Archive for October, 2009

Small Business Faces Sharp Rise in Costs of Health Care

by Reed Abelson

As Congress nears votes on legislation that would overhaul the health care system, many small businesses say they are facing the steepest rise in insurance premiums they have seen in recent years.

Insurance brokers and benefits consultants say their small business clients are seeing premiums go up an average of about 15 percent for the coming year — double the rate of last year’s increases. That would mean an annual premium that was $4,500 per employee in 2008 and $4,800 this year would rise to $5,500 in 2010.

The higher premiums at least partly reflect the inexorable rise of medical costs, which is forcing Medicare to raise premiums, too. Health insurance bills are also rising for big employers, but because they have more negotiating clout, their increases are generally not as steep.

Higher medical costs aside, some experts say they think the insurance industry, under pressure from Wall Street, is raising premiums to get ahead of any legislative changes that might reduce their profits.

The increases come at a politically fraught time for the insurers, as they try to fight off the creation of a government-run competitor and as they push their case that they have a central role to play in controlling the nation’s health care costs.

President Obama, in his Saturday radio address, said the Democrats’ health insurance overhaul would help small businesses and stimulate the economy by providing relief from “the crushing costs of health care — costs that have forced too many small businesses to cut benefits, shed jobs, or shut their doors for good.”

The insurance industry has already been under sharp attack by Democratic lawmakers who favor creating a government-run insurance plan that would compete with private insurers. Without that competition, proponents say, insurers will continue to price coverage beyond the reach of many Americans.

Small businesses, which employ about 40 percent of the private labor force, are a big constituency for both parties.

The House speaker, Nancy Pelosi of California, said the sharp rise in premiums for small businesses offered the latest evidence that Congress must act swiftly on health care legislation.

“This underlines the urgent need for health insurance reform, including a public option,” she said in an interview. “We need to have competition for the insurance companies to keep premiums down.”

Insurers say there is no need for a government-run insurance plan and argue that their health plans are already responsible for many of the initiatives, like programs to coordinate care for chronic conditions, that ultimately lower costs.

Insurers’ “profits are not responsible for increased health care costs,” said Robert Zirkelbach, a spokesman for the industry’s trade group, America’s Health Insurance Plans.

Like the insurers, Republican lawmakers, who portray themselves as champions of small business, argue that the proposed legislation would raise premiums across the board because sick people would be more likely to enroll than healthy people.

They also say the taxes and other ways of paying for the program would be passed on to employers in higher premiums, only making matters worse for small businesses.

The Senate minority leader, Mitch McConnell of Kentucky, said in a response to the president’s radio address, “We can’t support a bill that will raise premiums.” The big insurance companies declined to comment.

With negotiations over next year’s premiums still under way, data on rate increases are mostly anecdotal. Formal surveys have not yet been completed by the health benefits consultants who track the figures. And in some parts of the country, experts say rates are not overly high.

But benefits consultants say there is no doubt that premiums are soaring for many small businesses. Edward Kaplan, a consultant with the Segal Company, said his clients were seeing renewals for coverage at prices 15 to 23 percent higher this year. Last year, he said, they typically faced increases of 7 to 12 percent.

The brokers and consultants say the price jumps seem hard to justify. “Frankly, I’m mystified by the size of the increases,” said one broker, Charles J. Newman, who works with small employers in the New York area.

Some say the threat of an overhaul may be at least part of the reason. Joshua Miley, a consultant with HighRoads, which analyzes benefit information for employers, said the “undercurrent of health reform is driving part of the renewal increases.”

HighRoads projects that premiums will rise 14.4 percent for an individual in a health maintenance organization plan at a typical small employer.

There is no question that insurers are under pressure from Wall Street. In recent years, insurers were often not quick enough to raise their premiums well above the rising cost of medical care.

But they have heard from angry investors disappointed by the companies’ earnings.

“There’s no one out there who hasn’t had to do a mea culpa to Wall Street,” said Sheryl Skolnick, an analyst for Pali Capital who follows the companies. While the industry is particularly vulnerable now in Washington, she said, “it seems like they’re more afraid of Wall Street.”

