No one there {Photo by JLM}

So I was disappointed to learn that SHRM does not support the recently passed House health care reform bill, HR 3962, The Affordable Health Care for America Act.

My readers will know I consistently argue that relying on employment as the primary gateway to the health care system is outmoded and ultimately harmful to the American economy.   Part of that argument is because employer sponsored health care limits the flexibility of employer human resource policies and the mobility of the workforce.

Does SHRM share those views?

Apparently not.

What does SHRM say?

In some areas, the legislation does not go far enough, especially in the area of containing costs.  In other ways, the legislation would create new impediments for employers and employees.  For example, the House bill:

1. Does not include provisions to create greater availability to wellness programs for employees and employers.
2. Mandates that employers provide and pay for “qualified” health care coverage for their employees. If employers do not provide coverage – or do not provide the specific “qualified” coverage at an “affordable” price, as determined by the federal government, they must pay an 8 percent payroll tax.
3. Erodes the effectiveness of the Employee Retirement Income Security Act (ERISA) by applying state law to employer- purchased coverage in a health insurance exchange; prohibits post-retirement reductions of retiree health benefits by group health plans, unless reductions are also made to active employees’ health benefits; and requires employer-sponsored plans to meet detailed federal requirements.  These changes would likely result in additional costs and burdens on multi-state employers who could face different rules in different states.
4. Establishes a public insurance plan option that, as currently drafted in the House bill, could result in cost-shifting to private plans, potentially increasing costs for both employers and employees.

The Maze’s response

I.            Their first point is preposterous.  Employers don’t need federal legislation to promote wellness.  For people without health insurance, their pathway to wellness is health insurance.   And wellness alone is no substitute for health insurance.  What more evidence do you need than the story of the shooting in the health club in Bridgeville, PA this past August?  One of the victims had no health insurance.  Her health club membership did not protect her from the bullets of a crazy man.

In addition, workplace wellness is a growing phenomenon around the world and is not dependent on employer sponsored health insurance.

II.            It continually mystifies me why the business community opposes employer mandates.  Apparently the ideology of a “free” market trumps the common sense of a competitive market.  In a competitive market, everyone plays by the same rules.  In a free market, the winners make the rules.

III.            I am a bit more sympathetic to some of the arguments about ERISA.  As typical of any legislation, especially proposals that are as hotly debated as this one, legislators make decisions that reflect a poor understanding of the complexities of the issue.  If the choice were between this proposal and a single payer system, I would agree this solution is a poor one and should be rejected.  That is not SHRM’s viewpoint.

IV.            If SHRM were truly concerned about cost shifting, they should support a single payer system or at least an employer mandate.  They could support an all-payer methodology that the state across the river from their headquarters has.  Their opposition to the public plan option reveals their true loyalty to the insurance companies.

An alternative perspective

Why not promote policies that enable employer flexibility for all employers, large and small, and facilitate workforce mobility and development?

Ken Dychtwald was the keynote speaker at the recent annual conference of the International Foundation of Employee Benefit Plans (IFEBP).  He described how Americans are living longer and the impact thus is having on workplaces and employment practices.  Workers want to extend their working careers with educational breaks, career shifts, part time and part year work.  He did not address specifically the issue of universal access to health care.  But it is obvious that current employment based health insurance practices are a significant hurdle to adoption of the kind of workforce flexibility envisioned by Dr. Dychtwald.

SHRM should be looking to enable the future and not protect the past.

According to The Segal Company’s just-completed survey of projected 2010 health plan costs, medical plan cost trends will continue to be more than four times greater than the annual increase in average hourly earnings and in sharp contrast to changes in the consumer price index for urban consumers.

Other key findings of the survey include:

• High-deductible health plans are projected to increase by just over one percentage point to 11.9 percent next year.
• In 2010, medical plan projections for most managed care plans are similar to those found in 2009, ranging from 10.2 percent to 10.8 percent.

Hot Topics | Segal

By DUFF WILSON and REED ABELSON

Published: November 8, 2009

For any industry, there has to be at least some good news any time Congress votes to expand the market by tens of millions of customers.

