Health Care Deformity

Back off, you bugaboos! Take a break. Take in a great big breath. Not only is this a proven method of relaxation but it also provides a good dose of oxygen for a healthier brain, thus a positive prognosis for the all too contentious debate on healthcare reform.

All of the knee-jerk reactions on the debate of providing medical coverage to the uninsured have gotten everybody’s panties in a bunch. The hate factor among all the interested groups won’t resolve the issue to anyone’s satisfaction, except possibly President Obama and a number of die-hard Democrats. Currently, there is no dialogue that will provide a cure-all for what ails uninsured Americans.

For years, the high cost of providing health insurance through employer-based coverage has made American business at a frightful disadvantage for competitive product pricing in the broadening realm of globalization.

Corporate medical contributions to employee benefits come to an annual expense of about $15,000 – for government employees the un-taxed benefits are even more obtuse at $19,000. These costs continue to be a prominent reason for the outsourcing of jobs to foreign lands. We’ve painted the survival of American enterprise into a corner, but there are steps that can be taken to correct this poor state of affairs.

Before providing “universal” coverage, the cost factors of health care must be addressed.
Three years ago Massachusetts enacted the most comprehensive subsidized insurance fee-for-service public offering and cut the rate of uninsured residents from 8% to 2.6%, the lowest in the country. Although an addition 428,000 people were given affordable coverage, it has resulted in an insurmountable budget crisis. The state is on the hook for an additional $595,000 than it was in 2006, a 42% increase.

Enacting universal coverage in Maine in 2005 resulted in a 74% increase in premiums, pricing many of the uninsured out of the market and dropping coverage. The uninsured rate is 10%, the same level as before legislation was passed.

Neither Maine nor Massachusetts bothered to address a means to implement cost-cutting measures of medical pricing. For decades, private insurance companies have maintained what could easily be considered price fixing since in-state health options are generally restricted to two or three major providers.

This lack of competition defies the intent of the free market system. The self-interest of insurance companies, service providers and drug companies is too impressionable on elected officials. The inherent power of lobbyist groups set up by former legislators are too influential on the course of action of Congress. They know the ropes. They have the contacts. The have access to funds for campaign contributions. And they have too tight a grip on the health of Americans.

Rather than accuse Obama of promoting a death forum for the elderly, the feeble and the less-than-productive members of society, put the blame on insurance companies for limiting and denying medical procedures that would otherwise enhance the lives of the unfortunate.

Pharmaceutical companies are major culprits in themselves. When the Medicare Drug Plan was enacted in January 2006, they raked in an additional $8B in profits in the first six months alone. The industry has promised an $80B sacrifice over a ten-year period as a buy-in to healthcare reform, a minor contribution toward the health of the country considering their huge profit margins.

The U.S. has the most profitable pharmaceutical business in the world with revenues of $315B in 2007. As a comparison, the illegal drug industry has profits of approximately $300B in revenue per year, globally speaking.

What could be considered an unethical tactic of pharmaceutical companies is the “pay-for-delay” scheme that keeps generic drugs off the market by providing attractive monetary incentives to maintain an extended monopoly over less expensive drug manufacturers. The FTC estimates Americans are cheated out of about $3.5B per year. Then there’s the practice of putting “name brand” generic versions on the market for drugs whose patents have expired, affectively making it unprofitable for true generic companies to offer competitive pricing for an additional six months

Pharmaceutical companies and insurance companies are keeping Red Bull Republicans and Blue Dog Democrats at bay, caged in dollar signs of influence.

It’s understandable that Americans are leery of healthcare reform. Obama claims his efforts will be deficit neutral. Even if an attainable goal, through higher premiums, increased deductibles and restricted coverage, a redistribution of health wealth will help some but will come at a great cost to the currently insured. Town Hall Brawls are not the answer.

Containing costs in all aspects of providing ‘universal medical coverage’ must be addressed before continued debate gets out of hand and people’s health conditions deteriorate. Is this an orchestrated script by insurers and providers to further increase profits? Depending on whether or not you have health insurance, you can bet your life or death on it.