Rx Health Reform Tanc Final

Trans-American

Alliance

for

a

National

Consensus

(TANC)

Rx for U.S. Healthcare Reform A Proven Model for NON-PROFIT “Universal Healthcare” Provides a Solution for Widespread Enactment www.transamericanalliance.org

Thousands of residents of Wise, Va., and Los Angeles seeking free exams and medical/dental treatments offered by the allvolunteer Remote Area Medical (RAM) organization. Copyright © 2009, Trans-American Alliance for a National Consensus (TANC) ALL RIGHTS RESERVED

Trans-American

Alliance

for

a

National

Consensus

(TANC)

Rx for U.S. Healthcare Reform A Self-Sustaining, Ready-Made NON-PROFIT Model for “Universal Healthcare” is Achievable at Little Cost www.transamericanalliance.org

By Michael A. Freeman Executive Director, TANC “Of all forms of inequality, injustice in healthcare is the most shocking and inhumane.” — Rev. Dr. Martin Luther King, Jr. (1966)

I

t’s right under the noses of President Obama and members from both major parties of Congress, and they may not even know it or have simply overlooked it: There is a practical, self-sustainable model and ready-made solution for the reform of America’s teetering healthcare system. And the federal Medicare system helped create it. It is a little-known federally-funded Medicare program that has successfully covered a segment of the Senior Citizen population for nearly a quarter-century in an innovative partnership with NON-PROFIT health insurance organizations. And it is one of the best kept secrets and a relatively tiny sliver of American healthcare. Operating under the Medicare Advantage Prescription Drug Program (MA-PD), which are standard ―Part D‖ Medicare payments from senior citizens’ accounts typically dedicated for prescription drug plans, is a special classification of ―Social Managed Care” — an entire suite of extensive healthcare services. These so-called ―Social HMOs‖ stand to serve as shining models for a ―national non-profit health insurance system‖ and offer broader applications for the general (under-65) American population — an innovative, new paradigm to potentially convert and reform our cost-spiraling FORPROFIT/PRIVATE Health Insurance system.

As this position paper attempts to illustrate, the model for ―Social HMOs” set an outstanding template for what low- to no-cost, NOT-FORPROFIT health insurance can do to alleviate and reverse the ever-escalating costs and gaps in coverage for an estimated 47 million uninsured Americans. The more altruistic and humane principles that are the basic tenets of these NON-PROFIT, senior-based ―Social HMOs,‖ if adapted and broadened out for the ―general‖ Remote Area Medical (RAM), a Nashville-based non-profit medical relief organization, stands at the vanguard of providing “mobilized” treatment under-65 population, could bring badly needed events across the country — attracting tens of thousands of Americans relief to the many millions of other ―insured‖ who can’t obtain or afford FOR-PROFIT/PRIVATE health insurance cover- Americans who live in dire fear of their FORage. PROFIT/PRIVATE carriers raising their deductible payments, co-pays on hospital stays, issuing outright DENIALS on critical life-saving medical procedures, and routine policy revocations for discovering ―preexisting conditions‖ — all of which can have a devastating economic impact on American families. Copyright © 2009, Trans-American Alliance for a National Consensus (TANC) ALL RIGHTS RESERVED

Page 3

Rx for U.S. Healthcare Reform A Proven Model for NON-PROFIT “Universal Healthcare” Provides a Solution for Enactment Under proposals from President Obama and Sen. Max Baucus (D-MT), chairman of the Senate Finance Committee sharing half of Congress’ load on healthcare reform, both have laid out plans for some kind of national or www.transamericanalliance.org state ―Insurance Exchanges‖ in which FOR-PROFIT/PRIVATE health insurance carriers would be placed into ―competitive, low-cost pools‖ for consumers to choose which plans best fit their needs and what they can afford. But, the President and Congress would find a much more affordable, minimally government budgeted and much lower cost solution in fostering the creation of a NON-PROFIT health insurance pool, which is already an operational, more justifiable “Social "One of the central HMO” model for future healthcare reform than long-standing FOR-PROFIT insurance public policy quesmodels. tions for U.S. citizens today is whether the The hallmark of these non-profit “Social HMOs,” originally authorized by Congress’ richest nation on enactment of the Deficit Reduction Act of 1984 and the federal government’s exearth will continue to pansion under the Omnibus Reconciliation Act of 1990, feature minimal to no outallow millions of poor of-pocket cost health insurance premiums guaranteeing affordable, equitable and people to exist withhumane access to healthcare services. out health insurance. To do so violates bibli- Originally constructed to serve as an ―alternative nursing care‖ system that keeps cal justice. How can senior citizens from being prematurely forced into nursing home facilities, these any Christian read NON-PROFIT health insurers formally operate under the banner of being Social what the Bible says Managed Care Plans; an organization that provides the full range of Medicare about the poor and benefits offered by standard Managed Care Plans plus additional services which what Jesus says include care coordination, prescription drug benefits, chronic care benefits covering about the sick withshort term nursing home care, a full range of home and community based services out hearing a divine such as homemaker, personal care services, adult day care, respite care, and medical transportation. Other services that may be provided include eyeglasses, hearing call to demand that aids, and dental benefits. These plans offer the full range of medical benefits that every person in this are offered by standard Managed Care Plans plus chronic care/ extended care sernation, starting with vices. Membership offers other health benefits that are not provided through Medithe poor, have access care alone or most other FOR-PROFIT/PRIVATE-SECTOR senior health plans. to health insurance?" — from "Just Generosity" by Ronald Sider, founder of Evangelicals for Social Action

There are four NOT-FOR-PROFIT, Social Managed Care Plan organizations — SCAN Health Plan of Southern California, Elderplan of Brooklyn, New York, Kaiser Health Foundation of the Northwest (Portland-Vancouver metropolitan area, Salem, Ore., and Longview, Wash.), and Health Plan of Nevada of Las Vegas — that secured MAPD funding from Medicare in servicing several hundred thousand Seniors with broad inpatient/outpatient and preventive health insurance coverage in their respective regions. The longest running of these ―Social HMOs‖ is the notfor-profit SCAN Health Plan (www.scanhealthplan.com), otherwise known as the Senior Care Action Network, founded in 1977 by a group of Long Beach, Calif. area seniors angered about some short-comings in the elder healthcare sector. With the backing and help of area doctors and other medical/caregiver practitioners joining their management staff, SCAN secured its first MA-PD funding from Medicare to offers health insurance and seniors-based healthcare services in 1985.

Copyright © 2009, Trans-American Alliance for a National Consensus (TANC) ALL RIGHTS RESERVED

