Democracy Under Assault
The rhetoric surrounding U.S. health care reform often obscures the real nature of health cost drivers, cost-shifting and reduced access. Reformers generally fall into one of three camps - advocates of privatizing all health insurance, including Medicare and Medicaid; proponents of a single-risk-pool public or national insurance; or some blend of public-private insurance.
For over three decades, ultraconservative groups like the Heritage Foundation have led the forces of corporatization. Declaring opposition to all forms of social insurance programs, including Social Security, Medicare and Medicaid, Heritage president Edward Fuelner has vowed to privatize them all. The tide of corporatism since the ‘90s has favored the privatizers.
The decades-long effort to eliminate Medicare as a true social insurance plan by moving seniors into multiple private plans, received a huge boost from the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA). Steered by the powerful insurance and pharmaceutical industries to benefit their bottom lines with billions of dollars of subsidies and inflated profits, reform expanded privatization through Medicare Advantage health plans that are subsidized by taxpayers at 12 percentÂ higher cost than traditional Medicare, with its lower 3-4% overhead cost.
Medicare has also been undermined by a series of cuts to provider reimbursements— underpayments that few providers are able to absorb. The ironically-named Medicare Sustainability Act in the ‘90s called for 9 annual cuts to provider reimbursements; another 10% cut is scheduled for January 2008.
Jockeying for rhetorical advantage in the health care debate during recent elections, the Republican Congressional Campaign Committee distributed candidate talking points, advising: "Never use the word ‘privatize’ when referring to Medicare…" Instead, terms like "choice" and "free-market" competition mask the intent to destroy Medicare as a social insurance plan and turn it into a defined contribution or voucher plan for purchase of private insurance.
George W. Bush’s disparagement —"federalized" health care— pointedly invokes fear of any government role in health coverage. The misnomer "socialized medicine," while appropriate for select systems like the V.A. and Great Britain, serves as distraction from the fact that our complicated administrative system of over 1200 private health insurance companies greatly inflates overhead costs to 31% of all health care dollars spent.
Inordinately high overhead costs of commercial insurances areÂ comprised of administration, marketing and profit-taking. The primary responsibility of private insurance companies is to earn profits for shareholders, rather than to leverage shared risk of a large insurance pool. Several years ago a Maine hospital administrator summarized the perverse incentive of profit-driven health care: Profits are guaranteed by insuring the healthy and eliminating everyone with a "preexisting condition." Profit-driven health care inflates health costs and perpetuates cost-shifting to taxpayers and the insured. The advantage of a single-payer health insurance risk pool are the large savings permitted by spreading cost and risk, and negotiating fair health costs across the widest pool.
So-called ‘consumer-driven’ or ‘free-market’ health care are essentially high-deductible catastrophic insurances that shift greater risk and cost to individuals. Not only do higher out-of-pocket expenses delay basic health care and result in higher-cost delayed care, they also contribute to higher rates of personal bankruptcy—over 50 percent now linked to medical bills.
Representing prohibitive out-of-pocket expenses for all but the wealthy, health savings accounts (HSAs) attached to catastrophic plans shift the cost of subsidizing tax credits for the rich to poor and middle-class workers. It is improbable that racial and ethnic minorities, who suffer disproportionately from acute or chronic conditions (e.g., diabetes, asthma) and are more likely to be low-income, could save $1,000 or more to put into an HSA. It is more likely that they would be harmed by delaying care due to high deductibles.
Increasingly, high-deductible catastrophic health insurance is identified as cause of uncompensated hospital and provider care. The American Hospital Association reports that between 1995 and 2005, consumers’ out-of-pocket medical bills increased 59%, and uncompensated health costs rose 60% nationwide. In response, some hospitals have begun to require up-front payments from individuals with high-deductible insurance. The cost of unpaid health care billsÂ continues to beÂ shifted to taxpayers and consumers.
Longtime editor of the New England Journal of Medicine and professor at Harvard Medical School, Dr. Arnold Relman in 1980 warned about the rise of a new, powerful U.S. "medical-industrial complex." He noted the commercialization of medicine is neither in patients' or society's best interest, and undercuts the ethics of the profession. Relman continues to call for a complete overhaul of the incentives that drive delivery of health care, and its mode of financing. Get control of the U.S.’s 'exorbitantly expensive' health care, and everyone can be covered, he maintains.
Dr. Relman advocates single-payer health care that covers everyone, like traditional Medicare for the elderly. He predicts that either doctors will accept fundamental change, or ultimately "the practice of medicine will be run by corporations or it'll become socialized and doctors will work for the government."
The more acceptable option is a single-risk pool public payer, private provider health care that would eliminate enormous administrative waste while cutting out-of-pocket expenses for the vast majority. It would permit everyone free choice of providers and hospitals, and herald a new era of quality-centered, instead of profit-centered, health care.