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Don't Make the American Worker Pay for Corporate Graft in Health Care Print E-mail
Written by David Batstone   

I was very surprised that President George Bush brushed over the health care crisis in his State of the Union address earlier this week. "Crisis" is not an exaggeration. Nearly one-quarter of Americans walk around in a precarious state absent health care insurance, yet this country expends nearly 15% of its gross domestic product (GDP) on health care. That figure is almost double the percentage of GDP expended by other industrialized nations.

Burdened down by rising costs, American businesses are finding it increasingly difficult to compete in a global economy.

Mind you, I was not anticipating any creative solutions to the health care
crisis to come out of the State of the Union address. The Bush administration's recent rhetoric focuses on consumer-driven reforms.

Translation: the weight of higher health care costs will be shifted to individual Americans. It is an alarming trend.

At the moment, the majority of Americans receive health insurance through their employer, and we are paying considerably more today to maintain those policies than we did even two years ago. American companies are not simply turning mean; truth is, most companies cannot keep pace with the runaway costs of health insurance and stay competitive. Companies are passing along a portion of those rising costs to their employees.

So, instead of doing the hard work of addressing the corporate graft that pushes health care costs upward, the Bush administration plans to put the squeeze on the average American worker to make choices about how much health care his or her family "really" needs. In this new paradigm, risk for illness or injury is not distributed across the board; rather, each individual must assume that risk for oneself. Pay as you go; if you need health care, that's your problem.

What do I mean by "corporate graft that push health care costs upward?" A personal story will help me make the point. Last year I was flying back to San Francisco from a East Coast event. I pulled out my Apple Powerbook - you know, the silver one with the apple illuminated that you often see in movie ad placements - and started typing away. After a few minutes, the woman in the adjoining seat interrupted my train of thought: "Excuse me, but do you like that computer?" I gushed a bit - I do love my Mac. I guess I convinced her, because she concluded, "Well, good, I am going to get my client to buy me one of those."

Well, that piqued my curiosity; after all, what kind of "client" buys high-priced computers for a consultant? So I politely asked her what line of business she is in. "I'm a surgeon," she replied. "Hmm," I paused then said, "so your hospital will buy you a laptop?"

"Oh no, not my hospital," she said with a laugh, "the medical device company that I use will do that without blinking." She went on to describe how she and her daughter (sitting in front of us) were on a junket to San Francisco, all paid for by her medical device company. Once assured of my interest, she carried on to tell me about the fabulous all-expenses trip to the Caribbean she took over the summer under the guise of training and education of company products.

My airplane encounter came to mind this past week when my eyes ran across a feature story on the front page of The New York Times business section: "Whistle-Blower Suit Says Device Maker Generously Rewards Doctors." The suit, accuses Medtronic, one of the country's largest medical device makers, with $10 billion in sales, of giving surgeons "excessive remuneration...and bribes in other forms for purchasing goods and medical devices." Because the devices that Medtronics - and believe me, they are not the only guilty party in the medical device field - sells are so expensive, providing perks to the doctors is a relatively cheap cost of sales.

Please do not assume that all medical doctors are on the gravy train. I know a gaggle of doctors who are committed to delivering the best care possible for their patients. However, I did uncover in my latest book, Saving the Corporate Soul, that graft in the Medicaid system and unscrupulous business arrangements between pharmaceutical companies and physicians is rampant. For example, some physicians, in exchange for money, allow pharmaceutical sales reps into their examining rooms to meet with patients, review medical charts and even recommend which medicines to prescribe. In a somewhat recent survey of doctors in the state of Maryland 37 percent of physicians admit that they accept some kind of compensation from pharmaceutical companies.

Addressing the graft in the system takes political courage from our elected officials. Unfortunately, such fortitude is lacking in the Beltway. They, too, are probably getting perks for their considered interest. How much easier is it to ask individual Americans to tighten their belts, and take responsibility for runaway health care costs?

The immorality of the system makes me sick.

