Maggie Grove
July 1, 2022
Bloodsuckers
Big Business has hijacked your healthcare.
America’s healthcare system is broken.
Today, we spend more on healthcare than any other OECD nation – “nearly twice as much as the average country” – yet we “have the worst health outcomes across the 11 nations.” America boasts the highest chronic disease burden, the highest rates of obesity, avoidable deaths, infant mortality, and suicide, the most preventable hospitalizations, the longest average hospital stays, and the lowest life expectancy.
But our system doesn’t just fail at making Americans healthy… it also fails at making care accessible. 1-in-10 Americans still don’t have healthcare coverage, while 1-in-4 are “underinsured,” meaning they’re unable to access needed care because of the cost. Research finds that 40% of Americans skip necessary medical care because they couldn’t afford it, while 3-in-10 Americans can’t afford their prescriptions. 13 million Americans know a friend or family member who died because they couldn't afford medical care.
Our system is impractical and inhumane. And there’s a simple explanation for why it’s so messed up: because it isn't designed to provide Americans with the best care – it’s designed to provide predatory insurance corporations with the biggest profits.
America has something called a private, ‘for-profit’ healthcare system, which is highly unusual. The National Institutes of Health has described it as “quite peculiar by international standards,” while the Economist calls it “an outlier in the developed world.” What it means is this: instead of having a government agency coordinate and administer our healthcare (like every other OECD country), it’s left in the hands of private health insurance companies like UnitedHealthcare or Aetna. Instead of healthcare being a public service, it’s a product we buy from a business. Instead of all of us paying into a single national health account and everyone getting health insurance, our employers pay private insurance companies to cover their employees… at whatever rate and coverage level they see fit.
This uniquely American approach to healthcare has been a disaster for our country and people. When we treat healthcare as a business, Big Business does what they do best: try to make money off it. US health insurers have done this in many ways – from price-gouging, to denying claims and coverage, to funneling taxpayer dollars into new profit streams for their rich shareholders.
This is nuts. An entire industry that is, on its face, supposed to help care for Americans is actively incentivized to do the opposite. And the only reason it still exists is because Big Biz health insurers stand to lose a lot of money if we reform it… so they bribe our politicians not to bring it up, and try to sell us empty PR narratives to justify it and pacify us. Healthcare reform is notoriously referred to as “the third rail” of US politics – because if our politicians try to touch it, they’ll become an enemy of the insurance companies who hold incredible political influence in our country (more on this shortly).
We can’t keep accepting a healthcare system that only works for Big Business. A system that kills Americans, shows virtually zero regard for human dignity, and remains only because of the ongoing corruption between our political and business elites. But to reform it, we must first understand how it works and how it got this way, so we can make it work for us again.
Big Health Wants Your Money
The explosion of America’s for-profit healthcare system is not natural. It is the intentional product of a new economic philosophy that has infected the minds of our business elites for the past 40 years. The gospel of Profits Over People.
This gospel came from a few quack economists in the Reagan administration, who advanced a new business doctrine for America, the Shareholder Theory. It was evangelized by top Reagan economist Milton Friedman, described as "the most influential economist of our time." The theory itself has become "one of the most famous and widely cited academic business articles of all time.” The argument was this: that a company's shareholders (the people who own stock in it) are actually employees of that company. As a result, the company has a responsibility to them, their employees, first and foremost. That means maximizing profits first and foremost, because those profits result in stock returns for their shareholders. Friedman said that companies who didn’t single-mindedly pursue profit were “puppets of the intellectual forces that have been undermining our society.”
This philosophy was illogical and insane (I've covered the logic in more depth here) but it has remained the North Star for our business leaders and Big Health ever since. They liked the whole ‘enrich yourselves as much as possible without any concern for workers or society’ shtick. Big Health’s primary motivation became making money for themselves and their shareholders. Ensuring Americans have good care became a distant second.
So what has the healthcare industry’s prioritization of profits over people looked like?
