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Whether deserving or not, President Obama’s name is now synonymous with change.  However, associating the US health insurance industry with progressive change is more of a challenge.  Which is why it was so surprising last week when AHIP, the industry’s trade group, signed a letter to the President committing to reduce the growth in health care expenditures and seemingly reversing its prior stance of resistance to reform

Despite the potential public good that the agreement could provide, it seemed strange to see the for-profit health insurance companies endorsing measures that would explicitly cut into their profits.  This would have been a welcomed change from their typical profit maximizing-care minimizing calculus.  However, once again, profits have proved to be more powerful than progress.

In backtracking from the stated commitment to reduce growth in health care expenditures by 1.5% per year, which the Obama administration projected could save $2 trillion over 10 years, representatives of the health insurance industry have contended that President Obama misrepresented the agreement  While they acknowledge that controlling costs and ensuring sustainability of the health care system is a long term goal, apparently they refuse to be accountable to specific benchmarks or numbers.  As the initial commitment was symbolic and without specific plans to reduce the growth in expenditures, this should not have been a surprise.  

The truth remains unchanged - profit motives in health care have been unable to control costs in the past and cannot be relied upon for necessary improvements in our health care system.  Managed care has failed at controlling growth in costs; with Medicare Advantage, private plans competing with traditional fee for service Medicare have required overpayments from the government to stay afloat, which will lead to a wasted $11 billion in 2009; and while shifting costs to providers with paperwork, prior authorizations, and claims denials has been profitable for the insurance industry, health care continues to grow more expensive and less accessible.  And a discussion of costs misses the well documented negative impact that profit motives have on quality of care  

We need real change when it comes to our health care system.  While hospitals, health practitioners, the pharmaceutical and device companies, and other major players will need to come together to identify and address areas of waste within the current system, it is clear that the profit driven health insurance industry cannot be relied upon to control costs and improve the quality of the health care that Americans receive.  It is not in their financial best interest.  And when it comes to maximizing profits for their investors, they are never going to change.

Originally posted to Dr Fox on Wed May 20, 2009 at 08:44 AM PDT.

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