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It's a wager
Insurance companies make a simple wager with you each time you sign a policy. They are betting that, over the life of the policy, they will pay out less to you and your beneficiaries than you will pay them.
Insurance companies of all kinds make tidy profits on this simple wager. If they don’t, sometimes the government will bail them out.
Either way, insurance is still just a bet. And in America, we do not have a healthcare system. We have a health insurance industry.
That industry has been one of the most profitable sectors of the economy for well over a decade. But costs skyrocketed and care suffered. We heard horror stories about rationed care, denied procedures and corporate bureaucracies run amok. Ironically, these were the horror stories we were supposed to hear if the government took the reigns of the “best healthcare system in the world.”
So, instead of a single-payer healthcare system, we got The Affordable Care Act—aka Obamacare. Instead of retiring the health insurance industry and its actuarial tables and profit margins and wagers, Obama “saved” the health insurance industry and enshrined it in perpetuity as the “Health Insurance-Industrial Complex.”
As the Affordable Care Act’s provisions begin to take effect, the folks in the Complex are wasting no time doing what they can to keep their profits tidy. Leading insurers in California are seeking increases in premiums ranging from 20% to 26%. Regulators in Florida and Ohio have already approved increasing premiums as much as 20%, and, since the ACA doesn’t set federal standards, insurance companies are moving in a number of states to force these spikes in premiums.
Remember, if you can “afford” health insurance, you have to buy it. If you refuse, you’ll pay a penalty to the government at tax time. Some are exempt from this mandate. But, in effect, the ACA has guaranteed the health insurance industry a captive market.
Meanwhile, they continue to change the terms of all those bets they’ve placed against millions of Americans and the cost of the “best healthcare in the world” continues to rise. When compared to other nations with some form of single-payer system, the difference is so stark that it’s almost obscene. It’s not just the $800 difference between an MRI in France versus the U.S., it’s almost every part of a system that has at its heart the relentless desire to turn a profit.
Even worse, a much-ballyhooed part of the promised “21st Century transformation” into greater “affordability” has turned out be little more than a profiteering scheme.
Remember the “streamlining” and “cost savings” guaranteed from the conversion to electronic medical records? Well, it hasn’t quite panned out. In fact, the only real beneficiaries of the conversion are companies like General Electric that sell electronic medical records systems. Not coincidentally, GE and other interested parties funded the key RAND study in 2005 that both predicted $81 billion in savings for America’s health care system and also became the driving rationale for the profitable conversion.
This type of closed system is par for the course in Washington, D.C.
Every door revolves in the nation’s only recession-proof city. Is it any surprise that the woman who wrote the Affordable Care Act is now leaving the White House for a job with health care giant Johnson & Johnson? Liz Fowler worked for Senator Max Baucus (D-MT) during the drafting of the ACA and had the primary responsibility for authoring the legislation. After its passage, she migrated to the White House to help with implementation. Seems reasonable enough. However, it is important to note where she was before joining the staff of Senator Baucus. Yup, you guessed it…she was a bigwig at WellPoint, the nation’s second leading health insurance company with nearly 54 million policyholders.
All of this makes you wonder who knew whom in the breast milk-pump industry, which is seeing a huge spike in its profits thanks to a new coverage requirement written into the ACA.
It may be too early to render judgment on a law that hasn’t yet been fully implemented, but it is not too early to determine that the profit motive might simply be incompatible with the equitable delivery of healthcare. As matter of course, businesses try to lower costs and increase revenue. That may be okay when they sell scissors or candlesticks, but it seems ill-suited to deliver labor-intensive care for those who are most vulnerable.
And as far as the health of the insurance industry, it’s a safe bet that they’ll keep coming out on top as the Affordable Care Act is fully implemented.
(the Newsvandal)
Photo by Images_of_Money under Creative Commons license
30 Comments
The profits of GE in regards to electronic medical records (EMR) can be easily avoided if hospitals and other health care providers would just stop being scared of using the best EMR system out there – VISTa. This is the system used by the VA, and it is available to anyone who wants to use it – for FREE! It was developed by the government, using taxpayer dollars – so it is owned by the taxpayers, you and me, and is part of the ‘commons’. If the hospitals and doctors would stop listening to GE’s sales people telling them lies about VISTa, they could just talk to the docs and nurses and people who actually use VISTa and see that it works well. After all, the VA has been using it for decades and has plenty of time to get all the bugs worked out.
And besides – IT’S FREE!
As far as a “public option” in the ACA, there actually is one. It’s called Medicaid. If all the states would just implement it – it was supposed to cover 30-33 million people. Unfortunately SCOTUS said they didn’t have to and so all the Rethug governors are refusing to do so, leaving all the millions of uninsured people in their state, uninsured.
