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The Actually Existing Health Care System


There is nothing inherently wrong with spending 17 per cent of GDP on health care if the result is a really healthy population. Just like there is nothing wrong with a “big” budget deficit if the money goes to making good jobs for working people, cleaning up their cities and environment and bettering schools instead of making rich financiers richer.  But given the fact that countless pregnant women go without sonograms, diabetes is near epidemic proportions, dialysis patients on average die within five years (in Japan they live 20) and, most significantly, the number of primary care doctors remains very low — taking preventive care off the agenda for most — the US health care system is a travesty.

Medicare is the point only if you let private health care off the hook.  We know that President Obama did exactly that when he invited in insurers earlier this spring and announced their voluntary commitment to cost containment (only to have them repudiate his interpretation of their comments within days) and you go before the nation in a news conference, July 22, and devote the presentation to existing government programs.

American health care is reeling because it is a profit center where gouging is the norm.  For-profit clinics and hospitals print money, paying out hefty dividends and huge salaries to management.  Not-for-profits operate along similar lines.   Ask Michelle Obama, who pulled down a reported $400,000 a year at a Chicago hospital doing non-medical work.  But that’s just a small piece of the action.

There is so much gouging, so much greed and gross profiteering, that you have to wonder why Bernie Madoff didn’t go that route and save himself a lifetime in prison.  Among the worst abuses was the conversion of non-profit insurance companies to for-profit institutions over the last decade.  The CEOs of numerous insurers walked away with hundreds of millions of dollars, each.  United Healthcare’s boss got close to a billion bucks for handing over the reins… until an outcry by consumer groups led to a reduction– to $800,000,000.  That’s a lot of money not going to underserved children. The sale of one Preferred Provider Network, Multiplan — nothing more than a sophisticated referral system — to private equity firm, Carlyle Group, a few years back netted the owner close to a billion bucks.   The top HMO chiefs have pulled down hundreds of millions of dollars year after year — again, nothing directly to do with getting people medical care.  If you start adding up the fees, options, salaries and other bounty extracted from the health care system by the top one hundred individuals associated with it over the last decade, some good portion of the $1 trillion now cited as needed by President Obama would be tallied.   To add insult to injury, a new Harvard study reports that the majority of people going bankrupt from medical costs are, in fact, insured.  What makes them go bust is that their insurance policies are “an umbrella full of holes”.

Fraud is pervasive in health care.  No surprise in a country where, according to Monthly Review, a hefty percentage of rents and dividends go unreported to the IRS.  Or where armies of accountants figure out how shift income off balance sheets.  Or where bond raters created a AAA-rating for subprime loans (when they were, in fact, junk bonds) and brokers traveled the world selling these debt instruments as top-rated.

But even if the system were cleansed of all the health fraud we would still be in a terrible mess in a despicably stratified health care system where discrepancies in longevity within our population run to 20 per cent.  The fact is that more and more data come out proving that in the US more care does not equate to better health.  Talk about a can of worms.

This brings us to Medicare, a system of reimbursement to medical institutions and professionals.  When made into law there were howls against it.  Over time it caught on.  The medical establishment does not like Medicare because it pays 20 per cent less than private insurance.  Pure and simple.  Medicare is actually the best thing going and were the White House to spearhead a plan to expand Medicare coverage much could be accomplished.

It doesn’t help Medicare when Congress passes a law forbidding it to negotiate for lower prices from the pharmaceutical industry.   Even JP Morgan/Chase’s Jamie Dimon would salute that lobbying effort. No other industrial country in the world holds back from using its market power to get drugs cheaper.   And it doesn’t help when a company like Amgen, the preeminent biomed firm, introduces a drug like Epoetin — an enhancer of red blood cell growth — and charges Medicare billions and billions for it, making Amgen investors ridiculously rich, and our Treasury a lot poorer.  Why did Medicare agree to pay Amgen such lofty prices for that drug?  Suffice it to say that the door between industry and the upper echelons of Medicare is a revolving one.

In principle, Medicare makes the most sense of anything going in the US health system.  And if it were to be run more efficiently, and the prices charged by the health industry strictly controlled, progress would be made.  But to simplistically suggest that the country is going broke because of Medicare (and its sister legislation, Medicaid) without identifying the culprits, without looking over the payable invoices does us all a disservice.

With his fanatic commitment to free markets President Obama’s stated commitment to working families unravels with every passing day.  Word is that the good people in Washington are starting to glaze over, as this president’s capacity for talk — and serving corporate interests — seems to have no bounds.

CARL GINSBURG is a tv producer and journalist based in New York. He can be reached at









CARL GINSBURG is a tv producer and journalist based in New York. He can be reached at

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