[Ip-health] Obamacare Already Starts Collapsing Into Medical-Industry Feeding Frenzy

Riaz K Tayob riaz.tayob at gmail.com
Wed Apr 3 02:21:47 PDT 2013



Snip>

One of the most wasteful parts of the entire system now is Medicare Part 
D "Advantage" private supplemental insurance plans, which are heavily 
subsidized by U.S. taxpayers, and yet, on average, still are costlier to 
Medicare recipients than is the government-run Part B program. On 25 
July 2008, the /Los Angeles Times/ bannered "Medicare Part D a Boon for 
Drug Companies, House Report Says: Taxpayers pay up to 30% more for 
prescriptions under the privately administered program" than under the 
publicly administered one, and Nicole Gaouette reported that, "U.S. drug 
manufacturers are reaping a windfall from taxpayers because Medicare's 
privately administered prescription drug benefit program pays more than 
other government programs for the same medicines. ... In the two years 
Medicare Part D has been in effect, drug manufacturers have taken in 
$3.7 billion more than they would have through prices under the Medicaid 
program." For example, "Bristol-Myers made an additional $400 million 
from higher prices for a single drug, the stroke medication Plavix."


  Obamacare Already Starts Collapsing Into Medical-Industry Feeding Frenzy

Posted on April 3, 2013 
<http://www.washingtonsblog.com/2013/04/obamacare-already-starts-collapsing-into-medical-industry-feeding-frenzy.html> 
by WashingtonsBlog <http://www.washingtonsblog.com/author/washingtonsblog>

/Guest post by Eric Zuesse.
/

Part of the Obama Administration's promise to the American people 
regarding Obamacare was that the enormous waste in America's medical 
expenses would be reduced. The reversal of that promise has already 
begun, with the Administration's announcement on April 1st, that is will 
increase instead of (as had been promised) decrease, taxpayer subsidies 
to private health insurance companies.

Estimates of this waste already range generally around 40%. On 15 May 
2007, Reuters headlined "US Health Care Expensive, Inefficient: Report," 
and announced: "Americans get the poorest health care and yet pay the 
most compared to five other rich countries," according to a study by the 
Commonwealth Fund. "The U.S. health care system ranks last compared with 
five other countries on measures of quality, access, efficiency, equity, 
and outcomes." In other words, the U.S. was paying gold for garbage. 
"Canada rates second worst. ... Germany scored highest, followed by 
Britain, Australia and New Zealand." Moreover: "Per capita health 
spending in the United States in 2004 was $6,102, twice that of 
[top-rated] Germany, which spent 3,005. Canada spent $3,165, New Zealand 
$2,083 and Australia $2,876, while Britain spent $2,546 per person." On 
top of that: "U.S. doctors are the least wired, with the lowest 
percentage using electronic medical records or receiving electronic 
updates on recommended treatments." The conservatives' myth that "free 
market" healthcare is more efficient, or is better, or is even more 
"wired," than socialized health insurance, benefits only the corporate 
providers within the system, and the stockholders of those corporations. 
[Comment by Washington's Blog:  We don't think capitalism is the problem 
<http://www.washingtonsblog.com/2009/11/dont-blame-capitalism-for-wall-streets-corruption-and-lawlessness.html> 
... Indeed, we don't even /have/ free market capitalism in America 
today. Instead, we have fascism, communist style socialism 
<http://www.washingtonsblog.com/2009/10/capitalism-socialism-or-fascism.html>, 
kleptocracy 
<http://www.washingtonsblog.com/2010/03/82-of-americans-clamp-down-on-wall.html>, 
oligarchy 
<http://www.washingtonsblog.com/2009/09/zandi-the-oligopoly-has-tightened.html> 
or banana republic 
<http://www.washingtonsblog.com/2010/04/banana-republic-with-no-bananas.html> 
style corruption ... choose your label.  Also, while Mr. Zuesse is 
passionately progressive, we are trying to follow the Founding Fathers' 
advice 
<http://www.washingtonsblog.com/2011/07/the-founding-fathers-tried-to-warn-us-about-the-threat-from-a-two-party-system.html> 
to be non-partisan.] Everyone else loses.

On 14 March 2012, the /Journal of the American Medical Association/, 
headlined "Eliminating Waste in US Health Care," and estimated that the 
waste amounted to somewhere between 21% and 47% of the total U.S. 
medical expenses, mixed public and private.

One of the most wasteful parts of the entire system now is Medicare Part 
D "Advantage" private supplemental insurance plans, which are heavily 
subsidized by U.S. taxpayers, and yet, on average, still are costlier to 
Medicare recipients than is the government-run Part B program. On 25 
July 2008, the /Los Angeles Times/ bannered "Medicare Part D a Boon for 
Drug Companies, House Report Says: Taxpayers pay up to 30% more for 
prescriptions under the privately administered program" than under the 
publicly administered one, and Nicole Gaouette reported that, "U.S. drug 
manufacturers are reaping a windfall from taxpayers because Medicare's 
privately administered prescription drug benefit program pays more than 
other government programs for the same medicines. ... In the two years 
Medicare Part D has been in effect, drug manufacturers have taken in 
$3.7 billion more than they would have through prices under the Medicaid 
program." For example, "Bristol-Myers made an additional $400 million 
from higher prices for a single drug, the stroke medication Plavix."

