Grassroot Perspective – March 12, 2003-Maryland May Allow Small Group HRAs; AMA Calls on FTC to Investigate Insurance Industry Concentration; NY Times – Bush Reinventing Medicare, Medicaid; Fortune – Upcoming Labor Negotiations to Focus on Health Benefits; Consumerism Means More Than Cost-Shifting; The Phenomenon of Globalization

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“Dick Rowland Image”

”Shoots (News, Views and Quotes)”


– Maryland May Allow Small Group HRAs

By Greg Scandlen

On Feb. 12, I testified on Health Reimbursement Arrangements before the Maryland Senate Finance Committee. Maryland is unique in having a “Health Care Access Commission” that defines what benefits will be allowed to be offered in the small group market. The powers-that-be in Maryland (including the couple of major insurers that control most of the market) are quite happy with this arrangement. Publicly they argue that having standardized benefit plans is good for consumers because it makes it easier to comparison shop between plans. In fact, it impedes competition and innovation, so the major players can continue dominating the market without having to work very hard. A few years ago the Commission decided to allow MSAs to be sold in Maryland, but added so many bells and whistles to the already complicated federal rules, that few if any have ever been sold in the state. The legislation I was testifying on would have required the Commission to allow small employers to set up Health Reimbursement Arrangements. There were quite a few misconceptions among the Senators. They seemed to assume that an
HRA must involve a high-deductible insurance plan. I tried to clarify
the issue in my testimony.


– AMA Calls on FTC to Investigate Insurance Industry Concentration

American Medical News ran an editorial calling for the Federal Trade
Commission to investigate this sort of market domination. It cites a
recent AMA report on “Competition in Health Insurance” that found as few as two plans hold 90 percent of the market in places like Dayton, OH and Pensacola, FL, and 61 out of 70 metropolitan areas are “highly concentrated.” It says that in 20 of the markets, a single plan held at least half of the HMO/PPO enrollment and that barriers to entry for new competitors are daunting. The editorial concludes, “The FTC needs to investigate, and act forcefully as needed, when a managed-care machine starts pushing people around.”


– NY Times – Bush Reinventing Medicare, Medicaid

This kind of market domination makes it easy for the single payer crowd to argue for governmental programs. If there is no meaningful
competition, what is lost when a government agency replaces a private monopoly? That is precisely the nut the Bush administration is trying to crack in developing Medicare and Medicaid reform proposals, as well as Social Security, according to Robin Toner and Robert Pear in the New York Times. They write, “The administration’s vision for Medicare and Social Security moves away from the notion that everyone should be in the same government-managed system with the same benefits. It promises individuals more choices.” The ability of individuals to make choices is a fundamental dividing line, according to the article. It quotes Former SSA Commissioner Robert Ball as saying, “(The Bush) proposals are a major departure from the principles that have governed the social insurance system from the beginning.” These principles include “that all working Americans pay into the same Medicare system; that the healthy and the sick, the rich and the poor, end up in the same program; and that all have the same core benefits when they retire.”


– Fortune – Upcoming Labor Negotiations to Focus on Health Benefits

Writing in Fortune Magazine, David Stires says, “You don’t need a
crystal ball to see that that is a fight waiting to happen.” He is
referring to the coming round of labor negotiations where health care
will be at the very tippy-top of the agenda. The tone has been set by
the two-day walk-out by General Electric workers and the earlier 44-day strike at Hershey Foods. The GE workers were resisting adding from $200 – $400 per year in out-of-pocket costs, and the Hershey workers ended up taking lower pay increases to offset added health care costs. The article says that corporations, especially in manufacturing, are reaching a breaking point. While prices went up in the services industry by 3.2 percent in December (over the year before), in manufacturing prices actually dropped by 1.5 percent. Meanwhile health-care costs are soaring, rising by 44 percent since 1999 at GE. SBC Communications is even worse off
with health costs jumping by almost 50 percent since 1999, for a total outlay of $2.5 billion for 343,000 active and retired employees — $7,829 per person. The Big Three automakers have total health care liabilities of $92 billion — 50 percent greater than their combined market capitalization of $66 billion. Though strikes are likely, they could also kill off the economic recovery. The article says the West Coast dock strike last year “was the single biggest influence on the fourth quarter’s sharp drop in national output” and cost the economy $2 billion a day. There isn’t much optimism in the article. While GE’s senior vice president of human resources is quoted as saying the company was passing on just 10 percent of its health-care increases, the president of the union, Edward Fire says, “We’ll fight to the bitter end,” if the company tries to get workers to pay more of their health care spending.


