Occupy Healthcare Rally/Progress PA Recap

On Sat Feb 11, dozens braved the bitter cold to protest near the fenced off Occupy Pittsburgh encampment.  We marched from UPMC to Highmark headquarters.  Julie Sokolow has a good video summary of the event.  Duquesne student Trenita Finney has an upcoming post on her experience of the rally.

At the same time the PA progressive summit was going on in Philadelphia.  Jerry Policoff of the statewide organization gave a talk on statewide efforts to enact single payer.  His presentation can be seen below.

Policoff state single payer

View more PowerPoint from jpolicoff

Walking back to my car afterward I met a man named Joe Vodvarka in the Strip District who was collecting signatures to get on the ballot for a Senate bid to challenge Bob Casey in the April 24 primary.  He said his main reason for doing so was to oppose Casey's support for trade deals with China.  I asked him what his position on single payer was and he gave me a vague answer that he supported health insurance for everyone which told me he didn't understand the question.  I suggested to him that he learn more about single payer and gave him a handout from the rally.  His webpage on the issue sounded like he's dissatisfied with 'Obamacare" but he needs to be informed that there is a better alternative.  Mr. Vodvarka is typical of many small businesspeople who may not realize that a single payer system could save their business a lot on health care costs. Below is his campaign video.

 

Calls to his office to discuss single payer were not returned.  His focus on trade with China runs the risk of having his campaign portrayed as 2010 Tennessee Gubernatorial candidate Basil Marceaux.
 

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STOP Obamacare in Pennsylvania: Where We Agree with Them

In my previous post on the STOP Obamacare in Pennsylvania, I commented on how Dr. Nicholas Pandelidis downplayed the problem of the uninsured in the US citing faulty research.  However there are some areas of agreement single payer advocates have with this group of controlling costs with the Affordable Care Act (aka Obamacare) that we do have.  Pandelidis cites many studies by groups like the Congressional Budget Office or CBO which show that health care costs have skyrocketed in the past and the new law will not control costs and be harmful to patients and providers.  He does note that costs have risen faster for the private sector than for Medicare and Medicaid in the last decade.  He goes on to list the causes driving the increases in cost here in the US which is "access to superior care" which is debunked in the graphic below and in the blog The Incidental Economist, the "third party payer system" which inflates costs due to profiteering, government regulation of insurance industry competition (how is the Highmanrk/UPMC tussle reducing costs and improving care for Pennsylvanians?), federal tax policy favoring employer provided versus individually purchased insurance (which is like switching the burden from Peter to Paul), and of course medical malpractice costs which is debunked in part two of the graphic below.

I am a statistician.  My background is not in actuarial science (financial forecasting).  I don't like relying on other people's arguments to build my own but this topic is too important for me to leave out.  We agree with the opponents that health care costs need to be controlled and with opponents of Obamacare that it will do little to curtail the causes of the inflation.  We do not agree with the proposed solutions.  Many other industrialized nations are better able to control costs and provide care with better outcomes than we are.  In Pandelidis' article, he even agrees that public insurance plans control costs better than private.

Via: Medical Billing And Coding

Via: Medical Billing And Coding

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You won't be surprised to learn that the University of Pittsburgh Medical Center's (UPMC) out-of-network fees are way above the national average. According to data compiled by the Center for Medicare and Medicaid Services, UPMC charges more than many of the nation's most highly regarded hospitals, such as the Cleveland Clinic, and twice as much as its only real competitor, Allegheny General Hospital (AGH). In 2010, UPMC's average charge for inpatient care was $121,765, compared to $74,406 at the Cleveland Clinic and $55,205 at AGH.

Out-of-network fees originated in the 1980s, when Medicare and Medicaid began reimbursing hospitals prospectively rather than after-the-fact for some procedures. Insurance companies then began to negotiate discounts for their subscribers, in exchange for channeling those subscribers to “approved” doctors and hospitals. By 1990, only people without health insurance and international visitors were charged the “full cost” of medical services—the out-of-network rate. For people with health insurance, the “full cost” is really just funny money—an unrealistically high charge that appears on their statement. Health insurance pays only a fraction of that cost, and the remainder is waived.

However, in June 2013, out-of-network fees may become real money for many Western Pennsylvanians if UPMC, the region's largest hospital chain, carries out its threat not to negotiate an agreement with Highmark, the region's largest health insurance company.