For starters, a lot of price-gouging. In America, “average family premiums for employer-based health insurance have jumped 47% in the last decade,” while “deductibles have surged 68%.” Out-of-pocket costs rose 10% in 2021, and will grow at the same rate for the next five years. The same medications cost 2.56x more in America than in the average OECD country, and we “spend more on the top 20 most-prescribed medications than the rest of the world combined.” But none of this is justifiable, because our health insurers’ profits are as high as ever, and because their price hikes have massively outpaced inflation. Health insurers and drugmakers aren’t raising costs to offset losses; they’re doing this just because they can.
Their profit-obsession also leads them to deny claims and limit coverage. The Kaiser Family Foundation found that health insurers “denied nearly 1-in-5 in-network insurance claims in 2020, though it’s often not clear why.” America’s largest insurer, UnitedHealthcare, tried to introduce a new policy that would “retroactively deny emergency room claims” – meaning that even if they said you’d be covered for your ER visit, they can go back on that and charge you (they “permanently shelved” the plan after facing public backlash). As for denying coverage, ProPublica writes that
“The Affordable Care Act prohibits insurers from denying people coverage based on pre-existing health conditions or charging sick people more for individual or small group plans. But experts said patients’ personal information could still be used for marketing, and to assess risks and determine the prices of certain plans. And the Trump administration promoted short-term health plans, which do allow insurers to deny coverage to sick patients.”
And finally, their Profits Over People philosophy has led insurers to funnel their resources away from providing good care, and towards inflating their profit sheets. Big Health has spent over $600 billion on something called “stock buybacks” over the past 10 years. This is the practice of buying up their own stock in order to artificially inflate its value, and then selling it off to make a profit. It’s a “common practice among the country’s largest companies to reward shareholders while inflating the company’s earnings.” It’s also a practice that solely benefits the stockholders and ownership class, by allowing them to spend their company’s resources on profit-making instead of care-giving.
The Center for Public Integrity writes that “health insurance companies have been on a stock buyback binge.” In 2018 alone, UnitedHealthcare spent a whopping $3.2 billion on stock buybacks – “more than half of the company’s $5.9 billion in first-half net earnings.” The House Congressional Oversight committee found that “pharma companies spend billions more on stock buybacks than developing drugs.” Instead of spending their money on innovation or better wages or better benefits or better administration… Big Health spends it all on themselves. Per William Lazonick, professor and co-director of Center for Industrial Competitiveness:
“We pay higher premiums because companies are propping up their stock prices; the name of the game is just getting stock prices to go up.” Former Cigna Vice President Wendell Potter echoes, “I can’t recall a single time in my career in the health insurance industry – in 20 years of investor relations meetings – where there was a conversation about how we can really benefit the end user of our products… It was all about enhancing shareholder value.”
It should be clear by now that this is an industry obsessed with profit over all else, including human lives. And it cannot be overstated how much they stand to lose if America makes the shift to nonprofit healthcare…
Per Open Secrets, “every time a major US health care reform bill is discussed, industry giants have a lot to lose and a major incentive to fight back.” In 2019, health insurers made $35.7 billion in profits. The top-5 health insurance CEOs made a combined $117 million that year. Big Pharma is one of the most profitable industries in the US. The top-5 Pharma CEOs made a combined $155 million this year. They will lose pretty all of that if we switch to non-profit healthcare. With a public health agency running the show, we won’t need them as much anymore.
So, they’ll do whatever it takes to keep this twisted system and have crafted an insidious, two-pronged strategy to do so:
1) Heavily bribing our politicians not to reform it, and
2) Churning out elaborate, expensive PR narratives designed to deceive us
Let’s unpack their strategy, the harm it’s caused, and discuss the roadmap for setting things right.
No-Good, Very-Bad Manipulators
First, let’s discuss the cozy relationship between our health insurance and political elites.
In politics, there’s a (horrific) practice called “lobbying” – defined as seeking to influence a politician or public official on an issue. Lobbying organizations wine and dine politicians, make them under-the-table promises, and support their political careers in order to buy policy favors from them. Basically, lobbying = legalized bribery.
The Health sector has spent more money lobbying Congress than any other industry over the past 20 years – more than $10 billion. “In 2020 alone, the healthcare sector spent more than $623 million on lobbying, and spent upward of $331 million in the first half of 2021” in what’s been described as a “health-care lobbying frenzy.” The industry showers Washington in money in exchange for their silence about our demented healthcare system that they don’t want reformed. An industry insider says insurers have been "freaking out" over recent non-profit healthcare movements, "but the industry is mindful of optics, and largely lobbies behind the scenes."
