USA - Health care for sale - if you can pay

Jan/Mar 2010

Unlike many industrialised countries since WWII, the USA never had a government-run health system, let alone an integrated system free at the point of use. So far, instead, the only way for most people in the US to get some form of health cover, was to buy, either directly or through an employer, a health insurance from an insurance company - much as one buys a car insurance. There were some exceptions: the disabled and the over-65s, who, under certain conditions, were covered by a public scheme called Medicare; and around 40% of the low-income families, who were covered by another public scheme called Medicaid. Even then, a large part of the health cover organised through these schemes was contracted out to private insurance companies. In any case, the result was that 15% of the population had no health cover whatsoever, while a large number of private companies - insurance, health providers, etc.. - made huge profits out of the system.

Obama's promise of health reform which would guarantee cover to everyone was certainly one of the big selling points of his presidential campaign. This reform has now passed some of the many stages through which it has to go before becoming law. Not only has this bill turned out to a real boon to all the private parasites who make their profits out of health care, but each new stage has incorporated into the bill, even more handouts to these profiteers. The article that we reproduce below, which was published in the November issue of the quarterly published in the US by the Trotskyist group Spark (Class Struggle #64), provides both a description of the dire state of health care in the US and a snapshot of the health reform bill at the time when this article was written. Since then, there have been many changes added to the draft bill, but they all have one thing in common - they just make it worse for the working class and more attractive to the health care profiteers!

Even before he gained the Democratic nomination, Barack Obama pledged that reform of the medical system would be one of the "defining" programs of his presidency. Without details, Obama seemed to pledge that his administration would accomplish what others had tried to do, but failed; that is, to establish nearly universal medical coverage for the population - a very big social reform in favour of the population. When describing the current state of the medical system, Obama repeatedly described it as "broken".

In reality, this medical reform, currently winding its tortured way through Congress, is above all aimed at giving even more money to those who "broke" the system: insurance companies, pharmaceutical companies, hospital systems and other medical providers.

And all these forces know it. They have been supporting the current medical "reform" from the beginning. According to US journalist Bill Moyers, the health care industry overall has spent $380 million (£235m) in just the last few months on lobbying, advertising and campaign contributions to back the "reform". In the early months, the insurance industry pushed to remove the "public option", whereby part or all of the health insurance system would be run directly by the state. Thus forcing everyone to get their insurance from them, the insurance companies then threatened to withdraw their support for reform if Congress left intact provisions that could allow some of the uninsured the option not to buy any insurance.

The population, for its part, will be presented with the bill for this latest government bailout of big capital. A lot of people are fearful - especially retirees on Medicare or workers with somewhat inadequate coverage provided through their employer, who worry they could face cuts in coverage and increased costs. And the bill coming out of the Senate committee shows that they are right to be concerned. Others have hopes that the reform, even if it doesn't fully address the problems, at least has to be better than the current disastrous situation. In one way or another, all these views reflect the extent to which the system is "broken" and desperately needs to be replaced.

Catastrophically broken

45,000 people died last year in large part because they had no medical insurance and could not get good care - this was the conclusion of a study just completed by researchers at Harvard Medical School. As one of the doctors involved, Steffie Woolhandler, commented: "For any doctor ... it's completely a no-brainer that people who can't get health care are going to die more from the kinds of things that health care is supposed to prevent"

It's not true that only the healthy go without medical coverage - as right-wing think tanks argue. Nearly half the uninsured have early stages of cancer or chronic conditions - diabetes, heart disease, high blood pressure, vascular problems. And nearly half of them did not see a doctor in the past year.

Forty-six million people, 15.4% of the population, have no medical coverage - none through their employer; none through the government via the Veterans Administration, or Medicaid, or Medicare, or any of the public programs established for children.

For the working age population, most of whom don't qualify for one of the government programs, the figures are worse: one in five went without medical insurance in 2008, one in three went without coverage sometime during the two years 2007-2008.

