MICHAEL LYON'S ORIGINAL EMAIL, SUBSEQUENT ORIGINALS FOLLOW:
ALL LETTERS ARCHIVED AT SPIRIT OF 1848 WEBSITE ALSO

"How to Talk to Business about Health Care Reform"

The November 15 2003 Physicians for a National Health Program
convention in San Francisco featured a talk "How to Talk to Business
about Health Care Reform" by Deb Richter, MD.  Dr Richter has spent
the last two years speaking to small business in Vermont, making many
of her contacts through Rotary Clubs.

Her overall point: "The business community is a potential influential
and powerful ally in health care reform. They are rapidly recognizing
they are losing out in the health care financing mess."

I disagree with this conclusion, but she makes valid and very
interesting assumptions that we must consider.  On one hand, they are
very inspiring; but on the other hand, they menacingly suggest a
scenario of how severe healthcare rationing could take place.

Dr. Richter's points cover three main themes:  (All quotes are from
notes distributed for the talk.)

First:  The only effective way to reduce health costs is to reduce the
health infrastructure:

  *  "Most of the costs of services are fixed costs (buildings,
supplies, staffing that you have to pay for whether they are used or
not."  (She estimates 70% of the health dollar is infrastructure.)

  *  "Cost containment measures leveled at individual usage,
therefore, are ineffective because most costs are fixed."  "Trying to
lower cost by limiting individual usage is like buying a car and
trying to lessen the cost of it by using it less."

  *  "Cost containment is most effective BEFORE the investment in
services is made, not after.  Rising costs have everything to do with
the amount of infrastructure you have in place."

  *  "With all this in mind, it becomes obvious why the most effective
way to contain costs is to "right-size" the infrastructure to meet the
needs of the population."

Second: The distribution of healthcare must be unequal, because our
needs are unequal.  Yet all of us are in the high-need group for at
least part of our lives.

  *  "At any one time, most of the health care dollar is spent on 10%
of the population."  (75% of Vermonters spend less than $600 per year
on healthcare, but 10% spend more than $35,000.)

  *  "Most of the population (80%) uses very little care, so cost
containment measures aimed at limiting utilization are not only
inefficient, but ineffective."

Third:  Patients, healthworkers, and business must decide together how
much care we want:

   *  "All of us will be in the group that consumes 70% of the care at
one or many points in our lives."

   *  "Ultimately the only thing we have in common is that we all want
health care. That is where you should start.  Another common thread is
we all agree health care costs too damn much."

*  "To have high quality services available requires a certain volume
of patients getting that care per year.  In other words, the people
getting care now are keeping the bed warm for you.  Paying for the
healthcare of the sick ensures that the hospital and other health care
services will be there for you. "

  *  "Since the most effective way to contain costs is to tailor the
size of the infrastructure to the needs of the population, those
making the decisions about the cuts might have to go without certain
services if they cut too far.  This increases the chances of keeping a
needed service in place."

  *  "A decision to invest in services needs to be made by all of us
in a public process.  We need to fully understand that when we need to
make an investment, we also have to pay for that investment. "

  *  "We as a society have to decide what health care services we all
want, how much we want it and how much we are willing to pay."


What conclusions can we draw from these statements?

1.) First, PNHP gives us an amazing and inspiring vision:  the vision
of society as a family that collectively and consciously makes the
commitment that its very young, very old, and very sick members will
be supported by its healthy and productive members. You don't often
seen this. This is really what the PNHP's principle of "Everybody in!
Nobody out!" is all about.

2.)  The article is convincing in saying infrastructure reduction is
the only effective way to reduce healthcare costs.  A corollary of
this statement is that government would need to drive this process,
because only the government has the power to restrain investment in
healthcare infrastructure, which the hospital-insurer sector of the
economy wants as a source of profits.  (Examples of this in the past
were the Certificates of Need required for capital investment in
health during the 1970s, and the 1995 UCSF Pew Health Policy Report
recommending closing half of US hospital and hospital beds, closing
20% of medical schools, nursing programs etc.)

3.)  The article is convincing in saying that deep reductions in the
health infrastructure could be made without badly hurting the majority
of the population that is in relatively good health, but where the
elderly, the sick, the frail, and the disabled would simply go without
care. As we have seen,  Dr. Richter is clearly NOT advocating this,
yet she shows that the possibility of doing this exists.

(Some past examples where this WAS advocated were:  Colorado Governor
Richard: Lamm's speeches saying the elderly have the duty to die to
free up scarce resources (SF Chronicle, 3-29-84), and  the 1983
Journal of the American Medical Association articles "Health Care
Technology and the Inevitability of Resource Allocation and Rationing
Decisions" which said:  "The longer people live, the greater the
likelihood that they will exhibit chronic disease, have subsequent
disability, make use of new and expensive medical technology, and
ultimately fall into the category of high-cost users of medical care.
... Only when society is fully able to come to grips with death and
dying is it likely that policies and  procedures for decisions not to
treat will not only will be formulated, but will also be followed.
This period is likely to be hastened as financial constraints force
the issue.")

