THE SYSTOCRAT PAPERS: Common Sense and Health Care Reform

Fellow Systocrats:

Health care reform is a simple matter of common sense, nothing more. Given the fact that our health care system is undeniably broken, and given the plan outlined by President Obama in his speech on Wednesday night, any American that still opposes health care reform is either in bed with private health insurance companies, simply not paying attention, confused by all the misleading rhetoric out there, or just a plain old garden variety idiot.

Joe Wilson's outburst during Obama's speech to a joint session of Congress this week capped a long summer of "debate" over health care reform during which a small but determined group of Americans took great pains to demonstrate to the rest of the world just how willfully obtuse they can be. Admittedly, there is a lot of confusing rhetoric out there - terms like "death panels," "socialized health care" and "rationing" have become part of our collective lexicon, and people have been bandying these terms about with little understanding of what they mean, or even if they are applicable to the proposed reforms. In addition, there are rumors that health care reform will involve financing abortions and care for illegal immigrants with taxpayer funds. Notably, Obama took care to specifically refute both of these rumors during his speech to Congress this week. In fact, the plan Obama currently supports is self-sustaining - in his own words, the White House will only endorse a bill that pays for itself, i.e. one that does not increase the federal deficit by so much as a dime. Let's hope that this remains the case.

In the meantime, the lunatic fringe will continue to try to confuse and confound the American people with outrageous, misleading "facts" and arguments that in most cases have nothing to do with reality, and everything to do with preserving the status quo. Just so we're clear, the status quo that a tiny minority of Americans are fighting so hard to preserve is a state of affairs where private insurance companies charge as much as possible for health care coverage, while taking every opportunity possible to deny coverage.

The goal of private health insurers is to maximize profits, regardless of what happens to the consumer. Even if it means that sick people will die. And make no mistake about it - without health insurance, people do die. In fact, a recent Treasury Department study notes that the mortality rate for a person without health insurance is 25 times that of a similarly situated person with insurance.

Let's discuss the status quo in more detail. The National Coalition on Health Care issued a report in July 2009 which estimates that over the last decade, employer sponsored health care premiums increased by 119% and that employees' share of these costs has risen at a corresponding rate. According to this report, this increase is 4 times the rate of inflation and wage increases during the same period.

Not surprisingly, this precipitous rise in health care costs has made it much more difficult for businesses to provide coverage to employees and for employees to afford the coverage themselves. The July 2009 NCHC report includes projections from the Congressional Budget Office indicating that, absent health care reform, the cost of health insurance could increase 100% by 2018, raising the cost for a family of 4 to a whopping $25,000 a year.

As a predictable result, there are a growing number of business interests who can no longer afford to provide their employees with health insurance, and millions of people in the U.S. who simply cannot afford it, even when times are good. The Treasury Department study above found that from 1997 to 2006, 48% of "non-elderly" Americans (under 65 years of age) went at least one month without health insurance. Some other notable findings for non-elderly Americans cited in this study indicate that between 1997 and 2006:

- 41% of Americans went without health insurance for at least six months;

- 57% of Americans under 21 weren't insured at some point during the this period;

- 53% of Americans in rural areas go without insurance at some point; and

- 45% of Americans whose household income averaged between $50,000 and $100,000 (i.e. people firmly in the middle class) were without health care at some point.

The report goes on to conclude that because the period between 1997 and 2006 was "generally characterized by economic growth and job creation, and that the most recent estimates indicate a positive trend in the number of uninsured Americans, extrapolating our findings into the next decade would likely underestimate the number of Americans who will go without health care insurance absent health care reform."

This is where the public option comes in. In the words of former Secretary of Labor Robert Reich, a nationally based public health care option will have the leverage necessary to negotiate lower prices from health care providers and provide consumers with a more reasonably priced option that is not available on the existing market. If you want to switch to the public option, you sign up and start paying premiums to the government instead of a private insurance company. If you don't like the coverage under the public plan, feel free to stroll back across the street and reconnect with the private insurance companies.

That's the public option in a nutshell - it's not a government takeover and it does not interfere with the "free market." It simply provides what in theory ought to be a more affordable option.

Simply put, here's the proposed deal. If you like your current plan, do nothing. Of course, your coverage may improve as a result of the proposed reforms, but I think we can all learn to live with that. For example, part of the White House proposal is a provision that prohibits insurance companies from dropping your coverage for frivolous reasons, or because of a preexisting condition.

On the other hand, if you are concerned about the rising cost of health care, your best bet is to get behind the public option. In either case, what's not to like?