There is enormous unmet need in this country for medical care. When the Remote Area Medical Foundation set up a week-long free health clinic in the middle of Los Angeles, the doctors, dentists and other health personnel were swamped by thousands of people who needed not only basic medical services, but attention to untreated chronic diseases, even cancer, dental surgery, etc. It may have been the centre of one of America's biggest and richest cities, but you might as well have been looking at a snapshot from an underdeveloped country, so obviously deprived of access to medical care were the people.

The US spends more, the population gets less

Every other industrialised country provides medical care practically to its whole population. Yet, all those countries spend less on health care than does the US - much less. This country spent $7,290 (£4,508) per person on health care in 2007, which is about double what Canada, Netherlands, Austria and France each spent. The US also spends a much bigger share of the total wealth produced in the country on health care than does any other country. According to the OECD, the US spent 16.2% of its gross domestic product just on health care in 2007, while the average for all OECD countries came to only 8.9%.

The right wing, not able to blow such facts off completely, argues that we spend more because we get more - that is, far better medical care.

Yes, for the wealthy, this country provides some of the most advanced procedures and equipment and the most skilled doctors. Operating rooms at the big name hospitals are the envy of the world and draw wealthy people from all over the world.

But that doesn't translate into good medical care for most of the US population. We have fewer doctors in comparison to the size of the population than does any other industrialised country - only about two-thirds as many, 2.4 doctors per 1,000 compared to 3.5 in the other advanced countries. And it's even worse when you come to look at where those doctors are. The number of specialists keeps multiplying by the year, with many specialties overfilled, but there is an acute shortage of primary care doctors, the very ones who do the work of preventing disease and coordinating care - the very doctors that most of us need to see.

Of the thirteen richest countries in the world, the US ranked 12, next to last, on the average of 16 indicators of the population's health. The US is dead last in the rate of deaths in childbirth, and dead last in the rate of infant mortality. Only two of those other countries came in with a lower life expectancy than the US - and that by only a few months!

Oh, but it's worse. A study made by the Institute of Medicine of the National Academies in 1999 showed that 144,000 people died in US hospitals from medical mistakes made by doctors or hospital staff: infections contracted in the hospital, errors in administering medication, errors on tests or record-keeping and unnecessary surgery. Another 106,000 people died from "inappropriate medication" prescribed for them while they were in the hospital. As one researcher put it, "Hospitals are the third leading cause of death in the US". ere again, on international comparisons, the US comes off dead last among so-called "advanced" countries. For every 100,000 people in the population, 77 people are killed by medical errors in Canada; the US system kills 110.2

Priced out of health care

The average annual premium for private health insurance today runs at $4,824 (£2,985) for an individual and $13,375 (£8,277) for a family. That's roughly double what it was nine years ago. But it's not much less than what someone earning minimum wage, working full-time all year round makes today ($15,080 or £9,332). And it's definitely more than what most people buying their own insurance can afford, and more than what most small employers will pay.

Outrageous costs dump most workers into low-priced policies - paid for either by the employer or by themselves. And, with such policies, we make big payments before insurance covers anything. Our part of the annual insurance premium for the "cheap" policies may be "only" $1,000 to $3,500 (£618-£2,166) a year, depending on, among other things, whether we have a family and on whether we have coverage through an employer. But then we are hit with a deductible (deductible : the amount of money that the patient has to pay on this health bills over a year, before insurance payments start kicking in) running as much as $1,500 to $4,000 a year, (£866-£2,475) again dependent on family status and employment benefits. In other words, we could be coughing up as much as $7,500 (£4,641) each year before our insurance pays a single bill.

But the medical system isn't done with us. Once we get past those obstacles, those of us with "low-premium" policies have co-pays on the bills running sometimes 10% or 20% or even more (co-pays: additional payments that patient have to make themselves on top of what the insurance pays).

Ten per cent doesn't sound like much? Consider this: the AVERAGE price for a short hospital stay after a heart attack came to $54,400 (£33,666) in 2007 - undoubtedly more today. A 10% co-pay gets you a bill for $5,440 (£3,366); 20% co-pay and it comes to almost $11,000 (£6,808). And that's just the average price - not the astronomical price for the super-duper heroics made famous by Dr Gregory House of TV fame.

