iOS app Android app More

Featuring fresh takes and real-time analysis from HuffPost's signature lineup of contributors
Michele Swenson

GET UPDATES FROM Michele Swenson
 

Corporate Profit Continues to Define Health Care Reform & the U.S. Race to the Bottom

Posted: 01/06/09 05:24 PM ET

To many, the 2008 election represented a fervent prayer for meaningful change in Washington, for restoration of the people's democracy and the end of corporate looting of the treasury. The U.S. corporatocracy reigns supreme - corporate profiteering steers most public policy, from finance, war and energy to health care. The system has been grossly polluted by years of the Gingrichian and Rovian practice of selling government to the corporate highest bidder.

Corporate framing prevails in the health care reform debate, as the profit-first insurance-pharmaceutical industrial complex holds the megabucks and the megaphone. "Market-based" health solutions promoted by multi-payer insurances ultimately translate into greater insurance profits, and rising health costs with reduced access for people. After all, haven't unfettered markets done so much for U.S. health care and financial institutions thus far?

An honest health care reform debate has thus far been short-circuited, as single-payer reform continues to be distorted and declared "off the table" and "politically unfeasible" by corporate "free-market" advocates and some among the political class. The country has yet to hear honest discourse about reform that is not framed by health care profiteers.

Debate about single-payer health insurance was effectively stifled when Colorado convened a Blue Ribbon Commission for Health Care Reform for over a year through 2007. Corporate media was complicit, as The Denver Post and the Rocky Mountain News refused to print anything other than pieces by "free-market" proponents. The business editor of the News, Rob Reuteman informed me that single-payer is "pie-in-the-sky," asserting he did not want to "confuse his readers."

The upshot is that many in Colorado still do not know what single-payer health care is, even though it was the only health care proposal of five evaluated by the Lewin Group in 2007 that demonstrated cost savings for the state ($1.4 billion in a year) and the ability to provide comprehensive coverage for all. Indeed, to this day, many in the state cannot tell you what the reform Commission did. The single-payer plan merited just 4 sentences in their final report.

"Free-market" buzzwords, specious arguments and corrupted framing continue to dominate the health care reform debate.

1) Republicans and others protest that health care reform is undoable, as it will require a major expansion of government spending.

Physicians for a National Health Program report: "The reason we spend more and get less than the rest of the world is because we have a patchwork system of for-profit payers" that waste health dollars on things unrelated to care - "overhead, underwriting, billing, sales and marketing departments as well as huge profits and exorbitant executive pay. Doctors and hospitals must maintain costly administrative staffs to deal with the bureaucracy." Inflated administration consumes one-third (31 percent) of Americans' health dollars.

Notes PNHP, single-payer financing is the only way to recapture this wasted money. Savings on paperwork for doctors and others with single-payer financing was estimated several years ago at more than $350 billion annually - enough to provide comprehensive coverage for everyone without paying any more than we already do. Over 20 federal and state studies have demonstrated single-payer savings and the ability to provide comprehensive coverage for all.

2) "Free-market" competition, it is said, will bring down costs and improve health care access.

In "Market-Based Failure..." (2-7-08) Robert Kuttner outlines the perverse incentives of profit-first health care that undermines access and increases costs. Third-party private insurers hold down costs by practicing risk-selection (insuring only the healthy), limiting covered services and payments to providers, and shifting costs to patients, e.g., copays and deductibles that discourage early intervention and result in more costly delayed crisis care.

Profits, not medical need, dictate resource allocation, prompting both extremes of undertreatment and overtreatment. There is an increasing gap between earnings of specialists and primary care providers, as more specialists move to high-paying "boutique" or investor-owned "specialty" hospitals (that often lack emergency rooms and other "high cost-centers"), leaving the least-compensated care to overburdened community hospitals and primary care practitioners. Primary care providers are forced to compensate for stagnating earnings by increasing caseloads and decreasing time spent with each patient, diminishing quality of care. Kuttner and others report that U.S. primary care infrastructure suffers the greatest attrition under profit-centered health care.

Further gaming of the system by "free-market" competition has spawned the insurance sub-industry of "denial management", employing middlemen solely to game the system for profit by delaying, denying or reniging on insurance claims. They add no health care value, only inflated annual overhead costs of $20 billion.

3) "...you have to give people choice," argue Families USA directorRon Pollack and others.

Pollack uses the corporate framing of "choice" - choice of insurances - rather than true choice of private/public providers and hospitals, which is only available within a single-payer model of insurance. By contrast, private insurances limit choice to in-plan providers and hospitals, and require change of providers with change of plans, as often as every year.

Princeton economics professor Uwe Reinhardt expressed dismay about the framing of choice in the U.S. health care policy debate that results in Americans giving up the choice of doctors and hospitals, ostensibly so they can instead have a choice of insurance products. Ultimately, the choice of minimum benefit insurances with declining coverages is no real choice at all.

4) Pollack adds, "...you must not ever threaten the coverage that people have." Most current Democratic reform proposals hold that we must maintain employer-provided coverage, and individual private coverage.


