and the code for the treatment.
This is what my physical therapist does. My health insurance pays for it.
In addition, the SENATE bill passed by the HELP Committee pays for “rehabilitative and habilitative servces”.
(See my post “What the Health Reform Bills Tells Us about the Administration’s Priorities” where I list all of the services covered in the HELP bill.
So by saying that only a single payer bill would pay for physicial therapy, you have spread misinformation about TWO bills under consideration.
I suggest that you read the bill passed by the Senate HELP committee before commenting on it further.
In addition, you write: “Moreover, while he may dismiss a medical bill of $6000 as trivial, for most working Americans it is not.”
Professor Pollack was writing about a household earning $55,000 annually. As I suspect you know, this is not a “working class” household. This is middle-class (50% of households earn less.)
Secondly the question was not whether a medical bill of $6,000 is trivial for a middle-class family.
The Question Is Whether You Told the Truth When You Claimed (in the NYT) that Only a Single-Payer Plan Would Protect Such a Family From Being driven Into Bankruptcy By Medical Bills. .
They would not. Even if they only had $5,500 in savings, and took, say $2,000 of their savings to pay the first third of the bill, they could work out a payment schedule with the hospital or doctor to pay the remainder of the bill over time.
With an initial good-faith payment of $2,000 it is likely that a hospital or a doctor might give them a discount on the total bill. If not, they have to give up that year’s vacation, plans to buy new furniture, or cut back in some other way. It would not mean bankruptcy—losing their home, or financial disaster.
IN addition, they wouldn’t owe $6,000 out of pocket. No matter what the catastrophe, their out of pocket expense would be capped at $368 a month, or a total of roughly $4,400 a year. (They also would be paying premiums, but those would be capped at $322 a month, and would not come as a sudden, unexpected expense.
When Don commented on this thread, he added the premium to the unexpected out-of-pocket spending, but this doesn’t make sense. The premium is part of the family’s regular ongoing expense and this is not what pushes families into medical bankrupty.
Thinks of it this way– if the family had a car accident in August and ran up $300,000 in medical bills they would face only another $1,288 in insurance premiums that year–plus $4,400 in out of pocket spending, or a total of $5,588. The insurance would pick up everything over that amount.
An the basic benefit package under the house bill is extremely comprehensive.
Today, even an “insured” middle-class family can suddenly find themselves saddled with enormous medical bills there is no cap no limit. This is what leads to medical bankruptcy.
A study by your own organizations show that in the case of medical bankruptcies, the average bill is $18,000.
http://74.125.93.132/search?q=cache:RSXGarIsyo0J:minnesota.publicradio.org/display/web/2009/06/03/health_related_bankruptcies/+medical+and+bankruptcy+and+average+and+bill&cd=5&hl=en&ct=clnk&gl=us
Under the House Bill, no family would be asked to pay more than $10,000 out-of-pocket—no matter how wealthy they are. So a family with joint income of say, $180,000 could be charged no more than $10,000 out-of-pocket
Anything over $10,000 would be picked up by the insurnace.
And people who earn less would have their out-of-pocket capped at a lower level.
In your example, the family of four earnign $55,000 has their out-of pocket liability capped at $4,400 .
Their premium is also lower than a family earning $180,000.
You further distort the truth by suggesting that in the case of a severe illness, the patient might miss work for a long time, and a spouse might have to stop working to care for him. “Thus the paychecks stop when the medical bills begin.” In fact if the household was left with no income—or greatly reduced income—they would qualify for government subsidies.
In addition the House bill would pay for care so that a spouse would not have to quite work to care for the patient.
Under the president’s reform plan “shared responsibility” means that we all share in the cost—employers, other taxpayers who are lucky enough not to run into medical catastrophe, and the patient himself.
Single—payer advocates sometimes like to pretend that in countries in Western Europe, everyone has “single-payer” and no one faces significant medical bills.
In fact, none of the health care systems in Western Europe are single-payer. (Single –payer only exists in the UK and Canada)
Secondly, in a country like Switzerland, people are expected to spend 10% of their income on healthcare before receiving gov’t aid. For the household earning $55,000, that’s $5,500.
Throughout Europe, and in the UK and in Canada, taxes (as a percentage of income) are much higher than they are in the U.S because these countires have social safety nets (like universal coverage).