Having insurance is no guarantee that we'll have enough money to pay the bills. According to a just-released Consumers Union survey, one-third of the people who had insurance said they had either put off seeing a doctor, put off medical procedures, didn't take a test the doctor had ordered, or skipped filling prescriptions last year - because they couldn't afford the charges. The editor-in-chief of the International Journal of Health Services, Vicente Navarro, reports that 168 million people in the US have inadequate insurance, i.e., 55% of the total population of 305m.

Medical care is so expensive that it literally is expected to drive 900,000 households - or 2.6 million people - into bankruptcy this year. That's not because people had no insurance - in 2008, eight out of every ten people who declared bankruptcy due to medical costs had insurance when they fell ill.

They went bankrupt because - plain and simple - their insurance was so lousy.

One thing it's good at: producing profit

Profit has wormed its way into the US medical system to a much greater extent than in all other industrialised countries. That doesn't mean that profit doesn't deform health care in other countries. Capitalism, after all, still dominates the world. In countries that have a "single-payer" system like Canada's, although insurance is funded and run by the government based on taxes everyone pays, private interests play a large and increasing role in the other side of the medical system - that is, in hospitals, doctors' groups, other providers, pharmaceuticals.

In countries like England and Sweden, both sides of the system are "socialised"; that is, not only does the government pay the costs, based on taxes, but also the providers are integrated into a single public system. But even here private companies and the pharmaceutical industry exist alongside the system, feeding on it, pushing into it.

Nonetheless, in no country is the grip of profit on medical care so crushing as in the United States. The one country with a system similar to the US system is Switzerland - and Switzerland is also the country that spends almost as big a share of its GDP on medical care as does the US.

In 2008, seven different US industries making their money from health care made it into the top levels of Fortune Magazine's list of the 100 most profitable industries: health care wholesalers ranked number 39; managed care companies, 35; medical facilities, 34; pharmacies, 30; health insurance, 22; medical products and equipment, 4; and pharmaceutical products, 3, more profitable than oil, electronics, aerospace or military goods! The health insurance companies would have been much higher - in 2007 they were number 9 - but in 2008 they lost a lot of money in all the financial wheeling-and-dealings that marked the whole financial field.

Furthermore, the profits drained out of US medical care are getting progressively bigger. Between 2000 and 2007, the top four companies selling medical supplies and equipment enjoyed a 140% increase in their profits; that is, they more than doubled. In that same period, the top four pharmaceutical companies had an 86% increase in profits - not quite double, but based on profits that have been astronomical for much longer than the last decade. Investors must have been pleased with the results in both cases. Executives raked in big rewards. The highest paid exec in the medical supplier industry, the CEO of Becton, Dickinson & Co, made off with $21 million in 2007; the CEO of the pharmaceutical company Abbott Labs pocketed $45 million.

Forty years ago medical costs absorbed an infinitesimally smaller share of the overall GDP in this country, only 6%, compared to 16% today. But 40 years ago, the system was not so dominated by profit. Overall, hospitals, nursing homes and other medical facilities were run by doctors; or by non-profit groups, churches and religious orders; or by cities, counties and states - and doctors, while wealthy, had not yet thought to organise themselves as profit-making corporations.

The last four decades have seen enormous changes. State facilities are drying up. In many big cities - Baltimore, Philadelphia and Detroit, for example - there is no longer even one public hospital open to the population - other than a VA hospital, open only to army veterans.

Investor-owned, that is profit-making companies moved in, and Health Maintenance Organisations - HMOs - were one of their first targets. HMOs started out as entities funded by a single non-profit insurer, which hired groups of doctors who worked together to co-ordinate all aspects of care under one roof - something that medical researchers still propose would not only save costs, but would also provide better medical results. Originally started either by doctors themselves, or by trade unions in a cooperative kind of venture or by big employers when they began to provide medical coverage to their employees, HMOs began to be taken over or set up as for-profit organisations in the 1980s. By 1985, investor-owned HMOs were 26% of the whole field; by 1998, they had come to control 62% of the field. It was exactly in this same period that HMOs got such a bad name for themselves.

