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Michele Swenson

Michele Swenson

Posted: November 13, 2008 12:20 PM

Why Not a "Bailout" That Restructures Health Care to Benefit All?


Failed U.S. health care must be regarded a major contributor to our systemic economic crisis. Indeed, the excesses of Wall St. and the subprime mortgage catastrophe mirror U.S. health care policy -- both are typified by privatized profit (for investors and insurers), and socialized risk (for taxpayers and consumers). Inflated U.S. health care costs -- 16% of GDP and rising -- are major contributors to an inflationary economy. Redress of this single aspect of an out-of-control U.S. economy would lift all boats. Comprehensive health care reform would improve the economic status of all, relieving health access concerns of families, individuals and businesses, large and small.

So-called "legacy costs" alone, comprised largely of retiree health and pension benefits, have contributed significantly to General Motor's negative cash flow, prompting yet another request for government bailout. In 2005, costs of health care coverage to GM amounted to $5.6 billion for 1.1 million employees, retirees and their dependents. In 2005 BusinessWeek reported that legacy costs added $1,600 to the cost of each GM vehicle.

It's time to confront the crippling economic effects of employment-linked health coverage that reduces competitiveness of businesses in the world marketplace, reduces effective employee take-home pay, and adds to the costs paid by all for goods and services (note above $1,600 added cost to each U.S.-made car).

Progressive leaders must do a better job of promoting civic discourse while clearly defining issues, like health care reform. Democrats must cease parroting right-wing framing and code words intended to distort the issue, e.g., "government health care" or "socialized medicine," as a couple of recent Colorado candidates have done. The opposition must refute Republican "free-market" advocacy that treats health care as a commodity to be exploited for maximum profit, with top-skimming of over 25% of health care dollars for private insurance shareholder profits, CEO salaries, excessive administrative costs, marketing, lobbying, etc. "Free-market" health care is as perverse an incentive as free-market police and fire protection would be, leaving everyone vulnerable, at the mercy of the marketplace.

Barack Obama showed promise at broaching issues during the campaign. He made a start at explaining the high cost of privatizing Medicare (13% higher than traditional Medicare), and the failure of Medicare prescription drug reform that prohibits negotiation of bulk drug rates, as the VA does to save money. The 2003 reform was a giveaway to insurance and pharmaceutical lobbies, with billions of dollars of taxpayer subsidies and inflated costs to benefit their bottom lines. Now is the time to make the case for an improved Medicare for All -- a public insurance with true free choice of providers and hospitals. Whereas, for-profit insurance choices are narrowly limited to "in-plan" providers, necessitating change of providers with change of insurance.

Dialogue must be elevated to encompass comprehensive health care reform as part of a broad economic remedy. U.S. health costs are almost double those of all other industrialized nations, and growing; yet we still experience worse overall health outcomes. Increasing numbers of underinsured paying escalating costs for decreasing coverage. Taxpayers currently pay for over 60% of health care costs, including 70% of legislators' health coverage. By many accounts, that is enough to provide single-risk-pool coverage for all.

In fact, single-payer health care is the only model of reform that has demonstrated in over 20 federal and state studies the capacity to save money and provide comprehensive coverage for all.

Read more reaction from HuffPost bloggers to Barack Obama's victory in the 2008 presidential election