Tuesday, February 23, 2010

Misdirected Fire

“Ready on the firing line, lock and load, fire, aim.”

WalMart, a company which my wife despises so thoroughly that she won’t go into it, buys goods from others and sells those goods in their stores. WalMart is the middleman in this picture. Its selling prices are determined by the prices charged by the people making the goods, and a large part of WalMart’s success has been its ability to find and create places to buy goods at low prices. The result is low prices at the consumer level.

Health insurance companies are the WalMart of the health care system; they buy health care from doctors, hospitals, pharmaceutical companies and a host of other “providers” and they sell that health care to people who are sick. They do not generate health care costs; the companies that they buy from do. Their pricing is, of necessity, determined by the prices charged by the firms that supply health care for them to sell.

I was initially all for health care reform; in fact it was his rhetoric on that topic that, in part, led me to vote for Barack Obama. But the more this inane and illogical “debate” has gone on, and the more pandering that has gone into the makeup of it, the more tepid my support has become.

As a procedure for creating his “health care reform” Obama first sat down with the pharmaceutical industry and made a deal with them that if they would not spend money attacking his reform plan he would not reduce pricing on their products. His second step was to sit down with the hospital industry and make the same deal. His third step was to attack the health insurance industry as his version of the “evil empire” and base his reform package on driving their prices and profits downward.

Make deals to support the pricing and profits of the industries that create health care costs, and attack and demonize the industry that serves as a middleman, paying health care costs and passing them to the consumer.

Finally, having made deals that assure no restraint on what insurance companies are paying out, Obama announces his intention to regulate prices that insurance companies will be allowed to charge in premiums.

Obama to the pharmaceutical industry,
spacer“I will not challenge your pricing or profitability.”
Obama to the hospital industry,
spacer“I will not challenge your pricing or profitability.”
Obama to the health insurance industry,
spacer“I am going to gut you like a dead fish.”

During the oil crisis the “evil empire” was oil companies and their “filthy and excessive profits.” Except that after the dust settled it turned out they had not been making excessive profits at all. The culprits all along were the speculative commodity traders and the nations from whose ground the oil was being extracted. The oil companies were the politically easy target; the visible enemy which was easy for the media to demonize. They were not the problem, and all of the spewing of hatred aimed at them during the crisis did nothing to solve the problem

Today’s “evil empire” is health insurance, and the problem will grow worse while we continue this childish war of words against the wrong target. The correct target is the entire "for profit model" of health care delivery.

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