4.)  If these two assumptions are correct,  (infrastructure reduction
is the only effective way to control health costs, and there could be
deep reductions in infrastructure that would only affect the frail and
the sick), then proposing we partner with business in deciding how to
"right-size" the health infrastrucure is dangerously naive.

There will come a point where health costs have risen to the point
where health care profits are too expensive to the rest of the
economy, and the business community is ready to adapt single payer.
But by the time this happens, the business community will want cost
reductions far, far  beyond the savings of eliminating insurer profits
and private payer bureaucracy.  Business is already in a quandary
about how to care for 20 million new seniors with chronic diseases in
the next decade.

We need to be realistic about who makes decisions now.  The richest 1%
has enough power to amass more wealth than the bottom 80%.  They are
not about to give us the same health care as theirs without a fight
that goes far beyond health politics and even electoral politics.
They are not in the same boat as us.  Whatever they plan for our
healthcare will not apply to them, any more than the violence un an
unraveling society affects them in their gated communities.

What would business' plan be?  This article makes a convincing case:
business would  propose reducing the health infrastructure to
something that would serve the basic needs of the healthy 80 % of the
population. The high-using 20% among us, the old, sick, and frail,
would simply go without care. Do you think business would not do that?
In Gulf War I they destroyed the Iraqi water system and then prevented
its reconstruction, killing a half million kids, all to protect their
oil.  Why should our kids be more important?  Or our parents?  The
only way to assure we get as good healthcare as the leaders of
business is fight them, not partner with them.

5.)  We have a history of fighting.  The most significant social
reform laws were passed because of the pressure of millions of people
who worked and their families, in social upheavals that shook the
foundations of government, and forced passage of Social Security and
Unemployment Insurance in the 1930s, and Medicare and Medicaid in the
1960s.  We won Social Security and Unemployment during the Depression,
when business and government could least afford it.  As PNPH's Brief
History of Universal Healthcare points out ,"... the British and
German systems were developed by the more conservative governments in
power, specifically as a defense to counter expansion of the socialist
and labor parties."

6.) We should all fight for high-quality, universal, comprehensive,
single-tier, government-sponsored healthcare.   But we need to be
realistic about identifying our friends and enemies.

Michael Lyon
mlyon01@comcast.net

**************************************
ORIGINAL EMAIL FROM DEBBY AND TERRY DORAN OF VT HEALTH CARE FOR ALL

"How to Talk to Business about Health Care Reform"

The November 15 2003 Physicians for a National Health Program
convention in San Francisco featured a talk "How to Talk to Business
about Health Care Reform" by Deb Richter, MD.  Dr Richter has spent
the last two years speaking to small business in Vermont, making many
of her contacts through Rotary Clubs.

Her overall point: "The business community is a potential influential
and powerful ally in health care reform. They are rapidly recognizing
they are losing out in the health care financing mess."

I disagree with this conclusion, but she makes valid and very
interesting assumptions that we must consider.  On one hand, they are
very inspiring; but on the other hand, they menacingly suggest a
scenario of how severe healthcare rationing could take place.

Dr. Richter's points cover three main themes:  (All quotes are from
notes distributed for the talk.)

First:  The only effective way to reduce health costs is to reduce the
health infrastructure:

  *  "Most of the costs of services are fixed costs (buildings,
supplies, staffing that you have to pay for whether they are used or
not."  (She estimates 70% of the health dollar is infrastructure.)

  *  "Cost containment measures leveled at individual usage,
therefore, are ineffective because most costs are fixed."  "Trying to
lower cost by limiting individual usage is like buying a car and
trying to lessen the cost of it by using it less."

  *  "Cost containment is most effective BEFORE the investment in
services is made, not after.  Rising costs have everything to do with
the amount of infrastructure you have in place."

  *  "With all this in mind, it becomes obvious why the most effective
way to contain costs is to "right-size" the infrastructure to meet the
needs of the population."

Second: The distribution of healthcare must be unequal, because our
needs are unequal.  Yet all of us are in the high-need group for at
least part of our lives.

  *  "At any one time, most of the health care dollar is spent on 10%
of the population."  (75% of Vermonters spend less than $600 per year
on healthcare, but 10% spend more than $35,000.)

  *  "Most of the population (80%) uses very little care, so cost
containment measures aimed at limiting utilization are not only
inefficient, but ineffective."

Third:  Patients, healthworkers, and business must decide together how
much care we want:

   *  "All of us will be in the group that consumes 70% of the care at
one or many points in our lives."

   *  "Ultimately the only thing we have in common is that we all want
health care. That is where you should start.  Another common thread is
we all agree health care costs too damn much."

