This post was written by Maggie Mahar and Niko Karvounis

In 1980 Ronald Reagan claimed the presidency and America headed in a new, sharply more conservative direction.  It is no accident that this also was the year that “the corporatization of health care” in America began in earnest. This was the phrase that Paul Starr would use in his Pulitzer-prize-winning The Social Transformation of American Medicine to describe a revolution that would turn U.S. healthcare into an enormous for-profit business.

Thanks to changes in tax laws, for-profit HMOs would begin to replace not-for-profit  HMOs, and for-profit hospitals would begin to flourish. By 1986 for-profits had captured 14 percent of the nation’s acute-care hospital market. In this brave new world, more and more hospitals would be run, not physicians but by businessmen. After all, as Fortune magazine had declared some years earlier: “the management of medical care was too important to be left to doctors.”  Some physicians began to see themselves as entrepreneurs.  “Those who talked about ‘health care planning” in the 1970s now talk about “health care marketing,” Starr wrote in 1982. “Instead of public planning, there will be corporate planning.” And the goal driving that planning, Starr suggested, would no longer be better health, but rather “the rate of return on investments.”

Against that backdrop, in 1980 the Bayh-Dole Act was passed, and the face of medical research in America was forever altered.  The bill would bring academic institutions into the commercial world in a way that, at the time, seemed to ensure medical progress. Nature magazine offers a concise overview of the legislation, explaining that it “shifted the incentive structure that governed research and [the] development  . . . of federally funded [medical] inventions by allowing institutions to own inventions resulting from federally sponsored research and to exclusively license those inventions.” In other words, after Bayh-Dole, a university research team that came up with a drug could patent it and sell it to businesses.

This may seem hard to imagine today, but before Bayh-Dole, there was no such collaboration between those who invented a drug and for-profit companies.  Federally-funded research was considered a public good, owned by everybody and nobody. If, say, Doctor A created a breakthrough cancer drug at Harvard,  Doctor B at Stanford had free reign to experiment  with it as needed to improve it—as did other academics. There were no significant legal hurdles to open, ongoing collaboration and little profit attached to research.

Continue reading →

A few weeks ago a friend who I will call Tom was scheduled for cataract surgery.   As it happens, we share the same ophthalmologist, who I will call Doctor X. (Tom recommended Doctor X to me about 8 years ago.)

Dr. X told Tom that he was developing cataracts a couple of years ago, and a few months ago, he explained that the time had come for an operation on each eye. Dr. X  planned to do  one eye at a time.

Tom was about to go on a long business trip, so he didn’t schedule the operation immediately, but when he came back, he made an appointment with Dr. X who checked his eyes again,  and showed him a video of how the surgery done.  Doctor X also sent him for a cardiogram.

A few weeks ago, it was finally time for the operation on the first eye. Then, the day before the surgery, Dr. X’s  office called three times—each time rescheduling the operation for a different time the next morning.

Exasperated, Tom  finally said: “Let’s just cancel it.”

Since we had been talking about the operation and about Dr. X,  he called me.  “I feel like an idiot, canceling at the last minute,” he said. “I’m not afraid of the operation—these days it’s pretty simple, but there’s something about Doctor X . . .”

I couldn’t help but agree. Over the years, I have found Dr. X annoying. His waiting room always  is crowded;  it is not  unusual to wait  1 ½ to 2 hours to see him.  It struck me that he was trying to see too many patients, but when I mentioned the long waits  he blamed “my genius office staff" for over-scheduling him. 

Continue reading →

This post was written by Maggie Mahar and Niko Karvounis

Life expectancy is a pretty simple concept: it’s an estimation of how long the average person lives. Anyone can understand that. So how is this for a compelling data point: if you look at life expectancy in nations around the globe, you’ll find that over the past 20 years, the U.S. has sunk from ranking  No. 11 to  ranking No. 42. In other words, a baby born in 2004 in any one of 41 other countries can expect to live longer than his or her American counterpart.

