Who Profits from Killing Civil Discourse?-- The Clue in the Maze

Civil discourse bit the dust this summer, poisoned by deceptive ads, inflammatory labels, shouting groups of alleged ordinary citizens, terabytes of chain email, and decibellows of talk show hosts. When obvious big money is being poured into reshaping opinion, I can’t help but wonder why—and who’s doing it.  After all, health care reform promises were major factors in the winning presidential campaign. Thus the massive effort to defeat all or part of health care reform is worth every American’s careful attention. As a long time mystery reader, I know that “who stands to gain” is the basic question any detective worth her magnifying glass has to answer before the culprit can be revealed. Let's see if we can sort out who might be behind the murder of civil discourse.

Let’s keep in mind that there are several health care reform plans under consideration. These are really health insurance reform plans. They will not necessarily provide some kinds of change that would make the system better for our wellness. For one detailed analysis of the various plans on the table, see this Kaiser Family Foundation site.  Of the plans, HR 3200 is the House bill that we’re hearing most about. I’ve tried to wade through the actual bill but found the legal language daunting. Fortunately the site above analyzes it point by point in the left column of the first PDF link you come to.

Whatever compromise bill passes both houses of Congress and is signed by the President will be different from any of these current proposals. The big question is how different. That will depend on how successful the rhetoric and rewards are on all sides.

When it comes to who stands to gain from all the noise this summer, we should not just consider money, though that is very important. Cui bono means “good for whom”?  Besides money, profit—bono—can include getting elected or getting better health care or getting good feelings by doing the ethical thing. All too often, of course, the “goods” of money and power trump the altruistic goods.

The Suspects

So, who profits? I can think of several groups of key players—sometimes called “stakeholders” in the news. I’d love to hear from you about what I’ve missed.

• Consumers
• Insurance group managers (e.g. employers, unions, retirement plans)
  
• Providers
• Hospitals
• Doctors and support staff
• Counselors, psychologists, and social workers
  
• Labs
  

• Suppliers (e.g. pharmaceutical companies, equipment companies)
• Insurers
• Politicians

These are our major suspects for the murder of civil discourse.  Let’s take a look at the motivations of each.

Motivations

The interests of the various players are at odds in the present system. What does each need?

1.  Consumers want the best possible health care for the least possible money.

2. Their insurance group managers, who bargain with insurance companies for a policy, also want the best plan for the least money. For managers, though, the cost of a policy may be a much more important consideration than its quality.  Employers may need to cut corners. Even unions and cooperative groups may not make the same choices that the individual consumer would make, faced with the same numbers. For instance, some consumers might want an option to pay a little higher premium if the coverage is significantly better. A retirement fund manager might want to go just for the lowest price.

3. The next stakeholder, hospital systems with their affiliated physician practices, are in the business of maximizing income, which can mean serving as many patients in as short a time as feasible, eliminating competition from other hospitals, avoiding lawsuits, and making deals with insurers. Though they may wish to serve the community, especially if they are “non-profits,” they have no monetary incentive other than reputation to promote wellness, decrease patients’ return trips to the hospital, or minimize procedures and charges.

4. Doctors are also providers with some of the same monetary interests as hospitals, but they are in a special squeeze in this system. In the name of efficiency, hospitals want doctors to see as many patients as possible in the shortest time, and insurer limits on charges increase that pressure. Without patient quantity, doctors can’t make enough money. The pressure is increased by high malpractice premiums, burdensome record keeping, and a swollen staff to deal with it. Most doctors these days can’t make it on their own; they need phalanxes of billing clerks to keep up with the insurance. Sometimes the billing is handed over to the hospital system.

Though doctors may mourn for the bygone relationship with the patient, few have time for lengthy problem solving. Nor is there really any monetary incentive to spend time on wellness, prevention, or low cost alternative approaches. Doctors who take such approaches tend to go broke. Medicating the symptoms is fast and is promoted by cozy relationships with pharmaceutical companies. For more, see this article and this one.