If you're still reading, do your fellow citizens a favor. The next time you hear an outrageous claim about health care reform, ask yourself two questions. First, take the necessary time to consider whether the claim is accurate. Chances are that it's not.

Second and perhaps more importantly, ask yourself what the person/organization making the claim stands to gain if health care reform is defeated? The answer to this question is easy - preservation of the status quo, which means the freedom for private insurance companies to keep making enormous profits while more and more Americans are denied access to health care.

The American people deserve health care that is comprehensive, reliable and affordable. Let's all use our common sense and urge our elected representatives to improve the status quo now.

Comments

I haven't fact-checked this, but have been told that fully one-third of Medicare expenses are related to dialysis for patients with end stage renal disease (ESRD). Removing hurdles to voluntary living organ donation should be a central part of the reform. Think of the possible savings if more people were educated about the possibility of living organ donation and if folks considering organ donation could be confident in a healthy outcome (based on presently-lacking adequate donor follow-up studies), guaranteed health insurance coverage should any complications arise, and provided disability insurance for the weeks following surgery. Likewise, an "opt-out" system for post-mortem organ donations would vastly increase the number of transplants and reduce costs of ESRD. Currently, people in the USA have to go out of their way to indicate that they want to donate after death; whereas in continental Europe (I'm told) the default option is that you are willing to donate unless you've indicated to the contrary.
These are the sort of inefficiencies in the current system that, if corrected, could add up to sufficient savings to pay for the costly aspects of Obama's plan.

Posted by: Sarah McDaniel | September 13, 2009 07:16 PM

Being one in the mists of a new medical adventure that will ultimately cost close to 75K when done. Reform is a must. Doesn't matter what "party" you attend, if we do not get a handle on this our country as we know it will die. It is an absolutely shame that people who make 50-100k go without insurance. I realize some choose the "toys" instead thus get into enormous debt, but having said that why is health insurance leaping itself to the same price as a mortgage? For instance my monthly health insurance, which is so basic it doesn't even cover doctor's visits is more than my monthly house payment. Oh yes, I am self-employed. You know the ones whom the powers that be assume are so very rich we can afford anything!!! At least I can afford to pay my taxes so they have wonderful health insurance. Stop arguing and fix the problem!!!! It has been way too many years. I was a teen when Nixon proposed a plan...they have been arguing ever since, probably before that. What do we pay these people for?

Posted by: Mary Kay | September 14, 2009 08:56 AM

All:
Here's an interesting take on this debate that isn't getting a whole lot of press. Since posting this blog, it's been brought to my attention that the proposed health care reform may discriminate against women by eliminating existing public funds/subsidies for abortion. Have a look: http://www.mclu.org/?q=node/288

Posted by: TD | September 15, 2009 10:07 AM

Tom, you first write, "Health care reform is a simple matter of common sense, nothing more."
However, I might point out that this depends upon the strategy employed. As in - if the goal IS to amass great wealth, well then, a LACK of health reform is the common sense approach.

I believe that what we are seeing here is the great debate between equal rights and opportunity for all humans versus the opportunity to make profit off of other humans. I believe that this is why the debate has gotten so seemingly ridiculous - the GOP and insurance investors understand that outwardly admitting their profit motive would be "bad for business"; hence the silly, nonsensical "facts" they keep shoveling out.

Too bad that many of the people who support the GOP are rich "wanna-be's", as in, they are enticed by the concept that they could make it rich in America. As a result, they just become pawns for those power-players who can leverage greater and greater personal wealth.
I enjoyed this site, which showed how the richest in America keep consolidating their wealth: http://sociology.ucsc.edu/whorulesamerica/power/wealth.html

Posted by: RavenGrrrl | September 15, 2009 11:05 AM

Ravengrrl:

Health care reform is a matter of common sense. You hit the nail on the hed in your second paragraph above. The goal of the current system IS to amass great wealth at the expense of our collective well-being.

In terms of the motives for health care reform, I don't think that fans of the status quo see reform as a means to further their own selfish ends. Why would they want reform - they're ALREADY amassing "great wealth" under the current system!! They see it as a serious threat to the status quo, which is why they're fighting reform with every weapon at their disposal.

In addition, I would like to presume that any bill that facilitates the private insurance companies' ability to deny Americans affordable, reliable access to health care while turning huge profits will be vetoed by the President. Let's hope that I prove to be correct on this point.

