Insurance co.s want to make you healthy! They also have a bridge for sale

The still-fragile Affordable Care Act (ACA) gives the public a fighting chance at reining in health insurance premiums. But we’re going to have to wrestle with the insurance industry every step of the way. As the National Association of Insurance Commissioners (NAIC) convenes in Seattle today, the public has the imperative to stick up for ourselves. Here’s what’s at stake in this round.

Starting in September, health insurance plans are required to spend at least 80-85% of the premium we pay them on actual health care. Executive bonuses, administration, marketing and profits are limited to the other 15% (in large plans) to 20% (in small plans). This is supposed to incentivize the insurance industry to operate efficiently and to negotiate assertively with health care providers. rather than simply passing on cost increases to consumers.

The $2.5 trillion dollar question is this: how do you define actual health care? The Secretary of Health and Human Services defines this figure, known as the Medical Loss Ratio (MLR), after consulting with the NAIC. And the insurance industry has not been shy.

The insurance industry is asking the NAIC to define the MLR to its advantage, by counting marketing programs, including those with public health themes, as medical expenses, rather than the administrative expenses they clearly are.

The aims of the relevant section of the law (Sec. 2718) - low cost care that offers value to consumers – conflict with the financial imperatives of the health insurance industry, to maximize profits and returns to shareholders, as well as administration, including executive compensation. Proposals by the insurance industry call for calculating the MLR in a way that will frustrate the aims of the law. The MLR is a ratio, with all medical claims (in the numerator), divided by total premiums (in the denominator). A high MLR means that the insurance company is spending a relatively higher share of premium income on its members' medical care and less for administration and profit. A low MLR means that the insurance company is returning less in medical care benefits to its members while retaining more for executives and shareholders; this can also signal a solid opportunity for investors.

To fairly achieve an 85% MLR, a company would have to show that the amount spent on medical claims (in the numerator) is high relative to premiums. But companies can frustrate the intent of the law by defining medical claims to include other expenses, including expenses typically considered part of administration.

The Senate Commerce Committee has documented that, "At least one company, WellPoint, has already ‘reclassified’ more than half a billion dollars of administrative expenses as medical expenses, and a leading industry analyst recently released a report explaining how the new law gives for-profit insurers a powerful new incentive to ‘MLR shift’ their previously identified administrative expenses."

The ACA standard for including expenditures for non-clinical care as a medical expense (that is, in the numerator) is that it must "improve health care quality." It’s hard to imagine this test will be met by the few occasions of insurance companies’ co-sponsoring visible public health events, nor do they justify skewing the MLR in ways that would raise premiums, or requiring the additional administrative effort to determine whether or not it is in itself an administrative or medical expense.

In our letter to the HHS and NAIC, the EQUAL Health Network urged, "The NAIC and HHS should discourage efforts by insurance companies to create and benefit from insubstantial programs that masquerade as clinical treatments. These programs should be properly counted as the administrative expenses that they are. Otherwise, a proliferation of such programs, if regarded as clinical care, would have the exact opposite of the intended effect of the measure: it would cause health care expenditures to balloon, and dilute value for consumers."

What About Their Investments?

The ACA standard applies only to insurers' premium revenues. Yet patients and payors should be equally concerned about how an insurer uses income from its investment of the sums it extracted from previous years’ patient premiums. A more appropriate standard would measure the share of insurers' total revenues devoted to care, as some analysts have urged.

NAIC committees have been working largely outside of the public’s view to draft standards. In our letter, the EQUAL Health Network urged, "It is vital that rate review and other pressures be strong enough to prevent insurers from simply raising premiums in order to offset the limit on their administration/profit share. It will also be important to create an ongoing public process to set and review the initial regulations which are required to begin in September, 2010. Public comment on this system's achievements and limitations will provide assessments of the system's success, and offer the groundwork for constructive and equitable adjustments to the rules."