Page 4

Rx for U.S. Healthcare Reform A Proven Model for NON-PROFIT “Universal Healthcare” Provides a Solution for Enactment Today, SCAN provides insurance coverage and other wellness/preventive healthcare services to over 110,000 seniors in seven Southern California counties. Over the last year or so, SCAN has expanded its non-profit serwww.transamericanalliance.org vices to senior residents of Maricopa County (Phoenix) in Arizona and has drawn up plans to launch shortly in Northern California — potentially doubling its number of Senior subscribers within the next year or two. A key ingredient of SCAN’s success is its broad Southern California-area roster of 17,000-plus registered ―in-network‖ doctors and specialists and over 150 hospital choices. SCAN’s remaining care menu is quite broad and impressive to include other inpatient hospital care; outpatient doctor/hospital care; at-home care; emergency admittance and transportation services coverage; a prescription brand/generic drug program; vision services; dental coverage; hearing; other no- to low-cost co-pays on a variety of screenings and exams; and a wide array of preventive and health-and-wellness services — features necessary for senior care but MUCH GREATER than what could be found in either standard Medicare and so-called “Cadillac Plans” from PRIVATE/FOR-PROFIT insurance carriers for the general under-65 population. Most notably, out-of-pocket costs, or so-called co-pay expenses to senior subscribers, come at mere fractions in the two SCAN Health Plan choices — ―Classic‖ and ―Option‖ plans. For example, an in-hospital stay of 1 day to 150 days incurs out-of-pocket costs of up to $2,300 under the standard Medicare plan while SCAN’s ―Classic‖ plan has a maximum co-pay deductible of $400 and the ―Options‖ plan has a $0 co-pay deductible In fact, if you peruse either of SCAN’s two plans (on both facing pages), most of the benefit categories feature $0 co-pays/deductibles and hit a maximum of $100 for select care services. Adding frosting to the NON-PROFIT case, my next-door neighbors, a senior-aged married couple and long-time SCAN policy holders, both sing its praises by exclaiming that they have ―guaranteed‖ emergency care/hospital coverage on a ―worldwide basis‖ if they go travelling abroad. Additionally, my neighbors boast that they have an individual ―Personal Care Representative‖ who has been assigned to each of them for the duration of the SCAN memberships. They also emphasized they have ―never‖ had to deal with a disputed or denied claim from SCAN, and their Personal Care Representative ―always handled outside billing issues‖ that either arose from hospital or doctor/specialist procedures. Perhaps the most intriguing figure comes from a Wikipedia.org estimate that SCAN earns $1.3 billion in revenue from its direct billings to Medicare, which translates to Copyright © 2009, Trans-American Alliance for a National Consensus (TANC) ALL RIGHTS RESERVED

Page 5

Rx for U.S. Healthcare Reform A Proven Model for NON-PROFIT “Universal Healthcare” Provides a Solution for Enactment a premium cost of roughly $98 per month for each of its 110,000 subscribers or $1,181 per year for its full array of covered services — although Medicare’s database factors in the potential additional surcharge of up to $56 per month for SCAN’s Special Needs Plan (SNP) subscribers www.transamericanalliance.org and other ―options-based‖ premium charges. Still, the no-out-of-pocketcost premiums SCAN offers translate to little more than $2.00 above the ―minimum‖ base $96 per month Medicare deducts from seniors’ accounts (about $1,157 for all of 2009). Better yet, the most startling fact in this is that SCAN and the three other major NON-PROFIT health insurance carriers participating in the MA-PD program provide much higher levels of premium coverage and at lower co-pay/deductible costs and ―in-Medicare‖ monthly premium fees ($96 per month) — at about one-fifth (20%) to one-quarter (25%) of the cost of an average $400 to $500 per month (or $4,800 per-year premium average) of what FOR-PROFIT/PRIVATE health insurance carrier charges on a premium for an individual policyholder in the general under-65 population, according to World Health Organization data. If FOR-PROFIT/PRIVATE health insurance carriers label their so-called top-of-the-line plans as ―Cadillac Premiums,‖ than several ―Social HMOs‖ including SCAN’s Medicare-based plans for seniors should be coined the ―Rolls-Royce Premiums‖ of health insurance. It just proves that a greatly expanded menu of benefits and lower deductibles and co-pays are very achievable at a fraction of the monthly/yearly costs of what FOR-PROFIT/PRIVATE health insurers offer. An online trip to Medicare’s state-by-state and plan-specific website (http://www.medicare.gov/MPPF/Include/ DataSection/ComparePlans/BenefitsAtAGlance.asp) reveals a convenient database for searching out a wide array of mostly FOR-PROFIT/PRIVATE health insurance carriers that offer senior ―option‖ plans. Some of the plans are sponsored by the American Association of Retired People (AARP), but they originate from FOR-PROFIT, pay subscription plans (outside of standard Medicare-provided health insurance) typically featuring considerably higher co-pays/deductibles and far fewer coverage areas. If you really want to get a true gauge of how seniors in Southern California value their SCAN health plans, just give a read of a May 2001 article in The Christian Science Monitor. At the time, TCSM reported that SCAN garnered highly favorable ratings from Consumer Reports, which found that 96 percent of SCAN subscribers would ―never leave the plan‖ and 98 percent said they would recommend it to their senior friends. Basically, these NON-PROFIT ―Social HMOs‖ like SCAN offer as great or greater selection Copyright © 2009, Trans-American Alliance for a National Consensus (TANC) ALL RIGHTS RESERVED

Page 6

Rx for U.S. Healthcare Reform A Proven Model for NON-PROFIT “Universal Healthcare” Provides a Solution for Enactment of ―in-network‖ doctors, specialists and hospitals than what FOR-PROFIT/ PRIVATE insurers comparably offer. Ratings from Medicare’s own online database typically rank both SCAN Health Plans — ―Classic‖ and ―Options‖ — each with scores of 4 out of 5 stars when it comes to handling ―member complaints and those staying with the program.‖ The same numbers of stars are accorded to SCAN for the prescription ―drug pricing and patient safety‖ category as well. Similarly high ratings were attributed to other NON-PROFIT ―Social HMOs‖ like Elderplan and Kaiser Foundation Health Plan of the Northwest.

www.transamericanalliance.org

The lone ―Social HMO‖ on the East Coast is Elderplan (http://www.elderplan.org), a Brooklyn-based non-profit founded 23 years ago and operating under the auspices of the Metropolitan Jewish Health System, serving just over 15,000 seniors in the five boroughs of New York City. Although it operates on a much smaller scale than SCAN, Elderplan’s five plan options similarly offer $0 copay and deductible features across the board to a nearly identical menu of ―in-network‖ inpatient, outpatient and at-home services. Kaiser Health Foundation of the Northwest offers a pair of HMO plans, Senior Advantage Basic and Senior Advantage, but each have respective $39 and $99 Non-profit “Social HMOs” offer coverage at Public “Medicare-minimum” rates, so it’s likely the savings would be greater than the 25% in the fur- monthly add-on premium charges and generally higher thest right-hand bar if it would be operated as a “Non-Profit Insurance co-pays and deductibles than what SCAN and Elderplan Exchange” — not solely as “For-Profit/Private Exchanges” proposed by offer as ―Medicare-minimum‖ premium values. The Congress and the White House. slightly higher co-pay/deductible levels and additional premium charges are somewhat in keeping with other FOR-PROFIT/PRIVATE carriers offering Medicare exchange plans. Kaiser Health Foundation of the Northwest is a non-profit organization that is a MA-PD spinoff from the other FOR-PROFIT Kaiser Permanente healthcare subsidiaries.

Allowing FOR-PROFIT, “free-market” forces to go unregulated has proved disastrous — while government “incentivized” NON-PROFIT ventures like Medicare-based “Social HMOs” have proved hugely beneficial to Senior Citizens.

Health Plan of Nevada also offers ―Medicare minimum,‖ no outside monthly cost premiums, but does charge a low- to higher-range of co-pays/deductibles and offers fewer coverage areas to about 25,000 senior members in the southern and northern regions of the state. However, FOR-PROFIT insurance giant UnitedHealth Group acquired Health Plan of Nevada’s overall under-65 health insurance business (serving close to 500,000 subscribers overall) in early 2008, but was required by the U.S. Justice Department to divest ownership of the NOT-FOR-PROFIT ―Social HMO‖ senior care arm of the company to be fall into compliance with the deal. It is not immediately known if the ―Social HMO‖ has yet been fully divested from the UnitedHealth Group-owned parent company or discontinued entirely.

