Democrats Fire Back at Health Industry - washingtonpost.com

Image by Steve Rhodes via Flickr

By Lori Montgomery and David S. Hilzenrath
Washington Post Staff Writers
Thursday, October 15, 2009

Days after the insurance lobby began an aggressive campaign against a Senate plan to overhaul the nation's health-care system, senior Democrats fired back, threatening Wednesday to revoke the industry's long-standing antitrust exemption.

Health insurance is one of only a few industries exempted from certain federal antitrust regulations, and Sen. Charles E. Schumer (D-N.Y.) said the exemption was "one of the worst accidents of American history. It deserves a lot of the blame for the huge rise in premiums that has made health insurance so unaffordable."

Senate Majority Leader Harry M. Reid (D-Nev.) and Senate Judiciary Committee Chairman Patrick J. Leahy (D-Vt.) joined Schumer in a stinging denunciation of health industry practices, but the insurance lobby dismissed their threat as "a political ploy."

The dispute came as House leaders pushed off a vote on health care until the first week in November and as Reid and other Senate leaders met for the first time with senior White House officials to discuss how to craft compromise legislation. High on their agenda was the array of contentious matters that must be resolved before a bill can come before the full Senate.

Among them is whether to create a government-run insurance plan, whether to fine people who do not purchase insurance and whether to require employers to offer coverage to their workers.

Meanwhile, Senate Democrats sought Wednesday to shore up the support of a critical player in the health-care debate: the American Medical Association.

Senate leaders met with representatives of the AMA and other doctors' groups, then said they would press to repeal within days a decade-old law that subjects physicians who treat Medicare patients to regular pay cuts. The repeal would increase the federal budget deficit by nearly $250 billion over the next decade, but the influential organizations, whose members will face a 21 percent pay cut in January, had demanded a resolution to the issue as part of any health-care overhaul.

"It wipes the slate clean," said one representative from the medical groups who participated in a meeting Wednesday with Reid, Finance Committee Chairman Max Baucus (D-Mont.) and Sen. Christopher J. Dodd (D-Conn.). Instead of fighting pay cuts, the participant said, speaking on the condition of anonymity to describe a private meeting, doctors could pursue pay "updates."

The first of those updates -- giving Medicare doctors a 0.5 percent pay increase in 2010 -- will remain in the Senate health-care bill, Democratic aides said. But by repealing future pay cuts before the debate reaches the floor, the chamber's leaders hope to short-circuit any Republican plans to add the expensive repeal to the larger bill, which could threaten its prospects for passage.

The move could, however, trigger a fight with House leaders, who want the Senate to approve strict pay-as-you-go budget rules before consenting to such a large increase in future deficits.

Experts differ as to how much latitude the antitrust exemption gives health insurers.

To the extent that it provides insurers with market clout, repealing the exemption could shift power to doctors, hospitals and other health-care providers, potentially leading to higher premiums, some experts said.

A repeal, said lawyer Richard T. Greenberg of the firm McGuire Woods, would allow the federal government to regulate arrangements by which insurers steer their customers to particular hospitals and other health-care providers.

David Dranove, a professor at Northwestern University's Kellogg School of Management, said the exemption permits health insurers to exchange information about potential customers' medical risk before issuing policies.

Robert Zirkelbach, press secretary for the industry group America's Health Insurance Plans, said, "The health insurance industry is one of the most regulated industries in America," subject to regulators at the federal and state levels. "The focus on this issue is a political ploy designed to distract attention away from the real issues in this debate."

Staff writer Shailagh Murray contributed to this report.

Japan's Health-Care System Has Many Advantages, but May Not Be Sustainable - washingtonpost.com

By Blaine Harden
Washington Post Foreign Service
Monday, September 7, 2009

TOKYO -- Half a world away from the U.S. health-care debate, Japan has a system that costs half as much and often achieves better medical outcomes than its American counterpart. It does so by banning insurance company profits, limiting doctor fees and accepting shortcomings in care that many well-insured Americans would find intolerable.

The Japanese visit a doctor nearly 14 times a year, more than four times as often as Americans. They can choose any primary care physician or specialist they want, and surveys show they are almost always seen on the day they want. All that medical care helps keep the Japanese alive longer than any other people on Earth while fostering one of the world's lowest infant mortality rates.

Health care in Japan -- a hybrid system funded by job-based insurance premiums and taxes -- is universal and mandatory, and consumes about 8 percent of the nation's gross domestic product, half as much as in the United States. Unlike in the U.S. system, no one is denied coverage because of a preexisting condition or goes bankrupt because a family member gets sick.

