THE BLOG
09/10/2009 05:12 am ET Updated May 25, 2011

Occam's Razor Can Cut Down the Health Care Lobbyists

Private health-insurance and pharmaceutical industry lobbyists are threatening the health and stability of America. Some argue that this is equivalent to crimes against humanity. Perhaps these lobbyists should be sent to prison, not the Jack Abramoffs of the world, whose transgressions were comparatively trivial.

What frightens these lobbyists, along with their powerful clients, is something called "single-payer," also known as national health insurance. The easy way to bring about national health insurance would be to have Medicare eligibility -- now available only to the disabled and those 65 years of age and older -- begin at birth.

How Afraid?

On May 5, during a health-care reform hearing of the Senate Finance Committee, Dr. Margaret Flowers, a pediatrician from Baltimore, stood up and asked the chairman why he wasn't considering single-payer. She was followed by Dr. Carol Paris, who asked why "single-payer (wasn't being put) on the table." Three other physicians and seven nurses also stood and posed the same question.

Chairman Sen. Max Baucus (D-Mont) promptly had all of them arrested for "disruption of Congress."[1] Baucus, one of the leading recipients of campaign contributions from the health insurance and pharmaceutical industry, was loath to permit any discussion of single-payer insurance, even though many doctors -- whose incomes would probably be adversely affected -- support it.

A professional medical website, Cyberounds.com, recently conducted a poll of health professionals. Sixty-four percent (64%) supported the single-payer solution, which would be a landslide in an election. And yet Sen. Baucus, most of members of Congress, and even President Obama refuse to even talk about it.

Lobbyists are frantically gaming the political system -- many wearing sheep's clothing -- in order to kill meaningful comprehensive health-care reform. Their strategy is to make the legislation so complex and inscrutable -- neutering it with watered-down provisions and loopholes -- that "health-care reform" will be anything but. This will allow their clients to continue raking in their substantial profits. In 2008, when many average Americans saw their paychecks shrink or their jobs disappear, the top ten executives of America's leading private health insurers -- WellPoint, United Health Group, Aetna and Cigna -- lavished themselves with an average $4.43 million in annual compensation. That's more than ten times President Obama's salary.

To ensure their sumptuous survival, health-insurance and pharmaceutical companies have poured tens of millions into the campaign coffers and camped out on the doorsteps of lawmakers, especially those likely to be involved in regulating their industry. Even Nancy-Ann DeParle, President Obama's health-reform advisor, earned more than $6 million over the past few years serving on the boards of major health-care corporations, some of which have been accused of fraud, mismanagement and regulatory violations...not to mention Sen. Baucus, who has received in the last three years a total of $63,350 from Blue Cross/Blue Shield; $45,250 from Aetna, and $46,750 from AIG.

According to OpenSecrets.org, the health-care industry in 2008 feathered the nests of congressional candidates and their lobbyists with $167 million $484 million, respectively. The feathering is expected to far surpass those sums in 2009.

Recently, House Speaker Nancy Pelosi (D-Ca) declared that the health insurance and pharmaceutical industries and their lobbyists are the "villains" and that they have devised a "shock-and-awe carpet bombing" campaign to "perpetuate the status quo" for the sake of preserving their profits.

The entrenched self interest (and eventual self-destructiveness) of the health-care industry is staggering, especially in the face of the ever mounting astronomical costs of health care. These costs are ballooning the federal deficit, (which every year is added to the inconceivably gargantuan national debt), which will soon make all of us insolvent. Businesses are already being forced to cut their employees' health-care benefits or to offer catastrophic health plans (in which the employee pays a $3000-$5000 annual deductible before health insurance kicks in, while still paying enormous premiums). Remember, it was in large part the health-care costs of their workers, not competition from foreign automakers, which bankrupted General Motors and Chrysler.

Slowing the Runaway Cost of Heath Care
Peter Orszag, President Obama's budget director, has been wrestling with the "how-to-bend-down-the-cost-curve" gorilla of health care. Of course, "respected analysts" debate the potential savings or the reckless cost increases of every one of the myriad proposals, mind-boggling in complexity.[2] Each prediction is akin to that of exceptionally authoritative professional money managers who project that the Dow Jones will crack 40,000, plunge below 3,000, or settle somewhere in between.

