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medical debt
What Harris' Bid to End Medical Debt Tells Us About Her View of Corporate Price Gouging
For-profit hospitals jacking up prices matches a similar story of predatory corporate practices on grocery costs and housing prices. It's not market supply and demand. Corporate giants have figured out how to rip people off more effectively.
Aug 17, 2024
Vice President Kamala Harris’ bold proposal to eliminate medical debt offers a window into the approach that informs the entire progressive economic agenda the Democratic nominee for President unveiled August 16.
In addition to the proposals for re-instating and expanding the child tax credit with a baby bonus for new parents, federal support for affordable housing construction and a subsidy down payment for first time home buyers, much of the new focus and attacks have centered on what the Washington Post labeled the “first ever” ban on price gouging for groceries and food.
What makes that idea especially noteworthy is its correlation to the medical debt plan and caps on prescription drug costs and rent increases. A central cause of those inflated costs goes well beyond the usual claims of supply chain bottlenecks, government spending on social programs, and the disruption of the pandemic. In every case, there is a direct link to monopolization and big corporations exploiting those factors to jack up charges to extract higher, often record, profits, well beyond their own costs to produce or provide them.
Unpacking the crisis and main source of medical debt as well as for health care costs overall, including for prescription drugs, provides the tell.
For over two decades California Nurses Association/National Nurses United researchers have studied how hospitals inflate charges over their costs. Overall, the conclusion has been that hospital profit taking, augmented by corporate mergers, is a clear driver of medical debt.
A 2020 NNU study found that some hospitals had hiked their charges by as much as 18 times over their costs, exploding profits by 411 percent over the prior two decades. NNU’s forthcoming update on hospital charges will show that some hospitals by 2022/2023 were now setting charges at almost 24 times over their costs, doubling their charges over the past 20 years. Further, the biggest for-profit hospital chains set the highest prices and make the most profits from them. Among the 100 top hospitals with the highest charges, hospital giant HCA had six hospitals alone with a combined profit of almost $400 million for that fiscal year.
Big Pharma is the gold medal winner in profiteering which is why drug costs have become such a national scandal. The U.S. Senate Health, Education, Labor, and Pensions (HELP) Committee, chaired by Sen. Bernie Sanders, issued a Majority Staff Report in February documenting how three of the biggest pharmaceutical giants, Johnson & Johnson (J&J), Merck, and Bristol Myers Squibb (BMS), have prioritized profits over patient need, collectively piling up $112 billion in profits in 2022 through “unethical pricing strategies, relentless price hikes, manipulative patent tactics, and extensive lobbying efforts.”
That lobbying blocked years of efforts to allow Medicare to use its bulk purchasing power to negotiate lower drug prices, as most other industrial countries have achieved. It’s why President Biden’s Inflation Reduction Act to permit Medicare to bargain lower prices for 10 of the highest cost drugs that treat heart disease, cancer, diabetes, and blood clots was such a dramatic success. The White House this week announced it will save millions of Medicare recipients $1.5 billion in the first year of the program.
Grocery and housing prices
There’s a similar story of predatory corporate practices on grocery and housing prices. No they’re not just set by market supply and demand. “Is Harris right on the economics?” asked political economist Robert Kuttner on Friday in response to the announcement of Harris' plan.
"A detailed study by Groundwork Collaborative found that corporate concentration and increased profits accounted for more than half of the inflation felt by consumers in 2022 and 2023," Kuttner wrote. "First, it vividly connects with the issue of inflation where ordinary people feel it… Second, the plan reframes the issue … to how corporate concentration opportunistically drives price hikes…Third, the approach recasts the struggle as ordinary people vs. predatory corporations.”
“Today, everywhere consumers turn, whether they are shopping for groceries at the local Kroger or for plane tickets online, they are being gouged,” wrote David Dayan and Lindsay Owens in the lead to a major American Prospect series in June. “Landlords are quietly utilizing new software to band together and raise rents.”
In the “40 years from 1979 to 2019, nonfinancial corporate profits cumulatively drove about 11.4 percent of price growth. From April to September of last year,” Dayan and Owens continued, “that number was 53 percent.” Factors include corporate concentration, high-tech pricing practices, utilizing “technological innovations such as cloud computing, artificial intelligence, and surveillance targeting” of consumers to collect extensive personal information.
Jarod Facundo described a panoply of corporate grocery pricing practices including dominance of shelf space by the biggest chains, surge pricing, repackaging goods without changing prices, and tech driven personalizing pricing “for each shopping cart” that have been “the path to higher margins,” increased costs, and, of course, bigger profits.
Food company profit increases since inflation peaked, notes former labor secretary Robert Reich, include Cal-Maine, the largest U.S. producer and distributor of fresh shell eggs, whose profits soared 471 percent. Monopolization has also driven food inflation, Reich says: Just four companies control 85 percent of beef processing, 80 percent of corn seed distribution, 77 percent of fertilizer production, and 69 percent of grocery sales.
