The price of medical care and the lack of access to needed care are significant societal and political issues in our country and state. The public’s senses are fed lobbyist and HMO generated advertisements consisting of word, sound, and visual bytes to influence the public’s perception. Phrases and slogans have become substitutes for substance and in-depth information. Most Republican politicians and the Bush administration align themselves with the HMO’s and insurance companies whose primary purposes are to profit from your medical needs. The Democrats and Greens generally believe that basic changes in our nation’s medical delivery systems are required to provide comprehensive and affordable medical access for all of our citizens and they lean toward a single payer government system. The Republicans respond that a universal system would be socialism or communism at its pinnacle. Most advanced countries in the world have already decided it makes no difference. The people of Germany, France, Australia, Canada, United Kingdom(Ireland, Scotland, Wales. England), Japan, Norway, Sweden, Switzerland, The Netherlands, Denmark, Belgium, Austria, Luxembourg, and Finland are included among the countries of the world that some form of national health care available to all of their citizens. What do the people of these great countries know that we don’t? How can any reasonable individual claim or infer that these countries are unable to provide medical care to their citizens or that the care is bad because it is labeled as socialistic by the HMO supporters and others? The facts show that the citizen's of these countries pay substantially less per capita for medical care than we do in the USA and their access is universal.
Here in Wisconsin we must contend with a medical delivery system that is the highest priced in the USA! The Federal Government Accountability Office (GAO), a nonpartisan federal organization that evaluates the economic aspects of our government, recently issued a report on physician service prices in the USA. Our state, Wisconsin, had the questionable distinction of having eight out of the top ten spots from a selection of 319 metro areas in the country. The physician prices in La Crosse, Wausau, Eau Claire, and Madison are the highest in the entire country in the order stated. Janesville-Beloit, Green Bay, Appleton-Oshkosh-Neenah, Racine, and Sheboygan rated as the 6th, 8th, 9th 10th, and 11th. The Milwaukee-Waukesha area is the 16th highest priced area in the USA. The prices in the metro areas in Wisconsin ranged from 48% above the USA average for the La Crosse area to 21% above the national average for the Milwaukee-Waukesha area. The overall average price for physician services for the Wisconsin metro areas is a whopping 33% above the average for the 319 metro areas in the USA. If these numbers are not convincing enough, read on for the rest of the tale of our sick medical delivery system. Unfortunately, the patient is getting sicker.
During the last several months our state, Wisconsin, has been percolating with medical care issues that represent a microcosm of the USA. The political campaign for Congress has started early in the 8th Congressional District that includes Door County and several neighboring counties including Brown Kewaunee, Shawano, and Outagamie. Several potential candidates have their ideas regarding medical issues. It is imperative that we the voters of Wisconsin start understanding the issues and detach ourselves from slogans and advertising bytes so that we can vote intelligently and try to influence the future of medical care. The task is monumental, since the corporate and lobbying dollars will flow copiously to confuse and befuddle your senses so that you will help them achieve their ultimate purpose; to maximize corporate profits.
However, two Wisconsin Democratic legislators have faced the problem head on and introduced legislation that would establish a health plan in our state that would ensure that every Wisconsin resident has access to affordable health care. Sen. Mark Miller (D- Monona) and Rep. Chuck Benedict (D- Beloit) introduced the Wisconsin Health Security Act on Oct. 20, 2005 with support from many public interest groups. The legislation sets July 1, 2008 as the target date for initiation of the plan. Democratic Assemblyman Chuck Benedict is a retired neurologist who practiced at Beloit Memorial Hospital for 19 years. Hats off to these forward thinking Democrats who have the courage to take on the HMO. We will learn more about this legislation as the debate in the legislature unfolds. Write the Governor and your elected Assembly and Senate members with your comments.
The majority of Republicans in the Wisconsin Assembly and Senate favor the HMO system for health care delivery. These Republican (and a few Democrat) surrogates for HMO’s are often given significant campaign donations and “special educational junkets” by lobbyists from financial, insurance, and HMO corporations. These corporations universally oppose any form of state or national health care system. Many of the physicians who are part of the HMO networks are also opposed to change fearing that their incomes would decline if some form of state or national health care existed instead. The current medical care system provides service based upon the ability to pay. This essentially deprives approximately 600,000 Wisconsin residents from health care because of their inability to pay. The health care these uninsured adults and children receive is often limited in scope and prolonged waits are usual. Some “ Free Clinics” offer care to needy patients, but such care is also limited and sparse. The corporate HMO’s dominating the medical service industry have established an enormous foothold and will engage in virtually any political and media strategy to maintain or improve their money making machines. The Hippocratic Oath, once the only basis of a physicians relationship with his or her patient, has been essentially replaced by the “ bottom line” of the balance sheet of the HMO’s. The HMO’s control the delivery and price of health care in our state and country. The drug companies walk hand in hand with the corporate HMO’s as the self-acclaimed “protectors” of our failing health care system.
