Do you realize how badly the health insurance corporations are screwing you? Let me give you an idea. While the average American family pays $13,770 a year in premiums, in France premiums are dirt cheap, with a single person making $20,000 a year paying only $12.25 a month in 2007. The co-pay for a visit to an orthopedic costs 10 bucks. And the system is much cheaper than ours: per capita costs in France are $3165 compared to $7000 in America, while healthcare spending as a percentage of GDP is 10 percent there and 17 percent here. According to journalist T.R. Reid’s 2009 book, The Healing of America, a Global Quest for Better, Cheaper and Fairer Health Care, if we could get our spending down to France’s levels we’d save $600 billion a year. More broadly, America is way behind the rest of the industrialized world when it comes to health care, and it’s almost entirely because of the for-profit insurance model and our jungle-like fragmented system.
Reid traveled across the world to study other health care systems to offer guidance in our quest for reform. He reports that American health care is a laughingstock: “Whenever some aspect of a nation’s health care system is criticized, the all-purpose response from those in power is ‘At least we’re not as bad as the Americans.’” Although people in other countries clearly have an idea of how evil for-profit healthcare is, in interviews many were nonetheless astonished to learn from Reid that in America people go bankrupt and die because they can’t afford their medical bills. In fact, Reid says roughly 700,000 go bankrupt every year, and around 45,000 die from curable diseases because they were either uninsured or underinsured.
We are last in “avoidable mortality,” or curing curable diseases, according to a Commonwealth study: “The number of people under seventy-five who die from curable illness was about twice as high in the United States as in the countries that do the best in this measure: France, Japan, and Spain.” Another comparative study of nine different countries found that “Americans with diabetes die younger than diabetics in any of the other countries. After kidney transplants, Americans have the worst survival rate. And if you’ve been thinking about having major surgery in the United States, here’s a statistic to ponder: Among those nine rich nations, the per-capita rate of ‘Deaths Due to Surgical or Medical Mishaps’ was the highest by far in the USA.”
Yet another study found that America is tied for last among developed nations in “healthy life expectancy at age sixty”—how long 60-year-olds can expect to live in good health. (This is a more accurate measure of the performance of a health care system than simple life expectancy, in which America is also at the bottom, because more people die young in America than in most other rich countries.) And when it comes to infant mortality—how many babies die within a year of birth—we’re dead last: seven out of every 1000 babies die before their first birthday, which is double the total for countries that perform best in this area. This tragic outcome occurs because we are the only rich nation that does not provide free pre- and post-natal care—free prescriptions, hospital visits, treatment, childbirth classes and nursing help at home in the first few weeks of a baby’s life; some countries even pay parents to stay home during the first few months.
We have to pay a fortune to preserve this disgraceful, scandalous system. And it’s mainly because of the for-profit insurance structure (not health care providers, who are relatively harmless according to Reid). The insurance companies know that reimbursing patients eats into profits. They consider compensating people a “loss.” As such they have entire departments filled with investigators and adjustors to devise excuses to deny people coverage. According to Reid, “Insurance companies deny about 30 percent of all claims.”
This is why they make it as difficult as possible for you to receive compensation, charge as much as they can in premiums, purge small businesses that have too many sick people to make a profit, and shift huge costs to the customer through Health Savings Accounts (HSA’s). In addition, their administrative costs—money spent on marketing, customer service, billing, etc.—are “the highest of any healthcare payer in the world” Reid writes, often 20-30 percent, though on average 11-12 percent according to Politifact, compared with roughly three percent for Medicare. Reid says, “Most for-profit insurance companies maintain a medical-loss ratio of about 80 percent, which is to say that 20 cents of every dollar people pay in premiums for health insurance doesn’t buy health care.” For an insurance corporation to do otherwise, as former PR executive for CIGNA turned whistleblower Wendell Potter explains in his book Deadly Spin, would be to neglect its duty to maximize short-term profits and feel the wrath of Wall Street.
Mercifully, the Affordable Care Act will end the practice of denying coverage to those with pre-existing conditions as well as rescission—kicking people off their plans when they need it most because they’ve become too expensive; this can happen to someone who gets hit by a bus, for example—assuming the insurance lobbyists don’t abolish or emasculate these provisions, which is a big assumption. The new exchanges should also make it possible to maintain coverage if you lose your job, although there is already evidence that the exchanges will be staffed with insurance insiders.
