That Didn't Take Long: Insurance Industry Breaks Promise To President Obama

Just four days after standing next to President Obama and declaring their commitment to control health care costs to the tune of $2 trillion over 10 years, the insurance industry, drug and medical device makers, and hospital groups are backing off their promise:

Hospitals and insurance companies said Thursday that President Obama had substantially overstated their promise earlier this week to reduce the growth of health spending.

Mr. Obama invited health industry leaders to the White House on Monday to trumpet their cost-control commitments. But three days later, confusion swirled in Washington as the companies' trade associations raced to tamp down angst among members around the country.

...

Health care leaders who attended the meeting have a different interpretation. They say they agreed to slow health spending in a more gradual way and did not pledge specific year-by-year cuts.

"There's been a lot of misunderstanding that has caused a lot of consternation among our members," said Richard J. Umbdenstock, the president of the American Hospital Association. "I've spent the better part of the last three days trying to deal with it."

First, these groups are showing their true, dishonest colors. AHIP, the main insurance industry lobby group, sent out this press release from their fake grassroots campaign after the announcement:

By reducing the rate of growth in health care spending by 1.5% each year, the nation can achieve a savings of $2 trillion over the next decade. This effort will have a direct effect on the budgets of individuals and families and will also go a long way in ensuring that every American have access to affordable, high-quality health care. Stay tuned for more information on this important initiative in the weeks and months ahead.

Sounds like they made a commitment, right? Well, that commitment is now pretty soft (emphasis on the softness added):

He and other health care executives said they had agreed to squeeze health spending so the annual rate of growth would eventually be 1.5 percentage points lower.

...

One of the lobbyists, Karen M. Ignagni, president of America's Health Insurance Plans, said the savings would "ramp up" gradually as the growth of health spending slowed.

David H. Nexon, senior executive vice president of the Advanced Medical Technology Association, a trade group for makers of medical devices, said "there was no specific understanding" of when the lower growth rate would be achieved.

"It's a target over a 10-year period," Mr. Nexon said.

So we've gone from commitments to eventualities, targets, and non-specific understandings.

This just proves what the American people have known all along: You can't trust the insurance industry with health care reform.

Why have these commitments gone soft? It's about profits. Every dollar of health care "waste" in the system, every dollar that goes somewhere other than to your health, that's a dollar more in the pockets of a rich hospital administrator or insurance industry CEO. For health care costs to come down, somebody's profits have to come down as well.

Now, in a good reform plan, every player in the system would be squeezed a little bit to help alleviate the crushing cost on the patient. Doctors, hospitals, and other providers would charge a bit less for care and be paid based on quality, not quantity. Drug and medical device makers would be forced to sell their products at a discount in volume. And the insurance industry would trim overhead and profits to keep costs in line. Then, employers and government would pitch in to cover all individuals. It would be a system of shared responsibility.

Clearly, the insurance industry, hospitals, and drug makers aren't interested in shared responsibility. They don't want to be squeezed a bit. The want to protect their profits so much that they show their two-faced nature: Standing next to the President of the United States, promising responsibility, and then backpeddling as fast as they can four days later.

That's why we need to make them do it. Voluntary agreements are not enough. We need regulation and we need real cost control, and that means a public health insurance option that will force these awful companies to earn their keep through stiff competition, something they've avoided for far too long.

They're liars. They're cheats. They're greedy. They're untrustworthy. They cannot be trusted to come up with a health care reform plan that works for you and me. We must make them do it.

