The Imminent Passage of Health Care Reform
Sunday 21 March 2010
by: Dean Baker, t r u t h o u t | Op-Ed

(Image: Jared Rodriguez / t r u t h o u t; Adapted: steve.grosbois, takomabibelot)
The passage of President Obama’s health care reform will make a difference in the live of tens of millions of people. The subsidies will make insurance affordable to millions of families who could not pay the unsubsidized rate. More importantly, by prohibiting insurers from discriminating against people with serious health conditions, those who are currently covered will have real insurance for the first time. People will no longer have to worry that a serious illness will cause them to lose their job and then their insurance.
This is real progress, but the bill does little to change the fact that health care in the United States is ridiculously expensive and, if current trends continue, will grow more unaffordable through time. While many issues on controlling costs are complicated, some are very simple. At the top of the list is bringing the price of drugs, medical equipment, and medical supplies down to their competitive market price.
Under the current system, patent monopolies allow drug companies and the manufacturers of medical equipment and supplies to charge prices that are often several thousand percent above the free market price. In the case of prescription drugs, the vast majority of drugs could be sold profitably as generics for just a few dollars per prescription, if there were no patent protection. Instead these drugs can sell for hundreds of dollars or even thousands of dollars per prescription.
The huge gap between the patent protected price and the market price leads to the sort of corruption predicted by economic theory. Pharmaceutical companies mislead doctors and the public about the effectiveness and safety of the drug. They give kickbacks and even bribes to doctors for prescribing their drugs in addition to spending vast sums on marketing. And they spend a fortune lobbying Congress to get their patent monopolies extended and strengthened.
The Obama administration took a pass in confronting the pharmaceutical industry. As a result, we will spend about $2 trillion more than necessary on prescription drugs over the next decade. This is money that gives us worse, not better, health care. Remove the corruption and we are more likely to get pills that are actually good for our health.
We are also stuck with an insurance industry that will likely be more profitable and powerful than ever. The multi-millionaire wimps who run the insurance companies were terrified by the prospect of having to compete with a government-run plan. So people will not be able to buy into a Medicare-type public plan. The administrative waste in the private sector plans is equivalent to a tax of around $100 billion a year on our health care.
We are also stuck with an over-supply of highly paid medical specialists, many of whom draw salaries in the range of $500,000 a year. We will not be able to support these people in the style to which they have become accustomed indefinitely.
Because of the enormous power that these interest groups wield in Congress it is unlikely that they will be effectively challenged through legislative measures any time soon. Our best hope for reining in their power actually lies with the market: specifically through medical tourism.
We are the only country in the world that is saddled with such a corrupt and dysfunctional health care system. As a result there are enormous potential savings from taking advantage of more efficient health care systems elsewhere.
There are now facilities in India and Thailand that provide top quality medical care at prices that are often less than one-tenth as high as what people will pay in the United States. For medical procedures that can cost more than $100,000 or even $200,000, the gap is large enough to allow a patient, as well family members, to travel great distances and recuperate abroad, and still save enormous amounts of money.
As a result, medical tourism is a rapidly growing industry. This should be encouraged. Progressives should embrace free trade and the market. We can give all the proponents off "free trade" and market fundamentalism the opportunity to be true to their principles. Public and private health care plans can be opened up to allow patients to get medical care that meets U.S. standards in other countries.
We can yap all we want about health care reform, but the reality is that Washington is a cesspool. The special interests own the place and there is no plausible story in which legislation that seriously challenges the interests of the medical industrial complex has a prayer of passage any time soon.
The only serious way to defeat the drug companies, insurance companies, medical specialists and their partners in crime is to go around them. Let them charge whatever price they want, as long as no one actually has to pay it. It’s absurd that people have to go half away around the world to get decent medical care, but when special interests control the government to the extent they do in Washington, there is no alternative.

This work by Truthout is licensed under a Creative Commons Attribution-Noncommercial 3.0 United States License.



Comments
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Sounds good, let's get
Sun, 03/21/2010 - 09:50 — Anonymous (not verified)Sounds good, let's get everything down to the prices in other countries. Housing, salaries, health care - makes it easier for everyone.