What is the biggest driver of health care costs in this country? The costs of taking care of the uninsured! Every hospital must provide care – usually in the ER – the most expensive form of care – to anyone who walks in the door. Here in Montana, the hospitals report to the State annually, how much money they have spent on this endeavor. Montana is a small state, and each of our relatively small hospitals spends millions on care for the uninsured. Every year. These costs must be made up somewhere else – even by our mostly non-profit hospitals. So they do – by raising their fees on everything else. That’s why an aspirin costs $12 – included is the cost of the aspirin, the light bill, the heating bill, the janitor, the laundry lady, the laundry itself, the nurse who brought it to you, the nurse aide who takes your vital signs, the insurance bill, the building maintenance costs, the taxes, and a portion of those millions of non-covered expenses run up in the ER by those poor people with no insurance.
So, there IS health care in there – by providing PUBLIC insurance for those 30-33 million people, it reduces health care costs for everyone and makes health care itself more affordable – thus better – for everyone too.
My final point: best practices. (This is known as “death panels” by the right wing) The best hospitals and providers (Mayo Clinic, the VA, Cleveland Clinic, etc) utilize what are called “best practices”. When a patient has a problem, the doctor looks on a computer to see what other doctors/hospitals faced with a similar problem have done. She/he are shown all of the various things that have been tried, and what the best outcomes were. The “best practice” consensus is then recommended for the doctor to follow in order for their patient to have the best recovery.
The ACA provides funding for this to be implemented nationwide. This IS real health care of the best sort. I know the right wing thinks it is a conspiracy to kill off old people and ration health care, but it is not. What health insurance companies do now is actually death panels that ration health care, deny expensive treatments even if they are proven to work just on the basis of how much they cost, and cut corners every way they can.
Best Practices recommends the best treatment for the best result – it is not about cost, it is about results. Less complications, less re-admissions because the patient is sick again, less days in the hospital because the patient gets better faster.
Real health care based on facts and science. Isn’t that what we want?
Okay, I’ll quit now.
You couldn’t be righter, JP Sottile. Understandably, people are still looking for a little hope in the Affordable Care Act, but it isn’t there–and you’ve ably shown why. Recommended.
… X 2
Right. And the ACA forces all of us to be customers of this repulsive system you just accurately described.
Nuff said.
There is lots of hope in there….. if you’re a health insurance company.
This bill should’ve been called the HIPPA act, Healh Insurance Profit Protection Act.
The federal government had it’s best opportunity since FDR to finally get a real health care system and instead of helping patients CHOSE to force patients be cannon fodder and profit providers for the insurance industry.
And this was ONE HUNDRED PERCENT the result of DEMOCRATS. Not a single Republican voted for this bill. So no one can claim the bill is watered down to placate Republicans. Not a SINGLE compromise in this bill was for Republicans. No Republican voted for it. Only Democrats voted for it, and it was Democrats that CHOSE this route rather than something more beneficial to patients.
If you want proof that the Democratic Party is steadily moving right rather than slowly more progressive, as at least one well known D defender on these forums claims, consider this. In the 1960′s when it was considered necessary to reform senior citizens health care, they PASSED single payer health care, what is known as Medicare. In 2010, single payer health care wasn’t even allowed to be discussed.
Anyone claiming the party is moving in the right direction albeit too slowly means that literally, the direction they’re moving is RIGHT.
Problem is economic, not medical. No cost containment.
Often it’s not even access to healthcare.
Hey, remember that Kucinich guy the democrats wouldn’t let in the debates? He said it…”Those other people are talking about insurance, I’m talking about healthcare.”
JP…don’t be a sparkle-pony, pie-in-the-sky “enemy of the good”. ACA is a-okay, because it’s the best possible outcome of Obam-bam’s eleventy dimensional chess match with the Rethugs and because if McLame or Mittens had been elected we would have gotten something much, much worse…
Go Team “D”!!!
Dennis K was not a company man.
so if the MHCI industry does better when people are in better health, why aren’t they protesting our corrupted food system??
I thought he voted for it.
Never did get why Democrats called it “health care” reform when it was actually health insurance reform. It would have been a lot easier to sell as such. But then, maybe they didn’t really want to succeed.
It’s true: responsibility for this glued-together mess falls squarely on the Democrats’ doorstep. They gleefully did the bidding of their corporate masters.
Kucinich and some others realized the only viable path to single payer is state by state.
Vermont is slowly doing it. California legislature passed it twice, but Arnold vetoed it.
Canada had to go the piecemeal route. The seeds of reform are there, but its going to take some serious effort to grow single payer.
I’ll be in Salem Feb. 6 to demonstrate and do some face to face lobbying for single payer.
Right now thats the most constructive action I can think of. Probably pissing in the wind, but WTH..why not..
Thank you for the great article. Your comment “We don’t have a health care system. We have a health insurance industry.” is a point that I’ve been making with my friends for the past four years. It’s so true and it completely nails it. That is at the heart of the issue in terms of resistance to a healthcare system that works: Most Americans don’t make a distinction between healthcare insurance and the healthcare itself. They seem consider them one and the same, which of course they are not.