Comments
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Amy Lenzo - sick
2006-02-02 21:21:09
This makes me sick too - fingers crossed not literally, since I am one of those 25% of Americans without medical coverage. As an independent contractor, I just can't afford it.
Rowland Scherman - Health Care
2006-02-02 22:45:08
Just take the words "over 65" out of the Medicare Program. And have the VA run it.
Christine - There is no pill for this....
2006-02-03 03:39:28
Wow...this really made my blood boil and has solidified my opinion that it is time to embrace more natural and holistic approaches to healing. I honestly don't know how you kept your cool in your converstation with the surgeon - flaunting her lack of integrity like a badge of honor...what a shame. How does one get to the point of justifying participation in these types of immoral business practices?
Donna-Lane - Health Care
2006-02-03 03:43:41
I live in Switzerland and eeryone is required to buy their health care which costs between $1500 and $3000 a year depending on location. I go to a lot of French doctors across the border because an appointment costs about $25. Why not do an article on how different countries handle their health care. None are problem free -- all offer more than the US
Joan Coonrod - Health Care
2006-02-03 08:14:39
The Bush Administration is either exceedingly stupid OR just plain mean-spirited. There can be no other explanation, since all of the other developed nations address healthcare as a social responsibility. Other developed nations also figured out some time ago that economical and efficient healthcare can only come from spreading costs across the broadest possible population. Healthcare linked to employment is no longer viable if we are to compete in a global economy. I am hopeful that the US will recognize this CRISIS and demand that the next administration address it--with intelligent, enlightened policy.
Gary Morrissey - Corporate Environment
2006-02-03 09:37:47
I truly believe that the United States has the some of the best, if not the best system in the world today. However, I say today...the future is still in question. The problem we are and will be more so confronted with is that many doctors today are prostituting themselves out. The passion that once burned deep in them is now long gone with the dangling of the corporate carrot. A multi-billion dollar pharmecutical company offers them 'perks' which they graciously accept. In addition to this, they complain of the burdens of the tight holds of insurance companies that regulate their services. Keep in mind, this has been done after years of health care professionals milking the system. While they can no longer milk this entity, they now turn to another billion dollar industry for 'payment.' Perhaps we should begin looking at doctors as politicians - is there any difference between this and political campaign kickbacks?
Vince Tidwell - Healthcare
2006-02-03 09:44:38
David,

You have a nack for getting my attention each week with your observations. I have been researching health care alternatives for one of the companies I consult with and can find no solution to the absurd rate of increase of healthcare costs.

I have a story of my own: AS I was traveling through a residential area called Buckhead in Atlanta, one of the wealthiest areas in the country, I asked my former business partner whom at that time was moving out who was moving in to the new homes. He responded that a majority of the homes were being purchased by insurance company execs and agents.

I sure would like to see a pie chart of where the healthcare dollar goes to posted on a few billboards around cities and people have to actually reach into the purses and wallets and pay the recipients face to face.

Vince Tidwell
Bill Kessenich - Medical Reform
2006-02-03 10:16:49
While I agree with the article's basic point on rooting out graft in the health care system, I want to offer the perspective of a business owner and a brother-in-law of a surgeon. Like the article said we have begun participating in the consumer driven health care model which does shift costs to the worker. We have done this in such a way with medical savings accounts (HSA's)that we have cushioned the blow of increases and made them more gradual if not tolerable to our workers and they have understood the need to shoulder their portion.
But my sister-in-law, who is a surgeon in Minneapolis told me recently that she collects only 35% of her billings in part because she readily provides service to some unable to pay, but also because Medicare only reimburses so much. Those with the ability to pay end up footing the bill which, of course, drives up employer costs. The striking fact is that her percentage of collections is similar to the national average. I know I could not run a business collecting only 35% of my billings! I would be bankrupt. While this fact does not justify graft, it does point out that the whole system is broke and the government needs to convene a task force with all interested parties: consumers, docs, insurance cos., and employers and hospitals to forge a national strategic approach for the long term. Alas, this administration doesn't seem interested in doing so, and reality tells me that such a comprehensive approach would be fraught with political wrangling of all interested parties. But that is the challenge!
Carolyn - The tip of the iceburt
2006-02-03 11:05:15
David,
Look a little deeper and follow the money trail between the pharmaceutical companies and the FDA. It's really frightening that the agency that is here to protect us is in bed with the companies producing poisonous drugs that are killing us, while at the same time squelching natural cures because there is not financial incentive.
Jack Cerva - Medical Costs
2006-02-03 11:08:53
I love America! But when I retire in just a few short years, I will hopefully live in Panama, Honduras or Thailand Malaysia, ect. Being further away from my family and grandchildren is not ideal, but at least I will be able to maintain a standad of living I am used to without sacrificing such due to this BS corporate/govt medical costs game/graft/culture.
Patrick - DId Anyone Else Hear This on N
2006-02-03 17:45:08
I was listening to a debate on this topic yesterday on NPR. If I understood correctly, part of the latest deal from the government is giving billions to private companies to help pay for retired persons still using their old employers insurance. It was done to keep company's from dropping or cutting the retired employees from the health plan and further burdening Medicare.



