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MN-UHCAN Joel Albers Solving the Health Care Crisis in Minnesota Minnesota Universal Health Care Action Network Prepared and Researched by: Joel M. Albers.

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Presentation on theme: "MN-UHCAN Joel Albers Solving the Health Care Crisis in Minnesota Minnesota Universal Health Care Action Network Prepared and Researched by: Joel M. Albers."— Presentation transcript:

1 MN-UHCAN Joel Albers Solving the Health Care Crisis in Minnesota Minnesota Universal Health Care Action Network Prepared and Researched by: Joel M. Albers health economics researcher, clinical pharmacist Website: Tel:

2 MN-UHCAN Joel Albers Outline Documentation of the health care crisis Analysis of power structure of the industry What’s causing the health care crisis ? Compare universal publicly-funded single-payer model to private HMO, multi-payer, job-based market approach. What polls, studies show about various health care reform models ability to cover all without increasing costs. Solving the Crisis by Building a Movement

3 MN-UHCAN Joel Albers Essence and Summary of Health Reform Debate Health care system that is market-based in which health care is a commodity, distributed according to ability to pay ? Health care system that is social insurance distributed according to need?

4 MN-UHCAN Joel Albers Documentation of the health care crisis

5 MN-UHCAN Joel Albers Is There Really a Health Care Crisis in MN and U.S. ? “The American Health system is in need of fundamental change. It is failing both clinicians, and patients, and their frustration levels have never been higher”, U.S. Institute of Medicine, 2001 Report

6 MN-UHCAN Joel Albers WHO: Health System Rating US Ranks 37th in the World who.int/whr/2000/en/report.htm

7 MN-UHCAN Joel Albers Uninsured in Minnesota Point in time: 5.4% (266,000), at time of survey Uninsured at some point in year:8.1% Uninsured at some point in 2 yrs:20% or 941,000** Source: * MN Health Dept ‘01 Health Access Survey;** Robert Wood Johnson Foundation. Survey did not ask about mental health coverage. Minnesota’s population = 5 million 2004

8 MN-UHCAN Joel Albers Underinsured in MN 16% lack prescription drug insurance 50% of seniors lack prescription drug coverage 34% lack dental coverage Large unmeasured % lack mental health coverage Private insurance and Medicare generally do not cover long term care (neither nursing home nor home health care) Source: * MN Health Dept ‘01 Health Access Survey

9 MN-UHCAN Joel Albers 2001 Minnesota Uninsured Rates by Race/Ethnicity Source: MN Health Dept 2001 Health Access Survey 16.1% 15.6% 17.3% 6.6% 4.5%

10 MN-UHCAN Joel Albers International Comparison: Canada’s Single-Payer v. U.S. Multi-Payer System Life expectancy 2 years longer Infant deaths 25% lower Universal comprehensive coverage More MD visits, hospital care; less bureaucracy Quality of care equivalent to insured Americans’ Free choice of doctor/hospital Health spending half U.S. level

11 MN-UHCAN Joel Albers 8 MN Labor Union Strikes Provoked by Health Care Costs Transit Union ATU AFSCME 3800 U of MN 2002 Teachers in Red Wing 2002 Teachers in International Falls 2001 Nurses Fairview Hospital 2001 MN Association of Professional Employees 2000 HERE, Hotel and Restaurant Employees 2000 Teamsters Minneapolis Pepsi workers

12 MN-UHCAN Joel Albers MN 2003 Legislature Cut $200 Million From Public Assistance Programs 38,000 people will lose public health insurance by 2007 Severe restrictions for people still on MNCare,GAMC Source: MN Dept of Human Services

13 MN-UHCAN Joel Albers Effects of Budget Cuts on only Remaining Public Hospital: Hennepin Cty Medical Center Overcrowded emergency rooms Understaffing,higher workloads, longer shifts Lower quality health care $30 million in federal government cuts $7.8 million in other cuts Less revenue from public assistance patients, more uncompensated care Serious $ problems, 190 “nonclinical” staff fired. Source: Save HCMC Coalition

14 MN-UHCAN Joel Albers Power structure of the industry

15 MN-UHCAN Joel Albers Power Structure of MN Health Care Industry: Medical-Industrial-Government-Academic Complex Health Professional Associations: MMA, MPubHA, MN pharmacists Assoc. Corporate: HMOs, drug, medical device, biotech corporations:attorneys,lobbyists Big Business, MN Business Partnership, Chamber of Commerce Trade Assocs: MN Council of Health Plans (HMO), MNBio (biotech) Think tanks: Interstudy (HMO),MedicalAlley (Tech) Foundations: HealthPartners Research Foundation Government agencies:Legislature, MN Dept of Health Commissions: Pawlenty-Durenberger Academia: U of MN