In an investigative report in October, 2022, ProPublica’s Heather Vogell described how Texas-based RealPage’s software facilitated price inflation on rental units. “Property managers across the United States have gushed about how the company’s algorithm boosts profits,” she wrote. “The nation’s largest property management company, Greystar, used the software to price tens of thousands of apartments.”
In the American Prospect, Luke Goldstein also zeroed in on the effect of RealPage’s practices to “maximize profits” in rental markets. “Clients accept the RealPage recommendations over 80 percent of the time, and the company includes provisions in its contracts to ensure rent hikes. It heavily pushes adoption to new clients of an ‘auto-accept’ feature that forces price increases automatically.”
Corporate price gouging has not gone unnoticed by the Biden administration, as Dayen and Owens note, citing the work of its agencies to aggressively target algorithmic price-fixing, corporate mergers and other practices, such as junk fees and corporate care interest rates that spark inflation.
Harris has been a voice on those initiatives as well, which have contributed to her economic proposals today. The proposals will face considerable assault from corporate lobbyists and the politicians they influence, of course, which will require a lot of political organizing to support.
Among those praising her initiative was Sen. Sanders, as staff writer Jake Johnson reported Friday for Common Dreams. Sanders called the Harris plan “an important step forward in making our country a fairer and more just society. I look forward to working with Vice President Harris when she becomes president to implement her economic agenda, and more, within her first 100 days in office."
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Sanders Hails Harris Economic Agenda as Important Step Toward 'More Just Society'
"The time is long overdue for our government to represent the needs of working families, not just wealthy campaign donors," said Sen. Bernie Sanders
Aug 16, 2024
U.S. Sen. Bernie Sanders praised the economic agenda outlined Friday by Democratic nominee Kamala Harris as "an important step forward in making our country a fairer and more just society."
While acknowledging that the vice president's slate of proposals does not go as far as he "would like," Sanders said it is "an economic agenda that begins to speak to the needs of working families and takes on the unprecedented corporate greed that is taking place throughout America."
"At a time when the price of healthcare is soaring, Vice President Harris understands that we need to cancel medical debt in America," said Sanders. "At a time when we have a major housing crisis, with 650,000 people experiencing homelessness, Vice President Harris understands that we have to build at least 3 million units of affordable housing, provide a $25,000 down payment for first-time homebuyers, and prevent corporate landlords from jacking up rent."
"At a time when millions of Americans are struggling to raise their kids," the senator added, "Vice President Harris understands that we need to cut the child poverty rate by at least 50% by restoring and expanding the Child Tax Credit included in the American Rescue Plan."
Harris is expected to deliver a speech at 2:45 pm ET in North Carolina outlining her economic agenda, which includes a first-of-its-kind proposed ban on price gouging in the food and grocery sectors, a call to extend the Medicare price caps on insulin and other prescription drugs to all Americans, and a $6,000-per-child tax credit to families during the first year of their newborn's life.
"The time is long overdue for our government to represent the needs of working families, not just wealthy campaign donors," Sanders said Thursday, stressing that progressive policy goals are broadly popular with American voters. "I look forward to working with Vice President Harris when she becomes president to implement her economic agenda, and more, within her first 100 days in office."
Sen. Ron Wyden (D-Ore.), chairman of the Senate Finance Committee, joined Sanders in applauding Harris' proposals.
"Vice President Harris gets it—her economic agenda goes after the expenses that hit American families the hardest: housing, healthcare, and raising children," said Wyden. "While [Republican vice presidential nominee] JD Vance didn't even bother to show up for the vote on my bill to strengthen the Child Tax Credit, Vice President Harris has committed to expanding it, lifting millions of kids out of poverty and providing extra support for families in the first year of a child's life, when expenses are especially high."
Harris unveiled her economic agenda on the two-year anniversary of the enactment of the Inflation Reduction Act, the Biden administration's signature law that contained major victories for progressives—including a provision allowing Medicare to negotiate drug prices directly with pharmaceutical companies.
Other proposals backed by Sanders and his fellow progressives in Congress were ultimately excluded from the final measure, including universal pre-kindergarten and an expansion of Medicare to cover dental, vision, and hearing.
"Progressives will not stop fighting for the pieces left on the cutting room floor: universal childcare, an expanded Child Tax Credit, housing, workers' rights, immigration justice, Medicare expansion, home care, pre-K, and so much more," the Congressional Progressive Caucus said Friday.
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Harris Unveils Sweeping Economic Agenda With New Child Tax Credit, Medical Debt Relief
Proposals to lower housing, childcare, and healthcare costs for millions of families are "a welcome step in the right direction," said one advocate.
Aug 16, 2024
After announcing earlier this week that U.S. Vice President Kamala Harris plans to take on corporate price gouging with the first-ever federal ban in the food and grocery industries, the Democratic presidential nominee's campaign on Friday unveiled details about Harris' broader economic agenda, making clear to advocates that she is focused on lowering numerous costs facing working households.