The Health sector has also donated over $2 billion directly to politicians’ campaigns over the past 20 years, split evenly between Democrats and Republicans. Unsurprisingly, their donations go straight to the people who carry out their dirty work – “House Democrats who did not support the [health reform] bill in 2016 received 137% more money from health insurance companies during the 2016 election cycle than those who did.” In the Senate that number grew to 146%. It pays to play along, but it’s at our expense. As industry publication FierceHealthcare writes, “health insurers' political contributions are stalling the single-payer (nonprofit healthcare) movement.”
But it’s not just health insurers’ political bribery that’s undermining our healthcare – it’s also the strategic PR narratives they’ve weaponized to convince us this is all normal, healthy even. But that couldn’t be further from the truth.
Many of our politicians, as the mouthpieces for Big Health, say that American healthcare is the best in the world. John McCain said we have “the world’s best medical care.” Mitch McConnell calls ours “the finest healthcare system,” and John Boehner echoes that reform would “ruin the best health care delivery system in the world.” Mike Simpson waxes on about how “America is blessed with the best health care system in the world.” These leaders say reforming our system is unnecessary. And everyday Americans on the Right have begun to parrot this line; nearly seven-in-ten Republicans believed the US healthcare system is the best in the world. All of this despite the World Health Organization ranking our healthcare system 37th in the world.
And our political leaders say that not only is reforming healthcare unnecessary, they say it would be bad for us. They peddle two main PR narratives (lies) to make us believe this:
First, that nonprofit healthcare would kill innovation. They say that the greatest strength in America’s healthcare system is the innovation it produces – like advanced drugs and technologies. They say a competitive market spurs innovation, and without a profit-motive, the industry will fail to innovate and will fall behind the times. This is simply untrue.
“Pharmaceutical and healthcare companies receive substantial US government assistance in the form of publicly funded basic research and tax breaks.” We give them taxpayer dollars for Research & Development so they can innovate new products and services that will benefit the American people. From 2010-2016, the pharma industry received $80-100 billion in government funding for R&D (and it’s worth noting that they wildly abuse these funds, even more reason to take what they say with a grain of salt). This public funding for innovation would continue under a public healthcare system.
It’s also disingenuous to pretend there’s some binary between innovation and humane, universal care – like we can’t have both. Of course we can; we can keep the funding for research and development, but get rid of the profit streams for Big Business. And even if there was a binary, even if we could only choose innovation or universally accessible care… why are we choosing unfettered innovation over human lives? Isn’t innovation meant to serve us, not the other way around? Besides, innovation is important and all, but the form it takes in healthcare most benefits those at the top. America’s primary form of healthcare innovation has been the “use of expensive technologies, such as MRIs, and specialized procedures.” Healthcare futurist Reenita Das writes that in America today, “making innovations available to the masses globally at affordable costs is not made a priority objective.” How valuable is innovation when it isn’t available to the masses?
Their second narrative is that nonprofit healthcare is boogeyman socialism. But again, the message rings hollow.
America has a rich history of socializing programs (bringing them under a government agency) in order to protect American lives. Where we used to have independent militias that were unaffordable to many Americans, we now have a national military. Where we used to have for-contract firefighters, we now have government-run firefighting. People might disagree on which services the government should provide but pretending that it's unamerican for the government to offer socialized services in the first place is intellectually dishonest.
Bought-off politicians also pretend you’ll have crazy wait times for care, that you’ll never be able to see your preferred doctor. While wait times to see a specialist in America are a bit lower than other OECD countries, they aren’t any shorter for standard visits. And under most nonprofit healthcare proposals, there will no longer be “in-network” versus out-of-network doctors; all will be accessible. This could cause a bit of a backlog amongst the most popular physicians that everyone wants to see… but people can also be redirected to the much larger pool of providers available to them, thwarting the wait-time problem. Besides, Americans see doctors less frequently and have fewer doctors versus any OECD country, so clearly we have an access issue already.
