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TechnoratiObama's False Friends of Health Reform
I'm hoping President Obama realizes that some of the folks who've been currying favor with him are not, as they claim, bringing "solutions" to the health care reform table. Most Americans -- especially those who voted for him -- want nothing to do with the kind of "reforms" they are peddling.
If you watched the president's televised Q&A on ABC last Wednesday night, you probably noticed that one of the people in the audience was Ron Williams, the chairman and CEO of Aetna, Inc., the nation's third largest health insurer, and currently one of the most profitable. But there are a few things that you should know about Williams.
Back in the '90s, Aetna set out on an acquisition binge in its quest to become the biggest health insurer in the country. It got there by the end of the decade after spending billion of dollars for several competitors. By 1999 it had 21 million health plan members, the most any insurer had ever had at the time.
But, as often happens after buying sprees, Aetna soon came down with a bad case of buyers' remorse. As it turned out, some of the customers it had paid top price for were not as profitable as Wall Street analysts and the big institutional investors who owned most of Aetna's stock expected. When they took a closer look at what Aetna had bought, investors started deserting the company in droves. As a result, the company found its stock price in a free fall.
As the Wall Street Journal reported on August 13, 2004, Aetna's pretax profits as a percentage of revenues began falling dramatically after peaking at about 12 percent in 1998. By 2001 the company was a basket case as far as Wall Street was concerned. It had to do something, and fast.
Probably the most important thing it did to turn itself around was recruit Williams from rival WellPoint, the ambitious for-profit company that was gobbling up Blue Cross and Blue Shield plans from coast to coast.
As the Journal reported, Williams promptly ordered a $20 million revamp of Aetna's data systems. Health care analyst Joshua Raskin told the Journal that the new system that emerged from that investment, which Aetna dubbed the Executive Management Information System (EMIS for short), was "the single largest driver of the Aetna turnaround." Why? Because it helped Aetna "identify and dump unprofitable corporate accounts." How did it do the dumping? By jacking up premiums to unaffordable levels.
By the time the dumping -- or purging, as it is frequently called in the industry -- was done, Aetna had shed eight million of its 21 million members. It shrank so much that by the time it emerged from the Ron Williams-led turnaround, it had fewer members than when the company started out on its multi-billion dollar buying binge.
While Aetna was shedding those eight million men, women and children, by the way, it also reportedly shed 15,000 of its employees. Wall Street likes it when insurers dump employees, too, because the workers who don't get the ax have to assume the responsibilities of their laid-off colleagues. That theoretically boosts productivity, which Wall Street likes. And reducing the payroll leaves more money for profits.
The health insurance industry and its allies are working hard right now to convince you that the creation of a public insurance option would put a government bureaucrat between you and your doctor. As the 2004 Wall Street Journal article makes it clear, however, EMIS was at its heart a system that put corporate bureaucrats between people and their doctors. Here's what it saId:
Mr. Williams says EMIS helps him ferret out creeping costs so Aetna can react quickly. Sitting in his first-floor office in Hartford overlooking the Aetna parking lot, he taps on his keyboard to see whether some of the health insurer's members are visiting emergency rooms too much for nonemergency reasons, such as for the flu or a sprained ankle.
Did that send a chill up your spine like it did mine? And know this, if Aetna's CEO can keep an eye on your trips to the doctor, so can the CEOs of all the other big insurers.
The insurance industry claims that this time it really and truly supports legislation to reduce the number of people without insurance, that they've changed so much since 1994 -- when they said the same thing but did everything they could behind the scenes to kill reform -- that you can and should believe them now.
The next time you hear someone from the industry talking about how much they are committed to reform, remember that just a few years ago, the CEO of one of the biggest health insurers was the mastermind behind a business strategy that cost thousands of workers their jobs and millions of other people their insurance coverage. That's the real "solution" the industry is bringing to the table -- and the kind of reform Wall Street can really get behind.
Ron Williams has been richly rewarded by Aetna's board of directors for leading the company back to a level of profitability suitable to Wall Street. They tapped him to succeed Jack Rowe as CEO when Rowe retired in 2006. And they rewarded him with compensation totaling nearly $65 million over the past two years.
(Rowe, by the way, was paid $22.2 million in 2005, his last full year as CEO. He played a big role in hawking the high-deductible plans that Aetna and the other big insurers are now trying to push us all into. He claimed that Americans enrolled in managed care plans have been too sheltered from the real costs of health care and that we need to have more "skin in the game," by which he meant that we should have to pay a lot more out of our own pockets when we go to the doctor and pick up our prescriptions, even if we have health insurance. The median family income in the United States is just $50,000, which means that most of us already have a lot more skin in the game than Dr. Rowe and Ron Williams will ever need to.)
