Features » May 1, 2006

Careless Industry

How corporate America perpetuates the health care crisis

By David Sirota

EXCLUSIVE:This article was adapted from Hostile Takeover: How Big Money and Corruption Conquered Our Government—and How We Can Take It Back, with permission from Crown Publishers.

Let’s be honest—very few political operatives, politicians or pundits actually want to explore the real-life, day-to-day economic challenges facing the American people, because to explore them would ultimately force us to admit that our entire venerated political system is totally corrupt.

Take this idiotically simple question that is almost never asked in the normal course of this country’s political debate: Why do we hear so much about how well-off America is, yet our country has the highest number of uninsured citizens in the industrialized world?

Why isn’t that question asked? Because you can’t answer it honestly without exploring how Corporate America has bought off enough politicians to make sure our government helps corporations perpetuate this travesty.

I’m not naïve. I know that corporations exist for one reason and one reason only: the relentless, single-minded pursuit of profit, no matter who gets shafted. That is their stated purpose in a capitalist society, and that’s fine. But in our country, corporations aren’t supposed to pursue this purpose in a vacuum, unchecked, unregulated, unopposed. There is supposed to be a counterweight, a government separate from Big Business whose job is to prevent the corporate profit motive from destroying society. That government once passed laws protecting the environment, so the profit motive wouldn’t end up eliminating breathable air. That government once protected workers, so the profit motive wouldn’t result in Americans toiling in sweatshops. And that government once demanded better wages, so the profit motive wouldn’t result in a race to the bottom for poverty-level paychecks. But that government, as we all know, is long gone. Our government has been the victim of a hostile takeover. Over the last thirty years,Corporate America has applied its most effective business tactics to the task of purchasing the one commodity that’s not supposed to be for sale: American democracy.

To fight back, I decided to write a guidebook to help people see exactly how politicians’ lies, myths and half-truths justify government policies that allow Corporate America to rip us off. That book, Hostile Takeover: How Big Money & Corruption Conquered our Government—and How We Can Take It Back, is meant to provide a window into the one fact that the corporate lobbyists and their tools in the government don’t want you to know: that the problems undermining America on a daily basis can be fixed if our government starts representing the interests of ordinary people.

To give you a flavor of the book, consider this excerpt that analyzes the health care crisis—a particularly newsworthy issue considering the recent headlines about Massachusetts moving toward a universal health care system. The Bay State’s moves are certainly controversial—especially the steep mandates on uninsured individuals and the desperate efforts to protect the health insurance industry. But they show that the issue is now simmering to a boil not only in Washington, but in state capitals all over America.

——————————————

The Institute of Medicine was created by Congress in 1970 to be the chief, nonpartisan adviser to the federal government on all matters related to health care. That’s why the announcement it made in 2004 was so stunning. “Lack of health insurance causes roughly 18,000 unnecessary deaths every year in the United States,” the Institute said. Therefore, “By 2010, everyone in the United States should have health insurance … [The Institute] urges the president and Congress to act immediately by establishing a firm and explicit plan to reach this goal.”

The health care system, which is supposed to preserve and protect human life, is allowing thousands of Americans to die every year, and America’s top experts were sounding the alarm.

So how is it that government and media have settled into complacency when the system is so bad for so many? The status quo pays big dividends.

In 2003, HMOs nearly doubled their profits from just a year before, adding $10 billion to their bottom line. That year, top executives at the 11 largest health insurers made a combined $85 million in one year. In the first three quarters of 2004, HMO profits increased by another 33 percent. The sheer numbers behind these profits are staggering: In 2004 alone, the four biggest health insurance companies reported $100 billion in revenues. That’s $273 million a day, every day, 365 days of the year.

That’s the kind of cash that allowed the health industry to spend more than $300 million on lobbying in 2003, and another $300 million on campaign contributions to politicians since 2000. Their agenda is pretty simple: stop any proposals to curb health care profiteering by private insurance companies.

To make its arguments, the industry buys off high-profile ex-politicians and makes them its spokespeople. Take Marc Racicot—one of Corporate America’s favorite tools. This former governor of Montana left public service to become an Enron lobbyist, then became chairman of the Republican National Committee, and then headed President Bush’s re-election campaign. Now, looking once again to cash in, Racicot has taken a job as the public shill for the insurance industry’s chief lobbying group in Washington, D.C. His direct access to the president will undoubtedly serve him well in that role.

——————————————

Old pros in Washington know one of the easiest ways to kill a good idea is to invoke Americans’ fear of a slow, bloated government bureaucracy. In 2004, White House Press Secretary Scott McClellan attacked President Bush’s opponents for wanting “a government-run system, where the taxpayers will pick up more of the tab” for health care. Republican National Committee Chairman Ed Gillespie, previously head of a health industry lobbying firm, declared that “the American people have rejected a government-run system of national health care.”

But most Americans have not. According to a nationwide ABC/Washington Post poll in 2003, “Americans by a 2-1 margin, 62-32 percent, prefer a universal health insurance program over the current [private] employer-based system.”

Doctors, too, are chiming in with support for universal health insurance. In 2003, the prestigious—and conservative—Journal of the American Medical Association published a proposal for government-sponsored universal health care that was endorsed by more than 8,000 physicians (including two former surgeon generals).

Even parts of the business community support government intervention. For instance, Ford, GM and Chrysler all endorsed Canada’s system, where the government funds health care for all citizens. Similarly, a poll of Michigan small businesses found that 63 percent supported creating a universal health care system, even if it required tax increases. The health insurance industry, you see, is not only gouging patients—it is gouging employers who provide health care benefits to workers.