Copyright © 2009, Trans-American Alliance for a National Consensus (TANC) ALL RIGHTS RESERVED

Page 7

Rx for U.S. Healthcare Reform A Proven Model for NON-PROFIT “Universal Healthcare” Provides a Solution for Enactment That is why it is so vitally important for any ―true‖ healthcare reform to take place in this country, our government needs to step up and use the weight of its legal authority to untangle FOR-PROFIT/PRIVATE health insurwww.transamericanalliance.org ance carriers from a future ―Universal Healthcare‖ system. Given the ongoing criminality of FOR-PROFIT/PRIVATE health insurance practices, where Americans are either DYING or currently suffering from GROWING TERMINAL ILLNESSES due to DENIED CLAIMS, there is NO constitutionally justifiable reason why American lives are being weighted or balanced versus the model of MAXIMIZING AND MINIMIZING “Both the President‟s and Baucus‟ plans still fundamentally fail to address how the FOR-PROFIT/ RISKS so entrenched into our long-standing FORPROFIT/PRIVATE system up to today. PRIVATE health insurance industry has been artificially inflating the prices of premiums (most likely due to covering excessive executive compensation, bloated administrative overhead and an overstated emphasis on maximizing earnings and profit margins) while increasingly chipping away at coverage options and placing higher co-pay and deductible burdens on the backs of consumers. Essentially, it is a „middleman‟ system where the consumers pay more but get less in return.”

In his speech to a joint session of Congress on September 8, Pres. Obama reiterated a verbal-only proposal to create a ―non-profit insurance exchange,‖ conceivably featuring a pool of FORPROFIT/PRIVATE health insurance carriers for consumers to pick the ―most competitively priced plan‖ that fits their needs. On September 16, Sen. Baucus then released his ―Chairman’s Report,‖ an $856 billion, 10-year plan, that would similarly feature a ―State Insurance Exchange‖ program and FOR-PROFIT/PRIVATE-based healthcare ―cooperatives.‖ This is just pouring more taxpayer money into the pockets of corrupt FOR-PROFIT/PRIVATE carriers, who were the same $4 million contributors to Sen. Baucus’ latest fundraising dinner last May.

Under The Commonwealth Fund’s study offering three different healthcare plan scenarios, it is an inescapable fact that offering up a “Public Plan” based on Medicare rates — such as that the long-term projected savings of up to $56 billion by 2020 — would be most ideally maximized under a nonprofit-based “Health Insurance Organizational” proposed by TANC.

While sounding and appearing like potentially attractive, reasoned proposals, both the President’s and Baucus’ plans still fundamentally fail to address how the FOR-PROFIT/PRIVATE health insurance industry has been artificially inflating the prices of premiums (most likely due to covering excessive executive compensation, bloated administrative overhead and an overstated emphasis on maximizing earnings and profit margins) while increasingly chipping away at coverage options and placing higher co-pay and deductible burdens on the backs of consumers. Essentially, it is a ―middleman‖ system where the consumers pay more but get less in return.

Medicare already runs an ―exchangelike‖ system where senior consumers can choose from a pooled menu of largely Copyright © 2009, Trans-American Alliance for a National Consensus (TANC) ALL RIGHTS RESERVED

Page 8

Rx for U.S. Healthcare Reform A Proven Model for NON-PROFIT “Universal Healthcare” Provides a Solution for Enactment FOR-PRIVATE/FOR-PROFIT coverage plans, with the American Association of Retired People (AARP) even serving as a clearinghouse/sponsor for lower-cost ―Medicare Health Plans.‖ But many of these ―exchange‖ option plans — coming from such Big Health Insurance companies as UnitedHealth www.transamericanalliance.org Group, CIGNA, Aetna, Coventry, Wellpoint, Anthem Blue Cross/BlueShield and Humana — are still priced considerably higher, with additional ―out-ofpocket‖ monthly premium charges and other higher Medicare ―estimated costs‖ compared to what the handful of NON-PROFIT ―Social HMOs‖ charge in most cases to be ―Medicare-minimum‖ base rates. (The most noticeable differences in Medicare’s customizable/comparable database comes from what FOR-PROFIT/PRIVATE insurance carriers typically charge in additional ―out-of-pocket‖ monthly premium fees, higher co-pays and deductible costs, and generally offer considerably smaller menus of ―covered‖ care services.) Plain and simple, the excessively high levels of executive compensation for PRIVATE/FOR-PROFIT insurance, bloated administrative overhead costs and the 20%-plus profit margins of the Big Insurance Carriers (please refer to the accompanying charts), truly reflect the inordinate disparity of what they charge versus what NON-PROFIT carriers can charge on a much lowered-priced, feature-rich basis. It is also an accurate reflection of the grossly inequitable, unethical and often CRIMINAL business practices of FOR-PROFIT insurance and why Americans are literally ―paying through their teeth‖ for less healthcare. Additionally taking into account the outright DENIALS of medical procedure claims for at-risk patients and the often arbitrary revocations of premium holders for have what Big Insurance deems are ―preexisting conditions‖ to meet the ―business model‖ of MAXIMIZING PROFIT AND MINIMIZING RISKS common with Big Health insurance, are wholly UNETHICAL and frequently MORALLY CRIMINAL…purely on a Constitutional Law basis. In these proposed ―exchange systems,‖ where some lower-income/disadvantaged Americans will conceivably have the ability price out ―low-cost‖ insurance premiums but may actually face paying ―penalties‖ for not having coverage under Baucus’ original plan, there are still massive inequities in what being laid out in both the Congressional and White House proposals. Even the President has not elaborated Copyright © 2009, Trans-American Alliance for a National Consensus (TANC) ALL RIGHTS RESERVED

Page 9

Rx for U.S. Healthcare Reform A Proven Model for NON-PROFIT “Universal Healthcare” Provides a Solution for Enactment

www.transamericanalliance.org

on how to get the Big Health Insurance Carriers to seriously modify and reform their business practices away from their historical strategies of monopolizing/consolidating the marketplace with exploitive and punitive actions directed at American consumers.

In fact, I am not even sure if the President realizes it yet, but his marginalized, verbal-only vision of a ―non-profit insurance exchange‖ carries merit, but it actually should be broadened out to mandate that Health Insurance Carriers can only reform their CRIMINAL business practices by dropping their exploitive and predatory PRIVATE/FOR-PROFIT status and instead adopting NON-PROFIT roles going forward. And that NON-PROFIT organizational model, which once flourished when religious hospitals and family clinics were founded in America during the 18th to early 20th centuries, is something that could have broader applications beneficial to other segments of healthcare in America today. For those reasons, our non-profit citizens’ advocacy and ―Direct Democracy‖-based organization, Trans-American Alliance for a National Consensus (TANC), is proposing that the President and Congress crafts healthcare reform legislation that 1) funds and fosters the creation of NON-PROFIT health insurance carriers in structures similar to Medicare’s ―Social HMO‖ organizational architecture; and 2) presents FOR-PROFIT/PRIVATE Big Insurance carriers the opportunity to convert to NON-PROFIT status or face the consequences of not participating in the ―exchange program‖ and facing the specter of U.S. Justice Department and Congressional ―criminal investigations‖ into DENIAL-based patient deaths, the alarming rise of terminal illnesses, debilitation, and other needless suffering in other cases. This is a time when Congress, the White House and other federal investigatory agencies need to live up to their Constitutional oaths to uphold the law and end this longstanding corrupt pattern of business practices in the healthcare industries — the only thing Big Health Insurance will yield to is if Copyright © 2009, Trans-American Alliance for a National Consensus (TANC) ALL RIGHTS RESERVED

Page 10

Rx for U.S. Healthcare Reform A Proven Model for NON-PROFIT “Universal Healthcare” Provides a Solution for Enactment know the federal government is going to use its full weight of its authority to uphold laws and enact serious reform to re-regulate their business practices. Given that total healthcare costs currently eat up to 17% of the United States’ Gross Domestic Product (GDP), or roughly $2.5 trillion of nearly $15 trillion in total GDP for 2009 (according to World Health Organizawww.transamericanalliance.org tion estimates), the world’s most expensive healthcare system will eventually implode under the sheer weight of its excesses and lead to an even greater public health crisis/catastrophe in the near future. On that front, TANC has formed a pair of Facebook ―Cause Groups,‖ the most critical being a ―Petition for the Federal Government to Open CRIMINAL INVESTIGATIONS into DENIED Patient Deaths” (http:// apps.facebook.com/causes/340854/54103574?m=611088da) to compel our government not to let this long-standing pattern of criminality in the health insurance industry go unpunished.

