How corporate America perpetuates the health care crisis

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Careless Industry How corporate America perpetuates the health care crisis

By David Sirota May 1, 2006

EXCLUSIVE:This article was adapted from Hostile Takeover: How Big Money and

Corruption Conquered Our Government--and How We Can Take It Back, with

permission from Crown Publishers.

Let's be honest--very few political operatives, politicians or pundits

actually want to explore the real-life, day-to-day economic challenges facing

the American people, because to explore them would ultimately force us to admit

that our entire venerated political system is totally corrupt.

 

Take this idiotically simple question that is almost never asked in the normal

course of this country's political debate: Why do we hear so much about how

well-off America is, yet our country has the highest number of uninsured

citizens in the industrialized world?

 

Why isn't that question asked? Because you can't answer it honestly without

exploring how Corporate America has bought off enough politicians to make sure

our government helps corporations perpetuate this travesty.

 

I'm not naïve. I know that corporations exist for one reason and one reason

only: the relentless, single-minded pursuit of profit, no matter who gets

shafted. That is their stated purpose in a capitalist society, and that's fine.

But in our country, corporations aren't supposed to pursue this purpose in a

vacuum, unchecked, unregulated, unopposed. There is supposed to be a

counterweight, a government separate from Big Business whose job is to prevent

the corporate profit motive from destroying society. That government once passed

laws protecting the environment, so the profit motive wouldn't end up

eliminating breathable air. That government once protected workers, so the

profit motive wouldn't result in Americans toiling in sweatshops. And that

government once demanded better wages, so the profit motive wouldn't result in a

race to the bottom for poverty-level paychecks. But that government, as we all

know, is long gone. Our government has been the victim of a hostile

takeover. Over the last thirty years,Corporate America has applied its most

effective business tactics to the task of purchasing the one commodity that's

not supposed to be for sale: American democracy.

 

To fight back, I decided to write a guidebook to help people see exactly how

politicians' lies, myths and half-truths justify government policies that allow

Corporate America to rip us off. That book, Hostile Takeover: How Big Money &

Corruption Conquered our Government--and How We Can Take It Back, is meant to

provide a window into the one fact that the corporate lobbyists and their tools

in the government don't want you to know: that the problems undermining America

on a daily basis can be fixed if our government starts representing the

interests of ordinary people.

 

To give you a flavor of the book, consider this excerpt that analyzes the

health care crisis--a particularly newsworthy issue considering the recent

headlines about Massachusetts moving toward a universal health care system. The

Bay State's moves are certainly controversial--especially the steep mandates on

uninsured individuals and the desperate efforts to protect the health insurance

industry. But they show that the issue is now simmering to a boil not only in

Washington, but in state capitals all over America.

----------------------------

The Institute of Medicine was created by Congress in 1970 to be the chief,

nonpartisan adviser to the federal government on all matters related to health

care. That's why the announcement it made in 2004 was so stunning. " Lack of

health insurance causes roughly 18,000 unnecessary deaths every year in the

United States, " the Institute said. Therefore, " By 2010, everyone in the United

States should have health insurance ... [The Institute] urges the president and

Congress to act immediately by establishing a firm and explicit plan to reach

this goal. "

 

The health care system, which is supposed to preserve and protect human life,

is allowing thousands of Americans to die every year, and America's top experts

were sounding the alarm.

 

So how is it that government and media have settled into complacency when the

system is so bad for so many? The status quo pays big dividends.

 

In 2003, HMOs nearly doubled their profits from just a year before, adding $10

billion to their bottom line. That year, top executives at the 11 largest health

insurers made a combined $85 million in one year. In the first three quarters of

2004, HMO profits increased by another 33 percent. The sheer numbers behind

these profits are staggering: In 2004 alone, the four biggest health insurance

companies reported $100 billion in revenues. That's $273 million a day, every

day, 365 days of the year.

That's the kind of cash that allowed the health industry to spend more than

$300 million on lobbying in 2003, and another $300 million on campaign

contributions to politicians since 2000. Their agenda is pretty simple: stop any

proposals to curb health care profiteering by private insurance companies.

 

To make its arguments, the industry buys off high-profile ex-politicians and

makes them its spokespeople. Take Marc Racicot--one of Corporate America's

favorite tools. This former governor of Montana left public service to become an

Enron lobbyist, then became chairman of the Republican National Committee, and

then headed President Bush's re-election campaign. Now, looking once again to

cash in, Racicot has taken a job as the public shill for the insurance

industry's chief lobbying group in Washington, D.C. His direct access to the

president will undoubtedly serve him well in that role.

