Calls to Sen. Reid and Sen. Lieberman’s offices suggest the plan is little more than a framework proposal and is not yet written into any specific legislative language. Sen. Reid (D-NV) offers no comment on whether he favors this plan, and Sen. Lieberman (I-CT) continues to refuse to say whether he will support healthcare reform legislation, even with this compromise included. Sen. Olympia Snowe (R-ME) is said to be considering the plan, her support being necessary to get at least one Republican vote.

In order to help keep costs down and bring us closer to universal coverage, the plan is said to include a lowering of the Medicare eligibility age to 55, which would entail younger participants paying money directly into Medicare, instead of to private insurers, ostensibly to help keep Medicare solvent and lower costs for a high-risk age-group.

If the non-profit, private-run plan is included, it must meet the following criteria:

1. It must be low-cost and it must benefit from subsidies to those who cannot afford it otherwise;
2. It can never deny coverage for pre-existing conditions;
3. It can not refuse access based on income, geography, age or health status;
4. It cannot in any way interfere with doctors’ and patients’ shared choices on health treatment;
5. It cannot pay anything below what Medicare pays for treatment;
6. It must be accepted everywhere, by every doctor and hospital;
7. It must be regulated, so that insurers cannot institute a “medical-loss ratio” analysis intended to reduce access to care;
8. It must be part of an overall reform that brings us to near 100% coverage…

Unless the plan meets these criteria, the entire health reform bill will fail to achieve the two main goals of opening access to health insurance to all Americans (so that people do not suffer deteriorating health and even death, due to non-coverage) and lowering costs across the board (so that families, doctors and hospitals do not face the threat of bankruptcy due to the idiosyncrasies of insurance reimbursement).

If we don’t fix those two fundamental crises in our healthcare system, we face the near certainty that our entire economy will continue to suffer intense pressure from the out-of-control and still rapidly escalating costs of the current healthcare system. One possible safeguard would be to allow policy-holders to have a role in setting policy for the non-profit plan, so that it has some of the virtues of a cooperative and the added market “efficiency” of consumers spelling out clearly what works for them.

• Stakeholders Should Form Non-profit Grassroots Health Co-ops Now
• Healthcare Reform Explained
• Health Reform Requires Full-menu Insurance Exchange, including Low-cost

At 11:05, there remained fully 10 Democrats not having cast their vote, with rumors that one or two Republicans might also “defect” and join the Democratic majority in voting for passage. At 11:07 pm EST, the tally of yea votes reached 218, the threshold necessary to pass the comprehensive healthcare reform bill. The voting would remain open for 15 minutes, allowing for the possibility of a change in one or more votes.

At 11:10 pm, the impossible occurred, when the final Republican voting cast a yea vote, leaving only one Democrat to vote. The final vote, at 11:11 pm, was in favor, making the vote 220 in favor to 215 opposed. The vote means the House of Representatives passed healthcare reform weeks before the tentative Thanksgiving deadline, handing Pres. Obama a major legislative victory.

At 11:15 pm EST, Speaker of the House Nancy Pelosi dropped the gavel and declared to raucous applause that the bill had passed by a margin of 220 yeas to 215 nays. The vote was immediately followed by a 5-minute vote to honor those who died in the shooting tragedy at Fort Hood, Texas, 2 days earlier.

Rep. Anh Joseph Cao (R-LA) was the lone Republican voting to pass the reform bill. Louisiana is one of the states tat suffers from the least competition among health insurance providers, with high rates of denied claims, dropped coverage and uninsured, a large low-income population and serious budgetary challenges. His vote may put added pressure on Democratic Senator Mary Landrieu, also of Louisiana, to join her party in supporting passage.

The vote marks the first time either house of the US Congress has passed legislation that would extend healthcare coverage to nearly every American, after 100 years of attempts, some bold and visionary, some less daring and less developed. That historic achievement has been part of Pres. Obama’s rhetoric throughout the process, and the White House is expected to stress that achievement in declaring its efforts vindicated by tonight’s vote.

Earlier in the day, however, some difficult concessions were made in order to win support from conservative Democrats. The Stupak amendment will bar use of federal funds to purchase coverage under any plan that permits elective abortion procedures.

As Politico is reporting:

After hours of negotiations with a group of abortion opponents, led by Indiana Rep. Brad Ellsworth, and the United States Conference of Catholic Bishops, Pelosi made a final painful sacrifice to pick up crucial support, allowing a vote on an amendment sponsored by Ellsworth and Michigan Rep. Bart Stupak that would bar any insurance company participating in the exchange program from covering the procedure.