Still, everywhere you turn there is a politician deriding any proposal to use the power of government to expand health care. “When government writes the checks when it comes to health care, they start writing the rules when it comes to health care,” said President Bush during the 2004 campaign. “And when they start writing the rules when it comes to health care, they start making decisions for you when it comes to your health care, and they start making decisions for the doctors when it comes to health care.”

Sadly, the media reports this drivel with little question, even though it would only take one question to deflate Bush’s entire argument: If “government-run” health care is inherently bad, as he and the health care industry claim, wouldn’t Americans hate Medicare? The answer is yes, but they don’t—the program is widely considered one of the most popular in American history.

——————————————

In 2004, Senate Majority Leader Bill Frist (R-Tenn.) was asked whether America could afford to provide health care to all of its citizens. As the first surgeon to head the Senate, some were hoping Frist would address the situation optimistically. Instead, he said, “it is impossible to get everybody covered,” citing the fact that his home state was “going bankrupt” trying to achieve universal coverage.

The mind reels at how someone like Frist could claim the government does not have enough money to deal with health care. His comment, after all, came just a few years after his family was forced to pay $1.7 billion in criminal and civil fines for trying to rip off Medicare while running the nation’s largest for-profit hospital chain.

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• Reader Comments

  I haven’t read the book so my commments may misdirected — I hope so.

  If the rest of the book’s answers as to how “to take it back” are similar to the ones in this excerpt we are still going nowhere.

  I agree with his assessment that a lack of health care is a huge problem. The REAL problem ( the one the title points to) is that we ordinary unlobbied citizens have lost our representative government. The answer I hoped to hear was how we take government back.

  I often see and hear solutions presented to many issues, but dispare of getting any elected officials to impliment them.

  We are about to relect in November about 80 to 90 percent of the people who have done a truly unremarkable job so far. (Well, no remarks fitting for children and ladies to hear anyway.)

  In two more years we will choose once again from a pathetic field of candidates. From the last three we got these memorable quotes:

  “Read my lips, no new taxes.” and “I don’t have the vision thing.” (G.H.W.B)

  “It depends on what is IS.” and “I did not have sex with that woman, Monica Lewinski.” (W.J.C.)

  “Mission accomplished.” and “I don’t read newspapers.” (G.W.B.)

  Posted by whattheheck on May 1, 2006 at 2:57 PM

  Of course national health care makes perfect sense. Anything is better than the current system. The health care system is sucking as much surplus dollars out of the productive economy as the energy industry.  The US automakers are by far hurt the most with $1,500/vehicle cost addition due to health care costs.  When I was a construction laborer eleven years ago the Laborers’ International Union added $3.00/man hour to the wage bill to cover health insurance costs.  That is an effective 15%/hour raise for the entire staff just for health care.  The health care corporations are greedy and are raising costs just to gain record profits. They’ve stolen enough. It’s not about doctors, nurses, or other providers.  Most of the health care cost increases do not going to their salaries or fees but to the corporations. Who needs the corporate takeover of health care?  I just heard a story of a young surgeon who did a complex nine hour spinal surgery on a cancer patient who was denied post operative physical therapy because she was not expected to live and the money was viewed as wasted by the HMO. The surgeon, who received only $900.00 from what was assuredly a six figure precedure, was understandably livid at the HMO’s disregard for his patient’s recovery chances.  We need health care for people not for profit in this country.  We need it now!

  Posted by cabdriverinchicago on May 2, 2006 at 2:13 AM

  The problem with healthcare is Americans are “FAT & LAZY”. 

  When I went to Europe on a business trip for 2 weeks ... I couldn’t beleive it when I got off the plane in NYC.  Walking down the concourse I looked at my boss and I said “what do you notice?”

  He said “everyone is fat”. 

  If your fat and don’t exercise you drive up the cost, plus all of the illegals, plus all of the fraud, plus all of the lawsuits.

  Posted by tina1 on May 2, 2006 at 2:22 AM

  The problem is managed care which wastes hundreds of billions of dollars on administrative and other redundant costs which could be saved in a single payer system. More people would have access to care and the money lost through delinquancy would be saved by a more stable system of collecting and charging for premiums and by taxing to fund the system.  We would spend less per capita and insure more people. Also, certain fees for procedures should be regulated.  Health care providers should have more say in policy than corporate suits.  A public trust could administer the funds for the system which allow free choice of health care providers and decisions about care and confidentiality between doctor and patient would be better preserved in this system than under managed care.  I personally found it appalling that 18,000 people die unnecessarily every year of curable illnesses when Managed Care CEOs are raking in millions of dollars while there is 15% uninsured and unchallenged waste in the private corporate system.  Where are all those “pro-life” hypocrites on behalf of the unnecessary deaths of real live uninsured infirm of America?  As usual, real human life is not their true concern!

  Posted by cabdriverinchicago on May 2, 2006 at 7:56 AM

  One study a few years ago estimated that of the nearly $400 billion spent in the private US health system in administrative costs alone in 2003, a single payer system would have saved as much as $286 billion or nearly $7,000 per uninsured in the US at that time.  The number of uninsured in the US in 2003 was officially estimated at over 41 million people or 15% of the US population.  The administrative cost savings gained by shifting to a single payer system could have easily paid for a comprehensive health coverage program for the entire uninsured population many of whom are children!  The argument for such a system is irrefutable and will become more so as employer health costs price US goods and services out of the market and/or leave more people uninsured.  A single payer system along with some kind of modest regulation with regard to medical fee increase rates should currently allow for total comprehensive health care coverage for all US citizens.

  Posted by cabdriverinchicago on May 2, 2006 at 8:34 AM

• extended discussion >>>Continued...

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