The Bush administration and its Republican controlled Congress are attempting to privatize Medicare and Social Security as part of a broader desire to fatten the bankrolls of their loyal supporters. A good example of this is the recent Medicare change that added drug benefits. The real beneficiaries were the pharmaceutical corporations that got the royal caviar without any constraint on prices they charge for drugs. This amounts to a gigantic windfall of billions of dollars annually to the pharmaceutical industry and little benefit to the seniors who desperately need help. Government paid advertisements attempt to convince us that the giveaway to the pharmaceutical industry is good for us. I believe we can anticipate more of the same from the Bush administration and their corporate supporters.
To begin to understand the reality of health care in Wisconsin and the USA we must know where the money is. We already know that our state ranks as the highest priced for physician services in metro areas throughout the USA. Now let’s examine what the HMO’s do with the money. The appended table contains a summary of relevant data for the 22 HMO’s that were operating in Wisconsin in 2004. The data came from information obtained on-line from the Wisconsin Office of the Commissioner of Insurance (updated during October 2005), and is the latest available from this source.
The 22 HMO’s operating in Wisconsin accounted for about 1,400,000 enrollments consisting of individuals, family enrollments, Medicaid, Medicare supplements, and commercial coverage [including government and public institutions]. The total number of Wisconsin residents in the HMO pool is likely to approach at least 3 million, assuming there are an average of 2.5 people covered per enrollment. The HMO networks in Wisconsin are clearly the dominant source of medical care in Wisconsin, probably accounting for at least 80% of all the health care. Employers who provide health care benefits to their employees usually do so through an HMO network. As of the end of September 30, 2005, approximately 2,926,000 Wisconsin residents were working in our state, but the number provided health care benefits is unknown. However, an estimate of about 3 million seems reasonable. I do not have data on the number of Medicare enrollees who depend upon Medicare alone. Many retirees from government and private industry jobs have health insurance coverage until Medicare starts. The number is unknown.
The appended table categorizes the 22 HMO’s as “smaller” or “larger” based, arbitrarily (by me), on the volume of premiums paid. HMO’s with premiums above $200 million dollars are categorized as “larger”; HMO’s having a premium base under $ 200 million are termed “smaller” This arbitrary distinction seem to be reasonable as will be seen.
The premiums paid to the 13 “smaller” HMO’s in 2004 totaled about $760 million and accounted for about 10% of the total enrollment for all 22 HMO’s. Of this amount about 97% was for medical payments. The remaining 3% was for administrative costs and possible income [several of the smaller HMO’s are not-for-profit operations].
The nine “larger” HMO’s accounted for slightly more than 80% of the total premiums paid and nearly 90% of the total enrollment. The administrative costs of these nine represented about 7.9% of their premium pool and the remaining 3.2% was net income. The combined total of administrative costs plus net income for the larger HMO’s, equal to 11.1% of their premium base compares to the 3% for the smaller HMO’s. The larger HMO’s clearly spend more proportionately on administration than the smaller HMO’s and realize more net income.
It is noteworthy that the largest HMO serving Wisconsin, United Health Group, with a Wisconsin premium base more than 823 million dollars and a total enrollment of almost 305,000 provides medical coverage for several of the highest priced metro locations in Wisconsin. This includes the highest priced region in the USA, La Crosse, Wisconsin, that is 48% above the USA metro average. Is it a coincidence that this HMO realized net income in 2004 equal equivalent to nearly 7.4% of its premium base? The administrative costs were about 11.4% of the premium base, spent for overhead, wages, bonuses, and other non-medical expenses.
United Health Group is a publicly traded corporation on the NYSE and for the first nine months of 2005 had an operating margin of 11.8% and net earnings of almost 2.5 billion dollars. Fortune Magazine in their July 25, 2005 issue ranked United Health Group number 125 of the largest 500 world’s corporations based on 2005 revenues. This corporation is the HMO that manages health care for more than 55 million residents of our country’s population (about 20%). The Chief Executive Officer of United Health Group received $ 124.8 million compensation for 2004 making him the second highest paid CEO in the nation.