– Consumerism Means More Than Cost-Shifting

Michael Prince writes in Business Insurance that, “Cost-shifting is only a temporary solution.” What is really needed is, “a fundamental change in employees health-care mindset.” The article quotes Jack Mollen of EMC Corp. as saying, “We can never solve the 15 percent compounded growth problem without focusing on the long term.” The article goes on to say that a successful long term approach “involves instilling a consumer mentality,” including cost awareness and better information. Keith Peden of Raytheon said 3,000 of their employees have signed up for Definity’s consumer-driven plan. He reports there has been no adverse selection. At Coors Brewing, 14 percent of employees signed up for the plan when it was first offered. But Mr. Mollen added that consumerism does not have to mean adding a consumer-driven plan. “Consumerism is getting the employee to
be an effective decision-maker. It’s about making the right choices.”


Above articles are quoted from Galen Institute Consumer Choice Matters #5 Feb. 25, 2003

”Roots (Food for Thoughts)”

– The Phenomenon of Globalization
By Rev. Robert A. Sirico

Globalization has emerged as a new paradigm for describing the way in which the human family can relate to each other. Globalization is the increased interconnectedness of all peoples on the face of the earth. We can now more easily, rapidly, and cheaply move, and thus share, ourselves, our consumer goods, our material and human capital, and the values that comprise our respective cultures. Our ever-increasing ability to share our God-given and complementary gifts with one another holds with it the possibilities of enlarging the scope of our communion and solidarity.

The technological revolution and social dimensions of modernity have made this increased interconnectedness possible. Advancements in technology have made quick and radical improvements in communication and transportation capabilities. The social dimension of modernity contributes the assertion that because all men and women are equally valuable, they should be free from unfulfilling constraints imposed by other persons or the state. These technological capacities and the freedom to develop and use them promise to enhance the potential for integral human development by promoting authentic development in at least the areas of economics, politics, and culture. In economics, globalization broadens the free market to include many nations to which it had not previously reached. Improvement in the political arena is recognized in a newfound permeability of borders that allows for an exchange of information that can undermine the power of abusive regimes.
The effects of globalization on culture-society’s shared idea of human
good and morality-can also be positive in that never in history have
these societal ideas and cultural characteristics been so easy to share.

Resulting from human sinfulness, however, our increasing
interconnectedness also holds great potential for offenses against human dignity. Greater economic development means a greater need for additional capital. Businesses or states can raise capital through
borrowing or “foreign direct investment.” Corruption, incompetence, or circumstance may cause business or state revenues to be lower than expected and result in a debt repayment crisis that may lead to
austerity measures that disproportionately benefit creditors and hurt
the poor. “Foreign direct investment” may promote conditions that allow for dispersed, non-localized ownership and management of the market franchise. Globalization also poses immense long-term challenges for culture. Because widespread skepticism now exists about whether universal and timeless truths exist, cultural freedom can be abused. The weak who seem to have little to offer culture -the poor, the unborn, the elderly, and the disabled-become a burden to be marginalized, limited, and even destroyed instead of being recognized as persons worthy of respect and solidarity.

So what can believers offer to the globalization process? One of the
great resources Christianity brings to the mission of ensuring that
globalization serves the human person is its universality. We can be
more fully extended throughout the entire world, allowing its truth to be brought more completely to the human family. That truth and the community around it embolden us to proclaim unequivocally the absolute dignity of all human persons. The challenge before us now is to use our information and network effectively to develop apologetics that will positively influence the carriers of today’s culture.

The Rev. Robert A. Sirico is a Roman Catholic priest and the president
of the Acton Institute.

Above article is quoted from the Acton Institute Religion & Liberty

”Evergreen (Today’s Quotes)”

“Big Government is for little people. The better the people, the less
necessity there is for government. This simple, vicarious relationship
between the citizen and his government is obscured today in the fog of our confused political councils.” — Clarence Manion

“We must always remember that our Constitution was designed to protect the freedom of the smallest possible minority — one person — against the demands of the greatest possible majority — all other persons combined.” — Ben Moreell

“Champion the right to be yourself. Dare
own pattern. Live your own life, and follow your own star.” — Lin Yutang

”’Edited by Richard O. Rowland, president of Grassroot Institute of Hawaii. He can be reached at (808) 487-4959 or by email at:”’ ”’For more information, see its Web site at:”’