"Every person has the right to adequate health care. This right flows from the sanctity of human life and the dignity that belongs to all persons, who are made in the image of God... Our call for health care reform is rooted in the biblical call to heal the sick and to serve 'the least of these,' the priorities of justice and the principle of the common good. The existing patterns of health care in the United States do no meet the minimal standard of social justice and the common good." — Resolution on Health Care Reform, U.S. Catholic Bishops, 1993, coming before the Clinton Administration's failed efforts at achieving U.S. healthcare reform.

Secondly, TANC ideally hopes the proposals laid out in this position paper can be used as springboard for our Facebook Cause Group initiative to “Petition for a CITIZENS’ SUMMIT on U.S. Healthcare Reform” (http:// apps.facebook.com/causes/332619/54103574) to lay to out a set of proposals for a truly OPEN PUBLIC-FORUM debate — a draft bill-making process for American citizens to offer as template and blueprint for our ―elected‖ representatives to possibly follow as “THE WILL OF THE AMERICAN PEOPLE.” Even if our federal government chooses to dismiss this summit and draft bill, it will forever be on-therecord where American citizens decided the future direction of Healthcare Reform should go! If the health insurance industry does concede that its business practices need drastic reform and it abides by new government regulatory actions, TANC has set forth detailed recommendations for the Congress and the White House — at the very least — to SET MINIMUM PROFIT MARGIN CAPS and LIMITS ON EXECUTIVE COMPENSATION AND BONUSES for the PRIVATE/FOR-PROFIT Health Insurance Carriers. The other major option the federal government can present is that a funding program based on new, minimal corporate taxes and a special tax assessment on companies producing and distributing ―unhealthy/addictive consumable products‖ be used to help fund their conversion into NON-PROFIT Health Insurance Organizations (HIOs). To accomplish steps necessary for the NON-PROFIT conversion of Private/For-Profit Health Insurance, TANC is proposing the following preliminary scenarios: 1) De-list FOR-PROFIT/PRIVATE-SECTOR Insurance Companies from stock exchanges and Re-File under ―Non-Profit Articles of Incorporation‖ — Much in the same way the federal and state government issue interest-bearing bonds, the federal government can serve to guarantee bond funds to participating Private-Sector Insurance Carriers an exchange in expediting the buyback of shares from large institutional investors, hedge funds and individual shareholders in these publicly-held corporations. By unlocking themselves from the control of large shareholders, some of whom own

Copyright © 2009, Trans-American Alliance for a National Consensus (TANC) ALL RIGHTS RESERVED

Page 11

Rx for U.S. Healthcare Reform A Proven Model for NON-PROFIT “Universal Healthcare” Provides a Solution for Enactment

www.transamericanalliance.org

"To be without health insurance in this country means to be without access to medical care. But health is not a luxury, nor should it be the sole possession of a privileged few. We are all created b'tzelem elohim — in the image of God — and this makes each human life as precious as the next. By 'pricing out' a portion of this country's population from health care coverage, we mock the image of God and destroy the vessels of God's work." — Rabbi Alexander Schindler, Past President, Union of American Hebrew Congregations (1992)

large blocks of stock and exercise considerable control of ―voting‖ shares and seats on the Board of Directors for these Big Insurance corporations, the government is effectively alleviating the health insurance carrier of typical outside ―marketplace pressures‖ to meet certain per-share earnings and profit projections – in addition to eliminating ―conflicting agendas‖ and ―hostile takeover‖ scenarios, sometimes those arising internally from their own Board of Directors and/or large-block shareholders. 2) The federal government forms the temporary FEDERAL NONPROFIT HEALTHCARE CONVERSION ASSISTANCE CORPORATION with the mandate of helping Health Insurance Companies and potentially other FOR-PROFIT Healthcare entities un-tether themselves from outside investors and other marketplace-driven forces — The mission of this federal program will be solely to assist participating FOR-PROFIT Health Insurance Carriers with bond-issue funding to buyback the publicly-traded shares from major institutional investors and individual shareholders. Once buyers of these bonds (including investors and non-profit foundations, etc.) reach maturity and can be paid off (within the next 5 to 10 years), the government can effectively liquidate/disband the FEDERAL NON-PROFIT HEALTHCARE CONVERSION ASSISTANCE CORPORATION once all the conversions are completed. 3) The buyback of publicly-traded shares, with the assistance of government-backed bonds can be timed to mature in 5 years to 10 years, or less — This would allow the once-publicly traded/forprofit Health Insurance Carrier to recoup all costs related to the buyback share plan as well as covering any other debts incurred by the organization before converting to NON-PROFIT status. Monies from the government bond issues will also allow for a sliding scale of a 5% to 25% premium to be paid over the Health Insurance Carrier’s ―current‖ per-share stock market price, which will be based on any potential negative short-falls some shareholders may still incur from what they originally paid on a per-share basis. This is to make sure both the investor/shareholders, lien holders and the company are reimbursed and properly covered at or slightly above their original investments — so it effectively un-encumbers Health Insurance Carriers from any outside FOR-PROFIT interests and outside marketplace forces. 4) Upon their incorporation as NON-PROFIT Health Insurance Organizations (HIOs), participating insurance carriers will still be able to service their roster of current premiumholding customers on their existing levels of premium coverage but able to do it closer in line with lower cost Medicare-based rate structures — The maintaining of premium subscriptions with the HIO’s current roster of customers will also address concerns some consumers have about being forced into ―universal access‖ Public-Option plans offered to low-

Copyright © 2009, Trans-American Alliance for a National Consensus (TANC) ALL RIGHTS RESERVED

Page 12

Rx for U.S. Healthcare Reform A Proven Model for NON-PROFIT “Universal Healthcare” Provides a Solution for Enactment

www.transamericanalliance.org

income individuals and families. Moreover, current policy-holders will benefit from LOWER MONTHLY/ANNUAL PREMIUM COSTS due to the NON-PROFIT restructuring of health insurance, in addition to likely seeing their DEDUCTIBLE and CO-PAYMENT cost contributions greatly reduced or eliminated. Employer-compensated will also great benefit from lower individual and family plan premium costs, much as described above. 5) ―Universal Access‖ will also be a mandatory requirement as a result of a Health Insurance Organization’s NON-PROFIT, TAXEXEMPT STATUS, meaning a ―Public Option‖ program will be made available to low-/no-income Americans who can’t afford to obtain coverage on a reviewed, as-needed basis — By tapping into a special 1% or 2% general U.S. Corporate Healthcare Tax levy, which could bring in anywhere from $140 to $280 billion annually in annual revenues (depending on the state of the economy and final dollargeneration figures from annual Gross Domestic Product totals) to help cover non-profit HIOs offering the same kind of individual and family premiums offer to its regular customers. Currently, corporations pay the equivalent of 2.5% of the Gross National Product, or roughly $378 billion in corporate taxes in 2008 while ―individual‖ American taxpayers paid roughly 8% of the GDP or roughly $1.2 trillion in individual taxes. So, if corporations pay an additional 1% to 2% corporate tax (rather than individual taxes), they will still realize much larger immediate savings to their bottom-line expenses through a drastically reduced NONPROFIT health insurance system. Additionally, due to the disproportionately large burdens placed on the healthcare system by unhealthy/addictive consumables — tobacco, alcohol, fast foods, sweetened beverages, candy/ confectionery products, and packaged snack foods — could be assessed a special 5% to 10% corporate tax based on their gross sales revenue volume, possibly raising between $25 billion to $50 billion in new tax revenue to help subsidize a ―Public Option‖ program (see the accompanying chart). These unhealthy/addictive consumables account for the greatest

