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Paying for National Health Insurance ... and Not Getting It

Wealth and Health

by CARL FINAMORE

Let’s not kid ourselves, despite all the talk about healthcare reform the last few years, getting sick in America is still very risky.

There are 25 million people with insurance in 2010 still struggling to pay medical bills according to a conservative estimate by the Commonwealth Fund. In fact, nearly two-thirds of all personal bankruptcies are still linked to those debts.

Meanwhile, those without any health insurance were estimated at 48 million in 2011 with the Congressional Budget Office estimating that even after the Affordable Care Act is fully implemented seven years from now, at least 29 million people will remain completely uninsured.

Overall, not such a good social contract for most Americans.

However, it appears to be a very good deal for wealthy investors. What better source to consult than Bain & Company. Yes, that Bain & Company. According to Bain, private equity global investments in healthcare doubled in one year – from $15 billion in 2010 to $30 billion in 2011.

That remarkably concentrated investment represents a whopping 15 percent of all private equity deals in the world last year and netted an astounding profit of $500 billion. The question is raised – what impact, aside from the aforementioned huge profits for the few, does that investment in private healthcare have on the rest of us?

I wanted to ask this and other questions of someone equally expert at providing care to patients as Bain is at making money off patients. So, I paid a visit to a working doctor attending the October 27 national conference of Physicians for a National Health Program (PNHP) held in San Francisco.

Andy Coates MD, is president-elect of PNHP, an acute care physician at a community hospital in upstate Troy, New York, a medical director at a county public nursing home and a faculty member at Albany Medical College. A busy guy.

Asked to identify the number one problem with healthcare in the United States, Dr. Coates replied:  “I am very tempted to say ‘profit is the problem,’ end of story.”

But there’s more. “The American system has an enormous amount of unnecessary bureaucratic waste,” he elaborated. “A great burden of time-consuming administrative efforts, aimed at extracting profit from caregiving, weighs upon us.  So much of the cost of healthcare has nothing to do with what is happening at the bedside. The quest for corporate profits undermines the effort to provide medical care to human beings.”

Healthcare is Big Business Funded by Our Taxes

Some might be surprised that the for-profit healthcare system Dr. Coates criticizes so sharply is mostly paid for with our tax dollars. Through tax subsidies for private health insurance and for public employee health benefits, through direct government Medicare and Medicaid subsidies and through numerous other ways, our taxes pay around 60 percent of our current health spending, or as PNHP leaders Drs. Steffie Woolhandler and David U. Himmelstein say, we are “paying for national health insurance and not getting it.”

Woolhandler MD, is professor of public health at City University of New York, visiting professor of medicine at Harvard Medical School and spokesperson for PNHP. She told me that “the majority of healthcare funding in other developed countries is also paid through taxes but in each case the costs are much lower and you get more.”

Incredibly, health spending amounts to around $9000 per capita in this country whereas other developed countries spend about half as much because they have some version of a not-for-profit national public healthcare system.

It’s another sad commentary that the data also clearly establishes that “our system does not perform any better,” says Woolhandler, such as, for example, in life expectancy where we are two or three years behind other developed countries.

Actually, we do not have to go too far to find more comparisons between private and public forms of healthcare delivery. We can look right here in this country.

For example, the completely government paid and operated Veterans Health Administration (VA), widely acclaimed for its superior medical services, makes bulk purchases of prescription drugs at substantially reduced costs.

By contrast, the government is prohibited by law from making these same bulk purchases on the open market on behalf of Medicare and Medicaid patients because it would undercut monopoly profits of pharmaceutical giants.

Another comparison is the cost advantages of the two systems. Fortune magazine called the not-for profit VA “the most wired and cost-effective health system in the land” whereas the private sector squanders around 31 percent of their budget on non-treatment related administrative costs. These statistics are not secret. In fact, they are generally known.

As Walter Tsou MD ,PNHP member and past president of the American Public Health Association told a San Francisco public forum on October 29, “We know what works, all we have to do is pay attention to the social science data.”

But even when these savings are clearly documented, the for-profit system is so entrenched that government Medicare and Medicaid tax funds continue flowing to private providers and insurers such as the expanding Medicare Advantage programs. And here is where, according to PNHP, the private sector grievously repeats its pattern of extravagance and greed.

Facts are Facts but Money is Power

According to research soon to appear in the International Journal of Health Services by a group of policy experts, including Dr. Woolhandler, it was determined that the amount of tax dollars that Medicare has “overpaid private insurance companies under the Medicare Advantage program and its predecessors over the past 27 years is a startling figure of $282.6 billion in excess payments, most of them over the past eight years.”

That’s wasted money that should have been spent on improving patient care, shoring up Medicare’s trust fund or reducing the federal deficit, researchers said.

So, here we have the rather noteworthy variance of huge amounts of public dollars going to private suppliers of healthcare, often insatiable Wall Street investors operating without any of the control or regulation taxpayers should expect. Is there any wonder costs are going up?

We as a society will pay the price as millions of uninsured avoid treatment, millions suffer economic hardship because of rising co-pay and deductible costs and millions discover too late their skimpy insurance coverage will not cover their medically recommended recovery plan.

“We need to be active on these issues,” San Francisco single-payer activist Don Bechler told me at the PNHP conference.

“When we have access to the microphone, we win these debates. So, to organize the campaign for universal healthcare minus the insurance companies, it is important that people go to singlepayernow.net or healthcare-now.org and support the national ‘Improved and Expanded Medicare for All Act’ in Congress (HR 676).”

Certainly both research and activism are necessary components of the renewed and reinvigorated national healthcare debate that we so desperately need. But, for this debate to be productive, it cannot, unlike the Congressional discussions we’ve seen, tap dance around the greed and inefficiency of the profiteers who are engulfing and undermining our medical system.

Carl Finamore is Machinist Lodge 1781 delegate to the San Francisco Labor Council. He can be reached at local1781@yahoo.com 

Sources available upon request.