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August 10th, 2009
Freethought San Marcos: Looking for an American solution on healthcare

Freethought San Marcos: A column

I begin with a simple proposition: If the marketplace cannot or will not provide a good or service needed by the people, the people have the right to satisfy that need through their own cooperative efforts, whether through private cooperation or through cooperative government action.

If you believe that only private markets should be allowed to provide goods and services, then nothing I write will persuade you otherwise. However, the private market model does not represent how the American economy has worked throughout our history. The following examples of failed markets that have been improved by both private and public cooperation illustrate this economic history.

Credit unions are an example of private cooperation to create a financial system that encourages savings and meets the basic need of most families to borrow money for homes, cars, vacations, and other consumer purchases. Other consumer cooperatives provide housing, water, electricity, telecommunications services, child care, health care, food, books, and funeral services.

Producer cooperatives are owned by people who produce similar products, such as farm crops, cattle. milk, crafts and other artistic products. Worker cooperatives are businesses owned by workers, including employee-owned food stores, bakeries, restaurants, taxicab companies, sewing companies, timber processors, and other industrial manufacturers.

Some businesses, cities, and state governments have banded together to purchase goods and services that they need in order to lower costs, improve services, and increase competitiveness.

While all of these kinds of cooperatives are vital to the economic health of the nation, they exist alongside profit-making businesses that offer the same or similar goods and services. Cooperatives usually exist where the private market has failed to provide people something they need, at a price they can afford, and on terms they find acceptable.

Government is another type of cooperative venture that operates under different rules and structures from those followed by either the private, market-driven sector or the cooperatives sector. Government usually provides streets, roads, and highways; fire and police protection; schools; libraries; recreational facilities; airports; sewer services, garbage collection, and recycling services; water, electrical, and gas utilities; low-income housing and a range of social services, including health care and health care insurance for the elderly, children, the disabled, and the military (TRICARE and VA).

According to recent polling, nearly 75% of Americans now realize that the private health insurance industry, driven by market forces, has been unable to provide adequate health insurance to meet the health care needs of nearly 50 million Americans and costs far more than it should for another 50 million Americans who have some coverage.

Something similar happened with fire insurance companies. If you had a fire insurance policy in the early 1800s, a private fire brigade would respond to a fire alarm at your home. The system did not work well because not everyone was covered by insurance and conflicts often arose between competing companies with different customers who were affected by a common fire. Governments gradually assumed fire-fighting functions in most communities. Today, even volunteer fire departments are controlled by government laws and regulations, and such departments perform an admirable service.

While many for-profit companies provide utility services, build and operate roadways, build and manage prisons and jails, and provide private security services, most such functions are done directly by governments at all levels.

The mixture of government, for-profit, and not-for-profit entities providing goods and services to the public indicates that there is a role for all of these business models in our economy. When one model fails to perform adequately, usually some other model is developed or expanded to meet the unmet needs. With health care insurance, we have come to such a point.

The private health care insurance system is not adequately meeting the needs of about one-third of all Americans, either those who cannot afford any health care insurance or those whose premiums and co-payments have reached the point that they have to forego other necessities to meet the increased costs or go without the health care. Given the government’s experience providing health care and health care insurance through the military and through Medicare and Medicaid, it is clear that the government is capable of making affordable health care available to all Americans, especially those who are not served by the present for-profit system and those who can afford only inadequate coverage.

What is now standing in the way of a Medicare-like option for those Americans who cannot afford private health insurance is the insurance system itself. According to Consumers Union, “the giant drug companies, insurance companies and medical conglomerates are spending $1.4 million each day” on lobbyists to make sure that whatever health insurance bill is passed by Congress “benefits them, not you.” (Emphasis added.) These corporate entities have “even hired 350 former members of Congress and staff to push their agenda of getting more money in their pockets, and less in yours.”

The only reason the insurance companies oppose a public option for health insurance coverage, which would guarantee health care for those who can’t afford insurance now, is that they don’t want to risk that the government option will be so popular that their customers will move by the millions away from expensive private insurance to the more reasonable coverage that could be provided by a Medicare-like option.