Much of the push to turn health care into a profit-making venture came from some of the biggest Wall Street investment houses. According to Mary Tanner, a managing director specialising in health care first at Lehman Brothers, then at Bear Stearns, "At the beginning, many[investors] were not sure whether they should try to make money off the sick and the dying" a reservation they apparently soon got over!

The profit-makers today control about three-fourths of kidney dialysis facilities, nursing homes, rehabilitation facilities and psychiatric facilities, as well as health maintenance organisations. They are close to dominating outpatient clinics and are pushing rapidly into surgical clinics, and more recently into acute care hospitals.

In none of these cases - hospitals, nursing homes, HMOs, dialysis centres, etc., - has care improved. Actually, care worsened. Researchers from the most important medical schools - Harvard, Johns Hopkins, Columbia - in one research study after another, have shown the inferiority of care provided by profit-making institutions.

What does an investor want? Ever increasing profits! How do medical facilities produce that? By increasing the gap between what they charge and their costs, especially costs associated with labour. Hospitals, for example, lengthen hours for nurses, decrease the number of nurses on a shift, depend on temps, cut back on clinical and lab workers, cut janitorial staff. And all of this translates into serious transgressions of even such basic sanitary procedures as hand washing by medical personnel - not to mention mistakes in medications or lab tests. Hospitals farm out testing to lower-wage, often less qualified companies, etc. Sounds much like speed-up on an auto company assembly line, except this speed-up is implemented directly on human beings. Actually, the fact they are human beings provides other possibilities for magnifying profits. Doctors schedule test after unnecessary test, or even unnecessary procedures for patients with good insurance policies. When people without good insurance or with no insurance come in, however, most hospitals push them out the door as quick as they can.

Sometimes hospitals get caught in outright fraud, their practices are so blatant. Hospital Corporation of America (HCA), which is the biggest hospital company in the world, owning 160 hospitals in the US and Britain, is currently under investigation for padding nursing schedules - that is, charging for 120,000 nursing shifts that were not worked or for which wages were not paid. Before this, in 2003, HCA settled Medicare fraud charges with the US government, paying 1.7 billion dollars, without admitting any guilt. HCA wasn't shut down - it only got bigger.

And here's an interesting point: HCA is owned in part by the family of former Senate majority leader, Republican Bill Frist - who in early October broke ranks with the Republican party, reproaching them for not supporting health care reform, de facto throwing his support to the bill coming from the Senate finance committee, written by the Democrats.

Apparently, Frist knows who's buttering HCA's bread.

The insurance industry: an exorbitant bureaucracy

The medical insurance industry had long been dominated by Blue Cross, a non-profit company, organised by the state. Originally set up during the Depression as mutual associations by groups of teachers, followed quickly by associations of doctors, Blue Cross allowed people to pay in a small sum as insurance every month, so the doctors could be paid when they treated someone. Gradually, Blue Cross became mammoth, joining with Blue Shield, but it still maintained its non-profit status. This didn't prevent Blue Cross executives from collecting big salaries, increasingly bigger over the years. The doctors themselves came to make money, and quite a bit of money. Eventually, the "non-profit" Blues set up for-profit subsidiaries to drain off some of their reserves.

Then profit-making companies moved in, and the hunt to wring out money at the expense of both those who paid for their policies and those who worked in the industry accelerated. Big national companies like Cigna, Aetna, United Health and Coventry quickly dominated on the national level, in some states even squeezing out Blue Cross. In other states, Blue Cross companies transformed themselves into investor-owned companies, with the executives sometimes becoming the chief "investors," on borrowed money, to be paid back out of the new company's future income.

The history of Wellpoint demonstrates the rapid changes in the insurance industry. It was spun off in 1993 from a non-profit California Blue Cross as a for-profit HMO, only to absorb the rest of California Blue Cross three years later. It merged in 2004 with Anthem, which had had a similar evolution, starting as two Indiana Blue Cross mutual companies, and then acquired Empire, an already for-profit Blue Cross in New York State. In the process, each of these companies absorbed formerly non-profit Blue Cross companies in other states. Today, Wellpoint is the parent of for-profit Blue Cross/Blue Shield companies operating in 15 states.

