For decades, US per capita health care costs have been roughly double those of the rest of the industrialized world even though we leave one-sixth of our people uninsured. In the year 2002, the US spent $5,267 per person on health care. Switzerland, which had the next most expensive system on the planet, spent $3,446. The UK spent just $2,160.
But despite the fact that the UK spends only 40 per cent as much as the US and still insures 100 percent of her people, and despite the fact that Americans are furious with their health insurance industry, the Labour Party has decided to transplant American healthcare corporations, including United Health Care and Kaiser Permanent, into the body of the National Health Service. I predict you will rue the day you let this happen.
In America these and other companies have operated as “health maintenance organizations” (HMOs), and have made a mess of the healthcare system. HMOs are insurance companies that influence doctors with two tools – financial incentives and “utilization review.” The financial incentives encourage doctors to deny services to their patients. Utilization review (UR) means an employee of the HMO vetoes or amends a decision made by a doctor and patient. To enhance the leverage of the financial-incentive and UR tools, HMOs often restrict the doctors patients can see in order to be able to funnel more patients to doctors on the staff of or on contract with
the HMO. An HMO that insures, for example, 30 per cent of a clinic’s patients is far more likely to work its will over the clinic than an HMO that insures only 5 per cent of the clinic’s patients.
America’s great experiment with HMOs began in the early 1970s, peaked in the mid-1990s, and crashed in the latter half of the 1990s. The experiment failed because HMO advocates diagnosed the cause of American health care inflation incorrectly, and, on the basis of that incorrect diagnosis, devised an awful solution. HMO advocates claimed inflation in American health care costs was due primarily to overuse of medical care caused by physicians who allegedly ordered unnecessary services in order to make themselves rich. HMO proponents argued that the solution to this alleged overuse was a new-fangled form of insurance company that controlled
the decision-making of doctors.
By the mid-1980s, the vast majority of health insurance companies were using one or both of the two tools pioneered by HMOs. By 1985 the two tools were collectively called “managed care.” Managed care was bound to fail for two reasons. First, it just isn’t possible for bureaucrats who aren’t doctors and who aren’t in the examining room to make better clinical decisions than doctors and patients do. Second, the bureaucrats hired by the HMOs to manage doctors and hospitals raised insurance company costs, and the clerks that doctors and hospitals had to hire to deal with the new managed care bureaucrats raised provider costs as well.
By the late 1990s, it was apparent even to formerly enthusiastic proponents of managed care that the great American HMO experiment had failed. George Lundberg, who promoted managed care during his tenure as editor of the Journal of the American Medical Association, revealed his disgust for managed care in a 2001 interview with the Los Angeles Times. “Managed care is basically over,” he said. “People hate it, and it’s no longer controlling costs. Healthcare inflation is now back in the double digits. So if it’s not saving money, then why should we have it? But like an unembalmed corpse decomposing, dismantling managed care is going to be very messy and very smelly, and take awhile.”
As it became clear even to the obtuse that managed care had failed, the insurance industry, with encouragement from Republicans, began to promote high-deductible policies as the solution to the US health care crisis. They called these high-deductible policies “medical savings accounts” in the 1990s, and then switched to the phrase “health savings accounts” (HSAs) in 2003. These insurance policies have annual deductibles on the order of $2,000 for individuals and $5,000 for families.
Repeating the mistakes of HMO proponents before them, HSA proponents have made the wrong diagnosis. Like HMO advocates, they claim overuse of medical services is the main problem. Unlike HMO advocates, they claim the overuse is caused by whiny, “overinsured” patients, not greedy doctors. Patients, we are told now, demand medical services they don’t need just because they have insurance with “low” deductibles (the deductible in a typical managed care policy these days is $500 for family coverage).
The argument that Americans overuse medical care is not a lie, but it is a half-truth, or better yet, a quarter-truth. The overuse argument ignores two facts: Underuse of medical care in the US is rampant, even among the insured; and the insurance and medical industries are dreadfully wasteful.
The latest data on overuse and underuse show that underuse occurs four times more often than overuse. For example, half of all insured Americans with high blood pressure are not being treated for it. For another example, a quarter of insured Americans who have been told their angiogram indicates they need bypass surgery or balloon angioplasty have neither procedure done. The truth is the average American underuses health care, and managed care and high deductibles will only make this problem worse.
The other fact concealed by HSA advocates is that the supply side of the US health care system – the insurance and medical industries – waste hundreds of billions of dollars on excessive administrative costs, redundant purchases of equipment such as MRIs, overcharging by specialists and drug companies, and fraud. It is this supply-side waste that America needs to address, and we cannot address it by exposing patients to $5,000 and hoping they will refrain from self-rationing and will arm-wrestle with their hospital or their drug manufacturer to bring their prices down.
America has just emerged from one dumb experiment – the managed care experiment – imposed upon us by our powerful health insurance industry. It now appears likely we will stumble into another stupid experiment – HSAs – brought to us by the US health insurance industry. But this experiment too will fail, and fail rather quickly. At that point, America may finally turn to single-payer system, or components of a single-payer system, that address the real cause of our horrendous healthcare costs – waste in the insurance and medical industries.Kip Sullivan sits on the steering committee of the Minnesota Universal Health Care Coalition. He is the author of The Health Care Mess, published by AuthorHouse, February 2006.