16 How MN HMO & Drug Corporate Money Controls MN Legislature,2000 House Health & Human Services Policy Cmte$28,187 Senate Health & Family Security Cmte$24,943 House & Senate Legislative Caucuses*$194,221 MN DFL Party$4,500 Republican Party of MN$178,880 Source: MN for Fair and Clean Elections, *Caucuses are the legislative leaders’ PACs

17 MN-UHCAN Joel Albers What’s causing the health care crisis ?

18 MN-UHCAN Joel Albers MN Statewide Health Care Cost Trends; Current Law Billions $ Year Sources: Center for Medicare and Medicaid Services ;www.hcfa.gov “Health spending projections for ,Health Affairs, 2/3/

19 MN-UHCAN Joel Albers Double-Digit Health Care Cost Increases in Every Sector of MN Total Statewide State government Seniors Business Labor Unions Households

20 MN-UHCAN Joel Albers Market-based System Since 1994 Results in Oligopoly 4 Private HMOs Control MN Health Care Market 2002 Blue Cross-Blue Shield, 2 million members Medica, 1 million members HealthPartners,660,000 members Preferred One, 600,000 members These 4 insure 9 of every 10 Minnesotans, Own or investors in most of MN’s major hospitals & clinics Source: HMO companies

21 MN-UHCAN Joel Albers Allina 27%, 29.2% Fairview University 26%, 20.9% HealthEast12.0%, 12.1% Hennepin Cty 8%,6.3% HealthPartners,(was Regions) 7%,7.6% Methodist 6% Children’s 5%,5.6% Other non-affiliated 3%,3.9% Twin Cities Hospital Market Share,1996 & 2001 Measured as Percent of Inpatient Admissions Source: MN Dept of Health, Consolidation in MN’s Health Care Market, Issue Brief 98-04, MN Managed Care Review 2002, Part 1 N.Memorial 7%,7.8%

22 MN-UHCAN Joel Albers What is causing health care costs to spiral out of control? Medical-industrial-government-academic-complex strategy: blame consumer demand & overutilization Drink too much alcohol Smoke too much Overweight Don’t feel cost of care Aging population Malpractice costs

23 MN-UHCAN Joel Albers Myth: The US Health System Costs so Much Because Americans Drink and Smoke so Much

24 MN-UHCAN Joel Albers Myth: US Health Care Costs so Much Because Americans are so Fat and Obesity Res 2001;9:2306

25 MN-UHCAN Joel Albers Myth: US Health Care Costs so Much Because Americans Don’t Feel the Cost of Care % of total health spending: WHO: 2000

26 MN-UHCAN Joel Albers Myth: US Health Care Costs so Much Because Americans don’t personally pay for Health Care

27 MN-UHCAN Joel Albers Myth: US Health Care Costs so Much Because Americans are Really Old!

28 MN-UHCAN Joel Albers Per Capita Spending and % Elderly % of Population over 65 Health Aff 2002;21:170

29 MN-UHCAN Joel Albers Myth: Malpractice costs are why US Health care costs so much % of total US Health Spending Premiums MD and Hosp.07% Defensive medicine.12% –Comp Ther 1998;24:455-9

30 MN-UHCAN Joel Albers What is REALLY causing health care costs to spiral out of control? In reality, the CAUSE comes from the supply side HMO premium prices, administrative costs Drug,medical device, biotechnology company prices

31 MN-UHCAN Joel Albers It’s the Prices and Administrative costs Health Care Costs = Price X Volume + adm costs

32 MN-UHCAN Joel Albers Excess Administrative Costs (% of Revenues) in U.S. Compared to Canada,1999 Source: Woolhandler S., Campbell T., Himmelstein D. Costs of Health Care Administration in the U.S. and Canada. New England Journal of Medicine 2003;349:768-75

33 MN-UHCAN Joel Albers International Comparisons Every other industrialized nation has a healthcare system that assures medical care for all All spend less than we do; most spend less than half Most have lower death rates, more accountability, and higher satisfaction

34 MN-UHCAN Joel Albers U.S. Public Spending Per Capita for Health is Greater than Total Spending in Other Nations Note: Public includes benefit costs for govt. employees & tax subsidy for private insurance Source: NEJM 1999; 340:109; Health Aff 2000; 19(3):150