Because of doctors' financial pressures, high cost specialties are attractive to medical school graduates—hence the shortage of primary care doctors.  Specialty practices are more lucrative, and the huge debt from medical school has to be paid, after all.  For years, the American Medical Association actively worked to avoid a physician “glut” that might drive prices down, encouraging limits on new medical schools and hospital residencies.  The AMA has changed its tune somewhat in the face of mounting evidence of specific shortages  and some new medical schools are also in the works in various states.

Other provider groups such as nurses, physician assistants, medical assistants, counselors and social workers have their own issues in the health care reform debate and have faced years of cutbacks already.

5. The next suspects, the pharmaceutical, biotech, and equipment companies, as well as independent labs are all in the business of making money. They need to maximize profits for stockholders and company employees.  Solving patients' health problems may be both an altruistic and monetary motivation, but keeping prices high serves company interests best. High prices may promote groundbreaking research, yes, but they also mean maintaining patents as long as possible, as well as cultivating relationships with doctors and hospitals--perhaps with special deals. Obviously, the most widespread illnesses and injuries are going to be the most financially sound targets for research. Alternative low cost treatments are not going to be in the interests of these companies unless they can be made more expensive by patenting.

6. Now we come to insurers. Again, private companies want to maximize stockholder profit, which calls not only for healthy prices for policies, but for lots of healthy policyholders and as few sick policyholders and as few pay outs as possible. How to achieve that? Refuse to insure people with pre-existing conditions (the very people who need insurance most) and figure out ways to get policyholders to pay more and more of their own bills.  High deductibles are one way. Another way is limiting the number and type of procedures (Was a test covered last year?  This year it may not be). Still another tactic is to impose lifetime caps and/or annual caps on pay outs. (Have you been afraid of “rationing”? Have you been afraid of “interference with doctors’ decisions”? Those nightmares already exist in our system, courtesy of these insurance tactics.)

On the good side, insurance companies are the only stakeholders besides consumers and their bargaining agents who have a real monetary interest in promoting wellness, prevention, and healthy living. Insurance companies only make money on us if we stay well or die quickly.

7. Finally, let’s consider politicians as our last suspect. Here we need to look at two issues: getting (re)elected and—for some politicians—setting up a private sector career path for the future.

Getting elected is obviously of first importance to any politician. In our system, that does not happen without huge campaign contributions from organizations—often corporations—which want something in exchange. True, the actual exchange is not legal. No politician will admit to being influenced by these gifts, but lobbyists for the same organizations are ever present in the halls of Congress.  In fact, many bills are actually written by lobbyists because lobbyists have the needed expertise and incentive to get the job done. Lobbyists have become the not-so-hidden fourth branch of government—forget the traditional fourth-estate, the press. The influence of lobbyists extends to both sides of the aisle, but some companies will find one lawmaker or party more compatible and thus more likely to receive campaign help. What sort of lobbying has been done on healthcare? Try this article or this one.

Getting elected also means defeating the other candidates. A party candidate gets a boost from a strong party. If a party can sow discontent with the other party, its candidates will be more likely to win next time around. These days, we see this translated into trashing the other party at every opportunity. Good policy may take a backseat to decimating the “enemy.” We are seeing turnabouts every day in lawmakers’ stances on issues as they gauge how much damage they can do to the other party by a particular stance. Since Democrats are currently in power, Republicans are most likely to try to discredit any Democratic initiative.

The second issue to look at when considering politicians’ stake in the health care issue is the “revolving door.”  Some politicians find the tight relationship with lobbyists a boon when they are voted out of office or retire. They become consultants, lobbyists, or executives for the very companies that curried their favor before. See, for instance, this story.  If it’s not the lawmakers themselves going through the door, it’s their staff members.

