The Case Against a Universal Health Plan That Includes PRIVATE For Profit Insurers

McCamy Taylor

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Tue Feb-17-09 07:33 PM
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The Case Against a Universal Health Plan That Includes PRIVATE For Profit Insurers

Edited on Tue Feb-17-09 07:47 PM by McCamy Taylor

Warning! A super-long McCamy post! Only read if you care about health care!

Intro. A Capitalist Will Sell You the Anthrax Spore You Use To Kill Him

In the field of its highest development, in the United States, the pursuit of wealth, stripped of its religious and ethical meaning, tends to become associated with purely mundane passions, which often actually give it the character of sport.

Max Weber, The Protestant Ethic and the Spirit of Capitalism

In my last journal, I described the current Dutch national health care system, which is receiving a lot of attention from U.S. business interests. A handful of private companies compete for citizens� mandated government supplemented premium dollars, with a risk adjustment to equalize the field so that age, gender and disease status do not enter into the equation.

http://journals.democraticunderground.com/McCamy%20Taylor/373

I described why this is better (for the Netherlands) than their old three tiered system, and discussed some of the reasons why the United States may not be ready for such a plan.

Of course, we all know the number one reason why the Netherlands and the United States can not be compared. Max Weber spelled it out in his book The Protestant Ethic and the Spirit of Capitalism years ago. The Netherlands, one of the oldest capitalist countries, knows that there are rules to doing business. One delivers a sound product or service and is rewarded with profit in payment for one�s labor. This profit is proof of good moral character and of God�s favor---or so goes Calvinist doctrine. A capitalist who delivered an inferior product or service would not just be a trickster, he would be morally deficient under this code.

However, in the United States, anything goes. The rich are considered gods, money is its own reward, and it does not matter how you acquired your wealth and power. All you have to do is keep insisting that you are right and the other guys are wrong, and people will take your word for it if you have enough cash to back it up. No doubt the way that this country was settled----we were populated by the criminals, the riff raff, the discontented younger sons of Europe who held no truck with the prevailing wisdom of their home countries---had a lot to do with our current �every man for himself� attitude. Plus, the mix of cultures makes it easy for each group to find some Other to exploit. It is like being able to practice unbridled colonialism right at your own backdoor! The arrival of fresh waves of cheap immigrant labor could be exploited to divide and conquer the working class to keep their wages low, their living conditions poor and the employers� rich as sin. All of these factors combined to turn United States capitalists into some of the greediest sons of bitches you will ever meet, people who have been raised in an ethic which teaches that compassion is weakness, contracts were made to be broken, war is good for business, a certain level of unemployment, poverty, sickness and starvation are even better for business (they keep wages low) and the democratic process is the most dangerous thing for business of all.

I. The Second Price Gouging of California: Blue Cross Blue Shield/WellPoint/Anthem or How California�s Health Care Dollars Started Flowing to Indiana

We do not need to speculate. Some of these plans have proven track records of gross mismanagement bordering on highway robbery.

Take the case of Blue Cross Blue Shield in California . This PDF document details how BCBS California was acquired by WellPoint/Anthem.

http://www.moasc.org/CULMULATED_ARTICLES____Complaints_spark_state_DMHC_hearing_on_Blue_Cross____Updated_8_Aug_2007.pdf

Go to page four to find out that WellPoint started siphoning money out of California ($695 million in one year) at the same time that it began to institute such classic health insurance scams as

1) illegally deny insurance to people for frivolous reasons like acne�this can be used to hide the real reason you are denying a policy which may be based upon gender, race family history gleaned from illegal sources (like pharmacy records that have been purchased on the info market). It also provides a convenient excuse to terminate a policy later, since everyone has had a pimple at least once in their life.

2) illegally retroactively terminate policies---used to avoid paying for expensive conditions that develop in people who are already covered. For instance, if a member develops leukemia, the insurer has an employee find a loophole to retroactively terminate the policy.

3) deny medically necessary treatments for people with life threatening conditions. If the people die as a result, the insurance company can only be sued for the cost of the treatment in most cases, because of ERISA. And most people will pay for the treatment out of pocket and change insurance plans----which means one less sick member to worry about.