The rapid increase in insurance company profits in the last decade hints at the magnitude of the changes. From 2000 to 2007, profits of the 10 biggest medical insurance companies were up 428%, according to SEC reports. The four highest paid executives made between $13m and $26m each in 2007.

Profit and CEO salaries take a sizable chunk out of the money going to the insurance industry, estimated to be overall about three to three and a half per cent a year.

However, the much bigger drain on the US medical system is the cost to administer this enormously convoluted system, which produces layer upon layer of duplicated costs. Today, there are 13,000 different private insurance companies in the country, plus Medicare, which contracts with a multitude of private companies to administer its claims, and Medicaid, which is broken down into state systems, which also often contract with private companies to administer their claims, etc. And each of these insurance entities has its own billing system, its own system for checking patient eligibility and verifying a doctor's claims; its own system for paying doctors; its own sales and advertising departments to attract clients. That's duplication on top of duplication. Administrative costs drown US medical care in a vast sludge of waste. Compare Canada, where the single government-run insurance system absorbs only 1.3% of total medical expenditures for administrative costs, to the United States where this multitude of private insurers gobbles up 11.7% in administrative costs.

Original Medicare - which is very similar to the Canadian system - has administrative costs below 2% a year. Compare this to the system set up with Medicare Advantage, where private insurance essentially determines, within wide limits, what will be charged, what benefits offered, at what co-pays, with different insurance companies not only offering different plans, but each offering multiple plans themselves and competing with each other for subscribers. With private insurance playing a much bigger role in Medicare Advantage, the administrative costs ran to 11% in 2007.

The insurance companies are not the whole story. Doctors and their staffs spend an enormous amount of time, and therefore money, just to work through all the various claims procedures. This is estimated to account for another 12% of the total costs of medical care.

If you work in a doctor's office, you transmit bills in one format to one insurance company, in another format to another company, then you wait, telephone to find out why payment is taking so long, submit an appeal when the bill is turned down, resubmit the bill - or as is often the case, forget the bill. We hear all about all these supposed deadbeats that don't pay their medical bills. Well, chief among the deadbeats are many insurance companies, which, with delays and multiple rejections, wear down patients and their doctors into giving up their claims.

Hospitals have their own administrative costs, as do laboratories, temp agencies for nurses, etc., etc., etc. When all these administrative costs are added together, they come to about 31% of the insurance premiums.

This is the "broken" medical system that Obama has pledged to "reform."

"Reforming" it by breaking it further

The first thing that can be said about the "reform" is that the population has no idea of everything that is in it - and won't have.

The Senate Finance Committee bill, which is being described as the framework for the final bill, runs to nearly 800 pages of "conceptual language" - this is what has been released publicly. The actual bill that has now been written comes to 1502 pages, plus references to thousands more pages in existing legislation that this bill will modify in the tax code, Medicare, Medicaid, various children's programs, for example.

Between now and the final version, two bills in the Senate are to be "merged" by the heads of the two Senate Committees, plus representatives of the Obama administration and Senate Majority Leader Harry Reid; three bills in the House, similarly "merged." Then after a show of great debate and amendments in both houses, final bills should come from each house, in order to be "merged" and "amended" and generally made to conform to the interests of big investors. In other words, there is room for a lot of dirty dealing and lots of little details abrogating even those things that seem to be advantages.

Nonetheless, the big obvious aspects of the Senate Finance bill, ones that won't change except in detail, already show what a big attack on the population is this "reform."

The essential thing about the reform is that the current system, which has so deformed medical care, has not only been left in place, it has been reinforced. Nothing controls or even restricts the amount of profit to be made off medical care. Nothing strips out administrative costs - and in fact, with all the additional book-keeping entailed by the complicated additional layers added onto the system, administrative costs will go higher. There have been estimates in the press that the new layers of bureaucracy will add another 4% to 5% in administrative costs alone.