Rep. Diana DeGette, of Colorado, said the amendment —which passed with 240 votes in favor— has left many “furious” and that it marks a rolling back of women’s basic reproductive rights. The Stupak amendment will continue to be a point of serious contention, as there will surely be demands to remove it from the conference committee bill, if the Senate passes its reform bill.

Sen. Harry Reid, the majority leader, commended Speaker Pelosi on her leadership and said the House vote was “another mile traveled on the road to reforming our broken healthcare system”. Speaker Pelosi announced at 11:37 pm that she had received a congratulatory phone call from Pres. Obama, who she said “provided the vision and the momentum”, adding that without Pres. Obama in the White House, the process itself would not have been possible.

The Speaker personally commended Rep. John Dingell, who has introduced a universal healthcare coverage bill every year since he entered the House, as did his father, going back to the 1940s. Steny Hoyer praised Speaker Pelosi for “Her focus, her vision, her tenacity, her energy, her commitment” and said her leadership had served the future of America’s children. Rep. James Clyburn, the Democratic whip said the process had greatly strengthened the Democratic caucus.

The process of passing the legislation has only just begun, however, as the Senate still needs to finalize, present for debate, clear from debate and vote on it’s version of the reforms. Once that is done, the bills will go to conference committee to be reconciled into one merged bill, which both Houses will again have to pass, before Pres. Obama will have anything on his desk to sign into law.

UPDATE, 8 November 2009, 13:39 EST: Anh Joseph Cao has said he came to understand the need to vote to pass the sweeping healthcare reform program, after listening to the concerns of constituents desperate to find a way to secure reliable, affordable coverage for basic and/or emergency healthcare. A release on his website reads as follows:

Tonight, Congressman Anh “Joseph” Cao (LA-2) voted in favor of the comprehensive health reform bill, H.R. 3962, the Affordable Health Care for America Act.

Of his vote, Cao said: “Tonight, I voted to keep taxpayer dollars from funding abortion and to deliver access to affordable health care to the people of Louisiana.

Cao said: “I read the versions of the House [health reform] bill. I listened to the countless stories of Orleans and Jefferson Parish citizens whose health care costs are exploding – if they are able to obtain health care at all. Louisianans needs real options for primary care, for mental health care, and for expanded health care for seniors and children.

The bill passed the House at a 220-215 vote.

Cao said: “Today, I obtained a commitment from President Obama that he and I will work together to address the critical health care issues of Louisiana including the FMAP crisis and community disaster loan forgiveness, as well as issues related to Charity and Methodist Hospitals. And, I call on my constituents to support me as I work with him on these issues.

Cao said: “I have always said that I would put aside partisan wrangling to do the business of the people. My vote tonight was based on my priority of doing what is best for my constituents.

PoliticsDaily has put out a list of the 39 Democrats who voted against healthcare reform, their party’s banner legislative effort of the year. The list is as follows:

John Adler (NJ)
Jason Altmire (PA)
Brian Baird (WA)
John Barrow (GA)
John Boccieri (OH)
Dan Boren (OK)
Rick Boucher (VA)
Allen Boyd (FL)
Bobby Bright (AL)
Ben Chandler (KT)
Travis Childers (MS)
Artur Davis (AL)
Lincoln Davis (TN)
Chet Edwards (TX)
Bart Gordon (TN)
Parker Griffith (AL)
Stephanie Herseth Sandlin (SD)
Tim Holden (PA)
Larry Kissell (NC)
Suzanne Kosmas (FL)
Frank Kratovil (MD)
Dennis Kucinich (OH)
Jim Marshall (GA)
Betsy Markey (CO)
Eric Massa (NY)
Jim Matheson(UT)
Mike McIntyre (NC)
Michael McMahon (NY)
Charlie Melancon (LA)
Walt Minnick (ID)
Scott Murphy (NY)
Glenn Nye (VA)
Collin Peterson (MN)
Mike Ross (AR)
Heath Shuler (NC)
Ike Skelton (MO)
John Tanner (TN)
Gene Taylor (MS)
Harry Teague (NM)

Some, but not all, of the 39 defectors are members of the Blue Dog Coalition, a caucus of conservative Democrats. The leaders of the Blue Dog Coalition had pushed for a broader uniform opposition among their membership to the passage of a public option. In the end, only three of the four leaders of the coalition —Herseth Sandlin, Melancon and Shuler— voted against passage, while Rep. Baron Hill (IN-09) voted for passage.

A statement published on Hill’s website explained his reasoning:

As an elected representative I have been tasked with the weighty responsibility of acting as a good steward of the general welfare of my constituents and a good steward of their money. My vote in support of the Affordable Health Care for America Act is a fulfillment of those responsibilities.

