San Francisco Health Insurance Mandate gets Green Light from 9th Circuit Court

The Ninth Circuit Court of Appeals is allowing the City of San Francisco to move forward with its new health care plan despite the recent ruling of the U.S. Federal District Court. A few weeks ago Judge Jeffrey White ruled that the funding component of the plan violated The Employee Retirement Income Security Act of 1974 (ERISA)

Bob Egelko at the San Francisco Chronicle offers a simple summation in his analysis of the situation:

That provision requires large and medium-size companies to offer insurance to their employees or pay a fee to the city for the cost of their coverage. The court said the city probably would win its argument that U.S. District Judge Jeffrey White was wrong when he ruled Dec. 26 that local governments lack the power to force employers to contribute to a health care program. [...]

The law was challenged by the Golden Gate Restaurant Association, which represents more than 900 Bay Area establishments. Dan Scherotter, the association's incoming president, said the restaurants were disappointed but would comply with the ruling and remained confident of winning after the court hears all the evidence.

Avoidable suffering was cited by Judge Williams Fletcher as a reason for the 3-0 decision. According to Egelko's article the case has been prioritized and final written arguments are due this April with a possible decision this year.

For more detail on this topic I would advise reading the primer on the case posted yesterday on the Alan Katz Health Care Reform Blog. As usual Mr. Katz included a number of useful sources including a link to the actual court decision and some thoughts concerning the ramifications of this decision for California's proposed statewide health care plan (ABX1-1).

ABX1-1 and its companion ballot initiative create a similar funding mechanism at the state level. Opponents of the legislation claim it, too, violates ERISA. This decision undermines the argument of those critics.

Or as Speaker Nunez put it in a statement issued by his office today, in what can be considered the political equivalent of a running back's victory dance in the end zone, "Opponents of health care reform now have one less rubber arrow in their quiver as they try to stop our historic effort to fix the broken system and make health care more affordable and accessible to the people of California."

Only time will tell what impact the precedents set in this case will have on the reform of health care across the nation. One thing is certain: no matter what the final decision is, it will have a far-reaching ripple effect.

SOURCE: "Ninth Circuit Allows SF Health Plan to Go Forward" 01/09/08
SOURCE: "Appeals court allows S.F. to enforce health care law" 10/10/08
photo courtesy of tinkerroll21, used under this Creative Commons license

On The Road With Robert Reich

Today our media offering is from The Wall Street Journal. This morning in their commentary section we find Robert B. Reich, professor of public policy at the University of California at Berkeley and former U.S. Secretary of Labor under President Clinton, sharing his views on "The Road to Universal Coverage."

He begins by noting that on the Democratic side of the current race for the White House all three major candidates (Senators Clinton, Obama, and Edwards) have made health insurance issues a major part of their individual platforms. He also notes the despite overwhelming similarities in their plans they are focusing on the small differences in the battle for their party's nomination. "Mandates are a sideshow, and fighting over them risks turning away voters from the main event."

After a lucid and concise comparison of the plans presented by Democratic frontrunners, in which he demonstrates just how similar they are, he continues:

This fight is little more than a distraction, given that a mandate would matter only to a tiny portion of Americans. All major Democratic candidates and virtually all experts agree that the combination of purchasing pools, subsidies, easy enrollment and mandatory coverage of children will cover a large majority of those who currently lack insurance -- even without a mandate that adults purchase it. A big chunk of the remainder are undocumented immigrants, who aren't covered by any of the plans.

Should the remaining 3% of the population be required to purchase insurance, or lured into it by rate decreases and subsidies? Reich's position is that the answer depends on who you think comprises that 3%.

Comparing Senators Clinton and Obama he shows us the difference in views on this topic. Senator Clinton's position is that the 3% are youthful and in good health, which means they would lower the overall cost of health care as their payments subsidize others. Senator Obama's position is that many of them simply cannot afford coverage even with subsidized premiums. His belief is that they would either ignore the mandate or simply be unable to afford it. To Mr. Reich's credit his conclusion after comparing them is cautious and well reasoned. Like much of the current discussion on the topic it also casts an eye towards Massachusetts:

Who's correct? It's hard to know. So far, the Massachusetts experiment suggests Mr. Obama. Massachusetts is the only state to require that every resident purchase health insurance. The penalty for failing to do so could reach $4,000 next year, but the state has already exempted almost 20% of its current uninsured from the requirement. Massachusetts is concerned they can't afford a policy, even with subsidies similar to those in all the Democratic plans. So far, about 50% of Massachusetts's uninsured have complied with the mandate.

