OUR HEALTHCARE SYSTEM IS BROKEN!

The pressing need for real health care reform has brought about a variety of proposed solutions to the problem. Few would argue that the system, as it stands, isn't broken, but fixing it requires a realistic approach that addresses it in a fiscally and morally sound way. Those who advocate universal health care yet feel that some measure of private insurance is necessary or desirable overlook the fact that, on average, 15% of the cost of private insurance is administrative while Medicare's administrative costs are around 2 %. The comparison between private and public health care is more stark when costs in the US  are compared to what other countries spend while delivering high quality care to all their people.

Recent proposals, such as the so-called "Massachusetts plan" which would mandate the purchase or enrollment of all state residents in a private insurance plan amounts to little more than "corporate welfare" whereby insurance companies would reap profits at the expense of the insured or, in the case of citizens who fall below a certain income level and are given assistance in the purchase of private insurance, the taxpayers of the state. In contrast, a publicly funded, publicly administered program would put the money directly where it was needed without enriching the owners of and investors in the insurance business.

The best plan available to date is encompassed in a bill before Congress, HR 676, which already has 88 co-sponsors and the backing of several Labor Councils and organizations. This bill eliminates the corporate middleman and promises to deliver health care to all at a much lower cost than other universal plans that retain the involvement of insurance companies. This is really the only approach that is both humane and economically feasible.

During World War II when the government imposed a cap on wages, employers were permitted to offer health insurance as an inducement to attract workers from a sharply reduced labor pool.

Wages are no longer capped. Continuing to link health care with employment is not only irrational, it has eroded health care and created a national economic disaster.

• Employees take-home wage are reduced by the contribution to their insurance costs.
• Employers maintain their desired profit level by raising prices to consumers.
• High profits skimmed by insurance companies and HMOs providing health care substantially reduce the funds available for actual health care. (e.g. Merck reported second quarter 2006 profits of $1.6 billion, more than twice their profit for the second quarter of 2005, attributed largely to Medicare Part D. NYTimes 7/25/06, p. C1.
• The VA, based on huge volume purchases, has always negotiated advantageous low prices with drug manufacturers. Medicare Part D specifically prohibits the government from negotiating prices set by drug suppliers. A recent comparison of VA and Medicare prices for 20 of the most often prescribed drugs for
• Seniors were at least 29.8% more expensive through Medicare than through the VA. A one-year supply of 20 mg doses of Zocor (anti-cholesterol) cost $1,142.92 through Medicare and $127.44 through the VA. (NYTimes 7/13/06 J. Bookman)
• Escalating health care costs have so increased the cost of US products that not only jobs are outsourced, but entire manufacturing plants–main auto, a high-wage industry–are outsourced leading to unemployment, declarations of bankruptcy, and pension defaults.

Employment-based pension funds also depress US competitiveness. The auto industry is generally credited with building a middle class in the US. Consider the consequences of the dying auto industry:

• General Motors announced it will cut 25,000 jobs and close 12 factories by 2008.
• Delphi auto parts declared bankruptcy, plant to close at least a dozen plants and cut 24,000 jobs within three years.
• Ford announced cutting 30,000 jobs by 2012.
• The closing of these auto-manufacturing jobs will have an impact on employment in steel, rubber, and other industries as well.

Universal health care and keeping Social Security’s promise as its enactors intended are policies which are fair to employees and employers and a path toward economic recovery and a rational health care system.

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