4) delay payments. This is a classic way private insurers make money on the interest of all the millions they sit on for three to six or more months routinely.

5) began to sharply increase premiums�self explanatory.

6) and cut reimbursements to providers----self explanatory. However, this is also intended to force medical providers off the insurance plan. The fewer doctors who are on the insurance plan, the more �sick� patients will drop out. �Healthy� members will not notice or care. This allows the insurer to prune the expensive patients and keep the cherries. Insurers will often find ways to cut reimbursements more for certain undesirable specialists like cancer doctors (oncologists) whose patients are always money sinks. They can do this with outlandishly low reimbursements for chemotherapy. This will ensure that everyone with cancer goes to a different insurer. Cherry picking is the number one way that health insurers make money in America. They love healthy people. They despise anyone with a health problem and the doctors who treat them.

No wonder private insurers have such inflated overhead. They must stay busy with all their schemes. The state of California received thousands of complaints from health care consumers and providers after the merger of BCBS with WellPoint/Anthem.

Note on page 6 that by 2007, WellPoint had posted an 11 point profit---at the same time that it was whining to California about how its contract with that state was making it go broke.

Note on page 15 that BCBS paid an �out of state sister company� $1.3 billion in one year for claims processing, an �expense� which was suspected of being yet another illegal transfer of funds of the California health care system.

On page 16, the LA Times reports that in a sample of 83 out of the over 1000 policies rescinded in 2004-5, 63 (well over half the sample) were illegally rescinded. For instance, the people actually did report the medical condition BCBS said that they did not report or the time elapsed between an old illness was longer than the cut off period. In one case, even though the state told them to reinstate a policy, BCBS refused (!). This study means that it is likely that over 500 people had their individual policies canceled because they filed expensive medical claims, not because of any problem with their initial application.

On page 19, an internal insurance memo shows that BCBS had redlined firefighters, policemen, steel workers, athletes, people with toenail fungus, allergies, acne, expectant fathers among others. This added up to 1 in 5 Californians accorded to the article. Why was all of this still happening in a progressive state like Calfornia? Because Gov. Arnold kept getting big bucks from the same health insurers who were price going California and taking its money to Indiana. In exchange, he kept demanding that Californians be forced to buy individual health insurance polices (from the companies that would refuse to sell to one in five) but at the same time he would keep vetoing any efforts to reform health care in the state.

You know, Arnold was hand picked by Ken Lay of Enron. His job was supposed to be to facilitate the California price gouging by Enron and the other energy distributors. By the time he was sworn in, his job was to squash the California civil suit against Enron. The deposition phase of the lawsuit would have required people like Karl Rove, Dick Cheney, Thomas White and some people at the FERC to testify about their involvement in the price gouging. Arnold helped Enron and the White House cover up the price gouging (the DOJ had the criminal case sealed up) and ensured that justice would never be done. So now, Arnold is helping another red state, Indiana via WellPoint/Anthem price gouge California. When will the people of California learn?

So, did Blue Cross Blue Shield finally get banned from California for their illegal deceptive practices? Are you kidding?

http://law.freeadvice.com/insurance_law/insurers_bad_faith/blue-shield-blue-cross-agree-to-pay-fine.htm

They got a wrist slap. They got a $13 million fine that could be reduced if they follow through with plans to offer new insurance polices to the 1000 people whose polices were rescinded back in 2004-5. Oh, and they might reimburse some of those people for care they received. In exchange, I am sure that the state of California will step up the plate on their behalf in the billion dollar lawsuit that has been filed against BCBS in the same matter. I wonder how many of those 1000 people want to be associated with an insurance company whose name is worse than mud?

And looky! Arnold vetoed a bill that would have created a review process for when insurers try to rescind insurance contracts.

http://www.fiercehealthcare.com/story/ca-governor-vetoes-bill-banning-some-health-policy-cancellations/2008-10-01

He must love those insurance company dollars. That brings me to my next point.

II. Private Insurance Companies Will Answer to a Handful of Corrupt Politicians and Not to Health Care Consumers *

The main reason for having private companies involved is because that gives people choice , right? If several companies compete for your health insurance business, then they will have to play by the rules, cater to the consumer and practice good business polices. That is the mantra we are going to hear in the months to come.

