http://www.pnhp.org/news/2009/…..avid_u.php

April 23, 2009

Dr. David Himmelstein

There is no question that we have a fragmented health insurance industry. And it thrives on being fragmented, avoiding any kind of serious centralized examination or control. The drug companies make much more money with this insurance fragmentation, because there’s no price control. The insurance companies make much more money because they can push away people who aren’t going to be profitable, let public programs take care of these patients who are “unprofitable”.

What the President and the Congress are really, realistically advocating – since there is absolutely no possibility of having enough money to cover all people in this country as long as the private, for-profit health insurance industry is allowed to exist – is more incremental reform, not National Health Insurance. It is now 44 years since Medicare and Medicaid came into existence. In the interim, there have been many experiments in this country and abroad to try to provide universal health coverage.

Other countries have uniformly rejected the private for-profit insurance industry and have adopted National Health Insurance. Is everyone else wrong and only the US is right?

A recent study by the international OECD (Organisation for Economic Co-operation and Development)[1] provided health insurance data from its 30 member countries (Europe, Korea, Japan, Mexico, Canada, the U.S. and others including Australia, New Zealand and Iceland). The latest data from those countries showed that 27 of the 30 had health insurance coverage for more than 96% of the population, with only Germany having any non-public coverage (10.3%). The other three were Mexico with 60.4% covered – all with public coverage, Turkey, with 67.2% covered, also with public coverage and the U.S. with 84.9% covered 57.5% with private and 27.4% with public coverage.

In Canada, back in 1970, they were spending the same percentage of their gross national product as we were on health. They also had millions of uninsured people and many of the same insurance companies such as Blue Cross, Blue Shield. They decided to just get rid of the health insurance industry. They had experimented with it in Saskatchewan ten years earlier and it had worked so well, they couldn’t wait to do it nationally. So, where there’s a will, there’s a way. There is no way we are ever going to get to having good health insurance for everyone, as long as there’s a health insurance industry, in the way, obstructing care.

Other more recent experiments abroad include Taiwan. In 1995, Taiwan had said, we don’t like the fact that 40 percent of our people are uninsured. They passed, essentially, single-payer plan and within a few years 90-95 percent of the people were covered.

I don’t think of it as the public option or nothing. If we do not get a good public option now, we will get it after we shed some blue dogs in the next election. I just hope we don’t get some insurance company written plan that is designed to fail. I want a real public option. The insurance companies need some competition. They are trying to build fail into the public option by trying to make it follow all the many different rules and regulations in all the states. It would make much more sense, if you want it to succeed, to allow all the insurance companies in all the States to offer the same benefits as the public option. But that is the point. They do not want the public option to succeed, and they do not want competition. That’s why they are trying to sabotage it.

Absolutely, Jane. People are already angry over the bailouts, high unemployment, etc..If they fully understood how Congress is screwing them on health care, yes, I think it would make a difference. You assume all the public option support is strong support, I think it’s soft support. I know there are polls showing less enthusiasm for reform without the PO among the base, but there are also polls, that show something like 80% of Democrats still support reform without the PO. I’d define that as soft support, and I think Obama and the Democrats know this. I think people indeed have to be told how screwed they are getting on health care. Single payer provides context for the public option. Without it, few Americans actually can grasp either concept. They don’t know if it’s a sliver for a few Americans who can’t afford better insurance, or something they may actually want. As far as “the ability to negotiate prescription drug prices”, there is no excuse, public option or not, for health reform advocates to ignore this egregious deal making. Wal-Mart negotiates drug prices based on their market size. There is no excuse for Congress not to do what Wal-Mart does freely. This should have been reform number one. The reform debate from the activists side needs to be broadened or we are going to be stuck with Romney Care for several years to come.

Hey I think Jane has some connections with Rachel and Keith. Hope she mentions the Mad as Hell Docs

Really glad Ed gave them the time

Their position is in favor of single payer.

They will rally at the Humana Insurance building in Louisville, KY tomorrow. The next day, their schedule shows events in Xenia, OH.

The culmination of all this will be a rally in D.C. on September 30. Please get the word out.

By the way, their Facebook page is becoming very active. Just search “Mad as Hell Doctors” on Facebook and you’ll find them. Let’s get their “fan” numbers up, up, up!!!

There are however very clear reasons to advocate for the PO as being crucial in a reform of the current system run by private insurers.

Basically, private insurers make a profit by excluding people with a high risk of costly medical care. They also gain by diverting a portion of the cost of the health service provided to the policy holder. These practices are the main reason why the delivery of health care is so expensive.

These practices result in a large number of people unable to meet the cost of the health services they receive and as a result health care providers need to increase the cost of their services to cover these non-reimbursements. However the private insurers then turn around and increase their premiums pointing at the fact that health services have increased.

This cycle can go on indefinitely with premiums and health services increasing all the time. Private companies are continually gaining because it is the non-reimbursement they create that constitutes their profit.

The fact that private insurers cause rising premiums and health care costs argue against their whole reason for being. It does no good to attempt to reform this model of operating because the profit for a private insurance plan will necessarily come from some degree of non-reimbursement with the consequences that flows from it. It is this way of generating profit that is the essential pernicious aspect of private insurers and would need to eliminated.

I’m also uncomfortable with vagueness, because in government that usually provides cover for politicians who don’t want to do the right thing.

Any insurance plan is designed to cover the cost associated with the risk of sutaining an expense that an individual could not afford to pay. To operate properly it must have a sufficient number of particants paying into a pool that would cover the expenses of all members as the occassion arose. Because the cost would be too high if only high risk high cost participants were involved you need to have a wide majority of relatively low risk low cost members participating. This means more relatively healthy than relatively sick participants.

The merit of this way to cover risk associated cost is that the cost to each member is the lowest possible, but only if it operates in a not for profit manner. In this way payouts from the pool go only to cover the cost associated with the risk involved, in our case the cost associated with becoming sick. The not for profit aspect of this way of covering risk is what characterises the PO.

The PO is essential because it allows for overall cost reduction. It would basically cover the 40 million or so people who are currently not able to afford the high cost of the premiums offered by private insurers who provide coverage for risk but who keep a portion of your premium to themselves as a profit. Private insurers are the main reason why the cost of medical care is so expensive and why it continues to grow and that is because they do not fully reimburse for the cost of the health services provided. This non-payment for services is what constitutes their profits. The larger the non-reimbursement the higher their profit.

Now of course private insurers are incensed of having to compete with a not for profit insurance plan but that should be of no interest to people in general. In fact it would be self defeating and stupid to prefer to pay a higher premium for the same service, so that someone has the nice priviledge of keeping some of that premium for themself.

I mean, this is all about politics at this point. I think there is a good chance the House will pass a “public option”, the Senate won’t, and it will be nixed in reconciliation.

How is a public policy discussion going to change that? You’re going to have to clue me in.

It could be single payer, it could be a public option, it could be the ability to negotiate prescription drug prices. Congress is going to take something the public wants and they don’t intend to pass it, they’re going to try and bail out the insurance industry instead.

If they’re not responsive to what the public wants, is the fact that people are clearer about how they are getting screwed going to change that fact?