Wednesday, July 01, 2009

The great health care reform betrayal

By Richard Stander and Nancy Galland

There are three camps in the Healthcare Reform movement here in Maine and across the country: the Republicans, who basically want to keep the status quo, the Democrats, who are promoting the "Healthcare for America Now" campaign, and those who support HR676, the House bill that lays out a single-payer model, which is the time-proven system in every other industrial democracy in the world where all citizens, without qualification, are covered from cradle to grave.

The single payer camp has been split between HR 676 supporters and the Public Option/Obama loyalists who claim passionately, "I support single payer with all my heart, I believe it's the best way, but we have to take baby steps to get there." They believe, as the Administration insists, that we have to work with the system we have "for now" and pass a bill out of political expediency, no matter how bad it may be.

But the ground rules for the debate on health care reform in Congress portend a dead end for the "baby steps." It is shaping up to be a wholesale exclusion of a single-payer option in favor of a health care financing hybrid which would include private insurance companies and a government-run insurance program, the "public option."

It keeps the for-profit insurance industry alive and well by actually forcing people to buy into it or be fined; the public option will be available only to those who cannot afford to buy for-profit insurance. If income or age is used as a qualifier to receive Medicare-style payments for health care (as is now the case), there will still be millions of middle-to-low-income Americans and small businesses slipping through the cracks.

The Obama Administration's decision to take single payer off the table for now and into the future has many serious, if not fatal, consequences. Most egregiously, it eliminates from consideration the largest sources of savings which a single-payer system would accomplish without affecting quality of care: eliminating the profits paid out to insurance company stockholders, the inflated salaries paid to corporate CEOs, the phenomenal cost of redundant administrative expenses, the cost to providers for billing to countless insurers (instead of just one), and finally the millions the industry pays out to lobbyists and their congressional targets, around $300 million at the last count.

The devil, of course, is in the details, and the details as now dictated by the insurance industry are that private and public insurers, "must compete on a level playing field." The President has recently signaled that he is willing to compromise on the public option, even as he launched a grassroots campaign (through Organizing for America) to promote HCAN and save the public option.

However, the insurance industry is committed to removing any advantage the public option may have that would threaten their competitive edge: specfically, any cost-saving devices, like public subsidies or negotiating more favorable terms for drugs and services, would not be permitted.

Another consequence of setting up two competing systems is to create, inevitably, a two-tier health care establishment with very different risk pools: one for the old, sick, poor and disabled (Medicare/Medicaid/ public option), and the second for the young, the healthy and the rich. The costs to the "public," high-risk pool is substantially higher, obviously, than the private, low-risk pool.

Since private insurers are accountable only to their stockholders, not to the consumer, they are bound by their fiduciary obligation to lower costs and maximize profit. The only way they can deliver on their obligation to their stockholders is to cut payouts and reduce risk.

This business plan is achieved typically by denying prior approval to subscribers for recommended procedures or selected prescribed drugs and by insuring only the healthy by removing the sick from their rolls, including those with “prior conditions.” This last point is on the table in congressional committees and may likely become one of the deal-breakers in the congressional negotiations on a final bill.

All of this begs the question: Why would an administration with so much political capital for "change you can believe in" want to set up a public option to compete with the private insurers on these terms? Terms which, in our view, carry the seeds of its own failure as it founders under the high costs of a risk pool overwhelmingly skewed towards the sickest and most vulnerable, while in the other pool "the water's just fine, thank you, why don't you just hop in, while we sweep in the profits. Just don't get sick."

The way things are shaping up in Congress now, the Obama people will either cave in to unreasonable conditions and amendments, which produces a compromise doomed to failure, casting a blot on anything "public," or risk not getting a bill passed this year at all, with diminishing chances, as in the Clinton era.

The Republicans and the insurance industry have a big stake in the failure of this legislation, and have no stake in compromise. The Obama people, on the other hand, seem to have a big stake in passing legislation, any legislation -- no matter how bad -- and have shown their willingness to compromise big, as in their bowing to a crippling amendment on the recent federal budget bill in order to gain merely three, count 'em, Republicans for the sake of "bi-partisanship" appearances.

This seems to add up to setting the stage for a final bill which fails altogether, or which so compromises a public option as to completely squander any opportunity for real change for another decade or more.

The last time a serious discussion of national (single- payer) health care occurred in Congress was in 1948, when Harry Truman choked and withdrew the bill. That was 61 years ago. It would be a tragedy if we have to wait that long again for another chance.


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