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By David Cay Johnston
Newsweek, January 3, 2014

Has it ever occurred to you to negotiate with the pilot of the plane you just boarded about her pay?

Assuming the pilot was willing to take bids for her services, would you have any idea of how to evaluate the worth of that particular pilot compared to anyone else who might be at the controls? How long would it delay the flight while you and other passengers haggled over that fee?

And what of the risks in having a pilot focused on whether she negotiated good deals with her passengers, rather than getting everyone safely to their destination?

While haggling with pilots is absurd, the idea that individual Americans should negotiate the prices each pays for health care is getting a lot of serious discussion right now. The reason is the Affordable Care Act, a.k.a. Obamacare, which critics are desperate to find some way to stop.

For weeks, politicians and writers in the opinion pages of The Wall Street Journal and other critical outlets have declared Obamacare a failure with plenty of victims. Those are silly assertions because the law only took effect this week, on the first day of 2014.

These critics are all outrage with no detailed alternatives, except the mantra that competition will magically bring down health-care costs. The libertarians at the Cato Institute argue “we need market competition more than ever. Not the mealymouthed substitutes bandied about by most health policy wonks. We need something that none of us has ever seen – real competition in a free health-care market.”

No. We need something easier, simpler, and already proven to cut costs.

For starters, markets can push prices up as well as down. The electricity market rules, initially written by Enron (at the urging of former Vice President Dick Cheney, who was pals with the company’s late founder), can raise prices to 90 percent of what an unfettered monopolist could charge, as I showed in my book Free Lunch, citing research by Professor Sarosh Talukdar of Carnegie-Mellon University that no one has challenged.

Then there’s the knowledge component of markets. When one side knows and the other side is ignorant, you get price-gouging. Under current policies, prices for medical services are generally confidential. You could call hospitals and your health insurer to ask the cost of a standard medical procedure, say cataract or gall-bladder surgery. I tried that, and was told at every turn that prices were proprietary information – none of my business, until I got a bill.

More than four decades ago the Supreme Court defined a fair market as the “price at which the property would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy or to sell and both having reasonable knowledge of relevant facts.” How many of us have “reasonable knowledge” of medical procedures, costs, or even the difference between a neurologist and a nephrologist?

Is an accident victim writhing in pain, life’s blood flowing out of his body, free of compulsion?

And how many of us know the assortment of facts needed to price an MRI, an angiogram or just a dozen stitches? Or, for that matter, whether any of those procedures is the best alternative, or even necessary?

We don’t have a free market for health-care services. If we did, we would see a narrow range of prices for the same service. After all, a Ford F-150 pickup with the same options costs about the same in Washington, West Virginia, or Wyoming. Not so hospital and medical costs, a fact brought home in the 2012 Pricing Report of the International Federation of Health Plans, a trade association for health insurance companies.

While the average U.S. hospital stay is just under $4,300 per day, one in four patients are charged $1,514 or less and one in 20 pay $12,537 or more.

The total cost for an appendectomy ranges from $8,156 for a fourth of these procedures to more than $29,426 for the most expensive 5 percent. The average cost is $13,851.

Economists learn before they get their undergraduate degrees that such huge variations are signs of inefficient markets or even faux markets. Such wide price variations may even indicate collusion among some providers to jack up prices, which is generally illegal.

But even if we ignore these huge price variations, the trade industry report illustrates another problem: American health-care costs are completely out of line with the rest of the modern world.

In France the average daily cost of a hospital stay is $853; in the U.S., it’s $4,287.

An MRI costs on average $335 in Britain and $363 in France, but $1,121 in the U.S.

Routine and normal childbirth costs, on average: $2,641 in Britain and $3,541 in France but in the U.S. averages $9,775. Caesarean section delivery runs $4,435 in Britain, $6,441 in France; $15,041 in the U.S.

This pattern holds for all 21 procedures examined in the report.

Excessive health-care costs drain both the public purse and private purses, make manufacturing uncompetitive and force employers to divert attention from running their firms to dealing with health insurers.

Our universal single-payer health-care plan for older Americans, Medicare, has lower costs and lower overhead than the system serving those under age 65. If everyone in the U.S. was on Medicare, the savings would move the federal budget from deficit to surplus.

Of the 34 modern economies, the U.S. has by far the costliest health care system. For each dollar per capita that the other 33 economies spend on health care the U.S. spends $2.64, my analysis of Organization for Economic Cooperation and Development data shows.

Canada, Germany, and France each spend about 11.5 percent of their economy on health care, compared to 17.6 percent in the U.S.

We could have eliminated the income tax in 2010 had we adopted the Canadian, German, or French health-care systems.

Look at your pay stub and how much goes to federal income taxes, then think about the unnecessary economic pain American health care causes you.