Michael A. Turpin, a former senior executive for UnitedHealth, the insurer, and now a top official at USI Holdings, an insurance brokerage firm, said insurers were now “under so much pressure to post earnings, they’re going to make hay while the sun is shining.”

Along with many Republican lawmakers, the insurers say the current Congressional proposals do too little to address the underlying reasons for high premiums — the unabated rise in medical costs and effects of a weak economy. Hospitals, for example, have been treating greater numbers of people who have lost their jobs and their insurance, and they are passing along some of those costs by charging higher prices to private insurers.

The industry also points to low government payments to hospitals and doctors, which insurers say result in higher prices for employer-based coverage to make up for the shortfall.

In an analysis released two weeks ago by America’s Health Insurance Plans, insurers said premiums would rise even faster under the legislation under study in Congress — an assessment fiercely disputed by Democratic Congressional leaders and some health care economists but shared by many Republicans.

Small businesses, besides having less negotiating leverage than big employers, tend to pay more for the same coverage because they cannot spread the cost of expensive medical conditions or hospitalizations over large numbers of workers. Premiums can be especially high if they have sick or older workers.

Owners of small companies say the lack of options is why they have been paying increasingly higher premiums for less and less coverage — this year perhaps more than ever.

In August, when Walter Rowen, who owns Susquehanna Glass in Columbia, Pa., sought to renew his company’s coverage for two dozen employees, he said his insurer demanded a 160 percent rate increase. Mr. Rowen said he was told his work force was “getting too old and very expensive.”

Mr. Rowen said his insurance broker found that any other health plan was likely to charge 30 to 50 percent more than he paid last year. He chose a less generous plan from a different carrier for 44 percent more.

A GROWING BURDEN

Cancer Society, in Shift, Has Concerns on Screenings

by Gina Kolata

The American Cancer Society, which has long been a staunch defender of most cancer screening, is now saying that the benefits of detecting many cancers, especially breast and prostate, have been overstated.

It is quietly working on a message, to put on its Web site early next year, to emphasize that screening for breast and prostate cancer and certain other cancers can come with a real risk of overtreating many small cancers while missing cancers that are deadly.

“We don’t want people to panic,” said Dr. Otis Brawley, chief medical officer of the cancer society. “But I’m admitting that American medicine has overpromised when it comes to screening. The advantages to screening have been exaggerated.”

Prostate cancer screening has long been problematic. The cancer society, which with more than two million volunteers is one of the nation’s largest voluntary health agencies, does not advocate testing for all men. And many researchers point out that the PSA prostate cancer screening test has not been shown to prevent prostate cancer deaths.

There has been much less public debate about mammograms. Studies from the 1960s to the 1980s found that they reduced the death rate from breast cancer by up to 20 percent.

The cancer society’s decision to reconsider its message about the risks as well as potential benefits of screening was spurred in part by an analysis published Wednesday in The Journal of the American Medical Association, Dr. Brawley said.

In it, researchers report a 40 percent increase in breast cancer diagnoses and a near doubling of early stage cancers, but just a 10 percent decline in cancers that have spread beyond the breast to the lymph nodes or elsewhere in the body. With prostate cancer, the situation is similar, the researchers report.

If breast and prostate cancer screening really fulfilled their promise, the researchers note, cancers that once were found late, when they were often incurable, would now be found early, when they could be cured. A large increase in early cancers would be balanced by a commensurate decline in late-stage cancers. That is what happened with screening for colon and cervical cancers. But not with breast and prostate cancer.

Still, the researchers and others say, they do not think all screening will — or should — go away. Instead, they say that when people make a decision about being screened, they should understand what is known about the risks and benefits.

For now, those risks are not emphasized in the cancer society’s mammogram message which states that a mammogram is “one of the best things a woman can do to protect her health.”

Dr. Brawley says mammograms can prevent some cancer deaths. However, he says, “If a woman says, ‘I don’t want it,’ I would not think badly of her but I would like her to get it.”