Not many are able to "keep the coverage that they had" even several years ago, whether through employers or otherwise. Ask General Motors employees and retirees, facing possible loss of their promised lifetime health coverage. In 2008, nearly4,200 Lawrence Livermore Laboratory retirees and their spouses lost the group health coverage plan promised them into retirement. Some 2,400 more who took early retirement will also lose group coverage when they become eligible for Medicare at age 65. Such retiree/employee health costs are described as "unsustainable."

Employer-provided coverage is diminishing - a vestige of a bygone era, before the rate of job loss soared, and continuously escalating health care premiums eroded employer plans and employee wages.

5) A single-payer health care model portends "health care rationing."

An insidious campaign of spurious stories about "health care rationing" and "long lines" in England, Canada and other industrialized nations is belied by the fact that everyone can get needed health care in those countries; those seeking elective procedures have to wait, just as they do in the U.S. Kuttner notes that the U.S. has the highest rate of de-facto health care rationing of any country, with large numbers of uninsured and underinsured, exclusions for pre-existing conditions, excessive deductibles and copays, and shorter hospital stays and doctor visits. Many in the U.S. cannot even get in line for care.

WHO ranks the U.S. 37th worldwide in overall health care performance. See the movie/documentaries "Sicko" and "Sick Around the World" to understand why we lag. The Institutes of Medicine reported in 2003 that 18,000 U.S. Americans die prematurely each year because they lack access to health care.

Some ultraconservatives assert that Medicare/Medicaid patients have worse outcomes than the uninsured. Significantly, the efforts of the political right to privatize-for-profit Medicare and Medicaid have raised costs and lowered provider reimbursements, thus compromising health care access for recipients. Medicare prescription drug reform of 2003 was a major effort to privatize Medicare, while extending billions of dollars of subsidies and inflated profits to the insurance-pharmaceutical complex.

6) Single-Payer health care should be rejected as "socialized medicine."

HHS Secretary-designate Tom Daschle ( Critical: What We Can Do about the Health-Care Crisis) wrote that single-payer is "politically problematic in the United States, at least right now....Even though polls show that seniors are happier with Medicare than younger people are with their private insurance, opponents of reform have demonized government-run systems as 'socialized medicine.'"

I respectfully urge Sec. Daschle and Democrats to reject false framing; let's frame the debate for ourselves. The VA is a system of 'socialized medicine' with doctors working for, and hospitals owned by, the government - a good system in its own right. However, most state and federal single-payer insurance proposals are 'public payer, private provider' models - more like an improved traditional Medicare-for-All, with low overhead costs (3-5%). A government or quasi-government body pays the health care bills, while people maintain free choice of private or public providers.

Even Democrats' and president-elect Obama's favored reform - to regulate private insurances and provide an option for a public insurance plan - is as fiercely opposed as single-payer reform by corporate insurers and their lobby, America's Health Insurance Plans (AHIP). Theoretically, a parallel public-private plan would establish a level playing field, with the public plan option setting a benchmark as a standard for private plan performance.

Neverthertheless, it has proved virtually impossible to regulate private insurances. When Minnesota passed a statute in the '90s requiring HMOs to operate as not-for-profit, the response of insurers was reportedly to use "Enron-style bookkeeping" to hide their profits; they soon gained control of the legislature and state regulatory agencies, overcoming all efforts at regulation - further testament to the urgent need to eliminate corporate money from campaigns and policy-making.

Sensing their disadvantage on a "level playing field," so-called "free-market" Republicans and AHIP are vowing to defeat any kind of parallel public plan, willing to discuss changes only based upon the "existing private insurance industry" - the administratively wasteful, fragmented health insurance that has accelerated the U.S. race to the bottom on most measures of health care outcomes.

The Single Payer model is uniquely suited to overcome a multitude of problems. Kuttner notes that a national system would utilize efficiences of scale, and save large amounts currently wasted on administration, billing, marketing, profit, executive compensation and risk selection. PNHP reports that in addition to ensuring access for everyone to higher quality care at a reasonable cost, single-payer could realign incentives toward restoration of the declining U.S. primary care infrastructure; provide incentives to control global health care expenditures; reduce ineffective, even detrimental high-tech excesses that drive up costs, while ensuring that beneficial high-tech services will always remain available.

Much money is wasted on a complex U.S. system that erects barriers to health care by dividing people into thousands of different categories of health coverage (e.g., 20 different categories of Medicaid in Colorado alone), exponentially raising administrative costs for qualifying, means testing, annual reauthorizations, etc. It is far less costly to eliminate the redundancies of Auto and Workers' Comp health care, etc., and to cover everyone in a single-risk-pool insurance that protects all against medical financial ruin.

The current economic crisis begs for a single-payer remedy, to improve the wellbeing of all. Let's not permit the health care reform debate to be short-circuited with false framing again. As for the many insurance middlemen, let's retrain them to provide a meaningful contribution to health care.