Why Fight About Liz Fowler? Because We Need to Get Real

Progressives failed to prevail on important policy debates during health care reform, including on the public option. There is no doubt that this was a central victory for the insurance industry. The retreat into magical thinking holds that we can measure the how the industry got its way by measuring campaign contributions, and drawing totally unfounded conclusions about the role of indivduals like Liz Fowler and Max Baucus. The record does not support this simplistic though appealing analysis:

According to the Center for Responsive Politics (opensecrets.org), the largest health insurance PACs gave more money in 2008 to Henry Waxman than to Max Baucus (and it wasn't much, at that). Waxman voted yes on the public option; Baucus voted no.

They gave more to the House, which voted yes on the public option, than to the Senate, which voted no.

PACs:
Wellpoint Inc Contributions to Federal Candidates, 2008

House
Total to Democrats: $152,000
Total to Republicans: $260,100

Senate
Total to Democrats: $48,900
Total to Republicans: $98,500

UnitedHealth Group Contributions to Federal Candidates, 2008

House
Total to Democrats: $138,700
Total to Republicans: $100,500

Senate
Total to Democrats: $71,500
Total to Republicans: $58,300

Henry Waxman: $3,000 - yes on public option

Max Baucus: $1,500 - no on public option

What's my analysis? Over time we'll sort out who did what to whom. It's comforting and titillating to believe that there were a few culprits, and that we've found the main one in Liz. We could note alternatively many more profound truths about how disconnected much of the country is from advocacy at the national level, a pattern that persists, and which we can affect. Retreating into Fox News-style sensationalism is not a substitute for analysis.

New HHS Abortion Restriction Goes Beyond Current Law

Oppose Restrictions for Abortion Access in the Federal Pre-existing Condition Insurance Plans

Post-script:
This time they did not have to do it. There was no Ben Nelson, no Joe Lieberman. No applicable federal law. Not even much to lose. The Obama Administration chose to deny abortion funding in the new high risk pools, due to start next month. These enrollees will be among the most vulnerable women in the US: uninsured, with an existing health condition. The high risk pools were not already subject to the infamous Executive Order banning use of federal funds for abortion through the health insurance exchanges (due to start in 2014). The Executive Order was part of the price for heath reform. Well, ok, something to be fixed down the road. The road seems to have come to our door.

Why did the Administration extend this bad ruling to the high risk pools? Anti-choice groups went viral about the President betraying them if he did not extend to the already unconscionable Executive Oder to the high risk pools. Who thanked him? The Catholic bishops.

We have allowed abortion to become toxic. A procedure experienced by at least a third of women during our lives has been stigmatized. It is not enough to appoint and elect many fine, smart, progressive women – and pro-choice men – to government. They need, and we need, militant mobilized advocacy for reproductive choice and justice.

Keely Monroe, Lisa Kernan Social Justice Fellow; Ellen R. Shaffer, Co-Director; EQUAL Health Network

The Department of Health and Human Services has released an announcement stating that abortion coverage may only be obtained in the new high risk pool plans in cases of rape or incest, or where the life of the woman would be endangered. This wording mirrors the restrictions articulated in the Hyde Amendments to certain appropriations bills. (See below for full text of announcement)

As federal law currently stands, there are no restrictions placed upon federal or state money regarding abortion coverage in the Pre-existing Condition Insurance Plans (PCIP). The PCIPs are temporary insurance pools to provide insurance coverage to those deemed “high risk,” meaning the individual has some kind of pre-existing condition.

Because no law specifically addresses PCIPs and abortion coverage, the HHS statement would create a new sphere of abortion restrictions, undermining women’s reproductive autonomy.

The EQUAL Health Network believes these new restrictions are a response to pressure from anti-choice activist groups, and are unwarranted.

None of the current federal abortion restrictions that are in place apply to the PCIPs. The Hyde Amendment, which restricts abortion coverage to rape or incest, or where the life of the woman is in danger, only applies to funding appropriated through the Departments of Labor and Health and Human Services, including Medicaid. The appropriations for the Federal Employee Health Benefits Plan also restrict abortion coverage, but this clearly does not apply to the PCIPs.