But many health-care economists say Japan's low-cost system is probably not sustainable without significant change. Japan already has the world's oldest population; by 2050, 40 percent will be 65 or older. The disease mix is becoming more expensive to treat, as rates of cancer, stroke and Alzheimer's disease steadily increase. Demand for medical care will triple in the next 25 years, according to a recent analysis by McKinsey & Co., a consulting firm.

Japan has a stagnant economy, with a shortage of young people that hobbles prospects for growth and strangles the capacity of the debt-strapped government to increase health-care spending. Without reform, costs are projected to double, reaching current U.S. levels in a decade, according to the Organization for Economic Cooperation and Development (OECD).

For generations, Japan has achieved its successes by maintaining a vise-like grip on costs. After hard bargaining with medical providers every two years, the government sets a price for treatment and drugs -- and tolerates no fudging.

As a result, most Japanese doctors make far less money than their U.S. counterparts. Administrative costs are four times lower than they are in the United States, in part because insurance companies do not set rates for treatment or deny claims. By law, they cannot make profits or advertise to attract low-risk, high-profit clients.

To keep costs down, Japan has made tradeoffs in other areas -- sometimes to the detriment of patients. Some are merely irritating, such as routine hour-long waits before doctor appointments. But others involve worrisome questions about quality control and gaps in treatment for urgent care.

Japanese hospitals experience a "crowding out" effect, with space for emergency care and serious medical conditions sometimes overwhelmed by a flood of patients seeking routine treatment, said Naohiro Yashiro, a professor of economics and health-care expert at International Christian University in Tokyo.

"Patients are treated too equally," he said. "Beds are occupied by less-urgent cases, and there are no penalties for those who over-use the system."

The government has largely been unable to reduce the length of hospital stays, which are four times as long in Japan as in the United States. Hospital doctors are often overworked and cannot hone specialized life-saving skills, according to recent reports by McKinsey. Statistics show that the Japanese are much less likely to have heart attacks than people in the United States, but that when they do, their chance of dying is twice as high.

There are shortages of obstetricians, anesthesiologists and emergency room specialists because of relatively low pay, long hours and high stress at many hospitals, doctors and health-care analysts said. Emergency room service is often spotty, as ER beds in many hospitals are limited and diagnostic expertise is sometimes lacking. In a highly publicized but not unprecedented incident, a pregnant woman complaining of a severe headache was refused admission last year to seven Tokyo hospitals. She died of an undiagnosed brain hemorrhage after giving birth.

"We are in a hospital desert at night," said Yashiro, citing insufficient pay incentives for the robust 24-hour staffing common at large U.S. hospitals.

Skilled doctors tend to leave Japanese hospitals for the higher pay and predictable hours of private clinics. There, they become primary-care doctors, making up for low treatment fees with astonishingly high volume, seeing patients in an assembly-line process that leaves little time for questions.

Toshihiko Oba had spent most of his medical career in hospitals. As an ear, nose and throat specialist, he worked 80-hour weeks for 13 years, with an annual salary of $100,000. The average salary for a hospital-based doctor in Japan is about $150,000, according to the Ministry of Health.

"The money was not so good and you have lots of responsibility and pressure," said Oba, 47.

Five years ago, he made a career change common for Japanese doctors at the pinnacle of their careers. He left the hospital and opened a private clinic, and now treats mainly colds and allergies.

In his office in Tokyo's upscale Ginza district, Oba works from 9:30 a.m. to 7 p.m., five days a week. He said he works fast, typically treating 150 patients a day, usually for about three minutes each.

Volume has allowed him to increase his income severalfold, Oba said, although he declined to be specific. Most doctors in Japan who jump from hospitals to private clinics double their income, according to the Ministry of Health. Medical malpractice insurance in Japan is not a major expense for many doctors, in part because there are relatively few lawyers. Oba pays only about $1,000 a year.

One of the great strengths of Japan's health-care system -- the ability to see the doctor of one's choice and be seen quickly -- has become one of the greatest curses for controlling health-care quality and costs, experts here agree.

There is no gatekeeper for medical care or for hospital stays.

"The government has been trying for more than 20 years to put up gates," said Naoki Ikegami, professor of health policy and management at the Keio University School of Medicine in Tokyo. "But we don't train general practitioners to be gatekeepers."