The one change central to this "reform" is this: all individuals must either buy insurance, get it from their employer or pay a fine every year (currently set at $400 for the individual or $1500 for a family, but there's been a lot of horse-trading about the amounts, which probably isn't over).

In other words, today's uninsured are to be forced to buy insurance they can't afford, insurance that has been shown to be nearly useless, from private insurance companies - or pay a fine they can't afford, for the "luxury" of having no insurance.

Oh, yes, people canbe exempted from the fine if they can't find a policy whose premiums cost less than 8% of their gross income. So you may have the "right" not to buy insurance, but you still have the same problem as before: you won't have any insurance! If you do find a policy with a cheap premium, then come those high deductibles, high co-pays and many non-covered costs, which very quickly make health care unaffordable.

Behind this mandate is the outrageous assumption that people don't buy insurance because they are "irresponsible" and therefore must be forced to buy it. No, working people are not irresponsible - they cannot afford the cost of medical care as it is organised under this for-profit medical system.

The Medicaid option is being presented as a lifeline. People on an income of less than 133% of the government's poverty level (that is, $29,300 or £18,135 per year, for a family of four) will be able to qualify for Medicaid. But the fact that you are in Medicaid doesn't mean you can get medical care. No doctor or hospital or laboratory is mandated by this "reform" to accept Medicaid payments or to treat you. Already, before the current budget year's state cuts were imposed, less than a third of all primary doctors and less than a third of all obstetrics/gynecologists would accept Medicaid. Only about one quarter of all dentists accepted it. This year has brought more cuts to Medicaid - for example, eliminating dental care, eye care, eyeglasses, hearing, podiatry. Some states, currently getting exemptions from the federal government, have started to impose premiums and co-pays for Medicaid. But now all states will be authorised to do it.

Another "lifeline": people whose family income puts them between 133% and 400% of the poverty level can get tax credits on a sliding scale to cover part of their medical insurance. BUT, those credits won't begin to pay the costs of even the cheapest premiums, not to mention the monstrous deductibles and co-pays. AND you have to file an income tax return to get those credits, AND wait until next year to get them. Yet, living near the poverty level means living week to week - without the luxury of waiting until next year to be repaid for what you put out this year.

The Congressional Budget Office, which just ran cost estimates for the Senate Finance bill, estimated that the current bill will leave 25 million people uninsured. It's the biggest comment on the futility of this "reform."

The government is supposed to establish a new organism - with more layers of bureaucracy - to run a "national insurance exchange", where people supposedly can go to buy "affordable insurance". But no insurance company will be mandated to provide "affordable" insurance or list its policies on that exchange.

No employer will be compelled to provide insurance, and if they provide it, they won't be compelled to provide more than a very low minimum of coverage. In fact, the Congressional Budget Office assumes that if the bill passes, more employers will use it as a justification to dump insurance for their employees.

Yes, employers may have to pay a small "fee" - fee, not a fine - if they don't provide insurance. But the fee, up to $150 per employee, will not be assessed according to the total number of their employees, but only on the number who receive tax credits when they purchase insurance. The ones who don't get any insurance don't count toward the employer's assessment. The ones who have it through their family don't count. And - WalMart must be pleased with this - workers whose income is so low they qualify for Medicaid won't count. And employers with less than 50 full-time employees are exempted. In other words, an employer with 49 full time and 500 part-time employees - an increasingly common situation today - doesn't have to pay.

Insurance companies will supposedly be barred from cutting someone off when they get sick or from refusing to sell insurance to people with pre-existing conditions. But that prohibition exists in some states already - and it hasn't prevented insurance companies from delaying payment after payment, even denying claims for a sick person or refusing advance authorisation, when the companies want to drop someone, bringing the doctor eventually to tell the patient he'll have to pay the full bill.

Insurance companies will supposedly be barred from charging higher premiums based on your health status. For example, they cannot charge you more if you have a chronic condition like diabetes or high blood pressure or heart problems. BUT, this Senate bill allows them to charge older people four times as much as younger people. And it's exactly among the older population that chronic conditions are most prevalent.

