How Big Medicine and Politics as Usual Sabotaged Obamacare

It was the winter of our discontent, 2009. A season of bank failures, massive layoffs and $5-a-gallon gasoline.

Finally, a fractured country could at least agree on one thing: This had to change.

So President Barack Obama set out to deactivate the next bomb awaiting the U.S. economy, the one ticking inside our bloated, beleaguered health system.

Since the 1990s, insurance premiums had averaged double-digit annual increases. America was spending over $7,500 per person per year — 50 percent more than Norway, the next-largest contender. Health spending alone was chewing up one-sixth of the U.S. economy, double that of competitors like Japan, and putting American employers at a severe disadvantage.

Worse, we were paying Maserati premiums for something that looked a lot like a used Kia. Though pols like Ohio Republican House Speaker John Boehner loved to bray that America had "the best health-care delivery system in the world," it wasn't remotely so. The World Health Organization ranked us an embarrassing 36th, behind such notables as Costa Rica, Colombia and Saudi Arabia. Other rankings routinely put the U.S. near the bottom of the industrialized world.

"We spend one and a half times more per person on health care than any other country, but we aren't any healthier for it," Obama told Congress in 2009. "This is one of the reasons that insurance premiums have gone up three times faster than wages."

Big Medicine had done its best to keep it that way. Since 1999, it had spent nearly $6 billion on lobbying — three times what the next-largest industry, insurance, had spent. An obedient Congress had allowed it to build a system in which millions couldn't afford coverage, huge swaths of the country were essentially served by monopolies, and prices continued to go up and up.

"In the decade up to 2009, 79 percent of all the growth in household income was absorbed by health care," says Dr. Brian Klepper, CEO of the National Business Coalition on Health. "Everything in Washington is rigged, but the thing most rigged is health care, because they have even more money than the banks. Both sides take money at a rapid clip from the industry in exchange for getting their own way. So everything is done in the special interest, and nothing is done in the common interest."

But that spring, with an enraged electorate and the economy in tatters, Obama was given a once-in-a-lifetime chance to break Big Med's stranglehold. He vowed to do it the old-fashioned way: by introducing competition, forcing Big Med to earn its keep.

Everyone would sit "around a big table," Obama had told a crowd in Virginia the year before. "We'll have doctors and nurses and hospital administrators, insurance companies, drug companies. They'll get a seat at the table. They just won't be able to buy every chair."

Five years later, it's hard to argue with Obamacare's success. Some seven million people have signed up for insurance. The sick can no longer be barred from coverage, nor can the chronically ill be kicked to the curb.

Yet Republicans still rail that Obamacare is some socialist perversion. Democrats, meanwhile, often treat the plan as an illegitimate child they'd rather not acknowledge.

What both sides neglect to mention is their complicity in sabotaging the bill, selling out an unprecedented opportunity to the very guys who created the time bomb in the first place.

There was an obvious cure

The president's ultimate goal was coverage for the country's 48 million uninsured. In places like Europe and Canada, the government pays basic health-care costs for all citizens. This type of insurance is often called "single-payer," because one payer, the government, covers basic medical care.

Anyone wondering how it might function need look no further than Medicare, which runs all senior health care in this country. It's arguably the most popular government program in America, and one of the more cost-effective.

Start with the cost of administration. Medicare's ranges between 2 and 5 percent of its budget. For private insurance, the average is 12 percent. The Government Accountability Office once estimated that this simple savings alone would be "more than enough to offset the expense of universal coverage."

Moreover, a single provider would have the size to negotiate better prices from providers and pharmaceutical companies. According to a New England Journal of Medicine study, this would save another $400 billion — and provide a boon for American business, reducing labor costs by 10 to 12 percent.

A CBS poll found that 59 percent of the public favored a government health plan. Unfortunately, the body politic is more impressed with power than with the will of the people. One of the biggest players in Congress — the insurance industry — wasn't about to get squeezed out of its lucrative role as middle man.

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Chris Parker
Contact: Chris Parker