35 MN-UHCAN Joel Albers How are profits made in Health care ? HMOs,other insurers are fiscal intermediaries (middlemen) do it by denying care, underutilization Drug, device, biotech companies do it by overpromotion, overutilization Thus, the system suffers from both overutilization, AND underutilization of health care services

36 MN-UHCAN Joel Albers What is single-payer compared to current HMO multi-payer enterprise ?

37 MN-UHCAN Joel Albers Single-payer is: publicly financed and administered, yet privately practiced, social insurance system Public financing; public taxes replace private premiums Public Admin: the single-payer- a citizen board- replaces multi-payers Social insurance: All in,None out; healthy subsidize sick, disperse financial risk over entire population.No bankruptcy Socialized medicine: ONLY if gov’t EMPLOYS practitioners and OWNS hospitals, nursing homes etc

38 MN-UHCAN Joel Albers Health Care is a Public Good: like roads, fire protection, parks something we all need but cannot afford to pay for ourselves

39 Basic principles of a single-payer system Universal – it covers everyone  Comprehensive – covers all needed health care services  Cost Containment – sets fee schedules for practitioners, budgets for hospitals, controls prices; ends insurance co. waste.  Choice of Practitioners – patients choose practitioners  Fairly Financed – funds health care by consolidating existing public programs, & a tax that replaces premiums & copays. Publicly Accountable – a board of citizens sets fee schedules for providers, budgets for hospitals, and ensures quality of care.

40 MN-UHCAN Joel Albers Models for Single-payer Health Care ? U. S. Medicare 41 million elderly and disabled Internationally: Canada, Sweden, Norway, Denmark

41 MN-UHCAN Joel Albers Myths About Single-payer perpetuated by Medical-Industrial- Government- Academic Complex We can’t afford it It’s socialized medicine It’s not politically feasibility It will stifle innovation We would have to ration care Will increase taxes It would be government run

42 MN-UHCAN Joel Albers Difference Between Single-payer and Multipayer-HMO system Analogy Fences (Macromanagement) Reins (micromanagement)

43 MN-UHCAN Joel Albers How the HMO System Works in MN Micromanagement system to control costs by restrict or deny services Managed care: hands-on supervision of practitioners Transferred financial risk to physicians (capitation bonuses) Utilization review, Heavier workloads Sometimes limiting choice of physician. Managed competition theory: competition among HMOs controls costs.

44 MN-UHCAN Joel Albers What the polls, studies, and cost analyses show about various health care reform models.

45 MN-UHCAN Joel Albers Which of these do you think is more important? 80% 20% (Base=795) Providing health care coverage for all Americans, even if it means raising taxes Holding down taxes, even if it means some Americans do not have health care coverage. opinions regarding health care services Eight out of ten Minnesotans are willing to pay higher taxes in order to ensure that all Americans have health care coverage. ABCNEWS Poll Comparison: The response was very similar in the national poll with 17% favoring holding down taxes and 80% favoring providing health care for all Americans. 80% 20% 20% 80%

46 MN-UHCAN Joel Albers Washington Post/ABC Poll Oct % of the U.S. supports a national health care system that covers everyone 32% favor the current system 6% don’t know Most think Canada’s (single-payer) system is better

47 MN-UHCAN Joel Albers 56% of Medical Students & Faculty Favor Single Payer, Majority of Med School Deans Concur Source: NEJM 1999; 340:928 “What is the best health care system for the most people?”

48 MN-UHCAN Joel Albers 9 State Studies Conclude Single-Payer Financing Saves $ While Covering All Massachusetts Medical Society, 2 studies, 1998 California, funded by State legislature, 2002* Oregon, Health Care for All, 2001 Vermont State publicly funded study, 2001 * Maryland, privately funded* Maine Rhode Island 2002 Missouri 2003 *Evaluations carried out by The Lewin Group, Inc

49 MN-UHCAN Joel Albers 7 National Studies Conclude Single-Payer Financing Saves $, Covers All U.S. Economic Policy Institute (private) studies by Congressional Budget Office, ‘91-’93 U.S. General Accounting Office, 1991 Physicians for a National Health Program,PNHP,’91

