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2. COVERAGE & COVID:

Medicare-For-All written by Dr. Steffie Woolhandler

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Peter Burgess COMMENTARY

Peter Burgess
2. COVERAGE & COVID:

Medicare-For-All

Dr. Steffie Woolhandler

Let’s start with Medicare for All—although that’s not the issue of the day, it will be the issue going forward over the long term. While there’s a lot in health care that we can do in the short term, it’s useful to at least review the key arguments around Medicare for All since the majority of voters still endorse it…as do organizations like Physicians for a National Health Program, Public Citizen, the Nurses Union, and many other great organizations.

There’s a crisis in America’s health and longevity. You probably know that Americans have higher death rates than people in other developed countries but may not know just how bad it is. We just issued a report about what we call the “missing Americans”—the number of people who die each year in this country who would still be alive at the end of the year, if we had mortality rates as low as other developed nations. Even before the COVID pandemic, 500,000 Americans went “missing” every year, that is who died unnecessarily because of our poor mortality experience. During the COVID pandemic that number has gone up to 1 million deaths annually—1 million people going missing who would still be with us if we had the same death rates as other developed nations. And it turns out that half of all deaths below the age of sixty-five in this country are these “missing Americans.” (See Ed Young covering our work on the “missing Americans” in the Atlantic in July.)

The other price of our healthcare system is cost. Americans are paying twice as much as people in other developed countries for healthcare—20 percent of GDP—and of course the electorate is paying for that directly through their payments and indirectly through their taxes. Access and affordability are huge issues—30 million uninsured Americans, tens of millions more who have insurance that they can’t afford to use because of high co-payments, deductibles, and services that aren’t covered. Then there’s major problems with medical debts—more than half of all the bad things on your credit report are medical bills. And research we’ve done with Elizabeth Warren when she was at Harvard shows that medical illness or medical debt play a major role in personal bankruptcies, contributing to more than half of them.

How do you fund Medicare for All? We’re not supposed to say “spend,” but consider taking all the money that’s now being wasted on overhead and bureaucracy—which we estimated at $800 billion a year (the Rand Corporation and the Congressional Budget Office have similar estimates of the quantity of administrative waste)—and investing it in actual healthcare, such as doctors, nurses, drugs and preventive care.

Beyond Medicare for All, there’s what we in academia call “financialization.” In the electoral sphere, you may call it “the Wall Street takeover of American healthcare.” Amazon, for example, just purchased Medical One, a major provider of primary care and employer of primary care physicians. So Amazon now owns your doctor. That’s what we mean by financialization, which is a problem in two ways. One is just the surveillance fears about Amazon—which already knows the books I read, the stuff I buy that’s mailed to me, and the movies I stream—will now also know my personal healthcare and those of my patients.

That’s scary. But add to that the false assumptions that greed is good, that profits are good in healthcare, that whatever is profitable is somehow acceptable. We’ve already seen that with the insurance companies now going feet first into providing Medicare through the privatized Medicare Advantage plans and providing managed Medicaid plans. More than half of the private insurance industry’s total revenues come from the taxpayers through the Medicare Advantage or Medicaid managed care programs, which are privatized programs.

Those insurance companies are ripping off taxpayers According to MedPAC— Congress’s oversight agency of Medicare—the price of Medicare Advantage is 104 percent of the price of traditional Medicare. So they’re raising the price to everyone by charging taxpayers for their very high overhead and profits, which is in the range of about 15 to 19 percent overhead. How do they get those profits? Well, they “upcode”—the payment to private insurance firms from the government is based on how sick the patient is. So the private insurance companies just exaggerate how sick the patient is in order to cause the government to pay them a bigger capitation or premium payment.

Well, some of you who are familiar with health policy may be saying, “But wait, isn’t there a limit on how much overhead profit they can get? Didn’t the ACA say only 15 percent of the premiums from the government or the premiums from anyone can go to overhead and profit?” While the ACA does say that, insurance companies have gotten to be experts in what I call “overhead laundering.” They make these giant overhead and profits, and then, rather than computing it as insurance overhead, they just push that money over to provider organizations that they own.

For instance, United Healthcare, our largest insurance company, owns 60,000 doctors; if their overhead starts to look too high, they just shift those profits over to their subsidiary that owns doctors—then it’s out of their overhead and they get to hang on to the profit. Which means they’re profiteering at the expense of the taxpayers and at the expense of sick patients.

I needn’t spend a lot of time on drug company profiteering since most people understand that we’re paying twice as much for the same medicines here in the US as people can buy in Canada. Physicians for a National Health Program explained all this—along with drug company profiteering —in the British Medical Journal. But I would like to conclude about the new kid on the block: private equity, or what we used to call “leveraged buyouts.” Private equity vulture capitalists go in and extract value from productive industries, like doctors offices or hospitals. Wanting to get their money out in three to seven years, they load these providers, hospitals, nursing homes with giant debt. They hive off the real estate, put that in a separate company, or sometimes sell it for money.

Consider two egregious examples. The closure of Hanuman Hospital in downtown Philadelphia, a venerable safety net hospital, actually was closed and its downtown real estate sold off because it was more valuable as condos than it was for patient care. The nursing home industry puts it in a separate subsidiary, which means that the nursing home just becomes an operating company that has to pay rent…which in turn means they have to reduce staffing. This raises the death rate. But if patients try to sue the nursing home about a loved one being harmed or dying, the nursing home is then judgment-proof since they’re just an operating company that doesn’t own any property.

Mark Green: If a voter says to a candidate, “I hear that if the Republicans are back in control, they want to end Obamacare.” That true? And what would that mean for average Americans?

Dr. Steffie Woolhandler: That would mostly affect folks who are newly eligible for Medicaid since 2010, and there’s a lot of those. There’d be at least 10 million people who would lose their health insurance which would harm the health of low-income people all over the country.

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