Lesseee here.... so the big
Sun, 03/21/2010 - 10:01 — Chip (not verified)Lesseee here.... so the big "plus" to this bill is that you can't be turned down if you have a pre existing condition. So the "reform" boils down to:
You MUST buy insurance from insurance companies. And as an extra bonus, .. they MUST sell it to you.
Farce Farce Cynical Farce.
Don't get it when people
Sun, 03/21/2010 - 11:30 — drosera (not verified)Don't get it when people moan about being forced to buy health insurance. A fair system like Medicare depends upon the enrollment of all the elderly, sick and healthy, and demands everyone pay Medicare premiums. Fact is, the healthy young do support their aging parents and grandparents and when they get old, the young will support them, too. This "freedom" everyone yammers about, the freedom to do what you damn well please. has a vicious side, too: not giving a rip about the community and the welfare of ALL the people. I don't have much patience with it.
Melodrama for Obama, nothing
Sun, 03/21/2010 - 11:35 — Anonymous (not verified)Melodrama for Obama, nothing more.
Some little gains in the corrupt system Obama defends.
What Democrats refuse to
Sun, 03/21/2010 - 12:26 — Anonymous (not verified)What Democrats refuse to grasp is that there is a huge difference between health insurance and health care. We will be forced to buy high priced health insurance with large deductibles, so people still won't be able to afford to go to a doctor and won't go. Unregulated corporate nursing homes will continue charge thousands for 3rd rate care so patients don't get better. Yes, people will have health insurance but many won't be able to get any care. People will go broke quicker that's all.
Your article , Dean, is okay
Sun, 03/21/2010 - 12:33 — Anonymous (not verified)Your article , Dean, is okay in several respects,
however I fear that any day I will see
a pop-up advert next to your articles
touting
"Dean Baker Medical Horizons Medical Tourism
Ventures: Gall Bladder removal with a smile
and a daiquiri!"
The McCarran-Ferguson Act
Sun, 03/21/2010 - 12:47 — Mike Elzey (not verified)The McCarran-Ferguson Act will be repealed before Labor Day. Then you will see some real cost control. By my math, no more than 80 cent of a premium dollar goes to pay for health services. When these behemoths are regulated like your electric company, the benefit portion of your dollar will be no less than 90 cents. Now if we had a Public Option, it would be 97 cents right off the bat. We'll see how the rules are set up for what kind of return the inusrers are allowed. Retail net-net is 5% and Macy's stock isn't hurting.
On which planet do you spend
Sun, 03/21/2010 - 13:04 — Anonymous (not verified)On which planet do you spend most of you r time that 10s of millions will be helped by "
Oamas's bill"? (did he write this piece of crap??) Surely not in the world of those of us on medicaid who would like to get off and return to work.
They can charge you up to 3x
Sun, 03/21/2010 - 13:06 — Anonymous (not verified)They can charge you up to 3x as much for pre-existing conditons and it doesnt even go in effect until 2014..I repeat, oh which planet do you spend most of your time? Neo liberalville?
Well I hope you liberals are
Sun, 03/21/2010 - 14:15 — Ron Paquijn (not verified)Well I hope you liberals are happy about the change you wanted, now we have the most corrupt entity, the Federal Government, in charge of 51% of the public business's
I agree the health care in America needed to be fixed, but my God!!! not by the freaking government!!!!!!
Today is the first day of Communism in America, thanks liberals, God help are kid's and future generations.
Oh it's real easy for you to
Sun, 03/21/2010 - 14:31 — Mark Levin (not verified)Oh it's real easy for you to make your snarky comments hiding behind anonymity. If you have something to say then find some balls, identify yourself, and say it.
Otherwise why don't you just shut up.
"Mt. Levin", please mind
Sun, 03/21/2010 - 15:37 — Anonymous (not verified)"Mt. Levin", please mind your own tongue.
"Hiding behind anonymity"? Words stand on their own. There's too much in your face labeling
anyway. Do I have to wear a star with my name on it? Words stand on their own bubba!
RonP: Yep, I sure enjoy my
Sun, 03/21/2010 - 17:55 — drosera (not verified)RonP:
Yep, I sure enjoy my Medicare, brought to me by that corrupt entity, the Federal Government. I bet those getting veterans benefits just hate the Federal government for their healthcare, too. And Social Security? What a joke! If only we all had put our money into the stock market--we'd all be rich! You really haven't figured things out, have you?