50 MN-UHCAN Joel Albers Projected Universal Single-payer Health Plan Savings for MN 2005 (in millions) Total Health Care Expenditures (current law) $ 37,194 Additional health care utilization from extending coverage to under and uninsured, & eliminating cost sharing +$ 3,905 (10.5% of total costs) Minus excess administrative costs now incurred by insurers, employers, hospitals, practitioners,nursing homes, home health care -$ 6,309 (17% of total costs) Savings from prescription drug discounts a/ - $ 982 (2.6% of total costs) Total Health Care Expenditures, Single-payer$ 33,808 Total Savings under Single-payer AFTER covering all$ 3,386 (9.1% of total costs) Source: Joel Albers

51 MN-UHCAN Joel Albers State-by-State Estimates of Single-payer Savings MN Ranks 3rd in U.S. Administrative Savings Available Per Uninsured Resident 2003 Projected Health Expend. Current System Millions $ Admin. Expenses in Millions $ Potential Admin. Savings in Millions $ Uninsured Residents in s Admin. Savings Available per Uninsured Resident $ D.C.6,2261,8161, ,771 Mass.43,60312,0908, ,453 MN28,8627,8855, ,777 R.I.6,3531,6721, ,677 WI28,5987,7275, ,513 Harvard/Public Citizen Report by Himmelstein D.U., Woolhandler S, Wolfe S., “Administrative Waste in the U.S. Health Care System in 2003: The Cost to the Nation, the States, and the District of Columbia, “ With State-Specific Estimates of Potential Savings. August 27, 2003.

52 MN-UHCAN Joel Albers Year billions Cost growth under current trend of 7.3% per year Single-payer: limit cost growth to 5.5% per year Future Savings, Minnesota Total Health Care Spending: current system v. single-payer Cumulative savings from = $ 56.2 billion Source: Joel Albers

53 MN-UHCAN Joel Albers Projected Health Expenditures 2005: Transition to, Implementation of Single-payer, (in millions) Single-payer expenditures in 2005$ 33,808 Admin. costs 1st yr of plan operation:(6% of program costs) a/ +$ 2,029 Health Care Operating Budget b/ $ 35,837 Additional 1% of Operating budget for displaced worker training c/ $ 358 Construction Account, 1.15% of Op budget d/ $ 389 Reserve Account e/ $ 290 Total Health Plan Budget$ 36,874 Source: Joel Albers

54 MN-UHCAN Joel Albers Estimated Financing of Single-payer Health Plan,2005 (in millions) Government programs such as Medicare, Medicaid,and State employees, 44% of base personal health care expenditures $ 16,365 Payroll tax at 9.5% of $108.9 billion$ 10,563 Income tax at 5.1% of $179.9 billion Personal Income$10,794 Transfer of workers compensation medical payments$ 470 Transfer of medical portion of automobile insurance$ 573 Total projected revenue$ 36,929 Source: Joel Albers

55 MN-UHCAN Joel Albers Building a Movement Organizing Model Goals Objectives Strategies Tactics Timeline

56 MN-UHCAN Joel Albers Organizing Model: affinity group-spokescouncil- consensus is one model Networking & Coordinating (v. Centralized Single-issue Coalition) : organizations horizontally linked, diverse, inclusive Organizational Structure: decentralized, non-bureaucratic, non- hierarchical, organizations send reps to spokescouncil mtg Decisionmaking process: All decisions democratic by consensus, participatory, every voice heard equally. Develop Work Plan to proactively set mission, goals, objectives, strategy, narrowed down to specific Tactics and Timeline

57 MN-UHCAN Joel Albers Infrastructure: working groups Actions: strikes, rallies,marches, street theater, creative, continuity Outreach: flyering, tabling, endorsements, resolutions, petitions Education: forums,conferences, speaker’s bureau, HC resource center Legislation: bills, lobbying, hearings Media: independent, mainstream, incite sustained, accurate debate Research: cost analysis, analysis of policy proposals, surveys Communications: website,e listserve, phone tree

58 MN-UHCAN Joel Albers Goal and Objectives Goal: Implement Universal Single-payer Objectives: Political: State Legislation Single-payer Economic: Organizing huge purchasing groups until reach one state pool.

59 MN-UHCAN Joel Albers Strategy and Tactics Strategy Create fair democratic debate in MN, demarginalize us Build grassroots base and capacity of organizations into Network: labor, practitioners, seniors, community Tactics Guerrilla health care: change debate spin w/ few resources Protest any publicly unaccountable institution. corp or gov Striking labor unions can mobilize groups.

60 MN-UHCAN Joel Albers Of All Of The Forms Of Inequality, Injustice in Health Care is The Most Shocking and Inhumane -- Martin Luther King jr.


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