Everything you every wanted to know about why our “healthcare” (i.e., medical services delivery) system doesn’t work!

by faithgibson on September 5, 2018

in Economic Issue$

 Tell-A-Vision for the 21st Century

Written and first published in 2009, while the ACA was being being argued about in Congress. It’s original title was:


“The Debate on Health Care Policy Reform ~ an exercise in pseudo-journalism”.

I am reposting the original 10,000 word document in small bits. My best guess is 10 installments, including the addendum and citations.

Dateline: June 21, 2009
Full document as a PDF ~ print or send to your Kindle of read on a smart phone

See Table of Contents & Links to each specific topics  (separate page)

Five-Point Wrap Up:
The ABCs of a Political Action Plan
Excerpts from background materials:

Short-cut to: part 2part 3part 4part 5part 6Wrap-up, references & background material

The American healthcare system is failing all of us in one-way or another.

In 2007 we spent an average of $7,900 on health care for every person living in the US, or 16.4% of our total Gross Domestic Product (GDP). Every other developed country spent far less per person, had better outcomes and devotes only 9% to 12% its GDP to healthcare.

As an insider in the field, I’m all too familiar with the problems of the current system – lack of access and poor quality for the uninsured, unproductive expense, procedure-intensive care and over-treatment for the insured. I also know that a wealth of definitive information is just waiting for someone to connect up the dots. This is the only way the public and the policy-makers can understand what makes our current system so dysfunction and why doing more of the same won’t fix it.

An exercise in Pseudo-Journalism

So far this week I’ve heard a dozen different speeches and interviews on the pros and cons of national health insurance. According to the political pundits, the next few weeks are critical to the success or failure of the Administration’s plan for legislative reform.

Media coverage is plentiful and includes persons of great influence: no less than President Obama himself, elected officials, talk-show hosts, and healthcare experts. Unfortunately, this mile-wide coverage is only 1/8th of an inch deep, with the most vital facts consistently absent from the public discourse. This leaves citizens with no reliable source for factual information of the quality necessary to make important personal or political decisions.

“When you don’t know where you’re going, every road takes you there.”  

Policy decisions this important should be the subject of hard-hitting investigative journalism. But the corporate structure of newspaper journalism is so tied to advertising revenue that controversial topics are an economic liability. Given the long lead-time in the publishing business, books about current events rarely make it into print while the topic is still hot. For instance, the present crop of books on health care reform was published during the Bush administration.

What we need is the quality and quantity of investigative journalism that would allow us to formulate a rational national policy. What we are getting instead is pseudo-journalism — what looks like a good faith effort to inform the electorate is little more than infotainment or dumbed-down journalism. While there are lots of reporters, most of them are failing to do their home work or pulling their punches for some unstated reason.

The Information Gap


Many people believe they already know all they need to about health insurance reform. Public dissatisfaction is widespread, many businesses can no longer afford to cover their employees, groups formerly opposed to reform have grudgingly admitted its necessity.

On the political side of the equation, and the administration has a voting majority in the Congress that supports incremental reform. People expect these favorable conditions to generate an overwhelming political momentum that will prevail where earlier attempts by Presidents Roosevelt, Truman, Kennedy, Carter and Clinton all failed.

But the political and financial matrix of organized medicine, investor-owned corporate medicine, lobbies for Big Pharma and 1,300 private health insurance companies have hired the same PR firm that produced the Swift Boat ads during the 2004 presidential campaign. Sooner or latter, the gloves will come off and the fight will get dirty.

None of the usual sources of public discourse, including the administration, have been able (or willing) to provide factually-rich background information on health care policy reform. For ardent supporters, this is not such a problem. But for many others, the gap in understanding will be left to the special interest groups to fill.

This makes us, as a country, vulnerable to fear mongering, as few people have the necessary facts to correct a campaign of misinformation or disinformation funded by special interest groups and politicians who oppose health care reform. Confusion is the surest way to sabotage democracy.

Failure is not an option

Our current system of highly medicalized health care is unsustainable, not to mention unsatisfactory and increasingly unstable. A 2009 PBS program on the national debt by calculated that current levels of healthcare spending had already outstripped the cost of both foreign the wars (Afghanistan and Iraq) and is projected to be greater than the entire GDP by 2050.