When I say it's a matter of common sense, I mean at least the following. First, anyone with a heart and a brain will not deny people access to health care just to turn a buck. Second, what the White House is prepared to endorse in a reform bill is eminently reasonable, as long as whatever is passed makes provision for a public option now - no triggers and no co-ops. Local co-ops won't have the necessary leverage to negotiate lower prices from health care providers. A trigger just puts off the implementation of a public option until a later date - who knows what Congress will look like after the 2010 midterm elections?

Basically, if you like the current system and can afford to maintain your coverage, the proposed reforms won't affect you, except to perhaps make your coverage a bit more reliable. If, like many Americans, you can't afford health insurance, the public option provides a real alternative.

In short, reform is a matter of common sense because it's the right thing to do and because the plan outlined by the White House doesn't hurt anyone, except perhaps women seeking abortions (see my comment above) and private insurance companies. Hopefully the abortion issue will be remedied by the time a bill reaches the President's desk.

Posted by: TD | September 15, 2009 01:02 PM

Hi Tom, I had to weigh in here. By googling the term "Health insurance margin" I found that the average profit margin for the top insurance companies is a whopping 3.3% At that rate they would need to insure a huge number of people to stay a viable company. Luckily, Obama wants to force the entire population into using them so they can certainly keep on profiting. As one congressman puts it, "A big red flag, however, is that they would also have immunity from lawsuits, should they fail to actually cover what they are supposedly required to cover, so these requirements on them are probably meaningless. Mandates on all citizens to be customers of theirs, however, are enforceable with fines and taxes."
What everyone is missing is the fact that they actually want to reform health insurance and not health care. If the gov't really wanted to reform health care they would admit to their mistakes on the food pyramid and stop promoting a grain based diet. How much money have they blown on this thing? Either directly or indirectly through sudo-gov't groups like the American Heart Association etc. It continues to prove my point, we can't trust the gov't to do anything right. Show me one example in our lifetime where the gov't got something done efficiently and at or below their projected cost. It doesn't happen.

Posted by: Dave | September 15, 2009 02:00 PM

Dave:
Here's an excerpt from a recent Huffington Post article:

"It's no wonder, though, that the Health Insurers are frantically trying to head off competing with a public plan. Private insurance overhead and profits eat up 20% and more of health care premiums while Medicare overhead (and no profit) is closer to 3%. There is big money to be made in health insurance. The top 7 "for profit" health insurers made a combined $12.6 billion in 2007-- an increase of 170.2% from 2003. The same year, the average CEO compensation package for these health insurance companies was $14.3 million. Pay packages ranged from $3.7 million to $25.8 million."

Here's the link: http://www.huffingtonpost.com/donald-cohen/why-are-health-insurance_b_179317.html.

Here's another link to an excerpt from the Rachel Maddow Show indicating that, based on SEC filings, health insurance profits rose by a whopping 400% while the number of uninsured Americans increased by 7.3 million. http://www.youtube.com/watch?v=oAdVJUqWdDk

Is there potential for abuse, corruption and waste in any government program? Of course, but that's what we're already dealing with re: private insurance companies. The bottom line is that both the public and private sectors are highly susceptible to corruption. Given that, I'll take the public sector, because, at least in theory, public officials are accountable at the polls. Moreover, as I mentioned in the blog, I don't think the proposed plan qualifies as a "government takeover" or anything akin to it. Basically the plan amounts to regulation of the existing industry with a public option tacked on (hopefully).

In terms of mandatory health insurance coverage, this is only acceptable if you have a viable public option or some other effective cost-regulating measures in place.

In general, I'm not in favor of absolute immunity for anyone.

Finally, the diet issue. You may be correct that a low carb, high protein diet is indeed healthier - I'm no nutritionist!! However, I think you'd have to agree that private industry is much more responsible for our crappy eating habits than the government's potentially erroneous endorsement of a grain-based diet. Given that this is the case, do you really want to leave health insurance exclusively in the hands of the private sector?

Posted by: TD | September 15, 2009 03:35 PM

Like shelter and food, Humans need to have health care. Why is this such a argument!!!! We should be taking care of each other, this is not a government issue, it is a human issue.

Posted by: Mary K | October 7, 2009 07:11 AM

My Fellow Americans this is ALL unconstitutional
United States of America Constitution
Amendment X
The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.
Do not worry. I know this will not stop Congress. They have thrown the Constitution away a long time ago.
The Health care Bill will pass then you can all be proud that you killed America All your Freedoms will be gone.
Proud to be called an American
Robert Wayne Horr

Posted by: Robert Wayne Horr | November 10, 2009 11:02 PM

THE SYSTOCRAT PAPERS

MARKETPLACE OF IDEAS FOR THE FUTURE

Common Sense and Health Care Reform