If we accept the Medicare reimbursement rate as the real cost of hospitalization plus a modest profit for the provider, then UPMC has an average markup of 850%. Dr. Gerald Anderson, a health policy expert at Johns Hopkins University, is quoted as saying, “I think they have an ethical problem in trying to say they should be paid eight times more than what it costs to provide the service.”

This brings us to the presumed motive for UPMC's and Highmark's behavior—monopoly control and the ability to fix prices. Large corporations move toward monopolies through two types of integration, horizontal and vertical.

Horizontal integration occurs when companies buy out competitors that provide the same product or service, thereby increasing their market share. For the last decade, UPMC has been aggressively buying other hospitals in the region. AGH is its only major remaining competitor. If it provides an essential service and has no competitors, it can charge whatever it wants.

Vertical integration occurs when a company controls several stages in the supply chain that produces a product or service. For example, a company that sells natural gas to consumers may also own gas wells and control prices by speeding up or slowing down production. Or a movie studio may own a theatre chain which preferentially books its films and refuses to book films by competitors. In 1998, UPMC started its own health insurance division, the UPMC Health Plan. Highmark retaliated by agreeing to purchase AGH. Of course, both hospitals and insurance companies can use the threat of out-of-network fees to pressure clients to purchase the complementary service from its own affiliate.

It appears that both UPMC and Highmark are trying to obtain monopoly control of the health care system in Western Pennsylvania. Since our very lives are at stake, if either of these “nonprofits” achieves their goal, they will be in a position to make us what organized crime calls “an offer we can't refuse.”

Of course, this kind of outrageous profit-taking would disappear under a single payer health care system.

It Ain't Over 'Til It's Over

UPMC and Highmark have agreed to extend their contract until June 30, 2013. Until then, people who have Highmark health insurance will not have to pay out-of-network fees. Certainly, this is good news. Credit goes to Jay Costa, Dan Frankel, Randy Vulakovich, Don White and all those state legislators who put pressure on UPMC to negotiate, and to Governor Corbett, whose unnamed mediator is said to have brokered the deal.

However, Highmark customers may want to hold their applause. News reports don't say whether there have been any changes in the financial terms of the contract for the period between June 2012 and June 2013. It's still possible that Highmark policy holders face an unpleasant surprise the next time new rates are announced. More importantly, this is not a permanent solution to the problem. A UPMC spokesperson pissed on everyone's parade by stating, “This date provides 18 months for UPMC patients to review the multiple competitive health insurance options now available to assure that their care will continue uninterrupted with UPMC physicians and hospitals.” In other words, UPMC's refusal to negotiate with Highmark will continue. Highmark customers with pre-existing conditions have been given a stay of execution rather than a pardon.

On November 29, Ed Grystar, Chuck Pennaccio and Tony Buba published an op-ed in the Pittsburgh Post-Gazette pointing out how the ongoing conflict between these two corporate psychopaths shows how much we need a health care system administered by people who are accountable to the public—a single payer or Medicare-for-all system. (You can read their article by clicking on “op-eds” at the top of this page.) This new agreement gives single payer advocates another 18 months to keep repeating this argument to anyone who will listen.

Dan Onorato's Happy New Year

When Dan Onorato leaves office at the end of the year, he won't be cashing unemployment checks. On January 3, the retiring Allegheny County Executive and former Jackass Party candidate for governor will start working for health insurance giant Highmark as an executive vice president. He will be "head of the government relations team"--in other words, their chief lobbyist.

Jim McTiernan of Triad USA, the consulting firm that appears to have brokered the deal, said, "Having someone who can help [Highmark] navigate the political process is key." Onorato, he said, "has statewide connections--the knowledge base to get to the right levels and the right parties." Onorato, for his part, was sharing the love:  "I am thrilled to be joining Highmark, a great Pittsburgh-based organization that has a history of helping families and companies with their health and wellness needs." Since Highmark is a "corporate person," she is apparently best described as a philanthropist.

Onorato's salary was not made public, but the man he replaces makes over $1 million a year. His yearly salary as County Executive was $90,000. Rep. Jim Cooper of Tennessee famously quipped that "Capitol Hill is a farm league for K Street." A few years in Congress at a relatively modest salary can serve as a stepping stone to a lucrative career as a Washington lobbyist. Newt Gingrich is a prime example. You'll be happy to know that a similar career path is available to Pennsylvania politicians.