Moreover, employers that provide insurance can charge employees with chronic conditions up to 50% more for their part of the premiums if they don't enlist in a "wellness program" and move toward meeting "targets" for controlling their diabetes, their blood pressure, their weight, etc. This is being sold as an "incentive" for people to improve their health - despite the fact that medical experts say that such "incentives," which are really penalties, lead to worse health, not better. Organisations like the American Heart Association, the American Cancer Society and the American Diabetes Association have all lined up in the past to oppose such plans. It's nothing but a gift to employers, an easy way to push more of the premium onto their employees.

Furthermore, this same provision is to be extended to insurance companies on a "trial basis," allowing them to charge up to 50% more on the average premium if people don't meet the targets.

Even if the "public option" were to make its way back into the bill - which might be done in order to "sell" the bill - the Congressional Budget Office estimated that less than 5% of those without insurance would be able to qualify for it.

Two researchers well-known in the field, Drs. David Himmelstein and Steffie Woolhandler, professors of medicine at Harvard, explained why the so-called public option would do nothing to alleviate the problems so long as private insurance controls the field. They explain it this way: "A public plan might cut private insurers' profits, which is why they hate it. But their profits account for only 3 percent of the money squandered on bureaucracy.

"Far more goes for marketing (to attract healthy, profitable members). And tens of billions are spent on the armies of insurance administrators who fight over payment and their counterparts at hospitals and doctors offices. All of these would be retained with a public plan option.

"Unfortunately, competition in health insurance involves a race to the bottom. Insurers compete by not paying for care: by denying payment and shifting costs onto patients or other payers. These bad behaviours confer a decisive competitive advantage.

"A public plan option would either emulate them - becoming a clone of private insurance - or go under."

Medical industries predict a "cost rise"

What about the costs? There is no cost control whatsoever built into the system. Oh, yes, the Obama administration in mid-summer loudly announced deals it had reached with the different health industries to cut costs. In reality, the drug industry, the insurance industry and the hospital industry each agreed ONLY to "limit voluntarily" the INCREASE they expected would take place in their charges over the next ten years - without specifying how large they expected those increases to be.

In exchange, the Obama administration agreed that the government would not impose any restrictions on these industries over the next ten years. This side of the deal wasn't widely known until September, when an amendment was offered in the Finance Committee to abrogate those agreements - an amendment which was quickly voted down.

So no cost cuts will be coming from privately-run industries - only more increases.

The administration did discuss saving money by eliminating waste - and those provisions are in the Senate bill. Fine, there's a lot of waste in the system - as much as $400 billion a year are put down to administrative costs. But the reform is not targeting waste in the private companies, where most of such costs lie. No, the Senate bill proposes, as a way to pay for reform, to cut waste out of Medicaid and Medicare - which currently have less waste in them than any other part of the system. Nor does the bill envisage cutting waste in Medicare and Medicaid by eliminating their contracts with private insurers. Medicare beneficiaries are right to be suspicious, because their benefits will be targeted. Apparently, retired beneficiaries are the "waste" built into the Medicare system...

The Senate Finance Plan also proposes to pay for this plan by putting a tax on so-called "gold-plated" insurance plans offered by employers. "Gold-plated"? AFSCME, the union representing state and local government workers, estimated that half its membership would be hit by this proposal - not to mention workers in heavy industry whose medical coverage has long been attacked for being "gold-plated."

Conclusion? Medical costs, insurance costs, will continue to go up. Those who have insurance will be hit with higher bills, taxes and costs. Most of those who didn't buy insurance before will have as hard a time buying it now as they did before. People on Medicare will face cuts and people on Medicaid will face cuts in addition to the ones recently made, and those going into Medicaid will find that the majority of doctors will not accept it.

This is what this so-called "reform" boils down to: a widespread attack on the population.

For the medical industries, the "reform" is a bonanza. The insurance companies, faced with declining enrollments, expect to augment their rolls - and charge more money. The pharmaceutical companies not only expect new consumers, they have been targeted for big subsidies for biotech therapies. Hospital companies, fearing more unpaid bills and emergency room visits as the unemployment crisis worsens, now expect to recoup those losses.

