SICKO and a health care reform Primer.

I saw Michael Moore's SICKO last night and it is good movie, well worth seeing.

I had the good fortune to work for a Benefits Consulting company during the early 90's when Health Care Reform was proposed by the Clintons. Not only did the company prepare daily briefings for our employer clients about all of the aspects of the health care reform process and the politics of it, they made these available on our PROFS internal email system for any associate who wanted to read them. So, even though I was a low level manager of computer operators, I had the opportunity to read these daily briefings. For months, I was hooked on them, partly because I am a political junkie and wonk, but because my job did not fully challenge my intellect.

There will be a lot of discussion about health care reform after SICKO.

Some things to know and remember.

There are basically four sectors of the Health Care Industry: The Insurance Companies (Moore's target), the Providers (Doctors and Hospitals), the Government (which pays for much health care through Medicare and Medicaid) and the Drug Companies.

You can tell the power relationships between these four sectors by looking at their comparable profitability. One of ways that the government generated a surplus in the 90's was that they reduced Medicare and Medicaid payments to Providers. Not surprisingly, many of the Providers had very thin margins during this period.

Insurance Companies and Providers fight every day over money. They deploy teams of progammers to code programs to look for reasons in bills to deny payment, or to prepare bills that have every "i" dotted and "t" crossed to make them undeniable. As much as Moore tees off against the Insurance companies, before the Insurance companies came along, the Providers and Doctors ruled and profited. When Medicare was first established, and the government basically paid for anything billed, the providers gorged on free government money. There are still billions of dollars being falsely billed to the government by providers for Medicare and Medicaid.

The Clinton plan was to use the Insurance Companies as a check against the Providers, much as the current system does. The difference was that their plan would have made it possible for individual consumers to have a much wider choice of insurance companies to enroll in, and to set standards that each insurance company had to meet -- no disqualification for pre-existing conditions etc. The thought was the that the if any insurance company was too stingy with benefits, they would lose enrollees to less stingy plans. Not surprisingly, the leading opponents of the Clinton plan were the smaller insurance companies who realized that they could not compete against the largest companies for individuals. They had carved out a profitable niche offering crummy insurance plans to small employers at cut-rates who gave them to employees on a take it or leave it basis. (One of those companies, Golden Rule Insurance Company of Indianopolis, devised a high deductible plan at a low cost, which they said would be the basis of a Health Savings Account. They sold this plan to the Republican Party as the panacea of all health care problems with an unprecedented wave of campaign contributions. If Moore's movie sparks a renewed debate on health care reform, expect to hear "Health Savings Accounts" touted by your local lovable conservative Republican as the great alternative. They are not.)

The Drug Companies are the most profitable sector right now and are essentially unchecked. Eventually, the Democrats will enable the Government to negotiate prices for the Medicare drug benefits, which will shift money from the drug companies to the government.

Right now, providers are chafing under the domination of the Insurance companies. They will be supportive of a single payer system, but will not want an British style system where they work for the government.

There are three or four options of Health Care Reform.

The first is universal health care insurance. They figure out a way to get the 40-50 million people the same crummy insurance that SICKO documents.

The second is a Clinton type system, where they establish a competitive system which should correct the abuses of the insurance companies.

The third is a single payer system, which would essentially put everyone on Medicare. The govenment pays for it all. It puts the Health insurance companies out of business, which requires a determined political will of tidal wave proportions. They will not go quietly. The other problem is controlling costs -- do you let the providers just bill for anything they want?

The fourth is truly socialized medicine, with a government health service. Not only do you put the health insurance companies out of business, you also get the medical community to limit their potential earnings dramatically. It would probably take air power and sustained counterinsurgency campaigns to wipe out the last remaining hold out cosmetic surgeons in Beverly Hills.

Maybe, SICKO will start a real discussion toward fixing this. The one thing that has always stopped health care reform in the past has been that there has not been a mass movement of people demanding a better health care system. If during the Clinton era, there had been marches and demonstrations of the uninsured demanding insurance, it might have ended differently. Moore gives a human face to those who suffer with the current system, and when we/they stand up, the world will change.


  1. One core problem will have to be addressed, or none of the solutions you or anyone else has come up with will work: the fact that healthcare- regardless of who's paying the bill- has increased at more than double the inflation rate every year for decades. If this continues, there is not enough money in all of Christendom to cover the bill. I recently had a transfusion, for which I was held overnight for observation, and out-patient surgery, for which I stayed about four hours in the hospital... not counting the surgeon's fees, just the hospital costs for those two procedures totaled more than I paid for my 4-door pickup truck.

  2. Joel,
    Bills have only a vague relationship to costs. Your bill not only includes all the real costs of your treatment, but all the costs of other unpaid, or underpaid, treatments, a share of the development costs of new technology and drugs, again assuming that some payers will pay no part of those costs etc. There is a steady inflation in health care costs, but where it comes from and why it happens and what to do about it is not an easy thing.
    The upside of either a single-payer or government health service system is that it is a political decision to spend X amount on health care in the aggregate, or more or less, with resulting more generous or more stingy service.

  3. shelley7:47 PM

    Along with the film, I'd recommend that people see the PBS interview of Michael Moore about the film. He boils down the problem with American health care vs other countries in terms of a fundamental difference of social philosophy. In other nations, the philosophy is that "everyone gets a piece of the pie", that everyone gets equal access to the health care system. But in the U.S. it is "winner take all" and you can only get access by shelling out big bucks. Moore also pointed out that we don't have to duplicate any one model (Canada, France, the UK) we can take the best of each of them and create an American approach to health care which works best for our people. But we will still need a major change in our social philosophy from "winner take all" to "everyone gets a piece of the pie".


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