Is the health insurance business a racket? Yes, literally. And this is why the shameless pandering to robber baron corporations posing as “health providers” is such an egregious … and obvious … tactic to do nothing more than plump up insurance company profits.
And do you know who’s to blame? Believe it or not, the downfall of the American health insurance system falls squarely on the shoulders of former President Richard M. Nixon.
In 1973, Nixon did a personal favor for his friend and campaign financier, Edgar Kaiser, then president and chairman of Kaiser-Permanente. Nixon signed into law, the Health Maintenance Organization Act of 1973, in which medical insurance agencies, hospitals, clinics and even doctors, could begin functioning as for-profit business entities instead of the service organizations they were intended to be. And which insurance company got the first taste of federal subsidies to implement HMOA73 … *gasp* … why, it was Kaiser-Permanente! What are the odds? It’s all right here to read for yourself.
And to perfectly cement HMOA73 as the profiteering boondoggle that it actually was, the law Nixon mandated also included clauses that encouraged medical providers to not CURE afflictions, but to PROLONG them by only treating the symptoms. There’s no money to be made in CURING sickness. But the sky’s the limit when it comes to forcing people to endure repetitive doctor visits, endless (and often useless and redundant) tests, and … of course … let’s not forget the ever-increasing demand for American-made prescription drugs!
Have you noticed recently that the words “prolonged coma” and DEATH have wormed their way into the fast-spoken side-effects list of just about every new drug you see on television or hear on the radio? Death! From the medicine that’s supposed to cure you! You know what? I’ll take restless legs over DEATH.
So it’s an arms race between insurers, who deploy software and manpower trying to find claims they can reject, and doctors and hospitals, who deploy their own forces in an effort to outsmart or challenge the insurers. And the cost of this arms race ends up being borne by the public, in the form of higher health care prices and higher insurance premiums. Of course, rejecting claims is a clumsy way to deny coverage. The best way for an insurer to avoid paying medical bills is to avoid selling insurance to people who really need it. An insurance company can accomplish this in two ways, through marketing that targets the healthy, and through underwriting: Rejecting the sick or charging them higher premiums. See the pattern?
Like denial management, however, marketing and underwriting cost a lot of money. McKinsey & Company, the consulting firm, recently released an important report dissecting the reasons America spends so much more on health care than other wealthy nations. One major factor is that we spend $128 Billion a year in excess administrative costs, with more than half of the total accounted for by marketing and underwriting – costs that don’t exist in single-payer systems.
And this is just part of the story. McKinsey’s estimate of excess administrative costs counts only the costs of insurers. It doesn’t, as the report concedes, include other “important consequences of the multi-payor system,” like the extra costs imposed on providers. The sums doctors pay to denial management specialists are just one example. But the larger problem isn’t the behavior of any individual company. It’s the ugly incentives provided by a rigged, and now federally backed scam system in which giving care is punished, while denying it is rewarded.
American health care: It’s enough to make you sick.
pagg stack
September 1, 2011
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September 13, 2011
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dumbfarmboy
November 22, 2013
I know you are quick to blame Nixon, however, the President only signs a bill into Law, he does not write or ‘mandate’ anything.
One needs to look to Congress on this. And who was in control of both houses at this time?
Gary St. Lawrence
November 28, 2013
You need to read the article I referenced and listen to the unedited tapes from the Nixon White House. They literally say outright that Edgar Kaiser *WROTE* the Health Maintenance Organization Act of 1973 for Nixon, Nixon proposed it to Congress and Nixon pressured Congress to push it through for his signature. He admits doing so in his own signature statement about the bill.
“The national health insurance bill that I will be submitting to the next session of this Congress will allow patients to use such insurance to join HMO’s. For that reason, it is particularly important that this demonstration effort get underway immediately and build upon the momentum which has already been achieved in this field.” – Richard M. Nixon, December 29, 1973. Nixon’s statement is right here.
If you can read all the facts on the history of this law and still hold Nixon unaccountable, then there’s nothing that will shake your blind partisanship.
Colin Lovelace
December 19, 2017
Not only did Nixon sign it but, Ted Kennedy helped write it. A few years ago when Obamacare was coming up for a vote, Ted Kennedy railed against HMO’s as satan.
http://www.forhealthfreedom.org/Publications/Choice/ThenAndNow.html
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bill
March 20, 2017
I can see how Nixon was the beginning of everything bad
DeNeice Kenehan
October 7, 2017
Truman
v8dreaming
May 7, 2017
“It’s all right here read for yourself” link is broken. Cox internet can not find uspolitics.tribe.net.