Copyright © 2009, Trans-American Alliance for a National Consensus (TANC) ALL RIGHTS RESERVED

Page 13

Rx for U.S. Healthcare Reform A Proven Model for NON-PROFIT “Universal Healthcare” Provides a Solution for Enactment

www.transamericanalliance.org

"The health of a society is truly measured by the quality of its concern and care for the health of its members... The right of every individual to adequate health care flows from the sanctity of human life and that dignity belongs to all human beings... We believe that health is a fundamental human right which has as its prerequisites social justice and equality and that it should be equally available and accessible to all." -— Imam Sa'dullah Khan, The Islamic Center of Southern California

burdens and biggest public health risks that require inordinately larger public/private expenditures from America’s healthcare system budgets. So, the producers and distributors of these unhealthy/addictive consumables should shoulder an additional tax levy as part of ―social responsibility‖ to help assist in funding a ―Public Option‖ system, which originates from a ―10% Reform” healthcare reform tax proposal submitted by Facebook Friend, Andy Freeman (no relation). Currently, it is estimated that there are 47 million uninsured American citizens, so on a cost-level comparable to ―Medicare-minimum‖ base rates (for Senior Citizens), the full rolls of ―uninsured‖ being extended ―Public Option‖ premiums could come to a total cost of $188 billion annually with an average ―non-profit‖ premium adjusted to a cost of $2,500 to $3,000 per year – in reverse of the ongoing trend of $4,800 to $6,000 annual costs for individual premiums and upwards of $12,000 to $14,000 annually for family premiums that are UNATTAINABLE for low-income families on an out-of-pocket basis. 6) Limits on senior management/executive salaries and bonuses — One of the key driving forces for the escalating costs of healthcare in this country is the ever-escalating rise in senior management executive pay and administrative overhead costs. Currently, the top Chief Executive Officers (CEOs) of the ―Big 6‖ of Health Insurance — CIGNA, UnitedHealth Group, Aetna, Humana, Wellpoint and Coventry — take home an average of $11 million in pay annually (see chart on page 8), but stock options typically carry overall compensation into the HUNDREDS OF MILLIONS OF DOLLARS once shares are exercised for sale. For example, UnitedHealth CEO Steve Hemsley took home $3.2 million in pay for 2008 but his unexercised stock options are valued at $744 million, translating to roughly $700 out of each UnitedHealth customer’s monthly bill paid on a premium for one year, according to SickforProfit.com. Despite the groundswell of public criticism over excessive CEO pay in this country (especially in light of the federal government bailouts of corporate institutions failing to immediately address excessive executive pay and bonuses), the average CEO across all U.S. industries took home $10.8 million in total compensation annually — about 364 times the pay of the average American worker ($29,670 per year), according to an Associated Press survey of 386 of the top Fortune 500 companies. All of this points to why healthcare costs are rising faster in the United States than in any other countries in the world — largely due to excessive, undue executive costs, bloated administrative overhead and investor/marketplace pressures to maintain fat profit margins. Under a new NON-PROFIT Health Insurance structure, executive compensation should be capped at

Copyright © 2009, Trans-American Alliance for a National Consensus (TANC) ALL RIGHTS RESERVED

Page 14

Rx for U.S. Healthcare Reform A Proven Model for NON-PROFIT “Universal Healthcare” Provides a Solution for Enactment 3% to 10% of their current average, or about $300,000 to $1 million per year, and maybe at 3% to 6% of current levels for other senior-level management below CEO. www.transamericanalliance.org

7) Each of these freshly converted NON-PROFIT Health Insurance Organizations (HIOs) will begin search processes for a new, ―independent‖ Board of Directors, inclusive of medical practitioners, caregivers, first-responders and other non-profit hospital/ family clinic administrators — The proposed composition of these Boards will effectively help guide newly-converted NON-PROFIT Health Insurance Organizations to gather input and direction of how to better interact in a more responsive and efficient manner by observing a newlycreated ―UNIFORM HEALTH INSURANCE INDUSTRY STANDARDS” for the processing of medical billings and claims with hospital and family clinic administrators, in addition to athome caregiver and rehab services. Uniform standards for the claims and billing processes will greatly cut down on the red-tape and hassles many hospitals and family clinic physician centers deal with currently in a patchwork, haphazard and non-uniform PRIVATE/FOR-PROFIT system insurance carriers undertake in states across the country – effectively reducing hourly manpower costs in trying reconcile billpaying claims procedures. 8) To insure and maintain compliance on a newly structured national UNIFORM INSURANCE INDUSTRY STANDARDS, it would be advisable to form ―independent‖ HEALTH SERVICES PROVIDER AND PEER REVIEW BOARDS to regularly review Health Insurance Organizations’ compliance with various claims and billings reconciliation processes — These kind of board reviews, which can be conducted on an open hearing basis, can also allow any policy subscribers (either ―paid‖ or ―publicly-subsidized‖ subscribers) to register any complaints and concerns to an ―ombudsman-like panel‖ regarding issues that need to be addressed and corrected with these new NON-PROFIT Health Insurance Organizations.

Some partisans within the PRIVATE/FOR-PROFIT Health Insurance industry will likely be reticent and clearly reluctant to consider a NON-PROFTIT organizational model, but given the roughly 75-year history of their resistance and lobbying efforts against HealthCopyright © 2009, Trans-American Alliance for a National Consensus (TANC) ALL RIGHTS RESERVED

Page 15

Rx for U.S. Healthcare Reform A Proven Model for NON-PROFIT “Universal Healthcare” Provides a Solution for Enactment care Reform (dating back to the World War II efforts of the Franklin D. Roosevelt Administration), more vigorous publicly-generated petition and legislative efforts need to be taken today. www.transamericanalliance.org

Somewhere lost in the hysterics and vitriol that has marked the national Healthcare Reform debate in America is a serious, reasoned and sane exploration of how to craft a ―Universal Healthcare‖ system that somehow answers and assuages fears from some corners about a ―Government-run, Socialist Healthcare System.‖ It may surprise some congressional Republicans, most of whom think ―Big Government‖ and ―Socialized Healthcare‖ are the inevitable results of a reformed healthcare system, that TANC’s non-profit proposal is similarly based on the premise that the federal government should NOT be involved in the day-to-day operational management of health insurance and healthcare services in this country. Given the growing divisions and rancorous allegations being tossed within the halls of Congress and the White House in this largely CLOSED-DOOR/ CLOSED-FORUM debate and legislative proposal process, it is particularly understandable why the various political factions and BIG HEALTHCARE LOBBIES and other well-funded special interest groups have disseminated a head-dizzying array of MISINFORMATION, PROPAGANDIZING, STIGMATIZING and DEMONIZING about ―Universal,‖ ―Single-Payer‖ and so-called ―Public Option‖ healthcare systems — particularly against those already being practiced in over 50 countries around the world today. Recent proposed ―compromise‖ plans for instituting some form of national Healthcare Reform have produced what many Americans and the media have derided as either ―watered-down‖ half-measure solutions or have just been flatly rejected for injecting any kind of government-/taxpayer-financed ―Public Option.‖ It has been estimated that roughly 22,000 American citizens unnecessarily die annually due to either ―inadequate‖ health insurance coverage, denied/ delayed claim payouts for treatment or being unemployed and unable to afford PRIVATE health insurance coverage, according to Institute for Medicine research. A recently release Harvard University study found that up to 45,000 patient die annually (one every 12 minutes) due to a lack of insurance coverage and quality healthcare services. However, the National Center of Policy Analysis, a Washington-based think tank backing a free-market/private-sector ap-

