Reform Health Care: Ban HMOs, Now!

July 15, 2009 (LPAC)—If there is to be real health-care reform, in this country, HMOs must be banned and the nation returned to the 1946 Hill-Burton standards of provision of medical infrastructure for every part of the country. This afternoon, Sen. Bernie Sanders (I-Vt.), during a markup session of the Kennedy health-reform bill, provided what amounts to a bill of indictment against the private insurance business, in the context of an amendment relative to a discussion on single-payer health care. Using data from a recent Congressional Quarterly investigative article, Sanders reported that the insurance sector and pharmaceutical industries spend the "unbelievable" sum of $1.4 million a day on lobbying the Congress and on campaign contributions. The drug companies, he reported, spent $200 million last year, to influence federal policy—more than any other sector—and HMOs spent $62 million in the first quarter of this year. He called this effort "dangerous to democracy" and added that "they use it to make sure we don't do what we should to protect the American people."

All of this lobbying spending is to protect a system that increased profits to private insurance companies by 170 percent from 2003 to 2007 and pays the top executives of the top seven insurance companies an average of $414.2 million per year. That profit is generated by a massive bureaucracy, dedicated to denying payments to health-care providers, that costs 30 percent of every dollar that goes into health care and that "grows" administrative workers at a rate 25 times faster than new doctors are produced! Sanders cited the example of Duke University Hospital having to employ 900 billing clerks to fight with the insurers over denied payments. Duke is a 900 bed hospital, so that amounts to one billing clerk per bed!

Sanders' amendment to allow states which choose to do so to implement a state-wide single-payer system, was voted down by the committee on a 19-to-4 vote.