None of these heinous practices plague other industrialized nations because the government negotiates prices hospitals, doctors and pharmaceutical companies can charge to make sure patients get the best deal. Their systems are unified, with one basic structure for everyone (although within this framework is a huge variety of choice, usually much more so than in America, where you’re covered only by certain networks and providers), giving the government serious negotiating clout. In the United States the insurance and pharmaceutical corporations decide what to charge. And they seek only to enrich themselves and their shareholders on Wall Street at everyone else’s expense. Hence, a pill that costs $1.20 here costs 20 cents in England, and the Japanese pay $105 for an MRI while we pay $1000 to $1400, according to Reid.
Now, I know what you’re thinking. All this may be true, but the rest of the industrialized world relies on the dreaded “socialized medicine.” Doctors cannot make a living and are in short supply. And patients have to wait on long lines. These are largely myths. As Reid explains, there are four basic health care models: the Bismarck system, used in France, Germany, Japan and others, in which people buy coverage through work, with employers and employees paying together and the government setting prices; the Beveridge model, practiced by Great Britain, Italy and Spain, in which the government provides and finances health care through taxes, there are no medical bills, and medical treatment is a public service just like the fire department or library; the National Health Insurance Model, or single-payer, used by Canada and Taiwan, which features private health care providers and a government-run insurance program that everyone pays into; and finally, out-of-pocket, where you’re on your own—the patient pays for everything without insurance or government help—this is how poor countries work.
The only rich country where a sizeable chunk of the population uses out-of-pocket is America, where tens of millions have no coverage because they’re either too young for Medicare or too well off for Medicaid and are far more likely to die from diseases and injuries than those with insurance. You’ll notice that we use every system that exists. Seniors and the poor use the single-payer system, with Medicare and Medicaid, veterans use the Beveridge model with the VA, and most people use the Bismarck approach to get insurance through work, albeit with the insurance corporations in charge, not the government. As Reid says, “If you are a senior, a soldier, a veteran, a Native American, a member of Congress, or a renal-failure victim, or if you are scratching by on an income below the designated rate of poverty, government will help you obtain care. All the rest of us—that is, about 70 percent of the population—are on their own.”
This fragmented mess makes it a nightmare to keep track of billing and administrative paperwork, which is why your doctor usually can’t tell you how much anything costs because it depends on which system and which insurance program you have. This is very expensive because doctors and hospitals have to hire people to keep track of all the bureaucratic paperwork. Most rich countries, however, have a unified system, which allows them to use electronic cards to keep track of patients’ health records and handle payments. Doctors in France, for example, post signs with exact prices for procedures in their office and do not need to hire people to organize billing. This dramatically lowers administrative costs and allows the government to monitor and eliminate abuse. In America con artists steal billions from Medicare and Medicaid by opening up phony clinics and charging for fake products and procedures. Because of our fragmented system the government has not been able to keep track of and eradicate this abuse.
But what about all the aforementioned objections? First, socialized medicine. Many countries with universal health care use the Bismarck model, in which everything is privately owned and citizens get their insurance through work, just like in America. However, and crucially, the insurance companies must be non-profit, which means that they are required to satisfy customers, not Wall Street shareholders. The government decides what they can charge for pills and procedures. This ensures that patients pay as little as possible to guarantee equal access for everybody. The insurance funds are required to pay all claims promptly, and they are not allowed to deny people coverage. If you lose your job the government will cover you until you get a new one. Nobody goes bankrupt, and nobody dies for lack of coverage.
Many of the best systems in the world, as ranked by the World Health Organization, use this approach. France is ranked number one overall, and Germany, where universal health care was invented by Otto von Bismarck (hence the title), has kept this structure in place for well over a century.
Even the countries that use socialized medicine are not fully socialized. Single-payers such as Canada use private health care providers, and even Britain, which uses the Beveridge model, features general practitioners who run private practices and make a good living according to Reid.