Out [sic] great nation has been debating how to responsibly reform our health care system for decades. And the debate has grown increasingly important as health costs have escalated sharply – growing at nearly twice the rate of inflation, premiums rising four times faster than wages, and more than 60 percent of bankruptcies due to insurmountable medical bills. Inaction is both irresponsible and dangerous.

H.R. 3962 will allow those Hoosiers who work so hard every day but cannot afford health insurance for their families to secure it. Southern Indiana is currently home to 52,000 uninsured residents – a number that will significantly decrease under this bill.

Like Republican Rep. Ahn Joseph Cao, of Louisiana, Hill’s explanation appears to make clear that ideology aside, he was convinced it was in the immediate interest of his constituents that the reform legislation be passed. Having consistently run as a conservative Democrat, Hill’s vote is important, because it shows he viewed the virtue of public service as directing a vote to pass, something conservatives in the Senate may be forced to consider more closely.

They should be very wary. Obama is motivating the Democratic Congress to do the people’s work, working through the arduous process of passing comprehensive healthcare reform. The Republicans have not, however, apparently, been considering what might happen if healthcare reform comes to a full vote in both houses and they vote against it.

Essentially, the Republican party will have gleefully declared the irrelevance of its members to the process of effective and responsible service, with the added vulnerability of having opposed something that is a solution to a life or death quality of life problem for millions. Reports this year found that over a two-year period —2005-2007— more than one-third of the American population spent at least some time with no health insurance coverage.

Voting against a solution to that problem, however imperfect the solution, is to openly oppose an improvement to the wellbeing and household security of that one-third of the population. Today’s younger generation is projected to face a situation, without action to reform the system, in which half will spend significant time without insurance. The Republicans hope that generation will never hear that news, even if it comes to pass, because their stiff opposition to any of the pragmatist solutions that would rescue them from such risk could lose them that gneratiim’s support.

Personal bankruptcies are at an all-time high, with unprecedented numbers owing in part to the massive and escalating costs of healthcare — as much as 65%. How many of those families will base their vote in 2010, 2012, and beyond, on the experience of having one of the two major parties treat them like their travails and losses are of no importance whatsoever, or even a green light to malign them?

Democratic party supporters and those who support meaningful healthcare reform should and will begin organizing public awareness of the healthcare no-vote. It’s not hard to imagine enthusiastic young supporters of the Democratic agenda, motivated by Obama’s call to action and a generational shift that has seen interest in public service, volunteering and online networking, economic hard times and chronic vulnerability to the flaws of the health insurance system, decrying Republican no-voters for “voting to deny your children protection from the insurance cartel”.

The modern Republican party has made its way lying down with heavily monied interests, relying on large donations almost exclusively to fund it’s campaigns, and therefor doing the bidding of some of the least savory elements of mainstream society. It’s hard to imagine the party won’t have learned from Obama that you need to reach, take seriously, listen to and mobilize small donors and new voters, but then the Republican National Committee just launched its new website with no Spanish-language translation, just as momentum starts gathering for a new round of debate on immigration reform.

Is the GOP so reckless in its treatment of these very real problems of real Americans, because it’s out of touch? Maybe. But the party must worry more about the other interpretation that is more tempting to young, idealistic voters: that the Republican party is cynically calculating that it can deliberately undermine the interests of so many millions without them ever noticing. The uniform no-vote says that one of these two interpretations is true, and that will be a gift to the massive grassroots organizing of Democratic supporters in search of new voters.

But since we’re talking tough and being straightforward about what constitutes success and failure, it must be said: any amount of leeway for insurers to deny coverage or to limit treatment options will be a failure for the healthcare reform movement. Insurers are not substitutes for doctors and hospitals; they are insurance companies and payment systems, and that is all they should be involved in: they should have to survive without the market being rigged through allowances for denial of coverage and denial of care.

Allowance for exclusions based on chronic conditions, pre-existing conditions, or conditions that are costly to treat, will be a continuation of the status quo and will lead directly to patient deaths. Allowance for exclusions also allows the insurance industry to continue collecting huge sums of money for what is essentially a misleading business proposition: the money is taken in by what claims to be an insurance company, that will cover health costs when they arise, then the costs are ignored, vastly underpaid, perhaps up to 95% underpaid.

In many cases, the company with which the patient has entered into a good faith contractual relationship launches an expensive effort, organized by a full-time legal staff, oriented toward denying the patient coverage or even specific courses of needed treatment. The only way health insurance firms will return to behaving like insurance firms responsible for paying for people’s healthcare, is if they are barred from excluding any conditions or any methods of care.

