Articles by JCS
Wall Street attitudes ruin health care
Columnist Walter E. Williams who writes for Creators Syndicate attempted to enlighten readers about “affordable health care” in his article (10-23-08), “Can government deliver ‘affordable health care’?” He suggests that socialized medicine in Canada and the UK are plagued by delayed surgery, “health tourists” fleeing to other countries for care, and that the solution is more free enterprise. As usual for many uninformed writers on the healthcare dilemma in America, Mr. Williams fails to enlighten readers to the dire situation of American healthcare itself and why it’s failing.
The problem is that there is never has been nor ever will be free enterprise in American healthcare. Unlike the free market where meritocracy prevails, in the medical plutocracy where profiteers control the HMO boards, hospitals, drug companies, and every aspect of the healthcare industry, the best or cheaper mousetrap often fails to emerge in the marketplace. Compound the perverse economic motivation with intransigent MDs who ignore innovative mainstream medical or CAM methods, and we have an industry stuck in time, bias, tradition and tons of money. Medicine is wrought with too many surgeries, too many expensive MRI scans, too costly, ineffective, addictive, and dangerous medications, and an emphasis on disease care rather than preventative health care.
The Institute of Medicine, a part of the National Academy of Sciences, a private organization chartered by Congress to advise the government on scientific matters, released in its report, “Crossing the Quality Chasm: A New Health System for the 21st Century” mentioned that “Despite the major advances in medical research and disease treatment, the American healthcare system is failing to improve the care of patients.” This report also states that most troubling is that proven methods that can save lives and improve patient outcomes are not being used in everyday practice.
This publication courageously concluded that "the American health care system is in need of a fundamental change," especially because "what is perhaps most disturbing is the absence of real progress toward restructuring health care systems to address both quality and cost concerns."
We now know that superficial makeovers will not suffice. The IOM indicated that entirely new patterns of thinking will be necessary to escape this dilemma. "Our present efforts," suggested Mark Chassin, M.D., M.P.P., M.P.H., "resemble a team of engineers trying to break the sound barrier by tinkering with a Model-T Ford. We need a new vehicle, or perhaps many new vehicles. The only unacceptable alternative is not to change."
Indeed, if the electronics industry had such resistance to change, we’d still be in the vacuum tube era. Only in the medical plutocracy do we see such intransigence to change for no other reason than to suppress competition and maintain profits. Perhaps this explains the poor stats in the WHO study that rated the USA as #1 in cost, #37th in health care delivery, and 72nd in population health. (World Health Organization, The World Health Report 2000: Health Systems—Improving Performance, 2000).
The system is obviously broken, but the fat cats have no interest in changing this profitable albeit ineffective healthcare system since they’re making too much money with the present HMO system, a note Mr. Williams failed to mention in his column.
Profiteering in American Healthcare
Not only has Wall Street revealed how shysters with golden parachutes operate in a deregulated opaque environment, the healthcare industry has the same shysters in the HMO businesses. The public remains unaware of these shysters since the health care insurance industry hasn’t collapsed, yet. Instead of a $700 billion loan from Congress, the HMO industry has been propped up by double-digit increases in healthcare premiums for the past 8 years as it “squeezes care to expand profits.”
Shortly after George Dubya Bush was elected, the White House told all the healthcare lobbyists not to come around speaking about Health Care Reform or the proposed Patients’ Bill of Rights—issues begun during the Clinton administration. Instead, Bush decided to let the health care industry manage this huge issue of healthcare reform. In other words, the Republican wanted to “privatize” these services to let the “market” decide by eliminating governmental oversights or regulations. The rest is history, not unlike the present oil and banking scandals with the consumer paying more for less service.
After 8 years of this medical/HMO/pharmaceutical plutocracy—this wealthy class that controls or greatly influences the government of our society—we see the horrible results with over 47 million Americans without any coverage, decreasing patient services as premiums escalate and, most of all, HMO executive salaries escalating beyond imagination
According to Richard Coniff, the problem is the vast difference between for-profit and non-profit healthcare systems in terms of administrative costs. Medicare now covers about 40 million seniors, gets high marks for customer satisfaction and whips the private sector on efficiency by allocating approximately 5% toward administrative costs. On the for-profit side, private insurers spend six times as much on administration, proportionally—mostly to weed out costly customers or fight payment. This is a cash cow for HMO executives too.