One important distinction between other modern countries and the United States is that they all provide universal health care, while 48 million Americans had no health insurance in 2012 and another 30 million had coverage for only part of the year. Millions have coverage riddled with loopholes and exceptions, not paying for such vital services as an ambulance, even when the patient is unconscious. And all private health insurers try to avoid paying claims in various ways, from requiring onerous paperwork to denying a procedure was necessary.

On top of all this are restraints on trade in American medicine, like limiting the supply of doctors and nurses. The American Medical Association has acknowledged that it worked to hold down the number of physicians to push up income for doctors. Under state licensing rules, many of even the best-trained foreign doctors cannot practice here.

And then there are the drug and other medical patents. Economist Dean Baker notes that in America, “we grant patents to providers and then let them charge pretty much whatever they want, while other countries also grant patents, but then limit the prices charged.”

When a patent expires, American law allows the drug company to pay would-be makers of generic versions to not produce the drug. That keeps prices, and profits, high. It ought to be illegal.

Congress expressly forbids Medicare from negotiating wholesale price discounts for the Medicare Part D program initiated by President George W. Bush, so Americans pay far more for drugs available in other countries, which negotiate huge discounts.

Finally, not everything should be judged by price competition. The love and affection of our families, the loyalty of our diplomats, and the integrity of jetliner makers and of the airlines that hire pilots are not matters for market economics.

We could experiment with the kind of price competition that the Cato Institute proposes. It might even work, though I doubt it. But why? We already know that universal coverage with a single payer is much cheaper than what America spends now. And we know that the quality of U.S. health care is far from the best – 37th in the world, according to the World Health Organization, which ranks France No. 1.

When opponents of the Affordable Care Act argue for patients negotiating health-care prices they make as much sense as proposing that passengers haggle over pay with an airline pilot.

http://mag.newsweek.com/2014/01/03/myth-health-cares-free-market.html

By Pearl Korn
The Huffington Post, Dec. 30, 2013

The 113th Congress will likely be remembered as the most unproductive in our history, and with an overall approval rating of 9 percent, it is safe to say that most Americans do not consider this bunch to be a noble group of public servants engaged in good works for the people of this country. It is rare that any member of Congress is honored on any level these days, but one truly worthy exception is Rep. John Conyers (D-MI), who early in December was honored with a breakfast celebration attended by some 40 union representatives at a restaurant on East 29th Street in New York City.

Those present included leaders from Actors Equity, The International Alliance of Theatrical Stage Employees (IATSE) and the New York City Central Labor Council (NYCCLC), whose President, Vincent Alvarez, declared his support for Mr. Conyers’ bill HR 676, The Expanded and Improved Medicare for All Act, and promised to deliver their 1.3 million members to back this cause. This is a very significant development, as the 300 unions under the umbrella of the NYCCLC are made up of truck drivers, teachers, nurses, operating engineers, construction workers, janitors, train operators, electricians, fire fighters, retail workers and many more hardworking Americans who, along with everyone else in our nation, would benefit greatly from this revolutionary healthcare plan. They are the face of American labor today, and Mr. Alvarez spoke of the need for labor and the general public to unite and work together for this imperative cause: providing affordable, quality healthcare to all Americans. 

We might recall that it was labor that gave us the middle class during the post World War II years as they worked to indeed lift all boats in that time of unprecedented prosperity. Can they lead our nation once again in this time of unprecedented need? They have been taking quite a beating, and have been decimated in several states by the lackeys of the 1 percent. But their values are America’s values, and it is critical that they remain a vibrant force for change in this country.

Mr. Conyers was introduced by his longtime friend, TV talk show host Phil Donahue, and other speakers that morning included Robert Score, Recording-Corresponding Secretary of Local 1 of IATSE, and Stephen Shaff, speaking on behalf of Progressive Democrats of America. Mr. Conyers himself noted that it took him 15 years to move Congress to declare a national holiday for Dr. Martin Luther King, so he is prepared for a long haul to achieve Medicare For All. He has reintroduced HR 676 in every Congress since 2003, and has now garnered support from 54 other House members, along with an impressive 609 union organizations, including 146 Central Labor Councils/Area Federations and 44 State AFL/CIOs. Obamacare’s failure to address the Taft Hartley Plans and the operating procedures under which they work could create even more union support for the Single Payer movement. The president must address this issue.

Meanwhile, support from the public also continues to build, as the warts on the ACA become more apparent and the questions about its viability grow louder on almost a daily basis. This will undoubtedly drag into the 2014 election and continue to send shock waves throughout the political world into the 2016 race for the White House, as the Conservatives will remain active in their attacks and continuing efforts to end Obamacare.

