[lbo-talk] Ridgeway on bogus 1.5% health care cost cutting pledge

Michael Pollak mpollak at panix.com
Tue May 12 16:29:43 PDT 2009


http://www.motherjones.com/mojo/2009/05/health-care-industrys-pr-scam-will-obama-fall-it

http://www.commondreams.org/view/2009/05/12-3

Tuesday, May 12, 2009

Mother Jones

The Health Care Industry's PR Scam: Will Obama Fall for It?

by James Ridgeway

In a much-anticipated statement [yesterday], Barack Obama announced

[1]what is largely a public relations end-run by the health care

industry, designed to trim a few scraps off of the nation's porcine

health care budget, while preserving its basic system of medicine

for profit.

In a letter to Obama that was released over the weekend, executives

from the Advanced Medical Technology Association (the medical device

manufacturers lobbying group), the American Hospital Association,

the American Medical Association, America's Health Insurance Plans,

and the Pharmaceutical Research and Manufacturers of America, as

well as the Service Employees International Union, pledged to "do

our part" to reduce health care costs. Their vague, pie-in-the sky

promise amounts to just a 1.5 percent reduction in the growth rate

of health care spending. Such is the explosion in health care costs

that even this miniscule reduction represents a potential $2

trillion saving over 10 years. But there's no guarantee this figure

will be achieved. As the Washington Post points out [2]:

The groups did not spell out yesterday how they plan to reach

such a target, and...they offer only a broad pledge, not an

outright commitment....In addition, White House officials said,

there is no mechanism to ensure that the groups live up to their

offer, only the implicit threat of public embarrassment.

"Public embarrassment"? From Big Pharma [3]and the health insurance

companies [4]--two of the most shameless industries in the history

of corporate capitalism? In any case, even if the $2 trillion

reduction is achieved, it clearly won't come out of industry

profits. The Post reports:

Signers of the letter said that large amounts could be saved by

aggressive efforts to prevent obesity, coordinate care, manage

chronic illnesses and curtail unnecessary tests and procedures;

by standardizing insurance claim forms; and by increasing the use

of information technology, like electronic medical records.

So let's get this straight: Saving all this money depends on getting

Americans to eat less? Good luck with that one. And the other

brilliant cost-saving measures involve getting doctors to create

computer records of all the overpriced drugs they prescribe, and

giving patients easier forms to fill out before they get turned down

six times by their private insurance companies?

Do you see a pattern here? None of these changes would make a dent

in the industry's bottom line--and what's more, they could even

enhance profits, by encouraging government-funded programs to help

private companies streamline their bloated bureaucracy (much of

which would instantly become superfluous under a public,

single-payer system). The letter to Obama suggested this when it

said: "We are committed to taking action in private-public

partnership to create a more stable and sustainable health care

system." We all know by now that "private-public partnership"

usually means public investment for private profit.

It all adds up to a brilliant move, when you think about it. It

makes the private health care companies look cooperative and

proactive, rather than like the greedy obstructionists they really

are. It gets these companies on the inside track with the

administration, and creates common cause with the unions. In

particular, it establishes a solid place at the table for the health

insurance industry, the blood-sucking middlemen who ought to be

kicked out of the health care system altogether.

And what might the industry get in return for this generous

"cooperation"? The Kaiser Daily Health Policy report today

[5]rounded up the possibilities:

The [Wall Street] Journal [6]reports that although the groups did

not ask for anything in return for the pledge, many of the

factions are looking to prevent regulations that could "pose new

burdens" or affect their profitability. For example, the health

insurance industry is seeking to offset any reductions to their

payments by obtaining new rules that would require all U.S.

residents to have health coverage, according to the Journal. The

Journal reports that health insurers have made several

concessions intended to prevent a public option - which they fear

could affect their profitability - as part of reform legislation

(Wall Street Journal, 5/11). According to the AP/Philadelphia

Inquirer [7], drugmakers are hoping to avoid a requirement that

new drugs pass a cost-benefit test before receiving regulatory

approval. In addition, hospitals and physicians are looking to

avoid a system in which the government would dictate their

payments for all patients, not just those under Medicare or

Medicaid (Alonso-Zaldivar, AP/Philadelphia Inquirer, 5/11).

In other words, the underlying purpose of this PR stunt is to slow

or block any meaningful health care reforms, which could actually

improve care while reducing the price tag by a lot more than 1.5

percent. These include regulating the cost of pharmaceuticals and

medical devices, curtailing or eliminating the role of the insurance

companies, or introducing single-payer, which allows other developed

countries to deliver superior health care for 20 to 40

percent less--all of which make $2 trillion in weight-loss programs

and paperwork reduction measures look pretty pitiful by comparison.

All we can hope for is the possibility, remote as it may be, that

Obama himself is also playing a PR game--making nice with the

industry shills while planning some kind of genuine reform that will

hit them in the only place that counts, and the only place where

truly meaningful savings reside: their profit margins.

© 2009 Mother Jones

James Ridgeway is the Washington Correspondent for Mother Jones [8].



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