He closes with a call to action for Democrats, encouraging them to "stop leading with their chins," in counterproductive arguments over mandates and begin building momentum for large scale and desperately needed change. Change that they all already agree upon.

SOURCE: "The Road to Universal Coverage" 01/09/08
photo courtesy of Kevin Dooley, used under this Creative Commons license

The Two Trillion Dollar Health Care Bill

The nation's health care bill for 2006 has just been released in the current issue of Health Affairs. While the rate of growth has slowed the total still comes to a record high of $2.1 trillion dollars!

According to analysts, medical expenditures increased 6.7% in 2006 -- slightly higher than the 6.5% increase in 2005 and double the rate of inflation. The increase in health care spending has been as much as four times the inflation rate in recent years.

Prescription drug sales climbed more than average, jumping $16 billion in 2006, 8.5% higher than in 2005. Approximately half of that increase is due to the Medicare Part D prescription drug plan, which covers many people who had no prior prescription coverage.

NPR's Joanne Silberner addresses the ramifications in her report on Morning Edition today (which you can listen to online):

Health care consultant Bob Lasziewski says it's like a ship sinking at a reduced rate from how it was sinking before. "Health care is still increasing at twice the rate of inflation," he says. "Five years ago, it was four times the rate of inflation."

But twice the rate of inflation is still unsustainable, he says, especially given what he sees for the future: doctors and hospitals joining together to resist insurers' cost cutting, and baby boomers continuing to age.

Paul Ginsburg, president of the Center for Studying Health Systems Change, warns that if an economic downturn occurs the cost of health care will take an even larger portion of paychecks as wages decline. In addition he sees the national obesity epidemic and changes in the health care marketplace as worrisome issues that could exacerbate the situation further.

The increase in prescription drug spending was part of an overall increase of $62 billion in Medicare expenditures, which topped $400 billion in 2006, up a staggering 18.7% from 2005. Steven Reinberg of U.S. News and World Report examines the situation:

Dr. Sidney M. Wolfe, director of the Health Research Group of Public Citizen, said he thinks the significant increase in expenditures in the Medicare drug program was due to the law that prohibits the government from negotiating prices with the drug companies, as well as a great deal of waste in administering the program.

"If you have a segment of health care completely out of control as in prescription drug prices for Medicare -- it's a strong argument why there should have been price controls and negotiated prices," Wolfe said.

In 2006, the U.S. population reached 300 million people. With medical spending at $2.1 trillion, that's $7000 for every man, woman, child, and undocumented worker in the country.

The burden of over 50 million uninsured Americans is distributed largely to insured Americans through higher insurance bills, higher medical bills, and higher taxes. When the cost of the uninsured is added, the average cost for insured Americans is $8500. Medical spending per insured American now averages $25,000 a year for a family of three. Clearly something needs to be done to restrain the growth in those numbers and/or get better care for such substantial outlays.

SOURCE: "Nation's Health Care Bill Hits All-Time High" 01/08/08
SOURCE: "Medicare Drug Plan Fuels Health-Care Spending: But Medicaid spending slowed for first time since its inception in 1965 " 01/08/08
SOURCE: "National Health Spending In 2006: A Year Of Change For Prescription Drugs " Jan/Feb Issue, 2008
photo courtesy of AMagill, used under this Creative Commons license

Electronic Medical Records: The $77 Billion Solution

Reform of the American health care system is a huge part of the current political discourse. A major aspect of that reform as proposed by George Halvorson in his book Health Care Reform Now! is widespread adoption of Electronic Medical Records (EMR's or EHR's).

EMRs are making news on both the east coast and west coast this week. On the east coast Senator Hillary Clinton pressed for EMRs in response to a question from the crowd in a New Hampshire appearance.

C|net news blogger Anne Broache provides a sound bite from Sen. Clinton's comments:

"We go online to buy things from Mongolia, we go online to do our banking, but we can't go online in a secure, encrypted, confidential way to get access to our medical records," she lamented.

Diana Manos, Senior Editor of Healthcare IT News also covers the story:

The adoption of EHRs [electronic health records] is not new to Clinton, who has included them as a kingpin to her presidential healthcare platform from the start. Gearing up for New Hampshire's primary next Tuesday, Clinton told voters that moving to electronic records from paper could save an estimated $77 billion in healthcare costs.