This level of unbridled spending is stealing money from everything else we hold near and dear, sucking all the economic oxygen out of efforts to prevent global warming, improve our schools, modernize our public transportation system or develop the infrastructure needed to respond to a natural disaster, pandemic of H1N1 flu or an act of bio-terrorism.

Were this profoundly dysfunctional system forced on us by a foreign government, Americans would rise up in rebellion. There’d be marching in the streets in protest, willing to go do anything necessary to get out from under its tyrannical grip.

In a recent PBS interview Wendell Potter, retired head of CIGNA’s corporate communication department for 15 years (4th largest health insurance company in the US), acknowledged that unethical practices and skewed priorities are the industry norm.

As a former insider, he identified the preoccupation of the health insurance industry to mirror those of Wall Street, with its focus on ever-rising quarterly profits. CEOs truly believe their first responsibility is to shareholders and not to the people they insure. [Bill Moyer’s Journal – PBS ~ 07-10-2009].

In testimony before the US Senate Commerce Committee this summer (2009), Mr. Potter said:

“Recently it became abundantly clear to me that the industry’s charm offensive, which is the most visible part of a duplicitous and well-financed PR and lobbying campaign, may well shape reform more in ways that benefit Wall Street far more than average Americans.

The industry and its backers are using fear tactics, as they did in 1994, to tar a transparent and accountable public health care option as “government-run health care”, but what we have today Mr. Chairman, is Wall Street-run health care that has proven itself an untrustworthy partner to its customers, doctors and hospital who deliver care and to the state and federal governments who attempt to regulate it.”

While reforming health insurance policy is vitally important, particular the issue of pre-existing conditions and rescission (dropping insured people when they are diagnosed with an illness or need surgery), it is just one aspect of a much bigger problem.

Whether we have a not-for-profit public insurance, or for-profit private system or a blend of both, how we pay for health care is less important than what we are paying for – whether the medical treatment is genuinely needed and/or effective. If not, no newly configured source of payment can make the current system affordable. It would be like pouring water into a sieve – no matter how much or how fast it’s poured, you still can’t make it hold water. It will be the ultimate bitter disappointment to us all to discover that reform legislation failed to fix the underlying problem.

National Healthcare Policy 2009: 

If effective health care policy reform is to prevail in 2009, it must win against the same special interest groups that have always opposed these changes — organized medicine, investor-owned corporate medicine, Big Pharma, 1,300 health insurance lobbyists who are spending 1.3 million a day, plus the US Chamber of Commerce. That is a most daunting task in light of political history and the century long dominance of the health care system by organized medicine. Like the proverbial 800-pound gorilla, they are used to getting their way.

For health care reform to happen, people need to know the facts. Without an informed electorate, the Administration and the Congress would more likely convince the NRA to go along with a ban on assault weapons or Wall Street bankers to voluntarily give up executive bonuses.

Since 1920, a plan for universal health insurance has been introduced five times by presidents or the US Congress and five times it has been killed by organized medicine and its economic allies. They expect to use this same wellspring of political might and money to stop the 2009 legislative proposal for a public or non-profit health insurance even though a plurality of Americans support.

The AMA and National Health Insurance:

As a private corporation, the AMA’s website describes itself as “one of the biggest and wealthiest lobbies” in the US.

With the extensive political and economic resources available to the AMA, its ability to promote, introduce, control or defeat government policy or legislation is unparalleled.

As of 2007, the AMA had a national staff of 1,121 full-time employees. Sale of advertisements in the Journal of the American Medical Association (JAMA) and the other ten AMA-owned professional journals topped $289 million. In 2007 the AMA enjoyed a net income of $50.3 million and income growth of 99.6%.

In addition to advertising revenue and subscriptions to professional journals from libraries and institutions, the AMA also sells malpractice insurance, collects membership fees from its 240,000 MD-members and receives grants money from its many corporate sponsors. It has recently expanded its publishing business to include on-line data services for MDs and to gather, archive and then sell our statistical data on the nature, frequency and cost of health services and medical practices to corporations.