Insurance companies will not
Sun, 03/21/2010 - 18:26 — merrie (not verified)Insurance companies will not be forced to accept people with pre-existing conditions; they will be fined per day if they don't. The amount of the fine for a year would still be less than operations or care for many problems. So the companies can still refuse to sell the insurance to you as long as they pay the less-expensive-than-your-care fine.
As far as I am concerned,
Sun, 03/21/2010 - 19:39 — Jonas Rand (not verified)As far as I am concerned, the Democrat and Obama supporters are mis-characterizing the Single Payer Health Care movement in America as some kind of tea-party-supporting cadre of Republicans. This is simply not the case. The extension of Medicare to include all ages, rather than this bill (which will allow insurance companies to maintain control), would be the answer to health care in this country. Additionally, we should keep defense spending to a minimum and spend more on public services (like health care). Health care justice for the impoverished does not have to be expensive (see Cuba, Sweden, and all of the developed world sans the US), but it is once the insurance companies and politicians lay siege to it in America. With all the Republicans spouting fear-mongering slogans decrying the evils of socialism, the bill that is about to be passed is an insult to socialism and one that capitulates to insurance companies. The hypocrisy of the Democrats, coupled with the hatred and fear-mongering of the Republicans, is not representative of the needs of impoverished people.
A public option will give
Sun, 03/21/2010 - 20:57 — Anonymous (not verified)A public option will give the consumers a lot more clout. That's the next step. I am hopeful that they still may pass this shortly.
The article touts the
Mon, 03/22/2010 - 03:53 — Anonymous (not verified)The article touts the benefits of medical tourism and supporting "free trade" However Mr.Baker let me remind you that when the Medicare prescription drug benefit was enacted a provision was put in specifically prohibiting Medicare from being able to negotiate prices for prescriptions. That ability alone would have significantly reduced the price of medical care in this country. Not to mention the fact that for quite some time it has been illegal for individuals to import prescription drugs from outside the U.S., as in Canada, where the same prescription drugs manufactured in the same medical factories sells for from 50 to as much as 90% cheaper. The drug companies have effectively been able to create a captive market where they can charge whatever they want. Where are the strangely silent free traders? The ones who are always crying "protectionism" when it involves any other industry other than health care Mr. Baker? How long do you think it will be before the special interests get curbs put on medical tourism? My guess is just as long as it takes it to start eating into their profits in any significant amount. No Mr. Baker the answer isn't in trying to go around the special interests but to take them on head on and get their influence eliminated from government. A good start would be to outlaw lobbying and eliminate campaign contributions from anyone other than the individuals that each member of Congress represents. Until we get back to a government of, by, and for the people we will solve nothing.
Nice broken system we have
Mon, 03/22/2010 - 06:57 — Anonymous (not verified)Nice broken system we have here. We can either back the Racistcans or the Corporatecrats, neither of which care much about the American people. Both parties are war mongers, both parties are corporatists, neither party cares about accountability, neither party cares about transparency, both parties cheat us out of our civil rights, and both parties lie to cover their own asses. WE NEED A VIABLE THIRD PARTY CANDIDATE!!!
@Jonas Rand-That seems to be
Mon, 03/22/2010 - 07:05 — Anonymous (not verified)@Jonas Rand-That seems to be the new corporatecrat trick. I spent all of yesterday arguing with people about this supposedly wonderful HC bill exposing all of it's many weaknesses. No matter how many times I tried to explain that I am a life-long dem, I am a progressive, I want change to the HC system in this country but I do not want to give it all away to these big insurance hacks, it didn't matter. Each and every one simply tried to paint me as a neanderthal teabagger. As if someone with a mind and someone who cares about the people could not possibly be against this plan. Please.
All I can say, Jonas, is third party, third party, third party. I'm off to the courthouse this morning to change my registration to independent after thirty years voting for democrats. There are no democrats any longer, only corporatecrats.
@drosera-"I don't get it
Mon, 03/22/2010 - 07:14 — Anonymous (not verified)@drosera-"I don't get it when people moan about being forced to buy health insurance."