But everyone has to help pay for them, whether through high taxes, or in another way. .
Perhaps you agree with the single-payer advocate who came to a public discussion I co-hosted. “I want whatever medical care I want, when I want it, and I don’t ever want to see a bill.”
That’s not going to happen.
Finally, you suggest that under Massachusetts’ health reform, some people still can’t afford health care.
This is true. And this is because Massachusetts made no real effort to curtail spending on unnecessary test, unproven, ineffective treatments, unnecessary hospitalizations and over-priced cutting-edge drugs and devices that are no better than the less expensive, older products that they are trying to replace.
We have more than two decades of research from Dartmouth showing that 1/3 of our health care dollars are wasted in this way—putting patients at risk by exposing them to treatments without benefits—only risks.
The Dartmouth research also shows that Boston, Massachusetts is the most expensive spot on earth for a patient to receive medical care—in part because medicine is practiced so aggressively—without better outcomes.
In addition some “brand-name” hospitals in the Boston area over-charge. I am sure you have seen the Boston Globe stories on these hospitals extorting extremely high payments from insurers for care that is not any different from care that patients could receive at other less well-known hospitals.
These prestigious hospitals essentially black-mail insurers, saying you know you will lose customers if you don’t have our brand name in your network.”
We know that many private insurers pay hospitals 115% to 120% if what it would cost an efficient medical centere to pay for a patients care. Insurers then pass those costs on in the form of higher premiums. (See Pat S. post on how Medicare Pays Hospitals)
No doubt, there also are specialists in the Boston area overcharging for services and putting patients through unnecessary treatments. Certainly this is not true of all Boston specialists, but it is true of some. You and I both know that.
This is why some of your patients can’t afford medical care.
Please read my recent post “Low-hanging Fruit” where Dr. George Lundberg suggests that physicians need to take a long, hard look in the mirror when thinking about the high cost of care.
As the very recent update on the Massachusetts Plan points out in its last paragraph: “Beyond demonstrating that near universal health insurance coverage is possible, Massachusetts also demonstrates that the market will not address rising health care costs on its own. Massachusetts made the decision to expand insurance coverage and access to care first and then turn to health care costs. Having reached near universal health insurance cov-erage, Massachusetts is now facing the challenge of reigning in health care costs. While not driven by health reform, the continued rapid increase in health care costs threatens the stability of the Massachusetts model, just as health care costs nationwide threaten the stability of the public health programs in the other 49 states and the District of Columbia as well as the bottom line of busi¬nesses offering health insurance coverage to employees. In the next phase of health reform in Massachusetts, policymakers will attempt to transform the state’s health care payment system from a fee-for-service model to one of bundled-payments based on best practices and health outcomes.”
Massachusetts made a mistake by not addressing the waste and hazardous overtreatment in the system when it decided to try to cover everyone. In particular, Massachusetts needed to move away from “fee-for-service” payment which provides perverse incentives for health care providers to do more.
President Obama does not plan to make that mistake. The House bill calls for Medicare to begin “bundling payments” and try other ways to pay doctors not for how much they do, but for how well they do it.
Under the House bill, both Medicare and the public sector insurance plan would use their clout to negotiate for reasonable fees for doctors and hospitals– just as public plans in other countries do. They would not be blackmailed.
The House bill also would let them use their size and clout to negotiate for discoutns from drug-makers.
All of the countries in Western Europe negotiate fees adn prices –and None are Single-Payer Systems.
All have varoius forms of hybrid systems which, like the House Bill, provide for a combination of public sector insurance and regulated private sector insurance.
In the end, Massachusetts promised its citizens more than it could deliver because it did not rein in health care inflation.
Finally, you complain, Professor Pollack “called me names.”
Did your mother never tell you: “Sticks and stones will break my bones, names will never hurt me?”
Pollack had his facts right. I am afraid that you are only adding to the fear-mongering and misinformation that is
undermining health care reform.
To say otherwise, is simply fear-mongering.
Moreover, the well known single payer advocate who spoke to the Times was talking specifically about “bankruptcy.”
I gave him the benefit of the doubt and suggested he he wasn’t consciously lying. He just didn’t bother to read the House bill.
If so he is extremely lazy, and quite frankly, has no business commenting on the bills on the table in the press, misusing his position as an M.D. and a well known healh policy advocate.