Happy New Year, Dan-O! Welcome to the revolving door between corporations and government. Can a revolving charge account at Tiffany's be in your future?

Medicare For All is the Only Solution

The Highmark-UPMC battle shows how private insurers serve no useful purpose

Tuesday, November 29, 2011

By Ed Grystar, Chuck Pennacchio and Tony Buba

The current contract disagreement between Highmark and UPMC provides a clear example of why the free-market health care system has failed. When profit is the primary motive, patient needs get short shrift.

Health care is not a commodity, but a human right. These two "nonprofits" operate with the needs of the public clearly secondary to fulfilling their first objective, which is maximizing profit. The public be damned.

While these two health care businesses fight for market share in our region, the number of uninsured in the country and in Pennsylvania has reached all-time highs, health insurance profits are breaking records for the third year in a row and ever-rising health care insurance premiums are unsustainable for business and the public. Nationwide, they  now average $15,000 per year for family coverage while the median family income is approximately $49,000 per year.

What citizens want and need is the ability to choose physicians and providers for their health care needs, not the threat of losing their insurance or a forced choice (unavailable to many) to purchase another insurance plan.

Simply put, patients need and want heath care, not health insurance.

These insurance giants do not bring anything positive to the health care delivery system. They do not care for the sick or treat injuries. They are not necessary to patients, employers or the community.

While some are grateful for Highmark's takeover of the ailing West Penn Allegheny Health System, there is an inherent and dangerous conflict of interest in joining medical services with private insurance companies -- be it UPMC or Highmark -- given that insurance companies earn profits by denying care, raising premiums and increasing patient out-of-pocket costs.

Only by replacing the insurance-dominated health care system with an improved Medicare-for-all system can we resolve the myriad problems with the current system.

Now in Congress and in the Pennsylvania Legislature is legislation that would move all citizens to a single-payer, not-for-profit Medicare-for-all system -- H.R. 676 in the U.S. House of Representatives and S.B. 400 in the Pennsylvania Senate.

Patients would choose their physicians and hospitals, and decisions on care would be based not on which insurance product you have or network you are in, but on consultation between patient and doctor. Physicians and hospitals would not have to deal with time-consuming and wasteful insurance forms and processing.

In the federal bill, the government would negotiate lower prices for medications from pharmaceutical companies. Insurance company profits, executive salaries and marketing costs would no longer be passed on to the patient in the form of ever-increasing premiums and out-of-pocket costs. In fact, the overhead for the government to administer  traditional Medicare is 3 percent, compared to 15 percent to 30 percent for private insurance companies.

Insurance premiums would be replaced with a single-payer fund that would reimburse providers a fair amount. There would be no premiums, deductibles or co-pays. This funding would be based on a tax that would amount to less than current insurance premiums.

Everyone, from cradle to grave, would be covered for all health care needs, including preventive, dental, vision and long term care. Such systems exist in other industrialized countries that spend far less money per capita and achieve better health care outcomes than the United States.

Because everyone would be covered, hospitals in economically distressed communities like Braddock and Aliquippa would stay open because they would be uniformly and fairly reimbursed for the care they deliver and their patients' medical needs. In our current system, such communities have a larger proportion of people who are uninsured and on Medical Assistance, where reimbursement is lower and hospitals lose money.

Meanwhile, the advertising onslaught by UPMC and Highmark would no longer be necessary.

Opinion polls over the past decade show strong public support for a Medicare-for-all solution. Nevertheless, it has been consciously shut out of the debate by the media and political leaders.

The disconnect between strong public support and the lack of political support in the Congress and state legislatures can only be changed by building a grassroots movement that challenges the power of the big money that dominates our political process. It will take action by the 99 percent to make this happen.

Ed Grystar is co-chair of the Western Pennsylvania Coalition for Single Payer Healthcare (www.wpasinglepayer.org). Also submitting this article were Chuck Pennacchio, executive director of HEALTHCARE4ALLPA (www.healthcare4allpa.org), and Tony Buba, steering committee chair of Save Our Community Hospitals, whose original mission was to keep the UPMC hospital in Braddock.