Guaranteed Healthcare

Haven't we heard this song before? It sure looks like the people who already control our healthcare system are framing the biggest issues of the present healthcare reform debate.

From the back rooms to the committee hearings to the White House summits to the front pages of the newspapers, the demands of the insurance industry are given enormous deference and accommodation.

Is it fear of Harry and Louise, the insurance campaign that some believe torpedoed the muddled Clinton health proposal? Is it the considerable influence of insurance industry contributions in the pockets of many legislators?

Or perhaps it's the caution or lack of will of some liberal groups to press for more fundamental reform--such as a single payer/expanded Medicare for all approach--that permits the industry and its conservative champions in Congress to dominate the terrain.

There's two major indications of this trend.

First, who is in the room where the key decisions are being made. As Consumer Watchdog put it:

First we heard that consumer advocates had been left out of closed-door negotiations orchestrated by senate staffers to formulate health care reform legislation. Then, consumer advocates were left off the invite list to the White House summit on health care reform.  The third strike came when no consumer voices were heard at a U.S. Senate Heath, Education, Labor and Pensions committee round table discussion about insurance reforms in the forthcoming national health care reform effort.  Three of the seven panel members were from the insurance industry.  A forth panelist represents an insurer-friendly think tank.

The second key sign is what the chattering class defines as the contours of the debate.

In a telling piece earlier this week, the Washington Post's Ruth Marcus called the present moment "crunch time" in which only five major pieces remain to be resolved.

Piece One: Should there be a public insurance option?
Piece Two: How to pay for the program? Specifically, should employer-provided health insurance, no matter how generous, continue to be treated as tax-free income?
Piece Three: Should individuals be required to purchase insurance?
Piece Four: What mechanism should there be to control costs?
Piece Five: How much muscle should Democrats use to get health-care reform done? The temptation is to use special budget procedures known as reconciliation that would allow Senate Democrats to approve health reform with just 51 votes. House leaders, fed up with being held hostage by Senate gridlock, are pushing this approach.

On each of the policy points here, the insurance industry and its defenders are on the offensive. And on every point, major concessions that will appease the insurers, but do little to rein in skyrocketing costs or protect families, lurk.  

Imagine a scenario in which the bill that finally emerges includes a mandate that all individuals must buy private insurance, but there are no uniform standards, widely varying prices for coverage depending on where you live or your age, no real controls on what the insurance companies can charge in premiums, co-pays, deductibles and other out of pocket costs. If that sounds a lot like the badly flawed Massachusetts model, it should.

If you get health coverage at work, your benefits are now taxed, a clear incentive for your employer to reduce or drop coverage, pushing more people into the still poorly regulated cutthroat private market.

And even if proponents win on the much debated public plan option, don't expect it to solve the problem, as Physicians for a National Health Program leaders David Himmelstein and Steffi Woolhandler point out :

1. It forgoes at least 84 percent of the administrative savings available through single payer. The public plan option would do nothing to streamline the administrative tasks (and costs) of hospitals, physicians offices, and nursing homes, which would still contend with multiple payers, and hence still need the complex cost tracking and billing apparatus that drives administrative costs. These unnecessary provider administrative costs account for the vast majority of bureaucratic waste. Hence, even if 95 percent of Americans who are currently privately insured were to join the public plan (and it had overhead costs at current Medicare levels), the savings on insurance overhead would amount to only 16 percent of the roughly $400 billion annually achievable through single payer -- not enough to make reform affordable.

2. A quarter century of experience with public/private competition in the Medicare program demonstrates that the private plans will not allow a level playing field. Despite strict regulation, private insurers have successfully cherry picked healthier seniors, and have exploited regional health spending differences to their advantage. They have progressively undermined the public plan -- which started as the single payer for seniors and has now become a funding mechanism for HMOs -- and a place to dump the unprofitably ill. A public plan option does not lead toward single payer, but toward the segregation of patients, with profitable ones in private plans and unprofitable ones in the public plan.

Yet only on the final piece identified by the Post's Marcus, process, does it look like the insurers and the right are being aggressively challenged. Perhaps what may be most telling is the gushing this week over the non-concession by the insurance industry that it will be willing to end its immoral practice of denying coverage to people with pre-existing conditions if it gets everything else it wants. 

In his town meeting yesterday in which the public got to ask the questions, President Obama was asked about single payer, and while demurring that we have "a legacy, a set of institutions that aren't that easily transformed" showed that he understands a central tenet of what is clearly right about single payer.

"A lot of people think that in order to get universal health care, it means that you have to have what's called a single-payer system of some sort. And so Canada is the classic example: Basically, everybody pays a lot of taxes into the health care system, but if you're a Canadian, you're automatically covered. And so you go in -- England has a similar -- a variation on this same type of system. You go in and you just say, "I'm sick," and somebody treats you, and that's it."

The challenge to the rest of us is to show that legacy has collapsed and no longer works for the uninsured or the insured, and move the debate beyond what the insurers want to what the rest of us need.