The Governor’s Defense of the New Maine Health-Care Law

At his Town Hall in Presque Isle August 22, I asked the Governor to compare the costs and benefits of his new health-care plan with the single-payer bill proposed around the same time.  I was not satisfied with the responses, which referenced the Idaho bill as the model for his plan and the Canadian health care system as the comparison model.  In hopes of getting more specific responses, I wrote him a follow-up letter on August 30.  You can see my full letter and his full reply of September 14 below.  

In my letter I asked, “What cost/benefit analysis was done to compare the new health care law with the proposed single payer system?”  He replied in his letter, “Although the legislature passed [emphasis mine] the single payer bill many times, it did not provide funding that would have allowed a comparison to the existing system possible.”  Assuming the use of passed is a mistake, and he meant introduced, the assertion is still false.  The single-payer system proposed in LD 1397 does provide funding explained in the synopsis of the bill I sent him:  the bill “will eliminate for-profit health insurance and replace it with a standard premium payment, 9% of adjusted gross income, to be paid by every Maine resident to an independent trust fund.  Those making less than $300% of the federal poverty level, or $32,670, will pay a reduced rate” (www.mainelegislature.org/LawMakerWeb/summary.asp?ID=280041060).  

I also asked, “Considering that ‘total administrative costs consume 31% of U.S. health spending’ according to Physicians for a National Health Program (http://www.pnhp.org/facts/single-payer-faq#insurance-overhead)—costs that do not go for healthcare—how can any for-profit insurance that continues the current fragmented system be better for consumers or taxpayers?”    He replied, “Private companies have a nimbleness that bureaucracies cannot match, allowing them to innovate in response to market trends.”  I would like to know what evidence supports that, and even if it is true how does the nimbleness and innovation of insurance companies directly alleviate the burden of the 31% of costs that are not spent on healthcare in the private insurance system?

The governor referred to the website of the Maine Health Management Coalition, http://www.mehmc.org .  I spent a couple of hours at the website, and I could not find any information there that addresses the 31% of costs that don’t go to direct patient care:  advertising, lobbying, profits, high overhead costs in medical offices to deal with insurance forms, immorally high administrative salaries.  These costs would be sharply reduced in the proposed single payer system.  By comparison and depending on which source you consult, Medicare overhead is between 1 and 6% of total costs.  And Canada’s National Health Insurance Program had overhead costs in 1999 of 1.3% of its total expenditures (http://www.nejm.org/doi/full/10.1056/NEJMsa022033).   

I asked the governor, “How will the new law be better for Maine businesses and workers such as loggers who must compete with Canadians who can work for less because they have a national health care system?”  In his reply to this question, he ignored the issue of competition with Canada.  I asked “How will the new law provide for the 140,000 Mainers who are currently uninsured and for the equal number underinsured?” and “What is the source of charges made at the Town Hall Meeting about the Canadian Health Care System?”  He completely ignored these questions and did not respond to evidence (http://www.denverpost.com/opinion/ci_12523427) I sent that his charges about Canadian health care are false. 

My brother was diagnosed with cancer in Maine and received his early treatment here.  When it came time to retire, he and his wife, a Canadian citizen, decided to move to Canada where they could get much better quality health care at much less out-of-pocket expense.  Instead of worrying about threats to his assets by high premiums, deductions, and co-pays and possible long-term care, he could focus his final years on quality of life—time with his 4 generational family, gardening, fishing, practicing his craft of making beautiful jewelry.

The governor’s defense does not justify the passage of a new health care law which will surely perpetuate the current problems, and likely exacerbate them (http://bangordailynews.com/2011/09/12/opinion/republican-health-care-law-already-causing-price-spikes-fear/).  We take for granted that we need to provide publicly funded schools, fire and police protection, national defense, disaster relief.  Why shouldn’t health care be likewise publicly funded?  I haven’t found good reasons why not that consider the health and well-being of all our citizens and of the entire economy.  Having health insurance decoupled from employment as the Single Payer bill proposes would be a great incentive for Maine businesses to hire new employees and for new businesses to come to Maine, goals the Governor says he favors. 
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August 29, 2011

Governor LePage

Office of the Governor
#1 State House Station
Augusta, ME 04333-0001

Dear Governor LePage,

Thank you for visiting with us in Presque Isle August 22.  Such meetings give us the opportunity to think about the issues in more depth than we otherwise might.  As a result of that meeting, my list of concerns about the new health-care law has grown.  Perhaps, a letter is a better forum than a meeting for expressing my concerns and for getting the kind of specific responses I would like.  Please respond to the following:

·         What cost/benefit analysis was done to compare the new health care law with the proposed single payer system?  I’m enclosing a synopsis of that single-payer bill.

·         Considering that “total administrative costs consume 31% of U.S. health spending” (http://www.pnhp.org/facts/single-payer-faq#insurance-overhead)--dollars that do not go for healthcare—how can any for-profit insurance that continues the current fragmented system be better for consumers or taxpayers?    See enclosed quote from Physicians for a National Health Program.

·         How will the new law provide for the 140 thousand Mainers who are currently uninsured and for the equal number underinsured?

·         What is your source of information about the Canadian health-care system as compared to ours?  Please see enclosed information addressing your comments about Canadian health care at the August 22 town hall.  

·         How will the new law be better for Maine businesses and workers such as loggers competing with Canadians who have a public single-payer system?   

