Corporations profit from health care waste

The United States wastes about $3,000 per person annually in health care spending — nearly $1 trillion a year. That's bad enough. Even more disturbing is who gets that trillion.

The fact is, we cannot understand politics in the U.S. by watching mainstream media or following the arguments of Democrats and Republicans. That's because neither side is honestly addressing the main problem.

In the U. S., according to Rick Kronick, a political scientist at the University of California at San Diego, "health care costs [are] going up at 2.4 percent a year faster than GDP." We spent $2.5 trillion on health insurance and health care in 2009, or $8,086 per person, fully 17.6 percent of gross domestic product. In the next highest-spending nation, annual per-capital costs run about $5,000. Our health spending is remarkably above average and yet our health outcomes are below average for developed nations.

Drs. Steffie Woolhandler and David Himmelstein estimated that in 1999, Americans spent $1,059 per capita on administrative costs compared with only $307 spent in Canada — about $225 billion per year. The corporate geese are going to spare no effort to hold on to this golden egg.

Other components of waste in the U.S. health system include relatively high compensation for doctors; high prices for health services and pharmaceuticals due to the lack of a system that can negotiate fair prices; overuse of tests and other procedures; lack of access to primary care; and self-rationing, whereby people wait until their conditions are more advanced and costly to treat.

All this is driven by corporate profits. Doctors are increasingly employed by for-profit hospitals and practices, labs benefit from over-testing, and drug companies and device makers profit from lack of preventive services and overuse of medications and procedures.

The health care industry spends over a half billion dollars per year on lobbying. The corporate stranglehold on both parties that operates through the campaign financing system, the lobbying industry and corporate control of the media keep the real story in the background while politicians rant about death panels and Grandma eating dog food.

To break the chokehold, the people must wake up to the new reality that corporate dominance will destroy our democracy and that only massive grass-roots action can change the situation.

Let's look at President Barack Obama's history on this issue. In 2008, when he was running for president, and in 2009, when he was campaigning for his health insurance plan, he said that he opposed any mandate on the public to buy private insurance. He also declared support for the public option. In other words, anyone could opt into a plan similar to Medicare.

But soon after he took up health care as president, Mr. Obama dropped his opposition to the mandate and then his support for the public option. He negotiated with Big Pharma and the insurance industry and supported a national version of the plan put into effect in 2006 in Massachusetts by then-Gov. Mitt Romney, a Republican.

The Democrats' mandate creates real problems for middle-class families. For example, a couple with one child and no employment-related health insurance earning $72,000 annually will have to pay $570 per month in premiums plus 30 percent of incurred health expenses, up to a limit of $7,632 per year. Alternatively, they can pay a tax of $1,800 and have no health insurance.

Essentially, the Democrats are saying that people over 65 can have the public Medicare system, but people under 65 should be required to buy private insurance that, in many cases, will be unaffordable. Republicans, meanwhile, say that "Obamacare" is a socialist plan to control your personal health care decisions, even though it's modeled on a Republican template from Massachusetts.

Fast forward to the plan unveiled by Republican House Budget Committee Chairman Paul Ryan: Medicare would change to "premium support" — that is, vouchers — and recipients would buy private insurance. While they have not proposed a legal mandate, Republicans would force most elders to choose between unaffordable private insurance and not being covered. The voucher would not nearly pay the full premium.

Democrats imply this is a calamity, yet they just enacted a very similar plan for people under 65. They say they want to give everybody affordable care, but they are afraid to challenge their corporate patrons. In the end, they failed on many counts, passing a bill that doesn't cover everyone and isn't affordable.

The Republicans say that the only sustainable way to provide health coverage is to give more and more to corporations by way of tax breaks, subsidies and voucher schemes. Instead of cutting wasteful administrative costs or unnecessary tests and procedures, they cut workers and retirees.

The Republican and Democratic talking points cannot hide the fact that corporate profit on $1 trillion in health care waste limits what can even be discussed within the parties and the mainstream media.

Health care costs cannot rise year after year by 2.4 percent more than the overall economy. Unless the citizens of the United States organize independently of the political parties and demand an end to corporate waste of $1 trillion per year (and growing), we will see some combination of more people with no health insurance, a major deterioration of the quality of care, and a decline in the health of the population.

Charlie Cooper is a Baltimore-based activist. His e-mail is

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