In discussions I often hear arguments such as “We have the best doctors in the world.” [which actually is debatable] They don’t realize that the doctors and healthcare workers are not only not the same as the insurance companies, but they also get the shaft from these shysters just as the policy holders do.
The other thing that mainstream media neglect to point out is the obvious fact that private health insurance will always be more expensive than a single payer healthcare system because the private health insurance executive management and investors must also be paid. Having these middle men will ALWAYS make our healthcare system inefficient and more expensive than the European model (and by European I don’t mean England or Canada).
Until private insurance is kicked out of our healthcare system, I don’t expect any big change in the USA, only spiraling costs. There are a few institutions and industries that should not be open to private profit driven enterprises: Healthcare insurance, prisons, schools and public utilities.
Until voters wake up and kick multimillionaire Wall Street investors and corporate shills out of Congress, we can continue to expect the healthcare industry to be propped up by corporate shills like Max Baucus
Have you been drinking this morning or are you an Ins. Agent. The only plan we need as a people is Medicare For All! 2-3% overhead. When you can get there, then we’ll talk. The words profit and healthcare cannot be justified in the same conversation.
That was a reply to “health insurance”, who disappeared. Thank you.
X2, LB, I’ve been following many years also, and yours has been a voice of reason. Thank you. I wonder what DK was told on Air Force 1 to force him to vote for this. As i’m sure you know, they destroyed him anyway.
Truth, JP Sottile.
Very much appreciated.
Recommended.
DW
i was just listening to O’s press conference in which he said he would cut spending on health care, ‘the main driver of deficits’. Looks like Medicaid and Medicare are going down the chute followed by those who rely on them for health care access. (Any cuts to provider payments will be passed on to patients as out-of-pockets. And in the New Economy, there is nothing left in those pockets with which to pay.)
As the great Lisa Derrick likes to point out – nomenclature is destiny.
Well, Medicaid and Medicare now fall under the rubric of “entitlements.” This term implies that these are things people feel a right to have, but do not really deserve. Americans live in some boot-strapped, Horatio Alger fantasyland concocted in the 19th Century mind of Andrew Carnegie. If you are not “successful,” you should be punished. In fact, that goes back to our industrious, financially-obsessed and predestination-minded Puritan forebears. They believed that the only way to determine if they or their neighbors were going to Heaven was to look at the bottom line. Wealth was considered one of the “signs of election.” Funny how that sounds just like our political system today.
Anyone who has got to live with the COBRA knows all about so called Healthcare in this country. I’d move to Canada in a heartbeat, but they don’t want old Americans , who can blame them.
Your comment is truth, as well, JP Sottile.
Well said.
And also very much appreciated.
If comments might be recommended, then yours is one which well-deserves the added applause.
DW
‘Entitlements’ is a pretty noxious frame, haviang just the kind of resonance you point out. Which is truly wierd as Medicare, Medicaid and SS are all funded by taxpaying citizens. If taxpaying citizens should not benefit from the payment of their taxes, who the hell should?
Paying for the uninsured does jack up our taxes and provider charges (and consequently our premiums and out-of-pockets) — but it is definitely not what accounts for our grossly inflated aggregate health-care costs. We spend just shy of 18% of GDP covering around 85% of our population, while the world’s second most expensive health-care system, Switzerland’s, spends around 12% of GDP to cover nearly 100% of their population. Their rich are paying higher taxes to help subsidize premiums for their poor, and the country is still only paying 12% of GDP for health care. Something else is at work:
Every other developed country’s health-care system (regardless of its technical implementation) shares most of the core elements of single-payer:
* Monopsonistically bargained, uniform price schedules for providers
* A universal pool of insureds
* A universal provider network
* Uniform policies offering a high level of minimum coverage, with relatively low patient out-of-pockets
* No profit-making on minimum coverage
* Centralized or harmonized claims and payment processing
* No, or relatively limited, medical underwriting and cherry-picking
* Largely progressive funding, whether via taxes or progressively subsidized premiums
Our system has none of these features … and it won’t have any of them under Obamacare. The attendant administrative waste and profiteering is costing us around one trillion dollars a year (~6% of our 14.7 trillion GDP) — more, when Obamacare is fully implemented. And that trillion-dollars-plus is going into the pockets of the private interests that have shaped and designed our health-care system, including most particularly Obamacare.
So it’s not “paying for the uninsured” that’s the problem. Every other developed country “pays” for its poor and still spends dramatically less than we do. It’s the fact that we don’t have single-payer, or a system incorporating most of its key elements.
…excellent comment … succinctly stated …thank you PCM
This is knowable to you PCM now and also to anyone else as well– it had to be knowable and known to B.H.Obama and Obama WH in 2009.
We got sold out by B.H.Obama and Obama WH so that AHIP would/could win the big money payout(s) while 99%/90% USians get to pay these winnings out to AHIP.
B.H.Obama belongs in a jailhouse — not the WH.
Yours is another comment more than worthy of recommendation, PCM, thank you.
DW