Bicker, Back & Forth, PS.

Why is a public option a necessary component of meaningful health care reform?

Posted on 19 August 2009

Public option is a necessary component because without it the Insurance companies and the medical-industrial complex has already won.  What they want is an individual mandate or employer mandate – they don’t care which, they see that not as an opportunity for Americans to receive care  but as a guaranteed 50 million new customers.

In this health care reform land grab, Pharma has already wne almost everything it wanted already reports the WSJ

1. No Cost cutting
2. No cheaper drugs to be imported from Canada
3. No Negotiations for price breaks based on quantity by Medicare or any other government program
4. and Monopoly protection against generic drugs for 12 years

Their wins didn’t come for free though, so far this year they have spent millions on lobbying and campaign contributions,

• BigPHARMA $12.1 million             Pfizer $11.7 million     
• AMA $4 million             Eli Lilly $3.6 million      
• AHA $3.5 million          Blue Cross $2.8 million

Following the Sunday morning political shows, this Sunday the administration’s healthcare proxies seemed to have signaled that the White House was open to reach compromise by rejecting it’s former insistence on a public option, instead floating the idea of local health care cooperatives.  One thing we do know is that without some form of reform even the people with insurance today won’t be able to afford it for much longer, but I suppose in the mean time the insurance industry will make record profits and start diversifying into other sectors of the economy in preparation for the eventual collapse of our health care system.

A public option is necessary because nowhere else in the world is there any successful health care system based upon a for-profit insurance model.  If you believe that in every instance free market forces lead to the most ideal results – why isn’t there one successful for profit insurance model health care system anywhere?  If some form of cooperative health care system were formed, the insurance companies are smart, even requirements to refrain from punishing the ill with high premiums, denying coverage to those with pre-existing conditions (which really is most of us by age 50) and prohibiting other tricks of the trade would not prove enough.  The companies would just devise increasingly brilliant ways to avoid making payouts.  The business model for any insurance company is as simple as it is amoral: to take in as much as possible in premiums while paying out as little possible in claims yet nobody speaks about this.

The obligation to provide the best care to patients while producing the largest return to shareholders in a for profit system is intrinsically and perhaps irreconcilably inconsistent.  Nonetheless, the truth is that healthcare reform without a public option just means more profits to health care insurers.  Under the “individual mandate” plan every American would have to purchase insurance or pay a tax penalty (currently 2.5% of modified AGI).  Under the employer mandate plan even the smallest businesses will have to offer employees health insurance of pay a substantial tax penalty (currently 8% of payroll expense) – Both of these provisions will, despite any additional regulations increase the market share for the insurance industry from where ever it is now (which obviously is 47 million short of 100%) to just that, 100% of the market.  It is nothing short of 50 million new customers to them.  No wonder Business Week declared as a cover story on August 6, "The Health Insurers Have Already Won"  Those windfall profits would make the health care industry even more powerful than it is today and frankly I don’t think I’m alone in believing that it would mark the end of any possibility for meaningful health care reform in the United States for generations.

Every single other wealthy country other than the United States guarantees essential health care to it’s citizens.

There are three models.

Britain’s government runs its own hospitals and employees the doctors.  There are horror stories, but every care system has them, overall though the NHS is the largest employer in the EU with over 1.2 million employees which provide good care to everyone in Britain while spending only 40c of every dollar we spend on healthcare while providing better healthcare outcomes.  My personal experience with it is that it provides excellent care, I had an ambulance trip to a UK hospital and stayed over night just about this time last year – it cost me nothing and I received state of the art care.  I’d like to point out that the VA which in the past had a troubled history but in recent years has been doing an excellent job of treating veterans is run precisely on the British model.

In Canada universal coverage is left in the hands of private insurance companies and providers, but the government pays the lion’s share of the bills, in a more complex manner France does the same and with what the WHO describes as the best health care outcomes in the world.

French healthcare is excellent, Canadians with chronic conditions are polled as having higher satisfaction ratings with their care as Americans.

Finally the Swiss they have a private insurance system but with mandates to prevent exclusions for pre existing conditions, and punitive premiums.  It is this system that is most close in nature to the public option currently being discussed.  But of course opponents liken it to the British and Canadian systems because in the minds of Americans they already carry a stigma.

As Nobel winning economist and New York Times columnist Paul Kruger notes

“At this point, all that stands in the way of universal health care in America are the greed of the medical-industrial complex, the lies of the right-wing propaganda machine, and the gullibility of voters who believe those lies.

“There is no constitutional right to health care”  say many reform opponents.  I’d like to quote the Preamble to the U.S Constitution which I think quite unambiguously contradicts that proposition:

We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.

Once upon a time not very long ago in America, neither Women nor African Americans were considered to have a right to vote.  We have been wrong on issues of fundamental rights, and we have been wrong very recently.  Perhaps it’s time to rethink the position that there is no right to basic essential health care – what could be more reasonable in the world’s most wealthy country?

By pouring millions of dollars into lobbying, including hiring more than 350 former members of Congress and former government staffers and by enriching incumbents with campaign contributions the health care industry is winning this debate again. 

Read the Republican Strategist’s memo “The Language of Healthcare in 2009” – and think about how much of it you have seen parroted word for word by Health Care opponents.

If you take just 10 minutes to listen to the tactics of health insurance companies described by a senior executive of the 4th largest health insurer in the country.  It will show you why reform without a public option would be a victory for the insurance industry and a crushing defeat to the interests of the American people.  Please click the Bill Moyers banner just below.

Related posts:

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2. Why Washington Residents Need Meaningful Healthcare Reform.
3. Just say “NO” to anything that falls short of meaningful Healthcare Reform!
4. It’s time for a Reality Check (from the Whitehouse)
5. Civil Justice in Washington State