We recently wrote an op-ed in the Iowa Des Moines Register discussing a major reform package that sets a key priority for covering all children - Health Care Reforms: Limit costs to ensure affordability for families. At the time, the Senate bill would have limited the cost of coverage per child to an affordable percentage of family income, specifically 2% per child. The op-ed highlighted the importance of this affordability language, limiting health care costs to an affordable percentage of family income, and identified it as a model for other state and national reform.
The Senate bill's sponsor, Sen. Jack Hatch, had his own op-ed discussing the importance of covering all kids and moving comprehensive health care reforms to address cost, quality and access - Health Care Reforms: First, ensure all kids have access to coverage.
The legislation continues to evolve as it moves through the Senate and House.
State Del. Heather Mizeur has sponsored HB 1391, the "Kids First Act," which similarly sets the goal of health coverage for all children. The measure, however, first focuses on making sure all children eligible for existing programs are enrolled. Of Maryland's 131,000 uninsured kids, an estimated 90,000 are eligible for existing programs. The "Kids First Act" lays out a deliberate and promising strategy to notify parents of children's eligibility and reduce administrative barriers to enrolling in coverage programs. The bill also requires the state to identify the best way to ensure coverage for all kids, including a mandate if the state doesn't reach at least 3% uninsured kids by 2011.
Emphasizing the enrollment focus and strategies in the bill, we sent a LegAlert to the State Senate urging passage of the legislation, which has already passed the House.
It's counter-intuitive, but many US not-for-profit hospitals have bigger profits than their for-profit counterparts. Today, Kaiser Daily covered a Wall Street Journal article that discusses the growth of profits in the not-for-profit hospital sector and the welcome attention this is garnering from federal policymakers. As reported, the combined net income of the 50 largest not-for-profit hospitals across the US increased nearly eight-fold from 2001 to 2006 to a staggering $4.27 billion. 77% of the 2,033 not-for-profit hospitals in the US routinely make money, compared with 61% of for-profit hospitals.
In return for their not-for-profit status and $12.6 billion in tax exemptions, these hospitals must provide a "community benefit". Many people assume this means charity care, or free care for the uninsured and indigent, but the term is so loosely defined that some hospitals have been reporting the wages they pay to employees as a community benefit. To shed light on not-for-profit hospitals and the community benefits provided, the IRS will require hospitals to break-down their community benefit contributions starting in 2009. The new reporting standards are welcome, but minimum standards for providing charity care are a must next step.
What Can States Do? The Hospital Accountability Project, a strategic program from Community Catalyst, provides a panolpy of resources for advocates and lawmakers concerning community benefits and ensuring communities are getting value for the tax exempt status of not-for-profit hospitals. Resources include:
An illuminating 2005 report from the Center for Public Integrity reported that Pfizer, the world's largest drug company, made $11.3 billion in profits that year, out of $51 billion in sales. The report goes on to show that more is spent in marketing than new drug development and shed's light on the expertise of the PhRMAceutical industry in lobbying Congress to ensure its huge profit margin. Driving home this last point, a report from Congressman Henry Waxman showed that the drug industry increased its profits by more than $8 billion in the six months after the new Medicare drug benefit went into effect. In 2003, the year Congress enacted the new Medicare benefit, the industry spent $113 million in lobbying. Money, in their perspective, well spent; and which has increased in subsequent years to push back on attempts to improve the much -flawed Medicare drug benefit.
In 2007, the US spent $287 billion on prescription drugs, representing 14% of all health care spending. Driving this expense, in part, is the pharmaceutical industry which spends $30 billion each year on marketing, often regardless of a drug's efficacy, including $7 billion targeted directly at phsyicians to influence their prescribing decisions.
What Can State's Do? In case you missed it, you can still listen to last Friday's conference call with leading prescription drug reform experts and state legislative advocates. Click here to listen. As speakers made clear, states have a medley of options for reducing drug prices, saving state budgets millions of dollars without reducing access to medications, ensuring the quality and safety of prescriptions, and countering the cost-driving influence of the drug industry's marketing tactics.
We want to thank our co-sponsors, the National Legislative Association on Prescription Drug Prices, Prescription Policy Choices, and The Prescription Project for their support and expertise.
Lest we forget, insurance companies are in the business of making money. This was driven home yesterday in a Pittsburgh Post-Gazette report that health insurer Highmark enjoyed total revenue of $12.4 billion in 2007, growing its surplus to $3.5 billion despite a reduction in net profits. The article goes on to report that several insurers are planning premium hikes over the summer because "per-share earnings" have not met projections, down from a forecasted $6.41 per share to a low of $5.76 in the case of the huge multi-state insurer Wellpoint. Before you shed a tear for their financial woes, the Post-Gazette reports that Highmark's $3.5 billion surplus represents 734% of its risk-based capital - a measure of the money an insurer might need on hand in case of unforeseen claims. The National Association of Insurance Commissioners, however, as reported by the Post-Gazette says that surpluses exceeding 250% of risk-based capital are troubling. Troubling indeed.
To rein in insurance companies, several states are moving bills to ensure more of our premium payments go to medical care versus profits and administration, bring affordability to premium rates, require insurers to pay claims on time, and outlaw unfair business practices like rescinding coverage after a consumer experiences a costly medical event. Efforts to watch, include: