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White House Health-Care ‘Reforms’ Favor Drug & Insurance Companies

by Andrew Pollack  / June 2009

 

May was not a good month for liberals with illusions in President Barack Obama. Parallel to a series of statements indicating he would continue his predecessors’ attacks on civil liberties came a well-orchestrated show in the White House making clear that Obama’s health-care "reform" would be done by, for, and with the profit-makers in the industry.

 

On May 11, Obama welcomed to the White House representatives of the industry’s elite, to thank them for a letter they had issued promising to contain costs. Attendees included executives from the trade groups for insurers, drug companies, medical device manufacturers, hospitals, and doctors.

 

Obama’s "health-reform czar," Nancy-Ann DeParle, comes from these same rarefied circles. She has made her living advising health-care investors and sits on the board of many for-profit health-care firms. Also included was the Service Employees International Union, which The New York Times credited with having "led efforts to bring the industry groups together."

 

Obama portrayed the groups’ promise as a pledge to cut 1.5% each year over the next 10 years from the growth in health-care costs. The day after the event, industry reps said Obama was mistaken, that they had made no specific pledges in either amount or timing. And even Obama couldn’t claim that the pledge came with any specifics on how the growth in costs would be restrained.

 

Obama hyped the industry pledge as "a historic day, a watershed event." But the privateers were quite open about what they expected in return: that Obama kill inclusion of a public plan in his reform package, and that it include a mandate to force the uninsured to buy insurance from them.

 

The industry pledge comes on the heels of other concessions made to fend off the threat of a new public plan. These include lower rates, or easing access to coverage, for millions of women, the aged, and the already sick, who have been the victims of the most flagrant discrimination—which is only the worst example of insurers’ norm of charging the most, or denying care altogether, to those most direly in need of care.

 

Insurers have been unashamed to say they can’t compete with a public plan. They admit this is so for the same reasons that single-payer advocates have always said there should be no private insurance: a government plan would have an "unfair advantage" because it doesn’t have to spend on advertising, lobbying, profits, or high salaries. It would also enjoy economies of scale—an advantage that would aid in coordination of care, an increasing concern of health-care providers.

 

Mandates to buy private insurance are already included in draft legislation put forward by some Democrats. The party is split on whether to include a public plan alongside the existing private ones—but all the serious players in the party are united in their insistence that single-payer (i.e. Medicare For All) is off the table. Said Democratic House Speaker Nancy Pelosi: "Over and over again, we hear single-payer, single-payer, single-payer. Well, it's not going to be single-payer."

 

A Fairness & Accuracy in Reporting study showed that "in the week leading up to the White House forum, there was a media blackout on single-payer."

 

Karen Ignagni, president of America’s Health Insurance Plans, said that if Congress required everyone to carry health insurance, "we could guarantee issue of coverage with no pre-existing condition exclusions and phase out varying premiums based on health status"—something that single-payer would do by definition! However, she said insurers wanted to retain the right to charge different premiums based on age, residence, and family size.

 

Ignagni added, "There’s no way to run a side-by-side competition within the current structure." In a show of heartfelt concern for her worries, leading Democrats have pledged to hamstring any new public plan to prevent such "unfair" competition.

 

For instance, The New York Times backed a plan put forward by Senator Chuck Schumer of New York, which it praised for ensuring that "competition between a new public plan and private plans would be waged on a regulated field of battle.

 

"Schumer has come up with some reasonable principles to ensure competition between a public plan and private plans would be fair. He suggests that a public plan should have to comply with the same rules and standards as private plans: "The public plan could not be supported by tax revenues or government appropriations but by premiums and co-payments." In short, the public plan is to be denied many of the advantages making it superior in the first place.

 

In any case, the proposal for a public plan alongside private ones is generally rejected by single-payer advocates, who point out correctly that this would not stop the waste of trillions due to the inefficiency and profit-making of the privateers.

 

Obama’s dismissal of single-payer advocates had already been on display at a White House meeting on March 5 to hear proposals for health-care reform. Single-payer advocates were left off the guest list until threats of protest forced a last-minute invitation to the author of the single-payer bill before the House (HR 676), John Conyers, and to Physicians for a National Health Program leader Dr. Oliver Fein. Conyers excused Obama’s refusal to support single-payer by saying, "he's got too much on his plate—two wars and an economic crisis—and he's got to settle for the health-care reform he can get."