The smaller HMO’ spend less of your money on administrative costs and realize little or no net income (sometimes losses). The larger HMO corporations are acquiring the smaller operations so that eventually few if any smaller [and often not-for-profit] HMO’s will exist. More of your premium dollars will go toward excessive administrative costs, executive salaries, bonuses, profits, and stock dividends rather than for medical purposes. Is this what you want for you and your families?
Another sector of the medical arena is the private practice. Here doctors charge what they decide is appropriate for their services and derive a profit if they manage effectively. The state and federal governments impose fee limits for their Medicaid and Medicare patients, but otherwise they are not limited in what they may charge. Private practice physicians are often part of an HMO network, and therefore are at least partially dependent upon HMO’s for their patient base and income.
Not-for-profit hospital/medical groups derive no profits from their services and funnel earnings into improvements that generally benefit the patients. We are fortunate in Door County to have a major non-profit organization, Mercy Care HMO, Inc. However, the corporate profit making HMO’s are the largest and most powerful segment of the medical services market in our state and country and they dominate political lobbying because of their vast cash assets and motivation to enlarge their markets.
Perhaps, now, you can begin to appreciate that corporate HMO’s, such as United Health Group, are businesses whose primary purpose is to earn profits and pay astronomical wages to their executives by administering managed health care. Is it any wonder that they shower their political lackeys with campaign rewards and other “intangibles”? The HMO’s products are “managed health care” with the emphasis on “managed”. Is it possible to achieve affordable and accessible health care for our nation under such a greed based system? The Republicans respond with a resounding YES! Most Democrats and Greens ( members of the Green Party, so named for their environmental activism) will answer NO!
Today, many USA business executives are beginning to realize that they ,too, cannot continue to be competitive with the rest of the world [who have some form of nationalized health care] under our existing HMO-based medical system. The price they pay for employee health insurance is simply too high! Many businesses have already eliminated employee health-care benefits, altogether, or are increasing the employee share of the cost. The co-payments paid by HMO enrollees are increasing because of higher prices and reduced medical coverage. Retirees are sometimes advised that the companies simply that they devoted their working lives to have stopped their health benefits. The price for loyalty can be high. What can you do to assure the availability and affordability of health care as prices escalate and access decreases?
It seems to me that the overall issues surrounding accessible and affordable health care for all people in Wisconsin and our country can only be resolved if we the people, not the politicians nor the private HMO’s, insurance companies, and investment bankers, decide whether medical care should be primarily a profit making business or not. The private insurance companies and health management organizations (HMO’s), and their major stock holders and investment bankers, will never support any plan that threatens their corporations profits and dividends, and executive compensation. Many executives of HMO’s, insurance companies, and banks are paid salaries and bonuses in the tens to hundred million dollar range annually. Most politicians who derive campaign funding from these financially endowed organizations will assuredly support the status quo. “Political pork”, deliberately misnamed as “campaign contributions”, are nothing more than simple bribes paid to political allies to win votes for legislation that continues to feed their HMO trough. This same synergy applies to other special interest groups as well. Carefully chosen words and phrases will not alter the reality that the hogs obey their pen keepers and they all wallow in the same muck.
The citizens of Wisconsin and of our country can help create a new health care system, but only if we citizens become a collective force for change. Do not allow puppet-like politicians and their corporate puppet masters control your health care future [unless you believe that corporate enrichment is your purpose]. If you believe in affordable and accessible health care for all citizens, you must convey your message to state and federal elected representatives until they get it straight! Phone, write snail mail and email, demonstrate, and vote for representatives who share your beliefs. Also demand campaign finance reform that allows the average citizen to become a candidate and elected official without depending upon corporate and lobbyist sponsorship or their own millions of dollars. We cannot allow corporations and their subservient politicians dictate the future of health care in Wisconsin and the USA. You family’s health is at stake. Take action NOW and contact those listed below and other elected officials. We must join the rest of the advanced countries in the world, who already have national health care, and support some form of national health care for the USA! You will make a difference.