(also posted at the NOW! blog)

Comments

[aeremetc]

A doctor speaks out on the Obama marriage with the insurance guys. His perspective is MD Whistle Blower blog very interesting i

Obama's Health Care Reform: An indecent proposal

In the White House marriage we watched last Monday between Obama and a coalition of health care groups, the sniping started barely after they left the chapel. Wise bloggers had predicted this outcome, but I admit that I was mildly shocked at the speed that the bride pursued an annulment. What went wrong? Did that prankster Cupid dip his arrows into a vat of single-payer elixir poisoning the affair? This is not a simple example of wedding day ‘cold feet’. It’s more like frostbite.

http://mdwhistleblower.blogspot.com/

[Behzad Mohit]

It is not surprising. The for-profit health care segment only wants to expand their profit margin through government-mandated universal health care insurance. The taxpayer would foot the bill. Doesn’t that remind you of the bailout of the banker bandits? This approach seems to meet the greedy bottom line of the for-profit segment. It is really disappointing that President Obama has caved in to this obvious decoy for further burdening us with a failing health care system that provides poor quality service at twice the cost per capita of other developed countries. (See my open letter to the President, published on the Huffington Post here: http://www.huffingtonpost.com/dr-behzad-mohit/the-promise-of-universal_b_203159.html.)

Unless people rally behind a nonprofit, private, people-funded, people-managed, single payer insurance agency that avoids the sigma and inefficiencies of government-run “socialized” medicine, our health will be sold to profiteers and our economy will sink. (See my Huffington Post article at: http://www.huffingtonpost.com/dr-behzad-mohit/universal-health-care-can_b_187484.html).

For an in-depth look at a nonprofit, private, single payer system you may do a free download of the book, Universal Health Care System for the United States of America, at http://uhc.helpeachother.com/. It is a must read on the issue.

Behzad Mohit, M.D.

[Cryostatic]

I doubt anyone here would take it very kindly if the government came to your place of business, and told you that you were going to have to take a pay cut, so that your company's products could be purchased by people who couldn't otherwise afford them.

It's all well and good to spout off these ideological rants saying that other people should make less for what they do, but reality begs that we find another option.

[UKOH]

This is not an idelogical rant. It is based on an idea that the USA, alone among developed countries, does not have a health care system that covers eveybody, stops people going bankrupt because of a health issue and even fails to prevent people from death due to inability to pay.

Look I'm European and I am used to health care having a few problems, but basically working for the benefti of all.

The simple principe is that making a profit out of people's bad health is unacceptable. Most of us would call it un-American. If that's "an ideological rant" then so be it.

To use your "product" analogy (even though it is not a good one because health care should be a basic right not a means of making a fast buck), if use of a product is killing people, then the makers of that product need to be regulated to avoid the risk to the public. Ever heard of the tobacco industry?

[ChelseaC]

I agree.
Indeed, why should the government dictate prices/rules to private health insurance companies?
I think the health insurance companies should charge whatever they want, let them exclude anyone they want.
The government's role should be to offer We The People a PUBLIC OPTION PLAN--Medicare for ALL ( bill HR676) and let us decide what we want--Medicare or to support a private for profit system.

Allow the insurance companies to do what they do best--profit off the ill, deny coverage and rip people off--after all we're a free country.
If we had the Medicare option, we could just leave the insurance companies behind(if we chose to)--it's the ultimate form of competition. If a public option were available, I suspect the health insurance industry would go belly up because of the mass exodus of people will go to the public option---or in order for the private insurance company to survive ( they would have to downsize considerably) , they could transition to supplemental insurance and they could also go into the home, personal property, fire,flood, auto, disability, malpractice,travel, pet health insurance business,etc.

Don't bother demanding these insurance companies to change their ways-- leopards do not change their spots--instead we should have OUR OWN PLAN and leave them in the dust.
It's time for the people's plan!

Sign Dr. Howard Dean's public health care option petition:
http://www.standwithdrdean.com/credo

Also, to find out more about HR-676 see:

www.pnhp.org

[ChelseaC]

You're right in a way. Why have the government dictate prices to the private health insurance industry.
Let's just have a public option and let the people decide what they want--gov. funded health care, or making a private insurance company rich by our illnesses.
If a public option were put forth, there would be a mass exodus from the private to public system.
I think the best plan is Medicare for all--who want it.
If you want a private room, buy supplemental insurance.