The insurance industry's two biggest lobbying groups -- America's Health Insurance Plans (AHIP) and the Blue Cross and Blue Shield Association of America -- warned members of Congress in a joint letter a few days ago that the creation of a public insurance option would unravel the country's employer-based system.
As they say where I come from, that dog won't hunt.
It is the insurance company executives -- in their never-ending quest to meet Wall Street's profit expectations -- who are doing the unraveling by purging employers whose workers have the audacity to file claims when they get sick or injured.
A final point about Ron Williams: Not only are he and his fellow CEOs trying to kill the idea of a public health insurance option -- a central part of candidate Obama's health care proposal -- but he is the leading advocate of an idea Obama rejected and which differentiated his proposal from Hillary Clinton's -- the imposition on all of us of an "individual mandate." Many insurance executives were wary of such a mandate because they don't like the government mandating anything, especially those pesky state mandates that force them to include certain benefits in the policies they sell. Advocates of an individual mandate eventually brought the skeptics, including many of AHIP's board members, around to their way thinking by persuading them that insurers could make billions more in profits if every American had to buy an insurance policy from them. Now you know the real reason behind AHIP's shift from neutrality on the issue to full-fledged support. It's all about the money.
13 Comments so far
Show AllAetna again? If my memory serves me right, it was Hillary
Clinton who brought in Aetna Head Honcho Zoe Baird to oversee
the Health-Care program that Bubba Clinton was bringing in
to the table. Is Obama in bed with Hillary again?
Time for us to wise up to this game of doublecrossers..
Why was Aetna in the Obama program again since they were also
in the game with Hillary??
What is thie bogus "health reform" really about? It's about Ron Williams and other fascists coming after the modest monies of "the common people," small amounts per person but a substantial amount overall.
Why are Williams and some of his cronies interested in this historically ignored, relatively small, by big money standards at least, cache of money?
Because it's getting hard to turn a buck in America in the traditional ways.
Things are not made anymore to any substantial extent in America. And the market for most services is saturated and more or less monopolized. More and more, the only way to make new money in America is by stealing from some group of saps. So in light of this, the health insurance industry has paid off Obama to promote the stealing of common people's money for their illegal industry.
Although there are a few other elements, this is the number one thing the "health reform" is all about. The "public option" is actually largely a side show. It is possible there will be a mandate and no public option at all. If anything at all passes, it will include a mandate. The Republicans are obviously not going to stand against something that is partial slavery for lower income people. That should be obvious.
Also, any "public option" will not be a real, true public option. It won't have even 1/4 of the bargaining power that single payer programmes in the reputable countries have. It will not be able to more than marginally control costs. The amount of cost control potential any American style "public option" will contain will simply be inadequate. In fact, costs need to be reduced immediately, so even heavy cost control going forward would not be enough. We went over that waterfall already; the economy is now drowning in super high health costs.
To see exactly how and why any "public option" will either be dead on arrival or will fail within a few short years, read any good progressive internet site on the subject.
The public option is also intended to put off for decades the adoption of single payer in the US, which is of course the only reform that can actually work to repair the current disaster of a system.
If you have a twisted sense of humor, you can steal a quick chuckle about this. If this "mandate" passes, you will have the spectacle of millions of poor white folks who can not in 2009 afford ANY health insurance hiding out from being partly owned as a wage slave by "that black man in the White House". Trying to avoid becoming homeless due to the Government of a black man. Yikes. Laugh out Loud.
But seriously, this is not really funny, because Obama wants to make all lower income people slaves to the health insurance industry, regardless of what color they are.
With today's (loss of) jobs report showing that the economy continues to slide into a depression, and with just the discussion of making people financial slaves to the health insurance industry, Obama is rapidly becoming someone who will not find it possible to be reelected. Republicans are licking their chops as they watch Obama slide into the cess pool of depression and doomed to fail health proposals.
What a fool Obama is, thinking that being bipartisan at this point in history could possibly help him. What an idiot, in fact.
Well said. These corporate leaches never tire of finding another place on our emaciated masses to draw blood.
All Obama has to do is stand up and say “I will not sign a bill that does not have a sound public option, this is all the reform we need”. The congressional dems could cover their butts. Unfortunately the stupid people who voted for Obama missed the most important statement in the whole campaign. “I am a uniter”. Two uniters in a row, talk about expecting different results. When are you going to elect a divider, someone, who carries a double edge sword, one side to cut the wheat and one side to cut the chaff? If it looks like a duck and quacks like a duck, it’s probably Obama, aflac.