In addition to nonexistent precedent for this action in prior federal law, there is no precedent in the Patient Protection and Affordable Acre Act (PPACA). The Nelson Amendment, adopted in the new law, only applies to plans obtained in the healthcare exchanges, which will not be active until 2014. Lastly, the Executive Order that the President signed regarding abortion coverage through PPACA gives no indication that it was meant to apply to more than the healthcare exchanges and community health centers.

The abortion coverage restrictions placed on the PCIPs is reminiscent of the Stupak Amendment first seen in the House version of PPACA, but later removed. The Stupak restrictions would have forbidden use of any funds, even those procured privately or through states, to provide abortion coverage to individuals participating in the PCIPs.


Objections to the White House and HHS Secretary Kathleen Sebelius.

White House:
Call: 202 456 1111
Email: public@who.eop.gov

Department of Health and Human Services
Call: 877 696 6775
Email: healthinsurance@hhs.gov

References:
Raising Women’s Voices
http://www.raisingwomensvoices.net/raisingwomensvoices-blog/2010/7/15/white-house-hhs-restrict-abortion-coverage-in-high-risk-pool.html#entry8268887

Jessica Arons from the Center of American Progress
http://www.rhrealitycheck.org/blog/2010/07/15/obama-administration-applies-stupak-amendment-high-risk-pools

Text of HHS announcement:
As is the case with FEHB plans currently, and with the Affordable Care Act and the President’s related Executive Order more generally, in Pennsylvania and in all other states abortions will not be covered in the Pre-existing Condition Insurance Plan (PCIB) except in the cases of rape or incest, or where the life of the woman would be endangered.

Our policy is the same for both state and federally-run PCIP programs. We will reiterate this policy in guidance to those running the Pre-existing Condition Insurance Plan at both the state and federal levels. The contracts to operate the Pre-existing Condition Insurance Plan include a requirement to follow all federal laws and guidance.

Immigration is a NAFTA Problem. This is Not Big News

It's too bad the governors worrying that challenging the Arizona law will hurt their chances in the upcoming election can't find the NYT article on February 18, 2007 by Louis Uchitelle, explaining precisely how NAFTA has driven Mexicans out of their own fields and factories and into the U.S.' Years later, all the misguided policy gurus at the Peterson Institiute can say is "oops," (and let's dismantle Social Security while we're at it). Concerned about creating jobs and stemming the deficit? Reverse NAFTA and CAFTA, and invest in education and social programs. We need leaders who will follow the President's example, and exhibit leadership.

Here's the news from the NY Times, over 3 years ago.

February 18, 2007
The Nation
Nafta Should Have Stopped Illegal Immigration, Right?
By LOUIS UCHITELLE
THE North American Free Trade Agreement, enacted by Congress 14 years ago, held out an alluring promise: the agreement would reduce illegal immigration from Mexico. Mexicans, the argument went, would enjoy the prosperity and employment that the trade agreement would undoubtedly generate — and not feel the need to cross the border into the United States.

But today the number of illegal migrants has only continued to rise. Why didn’t Nafta curb this immigration? The answer is complicated, of course. But a major factor lies in the assumptions made in drafting the trade agreement, assumptions about the way governments would behave (that is, rationally) and the way markets would respond (rationally, as well).

Neither happened, yet Nafta remains the model for trade agreements with developing Latin countries, including the Central American Free Trade Agreement, passed by Congress in 2005. Three more Nafta-like agreements are now pending in Congress — with Panama, Columbia and Peru.

When Nafta finally became a reality, on Jan. 1, 1994, American investment flooded into Mexico, mostly to finance factories that manufacture automobiles, appliances, TV sets, apparel and the like. The expectation was that the Mexican government would do its part by investing billions of dollars in roads, schooling, sanitation, housing and other needs to accommodate the new factories as they spread through the country.

It was more than an expectation. Many Mexican officials in the government of President Carlos Salinas de Gortari assured the Clinton administration that the investment would take place, and believed it themselves, said Gary Hufbauer, a senior fellow at the Peter G. Peterson Institute for International Economics in Washington who campaigned for Nafta in the early 1990s.

“It just did not happen,” he said.

