Statement on Obama's Pseudo Health Reform

The following is the original text of my “Statement on Health Pseudo Reform” delivered to the American people on the September 12th Mark Weaver Show

At its core the health “reform” spectacle we are witnessing – the town hall thuggery, the blatant lying, most notably of the woman who came within six percentage points and a heart attack of the presidency, the insult on the floor of the House by its #1 recipient of health industry money, the telling $150 million ad campaign of the price gouging pharmaceutical industry FOR reform, the preposterous shut out of single player advocates from the discussions, to the Blue Dog and Gang of Six insurance industry shills to the industry shmucking president and his resulting conflated messages to the nightmare patchwork of the emerging bill itself – is a war by the medical industry to maintain its hegemonic pricing power over our healthcare. And guess who is going to win.
Every event of this spectacle, every one, can be explained by this motive. It explains the emerging bill itself.
At its core the reforms preserve the main (though not only) cause of all our problems – the superfluous middle man health insurance industry with its high administrative overhead to fight billing claims, pay multimillion dollar executive salaries, stock dividends and profit margins. Eliminating this overhead is the Big Enchilada of health reform. It cuts costs $350 billion a year on wasteful paperwork alone, enough to cover all the uninsured and reduce premiums. All the squabbling about deficit neutrality and whether insurance subsidies should cost $88 or 90 or $120 billion a year is a false debate derived from the war to maintain the profiteering insurance industry. The U.S. is the ONLY country in the world, the only one, that allows a for-profit health insurance industry. This is the primary reason we pay the highest health care costs in the world. America is a country where a super powerful industry exploits its citizenry and President Obama is actively perpetuating that.

The verdict is still out on this health reform. We’re at S in the alphabet of the process and all the issues have yet to be decided. We know the broad outlines but the actual working system that is enacted is still unknowable. Even then, how the details are filled in over the next few years by the administration and how they are actually implemented will determine the fate of reform. Even then, the system is so complex that it will take several years after they go into effect in 2013, that’s right, none of this is going into effect for over three years, to know how things are working themselves out. We won’t know til 2015 if this was worth it.