Following the breakfast, Mr. Conyers and his policy director Mike Darner met with 15 of his core Single Payer activist leaders from organizations like Physicians For A National Health Program and Healthcare-Now! — as well as some doctors — to discuss strategy and continue building the movement. This group is definitely in it for the long haul, too, as they have supported Mr. Conyers and his bill for years. This is a bill that would deliver all necessary health services at less than half the cost we pay now, eliminating co-pays, deductibles and co-insurance while providing long-term care — including all of those expensive dental specialties. The estimated savings would be in the range of $592 billion a year. Better healthcare at lower costs — what’s not to like? And if you like your doctor, you actually could keep him or her — did you hear that, Mr. President? You can also pick any doctor you like — no more provider networks. These healthcare professionals would be able to become doctors once again, instead of a “provider” or “vendor,” and we could become patients again, ending our dehumanizing role as a “consumer” or “customer.”

Of late, we have been reading about Medicare For All from such luminaries as Robert Reich, Ralph Nader and William Greider in The Nation, among others. Even Bill Clinton mentioned it during President Obama’s second campaign. If Hillary were to acknowledge that Medicare For All is the next logical step after Obamacare, she would gain tremendous support and a second opportunity to get the right healthcare plan in place for her presumed 2016 run for president. Unfortunately, Hillary has proven herself to be far from progressive on many issues in the past, so we will have to wait and hear from her what her healthcare plan actually is if she decides to run.

Meanwhile, in the past few weeks Vermont Senator Bernie Sanders and Rep. James McDermott (D-WA) — who is also a doctor — have both introduced Single Payer bills. Bernie’s bill is a Medicare-for-All proposal known as the American Health Security Act of 2013 (S.1782), which would be administered by the states and transferable between states. The McDermott bill also moves the initiative outside of D.C., leaving it up to the states to develop their own plans based on their diversity and individual needs. As Massachusetts was the template for the ACA, it makes sense to finally introduce Single Payer on a state-by-state level.

Vermont has approval in both of its houses for a Single Payer plan, but it needs a waiver from the ACA to implement it in 2017. Can’t the federal government speed up that process? There are also plans at the ready in New York and in Rep. McDermott’s home state of Washington. And what of California, which has come so close in the past? One state can lead the country toward this monumental goal, the way Massachusetts did with the ACA. We just need to find the will.

In the Greider article in this month’s The Nation, entitled “Reviving The Fight For Single Payer,” he raises the question many of us ask: Can Obamacare deliver what it promised? One of the major problems he notes is that “…the reformed system will also still rely on the market competition of profit-making enterprises, including insurance companies.” Rep. McDermott was interviewed for this article, and he pointed out another major flaw in the ACA: “In the long arc of healthcare reform, I think [the ACA] will ultimately fail, because we are trying to put business-model methods into the healthcare system. We’re not making refrigerators. We’re dealing with human beings, who are way more complicated than refrigerators on an assembly line.”

Rep. McDermott – an advocate for Single Payer for decades – further wondered if hospitals will become “too big to fail” as they continue to merge and buy up private practices, and continue hiring younger doctors as salaried employees. Mr. Greider also made the following revelation: “An AMA survey in 2012 found the majority of doctors under 40 are salaried employees.” Rep. McDermott sees the troubling direction of this trend, noting that many new doctors “…will simply be serfs working for the system,” and Mr. Greider referred to another key point in the AMA research, noting that “…hospitals focus on employing primary-care physicians in order to maintain a strong referral base for high-margin specialty service lines.” Mr. Greider added further insight from Rep. McDermott: “Big hospitals need a feeder system of salaried doctors, McDermott explained, to keep sending them patients in need of surgery or other expensive procedures.” Even so, Rep. McDermott remains optimistic that stronger health care systems resembling Single Payer will spring up moving forward.

The New York Daily News offered a scathing editorial on December 24th entitled “Can This Patient Be Saved?” in which we were given a blow-by-blow analysis of the devastatingly mishandled rollout of the Obamacare exchanges and the problems millions of Americans have been having signing up for them. The situation was so bad that the deadline was extended until Christmas Eve for those to sign up who wanted their insurance to kick in on January 1, 2014. The CBO projects seven million will sign up in 2014, in addition to the about 1.1 million this year — well below the Administration’s projections. Meanwhile, millions will be losing their current plans due to the mandate. The question of more people losing their insurance than gaining it as a result of the president remaking the “healthcare economy” was also raised in this Op Ed piece.

Key provisions of the bill have already been waived in the past three years since its passage, and an additional postponement of the requirement for companies with fifty or more employees to offer health insurance or pay a tax penalty has now been postponed until 2015.

The individual mandate requiring most Americans to find coverage by April is also waiving penalties for those who had insurance and lost it this year. Most glaring in this critical article is the fact that there is “little reliable” information on who is getting what as far as coverage is concerned, and at what cost. The even larger question is, will those younger and healthier people opt in at all? If not, financially this boondoggle will sink. Obamacare is counting on them.