This may come as a surprise. Sure, we all know the health care system in the U.S. is broken, but life expectancy isn’t just tied to medicine—it’s also related to quality of life in a larger sense. (I can live in a nation with the best health care system in the world, but if it’s in the throes of civil war, my life expectancy will be short). As we all know, the American standard of living is the envy of the world.  After all, we’re the richest country on the globe. So what gives?

While some of us are rich, the average American is not.  And while the rich are living longer, the poor are living shorter.  Factor in the profit motive that drives U.S. healthcare, and you will begin to understand why American medicine has done little to heal the gap between rich and poor.  Over the past twenty-five years, we have poured money into healthcare, but have paid relatively little attention to public health.

This may seem a bold claim, but last month the Congressional Budget Office (CBO) issued a report that provides the numbers:  “In 1980,” the CBO found that “life expectancy at birth was 2.8 years more for the highest socioeconomic group than for the lowest. By 2000, that gap had risen to 4.5 years.”

The report notes that “the 1.7-year increase in the gap” between socioeconomic groups “amounts to more than half of the increase in overall average life expectancy at birth between 1980 and 2000.” In other words, even though the average life expectancy has increased in the U.S., it has grown more slowly because of widening socioeconomic disparities.

Continue reading →

If healthcare reformers hope to capture the Congressional votes they will need to make universal coverage a reality, they must unite. Only then can they hope to form a wedge strong enough and sharp enough to divide the opposition. With that in mind, last week I wrote about the debate in The American Prospect‘s May 2008 Special Report, The Path to Universal Health Care, underlining areas where reformers agree, as well as issues that still divide us.

By clarifying our differences, and offering each other arguments and evidence for our positions, I am hoping that reformers can move closer together. In this second post, I consider the cost of universal coverage, the argument that talking about cost-control only hands ammunition to those who oppose reform, and, finally, whether American Prospect co-founder Robert Kuttner is right when he says that “there are not the votes in Congress to enact a true universal health-insurance system. Any progress toward universal coverage will necessarily be incremental.”

Last week, in part 1 of this post, I explained why many reformers who might  prefer to see a single-payer plan replace employer-based, private insurance have nonetheless rallied around Yale political scientist Jacob Hacker’s alternative—a proposal that gives Americans a choice between private insurance and a public-sector plan modeled on Medicare.

The truth is that the majority of Americans who have employer-based insurance want to keep it. As I’ve discussed on Health Beat, poll after poll makes it clear that they will not accept a government edict telling them that they have give up what they know for an unknown—a single-payer plan designed by Washington.  Most people are afraid of change, and the last eight years have not boosted their faith in programs run by the federal government. Congressmen know that this is how their constituents feel.  And this is why they will not vote for single-payer.

Continue reading →

I’m  always looking for new (or unnoticed) healthcare blogs that might interest  HealthBeat readers. Recently, I discovered “What If” (American Had a HealthCare  System That Worked).

The  blog is run by Georgia Berner, (founder and Director) and Emily Cleanth  (content manager/ researcher). Berner, who  owns a small to medium size company in Western  PA where she pays the entire health insurance costs for her 60 employees, has  become familiar with the inequities in our system both as an employer, and by  talking to voters while running for U.S. Congress in 2006.  Cleanth has a Master’s in Public  Policy and Management from Carnegie Mellon.

Not long ago, “What If” took a look at healthcare  for Veterans. I have reprinted the post below.

I  would add only that, since 2000, funding for the VA system has fallen far  behind the needs of returning troops and veterans. In the 1990s, the VA was  overhauled and became a very good health care system. I’ve written about it  here (The VA should not be confused with Walter Reed  hospital, which is run by the army. The Veteran’s Administration oversees the  VA.) But over the past eight years, funding has not kept up with the needs of badly  wounded vets returning from Iraq. Meanwhile, Vietnam vets are aging. This has led to impossibly long lines  and, in some cases, has meant that the VA has not been able to hire and retain  the medical staff that they need.

“What If “points out that conservatives have  protested increased funding for the VA, pointing to and explosion in  “entitlement programs.” Like Berner and Cleanth, I believe that veterans are  fully “entitled” to timely, high quality care.

I also agree that the cost of healthcare for  wounded troops should be included in the cost of the war. Why doesn’t it show  up as part of the total cost now? “Because,” they point out, “it essentially  doubles the cost of the war in Iraq.”

