This is Reform? NY Times

[Guest guest]

" ...there will be no effective alternative for consumers in the market for

health coverage, which means no competitive pressure for private insurers

to rein in premiums and other charges. (Forget about the nonprofit

cooperatives. That's like sending peewee footballers up against the Super Bowl

champs.) "

NYTimes -- August 18, 2009

OP-ED COLUMNIST

This Is Reform?

By BOB HERBERT

It's never a contest when the interests of big business are pitted against

the public interest. So if we manage to get health care " reform " this time

around it will be the kind of reform that benefits the very people who

have given us a failed system, and thus made reform so necessary.

Forget about a crackdown on price-gouging drug companies and predatory

insurance firms. That's not happening. With the public pretty well confused

about what is going on, we're headed - at best - toward changes that will

result in a lot more people getting covered, but that will not control

exploding health care costs and will leave industry leaders feeling like

they've

hit the jackpot.

The hope of a government-run insurance option is all but gone. So there

will be no effective alternative for consumers in the market for health

coverage, which means no competitive pressure for private insurers to rein in

premiums and other charges. (Forget about the nonprofit cooperatives. That's

like sending peewee footballers up against the Super Bowl champs.)

Insurance companies are delighted with the way " reform " is unfolding.

Think of it: The government is planning to require most uninsured Americans to

buy health coverage. Millions of young and healthy individuals will be

herded into the industry's welcoming arms. This is the population the insurers

drool over.

This additional business - a gold mine - will more than offset the cost of

important new regulations that, among other things, will prevent insurers

from denying coverage to applicants with pre-existing conditions or

imposing lifetime limits on benefits. Poor people will either be funneled into

Medicaid, which will have its eligibility ceiling raised, or will receive a

government subsidy to help with the purchase of private insurance.

If the oldest and sickest are on Medicare, and the poorest are on

Medicaid, and the young and the healthy are required to purchase private

insurance

without the option of a competing government-run plan - well, that's reform

the insurance companies can believe in.

And then there are the drug companies. A couple of months ago the Obama

administration made a secret and extremely troubling deal with the drug

industry's lobbying arm, the Pharmaceutical Research and Manufacturers of

America. The lobby agreed to contribute $80 billion in savings over 10 years

and

to sponsor a multimillion-dollar ad campaign in support of health care

reform.

The White House, for its part, agreed not to seek additional savings from

the drug companies over those 10 years. This resulted in big grins and high

fives at the drug lobby. The White House was rolled. The deal meant that

the government's ability to use its enormous purchasing power to negotiate

lower drug prices was off the table.

The $80 billion in savings (in the form of discounts) would apply only to

a certain category of Medicare recipients - those who fall into a gap in

their drug coverage known as the doughnut hole - and only to brand-name

drugs. (Drug industry lobbyists probably chuckled, knowing that some patients

would switch from generic drugs to the more expensive brand names in order to

get the industry-sponsored discounts.)

To get a sense of how sweet a deal this is for the drug industry, compare

its offer of $8 billion in savings a year over 10 years with its annual

profits of $300 billion a year. Reich, who served as labor secretary in

the Clinton administration, wrote that the deal struck by the Obama White

House was very similar to the " deal W. Bush struck in getting the

Medicare drug benefit, and it's proven a bonanza for the drug industry. "

The bonanza to come would be even larger, he said, " given all the Boomers

who will be enrolling in Medicare over the next decade. "

While it is undoubtedly important to bring as many people as possible

under the umbrella of health coverage, the way it is being done now does not

address what President Obama and so many other advocates have said is a

crucial component of reform - bringing the ever-spiraling costs of health care

under control. Those costs, we're told, are hamstringing the U.S. economy,

making us less competitive globally and driving up the budget deficit.

Giving consumers the choice of an efficient, nonprofit, government-run

insurance plan would have moved us toward real cost control, but that option

has gone a-glimmering. The public deserves better. The drug companies, the

insurance industry and the rest of the corporate high-rollers have their

tentacles all over this so-called reform effort, squeezing it for all it's

worth.

Meanwhile, the public - struggling with the worst economic downturn since

the 1930s - is looking on with great anxiety and confusion. If the drug

companies and the insurance industry are smiling, it can only mean that the

public interest is being left behind.