Last May at George Washington University, Clinton said that moving healthcare from paper to electronic records is among several key ways the country could cut runaway healthcare spending by one third.

The other side of the U.S. brings more news about EMRs. Reuters offers a press release about Cisco Systems joining the effort to create the country's largest health information exchange service:

"Cisco recognized early on the importance of transforming the health care
system through electronic health records and information sharing," said Nick
Augustinos, Cisco Internet Business Solutions Group Director. "Through
collaboration with CalRHIO and other technology leaders, we believe California
will lead the nation in creating a statewide health information exchange
system that not only supports clinicians, but also helps consumers make better
health care choices."

Cisco partners with HP, Perot Systems Corporation, and Medicity, Inc. as partners in this effort. The final objective is to enable EMRs to be shared in a confidential manner among health care providers across the state of California as well as through the National Health Information Network (which is currently under development).

Before EMRs grabbed the attention of the U.S. Presidential contenders, healthcare delivery systems were already moving toward shared electronic records. Prompted by individual states or by financial self-interest, health care providers and employers have decided not to wait for federal legislation. Now that the politicians are climbing on board, it's hard to imagine a future that does not include easy access to medical records over the Internet.

SOURCE: "Clinton presses for electronic medical records" 01/04/08
SOURCE: "Clinton: Time to digitize all Americans' medical records" 01/04/08
SOURCE: "Cisco Joins CalRHIO Effort to Build Country's Largest Statewide Health Information..." 01/07/08
photo courtesy of Kevin Zollman, used under this Creative Commons license

New Year's Health Care Reform Roundup

Welcome to our first health care news roundup of 2008! Most of the health care news lately has been about the politics of reform. From mandates in Massachusetts to the floor of the California State Capitol there is no lack of news on the subject. With that in mind we would like to share a small sampling of health care in the media as we end the first week of the New Year.

Lets start in Iowa, the land of the caucus. CNN brings us text and video about Kathy Strangli, an Iowa voter who is dying of an incurable lung disease called lymphangioleiomyomatosis. She is devoting her final days to changing U.S. health care and has been grilling candidates on the subject across the state of Iowa to do it. So far she has confronted all but two presidential hopefuls on the subject and has attended more than 70 campaign events to do so.
[Story] [Video]

Next stop is California, a state that has held a high profile in the news as Governor Schwarzenegger and the state legislature have wrestled with implementing universal healthcare. Aliza Marcus over at Bloomberg takes a good hard look at Schwarzenegger's battle for health care reform and the lessons it holds for U.S. Presidential candidates.
[Story]

Then we turn our attention to the East Coast of the U.S. The Business Review brings us the scoop on New York Governor Eliot Spitzer's decree to his Health Commissioner and his Insurance Superintendent that they have until May 31 to concoct a plan for universal coverage in New York state.
[Story]

As we move along the coast we find the Boston Globe reporting on Vermont Governor Jim Douglas who is aiming his efforts at preventative medicine. To be specific he is attacking obesity, a major contributor to "more than 15 chronic conditions." The details will be released during his State of the State address next week, but the Globe article gives a basic overview of the plan (adding prevention specialists, allocation of grant money, among other features).
[Story]

Our last stop on this virtual tour is in New Hampshire, the next state to fall under the media microscope now that the Iowa caucuses are finished. As the various contenders for the White House prepare to converge on the state the International Association of Dental and Medical Disciplines (IADMD) has issued a press release calling on the candidates to get input from actual doctors when formulating their approaches to health care reform.

"Health care is such an important issue the candidates should be listening to the IADMD doctors that have the medical training to solve the crisis. I commend Hillary Clinton, John Edwards, Mitt Romney and Barack Obama for talking about health care. But their plans are not viable for many reasons, such as cost and their non-doctor approach," says Dr. Ryan.

Dr. John J. Ryan is the founder of the IADMD and a New Hampshire based family dentist.
[Press Release]

That's all for now, see you next week!