I will give you time to pick yourself off the floor where I am sure that you are rolling around, laughing.

Big companies no longer answer to consumers. As you can see from the example of California and BCBS/Wellpoint/Anthem, all a greedy health insurer has to do is bribe one corrupt governor and he will keep vetoing any legislation that interferes with the insurers� ability to profit at the misery of the people. If the governor is a former movie star in the state where Hollywood is located, people will keep electing him, even though he is killing their elderly mother and their premature babies, because they like having a movie star governor.

Only in America.

The same thing happened in Texas over a decade ago. Way back then, the Health Maintenance Organizations (HMOs) had gone absolutely ape shit with greed. To give you an idea how batty they were, I will tell you a few real life stories that happened to me way back when in the mid to late 1990s.

First story. HMO physician calls me up, tells me that my patient who has lung cancer is getting too many expensive treatments from his specialist and he needs to be on hospice. The treatment in question is a fairly simple procedure in which a needle in inserted into the area around the lung to withdraw fluid which builds up occasionally, smothering him. Other than that, he is walking, talking, doing well. The HMO thinks he would be better off if he was allowed to die (from being smothered). They want me to tell the patient that I do not like the specialist�s treatments and that I want him to see a different specialist from now on. I tell the HMO doctor that I am fine with the specialist�s treatments, and that if the HMO does not like what they specialist is doing, they always have the option of not paying him. He says that the HMO does not want to do that. They want the patient to think that the HMO�s decision is coming from me. I tell them that it is not my decision and I hang up. At this point, I am convinced that I have seen the absolute worst that an insurance company is capable of. Of course, I am wrong.

A different insurance company will not allow my ten year old patient who is having �staring spell� seizures to see a pediatric neurologist. They insist that he has to see an adult neurologist, because their plan only has adult neurologists. There are plenty of pediatric neurologists in our community, and (of course) none of the adult neurologists will have anything to do with a ten year old patient. The physician medical director of the HMO comes up with a 1001 reasons why we are being unreasonable. I finally have to turn in my resignation from the insurance plan, before we get a referral for the child.

Third story. I have a lot of people with complicated medical conditions in my practice, because that is just how I am. I am pretty good at keeping them out of the hospital. I get a visit from a physician representing my local doctor run HMO one day telling me that I have a lot of people who are members of their insurance with complicated medical problems but I am really good at keeping them out of the hospital, so keep up the good work. A few weeks later, I get a letter telling me that because I have so many �sick� people in my patient pool, the insurance is going to have to start penalizing me a whopping 25-50% of my reimbursement to make up for how much money they are costing the HMO. For the next year, the HMO is on my back constantly, telling me what a bad doctor I am for treating so many people with complicated medical problems, when other doctors in the community have managed to attract only healthy patients. I have seen some of those patients. They tell me that Doctor so and so saw them one time and told them �Your condition is too complicated for me.� Or �I only let people discuss one medical problem per visit.� Or �You do not need to see an oncologist for your cancer. I will take care of it from now on.� (All true stories!) I warn the HMO that what they are doing is illegal. Eventually the HMO gets into a lot of trouble with the state, but not before I have given up the practice of medicine, in part because of the threats that have me worried that I will be forced out of business.

I tell you these representative tales not to garner sympathy but rather to give non-physicians an idea of what it was like to practice medicine in an area with heavy HMO infiltration back in the 1990s. It was sheer hell.

Now, to bring this Cajun tale to a close, patients felt the abuses, too, and they were also fed up. So, the Texas State legislature decided to act to rein in the managed care industry. In 1996, they crafted the first Patient Protection Act. It passed overwhelmingly. And guess which Texas Governor vetoed it when the legislature was out of session, meaning that the legislature would not have a chance to override the veto? That�s right. George W. himself. Keep in mind that W. never did anything controversial. Never vetoed anything. Never did anything that might make himself unpopular with the voters. However, he sucked up to the health insurance industry on this one and took the heat that followed. Because there is a lot of money to be made in being the errand boy for the health insurance industry.