Copyright © 2009, Trans-American Alliance for a National Consensus (TANC) ALL RIGHTS RESERVED

Page 16

Rx for U.S. Healthcare Reform A Proven Model for NON-PROFIT “Universal Healthcare” Provides a Solution for Enactment proach to healthcare, countered that the Harvard study overstated the ―death risk‖ and did not track for how long the subjects were uninsured. On top of the current, nearly three-year-old economic recession, the most dramatic, darkly illustrative byproduct of growing unemployment (more than doubling from 4.7% at the beginning of 2006 to 9.7% in August 2009), the number of UNINSURED Americans has risen to an estimated 47 million American citizens, according to U.S. Bureau of Labor and U.S. Department of Commerce statistics. This growing number of the UNINSURED Americans has created a rising, festering public healthcare crisis — nearly universally decried by medical practitioners, caregivers, first-responders and hospital administrators — that our ―elected‖ representatives can’t ignore any longer…even with the roughly $2.3 billion in political contributions by the INSURANCE LOBBY from 1998-2006 (source: OpenSecrets.org) to maintain the status quo of America’s ―Have or Have-Not,‖ FOR-PROFIT HEALTH INSURANCE SYSTEM.

www.transamericanalliance.org

Please click the hyperlink with this photo for one of the most revealing, informative interviews PBS‟s Bill Moyers had with former CIGNA executive Wendell Potter, a whistleblower who speaks in detail of insurance industry practices and with insider knowledge of CIGNA‟s foot -dragging claims DENIALS involved in the death of Nataline Sarkisyan.

Given the poor economic climate and the alarming rise in unemployed and uninsured Americans, other immense public pressure if coming down on the FORPROFIT/PRIVATE health insurance over its burgeoning ―DENIALS-BASED‖ business practices and other allegations of manipulating the marketplace, artificially inflating pricing and shifting the costs of deductibles and co-pay charges to consumers, even with ―employer-based‖ premiums. Over the last few months, the California Nurses Association successfully lobbied state Attorney General Jerry Brown Jr. to mount a full investigation into what the group claimed were 45 million ―suspect‖ denied claims for medical treatment of patients — unlawfully carried about by major FOR-PROFIT/PRIVATE-SECTOR health insurance companies in the state. SmartMoney.com recently reported that out of 1 billion medical claims filed nationally with PRIVATE/FOR-PROFIT insurers, as many as 75 million claims annually are ―rejected outright, leaving patents unable to get treatment or stuck with medical bills that add up to at least $50 billion annually.‖ Furthermore, Sen. Patrick Leahy (D-VT) is leading the charge on a pair of Congressional bills (S. 1681 and H.R. 3596) under the Health Insurance Industry Antitrust Enforcement Act banner to bring an end to the 64-year-old exemption that the health insurance industry has been allowed to operate outside the federal Sherman Antitrust laws — rules that ―protect consumers from anticompetitive practices like price fixing,‖ Leahy wrote in his email blast to the American public. ―They can pick and choose their customers and deny coverage to anyone with any sort of pre-existing condition -even acne. They can get away with dropping your coverage when you get sick,‖ Leahy wrote. ―Passing health care reform with an effective public option is one key way to pro-

Copyright © 2009, Trans-American Alliance for a National Consensus (TANC) ALL RIGHTS RESERVED

Page 17

Rx for U.S. Healthcare Reform A Proven Model for NON-PROFIT “Universal Healthcare” Provides a Solution for Enactment mote competition in the health insurance marketplace, but we must also eliminate the unjustified and unnecessary antitrust exemption currently enjoyed by insurance companies.‖ www.transamericanalliance.org

Sen. Leahy went on cite an unnamed ―recent study‖ that when one or two of the handful of major FOR-PROFIT Big Insurance Carriers control found 94% of the American health insurance markets across the country, it means ―every year consumers are paying more for less coverage.‖

Nataline Sarkisyan "Health security is an issue that affects all of us. Every person has a fundamental human right to quality healthcare — healthcare that is affordable, accessible, and compassionate. As the nation begins to transform the healthcare system to one that is sustainable, it will be important that we, as a society, ensure that healthcare in the U.S. respects the dignity of every person and delivers the quality, compassionate care we expect and deserve. Meaningful reform will require dialogue, the acceptance of diverse views and above all, compromise. With the human right of healthcare at stake, all of us must work together to make sure future generations inherit a healthcare system that embraces quality and compassion." — Catholic Healthcare West's Perspective, as printed in their Health Security Index, Spring 2007

When insurance companies know they don’t have to compete, they don’t,‖ Leahy added. ―When they know they can get away with raising your premiums every year, they do. And when they know they can deny you coverage without consequence, they'll leave you high and dry. The Health Insurance Industry Antitrust Enforcement Act, which I introduced in the Senate in [mid-September 2009], is not the be all and end all of necessary reform, but it is a key way we can give consumers more choice in the health insurance marketplace.‖ As the result of this ―DENIAL-BASED‖ private health insurance system, millions of Americans either live in dire fear of ever using their PRIVATE health insurance plans (and risking higher premium costs, higher deductibles or outright policy cancellations for having ―preexisting conditions‖) or having no coverage at all and risking going into bankruptcy due to a mountain of incoming medical bills. Wikipedia.org cited an un-sourced ―recent study‖ that found uninsured and uncovered, denial-based medical expenses played a ―significant factor‖ in 60% of all personal bankruptcies filed in the United States. Even those who thought they had good insurance coverage took pause at the story of Nataline Sarkisyan, a 17-year-old Los Angeles girl who died while her health insurance carrier, CIGNA, hemmed and hawed over whether to pay for her livesaving liver transplant surgery. CIGNA deemed Sarkisyan’s badly-needed and delayed liver transplant surgery an ―exploratory procedure‖ and this came despite UCLA Medical specialists citing instances where they had performed the transplant surgery successfully before. Nataline passed away while awaiting the transplant in December 2007 — although CIGNA finally relented in approving her claim (after massive public outcry against the insurer) just a day before she died. Sarkisyan’s story is one that rings familiar in denial-based cases where other Americans have died while awaiting critical life-saving surgeries and can be found, along with other stories about prolonged, growing terminal illnesses and other suffering at

Copyright © 2009, Trans-American Alliance for a National Consensus (TANC) ALL RIGHTS RESERVED

Page 18

Rx for U.S. Healthcare Reform A Proven Model for NON-PROFIT “Universal Healthcare” Provides a Solution for Enactment -risk patients have endured, at film documentarian Robert Greenwald’s healthcare advocacy site, www.SickforProfit.com. www.transamericanalliance.org

If all or some of the Big Health Insurance carriers reject the NON-PROFIT conversion program model TANC is proposing here, then this federally-funded program should be entirely focused on fostering the creation of new NON-PROFIT Health Insurance Organizations and/or expanding the existing Medicare-based ―Social HMOs,” such as SCAN and Elderplan, into the general under-65 marketplace. Allowing greater NON-PROFIT participation will generate lower pricing competition in the marketplace that could similarly create new ―market-driven forces‖ to drive down the artificially inflated pricing from FOR-PROFIT/PRIVATE insurance carriers. The benefits of creating and fostering the growth of NONPROFIT carriers are many: • Larger, feature-rich menus of inpatient and outpatient coverage areas and prescription drug assistance on a low- to no-cost basis available to all American consumers. •

All medical procedures, doctor visits, preventative/at-home care and screening exam tests are completely covered with no chance of DENIALS or REVOCATIONS of premiums if someone is identified with a ―preexisting condition.‖ • A large selection of in-network Primary Care Physicians (PCPs), specialists, hospitals, emergency care, family clinics, outpatient treatment facilities, at-home caregiver services and lowto no-cost prescription drug services.