(Conniff, Richard; How to fix: Health care; MSN Money Feb. 19, 2008.)
Indeed, the policy holders have been bailing out the healthcare insurance industry for years now, while CEOs have their golden, if not platinum, salaries and parachutes, most notable the former CEO of United Healthcare, Dr. William McGuire, who in 2004 was paid $158 million along with 5-year bonuses totally $1.6 billion.
This egregious compensation didn’t escape the comments of columnist Steven Pearlstein of The Washington Post: “Isn't it odd that a company could be so persnickety when it comes to pinching pennies from doctors and patients, and so cavalier when it comes to lavishing executives with hundreds of millions of dollars of shareholders' money? Or maybe it's not. Maybe what we have here is the most outrageous corporate scandal since Enron and WorldCom.”
(Pearlstein, Steven, UnitedHealth's Options Scandal Shows Familiar Symptoms, Washington Post, October 18, 2006.)
While healthcare insurance costs have risen dramatically with double-digit inflation since 2000, we’ve seen patient services drop substantially. Why are Americans paying more for health insurance, but getting less coverage and poor service? The problem with American health care is not the doctors or patients, but the real culprits are the greedy executives in the Health Maintenance Companies (HMOs), hospitals, and drug companies.
Indeed, health care in America is a function of plutocrats and bureaucrats who are living high on the hog, to say the least, at the expense of patient and providers. Take a look at these numbers of the HMO kingpins and ask yourself why the USA doesn’t implement nationalize healthcare for all as we do for our seniors with Medicare.
Top 6 Health Plans Annual Totals compared to US Government salaries:
• Grand Total for 6 HMOs in 2007 was $277,998,393
• U.S. Government Leaders Salaries $95,974,600
• Executive Branch $3,517,600
• President $400,000
• Vice President $221,100
• Cabinet Secretaries (15) $2,896,500
• Judicial Branch
• Justices (9) $1,881,000
• Congressional Salaries $90,576,000
• U.S. Senate - (100 members) $16,930,000
• House of Representatives - (435 members) $73,646,000
Taken together, these six health plans paid 37 executives three times (average salary of $7,513,470) what the top 562 leaders received in the federal government (executive, judicial, and legislative; average salary of $170,773).
Not only is this incomprehensible for working class people, it’s a rip-off for their own stockholders and clients who are bilked by these insolated executives with platinum parachutes.
If these egregious salaries aren’t enough to make you scream out for a total change to a nationalized healthcare system, what would? Sadly, these medical plutocrats control the system with the blessings of the Bush White House and defended by the largest medical/drug lobby in Washington. Until this tragic market failure is known by every American, we’ll continue to see such inequities in USA healthcare.
Mr. Robert Kuttner is co-editor of the American Prospect and a senior fellow at a New York–based public policy research and advocacy organization. In The New England Journal of Medicine, he wrote an eye-opening article about this HMO mess, Market-Based Failure — A Second Opinion on U.S. Health Care Costs @ http://content.nejm.org/cgi/content/full/358/6/549
“The extreme failure of the United States to contain medical costs results primarily from our unique, pervasive commercialization. The dominance of for-profit insurance and pharmaceutical companies…raise costs and distort resource allocation. Profits, billing, marketing, and the gratuitous costs of private bureaucracies siphon off $400 billion to $500 billion of the $2.1 trillion spent, but the more serious and less appreciated syndrome is the set of perverse incentives produced by commercial dominance of the system…
“Comprehensive, government-organized, universal health insurance systems are far better equipped to realize these efficiencies because everyone is covered and there are no incentives to pursue the most profitable treatments rather than those dictated by medical need.”
(Kuttner, R., Market-Based Failure — A Second Opinion on U.S. Health Care Costs, NEJM, Vol 358:549-551 Feb. 7, 2008, Number 6.)
Obviously the present American HMO system of healthcare is not working for citizens, especially the 47 million uncovered. While Mr. Williams criticizes those universal systems in Canada and the UK, the fact is they do get more bang for their buck—less costly and better overall results. Just as Wall Street proved unregulated capitalism is corrupt, so too have the HMOs proven that their brand of healthcare is expensive and ineffective. Until we overhaul the best of universal healthcare with a dash of American ingenuity, we’ll continue to see more dollars spent on less effective treatments, allthewhile the HMO fat cats laugh all the way to the bank.