Shellshocked:  Veterans Health Care

Originally posted on “Whatif” . . . (American Had a HealthCare System That  Worked)  

According to polling in the past few months, the biggest issues troubling  Americans are health care and the war in Iraq.  What gets talked about less often is the point where these two issues  intersect. . .

Around 12% of the 47 million uninsured people  in the United    States are  veterans and their families: this adds up to 1.8 million  uninsured veterans. These 1 in 8 veterans are typically  45-year-old men who worked in the past year and are earning from $30,000 to  $40,000. Almost two-thirds of uninsured veterans were employed, and nearly 9  out of 10 had worked within the past year.

Why are they  uninsured?

  Defense Department data released in late 2007  show that thousands of National Guard and  Reserve members who had to give up civilian jobs when they were  deployed overseas have now permanently lost these jobs and with them their  health insurance, pensions, and other benefits. (Federal laws are supposed to  protect them from being penalized for leaving civilian employment for wartime  service.)

Continue reading →

On Monday the New York Times ran a nice story detailing how Massachusetts is the newest in a long line of states hoping to fund health care initiatives by raising tobacco taxes. The report notes that “bills to raise tobacco taxes have been active in 22 state legislatures in 2008, according to the Tobacco Merchants Association, a trade group. That follows a year in which 11 states enacted increases, according to the National Conference of State Legislatures.” In other words, taxing cigarettes to fund health care reform is an increasingly popular strategy amongst policymakers across the nation.

Big Tobacco is not happy about this. The industry is putting a lot of time, effort, and money into snuffing out health care reform proposals—at both the state and national level—that rely on tobacco tax hikes for funding. In doing so, tobacco companies are torpedoing one of the few politically feasible strategies for raising funds needed to pay for reform.

Consider California. The Times notes that the state’s recent bipartisan plan for instituting universal health care, endorsed by Republican Gov. Arnold Schwarzenegger and Democratic Assembly Speaker Fabian Núñez, “died in the State Senate in January partly because of opposition to the $1.50-a-pack increase it included.”

This wasn’t the first time cigarette taxes have been an issue in California. In 2006, California voters turned back a ballot initiative, Proposition 86, that proposed to increase the cost of a cigarette pack by $2.60. Supporters of the proposition estimated proceeds from the tax at $2 billion—which would have been used to help fund health care reforms—and forecasted a $16.5 billion long-term decline in health care costs thanks to reductions in smoking. Good stuff.

Continue reading →

Can we reach a consensus on what we need to do to achieve meaningful health care reform in the U.S.?

This week, I have been mulling over The American Prospect’s May 2008 Special Report: The Path to Universal Health Care At first glance, it might seem that the eight articles in the report take eight different roads to reform. But I’m glad to see agreement on many pivotal points.

Yet there are still major issues that could divide reformers:  Should we acknowledge that we won’t be able to cover everyone unless we learn to “control costs”? Should we move directly to a single-payer system?  And finally, should we try to move quickly, to cover everyone, or should we aim for incremental progress while sticking, stubbornly, to first principles? 

In the months ahead, I think it is crucial that would-be reformers try to hash out their differences on these issues and unite under a single banner. Only then, can we divide opponents who have billions invested in preserving the status quo.

With that in mind, I decided to weave together some of the strongest insights in the Report—focusing on recurring themes—while also addressing the areas where reformers remain divided.

First, as I wrote two weeks ago on TPM Café the high and rising cost of health care may be the greatest obstacle to health care reform.  In the American Prospect report, Ezra Klein captures the problem with brilliant simplicity at the very beginning of his piece: “If health insurance were cheap, we could all buy it. If universal health care could get 60 votes in the Senate, we’d all have it. But these two imperative—tthe need to control costs and the need to attract the 60 Senate votes required to overcome a filibuster—point in opposite directions. This is the central paradox of health reform.”

Congressmen are loath to vote for a plan that would rein in spending for two reasons. First, they fear that if they call for “cost-control,” voters will hear “rationing.”  Secondly, they know how lobbyists will react to any attempt to cut the waste in our bloated healthcare system. One man’s hazardous waste is another man’s income stream.

