Healthcare "Reform": Cui Bono--To Whose Benefit?

The only starting point with any real merit in any political/financial debate is to ask: cui bono? To whose benefit?

If we ask cui bono--to whose benefit?--in the current healthcare mess, we are told "the patients." Yeah, and the U.S. banking sector is healthy and the check is in the mail, too.

By every standard global healthcare metric, the U.S. lags in every category except cost: yea, we're the priciest! We win! But do we?

To help answer "to whose benefit?," I am reprinting three telling emails from readers.

Rich H.

A quick story...

20 years ago my dad was diagnosed with prostate cancer. The urologist said the cancer had spread all over his body and there was nothing that could be done. He sent a letter saying my dad had 6 months to live. The only treatment he could offer was pain management when the pain got bad.

This was quite a shock. At the time I was working about 1 mile from Rutgers medical library. I went there every day at lunch and after work. Within a month or so I had read every book and peer reviewed journal on cancer not only in the library but in the book store. It was quite clear to me what was and still is going on. The treatments available to us in the US limited compared to the rest of the world. The cancer treatments here are only the ones that make the most money for the medical industry. Regardless of success or what the scientific literature proves or disproves.

In the end it was clear that the only treatment option was 'alternative medicine'. I put this in quotes because this, in my opinion, should not be called alternative. It should be mainstream. While reading I made copies of all material that I felt would be beneficial to my dad's recovery. I took notes constantly. The next step was to contact the doctors who wrote the books and articles. For the most part the doctors and research scientists were happy to talk with me on the phone and help with making decisions about which treatments would be most beneficial. In the end we actually did all the treatments as none were toxic in any way and would help health in general.

Many of the changes my dad made were lifestyle and dietary but there were some supplements involved that were not available in the US. But the big problem was getting these supplements and extracts into the US. The companies and doctors that made them would not send them to the US without a doctors order. We went from doctor to doctor and none would take the challenge.

Until we went to see Dr. Atkins in NYC. We first met with one of his doctors on staff and then we got a call requesting we come back and speak with Dr. Atkins directly. We showed Dr. Atkins all the research we had done and he said we were ahead of the curve and ahead of his current cancer treatments. He was thrilled to take on my dad's case. We turned over all the research to him and within a few day the treatments started.

Little by little my dad got stronger. The various blood tests and scans showed vary gradual improvements. But after two years the cancer was gone.

Several years later my dad went back to the original urologist that gave him the death sentence. Blood tests, scans and physical examination showed no cancer whatsoever. When we had the last meeting with the doctor to go over test results, the doctor said that if he had not personally seen my dad and diagnosed the cancer originally he would have not believed he ever had cancer. At the end of this meeting I asked if the doctor was curious as to what was done to get rid of the cancer. All the doctor said was 'no'.

Not only was the cancer gone but full function to the organs and systems was restored. Many of the doctors visits and diagnostic tests were covered by insurance at least to some extent. But none of the supplements and extracts were covered. I added up all the out of pocket expenses and it came to $5k including mileage on the car, tolls, etc. Not bad considering conventional chemotherapy and surgery, if done, would have been 10s of thousands of dollars at the very least. And the success rate of the conventional therapies is low.

As a side note I found out why many doctors, even though they believed the alternative approach was the right one, would not touch my dad's case. To illustrate I'll oversimplify. Let's say doctor A is a conventional cancer doctor. On the other side of the street is doctor B who is an alternative cancer doctor. Doctor A does all the acceptable therapies - chemo, radiation, surgery, etc. Doctor B does everything including conventional to get his patients cured. All of doctor A's patients die in the end. All of doctor Bs patients survive to a ripe old age. Doctor A notices the number of patients walking in the door is dropping. He hears they are going to doctor B instead. The word is getting out. Doctor A does not like seeing his income drop. So he goes to the state medical board and makes a complaint against doctor B. Doctor B is hauled in to the inquisition. His license to practice medicine in the state is revoked because he did not use proven and currently acceptable treatments.

This type of simplified scenario has been played out many, many times in the US. Most of the time the alternative doctor thinks he can prove his case in front of the medical board because not a single patient has complained and his success rate is so high. But saving lives is not what it's about. It's about money.

P.

Walter Cook’s essay is brilliant ( More on The "Impossible" Healthcare Solution) until it reaches its recommendation. Just as car insurance doesn’t pay for maintenance and small stuff, and homeowners insurance similarly isn’t expected to cover maintaining the home (repairs, painting, cleaining, gardening), all health care should not be covered by insurance.

As I have written to you in the past, these plans used to be called “hospital” plans…but that was trillions of dollars ago, half a century ago, and we didn’t have a trillion dollar drug industry whom Congress decided in the 90’s could advertise to the public drugs which the public did not understand, rather than being restricted to advertising to physicians who presumably were trained in medicine, and we didn’t have multi-million dollar pieces of medical equipment whose benefits seem mainly to be that they required the physician to think less and rely on “test results” more, and that was before our citizens developed an entitlement mentality to deserve the highest most expensive procedures, equipment and facilities for their bodies after they abused them with fatty foods, lethargy, and drugs overly used and prescribed.