But we do know that the improvements being proposed in this rapacious dysfunctional system have to be looked at in light of the directive to preserve this system of exploitation of our need for health. And there are some major major improvements. The insurance companies will no longer be able to reject people with pre-existing conditions, cancel them when they get too sick or jack up their premiums as you get older. There will be no more annual or lifetime limits on the payout of a policy if you get desperately ill. The House plan slaps a $5,000 annual maximum on an individual policy for out of pocket expenses. That means if you get cancer, the most you’ll pay in one year is five grand. This is all very big stuff. But there’s a catch, as there is with everything in this ticking time bomb of pseudo reform. These new claims and bigger insurance payouts are going to cost the insurance companies money and they will add these to everybody’s premiums. Nothing in the “reforms” controls the premiums the insurers can charge.
But wait, you say, astutely pointing out that millions of uninsured healthy people will now be required to buy insurance, that adds billions to the premium pool which will cover the costs of the ill and older. Don’t bet on it. The medical industry is riddled with greedy predators who know, who sense, who smell that a sick person is easy prey to charge what the market will bear, which is increasingly without limit. Just talk to the 900,000 victims of medical bankruptcy in this country each year, a phenomenon unheard of in most of the world. Fortunately, the reforms are going to dramatically reduce these bankruptcies. But the insurance industry is going to roll all these higher payouts into its rates. Premiums may actually go up under Obamacare, which is why it all comes down to the public option, how strong it is and how much pricing pressure it can put on the private insurance companies to curb their profits and executive salaries and dividends. The public option is on the ropes and even if it survives it will be too weak to reign in the insurance companies. The Blue Dogs have already forced the House plans to increase Medicare payments to doctors from Medicare plus 5%, which might have been reasonable, to whatever they can negotiate for new rates, which wipes out most of any pricing reductions in the public option. As we watch the public option/ insurance cooperatives debate unfold, remember, it’s all about the pricing power of the medical industry, to what extent there is going to be downward pressure on their pricing power – how much private insurance will cost us and how much the government is going to have to fork over to the insurance companies for the subsidies.
In a deeper sense, the predation of the medical industry is THE crux of the health reform spectacle. The shocking thing about Obamacare is that it is NOT going to substantially reduce the bloated costs that everyone says are the core of the problem. Obama admitted as much in his address to Congress. The only cost reduction number he cited was a one-tenth of one percent reduction per year in the rate of cost increases. Why? As with everything with these reforms, the answer is that the reforms are centered around preserving the profiteering medical industries.
While there are some long term cost reduction mechanisms in the bills, they don’t amount to much. Electronic medical records will take ten years to phase in but won’t cut costs that much. Malpractice tort reform, if it is ever meaningfully enacted over the campaign contributions of the Democratic Party trial lawyer lobby, would help, but it’s not among the really big contributors to the price of health care.
Obamacare will leave intact the 30% administrative paperwork overhead for filing claims with 1300 different insurance companies. The average doctor will still spend $64,000 a year on medical billing and hire one and a half clerks to do it. It’d be insane if it didn’t make perfect sense for the insurance industry. VERYTHING about health reform revolves around preserving the money making power of the medical industry.
Take the pharmaceutical industry. Obama negotiated a secret deal with them, despite his campaign promise to make the health reform process transparent. They’re gonna give a 50% discount to people in the ridiculous Medicare part D “doughnut” hole, that political compromise under W whereby people with moderately high drug expenses have to pay out of pocket but if your drug costs are lower or catastrophic you’re covered. Finally you’re gonna get a 50% break. That’s going to cost Big Pharma $8 billion a year. But Obamacare does NOTHING else to cut overpriced drug costs and profiteering. Nothing. Obama negotiated away the most important drug reform of all, allowing Medicare, and any public option, to negotiate volume discounts with the drug companies. The $8 billion “concession” by this price gouging industry that gets away with charging us far more for drugs than the same drugs cost in other countries is only point two percent of their annual revenue. That’s .2%.
Hospital costs? The industry has “promised” to pursue cost cuts of $15 billion a year, not much in the giant industry. It sounds good, but most of that will come from a decrease in the charity care it has to provide at discount or no cost to the uninsured and others who can’t pay their bills. This is an improvement in the insane system of tacking charity care costs onto paying patients and insurance bills. But its cost shifting to the government and people forced to buy insurance now. The reforms do little, other than some pilot programs which Medicare and Aid have been running for decades looking for more efficient ways of doing things, to ring the profiteering out of the for profit hospital and non profit act alike industry.
Most importantly, reform does not create the push needed for hospitals and doctors to move away from the gouging “fee for service” private practice system to integrated systems like the Mayo and Cleveland Clinics where doctors work for the organization and are paid annual salaries and collaborate on diagnoses and care. It takes the pressure off doctors to nickel and dime patients and insurance companies to cobble together an income. These clinics rank the highest in the quality ratings and the lowest in costs. It’s an essential reform. Many many experts say so, but it’s not in the “reform”.
Despite all these problems, the reforms are going to put a big dent in the number of uninsured, although they are probably only going to increase the number of insured people from 85% of the population now, to about 94%. Six percent are still going to fall through the cracks and they’ll still be going to emergency rooms and getting charity care which will get rolled into insurance rates. Still tens of millions of people are going to be added to the insurance rolls. There’s going to be a dramatic expansion of Medicaid to people making 130% of the poverty level. And there are billions of dollars in subsidies to lower income people making more than that to help them afford insurance.
All this is very good, but it’s unnecessary if we went to single payer and this is what’s so disturbing about Obamacare, like I keep saying, it’s all about preserving the profiteering. All of these subsidies are going to be paid to the insurance companies. It’s a massive transfer of wealth from taxpayers to the insurance companies, the insurance companies with no price controls, the continuing 30% administrative waste, the bloated executive pay and the dividends. It’s insane. That’s why its important to watch who is going to pay for all of this. All Obama has committed to is taxing high end insurance plans. There’s still a gaping hole in the financing and there will be a big fight over who plugs it.
Why did Obama sell us out on all this? The drug industry agreed to spend $150 million of pro-reform advertising. It’s in their interest, not yours. Think of how many billions they’re going to make from the newly insured, much of which will come from the taxpayers in the subsidies. Obama’s deal is no deal. It’s a pathetic give away. If I had an agent bargaining for me like that I’d fire him, and sue him for malpractice. But the deeper reason Obama caved is that by keeping the industry flush it won’t spend hundreds of millions next year trying to defeat Democratic congressmembers, or Obama in 2012. And that illustrates the sickness of our political system, that they are able to get a way with that threat.
This gets us to the heart of America’s pseudo democracy. Why was Big Pharma and Big Insurance and Big Hospital Corporate Nursing Homes and Big Diagnostics and the AMA able to get away with all of this? It’s because they and the other financial titans – Wall Street, the giant corporations, the media corporations – have near total control of our society. We live in a corporate dictatorship and their domination is so pervasive that many of you reading this don’t even realize it, especially the ones who dumped this essay when it got too “militant” for them. These economic behemoths have no competitor to challenge their power in elections. They can pump billions into campaigns of their shill candidates like Bill Nelson and Kendrick Meek while the conservative corporate media brainwash the electorate into industry complicity, lead by the loud mouth wingnut TV and radio hosts. They have half the Senate and half of the House. Wanna run for Congress? Just make the rounds of the big business groups, shill for them and bingo you’ve funded your campaign.They own this sycophant president and they also have the Supreme Court including Sonia Sotomayor, who doesn’t have the vision let alone will to advocate powerfully for constitutional restraints on the unfettered political power of the giant corporations, which is to be expected from an appointee of this corporate stooge of a president.