All could have adequate cover - right away

Consider the costs of the current bill - taking for the moment the figure that the CBO gave, $829 billion over ten years, that is, $83 billion a year. Those costs are dwarfed by the cost of just one year's administrative waste - which is something on the order of $400 billion dollars when the US system is compared to Canada's. There is more than enough wasted money in the system today to provide adequate coverage to everyone - and to beef up the US public health system, which is completely inadequate and one of the causes of so many scourges afflicting the population, even epidemics and the return of diseases once considered eradicated.

Canada's system is hardly perfect, but it's much more efficient and less costly, while providing better health outcomes than that of the US. These facts are obvious - and widely known in medical circles.

The Obama administration and the leading lights in Congress know it. Many of them, including Obama himself, have admitted that a single-payer system is the single most efficient way to rapidly improve medical care in this country. If the Democrats didn't pursue this possibility, if they didn't even look into it, it's because their goal in this reform is not to make the system more medically efficient and less costly, but to offer a still bigger hand-out to various parts of the medical care industry.

For years now, a sizable majority of the population has shown itself in polls to be in favour of a government-run medical system something like Medicare that includes everyone - something similar to the Canadian system. 39 State AFL-CIO Councils, 134 Central Labour Councils and about 400 other labour organisations endorsed a single-payer system.

In 2007, 42% of doctors, when polled, expressed support for a single-payer system - up from only 16% five years earlier. Many of the leading researchers in public health matters have been pushing for a "single-payer" system. Not only were none of them invited to appear before Congressional hearings and to speak with the Obama administration, but some of the most recognised experts in the field of health care were pulled out of the room in handcuffs and then arrested, when they tried to intervene in the Senate Finance Committee hearing on May 5!

In other words, the Obama administration and Congress wanted nothing to stand in the way of the steamroller they were pushing through Congress, aimed not at providing better access to medical care, but better access to profits.

The shunting aside of any discussion shows exactly what the purpose of the Democrats' bill is - to answer the demands of the insurance industry and other medical institutions. And the insurance industry, having gotten almost everything it wanted in the bill, understood it could demand even more. Its last-minute "break" with Obama and criticism of the Senate Finance Committee bill is a propaganda pose, aimed at getting the government to force EVERY uninsured person to buy from them.

The stance of the insurance industry wasn't a bad thing for Obama. It allowed him to appear as fighting against big insurance - which was something he needed, given the embarrassing deals he had made with the medical care profit-makers. But it was all part of the political game involved in pushing through this "reform," which is really an attack on the population.

The Republicans certainly have played no better a game. To the extent that they criticized, hoping to tap into the distrust toward the "reform" that exists in the population, they offered no perspective, other than vile reactionary slogans attacking immigrants, and defending the system as it is. As for Republican demands on abortion, Obama and the Senate bill beat them to the punch with a provision that prevents government money from being used to fund abortions, guaranteeing that women will face even more restrictions.

The Wall Street Journal and New York Times both recently raised the question: why are the Republicans snubbing their traditional big business friends? No surprise there: the Republicans are the opposition party today. The Democrats, as the ruling party, have to push through what the bourgeoisie wants. The Republicans are doing today what the Democrats did with Iraq when they were the opposition party - talking against the bill, while providing enough votes to guarantee its passage. The Republicans are perfectly ready to let the Democrats take the blame when the population begins to discover the magnitude of the attack - which won't be for a while, since most of the provisions don't take effect until 2013, after the next presidential election.

The working class cannot expect to gain access to medical care as a right through either of these two parties. They both defend this capitalist system tooth and nail, and the capitalists have never put human needs before profit, except for brief times when vast mobilizations forced them to take a step backwards.

We, every one of us, regardless of age or citizenship, should have access to free medical care. Anything less is not only inhumane, it also guarantees that disease spreads, that overall society is not only less healthy, but less efficient.

We already pay the taxes. Why not free medical care for every person?

Why not? Because capitalism rules the roost today - which is nothing more than one more reason to get rid of this whole filthy system, to replace it with one that puts human needs first, a socialist system.

21 October 2009