‘Health reform’ is fake news

Because there are never any total cost projections, everything we hear about health reform is just right or left wing talking points. Discussions on both sides of the aisle are fake.

It has sailed over everyone’s head that neither the Congressional Budget Office (CBO) – nor any other governmental agency – considers total U.S. health costs in connection with reform proposals.

The purpose of the CBO is to “analyze the likely effects of proposed legislation on the federal budget.” The CBO does not consider the effect of any proposed reform on total health costs. The budget of ordinary citizens is not within the CBO’s purview.

The prices charged by hospitals, drug companies, physicians and labs have been rising for decades at a rate far in excess of the cost of everything else. Politicians avoid addressing the nation’s health cost misery by changing the subject to the system of paying medical bills - insurance. But insurance, including single payer, is just a means to pay the bills.

Back in 2009, President Obama acknowledged medical costs were unsustainable and driving premium increases, stating:

We spend one and a half times more per person on health care than any other country, but we aren't any healthier for it. This is one of the reasons that insurance premiums have gone up three times faster than wages . . .

Unfortunately, while the Affordable Care Act (ACA) provided government subsidies to finance premiums, it did not address skyrocketing medical bills which continue to propel premiums.

The most recent official U.S. projection by the Centers for Medicare & Medicaid Services confirms the Obama diagnosis that total national health costs will continue to be driven by rapid growth in medical pricing:

Throughout the 2016-25 projection period, growth in national health expenditures is driven by projected faster growth in medical prices.

The most recent presidents (Clinton, Bush, Obama, Trump - two Democrats and two Republicans) came into office promising reform. The first three oversaw an explosion in total healthcare costs from 13% of GDP when Clinton was sworn in to 18% of GDP by the time Trump took office. It is projected to zoom to 20% of GDP by the end of Trump’s second term – a bigger jump than the Obama years.

Proposals touted by Republicans as reducing premiums fail to quantify the average amount of deductibles and non-covered care to be paid out of pocket by our families. Without an understanding of total health costs, reduced premium projections for “free market” healthcare, even if accurate, are useless information.

On the other hand, single payer will only reduce total U.S. costs if lower amounts are paid for hospital bills, labs, physicians and drugs. For example, U.S. hospitals charge private insurers more than 50 percent over Medicare rates. We’ve heard plenty of politicians with the courage to tell the public single payer will provide “free” healthcare, but no politician talks about how much medical industry pricing would be slashed; or, the expected total cost of a single payer system.

The truth is that the pricing of medical services, which is the whole ball game, is politically untouchable. The healthcare industry has wired a well-oiled political machine to eliminate price competition and keep the prices of medical services rising. The industry spends more on lobbying than the defense, aerospace and oil and gas industries combined.

Medical pricing is all smoke and mirrors and totally dishonest. In fact, there are no actual prices for medical services. Ask any hospital, lab or physician the price of anything and all you ever get back is a question: “What insurance do you have?” Your price depends on how much can be extracted from you, often at your most vulnerable. Industry apologists, of course, disagree and explain that there are actual prices, it’s just that we all get a different discount. In any other business this is fraud.

Calculating total health costs simply requires adding the cumulative amounts paid to hospitals, labs, drug companies and physicians. No thinking person (or Congress) can evaluate the merits of any proposed reform without considering how it would affect total costs. If the total amount continues to rise and gobble up ever increasing chunks of our economy, by definition, any alternative system of payment would be a failure.

Democrats and Republicans uniformly refuse to address the pricing of medical services. It is rarely mentioned by politicians. Simple arithmetic is ignored. The constant flow of fake health reform news is a strategy to continue a crony capitalist system featuring rapidly growing, non-competitive medical pricing.

[Photo courtesy of boingboing.net]