Reflections on health care economics...
Benefis, Blue Cross, and the rise of Monopoly Health Care
This is part of an article on the Montana Medicaid "HELP" program which I wrote when it was being sorted out last Fall. It was opposed because it was "part of Obamacare." Actually, it wasn't. It was a small part of a real public health care system which was proposed instead of the corporate "insurance model" which has proven to be disastrous in nearly all respects. The following deals with the wider issues of socialized vs. for-profit, corporate health care.. -- PHS 8-1-16
If medical products and services were properly priced, without the monopoly protections they now receive, most people would be able to afford them, and "insurance" would be nothing more than a small charge and required examinations and follow-ups to make sure that people were getting the health care they were paying for.
The present disaster is, in part, a legacy of the battle between Church and State. It needs to stop right now. If the State is going to use public money for things like education and health care, which are fundamental to our individual and social well-being, then it must provide fairly and equitably to those who may support differing "education" or health care philosophies and practices.
I've long maintained that a couple of good economists could, in a matter of days, design an excellent health care system on any scale which would be far less expensive and more comprehensive than anything proposed, today. Medicine is now run as a "business" rather than a public necessity, like police, fire, the military, or whatever - the core "institutional infrastructure" of a humane and sustainable society. And so, it is entirely the business (and even financial interests) of the "stakeholders" which is under consideration.
These "stakeholders" turn out to be, not the doctors, nurses, and patients utilizing the health care, but some 3rd party bureaucrats and for-profit "insurance" companies as well as huge and powerful Drug Cartels who have no concern with the medical aspects of their "business" at all. They are simply corporations with a lot of monopoly power which is fungible. The more they rip off the customers, the government which funds health care, and anyone else, the more their stock rises, and the more valuable they are as a corporation.
If a small company invents a new miracle drug (as recently happened with a cure for the previously incurable Hepatitis C), it is quickly taken over by a hedge fund or some other non-medical entity which then charges "the market price" for a treatment which costs them $200 to make, for something like $70,000. And this even happens with old drugs which are still under patent, as we learned with an AIDS drug which used to sell for $17, and after being "acquired" by a Hedge Fund (whose manager is now in jail for various financial frauds) now sells for $thousands, and there is no shortage of lawyers and public policy "experts" who will defend this abuse of "property rights" and the totally fictional idea of "intellectual property," which belongs to those "fictional persons," corporations, which now own and control practically every part of the government and "the public sector" in general.
When Darwin and Wallace argued over who "discovered" or first enunciated the Theory of Evolution, it wasn't over "property rights." It was over intellectual pride, and such "rivalries" rarely resemble the popular dramas based on them. Often, the protagonists are good friends, and freely recognize the other's contributions. The very fact that there's a word, "evolution," indicates that the process was very well-understood since Aristotle, at least..
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HELP is our new state (Montana) Medicaid Expansion program, and it differs significantly from what was envisioned in the ACA which most other states have adopted.
It was Ed Buttrey from Great Falls who actually put the package together and got enough Republicans to support it as a "conservative approach" to Medicaid expansion, meaning it is corporate-run (by the now for-profit "Blue Cross/Blue Shield"), and still maintains the structure of the "insurance model" of micromanaging the cost and appropriateness of every particular drug or medical service being billed. And it includes premiums and co-pays, which are anathema to the whole idea of Medicaid, even if they are quite reasonable, which they are.
Had the HELP program been offered independently of the ACA , it would have been hailed as a major "reform" toward something like the Canadian Single Payer system, which has the highest approval rate in the world, or did until the Neo-cons "introduced" private insurance and other rackets into the Canadian system, plus letting a third or more of their government-trained doctors and nurses move to the US where they could earn 2-5 times more.
Medicare and Medicaid are "socialized medicine", which is public provision of medical products and services. Medicare and Medicaid are considered "Single-payer" systems, meaning that that the state or other government agency pays the providers, out of general tax revenues or out of some special tax and funding allocated to that purpose.
Although this is often contrasted with "Single-provider" systems (Britain's NHS) which most developed countries maintain, this is the old view of "socialism" which is centralized and directed by some sort of planning board, rather than being "market-directed." Medicare and Medicaid are very "market-driven", or would be if any sort of competition were allowed between the various providers. Wherever there is a healthy multi-provider "marketplace" for medical products or services, prices stay reasonable, but there is a strong financial (and political) incentive to create monopolies and reduce services, while always raising costs which are separated from real costs across the board.
