The August 3, issue of Business Week has an article about the “Tight Grip” health insurers have on the health insurance market. Leaving aside the ridiculous notion that you have to buy insurance from a middleman to get medical care; the article makes some interesting observations.
The AMA’s latest survey on the commercial health insurance market reports that out of 134 metropolitan markets 94% of them are controlled by only two companies. In 15 states, the report adds, one insurer has 50% or more of the entire market. Meanwhile, over the last 10 years, health insurance premiums have increased by 120%. Inflation has risen by 44% over the same period and wages comes in third at 29%.* So if you feel like your being robbed every day, it’s real. This is the US health industry.
The insurers are up in arms that the Obama administration wants to set up a public insurer that would compete with the private ones. This is not a public national health system mind you, but a public insurance company. With the profit motive eliminated, this company would be able to provide the same health care cheaper and is designed, says the administration, to put competitive pressure on the private companies.
The private insurers are outraged, it’s unfair competition; “Americans would jump to the cheaper public option,” claims one study. Duh! I must respond. What is wrong with that? Karen Ignani, president of the bribery group that lobbies for the US health insurance plan industry (AHIP), is not pleased either and has written to Congress complaining that a public plan would, “significantly increase costs for those who remain in private coverage.”
So what! They will shift over to the public plan to receive the same or better health care for the less money. But this threatens the dominant ideology in US society that free enterprise is God’s will and the market is his baby.
On the other side we have the hospitals that are, like insurance companies, controlling a service that should be public. According to Business Week, “A 2000 study found that one or two hospitals controlled the market in 88% of the nations largest metropolitan areas.” So what we have is two corporations fighting over profits at the expense of people’s health and welfare. This is nothing new is it?
Obama’s mild attempt to do something about the most costly and least effective health care system in the industrialized world, and parts of the former colonial world like Cuba, shows us something else. In response to the terrifying possibility that a public concern will reveal the failure, waste and inefficiency of the private sector, the insurance companies are volunteering reform. They have accepted that it’s not nice to charge people higher premiums because they are sick or deny people coverage for pre-existing conditions. So in a mild struggle between the capitalist class themselves, one side has promised some reforms that will benefit workers in order to avoid further encroachment in to the private sector by the public.
Maybe the Union leaders could take note and abandon their strategy of complete capitulation to the employer’s demands and attacks on living standards. Perhaps if giant insurance companies can be moved with a simple threat like this from one of their own, a little push in a forward direction from organized Labor will might actually produce some gains for the average member and society as a whole.
Most people support this proposal from the Obama administration despite that the crisis in US health care will continue as long as it is a for profit business. It is this that worries the capitalists that make an obscene living selling and denying people the right to decent health care.
The health care industry, including the pharmaceutical corporations, should be nationalized. Free market advocates always argue that they take the risks so they keep the profits. But here we’ve seen a crisis of their making, of their failures, being remedied by public funds; they have failed. The free market system has failed.
The Business Week article makes it clear, even in a capitalist economy, a public institution provides better all round care, better all round transit, better all round education, than private industry ever could and for less money.
The definition of progress is that which improves the welfare of human beings not the bank accounts of a few investors.
* Kaiser Family Foundation survey
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