W.�s veto of the first Patient Protection Act, which would have stopped a lot of health insurance industry abuses, like the ones I describe in that last vignette was so wildly unpopular that when the Texas State Legislature passed a second version of the law in 1998 and he was considering a run for the presidency, he did not dare veto it again. Instead, he let it pass into law without signing it. That way, he could brag during the debates with Al Gore that he had helped pass the landmark Texas Patient Protection laws�even though he vetoed them the first time around. Note that Margaret Carlson and all the people in the press who had so much fun nitpicking Gore could not be bothered fact checking W. on something important like that. If they had, they might have guessed what he would do next. Once selected to be president, he had John Ashcroft challenge that same Texas Patient Protection Act that he bragged about to get selected, and he had it struck down in federal court.

So you see, the health insurance industry can always prevail over the will of the people, if they just buy the right politician.

Check out this document about the Medical Industrial Complex ties of the Bush Administration starting lineup back in 2001. Anyone who read this knew exactly where this country was heading. W. was bought and paid for by Big Health.

http://www.healthlaw.org/library/attachment.67694?print

Of the 46 members of the transition team, 30 are hired lobbyists or representatives of insurance and pharmaceutical companies and their trade associations, including such notables as Blue Cross and Blue Shield, the Federation of American Hospitals, Merck & Co., the Pharmaceutical Research and Manufacturers of America, the Health Insurance Association of America, the American Hospital Association, and Eli Lilly and Co.

Together, these 31 individuals and their firms gave $11,181,236 in campaign contributions during the 1999-2000 election cycle�an average of $360,685 apiece. Blue Cross and Blue Shield Association alone gave over $2 million in PAC, soft money, and individual donations during the 2000 election cycle. The American Hospital Association and Eli Lilly each contributed $1.6 million. Lobbying expenditures were also in the millions. The American Hospital Association�s total lobbying expenditures in 1999 were over $12.4 million. Blue Cross & Blue Shield spent over $11 million in 1999 lobbying expenditures. Merck and the Pharmaceutical Research and Manufacturers of America both spent more than 5 million.

What did they get? The massive Medicare drug give away to Big Pharm. The Medicare Advantage rip off which steals from traditional Medicare to overpay insurers to do nothing for healthy seniors. Lax oversight of the drug industry. The VA System and Medicare both attacked in order to frighten Americans away from national single payer models. The installation of Gov. Arnold in California, since �as goes California so goes the nation� would have meant many more states with sensible health policy by now if he had not been installed by coup to prevent that state from enacting sane health care reform.

The ability of private companies to give bribes to elected officials is probably the number one reason to keep them out of our national (or state) health care reform package. If we use the existing Medicare system, or, if we set up state governmental agencies modeled upon Medicare, these governmental bodies will be restricted, by law, from lobbying or making campaign contributions to people like Arnold and W.----and Democrats. Right now there are a lot of greedy politicians on both sides of the aisle having a collective

moment at the thought of turning off this tap.

Too fucking bad. Given the lack of morals in America when it comes to money, there is no way that we can trust our businessmen and our politicians when it comes to our nation�s health. No way. No how. All it will take is one weasely little Texas governor to blow it all for the rest of us. Or one Hollywood actor. Two, if you count Reagan who got his start doing anti-health work, too.

III. How Can You Have Cradle to Grave Coverage With Companies That Have the Lifespan of Fireflies?

The key to sane public health is having one payer responsible for each person�s health care expenditures from birth to death. That way, the payer has an incentive to keep each person as healthy as possible. An investment in good nutrition, exercise, blood pressure control etc. made in the teens will pay off in decreased cardiovascular disease in the 50s and 60s. Right now, Americans pay twice as much per person as most other industrialized countries to get poor quality health care, because we spend too much on rescue care when we get sick and end of life futile care and not enough on prevention when it counts.

Companies which are bought and sold annually do not give a shit what happens to you next year. They want to collect your premiums this year and pay no claims on you this year. Prevention means preventing you from filing a claim this year. Period. If they can spend a dime on you this year to keep you from needing a thousand dollars worth of health care on some other insurance next year, they will keep the dime, thank you. That is how they make their profit. Those dimes add up. Even if the thousand dollars worth of care leaves you only half as healthy as you would have been if the disease had been prevented with the dime. Your health is your problem. They are in the business of making money.