Absent that investment, foreign factories congregated in the north, within 300 miles of the American border, where some infrastructure already existed. “Monterrey is quite good,” Mr. Hufbauer said, “but in a lot of other cities the infrastructure is terrible, not even enough running water or electricity in poor neighborhoods. People get temporary jobs, but that is all.”

Meanwhile, Mexican manufacturers, once protected by tariffs on a host of products, were driven out of business as less expensive, higher quality merchandise flowed into the country. Later, China, with its even-cheaper labor, added to the pressure, luring away manufacturers and jobs.

Indeed, despite the influx of foreign-owned factories, total manufacturing employment in Mexico declined to 3.5 million by 2004 from a high of 4.1 million in 2000, according to a calculation of Robert A. Blecker, an American University economist.

As relatively well-paying jobs disappeared, Mexico’s average wage for production workers, already low, fell further behind the average hourly pay of production workers in the United States, and Mexicans responded by migrating.

“The main thing that would have stemmed the flow of people across the border was a rapid increase in wages in Mexico,” said Dani Rodrik, an economist and trade specialist at Harvard’s John F. Kennedy School of Government. “And that certainly has not happened.”

Something similar occurred in agriculture. The assumption was that tens of thousands of farmers who cultivated corn would act “rationally” and continue farming, even as less expensive corn imported from the United States flooded the market. The farmers, it was assumed, would switch to growing strawberries and vegetables — with some help from foreign investment — and then export these crops to the United States. Instead, the farmers exported themselves, partly because the Mexican government decided to reduce tariffs on corn even faster than Nafta required, according to Philip Martin, an agricultural economist at the University of California, Davis.

“We understood that the transition from corn to strawberries would not be smooth,” Professor Martin said. “But we did not think there would be almost no transition.”

A financial crisis also dashed expectations. One expectation was that the Mexican economy, driven by Nafta, would grow rapidly, generating jobs and keeping Mexicans home. The peso crisis of 1994-95, however, provoked a steep recession, and while there was some big growth later, the average annual growth rate over Nafta’s lifetime has been less than 3 percent.

The financial crisis struck just months after Nafta came into existence, undermining, early on, the Mexican government’s ability to spend money on roads, education and other necessary government functions.

“We underestimated Mexico’s deficits in physical and human infrastructure,” said J. Bradford DeLong, an economist at the University of California, Berkeley, and a Treasury official in the Clinton administration.

But, he says, without Nafta the migration would have been even greater. For instance, he says, there would not have been as much investment in the north of the country.

Finally, the steady flow of Mexicans to the United States has produced a momentum of its own — what Jeffrey Passel, a demographer at the Pew Hispanic Institute, calls a “network effect,” in which young Mexicans travel to the United States in growing numbers to join the growing number of family members already here.

The upshot is that Mexican migration to the United States has risen to 500,000 a year from less than 400,000 in the early 1990s, before Nafta, Mr. Passel estimates. Roughly 80 percent to 85 percent of immigrants are here illegally, he says.

The peso crisis, recession, the network effect — their impact may have been beyond anyone’s control, but not the assumptions about how the market and the government would act.

“We have indeed had one disappointment after another on this score,” Mr. Rodrik said, noting that the same assumption about government spending is part and parcel of the agreements, now before Congress, with Columbia, Peru and Panama.

While there is opposition to these proposals, it is mainly from Democrats who want a better safety net for American workers who might be hurt.

The European Union, in contrast, assumes little about government spending on the part of economically weaker nations joining it. The union itself has hugely subsidized the improved services needed by entering countries like Portugal, Spain, Greece and Poland, rather than leave financing to the relatively meager resources of entering countries.

The money is used not only for public investment, Mr. Rodrik noted, but also to subsidize companies setting up operations in the new countries and to support government budgets.

“I am not saying Nafta was a bad agreement,” Mr. Rodrik said. “But more than a trade agreement is required for countries to converge economically. And Nafta has been viewed as a shortcut to convergence without having to do all the other stuff.”

U.S. scores dead last again in healthcare study: Health reform can help

The annual Commonwealth Fund study has found once again that the U.S. stacks up last in five measures of healthcare -- quality, efficiency, access to care, equity and healthy lives, compared with Britain, Canada, Germany, Netherlands, Australia and New Zealand. All these countries spend a fraction on health care compared with the U.S.