Given this depth and breadth of resources, it’s no surprise that the Association has achieved its insurance-related legislative goals 95% of the time – 1920, 1933, 1948, 1976 and 1993. Equally important, they got a self-serving provision inserted into the only major piece of legislation in the last hundred years to pass in spite its opposition – the 1965 Medicare bill for the aged, disabled and medically indigent. At the AMA’s insistence, a cost plus-fee-for-service reimbursement scheme was added to Medicare, thereby turning a potential defeat into an economic bonanza for medicine as a business.

Due to AMA’s influence over the Medicare legislation, medical providers retained their unbridled control over all treatment decisions – the number and kinds of tests ordered, drugs prescribed, medical and surgical procedures performed. This gave physicians and hospitals absolutely no reason to use cost-effective practices, since they self-defined the cost of care and billed Medicare for whatever amount they considered ‘customary’, plus setting professional fees for their services.

Cost-plus-fees is a straightforward economic incentive to do more tests and procedures (i.e., billable units), and refer more patients to specialists, who are paid nearly twice as much as primary care providers. Since this costly Medicare provision was first passed in 1965, it has been modified to reign in its most egregious excesses, but not nearly enough to keep the mounting number of retired baby-boomers from crashing the system. Unless corrected, the inevitable result will be insolvency.

Another contemporary example of what happens when health policy and legislation are controlled by corporate medicine and big pharma is the 2003 prescription drug bill. This legislation explicitly prohibits Medicare-Medicaid administrators from negotiating drugs prices –something the US military and Veterans Administration has always done — even though these purchases are being paid for by US tax dollars. Not even the Pentagon has this sweet of a deal.

A Real-World Study in Contrast: 

According to the US Bureau of Labor Statistics historical records, General Motors was the country’s largest employer during the 1960s and 1970s, but sometime during the mid-1980s, “health care”, or more properly described and named,  medical services delivery system took over as our largest industry.

By 1993, the cost of health insurance for GM’s employees added $700 to the price of every car and truck. In 2005, GM’s yearly spending on health care was $5.3 billion for its 1.1 million workers, families and retirees – slightly more than $5,000 for every GM-insured person. This added $1,525 to the price of every vehicle the company builds in the United States. GM’s largest competitor, Toyota, spends only $97 on workers’ healthcare for vehicles built in Japan [A Second Opinion; Arnold Relman, MD].

As could be predicted, the healthcare industry is thriving. With a projected 22% increase in its work force over the next decade, health care is one of the few growth industries in the US, along with banking and financial services. Meanwhile, GM was grateful for a government bailout in the fall of 2008 and was forced into bankruptcy by May of 2009.

What American should (but don’t) know about health care in the US:

Exactly what kind of ‘status quo’ is this medical dynasty fighting so hard to preserve and protect?

Certainly not one that is either cheaper or safer!


The Facts ~ Quality of Care: 

The US spends 50% more than any other country in the world, and yet we rank a lowly 19th in preventable mortalityAn estimated 100,000 Americans die prematurely each year due to inadequate or inappropriate care; an additional 100,000 people die from medical errors & hospital-acquired infections, and 20,000 more men, women and children die needlessly because they didn’t have health insurance – that’s nearly a quarter of a million unnecessary deaths.

On September 11th, 2001, the loss of 3,000 American lives was seen as a tragedy of such magnitude that we went to war to be sure it didn’t happen again. However, every year we quietly accept a death toll from a broken health care system that is 73 times greater than the 9-11 disaster. In the eight and half years since, almost 2 million Americans –1,870,000 to be exact — have died from toxic healthcare system syndrome.

Unfortunately, one of those fatalities was a highly-trained and experienced professional midwife (Donna Driscoll, LM), mentor and close friend of mine for 30 years. My colleague was the victim of a treatable condition that made health insurance unavailable to her. Without access to the necessary medical care until it was too late, she died tragically and unnecessarily, one more statistic in the collateral damage of a health care system that is neither healthy nor caring.