Along with a four-year plan to boost housing construction, provide financial help to first-time homebuyers, and rein in predatory corporate landlords, Harris announced plans to lower medical costs and provide financial assistance to new parents and families raising young children.
The proposals, which Harris is expected to officially announce at a campaign event in Raleigh, North Carolina on Friday, send the message that "the days of 'what's good for free enterprise is good for America' are over," Felicia Wong, president of the progressive think tank Roosevelt Forward, toldThe Washington Post.
"Harris has made a set of policy choices over the last several weeks that make it clear that the Democratic Party is committed to a pro-working, family agenda," Wong said.
Within Harris' plan to lower healthcare costs, the vice president will include proposals to expand Medicare's cap on prescription drug costs at $2,000 annually to all Americans and to place a limit of $35 per month on insulin. Both policies are provisions of the Inflation Reduction Act (IRA) and currently apply only to Medicare recipients. As the Postreported, allowing all Americans to benefit from the price limits "could face resistance from the pharmaceutical industry and Republicans," who have fought to block Medicare drug price negotiations that were also included in the IRA.
Harris said she would work to expedite those negotiations, the first round of which yielded lower costs for 10 widely used medications that were announced by the Biden administration on Thursday.
"Policies that lift up families will always be popular with voters. Working people want to see action from our federal government to address sky-high costs."
The vice president would also work closely with states to cancel medical debt for millions of people "and to help them avoid accumulating such debt in the future, because no one should go bankrupt just because they had the misfortune of becoming sick or hurt," said the Harris campaign. "This plan builds on Vice President Harris' leadership in removing medical debt from nearly all Americans' credit reports and in helping secure American Rescue Plan funds to cancel $7 billion of medical debt for up to 3 million Americans."
The final plank of the economic plan announced on Friday was focused on "cutting taxes for the middle class," the campaign said, with the vice president pledging to restore and expand child tax credits. Republican presidential nominee Donald Trump's campaign has been focusing on the issue in recent weeks as vice presidential candidate Sen. JD Vance (R-Ohio) has come under fire for his criticism of people who don't have children and for his absence from a Senate vote on expanding the existing child tax credit, which nearly the entire GOP Senate caucus voted against.
The Harris campaign said the vice president would restore the expanded child tax credit that provided a credit of up to $3,600 per child for middle- and lower-income families; the program was passed as part of the American Rescue Plan in 2021, but expired at the end of that year due to opposition from the Republican Party and conservative Sen. Joe Manchin (I-W.Va.), then a Democrat.
Harris would also push for a further "historic expansion of the child tax credit: providing up to $6,000 in total tax relief for middle-income and low-income families for the first year of their child's life when a family's expenses are highest—with cribs, diapers, car seats, and more—and many parents are still forced to forgo income as they take time off from their job."
Diane Yentel, president and CEO of the National Low Income Housing Coalition, said the proposal would also work hand-in-hand with Harris' housing plan to "positively impact families' ability to pay rent."
Vance earlier this week called for boosting the child tax credit—currently $2,000 per year—to $5,000, but Sen. Ron Wyden (D-Ore.), who proposed a package last month that would have raised the cap on the credit for low-income families, said Vance's failure to vote on the legislation exposed him as "a phony."
"If JD Vance sincerely gave a whit about working families in America, he would have shown up in the Senate a week and a half ago and voted for my proposal to expand the child tax credit and help 16 million low income kids get ahead," said Wyden. "He didn’t even care enough to use his platform to call on his Senate Republican colleagues to support it."
Maurice Mitchell, national director of the Working Families Party, said that with plans to extend tax cuts that disproportionately benefited corporations and the wealthy, "Trump and Vance are going to look out for bosses and billionaires, while Harris and [Democratic vice presidential candidate Tim] Walz are showing working people that they have their backs."
"Policies that lift up families will always be popular with voters. Working people want to see action from our federal government to address sky-high costs," said Mitchell. "By committing to take on greedflation, lower prescription drug costs, and make housing more affordable, Kamala Harris is listening to the voters she needs to turn out in November."
A Data for Progress poll late last month showed that 75% of Americans support slashing prescription drug prices, 79% support making corporations pay their fair share in taxes, and 58% support restoring the expanded child tax credit.
Joseph Geevarghese, executive director of Our Revolution, called Harris' economic agenda "a welcome step in the right direction, particularly with its focus on tackling corporate price gouging, reining in predatory corporate landlords, reducing prescription drug prices, and providing real relief to working families burdened by medical debt."
"However, to truly address the root causes of economic inequality, we must push for comprehensive reforms that dismantle the structural issues enabling corporations to exploit consumers and workers," said Geevarghese. "The Harris-Walz plan's proposals are critical first steps, but the progressive movement will be watching closely to ensure these policies are not only enacted but rigorously enforced to deliver the meaningful change that Americans desperately need."
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