Gary St. Lawrence
May 7, 2017
Thanks for the heads up. I’ve replaced the link.
tburcher
May 9, 2017
I always thought that the 11th Commandment is “Thou shalt not get caught”. Just sayin’…
Mike Regan
May 11, 2017
Thanks for reminding us that healthcare is supposed to be a public service.
M Thatcher
May 23, 2017
Good stuff here but let’s dispel with the following fiction:
“There’s no money to be made in CURING sickness.”
Harvoni and Sovalid would like a word with you: Medications to cure hepatitis C are are making BILLIONS.
If a pharmaceutical cure for Type 2 Diabetes could be developed I guarantee you it would be profitable. It would cost an obscene amount of money and corner the market.
M Thatcher
May 23, 2017
Forgot the reference: publicly available sales figure
http://www.webmd.com/drug-medication/news/20150508/most-prescribed-top-selling-drugs
LN do not want to say due to career
June 29, 2017
So true! All those years in nursing school and its all about numbers now. How many “clients”, “service recipients, “members”, or etc can you be assigned, see or talk to in an hours time. We’re not even allowed to call them “patients” anymore. Thought I got away from it when got out of in patient physical rehabilitation hospital nursing, where the patient to nurse ratio increased from 2:1 to 14:1 (fourteen not four) from 1993-1996, and went from having assistants to primary care IE do it all yourself. Working from home, metrics were recently increased from 75 case calls per day to 90 and then to 125 per day and only 8 hour days are allowed. Given requirement to take 30 min for lunch; metrics or time allowance per patient has decreased from 6.0 minutes per patient for 75 demanded each day; 5.0 minutes per patient for 90 demanded each day and 3.60 minutes per patient for each of 125 of these chronic conditions patients per day. It’s insane and anything but healthcare! Greed is a horrible thing and has no place in healthcare!
“All that is necessary for the triumph of evil is that good men do nothing.”
Author: Edmund Burke
“The penalty good men pay for indifference to public affairs is to be ruled by evil men” Author: Plato
“The evil that men do lives after them; The good is oft interred with their bones” Author: William Shakespeare
“I would prefer as friend a good man ignorant than one more clever who is evil too.” Author: Euripides
“God makes all things good; man meddles with them and they become evil”
Author: Jean-Jacques Rousseau
They have sown wheat, but shall reap thorns: they have put themselves to pain, [but] shall not profit: and they shall be ashamed of your revenues because of the fierce anger of the LORD. Jeremiah 12:13
For they have sown the wind, and they shall reap the whirlwind: it hath no stalk: the bud shall yield no meal: if so be it yield, the strangers shall swallow it up. Hosea 8:7
Let each of you look not only to his own interests, but also to the interests of others. Philippians 2:4
But if anyone has the world’s goods and sees his brother in need, yet closes his heart against him, how does God’s love abide in him? 1 John 3:17
But if anyone has the world’s goods and sees his brother in need, yet closes his heart against him, how does God’s love abide in him? Little children, let us not love in word or talk but in deed and in truth. 1 John 3:17-18
Whoever closes his ear to the cry of the poor will himself call out and not be answered. Proverbs 21:13
Whoever gives to the poor will not want, but he who hides his eyes will get many a curse. Proverbs 28:27
And the King will answer them, ‘Truly, I say to you, as you did it to one of the least of these my brothers, you did it to me.’ Matthew 25:40
And he answered them, “Whoever has two tunics is to share with him who has none, and whoever has food is to do likewise.” Luke 3:11
Whoever is generous to the poor lends to the Lord, and he will repay him for his deed. Proverbs 19:17
Bear one another’s burdens, and so fulfill the law of Christ. Galatians 6:2
What good is it, my brothers, if someone says he has faith but does not have works? Can that faith save him? If a brother or sister is poorly clothed and lacking in daily food, and one of you says to them, “Go in peace, be warmed and filled,” without giving them the things needed for the body, what good is that? So also faith by itself, if it does not have works, is dead. James 2:14-17
Trūth is Pɑwər
July 1, 2017
Reblogged this on Truth Is Power.
Moirraine
October 17, 2017
Thank you for posting this important piece of history not known by many.
If people knew, if they understood what ‘business’ and ‘service’ are and how different they make people ACT, we’d not have allowed Nixon to make such a horrid choice that stood for decades and has harmed and killed SO many Americans.