 

----------------------------

Old pros in Washington know one of the easiest ways to kill a good idea is to

invoke Americans' fear of a slow, bloated government bureaucracy. In 2004, White

House Press Secretary Scott McClellan attacked President Bush's opponents for

wanting " a government-run system, where the taxpayers will pick up more of the

tab " for health care. Republican National Committee Chairman Ed Gillespie,

previously head of a health industry lobbying firm, declared that " the American

people have rejected a government-run system of national health care. "

 

But most Americans have not. According to a nationwide ABC/Washington Post

poll in 2003, " Americans by a 2-1 margin, 62-32 percent, prefer a universal

health insurance program over the current [private] employer-based system. "

 

Doctors, too, are chiming in with support for universal health insurance. In

2003, the prestigious--and conservative--Journal of the American Medical

Association published a proposal for government-sponsored universal health care

that was endorsed by more than 8,000 physicians (including two former surgeon

generals).

 

Even parts of the business community support government intervention. For

instance, Ford, GM and Chrysler all endorsed Canada's system, where the

government funds health care for all citizens. Similarly, a poll of Michigan

small businesses found that 63 percent supported creating a universal health

care system, even if it required tax increases. The health insurance industry,

you see, is not only gouging patients--it is gouging employers who provide

health care benefits to workers.

 

Still, everywhere you turn there is a politician deriding any proposal to use

the power of government to expand health care. " When government writes the

checks when it comes to health care, they start writing the rules when it comes

to health care, " said President Bush during the 2004 campaign. " And when they

start writing the rules when it comes to health care, they start making

decisions for you when it comes to your health care, and they start making

decisions for the doctors when it comes to health care. "

 

Sadly, the media reports this drivel with little question, even though it

would only take one question to deflate Bush's entire argument: If

" government-run " health care is inherently bad, as he and the health care

industry claim, wouldn't Americans hate Medicare? The answer is yes, but they

don't--the program is widely considered one of the most popular in American

history.

----------------------------

 

In 2004, Senate Majority Leader Bill Frist (R-Tenn.) was asked whether America

could afford to provide health care to all of its citizens. As the first surgeon

to head the Senate, some were hoping Frist would address the situation

optimistically. Instead, he said, " it is impossible to get everybody covered, "

citing the fact that his home state was " going bankrupt " trying to achieve

universal coverage.

 

The mind reels at how someone like Frist could claim the government does not

have enough money to deal with health care. His comment, after all, came just a

few years after his family was forced to pay $1.7 billion in criminal and civil

fines for trying to rip off Medicare while running the nation's largest

for-profit hospital chain.

 

The issue came up again in the 2004 presidential debate when President Bush

attacked Sen. John Kerry's universal health care proposal. Kerry " wants

everybody to be able to buy into the same plan that senators and congressmen

get, " Bush said derisively, as if the idea of having us commonfolk get the same

health care as the elite was too disgusting to consider.

 

According to a study by top experts in 2005, " the United States wastes more on

[private] health-care bureaucracy than it would cost to provide health care to

all its uninsured. " As the World Health Organization noted, 15 cents of every

dollar Americans spend on private health insurance goes to " administrative "

expenses. That is a euphemism for everything from filling out and processing

insurance paperwork to padding HMO executives' salaries. By contrast, when the

government spends money on public health care programs like Medicare, those

" administrative " expenses only consume about 4 cents of every dollar.

 

A universal system in which the government is the single payer for everyone's

health care would eliminate most of that bureaucracy and redundancy, save

Americans a huge amount of money and still be able to extend high-quality

coverage to everyone. For instance, the universal health care proposal put

forward by 8,000 doctors in 2003 would save roughly $200 billion a year. That

almost matches a report during the same year showing that if American

administrative costs were limited to Canadian levels, our country would save

more than $280 billion a year.

 

The only industries universal health care would hurt are the big HMOs and drug

companies. In the current everyone-for-themselves system, they can dictate high

prices because citizens are not organized into large blocks that can negotiate

lower prices. People are divided, and so the health care industry conquers.

----------------------------

 

In 2004, the nonpartisan group Families USA was asked to testify before a

House committee on the issue of health care.

 

But of course, the hearing was only a formality, really. Congress had no

intention of listening too much to anyone who didn't come bearing a very large

check. Still, the political goons in the employ of the big insurance companies

understand that in even the most mundane situations in Washington, the truth

must be squelched at all costs. So it was no surprise when amidst the boring

proceedings, fireworks started.