The doctrine of “adverse selection” is a basic tenet throughout history in insurance. This means you can’t call your agent and buy a homeowners policy after you house has caught fire, and you can’t buy car insurance after you have wrecked your car or had it stolen from you (or after you have killed someone while behind the wheel).

As long as we have healthy people who won’t buy health insurance because they are not sick, then we reserve the right to not accept someone for health insurance who has been healthy all of his life and just now got diagnosed with a malignant tumor. If everybody is required to buy insurance, even the healthy, then we can accept everybody. A market-based solution is indeed the answer and Cook’s point is a good one, as is yours, BUT then alas, he blows it all to hell as so many have by bizarrely advocating SOCIALIZED medicine for everything but the big stuff.

The Medicare analogy doesn’t work; Medicare is going off an immense cliff, and in my area, more and more physicians are NOT accepting Medicare patients, so this is a dead end argument. Pray tell how will the federal govt. ensure adequate competition for medical services? No, sorry, only when the people are actually forced to start demanding to know the price of all services BEFORE they use them will market competition in medicine return to the U.S.

blaming the insurance companies for trying to hold the line on infinite consumer “wants” in medical care is really once again shooting the messenger. It is precisely the insurance companies who are the ONLY ones saying “NO” to those continually trying to raise prices and get more and more coverage without paying for it that are the only ones holding the line. The people have INFINITE wants when it comes to medical care, and the government cannot ever say no either, because they want to get re-elected. Insurance companies are the ONLY ones to engage in fierce contract negotiations with doctor groups, outpatient clinics, hospitals, and drug companies at every contract renewal date to keep costs down, something that NEITHER the consumers nor the govt. have the inclination to do.

For this they get criticized for their greed and heartlessness. As insurance companies have higher and higher deductibles, the consumers will HAVE TO demand more pricing info for their lower-level healthcare utilization prior to making their decision. The medical profession and industry is going to have to finally start advertising prices and actually competing, something they somehow think is beneath them, unlike ANY other profession or industry.

Human nature is such that until they are required to actually PAY for some of their care, people will continue to blame someone else, and demand that someone else pay for their bills. Sorry, I am put once again in the very difficult position of defending the insurance industry.

When I was just going through more of my Dad's papers this weekend (he passed away in late May), I found several of his old paychecks from Sears, dated 1960. Out of about $400 a month in salary, he paid $5.11 for his "hospital" insurance for a family of six and $11 for his life insurance plan. Maybe Sears paid a stupendous sum for "hospital" insurance and his $5 was a tiny co-pay, but I doubt it, as the $11 for life insurance was the total payment--Sears did not subsidize that policy payment.

The point is that "hospital" insurance (as mentioned above) was very modest in cost (even when adjusted for inflation) and was rarely used. As I have noted elsewhere, in terms opf healthcare, Americans did not feel resentful, deprived or like they lived in a Third World country in 1960. They felt prosperous and considered the (low-cost) healthcare available to be generally excellent.

Frank M.

I saw your article on health insurance with one reader's comparison to car insurance. It's a nice metaphor that makes for great phrases like "buy neon undercarriage lights with car insurance." But the comparison isn't perfect because no health insurance will pay for a tattoo or a tummy tuck, the human equivalent of a neon undercarriage.

I lived in Switzerland for a couple of years, and they have split their insurances into "medical insurance" and "accident insurance." The accident insurance is comparable to car insurance: if you break something, they fix it. Medical insurance is if you get an infection or have a heart attack. This is more like an extended warranty. (Unfortunately, there is no factory warranty on the human body.) If your car blows a gasket (has a heart attack), no car insurance will pay, but a warranty will (or should).

Of course, when evaluating aftermarket warranty companies in the US, the consensus seems to be that they are over-priced and will work hard to not cover needed repairs. Sounds kind of like an HMO.

The larger question is whether we as a society think it's important to offer factory warranties for our children and extended warranties for everyone else. There's a cost, of course. But is it "worth it"?

Exactly what is "worth it"? As long as the costs are hidden from the end consumers and nobody says "no" to anything, then we'll never know. Those with enormous vested interests in the unsustainable status quo system try to present the present insane system as "to the benefit of the patient," but the above commentaries suggest we should be skeptical of such claims. It is, after all, to the benefit of those profiting from the current system to shape the "politics of experience" such that their profit/benefit is hidden behind jargon, distracting side-issue debates and noble-sounding calls for some other part of the sprawling sick-care industry to absorb a cost reduction.

Calling other players "villains" is equally useful at diverting attention from their own role in the mad game being played to sustain the unsustainable.

Here is a chart of Medicare costs from inception to the late 90s:

I have covered this topic many times--please read these previous entries for full statistics and links to further data:

Social Welfare, Socialism and Healthcare (May 19, 2009)

Yes, There Will Be Armageddon: Government Goes Bankrupt (July 24, 2008)

Recipe for National Insolvency (June 9, 2008)

The End of Entitlements (July 27, 2007)

Medicare's growth has continued unimpeded at about twice the rate of GDP (5-6% growth in Medicare/Medicaid compared to 2.5-3% growth in GDP). This one fact alone dooms the entire status quo to insolvency. Who will benefit from that insolvency? That can be debated endlessly but the collapse of the system is no longer even in question--it is inevitable, and the current "reforms" will not change that end-state in the slightest way.


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