Japan also has about three times as many hospitals per capita as the United States does. The government has tried to limit hospital beds, but with little success because of institutional inertia and a cultural preference for in-patient treatment. New mothers in Japan often stay in a hospital five days after a routine delivery; in the United States, they rarely stay for more than one or two.

Japan's health-care system mixes socialism with individual responsibility and market forces. The government pays one-quarter of the total health-care bill, and employers and workers pay the rest through mandatory insurance.

"More than one-third of the workers' premiums are used to transfer wealth from the young, healthy and rich to the old, unhealthy and poor," Ikegami said.

Workers at major corporations pay about 4 percent of their salary to a company-based insurance provider. These premiums are limited to $6,000 a year, but the average salary worker pays $1,931, the government says. Job-based insurance in the United States costs the typical employee $3,354 a year, according to the U.S.-based National Coalition on Health Care.

In Japan, employers pay premiums that match each employee's contribution. In the United States, where health insurance is far more expensive, employers pay private insurers three or four times the amount contributed by each employee.

The self-employed and the unemployed in Japan must pay about $1,600 a year for insurance coverage. In addition, working-age patients are required to make a 30-percent co-payment for treatment and drugs -- the highest such fee in the world. But those payments tend to be relatively low because of the tight lid on costs. If the co-payment exceeds $863 in any month, it drops to 1 percent of additional medical bills.

Hana Mukai, a fashion merchandiser in Tokyo, said she cannot think of anything wrong with health care in Japan.

She takes her son Yugo, 4, to an ear, nose and throat specialist nearly every week during the cold and flu season. They go about 12 times a year, often when her son has a runny nose. She does not need to make an appointment, but has to wait about 75 minutes to see the doctor.

The doctor checks his ears, irrigates his nose and prescribes medicine. The visit usually lasts a few minutes, and it is free. There is supposed to be a co-payment, but Mukai's local ward government covers all medical costs for children, which is common in much of Japan. Mukai says she never buys over-the-counter drugs for Yugo, because prescribed drugs for children are also free.

As for her own health-care costs, she says they are either invisible or negligible. She has never checked to see how much she pays through payroll deductions for health-care premiums. The co-payment for doctor visits is insignificant, she says, since the total bill for most visits comes to less than $30, including drugs.

"I know my medical fee is going to be cheap, so I have never, ever thought about how much it will cost me to go to the doctor," said Mukai, 39.

The health of Mukai, her husband and her son -- and of nearly everyone in Japan -- also benefits from free annual checkups. Japan requires companies to pay for annual physicals for employees.

Local and national governments also push preventative care. Since Mukai is nearly 40, her local ward government has notified her that she can sign up for a comprehensive, and free, battery of tests. Doctors will examine her eyes and teeth, and they will test for colon, stomach and cervical cancer. She will also receive a free gynecological workup.

For her son, an internal medicine specialist and a dentist visit his public day-care center twice a year to conduct free examinations. Once a year at day care, he is examined at no cost by two other doctors for potential eye, nose and ear problems.

The health-care system, though, does not deserve all the credit for the relatively robust health of the Japanese. Diet and lifestyle are generally healthier than they are in the United States. There is less violent crime, fewer car accidents and much less obesity. Only about 3 percent of Japanese are obese, compared with more than 30 percent of Americans, according to the OECD.

Still, Western food has encroached on the diet and there are increasing numbers of sedentary, overweight Japanese. As part of the preventative focus of health care, the government is pushing back against obesity-related health problems -- known here as "metabolic syndrome" -- in ways that probably would astonish Americans.

There is compulsory obesity screening for 70 percent of the population. If people are found to be too fat around the waist, they are required to receive counseling on exercise and diet.

The law was passed three years ago, so it is too soon to know whether screening and counseling are effective. But health-care experts agree that the government has succeeded in making nearly everyone worry about fat, while thinking more about what they eat and how often they exercise.

It puzzles Mukai that the United States does not imitate the best parts of her country's health-care system, particularly preventive care, universal coverage and free treatment for children.

"If the Japanese can do it, why can't the Americans?" she said.

Special correspondent Akiko Yamamoto contributed to this report.

Indian Weavers Shun Health Plan - WSJ.com

By VIBHUTI AGARWAL

PANIPAT, India -- Amir Jahan can spin thick, white thread into magnificent cloth, but the 46-year-old weaver has been unable to unravel her health plan to pay for stomach surgery.