"I'm hoping President Obama realizes that some of the folks who've been currying favor with him are not, as they claim, bringing "solutions" to the health care reform table. "
I'm hoping that Americans realize that Obama is not, as he claims, bringing "solutions" to health care reform. I'm hoping that Americans realize that Obama and the vast majority politicians Republican and Democrat are not, as the claim, bringing "solutions" to anything, except if these "solutions" benefit their corporate masters. Wake up, America!! We're continually screwed by those in power!!!
'Meet the new boss. Same as the old boss.' - Pete Townshend
People must wake up. I am disappointed that so many cannot see the scam. The way to get affordable healthcare is for doctors to stop being stooges or leeches and start treating causes of disease. They now, for the most part, treat symptoms. No one tries to find out why blood pressure is up, why Johnny is making everybody nuts, why can't you digest your food etc., etc. Just pop a pill, alter your biochemistry, and all is well. Until you get really really sick and need massive medical inputs. This, too, is a plan.
Search functional medicine or nutritional medicine. Dr. Mark Hyman testified before Ted Kennedy's committee. He said, at his clinic (can't remember the name), they treated ADHD kids with diet, allergy testing, and supplements. They got better results and the cost was down by 80%!!
Potter sez: "...(AHIP) and the Blue Cross and Blue Shield Association of America warned members of Congress in a joint letter a few days ago that the creation of a public insurance option would unravel the country's employer-based system."
***
They say that as if it's a bad thing.
Aetna is still doing well selling insurance and not delivering care. To say that the "solution" is to mandate the purchase of insurance overlooks the fact that the insurers are already making lots of money off their insurance business. They are losing money on their "investments" and because half a million people are losing their jobs every month while Washington obsesses over how to bail out FIRE execs.
From an earlier post after doing some research:
Aetna was doing well in the first half of 2008 due to rising membership numbers and a raise in premiums. Fiercehealthcare, a site for health care execs speaks glowingly of Aetna's ability to pay out as little as possible in actual medical costs saying, "Clearly, one factor was its respectable medical benefit ratio, i.e. the percentage of each dollar of premium it spends on healthcare costs. The ratio was 81.9 percent this quarter..."
Sadly, the second half of 2008 showed Aetna's profits sliding badly. Their 4th quarter showed another 57% drop DUE TO INVESTMENT LOSSES. UnitedHealth Group and Wellpoint also had a drop in profits.
Aetna had increased its medical enrollment by 848,000 and had 17.7 million customers, but lost money on it's "investments." So, despite rising enrollment, rising premiums and successfully not paying for care, Aetna lost money in the casino. It's not that health insurance isn't profitable. It is. It's not that they can't make money without capturing the uninsured. If government mandates buying insurance, we will be helping to bail out the insurance industry's investment portfolio. Maybe we deserve to know what is in it and why.
"Clearly, one factor was its respectable Clearly, one factor was its respectable medical benefit ratio, i.e. the percentage of each dollar of premium it spends on healthcare costs. The ratio was 81.9 percent this quarter..."
Medical Benefit Ratio equals Reptilian Corporate speak for "How much milk is that cow giving?".
A firing squad is too good for these F.I.R.E. executives.
Have you noticed that NOBODY talks about a progressive insurance rate based on your income? Oh, no, that would be punitive. It would also pay cradle to grave medical and dental along with funding wellness exercise clubs for everyone. No one who makes less than $50,000 a year should pay for health insurance/care. As you you go up the ladder of compensation, you pay more but never exceed a certain percentage ( 20% max for Billy goat Gates and his peers ). Twenty percent! That's highway robbery, you say? Well that's LESS than what I'm paying RIGHT NOW and I make LESS than $40,000 a year and am a retired government air traffic controller/ scientist with a fixed benefit pension. So if I have to do it, you rich bastards quit your bitching.
Bernie Sanders, if you read this and still possess some integrity, stop with the bullshit about cloture on the health bill filibuster. Scream for a public single payer with progressive insurance rates or you are a coward.
Great post! Great points!!
While "some of these folks may not be bringing solutions to the health care reform table", they ARE bringing boatloads of campaign contributions and other bribes to the Obama regime and key congressional players in order to assure that US citizens are held hostage to the existing expensive private medical insuarance system that limits participation and choice.
A true "tea party" would be a symbolic burning of actual or fake corporate campaign $ in a large bonfire.
Yes, it's ALL about the $$ for these pricks. They've used their computer systems to PURGE millions, sound familiar? Remember, when the GOPers in Fla., in 2000 also used computers to purge tens of thousands off the voter rolls? If we get the Mandate to have to buy so called health Ins. without a public option this will not be reform. It will however amount to a huge give away to Private Ins. companies. This is the kind of so called Health Reform the Health Ins. Mafia are looking for and guys like Max Bauchus and other DINOcrats also are more then willing to provide them.