Under the 3 scenarios proposed by The Commonwealth Fund (with research from the Lewin Group), the “Public Plan” — based on setting rates at “Medicareminimum” levels — offers most optimal long-term reduction in federal outlays (at nearly $3 trillion) over the next 10 years. But, imagine how much higher the savings would be in all-nonprofit organizational health insurance system.

• Even if corporations pay a 1 to 2 percent special corporate tax to fund NON-PROFIT healthcare, these companies will quickly realize greater overhead savings with lower ―group‖ coverage policy costs — realizing that a current ―individual‖ employee premium will drop more than half in cost from about $6,000 annually while a typical ―family-of-four‖ premium will similarly drop by more than half from its annual $12,000 to $18,000 range today.

• There will be NO day-to-day, ―invasive‖ involvement of the federal government in ―managing‖ a NON-PROFIT healthcare system, only badly-needed regulatory and legal oversight.

Copyright © 2009, Trans-American Alliance for a National Consensus (TANC) ALL RIGHTS RESERVED

Page 19

Rx for U.S. Healthcare Reform A Proven Model for NON-PROFIT “Universal Healthcare” Provides a Solution for Enactment • Non-profit HIO carriers will be able to charge middle- to upperincome consumers directly for their premiums, incrementally lowering the amounts of special federal startup and long-term funding.

www.transamericanalliance.org

"Science may have found a cure for most evils, but it has found no remedy for the worst of them all — the apathy of human beings."

• Low- to no-income Americans get ―Public Option‖ coverage through the general and special corporate taxes on ―unhealthy/addictive‖ product categories on a reviewed, ―as-needed‖ basis. •

People who choose stay with their FOR-PROFIT/PRIVATE carriers can stay with their option plans, but will likely also realize a considerable lowering in monthly/yearly premium costs because of the new-found competition from an emerging and expanding offering of NON-PROFIT Health Insurance Organizations entering into the marketplace.

•

Adoption of new ―UNIFORM INSURANCE INDUSTRY STANDARDS” will greatly reduce or eliminate red-tape hassles that medical practitioners, hospitals, family clinics and other caregiver services must deal with in frequently arbitrary DENIALS on billings/pay-out claims — thus having a ―snowball-effect‖ on greatly lowering hourly administrative and outside collection agency costs to reconcile billing statements.

•

The emergence of a flourishing, growing NON-PROFIT health insurance market could also have the ―domino effect‖ of leading to the de-listing of other FOR-PROFIT/PRIVATE healthcare companies — rekindling the founding spirit of ―social contract‖ non-profit, religious- and publiclyfunded hospitals and other caregiver services.

•

Jobs in the health insurance and other healthcare sectors will be more stable and secure in a NON-PROFIT organizational model — a much more professionally and personally rewarding experience would await those who currently toil in the FOR-PROFIT/PRIVATE arena and switch to NON-PROFIT roles in fulfilling a vital ―Social Contract‖ dedicated to aiding the health and well-being of Americans.

— Helen Keller

Hopefully, more than anything, this potential reinvigoration of NONPROFIT health insurance can get topto middle-level executives, administrators and highly-skilled medical practitioners to look inside at a healthcare system badly in need of reform when it comes to overhead costs and compensation. Reform of the health insurance industry, like all other sectors of healthcare, has to Copyright © 2009, Trans-American Alliance for a National Consensus (TANC) ALL RIGHTS RESERVED

Page 20

Rx for U.S. Healthcare Reform A Proven Model for NON-PROFIT “Universal Healthcare” Provides a Solution for Enactment

www.transamericanalliance.org

do with amending internal business practices and renewing government’s role as a regulatory/legislative oversight body — not just pouring in $856 billion dollars over the next 10 years (as Sen. Baucus proposes) without a clear mandate and plan to truly end the unjustified FOR-PROFIT inequities of a long-running ―Have or Have-Not‖ healthcare system.

If this country can manage to return to the ―Spirit of Collectivism‖ that was a hallmark and fixture in the founding of religious-based hospitals and family-based practices from a variety of Christian faiths and other denominations originally settling in America during the 18th to early 20th centuries, then we truly have a chance to create an American healthcare system that will be uniquely self-reliant/selfsustainable, just, equitable and accessible for this and future generations of Americans.

"When will our consciences grow so tender that we will act to prevent human misery rather than avenge it?" — Eleanor Roosevelt

In 2003, of the roughly 3,900 nonfederal, short-term, acute care general hospitals in the United States, the majority — about 62 percent — were NON-PROFIT, according to Wikipedia.org. The rest included government hospitals (20 percent) and forprofit hospitals (18 percent). Still, it has been widely reported that even not-forprofit hospitals are being racked with higher executive and administrative costs, so even NON-PROFIT religious- and government-backed hospitals need to address and conform with lower, more equitable compensation structures to fulfill their ―social contracts‖ with the American public. In other key areas of U.S. healthcare reform, TANC is additionally proposing the following measures to reform America’s healthcare system: Medical Malpractice Liability and Tort Reform — State and federal statutes have to be legislatively amended to mandate a set structure for the limitation of jury rewards on malpractice suits against hospitals and medical practitioners. This will also help to drive down the cost of malpractice insurance for doctors and hospitals, both of which pass those costs back to consumers in what they charge for services. • Pharmaceutical Pricing and Practices — Prescription drug prices in the United States are the highest in the world, according to Wikipedia.org. The prices Americans pay for prescription drugs, which are far higher than those paid by citizens of any other developed country, help explain why the pharmaceutical industry is — and has been for years — the most profitable of all businesses in the U.S. In the annual Fortune 500 survey, the pharmaceutical industry topped the list of the most profitable industries, with a return of 17% on revenue and 30% operating profit margins. The high price of prescription drugs has been typically one of the most contentious areas of discussion in the U.S. healthcare reform de-

Copyright © 2009, Trans-American Alliance for a National Consensus (TANC) ALL RIGHTS RESERVED

