Wow, just wow. This is one of Wendell Potter's best columns:
Several years ago, a coworker asked our CEO during a staff meeting what kept him up at night. He responded with a single word: disintermediation.This is a powerful column, because Wendell Potter brilliantly argues the point that private health insurance companies, while adding no value for American patients, extract a tremendous cost on their -- and the nation's -- pocketbook. He brilliantly shows that AHIP -- the big-profit insurance lobbying organization -- wears no clothes:
Merriam-Webster defines disintermediation as “the elimination of an intermediary in a transaction between two parties.” So what my boss was saying was that sooner or later, Americans might reach the conclusion that private insurers are no more essential than travel agents (remember them?), and that by dispatching health insurers to the history books, we could reduce spending on health care by billions if not trillions of dollars.
Much of what I was paid to do in my former job was to create and perpetuate the impression that insurers are “part of the solution” and “add value” to the system. I put those words between quotation marks because they were used repeatedly by my CEO and other industry leaders and became our mantras, especially in conversations with policymakers and the media.
Here’s the world as AHIP sees it: “The Affordable Care Act (ACA) will help millions of people get coverage for the first time, but the new health insurance tax, costly benefit requirements and age rating restrictions will drive up the cost of coverage for many consumers and employers. When this happens, many younger and healthier Americans could decide not to get coverage, which would further drive up costs for everyone else.”Insurers want their cake -- and their ice cream, steak and fine wine -- and to eat it, too. At the same time, they are absolute failures at negotiating lower medical costs from providers -- their entire reason for existing -- and thus must present campaigns based on lies to justify their continued presence in the American health care 'system':
If you think insurance firms are only—or even primarily—interested in holding down the cost of coverage for younger and healthier Americans, you are buying the spin I used to crank out.
Here’s the real reason for AHIP’s campaign: insurers love the part of ObamaCare that requires us to buy coverage from them because it means billions of dollars in new revenue for them. But they don’t want to part with a penny of that money to help expand coverage to more Americans and they don’t want to be prohibited from discriminating against older and less healthy people. And those are some of the things that the Affordable Care Act will do when it’s fully implemented next year, and that means their profit margins and return on equity likely will take a hit.
We will not hear in their “Time for Affordability” campaign that insurers have failed miserably at controlling costs, which supposedly is their raison d’être. Over the past ten years, according to the Kaiser Family Foundation, average premiums have increased 97 percent, much more than inflation (28 percent) and wages (33 percent). Premiums have also increased much more than medical inflation, which according to a recent Standard and Poors study totaled 48 percent between 2000 and 2010.Wow, Wendell, wow!
Meanwhile, insurance corporations continue to make Wall Street-pleasing profits. UnitedHealthcare announced last week that it made $9.3 billion in profits in 2012. That’s just one of the 1,300 health plans AHIP says it represents. UnitedHealth used a third of that—$3.1 billion—to repurchase its own stock last year, which had the effect of boosting earnings per share for stockholders.
Yes, insurers, it is time for affordability. And time for us as a country to take a good look at why we need to keep you around.
Folks, insurers have to fight so vociferously against single payer because they literally cannot justify their existence with honesty and truth.
Please tweet and share this column far and wide -- the ideas in it are dangerous, dangerous for big-profit insurance company bottom lines.