Hilary Wainwright argues against reclaiming populism for the left and for a leadership that supports people’s capacity for self-government
It may seem as though these apps are working for us, but we are also working for the apps, writes Kurt Iveson
It's over 100 years ago that domestic workers began to organise to demand the same rights as other workers. Yet with LSE cleaners on strike this week, historian Laura Schwartz asks: how much has really changed?
Omar Barghouti asks whether Donald Trump, in his recent break with America’s long-standing support for the two-state solution, has unwittingly revived the debate about the plausibility, indeed the necessity, of a single, democratic state in historic Palestine?
Glenn Greenwald was interviewed by Amandla Thomas-Johnson over the phone from Brazil. Here is what he had to say on the War on Terror, Trump, and the 'special relationship'
In 1972 David Widgery wrote about the bitter intensity of love in capitalism
Andrew Dolan on how the left must match the anti-establishment rhetoric of the right, but with a different politics
Emma Snaith speaks with directors Emer Mary Morris and Nina Scott about the power of theatre to encourage community resistance to estate demolitions.
In the first of a series of interviews with migrants' rights and racial justice activists from the US, Marienna Pope-Weidemann speaks to Peter Pedemonti, co-founder and director of the New Sanctuary Movement in Philadelphia
Photos from The World Transformed festival in Liverpool, by David Walters
Red Pepper’s race section: open editorial meeting 19 April
On April 19th, we’ll be holding the second of Red Pepper’s Race Section Open Editorial Meetings.
Changing our attitude to Climate Change
Paul Allen of the Centre for Alternative Technology spells out what we need to do to break through the inaction over climate change
Introducing Trump’s Inner Circle
Donald Trump’s key allies are as alarming as the man himself
Secrets and spies of Scotland Yard
A new Espionage Act threatens whistleblowers and journalists, writes Sarah Kavanagh
#AndABlackWomanAtThat – part II: a discussion of power and privilege
In the second article of a three-part series, Sheri Carr reflects on the silencing of black women and the flaws in safe spaces
How progressive is the ‘progressive alliance’?
We need an anti-austerity alliance, not a vaguely progressive alliance, argues Michael Calderbank
The YPJ: Fighting Isis on the frontline
Rahila Gupta talks to Kimmie Taylor about life on the frontline in Rojava
Joint statement on George Osborne’s appointment to the Evening Standard
'We have come together to denounce this brazen conflict of interest and to champion the growing need for independent, truthful and representative media'
Paul O’Connell and Michael Calderbank consider the conditions that led to the Brexit vote, and how the left in Britain should respond
On the right side of history: an interview with Mijente
Marienna Pope-Weidemann speaks to Reyna Wences, co-founder of Mijente, a radical Latinx and Chincanx organising network
Disrupting the City of London Corporation elections
The City of London Corporation is one of the most secretive and least understood institutions in the world, writes Luke Walter
#AndABlackWomanAtThat: a discussion of power and privilege
In the first article of a three-part series, Sheri Carr reflects on the oppression of her early life and how we must fight it, even in our own movement
Corbyn understands the needs of our communities
Ian Hodson reflects on the Copeland by-election and explains why Corbyn has the full support of The Bakers Food and Allied Workers Union
Red Pepper’s race section: open editorial meeting 15 March
On 15 March, we’ll be holding the first of Red Pepper’s Race Section open editorial meetings.
Social Workers Without Borders
Jenny Nelson speaks to Lauren Wroe about a group combining activism and social work with refugees
Growing up married
Laura Nicholson interviews Dr Eylem Atakav about her new film, Growing Up Married, which tells the stories of Turkey’s child brides
The Migrant Connections Festival: solidarity needs meaningful relationships
On March 4 & 5 Bethnal Green will host a migrant-led festival fostering community and solidarity for people of all backgrounds, writes Sohail Jannesari
Reclaiming Holloway Homes
The government is closing old, inner-city jails. Rebecca Roberts looks at what happens next
Intensification of state violence in the Kurdish provinces of Turkey
Oppression increases in the run up to Turkey’s constitutional referendum, writes Mehmet Ugur from Academics for Peace
Pass the domestic violence bill
Emma Snaith reports on the significance of the new anti-domestic violence bill
Report from the second Citizen’s Assembly of Podemos
Sol Trumbo Vila says the mandate from the Podemos Assembly is to go forwards in unity and with humility
Protect our public lands
Last summer Indigenous people travelled thousands of miles around the USA to tell their stories and build a movement. Julie Maldonado reports
From the frontlines
Red Pepper’s new race editor, Ashish Ghadiali, introduces a new space for black and minority progressive voices
How can we make the left sexy?
Jenny Nelson reports on a session at The World Transformed
In pictures: designing for change
Sana Iqbal, the designer behind the identity of The World Transformed festival and the accompanying cover of Red Pepper, talks about the importance of good design
Angry about the #MuslimBan? Here are 5 things to do
As well as protesting against Trump we have a lot of work to get on with here in the UK. Here's a list started by Platform
Who owns our land?
Guy Shrubsole gives some tips for finding out
Don’t delay – ditch coal
Take action this month with the Coal Action Network. By Anne Harris
Utopia: Work less play more
A shorter working week would benefit everyone, writes Madeleine Ellis-Petersen
Mum’s Colombian mine protest comes to London
Anne Harris reports on one woman’s fight against a multinational coal giant