Government Contacts:
1)Governor Jim Doyle, Office of the Governor, 115 East State Capitol, Madison, WI 52702 608 2661212
2) Senator Russ Feingold, 506 Hart Senate Office Bldg., Washington, D.C. 20510-4904 202 2245323 Email: russ_feingold@feingold.senate.gov or 1640 Main Street, Green Bay, WI 54302-7508 920 4657508
3) Senator Herb Kohl, 330 Hart Senate Office Bldg., United States Senate, Washington, D.C. 20510 202 2245653 or 4321 West College Avenue, Suite 235, Appleton, WI 54914 920 7381640
4) Congressman Mark Green, WI 8th Congressional District, 1314 Longworth Building, Washington, D.C. 20515 or 700 East Walnut Street, Green Bay, WI 54301 800 7738579 or (Campaign Office for Governor) P.O. Box 22366, Green Bay, WI 54305 920 4352006 Email: greenteam@markgreen.com
4) WI State Assemblyman Garey Bies, WI 1st District, 2590 Settlement Road, Sister Bay, WI 54234 920 336 8830 or P.O. Box 8952, State Capitol, Capitol 125 West
Madison, WI 53708 608 2665350 Email: rep.bies@legis.state.wi.us
6) WI State Senator Alan Lasee, WI 1st District, 2259 Lasee Road, De Pere, WI 54115 920 336 8830 or Room 219 South, State Capitol, P.O. Box 7882, Madison, WI 53707-7882
608 2663512 Email: sen.lasee@legis.state.wi.us
7) WI State Senator Mark Miller, Room 106 South, State Capitol, P.O. Box 7882,
Madison, WI 53707-7882 Email: sen.miller@legis.state.wi.us
8) WI Rep. Chuck Benedict, Room 306 West, State Capitol, P.O. Box 8952,
Madison, WI 53707-8953 608 2669967 Email: rep.benedict@legis.state.wi.us
HMO DATA:
Company Name & Parent HMOGroup; Number of Physicians In HMOGroup; Enrollment,2004 and Number of WI Counties Served; Total 2004 Premiums,Thousands$; Total 2004 Medical Expense,Thousands$; Total 2004 Administrative Expense, Thousands$; 2004 Net Income Thousands $; Category
Abri(AvatarPartners,LLC) 1,000 814(2) 592 367 615 (294) smaller
Atrium (Blue Cross Blue Shield of Minn.;2005, of WI) 5,042 51,845(27) 116,005 103,927 10,540 2,362 smaller
Compcare(Blue Cross Blue Shield of WI) 2,353 87,388(all but 3) 334,192 292,681 42,143 13,814 larger
Dean Health Care 1415 214,373(35) 598,952 561,570 39,837 197 larger
Group HealthCare of EauClaire 1,965 21,932(27) 55,105 52,690 12,168 (144) smaller
Group Health Coop of SouthCent. WI 113 51,353(5) 143,578 119,867 15,205 10,847 smaller
Gunderson Lutheran Health Plan 542 27,184(10) 117,408 108,856 8,146 455 smaller
Health Tradition Health Plan, Inc. 829 29,565(10) 81,121 72,950 8,423 174 smaller
Humana WI Health Org. Insur. Corp. 4,865 76,968(20) 288,067 268,094 23,469 3,555 larger
Independent Care HealthPlan 1,198 6,046 Milwaukee 55,589 46,143 6,138 2,547 smaller
Managed Health CareServices Insur. Corp. 5,266 111,872(22) 204,521 176,887 37,989 2,882 larger
Medica Health Plans of WI 19,938 2,296(13) 7,583 7,167 723 (272) smaller
Medical Assoc.Clinic Health Plan of WI 169 6,854(4) 21,184 19,048 1,887 328 smaller
Mercy Care HMO, Inc. 273 31,478(5) 19,492 18,232 1,364 (53) smaller
Network Health Plan, Inc. 882 30,192(14) 298,486 266,137 31,285 2,516 larger
Physicians Plus Insur. Corp. 1,251 93,670(9) 253,150 219,947 28,650 6,418 larger
PHP Insur. Plan 1,602 33,723(12) 95,219 85,992 10,665 (866) smaller
Security Health Plan of WI 1,371 111,428(29) 369,834 328,726 27,636 18,586 larger
Touchpoint Health Plan Inc. 1,027 NR(18) 78,849 63,747 12,649 24,312 smaller
United HealthCare of WI, Inc. 7,001 304,930(31) 823,083 645,281 93,765 60,565 larger
Unity Health Plans Insur. Corp. 2,126 74,744(20) 208,466 177,826 23,314 6,529 larger
Valley Health Plan, Inc. 245 12,488(19) 46,983 37,197 6,260 3,262 smaller
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