Michael Townes Watson
HIGH COST OF HEALTHCARE—THE POLITICAL EFFECT
For at least the next three years, whether we elect a Democrat or Republican president and/or a Democratic or Republican Congress, our country will be engaged in a debate about what we must do to make healthcare more available and affordable for the largest number of Americans. Our mission will be to determine:
1. What is good about our healthcare system that should be preserved;
2. What must be changed to benefit the largest number of Americans;
3. The appropriate and achievable role of the government;
4. The economic and social benefits to be derived from a changed system;
5. Our philosophical attitude about what could and should be done by the “haves” in order to benefit the “have-nots” (and whether those benefits will ultimately trickle up;
6. Who is entitled (if anyone) to profit from keeping people healthy, and how much.
Let us not be fooled—the entrenched forces that currently profit from the delivery of healthcare have their own agenda. The bottom line in the debate is about cost. Who is going to end up with the benefits and who is it going to cost? Even Business Week, one of the bastions of conservative business-oriented magazines, realizes that “the debate boils down to varying levels of commitment to universal coverage and ideas about who's going to pay for it.”
Several news stories from the past two weeks illuminate the issues. The New England Journal of Medicine (one of the most, if not the most, respected medical journals in the world) has published two different articles in the past two issues that give us a good starting point about how to address the issue of rising healthcare costs. Ask any presidential candidate in the 2008 race and you will hear that the biggest stumbling block on the road to better healthcare coverage is the cost issue. A very important article from the New England Journal of Medicine, entitled “Addressing Rising Health Care Costs — A View from the Congressional Budget Office” concludes that in our current healthcare system, “the financial incentives for both providers and patients tend to encourage the adoption of more expensive treatments and procedures, even if evidence of their relative effectiveness is limited.” In other words, when doctors, hospitals, and other healthcare providers can make more money by providing a given service, they will do so, even if it does not result in a better result for the patients. This is not just a consumer group or a wild-eyed liberal politician talking, it is the New England Journal of Medicine.
The second article from the New England Journal of Medicine is about one of the entrenched interests in the debate--the prescription drug industry. Since generic drugs sell at substantially lower prices than their brand-name counterparts, they save consumers and purchasers of prescription drugs tens of billions of dollars per year. According to another article in the New England Journal of Medicine, “between 2007 and 2010, roughly 110 drugs will lose their patent protection — estimates suggest that these 110 drugs are currently responsible for $50 billion a year in sales1 — so competition from generic drugs could generate large additional savings.”
What is unknown to the average healthcare consumer, however, is that the lobbying, jostling and tactics that the drug companies engage in to try to thwart the prospect of lower prices. Legislation aimed at speeding the availability of cheaper generic drugs has stalled in Congress in the face of major lobbying by the drug industry. An Associated Press review of lobbying reports, from July 1, 2006, through June 30, 2007, found that $38.8 million was spent by at least a dozen generic and brand-name companies and their trade associations on issues including the Senate legislation.
The Brookings Institute, a respected think tank for public policy, states an opinion on why healthcare reform has failed. It states that the entrenched interests realize that “large-scale health reform is large-scale income redistribution, and the politics of redistribution is the politics of trench warfare… The next president can articulate a vision, but like Moses, he or she is unlikely to see the promised land.” In a recent speech at Northwestern University, Professor Dr. Quentin Young, a leading healthcare expert, said that “the reason for the subpar quality of health care is a combination of bribes, sweetheart contracts and nepotism.” The people that are making money on the existing system do not want a new system.
We have already seen what may become the whipping boy of the debate—as usual, the healthcare consumer is expected to pay. Mitt Romney, who himself has marshalled the forces to create universal coverage as governor of Massachusetts, now wants to appeal to the conservative crowd, so he decides to play the card that so many of his conservative predecessors have played, stating, "I believe we have to enact federal caps on non-economic and punitive damages related to malpractice." The tort reform movement, and its claim that medical malpractice reform decreases healthcare costs, has already been thoroughly defeated by the Congressional Budget Office. (See this report (pdf), (html), showing the finding that the medical malpractice tort reforms instituted have had no significant statistical impact on healthcare costs). That does not stop Romney from trying to beat the age-old whipping boy, in order to keep from addressing the real problems in healthcare. The healthcare insurance industry has already shown that it knows how to increase profits, and is doing so at record rates. Last year, health insurance profits rose nine percent.
The insurance industry and the prescription drug industry are doing all that they can to keep prices high and to keep the current system intact. As consumers of healthcare, our most important commodity, we must be aware of those who want us to take our eye off of the ball.