The new health reform law could address some of these deficiencies. But the findings are under attack from defenders of the status quo who claim in part that the problem is not in our health care system, but in our poverty rate.

Countries do have to do a number of things right to actually improve health:
1. Cover everyone for ready access to health care, to nip problems before they escalate, and to control chronic conditions with medicines or lifestyle changes.
2. Treat acute cases by well trained teams that have access to information about how to diagnose and treat hospitalized patients safely, and have the financial and organizational incentives to do so.
3. Reduce inequities that aggravate poor health, particularly economic differences between rich and poor, and social discrimination based on race, gender, sexuality, disability, etc. The stress of relative powerlessness takes a physical toll and compounds the lack of resources that can buy healthy circumstances: Violence-free neighborhoods where outdoor exercise is safe, healthy food and time to prepare it, spending on social programs like education and income support, information about sexual and physical health, as well as good health care.
4. Finally, it should be affordable so that everyone can use it, including those who need it most. This usually means authorizing the government to play a major role in negotiating prices with the health care industry.

U.S. is deplorably deficient in these areas of performance. And it doesn't all happen in lower-income states like Mississippi. Access is unquestionably a function in part of coverage and is equally wretched in California (where policy has been held hostage for decades to arcane but effective rules against social spending) as in the south. Preventable hospitalizations for chronic conditions vary by county as well as state and reflect poor access to primary care as well as demographic variables. Patient safety is a function of systems, and adequate staffing. Outside of the VA system, our acute care hospitals have insufficient standards for safe and efficient performance, which compromises patient safety and outcomes. In addition, uncontrolled high prices for overuse of medical technology drives the costs of care in the U.S.

Does all this, or even the promise that it will improve as reforms are implemented, justify cutting payments to disproportionate share (DSH) hospitals, as the new law proposes? Very debatable.

However. Let's grant that the U.S. has a higher percent of poor people than other countries, that people of color are disproportionately poor, and that poorer people in the U.S. tend to be in worse health. Dr. Richard Cooper, for one, suggests that the main reason we are outspending the world on health care is that we are spending more money taking care of our poor who are sick.

To the extent that this is true, it is only possibly the case because we take care of poor people in the worst possible way - not through universal access to timely primary care, but through crisis medicine when even U.S. standards generally would not tolerate outright denials of care.

We should have fewer poor people. Race should no longer be associated with poverty. Relatively lower income should no longer determine the degree of power and control over life circumstances that are in turn associated with longevity and good health (nor for that matter should gender, sexuality, religion, or most demographic factors and lifestyle choices; age of course is the exception.). We should not only continue to document these pernicious trends, we should turn our scholarship and advocacy to redressing them. Furthermore, our health care system can contribute to social equity, and presently does poorly.

An unspoken argument is that poverty and race account not only for our higher health care spending butt also for our worse health outcomes, so it will not help to look to reforms of the health care delivery system for solutions. I don't know whether rates of medical errors or C-sections (or misuse of neonatal intensive care units) are higher in the U.S. than in, say, Finland. I know that they are higher than they should be, that they are not disproportionately prevalent in "poverty ghettos," and that they contribute to unjustifiable costs and poor outcomes. Reforming the health care delivery system should not be an excuse for failing to remedy social inequalities. Pointing to inequalities cannot divert attention from the inefficiencies and remediable deficiencies in our delivery system.

The new health reform law and ongoing HHS initiatives make reasonable efforts to acknowledge and address access, inequalities, and delivery system reforms. They won't be as successful as they could be in a single payer system like Medicare and the VA, but even a single payer system in the U.S. would have to implement the kind of delivery and organizational reforms that are now before us.

Quiz: Why Are Medicines Too Expensive and Cigarettes Too Cheap? Clue #1: The Trans Pacific Partnership (!?) Clue #2: You're Not Authorized to Know

It's 2005. Three southern Pacific countries including oil-rich Bunei get together with Chile and craft a trade agreement (on the edge of your seat yet?). The "P4"do not include standard U.S. trade rules that escalate drug prices and promote smoking. They do include some weak provisions on labor and the environment.