But some, like Colin Begg, a biostatistician at Memorial Sloan-Kettering Cancer Center in New York, worry that the increased discussion of screening’s risks is going to confuse the public and make people turn away from screening, mammography in particular.

“I am concerned that the complex view of a changing landscape will be distilled by the public into yet another ‘screening does not work’ headline,” Dr. Begg said. “The fact that population screening is no panacea does not mean that it is useless,” he added.

The new analysis — by Dr. Laura Esserman, a professor of surgery and radiology at the University of California, San Francisco, and director of the Carol Frank Buck Breast Care Center there, and Dr. Ian Thompson, professor and chairman of the department of urology at The University of Texas Health Science Center, San Antonio — finds that prostate cancer screening and breast cancer screening are not so different.

Both have a problem that runs counter to everything people have been told about cancer: They are finding cancers that do not need to be found because they would never spread and kill or even be noticed if left alone. That has led to a huge increase in cancer diagnoses because, without screening, those innocuous cancers would go undetected.

At the same time, both screening tests are not making much of a dent in the number of cancers that are deadly. That may be because many lethal breast cancers grow so fast they spring up between mammograms. And the deadly prostate ones have already spread at the time of cancer screening. The dilemma for breast and prostate screening is that it is not usually clear which tumors need aggressive treatment and which can be left alone. And one reason that is not clear, some say, is that studying it has not been much of a priority.

“The issue here is, as we look at cancer medicine over the last 35 or 40 years, we have always worked to treat cancer or to find cancer early,” Dr. Brawley said. “And we never sat back and actually thought, ‘Are we treating the cancers that need to be treated?’ ”

The very idea that some cancers are not dangerous and some might actually go away on their own can be hard to swallow, researchers say.

“It is so counterintuitive that it raises debate every time it comes up and every time it has been observed,” said Dr. Barnett Kramer, associate director for disease prevention at the National Institutes of Health.

It was first raised as a theoretical possibility in the 1970s, Dr. Kramer said. Then it was documented in a rare pediatric cancer, but was dismissed as something peculiar to that cancer. Then it was discovered in common cancers as well, but it is still not always accepted or appreciated, he said.

But finding those insignificant cancers is the reason the breast and prostate cancer rates soared when screening was introduced, Dr. Kramer said. And those cancers, he said, are the reason screening has the problem called overdiagnosis — labeling innocuous tumors cancer and treating them as though they could be lethal when in fact they are not dangerous.

“Overdiagnosis is pure, unadulterated harm,” he said.

Dr. Peter Albertsen, chief and program director of the urology division at the University of Connecticut Health Center, said that had not been an easy message to get across. “Politically, it’s almost unacceptable,” Dr. Albertsen said. “If you question overdiagnosis in breast cancer, you are against women. If you question overdiagnosis in prostate cancer, you are against men.”

Dr. Esserman hopes that as research continues on how to advance beyond screening, distinguishing innocuous tumors from dangerous ones, people will be more realistic about what screening can do.

“Someone may say, ‘I don’t want to be screened’ ” she said. “Another person may say, ‘Of course I want to be screened.’ Just like everything in medicine, there is no free lunch. For every intervention, there are complications and problems.”

Statement by PEF President Ken Brynien on Gov. Paterson’s Deficit Reduction Plan

“The New York State Public Employees Federation (PEF) is encouraged that the governor realizes there is savings to be had by reducing the state’s reliance on costly private consultants as a way to close a $2.1 billion budget deficit in the current fiscal year,” said PEF President Ken Brynien.

“The state can achieve much of the $500 million in current-year agency spending reductions simply by setting specific agency targets to cut the use of consultant contractors.

“We welcome the call for flexibility in the governors efforts to broaden the severance buyout and voluntary work reduction schedule programs.

“We will continue to press for additional cuts in consultant services and will work with the governor and offer further cost savings that will not target the state workforce and jeopardize quality services,” Brynien said.

