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Why haven’t Democrats taken on the hospital industry?

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Written by Diane Archer

David Dayen writes in The American Prospect that Democrats lack the guts to take on the hospital industry. But, Democrats like Senators Sanders and Warren, have plenty of guts and fully appreciate the power of the entire health care industrial complex. That’s why they are proposing health care reform that unites Americans to make Congress take on the entire health care industry.

Dayen, much like Josh Barro, sees the hospitals and doctors as the biggest challenge for Democrats. They believe that meaningful health care reform is not possible unless policymakers take them on. Dayen gives no reason why the hospitals are any more of a challenge than the pharmaceutical corporations and the medical device manufacturers.

The health insurance industry is the biggest challenge, as Medicare for All, for the most part, puts health insurers out of business. The insurers have massive power, yet they are unwilling or unable to leverage their power to keep all of the health care industries in check. That’s why Sanders and Warren and Harris and others are calling them out.

Hospitals accept Medicare and Medicaid rates. They take Medicare and Medicaid patients. They know that they must in order to stay in business. People with Medicare and Medicaid are their bread and butter patients. With Medicare for All–public health insurance for everyone–hospitals would need to accept federal provider rates.

Yes, when Obama was president,  he cut a deal with the for-profit hospital industry to not push for a public option. That was his mistake. Sanders and Warren are not Obama. Hospital prices make no sense. No one who sees the numbers thinks otherwise. Hospital rates bear no relationship to cost and are all over the map. They need to be fair. Medicare for All would ensure they are fair so that hospitals continue to deliver the care people need.

Insurers are to blame for the exorbitant health care prices we pay. If they were doing their job, they would unite with one another to secure far better prices than they currently secure. But, they don’t. That’s what they do in Germany. Or, they would unite with their members to urge the federal government to set provider rates. But, they don’t. High provider rates deliver bigger profits to them.

Insurers don’t even allow us to shop for health insurance in a meaningful way. When you are shopping for an expensive product other than health insurance, let’s say a car or a refrigerator, first you use available information to determine which brand you want based on quality. Once you know about quality, you typically shop for the product based on price. Retailers with the largest market share usually deliver at the lowest price. You cannot shop in this way for a health insurer, the retailer for health care products and services.

Health insurers provide us with no good information about the quality of the services they offer. And, they provide us little clue about what our costs will be if we need care, except for premiums and deductibles. Insurers neither leverage their power to bring prices down, nor do they compete with one another to offer low prices.

The health care problem in the US is not as simple as high hospital, doctor, medical device and prescription drug prices, as Dayen believes. If it were, we could solve it through all-payer rate setting; the government determining the rates we pay for all these products and services.

Why is talking about hospital rates so important? Democrats have been talking about high prescription drug prices for some time now, and we have yet to see any meaningful reform. They have talked about dangerous medical devices, and we have yet to see any meaningful reform. They have talked about surprise medical bills, and we have yet to see any meaningful reform. They have talked about people dying because they cannot afford their health care, and we have yet to see any meaningful reform.

Insurers may be a small piece of the revenues, but their failure to use their market clout to guarantee people good affordable health care is the heart of the problem with our health care system. Their goal is to deliver as little health care to people as possible in order to profit as much as possible. They do not benefit from providing their members high value care. That’s what the public needs to understand.

The public cares about one thing–getting good affordable health care. They have yet to be asked whether they would prefer to keep their current coverage with its high costs or to trade it for public insurance with access to the doctors they want to see, along with better benefits at lower cost. If the answer is yes, as it should be, Medicare for All is more than possible.

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1 Comment

  • answer the primary question. Some establishment dems are on the take, receiving campaign donations from the insurance and healthcare industry. For example this is why I had little faith in Mrs. Clinton’s “turn around” on the banking industry because I didn’t really believe she’d bite the hand that had fed her political career. The same goes for anyone who benefits politically from any big money interest, healthcare and the private insurance being two.

    Part of the matter with the ACA involving the private insurance industry stems from Mr Obama compromising the plan to make it “palatable” to obstructionist Republicans who would vote against it. It was a typical neoliberal centrist move. Even with the compromises the Republicans liked they still opposed it which is why he ended up enacting it through executive order. Now granted it was better than nothing, which is what we had before, but it is nothing like the idea of a healthcare programme modelled after what other nations have.

    Another derious part of this situation is what hospitals and big pharma charge programmes like Medicare and Medicaid which is running up their budgets. The Republicans preventing of Medicare from negotiating more fair and affordable drug prices is one reason they are not to be trusted when they start talking about privatising Medicare or replacing the ACA (as flawed as it is) with their own healthcare plan. For almost three years, Mr. Trump said he wanted to lower drug prices, yet the cost just keeps getting higher and higher and he basically gave up (I like to say never intended to do anything, just like he said he’d never cut Social Security, Medicare and Medicaid). It is criminal that the cost of life saving medications and procedures has to be so prohibitively high in this nation to the point that people either go without or travel to Canada for more affordable prescription meds and Mexico for medical and dental treatment that doesn’t send them into bankruptcy.

    A more comprehensive universal plan like Medicare for All is what we should strive for, but it also shouldn’t be a cash cow for the healthcare and pharmaceutical industries (the latter which profits mighty off of taxpayer funded R&D grants and use of publicly funded universities). We need to rein this greed in.

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