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Healthcare privateers are gouging America

Judy Garland, Community Voices • Jun 4, 2019 at 6:45 AM

It’s been a privilege to contribute to Community Voices, primarily as an advocate on issues of quality healthcare as a right, regardless of ability to pay. The newspaper is making room for other voices. I look forward to the new contributors.

I’ve been intending an expansion of my last topic which advocated for Medicare for All, already a major focus of the 2020 election, with all Democrats favoring some form of access to healthcare through the proven infrastructure of Medicare and seemingly all Republicans opposed. I referenced the Health Care Cost Summit, Morning Session (Apr. 2/CSPAN) and encourage you to find time to watch and listen in. It will deepen your understanding and I suspect make you more willing to listen when you hear the way we do healthcare in America being challenged. It will certainly help understand why Democrats keep healthcare reform at the top of our agenda.

It’s important to understand that American healthcare is a cartel made up of insurers, providers, pharmaceuticals, pharmacy benefit managers, medical technicians, plus an army of lobbyists to protect the status quo. It is never going to regulate itself or bring costs down. We’ve failed by tolerating healthcare systems built and maintained on high prices and low levels of competition, in spite of the fact that Americans by overwhelming majority understand that’s what it’s all about. Three out of four agree about why prices soar. Two-thirds agree about the suppressing of competition as the operating model.

Republicans would have you cry “SOCIALISM” whenever you hear the phrases Medicare for All or Single Payer and withdraw into some echo chamber where that’s all you hear, without exposure to facts about where we’re headed and why it isn’t sustainable. Here’s some of what we all need to know.

We currently spend $3.5 trillion dollars a year on healthcare which is projected to increase to $6 trillion by 2027. That will mean no money for defense, education, Social Security, disaster relief, you name it. Healthcare cost now consumes 18% of our GDP (compared to 12.5%, the next highest cost in any western country). We’ll experience soaring cost, even as coverage continues to decline. Something is very wrong, and it’s high time we admitted we’re all in the same damaged boat requiring urgent attention.

The logical reason Democrats are looking first to Medicare as a direction is that Medicare is better at managing healthcare costs. In the last twelve years, Medicare costs have grown at half the per capita rate of the private sector, EVEN WHILE SERVING AN OLDER AND SICKER POPULATION. You see, Medicare is not financially incentivized. It‘s not about profits. Medicare doesn’t depend on cost increases to provide outrageous executive pay, for future acquisitions and capital expenditure, or dealing with bad debt. What Medicare pays for the care of its beneficiaries is about right when compared to what the rest of the world pays. We Medicare recipients know well what a blessing that is.

The problem with employer-based family coverage is that the healthcare privateers will gouge it to the point of non-sustainability, so that now only one in four new jobs even offers insurance. It’s our working population which will increasingly suffer from our profit-based system. Even though it may seem invisible as it‘s deducted from pay, the average basic cost of employer-based insurance is $20,000 a year, with the employer paying around $14,000. It’s from this group that hospitals profit, and so it is, and will continue to be, the group that is gouged, to the detriment of the American business climate. As this happens, employees pay more out-of-pocket, with higher deductibles and co-pays.

Why this came about is complicated and I suggest you access the Health Care Cost Summit CSPAN page to understand it better (advance to the l.01.52 position to begin a brilliant expert analysis). Put simply, it’s this. In the mid-1980s and 90s, the insurance companies consolidated for more leverage to get the better of negotiations with hospitals on cost. In response, hospitals consolidated to create a more aggressive posture with more leverage against employer and private plans. Then they began “buying” physicians, and now control 50% of our doctors. Owning the facilities as well, hospitals now control cost and can charge whatever they want. With the result that both insurance and hospital costs are now out of sight. And it’s not the fault of Obamacare‘s increase in the insured population.

Democrats are adamant about reform and all of us should pay attention and speak up. Republicans have to know by now that we need a serious course correction, and opposing Democrats for the sake of opposing Democrats is not a useful perspective. Employers, labor, and individual citizens should unite to insist that all this not remain a partisan issue. Please pressure Senator Mitch McConnell to at least allow the Senate to vote on the Democrat-passed House bill empowering Medicare to negotiate drug prices. That would be a productive start.

Judy Garland of Johnson City is a community health care activist.

 

 

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