Saturday, September 25, 2010

The Numbers; One Reason Why Obamacare Attack on Health Plans Isn’t Working

“78,000 people looking out for 70 million Americans.”

United Health Care Ad,

Every successful political campaign needs a foil or a devil– someone or something to demonize. Every organization, profit or non-profit, needs a margin to function.
No margin, no mission, as a Catholic nun CEO of a major hospital system once said.

In the case of the Obama administration, that demon is the nation’s health plans.

The demonized theory is that health plans put profits before people – particularly children, those with pre-existing illnesses, college students without income under their parents plans, those whose health expenses exceed lifetime limits.

For some reason, this strategy isn't working well politically. The latest 9/18- 9/19 Rasmussen report of 1000 likely voters says 33% are for the plan with 61% are against, a spread of 28 %.

I suspect one reason for this wide spread disbelief in reform is that most Americans have yet to receive any tangible benefits. Yet they are receiving notices of 2% to 9% increases, with hikes up to 20% to 40% in individual or small group plans, and spikes in copayments and deductibles.

People respond more to their own real world experiences rather than to political promises.

The Numbers

Another reason may simply be the numbers. Children affected with pre-existing illness number only 72,000, and young people covered up to 26 and those exceeding lifetime limits, probably number in the hundreds of thousands, not the millions.

Significant to be sure, and agreed to on both sides of political aisle, but miniscule when compared to 270 million already covered and even to the 51 million uninsured. Good steps, but small steps.

Finally there are cultural and structural problems.

Like it or not, we live in a capitalist society. In that society, organizations, like health plans, require profit to survive and offer services.

Here is how David Dranove, a health care economist at Northwestern’s Kellogg school of management , sees the problem,

“Healthcare reform becomes official this week, as many of the provisions of the legislation kick in. One provision requires insurers to accept children with preexisting conditions while capping what they can charge, undoing a standard industry practice. Several insurers have indicated that they will stop selling child-only policies. Industry officials are having a field day criticizing insurance industry greed.”

“Maybe these officials haven’t noticed, but insurers are greedy and there is nothing anyone in the Obama administration can do about it. Maybe it needs repeating. Insurers are greedy, have always been greedy, and always will be greedy. So are all investor-owned companies. People don’t invest in health insurance companies (or any other investor-owned companies) for charity. They invest in them to make money. (Investors tend to be greedy too, and that includes the pension funds that most working Americans rely upon for their comfortable retirements.) “

Source: “Profit-Seeking Health Insurers Seek Profits, “ September 22, 2010, The Health Care Blog

In a capitalistic society, in other words, one’s man profit is another man’s greed, or, in the lexicon of politics, another man’s “special interest.” In the case of health plans, the Obama administration has sought to reduce “obscene profits” by demanding that plans devote 85% to care, and only 15% to marketing and administration.

With United Healthcare, controlling profit has political overtones, for among United’s 70 million covered Americans are some of the 46 million seniors belonging to AARP’s Medicare supplement or Medicare Advantage plans. Seniors are the single group most opposed to the Obama health plan. Then, too, there are those 78,000 United employees, who could lose their jobs if United’s profits, based on greed, suffer too much.

No comments: