Circleville Herald -- January 13, 2009

"Why Bail Out the Health Insurance Companies?"


" In health care financing, the private insurers are not the solution to our problem; the private insurers are the problem." -- Howard Dean MD, Chair Democratic National Committee


Reminiscent of Wall Street financiers jumping from windows in October 1929, I recently viewed a photo of an anti-bailout demonstration on Wall Street, several folks were carrying signs reading read "Jump You -----!!. Our current financial crisis came about when the cat (government regulation and oversight) was declawed by Ronald Reagan and his acolytes. The mice, or should I say greedy rats, played. We paid. Government oversight by the people, for the people was replaced by the belief, held by many as firmly as any religious doctrine, that the unregulated free market is always the solution, whatever the question may be. Rather than the community minded Bailey Brothers Building and Loan from the instructive film "It's a Wonderful Life", we worshipped financier Mr. Potter. Now we are all bereft in Potterville, especially regarding access to health care.

It is time to recognize that the pharmaceutical company/health care insurance companies are every bit as undesirable as the scheming financiers from AIG, Lehman Brothers, Goldman-Sachs. These pharmaco-insurance complex giants enjoy profit margins twice as large as other Fortune 500 companies. The lobbying power of these financial behemoths, controlling one-sixth of our gross national product, allowed them to ram through the Medicare Modernization Act of 2003. The act requires that only private insurers may administer the Medicare part "D" drug benefit, but only at drug prices set by the pharmaceutical companies! Medicare is expressly forbidden from negotiating prices. Private Medicare plans authorized by the act, supposedly to prove that the market is always better, actually cost the taxpayer an average of 19% more than traditional publicly administered Medicare while providing poorer quality healthcare. ("Private Plan enrollees in Poorer health" , Medicare Watch, 27 November 2007 and "Comparing Medicare and private insurers" Health Affairs 22(2)235)

The Federal Trade Commission has opened an anti-trust investigation into Ovation Pharmaceuticals. Ovation bought the rights to the drug Indomethacin, used to treat an oft-fatal congenital heard defect. Ovation did not do any research, did not do anything other than buy-out the rights to the drug from Merck and Abbot. Drug companies like to tell you that their huge profit margins are used to fund research, this is simply not true, most new, real pharmaceutical research is sponsored by the National Institute of Health. Once Ovation had secured the rights to the neonatal form of Indomethacin, it raised the price from $36 a vial to $483.( Seattle Times "FTC accuses firm of drug monopoly" 17 December 2008). Praises to the Federal Trade Commission for demonstrating that government regulation and oversight is by and for the people.

The case of Humana Health Care, one of the largest private Medicare providers, spotlights the waste, incompetence and criminality that is rampant when for-profit companies access public (our) healthcare funds. Humana initially grabbed the largest market share of the Medicare part "D" drug benefit by offering very low initial premiums, which were soon precipitously raised by 71% on the average and 466% in seven states! ("Insurer hits millions of seniors with drug cost hike" Boston Globe 31 Dec. 2006). This is a classic "bait and switch" scheme. Humana maintains a "medical-loss ratio", to use the industry parlance, of about 79%, meaning that 21% of all Medicare funds Humana siphons off go to overhead and profit. Humana's CEO Mike McCallister made nearly $15 million in 2007 while company profits for third quarter 2007 were a record $302 million, much of it from it's Part "D" allocation of public Medicare funds.( Medicare Rights Center "Who is Medicare for?" November 2007) Traditional Medicare,a "wasteful government bureaucracy" , on the other hand spends 97 cents of every dollar directly on healthcare

In that same year of record profits, 2007, Humana was cited by the Oklahoma Insurance Commission for fraudulent enrollment practices. ("Insurer faces reprimand in Medicare marketing case" New York Times 15 May 2007) Linda Peeno, MD, former Medical Director for Humana, has testified that she was routinely pressured to deny care systematically to patients so that profits could be maximized for the corporation.( LeBow, R., MD "Health Care Meltdown", 2007 p. 53

President-Elect Obama's, Senator Max Baucus's and Health and Human Services cabinet nominee Tom Daschle all support a health-reform plan that has been tried and failed in Massachusetts and several other states. Their plans amount to using your taxes to bail-out the health insurance industry. 59% of all physicians and over 60% of the public support single payer healthcare, shown in every other industrialized nation in the world to be not only the most compassionate, but also the most cost-effective method of care. Write, call, e-mail, your congressmen, your senators, Mr. Obama and Mr. Daschle to support HR 676, the "Medicare for All" legislation. It is time for a New Deal in healthcare.

Brad Cotton, Emergency Physician. E-mail: Dr. Cotton is available to talk to civic, church groups on single payer healthcare.