Humm, we are taking on more for our own health insurance through larger deductions from our pay check (my wife again had to chose a new plan at work and in turn accept more of the costs), and the government is at the same time subsidizing private companies for health insurance (using our tax dollars of course)

What is really going on?



There was much debate regarding the drug companies input on the new plan and a perception of less bargaining power with drug companies under the new structure. One opinion was the VA is the only group now strong enough to get price deals from drug companies.
Todd - Heart-breaking trend
2006-02-03 17:47:53
We're on the same brainwave: "How much easier is it to ask individual Americans to tighten their belts, and take responsibility for runaway health care costs? The immorality of the system makes me sick."
I've spent the past week in union negotiations, and the most difficult issue on the table is health coverage. Bottom line, the union would rather collect premiums than create more jobs for their members. It's really heartbreaking, and ultimately deal breaking.
Dr. Tony Dale - Health Care Costs
2006-02-04 14:33:23
David, I run a company that deals with medical cost containment. We focus all that we do as a company on helping those who are in the bottom third of the health care world, namely those who are under-insured or those who are uninsured. We are best know for the Patient Advocacy Service that we provide through The Karis Group. I say this to try to give some credibility to my comments to follow.

I could not disagree with your article more from both a philosophic and practical point of view. The examples you quote are true and I don't doubt that I personally could give you many more. But you are missing the point in terms of what President Bush is trying to do. Everything about the current health care system here in the United States conspires to push up the costs. It is vital that consumers take more personal responsibility for their own health and for how their health care dollars are spent. Whenever you have a system where someone else pays (actually, you still pay through lower wages)for you health care, then you tend to pay little attention to how you then spend those dollars. The present trend towards consumer driven health care, and the long term implication of consumers both having responsibility for and owing the rewards of living healthily through their personal Health Savings Accounts (HSAs) is a huge step in the right direction.

I would love to write an article for you to balance what you have said and to further explore the philosophic differences between the current employer paid for model (really a back door type of socialist or government mandated payment system) and what happens when individuals carry responsibility for their own health care choices and decisions.
B.Adams - Healthcare
2006-02-07 07:24:09
THE HOUSE AND SENATE HAVE PASSED A BILL TO PUT MORE HEALTH CARE COSTS ONTO OUR SENIOR CITIZENS. MEDICARE WILL ONLY COVER FOR 36MONTHS OF OXYGEN AND THEN IT IS UP TO THE PATIENT TO COVER ALL COSTS(MAINTENANCE, EXTRA OXYGEN TANKS, ETC.)THIS IS A COST THAT MOST MEDICARE PATIENTS CANNOT AFFORD. AND TO TOP IT, MOST INSURANCE COMPANIES FOLLOW MEDICARE GUIDELINES!! SO EVERYONE IS AT RISK. I KNOW THIS BECAUSE I WORK IN THE HEALTHCARE INDUSTRY.
Tom Herbert - Trainwreck a comin'
2006-02-07 23:30:11
Yep, there?s going to be a veritable trainwreck in this country - maybe not this year or next, but soon. It worries me.

Pharmaceuticals are the second most profitable business in America. I know this because Exxon ratted them out last week in an advertisements defending its percentage of profits by saying Banking and Pharma have even bigger profit margins.

Seriously, the 25% of the under-insured and un-insured you mention is more than a simple number. It represents real people that live with unnecessary pain and misery every day of their lives - In this America.

It?s hard for me at this point to not get political. Let?s just say that the ?Fair and Balanced?, God-Fearing, Right-Living lawmakers in DC have no leg to stand on.

