December 3, 2009

Elizabeth Schulte looks at what could be done to fix the health care system--but isn't.

AFTER ALL the deal-making is done in Congress, health care reform legislation--if it passes--won't come close to meeting the expectations of people who were hoping for something to fix an obviously broken system. All the compromises made to entice support from the health care industry will likely leave millions of Americans worse off than they were before so-called reform was enacted.

That, we're told, is that best that could be done under the circumstances. But that's the problem--the circumstances. "Under the circumstances" means preserving the private insurance and drug industries that make unbelievable profits off the status quo.

The money and other resources are there to provide a health care system that guarantees coverage to every American. The U.S. already spends $8,160 per capita on health care--twice as much as the next closest country--but much of that money doesn't go to care. It feeds an unbelievably inefficient and profitable industry.

Most Americans live an illness or injury away from life-changing hardship. Medical bills contributed to more than 60 percent of all bankruptcies in 2007, according to a report in the August 2009 American Journal of Medicine. More than three-quarters of these people had insurance.

For 45-year-old Christine Phillips in Nashville, an emergency room visit after a car accident, in addition to two other expensive operations, doomed her. When she filed for bankruptcy, she listed about $7,000 in unpaid medical bills among her $187,000 in liabilities.

"The medical bills put me over the edge," Phillips, who lost her health insurance along with her job when she was fired because she had missed so much work while recuperating, told the New York Times. "I had no money for food at this point. How was I going to do it?"

The $7,000 in medical bills was a disaster for Phillips--but a drop in the bucket for Ron Williams, the CEO of Aetna--who took home over $24 million in total compensation in 2008, not including his personal use of a company aircraft and vehicle. Williams' pay in 2008 could pay Christine Phillips' overdue medical bills 3,400 times over.

If members of Congress really wanted to find the money for an adequate health care system, they could increase taxes on parasites like Williams--and cap CEO salaries.

But there's a lot more waste that could be done away with. According to Physicians for a National Health Program, more than 31 percent of every health care dollar goes to administrative costs like "paperwork, overhead, CEO salaries, profits, etc."

The process of doctors and other health care workers having to deal with numerous insurance plans at once adds plenty to cost of health care. According to a national survey of physicians by Lawrence Casalino and others, physicians spend an average of nearly three weeks a year on health insurance-related activities, such as authorization, pharmaceutical formularies, claims and billing, credentialing, contracting, and collecting and reporting quality data. Nursing staff spends more than 23 weeks per physician per year interacting with health plans, and clerical staff accrued 44 weeks.

Casalino calculated that U.S. physician practices spend an average of $68,274 per physician per year dealing with health plans--a total of $31 billion a year. Simplifying the administration of health care into one national plan could save billions that could go toward providing people with the health care they need.

BUT COMPETITION, we're told, guarantees consumers quality services, right?

Wrong. Wherever private industry gets involved, expenses rise. So between 2005 and 2006, Medicare's annual administrative costs went from $12 billion to $20 billion, largely because of increased payments to cover the administrative costs of private health and drug plans participating in the program.

"The McKinsey Global Institute has estimated that $5 billion of the increase in Medicare administrative costs during that period could be attributed to payments for the administrative costs of private drug plans managing the new Medicare Part D benefit," reported the Commonwealth Fund. "The remaining $3 billion in increased administrative costs derived from private plans involved in the Medicare Advantage program."

In addition, the billions that drug and health insurance companies waste on marketing their products and services dwarfs the amount they spend researching and development of new medicines and procedures. It's estimated that the industry spends about twice as much on marketing as on research.

"[B]y their own figures, over a third of their employees are in marketing," Harvard Medical School's Marcia Angell told Frontline a few years ago. "Not marketing administration, but marketing. So I think it's safe to conclude that somewhere on the order of 30 percent--over twice the R&D costs--are marketing."

As for the drug companies' claim that they have to charge high prices to cover those R&D costs, in reality, the federal government typically shoulders the most expensive costs of developing medicines--and then hands them over to private companies for distribution, and profit. Such was the case for AZT, the drug used to treat HIV patients.

Competition not only wastes money but denies people the care they need. Insurers are notorious for trying to cherry pick the healthiest patients to provide insurance to--and then denying services and payments they're supposed to cover.

Contrary to what the industry spokespeople claim, the threat to health care isn't future "government control" of the system, but current control by big companies right now--and that will only get worse with the proposals under consideration in Congress.

If members of Congress wanted to find the money to provide the health care that their constituents deserve, they could look at their own campaign coffers. The health care industry runs one of the most expensive lobbying operations in Washington. In 2007, pharmaceutical, medical device and other health product manufacturers spent more than $189 million lobbying Congress, according to the Center for Public Integrity. For their money, they won a shorter approval time for new drugs, among other demands.

Both political parties take health care, insurance and pharmaceutical industry money--in 2008, the insurance industry split their money almost evenly between Democrats and Republicans, according to the Center for Responsive Politics--and both parties do their bidding. That's one reason why you won't see any far-reaching change coming out of congressional health care proposals.

A real plan to fix health care, a not-for-profit single-payer plan, likewise wouldn't rely on maneuvers such as scapegoating undocumented immigrants and poor women wanting coverage for abortions in the interest of political expediency.

There are two health care systems in the U.S.--one for the rich and another for the rest of us. The congressional health care proposals maintain this terrible status quo.