Cost Inefficiencies Are No Accident


For evidence that a strong government health insurance plan — single-payer, Medicare for all, or a robust public option paying Medicare rates — is all that is needed to reduce costs, The Times need only to look at its own reporting when on June 23 it reported that the presidents of America’s Health Insurance Plans and the Blue Cross and Blue Shield Association stated that a government plan would have “built-in advantages” which would allow it to “take over the health insurance market” — because of its inherit efficiencies.

In light of America’s actually existing democracy, where it’s no secret that a special interest group can kill even moderate health care reform, e.g., Bill Clinton and the insurance industry, despite, and in fact with no regard to, the preferences of the American public, it’s no surprise that authentic health care reform is not being proposed; and the reason is quite obvious: because it does not reflect the interests of the Washington’s real constituents.

The cost inefficiencies are no accident. Negotiations behind closed doors — despite campaign promises — between the Obama administration and industry representatives, through the Senate Finance Committee, reflect the relations of power. The pharmaceutical and hospital industries made deals with the administration to limit their cost reductions to $80 billion and $155 billion, respectively, over the next 10 years.

In addition, details of the PhRMA deal, at one stage in its development, have been leaked. The contents of the leak outline the dictates of the pharmaceutical industry. The White House would oppose any legislative effort to repeal generous rebates award during the Republican congress, oppose importation of cheaper drugs, oppose repeal of the law disallowing negotiated drug prices, oppose moving “infusion drugs” to Medicare D where they would get paid less and impose the above mentioned cost-reduction limit, and then the reform would be suitable, nay — even beneficial.

The details of the hospital industry’s deal are not known, but The Times did offer readers another glimpse behind the curtain. “Several hospital lobbyists involved in the White House deals said it was understood as a condition of their support that the final legislation would not include a government-run health plan paying Medicare rates” nor would it be “controlled by the secretary of health and human services” — in addition to the cost-reductions cap.

Change that we can believe in is possible. A good solution sits idly in room filled with grandiose debate. But it doesn’t seem like the proper way forward can be paved without the resolution of our current democratic crisis — where the affairs of the country ought to be directed to “protect the minority of the opulent against the majority” — as James Madison put it. Until we can improve upon our state of democracy, politics will stay, in the words of John Dewey, “the shadow cast on society by big business.”

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