[tdbach]

Chelsea, we don't make insurance companies rich by being sick, we make them rich by being well, but being afraid we might get sick.

The problem with the public option alone, is that private insurers will offer policies to only the healthiest demographi­cs/medical histories at reduced rates, leaving the sickest people to the public market, so that the public system, even if it's runmuch more efficiently, can't compete on price.

You' have to have laws prohibiting private insurers from withholding coverage based on prior conditions, age, or occupation, etc.

[Alford Vassall]

The illusion here is that the government is responsible for the state of health. Health is really a state of being chosen by the individual based on their behavior. When it is funded by someone else the government or the employer, the individual makes choices that he/she is not held ultimatley responsible for. We collectively pay for each other's bad behavior. After we make bad choices to produce poor results we then hold the insurance companies responsible for what they charge to take care of our poor choices. The cost we generate is never our responsibility but that of the provider, the insurance company, the employer, often disparaged for not sponsoring generous enough plans. It is always someone's responsibility other than our own. Indeed private insurance companies don't get rich because of our illnesses, but we simply make poor health choices for which we have to pay. Indeed ,if the money came directly from our pockets instead of through a third party we would make better choices. For example the dentition of the average Iraqui person, in a state of war and impoverishment, is far superior to the average American. Any idea why? Poor decision-making. For more see " The State of Health" newsletter http://www.thehealingattribute.com/index-inside.php/archives-of-newsletters/

[Rmath]

That's okay..ther­e's another agenda that won't take ten years. Crush the mega-insurance and mega-health industry robber barons and pass legislation that teaches them a lesson they'll never forget.

[durnik123]

What about the lawyers? Medical malpractice lawsuits are bankrupting the industry. I some places the malpractice insurance is so high small town doctors cannot afford to keep their practice open.

Want to bring down heathcare costs? Push for Tort Reform and put an end to frivolous lawsuits.

[ChelseaC]

That's a myth. malpractice is a tiny part of the budget--that's Repug Kool-Aide speak, don't buy into it. Even CNN admitted that is not an issue impacting the cost of health care.

[HotInAZ]

The direct cost of malpractice is not the whole issue. There is the issue of "defensive medicine." Because of the THREAT of a lawsuit, up to 25% of the tests that doctors order are not medically necessary, but rather are ordered so that the doctor can defend her/himself in the event of a lawsuit. THAT is the burden of malpractice. Is it the whole problem with our system? No. Is it the biggest part of the problem? No. But is it a real and important part of the problem? Yes.

[chonus]

Single. Payer.

Problem solved.

[HotInAZ]

With great respect, I disagree. Single payer - DIFFERENT problem. Since when does "one size fits all" really work in the real world? And why would it work in healthcare? There really are different needs and priorities in healthcare. No single payer or single plan can accommodate those needs - but a combination might.

Consider a system (like in Switzerland) where common and chronic health problems (like diabetes, cancer, kidney failure) are covered by a government plan, but other problems are covered by INDIVIDUAL private insurance. This offers a safety net that avoids bankruptcy for the seriously ill, but preserves CHOICE as well. You would have a wide range in coverage options and costs for your additional insurance (that would cover things like sports injuries in the young, and knee replacements in the elderly), and it would be AFFORDABLE. You would control how those dollars are spent and have the freedom to select a plan that fits you.

The surgeon I work for operated on 3 patients from Canada WHO PAID CASH in the last year because their system because their system did forced them to wait 2 years to see a surgeon and another 18 months after that for surgery. They would not have paid their own hard-earned cash if they had another choice. We should preserve that choice here.

[uvymopka]

Obama is the CEO-n-chie­f.....is he completly incompetent?