As the tinkering continues on the ACA, a major architect of this mess has just been rewarded by the president with an ambassadorship offer to China. Senator Baucus, do you not know the meaning of the word “retire?”

All good wishes for a (hopefully) healthy and happy New Year!

Jonathan Stone also contributed to this post.

http://www.huffingtonpost.com/pearl-korn/while-obamacare-enrollmen_b_4516708.html?utm_hp_ref=politics

By Michael Moore
The New York Times, Dec. 31, 2013

Today marks the beginning of health care coverage under the Affordable Care Act’s new insurance exchanges, for which two million Americans have signed up. Now that the individual mandate is officially here, let me begin with an admission: Obamacare is awful.

That is the dirty little secret many liberals have avoided saying out loud for fear of aiding the president’s enemies, at a time when the ideal of universal health care needed all the support it could get. Unfortunately, this meant that instead of blaming companies like Novartis, which charges leukemia patients $90,000 annually for the drug Gleevec, or health insurance chief executives like Stephen Hemsley of UnitedHealth Group, who made nearly $102 million in 2009, for the sky-high price of American health care, the president’s Democratic supporters bought into the myth that it was all those people going to get free colonoscopies and chemotherapy for the fun of it.

I believe Obamacare’s rocky start — clueless planning, a lousy website, insurance companies raising rates, and the president’s telling people they could keep their coverage when, in fact, not all could — is a result of one fatal flaw: The Affordable Care Act is a pro-insurance-industry plan implemented by a president who knew in his heart that a single-payer, Medicare-for-all model was the true way to go. When right-wing critics “expose” the fact that President Obama endorsed a single-payer system before 2004, they’re actually telling the truth.

What we now call Obamacare was conceived at the Heritage Foundation, a conservative think tank, and birthed in Massachusetts by Mitt Romney, then the governor. The president took Romneycare, a program designed to keep the private insurance industry intact, and just improved some of its provisions. In effect, the president was simply trying to put lipstick on the dog in the carrier on top of Mitt Romney’s car. And we knew it.

By 2017, we will be funneling over $100 billion annually to private insurance companies. You can be sure they’ll use some of that to try to privatize Medicare.

For many people, the “affordable” part of the Affordable Care Act risks being a cruel joke. The cheapest plan available to a 60-year-old couple making $65,000 a year in Hartford, Conn., will cost $11,800 in annual premiums. And their deductible will be $12,600. If both become seriously ill, they might have to pay almost $25,000 in a single year. (Pre-Obamacare, they could have bought insurance that was cheaper but much worse, potentially with unlimited out-of-pocket costs.)

And yet — I would be remiss if I didn’t say this — Obamacare is a godsend. My friend Donna Smith, who was forced to move into her daughter’s spare room at age 52 because health problems bankrupted her and her husband, Larry, now has cancer again. As she undergoes treatment, at least she won’t be in terror of losing coverage and becoming uninsurable. Under Obamacare, her premium has been cut in half, to $456 per month.

Let’s not take a victory lap yet, but build on what there is to get what we deserve: universal quality health care.

Those who live in red states need the benefit of Medicaid expansion. It may have seemed like smart politics in the short term for Republican governors to grab the opportunity offered by the Supreme Court rulings that made Medicaid expansion optional for states, but it was long-term stupid: If those 20 states hold out, they will eventually lose an estimated total of $20 billion in federal funds per year — money that would be going to hospitals and treatment.

In blue states, let’s lobby for a public option on the insurance exchange — a health plan run by the state government, rather than a private insurer. In Massachusetts, State Senator James B. Eldridge is trying to pass a law that would set one up. Some counties in California are also trying it. Montana came up with another creative solution. Gov. Brian Schweitzer, a Democrat who just completed two terms, set up several health clinics to treat state workers, with no co-pays and no deductibles. The doctors there are salaried employees of the state of Montana; their only goal is their patients’ health. (If this sounds too much like big government to you, you might like to know that Google, Cisco and Pepsi do exactly the same.)

All eyes are on Vermont’s plan for a single-payer system, starting in 2017. If it flies, it will change everything, with many states sure to follow suit by setting up their own versions. That’s why corporate money will soon flood into Vermont to crush it. The legislators who’ll go to the mat for this will need all the support they can get: If you live east of the Mississippi, look up the bus schedule to Montpelier.

So let’s get started. Obamacare can’t be fixed by its namesake. It’s up to us to make it happen.

Michael Moore is a documentary filmmaker whose 2007 film “Sicko” examined the American health care industry.

http://www.nytimes.com/2014/01/01/opinion/moore-the-obamacare-we-deserve.html?ref=opinion