Under a health-insurance program introduced a few years ago, the Indian government has provided health-insurance coverage for the country's hand-loom weavers, a group of 6.5 million workers, 60% of them female, who are mostly illiterate and invariably poor. Yet holding an insurance card hasn't helped Ms. Jahan, who says the coverage only pays for minor ailments and not for major problems, such as the removal of a stomach tumor.

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Vibhuti Agarwal/The Wall Street Journal

Amir Jahan spins thick white thread into magnificent cloth. She puts in 12 hours of work every day to earn about $15 a month.

"The health care is all a sham," Ms. Jahan says angrily. "I was refused treatment on grounds of huge expense. I won't ever go to be humiliated again."

Ms. Jahan's health-care issues represent the problems that come with trying to provide insurance to India's poor. Access to quality care remains a distant dream for many in this country of 1.1 billion.

Last year, the Indian government launched the National Health Insurance Program on promised health coverage of $700 per person for families earning less than $100 a year.

Holders of health cards have to register in their home states to access benefits, thereby precluding a large population of migrant laborers. Those who can get past the complex state-identification and qualification process often can't cope with hospital bureaucracies.

One of the biggest problems: Getting the impoverished weavers to pay $1 for the card that provides free access to health care for one year. Many weavers feel the investment in the card is a waste of valuable household income.

Other plans aimed at farmers, construction workers and other low-income groups have been dogged by problems.

In India, the hand-loom industry is the second-largest segment in the economy, after agriculture. The Handloom Weavers Health Insurance Program was backed by a private insurance company, ICICI Lombard General Insurance Company Ltd., a joint venture of India's ICICI Bank Ltd. and Fairfax Financial Holdings Ltd. of Canada.

An initial payment of $1 entitles a family of four to coverage totaling 15,000 rupees, or about $300 -- but no more than $150 of that can be for any one family member. Beneficiaries receive coverage at designated hospitals and clinics, or are reimbursed for treatment at centers not on the list -- after upfront payments that can be difficult for weavers to afford.

According to insurance-company officials, the program has been implemented in 26 states across India, and covers 1.9 million weaver families. In the Lalahar Memorial Prem Private Hospital, here in Panipat, nearly 70 weavers line up each day for health services under the plan.

Many weavers work six days a week in factories, under poor conditions and with few benefits. Others, like Ms. Jahan, work from home, making clothing, rugs and other woven items for a variety of companies.

Ms. Jahan started working at the age of eight. Today, she says she works 12 hours, seven days a week, to earn about $15 a month. That isn't enough to support her seven kids, and the insurance card can only cover four family members.

Ms. Jahan's stomach surgery was $200, but she was told she could only use $150 from the card because of the spending cap for each family member. The remaining $50 had to be paid from her own pocket. She continues to work with the untreated stomach tumor.

The ICICI doesn't deny treatment to any individual, but "the weavers think it is an ATM card and want to get it cashed to the maximum limit," said ICICI manager Milan Maheshwari, based in New Delhi. "The government has fixed a cap, so that the benefits … can be extended to the entire family."

One of the program's goals was to cut out government intermediaries. In a past program, the Indian government was running a health package for the weavers that involved complicated payment procedures that deterred many participants, according to B.K. Sinha, development commissioner of hand-looms at the Ministry of Textiles in New Delhi.

The new program has won support among those who have been able to get long-neglected medical problems addressed. Working 12 hours a day on the loom from her dimly lit house, Janmati, who uses one name, suffered from blurred vision before she had eye surgery for $80 through the health card.

"Initially the hospital authorities hesitated, but finally agreed," says Janmati. "Thanks to the card, I got my vision back."

But broad participation hasn't panned out. The government acknowledged that only 40% of weavers are covered under the health program.

Insufficient funds -- 1.2 billion rupees ($25 million) preclude covering more, even if the weavers are willing. Nevertheless, "We intend to cover every handloom weaver in the country in the next two years," Mr. Sinha says.

On a simmering afternoon in Panipat, outside India's capital of New Delhi, a group of irate weavers surrounded an insurance agent to complain about the health-insurance scheme.

Mohammad Ali, 25, said he was denied treatment at one of the private hospitals in Panipat and ended up paying from his own pocket. Another man, Mohammad Irshad, grumbled that he couldn't get his wife covered under the same card because he couldn't provide proper identification for her. "Getting the insurance card is tedious," he says.

Write to Vibhuti Agarwal at vibhuti.agarwal@wsj.com