Occam's Razor[3]
According to Occam's Razor, simple is better. And simple would be to make Medicare universal, instantly providing health insurance to the 46 million Americans currently without it. Obviously, it wouldn't be perfect. Nothing is. Endless squabbling and tinkering would ensue. But the result would be that private health insurance would probably go the way of the horse and buggy, the pay phone, and the newspaper.[4]

Medicare, which covers the elderly and hence the sickest population, does a pretty good job.[5] Its administrative costs are around 2 percent. Private health-insurance administrative costs -- including advertising and executive pay -- approach 20 percent.

According to Nobel Prize-winning economist Paul Krugman, consolidating all of the various private health-insurance administrations into a single universal Medicare administration would save about $2 trillion over ten years, which is nearly 20 percent of the current national debt. The cost of this comprehensive Medicare system would be defrayed by increasing the social-security tax, which would end up costing the average employer and employee less than what they are currently spending on private health-insurance premiums.

Dr. Paris -- one of the physicians that Sen. Baucus had arrested -- said that doctors and patients would no longer have to waste time dealing with multiple insurers on billing matters, and patients would no longer have to worry about which doctor was in network. "You can go to any doctor you want," she said. "It's the private insurance industry where you can't go to any place you want." Unfortunately for doctors and drug companies, they would have to charge a bit less, a necessary ingredient in the new universal health-care recipe.

And let's not forget that most economically advanced countries in the world have a single-payer system: France, Sweden, Holland, Japan, Canada, and Great Britain. Even the impoverished and "evil" Cuba -- whose literacy rate is higher and whose mortality-at-birth rate is lower than those of the United States -- has universal health care.

It's true that the Canadian and British universal health care systems are often criticized for long wait times for specialists. However, Jerry Steiman, an international transportation broker from Montreal, Canada, said that his country's health-care system "is now getting back on track. It works well, provided it's funded properly. Otherwise doctors and nurses will flee to the U.S. where they are better paid, which means fewer of them and therefore longer waits."

That said, the universal health programs in Belgium and the Scandinavian countries apparently work quite well and perhaps the United States should try to model its system after theirs. "I can't think of a single person (in Belgium) who is not pleased with our (health-care) system," said Rik D'hiet from Aalst, Belgium, who was visiting the United States with his wife and two children last week. "Even people from Holland come to Belgium because the wait (to see a specialist) is so short."

Health care is a right, as fundamental as drinking clean water and breathing clean air. If Jack Abramoff was sent to prison for six years for a vaguely defined crime, called "private honest-services fraud," then those health-insurance and pharmaceutical lobbyists who are trying to rob us of our fundamental right to universal health care ought to be marched off to prison for life.

Gary S. Chafetz is the author of the recently published book, The Perfect Villain: John McCain and the Demonization of Lobbyist Jack Abramoff.

[1] The charges were later dropped.
[2] (a) Everyone seems to agree that implementing electronic medical records would eventually save money and improve patient care, but the start-up costs would be daunting.
(b) Analyzing which tests and procedures are wasteful and which ones do not improve health would be equally daunting. Efforts to research, evaluate, and gauge the comparative benefits of certain medicines and procedures--the so-called "cookbook medicine"--will end up in endless shouting matches.
(c) Taxing employer-paid health benefits might be fair and logical and would help lower the deficit, but it would generate a firestorm and backlash against any politician who voted for it.
[3] William of Occam (1284-1347), an English philosopher and theologian, wrote that entities must not be multiplied beyond what is necessary. This principle is known as Occam's Razor. In other words, a problem should be stated in its basic, simplest, and clearest terms. The simplest model is more likely to be the correct one.
[4] Many unemployed private health-care workers could be re-hired by the newly expanded Medicare administration. Only the exorbitantly paid executives would be out of work.
[5] Private insurers also do a good job, but their populations are younger and healthier, and those with pre-existing conditions are often rejected.