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Tuesday, October 13, 2009 - 7

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From Page 1
He added that itcis the uninsured
who currently drive up health care
spending by waiting and only seek-
ingmedical attentionwhen a problem
gets critical and very expensive to fix
- allwhile the insured cover the tab.
"When the uninsured in America
need to get health care and can'tepay
for it, then the people with coverage
end up paying for that care through
higher premiums," Davis said.
Besides the possibility that the
government will corner competi-
tion, opponents of the public option
are also concerned that insuring
the high-risk uninsured will drive
up health care costs for everyone
else. But, according to Dean Smith,
senior associate dean of the School
of Public Health, those with pri-
vate insurance are already footing
the bill for those patients.
"Just because they don't have
insurance doesn't mean they don't
" show up at the emergency room,"
Smith said.
Smith is part of a team at the
University that has had firsthand
involvement with the legislation
making its way through Congress.
He works at the University of
Michigan Center for Value-Based
Insurance Design, which helped
develop the concept of value-based
insurance.
The idea, which was included in
the bill, advocates that the value of
the patient's clinical benefit should
be equal to the amount of money
spent. For example, cosmetic sur-
gery, which holds relatively small
value for health, would be more
expensive.
But despite the public option's
potential for immediate cost-effec-
tiveness, some economists and pub-
lic health experts are concerned
with the legislation's possible long-
term economic ramifications.
Many who are critical ofthe new
legislation point to the evolution
of Medicare, which has changed
steadily since its institution in 1965,
and subsequently increased the
government's role in determining
pricing for health care.
"When Medicare first started,
(the government) said Medicare
would not be in the business of
setting hospital prices," Smith
explained.
The most recent addition to
Medicare was Part D, which
allows the government to setcpric-
es for prescription drugs.
Smith said he is concerned the
gov<rnmwnt will execute the same
strategy with the public option,
and that within a few years the
government could be paying med-
ical professionals less.
"With the ability to set prices
paidto providers, the public option
may be lower cost to employ-
ers and employees," said Public
Health Prof. Richard Hirth.
"The downside risk is that if
payments under the public option
approach current Medicare rates,
providers'willingness to participate
maybe jeopardized,"he added.
Smith argued that not only
would this pose a threat to the
nation's economy, but the notion
of lower prices for doctor and hos-
pital visits as well as prescription
drugs could jeopardize the future
advancement of medicine.
"Cross incentives are what
allows the research and develop-
ment and progress," Smith said.
"We're willing to pay more now
as part of our investment toward

what the future will look like."
Though many opponents of the
public option claim it would hurt
* the private sector during an eco-
nomic crisis, Smith said the public
option would decrease national
health care spending by increas-
ing the number of insured and
offering better coverage.
He added that with more than
40 million.new insured custom-
ers, even with lower premiums,
the numbers would even out.
"The threat of the public option
is enough to get insurance compa-
nies to bring prices down," Smith
said. "The nice thing about a public
option is that we save money today."
But despite the increased num-
ber ofinsured,Susan Goold, associ-
ate professor of Internal Medicine,
expressed concern that if the leg-
islation passes, Americans will
someday have to pay higher taxes
rather than higher premiums.
The solution to that problem,
she said, is to "make policy that
says that's not going to happen."
Mark Fendrick, associate pro-
fessor of Health Management and
Policy, who also works at the Val-
ue-Based Insurance Design office,
said the private sector doesn't
adequately serve the public's
needs, which is why so many are
uninsured and under-insured.
"Some certainly would argue
that there are certain times
where government involvement
isn't always a bad thing and
that a plan with the purchasing
power of the government can
clearly enhance competition and
markedly reduce overhead and
other profits that come with the

administration," he said.
Fendrick said that with govern-
ment intervention prices for health
insurance would drop, as many
insurers are currently operating
in near monopolies. According to
a report in The New York Times,
there are nine states where a single
insurer covers 70 percent or more
of residents. In Hawaii, for exam-
ple, one insurance company covers
78 percent of people and in Ala-
bama, it's 83 percent. And inat least
17 other states one insurer covers at
least half the population.
While some point to Medicare
and Medicaid's perceived faults
as potential pitfalls of the public
option, others, like Smith and Davis,
point to the programs as govern-
ment successes to be modeled.
Smith notes that though people
who qualify for Medicare are given
the option to choose between the
government-run plan and private
plans, very few customers go with
the private option.
Davis said Medicare has been
good for the health care economy,
which he said indicates that the
public option wouldn'thurt the pri-
vate insurance sector and the over-
all health care economy.
"Medicare as a government pro-
gram has served as acore source of
revenue for U.S. physicians who see
adults for the last 40-plus years,"
Davis said. "(Medicare) provides
reimbursement for people who
see doctors very often. If you're in
the business of health care, that's
exactly what you want to see."
He added that though Medicare
and Medicaid often end up covering
high-risk patients, there are unin-
sured individuals who are not elder-
ly or poor who still need coverage.
"Doctors want to provide care
to people who can pay," he said.
"And people can pay when they
have coverage."