Part D, including "Advantage," was sold by President George W. Bush to 
Congress on the basis of the President's estimate that it would add 
"only" $395 billion to the deficit during its first ten years. Douglas 
Holtz-Eakin, who had previously been the head of Bush's Council of 
Economic Advisors, was now the head of the Congressional Budget Office, 
and on 20 November 2003, right before the crucial House vote, he wrote 
to Congress, "CBO estimates that enacting the legislation would result 
in direct spending outlays totaling $395 billion." This figure was 
crucial, because opponents had already said that any such legislation 
which would cost more than $400 billion (these were ten-year estimates, 
2004-2013) would be unacceptable. Two months after the legislation was 
passed, the White House Budget Director revised that cost-estimate 
upward to the range of $534-$551 billion. Then, on 11 March 2004, Tony 
Pugh of Knight Ridder Newspapers headlined "Bush Administration Ordered 
Medicare Plan Cost Estimates Withheld," and he opened: "The government's 
top expert on Medicare costs [Richard S. Foster] was warned that he 
would be fired if he told key lawmakers about a series of Bush 
administration cost estimates that could have torpedoed congressional 
passage of the White House-backed Medicare prescription-drug plan." On 2 
April 2004, the /Los Angeles Times/ headlined "Medicare Secrecy Inquiry 
Is Silenced: House Republicans stop Democrats from delving further into 
why the prescription drug bill's true cost estimates were kept from 
Congress." On 9 February 2005, the White House re-estimated what this 
legislation would cost the federal Government over ten years: $720 
billion. That's $320 billion more than congressmen had been promised 
when they voted to pass the legislation. (Almost no Democrats voted to 
pass it, but Republicans needed this cover from the Administration -- 
"only $395 billion" -- so that they could justify this program when 
speaking about it to their constituents.)

So, now with a Democratic President, on a 15 February 2013 Friday night 
news dump, the Center for Medicare and Medicaid Services (CMS) announced 
a 2.3% reduction in subsidies to insurers who provide plans under Part 
D. This was supposed to be part of the cost-efficiencies in Obamacare, 
and an important part of the projected reductions in the growth of the 
federal debt. But then, after lots of lobbying by those insurers, CMS 
reversed itself on April 1st, and said that instead those subsidies 
would increase 3.3%. Reuters headlined on April 2nd, "In Reversal, US to 
Raise Medicare Advantage Payment Rate," and announced, "In a reversal 
that followed intense lobbying from the health insurance industry," the 
CMS "said on Monday it will increase the rate by 3.3 percent in 2014, 
reversing a 2.3 percent cut announced in February."  The many "free 
market" fans of increasing this Republican federal subsidy to big 
businesses were applauding. At fool.com <http://fool.com>, Sean Williams 
bannered "The Insurance Industry Shows Obamacare Who's Boss," and 
exulted "The insurance industry effectively dictated itself a raise." He 
pointed out that Humana, Universal American, UnitedHealth, and Health 
Net, "generate 63.5%, 75%, 25%, and 25%, respectively, of their revenue 
from Medicare Advantage." He didn't note, however, that this "revenue" 
comes from enormous subsidies that are paid by U.S. taxpayers to those 
companies. CNN headlined on April 2nd, "Health Insurance Stocks Surge on 
Medicare Rate Hike," and reported that all insurers jumped at least 4%, 
and "Humana, which has the greatest exposure to Medicare Advantage, 
jumped nearly 10%."

This is how America's "free market" works. But it is also how Americans 
spend twice as much per person and receive inferior health care, as 
compared to other industrialized countries. And now, with Obamacare, it 
is how these subsidies will be increased, not reduced, and the federal 
government's debt will rise even higher than is being projected, while 
the largest corporations will thrive.

So: President Obama is working, as he has since he first became 
President, with Republicans in Congress to cut Social Security, 
Medicare, and Medicaid. After all, Humana, UnitedHealth, and other 
health insurance companies -- and the mega-banks on Wall Street -- all 
need that money. "Entitlement" recipients shouldn't be so "greedy." They 
need to share more of it with the mega-banks and the corporations in the 
DJI and S&P.

----------

Investigative historian Eric Zuesse is the author, most recently, of 
/They're Not Even Close: The Democratic vs. Republican Economic Records, 
1910-2010 
<http://www.amazon.com/Theyre-Not-Even-Close-Democratic/dp/1880026090/ref=sr_1_9?ie=UTF8&qid=1339027537&sr=8-9>/, 
and of /CHRIST'S VENTRILOQUISTS: The Event that Created Christianity 
<http://www.amazon.com/dp/B007Q1H4EG>/.




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