Listen Up, Senate : Health Care Bill Needs Costs Reduction Amendment

By Sherman DeBrosse / The Rag Blog / December 17, 2009

Dr. Howard Dean, a true progressive and advocate of health care reform has given up on the bill now wending its way through the Senate. He thinks it should be scrapped. It makes too many concessions to the insurance industry, does too little to reduce costs, and will force many to buy health insurance they cannot afford.

However, if the Democrats scuttle the bill, they admit failure and their inability to govern. The election results in 2010 would probably be worse than the perfect storm of 1994.

By passing something now, they establish the principle that all citizens have a right to good health coverage. It has taken seven decades to get most Americans to agree to that basic proposition. Whatever is passed now can be amended later when rising costs force Congress to revisit it.

However, progressive Democratic Senators need to make one concerted effort to pass an amendment they might call the Medical Costs Reduction Amendment. If it does not pass, it could be reconsidered as part of the budget reconciliation process because its parts deal with spending and collecting money.

1. At its core would be a provision requiring that a health insurance company’s “medical loss ratio” cannot go below 90%. That means they must spend 90% on actual health care expenses. Anything above that would be subjected to a healthcare excise profits tax. A similar tax would be applied to salaries of everyone in the health care industry.

2. People purchasing insurance in the new insurance exchanges will be able to buy insurance from providers across state lines.

3. Mechanisms will be established for small businesses to combine bargaining power for the purpose of purchasing health care insurance.

4. Operations in the Justice Department devoted to finding Medicare fraud will be vastly expanded with hundreds of millions being set aside to hire, train, and support new fraud hunters. Thomas Reuters has found that there is about $200 billion of fraud every year in the Medicare system. He found similar fraud in the general medical insurance arena. These fraud hunters would search for fraud throughout both system and be assisted by a robust bounty system for whistleblowers.

5. All medical insurance and medical equipment and service accounting must be absolutely transparent. The Health and Human Services Department must be given several thousand new accountants and agents to dig out waste, inaccurate accounting, and dishonesty. What they learn can eventually be used to regulate insurance rates. We have failed to move toward single-payer insurance, so the only other choice is to follow Germany and Switzerland in working through very tightly regulated insurance providers.

6. Eliminate incentives for doctors and hospitals to overtreat by making lump payments for treatments of illnesses, rather than fees for each procedure.

7. Simplify and streamline billing procedures.

There are many other provisions that should be added, but we have already seen that the tolerance of Senate Democrats for real reform and cost cutting is fairly low. Recently, many of them even voted to kill Kent Conrad’s effort to help people get drugs at lower prices. In this they were upholding a tawdry deal President Obama and Rahm Emmanuel entered into with Big Pharm.

The months-long slog toward some sort of health bill has revealed how strategically inept the Democrats are. They are not good at defending themselves, and it took them forever to begin to sort out differences among themselves. They have also sacrificed opportunities to do something about carbon emissions and restoring some of the rights intended for labor under the Wagner Act. Above all, this sad debate demonstrated how center-right this country really is and how even the Congressional Democrats are in the hip pockets of the big interests.

Thirty years ago, scholars were still writing about the differences between Congressional Republicans and Presidential Republicans, etc. These were intricate discussions about how some people had powerful institutional memories and biases and others had deep commitments to governing well.

All that began to change when Newt Gingrich forced his party to put obstruction ahead of governing. Then Bob Dole, who once had contempt for Gingrich, hit on the tactic of using the threatened filibuster for every important matter before the Senate. When a Black community organizer got into the White House, total obstruction became the order of the day and almost no Republican put governance ahead of partisanship.

Governance at any cost is more of a habit for the Democrats, and this commitment also made them look weak when they were out of power. Some of us saw this tendency in people like Lee Hamilton, but now it seems to characterize the Obama administration.

When one observes all the concessions the administration has made to the big banks and the defense establishment, it is difficult to see progressive principles at work. The Justice Department’s inclination to function like the old Bush injustice operation is also deplorable. On the other hand, the situation would be so much worse if Republicans ran Congress and the White House.

If the Democrats want to go into the 2010 elections as the champions of both health care and health care cost cutting, they had better get some backbone and insist on a Medical Costs Reduction Amendment. They need to put the GOP on the record as fighting tooth and nail to prevent true cost cuts. They might also consider a 50% tax on compensation in excess of $500,000 in the financial services industry. The amendment and the tax might enable them to get back in touch with their natural constituency — ordinary Ameericans.

[Sherman DeBrosse is a retired history teacher. Sherm spent seven years writing an analytical chronicle of what the Republicans have been up to since the 1970s. The New Republican Coalition : Its Rise and Impact, The Seventies to Present (Publish America) can be acquired by calling 301-695-1707. On line, go here.]

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