Between them, my parents enjoyed over 45 years of Medicare coverage, without the hassles that my wife and I have endured in the private sector. They never needed to get approval to see a specialist. They never needed pre-approval for a medical procedure. They never had to worry that the co-pays would be beyond their means. They never had to worry that their health care coverage would be canceled by some corporate bureaucrat concerned more about the company’s profitability than with their health care needs. They never had to worry that a medical procedure would be disallowed by one of those same corporate bureaucrats. And they always were able to receive health care services from the doctor, specialty clinic, laboratory, rehab facility, hospice, and hospital of their choice.

Health care should not be just another commodity bought and sold in the marketplace. When it is, far too many people do not receive the care they need. The result is needless suffering, financial hardship, and premature death. The primary concern of the for-profit health insurance companies is their bottom lines. It is the nature of companies owned by stock-holders to serve the financial interests of those stock-holders above all else. An example of serving such interests to the detriment of policyholders was given recently in testimony before the Senate by former CIGNA Health Insurance executive Wendell Potter: “Insurers routinely dump policyholders who are less profitable or who get sick. They look carefully to see if a sick policyholder may have omitted a minor illness, a preexisting condition, when applying for coverage, and then they use that as a justification to cancel the policy, even if the enrollee has never missed a premium payment.”

There are alternatives to the present despicable system, but they will be created only if our elected representatives serve the interests of the people, rather than the interests of the corporations or the dictates of a rigid private market ideology, an ideology manifested recently in the efforts of menacing protesters who have interrupted and shouted down some of our elected representatives, including Congressman Lloyd Doggett. These include some of the same people who claim that the plan now being considered by the Congress will force euthanasia on the elderly–a loathsome and false charge.

A group of Oregon doctors pushing for universal health insurance have concluded that “there is only one way to control costs, one way to remove profiteering from the system, one way to reclaim the care of our patients, and one way to be sure everyone is covered: we must replace our current pay-or-die system with a comprehensive, publicly financed, privately delivered, Single Payer system that puts people first.”

We need a better health insurance system. The only kind that will fix our current broken, dysfunctional, excessively expensive system is a single-payer system, something like Medicare-for-all. If we cannot have a single-payer system for all Americans that saves billions of dollars each year in administrative costs and profiteering, and assures that health coverage will not be canceled at the whim of some corporate bureaucrat, then we should at least have a system that covers everyone in the most economical way possible, while prohibiting the private-sector health insurance companies from dumping any of their customers.

The way to do this is to have the government collect the premiums and pay the private medical providers of our choice if we can’t find affordable health insurance in the private sector. The private, profit-driven system will either figure out how to be more competitive or it will cease to exist. Such change is nothing new. It has been going on for the last 300 years in North America. It is not socialism. It is the American way.

© Freethought San Marcos, Lamar W. Hankins

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8 thoughts on “Freethought San Marcos: Looking for an American solution on healthcare

  1. Let’s Respect others and discussion, not violence.
    ‘What’s in it’ ? or ‘violence and disruption’, which one is the reason of slow-down ?

    Part 1.

    The runaway premium similar to the peak fuel price last year and left so many folks in despair insists on staying the course with the attitude ‘unchanged’, clearly this trend could bankrupt individual, business, and government. Now the government subsequently is tasked with these two main assignments, first, to address premium inflation, second, to expand coverage to all in urgent need.
    In order to cover all and not to add to the deficit, the public option can not set the same rates of private market, rather, it needs to have the function to keep it in check in terms of inflation, too. Unfortunately, this ‘unavoidable’ direction is aggressively being accused by the runaway premium, citing government ‘take-over’ .
    Under the circumstances the energy bill to determine human future and the other major issues are presently piled up, who wants to waste time making enemies ?, which also does not benefit the forthcoming election.
    On the other hand, to make things worse, critics say the savings from the proposed public option is not enough to meet the revenue goal. Furthermore, on another hand, some say ‘hands off’ . Where do these No tax, No saving and the like intend to force this reform to go ? The conclusion by ‘just-say-no’ is no doubt. Ironically, the Deficit-sensitive groups have a distinctive common ground, they all have a Deficit-driven background out of question.