But the business world found plenty to complain about Sunday, as it assessed the House bill that would make sweeping changes in the health care system and extend insurance coverage to millions more Americans.

Insurers do not like the provision to create a new government-run insurance program. Drug makers oppose billions of dollars in rebates they would have to give to the government over 10 years. Makers of artificial hips, heart defibrillators and other medical devices are not particularly happy about the proposed 2.5 percent tax on their products.

And employers large and small oppose rules that, for many of them, would make health care coverage — long a job benefit — become a federally mandated obligation.

News Analysis – Medical Industry Grumbles, but It Stands to Gain From Overhaul – NYTimes.com

James Ridgeway – the Unsilent Generation

We now know that the U.S. Conference of Catholic Bishops, which in the end run reports to Rome, was intimately involved in the crafting and promotion of the Stupak Amendment, which turned a tepid health care victory for the Democrats into a serious loss for women’s reproductive rights. Jessica Arons, director of the Women’s Health and Rights Program at the Center for American Progress Action Fund, writes today that the measure “potentially goes farther than any other federal law to restrict women’s access to abortion” by effectively guaranteeing that virtually all insurance plans will refuse to pay for the procedure in the future.

Catholic Bishops’ Faustian Bargain: “Burn Health Care Reform” to Advance Anti-Choice Cause « Unsilent Generation

Posted by Andrew Coates MD on Monday, Nov 9, 2009

“The House Public Plan: Yes, It’s Worth It” write Jacob S. Hacker and Diane Archer in The New Republic. Jacob Hacker is Stanley B. Resor Professor of Political Science at Yale University. Diane Archer is director of the Health Care Project at the Institute for America’s Future and founder and past president of the Medicare Rights Center.

A Response
to “The House Public Plan: Yes, It’s Worth It”
By Sarah K. Weinberg, MD

Jacob Hacker and Diane Archer ask us to believe that:

…health reform is much more likely to succeed with a public health insurance option, even one with negotiated rates, than if private insurers are left to run the show.

So a public plan that will be available to less than half the population and will attract maybe 2% as enrollees is going to have any effect at all on big insurers? I don’t think so, and I’ll bet the big insurers and their investors don’t think so either. (United Health Group and Wellpoint stock prices are stable this morning.)

In a remarkable paragraph, Hacker and Archer claim that private insurance premiums will be lower because sicker people will selectively enroll in the public plan:

Enough already! – PNHP’s Official Blog

The media took its lead from the Republicans, but criticism of AARP is not limited to Republicans and their media outlets.  Even respectable writers on the left, like James Ridgeway, find a conflict of interest with AARP’s collection of royalty fees and AARP’s advocacy position.

My interest in this is two-fold.  First, there is a certain hypocrisy in the Republican attack.  Second, the issue of fees to AARP can shed some light on the hidden costs of our fragmented patient delivery system.

In the interest of full disclosure and like Mr. Ridgeway, I too carry an AARP membership card.  I am not, however, enrolled in any of AARP’s insurance products.  That was not an easy decision after AARP’s disappointing advocacy of George W. Bush’s Medicare Part D prescription drug plan.

AARP’s conflict of interest?

Why are Republicans upset with this so called “conflict of interest”?  This summer, right wing nut cases furiously attempted to disrupt discussion of health care reform with obvious distortions about death panels, Medicare cuts and cries from distressed seniors urging politicians to keep their government hands off their Medicare.

What did AARP do?  They attempted to set the record straight.

So where is the conflict of interest?  Could it be because AARP is unwilling to back HR 676, the Medicare for All legislation?   That they cannot conclude that what is good for seniors could be good for all Americans?  Does anyone really think that would attract the ire of Republican politicians?

No, AARP supports the current House legislation HR 3962.

What about the NFIB?

But the NFIB, the National Federation of Independent Business does not support the current form of health insurance reform.

The NFIB also markets health insurance products to its members.  Who is asking the NFIB how much money they receive from their vendors?

