Sunday, June 25, 2017

RECOMMENDATION: HMO exemption in state single-payer legislation must be specific and narrow | Physicians for a National Health Program

RECOMMENDATION: HMO exemption in state single-payer legislation must be specific and narrow | Physicians for a National Health Program

From Kip Sullivan:

SB 562, the so-called "single payer" bill introduced in the CA
legislature earlier this year, has been tabled for now, and will
apparently not be heard again in 2017. This may or may not be good

As you know, I think the bill in its current form is a multiple-HMO bill because it
contains a huge loophole for Kaiser Permanente, a loophole so large
any insurance company calling itself an "integrated delivery
system" will walk through. SB 562 in its current form will at
best mislead the public about what a single-payer is and do a
relatively ineffective job of keeping costs under control, and at
worst will recreate the ACA mess -- costs won't be contained,
coverage will be stingy or much less than promised, taxes will go up
by more than they need to, and single-payer and universal coverage
and "government" will all get a bad name. Or maybe it will
recreate the Vermont-Governor-Shumlin mess: The researchers and
agencies that have to estimate the cost of SB 562 will see through
the "single payer" charade and score it for what it is -- a
multiple-HMO bill -- and Democrats will be forced to abandon it
because it costs too much.

But messages I have gotten from several people in CA suggest that real single-payer
advocates were working on amendments to SB 562 to shrink the Kaiser
loophole. Why these amendments weren't offered in the Senate I don't
know. From everything I've read, SB 562 was introduced in a hurry and
many issues, ranging from funding to the Kaiser loophole, hadn't been
resolved. I suspect SB 562 was written and introduced in a hurry
because the authors didn't anticipate Trump's election and, after his
election, realized Obamacare was in trouble and now was a good time
to push a solution that goes beyond the ACA.

I have also heard that the opportunity to amend in the Assembly wouldn't have arrived
till late July. If that's the case, then there was still time for
real single-payer advocates to prepare and lobby for an amendment
that would shrink the Kaiser loophole. Now that SB 562 is tabled, it
isn't clear (to me at least) what's going to happen to the loophole

If in fact what I just told you is true, that would explain why some PNHP docs are
referring to SB 562 as a single-payer. They didn't have a chance to
influence the writing of the original SB 562 because it was written
so quickly, but they anticipated shrinking the Kaiser loophole later
in the process and didn't want to stir up a fuss saying it's not a
single-payer. If the Kaiser loophole was going to be shrunk to the
size of the HMO loophole in HR 676, then the indefinite tabling of SB
562 is not good news.

Here is a description of the HMO loophole in HR 676 taken from a 2010 article
I wrote with David Himmelstein and Steffie Woolhandler, the
founders of PNHP, in 2010:

participating plans must:

(1) be nonprofit;
(2) "actually deliver care in their own facilities" through salaried physicians who are
employees (not contractors) of the HMO;
(3) not use their capitation or budget payments to cover hospital services (hospital
services would be paid for through a global budget paid directly to the hospital); and
(4) not offer financial incentives based on utilization.

Very few HMOs will qualify under this definition.
Not one of those four criteria are mentioned by the Kaiser-loophole provisions
currently in SB 562.


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