Fast forward to June 2010. No politician in the U.S. wants to run for reelection during a job-busting depression pushing for another free trade agreement. But tobacco giant Philip Morris, U.S.-based drug companies and other corporate interests think it would be just the thing.

So the U.S. invites the "P4"- Brunei Darussalam, Chile, New Zealand and Singapore - to join up in a Trans Pacific Partnership (TPP) with the United States, Australia, Peru and Viet Nam. The second round of talks descends on San Francisco from June 14-18, aiming for a "high-quality, 21st century agreement that builds on the standards of P4, setting it up as a platform for a regional trade agreement." (The first round was in Melbourne in March; next meeting set for Brunei in October.)

With a trade agenda in flux and facing demands for a voice in trade policy from public health, labor, environmentalists and consumers, the U.S. Trade Representative invited the Center for Policy Analysis on Trade and Health (CPATH) and colleague "stakeholders" to come inside. Sort of. Here's what we found.

The week's activities raised questions about whether there may be new opportunities in this Administration for shifts in trade policy, on public health, labor, development and the environment. US staff were consistently available and insisting that the Administration wanted a new era of transparency and consultation. Further they signaled that they wanted better labor standards; they were open to concerns about tobacco control, though they also said that some members of Congress would be ready to put the brakes on.

CPATH organized a press conference on opening day, where SF Supervisor Eric Mar and public health advocates called for removing tobacco from the negotiating table. We got good coverage, as did events organized by labor and environmental groups, and PETA. (The SF Board of Supervisors passed Supv. Mar's related resolution on June 22.)

While stakeholder groups have convened at the site of trade negotiations in the past, this time we were afforded the use of facilities inside the meeting area, and the opportunity to make presentations. Highlights of the week included well-attended presentations to the delegates by CPATH, the AFL-CIO, Public Citizen, IFG and others.

CPATH's presentation to trade delegates took place on the evening before the final day of negotiations. We identified the threats to health and health care posed by uneven and unsustainable development; investor-state rules that empower corporations to bring trade charges against governments; and rules that undermine tobacco controls, access to affordable medicines, and commitments on health care and health-related services. Every delegation attended except for Vietnam. The response was overwhelmingly positive.

At the same time, the usual shroud of secrecy surrounded the details of the talks. Morning stakeholder "briefings" were held by the U.S. chief negotiator Barbara Weisel, which focused broadly on what topics were being discussed, without any information on the content. The delegates were using "bracketed text" as the basis for some of their deliberations, but the U.S. would not make this text available for us to see.

This points to a key difference in access and participation between "stakeholders" and official trade advisers; stakeholders may participate in broad discussions about topics under consideration, whereas official U.S. trade advisers review and comment on U.S. negotiating positions and actual text to be negotiated. CPATH's national Campaign for Public Health Representation has focused on bringing public health advisers onto U.S. trade advisory committees, to balance the overwhelming representation by corporate interests. HR 2293/S 1644 seek to change this imbalance legislatively.

This is the perfect time for a campaign to add Congressional co-sponsors to HR 2293/S 1644, which will in turn add public health and consumers to trade advisory committees.

Practical Guide to Health Care Reform

by Ellen Shaffer and Judy Norsigian

(published in Salon, May 22, 2010: http://www.salon.com/news/opinion/feature/2010/05/22/progressives_practical_healthcare_guide/index.html)

Two months after it became law, many progressives are still simmering over healthcare reform, convinced that it did too much for private insurers and too little for average Americans. The stakes are high: Demagogues on the right are whipping up fear of the new law in hopes of big gains in the November elections — and counting on progressives to stay home.

It would be a tragic mistake for progressives to play into the right's hand like this. While we share the long-term goal of a universal "Medicare for all" system, too many on the left are ignoring the important improvements to access and quality of care that the new law will achieve — and the policy space that it creates to go further in the future. In particular, we believe four major myths have unduly undermined progressive enthusiasm for the new law:

Myth: Progressive activists should ignore or undermine the new law, which will get us to single payer more quickly.

