Serving the Medical-Industrial Complex

The usual knock on government programs is that they're not as efficient
as the private sector, which we're told can provide the same product
for less money and with higher quality. Thus, it should be no big deal
when the public and private collide because the private sector should
prevail.

However, in providing health insurance, those rules clearly don't
apply, which is why congressional Republicans and so-called "centrist"
Democrats are going to such lengths to deny the American people access
to a public option on health insurance.

Indeed, if a public option were to be piggybacked onto the existing
Medicare bureaucracy, the chances for savings could be impressive for
average Americans and the overall American economy.

Insurance middlemen could be eliminated; investigators who ferret out
"preexisting conditions" wouldn't be needed; doctors could save on
administrative costs; the burden on U.S. industry providing health
benefits could be reduced; and more money could be freed to cover the
nearly 50 million uninsured or for actual doctoring.

For a nation facing multiple fiscal crises - all complicated by the
costs of health care - one might think that the most sure thing in the
health care debate would be to allow a cost-saving public option, which
as President Barack Obama says would help keep private health insurers
"honest" regarding their promises to trim waste and control premiums.

According to a New York Times/CBS poll,
that point is obvious to 72 percent of the American people who favor
"offering everyone a government administered health insurance plan like
Medicare that would compete with private health insurance plans."

It's also reflected in a study cited
by Sen. Chuck Grassley, R-Iowa, and other insurance industry defenders
saying that 119 million Americans would bolt from their private
insurers to the public option if they were given the chance.

To put that figure in perspective, it is about two-thirds of Americans who have private insurance through their employers or as individuals. In other words, the industry's defenders say two of every three customers want out.

Though some analysts doubt the defection rate would reach 119 million,
Grassley's argument is that Americans would so prefer a government-run
plan that it would destroy the private insurance industry - and that
therefore the public option simply can't be permitted.

Grassley's fear of 119 million Americans voting with their pocketbooks
against private health insurance represents a remarkable admission of
failure by the industry and its backers. It says, in effect, that the
industry's treatment of its customers has been so highhanded over the
decades that the industry can only survive if Americans are left with
the unappetizing choice of private coverage or no coverage.

Representing Whom?

So, not only are the Republicans - and some Democrats - standing
against the desires for 72 percent of the population but, in effect,
they also are trying to lock in 119 million unhappy customers for a
profit-making industry. To add another windfall for the insurance
industry, Congress may compel the near 50 million uninsured to buy
insurance under penalty of fines.

Even
in the sorry history of special-interest-dominated Washington, it is
rare for politicians to so blatantly adopt defense of a private
industry over the will of the people.

One might think that Democrats would take this club and beat the
Republicans over the head with it. The Democrats could argue that the
public option is not only popular but could save money for struggling
U.S. businesses by bringing down their health insurance costs and
freeing up more money for investment and for the hiring of new workers.

One of the key factors that drove General Motors into bankruptcy was
how its health insurance benefits for employees inflated the company's
costs-per-worker total and thus hurt its competitiveness against rivals
who operate in countries where the government pays for health care.

The public option issue also would seem ready-made for Democrats given
that the New York Times/CBS poll found that a solid majority of
Americans (57 percent) were willing to pay higher taxes so that all
Americans could have "health insurance that they can't lose no matter
what." [NYT, June 21, 2009]

Nevertheless, key "centrist" Democrats, such as Sens. Max Baucus of
Montana and Kent Conrad of North Dakota, are ready to scuttle the
public option to secure a few GOP votes so they can claim their plan is
"bipartisan." Conrad has called for substituting a privately run,
non-profit "cooperative" for the public option.

While Conrad's "cooperative," which would be ostensibly owned by its
members, has some superficial appeal, it would require the creation of
an entirely new bureaucracy - rather than relying on the government's
existing infrastructure for Medicare - and would likely be run by
high-paid executives recruited from the existing private insurance
industry.

Critics of Conrad's
plan also note that the cooperative would have far less leverage in
negotiating lower prices from pharmaceutical companies and other parts
of the medical industry, so the savings would be marginal - which is
exactly why the idea appeals to industry groups.

Patrons and the People

It goes without saying that the medical-industry complex has made
generous contributions to all the key lawmakers, especially those like
Grassley and Baucus who are at the top of the influential Senate
Banking Committee.

But the
obsession of some Senate Democrats, like Conrad, to find "common
ground" with Republicans seems to go beyond simply rewarding
benefactors. Though it's clear that many, if not most, Republicans have
a single-minded goal - to sabotage the Obama administration - Democrats
nevertheless continue in their quest for the elusive "bipartisanship."

This quest goes on despite the fact that Republicans were trounced in
the last two elections, are down to 40 senators, and are facing
historically low approval ratings. Still, "centrist" Democrats insist
on bending over backwards to accommodate the GOP desires, even when
those desires fly in the face of popular opinion and do not represent
the most sensible policies.

These Democrats - sometimes including President Obama - appear deeply
influenced by Inside-the-Beltway chatter coming from pundits who still
reflect the Ronald-Reagan-to-George-W.-Bush conventional wisdom that
"government is the problem," that tax cuts are the answer to every
question, and that "self-regulating markets" have made bureaucrats
largely irrelevant.

Despite
the nation's cascading crises - which can be traced to too little
government, excessive tax cuts and a lack of sound regulation - the
chattering class has not been shaken from its biases. So, the minority
Republicans are given far more time and space than they reasonably
deserve (and much more than minority Democrats got during George W.
Bush's presidency).

Amid
Republican charges of "socialism," the reaction of Democrats, like
Baucus and Conrad, is to position themselves in what they must consider
the safe center, earning praise from the pundits for their courageous
willingness to stand up to the Democratic "base" - and to the
overwhelming majority of Americans - in order to stop the public option.

But Baucus and Conrad will likely find that the safe center isn't so
safe. When half-measures and half-baked compromises leave the American
people disappointed or angry, the fault will be laid on the
government's failure to do the job right.

And that failure will be cited by Republicans and the pundits as further proof of the superiority of the private sector.