Current law imposes a waiting period on such hiring, but stricter disincentives have—no surprise—failed to pass Congress. To demonstrate that hoards of such hires happen on both sides of the aisle, there's former Democratic U.S. Senate Majority Leader Tom Daschle, who is now “a special public policy adviser at Alston & Bird,” where he is, er, not exactly a lobbyist, but has represented clients interested in health care.  Nominated to the cabinet, he was about to cross back into the government, but had to withdraw because of  tax problems.

 Reexamining the Suspects

With all these suspects, who had the motive and means to perpetrate the big poisoning of the summer? You detective mystery readers don’t need to be told that motive, means, and opportunity are the keys to untangling the classic mystery puzzle. We’ll need to reexamine each of the suspects.

1. Did some of the poisoning of civil discourse come from consumers genuinely afraid of what might happen to their health plans?  No doubt.  Many people have been scared by the hype.  Some are ideologically opposed to any limitation on market forces. Some, whether Republican or Democrat, have questions about the details of the plans. But there is likely to be much more behind the disinformation campaign than unhappy individual consumers. On to the next suspect.

2. Of the negotiator-intermediaries for consumer insurance policies, the employers are the ones who have the most to gain and to lose from reform. No doubt employers would love to get out from under the burden of providing health insurance for their workers altogether. It is the single most important expense besides wages and is breaking the back of many companies. Anything that can bring the cost of policies down will benefit employers.

However, while HR 3200 will lower costs for many businesses or at least keep costs from rising as much, their costs will increase for part-time workers, who have to be covered somehow. Over the past couple of decades, the trend in many companies and institutions has been to hire part-timers exactly because the law didn’t insist they be offered health insurance.

In addition, there are all the small business owners who don’t offer health insurance to their mostly part-time staffs and will now have to ante up in the form of a tax that will help their workers buy coverage. You might think that would significantly stress the bottom line of small enterprises.  What small business owners may not yet understand is that HR 3200 has built in relief for small employers so that the plan will actually be a  good deal.

One big question is whether providing health coverage will in the long run increase the productivity of workers enough to offset any alleged costs. Worried employers have been some of the voices at town hall meetings, but mostly they’ve just been asking reasonable questions rather than screaming.

3. Early on, insurers looked to me like the best suspect for the perpetrators of most of the hype, especially in regard to the public option. Why wouldn’t insurance companies want to keep premiums as high as possible?  Why would they want competition from a public option designed to lower those premiums by providing an alternative? Why wouldn’t they hate to be told that they can’t drop people who get sick too many times? Why would they want to be made to provide for people with pre-existing conditions? Why would they want to have to eliminate caps on coverage?

One can see why insurers are thus a highly likely suspect, and they have certainly been pouring dollars into lobbying and advertising.

4.  What about doctors?  Though many doctors adamantly support health care reform, some are using their doctor-patient relationship to urge against HR 3200. Still others have been drafted into the fight by fraud. The AMA has waffled on the bill. Compare this June article with this one or this anti-public-option press release.  Some doctors, especially specialists, fear further limitations on their pricing structure or on their decision making, while others celebrate the possibility that they might finally get back to the ideal of helping patients to be well.

5. As for hospital systems, it is not apparent to me that they stand to gain much of anything from health care reform. HR 3200 won’t cut down much at all on the billing problems that stem from multiple insurance payers because there will still be multiple payers. What it will do that hospitals might not like is to mandate the reduction of unnecessary procedures and the reduction of the number of times a patient is released too quickly from a hospital only to have to return.

Hospitals might dislike the public option for another important reason: it will cut down on the deals they can make with insurance companies and thus cut down on a competitive edge they are getting against other hospitals—in other words, it will make it harder to monopolize a market.  Here’s how it works, based on a real example from my own city.