 

Rep. Mike Rogers (R-Mich.) apparently had heard enough about the health care

crisis. So in the middle of the testimony by Ron Pollack, Families USA's

executive director, Rogers snapped. " Just so I understand your organization, " he

said, " you support rationing, limited drug use, pharmaceutical use? "

 

It was a nice tribute to McCarthyism--couch an outrageous, unfounded

accusation in a seemingly innocent question. The Families USA representative

denied the charge. But it didn't stop there. Like a drooling pit bull snarling

at a passerby, Rogers barked, " You support rationing health care for American

citizens and limiting the ability for them to have access to pharmaceutical

treatment in order to keep costs down. "

 

Rogers might well have screamed " Communist! " had his time not run out. Why was

he so aggressively hurling out deceptive accusations? He was just doing the job

he'd been paid to do: Over the previous four years, Rogers found himself in

possession of more than a quarter million dollars of campaign contributions from

the health care industry. Rogers is just a cog in the industry's spin machine--a

$275,000 cog, but a cog nonetheless. That machine has been effective over the

years in one of its most important goals: tarring any government health care

initiative as the precursor to " rationing. " So when advocates of government

involvement make an appearance anywhere in Washington, the industry's hired

goons can be counted on to shout them down before any ugly truth gets out there.

 

We are led to believe that because we have a private, for-profit health care

system, we don't have health care rationing in America. But the whole point of

most health insurance companies is to ration care, limiting the amount of

coverage their patients get in order to save cash. Even the Supreme Court admits

that. In 2000, the justices issued a unanimous opinion noting that the existence

of HMOs means " there must be rationing and inducement to ration " care. The

ultraconservative Washington Times admitted that the court made very clear that

" it is the point of any HMO to ration care and within its prerogative to delay

tests, avert expensive consultations or refuse experimental care. "

 

Remember, this isn't just rationing of non-critical health services. In 2001,

for instance, the Sacramento Business Journal uncovered evidence that senior

citizens who were receiving cancer treatment were being priced out of their

chemotherapy by an HMO that had arbitrarily decided to raise its rates. " For

many seniors on fixed incomes the choice is to die or take a shot at physical

survival and life in poverty, " wrote the magazine. " This is how the free market

rations healthcare. ... We have the specter of an HMO effectively turning out

the elderly to die. "

 

Beyond just the sheer corruption and deception of all this is the insulting

pretense that these politicians actually care that health care rationing is

going on in the first place. They say they oppose a government-funded health

care system because it would result in rationing, yet they are the very same

people who actually write the policies that force the government to ration.

 

The truth is, government programs are as good or bad at providing health care

as they are given adequate money to do their jobs.

----------------------------

 

The health insurance crisis is serious and long-standing, but there are some

simple approaches to getting it fixed that don't require huge giveaways to the

big insurers.

One solution is a universal health care system where the government is the

single payer. A shorter name for this is " Medicare for Everybody. " As economist

Paul Krugman notes, " The great advantage of universal, government-provided

health insurance is lower costs. " Medicare, Krugman notes, " has much lower

administrative costs than private insurance. "

 

Another solution is to regulate health insurance prices like any other

utility. Because you are legally required to have car insurance, most states

regulate the rates auto insurance companies can charge you. It's clearly not

fair for the government to force you to acquire something, yet allow companies

to charge you whatever they want for it. It's equally true that some

services--even if not officially mandated by the government--are absolutely

essential to life: electricity, for instance. And in those cases, government

regulates what companies can charge, so no one is left at the mercy of the

profit motive when it comes to life's essentials. What's more essential than

healthcare? We all need health insurance, but our government does very little to

regulate the prices that insurance companies can charge consumers. That is

simply wrong. The solution is to regulate health insurance prices like any other

utility and stop this kind of profiteering.

 

The official mission of the Department of Health and Human Services is to

" protect the health of all Americans and provide essential human services,

especially for those who are least able to help themselves. " But protecting the

health of all Americans really isn't on the agenda in our corrupt political

system. The same politicians in Washington who preach about the " culture of

life " and " moral values " are too addicted to health care industry cash to care

about people who can't afford to see a doctor.

 

What is on their agenda is clear: more tax breaks for the wealthy, as 18,000

Americans die each year at the hands of our profit-at-all-costs system; more

billion-dollar federal contracts for Halliburton, as one in six Americans can't

afford to see a doctor; and more corporate giveaways as the government cuts back

programs for the truly destitute.

 

We do not have a government dedicated to " protecting the health of all

Americans, " as we are told. We have a bunch of bought-off frauds pretending to

care about ordinary Americans, but really only interested in protecting the

health of one thing: the insurance industry's bottom line.

 

 

 

 

David Sirota is the co-chairperson of the Progressive Legislative Action

Network (PLAN) and a Senior Editor at In These Times. He also writes for Working

Assets, and is a twice-a-week guest on “The Al Franken Show.” His new book

Hostile Takeover was published by Random House’s Crown Publishers.

 

 

 

" To be nobody-but-myself in a world which is doing its best, night and day, to

make me everybody else - means to fight the hardest battle which any human being

can fight, and never stop fighting. " -e.e. cummings-