There is no legitimacy in Big Health’s PR narratives – just deceptions designed to justify an unjustifiable system, one that only benefits the political and business elites who run it. But it isn’t enough to challenge their lies; we must come together to demand a better way…
There’s a Better Way
Private, for-profit healthcare clearly isn’t working for America. But it’s not enough to discuss how bad this system is; it’s equally important we recognize how good the alternative before us is. A public, nonprofit healthcare system.
Instead of getting coverage from our employers and the health insurers who sell it to them, we’d get it from a public health agency (with the goal being to actually take care of people instead of trying to profit off them). Instead of paying into our employer’s insurance plan, we’d pay into this national plan. This system is generally referred to as ‘single-payer’ healthcare, non-profit healthcare, or Medicare-for-All. I’ll use these terms interchangeably.
Whatever you want to call it, it’s objectively better for our economy, better for our people, and the only humane way to provide healthcare.
Despite what the propaganda machine says, nonprofit healthcare will be cheaper for our country. In a review of all 22 current single-payer proposals, the National Institute of Health found that 19 would “predict net-savings in the first year of program operation, and 20 predict net-savings over several years.” The cost of keeping our current system is an estimated $40 trillion over the next 10 years, versus $35 trillion under the single-payer system; “even a study by the (very-conservative) Koch-funded Mercatus Center estimates that Medicare for All would save around $2 trillion over a 10-year period.” How does that work?
Right now, there are millions of HR departments spread across millions of American companies administrating health insurance. These departments experience high turnover, and there is little expertise in how to navigate the complexities of healthcare. This is wildly inefficient, and a huge part of our cost problem; research shows that administrative complexity in healthcare costs the US $250 billion per year. Centralizing operations under one roof, under a single health agency with no profit motive, would make things a lot more efficient. The Congressional Budget Office found a single-payer system would “reduce administrative costs within the health care sector by approximately 1.8% of GDP” as “health care utilization would increase, but fewer resources would be used to administer those services.” The CBO ties this to the health of our larger economy, noting that “the decline of administrative expenses in the health care sector would free up productive resources for other sectors and ultimately increasing economywide productivity.”
Bad faith detractors will yell that the government is inherently corrupt and inefficient, and we can’t trust it to administer our healthcare effectively. But you know who are really corrupt and inefficient? Private health insurers! And Big Business generally. Have you ever tried interacting with privately-owned companies like Aetna or Comcast or United Airlines? They’re terrible. Plus, these detractors’ argument really falls apart when you realize they’re the ones actively sabotaging our government. By systematically dismantling and corrupting government agencies – and redirecting all our government funds away from them – they’re breaking the government on purpose and then saying it can’t work. We should not be listening to these people. We can absolutely install a healthy, efficient public health agency, and we can absolutely demand accountability from those overseeing it.
A single-payer system would also strengthen our economy by producing a healthier workforce, which boosts productivity. The sicker our workers are, and the less ability they have to see a doctor, the more they miss work. The Integrated Benefits Institute estimates that illness-related lost productivity costs employers $530 billion per year. The CBO writes that nonprofit healthcare “ultimately boosts labor productivity as people’s health outcomes improve.”
Even more importantly, a single-payer system would lower costs for everyday Americans and ease their financial burdens. Per the CBO, under a single-payer system, “households’ health insurance premiums would be eliminated, and their out-of-pocket costs would decline.” Working families (around $60K/year) would pay up to 14% less on their annual health care costs, which will in turn “boost households’ disposable incomes.”
Again, ignore the bad faith detractors who say that these cost savings will come at the expense of good care. A single-payer system would inevitably be easier to navigate for consumers – “without premiums, cost-sharing requirements, or insurer-specific provider networks, individuals and families would also find interacting with the health care system significantly less administratively complex,” the CBO writes. And despite propaganda that you’ll lose access to your preferred doctor, “all people will be able to choose their care providers,” because every provider will be in-network. “Many insurers provide enrollees with either an exclusive or preferred network of health care providers and only reimburse for those providers’ services… Under a single-payer approach, nearly all health care providers would be covered, offering substantially broader choices for many patients.”
But most importantly, our country would finally honor Americans’ basic right to health.
