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Obamacare: HMO Profits; LaRouche: Shut Down the HMOs! Restore Hill-Burton

October 2, 2009 (LPAC)—Within the next three weeks, the mega-HMO private insurers will be announcing their third-quarter income and profits, whose rights and privileges have been guaranteed all along in President Obama's health-care "reform," under his stance that, "we will start with the system we have..."

Lyndon LaRouche reiterated today, "Shut down the HMOs! Let's look at a real option for what kind of health care system to have: Go back to Hill Burton."

He refers to the post-World War II policy, begun with the 1946 Hospital Survey and Construction Act—called the Hill Burton law, after its Senate sponsors—which brought about the expansion of medical facilities so that populations in every county would have adequate ratios of hospital beds, staff, diagnostic and other treatment necessities per 1,000 residents.

Given this delivery infrastructure, the overhead of administrating care in the Hill Burton system, was in the 3-5% range, and operated through networks of public and private insurers (mostly non-profit), and government agencies. Then in 1973, the first law to back HMOs was enacted. Over the ensuing decades, mega-HMOs came into operation, supplanting the Hill Burton system. Today, the overhead ratio is at least 30 percent (some say, up to 50%). This amounts to some $600 billion out of the $2 trillion spent annually on health care in the U.S. today, being diverted into paperwork, profiteering, gross executive pay, etc.

This HMO looting system is exactly the "system" Obama is pledged to keep. Its second-quarter profits were impressive. UnitedHealth Group Inc., the biggest private HMO insurer (by revenue) announced July 21, that its Q2 profit had more than doubled from same time in 2008. The Q2 net income of UnitedHealth Group Inc. rose to $859 million (73 cents a share), well more than double that of the same time a year ago, at $337 million (27 cents a share). This occurred despite the fact that many of its private insurance customers cancelled their policies over the past year because of the crash, an occurrence which UnitedHealth Group more than made up for by hiking premiums, and by sucking in 260,000 new customers in 2009 (January through June 11) through its public/private partnership with AARP. UnitedHealth Group pays to use the AARP logo for various of its UnitedHealth Group plans for people over 65, called "Ovations.".

The UnitedHealth Group vice president in charge of Ovations is Simon Stevens, a British national (at UnitedHealth's head office since January, 2007), who was Tony Blair's health-care expert from 1997 to 2004, during which time the infamous NICE (National Institute for Health and Clinical Excellence) was set up to dictate to the British National Health Service how to limit and deny medical treatment, which increased the death rate for millions.

UnitedHealth Group is on a binge for even more dominance. In July, it announced that it would acquire the Northeast operations of rival Health Net Inc., for a sum in the range of $610 million. Also in July, UnitedHealth announced landing a $21.8 billion contract from the Defense Department to "manage" a five-year contract for 3 million beneficiaries of its TRICARE military service HMO program. This will begin April 1, 2010; the transition is already underway.

UnitedHealth Group is, thus, the foremost private company privateering in "managing" implementation of government medical programs of all kinds—the very ones Obamacare would cut. Of the total 2008 revenue of UnitedHealth Group of $81.19 billion, $28.1 billion came from Ovations—its Medicare business; another $6 billion from "Americhoice," its Medicaid business, and with its new military and veterans contract, UnitedHealth Group may reach up to the same level as its current non-government, $41.8 billion commerical business.

The specifics for the others in the top five U.S. managed-care companies (in annual revenue for 2008) are similar. By annual revenue they are: WellPoint ($61 billion), Aetna ($31 billion), Humana ($29 billion) and CIGNA ($19 billion).


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