In general, though, doctors make far less money in universal systems. Reid says they typically live middle class lifestyles because the government limits how much they can charge, (although in Britain doctors can make about as much as they do here since the government lavishes general practitioners with rewards for practicing preventive medicine). This is compensated, however, by the fact that in most countries medical school is either free or extremely cheap, so doctors don’t have to deal with mountains of debt, as is the case in America, where students typically accumulate a burden of $100,000 or more. Furthermore, medical malpractice lawsuits are almost a non-issue in rich countries. Malpractice insurance costs a tiny fraction of what American doctors pay, and most malpractice lawsuits fail because the government provides very specific guidelines for health care providers to follow. As long as they follow the rules, they cannot be sued. All this explains why there is no shortage of doctors in virtually every country with universal health care (except Canada). There is, however, a serious dearth of general practitioners in the United States. Only 35 percent of doctors are general practitioners, most specialize, compared to Britain, where 60 percent are GP’s.
As for long lines, the Bismarck countries have no such problem; in fact the Japanese often don’t even have to make an appointment, they can just show up and expect to be treated. In Britain, with the Beveridge model, long lines were a serious issue during the 1990s, but Reid reports that the government poured huge sums of money into the system, and now most people don’t have to wait much for basic and urgent care. If you have a non-urgent issue though, such as Reid’s aching shoulder (for which he sought treatment around the world), you will have to wait. In Canada, with single-payer, waiting is a problem, primarily for non-urgent care, but according to Reid most Canadians consider this a small price to pay for universal coverage and don’t mind waiting. Statistics show that very few Canadians come to America for treatment, contrary to the popular myth, and in general the only people who travel to the United States for health care are rich, because if you have the money you can get world-class care here. But if you’re not well off, you’re screwed.
So why are we still stuck with our for-profit, ultra-fragmented health care system that costs almost double in per capita terms and as a percentage of GDP compared to most rich countries, especially considering that according to polls the overwhelming majority of Americans consider health care a right, as do many major international agreements, such as the United Nation’s Declaration of Human Rights? It largely has to do with simple ignorance. Reid says polls show that when asked “Do you think people in your community, rich or poor, can get the medical care they need when they get sick?’… roughly nine out of ten Americans answer ‘yes.’”
There’s simply way too much propaganda out there. As is the case with most major issues, we simply cannot distinguish between fiction and reality. This is why we readily believe that anyone can get free treatment for anything at the emergency room. It also explains why we think the private sector is more efficient and that a government takeover would be a bad scenario. We’ve been so thoroughly indoctrinated with free market dogma that we allow ourselves to become slaves to the insurance corporations.
Health care reform may prove the first step towards a universal health care system that will provide everyone with quality, cheap care and wipe hundreds of billions of dollars a year off the deficit. But it might ultimately destroy any chances for a real reform that breaks up the for-profit structure. The corporations have worked so hard to portray the Affordable Care Act as socialized medicine that people will likely mistake this massive handout to the for-profit insurance industry, which forces tens of millions to buy their defective product, as real reform. It does have some benefits, as mentioned above, and it may cut costs by encouraging preventive medicine.
But, as Reid warned in 2009, every expert he spoke to, including people internationally renowned healthcare economists who have created universal systems for countries like Taiwan, “any proposal for ‘reform’ that continues to rely on our fragmented structure… will not reduce the cost or the complexity of American healthcare. Any proposal that sticks with our current dependence on for-profit private insurers—corporations that pick and choose the people they want to cover and the claims they want to pay— will not be sustainable.”
As for “Romneycare,” now known as “Obamacare,” Reid says “the Massachusetts approach just loads more people onto a system that is already the most expensive and the most inefficient in the developed world. If every state did that, the insurance industry would rack up even higher profits, but state budgets would implode.”
The mainstream healthcare debate, which left most Americans confused and lacking a vocabulary to articulate what actually happened, offers a perfect illustration of how the corporations control our national debate. The major source of contention has been whether the individual mandate is constitutional. This is absurd and largely a distraction from the real issue. Every rich country (about 40 in total) requires its citizens to buy insurance. Nobody protests because they get a great deal (although no system is perfect, and there’s always room for improvement). Our problem is not whether or not a mandate amounts to tyranny. Our problem is corporate tyranny. The debate should start with the understanding that we must abolish the for-profit structure. Only once we agree on this can we begin to discuss which system we should replace it with. Until that happens the rich will have access to excellent care, albeit at an obscenely expensive rate, and the bulk of the population will continue to be screwed.
—Read Marc Adler at thebloodycrossroads.com