We don’t have true universal healthcare today. 1-in-10 Americans don't have health insurance. Among those who are insured, many can’t afford or access good care. Under single-payer, “all members of the eligible population would be insured or would become insured when seeking to access health care services.” And “with broad benefits and no out-of-pocket costs at the point of service, access to care would increase.” Our politicians say that anyone today can get healthcare, and that’s technically true… but it’s not true practically-speaking when that person’s only option is a $700/month COBRA plan they can’t afford (or an ER visit that bankrupts them).
And single-payer healthcare would finally set right one of the greatest human injustices in our healthcare system: that when you lose your job, you also lose your healthcare coverage. America’s employer-sponsored healthcare system means that if you lose your job, you lose your healthcare too. Ten million Americans lost their jobs in the COVID downturn, and then lost their healthcare on top of it. During a health pandemic. This is senseless. Under single-payer, “coverage would also be continuous: people would not lose coverage or need to change coverage when their jobs, family status, income, state of residence, or age change.” This would also empower America’s workforce more broadly, because they’re no longer held hostage to a bad job in order to keep their health coverage. Countless workers are staying in bad jobs today because they’re sick or their wife is pregnant and they can’t afford to lose their insurance. Not being bound to an employer for their healthcare gives them greater freedom in their careers. This is what it looks like to put people over profits.
Fighting For Something Better
Human rights lawyer Mary Gerisch writes for the American Bar Association,
“In the United States, we cannot enjoy the right to healthcare. Our country has a system designed to deny, not support, the right to health. The United States does not really have a health care system, only a health insurance system. Our government champions human rights around the world, insisting that other countries protect human rights, even imposing sanctions for a failure to do so. Our government is not as robust in protecting rights at home.”
We don’t have a system that works for all Americans, either in theory or in practice. But the barrier to creating a better system isn’t that it’s hard – “the barrier to universal healthcare is not economic but political.” We can continue to let our business and political elites sabotage the health and wellbeing of an entire country – by stalling drug price regulation, sabotaging the Public Option, and straight-up lying to us – or we can finally hold the industry and its enablers accountable. As the AMA Journal of Ethics writes, “we will not solve our health care crisis as long as private insurance plays a dominant role.”
70% of us support Medicare-for-All, as an “increasing share of Americans favor a single government program to provide health care coverage.” Majorities of both Democrats and Republicans “agree it is the federal government’s responsibility to provide quality healthcare for all Americans.” And many of the Americans who don’t support it are held back by a fear of change, a very understandable feeling that’s been stoked by Big Health’s many PR narratives.
Reforming healthcare must be a top priority in both our political discourse and in upcoming elections. It isn’t just an economic issue – it’s a cultural one. Despite being the richest nation on the planet and having the resources to easily provide care for all citizens, we are actively choosing not to. We are choosing to leave behind our neighbors and siblings and friends, all because our politicians are too apathetic to stand up to Big Business and do some actual hard work for once. But this isn’t just about Big Business; it’s about us too. If we allow and support the current system then we too are choosing to ruthlessly prioritize profit over honoring basic human rights.
There are many ways we can both rein in our corrupt health insurers and transition towards a system that works for all of us. First, we must reject the narrative that the transition to a single-payer system is too difficult. Detractors say that “single-payer reform legislation has not succeeded so far because it is not a realistic or achievable goal and that smaller reforms with a greater likelihood of adoption are preferable." However, evidence shows that other countries “have had successful transitions to systems that provide universal coverage or have nationalized health care financing through single, large, coordinated legislative efforts.” We must demand Congress begin framing and formalizing our options, creating our transition plan and its specifics, and then take the steps to implement it. This is their literal job. Any members of Congress who are too lazy to roll up their sleeves should be voted out. Countless other countries that have installed this system; it’s not rocket-science.
Beyond the actual transition, we can also start reining in the industry’s corruption today. We can pass legislation to curtail stock buybacks and lobbying, we can regulate drug prices, we can enforce oversight of our taxpayer R&D funds. There are countless previous bills on these very things that have been killed by the industry; it’s as simple as resurrecting them.
To quote Lilo and Stitch, “Ohana means family. And family means nobody gets left behind or forgotten.” The only real question that remains before us is: do we care enough for our human family to fight for them? To make sure nobody gets left behind or forgotten? I hope we do.