|The New York Times
This Is Reform?
By BOB HERBERT
IT'S NEVER A contest when the interests of big business are pitted
against the public interest. So if we manage to get health care
“reform” this time around it will be the kind of reform that benefits
the very people who have given us a failed system, and thus made
reform so necessary.
Forget about a crackdown on price-gouging drug companies and predatory
insurance firms. That’s not happening. With the public pretty well
confused about what is going on, we’re headed — at best — toward
changes that will result in a lot more people getting covered, but
that will not control exploding health care costs and will leave
industry leaders feeling like they’ve hit the jackpot.
The hope of a government-run insurance option is all but gone. So
there will be no effective alternative for consumers in the market for
health coverage, which means no competitive pressure for private
insurers to rein in premiums and other charges. (Forget about the
nonprofit cooperatives. That’s like sending peewee footballers up
against the Super Bowl champs.)
Insurance companies are delighted with the way “reform” is unfolding.
Think of it: The government is planning to require most uninsured
Americans to buy health coverage. Millions of young and healthy
individuals will be herded into the industry’s welcoming arms. This is
the population the insurers drool over.
This additional business — a gold mine — will more than offset the
cost of important new regulations that, among other things, will
prevent insurers from denying coverage to applicants with pre-existing
conditions or imposing lifetime limits on benefits. Poor people will
either be funneled into Medicaid, which will have its eligibility
ceiling raised, or will receive a government subsidy to help with the
purchase of private insurance.
If the oldest and sickest are on Medicare, and the poorest are on
Medicaid, and the young and the healthy are required to purchase
private insurance without the option of a competing government-run
plan — well, that’s reform the insurance companies can believe in.
And then there are the drug companies. A couple of months ago the
Obama administration made a secret and extremely troubling deal with
the drug industry’s lobbying arm, the Pharmaceutical Research and
Manufacturers of America. The lobby agreed to contribute $80 billion
in savings over 10 years and to sponsor a multimillion-dollar ad
campaign in support of health care reform.
The White House, for its part, agreed not to seek additional savings
from the drug companies over those 10 years. This resulted in big
grins and high fives at the drug lobby. The White House was rolled.
The deal meant that the government’s ability to use its enormous
purchasing power to negotiate lower drug prices was off the table.
The $80 billion in savings (in the form of discounts) would apply only
to a certain category of Medicare recipients — those who fall into a
gap in their drug coverage known as the doughnut hole — and only to
brand-name drugs. (Drug industry lobbyists probably chuckled, knowing
that some patients would switch from generic drugs to the more
expensive brand names in order to get the industry-sponsored
To get a sense of how sweet a deal this is for the drug industry,
compare its offer of $8 billion in savings a year over 10 years with
its annual profits of $300 billion a year. Robert Reich, who served as
labor secretary in the Clinton administration, wrote that the deal
struck by the Obama White House was very similar to the “deal George
W. Bush struck in getting the Medicare drug benefit, and it’s proven a
bonanza for the drug industry.”
The bonanza to come would be even larger, he said, “given all the
Boomers who will be enrolling in Medicare over the next decade.”
While it is undoubtedly important to bring as many people as possible
under the umbrella of health coverage, the way it is being done now
does not address what President Obama and so many other advocates have
said is a crucial component of reform — bringing the ever-spiraling
costs of health care under control. Those costs, we’re told, are
hamstringing the U.S. economy, making us less competitive globally and
driving up the budget deficit.
Giving consumers the choice of an efficient, nonprofit, government-run
insurance plan would have moved us toward real cost control, but that
option has gone a-glimmering. The public deserves better. The drug
companies, the insurance industry and the rest of the corporate
high-rollers have their tentacles all over this so-called reform
effort, squeezing it for all it’s worth.
Meanwhile, the public — struggling with the worst economic downturn
since the 1930s — is looking on with great anxiety and confusion. If
the drug companies and the insurance industry are smiling, it can only
mean that the public interest is being left behind.