In fact, if we are really going to talk tough, insurance firms and the bureaucrats within them who are part of this, should be charged with criminal impersonation of physicians for every case where they give medical advice to patients they have not personally examined. Doctors who make remote judgments on care, while on an insurer’s payroll, with the specific intent of saving that company cash in the short term, should be held liable for medical errors that result from the altered course of treatment they propose.

In the year 2006, 22,000 people died because they were denied treatment due to lack of healthcare coverage. If we add to those people all those who died after being denied treatment because their paid insurer refused to pay, or who received deliberate undertreatment in a persistent or haphazard way, due to insufficient coverage or lack of coverage, or died from the medical errors resulting from such inconsistent care, we find between 44,000 and 299,000 dying per year.*

We now have 13% more uninsured in the US, fully 52 million people. There may be millions more in immigrant communities and the unofficial labor market. But working from the 52 million figure, we have 68 people losing their lives, on average, every day, because they are denied treatment due to lack of coverage. The figures relating to deaths from chronic undertreatment, mismatch of non-treatment with inadequate treatment and resulting errors, would now be 49,720 and 337,870.

That means that anywhere between 68 and 926 people are dying every day, due to the systemic failure and moral corruption of our current system, which leaves 17% of the population with no access to care. That many people will continue to die, every day, due to the inadequacies of the current system, if reform is not achieved and a new model brought into effect. If that new model allows for coverage exclusions based on condition or treatment option, it will continue to produce that kind of needless and unconscionable deaths.

The insurance industry has tended to argue that without such exclusions, they cannot derive enough profit from the insurance game to make it worth their while. But, they want the private-sector insurance game to be the only game in town. Or do they. This year, we have seen a dramatic shift in attitude from private insurers and their lobby organizations. Some are eager to see comprehensive healthcare reform, even if it pushes costs down for patients, even if it involves a “public option”.

The reason: the insurers can’t actually produce the needed solutions by way of their current business model, but their current business model is failing and will not be sustainable if the needed solutions are not achieved. Therefore, legislation to achieve comprehensive reform is needed, more than ever, and a public option might be able to get closer to universal coverage, which would make the entire industry more sustainable.

The entire US healthcare industry is subject to intense market distortions, due to the fact of 52 million people carrying no healthcare coverage whatsoever. Costs are so extreme that without high-efficiency insurance coverage (meaning cheap to buy, but which pays out huge amounts to cover health costs) no one but the wealthiest in our society can actually afford the most advanced treatments, including life-saving surgeries and prolonged cancer treatments.

The fact remains that as a matter of economic theory, the insurance business only works when the largest possible pool of people is involved. In healthcare, where every last person has a need, the pool has to be 100% of the market, or costs will be pushed up by the need to deal with “uncompensated care” — emergency treatment which must be provided to those with no way to pay for it.

Price distortions are now so out of control, because no major effort to bring everyone into the system has been successful, putting the dream of optimum pricing levels far beyond the reach of anyone in the healthcare sector. Surgeons may charge over $10,000 for a procedure and receive a minuscule payment of $400 from the insurer. A dermatologist may perform a skin procedure for $270 and receive only a $12 check from the insurer, despite signed agreements with the insurer for a fee more than 12 times the amount paid. The insurer in those cases has begun to tell the doctor, get it from your patient, we’ve done our part.

It is increasingly apparent that such anecdotal reports are indicative of a broad industry trend and that such a trend is in turn indicative of the deep and worsening unsustainability of customary profit-projections for insurers. Market pressures demand that they continue to meet forecasts and expand their profit base, but recession, layoffs and skyrocketing costs mean their pool of insured patients is shrinking, a phenomenon whose ill effects are exacerbated by the fact that often only the sickest stay insured.

So, the fix: insurers must have something comprehensive imposed on the marketplace in which they operate, to justify the kind of fundamental cash-flow alterations and refined expectations they must bring in, if they are to make their businesses viable. They need to have a lower profit-per-client model, but ideally will be able to expand their customer base, the pool of patients they insure, because 52 million more people will be part of the insurance market, one way or another.

In order to make the necessary adjustments, to be truly health insurance companies, to perform as their clients expect, to compete in a market where health insurance is about taking in from each patient less than you are obliged to pay out —this is the unique high-risk model that makes insurance what it is— and where treatments and conditions are not excluded from coverage, private insurers need to be jolted into adaptive mode, made to compete, made to begin to operate in a way where exclusions are seen as contrary to the entire purpose of their business, and a potential cause for massive jury verdicts, not a convenient cost-cutting measure.