I do not understand how they rationalize their opposition to some sort of Nationalized Health Care. What do they tell their little children at night? ?God will look after ?those people? dear?? Much like he looks after baby squirrels caught in a storm? or possibly, ?It?s just nature?s way precious??

Sigh.. If they believe in what they say they do, they?ll do something to fix it. If they don?t, then their posturing on morality is just opportunistic fakery.
Kent - How naive...
2006-02-07 23:31:35
I think it?s naive to think that addressing ?corporate graft? ? i.e. cracking down on the cozy relationship between doctors and pharmaceutical companies and medical device makers ? will solve the problem of runaway health care costs. The problem is a lot more complex than that.

Nationalized health care would cover everybody ? maybe. What about illegal immigrants? Do we cover them, or are they left to their own devices? Do we still treat them when they show up at emergency rooms? Fact is, the low-income uninsured can get health care today. Hospitals have to treat them. Many of the uninsured, though, are middle-class folks whose employers don?t provide health insurance or who choose to go without it. Most of them get by without it, but the unlucky few face the choice of paying thousands of dollars out of their own pocket or going without needed care.

I don?t think there?s any magic bullet to solve the health care crisis, unless we really are ready to have everybody covered by Medicare. Then we?d be complaining about high taxes instead of high health insurance premiums.
David Kimball - Health Care
2006-02-09 13:58:52
I have held the position for many years that our society did us an injustice when they tied health insurance into our jobs. It doesn't belong there.

I should make my own decisions - not my boss. Also, why aren't the big companies like WalMart and GM saying that they cannot be competitive globally against companies in other countries that don't have to pay insurance for their workers? We have been unable to get that type of reform from our lowly positions, but maybe these big boys can get the needed changes happening.
Joe Niederberger - Don't Blame the Big Guy
2006-02-10 09:39:44
How could Corporate Graft have anything to do with any problems that we face, including health care? It must be the consumers who are fueling corporate graft. After all, don't they buy the products? So they must approve of what's going on. Voting in favor of graft with their dollars doncha know. Smack down the consumers, maybe take away their rights to sue and seek redress of grievenaces, and saddle them with hard choices like medicine or shelter, then we will see some progress. But don't blame the big guys. They are just doing what society expects of them, which is to live like greedy little pigs.
Jean Hall - Conscientious Consumer
2006-02-10 09:52:57
As a start-up entreprenuer with just "catastrophe" insurance coverage, I've found it nearly impossible to be a careful consumer, since my doctor never knows how much a procedure or medication will cost, and NEITHER DOES THE BUSINESS OFFICE before it is actually billed. That's just not right!
Bud Adams - A Disconnected "Faith"
2006-02-23 00:25:50
Mr. Bush will march out his claim to be a man of faith - but never really defines what that means. By his actions, I could hardly believe he means he is a follower of Jesus of Nazareth.

If nothing else, Jesus was all about building community - about creating shalom. But Mr. Bush's constant drumbeat of "individual responsibility" is exactly the opposite.

Devising a health care system which is so blatantly a boon to those that have and a bust for the have nots is not congruent with any faith I'm familiar with.
Paul Everett - Healthcare alternatives
2006-03-09 14:34:40
One of my sons spent four years in Japan. He tore an ACL playing volleyball. He was operated on by one of the best surgeons in Japan for that injury. He spent two or three weeks in the hospital (spartan, btw) in rehab until he could manage the subways without crutches (their criteria). Cost to him was about $1500.00.

Compare that to his experience here for back surgery at Seattle's foremost center. He had a disc removed. He was sent home that evening!! As he got into the car, in pain, he muttered "****ing barbarians". He was right. It was barbaric to send him to his apartment immediately after serious back surgery. He is still in pain today. It took three days before he could crawl to the bathroom on his own. What if he had had no one to help him?

My point is, the insurance companies have a stranglehold on US medicine. Japan has insurance companies, too, in the medical field. But they NEVER tell medicine what to do. We should go and investigate what is good about their model, study what is good about northern European models (which I know about) and in general re-examine everything about our system, because it is not only broken, it is immoral, imho.

'I'm alright, Jack' won't do it any more. We must break the strangle hold of the vested interests and invent a humane, moral system. We Americans are especially good at inventing the truly new.

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