[ChelseaC]

POUTS Obama,
You can't trust these insurance companies. You gave them the benefit of the doubt, now it's the People's turn.
Please support a public health care OPTION. Give us Americans the choice-- to keep private insurance for those who want it, or a public option for those of us who are fed up with the current system.

Those of you who want a public option, please sign Dr. Howard Dean's petition:
http://www.standwithdrdean.com/credo

This will help the economy and take the burden off of the businesses both large and small.

[PatrickforO]

I did it. Nothing can convince me a single payer system, not tied to work, should not be a centerpiece of health care reform. Let's squeeze the heck out of the insurance companies, drug companies and lawyers. That's a lot better than having 16% of Americans in what is arguably the greatest civilization the world has ever known NOT insured!

[American50]

ensuring that every American have access to affordable, high-quality health care

Stop the liberal agenda

HealthCare isnt a God given Right!!!!!!!!!
Work and Pay for Your Own Policy....­..........­Period

[Hawaii5-0]

Maybe not a god given right, but basic Econ101 says, the govt must either produce guns of butter. We have a Defense budget that is more than $650B. Cost overruns on weapons systems each year is over $300B. Given the choice btwn using that money to produce a humongous military machine or providing healthcare for everyone, I choose healthcare. Most Americans are paying more than 10% of their income to healthcare already, and that is with more than 45M uninsured.

As Einstein said, "one cannot simultaneously prepare for war and peace." We are a country constantly preparing for war. We are in two wars now. We either give up the claim to be a country that wants to spread peace, or we give up wars as a solution.

[YeWight]

I beg to differ - I think that your perspective on this issue is skewed: America would not be what it is without a military-industrial complex. It has been this way for at least half a century if not longer. This variety of capitalism would not survive with the type of social justice you are advocating. We live in a combination of profit based and global domination system.

Unfortunately for social justice advocates, this type of system still rules. That is why most of the world keeps knocking at our borders, not those of Uzbekistan, Bolivia or Switzerland. You can't have it all. It IS butter OR guns. If you want both (or more butter) move to Canada or Sweden.

[ChelseaC]

American 50,
I just wrote a nasty post to you because I can't believe how callous you sound.I am angry but I thought it might be better to explain things to you rather than to lash out.

Are you not aware that hard working people do lose health insurance or have health insurance but become chronically ill through no fault of their own and premiums get jack up so high they can't afford it any more?
I worked hard, I am a college graduate, but I got sick. I had/have insurance but that didn't solve the problems of mounting medical debt and fighting for coverage.E­very day is a fight.
Do you really believe if you just "work hard" everything will be ok? I used to believe that too until I got sick.
Please think about what you're saying, and think about it again--for you don't know what can happen to you, your health, and your insurance policy when you need it the most.Good hard working people are in battle with insurance companies--why? So they can turn a profit?

I hope you don't end up sick. Then you will learn the hard way. Or will you?

[SlashPrower]

Yeah! Let's let the poor people die in the streets! U.S.A.! U.S.A!

[ChelseaC]

Slash Prower,
You make a good point but this is not just about the poor--it's about the middle class, business owners big and small who are burdened by our current health care system.
The auto industry --one of their problems among others is the health insurance they must provide to employees and it's been a huge financial strain.
It's not just the auto industry, hospitals lose money having to hire staff to deal with all the different insurance companies instead of hiring more nurses, etc to deliver health care.

I have a friend who owns a restaurant, who needs more staff but to hire full time employees means having to pay for health benefits--if he did this, it would take down his business. If he did not have to provide health insurance, he could hire another couple of people without cutting his profits that he needs to compete in this economy.
Single payer is business friendly (unless you're in the health insurance business).


Make no mistake, health care reform is not just a poor people issue. Many middle class people ended up in bankruptcy due to medical bills--any many were insured!

See the documentary Sicko. Moore's documentary is mainly based on INSURED middle class people--not the uninsured poor.
Yes, the poor are very important in this health care debate, but it goes so much further than that.
It's ALL of us.