Page 21

Rx for U.S. Healthcare Reform A Proven Model for NON-PROFIT “Universal Healthcare” Provides a Solution for Enactment

www.transamericanalliance.org

bates, especially given the complexities of trying to regulate big pharmaceutical conglomerates with operations spread across the world internationally. Areas of consideration have been tougher federal government regulation of the pharma industry to the adoption of a Medicare-type ―Part-D‖ prescription drug subsidization program already offered to seniors and possibly expanded to the general under -65 population. Coming up with an equitable solution in the ―public interest‖ could be tough, though, with thousands of lobbyists from the pharma lobby funneling their influence and contributions through halls of Congress and the White House in Washington, D.C. The pharmaceutical industry spent $855 million, more than any other industry category, on lobbying activities from 1998 to 2006, according to the non-partisan Center for Public Integrity. Strengthening/Financially Reinforcing Medicare — Having created the model for NON-PROFIT, ―Social Managed Care‖ programs, it would seem logical that the expansion of its Medicare Advantage Prescription Drug program is a highly attractive and seamless solution for relieving federal budgetary burdens on the senior-care agency. The budget for the U.S. Department of Health and Human Services, which encompasses budgetary/ operational oversight of Medicare, is the largest federal budget category at $707.8 billion in 2008, according to the White House Office of Management and Budget. Total budget outlays for Medicare (Parts A, B & D) are expected to top $506.8 billion for 2009, a near doubling (97% increase) over its $256.8 billion budget in 2002. According to a report by the board of trustees for Medicare and Social Security, Medicare spent more than it brought in from taxes in 2008, with predictions that the Medicare hospital insurance trust fund will become insolvent by 2019. However, if the federal government acts more aggressively in mandating an expansion of its successful Medicare Advantage (Part D) prescription drug program for ―Social HMOs,‖ it could be possible that more of the budgetary shortfall in meeting the needs of nearly 45 million seniors in this country could be alleviated and shifted toward direct premium contributions to innovative non-profits, such as SCAN, Elderplan and others, outlined in this paper.

Profit should not be the overriding motivating, driving force of American healthcare and if we can get this right, I truly believe other American business categories rocked by scandals, corruption and other forms of mismanagement — such as banking, real estate/housing and the automotive sectors — will have a model for conducting business on a more sound and ethical basis going-forward. The independence and innovation of these ―Social HMOs‖ feature the best of what NON-PROFIT, altruistic organizations offer, along with the innovations of what had once been considered sole proCopyright © 2009, Trans-American Alliance for a National Consensus (TANC) ALL RIGHTS RESERVED

Page 22

Rx for U.S. Healthcare Reform A Proven Model for NON-PROFIT “Universal Healthcare” Provides a Solution for Enactment prietorship of FOR-PROFIT, private enterprise. However, somewhere in this CLOSED-DOOR debate on Healthcare Reform in Washington, DC, the President and Congress seem to have shut off any further PUBLIC EXPLORATION of new proposals, although Pres. Obama still www.transamericanalliance.org insists he is keeping ―an open door policy‖ on ideas from his friends in Congress. But that is where the President doesn’t even realize there are other ideas that can be explored and derived from a truly OPEN-PUBLIC FORUM summit on healthcare that TANC is proposing. And that may be why the President doesn’t realize that he lacks much of any kind of PUBLIC CONSENSUS MANDATE FROM THE PEOPLE to give him leverage he needs in Congress. It’s time for all Americans to look inward, question, propose and work together on how we can do better to help each other, rather than feeding off a dated laissez faire theory of a ―free-market,‖ predatory healthcare system based on the ―survival of the fittest‖ — this is intolerable and unacceptable when it comes to balancing out the lives and wellbeing of Americans. Most notably, America’s arcane, haphazard ―Have or Have-Not‖ system of private healthcare appears to be built on a self-fulfilling prophecy of ethical and moral criminality, all of which has already been rejected by the 50 or so other nations of the world practicing various forms of ―Universal Healthcare.‖ Coming on the heels of massive, nearly TRILLION-DOLLAR bailouts of corporate banking, insurance and automotive institutions in this country, it is critical our ―representative‖ federal government proves it can still produce Healthcare Reform in the ―Public Interest‖ — not just in ―Corporate Interests.‖ Delivering on a NON-PROFIT-BASED, ―Universal Healthcare‖ system would be a triumphant, epic accomplishAdvocates of a “Single Payer” and “Universal Healthcare” had to ment after 75-plus years of mostly futile struggles to atmake their feelings known quickly as Sen. Max Baucus (D-MT), chairman of Senate Finance Subcommittee holding hearings on tain any kind of meaningful reform. It is time for America Healthcare Reform, had security officers quickly escort them out to regain its reputation for humanity, equality and innovadue to the CLOSED-DOOR nature of the HCR debate. Please tion as an ―advanced society‖ atop the world stage. click the hyperlink to watch the YouTube video as Baucus and other committee members scoff and laugh as the advocates are rushed out the door.

###

“If all or some of the Big Health Insurance carriers reject the NON-PROFIT conversion program model TANC is proposing here, then this federally-funded program should be entirely focused on fostering the creation of new NON-PROFIT Health Insurance Organizations and/or expanding the existing Medicare-based “Social HMOs,” such as SCAN and Elderplan, into the general under-65 marketplace. Allowing greater NON-PROFIT participation will generate lower pricing competition in the marketplace that could similarly create new “market-driven forces” to drive down the artificially inflated pricing from FOR-PROFIT/PRIVATE insurance carriers.” Copyright © 2009, Trans-American Alliance for a National Consensus (TANC) ALL RIGHTS RESERVED

Page 23

Rx for U.S. Healthcare Reform A Proven Model for NON-PROFIT “Universal Healthcare” Provides a Solution for Enactment

About TANC Trans-American Alliance for a National Consensus (TANC) is a California-based nonprofit 501[c][3] public advocacy organization dedicated to establishing a national ―Electorate Legislative Consortium‖ as part of a nonpartisan, citizen-based assembly bringing together all key segments of society to author and enact ―consensus‖ federal legislation. The primary mission of TANC is to act as a complementary but binding ―fourth branch‖ arbiter between the established Legislative, Executive and Judicial branches of the U.S. government.

www.transamericanalliance.org

Organization Michael A. Freeman Executive Director Co-Founder Jaimie J. Keane Assistant Director Co-Founder

You can also find more information, position papers, presentations, our draft bill for an ―Electorate Branch‖ of government and other research and how you are welcome to join in TANC membership at our Web site (listed above) or with our two social network site portals: Our Facebook TANC Cause Group at http:// apps.facebook.com/ causes/249715/541035 74?m=1 and TANC LinkedIn.com Group portal at http:// www.linkedin.com/

To convene on a local, regional and national basis through a representational number of universities and colleges in the United States, TANC is empowered to bring badly-needed consistency, accountability and transparency to policyand law-making from the federal government. Also referred to as The Alliance, the overriding goal is to establish TANC as a nonpartisan ―ethical conscience of democracy,‖ effectively seeking to contradict or mitigate the influence some well-funded lobbyists, special interest groups and political action committees hold on politicians throughout the corridors of power in Washington, D.C. For more information and how you can participate to make ―Citizens’ Oversight‖ a potential fixture of future federal governance, please visit us at www.transamericanalliance.org. You can also make a huge difference by mailing or emailing this position paper, Rx for U.S. Healthcare Reform, to your elected congressional Senate and House representatives by searching for their email addresses at http:// www.congress.org/congressorg/directory/congdir.tt. Emails, with the PDF version of the position paper attached, can be forwarded to the President ([email protected]), Vice President ([email protected]) and other members of executive branch-level cabinet departments can be sent to [email protected]; and snail mail to The White House, 1600 Pennsylvania Avenue NW, Washington, DC 20500. If you have any inquiries, suggestions or thoughts, please share them with us at [email protected]. ###

“If FOR-PROFIT/PRIVATE health insurance carriers label their so-called top-of-the-line plans as “Cadillac Premiums,” than several “Social HMOs” including SCAN‟s Medicare-based plans for seniors should be coined the “Rolls-Royce Premiums” of health insurance. It just proves that a greatly expanded menu of benefits and lower deductibles and co-pays are very achievable at a fraction of the monthly/yearly costs of what FOR-PROFIT/PRIVATE health insurers offer.”

Copyright © 2009, Trans-American Alliance for a National Consensus (TANC) ALL RIGHTS RESERVED