Healthcare Reform Obstructionists Can No Longer Be Taken for Serious Players

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6 August 2009 :: Webb Tisch

Companies that hope to impede the extension of care to more people or impede the improvement of care, even as costs come down, have no credibility in negotiating the fine points of reform, because they are rejecting the principle that caring for people’s health is about those people’s health, first and foremost. Doctors, patients and the government all share this particular interest, and groups diametrically opposed to that principle are more a problem than a solution. This is undisputed among those who view patient health as top priority.

While some insurers have signed up to a pledge to cease callous, unethical practices like denial of coverage for “pre-existing conditions” (one economist recently reminded readers that “mortality” is a pre-existing condition we all share), there is now growing stratification among industry groups on the issue of whether patient care should be prioritized over billing and profits. There continues to be a strong push among so-called “conservative” political factions that seek to protect business interests and their right to claim massive profits, even when their product fails the consumer, or openly violates contractual terms.

This faction is the principle responsible source for attacks on any semblance of increased regulation or government-backed insurance plan as “socialism”. While there are no proposals for socialized medicine or “government-run healthcare” (where “bureaucrats make choices about care”), opponents of responsible reform that will save lives and make needed adjustments oriented toward long-term healthcare industry sustainability in the US are actively seeking to organize rallies and “tea parties” to decry Democratic plans as a “socialist takeover” of the American healthcare system.

This fear-mongering has one objective: to stop any serious reform from being implemented. Some in the industry, who understand that adjustments that will shape a more sustainable insurance system are beneficial to all parties, and a necessary step, understand that without covering everyone, the problem of skyrocketing costs will not go away. Others, who seek to maintain a level of profit that is, in fact, mathematically unsustainable, hope they can beat the economic system at its own game, outwit the math of periodic down-cycles and achieve profits even when no one can fund them any longer.

The split between pro-reform and anti-reform is not one between anti-business and pro-business, but rather one between rational pragmatist and irrational mystic. The anti-reform position is that without adjusting anything, this catastrophically broken system will “correct itself” without any major economic fallout, and stop bankrupting the US economy, from individual to corporate to government level. It is an irrational and mystical assumption, based solely on the desire to see things that way, and contrary to all evidence and to anything like “fiscal responsibility”.

That mystical approach, which claims to be pro-business, and which claims that business interests are inherently virtuous, is the same flawed logic that claimed Enron could grow forever and the housing bubble could continue to be funded at an accelerating rate, even though the world itself was running out of money even to sustain existing values. It is worse than naïve; it is reckless and will lead to great economic and personal hardship for millions of people, if not tens of millions, if this anti-reform position wins out over responsible, pragmatic reform.

The fact is: reform is necessary or the system will cease to function, and the US economy may be forced into a prolonged and deepening recession due to mass bankruptcy, layoffs related to rapidly escalating benefit costs and extreme stresses on government plans like Medicare and Medicaid and the healthcare providers that depend on them to pay for care. Voices that decry reform as unnecessary, overly aggressive, “liberal” or “socialist”, have their heads in the sand and are asking everyone involved to gamble away their future on the word of the most interested, least cooperative players in the process.

Responsible opposition to specific provisions should, as Pres. Obama has time and again suggested, include substantive, viable alternatives that would do better at imposing competition where it has failed, reducing costs, increasing quality of care and curing the sick than what is being opposed. Absent such an alternative, it is hard to consider as credible any outright opposition to reforms currently under consideration.

Pres. Obama’s call for a “public option”, where individuals can buy low-cost non-profit blanket insurance coverage that will not deny treatment, in order to find insurance the private sector will not offer and in order to force the private sector to compete with those standards, is key to these discussions. It’s a lead-by-example concept of market dynamics, and has widespread support among economists who do not see it as a Trojan horse for government management of care.

One alternative that has been floated is health insurance cooperatives: ordinary people and institutions could band together in a non-profit cooperative aimed at achieving those specific goals in terms of coverage, care and competition. Such an option could entirely stand in for the public option, or could serve as added competition, to lessen the degree to which the government becomes de facto owner of the nation’s largest insurance policy-manager. So far no substantive opposition to this idea has been put forward, except by individuals who speculate that such a system would be “inefficient” compared to for-profit plans.

The fact is: much of the vitriol involved in the current healthcare debate revolves around the problem of profit: by definition, a policy that must fund not only health treatments but also profit expectations will incur more costs and be more expensive than a policy that does not have to fund profit expectations. This is the major salient fact that for-profit interests have long sought to bury in confusing language about the “inefficiencies” commercial interests perceive to be inherent in all government spending. But in many cases, public spending is more efficient at achieving the desired outcome than private business.

What’s more, private healthcare costs have been rising faster than government-paid benefits (9.9% per year, as compared with 8.8% per year) over the last 30 years. It’s a massive difference over time, and the resulting cost-divide is the single biggest factor driving the decline of the American healthcare sector (in terms of average quality of care per resident of the US). If this trend continues, private insurance in the US will become totally inviable, and the “public option” will look like an absurdist offer to placate pro-market thinkers, as nationalized healthcare or some form of zero-profit insurance will become the norm, by urgent necessity.

In the current climate, there is no single plan available that would embody the specific competitive virtues sought for a “public option”: bringing down costs, scaling back profit-taking, and forcing more wide-ranging coverage, both for health conditions and for methods of treatment. Anyone who wants the American system of healthcare —a complex hybrid of public and private interests— to survive knows reform must happen this time, and it cannot be watered-down.

Those who seek to obstruct reform solely in service of their own short-term profit-taking are short-sighted and working under a problematic delusion. They will not be bigger than the collapse; they will not survive the fallout from a total unraveling of over-priced under-treating private-sector insurance; they are not defending “the best system in the world” against a sinister attack by would-be socialists: they are disinterested in real patient outcomes, offer no real solutions, and would have us all do nothing, while they fiddle and Rome burns.