Don't Fall for the Health Industry Barons' Empty Promises

Posted by Joshua Holland, AlterNet at 1:00 PM on May 11, 2009.

I am awed at people's capacity for self-deception. On Monday, the Obama administration and SEIU joined with Big Health lobbyists to trot out a six-month old, non-specific, non-binding "promise" to cut the rate at which health care costs grow to "only" 4.7 percent annually.

This is very simple: the insurance, pharmaceutical and medical devices industries see the writing on the wall -- American health care puts an unsustainable economic burden on families and employers, leaves 47 million people without coverage and results in some of the worst outcomes in the industrial world. Fearful of a growing movement towards real, substantive reform, they are trying to co-opt the process under the guise of "getting a seat at the table."

There's no news here -- "voluntary" codes  of conduct, self-regulation and industry-driven initiatives for the private sector to address complex policy issues have long been a standard tactic for heading off real regulation, real accountability measures, systemic reforms.

America's Health Insurance Plans (AHIP) -- the insurance industry group descended from the organization that aired the infamous "Harry and Louise" campaign during the Clinton health care wars -- first trotted out this proposal 6 months ago. It wasn't big news then, but with Obama's nod and one of the major, ostensibly progressive players in the health care debate getting on board, it is now.

Earlier this month, AHIP also "surprised" more credulous observers by calling for more regulation of the health care industry! At the time, Congressional Quarterly noted the obvious:

Part of the reasoning behind the industry’s push for regulation may be that, with the momentum Democrats have built for a health care overhaul, private health insurers face two choices: change the way they do business, or face competition from a government-run insurance plan that many say would eventually run them out of business...

And with support building for a government-run insurance option with some limits on how it operates, [AHIP CEO Karen] Ignagni appears to be offering concessions: dodging the government-run plan in return for regulation that would more strictly guide how her member companies operate.

Surprisingly, many otherwise bright progressive minds are hailing this latest move as some sort of breakthrough in the fight for health care reform. Paul Krugman called it "some of the best policy news" he's heard in a long time. Bill Scher at Campaign for America's Future said the insurance industry is ready to "play ball" with the administration, even though the outlines of the proposal preceded Obama's inauguration by two months.

Never mind that there's little in the way of specifics. Never mind that this "proposal" is non-binding -- based on pixie  dust rather than any solid commitment to contain costs. A key question is this: the economy as a whole has grown by an average of 3.2 percent per year for the past three plus decades, and this is a commitment to reduce the growth in health care costs to 4.7 percent. How does that fix a system on which we already spend close to twice as much per person on care than other wealthy countries, and get consistently poorer results? (We rank 42nd in the world in infant mortality and 46th in life expectancy. According to a study conducted by the Commonwealth Fund comparing health care in six wealthy countries, the U.S. ranked “last on dimensions of access, patient safety, efficiency, and equity.” Among residents of 30 rich countries polled by Gallup, Americans came in 18th in terms of satisfaction with their care, despite the fact that we out-spend everyone else on the list by a significant amount.)

Here's the other key question: how can anyone expect a coalition with diametrically opposed interests to hold together?

This new alliance includes the Big Health lobby, the Obama administration and SEIU. The latter are advocates of what could indeed prove to be a game-changer: the creation of a public insurance option that would compete with  private insurers, and might eventually lead to something approaching a single-payer system.

The disease care industry is dead-set against adding a public insurance option to the country's health care mix. AHIP president Karen Ignagni, according to CQ, "has made clear" that her organization "would oppose any proposal with a government plan."

In March, SEIU was one of two unions to pull out of a similar "big tent" left-right coalition trying to address health care reform. The defining issue behind the rift, according to the New York Times, was that "agreement on two of the knottiest issues in the health care debate: whether to offer a new government-sponsored insurance option, and whether to require employers to help pay for employee health benefits" proved to be elusive. If someone can explain how these competing visions for reform can be reconciled now, I'm all ears.

This first appeared in AlterNet's PEEK.

Tagged as: obama, health care, seiu, lobbying, corporate power, economic crisis

Joshua Holland is an editor and senior writer at AlterNet.