[artgurrl]

Put these corporations out of business so that our tax dollars work for the people, not the multi billion dollar insurance industry. Get corporations off the backs of the American people. We don't need middle men to pay for our health care. We need our tax dollars to do that. That will effectively drive down the cost of health care immediately.

[artgurrl]

Did anyone naively think that the Insurance corporations and the big pharmas were going to go along with any Obama plan to cut costs in healthcare? The only misunderstanding here that is going on is the misunderstanding by the Insurance and pharma industries on how to tell the truth and how to broker an honest deal. I really hope no one is stupid enough to fall for their b.s.

[ichan]

The Health Industry is basically a monopoly business. Sickness is like Death and Taxes, so these freaking executives are basically shooting fish in a barrel in terms of making money. When they want to make more money they just raise prices...

Seriously what in the world do these companies really do? They collect money and pay bills. They don't provide the actual health service. IMHO paying bills isn't high value. Put them in their place with regulation and there you go Affordable Health Care.

Same goes for Wall Street. The companies that create earnings, and regulators(when they are actually regulating) that make it easy for folks to make sound decisions has value just working the transaction that's clerking. You don't get top dollar for that.

[textynn]

How about I create a Grocery Insurance Company and I charge everyone a premium to go to a grocery store and I decide what people can eat and how much food they can have.

Dear Mrs. Smith, American Grocery Insurance Incorporated must decline your request for extra milk. Your plan does not cover this. However, if you would like to buy our premium plan you can get more milk if you qualify...

This is no different. The Medical Insurance Complex is a useless toll booth between us and our health care that no one needs or wants. How long do we have to go on being fleeced like this before we rid ourselves of this albatross???

[HotInAZ]

We should rid ourselves of this albatross! But let's use your own analogy.

Imagine we have single payer healthcare with no requirement for patient responsibility.

Remember, we currently PAY for what we take from a supermarket. Using your own analogy, that would be like having the government tax us, presumably based on income, and allow anyone to go into any supermarket and get as much as they want or need of anything they want or need at no additional cost. I see some problems there too.

Currently over 30% of Medicare money goes to treating diabetes and the complications thereof. Adult diabetes is largely a preventable disease - and is often a complication of obesity. Prevention and patient education are key to the success for any solution to our healthcare problems. If we did that FIRST, the rest would be easier, because we would have so many fewr sick to care for.

[ChelseaC]

I like your grocery store example--very good.

[jpinsatx]

Hmmm... Health Care for All Americans is Simple!

1) Merge Medicare with Medicade into one single "Income Based" system.

2) Require insurance companies to provide the same basic coverage for Non-Medica­de/Medicar­e American citizens, regardless of health status, at government established rates.

3) Allow insurance companies to offer additional benefits and options to those who qualify and are willing to pay for the coverage upgrades.

As for Funding...

1) Changing from an "Emergency Treatment" to a "Preventative Care" system will save local communities billions, maybe even trillions of taxpayer dollars!

2) Small business will be able to compete globally and hire additional taxpaying employees!

3) Wealthy seniors will pay their fair share!

4) The tremendous burden on future generations will be greatly reduced!

[JusticiaParaTodos]

The Obama administration and Congress must face reality! The healthcare insurance barons cannot and should not be trusted!
This is why single payer healthcare must be a serious part of the discussion and why progressives must come to realize that single payer is the only viable alternative to the injustice we have now!
For me to hear or read neo-liberals claiming single payer is NOT politicially practical reminds me when the same bunch of cowards said the same of ending jim crow segregation!
To you politicians in Congress we say either you are for us, or you are for the HMO parasites that have profiteered at our expense long enough!

[textynn]

That's the bottom line. Congress works for the people or the corporations. States see who your elected officials are working for and get rid of them if it is not the people.

[spirit22]

Congress is corrupt, we only have about 50 or so honest ones. The failure od the housing bill proved that.