Human life must matter in this reform. It must matter more than cost; it must matter more than the bottom line of any one firm. Because if it doesn’t, the right reforms will not be introduced, and the insurance market will continue to be beyond the reach of tens of millions of Americans. And if that occurs, if even 5% of the population (15.45 million people) remain uninsured, needless deaths, escalating costs, mass bankruptcies (of patients, doctors and hospitals) and the chronic threat of collapse will continue to haunt the entire system.

* The first figure (22,000) is from the Urban Institute, while the second set of figures (ranging from 44,000 to 299,000) is derived from a confluence of other studies relating to chronic undertreatment, non-treatment, medical errors and misjudgments relating to insurance industry advice on treatment.

More on comprehensive healthcare reform in the United States:

• U.S. Uninsurance Rate Jumps 13% in 2 Years
• CBO Never Reported Patients’ Healthcare Costs Would Go Up
• Obama Weekly Address: Healthcare Reform Cannot Wait (video + transcript)
• Obama Holds Impromptu Healthcare Press Conference
• American Medical Association Backs House Healthcare Bill
• Conservatives for Patients Rights Lying to Kill Healthcare Reform
• Hospitals Agree to Lower Medicare Charges in Exchange for Universal Coverage (video)
• Obama Remarks to Online Townhall Meeting on Healthcare (video + transcript)
• White House Invites Public Video Comments on Healthcare Reform (video)
• The ‘Public Option’ is NOT SOCIALIZED MEDICINE
• Obama Healthcare Reform Speech to the American Medical Association (transcript)
• Private Not-for-profit Insurance Could Be Part of New Healthcare Market (discussion)
• Tens of Thousands Die Each Year from Lack of Healthcare Coverage (discussion)
• Why Healthcare Needs a Cure: Tens of Thousands Dying, System Failing, Despite Rising Profits
• No One Should Go Bankrupt for Needing Healthcare, Ever, Period
• Electronic Medical Records Could Help Find Cures, Speed Progress, Cut Costs
• ‘We Cannot Rebuild this Economy on the Same Pile of Sand’
• How to Solve Healthcare: Focus on Coverage, Cost & Cure

Douglas Elmendorf, the CBO director, told Congress last Thursday that reform proposals currently under consideration would likely increase costs for the federal government. He never said they would fail to bring costs down across the market as a whole; nor did he, for that matter, comment on whether the federal cost increases would materialize if costs did, in fact, come down in the marketplace.

He did specify, however, due to the potentially inflammatory nature of the testimony he gave, that “The point I made earlier this morning is that it raises future federal outlays more than it reduces future federal outlays.” Elmendorf’s testimony, therefore, means nothing more than that there will be a cost to the federal government for fixing healthcare. Pres. Obama and Congressional leaders have made it clear they intend to cover all those cost increases, so that the budget deficit does not rise.

There has been a bizarre and obsessive debate about the perils of “socialized medicine”, with comparisons being made to the Canadian or British healthcare systems, which are entirely managed through a government health system. No such plan has been proposed or is being debated. Pres. Obama’s plan is specifically designed to foster competition, efficiency and resilience in the marketplace and in no way involves socializing care.

In a very disturbing abdication of their duty, mainstream media outlets have virtually ignored this part of the story: Pres. Obama has vowed not to sign any bill that involves government-managed care or an inflation of federal deficits, but media have continued to call forward any opponent of the reform plans, in order to continue airing the irrelevant debate between laissez-faire pro-business groups and the notion of nationalized government-run care.

Republican opponents of healthcare reform legislation have openly stated their determination to derail Pres. Obama’s proposed reforms, aimed at bringing “quality, affordable care” within reach of all Americans. Yet they have refused to address the moral issue of patient deaths: no less than 22,000 people died in 2006 as the direct result of treatment denied for lack of coverage, as reported by the Urban Institute. As many as 299,000 died due to complications from undertreatment resulting from inadequate insurance coverage or other variations on medical error or undertreatment.

Since then, the official count of the uninsured has expanded by 13%. There were 46 million uninsured at the start of 2007, and there are now 52 million uninsured, by the official count. It is unclear whether a substantial number of undocumented immigrants are included in that count. Their number could mean that as many as 65 million residents of the US —legal or otherwise— have no healthcare insurance of any kind.

One Republican opponent of the legislation, Sen. Jim DeMint, has said he wants to kill the bill in order to undermine the president, saying it would be Obama’s “Waterloo”. Such politicians are clear about their lack of interest in the hundreds of thousands of innocents who die each year due to the failings of the current system, and they admit their words are designed to play politics and oppose reform.

One of the key areas they have decided to manipulate the truth of the facts at hand is regarding the meaning of the CBO report last week showing federal government healthcare spending might increase by $200 billion. While this is what mid-term federal spending projections indicate (the plan is actually to see $200 billion each year, beyond what is currently funded, for the 6th through 10th years after the reforms kick in — what is in debate is how to fund that $200 billion per year).