My city is essentially a two-hospital town. Yes, there are a few others, but most of the physician practices are affiliated with one or another of the two biggies, each good hospitals across the board, but noted for research and expertise in different specialties.  Recently, Hospital A forced a deal with Insurance Company C. Hospital A would give pricing breaks to the insurance company if the company would drop its coverage for patients of Hospital B.  That means Hospital B’s patients now have to stop seeing all of their doctors affiliated with Hospital B, stop having their tests done at Hospital B, and stop going to Hospital B unless they want to assume out-of-network costs. Now there is no place to go for a second opinion. (Talk about rationing of care or control of doctor choice!) Why did Insurance Company C comply? The covered groups we are talking about here are quite large, composed of many public service employees.  Why didn’t the groups’ negotiators find another insurer?  Rising costs and corporate political pressure. I’ve learned about this deal from friends, but this instance is not the only time hospitals have employed this monopoly tactic. Certainly, it clarifies why hospitals and insurance companies don’t want a public option. It would mean that people who care about being cut off from their doctors would have a real choice.

For other views of hospital monopoly, see this and this. Look for Henry Waxman to hold hearings on the health care industry’s monopoly tactics as Congress reconvenes.

One example of a hospital ad campaign against health reform includes this gem, produced by Conservatives for Patient’s Rights. A legitimate grassroots political organization? Only if your definition of “grassroots” includes founding and backing by a multimillionaire former hospital CEO. The TV ads were put together by the same public relations company that made "Swift Boat Veterans for Truth," the ad that smeared John Kerry’s patriotism and belittled his military service.

Yes, the hospital systems are definitely in the running as suspects in the murder of civil discourse.

6.   On to the next suspect, suppliers.  First, let’s think about companies that supply equipment to hospitals and patients.  These no doubt dislike cost-cutting provisions in the health care reform that may reduce high prices companies can charge for their products.  Some products, indeed, may be deemed unnecessary and may no longer be covered. Again, a public option would make it more likely that tough negotiation through a government plan would bring prices down.

The next major group of suppliers is pharmaceutical companies. Until recently, this industry opposed the health care reform bills. They worried that instead of all the separate insurers trying to negotiate prices with them as now happens, it would be mainly the government negotiating with its far greater clout.  The “doughnut hole” in Medicare Part D is also up for closure, meaning drug companies would have to give Medicare patients a discount. In addition, there was the specter of allowing import of cheaper drugs from Canada. Consequently, the drug industry was opposed to reform plans early on. More recently, President Obama has angered many supporters by backing off from these cost saving possibilities with an agreement that would give up the power of government price negotiation and import from Canada if pharmaceuticals would support health care reform and promise voluntary price drops. See also this.

For the moment, then, pharmaceuticals are not my pick for the murder of civic discourse this summer.  Lately, though, there have been rumbles of discontent on both sides of the agreement, so keep an eye on further developments.

7. So what about the politicians? Motive and means abound. Now that Democrats are in power, they are definitely a target, especially the head guy who has hung a fair amount of credibility on getting reform passed.  Republicans have expressed their intent to frustrate Obama and the Democrats on everything they can in order to take back Congress in 2010. As talk show host Rush Limbaugh put it bluntly, he wants Obama to fail. Republican politicians are a little more subtle, but the language isn't far different. [By the way, Senator Inhofe is picking only figures that are favorable to his viewpoint. The U.S. is actually 8th in breast cancer survival behind seven other universal care countries. For a different view on Canadian health care, see this article.]

Conflict between the two parties is big entertainment in the media. Nothing is better than a fight for garnering an audience, so why wouldn’t the party out of power, the Republicans, encourage the biggest public fights possible?  Democrats are not a united front, however. Blue Dog Democrats in particular, know from whence their constituent and campaign support comes. Remember those lobbyists? They’re on both sides of the aisle.

The Accusation

Now that we’ve reexamined the suspects, can we say who killed civil discourse in the summer of ’09? I’m going to pick the big gainers if health reform goes down--especially if the public option goes down.  Those would be  insurers, hospitals, and suppliers, aided by Republican politicians and their pundit accomplices. The means? Enough money to spread lies and distortions across the landscape.