By Robert Gumbiner
Press-Telegram, 1/27/08
Long Beach, CA
There is a somewhat illogical argument being made against expanding Medicare to include all citizens and taxpayers in the U.S., which is that Social Security and Medicare are going to go broke. This argument makes no sense. For one thing, if this were true, how could the federal government keep borrowing from Social Security and Medicare? The fact is, Medicare has the money and the federal government doesn’t.
Another argument used to muddy the waters is that health care costs more than Medicare can afford to pay. The answer to this problem is simple: collect more money. When the cost of living goes up, we expect to pay more for goods and services. Twenty years ago, a house might cost $50,000 or $150,000; that same property now costs $800,000. So why should we expect to pay the same amount of money for Medicare health care that we were paying 20 years ago?
In addition, let’s pay more attention to controlling the costs and better education of the providers in the cost of their procedures. Give the providers, i.e. doctors and hospitals, some responsibilities for cost control.
True, when 80 million baby boomers join the 40 million people currently covered by Medicare, the budget may be stretched thin. But since Medicare will be spreading the risk over 120 million people, in the future it will work. Remember, a lot of those new people are accessing Medicare at 66 years of age and those are winners for the Medicare program because they are healthier than the average. These younger people will be feeding in over the next 20 to 30 years, and using less care initially. Actually, Medicare may work better; it’s the increasing number of people in their late 80s and 90s that we have to worry about.
By the same token, we could expand Medicare to provide health care to everyone, using a simple payroll deduction (from employees) and contribution (from employers). We know that people will agree to pay more if they get more. In the Scandinavian countries people are willing to pay more because they get more social services, including health care coverage. People in this country can understand this simple equation. They would be agreeable to pay another 4 percent payroll deduction if it meant 100 percent coverage and no financials worries.
This is a simple plan that can work, but the public is being led down the garden path by a bunch of unknown, talking heads. The propaganda machines for the insurance and pharmaceutical companies are trying their old-fashioned scare techniques on the American public, claiming that Medicare is going broke, so forget about using it to establish national universal health care.
Garbage!
It will just take another three or four percentage points – whatever it costs – out of payroll. People will be delighted to pay it in order to get full coverage.
The biggest opponents to expanding Medicare are the insurance and pharmaceutical companies. Insurance companies are parasitical. They get paid for doing nothing. In fact, they create their work. Having managed two insurance companies in addition to a large HMO, I can tell you that it costs at least 15 percent or more to market your product and another 10 percent to run the company, even if you are fully funded and spreading the risk. This means 25 percent to 30 percent of “health care cost” is going directly to the insurance companies and is not contributing anything to health care. Right now, Medicare avoids this added 25 to 30 percent, paying something like 4 to 6 percent, all in, for claims adjustments outsourced to companies like Blue Cross. It is time for insurance companies to get out of the health care business.
We brought the tobacco companies under control for the greater good of the American public; we can do the same with the insurance and pharmaceutical companies that shamelessly exploit the American public.
How is it that American pharmaceutical companies can sell their same product for 30 percent, 40 percent or 50 percent less in Canada and Mexico and make money? Doesn’t that mean they are making 30 percent, 40 percent or 50 percent more than they need to make off the American public? It is a crime. It’s ridiculous. Why doesn’t Congress do anything about it?
Robert Gumbiner, M.D., is founder and former CEO of FHP International.