PEF is the state’s second-largest, state employee union, representing 59,000 professional, scientific and technical employees.

American Cancer Society Recognized for Ongoing Work

The American Cancer Society and American Cancer Society Cancer Action Network (ACS CAN) have been recognized for their ongoing work to improve access to quality, affordable health care for all Americans. Last week, National Public Radio, the Kaiser Family Foundation, and the Harvard School of Public Health released a survey showing that the American Cancer Society is the most trusted among all the interest groups involved in health care.

As you can see on page nine of the attached survey report, 74 percent of those surveyed said they trust the Society to “recommend the right thing for the country when it comes to health care,” a higher percentage than any other group. The survey also found that groups representing patients are more trusted overall than all other groups except those representing nurses, as seen in the second chart on page eight of the survey report.

Capital Profile

by Scott Waldman

Richard Iannuzzi
President of the New York State United Teachers

Personal: Iannuzzi has three grown children and four grandchildren and splits his time between Albany and Long Island.

How he got there: NYSUT has 600,000 members in education and health care. Iannuzzi taught for 34 years in Central Islip on Long Island, a low wealth district. Iannuzzi, 62, was a cab driver when he put himself through graduate school. He marched in his first union strike just a few months after he started teaching.

This is the first school year we’re going to have a new president in place. What are some of the primary issues you’re going to handle in the coming year?

Washington is becoming the center of attention for education instead of Albany. I have been to Washington on each of the last three weeks. I’ll be back the week after next. Given the budgetary situations in states and the difficulty in funding and given the willingness of this administration in Washington to put dollars in front of what they believe are good ideas, that’s a major shift in how we do business. For eight years, we’ve heard, ‘let’s punish the low performing schools’ now we’re hearing ‘let’s turn them around.’ This is an acknowledgement there’s an achievement gap that has to be addressed.

Since you started as an educator, there have been many approaches to solving the problem of poor children not getting the same quality education as richer counterparts. Are we in a different place now with reaching those kids?

What’s different is not imposing a new program or way of doing business on top of what you’re doing, but really looking at some of the fundamental issues such as teacher effectiveness. If we concentrate on making teachers as effective as possible, then it won’t much matter what program you bring in.

Was there a moment in your own teaching when you said to yourself ‘this is a problem that may never be solved?”

The hardest thing as teacher in a difficult district is when you see yourself making progress with a struggling youngster and ultimately factors totally outside that child’s control take over, whether it’s parents who have to relocate or gang violence involving a sibling. Your role as a teacher changes, it becomes one of emotional support.

What does NYSUT tell those teachers who are going to leave the profession, because it just seems hopeless in some hard-hit communities?

We try to prevent the hopeless feeling from taking over by preparing them early. I think the idea is to prepare them for the larger mission and if they’re looking at content and emotional support than they’re prepared for that.

What comes it charter schools, you have said they’re a drain on the public system. What are we going to see from NYSUT now that the Obama administration is pushing charters?

I’ll be the first to admit I was one of the staunchest opponents (of charters) and waged a real battle in my own school district in Central Islip. The world has changed since then. Charter schools are established. The ingredients that are missing right now and that will allow us to move forward are accountability, full transparency and a funding system that doesn’t decimate either the regular public school or the charter school.

What do you do on your weekends and how do you unwind?

Four grandchildren fill all of the extra moments. Four little boys. (He reads them “Goodnight Moon.”) So many of the things I do here are with a lot of people, so unwinding for me is not being with a lot of people so whether it’s biking or kayaking., things that allow me to do things solo is probably the best.

What’s similar or different between being a grandfather and being NYSUT president?

Being a grandparent lets you look at children growing in a way that helps me reflect here on the kids that have nowhere near the opportunity of my grandkids. If any of my grandchildren sniffled, they would have a visit with their pediatrician before the day is out. My experience in the classroom is that the child would come to school day after day, getting sicker and sicker until finally, in the middle of the night, their visit is to the emergency room and we don’t see them in school again for a week. My being able to go back to those experiences help a lot here.