Only an entity that will be around for the life of a human being can be trusted to care for that human being. And there are only a few organizations that will still exist intact in the year 2060. Those are your state and federal government and maybe a handful of large, charitable (nonreligious) nonprofits. Blue Cross Blue Shield, United Health. Cigna and all the rest will have changed names, filed for bankruptcy, been reorganized and reshuffled a dozen times or more before we grow old and die.

Now, maybe if this was Europe or Japan, we might find some private insurance companies that have been around forever and which plan to be around forever. But not in the land of �let�s ditch the old and start over with something fresh and new.� Americans love to try out the next new thing. After the word free the best way to capture attention in an ad is with the word new .

So, if we entrust health care to companies that like to buff themselves up all nice and pretty and glowing so that they can merge or be acquired by other companies, those companies will try to scoop all the cream off the health care dollars. They will reap a fast profit, forego expenditures for disease prevention and health education, cherry pick so that they can get lots of premiums with a minimum of outlays, delay payments, and when their bank accounts are full, they will sell and give themselves big fat bonuses and squander the rest on artificially inflated overhead that feeds their subsidiaries----then come begging the tax payers for more money for the failing public health care system. No research into disease prevention strategies will ever be performed, because they could care less. They will not be in this business that long. They will not try to establish good will with the clients, because if you actually file a claim or use their services, you are one of their bad customers.

On the other hand, if our health care dollars go to a payer which will be around a long time and which does not plan to post a profit or pay its CEOs hundreds of millions or pay itself billions to file claims, that payer will invest in a sound public health policy that includes disease prevention. If we reduce smoking, gun violence, obesity, sedentary lifestyle, we can cut health expenditures a lot, for very little money. Improvements in clean water, air and some other environmental changes will cost a little more, but they will allow us to reap much greater medical savings than another ACE inhibitor or statin type cholesterol drug. If we reduce unwanted pregnancies through sane sex ed and contraception policy, the medical savings will be vast----and none of this requires an MRI scan for every citizen or ten pills a day or medical spending that eats up 15% of our GNP.

IV. A Clockwork Orange a Day Is Not What the Doctor Prescribed

At this point, I am not sure that we could even train one of the traditional health insurance companies to become a new, improved national public health payer----and why should we try? Their whole mind set has been sick people are bad for much too long. They exist to collect premiums and all their actions are geared towards finding new and creative ways to avoid paying out on medical claims. Is that a skill that is likely to come in handy in the brave new world of better public health and disease prevention?

I don�t think so. We might as well hire a company like Nike that has good accountants and keeps legible books. At least they are disease neutral.

Asking someone like Blue Cross Blue Shield to change is a bit like the mind control number played on Malcolm McDowell in a Clockwork Orange . Even if we could turn that insurance company into an apple that was good for us, wouldn�t it require an awful lot of work? What if the training did not stick and it reverted to its unhealthful ways? We already have Medicare with its 3-7% overhead, and its large network of providers (which would become even larger if there was a massive enrollment of a bunch of younger, healthier people. Not all doctors want to have geriatric practices.) Maybe we should all take advantage of the natural apples that we have and not go trying to play Dr. Frankenstein. All those nurses and doctors who work for the health insurance companies right now will have no problem getting jobs once we have universal health care. The same goes for the coders, billers and all the other skilled workers. Only the CEOs may find themselves looking for work.

* I just had to edit this to add a link to an article about WellCare an insurance company in Florida which apparently gave millions in bribes to Jeb Bush Republicans. In exchange it was allowed to divert funds that should have been spent on the neediest people in the state---Medicaid recipients---for its own profits.

http://citizensforethics.org/node/37300

You know, there is a reason states like California and Florida are now facing bankruptcy. When you allow private companies to rob you of all your taxpayer dollars and you still have all of these citizens who still have all of their needs which must be met, you wind up being broke and needy. And the companies that you allowed to rip you off like WellCare and WellPoint, and the others just like them, they sure as hell as not going to offer to give it back without a fight.