*  "To have high quality services available requires a certain volume
of patients getting that care per year.  In other words, the people
getting care now are keeping the bed warm for you.  Paying for the
healthcare of the sick ensures that the hospital and other health care
services will be there for you. "

  *  "Since the most effective way to contain costs is to tailor the
size of the infrastructure to the needs of the population, those
making the decisions about the cuts might have to go without certain
services if they cut too far.  This increases the chances of keeping a
needed service in place."

  *  "A decision to invest in services needs to be made by all of us
in a public process.  We need to fully understand that when we need to
make an investment, we also have to pay for that investment. "

  *  "We as a society have to decide what health care services we all
want, how much we want it and how much we are willing to pay."


What conclusions can we draw from these statements?

1.) First, PNHP gives us an amazing and inspiring vision:  the vision
of society as a family that collectively and consciously makes the
commitment that its very young, very old, and very sick members will
be supported by its healthy and productive members. You don't often
seen this. This is really what the PNHP's principle of "Everybody in!
Nobody out!" is all about.

2.)  The article is convincing in saying infrastructure reduction is
the only effective way to reduce healthcare costs.  A corollary of
this statement is that government would need to drive this process,
because only the government has the power to restrain investment in
healthcare infrastructure, which the hospital-insurer sector of the
economy wants as a source of profits.  (Examples of this in the past
were the Certificates of Need required for capital investment in
health during the 1970s, and the 1995 UCSF Pew Health Policy Report
recommending closing half of US hospital and hospital beds, closing
20% of medical schools, nursing programs etc.)

3.)  The article is convincing in saying that deep reductions in the
health infrastructure could be made without badly hurting the majority
of the population that is in relatively good health, but where the
elderly, the sick, the frail, and the disabled would simply go without
care. As we have seen,  Dr. Richter is clearly NOT advocating this,
yet she shows that the possibility of doing this exists.

(Some past examples where this WAS advocated were:  Colorado Governor
Richard: Lamm's speeches saying the elderly have the duty to die to
free up scarce resources (SF Chronicle, 3-29-84), and  the 1983
Journal of the American Medical Association articles "Health Care
Technology and the Inevitability of Resource Allocation and Rationing
Decisions" which said:  "The longer people live, the greater the
likelihood that they will exhibit chronic disease, have subsequent
disability, make use of new and expensive medical technology, and
ultimately fall into the category of high-cost users of medical care.
... Only when society is fully able to come to grips with death and
dying is it likely that policies and  procedures for decisions not to
treat will not only will be formulated, but will also be followed.
This period is likely to be hastened as financial constraints force
the issue.")

4.)  If these two assumptions are correct,  (infrastructure reduction
is the only effective way to control health costs, and there could be
deep reductions in infrastructure that would only affect the frail and
the sick), then proposing we partner with business in deciding how to
"right-size" the health infrastrucure is dangerously naive.

There will come a point where health costs have risen to the point
where health care profits are too expensive to the rest of the
economy, and the business community is ready to adapt single payer.
But by the time this happens, the business community will want cost
reductions far, far  beyond the savings of eliminating insurer profits
and private payer bureaucracy.  Business is already in a quandary
about how to care for 20 million new seniors with chronic diseases in
the next decade.

We need to be realistic about who makes decisions now.  The richest 1%
has enough power to amass more wealth than the bottom 80%.  They are
not about to give us the same health care as theirs without a fight
that goes far beyond health politics and even electoral politics.
They are not in the same boat as us.  Whatever they plan for our
healthcare will not apply to them, any more than the violence un an
unraveling society affects them in their gated communities.

What would business' plan be?  This article makes a convincing case:
business would  propose reducing the health infrastructure to
something that would serve the basic needs of the healthy 80 % of the
population. The high-using 20% among us, the old, sick, and frail,
would simply go without care. Do you think business would not do that?
In Gulf War I they destroyed the Iraqi water system and then prevented
its reconstruction, killing a half million kids, all to protect their
oil.  Why should our kids be more important?  Or our parents?  The
only way to assure we get as good healthcare as the leaders of
business is fight them, not partner with them.

5.)  We have a history of fighting.  The most significant social
reform laws were passed because of the pressure of millions of people
who worked and their families, in social upheavals that shook the
foundations of government, and forced passage of Social Security and
Unemployment Insurance in the 1930s, and Medicare and Medicaid in the
1960s.  We won Social Security and Unemployment during the Depression,
when business and government could least afford it.  As PNPH's Brief
History of Universal Healthcare points out ,"... the British and
German systems were developed by the more conservative governments in
power, specifically as a defense to counter expansion of the socialist
and labor parties."

6.) We should all fight for high-quality, universal, comprehensive,
single-tier, government-sponsored healthcare.   But we need to be
realistic about identifying our friends and enemies.

Michael Lyon
mlyon01@comcast.net