If the $2.3 trillion American healthcare system continues to increase in cost at current rates, it could be costing Americans over $3 trillion within 10 years, even if no new patients are added to the insurance rolls. It could consume more than the entire current GDP within a generation. Every year, millions of households go into bankruptcy in part due to the out-of-control costs of healthcare. Yesterday, a White House spokesperson said 68% of bankruptcies now have a healthcare cost component, and of those, 75% relate to patients that hadinsurance.

Elmendorf told the Senate budget committee that “federal outlays” would not be significantly reduced by the reforms on the table. It should be noted: Pres. Obama has bold aims for healthcare reform, but he is not aiming for anything as liberal as the House bill; it has always been expected some major spending would be trimmed in the conference committee to resolve House and Senate measures.

What needs to be repeated: Elmendorf did not say CBO was projecting that either the House bill or Barack Obama’s framework proposals would increase “costs over time” for healthcare as a whole, across the market, patient by patient. Yesterday, it was reported that the average family is spending $29,000 per year to buy healthcare insurance. In many cases, if not most, that family will not actually consume $29,000 worth of actual care.

The figure raises the question as to whether insurance companies are, like banks over-dependent on subprime mortgages and mortgage-based financial derivatives, in over their heads, unable to sustain the kind of profits they are accustomed to reporting, if they actually return to functioning like insurance companies and take in less per patient than they are obliged to pay out.

Are patients being fleeced, point-blank, at the very root of their healthcare spending? Maybe. What is clear is that costs are escalating at rates that are economically and morally horrifying. What Obama promised to do, by way of comprehensive healthcare reform, is bring costs down across the board, so that care is more affordable in general and the market as a whole is not dependent on unsustainable rates of price increase.

If the government has to add $200 billion to its overall healthcare “outlays” in future years, in order to make coverage available to 50 million more people, through a more competitive public-private healthcare market, that $200 billion is nothing compared to the wild escalation of costs projected to occur across a multi-trillion-dollar healthcare market. Elmendorf did not make any assertions about the potential for comprehensive reform to reduce the rate at which healthcare costs are escalating.

Already, hospitals have agreed to lower costs in order to avoid dealing with the fiscal black-hole of uninsured emergency cases. Drug companies are negotiating ways to lower costs as well, so their market can be expanded by millions, while the costs per patient can come down. Even insurers have signed on to the principles of reform, as laid out by Pres. Obama.

The AMA, which defends doctors’ interests, and which has spent much of the last century opposing every major reform to the healthcare system aimed at providing government-backed coverage, constraining insurers’ practices or reducing costs, has now signed on to the House version of healthcare reform.

So, who is crying “socialism” and “too expensive”? Faux fiscal conservatives in the Republican party, who are planning to use this issue as a way to sabotage the policy agenda of Pres. Obama. On an issue that involves life or death situations for tens of thousands of Americans, these members of Congress, who backed George W. Bush’s $1.7 trillion tax cuts and his $1 trillion war in Iraq, without paying for either, are lying about the nature of the reform plans before Congress, in order to undermine the president politically.

What we have seen, actually, in this intense round of negotiations on healthcare reform, is a White House willing to work with members of both parties, to hear concerns about escalating federal deficits and work to craft a solution that is “deficit neutral” and does not “socialize” medicine. That means the White House plans for healthcare reform to 1) not be too expensive and 2) support and expand on the market-based system, making it work better.

Concerns are mounting that the effect of this campaign of sabotage and distraction, aimed at undermining the best-case proposals being offered, will be to produce something incremental and insufficient, which will not in fact control costs over the long term and will not in fact make coverage available to the tens of millions of uninsured Americans.

As the Washington Independent reports:

“Something will pass,” said Julius Hobson, former lobbyist for the American Medical Association and now a senior policy analyst at the Washington law firm Bryan Cave. “It’s not going to be what everybody’s looking at right now, but the president will sign something in December … The drive is there to do something, and they will.”

The ’something will pass’ position has many worried, because it could lead to the best opportunity for major healthcare reform in half a century being squandered on something totally insufficient to address the major causes of the healthcare crisis. Failure to achieve substantive reform that brings costs down per patient and brings everyone into the healthcare system, will lead to huge numbers of deaths and bankruptcies and will continue to the trend that is threatening the entire federal budget.

20% of the population of the wealthiest nation on the planet is unable to access regular medical treatment or preventive care. Emergency health situations, such as heart attack, cancer or accident, are leading to rising numbers of bankruptcies. Each year, it is estimated that tens of thousands of Americans die specifically from lack of coverage.