    Part 2.

    Of all choices, the best thing would be savings through efficiency. Considering the wasteful structure, the highest premium in the world (Costing over twice as much as every other county), and the most expensive part of medicare, with the prevention / wellness program in place, an American style innovation, an ‘outcome’-based payment founded upon IT system may be enough to save more than 50 billions per year (500 / decade), both ‘improving quality’ and removing the unnecessary procedures (as pay is dependent on patient’s outcome). Young folks and advocates need to explain the notion of a pay for outcome agreement to the elderly misled by the disinformation.
    Part 3.

    Unlike private market, this public option includes large-scale investments, these large investments still does not get the fair score, instead seem to become a source of acute conflict, even so, this common sense-based program needs to develop further as early detection goes beyond monetary value.

    In short, with the heartbreaking tears in mind (Nearly 11 Million Cancer Patients Without Health Insurance), private market also needs change and should join together to complete this reform , as promised, if not, the runaway premium only has itself to blame. Job-based coverage (indirect payment), mandate code, and ample capital might be favorable to the private market. And It can be said that fair competition starts with fair market value.
    Over time, supposedly, the public plan will concentrate more on basic, primary cares, and the private insurers will provide their clients with differentiated services.

    Thank You !

  2. So many of our electeds in Washington are owned by the lobbies that funnel money and other benefits to them. I just can’t see that we will be able to fix that problem. If we can’t fix that, we can’t have government for the people. Compromise may enable bills to pass, but compromise strips out the best in order to raise enough votes to enable passage. That’s what I see coming our way in the healthcare fight. I believe that whatever gets passed (if anything gets passed) will be an empty shell, or worse. I have seen the nasty lies spewing forth about healthcare reform on FOX TV. It’s just ugly. My own son has told me that FOX is all the news he needs because everyone else is wrong about everything. Makes me feel really sad that my own son is so ignorant – and that are millions of Americans who learn only from FOX and Limbaugh.

  3. Lets just change the name from The United States of America to The Unified Federal Government. Cooperatives are fine. State run programs are fine.However the federal government was created by a fedreration of sovereign states. The federal government cannot dictate to the states and consequently cannot dictate to the people.The states and the people tell the federal government what to do within the bounds of the Constitution.

    I propose an admendment tha would provide that all lower courts adhere to precedent but that the Supreme Court only refer to the Constitution and accept no arguement or precedent outside the text of the Constitution.

  4. You bring up some good points. I just read the following commentary on the influence of money in the health care debate from The Nation magazine:

    A Rancid Deal with Big Pharma


    August 6, 2009

    So now we know why the president wants everyone to make nice in the healthcare debate. His White House has cut a deal with Big Pharma that smells like the same old rotten politics that candidate Obama regularly denounced and promised to end. The drug industry agrees to deliver $80 billion in future savings and the president promises the government will not use its awesome purchasing power to negotiate lower drug prices.

    Wow. This is roughly the same deal that George W. Bush cut with the drug makers when he was legislating Medicare’s new coverage of drug purchases. It is the same bargain that Democrats in Congress universally condemned as wasteful and corrupt. The deal does not smell any better now that a Democratic president is embracing it.

    In effect, Obama wants to give away one of the principal objectives of strong reform. The details were spelled out in today’s New York Times and revealed by Big Pharma’s top-dog lobbyist, Billy Tauzin, a former Republican congressman who leads the industry association. Tauzin called it a “rock-solid deal,” and the White House did not dispute as much. But that is not the last word.