The US vs. Other Developed Countries: 

Compared to Australia, Canada, Germany, New Zealand and the UK, the United States ranks last, or next-to-last, on quality of care, access to care, efficiency, equity, and healthy lives. Measuring 37 different parameters, with a possible 100 points, the U.S. scored only 65. Its overall performance did not improve from 2006 to 2008.

The Commonwealth Fund’s National Scorecard on health care performance for 2008 found “disturbing” evidence that the health system is performing worse than two years ago in nearly every category measured. Authors of the National Scorecard used words such as “squander” to describe an unconscionable level of wasteful care, inefficient systems, failure to treat preventable conditions and unproductive spending, especially on administrative costs. Poor quality included:

v     Avoidable hospitalizations

v     Inappropriate, wasteful, or fragmented care

v     Disproportionately expensive administrative costs

v     Illogical variations in quality and cost of treatments

v     Failure to make appropriate use of new information technology

“Without a new national policy, millions more U.S. residents are on a path to becoming uninsured or under-insured. … Rising costs put families, businesses, and public budgets under stress, pulling down living standards for middle as well as low-income families”. [National Scorecard – 2008]

They estimated that lowering administrative costs for insurance could save up to $100 billion a year. According to the National Scorecard, if the U.S. health system achieved the benchmark levels of performance identified in other cost-effective systems, it would produce measurable benefits in terms of health, patient experiences, and money saved. For example:

v     100,000 fewer people would die from causes that could have been prevented by good care.

v     Save an estimated $102 billion per year if the US achieved the levels of the best performing countries.

v     Save $51 billion a year by lowering administrative costs of health insurances to the level found in Germany which, like the U.S., has a blended public–private health system.

v     Save at least $12 billion a year by reducing readmissions or reducing hospitalizations for preventable conditions for the Medicare patients

The failure to provide appropriate form of maternity care for healthy childbearing women and instead imposing an unproductively expensive and highly medicalized model provided by surgically-trained obstetrical specialists

The economic impact of maternity care for healthy women with normal pregnancies (70-80% of total childbearing population) accounts for 25% of our national health care budget or 4% of the GDPMaternity care is the #1 occasion for hospitalization and the largest category of expense for both private insurers and the federal Medicaid programs. Hospital charges for mothers and babies far exceed any other single condition. [Milbank Report: Evidence-Based Maternity Care, 2008] This money mainly pays for the routine use of obstetrical intervention on healthy women.

Recent surveys of birth practices in the U.S. identified a 99% medicalization rate, with an average of seven medical and surgical interventions per new mother. For seven out of new mothers, childbirth included a major surgical procedure – episiotomy, instrumental delivery or Cesarean section. [Listening to Mothers Survey, 2002, 2006, www.ChildbirthConnection.org] The US is currently spending 3% of its total GDP to unnecessarily medicalize a healthy population, while those with life-threatening medical needs continue to go untreated.

Cesarean surgery is the number one operating room procedure in American hospitals – 1.3 million a year – equal to the number of students that graduate from American colleges every year. Today, the Cesarean surgery rate in the US is 31.4% — triple the evidence-based rate — with no additional reduction in either maternal or newborn mortality.

Because of this or in spite of it, maternal death rates in the U.S. were higher than in 33 other countries in 2005 and have risen the last 3 years in a row. In 1977, the maternal mortality rate (MMR) was 10 deaths per 100,000; in 2007, MMR was 14. Despite the increase in maternal deaths, many in the obstetrical profession are promoting scheduled elective C-sections as the new standard of care for healthy women. Elective Cesarean delivery is associated with a 3.5 fold increase in maternal mortality[“Postpartum Maternal Mortality and Cesarean Delivery” Catherine Deneux-Tharaux, MD, MPH, et al; 2006]

Work-n-progress ~ To be continued.

In the meantime, here are links that will take you to the originally published version (format somewhat harder to read) but information is the same.

Full document as a PDF ~ print or send to your Kindle of read on a smart phone

See Table of Contents & Links to each specific topics  (separate page)

Five-Point Wrap Up:
The ABCs of a Political Action Plan
Excerpts from background materials:

Short-cut to: part 2part 3part 4part 5part 6Wrap-up, references & background material

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