FROM IN THESE TIMES WORKING BLOG
Could Healthcare ‘Reform’ Make Things Worse?
Sen. Richard Shelby (R) and Sen. Chris Dodd (L) talk while listening to the testimony from Federal Reserve Bank Chairman Ben Bernanke on July 22. Shelby, the ranking member on the Senate Committee on Banking, Housing and Urban Affairs, has spoken out against Obama’s healthcare reform plans. (Getty Images)
Sen. Richard Shelby (R-Ala.) is no friend of workers, as shown by his ferocious and hypocritical crusade to stop government assistance to GM and Chrysler aimed at saving the jobs of unionized autoworkers.
Yet his own impoverished state of Alabama has lavished hundreds of millions on highly-profitable auto firms like Mercedes-Benz and Honda who were seeking a harshly anti-union political climate, with no complaints from Shelby.
Now Shelby is mobilizing against President Obama’s health reform efforts, warning FOX News that Obama’s plan is the “first step in destroying the best healthcare system the world has ever known.”
However, this familiar “We’re Number One” Olympics-style cheerleading simply doesn’t fly.
The United States has been ranked 37th in quality by the World Health Organization, and has consistently fared poorly in several other major studies comparing advanced nations.
Untroubled by well-established facts, Shelby then plunged ahead to declare on FOX that a Medicare-style public option would “destroy the marketplace for healthcare.”
This nostalgia for the “free market” is totally disconnected from the reality of healthcare as working Americans currently experience it. A few facts:
- Out of 134 metropolitan markets, 94 percent are controlled by just two insurers, according to a report by Health Care for America Now.
- In 15 states, one insurer has 50 percent or more of the market in thewhole state.
Thus, it should be no surprise that health insurance premiums have
increased by 120 percent over the last decade, according to the Kaiser Family
Fund. Meanwhile, the top 10 health insurers’ profits soared 428 percent from 2000 to 2007.
During much the same time (2000 to 2005), for-profit insurers increased their employment by 32 percent, adding more bureaucrats to scrutinize years of medical records to uncover pretexts for turning down applicants and denying the payment of valid claims.
Just like insurers, hospitals face little serious competition. Remarkably, “A 2000 study found that one or two hospitals controlled the market in 88% of the nation’s largest metropolitan areas,” Business Week reported this year.
Similarly, the major drug companies—continually growing into ever-more powerful and profitable giants—wield unprecedented power to charge obscene prices to individual U.S. consumers and hang on to exclusive patents even for life-saving drugs. They have consistently enjoyed the profit rates of other major industries.
These realities make Sen. Shelby look like a Mr. Magoo-like buffoon blindly wandering through the healthcare battlefield muttering about “free markets.”
But working people need to ask: Do the Democrats’ health plans show any more awareness than Shelby of the medical-industrial complex’s vast power to set prices and dominate our healthcare system?
The insurers will receive a new captive market of tens of millions of new consumers mandated to buy private insurance. To minimize care and maximize profits, insurers will continue to impose a needless bureaucratic burden of about $400 billion a year.
The much-heralded public option, designed to serve as a measuring stick to keep insurers in line, may be been whittled down to a toothpick — or perhaps nothing at all in the Senate Finance version, as Sen. Olympia Snowe (R-Maine) claims.
Most fundamentally, will the Democrats’ reform plan restrain the metastasizing clout of insurers, hospitals and drug companies? Clearly, no market mechanism can hold them in check. They are truly too profitable to fail.
The relevant question is if real reform can succeed with insurers and drug companies still playing their dominant role.