Mike Renzulli

More About: Healthcare

America's Medical Cartel

My employer's open enrollment just started where I choose to retain or change my health, optical and dental insurance providers for the year.
Fortunately, I have the ability to choose a Prefered Provider Organization (PPO) rather than an Health Maintainence Organization (HMO) and, while my experience with HMO's is limited and healthcare is still a hot topic of discussion and debate, its time for total truth on the reason why managed care providers came into existence in the first place.
There was a gradual, though not planned, erosion of individual choice in healthcare from as far back as 1942. During that year, Congress implemented an income tax deduction for employers to extend health insurance to their employees but did not extend the deduction for individuals.
In 1965, Congress superseded healthcare for senior citizens over 65 years old by enacting Medicare which subsidizes unrestricted care for senior citizens.
In the 1970's, Massachusetts Senator Ted Kennedy, Congress took up the issue of healthcare again citing rising healthcare costs as the reason for doing so. Kennedy's proposal was not only for government to pay for everyone's healthcare, but promoted the idea of health maintainence organizations as a means of keeping healthcare costs in check.
At the urging of White House Domestic Affairs Assistant John Ehrlichman and Kaiser Permanente owner Edgar Kaiser, President Richard Nixon capitulated to the idea of some sort of managed national healthcare and proposed the Health Maintenance Organization Act of 1973 in which Ted Kennedy was one of the bill's main backers that helped push the measure through.
The HMO act was signed into law by Nixon in December 1973. It not only mandated the fees, structure and coverage HMO's would provide, but also doled out massive amounts of federal subsidies to insurance companies to provide, start or expand them.
The subsidies were given in order to not only compensate insurance providers for the costs of complying with the HMO law but also to help pay for each HMO customer's healthcare.
This law along with the corporate income tax deduction for insurance of the 1940's, the enactment of Medicare in the 1960's and the HMO Act of the 1970's individual choice in health insurance has slowly, but surely, been eliminated. Government interventions in health care has also contributed to a long-term ballooning of health care and insurance costs while depreciating quality.
Yet in each case politicians take credit for their short-term accomplishments out of their stupid notions that they know best when it comes to individual choice and the affairs of the marketplace. They then clamor for more power and control by blaming insurance companies and the profits they make when politician's plans backfire due to the problems their schemes create in the first place.
For example, during a 1978 Senate Committee hearing he chaired, Sen. Ted Kennedy made the following statements which are excerpted from his opening remarks:
The current revival of the HMO movement should come as no surprise. HMOs have proven themselves again and again to be effective and efficient mechanisms for delivering health care of the highest quality. HMOs cut hospital utilization by an average of 20 to 25 percent compared to the fee-for-service sector. They cut the total cost of health care by anywhere from 10 to 30 percent. And they accomplish these savings without compromising the quality of care they provide their members.
In our enthusiasm to see HMOs proliferate throughout this country we should not lose sight of the need to guarantee the quality and integrity of the prepaid plans we create.
Then in 2001, Kennedy made the following statement pitching for a Patient's Bill of Rights:
It is time to end the abuses of managed care that victimize thousands of patients each day. It is time for doctors and nurses and patients to make medical decisions again, not insurance company accountants. The American people deserve prompt action, and we intend to see that they get it.
Since the push for a so-called public option seems to be on its last legs and will die the death it deserves, in reality, the United States already has a public option in the form of Health Maintainence Organizations.
For all of the talk about the need for healthcare reform, the U.S. has gradually experienced health care reform in one way or another over many years and it is clear from the above examples that everytime government gets involved in the affairs of the marketplace (in this case health care and insurance) it makes everything worse and is a complete failure.
It's time for a rejection of the present day cartelization of our healthcare system and have a free market in the form of the complete seperation of medicine and state.
Doing so would lower insurance and healthcare costs while improving quality through competition and enhanced choice while people can truly choose the kind of care they want without government interference.
This, and not a government-run public option, is real change we can believe in.

2 Comments in Response to

Comment by clark clone
Entered on:

Who cares about spelling or grammar...Are you really so egocentric that you care more about the placement of letters than the message itself?

Thanks for the article as always!

Comment by Rocky Frisco
Entered on:

The article says: "our present-day "public option" has slowly lead to the erosion of individual choice"

The past tense of "lead" is "led," guys. Learn the language. 

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