Reality: An effective political movement requires both idealistic foot soldiers and politicians capable of achieving the art of the possible.

For now, this means fighting hard to protect what we’ve gained while also fighting for more on the public option, on abortion and on immigrant inclusion. Building the power to change the system involves winning victories that make a real difference in people’s lives, thus encouraging them to fight on. With healthcare reform, Democrats won a huge victory, fueled by millions of activists who need to get a pat on the back — and then get back to work. Women in particular have important reasons to stay active, including the need to defend new laws that prohibit insurance companies from discriminating against them.

It's also worth remembering that sitting out this fall's elections because of healthcare reform would mean handing control of the country back to the most extremist Republican Party in history.

Continue reading
Myth: The new law won’t save money because the insurance industry is still standing.

Reality: The law begins to address the major drivers of excess healthcare costs: the overuse and high prices of new technologies and drugs, and social and economic inequalities.

The health insurance industry is predatory, dishonest and parasitic. It contributes to unnecessary administrative complexity that drives up costs. We’d be better off without it. However, it has had the unenviable and only faintly achievable remit of negotiating with the rest of the healthcare industry, which is equally inefficient.

The new law gives us a lot to work with. We spend 16 percent of our GDP on healthcare, more than any other industrialized country, but our health outcomes are worse than most of them. Americans use fewer doctor visits and prescription drugs; we just pay much more for every procedure and every prescription. The U.S. trains more specialists, who charge more than primary care clinicians and also drive some of the inappropriate use of acute care. As a result, the U.S. experiences more hospitalizations for chronic illnesses like hypertension and diabetes — conditions that could be prevented and treated at a lower cost and with better results by appropriate primary and preventive care. And maternity care that underutilizes midwifery care frequently results in worse outcomes.

The cost-control torch ultimately needs to pass to the government, the only purchaser with sufficient countervailing power to negotiate effectively with the drug, hospital and medical device industries, and with clinicians. This is what a single-payer system would do, and the new law punts on this part. But it does use the power of Medicare and other government programs to shift toward system changes that control costs by improving quality. These changes include making comparative effectiveness research available and expanding primary care and prevention. It sets a global budget for Medicare, which must be achieved without reducing benefits or increasing costs for beneficiaries.

The other significant driver of our crummy health outcomes is the social and economic inequalities that derive from our Wild West brand of capitalism. Expanding coverage for more affordable healthcare will smooth some of these edges and improve health.

To be clear: Without a national budget of some sort, money saved through these policies will likely be shifted and spent elsewhere in the healthcare system. The pilot programs that the new law creates will provide lessons for how to improve care while reducing costs — valuable information for future reform efforts.

Myth: The insurance industry is still standing because President Obama made a backroom deal.

Reality: The president made a well-publicized deal with the entire healthcare industry, which is still a force to reckon with.

The healthcare debate revealed and reinforced important information about where power resides. Vast swaths of the U.S. are still in the grip of Republican or ConservaDem representation in Congress. Democratic campaign funding schemes bolster this arrangement by siphoning party funds from progressive to Blue Dog candidates. Progressive challengers are sprouting up in primaries around the country in response. (Bill Halter, take a bow.)

The healthcare industry accounts for one-sixth of the U.S. economy and remains enormously powerful. It includes pharmaceuticals, insurance, medical devices, hospitals and other institutions, and some groups of clinicians. Employers know that they pay less for healthcare in other countries with more equitable systems, but keeping healthcare benefits rooted in employment helps to discipline workers, who might otherwise unionize or change jobs. And more than ever, the corporate-owned, corporate-dominated media are a barrier to any meaningful population-wide comprehension of why patients and the public are being fleeced and abused, and what can be done about it.

Among the key players in the debate, on both sides, there just wasn't an appetite for major changes in how the system functions. For instance, some of the stronger unions are firmly ensconced in the same hospitals whose budgets would likely take a haircut under more substantial reform.