Continue reading →

Earlier this month I attended a conference sponsored by the MacArthur Foundation spotlighting the intersection of mental health and public policy. In introductory comments for the event, Howard Goldman, Professor of Psychiatry at the University of Maryland School of Medicine and director the MacArthur Foundation’s Network on Mental Health Policy Research, called mental illness “an overlooked crisis.” He’s right. But contrary to what you might expect, it’s not just the public which overlooks mental health. Medical practitioners are often slow to adopt well-researched, proven mental health interventions—because they’re rarely profitable.

This is bad news for America, because mental illness is a big problem. Goldman noted that 38 percent of Americans who receive Social Security Disability Insurance have a mental disorder, as do more than 200,000 adults in prison and 30 percent of the nation’s homeless.

But mental illness isn’t just an issue for the have-nots. Jon Fanton, Ph.D., President of the MacArthur Foundation, addressed the conference after Goldman and offered some compelling numbers on the fiscal impact of poor mental health. Every year, said Fanton, mental illness amounts to $80 billion in indirect costs (lost productivity due to illness, premature death, and losses for incarcerated individuals and for individuals providing family care) and another $99 billion in the direct cost of providing care. Fully half of children with mental illnesses drop out of school.

For these reasons, said Fanton, the “interests of those in trouble are not in contrast to the interests of society and or the rest of us”—though “we tend to think…[that] the opposite is actually true.” In the end, mental health is a very public concern.

Continue reading →

Last week, the Economic Policy Institute released a disturbing report revealing just how many white-collar workers have lost their employer-based health insurance in recent years—even though they didn’t change jobs.

Many workers believe that if they hold onto their job, their insurance is safe. Professionals with jobs near the top of the occupational ladder are especially likely to assume that their employer is not going to cut their coverage. That may well have been true in the 1990s, when the job market was tight—but not today.

The EPI report shows that in just the first six years of this century, the share of U.S. workers with employer-provided health insurance (EPHI) fell from 51.1 percent to 48.8 percent.  Moreover, workers in white-collar occupations—including executives, managers, and workers in professional specialties—were just as likely as blue-collar workers to lose their safety net.

Perhaps this shouldn’t come as a surprise, since employers typically pay a much larger share of premiums for higher-income employees, as I discussed on HealthBeat last month.  So as insurance premiums soar (up 78 percent since 2001), employers are beginning to chafe under the very costly burden of providing first-class benefits to white-collar employees. (Insurance premiums rose “only” 6.1 percent in 2007, but going forward, experts expect sharper increases because the cost of medical technology continues to skyrocket).

Most employers will just shift more costs to employees in the form of higher co-pays and deductibles. But some will decide that they cannot continue to offer insurance.

Continue reading →

In a society hooked on growth, “enough” just isn’t part of our vocabulary. Thus, the latest issue of The New England Journal of Medicine reports: “Despite the fact that there are now more physicians per capita in the United States than there have been for at least 50 years, the Council on Graduate Medical Education (COGME) recently predicted a 10% shortfall of physicians by 2020…The Association of American Medical Colleges has responded with calls for a 30% expansion of U.S. medical schools and a lifting of the current cap on Medicare funding for graduate medical education so that federal dollars can support the expansion of the workforce.”

Do we really need more doctors?  The boomers are aging and we’ve been told that this will lead to a huge spike in the need for health care. But as I explained just last month, the boomers will age, just as they were born, gradually, over decades.

And while the boomers are, indeed, a demanding group, the fact is that many boomers have taken quite good care of themselves. It all began twenty-five or thirty years ago when they quite smoking and switched from red meat to fish; from scotch to white wine, from tanning to jogging. In the next decade or two, they just won’t need as much healthcare as their parents did at the same age.

Moreover, as the article’s authors, Dr David C. Goodman and Dr. Elliott S. Fisher, point out: “Physician supply varies dramatically by region of the country. COGME is concerned about a 10% shortfall at a time when the regional supply of physicians varies by more than 50%.” In other words, while more doctors may be needed in some states, in other places we have more than enough, thank you.

Continue reading →