 

Obama’s contempt for single-payer was paralleled by the legislator heading health-care "reform" efforts in Congress, Democratic Senator Max Baucus. At a hearing on May 5, eight single-payer advocates, three of them physicians, were arrested for standing up to ask why their position had been excluded. The "Baucus Eight" were followed on May 12 by five more, including two from the California Nurses Association and two doctors from PNHP. When they shouted, "we need single-payer," Baucus smirked and replied, "we need more police!" Baucus has received more campaign contributions from health-insurance and pharmaceutical corporations than any other current Democratic legislator.

 

Single-payer advocates were also excluded from Senator Ted Kennedy's secret meetings to craft a legislative approach—but he let in insurance and drug company lobbyists. The Times reported that the meetings produced a consensus in favor of mandates. It is increasingly likely that mandates will be part of the final bill, regardless of whether a public plan is included or not, and despite Obama’s dismissal of mandates during the campaign. Thus we seem headed for a nationwide replay of the failed Massachusetts experiment, which has been a boon for insurers but has done little to increase coverage or lower costs for patients.

 

Certainly, single-payer will not be passed by Congress. But widespread protest and educational efforts of its supporters during these discussions have gained it many new activists.

 

What’s more, the question of socializing aspects of health care beyond payment is already being broached. In a May 16 letter to The New York Times, Arnold Relman and Marcia Angell, physicians and former editors of the New England Journal of Medicine, wrote that "runaway costs are due largely to high overhead expenses and to the excessive use of expensive technology. Both of these result from a system organized like a profit-seeking industry instead of a social service.

 

"If we want health care to be a universal entitlement, it cannot be controlled by market forces and the financial interests of insurers and providers (and the investors who own such a large part of the system). Some kind of government-regulated single-payer insurance plan and a reorganized nonprofit medical care delivery system may be ‘off the table’ for policy makers right now, but we will never achieve affordable universal coverage without major reform that deals with the real causes of medical inflation."

 

What’s most striking about their letter is the rare but welcome mention of the need to socialize not just payment for care, but also its delivery. This broadening of the discussion comes as the most important actor in winning genuine health-care reform is stepping up to the plate:

 

One of the Baucus Eight was Mark Dudzic, national coordinator of the Labor Campaign for Single-Payer. The Campaign was formed at a meeting attended by over 150 representatives from labor organizations in 31 states that have endorsed HR 676.

 

The group has pointed out, "As the economic crisis worsens, unions have begun to make the connection between the fight at the bargaining table and the fight for single-payer. In Collinsville, Illinois, members of the United Steelworkers picketed a Republican Congressman’s office to demand that he support national health insurance on behalf of the growing number of furloughed steelworkers faced with the loss of health insurance. In Santa Ana, California, United Electrical Workers members challenged their company to support single-payer rather than seek concessions from the already stressed workforce. ‘Don’t expect us to pay the costs of the dysfunctional corporate health-care system,’ they told the company."

 

Unions demonstrated at the Obama administration's second regional Health Care Summit in Burlington, Vt., on March 17 to protest the exclusion of single-payer and labor voices from the summit. The Labor Campaign also organized supporters to participate in the May 30 day of nationally coordinated local actions for single-payer.

 

The question of health-care access for workers is becoming more urgent every day. Some 14,000 people a day are losing their employer-based health-care benefits—2.4 million just since the beginning of the recession. Less than 60% of American workers are now covered.

Management demands for health-care benefit concessions in union contracts have gotten even harsher since the economic crisis broke. AT&T is right now demanding steep givebacks in such benefits from 112,500 workers in the Communications Workers of America, and retired auto workers at GM, Ford, and Chrysler have been pushed into new health-care plans half-financed by worthless company stock.

 

The initial actions by some in labor are encouraging, especially as they come in the face of passive acquiescence to Obama’s support for the privateers by most labor officials—or in the worst case, that of SEIU—by collaboration with the profit-makers.

 

Whatever bill finally issues forth from Washington, the Labor Campaign for Single Payer has positioned itself well for a second national conference, at which it could discuss more nationally-coordinated actions, or perhaps even the first-ever national march in DC for an end to profiteering at the expense of our health and pocketbooks.

 

 

Human Needs, Not Profits!