There is no group in the economy that stands to benefit more from meaningful health reform than small business.  Most of the uninsured work for small businesses.  Small businesses pay 18% more than their larger competitors.  Yet the NFIB health reform proposals are lifted directly from the Republican policy book.  They oppose HR 3962.

Out of touch

Evidence that the NFIB has lost touch with its constituents can be seen in the emergence of the Mainstreet Alliance and the Small Business Majority,  groups that have emerged specifically to urge for health care reform on behalf of small businesses.  Could this disconnect between NFIB policy positions and the interests of its members have anything to do with the money it receives from health insurance companies?

They need the money

But there is another aspect of this issue that is illuminating.  It cost money to offer a health insurance plan.  There are marketing and communication costs, enrollment and disenrollment costs, information system costs, customer service costs.  The only opportunity to pay for those costs is from the premiums paid by plan participants.

Plan participants aren’t going to write two checks each month, so they write one and the health insurance company sends some of it back to the plan sponsor to cover its costs.  I don’t know a single group purchasing arrangement that doesn’t work this way.  It could be AARP, the NFIB, a local chamber of commerce or business or union coalition.  Each of these organizations offers a portal through which people gain access to health care.  Monitoring that portal costs money.

Employer sponsors of health insurance plan pay those costs now.  They likely are not counted as part of our national health expenditures.

It’s the sytem

A system that permits multiple and sometimes simultaneous portals into health care is an inefficient system.  Recently I spent time with one of our members whose eligibility to stay on our plan as a widow had ended.  But she could not enroll in AARP’s plan because United Health Care’s computers indicated that she still had coverage with our plan.  It took almost an hour and half on the phone with the member, AARP, and United Health Care.

I tell this story not to point the finger at one actor but at a system that is inefficient by design.  It is that inefficient design that that opens opportunity for profit and for distorting one’s political policy inclinations.

by Max Baucus

One Montanan wrote to me recently about her father’s death. Six months away from qualifying for Medicare coverage, he did not have health insurance or the cash to pay for recommended heart surgery. He died on Christmas Day.

Since I began my current fight for health care reform 2 years ago, I have heard from hundreds of Montanans from across the state. So many of them tell heartbreaking personal accounts of tragedy and suffering that have resulted from our broken health care system. In nearly a century of effort, this country has never been as close as we are today to bringing true stability and security to our health care system. We must seize this opportunity on behalf of the millions of people throughout the country for whom this system is no longer working.

NEJM — Doctors, Patients, and the Need for Health Care Reform

by John Cassidy

With the publication of H.R. 3962, the House Democrats’ mammoth, 1,990-page proposal to restructure the health-care system (the outlines of which can be found in this detailed summary), decision time is fast approaching in the big reform debate. Paul Krugman, in his usual forthright style, says, “History is about to be made—and everyone has to decide which side they’re on.” Democrats and progressives can line up behind the reform legislation that House Speaker Nancy Pelosi put forward last week, or they can help to kill reform for another generation by aligning with hard-line conservatives.

As political analysis, there’s something to be said for Krugman’s Manichean view of the world. But Krugman is also an economist—a very good one—and the economics of what is proposed bear inspection. The President is on the verge of fulfilling his campaign pledge to extend health-care coverage to many of the uninsured. He is doing this, however, not by transforming the existing system of private insurance, which gave rise to many of the current problems, but by extending it.

Some Vaguely Heretical Thoughts on Health-Care Reform: Rational Irrationality : The New Yorker

By NICHOLAS D. KRISTOF

November 4, 2009

The moment of truth for health care is at hand, and the distortion that perhaps gets the most traction is this:

We have the greatest health care system in the world. Sure, it has flaws, but it saves lives in ways that other countries can only dream of. Abroad, people sit on waiting lists for months, so why should we squander billions of dollars to mess with a system that is the envy of the world? As Senator Richard Shelby of Alabama puts it, President Obama’s plans amount to “the first step in destroying the best health care system the world has ever known.”

Op-Ed Columnist – Unhealthy America – NYTimes.com