Instead, under our present system, the government reimbursements through Medicare and Medicaid are largely determined by the providers, and the amount of graft and false-billing is huge - not to mention the "false billing" done by every provider for the products and services they provide. The best luxury hotel suites in the world cost less than the typical hospital stay, which can hit a million $ in a few weeks for what used to be considered routine illnesses which simply required long hospital stays.
There is no relationship between prices and costs, and most of the profits are plowed back into corporate deals which further restrict competition and increase costs. Even staff and services are often cut in these "deals" (like the Benefis merger of two century-old community hospitals) - not to improve service, but to cut costs in accordance with the Enron-style Arthur Andersen plan they were sold as Boards, with the support of the School District (probably their largest customer, paying well), the Chamber of Commerce, and the military/retiree communities who need the services the most, but have access to all the VA facilities and Base clinics.
There was a huge organization of all sorts of people to oppose this dastardly scheme. More than 200 doctors testified against it. Everyone I knew in the peace and justice movements opposed it. The only people who favored it seemed to be the Deaconess Hospital Board, chaired by Dr. Gelernter, a psychiatrist known for his use of electro-convulsive "therapy" in the 1970's and before.
Somehow, Arthur Andersen had gotten in the door, and had a "plan" which promised to reduce health care costs while improving "profitability." It was a major point of contention, since both hospitals were profitable (how could they fail to be?), low-cost, provided a lot of charity care, etc. But the Columbus, run by the Sisters of Providence, gave much better service - especially to the Native American community.
I'm not even sure that the name "Columbus", which had become unpopular and a symbol of slavery and oppression, didn't have something to do with it. Plus, the newly-merged Benefis was actually run, under some sort of contract, by Providence Health Services, the umbrella organization, and still Catholic, so the "threat" of abortions was averted, or moved to a neighboring building. (Another major complaint against the Deaconess was that it provided therapeutic abortions, while the Columbus didn't, so there was an alliance between the Right to Life evangelicals and the traditional Catholics).
It turned out they were all fooled. After a decent interval had passed, Benefis announced it was pulling out of Providence. OK, so give us the Columbus back. No way! It's a done deal. We've already taken out the ER and OR. It's an annex with professional offices, now, and a treatment center. Sorry! It went to court or mediation, and Benefis ended up paying the Diocese $10 million (for a facility which the whole Catholic community relied on) to shut up about it. And of course Pope Benedict was happy to sign - it actually goes that high - probably some Vatican functionary, not anyone listening to the local Priests or faithful.
We should all remember that virtually every doctor, every patient, every family who had contributed to the Deaconess and Columbus endowments (now controlled by Benefis) opposed the "merger." And every clerk and janitor who worked for these hospitals could count on its care for themselves and their families should they fall ill. Not so anymore!
Remember what the word "hospital" is supposed to mean? It was like that. And any sick or dying person could just check in, under a doctor's care. You didn't need to prove you had "insurance" - which, if you did, was a sure ticket to getting vastly overcharged. Only the wealthy wanted or needed insurance. The rest got what they needed - health care.
In effect, it was "socialized medicine" in the same sense that the Catholic Church is "socialist." And one hospital was owned by the Church, while the other was founded by Brother Van (along with 12 others around the state, and more than 100 Methodist Churches.) The main point is that their "mission" was to heal the sick and reduce suffering - "harm reduction" - which is also the first principle enunciated in the Hippocratic Oath - "Do no harm".
"Obamacare" was attacked as being "Socialist" mainly because people are forced to participate in it, and the workers bear the full burden of a system which costs at least 4 times more than it should. If this is "socialism", only the insane will want to participate in it, unless they're Democrats, and told that this is the price they must pay for supporting the first African-American President.
What's wrong, then, with this "charity" model for health care? The rich would like better quality, so they don't want to be in "the charity ward". They want to go First Class. But, no, everyone wants to go First Class. The reality is that NO society, system, "insurance plan" or any other "provider" of health care services is going to pay for everyone going First Class. And since the physicians and other health care managers and providers make the most money off of the present system, it's not likely to change - especially if you put them in charge of changing the system. How many times have we learned that lesson in Montana (without, however, learning anything)?