There are two things going on here, drosera. The first is about the commons and all of us pitching in for the good of the community. That's all fine and well. I pay my taxes willingly. I have no problem throwing my money into the pot to be SPENT ON THE COMMUNITY AS A WHOLE.
But what this bill does is to force every citizen of this country to patronize a for-profit insurance company. If you want me to contribute to the commons, then my money better damn well go to the commons and not some rich, insurance CEO's pocket. That's not pitching into the commons, that's forced extortion.
Sadly, eliminating
Mon, 03/22/2010 - 08:06 — lupi (not verified)Sadly, eliminating preexisting condition exclusions without controls on premium will mean that access to coverage will be increased mainly on paper. It is likely that in response, insurers will increase rates for everyone.
OBAMAMOUTH: FORGETABOUTIT! I
Mon, 03/22/2010 - 11:01 — Peder (not verified)OBAMAMOUTH: FORGETABOUTIT!
I am 23, in very good health, and there is ZERO
reasons why I need health insurance - probably for a very long time.
BUT - this OBAMA guy and his cohorts now will FORCE ME to pay for insurance. No free will here. The state decides!
SOCIALISM ON IT'S WAY, as this Obama guy, in essence, said to Joe the Plumber - he intended to equalize by taking from the successful and give - donate - to the least successful. Traditional Communist doctrine.This guy is the most dangerous President we have ever had the misfortune to elect. Let's do all we can to get rid of him (and the clan that is behind him) as soon as we can. Let's start in November by electing an American Congress.
This article is a good
Mon, 03/22/2010 - 13:03 — BF (not verified)This article is a good summation of many of the good and bad parts of the bill. One point that I think everyone missed so far is that the bill uses regulations as a substitute for real, lasting change. That is the main cop-out by the Democrats. The insurance companies will find ways to get around the regulations, and if not, they will simply get them repealed in a few years. That is what pretty much always happens with regulations. They are better than nothing, but at best they are a temporary bandage over a massive, bleeding wound.
The exchange does not provide real competition and thus will have little or no pressure to hold down costs or strengthen coverage. A strong public option would have held down costs and put enormous pressure on the insurance companies to provide better coverage. But more importantly, it would make the regulations work. Even if insurance companies found new ways to screw us, even if they repealed some of the regulations, we would have another option, and they'd lose business.
Obama and the Congressional Democrat leaders decided they'd rather keep their promise to big corporations than keep their promise to the people. Big mistake. The reforms will be helpful, to some extent, for a period of time, but soon the situation will turn back into as much of a crisis as it is now. If Obama had just not blocked a strong public option, the bill would have been much better and the benefits would have lasted much longer.
Of course the best of all solutions would have been to expand Medicare to everyone. We should all fight for single payer, on the state and national levels.
ahhh..to be 23 and know
Mon, 03/22/2010 - 14:18 — Drclaw (not verified)ahhh..to be 23 and know everything! Or at least, to think you do.
Look friend, this is the way insurance works. It spreads risk. If you're healthy you may not need it and so your contribution helps to keep costs down for all of us. On the other hand-you may get hit by a bus and need some care. By your logic-if you didn't buy insurance then you shouldn't get care. I think this is a bad policy, and fortunately, in reality, you'd get treatment and I would end up paying anyway. The hospital would take a loss that is partially covered by Medicare and Medicaid, or by the hospital being a non-profit and hence paying no taxes.
Right now, my payments into this system support your parents and grandparents. I am happy to do this (in spite of the fact they seem to have neglected an important part of your upbringing). This is another form of spreading the risk, and it's what we do in a society (or at least, what we should do). I believe in this responsibility, but perhaps you don't.
Finally, you either don't understand the bill, or socialism, or both. In fact, my big problem with the bill is it is not socialist in any way; the government is not really taking on the role of insurer (which would be a socialist solution-government ownership of a nominally private enterprise). Rather, we will continue to have the same system of for-profit healthcare, with some government assistance. I personally think its unwise (if not immoral) to have a profit making enterprise supply what I consider to be a basic right. Again-we may differ on that score. At the end of the day-it will be a very unkind world that results from your vision-one in which I would not like even your children to live in.