And Cafe Sentido reported in April of this year:

It is also widely thought that ineffective insurance coverage and a punitive system that targets doctors and hospitals for providing care that is too costly grossly expand the risks for medical mistakes. Medical error is estimated to cause between 44,000 and 299,000 preventable deaths per year in the United States (estimates vary widely depending on weather only serious negligence is counted or whether additional cases of obscure human error, and potentially unforseen adverse drug interactions are included).

In 2008, 54.5% of all personal bankruptcies in the US “involved unpayable medical expenses or loss of income or insurance due to health-related causes”. In a working healthcare system, none of those bankruptcies would need to occur, and the economy broadly could escape the peripheral costs that emerge from the failure of individuals, businesses or communities to maintain good health in an affordable way.

In March, Pres. Obama hosted a forum designed to bring together all political and economic stakeholders in the healthcare policy debate, to initiate the discussions that would lead to new legislation to reform the healthcare system this year. Obama framed the event within the comment that “It’s time”.

Melody Barnes, a senior Obama policy adviser, told the gathering “Our healthcare costs are exploding our economy,” adding that as the president aims to address rapidly escalating spending costs, “one of the primary things he is focusing on is bringing our healthcare costs under control.” Doing that will require reforming the manner in which individuals are insured and in which insurers’ plan their own profit-forecasts.

At present, the private insurance industry covers less than two-thirds of the population, and devotes billions of dollars per year to fighting the right of their own clients to get coverage, despite paying for it. They also fight to keep from paying full price to doctors and hospitals, dictating to medical service providers what % of non-payment they must accept from the insurers.

The goal of reducing the pool of insured and the amount individual contributors can access is to maximize company profit margins: those legal bills, the higher profits extracted, money not paid for care given, and the reduced pool of insured, all contribute to rising costs. Part of comprehensive reform is making sure that everyone is covered: it will mean a different calculus in terms of profits, but it will also mean the insurers will have to find better ways to compete in the marketplace.

Today, Pres. Obama announced that comprehensive healthcare reform is “not a luxury that can wait” and that “out of control costs” are too “dangerous” not to be addressed. His plan aims to use the private insurance markets to extent “quality, affordable healthcare” coverage to all Americans. The expansion of coverage would be incentivized, with private businesses possibly receiving matching funds to buy mandatory policies.

Some argue that the most cost-effective system would be to re-orient the consumer insurance market to individual policy-holders, creating bulk policies much larger than those based in specific employers’ needs or means. This would require a dramatic increase in cost-competitiveness, as individual consumers are not accustomed to managing the costs of employer-based healthcare, and the larger insuree pools could help insurers spread the burden of risk.

One month ago, we published an article called “How to Solve Healthcare: Focus on Coverage, Cost and Cure”, listing the 8 top priorities that would allow for comprehensive healthcare reform to work and take root:

1. If we get everyone covered, costs will come down. Why? Because risk is spread over a broader population.

2. Getting everyone covered requires mandates. Someone has to be forced to follow a new regulation.

3. There will have to be government assistance, because the laws of the marketplace dictate that what people cannot afford, they will avoid, like paying exorbitant insurance costs, “reset” adjustable rate mortgages or high-interest credit cards.

4. Healthcare spending is an investment. Spending now to fix the system prevents massive entitlement programs from spinning out of control and bankrupting our economy, in the medium to long-term.

5. We cannot strip citizens of their existing right to sue (The First Amendment states that “Congress shall make no law … abridging … the right of the people … to petition the Government for a redress of grievances.”) If there is an abundance of grievance claims, then perhaps the system is in grave disarray. Burying the claims does not fix the problem.

6. One way to reduce medical malpractice claims is to reduce the insurers’ ability to deny treatment, a practice which can lead to complications, mistakes, chronic inefficiencies in the system that invite further lawsuits.

7. Drug costs must be reasonable. This may have to be legislated, with or without consent from the drug companies.

8. Incentives for those providers who do the best job getting quality treatment for their contributors; this will help market dynamics to yield a cost-competitive system.

The reason this has not been done until now is because it is exceedingly complicated to bring all of these factors into line. To get everyone at the bargaining table to agree to the same best way to deal with each problem. Over the long term, a viable, affordable system will be more sustainable and more profitable for all players, but in the short term, insurers and pharmaceutical companies may have to see their profit-margins scaled back in the interest of market-wide sustainability.

The problem is severe enough that neary 50 million people are without healthcare coverage, and another many millions are underinsured, not guaranteed to have necessary treatments covered, for one reason or another. Some blame malpractice insurance costs, some blame pharmaceutical drug costs, some blame malpractice lawsuits, some blame greedy insurers, greedy doctors, or stingy public-funding programs. And they are all right. But the one group that is not ripping anyone off and that has no interest in costs continuing to escalate, is the average patient.