·         I looked on the Maine.gov web site for the fact sheet on myths and facts about the health-care law, mentioned at the August 22 meeting and couldn’t find it.  I think I have seen it before, but could you send me a copy or tell me where to find one, so I can check my memory?   And, please, tell me also where you get your facts from.

Thank you for attention to these concerns.  I look forward to hearing from you

Sincerely,

Alice Bolstridge

cc.  H. Sawin Millett, Jr., Mary Mayhew

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Synopsis of LD 1397 “An Act To Establish a Single-payor Health Care System

To Be Effective In 2017”

“Introduced by Rep. Charlie Priest, District 63 (D-Bruswick), 55 co-sponsors

125th Maine State Legislature

“The bill, LD 1397, creates the Maine Health Care Plan to provide uniform access for all Maine residents to comprehensive, high quality and affordable health care. The Plan is to be financed by the Maine Health Care Trust Fund. The Maine Health Care Agency, an independent executive agency, is established to administer the Plan and the Trust Fund under the direction of the Maine Health Care Council.

“The Plan has eleven stated goals, the first three of which -- 1. access to health care for every Maine resident, 2. eliminate income-based disparity and 3. reduce the rate of growth in the cost of health care services -- will bring about fundamental changes over the current costly, unsustainable insurance-based, fragmented system. The Plan will accomplish its goals first, by decoupling health care from employment. By making health care an individual human right, this bill will relieve employers of any financial obligation for their employees’ health care. Secondly, it will eliminate for-profit health insurance and replace it with a standard premium payment, 9% of adjusted gross income, to be paid by every Maine resident to an independent trust fund. Those making less than 300% of the federal poverty level, or $32,670, will pay a reduced rate. Thirdly, the plan will incorporate technologies to create a highly efficient and accountable system, integrating patient records and payments with provider processes.

“The result will be a barrier-free health care system; patients requiring health care services need only present their personal health ID card to the health care professional of their choice to receive treatment. Providers, in turn, will receive agreed upon payments for services rendered in a timely manner, automatically.

“And here is the url for the actual 19-page bill.

 http://www.mainelegislature.org/LawMakerWeb/summary.asp?ID=280041060”  

Also visit www.maineallcare.org about the authors of the bill.

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from Physicians for a National Health Program

http://www.pnhp.org/facts/single-payer-faq#insurance-overhead:

How much do private insurance companies spend on overhead and profit?

“Private insurance overhead and profit, on average, fluctuates between 12% and 14% nationally. This figure is
somewhat lower than the 16-20% at many of the big insurers because it includes self-insured plans of many big employers that have overhead of about 6-7%. On the other hand, overhead in the individual market is often substantially higher than 20%, and in some cases above 30%.

“The estimate that total administrative costs consume 31% of U.S. health spending is from research by Drs. David Himmelstein and Steffie Woolhandler and published in the New England Journal of Medicine in 2003. The figure would undoubtedly be higher today. Insurance overhead accounts for a minority of the overhead. Much more occurs in physicians’ offices, hospitals, and nursing homes - driven by our current fragmented payment system. The fact that insurance overhead per se accounts for a minority of the bureaucratic waste in the system explains why implementing a public option plan would not achieve most of the potential bureaucratic savings that can be realized through single payer. Even with a public option, hospitals, physicians and nursing homes would still have to maintain virtually all of their internal billing and cost tracking apparatus in order to fight with private insurers.”

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FROM A FACEBOOK CONVERSATION THREAD FOLLOWING GOVERNOR LEPAGE’S COMMENTS ON CANADIAN HEALTH CARE AT TOWN HALL MEETING IN PRESQUE ISLE.

Ruthie McAllister.  I want to know where people get their info on the Canadian healthcare system?!?!?  He is not the first to say bad things.  Makes you wonder who is feeding this kind of info to our public servants?  Having lived there and having family and friends still there I have never known anyone who has had to wait or been denied.  I am sure that, like here when it comes to elective surgery, there may be a wait but nothing unusual.  They don’t wait either until they are so sick to go see the doctor.  And as far as inferior quality of medicine, that’s a crock of you know what.  Just like here there are great Drs. as well good and not so good, same with hospitals, but that as nothing to do with having a universal healthcare system.  I don't know of anyone who was denied any treatment or procedure over there because the government refused to pay.Having both lived there and have family and friends still there I have never known anyone who has had to wait or been denied..I am sure that like here when it comes to elective surgery..there may be a wait but nothing unusual.They don't wait either till they are so sick..to go see the doctor of info to our public servants?Having both lived there and have family and friends still there I have never known anyone who has had to wait or been denied..I am sure that like here when it comes to elective surgery..there may be a wait but nothing unusual.They don't wait either till they are so sick..to go see the doctor

Shelly Mountain.  Rationing occurs here [in Maine]. You are at the mercy of insurance executives who decide whether they will pay for procedures and rationing happens based on your ability to afford health care and/or insurance. People have died here because insurance companies have refused to pay for treatment.

Roberta Morris Bolstridge.  I never heard tell of rationing here (New Brunswick) and I worked in the system for 12 yrs and lived with it for 25 yrs. If your doctor orders something it is done. Period, end of discussion. No yoho in an insurance office decides. And what's this about having to move to get health care? What idiot thought that one up? And to put my views in perspective, I lived in ME for 16 yrs and worked in a hospital there as well.

Also see http://www.denverpost.com/opinion/ci_12523429?source=pkg,

http://www.denverpost.com/opinion/ci_12523427
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