Remarkably, the public stuck with the issue, breathing life back into the public option time and again. As late as February, the netroots mobilized 1.2 million contacts to Congress on a single day. But no organization ever had a credible strategy for mobilizing the massive uprisings required to get rid of the insurance industry, nor did any uprising materialize spontaneously.

This left the fulcrum of power for change at the White House. Clearly, the White House calculated early on that it needed to buy all possible peace from the healthcare industry and the U.S. Chamber of Commerce. Doing so would give it time and space to nudge the issue into the public’s view long enough to establish support, before the inevitable attacks flooded the media (which they ultimately did). In the end, the administration and congressional leaders reasonably calculated that the whole enterprise could evaporate at any moment, and they didn't want to gamble on losing any votes.

Obama's reluctance to push for a bolder final law — one that included the public option, abortion and immigrant inclusion — was surprising and disappointing. But in the end, progressives should appreciate that he overcame obstacles that have sunk every reform effort over the past 100 years and managed to sign a bill into law. Now the challenge is to build on the law — to recognize the institutional changes that the law enacts, while pushing for more fundamental reform.

Myth: The country is ready to go for a Medicare-for-all single-payer system, run by the government.

Reality: The country has mixed feelings about the government. While only the public sector can truly create affordable coverage for quality care for everyone, we need to contest with corporations for the policy direction of the state.

Progressive movements in the U.S. have often battled both the government and capital. The New Deal and the Great Society marked a coda in U.S. history, characterized by aggressive activism by the federal government in the interest of the majority of the population. This heritage, perhaps now resuscitated by the Obama administration, was damaged by the “credibility gaps” of the Vietnam era, undermined by the Reagan years, and ravaged by the Bush administration.

Since 1980, the prevailing economic agenda has represented the triumph of "free" markets. The exercise of state power to defend corporate interests has been presented as a benefit to society at large: It preserves our individual freedoms and the "right" to buy an unlimited array of cheap products. In return, we are asked to consent to cuts in taxes, social services, and spending on education and health, under the pretext that it’s good for us to compete for these basic human necessities.

It is possible that within the confines of the law we just passed, a law that is both compromised and a compromise, the Obama administration intends to introduce accountability and responsiveness to the public into its healthcare policymaking. Health and Human Services Secretary Kathleen Sebelius is seeking public comment about her regulatory authority to set insurance rates. She is deciding how to define "unreasonable" rate increases and whether in fact all rates should be regulated. These are important issues that advocates and the public can and should be addressing.

Where to From Here?

With the new law, we have won policy space to further challenge corporate control, including control of the healthcare system. Limits on the insurance industry’s ability to bilk and fleece the public now include: laws; an energized public that wants to see the laws enforced; and an administration that has already taken enforcement action and gives every indication of continuing to do so. We have won major advances in coverage for healthcare and maybe for affordability.

The short- and longer-term benefits of the law could discredit the scare tactics at the center of the Republicans’ campaign to repeal the law within months. The Medicare program will not go broke at a faster rate but will be sounder financially, as will our economy overall. The misgivings expressed even by the likes of Obama supporter Merle Haggard — “I’m afraid we just can’t afford it” — should give way to the preponderance of evidence that the law will in fact reduce the deficit, once it trickles out. Many benefits will begin to roll out immediately, including lower prescription drug costs for seniors and expanded coverage for young adults. Little will change — as promised — for the overwhelming majority of Americans who are covered by self-insured or commercial health plans through large employers.

Progressives need a strategy that combines jiujitsu with direct action, and that distinguishes between necessary compromises and sellouts. We have to reach out to congressional districts currently represented by ConservaDems or Republicans and win over some of the population that straddles the middle of the road. Our culture of political debate should aim to attract and develop supporters who are savvy and well-informed to surmount the formidable obstacles we face. Progressives must move forward together. We still have the same goal: equitable, quality, universal, affordable healthcare.

Ellen R. Shaffer, Ph.D., MPH, is co-director of the Center for Policy Analysis, which sponsors the EQUAL campaign for Equitable, Quality, Universal, Affordable healthcare. Judy Norsigian is the executive director of Our Bodies, Ourselves in Boston.