In
the mid-1980s, under Raygun, Medicare also began encouraging
elderly people to enrol in private HMOs. Raygun paid the private
plans a fixed monthly premium for each person who switched from
traditional (fee for service) Medicare, with the HMO taking
over responsibility for purchasing (or, rarely, providing) care.
This arrangement was touted as a means to bring athe "free market'
to the public programme and to broaden patients choices.
The
first crop of Medicare HMOs yielded mainly scandal—for
example, a major political donor whose plan enrolled thousands
of aged patients in Florida (and collected tens of millions
of government dollars) but neglected to contract with doctors
or hospitals to care for them. He fled prosecution, eventually
seeking refuge in Spain.
Medicare
applied stricter regulations. Raygun set the HMOs payment at
95% of the average monthly cost of care for a patient in Medicare,
with the expectation of 5% savings through improved efficiency.
Patients who chose an HMO—attracted by free spectacles,
lower copayments, and other benefits not covered under traditional
Medicare—were free to return to traditional Medicare.
HMOs
recognised an financial opportunity in the skewed distribution
of health costs. Most patients use little care—indeed
22% of elderly people cost Medicare nothing at all each year—while
the fraction who are severely ill account for the lions share
of expenditures. HMO's quickly realized windfall profits through
cherry picking—recruiting healthier people who brought
hefty premiums but used little care—and returning sick
patients, and their high medical bills, to the traditional Medicare
program—disrupting care for millions and costing the tax
payers Billions.
HMO'
devised selective recruitment schemes to attract healthier people,
like free fitness club memberships, complimentary recruiting
dinners, and advertisements painted on the bottoms of swimming
pools. HMOs used financial incentives to encourage doctors to
persuade sick patients to leave the HMO—for example, deducting
payments to specialists from the primary care doctors own capitation
payment. Hence, a general practitioner could raise her income
by advising patients needing hip replacement to leave the HMO,
and even convince herself that such advice might benefit patients
by freeing them of HMO restrictions on the choice of surgeon
and hospital.
When
an HMO found itself saddled with too many unprofitably ill patients
in a particular county, execs simply closed up shop and returned
the patients to traditional Medicare.
As
enrolment fell, HMOs lobbied hard for government rescue, and
Congress upped their payments. Currently, Medicare pays private
plans $77bn annually; the cost of caring for the eight million
Medicare members who have switched to HMOs is 12% above the
cost of caring for comparable patients in traditional Medicare.
So
much for "free market" pressure lowering costs.
In
a publicly financed, universal health care system, medical decisions
are left to the patient and doctor, as they should be.
In
a public system, the people have a say in how its run. Cost containment
measures are publicly managed at the state level by elected and
appointed agencies that represent the public. WE decide on the
benefit package and negotiate doctor fees and hospital budgets.
Most
current medical research is publicly financed through the National
Institutes of Health. Most basic drug research, is funded by the
government. Drug companies are invited in for the later stages
of product development, the formulation and marketing of new drugs.
AZT for HIV patients is one example. The early, expensive research
was conducted with government money. After the drug was found
to be effective, marketing rights went to the drug company, but
WE already paid the cost.
Many
famous discoveries have been made in other countries with national
health care systems. Laparoscopic gallbladder removal was pioneered
in Canada. The CT scan was invented in England. The treatment
for juvenile diabetes by transplanting pancreatic cells was developed
in Canada.
Big
Pharma's increasing reliance on contract research organizations
(and for-profit ethical-review boards) has coincided with a sharp
drop in innovative new drugs and mostly me-too drugs - minor variations
on old drugs that offer NO benefit other than 7 more years of
extended patent life, and NO cheaper, generic form of the drug.
A
majority of physicians (59%) and an even higher proportion of Americans
(86%) support single-payer national health insurance or Medicare
for All.
Every
other industrialized country has some form of universal health care.
Medical
bills contribute to more than half of all bankruptcies.
75%
of those bankrupted had health insurance at the time they got sick
or injured.
Taxes
already pay for over 60 percent of US health spending.
Business
pays less than 14% of our nations health costs.
Americans
pay the highest health care taxes in the world.
The
US could save enough on administrative costs (over $350 billion
annually) with a single payer system to cover all the uninsured.
Kjersten
Forseth, Change That Works
303-865-7985
x120