SOURCE: "Schwarzenegger's Health Battle Carries Warning for Candidates " 01/04/08
SOURCE: "Businesses warm to idea of universal health care" 01/04/08
SOURCE: "Governor wants to fight obesity with grants and specialists" 01/03/08
SOURCE: " Dying Iowa voter grills candidates on health care" 01/03/08
SOURCE: "Press Release: New Hampshire Doctors Group Challenges Presidential Candidates on Universal Health Care" 01/04/08

photo courtesy of Benimoto, used under this Creative Commons license

Kaiser Releases Summary of Candidates' Positions on Health Care

It is the third day of the New Year, and tonight the Iowa Caucasus will determine the shape of the upcoming run for President of the United States. Facts, fiction, and anecdote swirl together in a dizzying fashion as all of the hopefuls make one final push for the hearts and minds, or at least the votes, of the Iowa public.

What exactly, you may ask, is a caucus and why is it so important in the run for the White House? Mark Z. Barabak of the Los Angeles Times explains the process and its history in an article this morning.

No matter what part of the political spectrum you embrace one thing is sure: this year's Presidential race is going to be a doozy! This is good news in at least one respect because it means a lot more public debate about our broken health care system, which is consistently listed as one of the most important issues to American voters.

Whether you are in Iowa debating who will receive your vote tonight, New Hampshire where the next fight in this running political battle will be, or anywhere else in the U.S. you will need facts and details in order to properly formulate your decision.

On the subject of health care reform, at least, you have a wonderful resource available in the Kaiser Family Foundation's breakdown on what the candidates and the media are saying about health care. Released on January 2nd, the Kaiser Health Policy Report gathers together in one place the pertinent media coverage, recent developments, polls, broadcast coverage, and opinion pieces concerning the U.S. Presidential candidates' positions on health care reform. The data is summarized, documented, and linked for ease of use.

SOURCE: " Election 2008 | Presidential Candidates Debate Health Care Proposals in Preparation for Iowa Caucuses " 01/02/08
SOURCE: "Why Iowa? And what's a caucus, anyway?" 01/03/08
photo courtesy of John Edwards 2008, used and remixed under this Creative Commons license

Massachusetts Uninsured Penalty to Quadruple

I would like to start off today by wishing all of our readers a healthy and happy New Year from all of us on the Health Care Reform Now Blog Team! May 2008 be a fantastic year for all, and hopefully a year in which we will see substantive strides toward health care reform in the United States.

To kick off 2008 I would like to direct your attention to the Boston Globe's Jefffrey Krasner, who has his eye on Massachusetts.

2008 will be an important year for the state's health care reforms, which were signed into law by U.S. Presidential hopeful Mitt Romney during his term as Governor of Massachusetts in 2006. The maximum penalties for remaining uninsured will increase nearly four fold to almost a thousand dollars a year. The cap for 2007 was $219 and was implemented as a forfeiture of the individual's tax exemption, not a fine.

Mr. Krasner provides a nice breakdown of how the penalty fee structure is supposed to work. The amount of the penalty is directly tied to the lowest cost insurance option using a formula determined by the state's Department of Revenue:

Under the formula issued yesterday, the amount an uninsured resident pays for 2008 varies by income and how long the resident goes without insurance. For instance, those 26 and younger that earn too much to qualify for low-cost insurance and who go the whole year without coverage would pay a $672 penalty. Those 27 and older would pay $912, the maximum. Those who have coverage for part of the year would pay a corresponding amount of the penalty.

In addition, those who earn less than 150 percent of the federal poverty level, or $15,324 for an individual won't face penalty.

The fees are based on half the cost of the least expensive insurance plan available to each resident but are capped to avoid excessive fees. Thus, a 60-year-old resident of Boston, who would pay more than $4,600 a year for health insurance provided by the state, could have been hit with a $2,300 penalty. But the maximum possible penalty is $912 for all residents. The draft regulations are available at the revenue department's website at mass.gov/dor.

There is no accurate estimate of how many Massachusetts residents will have to pay the penalty for 2007 yet, due to the fact that the penalty is tied to individual tax returns which are not due for several months.

This will be the crucible in which the mandate approach is tested, and I am certain that as the U.S. Presidential campaign ramps up many eyes will be on the Massachusetts plan. Mandates have been a central part of the political discussions on health care, with Democratic Presidential hopeful Barrack Obama being the only member of his party not proposing one.

SOURCE: "Penalties to rise for shunning insurance: State healthcare levy could exceed $900" 01/01/08
SOURCE: "Massachusetts Dept. of Revenue"
photo courtesy of koalie, used under this Creative Commons license