Others fall into the category of innocents, but we have to recognize that the average person has zerocontrol over these egregious failings of the system and does not want to see them prolonged. Now, how to do we get everyone covered, and how to we bring down costs? Both of these things have to happen, if the system is to work for everyone and be solvent, whether it is majority private, majority public, or one or the other entirely.

1. The first thing that will help us on both these points is to recognize how they are connected. If we get everyone covered, costs will come down. Why? Because risk is spread over a broader population. And because healthcare providers know they will be paid, which keeps prices more reasonable, more relevant to supply and demand and not distorted by the chaos of a failed system.

2. Getting everyone covered requires mandates. Someone has to be forced to follow a new regulation. Insurers have to be barred from denying coverage, period. It may be necessary to mandate that individuals and/or businesses pay to be covered.

3. There will have to be government assistance, because the laws of the marketplace dictate that what people cannot afford, they will avoid, like paying exorbitant insurance costs, “reset” adjustable rate mortgages or high-interest credit cards. Subsidizing individuals’ and/or small businesses’ purchase of health insurance, to ensure that everyone is covered, will help lower costs; it is not money wasted, and it is NOT “socialism”.

4. Healthcare spending is an investment. Whether it’s public money or private, spending now to make sure healthcare works for everyone is cost-effective, because it prevents massive entitlement programs from spinning out of control and bankrupting our economy, in the medium to long-term.

5. The First Amendment must stand. (It may be surprising that this is relevant, but it is.) The First Amendment states that “Congress shall make no law … abridging … the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.” We cannot strip citizens of their existing right to sue, and we cannot pass laws saying citizens don’t have a right to be heard in court on a given issue. That is not the solution. Laws that limit or dictate the forum for resolving negligence claims, as a matter of definition, “abridge” the right to seek redress for grievances, so the issue of “damages” claims needs to be dealt with elsewhere.

There are important reasons why the First Amendment maintains not ony the vitality of our democracy, but also the ability of our population to adjust to change, correct the mistakes of the powerful and engineer a better future. Lessened redress for grievances means more impunity, and that can be measured in losses we are not likely prepared to stomach. We need to remember that each of the rights embodied in the Bill of Rights has a unique function in allowing citizens to exercise control over government policy or action. If there is an abundance of grievance claims, then perhaps the system is in grave disarray. Burying the claims does not fix the problem.

6. The law of the marketplace would be that only by expanding your insuree pool can you really minimize risk in a true insurance company. To rule out providing insurance means you are not an insurance company, but something else. One way to reduce medical malpractice claims is to reduce the insurers’ ability to deny treatment, a practice which can lead to complications, mistakes, chronic inefficiencies in the system that invite further lawsuits. Lawsuits, of course, also incentivize extreme “caution” and impede doctors’ ability to make fair judgments in some cases. First reduce denial of treatment, then worry about whether damages need to be capped.

7.  Drug costs must be reasonable. This may have to be legislated, with or without consent from the drug companies. They say they need high prices to fund research, but research funding can come from the taxpayer, from private institutions, or from tax incentives for research. And in fact, it often does already. The drug companies tend to spend more money on marketing than on research. It can also be mandated that any enterprise that sells drugs devote a certain percentage of its revenue to research (not counting market research).

The situation is literally out of control, with one after another major corporate interest, including insurers, calling for some kind of reform that will reduce costs, make a sustainable business model more possible and not provoke the ire of the masses (as expressed through Congress and the courts).

8. If we use market dynamics to price healthcare, having also applied the 7 preceding points, then there must be significant attractive incentives for those providers who do the best job getting quality treatment for their contributors. A system well-planned is not patchwork, but applicable and effective, even if it looks like patchwork.

It is ill-thought to split the debate between the irrationally simple “single-payer” paradigm and the recklessly haphazard all-private extreme. Neither is realistic and neither is in practice or near viable in the US market. Neither serves any purpose but to stoke ideological extremism on this issue and delay the crafting of a serious solution. Meanwhile, hundreds of thousands of people die from medical mistakes, undertreatment or lack of coverage.

Now that costs are crippling institutions at all levels, and the economic downturn and unwillingness of banks to lend, have converged to illustrate how functioning universal healthcare coverage is a mutual interest of major corporations, insurers, government and the people, we can agree on a starting point: it is necessary to make health insurance coverage, in one form or another, available to everyone; once we accept that, we can find ways to do it that are both cost-effective and sustainable for all stakeholders.