REGENTS
From Page 1
regents meeting. But unlike nearly
all other documents that are slated
to be discussed at regents meet-
ings, which are almost always
released on the Monday before
a regents meeting, the Univer-
sity will not publicly disclose the
report until the meeting.
University spokesman Rick
Fitzgerald said though the num-
bers are prepared in advance of
Thursday's meeting, traditionally
the University has not released the
figures publicly until the meeting.
TWO NEW CONSTRUCTION
PROJECTS
The regents will also consider
two new construction projects on
campus at the meeting.
The first project will replace
the Central Power Plant's existing
water treatmentsystem. Expected
to cost $2.6 million, the project
will replace water demineralizers
with reverse osmosis units and
will increase system capacity.
The project is expected to lead
to increased energy efficiency at
the power plant, and if approved,
is expected to be finished by the
winter of 2011.
The second project would
update the Administration Servic-
es Building electrical feed, build
a 650-square-foot enclosure and
install a new substation for the
building. If approved, construc-
tion on the project is projected to
be finished fall of 2010. That work
is estimated to cost $2 million.
THREE MORE LAWSUITS ON
LITIGATION REPORT
The regents will receive their

monthly litigation update at the
meeting Thursday. In the last
month, three new lawsuits have
been filed against the University.
According to the litigation
report released yesterday, Andrei
Borisov - a researcher at the
Medical School until last Septem-
ber - has charged the University
with defamation, assault and bat-
tery, false imprisonment, interfer-
ence with a contract, fraud and
malicious prosecution.
Last year, Borisov alleged sci-
entific misconduct, claiming his
work had been plagiarized and
misrepresented in an attempt to
secure grant money from federal
agencies.
As stated in the regents' liti-
gation report, Borisov claims
that he was arrested by Univer-
sity Police following a meeting
with his supervisor and that he
was detained in a jail cell at the
Department of Public Safety on
charges of trespassing and resist-
ing arrest. Borisov was acquitted
of all charges in April of this year.
After the acquittal, Borisov said
he was told he was ineligible for
rehire at the University because of
his prior arrest.
Asked about the ongoing situ-
ation at last month's meeting,
University President Mary Sue
Coleman said she would not com-
ment on the matter.
The other two lawsuits were
brought by students at the Univer-
sity's Dearborn and Flint campus-
es. A lawsuit by former Dearborn
campus student Mary Lee seeks $2
million after she was expelled for
an apparent violation of the Stu-
dent Code of Conduct. The other
suit, being brought by Stephen Tri-
podi, a student at the University's
Flint campus, seeks more than $40
million for alleged gender discrim-
ination by the University.

- - - ------ members to California for the first
SACUA time this April.
From Page 1 At the meeting, Robert Frost,
SACUA member and associate
Palm Beach, Naples and Sara- professor of Information Stud-
sota, Fla. - three of the Univer- ies, agreed with May that faculty
sity's largest alumni and donor members can have a significant
populations. influence on donors. He said he
At these events, faculty gave saw similar results when he gave
academic lectures and met with lectures during Alumni Associa-
nearly 400 alumni to discuss their tion tours last summer.
latest research. "During those tours, it's pretty
The University Office of Devel- clear that faculty doing exciting
opment paid for the travel expens- presentations to alums is a very
es. Though it was costly, May said powerful sort of way to get people
it pays off in the end. to donate," Frost said.
"It costs a bit of money to do Since the Michigan Difference
this - to have 12 faculty members Campaign ended last December,
travel, plane flights and every- the development office has been in
thing else - but we find that all post-campaign mode - focusing
it takes is a couple hundred thou- on thanking the 372,931 donors.
sand dollar gifts and million dol- But fundraising is still going on,
lar gifts, and it stimulates those May told the group.
relationships," he said. "Hopefully, we're goingto raise
Most of the people who come to between $200 and $300 million
the events are large donors who, (this year) forthe traditional kinds
May said, leave with a renewed of needs that we do for people that
sense of philanthropy after hear- haven't been exhausted by the last
ing interesting presentations campaign," he said.
about stem cell research, the In his 29 years in fundraising,
presidential campaign or African May said he has found faculty
American history. members and students to be the
"They have a new appreciation two key factors that encourage
for the quality and caliber of the people to donate and make goals
faculty members that reinforces achievable.
their commitment to the Univer- "In my experience, there are
sity," he said. two things that make the big-
While similar seminars have gest difference in a donor feeling
been organized on campus - more philanthropic...being stimulated
than 50 alumni attended one a ' by exciting, vibrant students and
few weeks ago - the development knowledgeable, articulate facul-
office will take a dozen faculty ty," he said.
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