    People who believe in real healthcare reform should not be nice about this. They must rise up and rebel against our popular new president’s outrageous concession. They must demand that Congress declare the private deal-making null and void. If Congress lacks the nerve to do this, then this exercise in reform begins to look more and more like previous attempts that were eviscerated by the clout of the corporate interests.

    The fate of healthcare reform may depend not on the Senate or the White House but on Nancy Pelosi and the Democratic majority in the House of Representatives. What prompted Billy Tauzin to spill the beans on his deal-making with White House chief of staff Rahm Emanuel was the House measure that specifies government’s right to bargain for lower prices. No, no, no! Tauzin said. We’ve got a deal with the president, who says that won’t be allowed.

    But House Speaker Nancy Pelosi simply responds that the House is not bound by any deals made with the Senate or the White House. Her caucus must back up her words. They should pass the House bill, which will allow the government to do what any major customer would do in the same circumstances–use its leverage to demand lower prices.

    If House Democrats stand their ground, then they will force a debate they can win with the American public. President Obama will have to choose between standing with the drug manufacturers or defending the original purpose of healthcare reform.

    About William Greider
    National affairs correspondent William Greider has been a political journalist for more than thirty-five years. A former Rolling Stone and Washington Post editor, he is the author of the national bestsellers One World, Ready or Not, Secrets of the Temple, Who Will Tell The People, The Soul of Capitalism (Simon & Schuster) and, most recently, Come Home, America. more…

  5. Reply to Mike Davis:

    If health care reform passes the Congress, it does not appear that it will be mandatory. The federal government would make health insurance available to those who choose to have it, much like Medicare, which is not mandatory. If I need or want health care insurance, it will give me another choice to meet that need, but I won’t be forced to participate and pay a monthly premium that is affordable.

  6. In reply to Lamar Hankins who replied to me:

    I believe the gist of the proposals on the table provide for universal healthcare (now referred as universal health insurance). It cannot be universal if anyone can opt out. There is certainly evidence that it will in fact be manditory.

    However, my contention is that the U.S. Government does not have a constitutional mandate to be in the insurance business at any level. I understand you once proposed a community bill of rights. That would be ok with me along with a state B.O.R.s if people want.

    Government intervention in Health Insurance would also be ok with me as long as it is below the federal level.


  7. To Mike Davis:

    President Obama said two days ago that he did not expect all of the nearly 50 million uninsured to accept coverage. This is an indication that it will be available universally, but not mandatory for all.

    My contention is that if the people who theoretically run the government can get their elected representatives to take action to correct the deficiencies in the private health insurance marketplace, there is nothing in the Constitution that prohibits the passage of such legislation. Otherwise, Medicare, Medicaid, and VA healthcare would have been declared unconstitutional decades ago.

    My concern is for the people who cannot afford adequate health insurance in the private marketplace. It has nothing to do with states’ rights political theory, but the real needs of real people.

  8. Well, it’s been a few days since the last posting and it looks like the Obama team and Congress have caved on the Public Option. I said previously that I was afraid that compromise would remove the best of whatever healthcare reform might hope to offer, and it appears to me that two groups are well on their way to killing meaningful reform.

    The 1st group is the big healthcare business group, which includes Pharma and the big insurance companies like Cigna & Aetna. This group also includes key legislators that have for years taken huge sums of benefit from private healthcare related companies. That invested money is now bearing sweet fruit for big business.

    The 2nd group includes the uninformed who believe the lies they are being told about healthcare reform. They listen to the garbage (death panels???) – propagated by those who want no change or who want to manipulate reform to their own benefit. This group also includes the “citizen liars”. I believe that the citizen liars are usually folks who have healthcare either thru their employer or perhaps they are wealthy enough to self-insure. They don’t say this out loud, but I believe they feel that those who don’t already have insurance are “trailer trash” that have not done what they need to do to be insured.

    I suggest that we read 2 editorials that appeared in the Austin American-Statesman on Tuesday, August 18th.
    ARA DARZI and TOM KIBASI – “The Truth about British health care”
    PAUL KRUGMAN – “Swiss way better than our way”

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